| | | | | | | | | ExhibitAmendment No. | | Description 2, dated as of August 6, 2021, to Equity Distribution Agreement, dated May 8, 2019, among American Finance Trust, Inc., American Finance Operating Partnership, L.P., BMO Capital Markets Corp., BBVA Securities Inc., B. Riley FBR, Inc., Citizens Capital Markets, Inc., KeyBanc Capital Markets Inc., Ladenburg Thalmann & Co. Inc., SunTrust Robinson Humphrey, Inc. and SG Americas Securities, LLC (Class A Common Stock) | | | Equity Distribution Agreement, May 8, 2019, among the American Finance Trust, Inc., American Finance Operating Partnership, L.P., BMO Capital Markets Corp., BBVA Securities Inc., Capital One Securities, Inc., Citizens Capital Markets, Inc., KeyBanc Capital Markets Inc., Mizuho Securities USA LLC and SunTrust Robinson Humphrey, Inc. (Series A Preferred Stock) | | | Amendment No. 1, dated as of June 25, 2019, to Equity Distribution Agreement, dated May 8, 2019, among American Finance Trust, Inc., American Finance Operating Partnership, L.P., BMO Capital Markets Corp., BBVA Securities Inc., B. Riley FBR, Inc., Citizens Capital Markets, Inc., KeyBanc Capital Markets Inc., Ladenburg Thalmann & Co. Inc., SunTrust Robinson Humphrey, Inc. and D.A. Davidson & Co. (Series A Preferred Stock) | | | Amendment No. 2, dated as of October 4, 2019, to Equity Distribution Agreement, dated May 8, 2019, among American Finance Trust, Inc., American Finance Operating Partnership, L.P., BMO Capital Markets Corp., BBVA Securities Inc., B. Riley FBR, Inc., Citizens Capital Markets, Inc., KeyBanc Capital Markets Inc., Ladenburg Thalmann & Co. Inc., SunTrust Robinson Humphrey, Inc. and D.A. Davidson & Co. (Series A Preferred Stock) | | | Amendment No. 3, dated as of January 13, 2021, to Equity Distribution Agreement, dated May 8, 2019, among American Finance Trust, Inc., American Finance Operating Partnership, L.P., and BMO Capital Markets Corp., BBVA Securities Inc., B. Riley Securities, Inc., Citizens Capital Markets, Inc., KeyBanc Capital Markets Inc., Ladenburg Thalmann & Co. Inc., Truist Securities, Inc. and D.A. Davidson & Co. (Series A Preferred Stock) | | | Amendment No. 4, dated as of August 6, 2021, to Equity Distribution Agreement, dated May 8, 2019, among American Finance Trust, Inc., American Finance Operating Partnership, L.P., and BMO Capital Markets Corp., BBVA Securities Inc., B. Riley Securities, Inc., Citizens Capital Markets, Inc., KeyBanc Capital Markets Inc., Ladenburg Thalmann & Co. Inc., Truist Securities, Inc. and D.A. Davidson & Co. (Series A Preferred Stock) | | | Third Amended and Restated Advisory Agreement, dated as of September 6, 2016, by and among American Finance Trust, Inc., American Finance Operating Partnership, L.P. and American Finance Advisors, LLC | | | Amendment No. 1 to the Third Amended and Restated Advisory Agreement, dated July 19, 2018, among American Finance Trust, Inc., American Finance Operating Partnership, L.P. and American Finance Advisors, LLC | | | Amendment No. 2, dated as of March 18, 2019, to the Third Amended and Restated Advisory Agreement, by and among American Finance Trust, Inc., American Finance Operating Partnership, L.P. and American Finance Advisors, LLC | | | Amendment No. 3, dated as of March 30, 2020, to the Third Amended and Restated Advisory Agreement, by and among American Finance Trust, Inc., American Finance Operating Partnership, L.P. and American Finance Advisors, LLC | | | Amendment No. 4, dated as of January 13, 2021, to the Third Amended and Restated Advisory Agreement, by and among American Finance Trust, Inc., American Finance Operating Partnership, L.P. and American Finance Advisors, LLC | | | Amended and Restated Property Management Agreement, dated as of September 6, 2016, by and among American Finance Trust, Inc. and American Finance Properties, LLC (as assignee of American Realty Capital Retail Advisor, LLC) | | | First Amendment to Amended and Restated Property Management Agreement, dated as of December 8, 2017, by and among American Finance Trust, Inc. and American Finance Properties, LLC and certain subsidiaries of American Finance Operating Partnership, LP |
| | | | | | | | | Exhibit No. | | Description | | | Second Amendment, dated as of November 4, 2020, to Amended and Restated Property Management Agreement, by and among American Finance Trust, Inc., American Finance Properties, LLC and certain subsidiaries of American Finance Operating Partnership, L.P. | | | Form of Property Management Agreement by and between American Finance Properties, LLC and certain subsidiaries of American Finance Operating Partnership, LP | | | Amended and Restated Leasing Agreement, dated as of September 6, 2016, by and among American Finance Trust, Inc. and American Finance Properties, LLC (as assignee of American Realty Capital Retail Advisor, LLC) | | | First Amendment, dated as of November 4, 2020, to Amended and Restated Leasing Agreement, by and between American Finance Trust, Inc. and American Finance Properties, LLC | | | Amended and Restated Property Management and Leasing Agreement, dated as of September 6, 2016, by and among American Finance Trust, Inc., American Finance Trust Operating Partnership, L.P. and American Finance Properties, LLC | | | First Amendment, dated as of August 27, 2020, to Amended and Restated Property Management and Leasing Agreement, by and among American Finance Trust, Inc., American Finance Trust Operating Partnership L.P. and American Finance Properties, LLC | | | Property Management and Leasing Agreement, dated as of December 18, 2019, by and among American Finance Properties, LLC, ARC HR5SSRI001, LLC, ARC HR5SSMA003, LLC, ARC HR5SSMA001, LLC and ARC HR5SSMA002, LLC | | | Property Management and Leasing Agreement, dated as of July 24, 2020, by and among the parties identified on Exhibit A thereto and American Finance Properties, LLC |
| | | | | | | | | Exhibit No. | | Description | | | Amended and Restated Property Management and Servicing Agreement, dated as of May 30, 2019,June 3, 2021, by and among AFN ABSPROP001, LLC, AFN ABSPROP001-A, LLC, AFN ABSPROP001-B, LLC, AFN ABSPROP002, LLC, AFN ABSPROP002-A, LLC, AFN ABSPROP002-B, LLC, AFN ABSPROP002-C, LLC, American Finance Properties, LLC, as property manager and special servicer, KeyBank National Association, as back-up manager, and Citibank N.A., as indenture trustee | | | Amendment, dated as of February 3, 2020, to the Property ManagementAmended and Servicing Agreement, by and among AFN ABSPROP001, LLC, AFN ABSPROP001-A, LLC, AFN ABSPROP001-B, LLC, American Finance Properties, LLC, as property manager and special servicer, KeyBank National Association, as back-up manager, and Citibank N.A., as indenture trustee | | | Restated Guaranty, dated as of May 30, 2019,June 3, 2021, by American Finance Operating Partnership, L.P. for the benefit of Citibank N.A., as indenture trustee | | | Form of Restricted Share Award Agreement (Directors - Pre-Listing) | | | Indemnification Agreement by and among American Finance Trust, Inc., Peter M. Budko, Robert H. Burns, David Gong, William M. Kahane, Stanley R. Perla, Nicholas Radesca, Nicholas S. Schorsch, Edward M. Weil, Jr., American Realty Capital Advisors V, LLC, AR Capital, LLC and RCS Capital Corporation, dated December 31, 2014 | | | Amended and Restated Credit Agreement, dated as of April 26, 2018,October 1, 2021, by and among American Finance Operating Partnership, L.P., American Finance Trust, Inc. and the other guarantors party thereto, the lenders from time to time party thereto, Citizens Bank N.A. and SunTrust Robinson Humphrey, Inc., as syndication agents, and BMO Harris Bank N.A., as administrative agent, | | | First Amendment to Credit Agreement, dated as of September 24, 2018, among American Finance Operating Partnership, L.P., Genie Acquisition, LLC, American Finance Trust, Inc., and the lenders partyother lender parties thereto and BMO Harris Bank N.A. | | | Second Amendment, dated as of November 4, 2019, to Credit Agreement, dated as of April 26, 2018, by and among American Finance Operating Partnership, L.P., the guarantors party thereto, the lenders party thereto, and BMO Harris Bank N.A., as administrative agent | | | Loan Agreement dated as of December 8, 2017 among Societe Generale and UBS AG as Lenders and certain subsidiaries of American Finance Operating Partnership, LP, as Borrowers | | | Guaranty of Recourse Obligations dated as of December 8, 2017 by American Finance Trust, Inc. in favor of Societe Generale and UBS AG | | | Form of Restricted Share Award Agreement (Directors - Post-Listing) | | | Advisor Multi-Year Outperformance Award Agreement, dated as of July 19, 2018, between American Finance Operating Partnership, L.P. and America Finance Advisors, LLC | | | First Amendment, dated as of March 6, 2019, to 2018 Advisor Multi-Year Outperformance Award Agreement, dated as of July 19, 2018, between American Finance Operating Partnership, L.P. and America Finance Advisors, LLC
| | | Advisor Multi-Year Outperformance Award Agreement, dated as of July 21, 2021, by and among American Finance Trust, Inc., American Finance Operating Partnership, L.P. and American Finance Advisors, LLC | | | 2018 Advisor Omnibus Incentive Compensation Plan | | | 2018 Omnibus Incentive Compensation Plan | | | Form of Indemnification Agreement (Post-Listing) | | | Loan Agreement, dated as of July 24, 2020, by and among the entities listed on Schedule I thereto, as borrowers, and Column Financial, Inc., as lender | | | Limited Recourse Guaranty, dated as of July 24, 2020, by American Finance Operating Partnership, L.P. in favor of Column Financial, Inc. | | | Environmental Indemnity Agreement, dated as of July 24, 2020, by and among the entities listed on Schedule I thereto, American Finance Operating Partnership, L.P. and Column Financial, Inc. | | | Third Amendment to Credit Agreement and Consent, entered into as of July 24, 2020 and effective as of April 1, 2020, among American Finance Operating Partnership, L.P., a Delaware limited partnership, Genie Acquisition, LLC, American Finance Trust, Inc., the other guarantors party thereto, the lenders party hereto, and BMO Harris Bank N.A., as administrative agent | | | Form of Restricted Share Award Agreement (Officers) |
| | | | | | | | | Exhibit No. | | Description | | | Equity Distribution Agreement, dated January 13, 2021, by and among American Finance Trust, Inc., American Finance Operating Partnership, L.P. and BMO Capital Markets Corp., BBVA Securities Inc., B. Riley Securities, Inc., Citizens Capital Markets, Inc., D.A. Davidson & Co., KeyBanc Capital Markets Inc., Ladenburg Thalmann & Co. Inc. and Truist Securities, Inc. (Series C Preferred Stock) | | | Amendment No. 1, dated as of August 6, 2021, to Equity Distribution Agreement, dated January 13, 2021, by and among American Finance Trust, Inc., American Finance Operating Partnership, L.P. and BMO Capital Markets Corp., BBVA Securities Inc., B. Riley Securities, Inc., Citizens Capital Markets, Inc., D.A. Davidson & Co., KeyBanc Capital Markets Inc., Ladenburg Thalmann & Co. Inc. and Truist Securities, Inc. (Series C Preferred Stock) | | | Agreement of Purchase and Sale, dated as of December 17, 2021, by and between the Sellers identified therein and American Finance Operating Partnership | | | First Amendment to Agreement of Purchase and Sale, dated January 3, 2022, by and between the Sellers identified therein and American Finance Operating Partnership | | | Second Amendment to Agreement of Purchase and Sale, dated January 10, 2022, by and between the Sellers identified therein and American Finance Operating Partnership | | | Third Amendment to Agreement of Purchase and Sale, dated January 14, 2022, by and between the Sellers identified therein and American Finance Operating Partnership | | | Fourth Amendment to Agreement of Purchase and Sale, dated January 19, 2022, by and between the Sellers identified therein and American Finance Operating Partnership | | | Fifth Amendment to Agreement of Purchase and Sale, dated January 21, 2022, by and between the Sellers identified therein and American Finance Operating Partnership | | | Leasing Earnout Side Letter from KPMG LLPAgreement, dated February 9, 2022, by and between the Sellers identified therein and American Finance Operating Partnership | | | Sixth Amendment to Agreement of Purchase and Sale, dated February 10, 2022, by and between the SecuritiesSellers identified therein and Exchange CommissionAmerican Finance Operating Partnership | | | Seventh Amendment to Agreement of Purchase and Sale, dated March 18, 2019February 11, 2022, by and between the Sellers identified therein and American Finance Operating Partnership | | | List of Subsidiaries | | | Consent of PricewaterhouseCoopers LLP | | | Consent of KPMG LLP |
| | | | | | | | | Exhibit No. | | Description | | | Certification of the Principal Executive Officer of American Finance Trust, Inc. pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.2002 | | | Certification of the Principal Financial Officer of American Finance Trust, Inc. pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.2002 | | | Written statements of the Principal Executive Officer and Principal Financial Officer of American Finance Trust, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.2002 | 101.INS * | | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | 101.SCH * | | Inline XBRL Taxonomy Extension Schema Document.Document | 101.CAL * | | Inline XBRL Taxonomy Extension Calculation Linkbase Document.Document | 101.DEF * | | Inline XBRL Taxonomy Extension Definition Linkbase Document.Document | 101.LAB * | | Inline XBRL Taxonomy Extension Label Linkbase Document.Document | 101.PRE * | | Inline XBRL Taxonomy Extension Presentation Linkbase Document.Document | 104 * | | Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.document |
____________________ * Filed herewith. (1)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on July 19, 2018. (2)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on April 13, 2020. (3)Filed as an exhibit to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 filed with the SEC on November 6, 2018. (4)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on March 25, 2019. (5)Filed as an exhibit to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 filed with the SEC on May 8, 2019. (6)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on September 6, 2019. (7)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on October 4, 2019. (8)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on December 16, 2020. (9)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on January 13, 2021. (10)Filed as an exhibit to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 filed with the SEC on August 8, 2019.
(11)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on May 31, 2019. (12)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on June 25, 2019. (13)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on September 7, 2016. (14)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on March 18, 2019. (15)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on March 30, 2020. (16)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on January 13, 2021. (17)Filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on March 19, 2018. (18)Filed as an exhibit to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 filed with the SEC on November 5, 2020. (19)Filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on February 27, 2020. (20)Filed as an exhibit to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 filed with the SEC on August 11, 2016. (21)Filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2014 filed with the SEC on May 15, 2015. (22)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on May 2, 2018. (23)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on November 7, 2019. (24)Filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on March 7, 2019. (25)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on July 28, 2020. (26)Filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on February 25, 2021. (27)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on June 4, 2021. (28)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on July 21, 2021. (29)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on August 6, 2021. (30)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on October 4, 2021. (31)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on October 8, 2021. (32)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on December 20, 2021. (33)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on February 14, 2022. Item 16. Form 10-K Summary. Not applicable.
SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized this 25th24th day of February, 2021.2022. | | | | | | | | | | AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC. | | By: | /s/ EDWARD M. WEIL, JR. | | | EDWARD M. WEIL, JR. | | | CHIEF EXECUTIVE OFFICER, PRESIDENT AND CHAIRMAN OF THE BOARD OF DIRECTORS |
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. | | | | | | | | | | | | | | | Name | | Capacity | | Date | | | | | | /s/ Edward M. Weil, Jr. | | Chief Executive Officer, President and Chairman of the Board of Directors (Principal Executive Officer) | | February 25, 202124, 2022 | Edward M. Weil, Jr. | | | | | | | | | /s/ Katie P. KurtzJason F. Doyle | | Chief Financial Officer, Treasurer and Secretary (Principal Financial Officer and Principal Accounting Officer) | | February 25, 202124, 2022 | Katie P. KurtzJason F. Doyle | | | | | | | | | /s/ Lisa D. Kabnick | | Lead Independent Director | | February 25, 202124, 2022 | Lisa D. Kabnick | | | | | | | | | /s/ Stanley Perla | | Independent Director | | February 25, 202124, 2022 | Stanley Perla | | | | | | | | | | /s/ Leslie D. Michelson | | Independent Director | | February 25, 202124, 2022 | Leslie D. Michelson | | | | | | | | | /s/ Edward G. Rendell | | Independent Director | | February 25, 202124, 2022 | Edward G. Rendell | | | |
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS | | | | | | | Page | | | | | | | | | | | | | | | | | | | | | | | | | Financial Statement Schedules: | | Schedule III — Real Estate and Accumulated Depreciation — Part I | | | | | |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMReport of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of American Finance Trust,The Necessity Retail REIT, Inc.:
Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of American Finance Trust,The Necessity Retail REIT, Inc. and its subsidiaries (the “Company”) as of December 31, 20202021 and 20192020, and the related consolidated statements of operations and comprehensive loss, of statements of changes in equity and of statements of cash flows for each of the twothree years in the period ended December 31, 2020,2021, including the related notes and financial statement schedule listed in the accompanying index for each of the two years in the period ended December 31, 2020 (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2020,2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 20202021 and 2019,2020, and the results of its operations and its cash flows for each of the twothree years in the period ended December 31, 20202021 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020,2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Reporting on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMReport of Independent Registered Public Accounting Firm
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Purchase Price Allocations for Property Acquisitions As described in Notes 2 and 3 to the consolidated financial statements, the Company completed real estate acquisitions with consideration paid for acquired real estate investments, net of liabilities assumed of $220.4$182.2 million for the year ended December 31, 2020.2021. For acquired properties with leases classified as operating leases, management allocated the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values. Tangible assets include land, land improvements, buildings, fixtures and tenant improvements on an as-if vacant basis. Management utilizes various estimates, processes and information to determine the as-if vacant property value. Management estimates fair value using data from appraisals, comparable sales, discounted cash flow analysis and other methods. Fair value estimates are also made using significant assumptions such as capitalization rates, fair market lease rates, discount rates and land values per square foot. Identifiable intangible assets include amounts allocated to acquired leases for above- and below-market lease rates and the value of in-place leases. Above-market and below-market lease values for acquired properties are initially recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining initial term of the lease for above-market leases and the remaining initial term plus the term of any below-market fixed rate renewal options for below-market leases. The principal considerations for our determination that performing procedures relating to purchase price allocations for property acquisitions is a critical audit matter are (i) the significant judgment by management when developing the fair value estimates of tangible and intangible assets acquired and liabilities assumed; (ii) a high degree of auditor judgment and subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to capitalization rates, fair market lease rates, discount rates and land values per square foot; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to purchase price allocations for property acquisitions, including controls over management’s valuation of tangible and intangible assets acquired and liabilities assumed and controls over development of the assumptions used in the valuation of tangible and intangible assets acquired and liabilities assumed, related to capitalization rates, fair market lease rates, discount rates and land values per square foot. These procedures also included, among others, (i) reading the purchase agreements and lease documents; (ii) testing the completeness and accuracy of underlying data used by management in the fair value estimates; and (iii) testing management’s process for estimating the fair value of tangible and intangible assets acquired and liabilities assumed, including testing management’s projected cash flows and evaluating the accuracy of valuation outputs. Testing management’s process included evaluating the appropriateness of the valuation methods and reasonableness of the significant assumptions, related to capitalization rates, fair market lease rates, discount rates and land values per square foot. Evaluating the reasonableness of the significant assumptions included considering whether these assumptions were consistent with external market data, comparable transactions, and evidence obtained in other areas of the audit. In conjunction with certain purchase price allocations, professionals with specialized skill and knowledge were used to assist in evaluating the reasonableness of certain assumptions utilized by management, related to capitalization rates, fair market lease rates, discount rates and land values per square foot. /s/ PricewaterhouseCoopers LLP New York, New York February 25, 202124, 2022
We have served as the Company’s auditor since 2019.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and Board of Directors
American Finance Trust, Inc.:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated statements of operations and comprehensive loss, changes in equity, and cash flows of American Finance Trust, Inc. and subsidiaries for the year ended December 31, 2018, and the related notes and financial statement schedule titled Schedule III – Real Estate and Accumulated Depreciation – Part II, for the year ended December 31, 2018 (collectively, the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the results of the Company’s operations and its cash flows for the year ended December 31, 2018, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ KPMG LLP
We served as the Company’s auditor from 2015 to 2019.
New York, New York
March 7, 2019
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) | | | December 31, | | December 31, | | | 2020 | | 2019 | | 2021 | | 2020 | ASSETS | ASSETS | | | | ASSETS | | | | Real estate investments, at cost: | Real estate investments, at cost: | | Real estate investments, at cost: | | Land | Land | $ | 723,316 | | | $ | 685,889 | | Land | $ | 729,048 | | | $ | 723,316 | | Buildings, fixtures and improvements | Buildings, fixtures and improvements | 2,830,508 | | | 2,681,485 | | Buildings, fixtures and improvements | 2,729,719 | | | 2,830,508 | | Acquired intangible lease assets | Acquired intangible lease assets | 454,245 | | | 448,175 | | Acquired intangible lease assets | 402,673 | | | 454,245 | | Total real estate investments, at cost | Total real estate investments, at cost | 4,008,069 | | | 3,815,549 | | Total real estate investments, at cost | 3,861,440 | | | 4,008,069 | | Less: accumulated depreciation and amortization | Less: accumulated depreciation and amortization | (639,367) | | | (529,052) | | Less: accumulated depreciation and amortization | (654,667) | | | (639,367) | | Total real estate investments, net | Total real estate investments, net | 3,368,702 | | | 3,286,497 | | Total real estate investments, net | 3,206,773 | | | 3,368,702 | | Cash and cash equivalents | Cash and cash equivalents | 102,860 | | | 81,898 | | Cash and cash equivalents | 214,853 | | | 102,860 | | Restricted cash | Restricted cash | 10,537 | | | 17,942 | | Restricted cash | 21,996 | | | 10,537 | | Deposits for real estate investments | Deposits for real estate investments | 137 | | | 85 | | Deposits for real estate investments | 41,928 | | | 137 | | | Deferred costs, net | Deferred costs, net | 16,663 | | | 17,467 | | Deferred costs, net | 25,587 | | | 16,663 | | Straight-line rent receivable | Straight-line rent receivable | 66,581 | | | 46,976 | | Straight-line rent receivable | 70,789 | | | 66,581 | | Operating lease right-of-use assets | Operating lease right-of-use assets | 18,546 | | | 18,959 | | Operating lease right-of-use assets | 18,194 | | | 18,546 | | Prepaid expenses and other assets (including $1,939 and $503 due from related parties as of December 31, 2020 and 2019, respectively) | 23,941 | | | 19,188 | | | Prepaid expenses and other assets (including $0 and $1,939 due from related parties as of December 31, 2021 and 2020, respectively) | | Prepaid expenses and other assets (including $0 and $1,939 due from related parties as of December 31, 2021 and 2020, respectively) | 26,877 | | | 23,941 | | Assets held for sale | Assets held for sale | 0 | | | 1,176 | | Assets held for sale | 187,213 | | | — | | Total assets | Total assets | $ | 3,607,967 | | | $ | 3,490,188 | | Total assets | $ | 3,814,210 | | | $ | 3,607,967 | | | LIABILITIES AND EQUITY | LIABILITIES AND EQUITY | | | | LIABILITIES AND EQUITY | | | | Mortgage notes payable, net | Mortgage notes payable, net | $ | 1,490,798 | | | $ | 1,310,943 | | Mortgage notes payable, net | $ | 1,464,930 | | | $ | 1,490,798 | | Credit facility | Credit facility | 280,857 | | | 333,147 | | Credit facility | — | | | 280,857 | | Senior notes, net | | Senior notes, net | 491,015 | | | — | | Below-market lease liabilities, net | Below-market lease liabilities, net | 78,674 | | | 84,041 | | Below-market lease liabilities, net | 78,073 | | | 78,674 | | Accounts payable and accrued expenses (including $273 and $1,153 due to related parties as of December 31, 2020 and 2019, respectively) | 25,210 | | | 26,817 | | | Accounts payable and accrued expenses (including $1,016 and $273 due to related parties as of December 31, 2021 and 2020, respectively) | | Accounts payable and accrued expenses (including $1,016 and $273 due to related parties as of December 31, 2021 and 2020, respectively) | 32,907 | | | 25,210 | | Operating lease liabilities | Operating lease liabilities | 19,237 | | | 19,318 | | Operating lease liabilities | 19,195 | | | 19,237 | | Derivative liabilities, at fair value | Derivative liabilities, at fair value | 123 | | | 0 | | Derivative liabilities, at fair value | 2,250 | | | 123 | | Deferred rent and other liabilities | Deferred rent and other liabilities | 9,794 | | | 10,392 | | Deferred rent and other liabilities | 9,524 | | | 9,794 | | Dividends payable | Dividends payable | 3,675 | | | 3,300 | | Dividends payable | 6,038 | | | 3,675 | | Total liabilities | Total liabilities | 1,908,368 | | | 1,787,958 | | Total liabilities | 2,103,932 | | | 1,908,368 | | | 7.50% Series A cumulative redeemable perpetual preferred stock, $0.01 par value, liquidation preference $25.00 per share, 8,796,000 shares authorized, 7,842,008 and 6,917,230 issued and outstanding as of December 31, 2020 and 2019, respectively | 79 | | | 69 | | | 7.375% Series C cumulative redeemable perpetual preferred stock, $0.01 par value, liquidation preference $25.00 per share, 3,680,000 shares authorized and 3,535,700 issued and outstanding as of December 31, 2020 and NaN authorized, issued, or outstanding as of December 31, 2019 | 35 | | | 0 | | | Common stock, $0.01 par value per share, 300,000,000 shares authorized, 108,837,209 and 108,475,266 shares issued and outstanding as of December 31, 2020 and 2019, respectively | 1,088 | | | 1,085 | | | 7.50% Series A cumulative redeemable perpetual preferred stock, $0.01 par value, liquidation preference $25.00 per share, 12,796,000 and 8,796,000 shares authorized, 7,933,711 and 7,842,008 issued and outstanding as of December 31, 2021 and 2020, respectively | | 7.50% Series A cumulative redeemable perpetual preferred stock, $0.01 par value, liquidation preference $25.00 per share, 12,796,000 and 8,796,000 shares authorized, 7,933,711 and 7,842,008 issued and outstanding as of December 31, 2021 and 2020, respectively | 79 | | | 79 | | 7.375% Series C cumulative redeemable perpetual preferred stock, $0.01 par value, liquidation preference $25.00 per share, 11,536,000 and 3,680,000 shares authorized, 4,594,498 and 3,535,700 issued and outstanding as of December 31, 2021 and 2020, respectively | | 7.375% Series C cumulative redeemable perpetual preferred stock, $0.01 par value, liquidation preference $25.00 per share, 11,536,000 and 3,680,000 shares authorized, 4,594,498 and 3,535,700 issued and outstanding as of December 31, 2021 and 2020, respectively | 46 | | | 35 | | Common stock, $0.01 par value per share, 300,000,000 shares authorized, 123,783,060 and 108,837,209 shares issued and outstanding as of December 31, 2021 and 2020, respectively | | Common stock, $0.01 par value per share, 300,000,000 shares authorized, 123,783,060 and 108,837,209 shares issued and outstanding as of December 31, 2021 and 2020, respectively | 1,238 | | | 1,088 | | Additional paid-in capital | Additional paid-in capital | 2,723,678 | | | 2,615,089 | | Additional paid-in capital | 2,915,926 | | | 2,723,678 | | Accumulated other comprehensive loss | Accumulated other comprehensive loss | (123) | | | 0 | | Accumulated other comprehensive loss | — | | | (123) | | Distributions in excess of accumulated earnings | Distributions in excess of accumulated earnings | (1,055,680) | | | (932,912) | | Distributions in excess of accumulated earnings | (1,217,435) | | | (1,055,680) | | Total stockholders’ equity | Total stockholders’ equity | 1,669,077 | | | 1,683,331 | | Total stockholders’ equity | 1,699,854 | | | 1,669,077 | | Non-controlling interests | Non-controlling interests | 30,522 | | | 18,899 | | Non-controlling interests | 10,424 | | | 30,522 | | Total equity | Total equity | 1,699,599 | | | 1,702,230 | | Total equity | 1,710,278 | | | 1,699,599 | | Total liabilities and equity | Total liabilities and equity | $ | 3,607,967 | | | $ | 3,490,188 | | Total liabilities and equity | $ | 3,814,210 | | | $ | 3,607,967 | |
The accompanying notes are an integral part of these consolidated financial statements.
THE NECESSITY RETAIL REIT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (In thousands, except share and per share data) | | | | | | | | | | | | | | | | | | | Year Ended December 31, | | 2021 | | 2020 | | 2019 | Revenue from tenants | $ | 335,156 | | | $ | 305,224 | | | $ | 299,744 | | | | | | | | Operating expenses: | | | | | | Asset management fees to related party | 32,804 | | | 27,829 | | | 25,695 | | Property operating expense | 55,431 | | | 52,296 | | | 52,715 | | Impairment of real estate investments | 33,261 | | | 12,910 | | | 827 | | Acquisition, transaction and other costs | 4,378 | | | 2,921 | | | 6,257 | | Equity-based compensation | 17,264 | | | 13,036 | | | 12,717 | | General and administrative | 20,856 | | | 19,683 | | | 20,375 | | Depreciation and amortization | 130,464 | | | 137,459 | | | 124,713 | | Goodwill impairment | — | | | — | | | 1,605 | | Total operating expenses | 294,458 | | | 266,134 | | | 244,904 | | Operating income before gain on sale of real estate investments | 40,698 | | | 39,090 | | | 54,840 | | Gain on sale/exchange of real estate investments | 4,757 | | | 6,456 | | | 23,690 | | Operating income | 45,455 | | | 45,546 | | | 78,530 | | Other (expense) income: | | | | | | Interest expense | (81,784) | | | (78,467) | | | (77,994) | | Other income | 91 | | | 1,024 | | | 3,627 | | Loss on non-designated derivatives | (3,950) | | | (9) | | | — | | Total other expense, net | (85,643) | | | (77,452) | | | (74,367) | | Net (loss) income | (40,188) | | | (31,906) | | | 4,163 | | Net loss (income) attributable to non-controlling interests | 9 | | | 44 | | | (16) | | Allocation for preferred stock | (23,262) | | | (14,788) | | | (7,248) | | Net loss attributable to common stockholders | (63,441) | | | (46,650) | | | (3,101) | | | | | | | | Other comprehensive (loss) income: | | | | | | Change in unrealized gain (loss) on derivative | 123 | | | (123) | | | 531 | | Comprehensive loss attributable to common stockholders | $ | (63,318) | | | $ | (46,773) | | | $ | (2,570) | | | | | | | | Weighted-average shares outstanding — Basic and Diluted | 115,404,635 | | | 108,404,093 | | | 106,397,296 | | Net loss per share attributable to common stockholders — Basic and Diluted | $ | (0.56) | | | $ | (0.44) | | | $ | (0.04) | |
The accompanying notes are an integral part of these consolidated financial statements.
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except share and per share data)
| | | | | | | | | | | | | | | | | | | Year Ended December 31, | | 2020 | | 2019 | | 2018 | Revenue from tenants | $ | 305,224 | | | $ | 299,744 | | | $ | 291,207 | | | | | | | | Operating expenses: | | | | | | Asset management fees to related party | 27,829 | | | 25,695 | | | 23,143 | | Property operating expense | 52,296 | | | 52,715 | | | 54,068 | | Impairment of real estate investments | 12,910 | | | 827 | | | 21,080 | | Acquisition, transaction and other costs | 2,921 | | | 6,257 | | | 7,557 | | Listing fees | 0 | | | 0 | | | 4,988 | | Vesting and conversion of Class B Units | 0 | | | 0 | | | 15,786 | | Equity-based compensation | 13,036 | | | 12,717 | | | 5,266 | | General and administrative | 19,683 | | | 20,375 | | | 22,733 | | Depreciation and amortization | 137,459 | | | 124,713 | | | 139,907 | | Goodwill impairment | 0 | | | 1,605 | | | 0 | | Total operating expenses | 266,134 | | | 244,904 | | | 294,528 | | Operating income (loss) before gain on sale of real estate investments | 39,090 | | | 54,840 | | | (3,321) | | Gain on sale/exchange of real estate investments | 6,456 | | | 23,690 | | | 31,776 | | Operating income | 45,546 | | | 78,530 | | | 28,455 | | Other (expense) income: | | | | | | Interest expense | (78,467) | | | (77,994) | | | (66,789) | | Other income | 1,024 | | | 3,627 | | | 863 | | Loss on non-designated derivatives | (9) | | | 0 | | | 0 | | Total other expense, net | (77,452) | | | (74,367) | | | (65,926) | | Net (loss) income | (31,906) | | | 4,163 | | | (37,471) | | Net loss (income) attributable to non-controlling interests | 44 | | | (16) | | | 62 | | Allocation for preferred stock | (14,788) | | | (7,248) | | | 0 | | Net loss attributable to common stockholders | (46,650) | | | (3,101) | | | (37,409) | | | | | | | | Other comprehensive (loss) income: | | | | | | Change in unrealized (loss) gain on derivative | (123) | | | 531 | | | (626) | | Comprehensive loss attributable to common stockholders | $ | (46,773) | | | $ | (2,570) | | | $ | (38,035) | | | | | | | | Weighted-average shares outstanding — Basic and Diluted | 108,404,093 | | | 106,397,296 | | | 105,560,053 | | Net loss per share attributable to common stockholders — Basic and Diluted | $ | (0.43) | | | $ | (0.03) | | | $ | (0.35) | |
The accompanying notes are an integral part of these consolidated financial statements.
AMERICAN FINANCE TRUST, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In thousands, except share data) | | | Series A Preferred Stock | | Series C Preferred Stock | | Common Stock | | | Series A Preferred Stock | | Series C Preferred Stock | | Common Stock | | | | Number of Shares | | Par Value | | Number of Shares | | Par Value | | Number of Shares | | Par Value | | Additional Paid-in Capital | | Accumulated Other Comprehensive Income (Loss) | | Accumulated Deficit | | Total Stockholders’ Equity | | Non-controlling Interests | | Total Equity | | Number of Shares | | Par Value | | Number of Shares | | Par Value | | Number of Shares | | Par Value | | Additional Paid-in Capital | | Accumulated Other Comprehensive Income (Loss) | | Accumulated Deficit | | Total Stockholders’ Equity | | Non-controlling Interests | | Total Equity | Balance, December 31, 2017 | 0 | | | $ | 0 | | | 0 | | | $ | 0 | | | 105,172,185 | | | $ | 1,052 | | | $ | 2,393,237 | | | $ | 95 | | | $ | (657,874) | | | $ | 1,736,510 | | | $ | 4,546 | | | $ | 1,741,056 | | | Common stock issued through distribution reinvestment plan | — | | | — | | | — | | | — | | | 990,393 | | | 10 | | | 23,238 | | | — | | | — | | | 23,248 | | | — | | | 23,248 | | | Common stock repurchases | — | | | — | | | — | | | — | | | (1,142,190) | | | (11) | | | (20,520) | | | — | | | — | | | (20,531) | | | — | | | (20,531) | | | Vesting and conversion of Class B Units | — | | | — | | | — | | | — | | | 1,052,420 | | | 11 | | | 15,775 | | | — | | | — | | | 15,786 | | | — | | | 15,786 | | | Redemption of Class A Units | — | | | — | | | — | | | — | | | 30,691 | | | — | | | 736 | | | — | | | 736 | | | (736) | | | 0 | | | Share-based compensation | — | | | — | | | — | | | — | | | 127,402 | | | 1 | | | 449 | | | — | | | — | | | 450 | | | 4,816 | | | 5,266 | | | Distributions declared on Common Stock, $1.10 per share | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (116,539) | | | (116,539) | | | — | | | (116,539) | | | Distributions to non-controlling interest holders | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (225) | | | (225) | | | (229) | | | (454) | | | Net loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (37,409) | | | (37,409) | | | (62) | | | (37,471) | | | Other comprehensive income | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (626) | | | — | | | (626) | | | — | | | (626) | | | Balance, December 31, 2018 | Balance, December 31, 2018 | 0 | | | 0 | | | 0 | | | 0 | | | 106,230,901 | | | 1,063 | | | 2,412,915 | | | (531) | | | (812,047) | | | 1,601,400 | | | 8,335 | | | 1,609,735 | | Balance, December 31, 2018 | — | | | $ | — | | | — | | | $ | — | | | 106,230,901 | | | $ | 1,063 | | | $ | 2,412,915 | | | $ | (531) | | | $ | (812,047) | | | $ | 1,601,400 | | | $ | 8,335 | | | $ | 1,609,735 | | Impact of adoption of new accounting pronouncement for leases (Note 2) | Impact of adoption of new accounting pronouncement for leases (Note 2) | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (170) | | | (170) | | | — | | | (170) | | Impact of adoption of new accounting pronouncement for leases (Note 2) | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (170) | | | (170) | | | — | | | (170) | | Issuance of Common Stock, net | Issuance of Common Stock, net | — | | | — | | | — | | | — | | | 2,229,647 | | | 22 | | | 31,579 | | | — | | | — | | | 31,601 | | | — | | | 31,601 | | Issuance of Common Stock, net | — | | | — | | | — | | | — | | | 2,229,647 | | | 22 | | | 31,579 | | | — | | | — | | | 31,601 | | | — | | | 31,601 | | Issuance of Series A Preferred Stock, net | Issuance of Series A Preferred Stock, net | 6,917,230 | | | 69 | | | — | | | — | | | — | | | — | | | 168,860 | | | — | | | — | | | 168,929 | | | — | | | 168,929 | | Issuance of Series A Preferred Stock, net | 6,917,230 | | | 69 | | | — | | | — | | | — | | | — | | | 168,860 | | | — | | | — | | | 168,929 | | | — | | | 168,929 | | Common stock repurchases | Common stock repurchases | — | | | — | | | — | | | — | | | (19,870) | | | (1) | | | (273) | | | — | | | — | | | (274) | | | — | | | (274) | | Common stock repurchases | — | | | — | | | — | | | — | | | (19,870) | | | (1) | | | (273) | | | — | | | — | | | (274) | | | — | | | (274) | | Share-based compensation, net of forfeitures | — | | | — | | | — | | | — | | | 34,588 | | | 1 | | | 1,071 | | | — | | | — | | | 1,072 | | | 11,645 | | | 12,717 | | | Equity-based compensation, net of forfeitures | | Equity-based compensation, net of forfeitures | — | | | — | | | — | | | — | | | 34,588 | | | 1 | | | 1,071 | | | — | | | — | | | 1,072 | | | 11,645 | | | 12,717 | | Dividends declared on Common Stock, $1.10 per share | Dividends declared on Common Stock, $1.10 per share | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (117,100) | | | (117,100) | | | — | | | (117,100) | | Dividends declared on Common Stock, $1.10 per share | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (117,100) | | | (117,100) | | | — | | | (117,100) | | Dividends declared on Preferred Stock, $1.56 per share | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (7,248) | | | (7,248) | | | — | | | (7,248) | | | Dividends declared on Series A Preferred Stock, 1.56 per share | | Dividends declared on Series A Preferred Stock, 1.56 per share | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (7,248) | | | (7,248) | | | — | | | (7,248) | | Distributions to non-controlling interest holders | Distributions to non-controlling interest holders | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (494) | | | (494) | | | (160) | | | (654) | | Distributions to non-controlling interest holders | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (494) | | | (494) | | | (160) | | | (654) | | Net loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 4,147 | | | 4,147 | | | 16 | | | 4,163 | | | Net income | | Net income | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 4,147 | | | 4,147 | | | 16 | | | 4,163 | | Other comprehensive income | Other comprehensive income | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 531 | | | — | | | 531 | | | — | | | 531 | | Other comprehensive income | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 531 | | | — | | | 531 | | | — | | | 531 | | Rebalancing of ownership percentage | Rebalancing of ownership percentage | — | | | — | | | — | | | — | | | — | | | — | | | 937 | | | — | | | — | | | 937 | | | (937) | | | 0 | | Rebalancing of ownership percentage | — | | | — | | | — | | | — | | | — | | | — | | | 937 | | | — | | | — | | | 937 | | | (937) | | | — | | Balance, December 31, 2019 | Balance, December 31, 2019 | 6,917,230 | | | 69 | | | 0 | | | 0 | | | 108,475,266 | | | 1,085 | | | 2,615,089 | | | 0 | | | (932,912) | | | 1,683,331 | | | 18,899 | | | 1,702,230 | | Balance, December 31, 2019 | 6,917,230 | | | 69 | | | — | | | — | | | 108,475,266 | | | 1,085 | | | 2,615,089 | | | — | | | (932,912) | | | 1,683,331 | | | 18,899 | | | 1,702,230 | | Issuance of Common Stock, net | Issuance of Common Stock, net | — | | | — | | | — | | | — | | | — | | | — | | | (239) | | | — | | | — | | | (239) | | | — | | | (239) | | Issuance of Common Stock, net | — | | | — | | | — | | | — | | | — | | | — | | | (239) | | | — | | | — | | | (239) | | | — | | | (239) | | Issuance of Series A Preferred Stock, net | Issuance of Series A Preferred Stock, net | 924,778 | | | 10 | | | — | | | — | | | — | | | — | | | 22,423 | | | — | | | — | | | 22,433 | | | — | | | 22,433 | | Issuance of Series A Preferred Stock, net | 924,778 | | | 10 | | | — | | | — | | | — | | | — | | | 22,423 | | | — | | | — | | | 22,433 | | | — | | | 22,433 | | Issuance of Series C Preferred Stock, net | Issuance of Series C Preferred Stock, net | — | | | — | | | 3,535,700 | | | 35 | | | — | | | — | | | 85,161 | | | — | | | — | | | 85,196 | | | 85,196 | | Issuance of Series C Preferred Stock, net | — | | | — | | | 3,535,700 | | | 35 | | | — | | | — | | | 85,161 | | | — | | | — | | | 85,196 | | | — | | | 85,196 | | Equity-based compensation | — | | | — | | | — | | | — | | | 361,943 | | | 3 | | | 1,176 | | | — | | | — | | | 1,179 | | | 11,856 | | | 13,035 | | | Equity-based compensation, net of forfeitures | | Equity-based compensation, net of forfeitures | — | | | — | | | — | | | — | | | 361,943 | | | 3 | | | 1,176 | | | — | | | — | | | 1,179 | | | 11,856 | | | 13,035 | | Dividends declared on Common Stock, $0.70 per share | Dividends declared on Common Stock, $0.70 per share | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (75,952) | | | (75,952) | | | — | | | (75,952) | | Dividends declared on Common Stock, $0.70 per share | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (75,952) | | | (75,952) | | | — | | | (75,952) | | Dividends declared on Preferred Stock, $1.875 per share | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (14,543) | | | (14,543) | | | — | | | (14,543) | | | Dividends declared on Series A Preferred Stock, $1.875 per share | | Dividends declared on Series A Preferred Stock, $1.875 per share | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (14,543) | | | (14,543) | | | — | | | (14,543) | | Distributions to non-controlling interest holders | Distributions to non-controlling interest holders | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (411) | | | (411) | | | (121) | | | (532) | | Distributions to non-controlling interest holders | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (411) | | | (411) | | | (121) | | | (532) | | Net loss | Net loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (31,862) | | | (31,862) | | | (44) | | | (31,906) | | Net loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (31,862) | | | (31,862) | | | (44) | | | (31,906) | | Other comprehensive loss | Other comprehensive loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (123) | | | — | | | (123) | | | — | | | (123) | | Other comprehensive loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (123) | | | — | | | (123) | | | — | | | (123) | | Rebalancing of ownership percentage | Rebalancing of ownership percentage | — | | | — | | | — | | | — | | | — | | | — | | | 68 | | | — | | | — | | | 68 | | | (68) | | | 0 | | Rebalancing of ownership percentage | — | | | — | | | — | | | — | | | — | | | — | | | 68 | | | — | | | — | | | 68 | | | (68) | | | — | | Balance, December 31, 2020 | Balance, December 31, 2020 | 7,842,008 | | | $ | 79 | | | 3,535,700 | | | $ | 35 | | | 108,837,209 | | | $ | 1,088 | | | $ | 2,723,678 | | | $ | (123) | | | $ | (1,055,680) | | | $ | 1,669,077 | | | $ | 30,522 | | | $ | 1,699,599 | | Balance, December 31, 2020 | 7,842,008 | | | 79 | | | 3,535,700 | | | 35 | | | 108,837,209 | | | 1,088 | | | 2,723,678 | | | (123) | | | (1,055,680) | | | 1,669,077 | | | 30,522 | | | 1,699,599 | | Issuance of Common Stock, net | | Issuance of Common Stock, net | — | | | — | | | — | | | — | | | 14,734,448 | | | 148 | | | 128,264 | | | — | | | — | | | 128,412 | | | — | | | 128,412 | | Issuance of Series A Preferred Stock, net | | Issuance of Series A Preferred Stock, net | 91,703 | | | — | | | — | | | — | | | — | | | — | | | 2,029 | | | — | | | — | | | 2,029 | | | — | | | 2,029 | | Issuance of Series C Preferred Stock, net | | Issuance of Series C Preferred Stock, net | — | | | — | | | 1,058,798 | | | 11 | | | — | | | — | | | 25,475 | | | — | | | — | | | 25,486 | | | — | | | 25,486 | | Equity-based compensation, net of forfeitures (1) | | Equity-based compensation, net of forfeitures (1) | — | | | — | | | — | | | — | | | 288,424 | | | 3 | | | 2,384 | | | — | | | — | | | 2,387 | | | 14,877 | | | 17,264 | | Common stock shares withheld upon vesting of restricted stock | | Common stock shares withheld upon vesting of restricted stock | — | | | — | | | — | | | — | | | (77,021) | | | (1) | | | (723) | | | — | | | — | | | (724) | | | — | | | (724) | | Dividends declared on Common Stock, $0.84 per share | | Dividends declared on Common Stock, $0.84 per share | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (97,532) | | | (97,532) | | | — | | | (97,532) | | Dividends declared on Series A Preferred Stock, $1.875 per share | | Dividends declared on Series A Preferred Stock, $1.875 per share | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (14,891) | | | (14,891) | | | — | | | (14,891) | | Dividends declared on Series C Preferred Stock, $1.84 per share | | Dividends declared on Series C Preferred Stock, $1.84 per share | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (8,616) | | | (8,616) | | | — | | | (8,616) | | Distributions to non-controlling interest holders | | Distributions to non-controlling interest holders | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (537) | | | (537) | | | (147) | | | (684) | | Net loss | | Net loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (40,179) | | | (40,179) | | | (9) | | | (40,188) | | Other comprehensive income | | Other comprehensive income | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 123 | | | — | | | 123 | | | — | | | 123 | | Forfeiture of 2018 LTIP Units | | Forfeiture of 2018 LTIP Units | — | | | — | | | — | | | — | | | — | | | — | | | 34,826 | | | — | | | — | | | 34,826 | | | (34,826) | | | — | | Rebalancing of ownership percentage | | Rebalancing of ownership percentage | — | | | — | | | — | | | — | | | — | | | — | | | (7) | | | — | | | — | | | (7) | | | 7 | | | — | | Balance, December 31, 2021 | | Balance, December 31, 2021 | 7,933,711 | | | $ | 79 | | | 4,594,498 | | | $ | 46 | | | 123,783,060 | | | $ | 1,238 | | | $ | 2,915,926 | | | $ | — | | | $ | (1,217,435) | | | $ | 1,699,854 | | | $ | 10,424 | | | $ | 1,710,278 | |
The accompanying notes are an integral part of these consolidated financial statements.
(1) Presented net of forfeitures. 25,050 restricted shares with a fair value of approximately $175,000 were forfeited during the period.
THE NECESSITY RETAIL REIT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) | | | | | | | | | | | | | | | | | | | Year Ended December 31, | | 2021 | | 2020 | | 2019 | Cash flows from operating activities: | | | | | | Net (loss) income | $ | (40,188) | | | $ | (31,906) | | | $ | 4,163 | | Adjustments to reconcile net (loss) income to net cash provided by operating activities: | | | | | | Depreciation | 90,608 | | | 88,778 | | | 78,396 | | Amortization of in-place lease assets | 37,592 | | | 46,496 | | | 44,795 | | Amortization of deferred leasing costs | 2,265 | | | 2,184 | | | 1,522 | | Amortization (including accelerated write-off) of deferred financing costs | 12,733 | | | 8,212 | | | 7,598 | | Accretion of mortgage premiums and discounts on borrowings | (968) | | | (2,126) | | | (3,816) | | | | | | | | Amortization (accretion) of market lease and other intangibles, net | (4,625) | | | (6,149) | | | (7,372) | | Equity-based compensation | 17,264 | | | 13,036 | | | 12,717 | | | | | | | | | | | | | | Loss on non-designated derivatives | 3,950 | | | 9 | | | — | | Gain on sale/exchange of real estate investments | (4,757) | | | (6,456) | | | (23,690) | | Impairment of real estate investments and goodwill impairment | 33,261 | | | 12,910 | | | 2,432 | | Payments of prepayment costs on mortgages | 3,970 | | | 807 | | | 4,491 | | Changes in assets and liabilities: | | | | | | Straight-line rent receivable | (7,033) | | | (19,824) | | | (9,521) | | Straight-line rent payable | 258 | | | 314 | | | 1,196 | | Prepaid expenses and other assets | (4,648) | | | (9,139) | | | (3,208) | | Accounts payable and accrued expenses | 5,815 | | | (3,831) | | | (1,458) | | Deferred rent and other liabilities | (270) | | | (598) | | | (2,675) | | Net cash provided by operating activities | 145,227 | | | 92,717 | | | 105,570 | | Cash flows from investing activities: | | | | | | | | | | | | Capital expenditures | (13,407) | | | (9,198) | | | (13,652) | | Acquisitions of investments in real estate and other assets | (182,157) | | | (220,412) | | | (428,939) | | Proceeds from sale of real estate investments | 16,630 | | | 6,707 | | | 34,813 | | Deposits | (41,791) | | | (53) | | | 2,952 | | Net cash used in investing activities | (220,725) | | | (222,956) | | | (404,826) | | Cash flows from financing activities: | | | | | | Proceeds from mortgage notes payable | 239,928 | | | 874,000 | | | 286,930 | | Payments on mortgage notes payable | (263,808) | | | (663,236) | | | (69,144) | | Proceeds from issuance of senior notes | 500,000 | | | — | | | — | | Proceeds from credit facility | 30,500 | | | 205,000 | | | 233,000 | | Payments on credit facility | (311,357) | | | (257,291) | | | (224,553) | | Payments of financing costs | (28,173) | | | (30,917) | | | (10,778) | | Payments of prepayment costs on mortgages | (3,970) | | | (807) | | | (4,491) | | Class A common stock repurchases | (560) | | | — | | | (274) | | Distributions on LTIP Units and Class A Units | (501) | | | (532) | | | (694) | | Dividends paid on Class A common stock | (97,532) | | | (75,951) | | | (117,140) | | Dividends paid on Series A preferred stock | (14,848) | | | (14,167) | | | (3,948) | | Dividends paid on Series C preferred stock | (6,498) | | | — | | | — | | Proceeds from issuance of Class A common stock, net | 128,409 | | | (211) | | | 31,601 | | Proceeds from issuance of Series A preferred stock, net | 1,885 | | | 22,490 | | | 168,956 | | Proceeds from issuance of Series C preferred stock, net | 25,475 | | | 85,418 | | | — | | Net cash provided by financing activities | 198,950 | | | 143,796 | | | 289,465 | | Net change in cash, cash equivalents and restricted cash | 123,452 | | | 13,557 | | | (9,791) | | Cash, cash equivalents and restricted cash, beginning of period | 113,397 | | | 99,840 | | | 109,631 | | Cash, cash equivalents and restricted cash, end of period | $ | 236,849 | | | $ | 113,397 | | | $ | 99,840 | |
THE NECESSITY RETAIL REIT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) | | | | | | | | | | | | | | | | | | | Year Ended December 31, | | 2021 | | 2020 | | 2019 | Cash and cash equivalents, end of period | $ | 214,853 | | | $ | 102,860 | | | $ | 81,898 | | Restricted cash, end of period | 21,996 | | | 10,537 | | | 17,942 | | Cash, cash equivalents and restricted cash, end of period | $ | 236,849 | | | $ | 113,397 | | | $ | 99,840 | | | | | | | | Supplemental Disclosures: | | | | | | Cash paid for interest, net of derivatives settled | $ | 65,886 | | | $ | 72,758 | | | $ | 72,826 | | Cash paid for income and franchise taxes | $ | 1,117 | | | $ | 720 | | | $ | 217 | | | | | | | | Non-Cash Investing and Financing Activities: | | | | | | Accrued offering costs - Series A Preferred Stock | $ | 5 | | | $ | 57 | | | $ | 27 | | Accrued offering costs - Series C Preferred Stock | $ | — | | | $ | 222 | | | $ | — | | Accrued offering costs - Class A common stock | $ | — | | | $ | 28 | | | $ | — | | Preferred dividend declared but not yet paid | $ | 5,837 | | | $ | 3,676 | | | $ | 3,300 | | Assets received through substitution | $ | — | | | $ | 4,380 | | | $ | — | | Assets provided through substitution | $ | — | | | $ | (2,180) | | | $ | — | | Proceeds from real estate sales used to pay off related mortgage notes payable | $ | 1,108 | | | $ | 5,586 | | | $ | 94,940 | | Mortgage notes payable released in connection with disposition of real estate | $ | (1,108) | | | $ | (5,586) | | | $ | (94,940) | | | | | | | | | | | | | | | | | | | | Accrued capital expenditures (payable) | $ | 1,553 | | | $ | 1,556 | | | $ | 355 | |
The accompanying notes are an integral part of these consolidated financial statements.
AMERICAN FINANCE TRUST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| | | | | | | | | | | | | | | | | | | Year Ended December 31, | | 2020 | | 2019 | | 2018 | Cash flows from operating activities: | | | | | | Net income (loss) | $ | (31,906) | | | $ | 4,163 | | | $ | (37,471) | | Adjustments to reconcile net loss to net cash provided by operating activities: | | | | | | Depreciation | 88,778 | | | 78,396 | | | 84,482 | | Amortization of in-place lease assets | 46,496 | | | 44,795 | | | 54,439 | | Amortization of deferred leasing costs | 2,184 | | | 1,522 | | | 986 | | Amortization (including accelerated write-off) of deferred financing costs | 8,212 | | | 7,598 | | | 5,648 | | Accretion of mortgage premiums and discounts on borrowings | (2,126) | | | (3,816) | | | (3,790) | | | | | | | | Amortization (accretion) of market lease and other intangibles, net | (6,149) | | | (7,372) | | | (15,518) | | Equity-based compensation | 13,036 | | | 12,717 | | | 5,266 | | Vesting and conversion of Class B Units | 0 | | | 0 | | | 15,786 | | Mark-to-market adjustments | 0 | | | 0 | | | (72) | | Loss on non-designated derivatives | 9 | | | 0 | | | 0 | | Gain on sale/exchange of real estate investments | (6,456) | | | (23,690) | | | (31,776) | | Impairment of real estate investments and goodwill impairment | 12,910 | | | 2,432 | | | 21,080 | | Payments of prepayment costs on mortgages | 807 | | | 4,491 | | | 4,224 | | Changes in assets and liabilities: | | | | | | Straight-line rent receivable | (19,824) | | | (9,521) | | | (9,596) | | Straight-line rent payable | 314 | | | 1,196 | | | 95 | | Prepaid expenses and other assets | (9,139) | | | (3,208) | | | (4,086) | | Accounts payable and accrued expenses | (3,831) | | | (1,458) | | | 1,694 | | Deferred rent and other liabilities | (598) | | | (2,675) | | | 3,646 | | Net cash provided by operating activities | 92,717 | | | 105,570 | | | 95,037 | | Cash flows from investing activities: | | | | | | | | | | | | Capital expenditures | (9,198) | | | (13,652) | | | (10,426) | | Acquisitions of investments in real estate and other assets | (220,412) | | | (428,939) | | | (241,772) | | Proceeds from sale of real estate investments | 6,707 | | | 34,813 | | | 66,455 | | Deposits | (53) | | | 2,952 | | | (2,472) | | Net cash used in investing activities | (222,956) | | | (404,826) | | | (188,215) | | Cash flows from financing activities: | | | | | | Proceeds from mortgage notes payable | 874,000 | | | 286,930 | | | 29,887 | | Payments on mortgage notes payable | (663,236) | | | (69,144) | | | (47,197) | | Proceeds from credit facility | 205,000 | | | 233,000 | | | 324,700 | | Payments on credit facility | (257,291) | | | (224,553) | | | (95,000) | | Payments of financing costs | (30,917) | | | (10,778) | | | (7,031) | | Payments of prepayment costs on mortgages | (807) | | | (4,491) | | | (4,224) | | Common stock repurchases | 0 | | | (274) | | | (20,531) | | Distributions on LTIP Units and Class A Units | (532) | | | (694) | | | (225) | | Dividends paid on common stock | (75,951) | | | (117,140) | | | (104,824) | | Dividends paid on preferred stock | (14,167) | | | (3,948) | | | 0 | | Proceeds from issuance of common stock, net | (211) | | | 31,601 | | | 0 | | Proceeds from issuance of Series A preferred stock, net | 22,490 | | | 168,956 | | | 0 | | Proceeds from issuance of Series C preferred stock, net | 85,418 | | | 0 | | | 0 | | Net cash provided by financing activities | 143,796 | | | 289,465 | | | 75,555 | | Net change in cash, cash equivalents and restricted cash | 13,557 | | | (9,791) | | | (17,623) | | Cash, cash equivalents and restricted cash, beginning of period | 99,840 | | | 109,631 | | | 127,254 | | Cash, cash equivalents and restricted cash, end of period | $ | 113,397 | | | $ | 99,840 | | | $ | 109,631 | |
AMERICAN FINANCE TRUST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| | | | | | | | | | | | | | | | | | | Year Ended December 31, | | 2020 | | 2019 | | 2018 | Cash and cash equivalents, end of period | $ | 102,860 | | | $ | 81,898 | | | $ | 91,451 | | Restricted cash, end of period | 10,537 | | | 17,942 | | | 18,180 | | Cash, cash equivalents and restricted cash, end of period | $ | 113,397 | | | $ | 99,840 | | | $ | 109,631 | | | | | | | | Supplemental Disclosures: | | | | | | Cash paid for interest | $ | 72,758 | | | $ | 72,826 | | | $ | 63,839 | | Cash paid for income and franchise taxes | $ | 720 | | | $ | 217 | | | $ | 1,100 | | | | | | | | Non-Cash Investing and Financing Activities: | | | | | | Accrued offering costs - Series A Preferred Stock | $ | 57 | | | $ | 27 | | | $ | 0 | | Accrued offering costs - Series C Preferred Stock | $ | 222 | | | $ | 0 | | | $ | 0 | | Accrued offering costs - Class A common stock | $ | 28 | | | $ | 0 | | | $ | 0 | | Preferred dividend declared but not yet paid | $ | 3,676 | | | $ | 3,300 | | | $ | 0 | | Assets received through substitution | $ | 4,380 | | | $ | 0 | | | $ | 0 | | Assets provided through substitution | $ | (2,180) | | | $ | 0 | | | $ | 0 | | Proceeds from real estate sales used to pay off related mortgage notes payable | $ | 5,586 | | | $ | 94,940 | | | $ | 90,038 | | Mortgage notes payable released in connection with disposition of real estate | $ | (5,586) | | | $ | (94,940) | | | $ | (90,038) | | | | | | | | | | | | | | Common stock issued through distribution reinvestment plan | $ | 0 | | | 0 | | $ | 23,248 | | Accrued capital expenditures (payable) | $ | 1,556 | | | $ | 355 | | | $ | 341 | |
The accompanying notes are an integral part of these consolidated financial statements.
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 20202021
Note 1 — Organization The Necessity Retail REIT, Inc. (formerly known as American Finance Trust, Inc.) (the “Company”), is an externally managed real estate investment trust for U.S. federal income tax purposes (“REIT”) focusing on acquiring and managing a diversified portfolio of primarily service-oriented and traditional retail and distribution-related commercial real estate properties located primarily in the United States. The Company’s assets consist primarily of freestanding single-tenant properties that are net leased to “investment grade” and other creditworthy tenants and a portfolio of multi-tenant retail properties consisting primarily of power centers and lifestyle centers. The Company intends to focus its future acquisitions primarily on net leased, single-tenant service retail properties, defined as properties leased to tenants in the retail banking, restaurant, grocery, pharmacy, gas, convenience, fitness, and auto services sectors. As of December 31, 2020,2021, the Company owned 920976 properties, comprised of 19.320.0 million rentable square feet, which were 93.9%93.2% leased, including 887943 single-tenant, net leased commercial properties (849(902 of which are leased to retail tenants) and 33 multi-tenant retail properties. On December 17, 2021, the Company signed a purchase and sale agreement to acquire 79 multi-tenant properties and 2 single-tenant properties (the “CIM Portfolio Acquisition”) see Note 16 — Subsequent Events for additional information. Substantially all of the Company’s business is conducted through The Necessity Retail REIT Operating Partnership, L.P (formerly known as American Finance Operating Partnership, L.P.L.P), (the “OP”), a Delaware limited partnership, and its wholly owned subsidiaries. Necessity Retail Advisors, LLC (formerly known as American Finance Advisors, LLCLLC) (the “Advisor”) manages the Company’s day-to-day business with the assistance of the Company’s property manager, Necessity Retail Properties, LLC (formerly known as American Finance Properties, LLCLLC), (the “Property Manager”). The Advisor and the Property Manager are under common control with AR Global Investments, LLC (“AR Global”) and these related parties receive compensation and fees for providing services to us. The Company also reimburses these entities for certain expenses they incur in providing these services to the Company. Note 2 — Summary of Significant Accounting Policies BasisInvestments in Real Estate
Investments in real estate are recorded at cost. Improvements and replacements are capitalized when they extend the useful life of Accountingthe asset. Costs of repairs and maintenance are expensed as incurred. At the time an asset is acquired, we evaluate the inputs, processes and outputs of the asset acquired to determine if the transaction is a business combination or asset acquisition. If an acquisition qualifies as a business combination, the related transaction costs are recorded as an expense in the consolidated statements of operations and comprehensive loss. If an acquisition qualifies as an asset acquisition, the related transaction costs are generally capitalized and subsequently amortized over the useful life of the acquired assets. See the Purchase Price Allocation section below for a discussion of the initial accounting for investments in real estate. The accompanyingDisposal of real estate investments that represent a strategic shift in operations that will have a major effect on our operations and financial results are required to be presented as discontinued operations in the consolidated statements of operations. No properties were presented as discontinued operations during the years ended December 31, 2021, 2020 or 2019. Properties that are intended to be sold are to be designated as “held for sale” on the consolidated balance sheets at the lesser of carrying amount or fair value less estimated selling costs when they meet specific criteria to be presented as held for sale, most significantly that the sale is probable within one year. We evaluate probability of sale based on specific facts including whether a sales agreement is in place and the buyer has made significant non-refundable deposits. Properties are no longer depreciated when they are classified as held for sale. As of December 31, 2021 we had one property classified as held for sale, our Sanofi property, and as of December 31, 2020 we had no properties classified as held for sale (see Note 3 — Real Estate Investments, Net to the consolidated financial statements included in this Annual Report on Form 10-K for additional information). The Sanofi property was disposed on January 6, 2022 (see Note 16 — Subsequent Events to the consolidated financial statements included in this Annual Report on Form 10-K for additional information).As more fully discussed in Note 2 — Summary of Significant Accounting Policies - Recently Issued Accounting Pronouncements - ASU No. 2016-02 Leases to the consolidated financial statements included in this Annual Report on Form 10-K, all of our leases as lessor prior to adoption of the Companynew leasing standard on January 1, 2019, were accounted for as operating leases and we continued to account for them as operating leases under the transition guidance. We evaluate new leases originated after the adoption date (by us or by a predecessor lessor/owner) pursuant to the new guidance where a lease for some or all of a building is classified by a lessor as a sales-type lease if the significant risks and rewards of ownership reside with the tenant. This situation is met if, among other things, there is an automatic transfer of title during the lease, a bargain purchase option, the non-cancelable lease term is for more than major part of remaining economic useful life of the asset (e.g., equal to or greater than 75%), if the present value of the minimum lease payments represents substantially all (e.g., equal to or greater than 90%) of the leased property’s fair value at lease inception, or if the asset so specialized in nature that it provides no alternative use to the lessor (and therefore would not provide any future value to the lessor) after the lease term. Further, such new leases would be evaluated to consider whether they would be failed sale-leaseback transactions and accounted for as financing transactions by the lessor. During the three year period ended December 31, 2021, we had no leases as a lessor that would be considered as sales-type leases or financings under sale-leaseback rules. We are preparedalso the lessee under certain land leases which were previously classified prior to adoption of lease accounting and will continue to be classified as operating leases under transition elections unless subsequently modified. These leases are reflected on the accrualbalance sheet and the rent expense is reflected on a straight line basis over the lease term. Purchase Price Allocation In both a business combination and an asset acquisition, we allocate the purchase price of acquired properties to tangible and identifiable intangible assets or liabilities based on their respective fair values. Tangible assets may include land, land improvements, buildings, fixtures and tenant improvements on an as if vacant basis. Intangible assets may include the value of in-place leases and above- and below- market leases and other identifiable assets or liabilities based on lease or property specific characteristics. In addition, any assumed mortgages receivable or payable and any assumed or issued non-controlling interests (in a business combination) are recorded at their estimated fair values. In allocating the fair value to assumed mortgages, amounts are recorded to debt premiums or discounts based on the present value of the estimated cash flows, which is calculated to account for either above or below-market interest rates. In a business combination, the difference between the purchase price and the fair value of identifiable net assets acquired is either recorded as goodwill or as a bargain purchase gain. In an asset acquisition, the difference between the acquisition price (including capitalized transaction costs) and the fair value of
identifiable net assets acquired is allocated to the non-current assets. All acquisitions during the years ended December 31, 2021, 2020 and 2019 were asset acquisitions. For acquired properties with leases classified as operating leases, we allocate the purchase price of acquired properties to tangible and identifiable intangible assets acquired and liabilities assumed, based on their respective fair values. In making estimates of fair values for purposes of allocating purchase price, we utilize a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other market data. We also consider information obtained about each property as a result of our pre-acquisition due diligence in estimating the fair value of the tangible and intangible assets acquired and intangible liabilities assumed. We utilize various estimates, processes and information to determine the as-if vacant property value. Estimates of value are made using customary methods, including data from appraisals, comparable sales, discounted cash flow analysis and other methods. Fair value estimates are also made using significant assumptions such as capitalization rates, discount rates, fair market lease rates, and land values per square foot. Identifiable intangible assets include amounts allocated to acquire leases for above- and below-market lease rates and the value of in-place leases as applicable. Factors considered in the analysis of the in-place lease intangibles include an estimate of carrying costs during the expected lease-up period for each property, taking into account current market conditions and costs to execute similar leases. In estimating carrying costs, we include real estate taxes, insurance and other operating expenses and estimates of lost rentals at contract rates during the expected lease-up period, which typically ranges from six to 24 months. We also estimate costs to execute similar leases including leasing commissions, legal and other related expenses. Above-market and below-market lease values for acquired properties are initially recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining initial term of the lease for above-market leases and the remaining initial term plus the term of any below-market fixed rate renewal options for below-market leases. The aggregate value of intangible assets related to customer relationships, as applicable, is measured based on our evaluation of the specific characteristics of each tenant’s lease and our overall relationship with the tenant. Characteristics considered by us in determining these values include the nature and extent of our existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals, among other factors. We did not record any intangible asset amounts related to customer relationships during the years ended December 31, 2021 and 2020. Gain on Sale/Exchange of Real Estate Investments Gains on sales of rental real estate will generally be recognized pursuant to the provisions included in ASC 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”). In accordance with ASC 845-10, Accounting for Non-Monetary Transactions, if a nonmonetary exchange has commercial substance, the cost of a nonmonetary asset acquired in exchange for another nonmonetary asset is the fair value of the asset surrendered to obtain it, and a gain or loss shall be recognized on the exchange. Impairment of Long-Lived Assets When circumstances indicate the carrying value of a property may not be recoverable, we review the property for impairment. This review is based on an estimate of the future undiscounted cash flows expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. If an impairment exists, due to the inability to recover the carrying value of a property, we would recognize an impairment loss in the consolidated statement of operations and comprehensive loss to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss recorded would equal the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net earnings. Depreciation and Amortization We are required to make subjective assessments as to the useful lives of the components of our real estate investments for purposes of determining the amount of depreciation to record on an annual basis. These assessments have a direct impact on our results from operations because if we were to shorten the expected useful lives of our real estate investments, we would depreciate these investments over fewer years, resulting in more depreciation expense and lower earnings on an annual basis. Depreciation is computed using the straight-line method over the estimated useful lives of up to 40 years for buildings, 15 years for land improvements, five years for fixtures and improvements and the shorter of the useful life or the remaining lease term for tenant improvements and leasehold interests (a “leasehold interest” is a right to enjoy the exclusive possession and use of an asset or property for a stated definite period as created by a written lease).
The value of in-place leases, exclusive of the value of above-market and below-market in-place leases, is amortized to expense over the remaining periods of the respective leases. The value of customer relationship intangibles, if any, is amortized to expense over the initial term and any renewal periods in the respective leases, but in no event does the amortization period for intangible assets exceed the remaining depreciable life of the building. If a tenant terminates its lease, the unamortized portion of the in-place lease value and customer relationship intangibles is charged to expense. Assumed mortgage premiums or discounts are amortized as an increase or reduction to interest expense over the remaining terms of the respective mortgages. Above and Below-Market Lease Amortization Capitalized above-market lease values are amortized as a reduction of revenue from tenants over the remaining terms of the respective leases and the capitalized below-market lease values are amortized as an increase to revenue from tenants over the remaining initial terms plus the terms of any below-market fixed rate renewal options of the respective leases. If a tenant with a below-market rent renewal does not renew, any remaining unamortized amount will be taken into income at that time. Capitalized above-market ground lease values are amortized as a reduction of property operating expense over the remaining terms of the respective leases. Capitalized below-market ground lease values are amortized as an increase to property operating expense over the remaining terms of the respective leases and expected below-market renewal option periods. Upon termination of an above or below-market lease any unamortized amounts would be recognized in the period of termination. Equity-Based Compensation We have a stock-based plan under which our directors, officers and other employees of the Advisor or its affiliates who are involved in providing services to us are eligible to receive awards. Awards granted thereunder are accounted for under the guidance for employee share based payments. The cost of services received in exchange for these stock awards is measured at the grant date fair value of the award and the expense for such an award is included in the equity-based compensation line item of the consolidated statements of operations and is recognized in accordance with the service period (i.e., vesting) required or when the requirements for exercise of the award have been met. Effective at the listing of the our Class A common stock, $0.01 par value per share (“Class A common stock”) on The Nasdaq Global Select Market (“Nasdaq”) on July 19, 2018 (the “Listing Date”), we entered into the 2018 OPP under which the LTIP Units were issued to the Advisor. These awards were market-based awards with a related required service period. In accordance with ASC 718, the LTIP Units were valued at their grant date and that value is reflected as a charge to earnings evenly over the service period. The cumulative expense was reflected as part of non-controlling interest in our balance sheets and statements of equity until the end of the service period. Following the end of the performance period under the 2018 OPP on July 19, 2021, the compensation committee of our board of directors determined that none of the 4,496,796 of the LTIP Units subject to the 2018 OPP had been earned, and these LTIP Units were thus automatically forfeited. On that date, we reclassified amounts reflected in non-controlling interest for these LTIP Units to additional paid in capital on its balance sheet and statement of equity. On May 4, 2021, our independent directors, authorized the issuance of a new award of LTIP Units effective after the performance period under the 2018 OPP expired on July 19, 2021, with the number of LTIP Units to be issued to the Advisor to be equal to the quotient of $72.0 million divided by the 10-trading day trailing average closing stock price of our Class A common stock for the ten trading days up to and including July 19, 2021. On July 21, 2021, we entered into the 2021 OPP pursuant to which the Advisor was granted an award of 8,528,885 LTIP Units, representing the quotient of $72.0 million divided by $8.4419. As a result, the LTIP Units issued under the 2021 OPP classified as an equity award with the cumulative expense reflected as part of non-controlling interest in our consolidated balance sheets and equity statements. In the event of a modification of any of the awards discussed above, any incremental increase in the value of the instrument measured on the date of the modification both before and after the modification, will result in an incremental amount to be reflected prospectively as a charge to earnings over the remaining service period. For additional information on all of our equity-based compensation arrangements, see Note 13 — Equity-Based Compensation. Recently Issued Accounting Pronouncements SeeNote 2 — Summary of Significant Accounting Policies - Recently Issued Accounting Pronouncements to the consolidated financial statements in this Annual Report on Form 10-K for further discussion.
Leasing Activity The following table summarizes our leasing activity during the year ended December 31, 2021: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Year Ended December 31, 2021 | | | | | | | (In thousands) | | | | | Number of Leases | | Rentable Square Feet | | Annualized SLR [1] prior to Lease Execution/Renewal | | Annualized SLR [1] after Lease Execution/Renewal | | Costs to execute leases | | Costs to execute leases - per square foot | New leases [2] | | 50 | | | 412,856 | | | $ | — | | | $ | 3,660 | | | $ | 2,237 | | | $ | 5.42 | | Lease renewals/amendments [2] | | 141 | | | 1,298,317 | | | 17,153 | | | 16,478 | | | 1,483 | | | 1.14 | | Lease terminations [3] | | 24 | | | 116,816 | | | 2,901 | | | — | | | — | | | — | |
__________ [1]Annualized rental income on a straight-line basis as of December 31, 2021. Represents the GAAP basis annualized straight-line rent that is recognized over the term on the respective leases, which includes free rent, periodic rent increases, and excludes recoveries. [2]New leases reflect leases in which a new tenant took possession of the space during the year ended December 31, 2021, excluding new property acquisitions. Lease renewals/amendments reflect leases in which an existing tenant executed terms to extend the term or change the rental terms of the lease during the year ended December 31, 2021. This excludes leases modifications for deferrals/abatements in response to COVID-19 negotiations which qualify for FASB relief. For more information see Overview — Management Update on the Impacts of the COVID-19 Pandemic — Management’s Actions. [3]Represents leases that were terminated prior to their contractual lease expiration dates. Results of Operations In December 2021, we signed a purchase and sale agreement to acquire 79 multi-tenant retail centers and two single-tenant properties (the “CIM Portfolio Acquisition”), representing a strategic shift away from a sole focus on single-tenant retail properties. Accordingly, we now operate in two reportable business segments for management and internal financial reporting purposes. In our single-tenant operating segment, we own, manage and lease single-tenant properties where tenants are required to pay for property operating expenses, which may be subject to expense exclusions and floors, in addition to base rent. In our multi-tenant operating segment, we own, manage and lease multi-tenant properties where we generally pay for the property operating expenses for those properties and most of our tenants are required to pay their pro rata share of property operating expenses. Below is a discussion of our results of operations for the years ended December 31, 2021 and 2020. Please see the “Results of Operations” section located on page 45 under Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2020 for comparison of our results of operations for the years ended December 31, 2020 to 2019. In addition to the comparative year over year discussion below, please see the “Overview — Management Update on the Impacts of the COVID-19 Pandemic” section above for additional information on the risks and uncertainties associated with the COVID-19 pandemic and management’s action taken to mitigate those risks and uncertainties. Same Store Properties Information based on Same Store, Acquisitions and Dispositions (as each are defined below) allows us to evaluate the performance of our portfolio based on a consistent population of properties owned for the entire period of time covered. As of December 31, 2021, we owned 976 properties. There were 802 properties (our “2020-2021 Same Store”) owned for the entire years ended December 31, 2021 and 2020 which were 92.4% leased as of December 31, 2021. Since January 1, 2020 and through December 31, 2021, we acquired 176 properties (our “Acquisitions Since January 1, 2020”)which were 100% leased as of December 31, 2021, and disposed of 19 properties (our “Disposals Since January 1, 2020”). | | | | | | | Number of Properties | Number of properties, December 31, 2019 | 819 | Acquisition activity during the year ended December 31, 2020 | 107 | Disposition activity during the year ended December 31, 2020 | (6) | Number of properties, December 31, 2020 | 920 | Acquisition activity during the year ended December 31, 2021 | 69 | Disposition activity during the year ended December 31, 2021 | (13) | Number of properties, December 31, 2021 | 976 | | | Number of Same Store Properties | 802 |
Comparison of the Year Ended December 31, 2021 to 2020 Net loss attributable to common stockholders was $63.4 million and $46.7 million for the year ended December 31, 2021 and 2020, respectively. The following table shows our results of operations for the years ended December 31, 2021 and 2020 and the year to year change by line item of the consolidated statements of operations: | | | | | | | | | | | | | | | | | | | | | Year Ended December 31, | | Increase / (Decrease) | | 2021 | | 2020 | | $ | | | Revenue from tenants | $ | 335,156 | | | $ | 305,224 | | | $ | 29,932 | | | | | | | | | | | | Operating expenses: | | | | | | | | Asset management fees to related party | 32,804 | | | 27,829 | | | 4,975 | | | | Property operating expense | 55,431 | | | 52,296 | | | 3,135 | | | | Impairment of real estate investments | 33,261 | | | 12,910 | | | 20,351 | | | | Acquisition, transaction and other costs | 4,378 | | | 2,921 | | | 1,457 | | | | Equity-based compensation | 17,264 | | | 13,036 | | | 4,228 | | | | General and administrative | 20,856 | | | 19,683 | | | 1,173 | | | | Depreciation and amortization | 130,464 | | | 137,459 | | | (6,995) | | | | | | | | | | | | Total operating expenses | 294,458 | | | 266,134 | | | 28,324 | | | | Operating income before gain on sale of real estate investments | 40,698 | | | 39,090 | | | 1,608 | | | | Gain on sale/exchange of real estate investments | 4,757 | | | 6,456 | | | (1,699) | | | | Operating income | 45,455 | | | 45,546 | | | (91) | | | | Other (expense) income: | | | | | | | | Interest expense | (81,784) | | | (78,467) | | | (3,317) | | | | Other income | 91 | | | 1,024 | | | (933) | | | | Loss on non-designated derivatives | (3,950) | | | (9) | | | (3,941) | | | | Total other expense, net | (85,643) | | | (77,452) | | | (8,191) | | | | Net (loss) income | (40,188) | | | (31,906) | | | (8,282) | | | | Net loss (income) attributable to non-controlling interests | 9 | | | 44 | | | (35) | | | | Allocation for preferred stock | (23,262) | | | (14,788) | | | (8,474) | | | | Net loss attributable to common stockholders | (63,441) | | | (46,650) | | | (16,791) | | | |
Net Loss Attributable to Common Stockholders Net loss attributable to common stockholders decreased $16.8 million to $63.4 million for the year ended December 31, 2021 from $46.7 million for the year ended December 31, 2020. The change in net loss attributable to common stockholders is discussed in detail for each line item of the consolidated statements of operations and comprehensive loss in the sections that follow. Net Operating Income Net operating income (“NOI”) is a non-GAAP financial measure used by us to evaluate the operating performance of our real estate portfolio. NOI is equal to revenue from tenants less property operating expense. NOI excludes all other financial statement amounts included in net loss attributable to stockholders. We believe NOI provides useful and relevant information because it reflects only those income and expense items that are incurred at the property level and presents such items on an unlevered basis. See “Non-GAAP Financial Measures” included elsewhere in this Annual Report for additional disclosure and a reconciliation to our net loss attributable to stockholders.
Segment Results — Single-Tenant Properties The following table presents the components of NOI and the period change within the single-tenant segment for the years ended December 31, 2021 and December 31, 2020: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Segment Same Store (1) (2) | | Acquisitions (3) | Disposals (4) | | Segment Total (5) | | Year Ended December 31, | | Increase (Decrease) | | Year Ended December 31, | | Increase (Decrease) | | Year Ended December 31, | Increase (Decrease) | | Year Ended December 31, | | Increase (Decrease) | | 2021 | | 2020 | | $ | | 2021 | | 2020 | | $ | | 2021 | | 2020 | | $ | | 2021 | | 2020 | | $ | Revenue from tenants | $ | 187,856 | | | $ | 181,263 | | | $ | 6,593 | | | $ | 26,213 | | | $ | 9,244 | | | $ | 16,969 | | | $ | 4,875 | | | $ | 1,355 | | | $ | 3,520 | | | $ | 218,944 | | | $ | 191,862 | | | $ | 27,082 | | Less: Property operating expenses | 10,728 | | | 9,654 | | | 1,074 | | | 1,053 | | | 239 | | | 814 | | | 224 | | | 294 | | | (70) | | | 12,005 | | | 10,187 | | | 1,818 | | NOI | $ | 177,128 | | | $ | 171,609 | | | $ | 5,519 | | | $ | 25,160 | | | $ | 9,005 | | | $ | 16,155 | | | $ | 4,651 | | | $ | 1,061 | | | $ | 3,590 | | | $ | 206,939 | | | $ | 181,675 | | | $ | 25,264 | |
__________ [1]Includes the two properties exchanged during the year ended December 31, 2020 as we considered the substitution of new properties under the same master lease as a continuation of the same tenant relationship and therefore as part of our 2020-2021 Same Store. For additional information on real estate sales, see Note 3 — Real Estate Investments to our consolidated financial statements in this Annual Report on Form 10-K. [2]Our single-tenant segment included 769 Same Store properties. [3]Our single-tenant segment included 174 Acquisition properties. [4]Our single-tenant segment included 19 Disposition properties. [5]Our single-tenant segment included 943 properties. Revenue from tenants in our single-tenant segment increased approximately $27.1 million to $218.9 million for the year ended December 31, 2021, compared to $191.9 million for the year ended December 31, 2020. This increase in revenue from tenants was due to the incremental increase in revenue from our Acquisitions Since January 1, 2020 of $17.0 million, an increase of our 2020-2021 Same Store properties of $6.6 million and an increase of our Disposals Since January 1, 2020 of $3.5 million. The increase in our 2020-2021 Same Store revenue reflects the impact of termination fees recorded in the year ended December 31, 2021, totaling $11.2 million in net termination fee income ($3.6 million of which related to our Disposals Since January 1, 2020) as well as by an increase of $2.1 million of operating expense reimbursement revenue. These increases were partially offset by $2.7 million of lower revenue due to the expiration of our United Healthcare lease, which was not renewed on July 1, 2021 and had annual rents of $5.4 million prior to its expiration, as well as by and increase of $0.8 million in bad debt expense recorded during the year ended December 31, 2021 as compared to the year ended December 31, 2020. Property operating expenses primarily consist of the costs associated with maintaining our properties including real estate taxes, utilities, and repairs and maintenance. Property operating expense increased $1.8 million to $12.0 million for the year ended December 31, 2021, compared to $10.2 million for the year ended December 31, 2020. This increase was primarily driven by increases from our 2020-2021 Same Store properties of $1.1 million, an increase of $0.8 million from our Acquisitions Since January 1, 2020, partially offset by a decrease of $0.1 million from our Disposals Since January 1, 2020. Segment Results — Multi-Tenant Properties The following table presents the components of NOI and the period change within the multi-tenant segment for the years ended December 31, 2021 and December 31, 2020: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Segment Same Store (1) | | Acquisitions (2) | Disposals (3) | | Segment Total (4) | | Year Ended December 31, | | Increase (Decrease) | | Year Ended December 31, | | Increase (Decrease) | | Year Ended December 31, | Increase (Decrease) | | Year Ended December 31, | | Increase (Decrease) | | 2021 | | 2020 | | $ | | 2021 | | 2020 | | $ | | 2021 | | 2020 | | $ | | 2021 | | 2020 | | $ | Revenue from tenants | $ | 116,212 | | | $ | 113,362 | | | $ | 2,850 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 116,212 | | | $ | 113,362 | | | $ | 2,850 | | Less: Property operating expenses | 43,426 | | | 42,109 | | | 1,317 | | | — | | | — | | | — | | | — | | | — | | | — | | | 43,426 | | | 42,109 | | | 1,317 | | NOI | $ | 72,786 | | | $ | 71,253 | | | $ | 1,533 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 72,786 | | | $ | 71,253 | | | $ | 1,533 | |
__________ [1]Our multi-tenant segment included 33 Same Store Properties. [2]Our multi-tenant segment did not have any Acquisition properties. [3]Our multi-tenant segment did not have any Disposition properties. [4]Our multi-tenant segment included 33 properties. Revenue from tenants in our multi-tenant segment increased approximately $2.9 million to $116.2 million for the year ended December 31, 2021, compared to $113.4 million for the year ended December 31, 2020.
The increase in our 2020-2021 Same Store revenue reflects an increase of net termination fee income of $0.7 million to $1.1 million for the year ended December 31, 2021 compared to $0.4 million for the year ended December 31, 2020, as well as a decrease in bad debt expense of $5.7 million. The higher bad debt expense in the year ended December 31, 2020 was due to our assessment of receivables due from tenants which have been most significantly impacted by the COVID-19 pandemic. These increases were partially offset by $1.9 million of below market lease intangible liability write-offs for the year ended December 31, 2020 pertaining to two multi-tenant lease terminations, which were recorded as an addition to revenue from tenants. In addition, although occupancy in our multi-tenant segment has improved throughout the year ended December 31, 2021, we recorded $1.9 million of less revenue as a result of renewing multi-tenant lease agreements at lesser rates. Property operating expenses primarily consist of the costs associated with maintaining our properties including real estate taxes, utilities, and repairs and maintenance. Property operating expense increased $1.3 million to $43.4 million for the year ended December 31, 2021, compared to $42.1 million for the year ended December 31, 2020. Other Results of Operations Asset Management Fees to Related Party Asset management fees paid to the Advisor increased $5.0 million to $32.8 million for the year ended December 31, 2021, compared to $27.8 million for the year ended December 31, 2020, primarily due to an increase of $2.1 million in the variable portion of the base management fee due to our increased equity issuances during 2021 and 2020 (which begin to impact the fee in the month succeeding the capital raise) and an increase of $2.9 million incentive variable management fees. The variable portion of the base management fee is calculated on a monthly basis and is equal to one-twelfth of 1.25% of the cumulative net proceeds of any equity raised by us (including, among other things, common stock, preferred stock and certain convertible debt but excluding among other things, equity based compensation) from and after February 16, 2017. The variable portion of the base management fee will increase in connection with future issuances of equity securities. In light of the unprecedented market disruption resulting from the COVID-19 pandemic, in March 2020, we agreed with the Advisor to amend the advisory agreement to temporarily lower the quarterly thresholds we must reach on a quarterly basis for the Advisor to receive the variable incentive management fee through the end of 2020, and in January 2021, we agreed with the Advisor to further amend the advisory agreement to extend the expiration of these thresholds through the end of 2021. We incurred $3.0 million of variable incentive management fees in the year ended December 31, 2021 and $0.1 million of variable incentive management fees were earned incurred during the year ended December 31, 2020. Please see Note 11 — Related Party Transactions and Arrangements to our consolidated financial statements included in this Annual Report on Form 10-K for more information on fees incurred from the Advisor. Impairment Charges We recorded $33.3 million of impairment charges for the year ended December 31, 2021, related to one single-tenant property formerly leased to United Healthcare and eight vacant single-tenant properties leased to Truist Bank located across various states. The United Healthcare property has been vacant since June 30, 2021 when the tenant did not renew their lease. We have evaluated local market conditions and considered various alternative plans for this property. Due to weak local market conditions, expected sustained vacancy of this property as either a single-tenant or multi-tenant property, as well as an increased probability of sale, we determined that the property was impaired. We recorded an impairment of $26.9 million to adjust the property’s carrying value to its estimated fair value. Of the Truist properties, seven were impaired to adjust the properties to their fair values as determined by their respective purchase and sales agreements or non-binding letters of intents, and one property was impaired to adjust its carrying value to its fair value as determined by the income approach. We recorded $12.9 million of impairment charges for the year ended December 31, 2020, $11.5 million of which related to one of our multi-tenant held-for-use properties, and $1.4 million of which related to three of our single-tenant held-for-use properties one of which was under contract to be sold at a price lower than the carrying value and two of which had experienced recent performance declines. See Note 3 — Real Estate Investments to our consolidated financial statements included in this Annual Report on Form 10-K for additional information. Acquisition, Transaction and Other Costs Acquisition, transaction and other costs increased $1.5 million to $4.4 million for the year ended December 31, 2021, compared to $2.9 million for the year ended December 31, 2020. The increase was due to prepayment penalties on three mortgage notes which were fully repaid in the year ended December 31, 2021, totaling $4.0 million. Prepayment charges on mortgages were $0.8 million during the years ended December 31, 2020. This increase was partially offset by transaction costs associated with our Credit Facility Amendment and dead deals which totaled $1.0 million in the year ended December 31, 2020 which did not occur in the year ended December 31, 2021, as well as decreased litigation costs of $0.7 million.
Equity-Based Compensation Equity-based compensation increased by approximately $4.2 million to $17.3 million for the year ended December 31, 2021 compared to $13.0 million for the year ended December 31, 2020. This increase was primarily due to additional non-cash equity-based compensation expense from the 2021 OPP and additional non-cash equity based compensation expense from a new grant of restricted shares in the second quarter of 2021 as well as an amendment to the original award agreement on February 26, 2021 for restricted shares previously issued to our former chief financial officer (see additional details below). Our independent directors authorized the issuance of a new award of LTIP Units on May 4, 2021 which was subsequently issued to the Advisor under the 2021 OPP after the performance period under the 2018 OPP expired on July 19, 2021. The year ended December 31, 2021 includes expenses for both the 2018 OPP and the 2021 OPP. In addition, there were higher equity-based compensation expenses for restricted shares recorded in the year ended December 31, 2021 which was due to new grants as well as an amendment to the original award agreement on February 26, 2021 for restricted shares previously issued to our former chief financial officer which accelerated the vesting of those restricted shares on April 9, 2021 upon the effectiveness of her resignation. These restricted shares were scheduled to vest in 25% increments on each of the first four anniversaries of the grant date (September 15, 2020). Also, we recorded additional expense for the excess of the new value of those awards on the date of modification over the fair value of the awards immediately prior to the amendment. In addition, we granted our former chief financial officer an additional award of restricted shares that also fully vested upon the effectiveness of her resignation April 9, 2021, contributing to the increase to equity-based compensation expense recorded during the year ended December 31, 2021. The acceleration of vesting of the prior grant and the new grant resulted in approximately $1.1 million of increased equity-based compensation expense recorded during the year ended December 31, 2021. For additional details on our restricted shares and the 2021 OPP, see Note 13 — Equity-Based Compensation to our consolidated financial statements included in this Annual Report on Form 10-K. General and Administrative Expense General and administrative expense increased $1.2 million to $20.9 million for the year ended December 31, 2021, compared to $19.7 million for the year ended December 31, 2020. The increase was primarily due to professional fees and other miscellaneous general and administrative costs of $1.5 million, which includes an increase of $0.2 million related to COVID-related lease disputes. Depreciation and Amortization Expense Depreciation and amortization expense decreased $7.0 million to $130.5 million for the year ended December 31, 2021, compared to $137.5 million for the year ended December 31, 2020. Depreciation and amortization expense was impacted by a decrease of $13.4 million from our 2020-2021 Same Store properties and a decrease of $0.8 million from our Disposals Since January 1, 2020 partially offset by an increase of $7.2 million resulting from our Acquisitions Since January 1, 2020. The decrease in our 2020-2021 Same Store depreciation was primarily due to the write-off of tenant improvements at one of our properties. During the second quarter of 2020, a tenant in the health club business declared bankruptcy and vacated its space. We were in the process of funding improvements that were being made to the space for the tenant. We determined that certain of the improvements no longer had any value in connection with any foreseeable replacement tenant and wrote off approximately $3.1 million which is recorded in depreciation and amortization expense in the consolidated statement of operations. The decrease was also attributable to the expiration of our United Healthcare lease on June 30, 2021, which reduced our amortization expense by $1.0 million in the year ended December 31, 2021 compared to the year ended December 31, 2020. Lastly, the decrease was attributable to leasing intangible write-offs during the year ended December 31, 2020 related to a tenant’s lease termination at 19 of our properties totaling $3.0 million which did not occur in the year ended December 31, 2021. Gain on Sale/Exchange of Real Estate Investments During the year ended December 31, 2021, we sold 13 properties for an aggregate contract price of $18.9 million, resulting in aggregate gains on sale of $4.8 million. During the year ended December 31, 2020, we sold six properties for an aggregate contract price of $13.3 million, resulting in aggregate gains on sale of $4.3 million. In addition, we recorded a $2.2 million gain related to a non-monetary exchange of two properties then owned by us for two different properties not then owned by us pursuant to a tenant’s exercise of its right to substitute properties under its lease, resulting in a total gain on sale of $6.5 million recorded in our consolidated statements of operations and comprehensive loss income. For additional information on real estate sales, see Note 3 — Real Estate Investments to our consolidated financial statements included in this Annual Report on Form 10-K.
Interest Expense Interest expense increased $3.3 million to $81.8 million for the year ended December 31, 2021, compared to $78.5 million for the year ended December 31, 2020. This increase was primarily due to the issuance of $500.0 million in 4.50% per annum Senior Notes on October 7, 2021 which accrued interest of $5.3 million through the end of 2021, as well as higher average outstanding balances on our mortgage notes payable and increased amortization of deferred financing costs of $4.5 million, partially offset by lower average outstanding balances on our Credit Facility and lower interest rates and lower costs incurred during 2021 related to debt repayments and refinancings. In addition, we terminated a non-designated interest swap agreement on October 7, 2021 and received $2.1 million after settlement. This amount was recorded as a reduction of interest expense during the year ended December 31, 2021. During the year ended December 31, 2021 and 2020, the average outstanding balances on our mortgage notes payable were $1.6 billion and $1.4 billion, respectively, and our average outstanding balance under our Credit Facility was $175.9 million and $376.0 million, respectively. For the year ended December 31, 2021 and 2020, the weighted-average interest rates on our mortgage notes payable were 3.88% and 4.28%, with the decline reflecting in part, our refinancing activity during the third quarter of 2020, and the weighted-average interest rates on our Credit Facility were 2.71% and 2.86%, respectively. Other Income Other income was $0.1 million for the year ended December 31, 2021, primarily comprised of interest income on our cash deposits. Other income was $1.0 million for the year ended December 31, 2020, primarily comprised of the receipt of approximately $0.8 million of funds disbursed to us for permitting the early release of a pre-acquisition tenant improvement escrow account, which had not been previously funded by us, in connection with the release of a mortgage loan encumbering a property as part of refinancing the mortgage loan in September 2020 (see Note 4 — Mortgage Notes Payable to our consolidated financial statements included in this Annual Report on Form 10-K). Additionally, $0.1 million relates to interest income on our bank deposits, and $0.1 million relates to other miscellaneous income, including $9,000 of insurance reimbursements related to the Merger. Loss on Non-Designated Derivatives Loss on non-designated derivative instruments was $4.0 million for the year ended December 31, 2021 and related to the change in fair value of an embedded derivative within the PSA for the CIM Portfolio Acquisition. The loss was recorded to account for the decrease in fair value of the equity offered in the PSA from December 17, 2021, the date of the PSA, until December 31, 2021. Loss on non-designated derivative instruments was immaterial for the year ended December 31, 2020, and relates to an interest rate cap on a mortgage note payable entered into in the fourth quarter of 2020 that is designed to protect us from adverse interest rate changes. For additional information, see Note 4 — Mortgage Notes Payable, Note 8 — Derivatives and Hedging Activities and Note 16 — Subsequent Events to our consolidated financial statements included in this Annual Report on Form 10-K. Cash Flows from Operating Activities The level of cash flows provided by or used in operating activities is affected by the rental income generated from leasing activity, including leasing activity due to acquisitions and dispositions, restricted cash we are required to maintain, the timing of interest payments, the receipt of scheduled rent payments and the level of property operating expenses. Cash flows provided by operating activities of $145.2 million during the year ended December 31, 2021 and consisted of a net loss of $40.2 million, adjusted for non-cash items of $187.3 million, including depreciation and amortization of tangible and intangible real estate assets, amortization of deferred financing costs, amortization of mortgage premiums on borrowings, equity-based compensation, gain on sale of real estate investments and impairment charges. In addition, cash flows from operating activities was impacted by an increase in straight-line rent receivable of $7.0 million which primarily related to COVID-19 related lease amendments and acquisitions, an increase in prepaid expenses and other assets of $4.6 million, a decrease in accounts payable and accrued expenses of $5.8 million and a decrease in deferred rent and other liabilities of $0.3 million as well as by prepayment costs on mortgages of $4.0 million. Cash flows provided by operating activities of $92.7 million during the year ended December 31, 2020 and consisted of a net loss of $31.9 million, adjusted for non-cash items of $157.7 million, including depreciation and amortization of tangible and intangible real estate assets, amortization of deferred financing costs, amortization of mortgage premiums on borrowings, equity-based compensation, gain on sale of real estate investments and impairment charges. In addition, cash flows from operating activities was impacted by an increase in straight-line rent receivable of $19.8 million which primarily related to COVID-19 related lease amendments and acquisitions, an increase in prepaid expenses and other assets of $9.1 million, a decrease in accounts payable and accrued expenses of $3.8 million and a decrease in deferred rent and other liabilities of $0.6 million.
Cash Flows from Investing Activities The net cash used in investing activities during the year ended December 31, 2021 of $220.7 million consisted primarily of cash paid for investments in real estate and other assets of $182.2 million, capital expenditures of $13.4 million and deposits for real estate acquisitions of $41.8 million, partially offset by cash received from the sale of real estate investments (net of mortgage loans repaid) of $16.6 million. The net cash used in investing activities during the year ended December 31, 2020 of $223.0 million consisted primarily of cash paid for investments in real estate and other assets of $220.4 million and capital expenditures of $9.2 million, partially offset by cash received from the sale of real estate investments (net of mortgage loans repaid) of $6.7 million and deposits for real estate acquisitions of $0.1 million. Cash Flows from Financing Activities The net cash provided by financing activities of $199.0 million during the year ended December 31, 2021 consisted primarily of proceeds from the issuance of the Senior Notes of $500.0 million, net proceeds from the issuance of Class A common stock of $128.4 million, net proceeds received from the issuance of Series A Preferred Stock of $1.9 million and net proceeds received from the issuance of Series C Preferred Stock of $25.5 million, partially offset by net payments of mortgage refinancings of $23.9 million, net repayments on our Credit Facility of $280.9 million, cash dividends paid to holders of Class A common stock of $97.5 million, cash dividends paid to holders of Series A Preferred Stock of $14.8 million, cash dividends paid to holders of Series C Preferred Stock of $6.5 million and payments of financing costs of $28.2 million. The net cash provided by financing activities of $143.8 million during the year ended December 31, 2020 consisted primarily of net proceeds from mortgage refinancings of $210.8 million, net proceeds received from the issuance of Series A Preferred Stock of $22.5 million and net proceeds received from the issuance of Series C Preferred Stock of $85.4 million, partially offset by net repayments on our Credit Facility of $52.3 million, cash dividends paid to holders of Class A common stock of $76.0 million, cash dividends paid to holders of Series A Preferred Stock of $14.2 million and payments of financing costs of $30.9 million. Liquidity and Capital Resources Our principal demands for cash are to fund operating and administrative expenses, debt service obligations, dividends on our Class A common stock, dividends on our Series A Preferred Stock, dividends on our Series C Preferred Stock, distributions on our LTIP Units and distributions for limited partnership units that correspond to shares of our Class A common stock, and capital expenditures. In addition, our demand for cash includes the purchase of additional properties. CIM Portfolio Acquisition In December 2021, we signed a purchase and sale agreement for the CIM Portfolio Acquisition, which consists of 79 multi-tenant retail centers and two single-tenant properties, for a contract purchase price of $1.3 billion. On February 11, 2022, we acquired 44 properties in the first tranche of the CIM Portfolio Acquisition consisting of 44 power center and grocery-anchored multi-tenant retail centers and a detention pond parcel located across 17 states and aggregating approximately 4.5 million square feet for an aggregate contract purchase price of $547.4 million. We funded the closing of the first tranche with cash of $350.7 million, which included net proceeds from the approximately $260.7 million sale of our Sanofi property and remaining proceeds from our Senior Notes offering, borrowings under our Credit Facility of $170.0 million and the issuance of 3,264,693 shares of our Class A common stock, representing consideration of $26.7 million, which were issued at a price of $8.18 per share. We currently expect to close on the CIM Portfolio Acquisition in successive tranches by the end of March 2022 and add any unencumbered assets from these tranches to the borrowing base of our Credit Facility. We expect to fund the remainder of the tranches with additional borrowings under our Credit Facility of approximately $320.0 million, assumed mortgages of $348.7 million, the issuance of $26.7 million of our Class A common stock, the application of our previously funded deposit of $40.0 million and the remainder with cash on hand. Short-Term Material Cash Requirements As of December 31, 2021 and 2020, we had cash and cash equivalents of $214.9 million and $102.9 million, respectively. On October 1, 2021, we entered into an amendment and restatement of the Credit Facility with BMO Harris Bank N.A., as administrative agent, and the other lender parties thereto. Upon the closing of the Senior Notes (as defined below) on October 7, 2021, we repaid the outstanding balance of $186.2 million under the Credit Facility. As of December 31, 2021, we had $214.3 million available for future borrowings under our Credit Facility.
With the exception of the CIM Portfolio Acquisition (funding details described in detail above), we expect to fund our future short-term material cash requirements through a combination of cash on hand, net cash provided by our property operations and proceeds from our Credit Facility. Pursuant to our Credit Facility, we are restricted from using proceeds from borrowings under the Credit Facility to accumulate or maintain cash or cash equivalents in excess of amounts necessary to meet current working capital requirements. We may also generate additional liquidity through property dispositions and, to the extent available, secured or unsecured borrowings including the issuance of additional Senior Notes or similar securities, our “at the market” equity offering program for Class A common stock (the “Class A Common Stock ATM Program”), our “at the market” equity offering program for Series A Preferred Stock (the “Series A Preferred Stock ATM Program”), our “at the market” equity offering program for Series C Preferred Stock (the “Series C Preferred Stock ATM Program”), or other offerings of debt or equity securities. Deleveraging Initiative In May, 2021, we began a deleveraging initiative to reduce our net debt relative to our earnings. We hope to achieve this initiative by: •reducing outstanding debt over time; •funding acquisitions through cash on hand rather than proceeds from debt, or at lower debt-to-equity ratios; •raising equity to fund acquisitions and pay down debt; and •increasing revenues through external and internal growth factors such as property acquisitions and multi-tenant leasing activity. The CIM Portfolio Acquisition will increase our leverage in the first quarter of 2022, however, we plan to continue with our deleveraging strategy after the completion of the CIM Portfolio Acquisition. However, we may issue additional Senior Notes or similar securities in the future particularly as we revise our capital structure following the CIM Portfolio Acquisition in a similar fashion as we may add or refinance existing mortgage debt or indebtedness under our Credit Facility. Mortgage Notes Payable, Credit Facility and Senior Notes — December 31, 2021 As of December 31, 2021, we had $1.5 billion of gross mortgage notes payable outstanding, $500.0 million of gross Senior Notes outstanding and no balance outstanding under our Credit Facility, for total gross debt of $2.0 billion. Of our total gross debt, 100.0% was fixed-rate, however, after completing the first tranche of the CIM Portfolio Acquisition, we incurred $170.0 million of variable-rate debt outstanding under our Credit Facility, and we expect to incur an additional $320.0 million through March 2022 to complete the transaction. As of December 31, 2021, our net debt to gross asset value ratio was 40.0%. We define net debt as the principal amount of our outstanding debt (excluding the effect of deferred financing costs, net and mortgage premiums and discounts, net) less cash and cash equivalents. Gross asset value is defined as total assets plus accumulated depreciation and amortization. As of December 31, 2021, the weighted-average interest rates on the mortgage notes payable, Credit Facility and Senior Notes were 3.8%, 0.0% (no amounts outstanding) and 4.5%, respectively. At the closing of the first tranche of the CIM Portfolio Acquisition on February 11, 2022 we did not assume any mortgage debt, and we expect to assume $348.7 million of fixed-rate mortgage debt after the closing of the remaining tranches by the end of March 2022. As of December 31, 2021, we had $3.9 billion in real estate investments, at cost and we had pledged approximately $2.4 billion of these real estate investments, at cost, as collateral for our mortgage notes payable. In addition, approximately $1.3 billion of these real estate investments, at cost, were included in the unencumbered asset pool comprising the borrowing base under the Credit Facility which had a total borrowing capacity thereunder of $214.3 million. Therefore, this real estate is only available to serve as collateral or satisfy other debts and obligations if it is first removed from the borrowing base under the Credit Facility, which would reduce the amount available to us on the Credit Facility. At the closing of the first tranche of the CIM Portfolio Acquisition on February 11, 2022, we borrowed $170.0 million under the Credit Facility. Although this exceeded our borrowing capacity after disposing of our Sanofi property, we were permitted to pledge certain of the assets acquired at the closing of the first tranche of CIM Portfolio Acquisition onto the Credit Facility’s borrowing base. We expect to pledge additional acquired properties at the closing of the remaining tranches of the CIM Portfolio Acquisition and borrow approximately $320.0 million under the Credit Facility to fund a portion of the closing of the remaining tranches of the CIM Portfolio Acquisition. The Senior Notes are fully and unconditionally guaranteed (the “Senior Note Guarantees”) on a joint and several basis by the subsidiaries of each Issuer (defined below) that are guarantors under the Credit Facility. Subject to certain exceptions, each future subsidiary of each Issuer that subsequently guarantees indebtedness under the Credit Facility, any other syndicated loan facility or any capital markets indebtedness, in each case, of the Issuers or a Guarantor will be required to execute a Senior Note Guarantee. Under certain circumstances, the Guarantors may be automatically released from their Senior Note Guarantees without the consent of the holders of Senior Notes.
Net Lease Mortgage Notes On June 3, 2021, through subsidiaries, we issued $318.0 million aggregate principal amount of Net Lease Mortgage Notes (the “2021 Net Lease Mortgage Notes”). The 2021 Net Lease Mortgage Notes are cross-collateralized with the $242.0 million in aggregate principal amount of Net Lease Mortgage Notes issued through subsidiaries in 2019 (the “2019 Net Lease Mortgage Notes” and, together with the 2021 Net Lease Mortgage Notes, the “Notes”). The Notes were issued using a master trust structure, which enables additional series of notes to be issued upon the contribution of additional properties to the collateral pool without the need to structure a new securitization transaction. Any new notes that are so issued will be cross-collateralized with the Notes. The 2021 Net Lease Mortgage Notes were issued in six classes: Class A-1 (AAA), Class A-2 (AAA), Class A-3 (A), Class A-4 (A), Class B-1 (BBB) and Class B-2 (BBB). The Class A-1 (AAA) Notes are rated AAA (sf) by Standard & Poors and are comprised of $55.0 million initial principal amount of 2021 Net Lease Mortgage Notes with an anticipated repayment date in May 2028 and an interest rate of 2.21%. The Class A-2 (AAA) Notes are rated AAA (sf) by Standard & Poors and are comprised of $95.0 million initial principal amount of 2021 Net Lease Mortgage Notes with an anticipated repayment date in May 2031 and an interest rate of 2.79%. The Class A-3 (A) Notes are rated A (sf) by Standard & Poors and are comprised of $35.0 million initial principal amount of 2021 Net Lease Mortgage Notes with an anticipated repayment date in May 2028 and an interest rate of 3.03%. The Class A-4 (A) Notes are rated A (sf) by Standard & Poors and are comprised of $55.0 million initial principal amount of 2021 Net Lease Mortgage Notes with an anticipated repayment date in May 2031 and an interest rate of 3.60%. The Class B Notes are currently retained by the OP and are eliminated upon consolidation, and are therefore not presented in our consolidated financial statements. The Class B Notes may be sold to unaffiliated third parties in the future. The Class B-1 (BBB) Notes are rated BBB (sf) by Standard & Poors and are comprised of $30.0 million initial principal amount of 2021 Net Lease Mortgage Notes with an anticipated repayment date in May 2028 and an interest rate of 4.02%. The Class B-2 (BBB) Notes are rated BBB (sf) by Standard & Poors and are comprised of $48.0 million initial principal amount of 2021 Net Lease Mortgage Notes with an anticipated repayment date in May 2031 and an interest rate of 4.58%. The 2021 Net Lease Mortgage Notes have a rated final payment date in May 2051. The 2019 Net Lease Mortgage Notes were issued in two classes, Class A-1 (AAA) and Class A-2 (A). The Class A-1 (AAA) Notes are rated AAA (sf) by Standard & Poors and are comprised of $121.0 million initial principal amount of 2019 Net Lease Mortgage Notes with an anticipated repayment date in May 2026 and an interest rate of 3.78%. The Class A-2 (A) Notes are rated A (sf) by Standard & Poors and are comprised of $121.0 million initial principal amount of 2019 Net Lease Mortgage Notes with an anticipated repayment date in May 2029 with an interest rate of 4.46%. The 2019 Net Lease Mortgage Notes have a rated final payment date in May 2049. The Notes may be redeemed at any time prior to their anticipated repayment date subject to payment of a make-whole premium. If any class of Notes is not paid in full at its respective anticipated repayment date, additional interest will begin to accrue on those Notes. Patton Creek Mortgage On June 28, 2021, we repaid the mortgage loan secured by our Patton Creek property in full using a portion of the proceeds from the issuance of the 2021 Net Lease Mortgage Notes. The mortgage loan had a principal balance of $34.0 million and bore interest at a floating interest rate of one-month LIBOR plus 4.25% and was scheduled to mature on December 6, 2021. SAAB Sensis and Shops at Shelby Crossing Mortgages On September 23, 2021, we repaid the mortgage loan secured by our SAAB Sensis and Shops at Shelby Crossing properties using proceeds from borrowings under the Credit Facility. The mortgage loan on the SAAB Sensis property had a principal balance of $5.9 million, bore interest at 6.01% and was scheduled to mature in April 2025. The mortgage loan on the Shops at Shelby Crossing property had a principal balance of $21.3 million, bore interest at 4.97% and was scheduled to mature in March 2024. Sanofi Mortgage On October 7, 2021, we repaid the mortgage loan secured by our Sanofi property using proceeds from the issuance of the Senior Notes. The Sanofi mortgage had a principal balance of $125.0 million and bore interest at a floating interest rate of one-month LIBOR plus 2.9%, with the effective interest rate fixed at 3.27% by swap agreement. The loan was interest-only and scheduled to mature on September 4, 2025. Following the repayment of the Sanofi mortgage, we terminated our $125.0 swap agreement. The fair value of the swap upon termination was $2.1 million, which was settled in cash on October 19, 2021 and has been reflected as a reduction of interest expense in our consolidated statement of operations for the year ended December 31, 2021. Credit Facility — Terms and Capacity
As of December 31, 2021, we had no amounts outstanding under our Credit Facility. As of December 31, 2020, we had $280.9 million outstanding. On October 1, 2021, we entered into an amendment and restatement of the Credit Facility with BMO Harris Bank N.A., as administrative agent, and the other lender party thereto. The aggregate total commitments under the Credit Facility were increased to $815.0 million, including a $50.0 million sublimit for letters of credit and a $55.0 million sublimit for swingline loans. The Credit Facility includes an uncommitted “accordion feature” permitting us to increase the commitments under the Credit Facility by up to an additional $435.0 million, subject to obtaining commitments from new lenders or additional commitments from participating lenders and certain customary conditions. The Credit Facility is supported by a pool of eligible unencumbered properties that are owned by the subsidiaries of the OP that serve as Guarantors. We may add or remove properties to or from this pool so long as at any time there are at least 15 eligible unencumbered properties with a value of at least $300.0 million, among other things. The amount available for future borrowings under the Credit Facility depends on the amount outstanding thereunder relative to the aggregate commitments; however, the amount we may borrow under the Credit Facility will be limited by financial maintenance covenants. At the execution of the amendment and restatement of the Credit Facility, $186.2 million was outstanding under the Credit Facility. This amount was subsequently repaid with a portion of the net proceeds of the Senior Notes. The Credit Facility requires payments of interest only prior to maturity. At the execution of the amendment and restatement of the Credit Facility the interest rate was LIBOR plus 1.90% per annum. Following the amendment and restatement of the Credit Facility, borrowings bear interest at either (i) the Base Rate (as defined in the Credit Facility) plus an applicable spread ranging from 0.45% to 1.05%, or (ii) LIBOR plus an applicable spread ranging from 1.45% to 2.05%, in each case depending on the our consolidated leverage ratio. These spreads reflect a reduction from the previously applicable spreads. In addition, pursuant to the Credit Facility, (i) if either we or the OP achieves an investment grade credit rating, the OP can elect for the spread to be based on our credit rating of ours or the OP, and (ii) the “floor” on LIBOR was decreased from 0.25% to 0%. The Credit Facility includes provisions related to the anticipated transition from LIBOR to an alternative benchmark rate. Through September 30, 2021, prior to the closing of the amendment and restatement of the Credit Facility on October 1, 2021, borrowings under our Credit Facility bore interest at either (i) the Base Rate (as defined in the Credit Facility) plus an applicable spread ranging from 0.60% to 1.20% depending on our consolidated leverage ratio or (ii) LIBOR plus an applicable margin ranging from 1.60% to 2.20%, depending on our consolidated leverage ratio. From July 24, 2020 until delivery of the compliance certificate for the fiscal quarter ended June 30, 2021, the margin was 1.50% with respect to the Base Rate and 2.50% with respect to LIBOR regardless of our consolidated leverage ratio. The “floor” on LIBOR was 0.25%. As of December 31, 2021 we have elected to use the LIBOR rate for all our borrowings under the Credit Facility. The Credit Facility matures on April 1, 2026, subject to our right, subject to customary conditions, to extend the maturity date by up to two additional six-month terms. Borrowings under the Credit Facility may be prepaid at any time, in whole or in part, without premium or penalty, subject to customary LIBOR breakage costs. As of December 31, 2021, we were in compliance with the operating and financial covenants under the Credit Facility. As of December 31, 2021, we had $214.3 million available for future borrowings, which included the Sanofi property as part of the unencumbered asset pool comprising the borrowing base of the Credit Facility. On January 6, 2022, we sold the Sanofi property and removed it from the borrowing base of the Credit Facility (see the Acquisitions and Dispositions — Subsequent to December 31, 2021 section below for additional details on the Sanofi sale). At the closing of the first tranche of the CIM Portfolio Acquisition on February 11, 2022, we added certain acquired properties to the borrowing base of our Credit Facility and drew $170.0 million on our Credit Facility which was used at closing. After the closing of the first tranche of the CIM Portfolio Acquisition and the $170.0 million draw, we had approximately $250.1 million available for future borrowings under the Credit Facility. We expect to add additional acquired properties to the borrowing base of our Credit Facility at the closing of the remaining tranches of the CIM Portfolio Acquisition to further increase our borrowing availability. As a result, we expect to draw an additional $320.0 million on our Credit Facility to fund all of the remaining tranches of the CIM Portfolio Acquisition. After the closing of all tranches of the CIM Portfolio Acquisition, we expect to draw a total of approximately $490.0 million on our Credit Facility and we would have $325.0 million of potential availability remaining if we are able to reach the maximum commitment level of our Credit Facility, which is $815.0 million. Issuance of Senior Notes On October 7, 2021, we and the OP issued $500.0 million aggregate principal amount of 4.500% Senior Notes due 2028 (the “Senior Notes”). At closing, we used a portion of the net proceeds from the issuance of the Senior Notes, after deducting the initial purchasers’ discounts and offering fees and expenses, to repay amounts outstanding at the time under the Credit Facility of approximately $186.2 million and to repay a $125.0 million variable rate mortgage note secured by our property
leased to Sanofi (discussed below). We may use the remaining proceeds to fund future property acquisitions and for other general corporate purposes. As of December 31, 2021, we were in compliance with the operating and financial covenants under the Senior Notes. LIBOR Exposure In July 2017, the Financial Conduct Authority (which regulates LIBOR) announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. As a result, the Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee, which identified the Secured Overnight Financing Rate (“SOFR”) as its preferred alternative to LIBOR in derivatives and other financial contracts. On November 30, 2020, the Financial Conduct Authority announced a partial extension of this deadline, indicating its intention to cease the publication of the one-week and two-month USD LIBOR settings immediately following December 31, 2021, and the remaining USD LIBOR settings immediately following the LIBOR publication on June 30, 2023. While we expect LIBOR to be available in substantially its current form until at least the end of 2023, it is possible that LIBOR will become unavailable prior to that time. To transition from LIBOR under the Credit Facility, we will either utilize the Base Rate (as defined in the Credit Facility) or an alternative benchmark established by the agent in accordance with the terms of the Credit Facility, which will be SOFR if available or an alternate benchmark that is being widely used in the market at that time as selected by the agent. Please see the “Increasing interest rates could increase the amount of our debt payments and adversely affect our ability to pay dividends, and we may be adversely affected by uncertainty surrounding the LIBOR”section inItem 1A. Risk Factors for additional information. Acquisitions and Dispositions — Year Ended December 31, 2021 One of our primary uses of cash during the year ended December 31, 2021 has been to acquire properties. During the year ended December 31, 2021, we acquired 69 properties for an aggregate purchase price of $182.2 million, including capitalized acquisition costs. The acquisitions of 13 of these properties for $28.5 million, including capitalized acquisition costs, were completed during the three months ended December 31, 2021. The acquisitions during the quarter and year ended December 31, 2021 were funded through a combination of cash on hand, comprising a combination of draws on the Credit Facility, net proceeds from the issuance of the Senior Notes, proceeds from the issuance and sale of Class A common stock (discussed below), Series A Preferred Stock (discussed below), Series C Preferred Stock (discussed below) and proceeds from dispositions of properties (discussed below). During the year ended December 31, 2021, we sold 13 properties, for an aggregate contract price of $18.9 million, excluding disposition related costs. We disposed of five properties during the three months ended December 31, 2021 for a contract purchase price of $12.9 million. In connection with sales made during the year ended December 31, 2021, we repaid approximately $1.1 million of mortgage debt and after all disposition related costs, net proceeds from these dispositions, classified as investing cash flows, were $16.6 million. Acquisitions and Dispositions — Subsequent to December 31, 2021 Subsequent to December 31, 2021, we closed on the acquisition of three properties for an aggregate purchase price of $40.9 million. Excluded in our acquisitions completed subsequent to December 31, 2021 is the closing of the first tranche of the CIM Portfolio Acquisition, as previously discussed above. The Company expects to complete the transaction with the closing of the one or more tranches through March 2022. Subsequent to December 31, 2021, we closed on the sale of three office buildings leased to Sanofi S.A. for a contract purchase price of $260.7 million (the “Sanofi Sale”). The proceeds from the Sanofi Sale were used to partially fund the closing of the first tranche of the CIM Portfolio Acquisition as discussed above. The assets sold in the Sanofi Sale were part of the unencumbered asset pool comprising the borrowing base of the Credit Facility as of December 31, 2021. We also disposed of five other single-tenant properties for an aggregate contract sale price of $4.6 million. These five properties were not encumbered by mortgages and were not part of the unencumbered asset pool comprising the borrowing base of the Credit Facility. We have entered into two definitive purchase and sale agreements (“PSAs”) to acquire nine additional properties for an aggregate contract purchase price of approximately $17.8 million and a non-binding letter of intent (“LOI”) to acquire an additional 11 properties for approximately $45.3 million. We have entered into three PSAs to dispose of three properties for an aggregate contract sales price of $3.4 million and two LOIs to dispose of two properties for an aggregate contract sales price of $4.5 million. The PSAs are subject to conditions, and the LOI is non-binding. There can be no assurance we will complete any of these acquisitions on their contemplated terms, or at all. To fund the consideration required to complete these acquisitions, we anticipate using proceeds from future dispositions of properties, proceeds from borrowings (including borrowings under our Credit Facility) and net proceeds received from our Class A Common Stock ATM Program, Series A Preferred Stock ATM Program, and Series C Preferred Stock ATM Program.
ATM Programs In May 2019, we established an “at the market” equity offering program for Class A common stock (the “Class A Common Stock ATM Program”), pursuant to which we may from time to time, offer, issue and sell to the public up to $200.0 million in shares of Class A common stock, through sales agents. We intend to use any net proceeds from these offerings for general corporate purposes, including funding property acquisitions, repaying outstanding indebtedness (including borrowings under our Credit Facility), and for working capital. During the year ended December 31, 2021, we sold 14,734,448 shares of Class A common stock through the Class A common stock ATM Program for gross proceeds of $130.6 million and net proceeds of $128.4 million, after commissions and fees paid of $2.2 million. During the three months ended December 31, 2021, we sold 277,611 shares of Class A common stock through the Class A common stock ATM Program for gross proceeds of $2.4 million and net proceeds of $2.3 million after commissions and fees paid of $0.1 million. Subsequent to December 31, 2021, we sold 2,761,711 shares of our Class A common stock through our Class A Common Stock ATM Program for gross proceeds of $24.9 million which will be used to repay debt obligations, including amounts outstanding under our Credit Facility. In May 2019, we established an “at the market” equity offering program for Series A Preferred Stock (the “Series A Preferred Stock ATM Program”) pursuant to which we may, from time to time, offer, issue and sell to the public up to $100.0 million in shares of Series A Preferred Stock through sales agents. In January 2021, the aggregate amount that may be sold was increased to $200.0 million. During the year ended December 31, 2021, we sold 91,703 shares of Series A Preferred Stock through the Series A Preferred Stock ATM Program for gross proceeds of $2.3 million and net proceeds of $2.0 million, after commissions, fees and other costs incurred of $0.3 million. We did not sell any shares of Series A Preferred Stock during the three months ended December 31, 2021. In January, 2021 we established an “at the market” equity offering program for Series C Preferred Stock (the “Series C Preferred Stock ATM Program”) pursuant to which we may, from time to time, offer, issue and sell to the public, through sales agents, shares of the Series C Preferred Stock having an aggregate offering price of up to $200.0 million. During the year ended December 31, 2021, we sold 1,058,798 shares of Series C Preferred Stock through the Series C Preferred Stock ATM Program for gross proceeds of $26.5 million and net proceeds of $25.5 million, after commissions, fees and other costs incurred of $1.0 million. We did not sell any shares of Series C Preferred Stock during the three months ended December 31, 2021. Distribution Reinvestment Program Our distribution reinvestment plan (“DRIP”) allows stockholders who have elected to participate in the DRIP to have dividends payable with respect to all or a portion of their shares of Class A common stock reinvested in additional shares of Class A common stock. Shares issued pursuant to the DRIP are, at our election, either (i) acquired directly from us, by issuing new shares, at a price based on the average of the high and low sales prices of Class A common stock on Nasdaq on the date of reinvestment, or (ii) acquired through open market purchases by the plan administrator at a price based on the weighted-average of the actual prices paid for all of the shares of Class A common stock purchased by the plan administrator with all participants’ reinvested dividends for the related quarter, less a per share processing fee. During the years ended December 31, 2021, 2020 and 2019, all shares acquired by participants pursuant to the Post-Listing DRIP were acquired through open market purchases by the plan administrator and not issued directly to stockholders by us. Capital Expenditures and Construction in Progress We invest in capital expenditures to enhance and maintain the value of our properties. We define revenue enhancing capital expenditures as improvements to our properties that we believe will result in higher income generation over time. Capital expenditures for maintenance are generally necessary, non-revenue generating improvements that extend the useful life of the property and are less frequent in nature. By providing this metric, we believe we are presenting useful information for investors that can help them assess the components of our capital expenditures that are expected to either grow or maintain our current revenue. Further detail related to our capital expenditures is as follows: | | | | | | | | | (In thousands) | | Year Ended December 31, 2021 | Capital Expenditures | | | Revenue enhancing | | $ | 12,911 | | | | | Maintenance | | 2,049 | | Total Capital Expenditures | | 14,960 | | Leasing commissions | | 4,524 | | Total | | $ | 19,484 | |
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Also, as of December 31, 2021 and December 31, 2020, we had $1.5 million and $0.0 million, respectively, of construction in progress which is included in the prepaid expenses and other assets on the consolidated balance sheets. Non-GAAP Financial Measures This section discusses the non-GAAP financial measures we use to evaluate our performance, including Funds from Operations (“FFO”), Adjusted Funds from Operations (“AFFO”) and NOI. While NOI is a property-level measure, AFFO is based on our total performance and therefore reflects the impact of other items not specifically associated with NOI such as interest expense, general and administrative expenses and operating fees to related parties. Additionally, NOI as defined herein, does not reflect an adjustment for straight-line rent but AFFO does. A description of these non-GAAP measures and reconciliations to the most directly comparable GAAP measure, which is net income (loss), is provided below. Adjustments for unconsolidated partnerships and joint ventures are calculated to exclude the proportionate share of the non-controlling interest to arrive at FFO, AFFO and NOI attributable to stockholders. Funds from Operations and Adjusted Funds from Operations Funds from Operations Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts (“NAREIT”), an industry trade group, has promulgated a performance measure known as FFO, which we believe to be an appropriate supplemental measure to reflect the operating performance of a REIT. FFO is not equivalent to net income or loss as determined under GAAP. We calculate FFO, a non-GAAP measure, consistent with the standards established over time by the Board of Governors of NAREIT, as restated in a White Paper and approved by the Board of Governors of NAREIT effective in December 2018 (the “White Paper”). The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding depreciation and amortization related to real estate, gains and losses from sales of certain real estate assets, gain and losses from change in control and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. Adjustments for consolidated partially-owned entities (including our OP) and equity in earnings of unconsolidated affiliates are made to arrive at our proportionate share of FFO attributable to our stockholders. Our FFO calculation complies with NAREIT’s definition. The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, and straight-line amortization of intangibles, which implies that the value of a real estate asset diminishes predictably over time. We believe that, because real estate values historically rise and fall with market conditions, including inflation, interest rates, unemployment and consumer spending, presentations of operating results for a REIT using historical accounting for depreciation and certain other items may be less informative. Historical accounting for real estate involves the use of GAAP. Any other method of accounting for real estate such as the fair value method cannot be construed to be any more accurate or relevant than the comparable methodologies of real estate valuation found in GAAP. Nevertheless, we believe that the use of FFO, which excludes the impact of real estate related depreciation and amortization, among other things, provides a more complete understanding of our performance to investors and to management, and when compared year over year, reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income. Adjusted Funds from Operations In calculating AFFO, we start with FFO, then we exclude certain income or expense items from AFFO that we consider to be more reflective of investing activities, such as non-cash income and expense items and the income and expense effects of other activities that are not a fundamental attribute of our day to day operating business plan, such as amounts related to litigation arising out of the merger with American Realty Capital-Retail Centers of America, Inc. in February 2017 (the “RCA Merger”). These amounts include legal costs incurred as a result of the litigation, portions of which have been and may in the future be reimbursed under insurance policies maintained by us. Insurance reimbursements are deducted from AFFO in the period of reimbursement. We believe that excluding the litigation costs and subsequent insurance reimbursements related to litigation arising out of the RCA Merger helps to provide a better understanding of the operating performance of our business. Other income and expense items also include early extinguishment of debt and unrealized gains and losses, which may not ultimately be realized, such as gains or losses on derivative instruments and gains and losses on investments. In addition, by excluding non-cash income and expense items such as amortization of above-market and below-market leases intangibles, amortization of deferred financing costs, straight-line rent, and share-based compensation related to restricted shares and the 2018 OPP from AFFO, we believe we provide useful information regarding those income and expense items which have a direct impact on our ongoing operating performance. In calculating AFFO, we exclude certain expenses which under GAAP are characterized as operating expenses in determining operating net income (loss). All paid and accrued merger, acquisition and transaction related fees and certain other expenses negatively impact our operating performance during the period in which expenses are incurred or properties are acquired will also have negative effects on returns to investors, but are not reflective of our on-going performance. In addition,
legal fees and expense associated with COVID-19-related lease disputes involving certain tenants negatively impact our operating performance but are not reflective of our on-going performance. Further, under GAAP, certain contemplated non-cash fair value and other non-cash adjustments are considered operating non-cash adjustments to net income (loss). In addition, as discussed above, we view gains and losses from fair value adjustments as items which are unrealized and may not ultimately be realized and not reflective of ongoing operations and are therefore typically adjusted for when assessing operating performance. Excluding income and expense items detailed above from our calculation of AFFO provides information consistent with management’s analysis of our operating performance. Additionally, fair value adjustments, which are based on the impact of current market fluctuations and underlying assessments of general market conditions, but can also result from operational factors such as rental and occupancy rates, may not be directly related or attributable to our current operating performance. By excluding such changes that may reflect anticipated and unrealized gains or losses, we believe AFFO provides useful supplemental information. By providing AFFO, we believe we are presenting useful information that can be used, among other things, to assess our performance without the impact of transactions or other items that are not related to our portfolio of properties. AFFO presented by us may not be comparable to AFFO reported by other REITs that define AFFO differently. Furthermore, we believe that in order to facilitate a clear understanding of our operating results, AFFO should be examined in conjunction with net income (loss) as presented in our consolidated financial statements. AFFO should not be considered as an alternative to net income (loss) as an indication of our performance or to cash flows as a measure of our liquidity or ability to pay dividends. FFO and AFFO for the year ended December 31, 2021 includes income from a lease termination fee of $10.4 million, which is recorded in Revenue from tenants in the consolidated statements of operations. While such termination payments occur infrequently, they represent cash income for accounting and tax purposes and as such management believes they should be included in both FFO and AFFO. Accounting Treatment of Rent Deferrals/Abatements The majority of the concessions granted to our tenants as a result of the COVID-19 pandemic are rent deferrals or temporary rent abatements with the original lease term unchanged and collection of deferred rent deemed probable (see the “Overview - Management Update on the Impacts of the COVID-19 Pandemic” section of this Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional information). As a result of relief granted by the FASB and SEC related to lease modification accounting, rental revenue used to calculate Net Income and NAREIT FFO has not been, and we do not expect it to be, significantly impacted by these types of deferrals. In addition, since we currently believe that these deferral amounts are collectable, we have excluded from the increase in straight-line rent for AFFO purposes the amounts recognized under GAAP relating to these types of rent deferrals. Conversely, for abatements where contractual rent has been reduced, the reduction in revenue is reflected over the remaining lease term for accounting purposes but represents a permanent reduction in revenue and we have, accordingly, reduced our AFFO. For a detailed discussion of our revenue recognition policy, including details related to the relief granted by the FASB and SEC, see Note 2 — Significant Accounting Polices to our consolidated financial statements included in the Annual Report on Form 10-K.
The table below reflects the items deducted from or added to net loss in our calculation of FFO and AFFO for the periods presented: | | | | | | | | | | | | | | | | | | | Year Ended December 31, | (In thousands) | | 2021 | | 2020 | | | Net loss attributable to common stockholders (in accordance with GAAP) | | $ | (63,441) | | | $ | (46,650) | | | | Impairment of real estate investments | | 33,261 | | | 12,910 | | | | Depreciation and amortization | | 130,464 | | | 137,459 | | | | Gain on sale/exchange of real estate investments | | (4,757) | | | (6,456) | | | | Proportionate share of adjustments for non-controlling interests to arrive at FFO | | (198) | | | (228) | | | | FFO attributable to stockholders [1] | | 95,329 | | | 97,035 | | | | Acquisition, transaction and other costs [2] | | 4,378 | | | 2,921 | | | | Litigation cost reimbursements related to the Merger [3] | | — | | | (9) | | | | Legal fees and expenses — COVID-19 lease disputes [4] | | 422 | | | 269 | | | | Accretion of market lease and other intangibles, net | | (4,625) | | | (6,149) | | | | Straight-line rent | | (6,775) | | | (19,510) | | | | Straight-line rent (rent deferral agreements) [5] | | (3,669) | | | 4,649 | | | | Amortization of mortgage premiums and discounts on borrowings | | (968) | | | (2,126) | | | | Loss on non-designated derivatives [6] | | 3,950 | | | 9 | | | | Equity-based compensation | | 17,264 | | | 13,036 | | | | Amortization of deferred financing costs, net [7] | | 12,733 | | | 7,846 | | | | Proportionate share of adjustments for non-controlling interests to arrive at AFFO | | (26) | | | (2) | | | | AFFO attributable to common stockholders [1] | | $ | 118,013 | | | $ | 97,969 | | | |
__________ [1]FFO and AFFO for the year ended December 31, 2021 have not been adjusted to exclude income from lease termination fees of $12.2 million, which is recorded in Revenue from tenants in the consolidated statements of operations. While such termination payments occur infrequently, they represent cash income for accounting and tax purposes and as such management believes they should be included in both FFO and AFFO. [2]Includes primarily prepayment costs incurred in connection with early debt extinguishment as well as litigation costs related to the RCA Merger. [3]Included in “Other income” in our consolidated statement of operations and comprehensive loss. [4]Reflects legal costs incurred related to disputes with tenants due to store closures or other challenges resulting from COVID-19. The tenants involved in these disputes had not recently defaulted on their rent and, prior to the second and third quarters of 2020, had recently exhibited a pattern of regular payment. Based on the tenants involved in these matters, their history of rent payments, and the impact of the pandemic on current economic conditions, we view these costs as COVID-19-related and separable from our ordinary general and administrative expenses related to tenant defaults. We engaged counsel in connection with these issues separate and distinct from counsel we typically engage for tenant defaults. The amount reflects what we believe to be only those incremental legal costs above what we typically incur for tenant-related dispute issues. We may continue to incur these COVID-19 related legal costs in the future. [5]Represents amounts related to deferred rent pursuant to lease negotiations which qualify for FASB relief for which rent was deferred but not reduced. These amounts are included in the straight-line rent receivable on our consolidated balance sheet but are considered to be earned revenue attributed to the current period for which rent was deferred for purposes of AFFO as they are expected to be collected. Accordingly, when the deferred amounts are collected, the amounts reduce AFFO. For rent abatements (including those qualified for FASB relief), where contractual rent has been reduced, the reduction in revenue is reflected over the remaining lease term for accounting purposes but represents a permanent reduction in revenue and we have, accordingly reduced our AFFO. [6]In the year ended December 31, 2021, we recognized a loss of $4.0 million related to the change in fair value of a embedded derivative within the PSA of the CIM Acquisition. We do not consider non-cash losses for embedded derivative fair value adjustments to be capital in nature, nor do we consider them a part of recurring operations. Accordingly, such amounts are excluded for AFFO purposes. See Note 8 — Derivatives and Hedging Activities and Note 16 — Subsequent Events for more information. [7]We issued $500.0 million in Senior Notes in October 2021. The Senior Notes pay semiannual interest which we accrue interest over time for GAAP purposes. Accordingly, to better reflect our operating performance, beginning with the year ended December 31, 2021 and for all periods thereafter, we have elected to remove the impact of the change in accrued interest from the calculation of AFFO, which was previously included in this line item. We have not amended the calculation of AFFO for the year ended 2020 or any other prior years. The impact to AFFO for the change in accrued interest included in this line for the year ended December 31, 2020 was a reduction to AFFO of $0.4 million.
Net Operating Income NOI is a non-GAAP financial measure used by us to evaluate the operating performance of our real estate. NOI is equal to total revenues, excluding contingent purchase price consideration, less property operating and maintenance expense. NOI excludes all other items of expense and income included in the financial statements in calculating net income (loss). We believe NOI provides useful and relevant information because it reflects only those income and expense items that are incurred at the property level and presents such items on an unleveraged basis. We use NOI to assess and compare property level performance and to make decisions concerning the operation of the properties. Further, we believe NOI is useful to investors as a performance measure because, when compared across periods, NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating expenses and acquisition activity on an unleveraged basis, providing perspective not immediately apparent from net income (loss). NOI excludes certain items included in calculating net income (loss) in order to provide results that are more closely related to a property’s results of operations. For example, interest expense is not necessarily linked to the operating performance of a real estate asset. In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort operating performance at the property level. NOI presented by us may not be comparable to NOI reported by other REITs that define NOI differently. We believe that in order to facilitate a clear understanding of our operating results, NOI should be examined in conjunction with net income (loss) as presented in our consolidated financial statements. NOI should not be considered as an alternative to net income (loss) as an indication of our performance or to cash flows as a measure of our liquidity or ability to pay dividends. The following table reflects the items deducted from or added to net loss attributable to stockholders in our calculation of NOI for the year ended December 31, 2021: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (In thousands) | | Same Store | | Acquisitions | | Disposals | | Non-Property Specific | | Total | Net loss attributable to common stockholders (in accordance with GAAP) | | $ | 23,711 | | | $ | 14,796 | | | $ | 6,391 | | | $ | (108,339) | | | $ | (63,441) | | Asset management fees to related party | | — | | | — | | | — | | | 32,804 | | | 32,804 | | Impairment of real estate investments | | 30,947 | | | — | | | 2,314 | | | — | | | 33,261 | | Acquisition and transaction related | | 4,095 | | | — | | | — | | | 283 | | | 4,378 | | Equity-based compensation | | — | | | — | | | — | | | 17,264 | | | 17,264 | | General and administrative | | 1,415 | | | 16 | | | 2 | | | 19,423 | | | 20,856 | | Depreciation and amortization | | 119,414 | | | 10,349 | | | 701 | | | — | | | 130,464 | | Interest expense | | 70,415 | | | — | | | — | | | 11,369 | | | 81,784 | | Gain on sale/exchange of real estate investments | | — | | | — | | | (4,757) | | | — | | | (4,757) | | Other income | | (83) | | | (1) | | | — | | | (7) | | | (91) | | Loss on non-designated derivatives | | — | | | — | | | — | | | 3,950 | | | 3,950 | | Allocation for preferred stock | | — | | | — | | | — | | | 23,262 | | | 23,262 | | Net loss attributable to non-controlling interests | | — | | | — | | | — | | | (9) | | | (9) | | NOI | | $ | 249,914 | | | $ | 25,160 | | | $ | 4,651 | | | $ | — | | | $ | 279,725 | |
The following table reflects the items deducted from or added to net loss attributable to stockholders in our calculation of NOI for the year ended December 31, 2020:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (In thousands) | | Same Store | | Acquisitions | | Disposals | | Non-Property Specific | | Total | Net loss attributable to common stockholders (in accordance with GAAP) | | $ | 32,315 | | | $ | 5,832 | | | $ | 2,425 | | | $ | (87,222) | | | $ | (46,650) | | Asset management fees to related party | | — | | | — | | | — | | | 27,829 | | | 27,829 | | Impairment of real estate investments | | 11,502 | | | — | | | 1,408 | | | — | | | 12,910 | | Acquisition and transaction related | | 1,093 | | | 4 | | | — | | | 1,824 | | | 2,921 | | Equity-based compensation | | — | | | — | | | — | | | 13,036 | | | 13,036 | | General and administrative | | 1,376 | | | 3 | | | 4 | | | 18,300 | | | 19,683 | | Depreciation and amortization | | 132,810 | | | 3,166 | | | 1,483 | | | — | | | 137,459 | | Interest expense | | 66,061 | | | — | | | — | | | 12,406 | | | 78,467 | | Gain on sale of real estate investments | | (2,211) | | | — | | | (4,245) | | | — | | | (6,456) | | Other income | | (93) | | | — | | | (14) | | | (917) | | | (1,024) | | Loss on non-designated derivative | | 9 | | | — | | | — | | | — | | | 9 | | Allocation for preferred stock | | — | | | — | | | — | | | 14,788 | | | 14,788 | | Net loss attributable to non-controlling interests | | — | | | — | | | — | | | (44) | | | (44) | | NOI | | $ | 242,862 | | | $ | 9,005 | | | $ | 1,061 | | | $ | — | | | $ | 252,928 | |
Dividends and Distributions In March 2020, our board of directors approved a reduction in our annualized dividend to $0.85 per share, or $0.0708333 per share on a monthly basis, due to the uncertain and rapidly changing environment caused by the COVID-19 pandemic. The new dividend rate became effective beginning with our April 1 dividend declaration. Historically, and through September 30, 2020, we declared dividends based on monthly record dates and generally paid dividends, once declared, on or around the 15th day of each month (or, if not a business day, the next succeeding business day) to Class A common stock holders of record on the applicable record date. On August 27, 2020, our board of directors approved a change in our Class A common stock dividend policy. Subsequent dividends authorized by our board of directors on shares of our Class A common stock have been, and we anticipate will continue to be, paid on a quarterly basis in arrears on the 15th day of the first month following the end of each fiscal quarter (unless otherwise specified) to Class A common stockholders of record on the record date for such payment. This change affected the frequency of dividend payments only, and did not impact the annualized dividend rate on Class A common stock of $0.85. The amount of dividends payable on our Class A common stock to our common stock holders is determined by our board of directors and is dependent on a number of factors, including funds available for dividends, our financial condition, provisions in our Credit Facility or other agreements that may restrict our ability to pay dividends, capital expenditure requirements, as applicable, requirements of Maryland law and annual distribution requirements needed to maintain our status as a REIT. Dividends on our Series A Preferred Stock accrue in an amount equal to $1.875 per share each year, which is equivalent to the rate of 7.50% of the $25.00 liquidation preference per share per annum. Dividends on the Series A Preferred Stock are payable quarterly in arrears on the 15th day of each of January, April, July and October of each year (or, if not a business day, the next succeeding business day) to holders of record on the applicable record date. Dividends on our Series C Preferred Stock accrue in an amount equal to $1.844 per share each year, which is equivalent to the rate of 7.375% of the $25.00 liquidation preference per share per annum. Dividends on the Series C Preferred Stock are payable quarterly in arrears on the 15th day of each of January, April, July and October of each year (or, if not a business day, the next succeeding business day) to holders of record on the applicable record date. Our Credit Facility contains provisions restricting our ability to pay distributions, including paying cash dividends on equity securities (including the Series A Preferred Stock and Series C Preferred Stock). We are generally permitted to pay dividends on the Series A Preferred Stock, Series C Preferred Stock, and Class A common stock and other distributions for any fiscal quarter in an aggregate amount of up to 105% of annualized MFFO for a look-back period of four consecutive fiscal quarters but only if, as of the last day of the period, after giving effect to the payment of those dividends and distributions, we are able to satisfy a maximum leverage ratio and maintain a combination of cash, cash equivalents and amounts available for future borrowings under the Credit Facility of not less than $60 million. If these conditions are not satisfied, the applicable threshold percentage of MFFO will be 95% instead of 105%. If applicable, during the continuance of an event of default under the Credit Facility, we may not pay dividends or other distributions in excess of the amount necessary for us to maintain our status as a REIT.
We may repurchase shares if we satisfy a maximum leverage ratio after giving effect to the repurchase and also have a combination of cash, cash equivalents and amounts available for future borrowings under the Credit Facility of not less than $40.0 million. Notwithstanding the previous amendments, there is no assurance that the lenders will consent to any additional amendments to the Credit Facility that may become necessary to maintain compliance with the Credit Facility. During the year ended December 31, 2021, cash used to pay dividends on our Class A common stock, dividends on our Series A Preferred Stock, dividends on our Series C Preferred Stock, distributions on our LTIP Units and distributions for limited partnership units that correspond to shares of our Class A common stock was generated from cash flows provided by operations. We have, in prior periods, funded dividends from other sources. If we need to identify financing sources other than operating cash flows to fund dividends at their current level, there can be no assurance that other sources will be available on favorable terms, or at all. Complying with the restriction on the payment of dividends and other distributions in our Credit Facility may limit our ability to incur additional indebtedness and use cash that would otherwise be available to us. Funding dividends from borrowings restricts the amount we can borrow for property acquisitions and investments. Using proceeds from the sale of assets or the issuance of our Class A common stock, Series A Preferred Stock, Series C Preferred Stock or other equity securities to fund dividends rather than invest in assets will likewise reduce the amount available to invest. Funding dividends from the sale of additional securities could also dilute our stockholders. The following table shows the sources for the payment of dividends to common stockholders, including dividends on unvested restricted shares and other dividends and distributions for the periods indicated: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended | | Year Ended December 31, 2021 | | | March 31, 2021 | | June 30, 2021 | | September 30, 2021 | | December 31, 2021 | | (In thousands) | | Amount | | Percentage of Dividends | | Amount | | Percentage of Dividends | | Amount | | Percentage of Dividends | | Amount | | Percentage of Dividends | | Amount | | Percentage of Dividends | Dividends and other cash distributions: | | | | | | | | | | | | | | | | | | | | | Cash dividends paid to common stockholders | | $ | 23,128 | | | 85.8 | % | | $ | 23,122 | | | 79.1 | % | | $ | 25,037 | | | 81.0 | % | | $ | 26,245 | | [2] | 81.3 | % | | $ | 97,532 | | [2] | 81.7 | % | Cash dividends paid to Series A preferred stockholders | | 3,691 | | | 13.7 | % | | 3,719 | | | 12.7 | % | | 3,719 | | | 12.0 | % | | 3,719 | | | 11.5 | % | | 14,848 | | | 12.4 | % | Cash dividends paid to Series C preferred stockholders | | — | | | — | % | | 2,263 | | | 7.7 | % | | 2,117 | | | 6.8 | % | | 2,118 | | [3] | 6.6 | % | | 6,498 | | [3] | 5.4 | % | Cash distributions on LTIP Units | | 94 | | | 0.3 | % | | 96 | | | 0.3 | % | | — | | | — | % | | 164 | | | 0.5 | % | | 354 | | | 0.3 | % | Cash distributions on Class A Units | | 37 | | | 0.1 | % | | 36 | | | 0.1 | % | | 37 | | | 0.1 | % | | 37 | | [2] | 0.1 | % | | 147 | | | 0.1 | % | Total dividends and other cash distributions paid | | $ | 26,950 | | | 100.0 | % | | $ | 29,236 | | | 100.0 | % | | $ | 30,910 | | | 100.0 | % | | $ | 32,283 | | | 100.0 | % | | $ | 119,379 | | | 100.0 | % | | | | | | | | | | | | | | | | | | | | | | Source of dividend and other cash distributions coverage: | | | | | | | | | | | | | | | | | | | | | Cash flows provided by operations [1] | | $ | 26,950 | | | 100.0 | % | | $ | 29,236 | | | 100.0 | % | | $ | 30,910 | | | 100.0 | % | | $ | 32,283 | | | 100.0 | % | | $ | 119,379 | | [1] | 100.0 | % | Available cash on hand | | — | | | — | % | | — | | | — | % | | — | | | — | % | | — | | | — | % | | — | | | — | % | Total sources of dividend and other cash distributions coverage | | $ | 26,950 | | | 100.0 | % | | $ | 29,236 | | | 100.0 | % | | $ | 30,910 | | | 100.0 | % | | $ | 32,283 | | | 100.0 | % | | $ | 119,379 | | | 100.0 | % | | | | | | | | | | | | | | | | | | | | | | Cash flows provided by operations (GAAP basis) | | $ | 34,422 | | | | | $ | 30,935 | | | | | $ | 35,166 | | | | | $ | 44,704 | | [4] | | | $ | 145,227 | | | | Net loss (in accordance with GAAP) | | $ | (3,754) | | | | | $ | (1,482) | | | | | $ | (565) | | | | | $ | (34,387) | | | | | $ | (40,188) | | | |
________ [1]Year-to-date totals may not equal the sum of the quarters. Each quarter and year-to-date period is evaluated separately for purposes of this table. [2]As more fully discussed in Note 9 -Stockholder’s Equity and Non-controlling interests - dividends relating to the fourth quarter of 2021 on our Class A common stock totaling $26.6 million were declared and paid in January 2022. Because these dividends were not declared prior to December 31, 2021, they are not accrued in our financial statements until 2022. [3]Our Series C Preferred Stock was first issued in December 2020, and we were not required to begin paying dividends on the Series C Preferred Stock until April 2021. The first quarterly dividend included amounts attributable to December 2020 in addition to the amounts attributable for the quarter ending March 31, 2021. [4]Reflects the collection of a $10.4 million termination fee recognized in the third quarter of 2021.
Loan Obligations The payment terms of certain of our mortgage loan obligations require principal and interest payments monthly, with all unpaid principal and interest due at maturity. Our loan agreements stipulate that we comply with specific reporting covenants. As of December 31, 2021, we were in compliance with the debt covenants under our loan agreements. Election as a REIT We elected to be taxed as a REIT under Sections 856 through 860 of the Code, effective for our taxable year ended December 31, 2013. We believe that, commencing with such taxable year, we have been organized and have operated in a manner so that we qualify for taxation as a REIT under the Code. We intend to continue to operate in such a manner, but can provide no assurances that we will operate in a manner so as to remain qualified as a REIT. To continue to qualify for taxation as a REIT, we must distribute annually at least 90% of our REIT taxable income (which does not equal net income as calculated in accordance with GAAP), determined without regard for the deduction for dividends paid and excluding net capital gains, and must comply with a number of other organizational and operational requirements. If we continue to qualify for taxation as a REIT, we generally will not be subject to federal corporate income tax on the portion of our REIT taxable income that we distribute to our stockholders. Even if we qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income and properties, as well as federal income and excise taxes on our undistributed income. Inflation We may be adversely impacted by inflation on the leases that do not contain indexed escalation provisions, or those leases which have escalations at rates which do not exceed or approximate current inflation rates. For the year ended December 31, 2021, the increase to the 12-month CPI for all items, as published by the Bureau of Labor Statistics, was 7.0%. To help mitigate the adverse impact of inflation, approximately 80.9% of our leases with our tenants contain rent escalation provisions which average 1.2% per year. These provisions generally increase rental rates during the terms of the leases either at fixed rates or indexed escalations (based on the Consumer Price Index or other measures). Approximately 77.8% are fixed-rate, 3.1% are based on the Consumer Price Index and 19.1% do not contain any escalation provisions. In addition, we may be required to pay costs for maintenance and operation of properties which may adversely impact our results of operations due to potential increases in costs and operating expenses resulting from inflation. However, our net leases require the tenant to pay its allocable share of operating expenses, which may include common area maintenance costs, real estate taxes and insurance. This may reduce our exposure to increases in costs and operating expenses resulting from inflation. As the costs of general goods and services continue to rise, we may be adversely impacted by increases in general and administrative costs due to overall inflation. Related-Party Transactions and Agreements Please see Note 11— Related Party Transactions and Arrangements to our consolidated financial statements included in this Annual Report on Form 10-K. Off-Balance Sheet Arrangements We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. Item 7A. Quantitative and Qualitative Disclosures About Market Risk. The market risk associated with financial instruments and derivative financial instruments is the risk of loss from adverse changes in market prices or interest rates. Our long-term debt, which consists of secured financings, bears interest at fixed rates. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. To achieve these objectives, from time to time, we may enter into interest rate hedge contracts such as swaps, collars and treasury lock agreements in order to mitigate our interest rate risk with respect to various debt instruments. We would not hold or issue these derivative contracts for trading or speculative purposes. We do not have any foreign operations and thus are not exposed to foreign currency fluctuations. As of December 31, 2021, our fixed rate debt consisted of secured mortgage financings with a gross carrying value of $1.5 billion, which approximates their fair value, and senior notes with a gross carrying value of $500.0 million, which approximates their fair value. Changes in market interest rates on our fixed-rate debt impact its fair value, but it has no impact on interest expense incurred or cash flow. For instance, if interest rates rise 100 basis points and our fixed-rate debt balance remains constant, we expect the fair value of our obligation to decrease, the same way the price of a bond declines as interest rates rise. The sensitivity analysis related to our fixed–rate debt assumes an immediate 100 basis point move in interest rates from their December 31, 2021 levels, with all other variables held constant. A 100 basis point increase in market interest rates would result in a decrease in the fair value of our fixed-rate debt by $66.6 million. A 100 basis point decrease in market interest rates would result in an increase in the fair value of our fixed-rate debt by $70.8 million.
As of December 31, 2021 we did not have any variable-rate debt. These amounts were determined by considering the impact of hypothetical interest rate changes on our borrowing costs, and, assuming no other changes in our capital structure. The information presented above includes only those exposures that existed as of December 31, 2021 and does not consider exposures or positions arising after that date. The information represented herein has limited predictive value. Future actual realized gains or losses with respect to interest rate fluctuations will depend on cumulative exposures, hedging strategies employed and the magnitude of the fluctuations. Item 8. Financial Statements and Supplementary Data. The information required by this Item 8 is hereby incorporated by reference to our Consolidated Financial Statements beginning on page F-1 of this Annual Report on Form 10-K. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None. Item 9A. Controls and Procedures. Disclosure Controls and Procedures In accordance with Rules 13a-15(b) and 15d-15(b) of the Exchange Act, our disclosure controls and procedures include internal controls and other procedures designed to provide reasonable assurance that information required to be disclosed in this and other reports filed under the Exchange Act is recorded, processed, summarized and reported within the required time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures. It should be noted that no system of controls can provide complete assurance of achieving a company’s objectives and that future events may impact the effectiveness of a system of controls. Our Chief Executive Officer and Chief Financial Officer, carried out an evaluation, together with other members of our management, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Annual Report on Form 10-K. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective December 31, 2021 at a reasonable level of assurance. Management’s Annual Reporting on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) or 15d-15(f) promulgated under the Exchange Act. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, (“GAAP”).and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate. PrinciplesOur management assessed the effectiveness of Consolidationour internal control over financial reporting as of December 31, 2021. In making that assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (2013). In making that assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (2013). Based on its assessment, our management concluded that, as of December 31, 2021, our internal control over financial reporting was effective based on those criteria.
The effectiveness of our internal control over financial reporting as of December 31, 2021 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in its report, which is included on page F-2 in this Annual Report on Form 10-K.
Changes in Internal Control over Financial Reporting During the three months ended December 31, 2021, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item9B. Other Information. Effective February 10, 2022, the board of directors approved the Fifth Amended and Restated Bylaws, which amend and restate the Company’s existing bylaws to reflect the Company’s name change from “American Finance Trust, Inc.” to “The Necessity Retail REIT, Inc.” The foregoing summary of the Fifth Amended and Restated Bylaws does not purport to be complete and is qualified in its entirety by reference to the full text of the Amended Bylaws, a copy of which is attached hereto as Exhibit 3.2 and is incorporated by reference herein.
Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections Not Applicable.
PART III Item 10. Directors, Executive Officers and Corporate Governance. We have adopted a Code of Business Conduct and Ethics that applies to all of our executive officers and directors, including but not limited to, our principal executive officer and principal financial officer. A copy of our code of ethics may be obtained, free of charge, by sending a written request to our executive office: 650 Fifth Avenue – 30th Floor, New York, NY 10019, Attention: Chief Financial Officer. Our Code of Business Conduct and Ethics is also publicly available on our website at www.necessityretailreit.com. If we make any substantive amendments to the code of ethics or grant any waiver, including any implicit waiver, from a provision of the Code of Business Conduct and Ethics to our chief executive officer, chief financial officer, chief accounting officer or controller or persons performing similar functions, we will disclose the nature of the amendment or waiver on that website or in a Current Report on Form 8-K. The information required by this Item will be set forth in our definitive proxy statement with respect to our 2022 annual meeting of stockholders to be filed not later than 120 days after the end of the 2021 fiscal year, and is incorporated herein by reference. Item 11. Executive Compensation. The information required by this Item will be set forth in our definitive proxy statement with respect to our 2022 annual meeting of stockholders to be filed not later than 120 days after the end of the 2021 fiscal year, and is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The information required by this Item will be set forth in our definitive proxy statement with respect to our 2022 annual meeting of stockholders to be filed not later than 120 days after the end of the 2021 fiscal year, and is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions, and Director Independence. The information required by this Item will be set forth in our definitive proxy statement with respect to our 2022 annual meeting of stockholders to be filed not later than 120 days after the end of the 2021 fiscal year, and is incorporated herein by reference. Item 14. Principal Accounting Fees and Services. The information required by this Item will be set forth in our definitive proxy statement with respect to our 2022 annual meeting of stockholders to be filed not later than 120 days after the end of the 2021 fiscal year, and is incorporated herein by reference.
PART IV Item 15. Exhibits, Financial Statement Schedules. (a) Financial Statement Schedules See the Index to Consolidated Financial Statements at page F-1 of this report. The following financial statement schedules are included herein beginning at page F-58 of this report: Schedule III — Real Estate and Accumulated Depreciation (b) Exhibits EXHIBIT INDEX The following exhibits are included, or incorporated by reference, in this Annual Report on Form 10-K for the year ended December 31, 2021 (and are numbered in accordance with Item 601 of Regulation S-K): | | | | | | | | | Exhibit No. | | Description | | | Articles of Restatement | | | Articles Supplementary relating to reclassification of common stock, classification of additional shares of 7.375% Series C Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share, and classification of additional shares of 7.50% Series A Cumulative Redeemable Perpetual Preferred Stock, par value $0.01 per share, filed January 13, 2021 | | | Fifth Amended and Restated Bylaws | | | Second Amended and Restated Agreement of Limited Partnership of American Finance Operating Partnership, L.P., dated as of July 19, 2018 | | | First Amendment to Second Amended and Restated Agreement of Limited Partnership of American Finance Operating Partnership, L.P., dated as of November 6, 2018 | | | Second Amendment, dated March 22, 2019, to the Second Amended and Restated Agreement of Limited Partnership of American Finance Operating Partnership, L.P, dated as of July 19, 2018 | | | Third Amendment, dated May 8, 2019, to the Second Amended and Restated Agreement of Limited Partnership of American Finance Operating Partnership, L.P, dated as of July 19, 2018 | | | Fourth Amendment, dated September 6, 2019, to the Second Amended and Restated Agreement of Limited Partnership of American Finance Operating Partnership, L.P., dated July 19, 2018 | | | Fifth Amendment, dated October 4, 2019, to the Second Amended and Restated Agreement of Limited Partnership of American Finance Operating Partnership, L.P., dated July 19, 2018 | | | Sixth Amendment, dated December 16, 2020, to the Second Amended and Restated Agreement of Limited Partnership of American Finance Operating Partnership, L.P., dated July 19, 2018 | | | Seventh Amendment, dated January 13, 2021, to the Second Amended and Restated Agreement of Limited Partnership of American Finance Operating Partnership, L.P., dated July 19, 2018 | | | Eighth Amendment, dated as of July 21, 2021, to the Second Amended and Restated Agreement of Limited Partnership of American Finance Operating Partnership, L.P., dated July 19, 2018 | | | Amended and Restated Distribution Reinvestment Plan | | | Master Indenture, dated as of May 30, 2019, as amended by that certain Amendment No. 1 dated as of June 3, 2021, by and among AFN ABSPROP001, LLC, AFN ABSPROP001-A, LLC, AFN ABSPROP001-B, LLC, AFN ABSPROP002, LLC, AFN ABSPROP002-A, LLC, AFN ABSPROP002-B, LLC, AFN ABSPROP002-C, LLC and Citibank, N.A., as indenture trustee | | | Series 2019 I Indenture Supplement, dated as of May 30, 2019, by and among AFN ABSPROP001, LLC, AFN ABSPROP001-A, LLC, AFN ABSPROP001-B, LLC, and Citibank, N.A., as indenture trustee | | | Series 2021-1 Indenture Supplement, dated as of June 3, 2021, by and among AFN ABSPROP001, LLC, AFN ABSPROP001-A, LLC, AFN ABSPROP001-B, LLC, AFN ABSPROP002, LLC, AFN ABSPROP002-A, LLC, AFN ABSPROP002-B, LLC, AFN ABSPROP002-C, LLC and Citibank, N.A., as indenture trustee | | | Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 | | | Rights Agreement, dated April 13, 2020, between American Finance Trust, Inc. and Computershare Trust Company, N.A., as Rights Agent | | | Amendment to Rights Agreement dated as of February 25, 2021, between American Finance Trust, Inc. and Computershare Trust Company, N.A., as Rights Agent | | | Indenture, dated as of October 7, 2021, among American Finance Trust, Inc., American Finance Operating Partnership, L.P., the Guarantors party thereto and U.S. Bank National Association, as trustee (including the form of Notes) |
| | | | | | | | | Exhibit No. | | Description | | | Equity Distribution Agreement, May 8, 2019, among the American Finance Trust, Inc., American Finance Operating Partnership, L.P., BMO Capital Markets Corp., BBVA Securities Inc., Capital One Securities, Inc., Citizens Capital Markets, Inc., KeyBanc Capital Markets Inc., Mizuho Securities USA LLC and SunTrust Robinson Humphrey, Inc. (Class A common stock) | | | Amendment No. 1, dated as of June 25, 2019, to Equity Distribution Agreement, dated May 8, 2019, among American Finance Trust, Inc., American Finance Operating Partnership, L.P., BMO Capital Markets Corp., BBVA Securities Inc., B. Riley FBR, Inc., Citizens Capital Markets, Inc., KeyBanc Capital Markets Inc., Ladenburg Thalmann & Co. Inc., SunTrust Robinson Humphrey, Inc. and SG Americas Securities, LLC (Class A Common Stock) | | | Amendment No. 2, dated as of August 6, 2021, to Equity Distribution Agreement, dated May 8, 2019, among American Finance Trust, Inc., American Finance Operating Partnership, L.P., BMO Capital Markets Corp., BBVA Securities Inc., B. Riley FBR, Inc., Citizens Capital Markets, Inc., KeyBanc Capital Markets Inc., Ladenburg Thalmann & Co. Inc., SunTrust Robinson Humphrey, Inc. and SG Americas Securities, LLC (Class A Common Stock) | | | Equity Distribution Agreement, May 8, 2019, among the American Finance Trust, Inc., American Finance Operating Partnership, L.P., BMO Capital Markets Corp., BBVA Securities Inc., Capital One Securities, Inc., Citizens Capital Markets, Inc., KeyBanc Capital Markets Inc., Mizuho Securities USA LLC and SunTrust Robinson Humphrey, Inc. (Series A Preferred Stock) | | | Amendment No. 1, dated as of June 25, 2019, to Equity Distribution Agreement, dated May 8, 2019, among American Finance Trust, Inc., American Finance Operating Partnership, L.P., BMO Capital Markets Corp., BBVA Securities Inc., B. Riley FBR, Inc., Citizens Capital Markets, Inc., KeyBanc Capital Markets Inc., Ladenburg Thalmann & Co. Inc., SunTrust Robinson Humphrey, Inc. and D.A. Davidson & Co. (Series A Preferred Stock) | | | Amendment No. 2, dated as of October 4, 2019, to Equity Distribution Agreement, dated May 8, 2019, among American Finance Trust, Inc., American Finance Operating Partnership, L.P., BMO Capital Markets Corp., BBVA Securities Inc., B. Riley FBR, Inc., Citizens Capital Markets, Inc., KeyBanc Capital Markets Inc., Ladenburg Thalmann & Co. Inc., SunTrust Robinson Humphrey, Inc. and D.A. Davidson & Co. (Series A Preferred Stock) | | | Amendment No. 3, dated as of January 13, 2021, to Equity Distribution Agreement, dated May 8, 2019, among American Finance Trust, Inc., American Finance Operating Partnership, L.P., and BMO Capital Markets Corp., BBVA Securities Inc., B. Riley Securities, Inc., Citizens Capital Markets, Inc., KeyBanc Capital Markets Inc., Ladenburg Thalmann & Co. Inc., Truist Securities, Inc. and D.A. Davidson & Co. (Series A Preferred Stock) | | | Amendment No. 4, dated as of August 6, 2021, to Equity Distribution Agreement, dated May 8, 2019, among American Finance Trust, Inc., American Finance Operating Partnership, L.P., and BMO Capital Markets Corp., BBVA Securities Inc., B. Riley Securities, Inc., Citizens Capital Markets, Inc., KeyBanc Capital Markets Inc., Ladenburg Thalmann & Co. Inc., Truist Securities, Inc. and D.A. Davidson & Co. (Series A Preferred Stock) | | | Third Amended and Restated Advisory Agreement, dated as of September 6, 2016, by and among American Finance Trust, Inc., American Finance Operating Partnership, L.P. and American Finance Advisors, LLC | | | Amendment No. 1 to the Third Amended and Restated Advisory Agreement, dated July 19, 2018, among American Finance Trust, Inc., American Finance Operating Partnership, L.P. and American Finance Advisors, LLC | | | Amendment No. 2, dated as of March 18, 2019, to the Third Amended and Restated Advisory Agreement, by and among American Finance Trust, Inc., American Finance Operating Partnership, L.P. and American Finance Advisors, LLC | | | Amendment No. 3, dated as of March 30, 2020, to the Third Amended and Restated Advisory Agreement, by and among American Finance Trust, Inc., American Finance Operating Partnership, L.P. and American Finance Advisors, LLC | | | Amendment No. 4, dated as of January 13, 2021, to the Third Amended and Restated Advisory Agreement, by and among American Finance Trust, Inc., American Finance Operating Partnership, L.P. and American Finance Advisors, LLC | | | Amended and Restated Property Management Agreement, dated as of September 6, 2016, by and among American Finance Trust, Inc. and American Finance Properties, LLC (as assignee of American Realty Capital Retail Advisor, LLC) | | | First Amendment to Amended and Restated Property Management Agreement, dated as of December 8, 2017, by and among American Finance Trust, Inc. and American Finance Properties, LLC and certain subsidiaries of American Finance Operating Partnership, LP |
| | | | | | | | | Exhibit No. | | Description | | | Second Amendment, dated as of November 4, 2020, to Amended and Restated Property Management Agreement, by and among American Finance Trust, Inc., American Finance Properties, LLC and certain subsidiaries of American Finance Operating Partnership, L.P. | | | Form of Property Management Agreement by and between American Finance Properties, LLC and certain subsidiaries of American Finance Operating Partnership, LP | | | Amended and Restated Leasing Agreement, dated as of September 6, 2016, by and among American Finance Trust, Inc. and American Finance Properties, LLC (as assignee of American Realty Capital Retail Advisor, LLC) | | | First Amendment, dated as of November 4, 2020, to Amended and Restated Leasing Agreement, by and between American Finance Trust, Inc. and American Finance Properties, LLC | | | Amended and Restated Property Management and Leasing Agreement, dated as of September 6, 2016, by and among American Finance Trust, Inc., American Finance Trust Operating Partnership, L.P. and American Finance Properties, LLC | | | First Amendment, dated as of August 27, 2020, to Amended and Restated Property Management and Leasing Agreement, by and among American Finance Trust, Inc., American Finance Trust Operating Partnership L.P. and American Finance Properties, LLC | | | Property Management and Leasing Agreement, dated as of December 18, 2019, by and among American Finance Properties, LLC, ARC HR5SSRI001, LLC, ARC HR5SSMA003, LLC, ARC HR5SSMA001, LLC and ARC HR5SSMA002, LLC | | | Property Management and Leasing Agreement, dated as of July 24, 2020, by and among the parties identified on Exhibit A thereto and American Finance Properties, LLC | | | Amended and Restated Property Management and Servicing Agreement, dated as of June 3, 2021, by and among AFN ABSPROP001, LLC, AFN ABSPROP001-A, LLC, AFN ABSPROP001-B, LLC, AFN ABSPROP002, LLC, AFN ABSPROP002-A, LLC, AFN ABSPROP002-B, LLC, AFN ABSPROP002-C, LLC, American Finance Properties, LLC, as property manager and special servicer, KeyBank National Association, as back-up manager, and Citibank N.A., as indenture trustee | | | Amended and Restated Guaranty, dated as of June 3, 2021, by American Finance Operating Partnership, L.P. for the benefit of Citibank N.A., as indenture trustee | | | Form of Restricted Share Award Agreement (Directors - Pre-Listing) | | | Indemnification Agreement by and among American Finance Trust, Inc., Peter M. Budko, Robert H. Burns, David Gong, William M. Kahane, Stanley R. Perla, Nicholas Radesca, Nicholas S. Schorsch, Edward M. Weil, Jr., American Realty Capital Advisors V, LLC, AR Capital, LLC and RCS Capital Corporation, dated December 31, 2014 | | | Amended and Restated Credit Agreement, dated as of October 1, 2021, by and among American Finance Operating Partnership, L.P., American Finance Trust, Inc. and the other guarantors party thereto, BMO Harris Bank N.A., as administrative agent, and the other lender parties thereto | | | Loan Agreement dated as of December 8, 2017 among Societe Generale and UBS AG as Lenders and certain subsidiaries of American Finance Operating Partnership, LP, as Borrowers | | | Guaranty of Recourse Obligations dated as of December 8, 2017 by American Finance Trust, Inc. in favor of Societe Generale and UBS AG | | | Form of Restricted Share Award Agreement (Directors - Post-Listing) | | | Advisor Multi-Year Outperformance Award Agreement, dated as of July 19, 2018, between American Finance Operating Partnership, L.P. and America Finance Advisors, LLC | | | First Amendment, dated as of March 6, 2019, to 2018 Advisor Multi-Year Outperformance Award Agreement, dated as of July 19, 2018, between American Finance Operating Partnership, L.P. and America Finance Advisors, LLC
| | | Advisor Multi-Year Outperformance Award Agreement, dated as of July 21, 2021, by and among American Finance Trust, Inc., American Finance Operating Partnership, L.P. and American Finance Advisors, LLC | | | 2018 Advisor Omnibus Incentive Compensation Plan | | | 2018 Omnibus Incentive Compensation Plan | | | Form of Indemnification Agreement (Post-Listing) | | | Loan Agreement, dated as of July 24, 2020, by and among the entities listed on Schedule I thereto, as borrowers, and Column Financial, Inc., as lender | | | Limited Recourse Guaranty, dated as of July 24, 2020, by American Finance Operating Partnership, L.P. in favor of Column Financial, Inc. | | | Environmental Indemnity Agreement, dated as of July 24, 2020, by and among the entities listed on Schedule I thereto, American Finance Operating Partnership, L.P. and Column Financial, Inc. | | | Form of Restricted Share Award Agreement (Officers) |
| | | | | | | | | Exhibit No. | | Description | | | Equity Distribution Agreement, dated January 13, 2021, by and among American Finance Trust, Inc., American Finance Operating Partnership, L.P. and BMO Capital Markets Corp., BBVA Securities Inc., B. Riley Securities, Inc., Citizens Capital Markets, Inc., D.A. Davidson & Co., KeyBanc Capital Markets Inc., Ladenburg Thalmann & Co. Inc. and Truist Securities, Inc. (Series C Preferred Stock) | | | Amendment No. 1, dated as of August 6, 2021, to Equity Distribution Agreement, dated January 13, 2021, by and among American Finance Trust, Inc., American Finance Operating Partnership, L.P. and BMO Capital Markets Corp., BBVA Securities Inc., B. Riley Securities, Inc., Citizens Capital Markets, Inc., D.A. Davidson & Co., KeyBanc Capital Markets Inc., Ladenburg Thalmann & Co. Inc. and Truist Securities, Inc. (Series C Preferred Stock) | | | Agreement of Purchase and Sale, dated as of December 17, 2021, by and between the Sellers identified therein and American Finance Operating Partnership | | | First Amendment to Agreement of Purchase and Sale, dated January 3, 2022, by and between the Sellers identified therein and American Finance Operating Partnership | | | Second Amendment to Agreement of Purchase and Sale, dated January 10, 2022, by and between the Sellers identified therein and American Finance Operating Partnership | | | Third Amendment to Agreement of Purchase and Sale, dated January 14, 2022, by and between the Sellers identified therein and American Finance Operating Partnership | | | Fourth Amendment to Agreement of Purchase and Sale, dated January 19, 2022, by and between the Sellers identified therein and American Finance Operating Partnership | | | Fifth Amendment to Agreement of Purchase and Sale, dated January 21, 2022, by and between the Sellers identified therein and American Finance Operating Partnership | | | Leasing Earnout Side Letter Agreement, dated February 9, 2022, by and between the Sellers identified therein and American Finance Operating Partnership | | | Sixth Amendment to Agreement of Purchase and Sale, dated February 10, 2022, by and between the Sellers identified therein and American Finance Operating Partnership | | | Seventh Amendment to Agreement of Purchase and Sale, dated February 11, 2022, by and between the Sellers identified therein and American Finance Operating Partnership | | | List of Subsidiaries | | | Consent of PricewaterhouseCoopers LLP | | | Certification of the Principal Executive Officer of American Finance Trust, Inc. pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | Certification of the Principal Financial Officer of American Finance Trust, Inc. pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | Written statements of the Principal Executive Officer and Principal Financial Officer of American Finance Trust, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | 101.INS * | | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | 101.SCH * | | Inline XBRL Taxonomy Extension Schema Document | 101.CAL * | | Inline XBRL Taxonomy Extension Calculation Linkbase Document | 101.DEF * | | Inline XBRL Taxonomy Extension Definition Linkbase Document | 101.LAB * | | Inline XBRL Taxonomy Extension Label Linkbase Document | 101.PRE * | | Inline XBRL Taxonomy Extension Presentation Linkbase Document | 104 * | | Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
____________________ * Filed herewith. (1)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on July 19, 2018. (2)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on April 13, 2020. (3)Filed as an exhibit to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 filed with the SEC on November 6, 2018. (4)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on March 25, 2019. (5)Filed as an exhibit to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 filed with the SEC on May 8, 2019. (6)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on September 6, 2019. (7)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on October 4, 2019. (8)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on December 16, 2020. (9)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on January 13, 2021. (10)Filed as an exhibit to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 filed with the SEC on August 8, 2019.
(11)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on May 31, 2019. (12)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on June 25, 2019. (13)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on September 7, 2016. (14)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on March 18, 2019. (15)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on March 30, 2020. (16)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on January 13, 2021. (17)Filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on March 19, 2018. (18)Filed as an exhibit to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 filed with the SEC on November 5, 2020. (19)Filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on February 27, 2020. (20)Filed as an exhibit to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 filed with the SEC on August 11, 2016. (21)Filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2014 filed with the SEC on May 15, 2015. (22)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on May 2, 2018. (23)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on November 7, 2019. (24)Filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on March 7, 2019. (25)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on July 28, 2020. (26)Filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on February 25, 2021. (27)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on June 4, 2021. (28)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on July 21, 2021. (29)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on August 6, 2021. (30)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on October 4, 2021. (31)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on October 8, 2021. (32)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on December 20, 2021. (33)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on February 14, 2022. Item 16. Form 10-K Summary. Not applicable.
SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized this 24th day of February, 2022. | | | | | | | | | | THE NECESSITY RETAIL REIT, INC. | | By: | /s/ EDWARD M. WEIL, JR. | | | EDWARD M. WEIL, JR. | | | CHIEF EXECUTIVE OFFICER, PRESIDENT AND CHAIRMAN OF THE BOARD OF DIRECTORS |
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. | | | | | | | | | | | | | | | Name | | Capacity | | Date | | | | | | /s/ Edward M. Weil, Jr. | | Chief Executive Officer, President and Chairman of the Board of Directors (Principal Executive Officer) | | February 24, 2022 | Edward M. Weil, Jr. | | | | | | | | | /s/ Jason F. Doyle | | Chief Financial Officer, Treasurer and Secretary (Principal Financial Officer and Principal Accounting Officer) | | February 24, 2022 | Jason F. Doyle | | | | | | | | | /s/ Lisa D. Kabnick | | Lead Independent Director | | February 24, 2022 | Lisa D. Kabnick | | | | | | | | | /s/ Stanley Perla | | Independent Director | | February 24, 2022 | Stanley Perla | | | | | | | | | | /s/ Leslie D. Michelson | | Independent Director | | February 24, 2022 | Leslie D. Michelson | | | | | | | | | /s/ Edward G. Rendell | | Independent Director | | February 24, 2022 | Edward G. Rendell | | | |
THE NECESSITY RETAIL REIT, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS | | | | | | | Page | | | | | | | | | | | | | | | | | | | | | | | | | Financial Statement Schedules: | | | |
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of The Necessity Retail REIT, Inc.:
Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of The Necessity Retail REIT, Inc. and its subsidiaries (the “Company”) as of December 31, 2021 and 2020, and the related consolidated statements of operations and comprehensive loss, of statements of changes in equity and of statements of cash flows for each of the three years in the period ended December 31, 2021, including the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements includereferred to above present fairly, in all material respects, the accountsfinancial position of the Company as of December 31, 2021 and 2020, and the OPresults of its operations and its subsidiaries. All inter-company accountscash flows for each of the three years in the period ended December 31, 2021 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and transactionsfor its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Reporting on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are eliminateda public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in consolidation. In determiningaccordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the Company has a controllingconsolidated financial intereststatements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rightsall material respects. Our audits of the other partnersconsolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or membersfraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as whetherevaluating the entityoverall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a variable interest entity (“VIE”)process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for whichexternal purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the Company ismaintenance of records that, in reasonable detail, accurately and fairly reflect the primary beneficiary. The Company has determined the OP is a VIE of which the Company is the primary beneficiary. Substantially alltransactions and dispositions of the Company’s assets and liabilitiesof the company; (ii) provide reasonable assurance that transactions are held by the OP. The Company has determined the OP is a VIE of which the Company is the primary beneficiary. Use of Estimates
Therecorded as necessary to permit preparation of financial statements in conformityaccordance with GAAP requiresgenerally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the datedirectors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Report of Independent Registered Public Accounting Firm Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the reportedconsolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Purchase Price Allocations for Property Acquisitions As described in Notes 2 and 3 to the consolidated financial statements, the Company completed real estate acquisitions with consideration paid for acquired real estate investments, net of liabilities assumed of $182.2 million for the year ended December 31, 2021. For acquired properties with leases classified as operating leases, management allocated the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values. Tangible assets include land, land improvements, buildings, fixtures and tenant improvements on an as-if vacant basis. Management utilizes various estimates, processes and information to determine the as-if vacant property value. Management estimates fair value using data from appraisals, comparable sales, discounted cash flow analysis and other methods. Fair value estimates are also made using significant assumptions such as capitalization rates, fair market lease rates, discount rates and land values per square foot. Identifiable intangible assets include amounts allocated to acquired leases for above- and below-market lease rates and the value of revenuesin-place leases. Above-market and expenses duringbelow-market lease values for acquired properties are initially recorded based on the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding revenue recognition,present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining initial term of the lease for above-market leases and the remaining initial term plus the term of any below-market fixed rate renewal options for below-market leases. The principal considerations for our determination that performing procedures relating to purchase price allocations to record investments in real estate, andfor property acquisitions is a critical audit matter are (i) the significant judgment by management when developing the fair value measurements, as applicable.estimates of tangible and intangible assets acquired and liabilities assumed; (ii) a high degree of auditor judgment and subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to capitalization rates, fair market lease rates, discount rates and land values per square foot; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge. ImpactsAddressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to purchase price allocations for property acquisitions, including controls over management’s valuation of tangible and intangible assets acquired and liabilities assumed and controls over development of the COVID-19 Pandemic
During the first quarter of 2020, the global COVID-19 pandemic that has spread around the world and to every stateassumptions used in the United States commenced. valuation of tangible and intangible assets acquired and liabilities assumed, related to capitalization rates, fair market lease rates, discount rates and land values per square foot. These procedures also included, among others, (i) reading the purchase agreements and lease documents; (ii) testing the completeness and accuracy of underlying data used by management in the fair value estimates; and (iii) testing management’s process for estimating the fair value of tangible and intangible assets acquired and liabilities assumed, including testing management’s projected cash flows and evaluating the accuracy of valuation outputs. Testing management’s process included evaluating the appropriateness of the valuation methods and reasonableness of the significant assumptions, related to capitalization rates, fair market lease rates, discount rates and land values per square foot. Evaluating the reasonableness of the significant assumptions included considering whether these assumptions were consistent with external market data, comparable transactions, and evidence obtained in other areas of the audit. In conjunction with certain purchase price allocations, professionals with specialized skill and knowledge were used to assist in evaluating the reasonableness of certain assumptions utilized by management, related to capitalization rates, fair market lease rates, discount rates and land values per square foot.
/s/ PricewaterhouseCoopers LLP New York, New York February 24, 2022
We have served as the Company’s auditor since 2019.
THE NECESSITY RETAIL REIT, INC.
CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) | | | | | | | | | | | | | December 31, | | 2021 | | 2020 | ASSETS | | | | Real estate investments, at cost: | | | | Land | $ | 729,048 | | | $ | 723,316 | | Buildings, fixtures and improvements | 2,729,719 | | | 2,830,508 | | Acquired intangible lease assets | 402,673 | | | 454,245 | | Total real estate investments, at cost | 3,861,440 | | | 4,008,069 | | Less: accumulated depreciation and amortization | (654,667) | | | (639,367) | | Total real estate investments, net | 3,206,773 | | | 3,368,702 | | Cash and cash equivalents | 214,853 | | | 102,860 | | Restricted cash | 21,996 | | | 10,537 | | Deposits for real estate investments | 41,928 | | | 137 | | Deferred costs, net | 25,587 | | | 16,663 | | Straight-line rent receivable | 70,789 | | | 66,581 | | Operating lease right-of-use assets | 18,194 | | | 18,546 | | Prepaid expenses and other assets (including $0 and $1,939 due from related parties as of December 31, 2021 and 2020, respectively) | 26,877 | | | 23,941 | | Assets held for sale | 187,213 | | | — | | Total assets | $ | 3,814,210 | | | $ | 3,607,967 | | | | | | LIABILITIES AND EQUITY | | | | Mortgage notes payable, net | $ | 1,464,930 | | | $ | 1,490,798 | | Credit facility | — | | | 280,857 | | Senior notes, net | 491,015 | | | — | | Below-market lease liabilities, net | 78,073 | | | 78,674 | | Accounts payable and accrued expenses (including $1,016 and $273 due to related parties as of December 31, 2021 and 2020, respectively) | 32,907 | | | 25,210 | | Operating lease liabilities | 19,195 | | | 19,237 | | Derivative liabilities, at fair value | 2,250 | | | 123 | | Deferred rent and other liabilities | 9,524 | | | 9,794 | | Dividends payable | 6,038 | | | 3,675 | | Total liabilities | 2,103,932 | | | 1,908,368 | | | | | | 7.50% Series A cumulative redeemable perpetual preferred stock, $0.01 par value, liquidation preference $25.00 per share, 12,796,000 and 8,796,000 shares authorized, 7,933,711 and 7,842,008 issued and outstanding as of December 31, 2021 and 2020, respectively | 79 | | | 79 | | 7.375% Series C cumulative redeemable perpetual preferred stock, $0.01 par value, liquidation preference $25.00 per share, 11,536,000 and 3,680,000 shares authorized, 4,594,498 and 3,535,700 issued and outstanding as of December 31, 2021 and 2020, respectively | 46 | | | 35 | | Common stock, $0.01 par value per share, 300,000,000 shares authorized, 123,783,060 and 108,837,209 shares issued and outstanding as of December 31, 2021 and 2020, respectively | 1,238 | | | 1,088 | | Additional paid-in capital | 2,915,926 | | | 2,723,678 | | Accumulated other comprehensive loss | — | | | (123) | | Distributions in excess of accumulated earnings | (1,217,435) | | | (1,055,680) | | Total stockholders’ equity | 1,699,854 | | | 1,669,077 | | Non-controlling interests | 10,424 | | | 30,522 | | Total equity | 1,710,278 | | | 1,699,599 | | Total liabilities and equity | $ | 3,814,210 | | | $ | 3,607,967 | |
The pandemic has had and could continue to haveaccompanying notes are an adverse impact on economic and market conditions, including a global economic slowdown or recession. The continued rapid development and fluidityintegral part of this situation precludes any prediction as to the ultimate adverse impact of COVID-19 on economic and market conditions. The Company believes the estimates and assumptions underlying itsthese consolidated financial statements are reasonablestatements.
THE NECESSITY RETAIL REIT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (In thousands, except share and supportable based on the information available as of December 31, 2020, however uncertainty over the ultimate impact COVID-19 will have on the global economy generally, and the Company’s business in particular, makes any estimates and assumptions as of December 31, 2020 inherently less certain than they would be absent the current and potential impacts of COVID-19. Actual results may ultimately differ from those estimates.per share data) | | | | | | | | | | | | | | | | | | | Year Ended December 31, | | 2021 | | 2020 | | 2019 | Revenue from tenants | $ | 335,156 | | | $ | 305,224 | | | $ | 299,744 | | | | | | | | Operating expenses: | | | | | | Asset management fees to related party | 32,804 | | | 27,829 | | | 25,695 | | Property operating expense | 55,431 | | | 52,296 | | | 52,715 | | Impairment of real estate investments | 33,261 | | | 12,910 | | | 827 | | Acquisition, transaction and other costs | 4,378 | | | 2,921 | | | 6,257 | | Equity-based compensation | 17,264 | | | 13,036 | | | 12,717 | | General and administrative | 20,856 | | | 19,683 | | | 20,375 | | Depreciation and amortization | 130,464 | | | 137,459 | | | 124,713 | | Goodwill impairment | — | | | — | | | 1,605 | | Total operating expenses | 294,458 | | | 266,134 | | | 244,904 | | Operating income before gain on sale of real estate investments | 40,698 | | | 39,090 | | | 54,840 | | Gain on sale/exchange of real estate investments | 4,757 | | | 6,456 | | | 23,690 | | Operating income | 45,455 | | | 45,546 | | | 78,530 | | Other (expense) income: | | | | | | Interest expense | (81,784) | | | (78,467) | | | (77,994) | | Other income | 91 | | | 1,024 | | | 3,627 | | Loss on non-designated derivatives | (3,950) | | | (9) | | | — | | Total other expense, net | (85,643) | | | (77,452) | | | (74,367) | | Net (loss) income | (40,188) | | | (31,906) | | | 4,163 | | Net loss (income) attributable to non-controlling interests | 9 | | | 44 | | | (16) | | Allocation for preferred stock | (23,262) | | | (14,788) | | | (7,248) | | Net loss attributable to common stockholders | (63,441) | | | (46,650) | | | (3,101) | | | | | | | | Other comprehensive (loss) income: | | | | | | Change in unrealized gain (loss) on derivative | 123 | | | (123) | | | 531 | | Comprehensive loss attributable to common stockholders | $ | (63,318) | | | $ | (46,773) | | | $ | (2,570) | | | | | | | | Weighted-average shares outstanding — Basic and Diluted | 115,404,635 | | | 108,404,093 | | | 106,397,296 | | Net loss per share attributable to common stockholders — Basic and Diluted | $ | (0.56) | | | $ | (0.44) | | | $ | (0.04) | |
The accompanying notes are an integral part of these consolidated financial stability and overall health of tenants is critical to the Company’s business. The negative effects that the global pandemic has had on the economy includes the closure or reduction in activity for many retail operations such as somestatements.
THE NECESSITY RETAIL REIT, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In thousands, except share data) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Series A Preferred Stock | | Series C Preferred Stock | | Common Stock | | | | | | | | | | | | | | Number of Shares | | Par Value | | Number of Shares | | Par Value | | Number of Shares | | Par Value | | Additional Paid-in Capital | | Accumulated Other Comprehensive Income (Loss) | | Accumulated Deficit | | Total Stockholders’ Equity | | Non-controlling Interests | | Total Equity | Balance, December 31, 2018 | — | | | $ | — | | | — | | | $ | — | | | 106,230,901 | | | $ | 1,063 | | | $ | 2,412,915 | | | $ | (531) | | | $ | (812,047) | | | $ | 1,601,400 | | | $ | 8,335 | | | $ | 1,609,735 | | Impact of adoption of new accounting pronouncement for leases (Note 2) | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (170) | | | (170) | | | — | | | (170) | | Issuance of Common Stock, net | — | | | — | | | — | | | — | | | 2,229,647 | | | 22 | | | 31,579 | | | — | | | — | | | 31,601 | | | — | | | 31,601 | | Issuance of Series A Preferred Stock, net | 6,917,230 | | | 69 | | | — | | | — | | | — | | | — | | | 168,860 | | | — | | | — | | | 168,929 | | | — | | | 168,929 | | Common stock repurchases | — | | | — | | | — | | | — | | | (19,870) | | | (1) | | | (273) | | | — | | | — | | | (274) | | | — | | | (274) | | Equity-based compensation, net of forfeitures | — | | | — | | | — | | | — | | | 34,588 | | | 1 | | | 1,071 | | | — | | | — | | | 1,072 | | | 11,645 | | | 12,717 | | Dividends declared on Common Stock, $1.10 per share | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (117,100) | | | (117,100) | | | — | | | (117,100) | | Dividends declared on Series A Preferred Stock, 1.56 per share | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (7,248) | | | (7,248) | | | — | | | (7,248) | | Distributions to non-controlling interest holders | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (494) | | | (494) | | | (160) | | | (654) | | Net income | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 4,147 | | | 4,147 | | | 16 | | | 4,163 | | Other comprehensive income | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 531 | | | — | | | 531 | | | — | | | 531 | | Rebalancing of ownership percentage | — | | | — | | | — | | | — | | | — | | | — | | | 937 | | | — | | | — | | | 937 | | | (937) | | | — | | Balance, December 31, 2019 | 6,917,230 | | | 69 | | | — | | | — | | | 108,475,266 | | | 1,085 | | | 2,615,089 | | | — | | | (932,912) | | | 1,683,331 | | | 18,899 | | | 1,702,230 | | Issuance of Common Stock, net | — | | | — | | | — | | | — | | | — | | | — | | | (239) | | | — | | | — | | | (239) | | | — | | | (239) | | Issuance of Series A Preferred Stock, net | 924,778 | | | 10 | | | — | | | — | | | — | | | — | | | 22,423 | | | — | | | — | | | 22,433 | | | — | | | 22,433 | | Issuance of Series C Preferred Stock, net | — | | | — | | | 3,535,700 | | | 35 | | | — | | | — | | | 85,161 | | | — | | | — | | | 85,196 | | | — | | | 85,196 | | Equity-based compensation, net of forfeitures | — | | | — | | | — | | | — | | | 361,943 | | | 3 | | | 1,176 | | | — | | | — | | | 1,179 | | | 11,856 | | | 13,035 | | Dividends declared on Common Stock, $0.70 per share | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (75,952) | | | (75,952) | | | — | | | (75,952) | | Dividends declared on Series A Preferred Stock, $1.875 per share | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (14,543) | | | (14,543) | | | — | | | (14,543) | | Distributions to non-controlling interest holders | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (411) | | | (411) | | | (121) | | | (532) | | Net loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (31,862) | | | (31,862) | | | (44) | | | (31,906) | | Other comprehensive loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (123) | | | — | | | (123) | | | — | | | (123) | | Rebalancing of ownership percentage | — | | | — | | | — | | | — | | | — | | | — | | | 68 | | | — | | | — | | | 68 | | | (68) | | | — | | Balance, December 31, 2020 | 7,842,008 | | | 79 | | | 3,535,700 | | | 35 | | | 108,837,209 | | | 1,088 | | | 2,723,678 | | | (123) | | | (1,055,680) | | | 1,669,077 | | | 30,522 | | | 1,699,599 | | Issuance of Common Stock, net | — | | | — | | | — | | | — | | | 14,734,448 | | | 148 | | | 128,264 | | | — | | | — | | | 128,412 | | | — | | | 128,412 | | Issuance of Series A Preferred Stock, net | 91,703 | | | — | | | — | | | — | | | — | | | — | | | 2,029 | | | — | | | — | | | 2,029 | | | — | | | 2,029 | | Issuance of Series C Preferred Stock, net | — | | | — | | | 1,058,798 | | | 11 | | | — | | | — | | | 25,475 | | | — | | | — | | | 25,486 | | | — | | | 25,486 | | Equity-based compensation, net of forfeitures (1) | — | | | — | | | — | | | — | | | 288,424 | | | 3 | | | 2,384 | | | — | | | — | | | 2,387 | | | 14,877 | | | 17,264 | | Common stock shares withheld upon vesting of restricted stock | — | | | — | | | — | | | — | | | (77,021) | | | (1) | | | (723) | | | — | | | — | | | (724) | | | — | | | (724) | | Dividends declared on Common Stock, $0.84 per share | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (97,532) | | | (97,532) | | | — | | | (97,532) | | Dividends declared on Series A Preferred Stock, $1.875 per share | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (14,891) | | | (14,891) | | | — | | | (14,891) | | Dividends declared on Series C Preferred Stock, $1.84 per share | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (8,616) | | | (8,616) | | | — | | | (8,616) | | Distributions to non-controlling interest holders | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (537) | | | (537) | | | (147) | | | (684) | | Net loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (40,179) | | | (40,179) | | | (9) | | | (40,188) | | Other comprehensive income | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 123 | | | — | | | 123 | | | — | | | 123 | | Forfeiture of 2018 LTIP Units | — | | | — | | | — | | | — | | | — | | | — | | | 34,826 | | | — | | | — | | | 34,826 | | | (34,826) | | | — | | Rebalancing of ownership percentage | — | | | — | | | — | | | — | | | — | | | — | | | (7) | | | — | | | — | | | (7) | | | 7 | | | — | | Balance, December 31, 2021 | 7,933,711 | | | $ | 79 | | | 4,594,498 | | | $ | 46 | | | 123,783,060 | | | $ | 1,238 | | | $ | 2,915,926 | | | $ | — | | | $ | (1,217,435) | | | $ | 1,699,854 | | | $ | 10,424 | | | $ | 1,710,278 | |
The accompanying notes are an integral part of these consolidated financial statements.
(1) Presented net of forfeitures. 25,050 restricted shares with a fair value of approximately $175,000 were forfeited during the period.
THE NECESSITY RETAIL REIT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) | | | | | | | | | | | | | | | | | | | Year Ended December 31, | | 2021 | | 2020 | | 2019 | Cash flows from operating activities: | | | | | | Net (loss) income | $ | (40,188) | | | $ | (31,906) | | | $ | 4,163 | | Adjustments to reconcile net (loss) income to net cash provided by operating activities: | | | | | | Depreciation | 90,608 | | | 88,778 | | | 78,396 | | Amortization of in-place lease assets | 37,592 | | | 46,496 | | | 44,795 | | Amortization of deferred leasing costs | 2,265 | | | 2,184 | | | 1,522 | | Amortization (including accelerated write-off) of deferred financing costs | 12,733 | | | 8,212 | | | 7,598 | | Accretion of mortgage premiums and discounts on borrowings | (968) | | | (2,126) | | | (3,816) | | | | | | | | Amortization (accretion) of market lease and other intangibles, net | (4,625) | | | (6,149) | | | (7,372) | | Equity-based compensation | 17,264 | | | 13,036 | | | 12,717 | | | | | | | | | | | | | | Loss on non-designated derivatives | 3,950 | | | 9 | | | — | | Gain on sale/exchange of real estate investments | (4,757) | | | (6,456) | | | (23,690) | | Impairment of real estate investments and goodwill impairment | 33,261 | | | 12,910 | | | 2,432 | | Payments of prepayment costs on mortgages | 3,970 | | | 807 | | | 4,491 | | Changes in assets and liabilities: | | | | | | Straight-line rent receivable | (7,033) | | | (19,824) | | | (9,521) | | Straight-line rent payable | 258 | | | 314 | | | 1,196 | | Prepaid expenses and other assets | (4,648) | | | (9,139) | | | (3,208) | | Accounts payable and accrued expenses | 5,815 | | | (3,831) | | | (1,458) | | Deferred rent and other liabilities | (270) | | | (598) | | | (2,675) | | Net cash provided by operating activities | 145,227 | | | 92,717 | | | 105,570 | | Cash flows from investing activities: | | | | | | | | | | | | Capital expenditures | (13,407) | | | (9,198) | | | (13,652) | | Acquisitions of investments in real estate and other assets | (182,157) | | | (220,412) | | | (428,939) | | Proceeds from sale of real estate investments | 16,630 | | | 6,707 | | | 34,813 | | Deposits | (41,791) | | | (53) | | | 2,952 | | Net cash used in investing activities | (220,725) | | | (222,956) | | | (404,826) | | Cash flows from financing activities: | | | | | | Proceeds from mortgage notes payable | 239,928 | | | 874,000 | | | 286,930 | | Payments on mortgage notes payable | (263,808) | | | (663,236) | | | (69,144) | | Proceeds from issuance of senior notes | 500,000 | | | — | | | — | | Proceeds from credit facility | 30,500 | | | 205,000 | | | 233,000 | | Payments on credit facility | (311,357) | | | (257,291) | | | (224,553) | | Payments of financing costs | (28,173) | | | (30,917) | | | (10,778) | | Payments of prepayment costs on mortgages | (3,970) | | | (807) | | | (4,491) | | Class A common stock repurchases | (560) | | | — | | | (274) | | Distributions on LTIP Units and Class A Units | (501) | | | (532) | | | (694) | | Dividends paid on Class A common stock | (97,532) | | | (75,951) | | | (117,140) | | Dividends paid on Series A preferred stock | (14,848) | | | (14,167) | | | (3,948) | | Dividends paid on Series C preferred stock | (6,498) | | | — | | | — | | Proceeds from issuance of Class A common stock, net | 128,409 | | | (211) | | | 31,601 | | Proceeds from issuance of Series A preferred stock, net | 1,885 | | | 22,490 | | | 168,956 | | Proceeds from issuance of Series C preferred stock, net | 25,475 | | | 85,418 | | | — | | Net cash provided by financing activities | 198,950 | | | 143,796 | | | 289,465 | | Net change in cash, cash equivalents and restricted cash | 123,452 | | | 13,557 | | | (9,791) | | Cash, cash equivalents and restricted cash, beginning of period | 113,397 | | | 99,840 | | | 109,631 | | Cash, cash equivalents and restricted cash, end of period | $ | 236,849 | | | $ | 113,397 | | | $ | 99,840 | |
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) | | | | | | | | | | | | | | | | | | | Year Ended December 31, | | 2021 | | 2020 | | 2019 | Cash and cash equivalents, end of period | $ | 214,853 | | | $ | 102,860 | | | $ | 81,898 | | Restricted cash, end of period | 21,996 | | | 10,537 | | | 17,942 | | Cash, cash equivalents and restricted cash, end of period | $ | 236,849 | | | $ | 113,397 | | | $ | 99,840 | | | | | | | | Supplemental Disclosures: | | | | | | Cash paid for interest, net of derivatives settled | $ | 65,886 | | | $ | 72,758 | | | $ | 72,826 | | Cash paid for income and franchise taxes | $ | 1,117 | | | $ | 720 | | | $ | 217 | | | | | | | | Non-Cash Investing and Financing Activities: | | | | | | Accrued offering costs - Series A Preferred Stock | $ | 5 | | | $ | 57 | | | $ | 27 | | Accrued offering costs - Series C Preferred Stock | $ | — | | | $ | 222 | | | $ | — | | Accrued offering costs - Class A common stock | $ | — | | | $ | 28 | | | $ | — | | Preferred dividend declared but not yet paid | $ | 5,837 | | | $ | 3,676 | | | $ | 3,300 | | Assets received through substitution | $ | — | | | $ | 4,380 | | | $ | — | | Assets provided through substitution | $ | — | | | $ | (2,180) | | | $ | — | | Proceeds from real estate sales used to pay off related mortgage notes payable | $ | 1,108 | | | $ | 5,586 | | | $ | 94,940 | | Mortgage notes payable released in connection with disposition of real estate | $ | (1,108) | | | $ | (5,586) | | | $ | (94,940) | | | | | | | | | | | | | | | | | | | | Accrued capital expenditures (payable) | $ | 1,553 | | | $ | 1,556 | | | $ | 355 | |
The accompanying notes are an integral part of these consolidated financial statements.
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 20202021
Note 1 — Organization The Necessity Retail REIT, Inc. (formerly known as American Finance Trust, Inc.) (the “Company”), is an externally managed real estate investment trust for U.S. federal income tax purposes (“REIT”) focusing on acquiring and managing a diversified portfolio of those operated by the Company’s tenants (e.g., restaurants). This has impacted the ability of some of the Company’s tenants to pay their monthly rent either temporarily orprimarily service-oriented and traditional retail and distribution-related commercial real estate properties located primarily in the long-term.United States. The Company’s assets consist primarily of freestanding single-tenant properties that are net leased to “investment grade” and other creditworthy tenants and a portfolio of multi-tenant retail properties consisting primarily of power centers and lifestyle centers. The Company has experienced delays in rent collectionsintends to focus its future acquisitions primarily on net leased, single-tenant service retail properties, defined as properties leased to tenants in the second, thirdretail banking, restaurant, grocery, pharmacy, gas, convenience, fitness, and fourth quartersauto services sectors. As of 2020. The Company has taken a proactive approach to achieve mutually agreeable solutions with its tenants and in some cases, in the second, third and fourth quarters of 2020,December 31, 2021, the Company has executed several typesowned 976 properties, comprised of lease amendments. These agreements include deferrals20.0 million rentable square feet, which were 93.2% leased, including 943 single-tenant, net leased commercial properties (902 of which are leased to retail tenants) and abatements (i.e. rent credits) and also may include extensions to the term of the leases. For accounting purposes, in accordance with ASC 842: Leases, normally a company would be required to assess a lease modification to determine if the lease modification should be treated as a separate lease and if not, modification accounting would be applied which would require a company to reassess the classification of the lease (including leases for which the prior classification under ASC 840 was retained as part of the election to apply the package of practical expedients allowed upon the adoption of ASC 842, which does not apply to leases subsequently modified). However, in light of the COVID-19 pandemic in which many leases are being modified, the FASB and SEC have provided relief that allows companies to make a policy election as to whether they treat COVID-19 related lease amendments as a provision included in the pre-concession arrangement, and therefore, not a lease modification, or to treat the lease amendment as a modification. In order to be considered COVID-19 related, cash flows must be substantially the same or less than those prior to the concession. For COVID-19 relief qualified changes, there are two methods to potentially account for such rent deferrals or abatements under the relief, (1) as if the changes were originally contemplated in the lease contract or (2) as if the deferred payments are variable lease payments contained in the lease contract. For all other lease changes that did not qualify for FASB relief,33 multi-tenant retail properties. On December 17, 2021, the Company would be requiredsigned a purchase and sale agreement to apply modification accounting including assessing classification under ASC 842.acquire 79 multi-tenant properties and 2 single-tenant properties (the “CIM Portfolio Acquisition”) see Note 16 — Subsequent Events for additional information.Some, but notSubstantially all of the Company’s lease modifications qualify forbusiness is conducted through The Necessity Retail REIT Operating Partnership, L.P (formerly known as American Finance Operating Partnership, L.P), (the “OP”), a Delaware limited partnership, and its wholly owned subsidiaries. Necessity Retail Advisors, LLC (formerly known as American Finance Advisors, LLC) (the “Advisor”) manages the FASB relief. In accordanceCompany’s day-to-day business with the relief provisions, instead of treating these qualifying leases as modifications, the Company has elected to treat the modifications as if previously contained in the lease and recast rents receivable prospectively (if necessary). Under that accounting, for modifications that were deferrals only, there would be no impact on overall rental revenue and for any abatement amounts that reduced total rent to be received, the impact would be recognized ratably over the remaining life of the lease.
For leases not qualifying for this relief, the Company has applied modification accounting and determined that there were no changes in the current classification of its leases impacted by negotiations with its tenants.
In addition to the proactive measures taken on rent collections, the Company has taken additional steps to maximize its flexibility related to its liquidity and minimize the related risk during this uncertain time. In March and April 2020, consistent with the Company’s plans to acquire additional properties, the Company borrowed an additional $170.0 million and $20 million, net, respectively, under its revolving unsecured corporate credit facility (the “Credit Facility”). Additionally, on March 30, 2020, the Company announced a reduction in the Company’s dividend, beginning in the second quarter of 2020, reducing the cash needed to fund dividend payments by approximately $27.2 million per year based on shares outstanding at that time. In addition, on July 24, 2020, the Company and its lenders modified the terms of its Credit Facility including, among other things, the covenants to provide more operating flexibility. In connection with the Company’s refinancing of certain mortgage debt in July 2020, the Company repaid approximately $197 million outstanding under its Credit Facility. The Company repaid an additional $25 million outstanding under its Credit Facility in December 2020 using cash on hand (see Note 4 — Mortgage Notes Payable, Net for additional information).However, the ultimate impact on the Company’s future results of operations, its liquidity and the ability of its tenants to continue to pay rent will depend on the overall length and severity of the COVID-19 pandemic, which management is unable to predict.
Out-of-Period Adjustments
During the three months ended March 31, 2019, the Company identified certain historical errors in its accounting for its land leases (as lessee) which impacted the previously issued quarterly and annual financial statements. Specifically, the Company did not consider whether a penalty would be considered to exist for impairment of leasehold improvements when considering whether to include certain extension options in the lease term for accounting purposes. The land leases related to property acquired between 2013 and 2017. As of December 31, 2018, the cumulative impact of using the appropriate lease term in its straight line rent expense calculations for the operating leases was an understatement of rent expense and accrued rent liability of $0.9 million. The Company concluded that the errors noted above were not material to the current period or any historical periods presented and, accordingly, the Company adjusted the amounts on a cumulative basis in the first quarter of 2019.
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
Revenue Recognition
The Company’s revenues, which are derived primarily from lease contracts, which include rents that each tenant pays in accordance with the terms of each lease reported on a straight-line basis over the initial term of the lease. As of December 31, 2020, these leases had an average remaining lease term of approximately 8.8 years. Because manyassistance of the Company’s leases provideproperty manager, Necessity Retail Properties, LLC (formerly known as American Finance Properties, LLC), (the “Property Manager”). The Advisor and the Property Manager are under common control with AR Global Investments, LLC (“AR Global”) and these related parties receive compensation and fees for rental increases at specified intervals, straight-line basis accounting requires the Companyproviding services to record a receivable for, and include in revenue from tenants, unbilled rents receivable that the Company will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. When the Company acquires a property, the acquisition date is considered to be the commencement date for purposes of this calculation. For new leases after acquisition, the commencement date is considered to be the date the tenant takes control of the space. For lease modifications, the commencement date is considered to be the date the lease modification is executed.us. The Company defers the revenue related to lease payments received from tenants in advance of their due dates. Pursuant to certain of the Company’s lease agreements, tenants are required to reimburse the Companyalso reimburses these entities for certain property operating expenses they incur in addition to paying base rent, whereas under certain other lease agreements, the tenants are directly responsible for all operating costs of the respective properties. Under ASC 842, the Company elected to report combined lease and non-lease components in a single line “Revenue from tenants.” For comparative purposes, the Company also elected to reflect prior revenue and reimbursements reported under ASC 842 also on a single line. For expenses paid directly by the tenant, under both ASC 842 and 840, the Company has reflected them on a net basis.
The following table presents future base rent payments on a cash basis dueproviding these services to the Company over the next five years and thereafter. These amounts exclude tenant reimbursements and contingent rent payments, as applicable, that may be collected from certain tenants based on provisions related to sales thresholds and increases in annual rent based on exceeding certain economic indexes among other items:Company.
| | | | | | | | | (In thousands) | | Future Base Rent Payments | 2021 | | $ | 268,535 | | 2022 | | 259,400 | | 2023 | | 246,195 | | 2024 | | 228,959 | | 2025 | | 210,543 | | Thereafter | | 1,307,238 | | | | $ | 2,520,870 | |
The Company owns certain properties with leases that include provisions for the tenant to pay contingent rental income based on a percentNote 2 — Summary of the tenant’s sales upon the achievement of certain sales thresholds or other targets which may be monthly, quarterly or annual targets. As the lessor to the aforementioned leases, the Company defers the recognition of contingent rental income, until the specified target that triggered the contingent rental income is achieved, or until such sales upon which percentage rent is based are known. For the year ended December 31, 2020, 2019 and 2018, approximately $1.1 million, $0.9 million and $0.9 million, respectively, in contingent rental income is included in revenue from tenants in the consolidated statements of operations and comprehensive loss.
The Company continually reviews receivables related to rent and unbilled rents receivable and determines collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. Under the leasing standard adopted on January 1, 2019 (see the “Recently IssuedSignificant Accounting Pronouncements” section below), the Company is required to assess, based on credit risk only, if it is probable that the Company will collect virtually all of the lease payments at lease commencement date and it must continue to reassess collectability periodically thereafter based on new facts and circumstances affecting the credit risk of the tenant. Partial reserves, or the ability to assume partial recovery are not permitted. If the Company determines that it’s probable it will collect virtually all of the lease payments (rent and common area maintenance), the lease will continue to be accounted for on an accrual basis (i.e. straight-line). However, if the Company determines it’s not probable that it will collect virtually all of the lease payments, the lease will be accounted for on a cash basis and a full reserve would be recorded on previously accrued amounts in cases where it was subsequently concluded that collection was not probable. Cost recoveries from tenants are included in operating revenue from tenants beginning on January 1, 2019, in accordance with new accounting rules, on the accompanying consolidated statements of operations and comprehensive income (loss) in the period the related costs are incurred, as applicable. In the second, third and fourth quarters of 2020, this assessmentPolicies
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
included consideration of the impacts of the COVID-19 pandemic on the ability of our tenants to pay rents in accordance with their contracts. The assessment included all of the Company’s tenants with a focus on the Company’s multi-tenant retail properties which have been more negatively impacted by the COVID-19 pandemic than the Company’s single-tenant properties.
Under ASC 842, uncollectable amounts are reflected as reductions in revenue from tenants. Under ASC 840, the Company recorded such amounts as bad debt expense as part of property operating expenses. As a result of the review and assessment as described above and the impacts of the COVID-19 pandemic on certain of the Company’s tenants, the Company recorded a reduction in revenue from tenants of $6.6 million during the years ended December 31, 2020. During the years ended December 31, 2019 and 2018, such amounts were $2.9 million (recorded as a reduction of revenue from tenants) and $2.7 million (recorded as bad debt expense in property operating expenses), respectively.
On April 1, 2019, the Company entered into a termination agreement with a tenant at one of its multi-tenant properties which required the tenant to pay the Company a termination fee of $8.0 million. The Company then entered into two leases, one of which was subsequently terminated in 2020 to replace the tenant (see Note 3 — Real Estate Investments, Net — Tenant Improvement Write-Off for further details regarding this termination). As a result of the April 2019 termination, the Company recorded termination income, net, of $7.6 million during the second quarter of 2019, which is included in revenue from tenants during the year ended December 31, 2019.Investments in Real Estate Investments in real estate are recorded at cost. Improvements and replacements are capitalized when they extend the useful life of the asset. Costs of repairs and maintenance are expensed as incurred. At the time an asset is acquired, we evaluate the inputs, processes and outputs of the asset acquired to determine if the transaction is a business combination or asset acquisition. If an acquisition qualifies as a business combination, the related transaction costs are recorded as an expense in the consolidated statements of operations and comprehensive loss. If an acquisition qualifies as an asset acquisition, the related transaction costs are generally capitalized and subsequently amortized over the useful life of the acquired assets. See the Purchase Price Allocation section below for a discussion of the initial accounting for investments in real estate. Disposal of real estate investments that represent a strategic shift in operations that will have a major effect on our operations and financial results are required to be presented as discontinued operations in the consolidated statements of operations. No properties were presented as discontinued operations during the years ended December 31, 2021, 2020 or 2019. Properties that are intended to be sold are to be designated as “held for sale” on the consolidated balance sheets at the lesser of carrying amount or fair value less estimated selling costs when they meet specific criteria to be presented as held for sale, most significantly that the sale is probable within one year. We evaluate probability of sale based on specific facts including whether a sales agreement is in place and the buyer has made significant non-refundable deposits. Properties are no longer depreciated when they are classified as held for sale. As of December 31, 2021 we had one property classified as held for sale, our Sanofi property, and as of December 31, 2020 we had no properties classified as held for sale (see Note 3 — Real Estate Investments, Net to the consolidated financial statements included in this Annual Report on Form 10-K for additional information). The Sanofi property was disposed on January 6, 2022 (see Note 16 — Subsequent Events to the consolidated financial statements included in this Annual Report on Form 10-K for additional information). As more fully discussed in Note 2 — Summary of Significant Accounting Policies - Recently Issued Accounting Pronouncements - ASU No. 2016-02 Leases to the consolidated financial statements included in this Annual Report on Form 10-K, all of our leases as lessor prior to adoption of the new leasing standard on January 1, 2019, were accounted for as operating leases and we continued to account for them as operating leases under the transition guidance. We evaluate new leases originated after the adoption date (by us or by a predecessor lessor/owner) pursuant to the new guidance where a lease for some or all of a building is classified by a lessor as a sales-type lease if the significant risks and rewards of ownership reside with the tenant. This situation is met if, among other things, there is an automatic transfer of title during the lease, a bargain purchase option, the non-cancelable lease term is for more than major part of remaining economic useful life of the asset (e.g., equal to or greater than 75%), if the present value of the minimum lease payments represents substantially all (e.g., equal to or greater than 90%) of the leased property’s fair value at lease inception, or if the asset so specialized in nature that it provides no alternative use to the lessor (and therefore would not provide any future value to the lessor) after the lease term. Further, such new leases would be evaluated to consider whether they would be failed sale-leaseback transactions and accounted for as financing transactions by the lessor. During the three year period ended December 31, 2021, we had no leases as a lessor that would be considered as sales-type leases or financings under sale-leaseback rules. We are also the lessee under certain land leases which were previously classified prior to adoption of lease accounting and will continue to be classified as operating leases under transition elections unless subsequently modified. These leases are reflected on the balance sheet and the rent expense is reflected on a straight line basis over the lease term. Purchase Price Allocation In both a business combination and an asset acquisition, we allocate the purchase price of acquired properties to tangible and identifiable intangible assets or liabilities based on their respective fair values. Tangible assets may include land, land improvements, buildings, fixtures and tenant improvements on an as if vacant basis. Intangible assets may include the value of in-place leases and above- and below- market leases and other identifiable assets or liabilities based on lease or property specific characteristics. In addition, any assumed mortgages receivable or payable and any assumed or issued non-controlling interests (in a business combination) are recorded at their estimated fair values. In allocating the fair value to assumed mortgages, amounts are recorded to debt premiums or discounts based on the present value of the estimated cash flows, which is calculated to account for either above or below-market interest rates. In a business combination, the difference between the purchase price and the fair value of identifiable net assets acquired is either recorded as goodwill or as a bargain purchase gain. In an asset acquisition, the difference between the acquisition price (including capitalized transaction costs) and the fair value of
identifiable net assets acquired is allocated to the non-current assets. All acquisitions during the years ended December 31, 2021, 2020 and 2019 were asset acquisitions. For acquired properties with leases classified as operating leases, we allocate the purchase price of acquired properties to tangible and identifiable intangible assets acquired and liabilities assumed, based on their respective fair values. In making estimates of fair values for purposes of allocating purchase price, we utilize a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other market data. We also consider information obtained about each property as a result of our pre-acquisition due diligence in estimating the fair value of the tangible and intangible assets acquired and intangible liabilities assumed. We utilize various estimates, processes and information to determine the as-if vacant property value. Estimates of value are made using customary methods, including data from appraisals, comparable sales, discounted cash flow analysis and other methods. Fair value estimates are also made using significant assumptions such as capitalization rates, discount rates, fair market lease rates, and land values per square foot. Identifiable intangible assets include amounts allocated to acquire leases for above- and below-market lease rates and the value of in-place leases as applicable. Factors considered in the analysis of the in-place lease intangibles include an estimate of carrying costs during the expected lease-up period for each property, taking into account current market conditions and costs to execute similar leases. In estimating carrying costs, we include real estate taxes, insurance and other operating expenses and estimates of lost rentals at contract rates during the expected lease-up period, which typically ranges from six to 24 months. We also estimate costs to execute similar leases including leasing commissions, legal and other related expenses. Above-market and below-market lease values for acquired properties are initially recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining initial term of the lease for above-market leases and the remaining initial term plus the term of any below-market fixed rate renewal options for below-market leases. The aggregate value of intangible assets related to customer relationships, as applicable, is measured based on our evaluation of the specific characteristics of each tenant’s lease and our overall relationship with the tenant. Characteristics considered by us in determining these values include the nature and extent of our existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals, among other factors. We did not record any intangible asset amounts related to customer relationships during the years ended December 31, 2021 and 2020. Gain on Sale/Exchange of Real Estate Investments Gains on sales of rental real estate will generally be recognized pursuant to the provisions included in ASC 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”). In accordance with ASC 845-10, Accounting for Non-Monetary Transactions, if a nonmonetary exchange has commercial substance, the cost of a nonmonetary asset acquired in exchange for another nonmonetary asset is the fair value of the asset surrendered to obtain it, and a gain or loss shall be recognized on the exchange. Impairment of Long-Lived Assets When circumstances indicate the carrying value of a property may not be recoverable, we review the property for impairment. This review is based on an estimate of the future undiscounted cash flows expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. If an impairment exists, due to the inability to recover the carrying value of a property, we would recognize an impairment loss in the consolidated statement of operations and comprehensive loss to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss recorded would equal the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net earnings. Depreciation and Amortization We are required to make subjective assessments as to the useful lives of the components of our real estate investments for purposes of determining the amount of depreciation to record on an annual basis. These assessments have a direct impact on our results from operations because if we were to shorten the expected useful lives of our real estate investments, we would depreciate these investments over fewer years, resulting in more depreciation expense and lower earnings on an annual basis. Depreciation is computed using the straight-line method over the estimated useful lives of up to 40 years for buildings, 15 years for land improvements, five years for fixtures and improvements and the shorter of the useful life or the remaining lease term for tenant improvements and leasehold interests (a “leasehold interest” is a right to enjoy the exclusive possession and use of an asset or property for a stated definite period as created by a written lease).
The value of in-place leases, exclusive of the value of above-market and below-market in-place leases, is amortized to expense over the remaining periods of the respective leases. The value of customer relationship intangibles, if any, is amortized to expense over the initial term and any renewal periods in the respective leases, but in no event does the amortization period for intangible assets exceed the remaining depreciable life of the building. If a tenant terminates its lease, the unamortized portion of the in-place lease value and customer relationship intangibles is charged to expense. Assumed mortgage premiums or discounts are amortized as an increase or reduction to interest expense over the remaining terms of the respective mortgages. Above and Below-Market Lease Amortization Capitalized above-market lease values are amortized as a reduction of revenue from tenants over the remaining terms of the respective leases and the capitalized below-market lease values are amortized as an increase to revenue from tenants over the remaining initial terms plus the terms of any below-market fixed rate renewal options of the respective leases. If a tenant with a below-market rent renewal does not renew, any remaining unamortized amount will be taken into income at that time. Capitalized above-market ground lease values are amortized as a reduction of property operating expense over the remaining terms of the respective leases. Capitalized below-market ground lease values are amortized as an increase to property operating expense over the remaining terms of the respective leases and expected below-market renewal option periods. Upon termination of an above or below-market lease any unamortized amounts would be recognized in the period of termination. Equity-Based Compensation We have a stock-based plan under which our directors, officers and other employees of the Advisor or its affiliates who are involved in providing services to us are eligible to receive awards. Awards granted thereunder are accounted for under the guidance for employee share based payments. The cost of services received in exchange for these stock awards is measured at the grant date fair value of the award and the expense for such an award is included in the equity-based compensation line item of the consolidated statements of operations and is recognized in accordance with the service period (i.e., vesting) required or when the requirements for exercise of the award have been met. Effective at the listing of the our Class A common stock, $0.01 par value per share (“Class A common stock”) on The Nasdaq Global Select Market (“Nasdaq”) on July 19, 2018 (the “Listing Date”), we entered into the 2018 OPP under which the LTIP Units were issued to the Advisor. These awards were market-based awards with a related required service period. In accordance with ASC 718, the LTIP Units were valued at their grant date and that value is reflected as a charge to earnings evenly over the service period. The cumulative expense was reflected as part of non-controlling interest in our balance sheets and statements of equity until the end of the service period. Following the end of the performance period under the 2018 OPP on July 19, 2021, the compensation committee of our board of directors determined that none of the 4,496,796 of the LTIP Units subject to the 2018 OPP had been earned, and these LTIP Units were thus automatically forfeited. On that date, we reclassified amounts reflected in non-controlling interest for these LTIP Units to additional paid in capital on its balance sheet and statement of equity. On May 4, 2021, our independent directors, authorized the issuance of a new award of LTIP Units effective after the performance period under the 2018 OPP expired on July 19, 2021, with the number of LTIP Units to be issued to the Advisor to be equal to the quotient of $72.0 million divided by the 10-trading day trailing average closing stock price of our Class A common stock for the ten trading days up to and including July 19, 2021. On July 21, 2021, we entered into the 2021 OPP pursuant to which the Advisor was granted an award of 8,528,885 LTIP Units, representing the quotient of $72.0 million divided by $8.4419. As a result, the LTIP Units issued under the 2021 OPP classified as an equity award with the cumulative expense reflected as part of non-controlling interest in our consolidated balance sheets and equity statements. In the event of a modification of any of the awards discussed above, any incremental increase in the value of the instrument measured on the date of the modification both before and after the modification, will result in an incremental amount to be reflected prospectively as a charge to earnings over the remaining service period. For additional information on all of our equity-based compensation arrangements, see Note 13 — Equity-Based Compensation. Recently Issued Accounting Pronouncements SeeNote 2 — Summary of Significant Accounting Policies - Recently Issued Accounting Pronouncements to the consolidated financial statements in this Annual Report on Form 10-K for further discussion.
Leasing Activity The following table summarizes our leasing activity during the year ended December 31, 2021: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Year Ended December 31, 2021 | | | | | | | (In thousands) | | | | | Number of Leases | | Rentable Square Feet | | Annualized SLR [1] prior to Lease Execution/Renewal | | Annualized SLR [1] after Lease Execution/Renewal | | Costs to execute leases | | Costs to execute leases - per square foot | New leases [2] | | 50 | | | 412,856 | | | $ | — | | | $ | 3,660 | | | $ | 2,237 | | | $ | 5.42 | | Lease renewals/amendments [2] | | 141 | | | 1,298,317 | | | 17,153 | | | 16,478 | | | 1,483 | | | 1.14 | | Lease terminations [3] | | 24 | | | 116,816 | | | 2,901 | | | — | | | — | | | — | |
__________ [1]Annualized rental income on a straight-line basis as of December 31, 2021. Represents the GAAP basis annualized straight-line rent that is recognized over the term on the respective leases, which includes free rent, periodic rent increases, and excludes recoveries. [2]New leases reflect leases in which a new tenant took possession of the space during the year ended December 31, 2021, excluding new property acquisitions. Lease renewals/amendments reflect leases in which an existing tenant executed terms to extend the term or change the rental terms of the lease during the year ended December 31, 2021. This excludes leases modifications for deferrals/abatements in response to COVID-19 negotiations which qualify for FASB relief. For more information see Overview — Management Update on the Impacts of the COVID-19 Pandemic — Management’s Actions. [3]Represents leases that were terminated prior to their contractual lease expiration dates. Results of Operations In December 2021, we signed a purchase and sale agreement to acquire 79 multi-tenant retail centers and two single-tenant properties (the “CIM Portfolio Acquisition”), representing a strategic shift away from a sole focus on single-tenant retail properties. Accordingly, we now operate in two reportable business segments for management and internal financial reporting purposes. In our single-tenant operating segment, we own, manage and lease single-tenant properties where tenants are required to pay for property operating expenses, which may be subject to expense exclusions and floors, in addition to base rent. In our multi-tenant operating segment, we own, manage and lease multi-tenant properties where we generally pay for the property operating expenses for those properties and most of our tenants are required to pay their pro rata share of property operating expenses. Below is a discussion of our results of operations for the years ended December 31, 2021 and 2020. Please see the “Results of Operations” section located on page 45 under Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2020 for comparison of our results of operations for the years ended December 31, 2020 to 2019. In addition to the comparative year over year discussion below, please see the “Overview — Management Update on the Impacts of the COVID-19 Pandemic” section above for additional information on the risks and uncertainties associated with the COVID-19 pandemic and management’s action taken to mitigate those risks and uncertainties. Same Store Properties Information based on Same Store, Acquisitions and Dispositions (as each are defined below) allows us to evaluate the performance of our portfolio based on a consistent population of properties owned for the entire period of time covered. As of December 31, 2021, we owned 976 properties. There were 802 properties (our “2020-2021 Same Store”) owned for the entire years ended December 31, 2021 and 2020 which were 92.4% leased as of December 31, 2021. Since January 1, 2020 and through December 31, 2021, we acquired 176 properties (our “Acquisitions Since January 1, 2020”)which were 100% leased as of December 31, 2021, and disposed of 19 properties (our “Disposals Since January 1, 2020”). | | | | | | | Number of Properties | Number of properties, December 31, 2019 | 819 | Acquisition activity during the year ended December 31, 2020 | 107 | Disposition activity during the year ended December 31, 2020 | (6) | Number of properties, December 31, 2020 | 920 | Acquisition activity during the year ended December 31, 2021 | 69 | Disposition activity during the year ended December 31, 2021 | (13) | Number of properties, December 31, 2021 | 976 | | | Number of Same Store Properties | 802 |
Comparison of the Year Ended December 31, 2021 to 2020 Net loss attributable to common stockholders was $63.4 million and $46.7 million for the year ended December 31, 2021 and 2020, respectively. The following table shows our results of operations for the years ended December 31, 2021 and 2020 and the year to year change by line item of the consolidated statements of operations: | | | | | | | | | | | | | | | | | | | | | Year Ended December 31, | | Increase / (Decrease) | | 2021 | | 2020 | | $ | | | Revenue from tenants | $ | 335,156 | | | $ | 305,224 | | | $ | 29,932 | | | | | | | | | | | | Operating expenses: | | | | | | | | Asset management fees to related party | 32,804 | | | 27,829 | | | 4,975 | | | | Property operating expense | 55,431 | | | 52,296 | | | 3,135 | | | | Impairment of real estate investments | 33,261 | | | 12,910 | | | 20,351 | | | | Acquisition, transaction and other costs | 4,378 | | | 2,921 | | | 1,457 | | | | Equity-based compensation | 17,264 | | | 13,036 | | | 4,228 | | | | General and administrative | 20,856 | | | 19,683 | | | 1,173 | | | | Depreciation and amortization | 130,464 | | | 137,459 | | | (6,995) | | | | | | | | | | | | Total operating expenses | 294,458 | | | 266,134 | | | 28,324 | | | | Operating income before gain on sale of real estate investments | 40,698 | | | 39,090 | | | 1,608 | | | | Gain on sale/exchange of real estate investments | 4,757 | | | 6,456 | | | (1,699) | | | | Operating income | 45,455 | | | 45,546 | | | (91) | | | | Other (expense) income: | | | | | | | | Interest expense | (81,784) | | | (78,467) | | | (3,317) | | | | Other income | 91 | | | 1,024 | | | (933) | | | | Loss on non-designated derivatives | (3,950) | | | (9) | | | (3,941) | | | | Total other expense, net | (85,643) | | | (77,452) | | | (8,191) | | | | Net (loss) income | (40,188) | | | (31,906) | | | (8,282) | | | | Net loss (income) attributable to non-controlling interests | 9 | | | 44 | | | (35) | | | | Allocation for preferred stock | (23,262) | | | (14,788) | | | (8,474) | | | | Net loss attributable to common stockholders | (63,441) | | | (46,650) | | | (16,791) | | | |
Net Loss Attributable to Common Stockholders Net loss attributable to common stockholders decreased $16.8 million to $63.4 million for the year ended December 31, 2021 from $46.7 million for the year ended December 31, 2020. The change in net loss attributable to common stockholders is discussed in detail for each line item of the consolidated statements of operations and comprehensive loss in the sections that follow. Net Operating Income Net operating income (“NOI”) is a non-GAAP financial measure used by us to evaluate the operating performance of our real estate portfolio. NOI is equal to revenue from tenants less property operating expense. NOI excludes all other financial statement amounts included in net loss attributable to stockholders. We believe NOI provides useful and relevant information because it reflects only those income and expense items that are incurred at the property level and presents such items on an unlevered basis. See “Non-GAAP Financial Measures” included elsewhere in this Annual Report for additional disclosure and a reconciliation to our net loss attributable to stockholders.
Segment Results — Single-Tenant Properties The following table presents the components of NOI and the period change within the single-tenant segment for the years ended December 31, 2021 and December 31, 2020: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Segment Same Store (1) (2) | | Acquisitions (3) | Disposals (4) | | Segment Total (5) | | Year Ended December 31, | | Increase (Decrease) | | Year Ended December 31, | | Increase (Decrease) | | Year Ended December 31, | Increase (Decrease) | | Year Ended December 31, | | Increase (Decrease) | | 2021 | | 2020 | | $ | | 2021 | | 2020 | | $ | | 2021 | | 2020 | | $ | | 2021 | | 2020 | | $ | Revenue from tenants | $ | 187,856 | | | $ | 181,263 | | | $ | 6,593 | | | $ | 26,213 | | | $ | 9,244 | | | $ | 16,969 | | | $ | 4,875 | | | $ | 1,355 | | | $ | 3,520 | | | $ | 218,944 | | | $ | 191,862 | | | $ | 27,082 | | Less: Property operating expenses | 10,728 | | | 9,654 | | | 1,074 | | | 1,053 | | | 239 | | | 814 | | | 224 | | | 294 | | | (70) | | | 12,005 | | | 10,187 | | | 1,818 | | NOI | $ | 177,128 | | | $ | 171,609 | | | $ | 5,519 | | | $ | 25,160 | | | $ | 9,005 | | | $ | 16,155 | | | $ | 4,651 | | | $ | 1,061 | | | $ | 3,590 | | | $ | 206,939 | | | $ | 181,675 | | | $ | 25,264 | |
__________ [1]Includes the two properties exchanged during the year ended December 31, 2020 as we considered the substitution of new properties under the same master lease as a continuation of the same tenant relationship and therefore as part of our 2020-2021 Same Store. For additional information on real estate sales, see Note 3 — Real Estate Investments to our consolidated financial statements in this Annual Report on Form 10-K. [2]Our single-tenant segment included 769 Same Store properties. [3]Our single-tenant segment included 174 Acquisition properties. [4]Our single-tenant segment included 19 Disposition properties. [5]Our single-tenant segment included 943 properties. Revenue from tenants in our single-tenant segment increased approximately $27.1 million to $218.9 million for the year ended December 31, 2021, compared to $191.9 million for the year ended December 31, 2020. This increase in revenue from tenants was due to the incremental increase in revenue from our Acquisitions Since January 1, 2020 of $17.0 million, an increase of our 2020-2021 Same Store properties of $6.6 million and an increase of our Disposals Since January 1, 2020 of $3.5 million. The increase in our 2020-2021 Same Store revenue reflects the impact of termination fees recorded in the year ended December 31, 2021, totaling $11.2 million in net termination fee income ($3.6 million of which related to our Disposals Since January 1, 2020) as well as by an increase of $2.1 million of operating expense reimbursement revenue. These increases were partially offset by $2.7 million of lower revenue due to the expiration of our United Healthcare lease, which was not renewed on July 1, 2021 and had annual rents of $5.4 million prior to its expiration, as well as by and increase of $0.8 million in bad debt expense recorded during the year ended December 31, 2021 as compared to the year ended December 31, 2020. Property operating expenses primarily consist of the costs associated with maintaining our properties including real estate taxes, utilities, and repairs and maintenance. Property operating expense increased $1.8 million to $12.0 million for the year ended December 31, 2021, compared to $10.2 million for the year ended December 31, 2020. This increase was primarily driven by increases from our 2020-2021 Same Store properties of $1.1 million, an increase of $0.8 million from our Acquisitions Since January 1, 2020, partially offset by a decrease of $0.1 million from our Disposals Since January 1, 2020. Segment Results — Multi-Tenant Properties The following table presents the components of NOI and the period change within the multi-tenant segment for the years ended December 31, 2021 and December 31, 2020: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Segment Same Store (1) | | Acquisitions (2) | Disposals (3) | | Segment Total (4) | | Year Ended December 31, | | Increase (Decrease) | | Year Ended December 31, | | Increase (Decrease) | | Year Ended December 31, | Increase (Decrease) | | Year Ended December 31, | | Increase (Decrease) | | 2021 | | 2020 | | $ | | 2021 | | 2020 | | $ | | 2021 | | 2020 | | $ | | 2021 | | 2020 | | $ | Revenue from tenants | $ | 116,212 | | | $ | 113,362 | | | $ | 2,850 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 116,212 | | | $ | 113,362 | | | $ | 2,850 | | Less: Property operating expenses | 43,426 | | | 42,109 | | | 1,317 | | | — | | | — | | | — | | | — | | | — | | | — | | | 43,426 | | | 42,109 | | | 1,317 | | NOI | $ | 72,786 | | | $ | 71,253 | | | $ | 1,533 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 72,786 | | | $ | 71,253 | | | $ | 1,533 | |
__________ [1]Our multi-tenant segment included 33 Same Store Properties. [2]Our multi-tenant segment did not have any Acquisition properties. [3]Our multi-tenant segment did not have any Disposition properties. [4]Our multi-tenant segment included 33 properties. Revenue from tenants in our multi-tenant segment increased approximately $2.9 million to $116.2 million for the year ended December 31, 2021, compared to $113.4 million for the year ended December 31, 2020.
The increase in our 2020-2021 Same Store revenue reflects an increase of net termination fee income of $0.7 million to $1.1 million for the year ended December 31, 2021 compared to $0.4 million for the year ended December 31, 2020, as well as a decrease in bad debt expense of $5.7 million. The higher bad debt expense in the year ended December 31, 2020 was due to our assessment of receivables due from tenants which have been most significantly impacted by the COVID-19 pandemic. These increases were partially offset by $1.9 million of below market lease intangible liability write-offs for the year ended December 31, 2020 pertaining to two multi-tenant lease terminations, which were recorded as an addition to revenue from tenants. In addition, although occupancy in our multi-tenant segment has improved throughout the year ended December 31, 2021, we recorded $1.9 million of less revenue as a result of renewing multi-tenant lease agreements at lesser rates. Property operating expenses primarily consist of the costs associated with maintaining our properties including real estate taxes, utilities, and repairs and maintenance. Property operating expense increased $1.3 million to $43.4 million for the year ended December 31, 2021, compared to $42.1 million for the year ended December 31, 2020. Other Results of Operations Asset Management Fees to Related Party Asset management fees paid to the Advisor increased $5.0 million to $32.8 million for the year ended December 31, 2021, compared to $27.8 million for the year ended December 31, 2020, primarily due to an increase of $2.1 million in the variable portion of the base management fee due to our increased equity issuances during 2021 and 2020 (which begin to impact the fee in the month succeeding the capital raise) and an increase of $2.9 million incentive variable management fees. The variable portion of the base management fee is calculated on a monthly basis and is equal to one-twelfth of 1.25% of the cumulative net proceeds of any equity raised by us (including, among other things, common stock, preferred stock and certain convertible debt but excluding among other things, equity based compensation) from and after February 16, 2017. The variable portion of the base management fee will increase in connection with future issuances of equity securities. In light of the unprecedented market disruption resulting from the COVID-19 pandemic, in March 2020, we agreed with the Advisor to amend the advisory agreement to temporarily lower the quarterly thresholds we must reach on a quarterly basis for the Advisor to receive the variable incentive management fee through the end of 2020, and in January 2021, we agreed with the Advisor to further amend the advisory agreement to extend the expiration of these thresholds through the end of 2021. We incurred $3.0 million of variable incentive management fees in the year ended December 31, 2021 and $0.1 million of variable incentive management fees were earned incurred during the year ended December 31, 2020. Please see Note 11 — Related Party Transactions and Arrangements to our consolidated financial statements included in this Annual Report on Form 10-K for more information on fees incurred from the Advisor. Impairment Charges We recorded $33.3 million of impairment charges for the year ended December 31, 2021, related to one single-tenant property formerly leased to United Healthcare and eight vacant single-tenant properties leased to Truist Bank located across various states. The United Healthcare property has been vacant since June 30, 2021 when the tenant did not renew their lease. We have evaluated local market conditions and considered various alternative plans for this property. Due to weak local market conditions, expected sustained vacancy of this property as either a single-tenant or multi-tenant property, as well as an increased probability of sale, we determined that the property was impaired. We recorded an impairment of $26.9 million to adjust the property’s carrying value to its estimated fair value. Of the Truist properties, seven were impaired to adjust the properties to their fair values as determined by their respective purchase and sales agreements or non-binding letters of intents, and one property was impaired to adjust its carrying value to its fair value as determined by the income approach. We recorded $12.9 million of impairment charges for the year ended December 31, 2020, $11.5 million of which related to one of our multi-tenant held-for-use properties, and $1.4 million of which related to three of our single-tenant held-for-use properties one of which was under contract to be sold at a price lower than the carrying value and two of which had experienced recent performance declines. See Note 3 — Real Estate Investments to our consolidated financial statements included in this Annual Report on Form 10-K for additional information. Acquisition, Transaction and Other Costs Acquisition, transaction and other costs increased $1.5 million to $4.4 million for the year ended December 31, 2021, compared to $2.9 million for the year ended December 31, 2020. The increase was due to prepayment penalties on three mortgage notes which were fully repaid in the year ended December 31, 2021, totaling $4.0 million. Prepayment charges on mortgages were $0.8 million during the years ended December 31, 2020. This increase was partially offset by transaction costs associated with our Credit Facility Amendment and dead deals which totaled $1.0 million in the year ended December 31, 2020 which did not occur in the year ended December 31, 2021, as well as decreased litigation costs of $0.7 million.
Equity-Based Compensation Equity-based compensation increased by approximately $4.2 million to $17.3 million for the year ended December 31, 2021 compared to $13.0 million for the year ended December 31, 2020. This increase was primarily due to additional non-cash equity-based compensation expense from the 2021 OPP and additional non-cash equity based compensation expense from a new grant of restricted shares in the second quarter of 2021 as well as an amendment to the original award agreement on February 26, 2021 for restricted shares previously issued to our former chief financial officer (see additional details below). Our independent directors authorized the issuance of a new award of LTIP Units on May 4, 2021 which was subsequently issued to the Advisor under the 2021 OPP after the performance period under the 2018 OPP expired on July 19, 2021. The year ended December 31, 2021 includes expenses for both the 2018 OPP and the 2021 OPP. In addition, there were higher equity-based compensation expenses for restricted shares recorded in the year ended December 31, 2021 which was due to new grants as well as an amendment to the original award agreement on February 26, 2021 for restricted shares previously issued to our former chief financial officer which accelerated the vesting of those restricted shares on April 9, 2021 upon the effectiveness of her resignation. These restricted shares were scheduled to vest in 25% increments on each of the first four anniversaries of the grant date (September 15, 2020). Also, we recorded additional expense for the excess of the new value of those awards on the date of modification over the fair value of the awards immediately prior to the amendment. In addition, we granted our former chief financial officer an additional award of restricted shares that also fully vested upon the effectiveness of her resignation April 9, 2021, contributing to the increase to equity-based compensation expense recorded during the year ended December 31, 2021. The acceleration of vesting of the prior grant and the new grant resulted in approximately $1.1 million of increased equity-based compensation expense recorded during the year ended December 31, 2021. For additional details on our restricted shares and the 2021 OPP, see Note 13 — Equity-Based Compensation to our consolidated financial statements included in this Annual Report on Form 10-K. General and Administrative Expense General and administrative expense increased $1.2 million to $20.9 million for the year ended December 31, 2021, compared to $19.7 million for the year ended December 31, 2020. The increase was primarily due to professional fees and other miscellaneous general and administrative costs of $1.5 million, which includes an increase of $0.2 million related to COVID-related lease disputes. Depreciation and Amortization Expense Depreciation and amortization expense decreased $7.0 million to $130.5 million for the year ended December 31, 2021, compared to $137.5 million for the year ended December 31, 2020. Depreciation and amortization expense was impacted by a decrease of $13.4 million from our 2020-2021 Same Store properties and a decrease of $0.8 million from our Disposals Since January 1, 2020 partially offset by an increase of $7.2 million resulting from our Acquisitions Since January 1, 2020. The decrease in our 2020-2021 Same Store depreciation was primarily due to the write-off of tenant improvements at one of our properties. During the second quarter of 2020, a tenant in the health club business declared bankruptcy and vacated its space. We were in the process of funding improvements that were being made to the space for the tenant. We determined that certain of the improvements no longer had any value in connection with any foreseeable replacement tenant and wrote off approximately $3.1 million which is recorded in depreciation and amortization expense in the consolidated statement of operations. The decrease was also attributable to the expiration of our United Healthcare lease on June 30, 2021, which reduced our amortization expense by $1.0 million in the year ended December 31, 2021 compared to the year ended December 31, 2020. Lastly, the decrease was attributable to leasing intangible write-offs during the year ended December 31, 2020 related to a tenant’s lease termination at 19 of our properties totaling $3.0 million which did not occur in the year ended December 31, 2021. Gain on Sale/Exchange of Real Estate Investments During the year ended December 31, 2021, we sold 13 properties for an aggregate contract price of $18.9 million, resulting in aggregate gains on sale of $4.8 million. During the year ended December 31, 2020, we sold six properties for an aggregate contract price of $13.3 million, resulting in aggregate gains on sale of $4.3 million. In addition, we recorded a $2.2 million gain related to a non-monetary exchange of two properties then owned by us for two different properties not then owned by us pursuant to a tenant’s exercise of its right to substitute properties under its lease, resulting in a total gain on sale of $6.5 million recorded in our consolidated statements of operations and comprehensive loss income. For additional information on real estate sales, see Note 3 — Real Estate Investments to our consolidated financial statements included in this Annual Report on Form 10-K.
Interest Expense Interest expense increased $3.3 million to $81.8 million for the year ended December 31, 2021, compared to $78.5 million for the year ended December 31, 2020. This increase was primarily due to the issuance of $500.0 million in 4.50% per annum Senior Notes on October 7, 2021 which accrued interest of $5.3 million through the end of 2021, as well as higher average outstanding balances on our mortgage notes payable and increased amortization of deferred financing costs of $4.5 million, partially offset by lower average outstanding balances on our Credit Facility and lower interest rates and lower costs incurred during 2021 related to debt repayments and refinancings. In addition, we terminated a non-designated interest swap agreement on October 7, 2021 and received $2.1 million after settlement. This amount was recorded as a reduction of interest expense during the year ended December 31, 2021. During the year ended December 31, 2021 and 2020, the average outstanding balances on our mortgage notes payable were $1.6 billion and $1.4 billion, respectively, and our average outstanding balance under our Credit Facility was $175.9 million and $376.0 million, respectively. For the year ended December 31, 2021 and 2020, the weighted-average interest rates on our mortgage notes payable were 3.88% and 4.28%, with the decline reflecting in part, our refinancing activity during the third quarter of 2020, and the weighted-average interest rates on our Credit Facility were 2.71% and 2.86%, respectively. Other Income Other income was $0.1 million for the year ended December 31, 2021, primarily comprised of interest income on our cash deposits. Other income was $1.0 million for the year ended December 31, 2020, primarily comprised of the receipt of approximately $0.8 million of funds disbursed to us for permitting the early release of a pre-acquisition tenant improvement escrow account, which had not been previously funded by us, in connection with the release of a mortgage loan encumbering a property as part of refinancing the mortgage loan in September 2020 (see Note 4 — Mortgage Notes Payable to our consolidated financial statements included in this Annual Report on Form 10-K). Additionally, $0.1 million relates to interest income on our bank deposits, and $0.1 million relates to other miscellaneous income, including $9,000 of insurance reimbursements related to the Merger. Loss on Non-Designated Derivatives Loss on non-designated derivative instruments was $4.0 million for the year ended December 31, 2021 and related to the change in fair value of an embedded derivative within the PSA for the CIM Portfolio Acquisition. The loss was recorded to account for the decrease in fair value of the equity offered in the PSA from December 17, 2021, the date of the PSA, until December 31, 2021. Loss on non-designated derivative instruments was immaterial for the year ended December 31, 2020, and relates to an interest rate cap on a mortgage note payable entered into in the fourth quarter of 2020 that is designed to protect us from adverse interest rate changes. For additional information, see Note 4 — Mortgage Notes Payable, Note 8 — Derivatives and Hedging Activities and Note 16 — Subsequent Events to our consolidated financial statements included in this Annual Report on Form 10-K. Cash Flows from Operating Activities The level of cash flows provided by or used in operating activities is affected by the rental income generated from leasing activity, including leasing activity due to acquisitions and dispositions, restricted cash we are required to maintain, the timing of interest payments, the receipt of scheduled rent payments and the level of property operating expenses. Cash flows provided by operating activities of $145.2 million during the year ended December 31, 2021 and consisted of a net loss of $40.2 million, adjusted for non-cash items of $187.3 million, including depreciation and amortization of tangible and intangible real estate assets, amortization of deferred financing costs, amortization of mortgage premiums on borrowings, equity-based compensation, gain on sale of real estate investments and impairment charges. In addition, cash flows from operating activities was impacted by an increase in straight-line rent receivable of $7.0 million which primarily related to COVID-19 related lease amendments and acquisitions, an increase in prepaid expenses and other assets of $4.6 million, a decrease in accounts payable and accrued expenses of $5.8 million and a decrease in deferred rent and other liabilities of $0.3 million as well as by prepayment costs on mortgages of $4.0 million. Cash flows provided by operating activities of $92.7 million during the year ended December 31, 2020 and consisted of a net loss of $31.9 million, adjusted for non-cash items of $157.7 million, including depreciation and amortization of tangible and intangible real estate assets, amortization of deferred financing costs, amortization of mortgage premiums on borrowings, equity-based compensation, gain on sale of real estate investments and impairment charges. In addition, cash flows from operating activities was impacted by an increase in straight-line rent receivable of $19.8 million which primarily related to COVID-19 related lease amendments and acquisitions, an increase in prepaid expenses and other assets of $9.1 million, a decrease in accounts payable and accrued expenses of $3.8 million and a decrease in deferred rent and other liabilities of $0.6 million.
Cash Flows from Investing Activities The net cash used in investing activities during the year ended December 31, 2021 of $220.7 million consisted primarily of cash paid for investments in real estate and other assets of $182.2 million, capital expenditures of $13.4 million and deposits for real estate acquisitions of $41.8 million, partially offset by cash received from the sale of real estate investments (net of mortgage loans repaid) of $16.6 million. The net cash used in investing activities during the year ended December 31, 2020 of $223.0 million consisted primarily of cash paid for investments in real estate and other assets of $220.4 million and capital expenditures of $9.2 million, partially offset by cash received from the sale of real estate investments (net of mortgage loans repaid) of $6.7 million and deposits for real estate acquisitions of $0.1 million. Cash Flows from Financing Activities The net cash provided by financing activities of $199.0 million during the year ended December 31, 2021 consisted primarily of proceeds from the issuance of the Senior Notes of $500.0 million, net proceeds from the issuance of Class A common stock of $128.4 million, net proceeds received from the issuance of Series A Preferred Stock of $1.9 million and net proceeds received from the issuance of Series C Preferred Stock of $25.5 million, partially offset by net payments of mortgage refinancings of $23.9 million, net repayments on our Credit Facility of $280.9 million, cash dividends paid to holders of Class A common stock of $97.5 million, cash dividends paid to holders of Series A Preferred Stock of $14.8 million, cash dividends paid to holders of Series C Preferred Stock of $6.5 million and payments of financing costs of $28.2 million. The net cash provided by financing activities of $143.8 million during the year ended December 31, 2020 consisted primarily of net proceeds from mortgage refinancings of $210.8 million, net proceeds received from the issuance of Series A Preferred Stock of $22.5 million and net proceeds received from the issuance of Series C Preferred Stock of $85.4 million, partially offset by net repayments on our Credit Facility of $52.3 million, cash dividends paid to holders of Class A common stock of $76.0 million, cash dividends paid to holders of Series A Preferred Stock of $14.2 million and payments of financing costs of $30.9 million. Liquidity and Capital Resources Our principal demands for cash are to fund operating and administrative expenses, debt service obligations, dividends on our Class A common stock, dividends on our Series A Preferred Stock, dividends on our Series C Preferred Stock, distributions on our LTIP Units and distributions for limited partnership units that correspond to shares of our Class A common stock, and capital expenditures. In addition, our demand for cash includes the purchase of additional properties. CIM Portfolio Acquisition In December 2021, we signed a purchase and sale agreement for the CIM Portfolio Acquisition, which consists of 79 multi-tenant retail centers and two single-tenant properties, for a contract purchase price of $1.3 billion. On February 11, 2022, we acquired 44 properties in the first tranche of the CIM Portfolio Acquisition consisting of 44 power center and grocery-anchored multi-tenant retail centers and a detention pond parcel located across 17 states and aggregating approximately 4.5 million square feet for an aggregate contract purchase price of $547.4 million. We funded the closing of the first tranche with cash of $350.7 million, which included net proceeds from the approximately $260.7 million sale of our Sanofi property and remaining proceeds from our Senior Notes offering, borrowings under our Credit Facility of $170.0 million and the issuance of 3,264,693 shares of our Class A common stock, representing consideration of $26.7 million, which were issued at a price of $8.18 per share. We currently expect to close on the CIM Portfolio Acquisition in successive tranches by the end of March 2022 and add any unencumbered assets from these tranches to the borrowing base of our Credit Facility. We expect to fund the remainder of the tranches with additional borrowings under our Credit Facility of approximately $320.0 million, assumed mortgages of $348.7 million, the issuance of $26.7 million of our Class A common stock, the application of our previously funded deposit of $40.0 million and the remainder with cash on hand. Short-Term Material Cash Requirements As of December 31, 2021 and 2020, we had cash and cash equivalents of $214.9 million and $102.9 million, respectively. On October 1, 2021, we entered into an amendment and restatement of the Credit Facility with BMO Harris Bank N.A., as administrative agent, and the other lender parties thereto. Upon the closing of the Senior Notes (as defined below) on October 7, 2021, we repaid the outstanding balance of $186.2 million under the Credit Facility. As of December 31, 2021, we had $214.3 million available for future borrowings under our Credit Facility.
With the exception of the CIM Portfolio Acquisition (funding details described in detail above), we expect to fund our future short-term material cash requirements through a combination of cash on hand, net cash provided by our property operations and proceeds from our Credit Facility. Pursuant to our Credit Facility, we are restricted from using proceeds from borrowings under the Credit Facility to accumulate or maintain cash or cash equivalents in excess of amounts necessary to meet current working capital requirements. We may also generate additional liquidity through property dispositions and, to the extent available, secured or unsecured borrowings including the issuance of additional Senior Notes or similar securities, our “at the market” equity offering program for Class A common stock (the “Class A Common Stock ATM Program”), our “at the market” equity offering program for Series A Preferred Stock (the “Series A Preferred Stock ATM Program”), our “at the market” equity offering program for Series C Preferred Stock (the “Series C Preferred Stock ATM Program”), or other offerings of debt or equity securities. Deleveraging Initiative In May, 2021, we began a deleveraging initiative to reduce our net debt relative to our earnings. We hope to achieve this initiative by: •reducing outstanding debt over time; •funding acquisitions through cash on hand rather than proceeds from debt, or at lower debt-to-equity ratios; •raising equity to fund acquisitions and pay down debt; and •increasing revenues through external and internal growth factors such as property acquisitions and multi-tenant leasing activity. The CIM Portfolio Acquisition will increase our leverage in the first quarter of 2022, however, we plan to continue with our deleveraging strategy after the completion of the CIM Portfolio Acquisition. However, we may issue additional Senior Notes or similar securities in the future particularly as we revise our capital structure following the CIM Portfolio Acquisition in a similar fashion as we may add or refinance existing mortgage debt or indebtedness under our Credit Facility. Mortgage Notes Payable, Credit Facility and Senior Notes — December 31, 2021 As of December 31, 2021, we had $1.5 billion of gross mortgage notes payable outstanding, $500.0 million of gross Senior Notes outstanding and no balance outstanding under our Credit Facility, for total gross debt of $2.0 billion. Of our total gross debt, 100.0% was fixed-rate, however, after completing the first tranche of the CIM Portfolio Acquisition, we incurred $170.0 million of variable-rate debt outstanding under our Credit Facility, and we expect to incur an additional $320.0 million through March 2022 to complete the transaction. As of December 31, 2021, our net debt to gross asset value ratio was 40.0%. We define net debt as the principal amount of our outstanding debt (excluding the effect of deferred financing costs, net and mortgage premiums and discounts, net) less cash and cash equivalents. Gross asset value is defined as total assets plus accumulated depreciation and amortization. As of December 31, 2021, the weighted-average interest rates on the mortgage notes payable, Credit Facility and Senior Notes were 3.8%, 0.0% (no amounts outstanding) and 4.5%, respectively. At the closing of the first tranche of the CIM Portfolio Acquisition on February 11, 2022 we did not assume any mortgage debt, and we expect to assume $348.7 million of fixed-rate mortgage debt after the closing of the remaining tranches by the end of March 2022. As of December 31, 2021, we had $3.9 billion in real estate investments, at cost and we had pledged approximately $2.4 billion of these real estate investments, at cost, as collateral for our mortgage notes payable. In addition, approximately $1.3 billion of these real estate investments, at cost, were included in the unencumbered asset pool comprising the borrowing base under the Credit Facility which had a total borrowing capacity thereunder of $214.3 million. Therefore, this real estate is only available to serve as collateral or satisfy other debts and obligations if it is first removed from the borrowing base under the Credit Facility, which would reduce the amount available to us on the Credit Facility. At the closing of the first tranche of the CIM Portfolio Acquisition on February 11, 2022, we borrowed $170.0 million under the Credit Facility. Although this exceeded our borrowing capacity after disposing of our Sanofi property, we were permitted to pledge certain of the assets acquired at the closing of the first tranche of CIM Portfolio Acquisition onto the Credit Facility’s borrowing base. We expect to pledge additional acquired properties at the closing of the remaining tranches of the CIM Portfolio Acquisition and borrow approximately $320.0 million under the Credit Facility to fund a portion of the closing of the remaining tranches of the CIM Portfolio Acquisition. The Senior Notes are fully and unconditionally guaranteed (the “Senior Note Guarantees”) on a joint and several basis by the subsidiaries of each Issuer (defined below) that are guarantors under the Credit Facility. Subject to certain exceptions, each future subsidiary of each Issuer that subsequently guarantees indebtedness under the Credit Facility, any other syndicated loan facility or any capital markets indebtedness, in each case, of the Issuers or a Guarantor will be required to execute a Senior Note Guarantee. Under certain circumstances, the Guarantors may be automatically released from their Senior Note Guarantees without the consent of the holders of Senior Notes.
Net Lease Mortgage Notes On June 3, 2021, through subsidiaries, we issued $318.0 million aggregate principal amount of Net Lease Mortgage Notes (the “2021 Net Lease Mortgage Notes”). The 2021 Net Lease Mortgage Notes are cross-collateralized with the $242.0 million in aggregate principal amount of Net Lease Mortgage Notes issued through subsidiaries in 2019 (the “2019 Net Lease Mortgage Notes” and, together with the 2021 Net Lease Mortgage Notes, the “Notes”). The Notes were issued using a master trust structure, which enables additional series of notes to be issued upon the contribution of additional properties to the collateral pool without the need to structure a new securitization transaction. Any new notes that are so issued will be cross-collateralized with the Notes. The 2021 Net Lease Mortgage Notes were issued in six classes: Class A-1 (AAA), Class A-2 (AAA), Class A-3 (A), Class A-4 (A), Class B-1 (BBB) and Class B-2 (BBB). The Class A-1 (AAA) Notes are rated AAA (sf) by Standard & Poors and are comprised of $55.0 million initial principal amount of 2021 Net Lease Mortgage Notes with an anticipated repayment date in May 2028 and an interest rate of 2.21%. The Class A-2 (AAA) Notes are rated AAA (sf) by Standard & Poors and are comprised of $95.0 million initial principal amount of 2021 Net Lease Mortgage Notes with an anticipated repayment date in May 2031 and an interest rate of 2.79%. The Class A-3 (A) Notes are rated A (sf) by Standard & Poors and are comprised of $35.0 million initial principal amount of 2021 Net Lease Mortgage Notes with an anticipated repayment date in May 2028 and an interest rate of 3.03%. The Class A-4 (A) Notes are rated A (sf) by Standard & Poors and are comprised of $55.0 million initial principal amount of 2021 Net Lease Mortgage Notes with an anticipated repayment date in May 2031 and an interest rate of 3.60%. The Class B Notes are currently retained by the OP and are eliminated upon consolidation, and are therefore not presented in our consolidated financial statements. The Class B Notes may be sold to unaffiliated third parties in the future. The Class B-1 (BBB) Notes are rated BBB (sf) by Standard & Poors and are comprised of $30.0 million initial principal amount of 2021 Net Lease Mortgage Notes with an anticipated repayment date in May 2028 and an interest rate of 4.02%. The Class B-2 (BBB) Notes are rated BBB (sf) by Standard & Poors and are comprised of $48.0 million initial principal amount of 2021 Net Lease Mortgage Notes with an anticipated repayment date in May 2031 and an interest rate of 4.58%. The 2021 Net Lease Mortgage Notes have a rated final payment date in May 2051. The 2019 Net Lease Mortgage Notes were issued in two classes, Class A-1 (AAA) and Class A-2 (A). The Class A-1 (AAA) Notes are rated AAA (sf) by Standard & Poors and are comprised of $121.0 million initial principal amount of 2019 Net Lease Mortgage Notes with an anticipated repayment date in May 2026 and an interest rate of 3.78%. The Class A-2 (A) Notes are rated A (sf) by Standard & Poors and are comprised of $121.0 million initial principal amount of 2019 Net Lease Mortgage Notes with an anticipated repayment date in May 2029 with an interest rate of 4.46%. The 2019 Net Lease Mortgage Notes have a rated final payment date in May 2049. The Notes may be redeemed at any time prior to their anticipated repayment date subject to payment of a make-whole premium. If any class of Notes is not paid in full at its respective anticipated repayment date, additional interest will begin to accrue on those Notes. Patton Creek Mortgage On June 28, 2021, we repaid the mortgage loan secured by our Patton Creek property in full using a portion of the proceeds from the issuance of the 2021 Net Lease Mortgage Notes. The mortgage loan had a principal balance of $34.0 million and bore interest at a floating interest rate of one-month LIBOR plus 4.25% and was scheduled to mature on December 6, 2021. SAAB Sensis and Shops at Shelby Crossing Mortgages On September 23, 2021, we repaid the mortgage loan secured by our SAAB Sensis and Shops at Shelby Crossing properties using proceeds from borrowings under the Credit Facility. The mortgage loan on the SAAB Sensis property had a principal balance of $5.9 million, bore interest at 6.01% and was scheduled to mature in April 2025. The mortgage loan on the Shops at Shelby Crossing property had a principal balance of $21.3 million, bore interest at 4.97% and was scheduled to mature in March 2024. Sanofi Mortgage On October 7, 2021, we repaid the mortgage loan secured by our Sanofi property using proceeds from the issuance of the Senior Notes. The Sanofi mortgage had a principal balance of $125.0 million and bore interest at a floating interest rate of one-month LIBOR plus 2.9%, with the effective interest rate fixed at 3.27% by swap agreement. The loan was interest-only and scheduled to mature on September 4, 2025. Following the repayment of the Sanofi mortgage, we terminated our $125.0 swap agreement. The fair value of the swap upon termination was $2.1 million, which was settled in cash on October 19, 2021 and has been reflected as a reduction of interest expense in our consolidated statement of operations for the year ended December 31, 2021. Credit Facility — Terms and Capacity
As of December 31, 2021, we had no amounts outstanding under our Credit Facility. As of December 31, 2020, we had $280.9 million outstanding. On October 1, 2021, we entered into an amendment and restatement of the Credit Facility with BMO Harris Bank N.A., as administrative agent, and the other lender party thereto. The aggregate total commitments under the Credit Facility were increased to $815.0 million, including a $50.0 million sublimit for letters of credit and a $55.0 million sublimit for swingline loans. The Credit Facility includes an uncommitted “accordion feature” permitting us to increase the commitments under the Credit Facility by up to an additional $435.0 million, subject to obtaining commitments from new lenders or additional commitments from participating lenders and certain customary conditions. The Credit Facility is supported by a pool of eligible unencumbered properties that are owned by the subsidiaries of the OP that serve as Guarantors. We may add or remove properties to or from this pool so long as at any time there are at least 15 eligible unencumbered properties with a value of at least $300.0 million, among other things. The amount available for future borrowings under the Credit Facility depends on the amount outstanding thereunder relative to the aggregate commitments; however, the amount we may borrow under the Credit Facility will be limited by financial maintenance covenants. At the execution of the amendment and restatement of the Credit Facility, $186.2 million was outstanding under the Credit Facility. This amount was subsequently repaid with a portion of the net proceeds of the Senior Notes. The Credit Facility requires payments of interest only prior to maturity. At the execution of the amendment and restatement of the Credit Facility the interest rate was LIBOR plus 1.90% per annum. Following the amendment and restatement of the Credit Facility, borrowings bear interest at either (i) the Base Rate (as defined in the Credit Facility) plus an applicable spread ranging from 0.45% to 1.05%, or (ii) LIBOR plus an applicable spread ranging from 1.45% to 2.05%, in each case depending on the our consolidated leverage ratio. These spreads reflect a reduction from the previously applicable spreads. In addition, pursuant to the Credit Facility, (i) if either we or the OP achieves an investment grade credit rating, the OP can elect for the spread to be based on our credit rating of ours or the OP, and (ii) the “floor” on LIBOR was decreased from 0.25% to 0%. The Credit Facility includes provisions related to the anticipated transition from LIBOR to an alternative benchmark rate. Through September 30, 2021, prior to the closing of the amendment and restatement of the Credit Facility on October 1, 2021, borrowings under our Credit Facility bore interest at either (i) the Base Rate (as defined in the Credit Facility) plus an applicable spread ranging from 0.60% to 1.20% depending on our consolidated leverage ratio or (ii) LIBOR plus an applicable margin ranging from 1.60% to 2.20%, depending on our consolidated leverage ratio. From July 24, 2020 until delivery of the compliance certificate for the fiscal quarter ended June 30, 2021, the margin was 1.50% with respect to the Base Rate and 2.50% with respect to LIBOR regardless of our consolidated leverage ratio. The “floor” on LIBOR was 0.25%. As of December 31, 2021 we have elected to use the LIBOR rate for all our borrowings under the Credit Facility. The Credit Facility matures on April 1, 2026, subject to our right, subject to customary conditions, to extend the maturity date by up to two additional six-month terms. Borrowings under the Credit Facility may be prepaid at any time, in whole or in part, without premium or penalty, subject to customary LIBOR breakage costs. As of December 31, 2021, we were in compliance with the operating and financial covenants under the Credit Facility. As of December 31, 2021, we had $214.3 million available for future borrowings, which included the Sanofi property as part of the unencumbered asset pool comprising the borrowing base of the Credit Facility. On January 6, 2022, we sold the Sanofi property and removed it from the borrowing base of the Credit Facility (see the Acquisitions and Dispositions — Subsequent to December 31, 2021 section below for additional details on the Sanofi sale). At the closing of the first tranche of the CIM Portfolio Acquisition on February 11, 2022, we added certain acquired properties to the borrowing base of our Credit Facility and drew $170.0 million on our Credit Facility which was used at closing. After the closing of the first tranche of the CIM Portfolio Acquisition and the $170.0 million draw, we had approximately $250.1 million available for future borrowings under the Credit Facility. We expect to add additional acquired properties to the borrowing base of our Credit Facility at the closing of the remaining tranches of the CIM Portfolio Acquisition to further increase our borrowing availability. As a result, we expect to draw an additional $320.0 million on our Credit Facility to fund all of the remaining tranches of the CIM Portfolio Acquisition. After the closing of all tranches of the CIM Portfolio Acquisition, we expect to draw a total of approximately $490.0 million on our Credit Facility and we would have $325.0 million of potential availability remaining if we are able to reach the maximum commitment level of our Credit Facility, which is $815.0 million. Issuance of Senior Notes On October 7, 2021, we and the OP issued $500.0 million aggregate principal amount of 4.500% Senior Notes due 2028 (the “Senior Notes”). At closing, we used a portion of the net proceeds from the issuance of the Senior Notes, after deducting the initial purchasers’ discounts and offering fees and expenses, to repay amounts outstanding at the time under the Credit Facility of approximately $186.2 million and to repay a $125.0 million variable rate mortgage note secured by our property
leased to Sanofi (discussed below). We may use the remaining proceeds to fund future property acquisitions and for other general corporate purposes. As of December 31, 2021, we were in compliance with the operating and financial covenants under the Senior Notes. LIBOR Exposure In July 2017, the Financial Conduct Authority (which regulates LIBOR) announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. As a result, the Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee, which identified the Secured Overnight Financing Rate (“SOFR”) as its preferred alternative to LIBOR in derivatives and other financial contracts. On November 30, 2020, the Financial Conduct Authority announced a partial extension of this deadline, indicating its intention to cease the publication of the one-week and two-month USD LIBOR settings immediately following December 31, 2021, and the remaining USD LIBOR settings immediately following the LIBOR publication on June 30, 2023. While we expect LIBOR to be available in substantially its current form until at least the end of 2023, it is possible that LIBOR will become unavailable prior to that time. To transition from LIBOR under the Credit Facility, we will either utilize the Base Rate (as defined in the Credit Facility) or an alternative benchmark established by the agent in accordance with the terms of the Credit Facility, which will be SOFR if available or an alternate benchmark that is being widely used in the market at that time as selected by the agent. Please see the “Increasing interest rates could increase the amount of our debt payments and adversely affect our ability to pay dividends, and we may be adversely affected by uncertainty surrounding the LIBOR”section inItem 1A. Risk Factors for additional information. Acquisitions and Dispositions — Year Ended December 31, 2021 One of our primary uses of cash during the year ended December 31, 2021 has been to acquire properties. During the year ended December 31, 2021, we acquired 69 properties for an aggregate purchase price of $182.2 million, including capitalized acquisition costs. The acquisitions of 13 of these properties for $28.5 million, including capitalized acquisition costs, were completed during the three months ended December 31, 2021. The acquisitions during the quarter and year ended December 31, 2021 were funded through a combination of cash on hand, comprising a combination of draws on the Credit Facility, net proceeds from the issuance of the Senior Notes, proceeds from the issuance and sale of Class A common stock (discussed below), Series A Preferred Stock (discussed below), Series C Preferred Stock (discussed below) and proceeds from dispositions of properties (discussed below). During the year ended December 31, 2021, we sold 13 properties, for an aggregate contract price of $18.9 million, excluding disposition related costs. We disposed of five properties during the three months ended December 31, 2021 for a contract purchase price of $12.9 million. In connection with sales made during the year ended December 31, 2021, we repaid approximately $1.1 million of mortgage debt and after all disposition related costs, net proceeds from these dispositions, classified as investing cash flows, were $16.6 million. Acquisitions and Dispositions — Subsequent to December 31, 2021 Subsequent to December 31, 2021, we closed on the acquisition of three properties for an aggregate purchase price of $40.9 million. Excluded in our acquisitions completed subsequent to December 31, 2021 is the closing of the first tranche of the CIM Portfolio Acquisition, as previously discussed above. The Company expects to complete the transaction with the closing of the one or more tranches through March 2022. Subsequent to December 31, 2021, we closed on the sale of three office buildings leased to Sanofi S.A. for a contract purchase price of $260.7 million (the “Sanofi Sale”). The proceeds from the Sanofi Sale were used to partially fund the closing of the first tranche of the CIM Portfolio Acquisition as discussed above. The assets sold in the Sanofi Sale were part of the unencumbered asset pool comprising the borrowing base of the Credit Facility as of December 31, 2021. We also disposed of five other single-tenant properties for an aggregate contract sale price of $4.6 million. These five properties were not encumbered by mortgages and were not part of the unencumbered asset pool comprising the borrowing base of the Credit Facility. We have entered into two definitive purchase and sale agreements (“PSAs”) to acquire nine additional properties for an aggregate contract purchase price of approximately $17.8 million and a non-binding letter of intent (“LOI”) to acquire an additional 11 properties for approximately $45.3 million. We have entered into three PSAs to dispose of three properties for an aggregate contract sales price of $3.4 million and two LOIs to dispose of two properties for an aggregate contract sales price of $4.5 million. The PSAs are subject to conditions, and the LOI is non-binding. There can be no assurance we will complete any of these acquisitions on their contemplated terms, or at all. To fund the consideration required to complete these acquisitions, we anticipate using proceeds from future dispositions of properties, proceeds from borrowings (including borrowings under our Credit Facility) and net proceeds received from our Class A Common Stock ATM Program, Series A Preferred Stock ATM Program, and Series C Preferred Stock ATM Program.
ATM Programs In May 2019, we established an “at the market” equity offering program for Class A common stock (the “Class A Common Stock ATM Program”), pursuant to which we may from time to time, offer, issue and sell to the public up to $200.0 million in shares of Class A common stock, through sales agents. We intend to use any net proceeds from these offerings for general corporate purposes, including funding property acquisitions, repaying outstanding indebtedness (including borrowings under our Credit Facility), and for working capital. During the year ended December 31, 2021, we sold 14,734,448 shares of Class A common stock through the Class A common stock ATM Program for gross proceeds of $130.6 million and net proceeds of $128.4 million, after commissions and fees paid of $2.2 million. During the three months ended December 31, 2021, we sold 277,611 shares of Class A common stock through the Class A common stock ATM Program for gross proceeds of $2.4 million and net proceeds of $2.3 million after commissions and fees paid of $0.1 million. Subsequent to December 31, 2021, we sold 2,761,711 shares of our Class A common stock through our Class A Common Stock ATM Program for gross proceeds of $24.9 million which will be used to repay debt obligations, including amounts outstanding under our Credit Facility. In May 2019, we established an “at the market” equity offering program for Series A Preferred Stock (the “Series A Preferred Stock ATM Program”) pursuant to which we may, from time to time, offer, issue and sell to the public up to $100.0 million in shares of Series A Preferred Stock through sales agents. In January 2021, the aggregate amount that may be sold was increased to $200.0 million. During the year ended December 31, 2021, we sold 91,703 shares of Series A Preferred Stock through the Series A Preferred Stock ATM Program for gross proceeds of $2.3 million and net proceeds of $2.0 million, after commissions, fees and other costs incurred of $0.3 million. We did not sell any shares of Series A Preferred Stock during the three months ended December 31, 2021. In January, 2021 we established an “at the market” equity offering program for Series C Preferred Stock (the “Series C Preferred Stock ATM Program”) pursuant to which we may, from time to time, offer, issue and sell to the public, through sales agents, shares of the Series C Preferred Stock having an aggregate offering price of up to $200.0 million. During the year ended December 31, 2021, we sold 1,058,798 shares of Series C Preferred Stock through the Series C Preferred Stock ATM Program for gross proceeds of $26.5 million and net proceeds of $25.5 million, after commissions, fees and other costs incurred of $1.0 million. We did not sell any shares of Series C Preferred Stock during the three months ended December 31, 2021. Distribution Reinvestment Program Our distribution reinvestment plan (“DRIP”) allows stockholders who have elected to participate in the DRIP to have dividends payable with respect to all or a portion of their shares of Class A common stock reinvested in additional shares of Class A common stock. Shares issued pursuant to the DRIP are, at our election, either (i) acquired directly from us, by issuing new shares, at a price based on the average of the high and low sales prices of Class A common stock on Nasdaq on the date of reinvestment, or (ii) acquired through open market purchases by the plan administrator at a price based on the weighted-average of the actual prices paid for all of the shares of Class A common stock purchased by the plan administrator with all participants’ reinvested dividends for the related quarter, less a per share processing fee. During the years ended December 31, 2021, 2020 and 2019, all shares acquired by participants pursuant to the Post-Listing DRIP were acquired through open market purchases by the plan administrator and not issued directly to stockholders by us. Capital Expenditures and Construction in Progress We invest in capital expenditures to enhance and maintain the value of our properties. We define revenue enhancing capital expenditures as improvements to our properties that we believe will result in higher income generation over time. Capital expenditures for maintenance are generally necessary, non-revenue generating improvements that extend the useful life of the property and are less frequent in nature. By providing this metric, we believe we are presenting useful information for investors that can help them assess the components of our capital expenditures that are expected to either grow or maintain our current revenue. Further detail related to our capital expenditures is as follows: | | | | | | | | | (In thousands) | | Year Ended December 31, 2021 | Capital Expenditures | | | Revenue enhancing | | $ | 12,911 | | | | | Maintenance | | 2,049 | | Total Capital Expenditures | | 14,960 | | Leasing commissions | | 4,524 | | Total | | $ | 19,484 | |
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Also, as of December 31, 2021 and December 31, 2020, we had $1.5 million and $0.0 million, respectively, of construction in progress which is included in the prepaid expenses and other assets on the consolidated balance sheets. Non-GAAP Financial Measures This section discusses the non-GAAP financial measures we use to evaluate our performance, including Funds from Operations (“FFO”), Adjusted Funds from Operations (“AFFO”) and NOI. While NOI is a property-level measure, AFFO is based on our total performance and therefore reflects the impact of other items not specifically associated with NOI such as interest expense, general and administrative expenses and operating fees to related parties. Additionally, NOI as defined herein, does not reflect an adjustment for straight-line rent but AFFO does. A description of these non-GAAP measures and reconciliations to the most directly comparable GAAP measure, which is net income (loss), is provided below. Adjustments for unconsolidated partnerships and joint ventures are calculated to exclude the proportionate share of the non-controlling interest to arrive at FFO, AFFO and NOI attributable to stockholders. Funds from Operations and Adjusted Funds from Operations Funds from Operations Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts (“NAREIT”), an industry trade group, has promulgated a performance measure known as FFO, which we believe to be an appropriate supplemental measure to reflect the operating performance of a REIT. FFO is not equivalent to net income or loss as determined under GAAP. We calculate FFO, a non-GAAP measure, consistent with the standards established over time by the Board of Governors of NAREIT, as restated in a White Paper and approved by the Board of Governors of NAREIT effective in December 2018 (the “White Paper”). The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding depreciation and amortization related to real estate, gains and losses from sales of certain real estate assets, gain and losses from change in control and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. Adjustments for consolidated partially-owned entities (including our OP) and equity in earnings of unconsolidated affiliates are made to arrive at our proportionate share of FFO attributable to our stockholders. Our FFO calculation complies with NAREIT’s definition. The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, and straight-line amortization of intangibles, which implies that the value of a real estate asset diminishes predictably over time. We believe that, because real estate values historically rise and fall with market conditions, including inflation, interest rates, unemployment and consumer spending, presentations of operating results for a REIT using historical accounting for depreciation and certain other items may be less informative. Historical accounting for real estate involves the use of GAAP. Any other method of accounting for real estate such as the fair value method cannot be construed to be any more accurate or relevant than the comparable methodologies of real estate valuation found in GAAP. Nevertheless, we believe that the use of FFO, which excludes the impact of real estate related depreciation and amortization, among other things, provides a more complete understanding of our performance to investors and to management, and when compared year over year, reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income. Adjusted Funds from Operations In calculating AFFO, we start with FFO, then we exclude certain income or expense items from AFFO that we consider to be more reflective of investing activities, such as non-cash income and expense items and the income and expense effects of other activities that are not a fundamental attribute of our day to day operating business plan, such as amounts related to litigation arising out of the merger with American Realty Capital-Retail Centers of America, Inc. in February 2017 (the “RCA Merger”). These amounts include legal costs incurred as a result of the litigation, portions of which have been and may in the future be reimbursed under insurance policies maintained by us. Insurance reimbursements are deducted from AFFO in the period of reimbursement. We believe that excluding the litigation costs and subsequent insurance reimbursements related to litigation arising out of the RCA Merger helps to provide a better understanding of the operating performance of our business. Other income and expense items also include early extinguishment of debt and unrealized gains and losses, which may not ultimately be realized, such as gains or losses on derivative instruments and gains and losses on investments. In addition, by excluding non-cash income and expense items such as amortization of above-market and below-market leases intangibles, amortization of deferred financing costs, straight-line rent, and share-based compensation related to restricted shares and the 2018 OPP from AFFO, we believe we provide useful information regarding those income and expense items which have a direct impact on our ongoing operating performance. In calculating AFFO, we exclude certain expenses which under GAAP are characterized as operating expenses in determining operating net income (loss). All paid and accrued merger, acquisition and transaction related fees and certain other expenses negatively impact our operating performance during the period in which expenses are incurred or properties are acquired will also have negative effects on returns to investors, but are not reflective of our on-going performance. In addition,
legal fees and expense associated with COVID-19-related lease disputes involving certain tenants negatively impact our operating performance but are not reflective of our on-going performance. Further, under GAAP, certain contemplated non-cash fair value and other non-cash adjustments are considered operating non-cash adjustments to net income (loss). In addition, as discussed above, we view gains and losses from fair value adjustments as items which are unrealized and may not ultimately be realized and not reflective of ongoing operations and are therefore typically adjusted for when assessing operating performance. Excluding income and expense items detailed above from our calculation of AFFO provides information consistent with management’s analysis of our operating performance. Additionally, fair value adjustments, which are based on the impact of current market fluctuations and underlying assessments of general market conditions, but can also result from operational factors such as rental and occupancy rates, may not be directly related or attributable to our current operating performance. By excluding such changes that may reflect anticipated and unrealized gains or losses, we believe AFFO provides useful supplemental information. By providing AFFO, we believe we are presenting useful information that can be used, among other things, to assess our performance without the impact of transactions or other items that are not related to our portfolio of properties. AFFO presented by us may not be comparable to AFFO reported by other REITs that define AFFO differently. Furthermore, we believe that in order to facilitate a clear understanding of our operating results, AFFO should be examined in conjunction with net income (loss) as presented in our consolidated financial statements. AFFO should not be considered as an alternative to net income (loss) as an indication of our performance or to cash flows as a measure of our liquidity or ability to pay dividends. FFO and AFFO for the year ended December 31, 2021 includes income from a lease termination fee of $10.4 million, which is recorded in Revenue from tenants in the consolidated statements of operations. While such termination payments occur infrequently, they represent cash income for accounting and tax purposes and as such management believes they should be included in both FFO and AFFO. Accounting Treatment of Rent Deferrals/Abatements The majority of the concessions granted to our tenants as a result of the COVID-19 pandemic are rent deferrals or temporary rent abatements with the original lease term unchanged and collection of deferred rent deemed probable (see the “Overview - Management Update on the Impacts of the COVID-19 Pandemic” section of this Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional information). As a result of relief granted by the FASB and SEC related to lease modification accounting, rental revenue used to calculate Net Income and NAREIT FFO has not been, and we do not expect it to be, significantly impacted by these types of deferrals. In addition, since we currently believe that these deferral amounts are collectable, we have excluded from the increase in straight-line rent for AFFO purposes the amounts recognized under GAAP relating to these types of rent deferrals. Conversely, for abatements where contractual rent has been reduced, the reduction in revenue is reflected over the remaining lease term for accounting purposes but represents a permanent reduction in revenue and we have, accordingly, reduced our AFFO. For a detailed discussion of our revenue recognition policy, including details related to the relief granted by the FASB and SEC, see Note 2 — Significant Accounting Polices to our consolidated financial statements included in the Annual Report on Form 10-K.
The table below reflects the items deducted from or added to net loss in our calculation of FFO and AFFO for the periods presented: | | | | | | | | | | | | | | | | | | | Year Ended December 31, | (In thousands) | | 2021 | | 2020 | | | Net loss attributable to common stockholders (in accordance with GAAP) | | $ | (63,441) | | | $ | (46,650) | | | | Impairment of real estate investments | | 33,261 | | | 12,910 | | | | Depreciation and amortization | | 130,464 | | | 137,459 | | | | Gain on sale/exchange of real estate investments | | (4,757) | | | (6,456) | | | | Proportionate share of adjustments for non-controlling interests to arrive at FFO | | (198) | | | (228) | | | | FFO attributable to stockholders [1] | | 95,329 | | | 97,035 | | | | Acquisition, transaction and other costs [2] | | 4,378 | | | 2,921 | | | | Litigation cost reimbursements related to the Merger [3] | | — | | | (9) | | | | Legal fees and expenses — COVID-19 lease disputes [4] | | 422 | | | 269 | | | | Accretion of market lease and other intangibles, net | | (4,625) | | | (6,149) | | | | Straight-line rent | | (6,775) | | | (19,510) | | | | Straight-line rent (rent deferral agreements) [5] | | (3,669) | | | 4,649 | | | | Amortization of mortgage premiums and discounts on borrowings | | (968) | | | (2,126) | | | | Loss on non-designated derivatives [6] | | 3,950 | | | 9 | | | | Equity-based compensation | | 17,264 | | | 13,036 | | | | Amortization of deferred financing costs, net [7] | | 12,733 | | | 7,846 | | | | Proportionate share of adjustments for non-controlling interests to arrive at AFFO | | (26) | | | (2) | | | | AFFO attributable to common stockholders [1] | | $ | 118,013 | | | $ | 97,969 | | | |
__________ [1]FFO and AFFO for the year ended December 31, 2021 have not been adjusted to exclude income from lease termination fees of $12.2 million, which is recorded in Revenue from tenants in the consolidated statements of operations. While such termination payments occur infrequently, they represent cash income for accounting and tax purposes and as such management believes they should be included in both FFO and AFFO. [2]Includes primarily prepayment costs incurred in connection with early debt extinguishment as well as litigation costs related to the RCA Merger. [3]Included in “Other income” in our consolidated statement of operations and comprehensive loss. [4]Reflects legal costs incurred related to disputes with tenants due to store closures or other challenges resulting from COVID-19. The tenants involved in these disputes had not recently defaulted on their rent and, prior to the second and third quarters of 2020, had recently exhibited a pattern of regular payment. Based on the tenants involved in these matters, their history of rent payments, and the impact of the pandemic on current economic conditions, we view these costs as COVID-19-related and separable from our ordinary general and administrative expenses related to tenant defaults. We engaged counsel in connection with these issues separate and distinct from counsel we typically engage for tenant defaults. The amount reflects what we believe to be only those incremental legal costs above what we typically incur for tenant-related dispute issues. We may continue to incur these COVID-19 related legal costs in the future. [5]Represents amounts related to deferred rent pursuant to lease negotiations which qualify for FASB relief for which rent was deferred but not reduced. These amounts are included in the straight-line rent receivable on our consolidated balance sheet but are considered to be earned revenue attributed to the current period for which rent was deferred for purposes of AFFO as they are expected to be collected. Accordingly, when the deferred amounts are collected, the amounts reduce AFFO. For rent abatements (including those qualified for FASB relief), where contractual rent has been reduced, the reduction in revenue is reflected over the remaining lease term for accounting purposes but represents a permanent reduction in revenue and we have, accordingly reduced our AFFO. [6]In the year ended December 31, 2021, we recognized a loss of $4.0 million related to the change in fair value of a embedded derivative within the PSA of the CIM Acquisition. We do not consider non-cash losses for embedded derivative fair value adjustments to be capital in nature, nor do we consider them a part of recurring operations. Accordingly, such amounts are excluded for AFFO purposes. See Note 8 — Derivatives and Hedging Activities and Note 16 — Subsequent Events for more information. [7]We issued $500.0 million in Senior Notes in October 2021. The Senior Notes pay semiannual interest which we accrue interest over time for GAAP purposes. Accordingly, to better reflect our operating performance, beginning with the year ended December 31, 2021 and for all periods thereafter, we have elected to remove the impact of the change in accrued interest from the calculation of AFFO, which was previously included in this line item. We have not amended the calculation of AFFO for the year ended 2020 or any other prior years. The impact to AFFO for the change in accrued interest included in this line for the year ended December 31, 2020 was a reduction to AFFO of $0.4 million.
Net Operating Income NOI is a non-GAAP financial measure used by us to evaluate the operating performance of our real estate. NOI is equal to total revenues, excluding contingent purchase price consideration, less property operating and maintenance expense. NOI excludes all other items of expense and income included in the financial statements in calculating net income (loss). We believe NOI provides useful and relevant information because it reflects only those income and expense items that are incurred at the property level and presents such items on an unleveraged basis. We use NOI to assess and compare property level performance and to make decisions concerning the operation of the properties. Further, we believe NOI is useful to investors as a performance measure because, when compared across periods, NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating expenses and acquisition activity on an unleveraged basis, providing perspective not immediately apparent from net income (loss). NOI excludes certain items included in calculating net income (loss) in order to provide results that are more closely related to a property’s results of operations. For example, interest expense is not necessarily linked to the operating performance of a real estate asset. In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort operating performance at the property level. NOI presented by us may not be comparable to NOI reported by other REITs that define NOI differently. We believe that in order to facilitate a clear understanding of our operating results, NOI should be examined in conjunction with net income (loss) as presented in our consolidated financial statements. NOI should not be considered as an alternative to net income (loss) as an indication of our performance or to cash flows as a measure of our liquidity or ability to pay dividends. The following table reflects the items deducted from or added to net loss attributable to stockholders in our calculation of NOI for the year ended December 31, 2021: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (In thousands) | | Same Store | | Acquisitions | | Disposals | | Non-Property Specific | | Total | Net loss attributable to common stockholders (in accordance with GAAP) | | $ | 23,711 | | | $ | 14,796 | | | $ | 6,391 | | | $ | (108,339) | | | $ | (63,441) | | Asset management fees to related party | | — | | | — | | | — | | | 32,804 | | | 32,804 | | Impairment of real estate investments | | 30,947 | | | — | | | 2,314 | | | — | | | 33,261 | | Acquisition and transaction related | | 4,095 | | | — | | | — | | | 283 | | | 4,378 | | Equity-based compensation | | — | | | — | | | — | | | 17,264 | | | 17,264 | | General and administrative | | 1,415 | | | 16 | | | 2 | | | 19,423 | | | 20,856 | | Depreciation and amortization | | 119,414 | | | 10,349 | | | 701 | | | — | | | 130,464 | | Interest expense | | 70,415 | | | — | | | — | | | 11,369 | | | 81,784 | | Gain on sale/exchange of real estate investments | | — | | | — | | | (4,757) | | | — | | | (4,757) | | Other income | | (83) | | | (1) | | | — | | | (7) | | | (91) | | Loss on non-designated derivatives | | — | | | — | | | — | | | 3,950 | | | 3,950 | | Allocation for preferred stock | | — | | | — | | | — | | | 23,262 | | | 23,262 | | Net loss attributable to non-controlling interests | | — | | | — | | | — | | | (9) | | | (9) | | NOI | | $ | 249,914 | | | $ | 25,160 | | | $ | 4,651 | | | $ | — | | | $ | 279,725 | |
The following table reflects the items deducted from or added to net loss attributable to stockholders in our calculation of NOI for the year ended December 31, 2020:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (In thousands) | | Same Store | | Acquisitions | | Disposals | | Non-Property Specific | | Total | Net loss attributable to common stockholders (in accordance with GAAP) | | $ | 32,315 | | | $ | 5,832 | | | $ | 2,425 | | | $ | (87,222) | | | $ | (46,650) | | Asset management fees to related party | | — | | | — | | | — | | | 27,829 | | | 27,829 | | Impairment of real estate investments | | 11,502 | | | — | | | 1,408 | | | — | | | 12,910 | | Acquisition and transaction related | | 1,093 | | | 4 | | | — | | | 1,824 | | | 2,921 | | Equity-based compensation | | — | | | — | | | — | | | 13,036 | | | 13,036 | | General and administrative | | 1,376 | | | 3 | | | 4 | | | 18,300 | | | 19,683 | | Depreciation and amortization | | 132,810 | | | 3,166 | | | 1,483 | | | — | | | 137,459 | | Interest expense | | 66,061 | | | — | | | — | | | 12,406 | | | 78,467 | | Gain on sale of real estate investments | | (2,211) | | | — | | | (4,245) | | | — | | | (6,456) | | Other income | | (93) | | | — | | | (14) | | | (917) | | | (1,024) | | Loss on non-designated derivative | | 9 | | | — | | | — | | | — | | | 9 | | Allocation for preferred stock | | — | | | — | | | — | | | 14,788 | | | 14,788 | | Net loss attributable to non-controlling interests | | — | | | — | | | — | | | (44) | | | (44) | | NOI | | $ | 242,862 | | | $ | 9,005 | | | $ | 1,061 | | | $ | — | | | $ | 252,928 | |
Dividends and Distributions In March 2020, our board of directors approved a reduction in our annualized dividend to $0.85 per share, or $0.0708333 per share on a monthly basis, due to the uncertain and rapidly changing environment caused by the COVID-19 pandemic. The new dividend rate became effective beginning with our April 1 dividend declaration. Historically, and through September 30, 2020, we declared dividends based on monthly record dates and generally paid dividends, once declared, on or around the 15th day of each month (or, if not a business day, the next succeeding business day) to Class A common stock holders of record on the applicable record date. On August 27, 2020, our board of directors approved a change in our Class A common stock dividend policy. Subsequent dividends authorized by our board of directors on shares of our Class A common stock have been, and we anticipate will continue to be, paid on a quarterly basis in arrears on the 15th day of the first month following the end of each fiscal quarter (unless otherwise specified) to Class A common stockholders of record on the record date for such payment. This change affected the frequency of dividend payments only, and did not impact the annualized dividend rate on Class A common stock of $0.85. The amount of dividends payable on our Class A common stock to our common stock holders is determined by our board of directors and is dependent on a number of factors, including funds available for dividends, our financial condition, provisions in our Credit Facility or other agreements that may restrict our ability to pay dividends, capital expenditure requirements, as applicable, requirements of Maryland law and annual distribution requirements needed to maintain our status as a REIT. Dividends on our Series A Preferred Stock accrue in an amount equal to $1.875 per share each year, which is equivalent to the rate of 7.50% of the $25.00 liquidation preference per share per annum. Dividends on the Series A Preferred Stock are payable quarterly in arrears on the 15th day of each of January, April, July and October of each year (or, if not a business day, the next succeeding business day) to holders of record on the applicable record date. Dividends on our Series C Preferred Stock accrue in an amount equal to $1.844 per share each year, which is equivalent to the rate of 7.375% of the $25.00 liquidation preference per share per annum. Dividends on the Series C Preferred Stock are payable quarterly in arrears on the 15th day of each of January, April, July and October of each year (or, if not a business day, the next succeeding business day) to holders of record on the applicable record date. Our Credit Facility contains provisions restricting our ability to pay distributions, including paying cash dividends on equity securities (including the Series A Preferred Stock and Series C Preferred Stock). We are generally permitted to pay dividends on the Series A Preferred Stock, Series C Preferred Stock, and Class A common stock and other distributions for any fiscal quarter in an aggregate amount of up to 105% of annualized MFFO for a look-back period of four consecutive fiscal quarters but only if, as of the last day of the period, after giving effect to the payment of those dividends and distributions, we are able to satisfy a maximum leverage ratio and maintain a combination of cash, cash equivalents and amounts available for future borrowings under the Credit Facility of not less than $60 million. If these conditions are not satisfied, the applicable threshold percentage of MFFO will be 95% instead of 105%. If applicable, during the continuance of an event of default under the Credit Facility, we may not pay dividends or other distributions in excess of the amount necessary for us to maintain our status as a REIT.
We may repurchase shares if we satisfy a maximum leverage ratio after giving effect to the repurchase and also have a combination of cash, cash equivalents and amounts available for future borrowings under the Credit Facility of not less than $40.0 million. Notwithstanding the previous amendments, there is no assurance that the lenders will consent to any additional amendments to the Credit Facility that may become necessary to maintain compliance with the Credit Facility. During the year ended December 31, 2021, cash used to pay dividends on our Class A common stock, dividends on our Series A Preferred Stock, dividends on our Series C Preferred Stock, distributions on our LTIP Units and distributions for limited partnership units that correspond to shares of our Class A common stock was generated from cash flows provided by operations. We have, in prior periods, funded dividends from other sources. If we need to identify financing sources other than operating cash flows to fund dividends at their current level, there can be no assurance that other sources will be available on favorable terms, or at all. Complying with the restriction on the payment of dividends and other distributions in our Credit Facility may limit our ability to incur additional indebtedness and use cash that would otherwise be available to us. Funding dividends from borrowings restricts the amount we can borrow for property acquisitions and investments. Using proceeds from the sale of assets or the issuance of our Class A common stock, Series A Preferred Stock, Series C Preferred Stock or other equity securities to fund dividends rather than invest in assets will likewise reduce the amount available to invest. Funding dividends from the sale of additional securities could also dilute our stockholders. The following table shows the sources for the payment of dividends to common stockholders, including dividends on unvested restricted shares and other dividends and distributions for the periods indicated: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended | | Year Ended December 31, 2021 | | | March 31, 2021 | | June 30, 2021 | | September 30, 2021 | | December 31, 2021 | | (In thousands) | | Amount | | Percentage of Dividends | | Amount | | Percentage of Dividends | | Amount | | Percentage of Dividends | | Amount | | Percentage of Dividends | | Amount | | Percentage of Dividends | Dividends and other cash distributions: | | | | | | | | | | | | | | | | | | | | | Cash dividends paid to common stockholders | | $ | 23,128 | | | 85.8 | % | | $ | 23,122 | | | 79.1 | % | | $ | 25,037 | | | 81.0 | % | | $ | 26,245 | | [2] | 81.3 | % | | $ | 97,532 | | [2] | 81.7 | % | Cash dividends paid to Series A preferred stockholders | | 3,691 | | | 13.7 | % | | 3,719 | | | 12.7 | % | | 3,719 | | | 12.0 | % | | 3,719 | | | 11.5 | % | | 14,848 | | | 12.4 | % | Cash dividends paid to Series C preferred stockholders | | — | | | — | % | | 2,263 | | | 7.7 | % | | 2,117 | | | 6.8 | % | | 2,118 | | [3] | 6.6 | % | | 6,498 | | [3] | 5.4 | % | Cash distributions on LTIP Units | | 94 | | | 0.3 | % | | 96 | | | 0.3 | % | | — | | | — | % | | 164 | | | 0.5 | % | | 354 | | | 0.3 | % | Cash distributions on Class A Units | | 37 | | | 0.1 | % | | 36 | | | 0.1 | % | | 37 | | | 0.1 | % | | 37 | | [2] | 0.1 | % | | 147 | | | 0.1 | % | Total dividends and other cash distributions paid | | $ | 26,950 | | | 100.0 | % | | $ | 29,236 | | | 100.0 | % | | $ | 30,910 | | | 100.0 | % | | $ | 32,283 | | | 100.0 | % | | $ | 119,379 | | | 100.0 | % | | | | | | | | | | | | | | | | | | | | | | Source of dividend and other cash distributions coverage: | | | | | | | | | | | | | | | | | | | | | Cash flows provided by operations [1] | | $ | 26,950 | | | 100.0 | % | | $ | 29,236 | | | 100.0 | % | | $ | 30,910 | | | 100.0 | % | | $ | 32,283 | | | 100.0 | % | | $ | 119,379 | | [1] | 100.0 | % | Available cash on hand | | — | | | — | % | | — | | | — | % | | — | | | — | % | | — | | | — | % | | — | | | — | % | Total sources of dividend and other cash distributions coverage | | $ | 26,950 | | | 100.0 | % | | $ | 29,236 | | | 100.0 | % | | $ | 30,910 | | | 100.0 | % | | $ | 32,283 | | | 100.0 | % | | $ | 119,379 | | | 100.0 | % | | | | | | | | | | | | | | | | | | | | | | Cash flows provided by operations (GAAP basis) | | $ | 34,422 | | | | | $ | 30,935 | | | | | $ | 35,166 | | | | | $ | 44,704 | | [4] | | | $ | 145,227 | | | | Net loss (in accordance with GAAP) | | $ | (3,754) | | | | | $ | (1,482) | | | | | $ | (565) | | | | | $ | (34,387) | | | | | $ | (40,188) | | | |
________ [1]Year-to-date totals may not equal the sum of the quarters. Each quarter and year-to-date period is evaluated separately for purposes of this table. [2]As more fully discussed in Note 9 -Stockholder’s Equity and Non-controlling interests - dividends relating to the fourth quarter of 2021 on our Class A common stock totaling $26.6 million were declared and paid in January 2022. Because these dividends were not declared prior to December 31, 2021, they are not accrued in our financial statements until 2022. [3]Our Series C Preferred Stock was first issued in December 2020, and we were not required to begin paying dividends on the Series C Preferred Stock until April 2021. The first quarterly dividend included amounts attributable to December 2020 in addition to the amounts attributable for the quarter ending March 31, 2021. [4]Reflects the collection of a $10.4 million termination fee recognized in the third quarter of 2021.
Loan Obligations The payment terms of certain of our mortgage loan obligations require principal and interest payments monthly, with all unpaid principal and interest due at maturity. Our loan agreements stipulate that we comply with specific reporting covenants. As of December 31, 2021, we were in compliance with the debt covenants under our loan agreements. Election as a REIT We elected to be taxed as a REIT under Sections 856 through 860 of the Code, effective for our taxable year ended December 31, 2013. We believe that, commencing with such taxable year, we have been organized and have operated in a manner so that we qualify for taxation as a REIT under the Code. We intend to continue to operate in such a manner, but can provide no assurances that we will operate in a manner so as to remain qualified as a REIT. To continue to qualify for taxation as a REIT, we must distribute annually at least 90% of our REIT taxable income (which does not equal net income as calculated in accordance with GAAP), determined without regard for the deduction for dividends paid and excluding net capital gains, and must comply with a number of other organizational and operational requirements. If we continue to qualify for taxation as a REIT, we generally will not be subject to federal corporate income tax on the portion of our REIT taxable income that we distribute to our stockholders. Even if we qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income and properties, as well as federal income and excise taxes on our undistributed income. Inflation We may be adversely impacted by inflation on the leases that do not contain indexed escalation provisions, or those leases which have escalations at rates which do not exceed or approximate current inflation rates. For the year ended December 31, 2021, the increase to the 12-month CPI for all items, as published by the Bureau of Labor Statistics, was 7.0%. To help mitigate the adverse impact of inflation, approximately 80.9% of our leases with our tenants contain rent escalation provisions which average 1.2% per year. These provisions generally increase rental rates during the terms of the leases either at fixed rates or indexed escalations (based on the Consumer Price Index or other measures). Approximately 77.8% are fixed-rate, 3.1% are based on the Consumer Price Index and 19.1% do not contain any escalation provisions. In addition, we may be required to pay costs for maintenance and operation of properties which may adversely impact our results of operations due to potential increases in costs and operating expenses resulting from inflation. However, our net leases require the tenant to pay its allocable share of operating expenses, which may include common area maintenance costs, real estate taxes and insurance. This may reduce our exposure to increases in costs and operating expenses resulting from inflation. As the costs of general goods and services continue to rise, we may be adversely impacted by increases in general and administrative costs due to overall inflation. Related-Party Transactions and Agreements Please see Note 11— Related Party Transactions and Arrangements to our consolidated financial statements included in this Annual Report on Form 10-K. Off-Balance Sheet Arrangements We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. Item 7A. Quantitative and Qualitative Disclosures About Market Risk. The market risk associated with financial instruments and derivative financial instruments is the risk of loss from adverse changes in market prices or interest rates. Our long-term debt, which consists of secured financings, bears interest at fixed rates. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. To achieve these objectives, from time to time, we may enter into interest rate hedge contracts such as swaps, collars and treasury lock agreements in order to mitigate our interest rate risk with respect to various debt instruments. We would not hold or issue these derivative contracts for trading or speculative purposes. We do not have any foreign operations and thus are not exposed to foreign currency fluctuations. As of December 31, 2021, our fixed rate debt consisted of secured mortgage financings with a gross carrying value of $1.5 billion, which approximates their fair value, and senior notes with a gross carrying value of $500.0 million, which approximates their fair value. Changes in market interest rates on our fixed-rate debt impact its fair value, but it has no impact on interest expense incurred or cash flow. For instance, if interest rates rise 100 basis points and our fixed-rate debt balance remains constant, we expect the fair value of our obligation to decrease, the same way the price of a bond declines as interest rates rise. The sensitivity analysis related to our fixed–rate debt assumes an immediate 100 basis point move in interest rates from their December 31, 2021 levels, with all other variables held constant. A 100 basis point increase in market interest rates would result in a decrease in the fair value of our fixed-rate debt by $66.6 million. A 100 basis point decrease in market interest rates would result in an increase in the fair value of our fixed-rate debt by $70.8 million.
As of December 31, 2021 we did not have any variable-rate debt. These amounts were determined by considering the impact of hypothetical interest rate changes on our borrowing costs, and, assuming no other changes in our capital structure. The information presented above includes only those exposures that existed as of December 31, 2021 and does not consider exposures or positions arising after that date. The information represented herein has limited predictive value. Future actual realized gains or losses with respect to interest rate fluctuations will depend on cumulative exposures, hedging strategies employed and the magnitude of the fluctuations. Item 8. Financial Statements and Supplementary Data. The information required by this Item 8 is hereby incorporated by reference to our Consolidated Financial Statements beginning on page F-1 of this Annual Report on Form 10-K. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None. Item 9A. Controls and Procedures. Disclosure Controls and Procedures In accordance with Rules 13a-15(b) and 15d-15(b) of the Exchange Act, our disclosure controls and procedures include internal controls and other procedures designed to provide reasonable assurance that information required to be disclosed in this and other reports filed under the Exchange Act is recorded, processed, summarized and reported within the required time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures. It should be noted that no system of controls can provide complete assurance of achieving a company’s objectives and that future events may impact the effectiveness of a system of controls. Our Chief Executive Officer and Chief Financial Officer, carried out an evaluation, together with other members of our management, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Annual Report on Form 10-K. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective December 31, 2021 at a reasonable level of assurance. Management’s Annual Reporting on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) or 15d-15(f) promulgated under the Exchange Act. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2021. In making that assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (2013). In making that assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (2013). Based on its assessment, our management concluded that, as of December 31, 2021, our internal control over financial reporting was effective based on those criteria. The effectiveness of our internal control over financial reporting as of December 31, 2021 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in its report, which is included on page F-2 in this Annual Report on Form 10-K.
Changes in Internal Control over Financial Reporting During the three months ended December 31, 2021, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item9B. Other Information. Effective February 10, 2022, the board of directors approved the Fifth Amended and Restated Bylaws, which amend and restate the Company’s existing bylaws to reflect the Company’s name change from “American Finance Trust, Inc.” to “The Necessity Retail REIT, Inc.” The foregoing summary of the Fifth Amended and Restated Bylaws does not purport to be complete and is qualified in its entirety by reference to the full text of the Amended Bylaws, a copy of which is attached hereto as Exhibit 3.2 and is incorporated by reference herein.
Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections Not Applicable.
PART III Item 10. Directors, Executive Officers and Corporate Governance. We have adopted a Code of Business Conduct and Ethics that applies to all of our executive officers and directors, including but not limited to, our principal executive officer and principal financial officer. A copy of our code of ethics may be obtained, free of charge, by sending a written request to our executive office: 650 Fifth Avenue – 30th Floor, New York, NY 10019, Attention: Chief Financial Officer. Our Code of Business Conduct and Ethics is also publicly available on our website at www.necessityretailreit.com. If we make any substantive amendments to the code of ethics or grant any waiver, including any implicit waiver, from a provision of the Code of Business Conduct and Ethics to our chief executive officer, chief financial officer, chief accounting officer or controller or persons performing similar functions, we will disclose the nature of the amendment or waiver on that website or in a Current Report on Form 8-K. The information required by this Item will be set forth in our definitive proxy statement with respect to our 2022 annual meeting of stockholders to be filed not later than 120 days after the end of the 2021 fiscal year, and is incorporated herein by reference. Item 11. Executive Compensation. The information required by this Item will be set forth in our definitive proxy statement with respect to our 2022 annual meeting of stockholders to be filed not later than 120 days after the end of the 2021 fiscal year, and is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The information required by this Item will be set forth in our definitive proxy statement with respect to our 2022 annual meeting of stockholders to be filed not later than 120 days after the end of the 2021 fiscal year, and is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions, and Director Independence. The information required by this Item will be set forth in our definitive proxy statement with respect to our 2022 annual meeting of stockholders to be filed not later than 120 days after the end of the 2021 fiscal year, and is incorporated herein by reference. Item 14. Principal Accounting Fees and Services. The information required by this Item will be set forth in our definitive proxy statement with respect to our 2022 annual meeting of stockholders to be filed not later than 120 days after the end of the 2021 fiscal year, and is incorporated herein by reference.
PART IV Item 15. Exhibits, Financial Statement Schedules. (a) Financial Statement Schedules See the Index to Consolidated Financial Statements at page F-1 of this report. The following financial statement schedules are included herein beginning at page F-58 of this report: Schedule III — Real Estate and Accumulated Depreciation (b) Exhibits EXHIBIT INDEX The following exhibits are included, or incorporated by reference, in this Annual Report on Form 10-K for the year ended December 31, 2021 (and are numbered in accordance with Item 601 of Regulation S-K): | | | | | | | | | Exhibit No. | | Description | | | Articles of Restatement | | | Articles Supplementary relating to reclassification of common stock, classification of additional shares of 7.375% Series C Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share, and classification of additional shares of 7.50% Series A Cumulative Redeemable Perpetual Preferred Stock, par value $0.01 per share, filed January 13, 2021 | | | Fifth Amended and Restated Bylaws | | | Second Amended and Restated Agreement of Limited Partnership of American Finance Operating Partnership, L.P., dated as of July 19, 2018 | | | First Amendment to Second Amended and Restated Agreement of Limited Partnership of American Finance Operating Partnership, L.P., dated as of November 6, 2018 | | | Second Amendment, dated March 22, 2019, to the Second Amended and Restated Agreement of Limited Partnership of American Finance Operating Partnership, L.P, dated as of July 19, 2018 | | | Third Amendment, dated May 8, 2019, to the Second Amended and Restated Agreement of Limited Partnership of American Finance Operating Partnership, L.P, dated as of July 19, 2018 | | | Fourth Amendment, dated September 6, 2019, to the Second Amended and Restated Agreement of Limited Partnership of American Finance Operating Partnership, L.P., dated July 19, 2018 | | | Fifth Amendment, dated October 4, 2019, to the Second Amended and Restated Agreement of Limited Partnership of American Finance Operating Partnership, L.P., dated July 19, 2018 | | | Sixth Amendment, dated December 16, 2020, to the Second Amended and Restated Agreement of Limited Partnership of American Finance Operating Partnership, L.P., dated July 19, 2018 | | | Seventh Amendment, dated January 13, 2021, to the Second Amended and Restated Agreement of Limited Partnership of American Finance Operating Partnership, L.P., dated July 19, 2018 | | | Eighth Amendment, dated as of July 21, 2021, to the Second Amended and Restated Agreement of Limited Partnership of American Finance Operating Partnership, L.P., dated July 19, 2018 | | | Amended and Restated Distribution Reinvestment Plan | | | Master Indenture, dated as of May 30, 2019, as amended by that certain Amendment No. 1 dated as of June 3, 2021, by and among AFN ABSPROP001, LLC, AFN ABSPROP001-A, LLC, AFN ABSPROP001-B, LLC, AFN ABSPROP002, LLC, AFN ABSPROP002-A, LLC, AFN ABSPROP002-B, LLC, AFN ABSPROP002-C, LLC and Citibank, N.A., as indenture trustee | | | Series 2019 I Indenture Supplement, dated as of May 30, 2019, by and among AFN ABSPROP001, LLC, AFN ABSPROP001-A, LLC, AFN ABSPROP001-B, LLC, and Citibank, N.A., as indenture trustee | | | Series 2021-1 Indenture Supplement, dated as of June 3, 2021, by and among AFN ABSPROP001, LLC, AFN ABSPROP001-A, LLC, AFN ABSPROP001-B, LLC, AFN ABSPROP002, LLC, AFN ABSPROP002-A, LLC, AFN ABSPROP002-B, LLC, AFN ABSPROP002-C, LLC and Citibank, N.A., as indenture trustee | | | Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 | | | Rights Agreement, dated April 13, 2020, between American Finance Trust, Inc. and Computershare Trust Company, N.A., as Rights Agent | | | Amendment to Rights Agreement dated as of February 25, 2021, between American Finance Trust, Inc. and Computershare Trust Company, N.A., as Rights Agent | | | Indenture, dated as of October 7, 2021, among American Finance Trust, Inc., American Finance Operating Partnership, L.P., the Guarantors party thereto and U.S. Bank National Association, as trustee (including the form of Notes) |
| | | | | | | | | Exhibit No. | | Description | | | Equity Distribution Agreement, May 8, 2019, among the American Finance Trust, Inc., American Finance Operating Partnership, L.P., BMO Capital Markets Corp., BBVA Securities Inc., Capital One Securities, Inc., Citizens Capital Markets, Inc., KeyBanc Capital Markets Inc., Mizuho Securities USA LLC and SunTrust Robinson Humphrey, Inc. (Class A common stock) | | | Amendment No. 1, dated as of June 25, 2019, to Equity Distribution Agreement, dated May 8, 2019, among American Finance Trust, Inc., American Finance Operating Partnership, L.P., BMO Capital Markets Corp., BBVA Securities Inc., B. Riley FBR, Inc., Citizens Capital Markets, Inc., KeyBanc Capital Markets Inc., Ladenburg Thalmann & Co. Inc., SunTrust Robinson Humphrey, Inc. and SG Americas Securities, LLC (Class A Common Stock) | | | Amendment No. 2, dated as of August 6, 2021, to Equity Distribution Agreement, dated May 8, 2019, among American Finance Trust, Inc., American Finance Operating Partnership, L.P., BMO Capital Markets Corp., BBVA Securities Inc., B. Riley FBR, Inc., Citizens Capital Markets, Inc., KeyBanc Capital Markets Inc., Ladenburg Thalmann & Co. Inc., SunTrust Robinson Humphrey, Inc. and SG Americas Securities, LLC (Class A Common Stock) | | | Equity Distribution Agreement, May 8, 2019, among the American Finance Trust, Inc., American Finance Operating Partnership, L.P., BMO Capital Markets Corp., BBVA Securities Inc., Capital One Securities, Inc., Citizens Capital Markets, Inc., KeyBanc Capital Markets Inc., Mizuho Securities USA LLC and SunTrust Robinson Humphrey, Inc. (Series A Preferred Stock) | | | Amendment No. 1, dated as of June 25, 2019, to Equity Distribution Agreement, dated May 8, 2019, among American Finance Trust, Inc., American Finance Operating Partnership, L.P., BMO Capital Markets Corp., BBVA Securities Inc., B. Riley FBR, Inc., Citizens Capital Markets, Inc., KeyBanc Capital Markets Inc., Ladenburg Thalmann & Co. Inc., SunTrust Robinson Humphrey, Inc. and D.A. Davidson & Co. (Series A Preferred Stock) | | | Amendment No. 2, dated as of October 4, 2019, to Equity Distribution Agreement, dated May 8, 2019, among American Finance Trust, Inc., American Finance Operating Partnership, L.P., BMO Capital Markets Corp., BBVA Securities Inc., B. Riley FBR, Inc., Citizens Capital Markets, Inc., KeyBanc Capital Markets Inc., Ladenburg Thalmann & Co. Inc., SunTrust Robinson Humphrey, Inc. and D.A. Davidson & Co. (Series A Preferred Stock) | | | Amendment No. 3, dated as of January 13, 2021, to Equity Distribution Agreement, dated May 8, 2019, among American Finance Trust, Inc., American Finance Operating Partnership, L.P., and BMO Capital Markets Corp., BBVA Securities Inc., B. Riley Securities, Inc., Citizens Capital Markets, Inc., KeyBanc Capital Markets Inc., Ladenburg Thalmann & Co. Inc., Truist Securities, Inc. and D.A. Davidson & Co. (Series A Preferred Stock) | | | Amendment No. 4, dated as of August 6, 2021, to Equity Distribution Agreement, dated May 8, 2019, among American Finance Trust, Inc., American Finance Operating Partnership, L.P., and BMO Capital Markets Corp., BBVA Securities Inc., B. Riley Securities, Inc., Citizens Capital Markets, Inc., KeyBanc Capital Markets Inc., Ladenburg Thalmann & Co. Inc., Truist Securities, Inc. and D.A. Davidson & Co. (Series A Preferred Stock) | | | Third Amended and Restated Advisory Agreement, dated as of September 6, 2016, by and among American Finance Trust, Inc., American Finance Operating Partnership, L.P. and American Finance Advisors, LLC | | | Amendment No. 1 to the Third Amended and Restated Advisory Agreement, dated July 19, 2018, among American Finance Trust, Inc., American Finance Operating Partnership, L.P. and American Finance Advisors, LLC | | | Amendment No. 2, dated as of March 18, 2019, to the Third Amended and Restated Advisory Agreement, by and among American Finance Trust, Inc., American Finance Operating Partnership, L.P. and American Finance Advisors, LLC | | | Amendment No. 3, dated as of March 30, 2020, to the Third Amended and Restated Advisory Agreement, by and among American Finance Trust, Inc., American Finance Operating Partnership, L.P. and American Finance Advisors, LLC | | | Amendment No. 4, dated as of January 13, 2021, to the Third Amended and Restated Advisory Agreement, by and among American Finance Trust, Inc., American Finance Operating Partnership, L.P. and American Finance Advisors, LLC | | | Amended and Restated Property Management Agreement, dated as of September 6, 2016, by and among American Finance Trust, Inc. and American Finance Properties, LLC (as assignee of American Realty Capital Retail Advisor, LLC) | | | First Amendment to Amended and Restated Property Management Agreement, dated as of December 8, 2017, by and among American Finance Trust, Inc. and American Finance Properties, LLC and certain subsidiaries of American Finance Operating Partnership, LP |
| | | | | | | | | Exhibit No. | | Description | | | Second Amendment, dated as of November 4, 2020, to Amended and Restated Property Management Agreement, by and among American Finance Trust, Inc., American Finance Properties, LLC and certain subsidiaries of American Finance Operating Partnership, L.P. | | | Form of Property Management Agreement by and between American Finance Properties, LLC and certain subsidiaries of American Finance Operating Partnership, LP | | | Amended and Restated Leasing Agreement, dated as of September 6, 2016, by and among American Finance Trust, Inc. and American Finance Properties, LLC (as assignee of American Realty Capital Retail Advisor, LLC) | | | First Amendment, dated as of November 4, 2020, to Amended and Restated Leasing Agreement, by and between American Finance Trust, Inc. and American Finance Properties, LLC | | | Amended and Restated Property Management and Leasing Agreement, dated as of September 6, 2016, by and among American Finance Trust, Inc., American Finance Trust Operating Partnership, L.P. and American Finance Properties, LLC | | | First Amendment, dated as of August 27, 2020, to Amended and Restated Property Management and Leasing Agreement, by and among American Finance Trust, Inc., American Finance Trust Operating Partnership L.P. and American Finance Properties, LLC | | | Property Management and Leasing Agreement, dated as of December 18, 2019, by and among American Finance Properties, LLC, ARC HR5SSRI001, LLC, ARC HR5SSMA003, LLC, ARC HR5SSMA001, LLC and ARC HR5SSMA002, LLC | | | Property Management and Leasing Agreement, dated as of July 24, 2020, by and among the parties identified on Exhibit A thereto and American Finance Properties, LLC | | | Amended and Restated Property Management and Servicing Agreement, dated as of June 3, 2021, by and among AFN ABSPROP001, LLC, AFN ABSPROP001-A, LLC, AFN ABSPROP001-B, LLC, AFN ABSPROP002, LLC, AFN ABSPROP002-A, LLC, AFN ABSPROP002-B, LLC, AFN ABSPROP002-C, LLC, American Finance Properties, LLC, as property manager and special servicer, KeyBank National Association, as back-up manager, and Citibank N.A., as indenture trustee | | | Amended and Restated Guaranty, dated as of June 3, 2021, by American Finance Operating Partnership, L.P. for the benefit of Citibank N.A., as indenture trustee | | | Form of Restricted Share Award Agreement (Directors - Pre-Listing) | | | Indemnification Agreement by and among American Finance Trust, Inc., Peter M. Budko, Robert H. Burns, David Gong, William M. Kahane, Stanley R. Perla, Nicholas Radesca, Nicholas S. Schorsch, Edward M. Weil, Jr., American Realty Capital Advisors V, LLC, AR Capital, LLC and RCS Capital Corporation, dated December 31, 2014 | | | Amended and Restated Credit Agreement, dated as of October 1, 2021, by and among American Finance Operating Partnership, L.P., American Finance Trust, Inc. and the other guarantors party thereto, BMO Harris Bank N.A., as administrative agent, and the other lender parties thereto | | | Loan Agreement dated as of December 8, 2017 among Societe Generale and UBS AG as Lenders and certain subsidiaries of American Finance Operating Partnership, LP, as Borrowers | | | Guaranty of Recourse Obligations dated as of December 8, 2017 by American Finance Trust, Inc. in favor of Societe Generale and UBS AG | | | Form of Restricted Share Award Agreement (Directors - Post-Listing) | | | Advisor Multi-Year Outperformance Award Agreement, dated as of July 19, 2018, between American Finance Operating Partnership, L.P. and America Finance Advisors, LLC | | | First Amendment, dated as of March 6, 2019, to 2018 Advisor Multi-Year Outperformance Award Agreement, dated as of July 19, 2018, between American Finance Operating Partnership, L.P. and America Finance Advisors, LLC
| | | Advisor Multi-Year Outperformance Award Agreement, dated as of July 21, 2021, by and among American Finance Trust, Inc., American Finance Operating Partnership, L.P. and American Finance Advisors, LLC | | | 2018 Advisor Omnibus Incentive Compensation Plan | | | 2018 Omnibus Incentive Compensation Plan | | | Form of Indemnification Agreement (Post-Listing) | | | Loan Agreement, dated as of July 24, 2020, by and among the entities listed on Schedule I thereto, as borrowers, and Column Financial, Inc., as lender | | | Limited Recourse Guaranty, dated as of July 24, 2020, by American Finance Operating Partnership, L.P. in favor of Column Financial, Inc. | | | Environmental Indemnity Agreement, dated as of July 24, 2020, by and among the entities listed on Schedule I thereto, American Finance Operating Partnership, L.P. and Column Financial, Inc. | | | Form of Restricted Share Award Agreement (Officers) |
| | | | | | | | | Exhibit No. | | Description | | | Equity Distribution Agreement, dated January 13, 2021, by and among American Finance Trust, Inc., American Finance Operating Partnership, L.P. and BMO Capital Markets Corp., BBVA Securities Inc., B. Riley Securities, Inc., Citizens Capital Markets, Inc., D.A. Davidson & Co., KeyBanc Capital Markets Inc., Ladenburg Thalmann & Co. Inc. and Truist Securities, Inc. (Series C Preferred Stock) | | | Amendment No. 1, dated as of August 6, 2021, to Equity Distribution Agreement, dated January 13, 2021, by and among American Finance Trust, Inc., American Finance Operating Partnership, L.P. and BMO Capital Markets Corp., BBVA Securities Inc., B. Riley Securities, Inc., Citizens Capital Markets, Inc., D.A. Davidson & Co., KeyBanc Capital Markets Inc., Ladenburg Thalmann & Co. Inc. and Truist Securities, Inc. (Series C Preferred Stock) | | | Agreement of Purchase and Sale, dated as of December 17, 2021, by and between the Sellers identified therein and American Finance Operating Partnership | | | First Amendment to Agreement of Purchase and Sale, dated January 3, 2022, by and between the Sellers identified therein and American Finance Operating Partnership | | | Second Amendment to Agreement of Purchase and Sale, dated January 10, 2022, by and between the Sellers identified therein and American Finance Operating Partnership | | | Third Amendment to Agreement of Purchase and Sale, dated January 14, 2022, by and between the Sellers identified therein and American Finance Operating Partnership | | | Fourth Amendment to Agreement of Purchase and Sale, dated January 19, 2022, by and between the Sellers identified therein and American Finance Operating Partnership | | | Fifth Amendment to Agreement of Purchase and Sale, dated January 21, 2022, by and between the Sellers identified therein and American Finance Operating Partnership | | | Leasing Earnout Side Letter Agreement, dated February 9, 2022, by and between the Sellers identified therein and American Finance Operating Partnership | | | Sixth Amendment to Agreement of Purchase and Sale, dated February 10, 2022, by and between the Sellers identified therein and American Finance Operating Partnership | | | Seventh Amendment to Agreement of Purchase and Sale, dated February 11, 2022, by and between the Sellers identified therein and American Finance Operating Partnership | | | List of Subsidiaries | | | Consent of PricewaterhouseCoopers LLP | | | Certification of the Principal Executive Officer of American Finance Trust, Inc. pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | Certification of the Principal Financial Officer of American Finance Trust, Inc. pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | Written statements of the Principal Executive Officer and Principal Financial Officer of American Finance Trust, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | 101.INS * | | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | 101.SCH * | | Inline XBRL Taxonomy Extension Schema Document | 101.CAL * | | Inline XBRL Taxonomy Extension Calculation Linkbase Document | 101.DEF * | | Inline XBRL Taxonomy Extension Definition Linkbase Document | 101.LAB * | | Inline XBRL Taxonomy Extension Label Linkbase Document | 101.PRE * | | Inline XBRL Taxonomy Extension Presentation Linkbase Document | 104 * | | Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
____________________ * Filed herewith. (1)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on July 19, 2018. (2)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on April 13, 2020. (3)Filed as an exhibit to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 filed with the SEC on November 6, 2018. (4)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on March 25, 2019. (5)Filed as an exhibit to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 filed with the SEC on May 8, 2019. (6)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on September 6, 2019. (7)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on October 4, 2019. (8)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on December 16, 2020. (9)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on January 13, 2021. (10)Filed as an exhibit to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 filed with the SEC on August 8, 2019.
(11)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on May 31, 2019. (12)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on June 25, 2019. (13)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on September 7, 2016. (14)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on March 18, 2019. (15)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on March 30, 2020. (16)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on January 13, 2021. (17)Filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on March 19, 2018. (18)Filed as an exhibit to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 filed with the SEC on November 5, 2020. (19)Filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on February 27, 2020. (20)Filed as an exhibit to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 filed with the SEC on August 11, 2016. (21)Filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2014 filed with the SEC on May 15, 2015. (22)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on May 2, 2018. (23)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on November 7, 2019. (24)Filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on March 7, 2019. (25)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on July 28, 2020. (26)Filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on February 25, 2021. (27)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on June 4, 2021. (28)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on July 21, 2021. (29)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on August 6, 2021. (30)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on October 4, 2021. (31)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on October 8, 2021. (32)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on December 20, 2021. (33)Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on February 14, 2022. Item 16. Form 10-K Summary. Not applicable.
SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized this 24th day of February, 2022. | | | | | | | | | | THE NECESSITY RETAIL REIT, INC. | | By: | /s/ EDWARD M. WEIL, JR. | | | EDWARD M. WEIL, JR. | | | CHIEF EXECUTIVE OFFICER, PRESIDENT AND CHAIRMAN OF THE BOARD OF DIRECTORS |
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. | | | | | | | | | | | | | | | Name | | Capacity | | Date | | | | | | /s/ Edward M. Weil, Jr. | | Chief Executive Officer, President and Chairman of the Board of Directors (Principal Executive Officer) | | February 24, 2022 | Edward M. Weil, Jr. | | | | | | | | | /s/ Jason F. Doyle | | Chief Financial Officer, Treasurer and Secretary (Principal Financial Officer and Principal Accounting Officer) | | February 24, 2022 | Jason F. Doyle | | | | | | | | | /s/ Lisa D. Kabnick | | Lead Independent Director | | February 24, 2022 | Lisa D. Kabnick | | | | | | | | | /s/ Stanley Perla | | Independent Director | | February 24, 2022 | Stanley Perla | | | | | | | | | | /s/ Leslie D. Michelson | | Independent Director | | February 24, 2022 | Leslie D. Michelson | | | | | | | | | /s/ Edward G. Rendell | | Independent Director | | February 24, 2022 | Edward G. Rendell | | | |
THE NECESSITY RETAIL REIT, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS | | | | | | | Page | | | | | | | | | | | | | | | | | | | | | | | | | Financial Statement Schedules: | | | |
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of The Necessity Retail REIT, Inc.:
Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of The Necessity Retail REIT, Inc. and its subsidiaries (the “Company”) as of December 31, 2021 and 2020, and the related consolidated statements of operations and comprehensive loss, of statements of changes in equity and of statements of cash flows for each of the three years in the period ended December 31, 2021, including the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Reporting on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Report of Independent Registered Public Accounting Firm Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Purchase Price Allocations for Property Acquisitions As described in Notes 2 and 3 to the consolidated financial statements, the Company completed real estate acquisitions with consideration paid for acquired real estate investments, net of liabilities assumed of $182.2 million for the year ended December 31, 2021. For acquired properties with leases classified as operating leases, management allocated the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values. Tangible assets include land, land improvements, buildings, fixtures and tenant improvements on an as-if vacant basis. Management utilizes various estimates, processes and information to determine the as-if vacant property value. Management estimates fair value using data from appraisals, comparable sales, discounted cash flow analysis and other methods. Fair value estimates are also made using significant assumptions such as capitalization rates, fair market lease rates, discount rates and land values per square foot. Identifiable intangible assets include amounts allocated to acquired leases for above- and below-market lease rates and the value of in-place leases. Above-market and below-market lease values for acquired properties are initially recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining initial term of the lease for above-market leases and the remaining initial term plus the term of any below-market fixed rate renewal options for below-market leases. The principal considerations for our determination that performing procedures relating to purchase price allocations for property acquisitions is a critical audit matter are (i) the significant judgment by management when developing the fair value estimates of tangible and intangible assets acquired and liabilities assumed; (ii) a high degree of auditor judgment and subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to capitalization rates, fair market lease rates, discount rates and land values per square foot; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to purchase price allocations for property acquisitions, including controls over management’s valuation of tangible and intangible assets acquired and liabilities assumed and controls over development of the assumptions used in the valuation of tangible and intangible assets acquired and liabilities assumed, related to capitalization rates, fair market lease rates, discount rates and land values per square foot. These procedures also included, among others, (i) reading the purchase agreements and lease documents; (ii) testing the completeness and accuracy of underlying data used by management in the fair value estimates; and (iii) testing management’s process for estimating the fair value of tangible and intangible assets acquired and liabilities assumed, including testing management’s projected cash flows and evaluating the accuracy of valuation outputs. Testing management’s process included evaluating the appropriateness of the valuation methods and reasonableness of the significant assumptions, related to capitalization rates, fair market lease rates, discount rates and land values per square foot. Evaluating the reasonableness of the significant assumptions included considering whether these assumptions were consistent with external market data, comparable transactions, and evidence obtained in other areas of the audit. In conjunction with certain purchase price allocations, professionals with specialized skill and knowledge were used to assist in evaluating the reasonableness of certain assumptions utilized by management, related to capitalization rates, fair market lease rates, discount rates and land values per square foot. /s/ PricewaterhouseCoopers LLP New York, New York February 24, 2022
We have served as the Company’s auditor since 2019.
THE NECESSITY RETAIL REIT, INC.
CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) | | | | | | | | | | | | | December 31, | | 2021 | | 2020 | ASSETS | | | | Real estate investments, at cost: | | | | Land | $ | 729,048 | | | $ | 723,316 | | Buildings, fixtures and improvements | 2,729,719 | | | 2,830,508 | | Acquired intangible lease assets | 402,673 | | | 454,245 | | Total real estate investments, at cost | 3,861,440 | | | 4,008,069 | | Less: accumulated depreciation and amortization | (654,667) | | | (639,367) | | Total real estate investments, net | 3,206,773 | | | 3,368,702 | | Cash and cash equivalents | 214,853 | | | 102,860 | | Restricted cash | 21,996 | | | 10,537 | | Deposits for real estate investments | 41,928 | | | 137 | | Deferred costs, net | 25,587 | | | 16,663 | | Straight-line rent receivable | 70,789 | | | 66,581 | | Operating lease right-of-use assets | 18,194 | | | 18,546 | | Prepaid expenses and other assets (including $0 and $1,939 due from related parties as of December 31, 2021 and 2020, respectively) | 26,877 | | | 23,941 | | Assets held for sale | 187,213 | | | — | | Total assets | $ | 3,814,210 | | | $ | 3,607,967 | | | | | | LIABILITIES AND EQUITY | | | | Mortgage notes payable, net | $ | 1,464,930 | | | $ | 1,490,798 | | Credit facility | — | | | 280,857 | | Senior notes, net | 491,015 | | | — | | Below-market lease liabilities, net | 78,073 | | | 78,674 | | Accounts payable and accrued expenses (including $1,016 and $273 due to related parties as of December 31, 2021 and 2020, respectively) | 32,907 | | | 25,210 | | Operating lease liabilities | 19,195 | | | 19,237 | | Derivative liabilities, at fair value | 2,250 | | | 123 | | Deferred rent and other liabilities | 9,524 | | | 9,794 | | Dividends payable | 6,038 | | | 3,675 | | Total liabilities | 2,103,932 | | | 1,908,368 | | | | | | 7.50% Series A cumulative redeemable perpetual preferred stock, $0.01 par value, liquidation preference $25.00 per share, 12,796,000 and 8,796,000 shares authorized, 7,933,711 and 7,842,008 issued and outstanding as of December 31, 2021 and 2020, respectively | 79 | | | 79 | | 7.375% Series C cumulative redeemable perpetual preferred stock, $0.01 par value, liquidation preference $25.00 per share, 11,536,000 and 3,680,000 shares authorized, 4,594,498 and 3,535,700 issued and outstanding as of December 31, 2021 and 2020, respectively | 46 | | | 35 | | Common stock, $0.01 par value per share, 300,000,000 shares authorized, 123,783,060 and 108,837,209 shares issued and outstanding as of December 31, 2021 and 2020, respectively | 1,238 | | | 1,088 | | Additional paid-in capital | 2,915,926 | | | 2,723,678 | | Accumulated other comprehensive loss | — | | | (123) | | Distributions in excess of accumulated earnings | (1,217,435) | | | (1,055,680) | | Total stockholders’ equity | 1,699,854 | | | 1,669,077 | | Non-controlling interests | 10,424 | | | 30,522 | | Total equity | 1,710,278 | | | 1,699,599 | | Total liabilities and equity | $ | 3,814,210 | | | $ | 3,607,967 | |
The accompanying notes are an integral part of these consolidated financial statements.
THE NECESSITY RETAIL REIT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (In thousands, except share and per share data) | | | | | | | | | | | | | | | | | | | Year Ended December 31, | | 2021 | | 2020 | | 2019 | Revenue from tenants | $ | 335,156 | | | $ | 305,224 | | | $ | 299,744 | | | | | | | | Operating expenses: | | | | | | Asset management fees to related party | 32,804 | | | 27,829 | | | 25,695 | | Property operating expense | 55,431 | | | 52,296 | | | 52,715 | | Impairment of real estate investments | 33,261 | | | 12,910 | | | 827 | | Acquisition, transaction and other costs | 4,378 | | | 2,921 | | | 6,257 | | Equity-based compensation | 17,264 | | | 13,036 | | | 12,717 | | General and administrative | 20,856 | | | 19,683 | | | 20,375 | | Depreciation and amortization | 130,464 | | | 137,459 | | | 124,713 | | Goodwill impairment | — | | | — | | | 1,605 | | Total operating expenses | 294,458 | | | 266,134 | | | 244,904 | | Operating income before gain on sale of real estate investments | 40,698 | | | 39,090 | | | 54,840 | | Gain on sale/exchange of real estate investments | 4,757 | | | 6,456 | | | 23,690 | | Operating income | 45,455 | | | 45,546 | | | 78,530 | | Other (expense) income: | | | | | | Interest expense | (81,784) | | | (78,467) | | | (77,994) | | Other income | 91 | | | 1,024 | | | 3,627 | | Loss on non-designated derivatives | (3,950) | | | (9) | | | — | | Total other expense, net | (85,643) | | | (77,452) | | | (74,367) | | Net (loss) income | (40,188) | | | (31,906) | | | 4,163 | | Net loss (income) attributable to non-controlling interests | 9 | | | 44 | | | (16) | | Allocation for preferred stock | (23,262) | | | (14,788) | | | (7,248) | | Net loss attributable to common stockholders | (63,441) | | | (46,650) | | | (3,101) | | | | | | | | Other comprehensive (loss) income: | | | | | | Change in unrealized gain (loss) on derivative | 123 | | | (123) | | | 531 | | Comprehensive loss attributable to common stockholders | $ | (63,318) | | | $ | (46,773) | | | $ | (2,570) | | | | | | | | Weighted-average shares outstanding — Basic and Diluted | 115,404,635 | | | 108,404,093 | | | 106,397,296 | | Net loss per share attributable to common stockholders — Basic and Diluted | $ | (0.56) | | | $ | (0.44) | | | $ | (0.04) | |
The accompanying notes are an integral part of these consolidated financial statements.
THE NECESSITY RETAIL REIT, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In thousands, except share data) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Series A Preferred Stock | | Series C Preferred Stock | | Common Stock | | | | | | | | | | | | | | Number of Shares | | Par Value | | Number of Shares | | Par Value | | Number of Shares | | Par Value | | Additional Paid-in Capital | | Accumulated Other Comprehensive Income (Loss) | | Accumulated Deficit | | Total Stockholders’ Equity | | Non-controlling Interests | | Total Equity | Balance, December 31, 2018 | — | | | $ | — | | | — | | | $ | — | | | 106,230,901 | | | $ | 1,063 | | | $ | 2,412,915 | | | $ | (531) | | | $ | (812,047) | | | $ | 1,601,400 | | | $ | 8,335 | | | $ | 1,609,735 | | Impact of adoption of new accounting pronouncement for leases (Note 2) | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (170) | | | (170) | | | — | | | (170) | | Issuance of Common Stock, net | — | | | — | | | — | | | — | | | 2,229,647 | | | 22 | | | 31,579 | | | — | | | — | | | 31,601 | | | — | | | 31,601 | | Issuance of Series A Preferred Stock, net | 6,917,230 | | | 69 | | | — | | | — | | | — | | | — | | | 168,860 | | | — | | | — | | | 168,929 | | | — | | | 168,929 | | Common stock repurchases | — | | | — | | | — | | | — | | | (19,870) | | | (1) | | | (273) | | | — | | | — | | | (274) | | | — | | | (274) | | Equity-based compensation, net of forfeitures | — | | | — | | | — | | | — | | | 34,588 | | | 1 | | | 1,071 | | | — | | | — | | | 1,072 | | | 11,645 | | | 12,717 | | Dividends declared on Common Stock, $1.10 per share | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (117,100) | | | (117,100) | | | — | | | (117,100) | | Dividends declared on Series A Preferred Stock, 1.56 per share | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (7,248) | | | (7,248) | | | — | | | (7,248) | | Distributions to non-controlling interest holders | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (494) | | | (494) | | | (160) | | | (654) | | Net income | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 4,147 | | | 4,147 | | | 16 | | | 4,163 | | Other comprehensive income | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 531 | | | — | | | 531 | | | — | | | 531 | | Rebalancing of ownership percentage | — | | | — | | | — | | | — | | | — | | | — | | | 937 | | | — | | | — | | | 937 | | | (937) | | | — | | Balance, December 31, 2019 | 6,917,230 | | | 69 | | | — | | | — | | | 108,475,266 | | | 1,085 | | | 2,615,089 | | | — | | | (932,912) | | | 1,683,331 | | | 18,899 | | | 1,702,230 | | Issuance of Common Stock, net | — | | | — | | | — | | | — | | | — | | | — | | | (239) | | | — | | | — | | | (239) | | | — | | | (239) | | Issuance of Series A Preferred Stock, net | 924,778 | | | 10 | | | — | | | — | | | — | | | — | | | 22,423 | | | — | | | — | | | 22,433 | | | — | | | 22,433 | | Issuance of Series C Preferred Stock, net | — | | | — | | | 3,535,700 | | | 35 | | | — | | | — | | | 85,161 | | | — | | | — | | | 85,196 | | | — | | | 85,196 | | Equity-based compensation, net of forfeitures | — | | | — | | | — | | | — | | | 361,943 | | | 3 | | | 1,176 | | | — | | | — | | | 1,179 | | | 11,856 | | | 13,035 | | Dividends declared on Common Stock, $0.70 per share | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (75,952) | | | (75,952) | | | — | | | (75,952) | | Dividends declared on Series A Preferred Stock, $1.875 per share | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (14,543) | | | (14,543) | | | — | | | (14,543) | | Distributions to non-controlling interest holders | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (411) | | | (411) | | | (121) | | | (532) | | Net loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (31,862) | | | (31,862) | | | (44) | | | (31,906) | | Other comprehensive loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (123) | | | — | | | (123) | | | — | | | (123) | | Rebalancing of ownership percentage | — | | | — | | | — | | | — | | | — | | | — | | | 68 | | | — | | | — | | | 68 | | | (68) | | | — | | Balance, December 31, 2020 | 7,842,008 | | | 79 | | | 3,535,700 | | | 35 | | | 108,837,209 | | | 1,088 | | | 2,723,678 | | | (123) | | | (1,055,680) | | | 1,669,077 | | | 30,522 | | | 1,699,599 | | Issuance of Common Stock, net | — | | | — | | | — | | | — | | | 14,734,448 | | | 148 | | | 128,264 | | | — | | | — | | | 128,412 | | | — | | | 128,412 | | Issuance of Series A Preferred Stock, net | 91,703 | | | — | | | — | | | — | | | — | | | — | | | 2,029 | | | — | | | — | | | 2,029 | | | — | | | 2,029 | | Issuance of Series C Preferred Stock, net | — | | | — | | | 1,058,798 | | | 11 | | | — | | | — | | | 25,475 | | | — | | | — | | | 25,486 | | | — | | | 25,486 | | Equity-based compensation, net of forfeitures (1) | — | | | — | | | — | | | — | | | 288,424 | | | 3 | | | 2,384 | | | — | | | — | | | 2,387 | | | 14,877 | | | 17,264 | | Common stock shares withheld upon vesting of restricted stock | — | | | — | | | — | | | — | | | (77,021) | | | (1) | | | (723) | | | — | | | — | | | (724) | | | — | | | (724) | | Dividends declared on Common Stock, $0.84 per share | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (97,532) | | | (97,532) | | | — | | | (97,532) | | Dividends declared on Series A Preferred Stock, $1.875 per share | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (14,891) | | | (14,891) | | | — | | | (14,891) | | Dividends declared on Series C Preferred Stock, $1.84 per share | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (8,616) | | | (8,616) | | | — | | | (8,616) | | Distributions to non-controlling interest holders | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (537) | | | (537) | | | (147) | | | (684) | | Net loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (40,179) | | | (40,179) | | | (9) | | | (40,188) | | Other comprehensive income | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 123 | | | — | | | 123 | | | — | | | 123 | | Forfeiture of 2018 LTIP Units | — | | | — | | | — | | | — | | | — | | | — | | | 34,826 | | | — | | | — | | | 34,826 | | | (34,826) | | | — | | Rebalancing of ownership percentage | — | | | — | | | — | | | — | | | — | | | — | | | (7) | | | — | | | — | | | (7) | | | 7 | | | — | | Balance, December 31, 2021 | 7,933,711 | | | $ | 79 | | | 4,594,498 | | | $ | 46 | | | 123,783,060 | | | $ | 1,238 | | | $ | 2,915,926 | | | $ | — | | | $ | (1,217,435) | | | $ | 1,699,854 | | | $ | 10,424 | | | $ | 1,710,278 | |
The accompanying notes are an integral part of these consolidated financial statements.
(1) Presented net of forfeitures. 25,050 restricted shares with a fair value of approximately $175,000 were forfeited during the period.
THE NECESSITY RETAIL REIT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) | | | | | | | | | | | | | | | | | | | Year Ended December 31, | | 2021 | | 2020 | | 2019 | Cash flows from operating activities: | | | | | | Net (loss) income | $ | (40,188) | | | $ | (31,906) | | | $ | 4,163 | | Adjustments to reconcile net (loss) income to net cash provided by operating activities: | | | | | | Depreciation | 90,608 | | | 88,778 | | | 78,396 | | Amortization of in-place lease assets | 37,592 | | | 46,496 | | | 44,795 | | Amortization of deferred leasing costs | 2,265 | | | 2,184 | | | 1,522 | | Amortization (including accelerated write-off) of deferred financing costs | 12,733 | | | 8,212 | | | 7,598 | | Accretion of mortgage premiums and discounts on borrowings | (968) | | | (2,126) | | | (3,816) | | | | | | | | Amortization (accretion) of market lease and other intangibles, net | (4,625) | | | (6,149) | | | (7,372) | | Equity-based compensation | 17,264 | | | 13,036 | | | 12,717 | | | | | | | | | | | | | | Loss on non-designated derivatives | 3,950 | | | 9 | | | — | | Gain on sale/exchange of real estate investments | (4,757) | | | (6,456) | | | (23,690) | | Impairment of real estate investments and goodwill impairment | 33,261 | | | 12,910 | | | 2,432 | | Payments of prepayment costs on mortgages | 3,970 | | | 807 | | | 4,491 | | Changes in assets and liabilities: | | | | | | Straight-line rent receivable | (7,033) | | | (19,824) | | | (9,521) | | Straight-line rent payable | 258 | | | 314 | | | 1,196 | | Prepaid expenses and other assets | (4,648) | | | (9,139) | | | (3,208) | | Accounts payable and accrued expenses | 5,815 | | | (3,831) | | | (1,458) | | Deferred rent and other liabilities | (270) | | | (598) | | | (2,675) | | Net cash provided by operating activities | 145,227 | | | 92,717 | | | 105,570 | | Cash flows from investing activities: | | | | | | | | | | | | Capital expenditures | (13,407) | | | (9,198) | | | (13,652) | | Acquisitions of investments in real estate and other assets | (182,157) | | | (220,412) | | | (428,939) | | Proceeds from sale of real estate investments | 16,630 | | | 6,707 | | | 34,813 | | Deposits | (41,791) | | | (53) | | | 2,952 | | Net cash used in investing activities | (220,725) | | | (222,956) | | | (404,826) | | Cash flows from financing activities: | | | | | | Proceeds from mortgage notes payable | 239,928 | | | 874,000 | | | 286,930 | | Payments on mortgage notes payable | (263,808) | | | (663,236) | | | (69,144) | | Proceeds from issuance of senior notes | 500,000 | | | — | | | — | | Proceeds from credit facility | 30,500 | | | 205,000 | | | 233,000 | | Payments on credit facility | (311,357) | | | (257,291) | | | (224,553) | | Payments of financing costs | (28,173) | | | (30,917) | | | (10,778) | | Payments of prepayment costs on mortgages | (3,970) | | | (807) | | | (4,491) | | Class A common stock repurchases | (560) | | | — | | | (274) | | Distributions on LTIP Units and Class A Units | (501) | | | (532) | | | (694) | | Dividends paid on Class A common stock | (97,532) | | | (75,951) | | | (117,140) | | Dividends paid on Series A preferred stock | (14,848) | | | (14,167) | | | (3,948) | | Dividends paid on Series C preferred stock | (6,498) | | | — | | | — | | Proceeds from issuance of Class A common stock, net | 128,409 | | | (211) | | | 31,601 | | Proceeds from issuance of Series A preferred stock, net | 1,885 | | | 22,490 | | | 168,956 | | Proceeds from issuance of Series C preferred stock, net | 25,475 | | | 85,418 | | | — | | Net cash provided by financing activities | 198,950 | | | 143,796 | | | 289,465 | | Net change in cash, cash equivalents and restricted cash | 123,452 | | | 13,557 | | | (9,791) | | Cash, cash equivalents and restricted cash, beginning of period | 113,397 | | | 99,840 | | | 109,631 | | Cash, cash equivalents and restricted cash, end of period | $ | 236,849 | | | $ | 113,397 | | | $ | 99,840 | |
THE NECESSITY RETAIL REIT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) | | | | | | | | | | | | | | | | | | | Year Ended December 31, | | 2021 | | 2020 | | 2019 | Cash and cash equivalents, end of period | $ | 214,853 | | | $ | 102,860 | | | $ | 81,898 | | Restricted cash, end of period | 21,996 | | | 10,537 | | | 17,942 | | Cash, cash equivalents and restricted cash, end of period | $ | 236,849 | | | $ | 113,397 | | | $ | 99,840 | | | | | | | | Supplemental Disclosures: | | | | | | Cash paid for interest, net of derivatives settled | $ | 65,886 | | | $ | 72,758 | | | $ | 72,826 | | Cash paid for income and franchise taxes | $ | 1,117 | | | $ | 720 | | | $ | 217 | | | | | | | | Non-Cash Investing and Financing Activities: | | | | | | Accrued offering costs - Series A Preferred Stock | $ | 5 | | | $ | 57 | | | $ | 27 | | Accrued offering costs - Series C Preferred Stock | $ | — | | | $ | 222 | | | $ | — | | Accrued offering costs - Class A common stock | $ | — | | | $ | 28 | | | $ | — | | Preferred dividend declared but not yet paid | $ | 5,837 | | | $ | 3,676 | | | $ | 3,300 | | Assets received through substitution | $ | — | | | $ | 4,380 | | | $ | — | | Assets provided through substitution | $ | — | | | $ | (2,180) | | | $ | — | | Proceeds from real estate sales used to pay off related mortgage notes payable | $ | 1,108 | | | $ | 5,586 | | | $ | 94,940 | | Mortgage notes payable released in connection with disposition of real estate | $ | (1,108) | | | $ | (5,586) | | | $ | (94,940) | | | | | | | | | | | | | | | | | | | | Accrued capital expenditures (payable) | $ | 1,553 | | | $ | 1,556 | | | $ | 355 | |
The accompanying notes are an integral part of these consolidated financial statements.
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021
Note 1 — Organization The Necessity Retail REIT, Inc. (formerly known as American Finance Trust, Inc.) (the “Company”), is an externally managed real estate investment trust for U.S. federal income tax purposes (“REIT”) focusing on acquiring and managing a diversified portfolio of primarily service-oriented and traditional retail and distribution-related commercial real estate properties located primarily in the United States. The Company’s assets consist primarily of freestanding single-tenant properties that are net leased to “investment grade” and other creditworthy tenants and a portfolio of multi-tenant retail properties consisting primarily of power centers and lifestyle centers. The Company intends to focus its future acquisitions primarily on net leased, single-tenant service retail properties, defined as properties leased to tenants in the retail banking, restaurant, grocery, pharmacy, gas, convenience, fitness, and auto services sectors. As of December 31, 2021, the Company owned 976 properties, comprised of 20.0 million rentable square feet, which were 93.2% leased, including 943 single-tenant, net leased commercial properties (902 of which are leased to retail tenants) and 33 multi-tenant retail properties. On December 17, 2021, the Company signed a purchase and sale agreement to acquire 79 multi-tenant properties and 2 single-tenant properties (the “CIM Portfolio Acquisition”) see Note 16 — Subsequent Events for additional information. Substantially all of the Company’s business is conducted through The Necessity Retail REIT Operating Partnership, L.P (formerly known as American Finance Operating Partnership, L.P), (the “OP”), a Delaware limited partnership, and its wholly owned subsidiaries. Necessity Retail Advisors, LLC (formerly known as American Finance Advisors, LLC) (the “Advisor”) manages the Company’s day-to-day business with the assistance of the Company’s property manager, Necessity Retail Properties, LLC (formerly known as American Finance Properties, LLC), (the “Property Manager”). The Advisor and the Property Manager are under common control with AR Global Investments, LLC (“AR Global”) and these related parties receive compensation and fees for providing services to us. The Company also reimburses these entities for certain expenses they incur in providing these services to the Company. Note 2 — Summary of Significant Accounting Policies Basis of Accounting The accompanying consolidated financial statements of the Company are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company, the OP and its subsidiaries. All inter-company accounts and transactions are eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity (“VIE”) for which the Company is the primary beneficiary. The Company has determined the OP is a VIE of which the Company is the primary beneficiary. Substantially all of the Company’s assets and liabilities are held by the OP. Except for the OP, as of December 31, 2021 and 2020, the Company had no interests in entities that were not wholly owned. Use of Estimates The preparation of 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 and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding revenue recognition, purchase price allocations to record investments in real estate, and fair value measurements, as applicable. Impacts of the COVID-19 Pandemic During the first quarter of 2020, the global COVID-19 pandemic that has spread around the world and to every state in the United States commenced. The pandemic has had and could continue to have an adverse impact on economic and market conditions, including a global economic slowdown, recession, or period of slow growth. The continued rapid development and fluidity of this situation precludes any prediction as to the ultimate adverse impact of COVID-19 on economic and market conditions. The Company believes the estimates and assumptions underlying its consolidated financial statements are reasonable and supportable based on the information available as of December 31, 2021, however uncertainty over the ultimate impact COVID-19 will have on the global economy generally, and the Company’s business in particular, makes any estimates
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 and assumptions as of December 31, 2021 inherently less certain than they would be absent the current and potential impacts of COVID-19. Actual results may ultimately differ from those estimates. The financial stability and overall health of tenants is critical to the Company’s business. The negative effects that the global pandemic has had on the economy includes the closure or reduction in activity for many retail operations such as some of those operated by the Company’s tenants (e.g., restaurants). This has impacted the ability of some of the Company’s tenants to pay their monthly rent either temporarily or in the long-term. The Company experienced delays in rent collections in the second, third and fourth quarters of 2020 and the first quarter of 2021. The Company took a proactive approach to achieve mutually agreeable solutions with its tenants and in some cases, in the second, third and fourth quarters of 2020 and throughout 2021, the Company has executed several types of lease amendments. These agreements include deferrals and abatements and also may include extensions to the term of the leases. For accounting purposes, in accordance with ASC 842: Leases, normally a company would be required to assess a lease modification to determine if the lease modification should be treated as a separate lease and if not, modification accounting would be applied which would require a company to reassess the classification of the lease (including leases for which the prior classification under ASC 840 was retained as part of the election to apply the package of practical expedients allowed upon the adoption of ASC 842, which does not apply to leases subsequently modified). However, in light of the COVID-19 pandemic in which many leases are being modified, the FASB and SEC provided relief that allowed companies to make a policy election as to whether they treat COVID-19 related lease amendments as a provision included in the pre-concession arrangement, and therefore, not a lease modification, or to treat the lease amendment as a modification. In order to be considered COVID-19 related, cash flows must be substantially the same or less than those prior to the concession. For COVID-19 relief qualified changes, there are two methods to potentially account for such rent deferrals or abatements under the relief, (1) as if the changes were originally contemplated in the lease contract or (2) as if the deferred payments are variable lease payments contained in the lease contract. For all other lease changes that did not qualify for FASB relief, the Company is required to apply modification accounting including assessing classification under ASC 842. Some, but not all of the Company’s lease modifications qualify for the FASB relief. In accordance with the relief provisions, instead of treating these qualifying leases as modifications, the Company has elected to treat the modifications as if previously contained in the lease and recast rents receivable prospectively (if necessary). Under that accounting, for modifications that were deferrals only, there would be no impact on overall rental revenue and for any abatement amounts that reduced total rent to be received, the impact would be recognized ratably over the remaining life of the lease. For leases not qualifying for this relief, the Company has applied modification accounting and determined that there were no changes in the current classification of its leases impacted by negotiations with its tenants. Out-of-Period Adjustments During the three months ended March 31, 2019, the Company identified certain historical errors in its accounting for its land leases (as lessee) which impacted the previously issued quarterly and annual financial statements. Specifically, the Company did not consider whether a penalty would be considered to exist for impairment of leasehold improvements when considering whether to include certain extension options in the lease term for accounting purposes. The land leases related to property acquired between 2013 and 2017. As of December 31, 2018, the cumulative impact of using the appropriate lease term in its straight line rent expense calculations for the operating leases was an understatement of rent expense and accrued rent liability of $0.9 million. The Company concluded that the errors noted above were not material to the current period or any historical periods presented and, accordingly, the Company adjusted the amounts on a cumulative basis in the first quarter of 2019. Revenue Recognition The Company’s revenues, which are derived primarily from lease contracts, which include rents that each tenant pays in accordance with the terms of each lease reported on a straight-line basis over the initial term of the lease. As of December 31, 2021, these leases had an average remaining lease term of approximately 8.6 years. Because many of the Company’s leases provide for rental increases at specified intervals, straight-line basis accounting requires the Company to record a receivable for, and include in revenue from tenants, unbilled rents receivable that the Company will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. When the Company acquires a property, the acquisition date is considered to be the commencement date for purposes of this calculation. For new leases after acquisition, the commencement date is considered to be the date the tenant takes control of the space. For lease modifications, the commencement date is considered to be the date the lease modification is executed. The Company defers the revenue related to lease payments received from tenants in advance of their due dates. Pursuant to certain of the Company’s lease agreements,
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 tenants are required to reimburse the Company for certain property operating expenses, in addition to paying base rent, whereas under certain other lease agreements, the tenants are directly responsible for all operating costs of the respective properties. Under ASC 842, the Company elected to report combined lease and non-lease components in a single line “Revenue from tenants.” For comparative purposes, the Company also elected to reflect prior revenue and reimbursements reported under ASC 842 also on a single line. For expenses paid directly by the tenant, under both ASC 842 and 840, the Company has reflected them on a net basis. The following table presents future base rent payments on a cash basis due to the Company over the next five years and thereafter. These amounts exclude tenant reimbursements and contingent rent payments, as applicable, that may be collected from certain tenants based on provisions related to sales thresholds and increases in annual rent based on exceeding certain economic indexes among other items. As of December 31, 2021: | | | | | | | | | (In thousands) | | Future Base Rent Payments | 2022 | | $ | 277,209 | | 2023 | | 265,327 | | 2024 | | 250,179 | | 2025 | | 232,619 | | 2026 | | 216,035 | | Thereafter | | 1,313,858 | | | | $ | 2,555,227 | |
The Company owns certain properties with leases that include provisions for the tenant to pay contingent rental income based on a percent of the tenant’s sales upon the achievement of certain sales thresholds or other targets which may be monthly, quarterly or annual targets. As the lessor to the aforementioned leases, the Company defers the recognition of contingent rental income, until the specified target that triggered the contingent rental income is achieved, or until such sales upon which percentage rent is based are known. For the year ended December 31, 2021, 2020 and 2019, approximately $1.4 million, $1.1 million and $0.9 million, respectively, in contingent rental income is included in revenue from tenants in the consolidated statements of operations and comprehensive loss. The Company continually reviews receivables related to rent and unbilled rents receivable and determines collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. Under the leasing standard adopted on January 1, 2019 (see the “Recently Issued Accounting Pronouncements” section below), the Company is required to assess, based on credit risk only, if it is probable that the Company will collect virtually all of the lease payments at lease commencement date and it must continue to reassess collectability periodically thereafter based on new facts and circumstances affecting the credit risk of the tenant. Partial reserves, or the ability to assume partial recovery are not permitted. If the Company determines that it’s probable it will collect virtually all of the lease payments (rent and common area maintenance), the lease will continue to be accounted for on an accrual basis (i.e. straight-line). However, if the Company determines it’s not probable that it will collect virtually all of the lease payments, the lease will be accounted for on a cash basis and a full reserve would be recorded on previously accrued amounts in cases where it was subsequently concluded that collection was not probable. Cost recoveries from tenants are included in operating revenue from tenants beginning on January 1, 2019, in accordance with new accounting rules, on the accompanying consolidated statements of operations and comprehensive income (loss) in the period the related costs are incurred, as applicable. In the second, third and fourth quarters of 2020 and throughout 2021, this assessment included consideration of the impacts of the COVID-19 pandemic on the ability of the Company’s tenants to pay rents in accordance with their contracts. The assessment included all of the Company’s tenants with a focus on the Company’s multi-tenant retail properties which have been more negatively impacted by the COVID-19 pandemic than the Company’s single-tenant properties. In accordance withe lease accounting rules, the Company records uncollectable amounts as reductions in revenue from tenants. The Company recorded a reduction in revenue from tenants of $1.8 million, $6.6 million and $2.9 million during the years ended December 31, 2021, 2020 and 2019, respectively. During the third quarter of 2021, the Company entered into a lease termination agreement with a tenant at 12 of its properties. The Company recorded approximately $10.5 million in revenue from tenants during the third quarter of 2021 as a
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 result of all of the accounting impacts of related to this lease termination. This amount consists of a lease termination fee of $10.4 million, a $0.7 million below market lease intangibles write off (see Note 3 — Real Estate Investments, Net), less $0.6 million in previously recorded straight-line rent receivables accrued on these leases. The $10.4 million termination fee was received by the Company in October 2021. In addition, during the year ended December 31, 2021, the Company recorded a $0.8 million lease termination fee from a tenant in one of the Company’s multi-tenant properties that terminated its lease. On April 1, 2019, the Company entered into a termination agreement with a tenant at one of its multi-tenant properties which required the tenant to pay the Company a termination fee of $8.0 million. The Company then entered into two leases, one of which was subsequently terminated in 2020 to replace the tenant (see Note 3 — Real Estate Investments, Net — Tenant Improvement Write-Off for further details regarding this termination). As a result of the April 2019 termination, the Company recorded termination income, net, of $7.6 million during the second quarter of 2019, which is included in revenue from tenants during the year ended December 31, 2019. Investments in Real Estate Investments in real estate are recorded at cost. Improvements and replacements are capitalized when they extend the useful life of the asset. Costs of repairs and maintenance are expensed as incurred. At the time an asset is acquired, the Company evaluates the inputs, processes and outputs of the asset acquired to determine if the transaction is a business combination or asset acquisition. If an acquisition qualifies as a business combination, the related transaction costs are recorded as an expense in the consolidated statements of operations and comprehensive loss. If an acquisition qualifies as an asset acquisition, the related transaction costs are generally capitalized and subsequently amortized over the useful life of the acquired assets. See the Purchase Price Allocation section in this Note for a discussion of the initial accounting for investments in real estate. Disposal of real estate investments that represent a strategic shift in operations that will have a major effect on the Company's operations and financial results are required to be presented as discontinued operations in the consolidated statements of operations. No properties were presented as discontinued operations during the years ended December 31, 2021, 2020 2019 or 2018.2019. Properties that are intended to be sold are to be designated as “held for sale” on the consolidated balance sheets at the lesser of carrying amount or fair value less estimated selling costs when they meet specific criteria to be presented as held for sale, most significantly that the sale is probable within one year. The Company evaluates probability of sale based on specific facts including whether a sales agreement is in place and the buyer has made significant non-refundable deposits. Properties are no longer depreciated when they are classified as held for sale. As of December 31, 2020,2021 the Company had 0 properties1 property classified as held for sale, and as of December 31, 2019,2020, the Company had 1 propertyno properties classified as held for sale (see Note 3 — Real Estate Investments, Net for additional information). As more fully discussed in this Note under Recently Issued Accounting Pronouncements - ASU No. 2016-02 Leases, all of the Company’s leases as lessor prior to adoption of the newthis leasing standard on January 1, 2019, were accounted for as operating leases and the Company continued to account for them as operating leases under the transition guidance. The Company evaluates new leases originated after the adoption date (by the Company or by a predecessor lessor/owner) pursuant to the new guidance where a lease for some or all of a building is classified by a lessor as a sales-type lease if the significant risks and rewards of ownership reside with the tenant. This situation is met if, among other things, there is an automatic transfer of title during the lease, a bargain purchase option, the non-cancelable lease term is for more than major part of remaining economic useful life of the asset (e.g., equal to or greater than 75%), if the present value of the minimum lease payments represents substantially all (e.g., equal to or greater than 90%) of the leased property’s fair value at lease inception, or if the asset so specialized in nature that it provides no alternative use to the lessor (and therefore would not provide any future value to the lessor) after the lease term. Further, such new leases would be evaluated to consider whether they would be failed sale-leaseback transactions and accounted for as financing transactions by the lessor. During the three-year period ended December 31, 2020,2021, the Company had no leases as a lessor that would be considered as sales-type leases or financings under sale-leaseback rules. The Company is also the lessee under certain land leases which were previously classified prior to adoption of lease accounting and will continue to be classified as operating leases under transition elections unless subsequently modified. These leases are reflected on the balance sheet and the rent expense is reflected on a straight line basis over the lease term.
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
Purchase Price Allocation In both a business combination and an asset acquisition, the Company allocates the purchase price of acquired properties to tangible and identifiable intangible assets or liabilities based on their respective fair values. Tangible assets may include land, land improvements, buildings, fixtures and tenant improvements on an as if vacant basis. Intangible assets may include the value of in-place leases and above- and below- market leases and other identifiable assets or liabilities based on lease or property specific characteristics. In addition, any assumed mortgages receivable or payable and any assumed or issued non-controllingnon-
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 controlling interests (in a business combination) are recorded at their estimated fair values. In allocating the fair value to assumed mortgages, amounts are recorded to debt premiums or discounts based on the present value of the estimated cash flows, which is calculated to account for either above or below-market interest rates. In a business combination, the difference between the purchase price and the fair value of identifiable net assets acquired is either recorded as goodwill or as a bargain purchase gain. In an asset acquisition, the difference between the acquisition price (including capitalized transaction costs) and the fair value of identifiable net assets acquired is allocated to the non-current assets. All acquisitions during the years ended December 31, 2021, 2020 2019 and 20182019 were asset acquisitions. For acquired properties with leases classified as operating leases, the Company allocates the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values. In making estimates of fair values for purposes of allocating purchase price, the Company utilizes a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other market data. The Company also considers information obtained about each property as a result of the Company’s pre-acquisition due diligence in estimating the fair value of the tangible and intangible assets acquired and intangible liabilities assumed. Tangible assets include land, land improvements, buildings, fixtures, and tenant improvements on an as-if vacant basis. The Company utilizes various estimates, processes and information to determine the as-if vacant property value. The Company estimates fair value using data from appraisals, comparable sales, discounted cash flow analysis and other methods. Fair value estimates are also made using significant assumptions such as capitalization rates, fair market lease rates, discount rates, and land values per square foot. Identifiable intangible assets include amounts allocated to acquired leases for above- and below-market lease rates and the value of in-place leases. Factors considered in the analysis of the in-place lease intangibles include an estimate of carrying costs during the expected lease-up period for each property, taking into account current market conditions and costs to execute similar leases. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at contract rates during the expected lease-up period, which typically ranges from six to 24 months. The Company also estimates costs to execute similar leases including leasing commissions, legal and other related expenses. Above-market and below-market lease values for acquired properties are initially recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining initial term of the lease for above-market leases and the remaining initial term plus the term of any below-market fixed rate renewal options for below-market leases. The aggregate value of intangible assets related to customer relationship, as applicable, is measured based on the Company's evaluation of the specific characteristics of each tenant’s lease and the Company's overall relationship with the tenant. Characteristics considered by the Company in determining these values include the nature and extent of its existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals, among other factors. The Company did not record any intangible asset amounts related to customer relationships during the years ended December 31, 2021, 2020 and 2019. Gain on Sale/Exchange of Real Estate Investments Gains on sales of rental real estate are not considered sales to customers and are generally recognized pursuant to the provisions included in ASC 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”). In accordance with ASC 845-10, Accounting for Non-Monetary Transactions, if a nonmonetary exchange has commercial substance, the cost of a nonmonetary asset acquired in exchange for another nonmonetary asset is the fair value of the asset surrendered to obtain it, and a gain or loss shall be recognized on the exchange.
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
Impairment of Long-Lived Assets When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the property for impairment. This review is based on an estimate of the future undiscounted cash flows expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. If an impairment exists, due to the inability to recover the carrying value of a property, the Company would recognize an impairment loss in the consolidated statement of operations and comprehensive loss to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss recorded would equal the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net earnings. Goodwill and Goodwill Impairment
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 The Company had 0no goodwill recorded as of December 31, 2021, 2020 and 2019. During 2019, and $1.6 million of goodwill recorded as of December 31, 2018. Thethe Company iswas required to assess whether its goodwill iswas impaired, which requiresrequired the Company to determine if it iswas more likely than not that the fair value of a reporting unit is less than its carrying amount. TheHistorically, the Company evaluatesevaluated goodwill for impairment at least annually or when other market events or circumstances occuroccurred that might indicate that goodwill iswas impaired. The Company performed its annual assessment in December 2018 and determined that there was 0 impairment of goodwill. Given fluctuations in the market price of the Class A common stock, the Company performed a reassessment as of June 30, 2019, which included the assessment of relevant metrics such as estimated carrying and fair market value of the Company’s real estate and market-based factors. Based on these assessments, the Company determined that goodwill was impaired and recorded an impairment charge of $1.6 million for the year ended December 31, 2019. There was 0The Company had no goodwill impairment forremaining after the year endedrecording of this impairment. Reportable Segments As of December 31, 2020. Reportable Segment
The2021, the Company has 1determined that it has 2 reportable segment, income-producing properties, which consists ofsegments, with activities related to investing in real estate. single-tenant properties and multi-tenant properties.
Depreciation and Amortization The Company is required to make subjective assessments as to the useful lives of the components of its real estate investments for purposes of determining the amount of depreciation to record on an annual basis. These assessments have a direct impact on the Company’s results from operations because if the Company were to shorten the expected useful lives of its real estate investments, the Company would depreciate these investments over fewer years, resulting in more depreciation expense and lower earnings on an annual basis. Depreciation is computed using the straight-line method over the estimated useful lives of up to 40 years for buildings, 15 years for land improvements, five years for fixtures and improvements and the shorter of the useful life or the remaining lease term for tenant improvements and leasehold interests. The value of in-place leases, exclusive of the value of above-market and below-market in-place leases, is amortized to expense over the remaining periods of the respective leases. The value of customer relationship intangibles, if any, is amortized to expense over the initial term of the lease and any renewal periods in the respective leases, but in no event does the amortization period for intangible assets exceed the remaining depreciable life of the building. If a tenant terminates its lease, the unamortized portion of the in-place lease value and customer relationship intangibles is charged to expense. Assumed mortgage premiums or discounts are amortized as an increase or reduction to interest expense over the remaining terms of the respective mortgages. Above and Below-Market Lease Amortization Capitalized above-market lease values are amortized as a reduction of revenue from tenants over the remaining terms of the respective leases and the capitalized below-market lease values are amortized as an increase to revenue from tenants over the remaining initial terms plus the terms of any below-market fixed rate renewal options of the respective leases. If a tenant with a below-market rent renewal does not renew, any remaining unamortized amount will be taken into income at that time. Capitalized above-market ground lease values are amortized as a reduction of property operating expense over the remaining terms of the respective leases. Capitalized below-market ground lease values are amortized as an increase to property operating expense over the remaining terms of the respective leases and expected below-market renewal option periods.
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
Upon termination of an above or below-market lease any unamortized amounts would be recognized in the period of termination. Derivative Instruments The Company may use derivative financial instruments to hedge all or a portion of the interest rate risk associated with its borrowings. Certain of the techniques used to hedge exposure to interest rate fluctuations may also be used to protect against declines in the market value of assets that result from general trends in debt markets. The principal objective of such agreements is to minimize the risks and costs associated with the Company’s operating and financial structure as well as to hedge specific anticipated transactions. The Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. The accounting for subsequent changes in the fair value of these derivatives depends on whether each has been designated and qualifies for hedge accounting treatment. If the Company elects not to apply hedge accounting treatment, any change in the fair value of these derivative instruments is recognized immediately in gains (losses) on derivative instruments in the accompanying consolidated statements of operations and comprehensive loss. If the derivative is designated and qualifies for hedge accounting treatment, the change in the estimated fair value of the derivative is recorded in other comprehensive income (loss) to the extent that it is effective. Any ineffective portion of a derivative’s change in fair value will be immediately recognized in earnings. Non-controlling Interests The non-controlling interests represent the portion of the equity in the OP that is not owned by the Company. Non-controlling interests are presented as a separate component of equity on the consolidated balance sheets and presented as net loss attributable to non-controlling interests on the consolidated statements of operations and comprehensive loss. Non-controlling interests are allocated a share of net income or loss based on their share of equity ownership. Non-controlling interests resulted from the issuance of OP Units in conjunction with the merger (the “Merger”) with American Realty Capital-Retail Centers of America, Inc. (“RCA”) and were recognized at fair value as of the at the effective time of the Merger on February 16, 2017. In determining the fair value of the non-controlling interests, the Company utilized multiple sources including real estate valuations prepared by independent valuation firms and market sales data. In addition, under the multi-year outperformance agreement with the Advisor in 2021 (the “2021 OPP”) and in 2018 (the “2018 OPP”), the OP issued a new class of units of limited partnership designated as LTIP Units (“LTIP Units”), which are also reflected as part of non-controlling interest as of December 31, 2021, 2020 and 2019. Please see Note 89 — Stockholders’ Equity and Non-Controlling Interest and Note 1213 — Equity-Based Compensation for additional information on transactions that impacted the amounts recorded for non-controlling interests during the years ended December 31, 2021, 2020 2019 and 2018.2019. Cash and Cash Equivalents Cash and cash equivalents include cash in bank accounts as well as investments in highly-liquid money market funds with original maturities of three months or less and funds in overnight sweeps, in which excess funds over an established threshold are swept daily. The Company deposits cash with high quality financial institutions. These deposits are guaranteed by the Federal Deposit Insurance Company (the “FDIC”) up to an insurance limit. As of December 31, 2020,2021, the Company had cash and cash equivalents of $102.9$214.9 million of which $101.1$213.6 million were in excess of the amount insured by the FDIC. As of December 31, 2019,2020, the Company had cash and cash equivalents of $81.9$102.9 million of which $80.0$101.1 million were in excess of the amount insured by the FDIC. Although the Company bears risk to amounts in excess of those insured by the FDIC, it does not anticipate any losses as a result thereof.
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
Note Receivable, net, and Related Income Included in prepaid assets and other assets on the consolidated balance sheet as of December 31, 2021 and 2020 is a note receivable, net, consisting of a loan the Company has established with an existing tenant to fund capital improvements at the applicable properties. The tenant may borrow up to $1.0 million, of which $0.6 million and $0.2 million was drawn as of December 31, 2020.2021 and December 31, 2020, respectively. The note bears interest at a fixed rate of 8.5% and matures on December 31, 2025. Interest income on the note receivable is presented within other income on the consolidated statements of operations and comprehensive loss. Deferred Financing and Leasing Costs Deferred costs, net consists of debt issuance costs associated with the Credit Facility (as defined in Note 5 — Credit Facility) and deferred leasing costs, net of accumulated amortization. Deferred financing costs relating to the mortgage notes payable (see Note 4 — Mortgage Notes Payable, Net) and the Senior Notes (see Note 6 — Senior Notes, Net)are reflected net of the related financing on our balance sheet.
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 Deferred financing costs associated with the Credit Facility and the mortgage notes payable represent commitment fees, legal fees, and other costs associated with obtaining commitments for financing. These costs are amortized as additional interest expense over the term of the financing agreement on a straight-line basis for the Credit Facility and using effective interest method over the expected term for the mortgage notes payable. Unamortized deferred financing costs are expensed when the associated debt is refinanced or paid down before maturity. Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined that the financing will not close. Deferred leasing costs consist primarily of lease commissions and payments made to execute new leases and are deferred and amortized over the term of the lease. Equity-Based Compensation The Company has a stock-based plan under which its directors, officers and other employees of the Advisor or its affiliates who are involved in providing services to the Company are eligible to receive awards. Awards granted thereunder are accounted for under the guidance for employee share based payments. The cost of services received in exchange for these stock awards is measured at the grant date fair value of the award and the expense for such an award is included in the equity-based compensation line item of the consolidated statements of operations and is recognized in accordance with the service period (i.e., vesting) required or when the requirements for exercise of the award have been met. Effective at the listing of the Company’s Class A common stock, $0.01 par value per share (“Class A common stock”) on The Nasdaq Global Select Market (“Nasdaq”) on July 19, 2018 (the “Listing Date”), the Company entered into the 2018 OPP under which the LTIP Units were issued to the Advisor. These awards arewere market-based awards with a related required service period. In accordance with ASC 718, the LTIP Units were valued at their grant date and that value is reflected as a charge to earnings evenly over the service period. Further,The cumulative expense was reflected as part of non-controlling interest in the Company’s balance sheets and statements of equity until the end of the service period. Following the end of the performance period under the 2018 OPP on July 19, 2021, the compensation committee of the board of directors of the Company determined that none of the 4,496,796 of the LTIP Units subject to the 2018 OPP had been earned, and these LTIP Units were thus automatically forfeited. On that date, the Company reclassified amounts reflected in non-controlling interest for these LTIP Units to additional paid in capital on its balance sheet and statement of equity. On May 4, 2021, the Company’s independent directors, authorized the issuance of a new award of LTIP Units effective after the performance period under the 2018 OPP expired on July 19, 2021, with the number of LTIP Units to be issued to the Advisor to be equal to the quotient of $72.0 million divided by the 10-trading day trailing average closing stock price of the Company’s Class A common stock for the 10 trading days up to and including July 19, 2021. On July 21, 2021, the Company entered into the 2021 OPP pursuant to which the Advisor was granted an award of 8,528,885 LTIP Units, representing the quotient of $72.0 million divided by $8.4419. As a result, the LTIP Units issued under the 2021 OPP classified as an equity award with the cumulative expense reflected as part of non-controlling interest in the Company’s consolidated balance sheets and equity statements. In the event of a modification of any of the awards discussed above, any incremental increase in the value of the instrument measured on the date of the modification both before and after the modification, will result in an incremental amount to be reflected prospectively as a charge to earnings over the remaining service period. The expense for the LTIP Units is included in the equity-based compensation line item of the consolidated statements of operations. For additional information on these awards,all of the Company’s equity-based compensation arrangements, see Note 1213 — Equity-Based Compensation. Income Taxes The Company elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with the taxable year ended December 31, 2013. The Company believes that, commencing with such taxable year, it has been organized and has operated in a manner so that it qualifies for taxation as a REIT under the Code. The Company intends to continue to operate in such a manner, but can provide no assurance that it will operate in a manner so as to remain qualified as a REIT. To continue to qualify for taxation as a REIT, the Company must distribute annually at least 90% of its REIT taxable income (which does not equal net income as calculated in accordance with GAAP), determined without regard for the deduction for dividends paid and excluding net capital gains, and must comply with a number of other organizational and operational requirements. If the Company continues to qualify for taxation as a REIT, it generally will not be subject to federal corporate income tax on the portion of its REIT taxable income that it distributes to its stockholders. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and properties, as well as federal income and excise taxes on its undistributed income.
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 The amount of dividends payable to the Company’s stockholders is determined by the board of directors and is dependent on a number of factors, including funds available for distribution, financial condition, capital expenditure requirements, as
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
applicable, and annual distribution requirements needed to qualify and maintain the Company’s status as a REIT under the Code. Per Share Data Basic net loss per share of common stock is calculated by dividing net loss by the weighted-average number of shares of common stock issued and outstanding during such period. Diluted net loss per share of common stock considers the effect of potentially dilutive instruments outstanding during such period. Recently Issued Accounting Pronouncements Adopted as of January 1, 2018:
In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), and has since issued several additional amendments thereto (collectively referred to herein as “ASC 606”). ASC 606 establishes a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. Under ASC 606, an entity is required to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASC 606 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. A reporting entity may apply the amendments in ASC 606 using either a modified retrospective approach, by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption or a full retrospective approach. The Company adopted this guidance effective January 1, 2018 using the modified retrospective approach, and it did not have an impact on the Company’s consolidated financial statements. The new guidance did not have an impact on the Company’s consolidated financial statements, primarily because the Company’s revenues are being sourced from lease arrangements that are outside the scope of ASC 606 until the new lease standard is adopted.
In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall (Subtopic 825-10), that amends the recognition and measurement of financial instruments. The new guidance revises an entity’s accounting related to equity investments and the presentation of certain fair value changes for financial liabilities measured at fair value. Among other things, it also amends the presentation and disclosure requirements associated with the fair value of financial instruments. The Company adopted this guidance effective January 1, 2018 and there was no impact on the Company’s consolidated financial statements.
In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which provides guidance on how certain transactions should be classified and presented in the statement of cash flows as either operating, investing or financing activities. Among other things, the update provides specific guidance on where to classify debt prepayment and extinguishment costs, payments for contingent consideration made after a business combination and distributions received from equity method investments. The Company adopted the new guidance beginning in the first quarter of 2018, and it did not have a material impact on the Company’s consolidated statement of cash flows.
In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”), which revises the definition of a business. This new guidance is applicable when evaluating whether an acquisition should be treated as either a business acquisition or an asset acquisition. Under the revised guidance, when substantially all of the fair value of gross assets acquired is concentrated in a single asset or group of similar assets, the assets acquired would not be considered a business. The Company adopted this guidance effective January 1, 2018, and will apply the new rules prospectively. The Company expects, based on historical property acquisitions primarily being treated as asset acquisitions, that in most cases, a future property acquired after adoption will be treated as an asset acquisition rather than a business acquisition, which will result in the capitalization of related transaction costs. The Company has evaluated the impact of this new guidance beginning in the first quarter of 2018, and determined that it did not have a material impact on the Company’s consolidated financial statements. All acquisition costs incurred during the years ended December 31, 2020, 2019 and 2018 were capitalized since our acquisitions during the years were all classified as asset acquisitions.
In February 2017, the FASB issued ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Assets Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, which provides guidance related to partial sales of non-financial assets, eliminates rules specifically addressing the sales of real estate, clarifies the definition of in substance non-financial assets, removes the exception to the financial asset derecognition model and clarifies the accounting for contributions of non-financial assets to joint ventures. The Company adopted this guidance effective January 1, 2018 using the modified transition method. Sales of real estate in which the Company loses its controlling interest in the real estate property will result in the full gain amount being
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
recognized at the time of the partial sale. During the years ended December 31, 2020, 2019 or 2018 the Company did not retain any interest in properties in which it sold.
In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting, which clarifies which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The update states that modification accounting should be used unless the fair value of the award, the vesting terms of the award and the classification of the award as either equity or liability, all do not change as a result of the modification. The Company adopted this guidance effective January 1, 2018 and it did not have an impact on the Company’s consolidated financial statements. The Company expects that any future modifications to its issued share-based awards will be accounted for using modification accounting, unless the modification meets all of the exception criteria noted above. As a result, the modification would be treated as an exchange of the original award for a new award, with any incremental fair value being treated as additional compensation cost.
In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting as an amendment and update expanding the scope of Topic 718 (“ASU 2018-07”). ASU 2018-07 specifies that Topic 718 now applies to all share-based payment transactions, even non-employee awards, in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. Under the new guidance, awards to nonemployees are measured on the grant date, rather than on the earlier of the performance commitment date or the date at which the nonemployee’s performance is complete. Also, the awards would be measured by estimating the fair value of the equity instruments to be issued, rather than the fair value of the goods or services received or the fair value of the equity instruments issued, whichever can be measured more reliably. In addition, entities may use the expected term to measure nonemployee awards or elect to use the contractual term as the expected term, on an award-by-award basis. The new guidance was effective for the Company in annual periods beginning after December 15, 2018 and interim periods within those annual periods, however early adoption is permitted. The Company early adopted ASU 2018-07 on July 1, 2018 as it relates to the award made to the Advisor pursuant to the 2018 OPP (see Note 12 — Equity-Based Compensation for additional details).Adopted as of January 1, 2019: ASU No. 2016-02 — Leases In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASC 842”), which provides guidance related to the accounting for leases, as well as the related disclosures. For lessors of real estate, leases are accounted for using an approach substantially the same as previous accounting guidance for operating leases and direct financing leases. For lessees, the standard requires the application of a dual lease classification approach, classifying leases as either operating or finance leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. Lease expense for operating leases is recognized on a straight-line basis over the term of the lease, while lease expense for finance leases is recognized based on an effective interest method over the term of the lease. Also, lessees must recognize a right-of-use asset (“ROU”) and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Further, certain transactions where at inception of the lease the buyer-lessor accounted for the transaction as a purchase of real estate and a new lease, may now be required to have symmetrical accounting to the seller-lessee if the transaction was not a qualified sale-leaseback and accounted for as a financing transaction. Upon adoption, lessors were allowed a practical expedient, which the Company has elected, by class of underlying assets to account for lease and non-lease components (such as tenant reimbursements of property operating expenses) as a single lease component as an operating lease because: (a) the non-lease components have the same timing and pattern of transfer as the associated lease component; and (b) the lease component, if accounted for separately, would be classified as an operating lease. Additionally, only incremental direct leasing costs may be capitalized under this guidance, which is consistent with the Company’s existing policies. Also, upon adoption, companies were allowed a practical expedient package, which the Company has elected, that allowed the Company: (a) to not reassess whether any expired or existing contracts entered into prior to January 1, 2019 are or contain leases; (b) to not reassess the lease classification for any expired or existing leases entered into prior to January 1, 2019 (including assessing sale-leaseback transactions); and (c) to not reassess initial direct costs for any expired or existing leases entered into prior to January 1, 2019. As a result, all of the Company’s existing leases at the time of adoption were classified as operating leases and will continue to be classified as operating leases for their duration, unless modified. Further, any existing leases for which the property is the leased to a tenant in a transaction that at inception was a sale-leaseback transaction will continue to be treated (absent a modification) as operating leases. The Company did not have any leases that would be considered financing leases as of January 1, 2019.
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
The Company assessed the impact of adoption from both a lessor and lessee perspective, which is discussed in more detail below, and adopted the guidance prospectively on January 1, 2019, using a prospective transition approach under which the Company elected to apply the guidance effective January 1, 2019 and not adjust prior comparative reporting periods (except for the Company’s presentation of lease revenue discussed below). Lessor Accounting As discussed above, the Company was not required to re-assess the classification of its leases, which are considered operating leases under ASC 842. The following is a summary of the most significant impacts to the Company of the lease accounting guidance, as lessor: •Since the Company elected the practical expedient noted above to not separate non-lease component revenue from the associated lease component, the Company has aggregated revenue from its lease components and non-lease components (tenant operating expense reimbursements) into one line. The prior period has been conformed to this new presentation.
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 •Changes in the Company’s assessment of receivables that result in bad debt expense is now required to be recorded as an adjustment to revenue, rather than a charge to bad debt expense. This new classification applies for the first quarter of 2019 and reclassification of prior period amounts is not permitted. At transition on January 1, 2019, after assessing its reserve balances at December 31, 2018 under the guidance, the Company wrote off accounts receivable of $0.1 million and straight-line rents receivable of $0.1 million as an adjustment to the opening balance of accumulated deficit, and accordingly rent for these tenants is currently recorded on a cash basis. •Indirect leasing costs in connection with new or extended tenant leases, if any, are being expensed. Under prior accounting guidance, the recognition would have been deferred. Lessee Accounting The Company is a lessee under ground leases for eight properties as of January 1, 2019. The following is a summary of the most significant impacts to the Company of the accounting guidance, as lessee: •Upon adoption of the standard, the Company recorded ROU assets and lease liabilities equal to $19.3 million for the present value of the lease payments related to its ground leases. These amounts are included in operating lease right-of-use assets and operating lease liabilities on the consolidated balance sheet. •The Company also reclassified $0.3 million related to amounts previously reported as a straight-line rent liability, $1.1 million, net related to amounts previously reported as above and below market ground lease intangibles and $0.1 million of prepaid rent to the ROU assets. For additional information and disclosures related to these operating leases, see Note 910 — Commitments and Contingencies. Other Accounting Pronouncements In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This standard simplifies subsequent measurements of goodwill by eliminating Step 2 from the goodwill impairment test. Instead, entities will perform their interim or annual goodwill impairment testing by comparing the fair value of a reporting unit with its carrying amount and recognizing an impairment charge based on the amount that the carrying amount exceeds the reporting unit’s fair value. The loss recognized should not exceed the total goodwill allocated to the reporting unit. The Company adopted early this guidance in 2019 and in connection with the reassessments, goodwill was impaired during the year ended December 31, 2019. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, to better align cash flow and fair value hedge accounting with the corresponding risk management activities. Among other things, the amendments expand which hedging strategies are eligible for hedge accounting, align the timing of recognition of hedge results with the earnings effect of the hedged item and allow companies to include the change in fair value of the derivative in the same income statement line item as the earnings effect of the hedged item. Additionally, for cash flow hedges that are highly effective, the update allows for all changes in fair value of the derivative to be recorded in other comprehensive income. The Company has adopted ASU 2017-12 on January 1, 2019, as required under the guidance, using a modified retrospective transition method and the adoption on January 1, 2019 did not have a material impact on its consolidated financial statements.
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 20202021 Adopted as of January 1, 2020: In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which changes how entities measure credit losses for financial assets carried at amortized cost. The update eliminates the requirement that a credit loss must be probable before it can be recognized and instead requires an entity to recognize the current estimate of all expected credit losses. Additionally, the amended standard requires credit losses on available-for-sale debt securities to be carried as an allowance rather than as a direct write-down of the asset. On July 25, 2018, the FASB proposed an amendment to ASU 2016-13 to clarify that operating lease receivables recorded by lessors (including unbilled straight-line rent) are explicitly excluded from the scope of ASU 2016-13. The new guidance is effective for the Company beginning on January 1, 2020. The Company adopted the new guidance on January 1, 2020 and determined it did not have a material impact on its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. The objective of ASU 2018-13 is to improve the effectiveness of disclosures in the notes to the financial statements by removing, modifying, and adding certain fair value disclosure requirements to facilitate clear communication of the information required by generally accepted accounting principles. The amended guidance is effective for the Company beginning on January 1, 2020. The Company adopted the new guidance on January 1, 2020 and determined it did not have a material impact on its consolidated financial statements. Pending AdoptionAdopted as of December 31, 2020:2021:
In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Topic 470) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Topic 815). The new standard reduces the number of accounting models for convertible debt instruments and convertible preferred stock, and amends the guidance for the derivatives scope exception for contracts in an entity's own equity. The standard also amends and makes targeted improvements to the related earnings per share guidance. The Company adopted the new standard is effective for fiscal years beginning after December 15,as required on January 1, 2021 including interim periods within those fiscal years. Earlyand its adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The standard allows for either modified or full retrospective transition methods. The Company is currently evaluating this guidance to determinedid not have a material impact on the impact it may have on its consolidatedCompany’s financial statements. Pending Adoption as of December 31, 2021: In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). Topic 848 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in Topic 848 is optional and may be elected over the period March 12, 2020 through December 31, 2022 as reference rate reform activities occur. During the year ended December 31, 2020, the Company elected to apply the hedge accounting expedients related to (i) the assertion that our hedged forecasted transactions remain probable and (ii) the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of our derivatives, which will be consistent with our past presentation. The Company will continue to evaluate the impact of the guidance and may apply other elections, as applicable, as additional changes in the market occur. Note 3 — Real Estate Investments The following table presents the allocation of assets acquired and liabilities assumed during the years ended December 31, 2021, 2020 2019 and 2018.2019. All acquisitions in 2021, 2020 2019 and 20182019 were considered asset acquisitions for accounting purposes.
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 20202021 | | | Year Ended December 31, | | Year Ended December 31, | (Dollars in thousands) | (Dollars in thousands) | | 2020 | | 2019 | | 2018 | (Dollars in thousands) | | 2021 (2) | | 2020 | | 2019 | Real estate investments, at cost: | Real estate investments, at cost: | | | | | | | Real estate investments, at cost: | | | | | | | Land | Land | | $ | 41,517 | | | $ | 76,610 | | | $ | 61,745 | | Land | | $ | 31,228 | | | $ | 41,517 | | | $ | 76,610 | | Buildings, fixtures and improvements | Buildings, fixtures and improvements | | 153,048 | | | 288,549 | | | 140,151 | | Buildings, fixtures and improvements | | 133,745 | | | 153,048 | | | 288,549 | | Total tangible assets | Total tangible assets | | 194,565 | | | 365,159 | | | 201,896 | | Total tangible assets | | 164,973 | | | 194,565 | | | 365,159 | | Acquired intangible assets and liabilities: [1] | Acquired intangible assets and liabilities: [1] | | Acquired intangible assets and liabilities: [1] | | In-place leases | In-place leases | | 27,873 | | | 66,787 | | | 39,978 | | In-place leases | | 23,358 | | | 27,873 | | | 66,787 | | Above-market lease assets | Above-market lease assets | | 1,786 | | | 1,973 | | | 1,055 | | Above-market lease assets | | — | | | 1,786 | | | 1,973 | | | Below-market ground lease asset | | Below-market ground lease asset | | — | | | — | | | 0 | Above-market ground lease liability | | Above-market ground lease liability | | — | | | — | | | 0 | Below-market lease liabilities | Below-market lease liabilities | | (3,812) | | | (4,980) | | | (1,157) | | Below-market lease liabilities | | (6,174) | | | (3,812) | | | (4,980) | | Total intangible assets, net | Total intangible assets, net | | 25,847 | | | 63,780 | | | 39,876 | | Total intangible assets, net | | 17,184 | | | 25,847 | | | 63,780 | | Consideration paid for acquired real estate investments, net of liabilities assumed | Consideration paid for acquired real estate investments, net of liabilities assumed | | $ | 220,412 | |
| $ | 428,939 | | | $ | 241,772 | | Consideration paid for acquired real estate investments, net of liabilities assumed | | $ | 182,157 | |
| $ | 220,412 | | | $ | 428,939 | | Number of properties purchased | Number of properties purchased | | 107 | | | 218 | | | 130 | | Number of properties purchased | | 69 | | | 107 | | | 218 | |
__________ [1]Weighted-average remaining amortization periods for in-place leases above-market lease assets, below-market ground lease asset, and below-market lease liabilities acquired during the year ended December 31, 20202021 were 14.8 years, 15.715.8 years and 23.519.2 years, respectively, as of each property’s respective acquisition date. [2]Includes two acquisitions of parcels adjacent to one of the Company’s multi-tenant properties. Total acquired intangible lease assets and liabilities consist of the following as of the dates presented: | | | | December 31, 2020 | | December 31, 2019 | | | December 31, 2021 | | December 31, 2020 | (In thousands) | (In thousands) | | Gross Carrying Amount | | Accumulated Amortization | | Net Carrying Amount | | Gross Carrying Amount | | Accumulated Amortization | | Net Carrying Amount | (In thousands) | | Gross Carrying Amount | | Accumulated Amortization | | Net Carrying Amount | | Gross Carrying Amount | | Accumulated Amortization | | Net Carrying Amount | Intangible assets: | Intangible assets: | | | | | | | | | | | | | Intangible assets: | | | | | | | | | | | | | In-place lease assets | In-place lease assets | | $ | 430,610 | | | $ | 176,011 | | | $ | 254,599 | | | $ | 424,509 | | | $ | 151,474 | | | $ | 273,035 | | In-place lease assets | | $ | 380,324 | | | $ | 156,488 | | | $ | 223,836 | | | $ | 430,610 | | | $ | 176,011 | | | $ | 254,599 | | Above-market lease assets | Above-market lease assets | | 23,635 | | | 9,129 | | | 14,506 | | | 23,666 | | | 8,152 | | | 15,514 | | Above-market lease assets | | 22,349 | | | 10,280 | | | 12,069 | | | 23,635 | | | 9,129 | | | 14,506 | | Total acquired intangible lease assets | Total acquired intangible lease assets | | $ | 454,245 | | | $ | 185,140 | | | $ | 269,105 | | | $ | 448,175 | | | $ | 159,626 | | | $ | 288,549 | | Total acquired intangible lease assets | | $ | 402,673 | | | $ | 166,768 | | | $ | 235,905 | | | $ | 454,245 | | | $ | 185,140 | | | $ | 269,105 | | | Intangible liabilities: | Intangible liabilities: | | | | | | Intangible liabilities: | | | | | | Below-market lease liabilities | Below-market lease liabilities | | $ | 104,758 | | | $ | 26,084 | | | $ | 78,674 | | | $ | 106,435 | | | $ | 22,394 | | | $ | 84,041 | | Below-market lease liabilities | | $ | 107,828 | | | $ | 29,755 | | | $ | 78,073 | | | $ | 104,758 | | | $ | 26,084 | | | $ | 78,674 | | Total acquired intangible lease liabilities | Total acquired intangible lease liabilities | | $ | 104,758 | | | $ | 26,084 | | | $ | 78,674 | | | $ | 106,435 | | | $ | 22,394 | | | $ | 84,041 | | Total acquired intangible lease liabilities | | $ | 107,828 | | | $ | 29,755 | | | $ | 78,073 | | | $ | 104,758 | | | $ | 26,084 | | | $ | 78,674 | |
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 The following table presents amortization expenses and adjustments to revenue from tenants and property operating expenses for intangible assets and liabilities for the years ended December 31, 2021, 2020 2019 and 2018:2019: | | | | | | | | | | | | | | | | | | | | | | | Year Ended December 31, | (In thousands) | | 2020 | | 2019 | | 2018 | In-place leases, included in depreciation and amortization | | $ | 46,496 | | | $ | 44,795 | | | $ | 54,439 | | | | | | | | | Above-market lease intangibles | | $ | (2,794) | | | $ | (3,375) | | | $ | (4,441) | | Below-market lease liabilities | | 8,994 | | | 10,796 | | | 19,989 | | Total included in revenue from tenants | | $ | 6,200 | | | $ | 7,421 | | | $ | 15,548 | | | | | | | | | Below-market ground lease asset [1] | | $ | 32 | | | $ | 32 | | | $ | 32 | | Above-market ground lease liability [1] | | (1) | | | (2) | | | (2) | | Total included in property operating expenses | | $ | 31 | | | $ | 30 | | | $ | 30 | |
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
| | | | | | | | | | | | | | | | | | | | | | | Year Ended December 31, | (In thousands) | | 2021 | | 2020 | | 2019 | In-place leases, included in depreciation and amortization | | $ | 37,592 | | | $ | 46,496 | | | $ | 44,795 | | | | | | | | | Above-market lease intangibles | | $ | (2,437) | | | $ | (2,794) | | | $ | (3,375) | | Below-market lease liabilities | | 7,122 | | | 8,994 | | | 10,796 | | Total included in revenue from tenants | | $ | 4,685 | | | $ | 6,200 | | | $ | 7,421 | | | | | | | | | Below-market ground lease asset [1] | | $ | 32 | | | $ | 32 | | | $ | 32 | | Above-market ground lease liability [1] | | — | | | (1) | | | (2) | | Total included in property operating expenses | | $ | 32 | | | $ | 31 | | | $ | 30 | |
__________ [1]Upon adoption of ASC 842 effective January 1, 2019, intangible balances related to ground leases were reclassified to be included as part of the Operating lease right-of-use assets presented on the Company’s consolidated balance sheet with no change to placement of the amortization expense of such balances included in property operating expenses on the Company’s consolidated statements of operations and comprehensive loss. See Note 2 — Summary of Significant Accounting Polices - Recently Issued Accounting Pronouncements for additional information. The following table provides the projected amortization expenses and adjustments to revenue from tenants for intangible assets and liabilities for the next five years: | | | Year Ended December 31, | | Year Ended December 31, | (In thousands) | (In thousands) | | 2021 | | 2022 | | 2023 | | 2024 | | 2025 | (In thousands) | | 2022 | | 2023 | | 2024 | | 2025 | | 2026 | In-place leases, to be included in depreciation and amortization | In-place leases, to be included in depreciation and amortization | | $ | 36,462 | | | $ | 32,665 | | | $ | 30,385 | | | $ | 27,666 | | | $ | 24,376 | | In-place leases, to be included in depreciation and amortization | | $ | 35,293 | | | $ | 32,631 | | | $ | 29,783 | | | $ | 26,539 | | | $ | 21,920 | | | Above-market lease intangibles | Above-market lease intangibles | | $ | 2,361 | | | $ | 2,003 | | | $ | 1,755 | | | $ | 1,617 | | | $ | 1,204 | | Above-market lease intangibles | | $ | 2,067 | | | $ | 1,764 | | | $ | 1,651 | | | $ | 1,287 | | | $ | 933 | | Below-market lease liabilities | Below-market lease liabilities | | (6,359) | | | (6,014) | | | (5,854) | | | (5,643) | | | (5,425) | | Below-market lease liabilities | | (6,323) | | | (6,182) | | | (5,986) | | | (5,759) | | | (5,537) | | Total to be included in revenue from tenants | Total to be included in revenue from tenants | | $ | (3,998) | | | $ | (4,011) | | | $ | (4,099) | | | $ | (4,026) | | | $ | (4,221) | | Total to be included in revenue from tenants | | $ | (4,256) | | | $ | (4,418) | | | $ | (4,335) | | | $ | (4,472) | | | $ | (4,604) | |
Deposits for Real Estate Investments As of December 31, 2021, the Company had $41.9 million in deposits for future acquisitions of real estate investments of which $40.0 million relates to the deposit on the CIM Acquisition. See Note 16 — Subsequent Events for additional information. Real Estate Held for Sale When assets are identified by management as held for sale, the Company ceases depreciation and amortization of the identified assets and estimates the sales price, net of costs to sell, of those assets. If the carrying amount of the assets classified as held for sale exceeds the estimated net sales price, the Company records an impairment charge equal to the amount by which the carrying amount of the assets exceeds the Company’s estimate of the net sales price of the assets. For additional information on impairment charges, see “Impairment Charges” section below. As of December 31, 2020, there were 0 properties classified as held for sale and, as of December 31, 2019,2021, there was 1 property, the Company’s Sanofi property, classified as held for sale. During the year ended December 31, 2020, the Company sold the 1This property that was held for sale as of December 31, 2019. The disposal of this propertydisposed on January 6, 2022 and did not represent a strategic shift. Accordingly, the operating results of this property remains classified within continuing operations for all periods presented. See Note 16—Subsequent Events for additional information. As of December 31, 2020, there were no properties classified as held for sale.
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 The following table details the major classes of assets associated with the propertiesproperty that havehas been reclassified as held for sale as of December 31, 2020 and 2019:2021: | | | | | | | | | | | (In thousands) | | | | December 31, 20192021 | | | Real estate investments held for sale, at cost: | | | | | Land | | | | $ | 56316,009 | | | | Buildings, fixtures and improvements | | 194,288 | | 750 | | Acquired intangible lease assets | | 46,980 | | | | Total real estate assets held for sale, at cost | | 257,277 | | 1,313 | | Less accumulated depreciation and amortization | | (70,064) | | (137) | | Total real estate investments held for sale, net | | 187,213 | | 1,176 | | | | | | | Assets held for sale | | | | $ | 1,176187,213 | | | |
Real Estate Sales/Exchanges During the year ended December 31, 2021, the Company sold 13 properties, 5 of which were leased to Truist Bank, for an aggregate contract price of $18.9 million, resulting in a gain of $4.8 million, which is reflected in gain on sale of real estate investments on the consolidated statement of operations and comprehensive loss for the year ended December 31, 2021. During the year ended December 31, 2020, the Company sold 6 properties leased to Truist Bank (formerly known as SunTrust Bank, “Truist Bank”), for an aggregate contract price of $13.3 million, exclusive of closing costs and related mortgage repayments. These sales resulted in aggregate gains of $4.3 million. In addition, the Company recorded a gain on sale of $2.2 million related to a non-monetary exchange of 2 properties then owned by the Company pursuant to a tenant’s exercise of its right to substitute properties under its lease. These gains are reflected in gain on sale/exchange of real estate investments on the consolidated statement of operations and comprehensive loss for the year ended December 31, 2020. During the year ended December 31, 2019, the Company closed on the sale of 25 properties, including 22 properties leased to Truist Bank, for an aggregate contract price of $131.7 million, exclusive of closing costs. These sales resulted in aggregate gains of $23.7 million, which are reflected in gain on sale of real estate investments on the consolidated statement of operations and comprehensive loss for the year ended December 31, 2019.
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
During the year ended December 31, 2018, the Company closed on the sale of 44 properties, including 31 properties leased to Truist Bank, which had lease terms that expired between December 31, 2017 and March 31, 2018, for an aggregate contract price of $161.5 million, exclusive of closing costs. These sales resulted in aggregate gains of $31.8 million, which is reflected in gain on sale of real estate investments on the consolidated statement of operations and comprehensive loss for the year ended December 31, 2018.
Real Estate Held for Use When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the property for impairment. For the Company, the most common triggering events are (i) concerns regarding the tenant (i.e., credit or expirations) in the Company’s single-tenant properties (ii) significant or sustained vacancy in the Company’s multi-tenant properties and (iii) changes to the Company’s expected holding period as a result of business decisions or non-recourse debt maturities. For all of its held for use properties, the Company had reconsidered the projected cash flows due to various performance indicators and where appropriate, and the Company evaluated the impact on its ability to recover the carrying value of such properties based on the expected cash flows over the intended holding period. See “Impairment Charges” below for discussion of specific charges taken. If a triggering event for held for use single-tenant properties is identified, the Company uses either a market approach or an income approach to estimate the future cash flows expected to be generated. The market approach involves evaluating comparable sales of properties in the same geographic region as the held for use properties in order to determine an estimated sale price. The Company makes certain assumptions including, among others, that the properties in the comparable sales used in the analysis share similar characteristics to the held for use properties, and that market and economic conditions at the time of any potential sales of these properties, such as discount rates; demand for space; competition for tenants; changes in market rental rates; and costs to operate the property, would be similar to those in the comparable sales analyzed. Under the income approach, the Company evaluates the impact on its ability to recover the carrying value of such properties based on the expected cash flows over its intended holding period. The Company makes certain assumptions in this approach including, among others, the market and economic conditions, expected cash flow projections, intended holding periods and assessments of terminal values.
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 Where more than one possible scenario exists, the Company uses a probability weighted approach. As these factors are difficult to predict and are subject to future events that may alter management’s assumptions, the future cash flows estimated by management in its impairment analysis may not be achieved, and actual losses or additional impairment may be realized in the future. During the year ended December 31, 2020, the Company owned 6 held for use properties for which the Company reconsidered their projected cash flows. One of these was a multi-tenant property which was evaluated due to a significant sustained vacancy rate as well as a change in the Company’s expected holding period. Two were single-tenant properties under a definitive purchase and sale agreement (“PSA”) which did not meet the criteria for held for sale treatment as of December 31, 2020. In this instance, the Company used the proportionate contract purchase price from the PSApurchase and sales agreement to estimate the future cash flows expected to be generated in the sale scenario. The Company made certain assumptions in this approach as well, mainly that the sale of these properties would close at the terms specified in the non-binding letter of intent or PSA.purchase and sales agreement. Three were single-tenant properties which were vacant. DuringImpairment Charges
The Company recorded impairment charges of $33.3 million for the year ended December 31, 2019, the Company owned 1 held for use2021 related to one single-tenant net lease property formerly leased to United Healthcare and eight vacant single-tenant properties formerly leased to Truist Bank which had lease termslocated across various states. The United Healthcare property has been vacant since June 30, 2021 when the tenant did not renew their lease. The Company evaluated local market conditions and various alternative plans for the property. Due to weak local market conditions, expected sustained vacancy of this property as either a single-tenant or multi-tenant property and an increased probability of sale, the Company determined that expired on December 31, 2017the property was impaired. The Company recorded an impairment of $26.9 million to adjust the property’s carrying value to its estimated fair value. Of the Truist properties, seven were impaired to adjust the properties to their fair values as determined by their respective purchase and sales agreements or non-binding letters of intents, and one property was vacant. Impairment Chargesimpaired to adjust carrying value to its fair value as determined by the income approach as described above.
The Company recorded total impairment charges of $12.9 million for the year ended December 31, 2020, $11.5 million of which related to one of its multi-tenant held-for-use properties which was recorded to adjust the property to its fair value as determined by the income approach described above, and $1.4 million of which related to three single-tenant properties, two of which were impaired to adjust the property to their fair value as determined by the income approach described above and one of which was impaired to adjust the property to the contract price of its PSA .purchase and sales agreement. The Company recorded total impairment charges of $0.8 million for the year ended December 31, 2019. This amount is comprised of impairment charges of $0.1 million, which were recorded upon reclassification of properties to assets held for sale to adjust the properties to their fair value less estimated cost of disposal and impairment charges of $0.7 million, which was recorded on one held for use property leased to Truist Bank during the year ended December 31, 2019.
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
The Company recorded total impairment charges of $21.1 million for the year ended December 31, 2018. This amount is comprised of impairment charges of $11.0 million, which were recorded upon reclassification of properties to assets held for sale to adjust the properties to their fair value less estimated cost of disposal and impairment charges of $10.1 million were recorded on 12 (including impairments of $1.7 million on 9 properties leased to Truist Bank) the Company’s held for use properties. The majority of the impairment charges on the held for use properties related to 2 multi-tenant properties.
Tenant Improvements Write-Off During the second quarter of 2020, a tenant in the health club business at one of the Company’s multi-tenant properties declared bankruptcy and vacated its space while in the process of improving the space. The Company had already reimbursed $0.8 million to the tenant for these improvements. As a result of the tenant’s bankruptcy, improvements being made by the tenant were not paid for and the Company additionally accrued approximately $2.3 million to pay liens on the property by the tenant’s contractors. The Company determined that certain of the improvements no longer had any value in connection with any foreseeable replacement tenant and wrote off approximately $3.1 million which is recorded in depreciation and amortization expense in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2020.
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 Note 4 — Mortgage Notes Payable, Net The Company’s mortgage notes payable, net as of December 31, 20202021 and 20192020 consisted of the following: | | | Outstanding Loan Amount as of | | Effective Interest Rate as of | | | Outstanding Loan Amount as of | | Effective Interest Rate as of | | | | December 31, | | December 31, | | | December 31, | | December 31, | | Portfolio | Portfolio | | Encumbered Properties | | 2020 | | 2019 | | 2020 | | Interest Rate | | Maturity | | Anticipated Repayment | Portfolio | | Encumbered Properties | | 2021 | | 2020 | | 2021 | | Interest Rate | | Maturity | | Anticipated Repayment | | | | | | (In thousands) | | (In thousands) | | | | | | | | | | | | | (In thousands) | | (In thousands) | | | | | | | | | Class A-1 Net Lease Mortgage Notes | | 95 | | $ | 119,084 | | | $ | 120,294 | | | 3.83 | % | | Fixed | | May 2049 | | May 2026 | | Class A-2 Net Lease Mortgage Notes | | 106 | | 121,000 | | | 121,000 | | | 4.52 | % | | Fixed | | May 2049 | | May 2029 | | 2019 Class A-1 Net Lease Mortgage Notes | | 2019 Class A-1 Net Lease Mortgage Notes | | 102 | | $ | 118,231 | | | $ | 119,084 | | | 3.83 | % | | Fixed | | May 2049 | | May 2026 | 2019 Class A-2 Net Lease Mortgage Notes | | 2019 Class A-2 Net Lease Mortgage Notes | | 108 | | 120,644 | | | 121,000 | | | 4.52 | % | | Fixed | | May 2049 | | May 2029 | 2021 Class A-1 Net-Lease Mortgage Notes | | 2021 Class A-1 Net-Lease Mortgage Notes | | 36 | | 54,487 | | | — | | | 2.24 | % | | Fixed | | May 2051 | | May 2028 | 2021 Class A-2 Net-Lease Mortgage Notes | | 2021 Class A-2 Net-Lease Mortgage Notes | | 47 | | 94,113 | | | — | | | 2.83 | % | | Fixed | | May 2051 | | May 2031 | 2021 Class A-3 Net-Lease Mortgage Notes | | 2021 Class A-3 Net-Lease Mortgage Notes | | 33 | | 35,000 | | | — | | | 3.07 | % | | Fixed | | May 2051 | | May 2028 | 2021 Class A-4 Net-Lease Mortgage Notes | | 2021 Class A-4 Net-Lease Mortgage Notes | | 35 | | 55,000 | | | — | | | 3.65 | % | | Fixed | | May 2051 | | May 2031 | Total Net Lease Mortgage Notes | Total Net Lease Mortgage Notes | | 201 | | 240,084 | | | 241,294 | | | Total Net Lease Mortgage Notes | | 361 | | 477,475 | | | 240,084 | | | | SAAB Sensis I | SAAB Sensis I | | 1 | | $ | 6,217 | | | $ | 6,660 | | | 5.93 | % | | Fixed | | Apr. 2025 | | Apr. 2025 | SAAB Sensis I | | — | | $ | — | | (6) | $ | 6,217 | | | — | % | | Fixed | | Apr. 2025 | | Apr. 2025 | Truist Bank II | Truist Bank II | | 15 | | 9,560 | | | 10,860 | | | 5.50 | % | | Fixed | | Jul. 2031 | | Jul. 2021 | Truist Bank II | | — | | — | | (5) | 9,560 | | | — | % | | Fixed | | Jul. 2031 | | Jul. 2021 | Truist Bank III | Truist Bank III | | 76 | | 60,952 | | | 62,228 | | | 5.50 | % | | Fixed | | Jul. 2031 | | Jul. 2021 | Truist Bank III | | — | | — | | (5) | 60,952 | | | — | % | | Fixed | | Jul. 2031 | | Jul. 2021 | Truist Bank IV | Truist Bank IV | | 10 | | 3,792 | | | 6,626 | | | 5.50 | % | | Fixed | | Jul. 2031 | | Jul. 2021 | Truist Bank IV | | — | | — | | (5) | 3,792 | | | — | % | | Fixed | | Jul. 2031 | | Jul. 2021 | Sanofi US I [8] | | 1 | | 125,000 | | | 125,000 | | | 3.26 | % | | Fixed [9] | | Sep. 2025 | | Sep. 2025 | | Stop & Shop [1] | | 4 | | 45,000 | | | 45,000 | | | 3.49 | % | | Fixed | | Jan. 2030 | | Jan. 2030 | | Mortgage Loan I [2] [7] | | 0 | | 0 | | | 497,150 | | | 0 | % | | n/a | | n/a | | n/a | | Sanofi US I | | Sanofi US I | | — | | — | | (7) | 125,000 | | | — | % | | Fixed (4) | | Sep. 2025 | | Sep. 2025 | Stop & Shop | | Stop & Shop | | 4 | | 45,000 | | | 45,000 | | | 3.50 | % | | Fixed | | Jan. 2030 | | Jan. 2030 | Column Financial Mortgage Notes | Column Financial Mortgage Notes | | 368 | | 715,000 | | | 0 | | | 3.79 | % | | Fixed | | Aug. 2025 | | Aug. 2025 | Column Financial Mortgage Notes | | 366 | | 715,000 | | (8) | 715,000 | | | 3.79 | % | | Fixed | | Aug. 2025 | | Aug. 2025 | Shops at Shelby Crossing | Shops at Shelby Crossing | | 1 | | 21,677 | | | 22,139 | | | 4.97 | % | | Fixed | | Mar. 2024 | | Mar. 2024 | Shops at Shelby Crossing | | — | | — | | (6) | 21,677 | | | — | % | | Fixed | | Mar. 2024 | | Mar. 2024 | Patton Creek [10] | | 1 | | 34,000 | | | 39,147 | | | 4.82 | % | | Variable | | Dec. 2021 | | Dec. 2021 | | Patton Creek | | Patton Creek | | — | | — | | (5) | 34,000 | | | — | % | | Variable | | Dec. 2021 | | Dec. 2021 | Bob Evans I | Bob Evans I | | 23 | | 23,950 | | | 23,950 | | | 4.71 | % | | Fixed | | Sep. 2037 | | Sep. 2027 | Bob Evans I | | 22 | | 22,842 | | | 23,950 | | | 4.71 | % | | Fixed | | Sep. 2037 | | Sep. 2027 | Mortgage Loan II | Mortgage Loan II | | 12 | | 210,000 | | | 210,000 | | | 4.25 | % | | Fixed | | Jan. 2028 | | Jan. 2028 | Mortgage Loan II | | 12 | | 210,000 | | | 210,000 | | | 4.25 | % | | Fixed | | Jan. 2028 | | Jan. 2028 | Mortgage Loan III | Mortgage Loan III | | 22 | | 33,400 | | | 33,400 | | | 4.12 | % | | Fixed | | Jan. 2028 | | Jan. 2028 | Mortgage Loan III | | 22 | | 33,400 | | | 33,400 | | | 4.12 | % | | Fixed | | Jan. 2028 | | Jan. 2028 | | Gross mortgage notes payable | Gross mortgage notes payable | | 735 | | 1,528,632 | | | 1,323,454 | | | 4.02 | % | (4) | | Gross mortgage notes payable | | 787 | | 1,503,717 | | | 1,528,632 | | | 3.79 | % | (1) | | Deferred financing costs, net of accumulated amortization [5] | | | | (38,760) | | | (15,564) | | | | | | Mortgage premiums and discounts, net [6] | | 926 | | | 3,053 | | | | Deferred financing costs, net of accumulated amortization (2) | | Deferred financing costs, net of accumulated amortization (2) | | | | (38,672) | | | (38,760) | | | Mortgage premiums and discounts, net (3) | | Mortgage premiums and discounts, net (3) | | (115) | | | 926 | | | Mortgage notes payable, net | Mortgage notes payable, net | | $ | 1,490,798 | | | $ | 1,310,943 | | | Mortgage notes payable, net | | $ | 1,464,930 | | | $ | 1,490,798 | | |
__________ [1]The prior Stop & Shop loan was refinanced on December 19, 2019 with a new loan (see Stop & Shop Loan section below). In connection with the prior loan, the Company paid prepayment penalties of approximately $2.0 million, which are included in the acquisition, transaction and other costs on the consolidated statement of operations and comprehensive (loss) income. [2]In connection with repayment a portion of this mortgage note, the Company paid prepayment penalties of $1.6 million in the second quarter of 2019, which are included in the acquisition, transaction and other costs on the consolidated statement of operations and comprehensive (loss) income.
[3]This loan was repaid in connection with the issuance of the Net Lease Mortgage Notes (see definition below) in the second quarter of 2019 and all 39 properties, which were previously encumbered under Mortgage Loan IV were added to the collateral pool for the Net Lease Mortgage Notes. As a result of repaying the loan, remaining unamortized deferred financing costs of $0.8 million were written off, which is included in interest expense in the consolidated statement of operations. Also, the “pay-fixed” interest rate swap agreements related to Mortgage Loan IV were terminated upon repayment (see Note 7 — Derivatives and Hedging Activities), which is included in interest expense in the consolidated statement of operations.
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
[4]Calculated on a weighted-average basis for all mortgages outstanding as of December 31, 2020.2021.
[5]2]Deferred financing costs represent commitment fees, legal fees and other costs associated with obtaining financing. These costs are amortized to interest expense over the terms of the respective financing agreements using the effective interest method. Unamortized deferred financing costs are generally expensed when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined that it is probable the financing will not close. [6]3]Mortgage premiums or discounts are amortized as an increase or reduction to interest expense over the remaining terms of the respective mortgages. [7]On July 24, 2020, this mortgage loan was repaid prior to its maturity with a portion of the proceeds from a $715 million loan secured by 368 properties (see “Loan Agreement With Column Financial” section below for additional information). [8]On September 4, 2020 this mortgage loan was refinanced (see “New Sanofi Loan Agreement” section below).
[9]4]Mortgage iswas fixed by an interest rate swap agreement (seewhich fixed the effective interest rate at 3.27%. In October 2021, in connection with the repayment of the mortgage, this interest rate swap agreement was terminated. See “New Sanofi Loan Agreement” Note 8section below). — Derivatives and Hedging Activities for additional information.[10]5]On December 1, 2020,Mortgage was fully repaid with proceeds from the 2021 Net Lease Mortgage Notes discussed below. [6]Mortgages were fully repaid with proceeds from borrowings under the Credit Facility during the third quarter of 2021. [7]In October 2021, this mortgage loan was refinanced (seefully repaid with proceeds from the issuance of the Senior Notes. See “New Patton Creek Loan Agreement” Note 6section below). — Senior Notes, Net for additional information. [8]In January 2022, this mortgage was repaid by $7.9 million. See Note 16 — Subsequent Events for additional information. As of December 31, 20202021 and 2019,2020, the Company had pledged $2.8$2.4 billion and $2.5$2.8 billion, respectively, in real estate investments, at cost as collateral for its mortgage notes payable. This real estate is not available to satisfy other debts and obligations unless first satisfying the mortgage notes payable on the properties. In addition, as of December 31, 2020, $1.12021, $1.3 billion in real estate investments were included in the unencumbered asset pool comprising the borrowing base under the Credit Facility (see Note 5 — Credit Facility for definition). Therefore, this real estate is only available to serve as collateral or satisfy other debts and obligations if it is first removed from the borrowing base under the Credit Facility.
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 The Company periodically refinances its mortgages and has incurred prepayment penalties when it pays off its mortgages prior to their maturities. The Company incurred prepayment penalties of $4.0 million, $0.8 million and $4.5 million for the years ended December 31, 2021, 2020 and 2019, respectively. The following table summarizes the scheduled aggregate principal payments on mortgage notes payable and the Company’s other debt based on anticipated repayment dates for the five years subsequent to December 31, 20202021 and thereafter: | | | | | | | | | | Future Principal Payments | (In thousands) | (In thousands) | | Future Principal Payments | (In thousands) | | Mortgage Notes | | Credit Facility [1] | | Senior Notes [2] | | Total | 2021 | | $ | 110,471 | | | 2022 | 2022 | | 2,311 | | 2022 | | $ | 3,712 | | | $ | — | | | $ | — | | | $ | 3,712 | | 2023 | 2023 | | 2,643 | | 2023 | | 2,629 | | | — | | | — | | | 2,629 | | 2024 | 2024 | | 22,287 | | 2024 | | 1,646 | | | — | | | — | | | 1,646 | | 2025 | 2025 | | 845,771 | | 2025 | | 716,670 | | | — | | | — | | | 716,670 | | 2026 | | 2026 | | 116,930 | | | — | | | — | | | 116,930 | | Thereafter | Thereafter | | 545,149 | | Thereafter | | 662,130 | | | — | | | 500,000 | | | 1,162,130 | | | | | $ | 1,528,632 | | | | $ | 1,503,717 | | | $ | — | | | $ | 500,000 | | | $ | 2,003,717 | |
__________[1]The Credit Facility matures on April 1, 2026, subject to the Company’s right, subject to customary conditions, to extend the maturity date by up to 2 additional six-month terms. See Note 5 — Credit Facility for additional information. [2]The Senior Notes will mature on September 30, 2028. See Note 6 — Senior Notes for additional information. The Company’s mortgage notes payable agreements require compliance with certain property-level financial covenants including debt service coverage ratios. As of December 31, 2020,2021, the Company was in compliance with financial covenants under its mortgage notes payable agreements. New Net Lease Mortgage Notes
On June 3, 2021, certain subsidiaries of the Company (the “2021 Issuers”) completed the issuance of $318.0 million aggregate principal amount of Net Lease Mortgage Notes (the “2021 Net Lease Mortgage Notes”) in a private placement exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”). The 2021 Net Lease Mortgage Notes are cross-collateralized with the $242.0 million in aggregate principal amount of Net Lease Mortgage Notes issued in 2019 (the “2019 Net Lease Mortgage Notes” and, together with the 2021 Net Lease Mortgage Notes, the “Notes”) issued by certain other subsidiaries of the Company (the “2019 Issuers” and, together with the 2021 Issuers, the “Issuers”). The Notes were issued using a master trust structure, which enables additional series of notes to be issued upon the contribution of additional properties to the collateral pool without the need to structure a new securitization transaction. Any new notes that are so issued will be cross-collateralized with the Notes. The 2021 Net Lease Mortgage Notes were issued in six classes, Class A-1 (AAA), Class A-2 (AAA), Class A-3 (A), Class A-4 (A), Class B-1 (BBB) and Class B-2 (BBB). The Class A-1 (AAA) Notes were initially rated AAA (sf) by Standard & Poors and are comprised of $55.0 million initial principal amount of 2021 Net Lease Mortgage Notes with an anticipated repayment date in May 2028 and an interest rate of 2.21%. The Class A-2 (AAA) Notes were initially rated AAA (sf) by Standard & Poors and are comprised of $95.0 million initial principal amount of 2021 Net Lease Mortgage Notes with an anticipated repayment date in May 2031 and an interest rate of 2.79%. The Class A-3 (A) Notes were initially rated A (sf) by Standard & Poors and are comprised of $35.0 million initial principal amount of 2021 Net Lease Mortgage Notes with an anticipated repayment date in May 2028 and an interest rate of 3.03%. The Class A-4 (A) Notes were initially rated A (sf) by Standard & Poors and are comprised of $55.0 million initial principal amount of 2021 Net Lease Mortgage Notes with an anticipated repayment date in May 2031 and an interest rate of 3.60%. The Class B Notes are currently retained by the OP and are eliminated upon consolidation, and therefore not presented in the Company’s consolidated financial statements/ The Class B Notes may be sold to unaffiliated third parties in the future. The Class B-1 (BBB) Notes were initially rated BBB (sf) by Standard & Poors and are comprised of $30.0 million initial principal amount of 2021 Net Lease Mortgage Notes with an anticipated repayment date in May 2028 and an interest rate of 4.02%. The Class B-2 (BBB) Notes were initially rated BBB (sf) by Standard & Poors and are comprised of $48.0 million initial principal amount of 2021 Net Lease Mortgage Notes with an anticipated repayment date in May 2031 and an interest rate of 4.58%. The 2021 Net Lease Mortgage Notes have a rated final payment date in May 2051. The 2019 Net Lease Mortgage Notes were issued in two classes, Class A-1 (AAA) and Class A-2 (A). The Class A-1 (AAA) Notes are rated AAA (sf) by Standard & Poors and are comprised of $121.0 million initial principal amount of 2019 Net
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 Lease Mortgage Notes with an anticipated repayment date in May 2026 and an interest rate of 3.78%. The Class A-2 (a) Notes are rated A (sf) by Standard & Poors and are comprised of $121.0 million initial principal amount of 2019 Net Lease Mortgage Notes with an anticipated repayment date in May 2029 with an interest rate of 4.46%. The 2019 Net Lease Mortgage Notes have a rated final payment date in May 2049. The Notes may be redeemed at any time prior to their anticipated repayment date subject to payment of a make-whole premium. The 2021 Net Lease Mortgage Notes (excluding the Class B Notes) are collectively amortizing at a rate of approximately 0.86% per annum. The 2019 Net Lease Mortgage Notes are collectively amortizing at a rate of approximately 0.5% per annum. If any class of Notes is not paid in full at its respective anticipated repayment date, additional interest will begin to accrue on those Notes. The Issuers may release or exchange properties from the collateral pool securing the Notes subject to various terms and conditions, including paying any applicable make-whole premium and limiting the total value of properties released or exchanged to not more than 35% of the aggregate collateral value. These conditions, including the make-whole premium, do not apply under certain circumstances, including a prepayment in an aggregate amount of up to 35% of the initial principal balance if the prepayment is funded with proceeds from qualifying deleveraging events, such as a firm commitment underwritten registered public equity offering by the Company that generates at least $75.0 million in net proceeds. Patton Creek Loan Agreement On December 1, 2020, the Company, through a wholly owned subsidiary, refinanced the mortgage loan with Column Financial. The loan is secured by the Company’s Patton Creek multi-tenant property in Alabama. In connection with the refinancing, the Company paid $7.3 million in cash on hand to reduce the principal balance outstanding to $34.0 million and paid for closing fees of $2.8 million. The loan bears interest at a floating interest rate of one-month LIBOR plus 4.25%. The loan is interest-only with the principal due at maturity on December 6, 2021. Beginning on this initial maturity date,This mortgage was repaid in full with proceeds from the floating interest rate will increase to one-month LIBOR plus 5.25% if the Company exercises its option to extend the loan past its initial maturity to December 6, 2022. 2021 Net Lease Mortgage Notes discussed above. In conjunction with this refinancing, the Company entered into an interest cap agreement for a notional amount of $34.0 million. The Company has elected to treat the interest rate cap as a non-designated derivative instrument, and the changes in the fair value of the cap will be accounted for as a mark-to-market adjustment in the consolidated statement of operations and comprehensive loss in each reporting period (see Note 78 — Derivatives and Hedging Activities for more information). New Sanofi Loan Agreement
On September 4, 2020, the Company, through a wholly owned subsidiary, borrowed $125.0 million from a syndicate of regional banks led by BOK Financial. The syndicated balance sheet loan is secured by three of the Company’s single-tenant buildings located in Bridgewater, New Jersey that serve as the U.S. headquarters for Sanofi US Services Inc. At closing, all net proceeds from the loan and approximately $2.6 million in cash on hand were used to repay the previously outstanding mortgage indebtedness encumbering the property, which included a $0.5 million defeasance fee reflected in acquisition and transaction costs on the consolidated statement of operations and comprehensive loss for the year ended December 31, 2020. The loan bears interest at a floating interest rate of one-month LIBOR plus 2.9%, with the effective interest rate fixed at 3.27% by a swap agreement which was effective on October 13, 2020. The loan is interest-only with the principal due at maturity on September 4, 2025. The Company maycould prepay the loan in whole or in part at any time subject to applicable prepayment penalties.
This mortgage was repaid in October 2021 and the related interest rate swap agreement was terminated, see Table of ContentsNote 8— Derivatives and Hedging Activities for more information. AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
In conjunction with this refinance, the Company was approached by the former owners of the Sanofi property regarding the release of a pre-acquisition escrow account of approximately $1.7 million associated with tenant improvements at the property which would not otherwise have been released until 2027. In exchange for permitting the early release of the escrow, the Company received approximately half of the balance, or $0.8 million, which is reflected in “Other Income” on our consolidated statement of comprehensive income. The Sanofi property was acquired in 2014.2014 and sold on January 6, 2022, see Note 16 — Subsequent Events for additional information.Loan Agreement with Column Financial On July 24, 2020, the Company, through wholly owned subsidiaries, entered into a loan agreement with Column Financial, Inc. for a $715.0 million loan. The loan is secured by, among other things, a first mortgage on 368366 single-tenant properties located in 41 states and the District of Columbia, totaling approximately 7.17.0 million square feet. The loan agreement permits the lender to either securitize the loan or any portion thereof or bifurcate the loan into a senior mortgage loan and a subordinate mezzanine loan.
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 The loan bears interest at a fixed rate of 3.743% and matures on August 6, 2025. The loan requires payments of interest only, with the principal balance due on the maturity date. The loan may be prepaid at any time, in whole or in part, subject to payment of a yield maintenance premium for any prepayments made prior to April 6, 2025. The loan agreement also contains provisions pursuant to which, subject to certain conditions and limitations, mortgaged properties may be released or replaced and provisions related to circumstances under which all rent and other revenue received from the mortgaged properties will be directly deposited into a bank account controlled by the lender and used to pay obligations under the loan. At closing, of the approximately $697.1 million of net proceeds from the loan after fees and expenses, $696.2 million was used to repay $499.0 million for a mortgage loan originally due September 2020 bearing an interest rate of 4.36% per annum, and the remainder was used to repay outstanding amounts under the Credit Facility. Of the 368 single-tenant properties securing the new loan, 223 were previously held as collateral under the mortgage loan originally due September 2020, and all but 1 of the remaining properties were previously part of the borrowing base under the Credit Facility.
The loan is nonrecourse to the borrowers, except for certain enumerated recourse liabilities of the borrowers under the loan agreement, which the OP has guaranteed pursuant to a limited recourse guaranty in favor of the lender. The guaranty also requires the OP to maintain a minimum net worth of $1.0 billion. In addition, the OP and the borrowers have indemnified the lender, pursuant to an environmental indemnity agreement, against certain environmental liabilities. Stop & Shop Loan
On December 18, 2019, subsidiaries of the Company entered into a loan agreement (“Stop & Shop Loan”) with Morgan Stanley Bank, N.A., for a principal amount of $45.0 million at a fixed interest rate of 3.445% per annum. The Stop & Shop Loan requires monthly interest-only payments, with the principal balance due on the maturity date in January 2030 and is secured by mortgage interests in 4 of the Company’s properties, 3 of which are located in the state of Massachusetts, totaling approximately 0.3 million square feet. The Stop & Shop Loan permits the lenderSubsequent to securitize the loan or any portion thereof.
Net Lease Mortgage Notes
On May 30, 2019, subsidiaries of the Company completed the issuance of $242.0 million aggregate principal amount of Net Lease Mortgage Notes (the “Net Lease Mortgage Notes”), in a private placement exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”). The Net Lease Mortgage Notes have been issued using a master trust structure, which enables additional series of notes to be issued upon the contribution of additional properties to the collateral pool without the need to structure a new securitization transaction. Any new notes that are so issued will be cross collateralized with the current Net Lease Mortgage Notes.
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020 The Net Lease Mortgage Notes were issued in two classes, Class A-1 (the “Class A-1 Net Lease Mortgage Notes”) and Class A-2 (the “Class A-2 Net Lease Mortgage Notes”). The Class A-1 Net Lease Mortgage Notes are rated AAA (sf) by Standard & Poor’s and had an initial principal amount of $121.0 million with an anticipated repayment date in May 2026 and an interest rate of 3.78% per annum. The Class A-2 Net Lease Mortgage Notes are rated A (sf) by Standard & Poor’s and had an initial principal amount of $121.0 million with an anticipated repayment date in May 2029 and an interest rate of 4.46% per annum. The Class A-1 Net Lease Mortgage Notes require interest and principal amortization payments until the applicable anticipated repayment date. The Class A-2 Net Lease Mortgage Notes are interest-only until June 2020, when principal amortization payments are required until the applicable anticipated repayment date. The Net Lease Mortgage Notes are collectively currently amortizing at a rate of approximately 0.5% per annum. The Net Lease Mortgage Notes may be redeemed at any time prior to their anticipated repayment date subject to payment of a make-whole premium. If any class of Net Lease Mortgage Notes is not paid in full at its respective anticipated repayment date, additional interest will begin to accrue on those Net Lease Mortgage Notes. The Net Lease Mortgage Notes have a rated final payment date in May 2049.
As of December 31, 2020, the collateral pool for the Net Lease Mortgage Notes was comprised of 201 of the Company’s double- and triple-net leased single-tenant properties that had been transferred to the subsidiaries of the Company that issued the Net Lease Mortgage Notes, together with the related leases and certain other rights and interests. The net proceeds from the sale of the Net Lease Mortgage Notes were used to repay $204.9 million in indebtedness related to 192 of the properties then in the collateral pool securing the Net Lease Mortgage Notes, and approximately $37.1 million of the remaining net proceeds were available to the Company for general corporate purposes, including to fund acquisitions. At closing,2021, the Company repaid $7.9 million of amounts outstanding under this mortgage notesafter disposing of $29.9 million previously secured by 39 individualtwo properties and repaid $175.0 million in outstanding borrowingsformerly encumbered under the Credit Facility. The Company removed 153 of its properties from the borrowing base under the Credit Facility to serve as part of the collateral poolmortgage in December 2021. See Note 16 — Subsequent Events for the Net Lease Mortgage Notes in connection with this repayment and added 10 recently acquired properties to the collateral pool securing the Net Lease Mortgage Notes.The subsidiaries of the Company may release or exchange properties from the collateral pool securing the Net Lease Mortgage Notes subject to various terms and conditions, including paying any applicable make-whole premium and limiting the total value of properties released or exchanged to not more than 35% of the aggregate collateral value. These conditions, including the make-whole premium, do not apply under certain circumstances, including a prepayment in an aggregate amount of up to 35% of the initial principal balance if the prepayment is funded with proceeds from qualifying deleveraging events, such as a firm commitment underwritten registered public equity offering by the Company that generates at least $75.0 million in net proceeds, that occur following June 2021.
The Net Lease Mortgage Notes have 2 debt service coverage ratio tests. If the monthly debt service coverage ratio falls below 1.3x and is not cured, cash flow that would be available to pay certain subordinated expenses or be released to the Company will instead be deposited into a reserve account. If the three-month average debt service coverage ratio falls below 1.2x and is not cured, all remaining cash flow after payments of interest on the Net Lease Mortgage Notes will be applied to pay principal on the Net Lease Mortgage Notes (first on the Class A-1 Net Lease Mortgage Notes and then on the Class A-2 Net Lease Mortgage Notes).additional information.
Note 5 — Credit Facility On April 26, 2018, the Company repaid its prior revolving unsecured corporate credit facility in full and entered into a credit facility (the “Credit Facility”) with BMO Harris Bank, N.A. (“BMO Bank”) as administrative agent, Citizens Bank, N.A. and SunTrust Robinson Humphrey, Inc., as joint lead arrangers, and the other lenders from time to time party thereto. In September 2018,On October 1, 2021, the lenders under the Credit Facility increased the aggregate total commitments under the Credit Facility by $125.0 million, bringing total commitments to $540.0 million. On July 24, 2020, the Company through the OP as the borrower thereunder, entered into an amendment toand restatement of the Credit Facility with BMO Harris Bank N.A., as administrative agent, and the other lenders partylender parties thereto. The amendment became effective asAlso, upon the closing of April 1, 2020 and is designed to providethe Senior Notes (as defined in Note 6 — Senior Notes, Net) on October 7, 2021, the Company with additional flexibility during the period from April 1, 2020 through March 31, 2021 (the “Adjustment Period”) to continue addressing the adverse impactsused a portion of the COVID-19 pandemic. The amendment revises specific provisions inproceeds to repay all outstanding borrowings under the Credit Facility governing: (i)at the payment of dividends; (ii) leverage coverage; (iii) borrowing availability; (iv) fixed charge coverage; (v)time. The aggregate total commitments after the interest rate;amendment and (vi) acquisitions. These revisions, which are generally incorporated into the description below, are generally only effective during the Adjustment Period, after which the previously effective termsrestatement of the Credit Facility will be reinstated. were increased from $540.0 million to $815.0 million, including a $50.0 million sublimit for letters of credit and a $55.0 million sublimit for swingline loans. The Credit Facility includes an uncommitted “accordion feature” whereby, uponpermitting the request of the OP, but at the sole discretion of the participating lenders,Company, subject to certain exceptions, to increase the commitments under the Credit Facility may be increased by up to an additional $500.0$435.0 million, subject to obtaining commitments from new lenders or additional commitments from participating lenders and
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
certain customary conditions. AsThe Credit Facility matures on April 1, 2026, subject to the Company’s right, subject to customary conditions, to extend the maturity date by up to 2 additional six-month terms. Borrowings under the Credit Facility may be prepaid at any time, in whole or in part, without premium or penalty, subject to customary LIBOR breakage costs. The Credit Facility is supported by a pool of December 31, 2020,eligible unencumbered properties that are owned by the subsidiaries of the OP that serve as Guarantors. The Company may add or remove properties to or from this pool so long as at any time there are at least 15 eligible unencumbered properties with a value of at least $300.0 million, among other things. The amount available for future borrowings under the Credit Facility depends on the amount outstanding thereunder relative to the aggregate commitments; however, the amount the Company had increased its commitments through this accordion featuremay borrow is limited by $125.0 million, leaving $375.0 million of potential increase remaining.the financial maintenance covenants described below. The amount available for future borrowings under the Credit Facility is based on the lesser of (i) 60% of the value of the pool of eligible unencumbered real estate assets comprising the borrowing base, and (ii) a maximum amount of total unsecured indebtedness that could be incurred while maintaining a minimum unsecured interest coverage ratio with respect to the borrowing base, in each case, as of the determination date. During the Adjustment Period (a) the value of all eligible unencumbered real estate assets comprising the borrowing base purchased through June 30, 2020 will generally be reduced by 10%, and (b) the minimum unsecured interest coverage ratio required to be maintained by the eligible unencumbered real estate assets comprising the borrowing base was decreased during the fiscal quarter ended June 30, 2020 and will be increased during the other fiscal quarters of the Adjustment Period. As of December 31, 2020,2021, the Company had a total borrowing capacity under the Credit Facility of $406.9$214.3 million based on the value of the borrowing base under the Credit Facility, andwhich included the Sanofi property as of this amount, $280.9 millionDecember 31, 2021 which was sold on January 6, 2022. No amounts were outstanding under the Credit Facility as of December 31, 20202021 and $126.0$214.3 million remained available for future borrowings. Subsequent to December 31, 2021 we borrowed $170.0 million to fund a portion of the first tranche of the CIM Acquisition, see Note 16 — Subsequent Events for additional information. DuringThe Credit Facility currently requires payments of interest only prior to maturity. Following the Adjustment Period,amendment and restatement of the Credit Facility, borrowings will bear interest at either (i) all properties acquired with proceedsthe Base Rate (as defined in the Credit Facility) plus an applicable spread ranging from 0.45% to 1.05%, or (ii) LIBOR plus an applicable spread ranging from 1.45% to 2.05%, in each case depending on the Company’s consolidated leverage ratio. These spreads reflect a reduction from the previously applicable spreads. In addition, pursuant to the amendment to the Credit Facility, (i) if the Company or the OP achieves an
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 investment grade credit rating, the OP can elect for the spread to be based on the credit rating of the Company or the OP, and (ii) the prior “floor” on LIBOR of 0.25% was removed. Prior to the amendment and restatement, borrowings under the Credit Facility must be added to the borrowing base, and (ii) the Company is prohibited from acquiring any multi-tenant properties and from making certain other investments. Following the amendment in July 2020, the Company is also restricted from using proceeds from borrowings under the Credit Facility to accumulate or maintain cash or cash equivalents in excess of amounts necessary to meet current working capital requirements, as determined in good faith by the OP. In addition, in accordance with the Credit Facility, in order for the Company to make payments required to fund certain share repurchases, the Company would be required to satisfy a maximum leverage ratio after giving effect to the payments and also have a combination of cash, cash equivalents and amounts available for future borrowings under the Credit Facility of not less than $40.0 million. During the Adjustment Period, the Company is not permitted to repurchase shares by tender offer or otherwise.
The Credit Facility requires payments of interest only. The maturity date of the Credit Facility is April 26, 2022 and the Company has a one-time right, subject to customary conditions, to extend the maturity date for an additional term of one year to April 26, 2023. Borrowings under the Credit Facility bearbore interest at either (i) the Base Rate (as defined in the Credit Facility) plus an applicable spread ranging from 0.60% to 1.20%, depending on the Company’s consolidated leverage ratio, or (ii) LIBOR plus an applicable spread ranging from 1.60% to 2.20%, depending on the Company’s consolidated leverage ratio. Pursuant to the amendment to the Credit Facility in July 2020, from July 24, 2020 until delivery of the compliance certificate for the fiscal quarter ending June 30, 2021, the margin will bewas 1.5% with respect to the Base Rate and 2.5% with respect to LIBOR regardless of the Company’s consolidated leverage ratio, and the “floor” on LIBOR was increased from 0.00% to 0.25%. ratio.
As of December 31, 2020 the Company has elected to use the LIBOR rate for all its borrowings under the Credit Facility. As of December 31, 20202021 and December 31, 2019,2020, the weighted-average interest rate under the Credit Facility was 2.79%0.00% and 3.80%2.79%, respectively. In July 2017, the Financial Conduct Authority (which(the authority that regulates LIBOR) announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. As a result, the Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee, which identified the Secured Overnight Financing Rate (“SOFR”) as its preferred alternative to LIBOR in derivatives and other financial contracts. On November 30, 2020,March 5, 2021, the Financial Conduct Authority announcedconfirmed a partial extension of this deadline, indicating its intention toannouncing that it will cease the publication of the one-week and two-month USD LIBOR settings immediately following December 31, 2021, and the2021. The remaining USD LIBOR settings immediately following the LIBOR publication onwill continue to be published through June 30, 2023. The Company is not able to predict when LIBOR may be limited or discontinued or when there will be sufficient liquidity in the SOFR market. The Company is monitoring and evaluating the risks related to potential changes in LIBOR availability, which include potential changes in interest paid on debt and amounts received and paid on interest rate swaps. In addition, the value of debt or derivative instruments tied to LIBOR couldwill also be impacted whenas LIBOR is limited orand discontinued and contracts must be transitioned to a new alternative rate. In some instances, transitioningWhile the Company expects LIBOR to be available in substantially its current form until at least June 30, 2023, it is possible that LIBOR will become unavailable prior to that time. This could occur, for example, if a sufficient number of banks decline to make submissions to the LIBOR administrator. The Credit Facility contains language governing the establishment of a replacement benchmark index to serve as an alternative rate may require negotiation with lenders and other counterparties and could present challenges. To transition fromto LIBOR, when necessary. Any subsidiary owning property that is included in the borrowing base is required to guarantee the OP’s obligations under the Credit Facility,Facility. This includes any wholly owned domestic subsidiary of the OP that directly or indirectly owns or leases a real estate asset added to the pool of eligible unencumbered properties. For any Guarantor subsidiary of the OP, this guarantee will be released if the Company or the OP achieves an investment grade credit rating, but will again be required (i) if either utilize the Base Rate (as defined inCompany or the Credit Facility)OP loses its investment grade credit rating, or an alternative benchmark established by the agent in accordance(ii) with the termsrespect to any Guarantor subsidiary of the Credit Facility, which will be SOFR if availableOP, for so long as the subsidiary is the primary obligor under or an alternate benchmark that is being widely used in the market at that time as selected by the agent.
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020 unsecured indebtedness.The Credit Facility contains various customary operating covenants, including the restricted payments covenant described in more detail below, as well as covenants restricting, among other things, restricted payments (including dividends and share repurchases), the incurrence of liens, the types of investments the Company may make, fundamental changes, agreements with affiliates and changes in nature of business. The amended and restated Credit Facility also contains(i) continues to have financial maintenance covenants with respect to maximum consolidated leverage, maximum consolidated secured leverage, minimum fixed charge coverage, and minimum net worth, (ii) amended the maximum other recourse debt to total asset value and minimum net worth. During the Adjustment Period, the calculation of Total Asset Value (as defined in the Credit Facility) - which serves as the basis for the denominator usedcovenant to calculate the maximum consolidated leverage, maximum consolidatedrefer instead to secured leverage and maximum other recourse debt, to total asset valueand (iii) added new financial maintenance covenants in the Credit Facility - will bewith respect to maximum consolidated unsecured leverage and adjusted such that the value ascribed to the Company’s multi-tenant properties purchased through June 30, 2020 will generally be decreased by 10.0%net operating income for the durationpool of the Adjustment Period. During the Adjustment Period, the minimum fixed charge coverage ratio financial maintenance covenant in the Credit Facility willeligible unencumbered properties required to be decreased. Additionally, during the Adjustment Period, the OP must maintain, as of the end of each month starting with June 2020, a combination of cash, cash equivalents and amounts available for future borrowingsmaintained under the Credit Facility of not less than $100.0 million.to debt service paid on unsecured indebtedness. Pursuant toUnder the Credit Facility, subject to certain conditions, the Company mayis not permitted to pay distributions, including cash dividends on equity securities (including the Company’s 7.50% Series A Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share (“Series A Preferred Stock”) and 7.375% Series C Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share (“Series C Preferred Stock”)) in an aggregate amount exceeding 95% of MFFOAFFO (as defined in the Credit Facility) for any look-back period of four consecutive fiscal quarters without seeking consent from the lenders under the Credit Facility. On November 9, 2019, the Company entered into an amendment toHowever, the Credit Facility whichalso permits the Company to pay distributions in an aggregate amount not exceeding 105% of MFFOAFFO for any applicable period if, as of the last day of the period, the Company is able to satisfy a maximum leverage ratio after giving effect to the payments and also has a combination of cash, cash equivalents and amounts available for future borrowings under the Credit Facility of not less than $60.0 million. During the Adjustment Period the Company is generally permitted to pay distributions up to 105% of annualized MFFO for a look-back period of two consecutive fiscal quarters for the fiscal quarter ending December 31, 2020 and a look-back period of three consecutive fiscal quarters for the fiscal quarter ending March 31, 2021Moreover, if as of the last day of the period, after giving effect to the payment of those dividends and distributions, the Company has a combination of cash, cash equivalents and amounts available for future borrowings under the Credit Facility of not less than $125.0 million. If this level of liquidity is not maintained, the applicable threshold percentage of MFFO will be 95% instead of 105%. If applicable, during the continuance of an event of default under the Credit Facility, the Company may not pay dividends or other distributions in excess of the amount necessary for the Company to maintain its status as a REIT.
As of December 31, 2020,2021, the Company was in compliance with the operating and financial covenants under the Credit Facility.
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 Note 6 — Senior Notes, Net On October 7, 2021, the Company and the OP, (together the “Senior Notes Issuers”), issued $500.0 million aggregate principal amount of 4.500% Senior Notes due 2028 (the “Senior Notes”). The Senior Notes Issuers and the subsidiaries of the Senior Notes Issuers that guarantee the Senior Notes (the “Guarantors”) entered into an Indenture (the “Indenture”) with U.S. Bank National Association, as trustee (the “Trustee”). As of December 31, 2021 the amount of the Senior Notes on the Company’s consolidated balance sheet totaled $491.0 million which is net of $9.0 million of deferred financing costs, respectively. At closing, the Senior Notes Issuers used a portion of the net proceeds from the issuance of the Senior Notes, after deducting the initial purchasers’ discounts and offering fees and expenses, to repay amounts outstanding at the time under the Credit Facility of approximately $186.2 million and to repay a $125.0 million mortgage note. The Senior Notes Issuers may use the remaining proceeds to fund future property acquisitions and for other general corporate purposes. The Senior Notes, which were issued at par, will mature on September 30, 2028 and accrue interest at a rate of 4.500% per year. Interest on the Senior Notes, which began to accrue on October 7, 2021, is payable semi-annually in arrears on March 30 and September 30 of each year, beginning on March 30, 2022. The Senior Notes are fully and unconditionally guaranteed (the “Senior Note Guarantees”) on a joint and several basis by the subsidiaries of each Senior Notes Issuer that are guarantors under the Credit Facility. Subject to certain exceptions, each future subsidiary of each Senior Notes Issuer that subsequently guarantees indebtedness under the Credit Facility, any other syndicated loan facility or any capital markets indebtedness, in each case, of the Senior Notes Issuers or a Guarantor will be required to execute a Senior Note Guarantee. Under certain circumstances, the Guarantors may be automatically released from their Senior Note Guarantees without the consent of the holders of Senior Notes. The Senior Notes and the Senior Note Guarantees are senior unsecured obligations of the Senior Notes Issuers and each Guarantor and are equal in right of payment with all of the other existing and future senior unsecured indebtedness of the Senior Notes Issuers and each Guarantor, including their obligations under the Credit Facility, senior in right of payment to any indebtedness that by its terms is expressly subordinated to the Senior Notes and the Senior Note Guarantees, effectively subordinated to all of the existing and future secured indebtedness of the Senior Notes Issuers and each Guarantor to the extent of the value of the collateral securing such debt and structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, of any subsidiary of the Senior Notes Issuers that do not guarantee the Senior Notes. The Senior Notes are redeemable at the option of the Senior Notes Issuers, in whole at any time or in part from time to time, in each case prior to June 30, 2028, for cash, at a redemption price equal to the greater of (i) 101% of the principal amount of the Senior Notes to be redeemed or (ii) an amount equal to the sum of the present values of the remaining scheduled payments of principal and interest on the Senior Notes to be redeemed that would be due if the Senior Notes matured on June 30, 2028 (exclusive of unpaid interest accrued to, but not including, the date of redemption) discounted to the date of redemption on a semi-annual basis at the treasury rate plus 50 basis points, plus, in each case, unpaid interest, if any, accrued to, but not including, the date of redemption. In addition, at any time on or after June 30, 2028, the Senior Notes will be redeemable, at the option of the Issuers, in whole at any time or in part from time to time, for cash, at a redemption price equal to 100% of the principal amount of the Senior Notes to be redeemed plus unpaid interest, if any, accrued to, but not including, the date of redemption. If a Change of Control Triggering Event (as defined in the Indenture) occurs, the Senior Notes Issuers will be required to make an offer to purchase the Senior Notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, up to, but excluding, the purchase date. If the Senior Notes Issuers or any of their restricted subsidiaries sell assets, under certain circumstances the Senior Notes Issuers will be required to make an offer to purchase the Senior Notes at a price equal to 100% of the principal amount, plus accrued interest and unpaid interest, if any, up to, but excluding, the purchase date. The Indenture contains covenants that, among other things, limit the ability of the Senior Notes Issuers and their restricted subsidiaries to (1) incur additional indebtedness, (2) pay dividends and make distributions on the capital stock of the Company and each Senior Notes Issuer’s restricted subsidiaries, (3) make investments or other restricted payments, (4) create liens on their assets, (5) enter into transactions with affiliates, (6) merge or consolidate or sell all or substantially all of their assets, (7) sell assets and (8) create restrictions on the ability of their restricted subsidiaries to pay dividends or other amounts to them. These covenants are subject to important exceptions and qualifications. In addition, if the Senior Notes are rated investment grade by any two of Moody’s Investors Service, Inc., Fitch Ratings Inc. and Standard & Poor’s Ratings Services, and at such
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 time no default or event of default under the Indenture has occurred and is continuing, many of the covenants in the Indenture will be suspended or become more lenient and may not go back into effect. The Indenture contains customary events of default which could, subject to certain conditions, cause the Senior Notes to become immediately due and payable. Note 7 — Fair Value Measurements Fair Value Hierarchy GAAP establishes a hierarchy of valuation techniques based on the observability of inputs used in measuring assets and liabilities at fair value. GAAP establishes market-based or observable inputs as the preferred sources of values, followed by valuation models using management assumptions in the absence of market inputs. The three levels of the hierarchy are described below: Level 1 — Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability. Level 3 — Unobservable inputs that reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques. The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. However, the Company expects that changes in classifications between levels will be rare.
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
A review of the fair value hierarchy classification is conducted on a quarterly basis. Changes in the type of inputs may result in a reclassification for certain assets and liabilities. The Company’s policy with respect to transfers between levels of the fair value hierarchy is to recognize transfers into and out of each level as of the end of the reporting period. There were no transfers between levels of the fair value hierarchy during the years ended December 31, 20202021 and 2019.2020. Financial Instruments Measured at Fair Value on a Recurring Basis Derivative Instruments The Company’s derivative instruments are measured at fair value on a recurring basis. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with this derivative utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. However, as of December 31, 2020,2021, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of the Company’s derivatives. As a result, the Company has determined that its derivatives valuation in its entirety is classified in Level 2 of the fair value hierarchy. The valuation of derivative instruments is determined using a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and implied volatilities. In addition, credit valuation adjustments are incorporated into the fair values to account for the Company’s potential nonperformance risk and the performance risk of the counterparties. Real Estate Investments Measured at Fair Value on a Non-Recurring Basis Real Estate Investments - Held for Sale The Company has had impaired real estate investments classified as held for sale (see Note 3 — Real Estate Investments for additional information on impairment charges recorded by the Company). There were no impaired real estate investments held for sale as of December 31, 20202021 and 2019.2020. The carrying value of impaired real estate investments held for sale on the
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 consolidated balance sheet represents their estimated fair value less cost to sell. Impaired real estate investments held for sale are generally classified in Level 3 of the fair value hierarchy. Real Estate Investments - Held for Use The Company has had impaired real estate investments that were classified as held for use at the time of impairment (see Note 3 — Real Estate Investments for additional information on impairment charges incurred by the Company). The carrying value of these held for use impaired real estate investments on the consolidated balance sheet represents their estimated fair value at the time of impairment. The Company primarily uses a market approach to estimate future cash flows expected to be generated. Impaired real estate investments which are held for use are generally classified in Level 3 of the fair value hierarchy. Financial Instruments that are not Reported at Fair Value The carrying value of short-term financial instruments such as cash and cash equivalents, restricted cash, prepaid expenses and other assets, accounts payable and accrued expenses and dividends payable approximates their fair value due to their short-term nature. As of December 31, 2021 there was no carrying value of advances to the Company under the Credit Facility, and as of December 31, 2020 the carrying value of advances to the Company under the Credit Facility were $280.9 million. The fair value of advances to the Company under the Credit Facility was $278.8 million as of December 31, 2020, due to the widening of the credit spreads during the current period. These advances had a carrying value of $280.9 million as of December 31, 2020. As of December 31, 2019, the $333.1 million carrying value of advances under the Credit Facility approximated their fair value. The fair value of advances under the Credit Facility are based on estimates of market credit spreads and interest rates. This approach relies on unobservable inputs and therefore is classified as Level 3 in the fair value hierarchy. The carrying value of the Company’s mortgage notes payable as of December 31, 20202021 and 20192020 were $1.5 billion and $1.3 billion, respectively,in each period, and the fair value of the Company’s mortgage notes payable were $1.6$1.5 billion and $1.3$1.6 billion, respectively. The fair value of gross mortgage notes payable is based on estimates of market interest rates. This approach relies on unobservable inputs and therefore is classified as Level 3 in the fair value hierarchy.
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 20202021, the Company’s Senior Notes had a gross carrying value of $500.0 million and a fair value of $504.4 million Note 78 — Derivatives and Hedging Activities Risk Management Objective of Using Derivatives The Company may use derivative financial instruments, including interest rate swaps, caps, options, floors and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. The principal objective of such arrangements is to minimize the risks and costs associated with the Company’s operating and financial structure as well as to hedge specific anticipated transactions. The Company does not intend to utilize derivatives for speculative or other purposes other than interest rate risk management. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which the Company and its related parties may also have other financial relationships. The Company does not anticipate that any of the counterparties will fail to meet their obligations.
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 The Company entered into an interest rate swap on September 1, 2020 for a notional amount of $125.0 million, which became effective on October 13, 2020, in order to fixand fixed the interest rate on a mortgage loan that was refinanced in September 2020 (see Note 4 — Mortgage Notes Payable for additional information). The interest rate swap fixesfixed interest on the mortgage at an effective interest rate of 3.26%3.27% and expireswas to expire in July 2026. This interest rate swap was terminated in the fourth quarter of 2021 when the mortgage loan was repaid and the Company received $2.1 million as a result of the termination. Following the termination, the Company reclassified approximately $2.1 million from AOCI as a reduction to interest expense in the Company’s consolidated statement of operations and comprehensive loss in the fourth quarter of 2021. Additionally, in conjunction with the refinancing of a mortgage loan in December 2020, the Company entered into an interest rate cap agreement for a notional amount of $34.0 million.million, which expired in December 2021. The fair value of this interest rate cap iswas insignificant and therefore is not shown on the consolidated balance sheet as of December 31, 2020 (see Note 4 — Mortgage Notes Payable for additional information). The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the accompanying consolidated balance sheets as of December 31, 2020. The Company did not have any derivative instruments outstanding as of December 31, 20192021 due to the termination of itsthe interest rate swaps after the repayment of certain mortgages during the third quarter of 2019 (see Note 4 — Mortgage Notes Payable, Net for additional information).swap noted above. | | | | | | | | | | | | | | | | | | | | | (In thousands) | | Balance Sheet Location | | December 31, 20202021 | | December 31, 2020 | Derivatives designated as hedging instruments: | | | | | | | Interest Rate “Pay-fixed” Swaps | | Derivative liabilities, at fair value | | $ | 123— | | | $ | 123 | | Derivatives not designated as hedging instruments: | | | | | | | Embedded derivatives | | Derivative liabilities, at fair value | | $ | 2,250 | | | $ | | — | |
Cash Flow Hedges of Interest Rate Risk The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Effective January 1, 2019 and upon adoption of ASU No. 2017-12 (see Note 2 — Summary of Significant Accounting Policies), all of the changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive loss (“AOCI”) and are subsequently reclassified into earnings in the period that the hedged forecasted transaction impacts earnings. Prior to January 1, 2019, the ineffective portion of the change in fair value of the derivatives was recognized directly in earnings. During the years ended December 31, 2021, 2020 2019 and 2018,2019, such derivatives were used to hedge the variable cash flows associated with variable-rate debt. Amounts reportedDuring the year ended December 31, 2021, the Company terminated its pay-fixed interest rate swap agreement with a notional amount of $125.0 million. This termination resulted in accumulated other comprehensive income related to derivatives will be reclassified toof $2.1 million during the year ended December 31, 2021, which is included as a reduction of interest expense as interest payments are made onin the Company’s variable-rate debt. During the next twelve months, the Company estimates that $0.2 million will be reclassified from otherconsolidated statement of operations and comprehensive loss as an increase to interest expense.loss.
Additionally, duringDuring the year ended December 31, 2019, the Company terminated its pay-fixed interest rate swap agreements with a combined notional amount of $29.9 million and accelerated the reclassification of amounts in other comprehensive income to earnings because it became probable that the hedged forecasted amounts would not occur. This acceleration resulted in a loss of $1.5 million during the year ended December 31, 2019, which is included in interest expense in the Company’s consolidated statement of operations and comprehensive loss.
As of December 31, 2021 the Company did not have any derivatives that were designated as cash flow hedges of interest rate risk. As of December 31, 2020 the Company had the following derivatives that were designated as cash flow hedges of interest rate risk:
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 20202021 | | | | | | | | | | | | | | | | | | | | | | | December 31, 2020 | Interest Rate Derivative | | | | | | Number of Instruments | | Notional Amount | | | | | | | | | (In thousands) | Interest Rate “Pay-fixed” Swaps | | | | | | 1 | | $ | 125,000 | |
The table below details the location in the consolidated financial statements of the gain or loss recognized on interest rate derivatives designated as cash flow hedges for the years ended December 31, 2021, 2020 2019 and 2018,2019, respectively: | | | Year Ended December 31, | | Year Ended December 31, | (In thousands) | (In thousands) | | 2020 | | 2019 | | 2018 | (In thousands) | | 2021 | | 2020 | | 2019 | Amount of loss recognized in AOCI on interest rate derivatives [1] | Amount of loss recognized in AOCI on interest rate derivatives [1] | | $ | (174) | | | $ | (979) | | | $ | (670) | | Amount of loss recognized in AOCI on interest rate derivatives [1] | | $ | 2,040 | | | $ | (174) | | | $ | (979) | | Amount of loss reclassified from AOCI into income as interest expense | Amount of loss reclassified from AOCI into income as interest expense | | $ | (51) | | | $ | (36) | | | $ | (125) | | Amount of loss reclassified from AOCI into income as interest expense | | $ | (213) | | | $ | (51) | | | $ | (36) | | Amount of gain recognized in income on derivative (ineffective portion, reclassifications of missed forecasted transactions and amounts excluded from effectiveness testing) | | $ | 0 | | | $ | 0 | | | $ | 81 | | | Total interest expense recorded in the consolidated statement of operations and comprehensive loss | Total interest expense recorded in the consolidated statement of operations and comprehensive loss | | $ | 78,467 | | | $ | 77,994 | | | $ | 66,789 | | Total interest expense recorded in the consolidated statement of operations and comprehensive loss | | $ | 81,784 | | | $ | 78,467 | | | $ | 77,994 | |
__________ [1] Excludes a gain of $2.1 million and a loss of $1.5 million in the Company’s consolidated statements of operations for the yearyears ended December 31, 2021 and December 31, 2019, respectively, recorded upon termination of its interest rate swaps after the repayment of certain mortgages (see Note 4 — Mortgage Notes Payable, Net for additional information). Non-Designated HedgesDerivatives These derivatives arehave historically been used to manage the Company’s exposure to interest rate movements, but do not meet the strict hedge accounting requirements to be classified as hedging instruments. These derivatives also include other instruments that don’t qualify for hedge accounting. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings. The Company recorded aan immaterial loss on non-designated hedging relationships of $9,000 during the yearyears ended December 31, 2021 and 2020. The Company did 0tnot record any gains or losses during the yearsyear ended December 31, 2019 and 2018 since the Company did not have any derivatives that were not designated as hedges of in qualifying hedging relationships during those years.that year. As of December 31, 2021 the Company did not have any derivative interest rate cap contracts that were not designated as hedges under qualifying hedging relationships. As of December 31, 2020 the Company had the following outstanding derivatives that were not designated as hedges under qualifying hedging relationships.relationships: | | | | | | | | | | | | | | | | | | | | | | | December 31, 2020 | Interest Rate Derivative | | | | | | Number of Instruments | | Notional Amount | | | | | | | | | (In thousands) | Interest Rate Cap | | | | | | 1 | | $ | 34,000 | |
Embedded Derivative The purchase and sale agreement for the CIM Acquisition (see Note 16 – Subsequent Events for more information) included the planned issuance of shares of the Company’s Class A common stock or Class A units in the Operating Partnership of the up to $53.4 million in value, $26.7 million of which was issued to the seller at the closing of the first tranche of the CIM Acquisition, and the remainder of which will be issued in one or more successive tranches. The number of shares or units to be issued at the applicable closing will be based on the value of the shares or units that may be issued at such closing divided by the per-share volume weighted average price of the Company’s Class A common stock measured over a five-day consecutive trading period immediately preceding (but not including) the date on which written notice is delivered, indicating the seller’s election to receive either shares or units, to the Operating Partnership (the price of which is to be limited by a 7.5% collar in either direction from the per share volume weighted-average price of the Company’s Class A common stock measured over a ten-day consecutive trading period immediately preceding (but not including) the effective date of the PSA, which was $8.34 per share. The Company concluded that this arrangement constituted an embedded derivative which requires separate accounting. The initial value of the embedded derivative was an asset upon the signing of the PSA of $1.7 million, and was a
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 liability of $2.3 million as of December 31, 2021. The change in the embedded derivative’s value is reflected as a loss on non-designated derivatives of $4.0 million. Offsetting Derivatives The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of December 31, 2020. The Company did not have any derivatives outstanding as of December 31, 2021 or 2019. The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the consolidated balance sheets. | | | Gross Amounts Not Offset on the Balance Sheet | | | Gross Amounts Not Offset on the Balance Sheet | | (In thousands) | (In thousands) | | Gross Amounts of Recognized Assets | | Gross Amounts of Recognized (Liabilities) | | Gross Amounts Offset on the Balance Sheet | | Net Amounts of Assets (Liabilities) Presented on the Balance Sheet | | Financial Instruments | | Cash Collateral Received (Posted) | | Net Amount | (In thousands) | | Gross Amounts of Recognized Assets | | Gross Amounts of Recognized (Liabilities) | | Gross Amounts Offset on the Balance Sheet | | Net Amounts of Assets (Liabilities) Presented on the Balance Sheet | | Financial Instruments | | Cash Collateral Received (Posted) | | Net Amount | December 31, 2021 | | December 31, 2021 | | $ | — | | | $ | 2,250 | | | $ | — | | | $ | 2,250 | | | $ | — | | | $ | — | | | $ | 2,250 | | December 31, 2020 | December 31, 2020 | | $ | 0 | | | $ | 123 | | | $ | 0 | | | $ | 123 | | | $ | 0 | | | $ | 0 | | | $ | 123 | | December 31, 2020 | | $ | — | | | $ | 123 | | | $ | — | | | $ | 123 | | | $ | — | | | $ | — | | | $ | 123 | | |
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
Note 89 — Stockholders’ Equity and Non-Controlling Interest Common Stock As of December 31, 20202021 and 2019, the Company had 108.8123.8 million and 108.5108.8 million shares, respectively, of Class A common stock outstanding including restricted shares of Class A common stock (“restricted shares”) and excluding LTIP Units. LTIP Units may ultimately be convertible into shares of Class A common stock in the future. Listing of the Company’s Common Stock
To address the potential for selling pressure that may have existed at the outset of listing, the Company listed only shares of its Class A common stock, which represented approximately 50% of its outstanding shares of common stock, on Nasdaq on the Listing Date. The Company’s two other classes of outstanding stock at the time of the Listing were Class B-1 common stock, which comprised approximately 25% of the Company’s outstanding shares of common stock at that time, and Class B-2 common stock, which comprised approximately 25% of the Company’s outstanding shares of common stock at that time. In accordance with their terms, all shares of Class B-1 common stock automatically converted into shares of Class A common stock and were listed on Nasdaq on October 10, 2018 and all shares of Class B-2 common stock automatically converted into shares of Class A common stock and were listed on Nasdaq on January 9, 2019. Fractional shares of Class B-2 common stock totaling approximately 19,870 shares were repurchased at a price of $13.78 per share by the Company as a result of the automatic conversion. Each share of Class B-1 common stock and Class B-2 common stock was otherwise identical to each share of Class A common stock in all other respects, including the right to vote on matters presented to the Company’s stockholders, and shares of all different classes of common stock received the same dividends while there were different classes of common stock outstanding.
Prior to Listing, the Company published an annual estimated net asset value per share of the Company’s common stock (“Estimated Per-Share NAV”) which was the price at which the Company sold its shares under the Pre-Listing DRIP (as defined below) and repurchased shares under the SRP (as defined below). Following the Listing, the Company’s previously published Estimated Per-Share NAV was no longer applicable, and the Company no longer publishes Estimated Per-Share NAV.
Related to the Listing, the Company incurred fees of $5.0 million for the year ended December 31, 2018 for financial advisory and other transaction related costs.
Corporate Actions
In order to effect the Listing described above, the Company took the following corporate actions on July 3, 2018:future if certain conditions are met.
•The Company effected a 2-to-1 reverse stock split combining every two shares of common stock, par value $0.01 per share, into one share of common stock, par value $0.02 per share, and subsequently reducing the resulting par value of the shares of common stock outstanding after the reverse stock split from $0.02 per share back to $0.01 per share. In addition, the Company changed the name of its common stock to “Class A common stock.”
•The Company reclassified a number of authorized but unissued shares of Class A common stock equal to half of the number of shares of Class A common stock then outstanding into equal numbers of shares of Class B-1 common stock and shares of Class B-2 common stock.
•The Company distributed to the holders of shares of Class A common stock a stock dividend equal to one-half share of Class B-1 common stock and one-half share of Class B-2 common stock for each share of Class A common stock outstanding.
As a result of the corporate actions described above, the number of outstanding sharesmore fully discussed in total, and on a weighted-average basis for earnings per share purposes, remained the same with the exception of any fractional shares that were repurchased or forfeited as a result of the reverse stock split.
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
The table below provides details of the Company’s outstanding shares of common stock as of June 30, 2018 (prior to the Listing) and December 31, 2018:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | June 30, 2018 (prior to the Listing) | | As of December 31, 2018 | | | Shares Outstanding | | Class A Common Stock | | Class B-2 Common Stock | | Shares Outstanding | Shares of common stock [1] | | 105,049,705 | | | 78,749,079 | | | 26,262,477 | | | 105,011,556 | | Vesting and conversion of Class B Units [2] [3] | | — | | | 1,052,420 | | | — | | | 1,052,420 | | Redemption of Class A Units (formerly known as OP Units) [3] [4] | | — | | | 30,691 | | | — | | | 30,691 | | Unvested restricted shares [5] | | 9,088 | | | 134,025 | | | 2,209 | | | 136,234 | | Total | | 105,058,793 | | | 79,966,215 | | | 26,264,686 | | | 106,230,901 | |
__________
[1]See “Corporate Actions” above for a description of the reverse stock split and classification of shares as Class A common stock, Class B-1 common stock and Class B-2 common stock. Fractional shares of Class A common stock totaling 18,460 were repurchased by the Company as a result of the reverse stock split. In accordance with their terms, all shares of Class B-1 common stock automatically converted into shares of Class A common stock and were listed on Nasdaq on October 10, 2018. As a result of this conversion, on October 10, 2018, all fractional shares of Class B-1 common stock totaling approximately 19,945 shares were repurchased by the Company. Amount at June 30, 2018 included 8,888 shares of common stock owned by American Finance Special Limited Partner, LLC (the “Special Limited Partner”). During the second half of 2018, 4,444 shares of Class A common stock owned by the Special Limited Partner were distributed to individual members of the entity and, as a result, the Special Limited Partner owned 2,222 shares of Class A common stock and 2,222 shares of Class B-2 common stock as of December 31, 2018.
[2]The performance-based restricted, forfeitable partnership units of the OP designated as “Class B Units” (“Class B Units”) vested and were converted into an equal number of units of limited partnership designated as “Class A Units” (“Class A Units”). In addition, effective at the Listing following this conversion and as approved by the Company’s board of directors, these Class A Units were redeemed for an equal number of newly issued shares of Class A common stock consistent with the redemption provisions contained in the agreement of limited partnership of the OP (see Note 1016 — Related Party Transactions and Arrangements– Subsequent Events, for additional information).[3]Following the Listing, all of the shares ofCompany expects to issue $53.4 million in Class A common stock, Class B-1 common stock and Class B-2 common stock owned by the Advisor and its affiliates (including the Special Limited Partner) were distributed pro rata to the individual members of those entities, including Edward M. Weil, Jr., the Company’s chairman and chief executive officer.
[4]Pursuant to the redemption provisions contained in the agreement of limited partnership of the OP, holders of Class A Units may redeem all or a portion of their Class A Units for, at the Company’s election, either shares of Class A common stock or the cash equivalent thereof. 203,612 Class A Units were eligible for redemption after the Listing. On July 20, 2018, 30,691 Class A Units held by the Special Limited Partner and another affiliate of the Advisor were redeemed for an equal number of newly issued shares of Class A common stock consistent with the redemption provisions contained in the agreement of limited partnership of the OP.
[5]Fractional unvested restricted shares of common stock (“restricted shares”) held by the Company’s independent directors totaled approximately 7, and these fractional shares were forfeitedCommon Stock in connection with the reverse stock split effected priorCIM Portfolio Acquisition, subject to adjustments, $26.7 million of which was issued on February 11, 2022 in connection with the Listing. Also, during the three months ended September 30, 2018, the Company issued 127,402 restricted shares in the aggregate to membersclosing of the Company’s board of directors (see Note 12 — Equity-Based Compensation).first tranche.Tender Offers
On February 15, 2018, in response to an unsolicited offer to the Company’s stockholders to purchase 1,000,000 shares of the Company’s common stock at a price of $13.66 per share, the Company commenced a tender offer for up to 1,000,000 shares at a price of $14.35 per share (the “February Offer”). The Company made the February Offer in order to deter an unsolicited bidder and other potential future bidders that might have tried to exploit the illiquidity of the Company’s then unlisted common stock. In accordance with the terms of the February Offer, which expired on March 27, 2018, the Company accepted for purchase 483,716 shares for a total cost of approximately $6.9 million, excluding fees and expenses relating to the February Offer.
On May 1, 2018, in response to an unsolicited offer to the Company’s stockholders to purchase 1,000,000 shares of the Company’s common stock at a price of $15.35 per share, the Company commenced a tender offer for up to 1,000,000 shares at a price of $15.45 per share (the “May Offer”). The Company made the May Offer in order to deter an unsolicited bidder and other potential future bidders that might have tried to exploit the illiquidity of the Company’s then unlisted common stock. In accordance with the May Offer, which expired on May 31, 2018, the Company accepted for purchase 207,713 shares for a total cost of approximately $3.2 million, excluding fees and expenses relating to the May Offer.
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
Terminated Share Repurchase Program
In anticipation of the Listing, the Company’s board of directors terminated the Company’s previous share repurchase program (the “SRP”) in accordance with its terms, effective June 30, 2018. The Company’s board of directors had previously authorized the Company to repurchase shares pursuant to the SRP, which permitted investors to offer to sell their shares back to the Company at a price based on the then-current Estimated Per-Share NAV after they held them for at least one year, subject to certain conditions and limitations. The Company repurchased shares on a semiannual basis, at the sole discretion of the Company’s board of directors, with respect to each six-month period ending June 30 and December 31.
When a stockholder requested repurchases and the repurchases were approved, the Company reclassified such an obligation from equity to a liability based on the settlement value of the obligation. Shares repurchased had the status of authorized but unissued shares.
The following table summarizes the repurchases of shares under the SRP cumulatively through the SRP termination date of June 30, 2018:
| | | | | | | | | | | | | | | | | Number of Shares | | Weighted-Average Price per Share | Cumulative repurchases as of December 31, 2014 | | 303,907 | | | $ | 24.01 | | Year ended December 31, 2015 | | 1,769,738 | | | 24.13 | | Year ended December 31, 2016 | | 7,854 | | | 24.17 | | Year ended December 31, 2017 | | 1,225,365 | | [1] | 23.71 | | Year ended December 31, 2018 | | 412,939 | | [2] | 23.37 | | Cumulative repurchases as of December 31, 2018 | | 3,719,803 | | | 23.90 | |
_________
[1]Excludes rejected repurchase requests received during 2016 with respect to 5.9 million shares for $140.1 million at a weighted-average price per share of $23.65. Also, in July 2017, following the effectiveness of an amendment and restatement of the SRP pursuant to which only repurchase requests made following the death or qualifying disability of a stockholder were eligible for repurchase, the Company’s board of directors approved 100% of the repurchase requests made following the death or qualifying disability of stockholders during the period from January 1, 2017 to December 31, 2017. No repurchases were made with respect to requests received during 2017 that are not valid requests in accordance with the amended and restated SRP. At the time the SRP was terminated in anticipation of the Listing, effective June 30, 2018, we had received repurchase requests made following the death or qualifying disability of stockholders during the period from January 1, 2018 to June 30, 2018 with respect to 0.6 million shares that were therefore not repurchased.
[2]During January 2018, the Company repurchased 412,939 shares for approximately $9.7 million at a price of $23.37 per share equal to the then current Estimated Per-Share NAV.
Distribution Reinvestment Plan On June 29, 2018, the Company announced that its board of directors had suspended the Company’s then effective distribution reinvestment plan (the “Pre-Listing DRIP”) effective June 30, 2018. As a result, all dividends paid for the month of June 2018 were paid in cash in July 2018. Prior to its suspension, the Company’s stockholders were able to elect to reinvest dividends by purchasing shares of common stock from the Company at the applicable Estimated Per-Share NAV. OnEffective on the Listing Date, an amendment and restatement of the Pre-Listing DRIPthen effective distribution reinvestment plan approved by the Company’s board of directors became effective (as so amended and restated, the “Post-Listing DRIP”(the “DRIP”).
Commencing with the dividend paid on August 3, 2018 (the first dividend paid following the Listing Date), the Company’s The DRIP allows stockholders thatwho have elected to participate in the Post-Listing DRIP mayto have dividends payable with respect to all or a portion of their shares of the Company’s common stock (including Class A common stock Class B-1 common stock, prior to its automatic conversionreinvested in Class A common stock on October 10, 2018, and Class B-2 common stock, prior to its automatic conversion in Class A common stock on January 9, 2019) reinvested inadditional shares of Class A common stock. Shares issued pursuant to the Post-Listing DRIP represent shares that are, at the election of the Company, either (i) acquired directly from the Company, which would issue new shares, at a price based on the average of the high and low sales prices of Class A common stock on Nasdaq on the date of reinvestment, or (ii) acquired through open market purchases by the plan administrator at a price based on the weighted-average of the actual prices paid for all of the shares of Class A common stock purchased by the plan administrator with all participants’ reinvested dividends for the related quarter, less a per share processing fee. During 2020, 2019 and 2018, all shares acquired by participants pursuant to the Post-Listing DRIP were acquired through open market purchases by the plan administrator and not acquired directly from the Company.
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
Shares issued pursuant to the Pre-Listing DRIP or the Post-Listing DRIP are recorded within stockholders’ equity in the accompanying consolidated balance sheets in the period dividends are declared. During the years ended December 31, 2021, 2020 and 2019 0all shares of common stock were issuedacquired by participants pursuant to the Post-Listing DRIP and during the year ended December 31, 2018, approximately 1.0 million shares of common stock were issuedacquired through open market purchases by the Company pursuant toplan administrator and not acquired directly from the Pre-Listing DRIP, and no shares were issued by the Company pursuant to the Post-Listing DRIP.Company. ATM Program — Class A Common Stock In May 2019, the Company established an “at the market” equity offering program for Class A common stock (the “Class A Common Stock ATM Program”), pursuant to which the Company may from time to time, offer, issue and sell to the public up to $200.0 million in shares of Class A common stock, through sales agents. The Company did not sell any shares under the Class A Common Stock ATM Program during the year ended December 31, 2020. •The Company sold 2,229,647 shares under the Class A Common Stock ATM Program for gross proceeds of $32.4 million and net proceeds of $31.6 million, after commissions paid and additional issuance costs of approximately $0.8 million during the year ended December 31, 2019. •The Company did not sell any shares under the Class A Common Stock ATM Program during the year ended December 31, 2020.
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 •The Company sold 14,734,448 shares of Class A common stock through its Class A Common Stock ATM program during the year ended December 31, 2021, which generated $130.6 million of gross proceeds, and net proceeds of $128.4 million after commissions, fees and other costs incurred of $2.2 million. •Subsequent to December 31, 2021, the Company sold 2,761,711 shares of its Class A common stock through its Class A Common Stock ATM Program for gross proceeds of $24.9 million. Preferred Stock The Company is authorized to issue up to 50,000,000 shares of preferred stock, of which it has classified and designated 8,796,00012,796,000 as authorized shares of its Series A Preferred Stock, 120,000 as authorized shares of its Series B Preferred Stock, $0.01 par value per share (“Series B Preferred Stock”) and 3,680,00011,536,000 as authorized shares of its Series C Preferred Stock as of December 31, 2020.2021. The Company had 7,842,0087,933,711 and 6,917,2307,842,008 shares of Series A Preferred Stock issued and outstanding as of December 31, 2021 and 2020, and 2019, respectively. NaNNo Series B Preferred Stock is issued or outstanding as of December 31, 20202021 or 2019.2020. The Company had 4,594,498 and 3,535,700 shares of its Series C Preferred Stock issued and outstanding as of December 31, 2021 and 2020, as a result of an underwritten offering in December 2020 (see below for details).respectively. Underwritten Offerings — Series A Preferred Stock On March 26, 2019, the Company completed the initial issuance and sale of 1,200,000 shares of Series A Preferred Stock in an underwritten public offering at a public offering price equal to the liquidation preference of $25.00 per share. The offering generated gross proceeds of $30.0 million and net proceeds of $28.6 million, after deducting underwriting discounts and offering costs paid by the Company. On April 10, 2019, the underwriters in the offering exercised their option to purchase additional shares of Series A Preferred Stock, and the Company sold an additional 146,000 shares of Series A Preferred Stock, which generated gross proceeds of $3.7 million and resulted in net proceeds of approximately $3.5 million, after deducting underwriting discounts. On September 9, 2019, the Company completed the issuance and sale of 3,450,000 shares of Series A Preferred Stock (including 450,000 shares issued and sold pursuant to the underwriter’s exercise of its option to purchase additional shares in full) in an underwritten public offering at a public offering price equal to $25.25 per share. The offering generated gross proceeds of $87.1 million and net proceeds of $83.5 million, after deducting underwriting discounts and offering costs paid by the Company.
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
ATM Program — Series A Preferred Stock In May 2019, the Company established an “at the market” equity offering program for Series A Preferred Stock (the “Series A Preferred Stock ATM Program”) pursuant to which the Company may, from time to time, offer, issue and sell to the public, through sales agents, shares of the Series A Preferred Stock having an aggregate offering price of up to $50.0 million, which was subsequently increased to $100.0 million in October 2019 and was then increased again to $200.0 million in January 2021. •During the year ended December 31, 2021, the Company sold 91,703 shares under the Series A Preferred Stock ATM Program for gross proceeds of $2.3 million and net proceeds of $2.0 million, after commissions, fees and offering costs incurred of $0.3 million. •During the year ended December 31, 2020, the Company sold 924,778 shares under the Series A Preferred Stock ATM Program for gross proceeds of $23.3 million and net proceeds of $22.4 million, after commissions, paidfees and offering costs incurred of $0.9 million. •During the year ended December 31, 2019, the Company sold 2,121,230 shares under the Series A Preferred Stock ATM Program for gross proceeds of $54.0 million and net proceeds of $53.2 million, after commissions, paidfees and offering costs incurred of approximately $0.8 million. Series A Preferred Stock — Terms The Series A Preferred Stock is listed on Nasdaq under the symbol “AFINP.“RTLPP.” Holders of Series A Preferred Stock are entitled to cumulative dividends at a rate of 7.50% of the $25.00 liquidation preference per share per annum. The Series A Preferred Stock has no stated maturity and will remain outstanding indefinitely unless redeemed or otherwise repurchased. On and after March 26, 2024, at any time and from time to time, the Series A Preferred Stock is redeemable in whole, or in part, at the Company’s option, at a cash redemption price of $25.00 per share, plus an amount equal to all dividends accrued and unpaid (whether or not declared), if any, to, but not including, the redemption date. In addition, upon the occurrence of a Delisting Event or a Change of Control, each as defined in the articles supplementary classifying and designating the terms of the Series
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 A Preferred Stock (the “Articles Supplementary”), the Company may, subject to certain conditions, at its option, redeem the Series A Preferred Stock, in whole but not in part, within 90 days after the first date on which the Delisting Event occurred or within 120 days after the first date on which the Change of Control occurred, as applicable, by paying the liquidation preference of $25.00 per share, plus an amount equal to all dividends accrued and unpaid (whether or not declared), if any, to, but not including, the redemption date. If the Company does not exercise these redemption rights upon the occurrence of a Delisting Event or a Change of Control, the holders of Series A Preferred Stock will have certain rights to convert Series A Preferred Stock into shares of Class A common stock. The Series A Preferred Stock ranks senior to Class A common stock, with respect to dividend rights and rights upon the Company’s voluntary or involuntary liquidation, dissolution or winding up. If dividends on any outstanding shares of Series A Preferred Stock have not been paid for six or more quarterly periods, holders of Series A Preferred Stock and holders of any other class or series of preferred stock ranking on parity with the Series A Preferred Stock, including the Series C Preferred Stock, will have the exclusive power, voting together in a single class, to elect 2 additional directors until all accrued and unpaid dividends on the Series A Preferred Stock have been fully paid. In addition, the Company may not authorize or issue any class or series of equity securities ranking senior to the Series A Preferred Stock with respect to dividend rights and rights upon the Company’s voluntary or involuntary liquidation, dissolution or winding-up or amend the Company’s charter to materially and adversely change the terms of the Series A Preferred Stock without the affirmative vote of at least two-thirds of the votes entitled to be cast on the matter by holders of outstanding shares of Series A Preferred Stock and holders of any other similarly-affected classes and series of preferred stock ranking on parity with the Series A Preferred Stock, including the Series C Preferred Stock. Other than the limited circumstances described above and in the Articles Supplementary, holders of Series A Preferred Stock do not have any voting rights. Underwritten Offering — Series C Preferred Stock On December 18, 2020, the Company completed the initial issuance and sale of 3,535,700 shares of Series C Preferred Stock (including 335,700 shares from the underwriters' exercise of their overallotment option to purchase additional shares) in an underwritten public offering at a public offering price equal to the liquidation preference of $25.00 per share. The offering generated gross proceeds of $88.4 million and net proceeds of $85.2 million after deducting the underwriting discount of $2.8 million and offering costs of $0.4 million paid by the Company. ATM Program — Series C Preferred Stock In January, 2021, the Company established an “at the market” equity offering program for Series C Preferred Stock (the “Series C Preferred Stock ATM Program”). See Note 15 — Subsequent Events pursuant to which the Company may, from time to time, offer, issue and sell to the public, through sales agents, shares of the Series C Preferred Stock having an aggregate offering price of up to $200.0 million. During the year ended December 31, 2021, the Company sold 1,058,798 shares under the Series C Preferred Stock ATM Program for additional information.gross proceeds of $26.5 million and net proceeds of $25.5 million, after commissions, fees and offering costs incurred of approximately $1.0 million. Series C Preferred Stock — Terms The Series C Preferred Stock is listed on Nasdaq under the symbol “AFINO.“RTLPO.” Holders of Series C Preferred Stock are entitled to cumulative dividends in the amount of 7.375% of the $25.00 liquidation preference per share per annum. The Series C Preferred Stock has no stated maturity and will remain outstanding indefinitely unless redeemed or otherwise repurchased.
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
On and after December 18, 2025, at any time and from time to time, the Series C Preferred Stock will be redeemable in whole, or in part, at the Company’s option, at a cash redemption price of $25.00 per share, plus an amount equal to all dividends accrued and unpaid (whether or not declared), if any, to, but not including, the redemption date. In addition, upon the occurrence of a Delisting Event or a Change of Control (each as defined in the Articles Supplementary), the Company may, subject to certain conditions, at its option, redeem the Series C Preferred Stock, in whole but not in part, within 90 days after the first date on which the Delisting Event occurred or within 120 days after the first date on which the Change of Control occurred, as applicable, by paying the liquidation preference of $25.00 per share, plus an amount equal to all dividends accrued and unpaid (whether or not declared), if any, to, but not including, the redemption date. If the Company does not exercise these redemption rights upon the occurrence of a Delisting Event or a Change of Control, the holders of Series C Preferred Stock will have certain rights to convert Series C Preferred Stock into shares of Class A Common Stock. The Series C Preferred Stock ranks senior to Class A Common Stock and the Company’s Series B Preferred Stock, with respect to dividend rights and rights upon the Company’s voluntary or involuntary liquidation, dissolution or winding up, and on parity with Series A Preferred Stock.
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 If dividends on any outstanding shares of Series C Preferred Stock have not been paid for six or more quarterly periods, holders of Series C Preferred Stock and holders of any other class or series of preferred stock ranking on parity with the Series C Preferred Stock, including the Series A Preferred Stock, will have the exclusive power, voting together in a single class, to elect 2 additional directors until all accrued and unpaid dividends on the Series C Preferred Stock have been fully paid. In addition, the Company may not authorize or issue any class or series of equity securities ranking senior to the Series C Preferred Stock with respect to dividend rights and rights upon the Company’s voluntary or involuntary liquidation, dissolution or winding-up or amend the Company’s charter to materially and adversely change the terms of the Series C Preferred Stock without the affirmative vote of at least two-thirds of the votes entitled to be cast on the matter by holders of outstanding shares of Series C Preferred Stock and holders of any other similarly-affected classes and series of preferred stock ranking on parity with the Series C Preferred Stock, including the Series A Preferred Stock. Other than the limited circumstances described above and in the Articles Supplementary, holders of Series C Preferred Stock do not have any voting rights. Dividends Dividends to Common Stockholders Year Ended December 31, 2021 During the year ended December 31, 2021, the Company paid dividends on its common stock to an annualized rate equal to $0.85 per share, or $0.2125 per share on a quarterly basis. Year Ended December 31, 2020 In January, February and March of 2020, the Company paid dividends on its common stock to an annualized rate equal to $1.10 per share, or $0.0916667 per share on a monthly basis. In March 2020, the Company’s board of directors approved a reduction in the Company’s annualized common stock dividend to $0.85 per share, or $0.0708333 per share on a monthly basis, due to the uncertain and rapidly changing environment caused by the COVID-19 pandemic. The new common stock dividend rate became effective beginning with the Company’s April 1 dividend declaration. Historically, and through September 30, 2020, the Company declared dividends on its common stock based on monthly record dates and generally paid dividends, once declared, on or around the 15th day of each month (or, if not a business day, the next succeeding business day) to Class A common stock holders of record on the applicable record date. On August 27, 2020, the Company’s board of directors approved a change in the Company’s Class A common stock dividend policy. The Company anticipates paying future dividends authorized by its board of directors on shares of Class A common stock on a quarterly basis in arrears on the 15th day of the first month following the end of each fiscal quarter (unless otherwise specified) to Class A common stockholders of record on the record date for such payment. This change affected the frequency of dividend payments only, and did not impact the annualized dividend rate on Class A common stock of $0.85. Year Ended December 31, 2019 During the year ended December 31, 2019, the Company paid dividends on its common stock to an annualized rate equal to $1.10 per share, or $0.0916667 per share on a monthly basis. Year Ended December 31, 2018
In April 2013, the Company’s board of directors authorized a monthly dividend equivalent to $1.65 per annum, per share of common stock. Effective July 1, 2017, the Company’s board of directors authorized a decrease in the daily accrual of dividends to an annualized rate of $1.30 per annum, per share of common stock. In connection with the Listing, the Company’s board of directors changed the rate at which the Company pays dividends on its common stock to an annualized rate equal to $1.10 per share, or $0.0916667 per share on a monthly basis, effective as of July 1, 2018. Additionally, effective July 1, 2018, the Company transitioned to declaring dividends based on quarterly basis with one month in arrears using monthly, rather than
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
daily, record dates and generally pays dividends on or around the 15th day of each month (or, if not a business day, the next succeeding business day) to common stockholders of record on the applicable record date of such month. Prior to July 1, 2018, dividends were payable by the fifth day following each month end to stockholders of record at the close of business each day during the prior month. In January 2019, the Company declared a dividend for December 2018, January 2019 and February 2019 resulting in only 11 months declared dividends during the year ended December 31, 2018. Notwithstanding the changes to the declaration dates, the Company paid 12 months of dividends during the year ended December 31, 2018. Dividend payments are dependent on the availability of funds. The Company’s board of directors may reduce the amount of dividends paid or suspend dividend payments at any time and therefore dividends payments are not assured.
Dividends to Series A Preferred Stockholders Dividends on the Company’s Series A Preferred Stock accrue at an amount equal to $1.875 per share each year, which is equivalent to the rate of 7.50% of the $25.00 liquidation preference per share per annum. Dividends on the Series A Preferred Stock are payable quarterly in arrears on the 15th day of each of January, April, July and October of each year (or, if not a business day, the next succeeding business day) to holders of record on the applicable record date. Dividends to Series C Preferred Stockholders Dividends on the Company’s Series C Preferred Stock accrue in an amount equal to $1.844 per share each year, which is equivalent to the rate of 7.375% of the $25.00 liquidation preference per share per annum. Dividends on the Series C Preferred Stock are payable quarterly in arrears on the 15th day of each of January, April, July and October of each year (or, if not a business day, the next succeeding business day) to holders of record on the applicable record date. The first dividend for the Series C Preferred Stock will bewas paid on April 15, 2021 and will representrepresented an accrual for more than a full quarter, covering the period from December 18, 2020 to March 31, 2021.
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 Tax Characteristics of Dividends The following table details from a tax perspective, the portion of common stock dividends classified as return of capital and ordinary dividend income for tax purposes, per share per annum, for the years ended December 31, 2021, 2020 2019 and 2018.2019. All dividends paid on the Series A Preferred Stock were considered 100% ordinary dividend income for tax purposes. As previously discussed, no dividends were paid on the Series C Preferred Stock during the year ended December 31, 2020.2021. The first such dividend will be paid in 2021. | | | Year Ended December 31, | | Year Ended December 31, | | | 2020 | | 2019 | | 2018 | | 2021 | | 2020 | | 2019 | Return of capital | Return of capital | | 90.3 | % | | $ | 0.63 | | | 90.2 | % | | $ | 0.99 | | | 93.2 | % | | $ | 1.03 | | Return of capital | | 94.8 | % | | $ | 0.81 | | | 90.3 | % | | $ | 0.63 | | | 90.2 | % | | $ | 0.99 | | Ordinary dividend income | Ordinary dividend income | | 9.7 | % | | 0.07 | | | 9.8 | % | | 0.11 | | | 6.8 | % | | 0.07 | | Ordinary dividend income | | 5.2 | % | | 0.04 | | | 9.7 | % | | 0.07 | | | 9.8 | % | | 0.11 | | | Total | Total | | 100.0 | % | | $ | 0.70 | | | 100.0 | % | | $ | 1.10 | | | 100.0 | % | | $ | 1.10 | | Total | | 100.0 | % | | $ | 0.85 | | | 100.0 | % | | $ | 0.70 | | | 100.0 | % | | $ | 1.10 | |
Stockholder Rights Plan In April 2020 the Company announced that its board of directors approved a short-term stockholder rights plan (the “Plan”) to protect the long-term interests of the Company. The Company adopted the Plan due to the substantial volatility in the trading of the Company’s Class A common stock that has resulted from the ongoing COVID-19 pandemic. The adoption of the Plan is intended to allow the Company to realize the long-term value of the Company’s assets by protecting the Company from the actions of third parties that the Company’s board of directors determines are not in the best interest of the Company. By adopting the Plan, the Company believes that it has best positioned itself to navigate through this period of volatility brought on by COVID-19. The Company’s Plan is designed to reduce the likelihood that any person or group (including a group of persons that are acting in concert with each other) would gain control of the Company through open market accumulation of stock by imposing significant penalties upon any person or group that acquires 4.9% or more of the outstanding shares of Class A common stock without the approval of the Company’s board of directors. In connection with the adoption of the Plan, the Company’s board of directors authorized a dividend of 1 preferred share purchase right for each outstanding share of Class A common stock to stockholders of record on April 23, 2020 to purchase from the Company one one-thousandth of a share of Series B Preferred Stock for an exercise price of $35.00 per one-thousandth of a share, once the rights become exercisable, subject to adjustment as provided in the related rights agreement. By the terms of the Plan, the rights will initially trade with Class A common stock and will generally only become exercisable on the 10th business day after the Company’s board of directors become aware that a person or entity has become the owner of 4.9% or more of the shares of Class A common stock or the commencement of a tender or exchange offer which would result in the offeror becoming an owner of 4.9% or more of
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
the Class A common stock. In February 2021, the expiration date of these rights was extended to April 12, 2024. See Note 15—Subsequent Events for additional information.2024 unless earlier exercised, exchanged, amended, redeemed or terminated. Non-Controlling Interest Non-controlling interests resulted from the issuance of OP Units in conjunction with the Merger and were recognized at fair value as of the effective time of the Merger on February 16, 2017. In addition, under the 2018 OPP, the OP issued LTIP Units, which are also reflected as part of non-controlling interest as of December 31, 20202021 and 2019.2020. See Note 1212 — Equity Based Compensation - Multi-Year Outperformance Agreement for more information regarding the LTIP Units and related accounting. On May 4, 2021, the Company’s independent directors, authorized the issuance of a new award of LTIP Units pursuant to the 2021 OPP to the Advisor after the performance period under the 2018 OPP expired on July 19, 2021. Accordingly, these new LTIPs are reflected in non-controlling interest on the Company’s balance sheet or statement of equity as of September 30, 2021. For additional information, seeNote 13 — Equity-Based Compensation relating to the accounting impacts of (i) the end of the performance period under the 2018 OPP and the forfeiture of all LTIP Units awarded thereunder, and (ii) the beginning of the performance period under the 2021 OPP and the grant of an award of LTIP Units thereunder.
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 As of December 31, 20202021 and 2019,2020, non-controlling interest is comprised of the following components: | | | December 31, | | December 31, | (In thousands) | (In thousands) | 2020 | | 2019 | (In thousands) | 2021 | | 2020 | Non-controlling interest attributable to LTIP Units | Non-controlling interest attributable to LTIP Units | $ | 28,317 | | | $ | 16,461 | | Non-controlling interest attributable to LTIP Units | $ | 8,368 | | | $ | 28,317 | | Non-controlling interest attributable to Class A Units | Non-controlling interest attributable to Class A Units | 2,205 | | | 2,438 | | Non-controlling interest attributable to Class A Units | 2,056 | | | 2,205 | | Total non-controlling interest | Total non-controlling interest | $ | 30,522 | | | $ | 18,899 | | Total non-controlling interest | $ | 10,424 | | | $ | 30,522 | |
Following the end of the performance period under the 2018 OPP on July 19, 2021, the compensation committee of the board of directors of the Company determined that none of the 4,496,796 of the LTIP Units subject to the 2018 OPP had been earned, and these LTIP Units were thus automatically forfeited. On that date, the Company reclassified $34.8 million of amounts reflected in non-controlling interest for these LTIP Units to additional paid in capital on its consolidated balance sheet and consolidated statement of changes in equity. Note 910 — Commitments and Contingencies Lessee Arrangements - Ground Leases The Company is a lessee in ground lease agreements for 7 of its properties. The ground leases have lease durations, including assumed renewals, ranging from 17.016.0 years to 34.733.7 years as of December 31, 2020.2021. On January 1, 2019, the Company adopted ASC 842 and recorded ROU assets and lease liabilities related to these ground leases, which are classified as operating leases under the lease standard (see Note 2 — Summary of Significant Accounting Polices for additional information on the impact of adopting the new standard). As of December 31, 2020,2021, the Company’s balance sheet includes operating lease right-of-use assets and operating lease liabilities of $18.5$18.2 million and $19.2 million, respectively. In determining operating ROU assets and lease liabilities for the Company’s existing operating leases upon the adoption of the new lease guidance in 2019 as well as for new operating leases in the current period,entered into after adoption, the Company estimated an appropriate incremental borrowing rate on a fully-collateralized basis for the terms of the leases. Because the terms of the Company’s ground leases are significantly longer than the terms of borrowings available to the Company on a fully-collateralized basis, the Company’s estimate of this rate required significant judgment. The Company did not enter into any additional ground leases during the year ended December 31, 2021. The Company’s operating ground leases have a weighted-average remaining lease term, including assumed renewals, of 27.927.0 years and a weighted-average discount rate of 7.5% as of December 31, 2020.2021. For the years ended December 31, 2021, 2020 and 2019, the Company paid cash of $1.5 million, $1.5 million and $1.5 million, respectively, for amounts included in the measurement of lease liabilities and recorded expense of $1.8 million, $1.8 million and $2.7 million, respectively, on a straight-line basis in accordance with the standard. The expenses recorded in 2019 included an out-of-period adjustment of $0.9 million (see Note 2 — Summary of Significant Accounting Polices for additional information). The lease expense is recorded in property operating expenses in the Company’s consolidated statements of operations and comprehensive income (loss). The Company did not enter into any additional ground leases during the nine months ended December 31, 2020. The following table reflects the base cash rental payments due from the Company as of December 31, 2020:2021: | (In thousands) | (In thousands) | | Future Base Rent Payments | (In thousands) | | Future Base Rent Payments | 2021 | | $ | 1,515 | | | 2022 | 2022 | | 1,532 | | 2022 | | $ | 1,532 | | 2023 | 2023 | | 1,549 | | 2023 | | 1,549 | | 2024 | 2024 | | 1,560 | | 2024 | | 1,560 | | 2025 | 2025 | | 1,598 | | 2025 | | 1,598 | | 2026 | | 2026 | | 1,628 | | Thereafter | Thereafter | | 44,358 | | Thereafter | | 42,730 | | Total lease payments | Total lease payments | | 52,112 | | Total lease payments | | 50,597 | | Less: Effects of discounting | Less: Effects of discounting | | (32,875) | | Less: Effects of discounting | | (31,402) | | Total present value of lease payments | Total present value of lease payments | | $ | 19,237 | | Total present value of lease payments | | $ | 19,195 | |
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 20202021
Litigation and Regulatory Matters On February 8, 2018, Carolyn St. Clair-Hibbard, a purported stockholder of the Company, filed a putative class action complaint in the United States District Court for the Southern District of New York against the Company, AR Global, the Advisor, and both individuals who previously served as the Company’s chief executive officer and chair of the board of directors (the “Former Chairmen”). On February 23, 2018, the complaint was amended to, among other things, assert some claims on the plaintiff’s own behalf and other claims on behalf of herself and other similarly situated shareholders of the Company as a class. On April 26, 2018, defendants moved to dismiss the amended complaint. On May 25, 2018, plaintiff filed a second amended complaint. The second amended complaint alleges that the proxy materials used to solicit stockholder approval of the Merger at the Company’s 2017 annual meeting were materially incomplete and misleading. The complaint asserts violations of Section 14(a) of the Exchange Act against the Company, as well as control person liability against the Advisor, AR Global, and the Former Chairmen under 20(a). It also asserts state law claims for breach of fiduciary duty against the Advisor, and claims for aiding and abetting such breaches, of fiduciary duty against the Advisor, AR Global and the Former Chairmen. The complaint seeks unspecified damages, rescission of the Company’s advisory agreement with the Advisor (the “Advisory Agreement”) (or severable portions thereof) which became effective when the Merger became effective, and a declaratory judgment that certain provisions of the Company’s advisory agreementAdvisory Agreement are void. The Company believes the second amended complaint is without merit and intends to defend vigorously. On June 22, 2018, defendants moved to dismiss the second amended complaint. On August 1, 2018, plaintiff filed an opposition to defendants’ motions to dismiss. Defendants filed reply papers on August 22, 2018, and oral argument was held on September 26, 2018. On September 23, 2019, the Court granted defendants’ motions and dismissed the complaint with prejudice, and the plaintiff appealed. On May 5, 2020, the United States Court of Appeals for the Second Circuit affirmed the lower court’s dismissal of the complaint. On October 26, 2018, Terry Hibbard, a purported stockholder of the Company, filed a putative class action complaint in New York State Supreme Court, New York County, against the Company, AR Global, the Advisor, the Former Chairmen, the Company’s chief financial officer at the time of the Merger and each of the Company’s directors immediately prior to the Merger. All of the directors immediately prior to the Merger, except for David Gong, currently serve as directors of the Company. The complaint alleged that the registration statement pursuant to which RCA shareholders acquired shares of the Company during the Merger contained materially incomplete and misleading information. The complaint asserted violations of Section 11 of the Securities Act of 1933, as amended (the “Securities Act”) against the Company’s chief financial officer at the time of the Merger and each of the Company’s directors immediately prior to the Merger, violations of Section 12(a)(2) of the Securities Act against the Company and the Company’s current chief executive officer, president and chair of the board of directors, and control person liability against the Advisor, AR Global and the Former Chairmen— under Section 15 of the Securities Act. The complaint sought unspecified damages and rescission of the Company’s sale of stock pursuant to the registration statement. On March 6, 2019, Susan Bracken, Michael P. Miller and Jamie Beckett, purported stockholders of the Company, filed a putative class action complaint in New York State Supreme Court, New York County, on behalf of themselves and others who purchased shares of common stock through the Company’s then effective distribution reinvestment plan, against the Company, AR Global, the Advisor, the Former Chairmen, the Company’s chief financial officer at the time of the Merger and each of the Company’s directors immediately prior to the Merger. The complaint alleged that the April and December 2016 registration statements pursuant to which class members purchased shares contained materially incomplete and misleading information. The complaint asserted violations of Section 11 of the Securities Act against the Company, the Company’s chief financial officer at the time of the Merger and each of the Company’s directors immediately prior to the Merger, violations of Section 12(a)(2) of the Securities Act against the Company and the Company’s current chief executive officer, president and chair of the board of directors, and control person liability against the Advisor, AR Global and the Former Chairmen under Section 15 of the Securities Act. The complaint sought unspecified damages and either rescission of the Company’s sale of stock or rescissory damages. On April 30, 2019, Lynda Callaway, a purported stockholder of the Company, filed a putative class action complaint in New York State Supreme Court, New York County, against the Company, AR Global, the Advisor, the Former Chairmen, the Company’s chief financial officer at the time of the Merger and each of the Company’s directors immediately prior to the Merger. The complaint alleged that the registration statement pursuant to which plaintiff and other class members acquired shares of the Company during the Merger contained materially incomplete and misleading information. The complaint asserted violations of Section 11 of the Securities Act against the Company, the Company’s chief financial officer at the time of the Merger and each of the Company’s directors immediately prior to the Merger, violations of Section 12(a)(2) of the Securities Act against the Company and the Company’s current chief executive officer, president and chair of the board of directors, and
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 20202021 control person liability under Section 15 of the Securities Act against the Advisor, AR Global, and the Former Chairmen. The complaint sought unspecified damages and rescission of the Company’s sale of stock pursuant to the registration statement. On July 11, 2019, the New York State Supreme Court issued an order consolidating the three above-mentioned cases: Terry Hibbard, Bracken, and Callaway (the “Consolidated Cases”). The Court also stayed the Consolidated Cases pending a decision on the motions to dismiss in the St. Clair-Hibbard litigation pending in the United States District Court for the Southern District of New York. Following the federal court’s decision on the St. Clair-Hibbard the motions to dismiss, on October 31, 2019 plaintiffs filed an amended consolidated class action complaint in the Consolidated Cases seeking substantially similar remedies from the same defendants. The Company moved to dismiss the amended consolidated complaint on December 16, 2019. After the parties completed briefing on this motion, the United States Court of Appeals for the Second Circuit issued its decision affirming dismissal of the St. Clair-Hibbard action. Plaintiffs moved to amend their complaint, purportedly to limit it to claims still viable in spite of the results of the federal action. The proposed second amended complaint no longer contains direct claims against the Company. Instead, plaintiffs seek to pursue state law claims derivatively against the Advisor, AR Global, the Company’s initial chief executive officer and chair of the board of directors, the Company’s current directors and David Gong, a former director, with the Company as a nominal defendant. Plaintiffs’On December 20, 2021, the Court denied plaintiffs’ motion to amend has been fully briefed, and oral argument was held in November 2020. The parties are now awaitingdismissed the litigation. On January 26, 2022, plaintiffs filed a decisionnotice of appeal from the Court. The Company believes that the proposed second amended complaint is without merit and intends to defend against it vigorously. Due to the early stage of the litigation, no estimate of a probable loss or any reasonably possible losses are determinable at this time.Court’s decision. There are no other material legal or regulatory proceedings pending or known to be contemplated against the Company. During the years ended December 31, 2021, 2020 2019 and 2018,2019, the Company incurred legal costs related to the above litigation of approximately $49,000, $0.8 million $1.3 million and $1.9$1.3 million, respectively. A portion of these litigation costs are subject to a claim for reimbursement under the insurance policies maintained by the Company (“the Policies”), and during the years ended December 31, 2020 and 2019, reimbursements of $9,000 and $2.3 million, respectively, were received and recorded in other income in the consolidated statements of operations and comprehensive loss. There were no such reimbursements recorded thereafter. The Company may receive additional reimbursements in the future. However, the Policies arewere subject to other claims that have priority over the Company’s claim for reimbursement, and the Company therefore does not believe it is likely to recover any additional reimbursements.have been exhausted. Environmental Matters In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. The Company maintains environmental insurance for its properties that provides coverage for potential environmental liabilities, subject to the policy’s coverage conditions and limitations. The Company has not been notified by any governmental authority of any non-compliance, liability or other claim, and is not aware of any other environmental condition that it believes will have a material adverse effect on its financial position or results of operations. Note 1011 — Related Party Transactions and Arrangements Fees and Participations Incurred in Connection with the Operations of the Company Summary of Advisory Agreement The initial term of the Advisory Agreement expires on April 29, 2035. This term is automatically renewed for successive 20-year terms upon expiration unless the Advisory Agreement is terminated (1) in accordance with an Internalization, (2) by the Company or the Advisor with cause, without penalty, with 60 days’ notice, (3) by the Advisor for (a) a failure to obtain a satisfactory agreement for any successor to the Company to assume and agree to perform obligations under the Advisory Agreement or (b) any material breach of the Advisory Agreement of any nature whatsoever by the Company, or (4) by the Advisor in connection with a change of control of the Company. Upon the termination of the Advisory Agreement, the Advisor will be entitled to receive from the Company all amounts due to the Advisor, as well as the then-present fair market value of the Advisor’s interest in the Company. The Advisory Agreement grants the Company the right to internalize the services provided under the Advisory Agreement (“Internalization”) and to terminate the Advisory Agreement pursuant to a notice received by the Advisor as long as (i) more than 67% of the Company’s independent directors have approved the Internalization; and (ii) the Company pays the Advisor an Internalization fee equal to (1) $15.0 million plus (2) either (x) if the Internalization occurs on or before December 31, 2028, the Subject Fees (defined below) multiplied by 4.5, or (y) if the Internalization occurs on or after January 1, 2029, the Subject Fees multiplied by 3.5 plus (3) 1.0% multiplied by (x) the purchase price of properties or other investments acquired after the end of the fiscal quarter in which the notice of Internalization is received by the Advisor and prior to the Internalization and (y) without duplication, the cumulative net proceeds of any equity raised by the Company during the period following the end of
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
the fiscal quarter in which notice is received and the Internalization. The “Subject Fees” are equal to (i) the product of 4 multiplied by the sum of (A) the actual base management fee (including both the fixed and variable portion thereof) plus (B) the
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 actual variable management fee, in each of clauses (A) and (B), payable for the fiscal quarter in which the notice of Internalization is received by the Advisor, plus, (ii) without duplication, the annual increase in the base management fee resulting from the cumulative net proceeds of any equity raised in respect of the fiscal quarter in which the notice of Internalization is received by the Advisor. Up to 10% of the Internalization fee may be payable in shares of Class A common stock subject to certain conditions. 2019 Advisory Agreement Amendment On March 18, 2019, the Company entered into Amendment No.2 to the Advisory Agreement, by and among the OP and the Advisor. Amendment No.2 revised the section of the Advisory Agreement specifically related to reimbursable administrative service expenses, including reasonable salaries and wages, benefits and overhead of all employees of the Advisor or its affiliates, including those of certain executive officers of the Company. See the “Professional Fees and Other Reimbursements” section below for details. 2020 Advisory Agreement AmendmentsAmendment On March 30, 2020, the Company entered into Amendment No.3 to the Advisory Agreement, by and among the OP and the Advisor. Amendment No.3 revised the section of the Advisory Agreement to temporarily lower the quarterly thresholds of Core Earnings Per Adjusted Share (as defined in the Advisory Agreement) the Company must reach on a quarterly basis for the Advisor to receive the Variable Management Fee (as defined in the Advisory Agreement). For additional information, see the “Asset Management Fees and Variable Management/Incentive Fees” section below. 2021 Advisory Agreement Amendment On January 13, 2021, the Company entered into Amendment No. 4 to the Advisory Agreement with the Advisor to extend the expiration of the modified quarterly thresholds established by Amendment No. 3 to the Advisory Agreement. The Company must reach these thresholds on a quarterly basis for the Advisor to receive the variable management fee from the end of the fiscal quarter ended December 31, 2020 to the end of the fiscal quarter endingended December 31, 2021. For additional information, see the “Asset Management Fees and Variable Management/Incentive Fees”section below and Note 15 — Subsequent Events.section below. In-Sourced Expenses The Advisor has been and may continue to beis reimbursed for costs it incurs in providing investment-related services, or “insourced“in-sourced expenses.” These insourcedin-sourced expenses may not exceed 0.5% of the contract purchase price of each acquired property or 0.5% of the amount advanced for a loan or other investment. Additionally, the Company has paid and may continue to pay third party acquisition expenses. The aggregate amount of acquisition expenses, including insourced expenses, may not exceed 4.5% of the contract purchase price of the Company’s portfolio or 4.5% of the amount advanced for all loans or other investments and this threshold has not been exceeded through December 31, 2020.2021. The Company incurred $0.2$0.1 million, $0.2 million and $0.3$0.2 million of acquisition expenses and related cost reimbursements for the years ended December 31, 2021, 2020 2019 and 2018,2019, respectively. Asset Management Fees and Variable Management/IncentiveManagement Fees The Company pays the Advisor a fixed base management fee, which includes a fixed and a variable baseportion, and, if certain performance thresholds are met, an incentive management fee. Under the Advisory Agreement, the fixed portion of the base management fee increased from $18.0 million annually to (i) $21.0 million annually for the period from February 16, 2017 until February 16, 2018; (ii) $22.5 million annually for the period from February 17, 2018 until February 16, 2019; and (iii)(ii) $24.0 million annually for the remainder of the term. If the Company acquires (whether by merger, consolidation or otherwise) any other REIT, that is advised by an entity that is wholly owned, directly or indirectly, by AR Global, other than any joint venture, (a “Specified Transaction”), the fixed portion of the base management fee will be increased by an amount equal to the consideration paid for the acquired company’s equity multiplied by 0.0031 for the first year following the Specified Transaction, 0.0047 for the second year and 0.0062 thereafter. The variable portion of the base management fee is a monthly fee equal to one-twelfth of 1.25% of the cumulative net proceeds of any equity raised by the Company and its subsidiaries from and after the initial effective date of the Advisory Agreement on February 16, 2017. Base management fees, including the variable portion, are included in asset management fees to related party on the consolidated statements of operations and comprehensive loss. The Company incurred $32.8 million, $27.8 million $25.7 million and $23.1$25.7 million for the years ended December 31, 2021, 2020 2019 and 2018,2019, respectively, in base management fees (including both the fixed and variable portion). and incentive management fees. In addition, under the Advisory Agreement, the Company is required to pay the Advisor a variablean incentive management fee. PriorSubsequent to the Listing Date, the amount that was required to be paid was equal to the product of (1) the fully diluted shares of common stock outstanding multiplied by (2) (x) 15.0% of the applicable quarter’s Core Earnings per share in excess of $0.375
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 $0.275 per share plus (y) 10.0% of the applicable quarter’s Core Earnings per share in excess of $0.50$0.3125 per share, in each case as adjusted for changes in the number of shares of common stock outstanding. On the Listing Date, the Company entered into an amendment
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
to the Advisory Agreement (the “Listing Amendment”) which lowered the quarterly thresholds of Core Earnings per share the Company must reach in a particular quarter for the Advisor to receive a variable management fee from $0.375 and $0.50 to $0.275 and $0.3125. The definition of Adjusted Outstanding Shares (as defined in the Advisory Agreement), which is used to calculate Core Earnings per share, is based on the Company’s reported diluted weighted-average shares outstanding. In accordance with Amendment No. 3 to the Advisory Agreement entered into March 30, 2020, for the quarters ending June 30, 2020, September 30, 2020 and December 31, 2020, the low and high thresholds were reduced from $0.275 and $0.3125, respectively, to $0.23 and $0.27, respectively. On January 13, 2021, the Company entered into Amendment No. 4 to the Advisory Agreement to extend the expiration of these thresholds from the end of the fiscal quarter ended December 31, 2020 to the end of the fiscal quarter endingended December 31, 2021 in light of the continued economic impact of the COVID-19 pandemic.
Core Earnings is defined as, for the applicable period, net income or loss computed in accordance with GAAP excluding non-cash equity compensation expense, the variableincentive management fee, acquisition and transaction related fees and expenses, financing related fees and expenses, depreciation and amortization, realized gains and losses on the sale of assets, any unrealized gains or losses or other non-cash items recorded in net income or loss for the applicable period, regardless of whether such items are included in other comprehensive loss, or in net income, one-time events pursuant to changes in GAAP and certain non-cash charges, impairment losses on real estate related investments and other than temporary impairments of securities, amortization of deferred financing costs, amortization of tenant inducements, amortization of straight-line rent, amortization of market lease intangibles, provision for loss loans, and other non-recurring revenue and expenses (in each case after discussions between the Advisor and the independent directors and the approval of a majority of the independent directors). The variableincentive management fee is payable to the Advisor or its assignees in cash or shares, or a combination of both, the form of payment to be determined in the sole discretion of the Advisor and the value of any share to be determined by the Advisor acting in good faith on the basis of such quotations and other information as it considers, in its reasonable judgment, appropriate. The Company recorded $0.1$3.0 million in variableincentive management fees during the year ended December 31, 20202021 and recorded $0.1 million in variableincentive management fees during the yearyears ended December 31, 2019. The Company did 0t incur any variable management fees during the year ended December 31, 2018. Prior to the Listing, in aggregate, the Company’s board of directors had approved2020 and the OP had issued 1,052,420 Class B Units to the Advisor. Pursuant to the terms of the amended and restated agreement of limited partnership of the OP (the “A&R OP Agreement”), the Advisor was entitled to receive distributions on unvested Class B Units equal to the dividend amount received on the same number of shares of the Company’s common stock. Such distributions on issued Class B Units were included in general and administrative expenses in the consolidated statements of operations and comprehensive loss. As a result of the Listing and the prior determination by the Company’s board of directors that the applicable conditions under the A&R OP Agreement had been satisfied, the Class B Units vested in accordance with their terms. The Class B Units were converted into an equal number of Class A Units. In addition, effective at the Listing following this conversion and as approved by the Company’s board of directors, these Class A Units were redeemed for an equal number of newly issued shares of Class A common stock consistent with the redemption provisions contained in the Second A&R OP Agreement. As a result, the Company recorded a non-cash expense of approximately $15.8 million, which is recorded in vesting and conversion of Class B Units in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2018.2019.
Property Management Fees The Company has a property management agreement (the “Multi-Tenant Property Management Agreement”), a leasing agreement (the “Multi-Tenant Leasing Agreement”) and a net lease property management and leasing agreement (the “Net Lease Property Management Agreement”) with the Property Manager. The Multi-Tenant Property Management Agreement, the Multi-Tenant Leasing Agreement and the Net Lease Property Management Agreement each became effective on February 16, 2017. In connection with the issuance of the Net Lease Mortgage Notes, subsidiaries of the CompanyIssuers have entered into the Property Management and Servicing Agreement dated May 30, 2019 (the(as amended from time to time, the “ABS Property Management Agreement”), with the Property Manager, KeyBank National Association (“Key Bank”) , as back-up property manager, and Citibank, N.A. as indenture trustee. See Note 4 — Mortgage Notes Payable, Net for additional information regarding the Notes. The Multi-Tenant Property Management Agreement provides that, unless a property is subject to a separate property management agreement with the Property Manager, the Property Manager is the sole and exclusive property manager for the Company’s multi-tenant properties, which are generally anchored, retail properties, such as power centers and lifestyle centers. In December 2017, in connection with a $210.0 million mortgage loan secured by 12 of the Company’s retail properties, the Company entered into 12 identical property management agreements with the Property Manager, the substantive terms of which are substantially identical to the terms of the Multi-Tenant Property Management Agreement, except they do not provide for the transition fees described below.
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
The Multi-Tenant Property Management Agreement entitles the Property Manager to a management fee equal to 4% of the gross rental receipts from the multi-tenant properties, including common area maintenance reimbursements, tax and insurance reimbursements, percentage rental payments, utility reimbursements, late fees, vending machine collections, service charges, rental interruption insurance, and a 15%15.0% administrative charge for common area expenses. In addition, the Property Manager is entitled to a one time transition fee of up to $2,500 for each multi-tenant property managed, a construction fee equal to 6%6.0% of construction costs incurred, if any, and reimbursement of all expenses specifically related to the operation of a multi-tenant property, including compensation and benefits of property management, accounting, lease administration, executive and supervisory personnel of the Property Manager, and excluding expenses of the Property Manager’s corporate and general management office and excluding compensation and other expenses applicable to time spent on matters other than the multi-tenant properties. Pursuant to the Multi-Tenant Leasing Agreement, the Company may, under certain circumstances and subject to certain conditions, pay the Property Manager a leasing fee for services in leasing multi-tenant properties to third parties.
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 The Company’s double- and triple-net leased single- tenant properties are managed by the Property Manager pursuant to the Net Lease Property Management Agreement, unless they are subject to a separate agreement with the Property Manager. The Net Lease Property Management Agreement permits the Property Manager to subcontract its duties to third parties and provides that the Company is responsible for all costs and expenses of managing the properties, except for general overhead and administrative expenses of the Property Manager. In December 2019, in connection with a loan secured by four properties leased to Stop & Shop, the Company entered into a property management and leasing agreement with the Property Manager with respect to the 4 properties, the substantive terms of which are substantially identical to the terms of the Net Lease Property Management Agreement, except that it limits the fees payable to the Property Manager and any subcontractor to 3.0% of operating income in the event that the Property Manager subcontracts its duties under the agreement. In July 2020, in connection with the loan agreement with Column Financial, Inc., all but one of the Company’s borrower subsidiaries entered into a new property management and leasing agreement with the Property Manager with respect to all but one of the mortgaged properties, all of which are double- and triple-net leased single-tenant properties. The Company’s other double- and triple-net leased single-tenant properties, including the one mortgaged property excluded from the new property management and leasing agreement, are managed by the Property Manager pursuant to the Net Lease Property Management Agreement. The new property management and leasing agreement is identical to the Net Lease Property Management Agreement, except that the new property management and leasing agreement does not permit the Property Manager to subcontract its duties to third parties. The current term of the Net Lease Property Management Agreement ends on October 1, 2021,2022, and is automatically renewed for successive one-year terms unless terminated 60 days prior to the end of a term or terminated for cause. On November 4, 2020, in light of the investment to be made by the Property Manager and its affiliates in property management infrastructure for the benefit of the Company and its subsidiaries, the Company amended each of the Multi-Tenant Property Management Agreement and the Multi-Tenant Leasing Agreement to reflect that each agreement will expire on the later of (i) November 4, 2025 and (ii) the termination date of the Advisory Agreement. These agreements with the Property Manager may only be terminated for cause prior to the end of the term. Prior to the amendments, the term of these agreements would have ended on October 1, 2021, with automatic renewals for successive one-year terms unless terminated 60 days prior to the end of a term or terminated for cause. Property Management and Services Agreement - Net Lease Mortgage Notes Under the ABS Property Management Agreement, the Property Manager is responsible for servicing and administering the properties and leases securing the Net Lease Mortgage Notes under ordinary and special circumstances, and KeyBank, as the back-up property manager, is responsible for, among other things, maintaining current servicing records and systems for the assets securing the Net Lease Mortgage Notes in order to enable it to assume the responsibilities of the Property Manager in the event the Property Manager is no longer the property manager and special servicer. Pursuant to the ABS Property Management Agreement, the Property Manager may also be required to advance principal and interest payments on the Net Lease Mortgage Notes to preserve and protect the value of the applicable assets. The Company’s subsidiariesIssuers are required to reimburse any of these payments or advances. Pursuant to the ABS Property Management Agreement, subsidiariesas amended and restated in connection with the issuance of the Company2021 Net Lease Mortgage Notes in June 2021, for all properties that are not specially serviced, the Issuers are required to pay the Property Manager a monthly fee equal to the product of (i) one-twelfth of 0.25%, and (ii) the lower of (a) the aggregate allocated loan amounts and (b) the aggregate collateral value of the properties that are a part of the collateral pool. Prior to the amendment and restatement of the ABS Property Management Agreement, for all properties that were not specially serviced, the Issuers were required to pay the Property Manager a monthly fee equal to the product of (i) one-twelfth of 0.25%, and (ii) the aggregate allocated loan amounts of all the properties that serve as part of the collateral for the Net Lease Mortgage Notes, except for specially serviced properties.Notes. With respect to the specially serviced properties, the Property Manager is entitled to receive a workout fee or liquidation fee under
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
certain circumstances based on 0.50% of applicable amounts recovered, as well as a monthly fee equal to one-twelfth of 0.75%, and (ii) the lower of (a) the aggregate allocated loan amounts and (b) the aggregate collateral value of all the specially serviced properties that are part of the collateral pool. Prior to the amendment and restatement of the ABS Property Management Agreement, the monthly fee for specially serviced properties was equal to the product of (i) one-twelfth of 0.75%, and (ii) the aggregate allocated loan amounts of all the specially serviced properties that serve as part of the collateral pool for the Net Lease Mortgage Notes. The Property Manager has retained KeyBank as a sub-manager pursuant to a separate sub-management agreement pursuant to which KeyBank provides certain services that the Property Manager is required to provide as property manager under the ABS Property Management Agreement. Under the ABS Property Management Agreement, the Property Manager has agreed to waive (i) the portion of the monthly fee related to the properties that are not specially serviced
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 that is in excess of the amount to be paid to KeyBank as sub-manager pursuant to the sub-management agreement, (ii) the workout fee, (iii) the liquidation fee and (iv) the monthly fee related to the properties that are specially serviced, although the Property Manager retains the right to revoke these waivers at any time. The Property Manager is also entitled to receive additional servicing compensation related to certain fees and penalties under the leases it is responsible for under the ABS Property Management Agreement. The services provided by the Property Manager with respect to the double- and triple-net leased single-tenant properties in the collateral pool and related property management fees are separate and independent from the property management services the Property Manager has provided and will continue to provide with respect to those properties pursuant to the Net Lease Property Management Agreement. Professional Fees and Other Reimbursements The Company reimburses the Advisor’s costs of providing administrative services, including among other things, reasonable allocation of salaries and wages, benefits and overhead of all employees of the Advisor or its affiliates, except for costs to the extent that the employees perform services for which the Advisor receives a separate fee. The reimbursement includes reasonable overhead expenses, including the reimbursement of an allocated portion of rent expense at certain properties that are both occupied by employees of the Advisor or its affiliates and owned by affiliates of the Advisor. These reimbursements are exclusive of fees and other expense reimbursements incurred from and due to the Advisor that were passed through and ultimately paid to Lincoln Retail REIT Services, LLC (“Lincoln”) as a result of the Advisor’s prior arrangements with Lincoln to provide services to the Advisor in connection with the Company’s multi-tenant retail properties that are not net leased. The Advisor’s agreement with Lincoln expired in February 2021 and was not renewed. The expiration of the agreement with Lincoln did not affect the responsibilities and obligations of the Advisor or the Property Manager to the Company under the Company’s agreements with them. These reimbursements are included inas part of Professional fees and other reimbursements in the table below and inas part of general and administrative expense in the consolidated statements of operations and comprehensive loss. During the years ended December 31, 2021, 2020 2019 and 2018,2019, the Company incurred $6.8 million (net of the $1.4 million change in estimate for the 2020 bonus awards), $7.5 million (net of the $1.4 million change in estimate for the 2019 bonus awards, discussed below), and $9.8 million and $8.6 million, respectively, of reimbursement expenses from the Advisor for providing administrative services. Prior to Amendment No. 2, the Company had not reimbursed the Advisor or its affiliates, including the Property Manager, for salaries, wages, or benefits paid to the Company’s executive officers. Starting in 2019, under Amendment No. 2, the Company began to reimburse the Advisor for a portion of the salary, wages, and benefits paid to the Company’s chief financial officer as part of the aggregate reimbursement for salaries, wages and benefits of employees of the Advisor or its affiliates, excluding any executive officer who is also a partner, member or equity owner of AR Global and subject to a limit on certain limitations. Beginning in 2019, under Amendment No. 2, to the Advisory Agreement, the aggregate amount that may be reimbursed in each fiscal year for salaries, wages and benefits (excluding overhead) of employees of the Advisor or its affiliates (the “Capped Reimbursement Amount”) for each fiscal year is subject to a limit that is equal to the greater of: (a) (the “Fixed Component”); and a (b) variable component (the “Variable Component”). Both the Fixed Component and the Variable Component increase by an annual cost of living adjustment equal to the greater of (x) 3.0% and (y) the CPI, as defined in the amendment for the prior year ended December 31. Initially, for the year ended December 31, 2019: (a) the Fixed Component was equal to $7.0 million; and (b) the Variable Component was equal to: (i) the sum of the total real estate investments, at cost as recorded on the balance sheet dated as of the last day of each fiscal quarter (the “Real Estate Cost”) in the year divided by 4, which amount is then (ii) multiplied by 0.20%.
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
If the Company sells real estate investments aggregating an amount equal to or more than 25% of Real Estate Cost in one or a series of related dispositions in which the proceeds of the disposition(s) are not reinvested in Investments (as defined in the Advisory Agreement), then within 12 months following the disposition(s), the advisory agreementAdvisory Agreement requires the Advisor and the Company to negotiate in good faith to reset the Fixed Component; provided that if the proceeds of the disposition(s) are paid to shareholders of the Company as a special distribution or used to repay loans with no intent of subsequently re-financing and re-investingreinvesting the proceeds thereof in Investments, the advisory agreementAdvisory Agreement requires these negotiations within 90 days thereof, in each case taking into account reasonable projections of reimbursable costs in light of the Company’s reduced assets.assets of the Company.
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 and 2019, the total amount of reimbursements by the Company to the Advisor for salaries, wages and benefits that were subject to the Capped Reimbursement Amount was approximately $7.2 million, which was less than the approximately $8.1 million Variable Component of the Capped Reimbursement Amount.2021 As part of this reimbursement, the Company paid approximately $2.7 million in 2019 to the Advisor or its affiliates as reimbursement for bonuses of employees of the Advisor or its affiliates who provided administrative services during such calendar year, prorated for the time spent working on matters relating to the Company. The Company does not reimburse the Advisor or its affiliates for any bonus amounts relating to time dedicated to the Company by Edward M. Weil, Jr., the Company’s Chief Executive Officer. The Advisor formally awarded 2019 bonuses to employees of the Advisor or its affiliates in September 2020 (the “2019 Bonus Awards”), which were comprised of cash and restricted shares (for additional information on the restricted shares issued to these employees, see Note 1213 — Equity-Based Compensation). The original $2.7 million estimate for bonuses recorded and paid to the Advisor in 2019 exceeded the cash portion of the 2019 Bonus Awards to be paid to employees of the Advisor or its affiliates by $1.4 million and to be reimbursed by the Company. As a result, during the three months ended September 30, 2020, the Company recorded a receivable from the Advisor of $1.4 million in prepaid expenses and other assets on the consolidated balance sheet and a corresponding reduction in general and administrative expenses. Pursuant to authorization by the independent members of the Company’s board of directors, the $1.4 million receivable is payablewas paid back to the Company over a 10-month period from January 2021 through October 2021. During the second quarter of 2021, the Advisor finalized the amounts and form of the 2020 bonuses previously estimated to be paid to the employees of the Advisor or its affiliates who provided administrative services during such calendar year, prorated for the time spent working on matters relating to the Company (the “2020 Bonus Awards”). The 2020 Bonus Awards are paid by the Advisor over an eleven-month period from June 2021 to April 2022. The final amounts awarded exceeded the amounts previously paid by the Company to the Advisor for estimated 2020 bonuses by approximately $1.4 million for the following reasons (i) forfeitures of bonuses related to employees of the Advisor or its affiliates who were terminated or resigned prior to payment (including the Company’s former chief financial officer), (ii) payment of a portion of bonuses in the form of restricted shares (which is recorded as equity-based compensation expense) and (iii) a general reduction in final bonuses for remaining personnel of the Advisor or its affiliates due to on-going negative impacts of the COVID-19 pandemic. As a result, during the second quarter of 2021, the Company recorded a receivable from the Advisor of $1.4 million, which is recorded in prepaid expenses and other assets on the consolidated balance sheet and a corresponding reduction in general and administrative expenses. The Advisor paid the $1.4 million receivable to the Company in August 2021. Reimbursements for the cash portion of 2020 and 2021 bonuses to employees of the Advisor or its affiliates continue to bewere expensed and reimbursed on a monthly basis during 2020 and 2021 in accordance with the cash bonus estimates provided by the Advisor. Generally, prior to the 2019 Bonus Awards, employee bonuses have been formally awarded to employees of the Advisor or its affiliates in March as an all-cash award and paid out by the Advisor in the year subsequent to the year in which services were rendered to the Company. Summary of fees, expenses and related payables The following table details amounts incurred and payable to related parties in connection with the operations-related services described above as of and for the periods presented. Amounts below are inclusive of fees and other expense reimbursements incurred from and due to the Advisor that are passed through and ultimately paid to Lincoln as a result of the Advisor’s former arrangements with Lincoln: | | | Year Ended December 31, | | Payable (Receivable) as of December 31, | | | Year Ended December 31, | | Payable (Receivable) as of December 31, | | (In thousands) | (In thousands) | | 2020 | | 2019 | | 2018 | | 2020 | | 2019 | | (In thousands) | | 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | One-time fees and reimbursements: | One-time fees and reimbursements: | | | | | | | | | | | One-time fees and reimbursements: | | | | | | | | | | | Acquisition related cost reimbursements [1] | Acquisition related cost reimbursements [1] | | $ | 201 | | | $ | 241 | | | $ | 318 | | | $ | 96 | | | $ | 53 | | | Acquisition related cost reimbursements [1] | | $ | 74 | | | $ | 201 | | | $ | 241 | | | $ | 32 | | | $ | 96 | | | Vesting and conversion of Class B Units | Vesting and conversion of Class B Units | | 0 | | | 0 | | | 15,786 | | | 0 | | | 0 | | | Vesting and conversion of Class B Units | | — | | | — | | | — | | | — | | | — | | | Ongoing fees: | Ongoing fees: | | Ongoing fees: | | Asset management fees to related party | Asset management fees to related party | | 27,829 | | | 25,695 | | | 23,143 | | | 177 | | | 9 | | | Asset management fees to related party | | 32,804 | | | 27,829 | | | 25,695 | | | — | | | 177 | | | Property management and leasing fees [2] | Property management and leasing fees [2] | | 6,604 | | | 9,921 | | | 9,620 | | | 0 | | | 1,153 | | | Property management and leasing fees [2] | | 8,596 | | | 6,604 | | | 9,921 | | | 901 | | | — | | | Professional fees and other reimbursements [3] | Professional fees and other reimbursements [3] | | 10,539 | | | 9,732 | | | 9,314 | | | (77) | | | (565) | | [4] | Professional fees and other reimbursements [3] | | 10,013 | | | 10,539 | | | 9,732 | | | 83 | | | (77) | | | Distributions on Class B Units [3] [5] | | 0 | | | 0 | | | 736 | | | 0 | | | 0 | | | | Professional fee credit due from Advisor and its affiliates [6] | | (1,862) | | | 0 | | | 0 | | | (1,862) | | [6] | 0 | | | | Professional fee credit due from Advisor and its affiliates [5] | | Professional fee credit due from Advisor and its affiliates [5] | | (1,444) | | | (1,862) | | | — | | | — | | [4] | (1,862) | | [4] | Total related party operation fees and reimbursements | Total related party operation fees and reimbursements | | $ | 43,311 | | | $ | 45,589 | | | $ | 58,917 | | | $ | (1,666) | | | $ | 650 | | | Total related party operation fees and reimbursements | | $ | 50,043 | | | $ | 43,311 | | | $ | 45,589 | | | $ | 1,016 | | | $ | (1,666) | | |
__________
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
[1]Amounts included in acquisition and transaction related expenses in the consolidated statements of operations and comprehensive loss. [2]Amounts included in property operating expenses in the consolidated statements of operations and comprehensive loss. [3]Amounts included in general and administrative expense in the consolidated statements of operations and comprehensive loss. During the year ended December 31, 2019, the Company recorded a reduction of general and administrative expenses in the amount of $0.8 million related to the reversal of a
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 payable balance at December 31, 2018 due to American National Stock Transfer, LLC, a subsidiary of RCS Capital Corporation (“RCAP”), which at the time the payable balance was recorded and prior to its bankruptcy filing was under common control with the Advisor. RCAP was also the parent company of Realty Capital Securities, LLC, the dealer manager in the Company’s initial public offering. [4]Balance included aIncluded in this receivable of $0.7 million from the Advisor as of December 31, 2019 previously recorded in the fourth quarter of 2018, which, pursuant2020 is $1.4 million that relates to authorization by the independent membersoverpayment of the Company’s board of directors, was payable over time during 2020 and had been fully repaid as of2019 Bonus Awards. During the year ended December 31, 2020.2021, the entire amount was received from the Advisor relating to the overpayment of the 2019 Bonus Awards and a $0.5 million receivable relating to the overpayment of invoices for a shared service was received. In addition, the Company was reimbursed for the $1.4 million related to the 2020 Bonus Awards in August 2021. [5]Subsequent to the Listing the Class B Units were fully vested and converted to Class A Units, which were then redeemed for shares of Class A common stock. Distributions with respect to shares of Class A common stock are treated as equity distributions whereas distributions with respect to Class B Units were treated as additional compensation and expensed. [6]Included in general and administrative expenses. For the year ended December 31, 2021, amount relates to the overpayment of the 2020 Bonus Awards. For the year ended December 31, 2020, $1.4 million relates to overpayment of the 2019 Bonus Awards and $0.5 million relates to a receivable recorded for the overpayment of invoices in current and prior years for a shared service.
Listing Arrangements Fees Incurred in Connection with a Listing Pursuant to the A&R OP Agreement, in connection with the Listing, the OP was obligated to distribute to the Special Limited Partner a promissory note in an aggregate amount (the “Listing Amount”) equal to 15.0% of the difference (to the extent the result is a positive number) between: •the sum of (i) the “Market Value” (as defined in the A&R OP Agreement) of the Company’s common stock plus (ii) the sum of all distributions or dividends (from any source) paid by the Company to its stockholders prior to the Listing; and •the sum of (i) the gross proceeds (“Gross Proceeds”) of all public and private offerings, including issuance of the Company’s common stock pursuant to a merger (including the Merger) or business combination (an “Offering”) as of the Listing Date plus (ii) the total amount of cash that, if distributed to those stockholders who purchased shares of the Company’s common stock in an Offering prior to the Listing, would have provided those stockholders a 6.0% cumulative, non-compounded, pre-tax annual return (based on a 365-day year) on the Gross Proceeds. Effective at the Listing, the OP entered into a listing note agreement with respect to this obligation (the “Listing Note”) with the Special Limited Partner and entered into a related subordination agreement (the “Subordination Agreement”) with the administrative agent under the Credit Facility, BMO Bank. The Listing Note evidenced the OP’s obligation to distribute to the Special Limited Partner the Listing Amount. The measurement period used to calculate the average Market Value of the Company’s common stock was from July 8, 2019 to August 16, 2019, the 30 consecutive trading days commencing on the 180th day following the date on which shares of Class B-2 common stock converted into shares of Class A common stock. Based on the actual Market Value during the measurement period, the Listing Amount was zero, and the Company has no distribution obligation to the Special Limited Partner related to the Listing Note. The final fair value of the Listing Note is zero, the same fair value the Listing Note had at issuance. The fair value at issuance was determined using a Monte Carlo simulation, which used a combination of observable and unobservable inputs. Multi-Year Outperformance Agreement
On the Listing Date, the Company granted a performance-based equity award to the Advisor in the form of a Master LTIP Unit (the “Master LTIP Unit”) pursuant to the 2018 OPP which, together with the Second A&R OP Agreement, superseded in all respects the general terms of the multi-year outperformance agreement and the amendment and restatement of the limited partnership agreement of the OP previously approved by the Company’s board of directors in April 2015 to be effective upon a listing of the Company’s common stock. On August 30, 2018, the Master LTIP Units automatically converted into 4,496,796 LTIP Units in accordance with its terms. For additional information on the 2018 OPP, see Note 12 — Equity-Based Compensation.Class A Unit Redemptions
Holders of Class A Units have the right to redeem their Class A Units for the cash value of a corresponding number of shares of Class A common stock, or at the option of the OP, a corresponding number of shares of Class A common stock in accordance with the Second A&R OP Agreement. Holders of OP Units had similar rights under the prior A&R OP Agreement. The remaining rights of the limited partner interests are limited, however, and do not include the ability to replace the general partner or to approve the sale, purchase or refinancing of the OP’s assets.
Subsequent to the Listing, all of the Class A Units held by the Advisor and its affiliates were redeemed for shares of Class A common stock and all of the shares of Class A common stock, Class B-1 common stock and Class B-2 common stock owned
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
by the Advisor and its affiliates (including the Special Limited Partner) were distributed pro rata to the individual members of those entities, including Edward M. Weil, Jr., the Company’s chairman and chief executive officer. See Note 8 — Stockholders’ Equity and Non-Controlling Interest for additional information regarding these transactions.Note 1112 — Economic Dependency Under various agreements, the Company has engaged or will engage the Advisor, its affiliates and entities under common control with the Advisor to provide certain services that are essential to the Company, including asset management services, supervision of the management and leasing of properties owned by the Company, asset acquisition and disposition decisions, as well as other administrative responsibilities for the Company including accounting and legal services, human resources and information technology. As a result of these relationships, the Company is dependent upon the Advisor and its affiliates. In the event that these companies are unable to provide the Company with the respective services, the Company will be required to find alternative providers of these services. Note 1213 — Equity-Based Compensation Equity Plans 2018 Equity Plan Effective at the Listing, the Company’s board of directors adopted an equity plan for the Advisor (the “Advisor Plan”) and an equity plan for individuals (the “Individual Plan” and together with the Advisor Plan, the “2018 Equity Plan”). The Advisor Plan is substantially similar to the Individual Plan, except with respect to the eligible participants. Under the Individual Plan, the Company may only make awards to its directors, officers and employees (if the Company ever has employees), employees of the Advisor and its affiliates, employees of entities that provide services to the Company, directors of the Advisor or of
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 entities that provide services to the Company, certain consultants to the Company and the Advisor and its affiliates or to entities that provide services to the Company. By contrast, under the Advisor Plan the Company may only make awards to the Advisor. The 2018 Equity Plan succeeded and replaced the existing employee and director restricted share plan (the “RSP”). Following the effectiveness of the 2018 Equity Plan at the Listing, no further awards issued under the RSP; provided, however, that any outstanding awards under the RSP, such as unvested restricted shares held by the Company’s independent directors, remained outstanding in accordance with their terms and the terms of the RSP until all those awards are vested, forfeited, canceled, expired or otherwise terminated in accordance with their terms. The Company accounts for forfeitures when they occur. The 2018 Equity Plan permits awards of restricted shares, restricted stock units (“RSUs”), options, stock appreciation rights, stock awards, LTIP Units and other equity awards. The 2018 Equity Plan has a term of 10 years, expiring on July 19 2028. Identical to the RSP, the number of shares of the Company’s capital stock available for awards under the 2018 Equity Plan, in the aggregate, is equal to 10.0% of the Company’s outstanding shares of common stock on a fully diluted basis at any time. Shares subject to awards under the Individual Plan reduce the number of shares available for awards under the Advisor Plan on a one-for-one basis and vice versa. If any awards granted under the 2018 Equity Plan are forfeited for any reason, the number of forfeited shares is again available for purposes of granting awards under the 2018 Equity Plan. Restricted Shares Restricted shares are shares of common stock awarded under terms that provide for vesting over a specified period of time. Holders of restricted shares may receive non-forfeitable cash dividends prior to the time that the restrictions on the restricted shares have lapsed. Any dividends to holders of restricted shares payable in shares of common stock are subject to the same restrictions as the underlying restricted shares. Restricted shares may not, in general, be sold or otherwise transferred until restrictions are removed and the shares have vested. Prior to June 30, 2020, the Company only granted restricted shares to the Company’s directors. DuringHowever, during the yearyears ended December 31, 2021 and 2020, the Company granted 52,468 restricted shares to the Company’s directors. In addition, during the third quarter of 2020, the Company granted 278,278 and309,475 restricted shares to employees of the Advisor or its affiliates who are involved in providing services to the Company, including the Company’s chief financial officer. The remainder of the restricted shares granted during the years ended December 31, 2021 and 2020 were formally issued in October 2020 at the time the related award agreements were executed. The awardgranted to the Company’s chief financial officer was recommended by the Advisor and approved by the compensation committee of the Company’s board of directors. The awards to other employees were made pursuant to authority delegated by the compensation committee to Edward M. Weil, Jr., the Company’s chief executive officer, president and chairman. Following the grant of these awards, there remained an additional 40,525 restricted shares that may be awarded in the future pursuant to the delegation of authority to Mr. Weil. No awards may be made to anyone who is also a partner, member or equity owner of the parent of the Advisor.
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
The restricted shares granted to the Company’s directors vest on a straight-line basis over periods of 1 year to 5 years from the date of grant and provide for accelerated vesting of the portion of the unvested restricted shares scheduled to vest in the year of the recipient’s termination of his or her position as a director of the Company due to a voluntary resignation or failure to be re-elected to the Company’s board of directors following nomination therefor. All unvested restricted shares held by the Company’s directors also vest in the event of a Change of Control (as defined in the RSP or the Individual Plan) or a termination of a directorship without cause or as a result of death or disability. The restricted shares granted to employees of the Advisor or its affiliates vest in 25% increments on each of the first four anniversaries of the grant date. Except in connection with a change in control (as defined in the award agreement) of the Company, any unvested restricted shares will be forfeited if the holder’s employment with the Advisor terminates for any reason. Upon a change in control of the Company, 50% of the unvested restricted shares will immediately vest and the remaining unvested restricted shares will be forfeited.
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 The following table reflects the number of restricted shares granted, vested, or forfeited for the years ended December 31, 2021, 2020 2019 and 2018:2019: | | | Number of Shares of Common Stock | | Weighted-Average Issue Price | | Number of Shares of Common Stock | | Weighted-Average Issue Price | Unvested, December 31, 2017 | 15,708 | | | $ | 23.67 | | | Granted | 127,402 | | | 16.01 | | | Vested | (6,869) | | | 23.58 | | | Forfeited | (7) | | | 0 | | | Unvested, December 31, 2018 | Unvested, December 31, 2018 | 136,234 | | | 16.51 | | Unvested, December 31, 2018 | 136,234 | | | $ | 16.51 | | Granted | Granted | 34,588 | | | 9.83 | | Granted | 34,588 | | | 9.83 | | Vested | Vested | (59,401) | | | 16.36 | | Vested | (59,401) | | | 16.36 | | Forfeited | Forfeited | 0 | | | 0 | | Forfeited | — | | | — | | Unvested, December 31, 2019 | Unvested, December 31, 2019 | 111,421 | | | 14.52 | | Unvested, December 31, 2019 | 111,421 | | | 14.52 | | Granted | Granted | 361,943 | | | 6.80 | | Granted | 361,943 | | | 6.80 | | Vested | Vested | (72,492) | | | 14.13 | | Vested | (72,492) | | | 14.13 | | Forfeited | Forfeited | 0 | | | 0 | | Forfeited | — | | | — | | Unvested, December 31, 2020 | Unvested, December 31, 2020 | 400,872 | | | 7.62 | | Unvested, December 31, 2020 | 400,872 | | | 7.62 | | Granted | | Granted | 313,474 | | | 9.84 | | Vested | | Vested | (266,427) | | | 9.27 | | Forfeited | | Forfeited | (25,050) | | | 6.97 | | Unvested, December 31, 2021 | | Unvested, December 31, 2021 | 422,869 | | | 8.26 | |
As of December 31, 2020,2021, the Company had $2.4$2.9 million of unrecognized compensation cost related to unvested restricted share awards granted. That cost is expected to be recognized over a weighted-average period of 3.1 years. The fair value of the restricted shares is being expensed in accordance with the service period required. Compensation expense related to restricted shares is included in general and administrative expense in the Company’s consolidated statements of operations and comprehensive loss. Compensation expense related to restricted shares was approximately $2.4 million, $1.2 million $1.1 million and $0.5$1.1 million for the years ended December 31, 2021, 2020 and 2019, and 2018, respectively. CompensationThe higher expense relatedrecorded in the year ended December 31, 2021 was due to the accelerated vesting of restricted shares is includedpreviously awarded to the Company’s former chief financial officer, as well as expense from an additional grant of restricted shares awarded to the Company’s former chief financial officer in generalFebruary 2021 (see additional discussion below). On February 26, 2021, the Company’s board of directors approved an amendment to the award agreement for 69,875 restricted shares previously awarded to the Company’s former chief financial officer. These restricted shares had been scheduled to vest in 25% increments on each of the first four anniversaries of the grant date (September 15, 2020), however, in accordance with the amendment, these shares fully vested upon the effectiveness of the resignation of the Company’s former chief financial officer on April 9, 2021. This was treated as a modification of the award of these restricted shares and, administrativein addition to accelerating the original expense, the Company was also required to calculate excess of the new value of those awards on the accompanying consolidated statementsdate of operationsmodification over the fair value of the awards immediately prior to the amendment and comprehensive loss.record such excess as expense through April 9, 2021. In addition, also on February 26, 2021, the Company’s board of directors granted the Company’s former chief financial officer an additional award of 52,778 restricted shares that also fully vested on upon the effectiveness of her resignation on April 9, 2021. The acceleration of vesting of the prior grant and the new grant resulted in approximately $1.1 million of increased equity-based compensation expense recorded during the year ended December 31, 2021. Restricted Stock Units RSUs represent a contingent right to receive shares of common stock at a future settlement date, subject to satisfaction of applicable vesting conditions and other restrictions, as set forth in the RSP and an award agreement evidencing the grant of RSUs. RSUs may not, in general, be sold or otherwise transferred until restrictions are removed and the rights to the shares of common stock have vested. Holders of RSUs do not have or receive any voting rights with respect to the RSUs or any shares underlying any award of RSUs, but such holders are generally credited with dividend or other distribution equivalents which are subject to the same vesting conditions and other restrictions as the underlying RSUs and only paid at the time such RSUs are settled in shares of common stock. The Company has not granted any RSUs, and no unvested RSUs were outstanding during the years ended December 31, 2021, 2020 2019 and 2018.2019.
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 Multi-Year Outperformance Agreement 2021 OPP On May 4, 2021, the Company’s independent directors, authorized an award of LTIP Units under the 2021 OPP after the performance period under the 2018 OPP expired on July 19, 2021, and, on July 21, 2021, the Company, the OP and the Advisor entered into the 2021 OPP (see below for additional information on the 2018 OPP, including information on the LTIP Units granted and earned thereunder). On July 21, 2021, the Company and the Advisor entered into the 2021 OPP. Based on a maximum award value of $72.0 million and the initial share price of $8.4419, which was determined on July 20, 2021, the Advisor was granted a total of 8,528,885 LTIP Units pursuant to the 2021 OPP. These LTIP Units may be earned and become vested based on the Company’s total shareholder return (“TSR”), including both share price appreciation and reinvestment of Class A common stock dividends, compared to the initial share price over a performance period that commenced on July 20, 2021 and ending on the earliest of (i) July 20, 2024, (ii) the effective date of any Change of Control (as defined in the Advisor Plan) and (iii) the effective date of any termination of the Advisor’s services as the Company’s advisor. The amortization of the fair value of the LTIP Units that were granted will be recorded evenly over the requisite service period which is approximately 38.5 months from May 4, 2021, the date that the Company’s independent board of directors approved the award of LTIP Units under the 2021 OPP, through July 20, 2024, the end of the performance period. The Company recorded $1.9 million in additional equity-based compensation expense during the year ended December 31, 2021 which represented the pro rata share of the 2021 OPP’s service period from May 4, 2021 (date of grant) to July 20, 2024 (end of the performance period).As of July 20, 2021, the initial share price and the number of LTIP Units to be granted under the 2021 OPP became known and the fair value of the award as of July 20, 2021 was determined to be $40.8 million. As a result, the award of LTIP Units under the 2021 OPP was reclassified as an equity award on July 20, 2021, with any change in value and cumulative effect thereof, reflected income and equity statements on that date. 2018 OPP On the Listing Date, the Company granted a performance-based equity award to the Advisor in the form of a Master LTIP Unit pursuant to the 2018 OPP. The Master LTIP Unit was automatically converted on August 30, 2018 (the “Effective Date”), the 30th trading day following the Listing Date, into 4,496,796 LTIP Units equal to the quotient of $72.0 million divided by
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
$16.0114, $16.0114, the ten-day trailing average closing price of the Company’s Class A common stock on Nasdaq over the 10 consecutive trading days immediately prior to the Effective Date (the “Initial Share Price”).Date. The Effective Date was the grant date for accounting purposes. In accordance with accounting rules, the total fair value of the LTIP Units of $32.0 million was calculated and fixed as of the grant date, and is beingwas recorded over the requisite service period of three years. In March 2019, the Company entered into an amendment to the 2018 OPP to reflect a change in the peer group resulting from the merger of one member of the peer group, Select Income REIT, with Government Properties Income Trust, with the entity surviving the merger renamed as Office Properties Income Trust. Under the accounting rules, the Company was required to calculate any excess of the new value of LTIP Units in accordance with the provisions of the amendment ($10.9 million) over the fair value immediately prior to the amendment ($8.1 million). This excess of approximately $2.8 million is beingwas expensed over the period from March 4, 2019, the date the Company’s compensation committee approved the amendment, through August 30,July 19, 2021.
The LTIP Units issued pursuant to the 2018 OPP could potentially have been earned by the Advisor based on the Company’s achievement of threshold, target and maximum performance goals based on the Company’s absolute and relative TSR over a three-year performance period that ended on July 19, 2021. Prior to the issuance of LTIP Units pursuant to the 2021 OPP, the compensation committee of the board of directors of the Company determined that none of the 4,496,796 LTIP Units subject to the 2018 OPP had been earned under either the absolute or relative thresholds. These LTIP Units were thus automatically forfeited effective as of July 19, 2021, without the payment of any consideration by the Company or the OP. On that date, the Company reclassified amounts reflected in non-controlling interest for these LTIP Units to additional paid in capital on its consolidated balance sheet and consolidated statement of equity. Compensation Expense - 2021 OPP and 2018 OPP During the years ended December 31, 2021 2020 2019 and 2018,2019, the Company recorded share-based compensation expense related to the LTIP Units of $14.9 million and $11.9 million and $11.6 million and $4.8 million, respectively, which is recorded in equity-based compensation in the consolidated statements of operations and comprehensive loss. As of December 31, 2020,2021, the Company had $6.5$32.4 million of unrecognized compensation expense related to the LTIP Units which is expected to be recognized over a period of 0.52.6 years.
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 LTIP Units represent the maximum number of LTIP Units that may be earned by the Advisor during a performance period commencing on July 19, 2018 and ending on the earliest of (i) July 19, 2021, (ii) the effective date of any Change of Control (as defined in the 2018 OPP) and (iii) the effective date of any terminationDistributions/Redemptions The rights of the Advisor’s service as advisor of the Company (the “Performance Period”). Half of the LTIP Units (the “Absolute TSR LTIP Units”) are eligible to be earned as of the last day of the Performance Period (the “Valuation Date”) if the Company achieves an absolute total stockholder return (“TSR”) for the Performance Period as follows:
| | | | | | | | | | | | | | | | | | | | | Performance Level | | Absolute TSR | | Percentage of LTIP Units Earned | Below Threshold | | Less than | 24 | % | | | 0 | % | Threshold | | | 24 | % | | | 25 | % | Target | | | 30 | % | | | 50 | % | Maximum | | | 36 | % | or higher | | 100 | % |
If the Company’s absolute TSR is more than 24% but less than 30%, or more than 30% but less than 36%, the percentage of the Absolute TSR LTIP Units earned is determined using linear interpolation as between those tiers, respectively.
Half of the LTIP Units (the “Relative TSR LTIP Units”) are eligible to be earned as of the Valuation Date if the amount, expressed in terms of basis points, whether positive or negative, by which the Company’s absolute TSR for the Performance Period exceeds the average TSR of a peer group for the Performance Period consisting of Colony Capital, Inc., Lexington Realty Trust, RPT Realty (formerly known as Ramco-Gershenson Properties Trust), Spirit Realty Capital, Inc. and Office Properties Income Trust as follows:
| | | | | | | | | | | | | | | | | | | | | Performance Level | | Relative TSR Excess | | Percentage of Relative TSR LTIP Units Earned | Below Threshold | | Less than | -600 | | basis points | | 0 | % | Threshold | | | -600 | | basis points | | 25 | % | Target | | | — | | basis points | | 50 | % | Maximum | | | +600 | | basis points | | 100 | % |
If the relative TSR excess is more than -600 basis points but less than — basis points, or more than — basis points but less than +600 basis points, the percentage of the Relative TSR LTIP Units earned is determined using linear interpolation as between those tiers, respectively.
The Advisor as the holder of the LTIP Units isare governed by the terms of the LTIP Units set forth in the agreement of limited partnership of the OP. Holders of LTIP Units are entitled to distributions on the LTIP Units equal to 10% of the distributions made per Class A Unit (other than distributions of sale proceeds) until the LTIP Units are earned. These distributionsDistributions paid on a Class A Unit are not
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
Class A common stock. Distributions paid on LTIP Units are not subject to forfeiture, even if the LTIP Units are ultimately forfeited. The Master LTIP Unit was entitled, on the Effective Date, to receive a distribution equal to the product of 10% of the distributions made per Class A Unit during the period from the Listing Date to the Effective Date multiplied by the number of LTIP Units. For the years ended December 31, 2020, 2019 and 2018, the Company paid distributions on the LTIP Units of $0.4 million, $0.5 million and $0.2 million, respectively, whichAdvisor is recorded in the consolidated statement of changes in equity. If any LTIP Units are earned, the holder will be entitled to a priority catch-up distribution on each earned LTIP Unit equal to 90% of the aggregate distributions paid on a Class A UnitUnits during the Performance Period, less the aggregate distributions paid on the LTIP Unit during the Performance Period. As of the Valuation Date, the earnedapplicable performance period. Any LTIP Units willthat are earned become entitled to receive the same distributions paid on the Class A Units. Further, at the timeIf and when the Advisor’s capital account with respect to an earned LTIP Unit that is earned and vested is economically equivalentequal to the average capital account balance of a Class A Unit, the Advisor, as the holder of the earned LTIP Unit, in its sole discretion, will, in accordance with the Second A&R OP Agreement, beis entitled to convert the LTIP Unit into a Class A Unit, which may in turn be redeemed on a one-for-one basis for, at the Company’s election, a share of Class A common stock or the cash equivalent thereof. The Company paid distributions on LTIP Units of $0.5 million, $0.4 million and $0.5 million for the years ended December 31, 2021 2020 and 2019, respectively. These amounts are recorded in the Company’s consolidated statements of changes in equity. Performance Measures As indicated above, on July 19, 2021, at the end of the performance period, the compensation committee of the Company’s board of directors determined that none of the 4,496,796 LTIP Units under the 2018 OPP had been earned. These LTIP Units were thus automatically forfeited effective as of July 19, 2021, without the payment of any consideration by the Company or the OP. With respect to one-half of the LTIP Units granted under the 2021 OPP, the number of LTIP Units that become earned (if any) will be determined as of the last day of the performance period based on the Company’s achievement of absolute TSR levels as shown in the table below. | | | | | | | | | | | | | | | | | | | | | | | | | | | Performance Level | | Absolute TSR | | Percentage of LTIP Units Earned | | Number of LTIP Units Earned | Below Threshold | | Less than | 18 | % | | | 0 | % | | 0.00 | | Threshold | | | 18 | % | | | 25 | % | | 1,066,110.63 | | Target | | | 24 | % | | | 50 | % | | 2,132,221.25 | | Maximum | | | 36 | % | or higher | | 100 | % | | 4,264,442.50 | |
If the Valuation DateCompany’s absolute TSR is more than 18% but less than 24%, or more than 24% but less than 36%, the effective datenumber of LTIP Units that become earned is determined using linear interpolation as between those tiers, respectively. With respect to the remaining one-half of the LTIP Units granted under the 2021 OPP, the number of LTIP Units that become earned (if any) will be determined as of the last day of the performance period based on the difference (expressed in terms of basis points, whether positive or negative, as shown in the table below) between the Company’s absolute TSR on the last day of the performance period relative to the average TSR of a peer group(consisting of Broadstone Net Lease, Inc., Office Properties Income Trust, RPT Realty and Spirit Realty Capital, Inc. as of the last day of the performance period as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | Performance Level | | Relative TSR Excess | | Percentage of Relative TSR LTIP Units Earned | | Number of LTIP Units Earned | Below Threshold | | Less than | -600 | | basis points | | 0 | % | | 0.000 | | Threshold | | | -600 | | basis points | | 25 | % | | 1,066,110.625 | | Target | | | — | | basis points | | 50 | % | | 2,132,221.250 | | Maximum | | | +600 | | basis points | | 100 | % | | 4,264,442.500 | |
If the relative TSR excess is more than -600 basis points but less than zero basis points, or more than zero basis points but less than +600 basis points, the number of LTIP Units that become earned is determined using linear interpolation as between those tiers, respectively. Other Terms
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 In the case of a Change of Control or a termination of the Advisor without Cause (as defined in the Advisory Agreement), the number of LTIP Units that become earned will be calculated based on actual performance through the last trading day prior to the effective date of the Change of Control or termination (as applicable), with the hurdles for calculating absolute TSR pro-ratedprorated to reflect that the Performance Period lasteda performance period of less than three years but without pro-ratingprorating the number of Absolute TSR LTIP Units or Relative TSR LTIP Units the Advisor would be eligible to earnthat may become earned to reflect the shortened performance period. IfIn the Valuation Date is the effective datecase of a termination of the Advisor withfor Cause, the number of LTIP Units that become earned will also be calculated based on actual performance through the last trading day prior to the effective date of the termination, with the hurdles for calculating absolute TSR pro-ratedand the number of LTIP Units that may become earned each prorated to reflect that the Performance Period lasteda performance period of less than three years and withyears.
Pursuant to the numberterms of Absolute TSRthe Advisor Plan, the LTIP Units or Relative TSR LTIP Units the Advisor wouldwill be eligible to earn also pro-rated to reflect the shortened period. The award of LTIP Units under the 2018 OPP is administered by the compensation committee, provided that any of the compensation committee’s powers can be exercised instead by the Company’s board of directors ifor a committee thereof, defined as the board of directors so elects. Following“Committee” in the Valuation Date,Advisor Plan. Promptly following the compensation committee is responsible for determiningperformance period, the Committee will, except in certain circumstances, determine the number of Absolute TSR LTIP Units and Relative TSR LTIP Units earned as calculated(if any) based on calculations prepared by an independent consultant engaged by the compensation committeeCommittee and as approved by the compensation committeeCommittee in its reasonable and good faith discretion. The compensation committeeCommittee also must approve the transfer of any Absolute TSR LTIP Units and Relative TSR LTIP Units (oror any Class A Units into which theyLTIP Units may be converted in accordance with the terms of the A&R LPA).
LTIP Units earned asagreement of limited partnership of the Valuation Date will also become vested as of the Valuation Date.OP. Any LTIP Units that are not earned and vested after the compensation committee makes the required determination will automatically and without notice be forfeited without the payment of any consideration by the Company or the OP, effective as of the Valuation Date.end of the performance period and neither the Company nor the OP will be required to pay any future consideration in respect thereof.
Director Compensation Effective onUnder the Listing Date, the Company’s board of directors approved a new director compensation program, which replaced the Company’s existing director compensation program and superseded in all respects the director compensation previously approved by the Company’s board of directors in April 2015. Under thecurrent director compensation program, on a regular basis, each independent director receives an annual cash retainer of $60,000 and, in connection with each of the Company’s annual meetings of stockholders, a grant of $85,000 in restricted shares, vesting on the one-year anniversary of the annual meeting.
The lead independent director receives an additional annual cash retainer of $100,000, the chair of the audit committee of the Company’s board of directors receives an additional annual cash retainer of $30,000, each other member of the audit committee receives an additional annual cash retainer of $15,000, the chair of each of the compensation committee and the nominating and corporate governance committee of the Company’s board of directors receives an additional annual cash retainer of $15,000, and each other member of each of the compensation committee and the nominating and corporate governance committee will receive an additional annual cash retainer of $10,000. Each of the Company’s directors received a one-time retention grant on September 5, 2018 of 21,234 restricted shares, representing the number of restricted shares equal to the quotient of $340,000 divided by the Initial Share Price, vesting annually over a three-year period commencing on the Listing Date in equal installments. Because the independent directors did not receive an annual grant of restricted shares in connection with the Company’s 2018 annual meeting of stockholders, on September 5, 2018 the independent directors received a grant of 5,308 restricted shares pursuant to the new director
AMERICAN FINANCE TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
compensation program, representing the number of restricted shares equal to the quotient of $85,000 divided by the Initial Share price, which vested on July 19, 2018.
Other Equity-Based Compensation The Company may issue common stock in lieu of cash to pay fees earned by the Company’s directors at each director’s election. If the Company did so, there would be no restrictions on the shares issued since these payments in lieu of cash relate to fees earned for services performed. There were 0no shares of common stock issued to directors in lieu of cash compensation during the years ended December 31, 2021, 2020 2019 and 2018.2019. Note 1314 — Net Loss Per Share The following table sets forth the basic and diluted net loss per share computations for the years ended computations: | | | | | | | | | | | | | | | | | | | | | | | Year Ended December 31, | (In thousands, except share and per share amounts) | | 2021 | | 2020 | | 2019 | Net loss attributable to common stockholders | | $ | (63,441) | | | $ | (46,650) | | | $ | (3,101) | | Adjustments to net loss for common share equivalents | | (1,037) | | | (613) | | | (792) | | Adjusted net loss attributable to common stockholders | | $ | (64,478) | | | $ | (47,263) | | | $ | (3,893) | | | | | | | | | Weighted average shares outstanding — Basic and Diluted | | 115,404,635 | | | 108,404,093 | | | 106,397,296 | | Net loss per share attributable to common stockholders — Basic and Diluted | | $ | (0.56) | | | $ | (0.44) | | | $ | (0.04) | |
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020, 20192021 Under current authoritative guidance for determining earnings per share, all unvested share-based payment awards that contain non-forfeitable rights to distributions are considered to be participating securities and 2018:therefore are included in the computation of earnings per share under the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common shares and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. The Company’s unvested restricted shares, Class A Units and unearned LTIP Units contain rights to receive distributions considered to be non-forfeitable, except in certain limited circumstances, and therefore the Company applies the two-class method of computing earnings per share. The calculation of earnings per share above adjusts net loss to exclude the distributions to the unvested restricted shares, Class A Units and the unearned LTIP Units that were issued under the 2021 OPP and 2018 OPP from the numerator. | | | | | | | | | | | | | | | | | | | | | | | Year Ended December 31, | | | 2020 | | 2019 | | 2018 | | | | | | | | | | | | | | | Net loss attributable to common stockholders — Basic and Diluted | | $ | (46,650) | | | $ | (3,101) | | | $ | (37,409) | | | | | | | | | Weighted average shares outstanding — Basic and Diluted | | 108,404,093 | | | 106,397,296 | | | 105,560,053 | | | | | | | | | Net loss per share attributable to common stockholders — Basic and Diluted | | $ | (0.43) | | | $ | (0.03) | | | $ | (0.35) | |
Diluted net lossincome per share assumes the vesting or conversion of restricted shares and Class A Unitsall Common Stock share equivalents into an equivalent number of unrestricted shares of Class A common stock and the conversion of all outstanding Class B Units, prior to their vesting and conversion into Class A Units which were redeemed for shares of Class A common stock in connection with the Listing (see Note 10 — Related Party Transactions and Arrangements for additional information),Common Stock, unless the effect is antidilutive. anti-dilutive. The Company considers unvested restricted shares, Class A Units and unvested LTIP Units to be common share equivalents. The following table shows common share equivalents on a weighted average basis that were excluded from the calculation of diluted earnings per share as their effect would have been antidilutive for the periods presented: | | | | | | | | | | | | | | | | | | | | | | | December 31, | | | 2021 | | 2020 | | 2019 | Unvested restricted shares [1] | | 423,096 | | | 199,325 | | | 128,959 | | Class A Units [2] | | 172,921 | | | 172,921 | | | 172,921 | | 2018 LTIP Units [3] | | 2,463,998 | | | 4,496,796 | | | 4,496,796 | | 2021 LTIP Units [3] | | 3,855,523 | | | — | | | — | | Total | | 6,915,538 | | | 4,869,042 | | | 4,798,676 | |
__________ [1]Weighted-average number of shares of unvested restricted shares outstanding for the periods presented. There were 422,869, 400,872 and 111,421 unvested restricted shares outstanding as of December 31, 2021, 2020 and 2019, respectively. [2]Weighted-average number of Class A Units outstanding for the periods presented. There were 172,921 Class A Units outstanding as of December 31, 2021, 2020 and 2019. [3]Weighted-average number of 2018 and 2021 LTIP Units outstanding for the periods presented. There were 8,528,885 2021 LTIP Units outstanding as of December 31, 2021 and 4,496,796 2018 LTIP Units outstanding as of December 31, 2020 and 2019.
If dilutive, conditionally issuable shares relating to the 2021 OPP award and 2018 OPP award (see Note 1213 — Equity-Based Compensation) for additional information) would be included, as applicable, in the computation of fully diluted EPS on a weighted-average basis for the years ended December 31, 2021, 2020 2019 and 20182019 based on shares that would be issued if the applicable balance sheet date werewas the end of the measurement period. No LTIP Unit share equivalents were included in the computation for the years ended December 31, 2021, 2020 and 2019 and 2018 because (i) no LTIP Units would have been earned based on the trading price of Class A common stock including any cumulative dividends paid (since inception of the 2021 OPP and 2018 OPP) at December 31, 2021, 2020 and 2019 or (ii) the Company recorded a net loss to common stockholders for all periods presented, any shares conditionally issuable under the LTIPs would be anti-dilutive. Note 15 – Segment Reporting As of December 31, 2021, as a result of the CIM Portfolio Acquisition and 2018.the related strategic shift in the Company’s operations, the Company has concluded it now operates in 2 reportable segments consistent with its current management internal financial reporting purposes: single-tenant properties and multi-tenant properties. The Company will evaluate performance and makes resource allocations based on its 2 business segments. Previously, before the CIM Portfolio Acquisition (for which the PSA was signed on December 17, 2021), the Company concluded it was operating in 1 segment. Upon concluding that a change in its reporting segments has occurred, the Company retroactively restates the historical operating results for the segment for all periods presented in that filing and, thereafter, the Company will restate other later prior periods when they are subsequently reported in later filings for comparative purposes. Net Operating Income The Company hadevaluates the following restricted shares, Class A Units, Class B Unitsperformance of the combined properties in each segment based on net operating income (“NOI”). NOI is defined as total revenues from tenants, less property operating and LTIP Units on a weighted-average basis that were excluded frommaintenance expense. NOI excludes all other items of expense and income included in the calculationfinancial statements in calculating net income (loss). The Company uses NOI to assess and compare property level performance and to make decisions concerning the operation of diluted net loss per share as their effect would have been antidilutive for the periods presented: | | | | | | | | | | | | | | | | | | | | | | | December 31, | | | 2020 | | 2019 | | 2018 | Unvested restricted shares [1] | | 199,325 | | | 128,959 | | | 52,847 | | Class A Units [2] | | 172,921 | | | 172,921 | | | 189,737 | | Class B Units [3] | | 0 | | | 0 | | | 573,785 | | LTIP Units [4] | | 4,496,796 | | | 4,496,796 | | | 1,515,359 | | Total | | 4,869,042 | | | 4,798,676 | | | 2,331,728 | |
__________
[1]Weighted-average number of shares of unvested restricted shares outstanding for the periods presented. There were 400,872, 111,421 and 136,234 unvested restricted shares outstanding as of December 31, 2020, 2019 and 2018, respectively.
[2]Weighted-average number of Class A Units outstanding for the periods presented. There were 172,921 Class A Units outstanding as of December 31, 2020, 2019 and 2018.
[3]Weighted-average number of Class B Units outstanding for the period presented. There were 0 Class B Units outstanding as of December 31, 2020, 2019 and 2018.
[4]Weighted-average number of LTIP Units outstanding for the periods presented. There were 4,496,796 LTIP Units outstanding as of December 31, 2020, 2019 and 2018.properties. The
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 20202021 Note 14 – Quarterly Results (Unaudited)Company believes that NOI is useful as a performance measure because, when compared across periods, NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating expenses and acquisition activity on an unleveraged basis, providing perspective not immediately apparent from net income (loss).
Presented belowNOI excludes certain components from net income (loss) in order to provide results that are more closely related to a property’s results of operations. For example, interest expense is not necessarily linked to the operating performance of a summaryreal estate asset and is often incurred at the corporate level. In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort operating performance at the property level. NOI presented by the Company may not be comparable to NOI reported by other REITs that define NOI differently. The Company believes that in order to facilitate a clear understanding of the unaudited quarterlyCompany’s operating results, NOI should be compared with net income (loss) prepared in accordance with GAAP and as presented in the Company’s consolidated financial informationstatements. NOI should not be considered as an alternative to net income (loss) as an indication of the Company’s performance or to cash flows as a measure of the Company’s liquidity or ability to pay distributions.
The following tables reconcile the segment activity to consolidated net loss for the years ended December 31,2021, 2020 and 2019: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Quarter Ended | (In thousands, except share and per share amounts) | | March 31, 2020 | | June 30, 2020 | | September 30, 2020 | | December 31, 2020 | Revenue from tenants | | $ | 74,564 | | | $ | 74,934 | | | $ | 78,489 | | | $ | 77,237 | | Net loss attributable to common stockholders | | $ | (9,153) | | | $ | (21,803) | | | $ | (7,091) | | | $ | (8,603) | | | | | | | | | | | Weighted-average shares outstanding — Basic | | 108,364,082 | | | 108,386,013 | | | 108,429,315 | | | 108,436,329 | | Weighted-average shares outstanding — Diluted | | 108,364,082 | | | 108,386,013 | | | 108,429,315 | | | 108,436,329 | | Net loss per share attributable to common stockholders — Basic and Diluted | | $ | (0.08) | | | $ | (0.20) | | | $ | (0.07) | | | $ | (0.08) | |
| | | | | | | | | | | | | | | | | | | | | | | Year Ended December 31, 2021 | (In thousands) | | Single-Tenant Properties | | Multi-Tenant Properties | | Consolidated | Revenue from tenants | | $ | 218,944 | | | $ | 116,212 | | | $ | 335,156 | | Property operating expense | | 12,005 | | | 43,426 | | | 55,431 | | NOI | | $ | 206,939 | | | $ | 72,786 | | | 279,725 | | Asset management fees to related party | | | | | | (32,804) | | Impairment of real estate investments | | | | | | (33,261) | | Acquisition, transaction and other costs | | | | | | (4,378) | | Equity-based compensation | | | | | | (17,264) | | General and administrative | | | | | | (20,856) | | Depreciation and amortization | | | | | | (130,464) | | | | | | | | | Gain on sale/exchange of real estate investments | | | | | | 4,757 | | Interest expense | | | | | | (81,784) | | Other income | | | | | | 91 | | | | | | | | | Net loss attributable to non-controlling interests | | | | | | 9 | | Allocation for preferred stock | | | | | | (23,262) | | Net loss attributable to common stockholders | | | | | | $ | (63,441) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Quarter Ended | (In thousands, except share and per share amounts) | | March 31, 2019 | | June 30, 2019 | | September 30, 2019 | | December 31, 2019 | Revenue from tenants | | $ | 71,541 | | | $ | 79,109 | | | $ | 72,863 | | | $ | 76,231 | | Net (loss) income attributable to common stockholders | | (3,227) | | | 7,884 | | | (2,931) | | | $ | (4,827) | | | | | | | | | | | Weighted-average shares outstanding — Basic | | 106,076,588 | | | 106,075,741 | | | 106,139,668 | | | 107,286,620 | | Weighted-average shares outstanding — Diluted | | 106,076,588 | | | 106,394,277 | | | 106,139,668 | | | 107,286,620 | | Net loss per share attributable to common stockholders — Basic and Diluted | | $ | (0.03) | | | $ | 0.07 | | | $ | (0.03) | | | $ | (0.04) | |
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 | | | | | | | | | | | | | | | | | | | | | | | Year Ended December 31, 2020 | (In thousands) | | Single-Tenant Properties | | Multi-Tenant Properties | | Consolidated | Revenue from tenants | | $ | 191,862 | | | $ | 113,362 | | | $ | 305,224 | | Property operating expense | | 10,187 | | | 42,109 | | | 52,296 | | NOI | | $ | 181,675 | | | $ | 71,253 | | | 252,928 | | Asset management fees to related party | | | | | | (27,829) | | Impairment of real estate investments | | | | | | (12,910) | | Acquisition, transaction and other costs | | | | | | (2,921) | | Equity-based compensation | | | | | | (13,036) | | General and administrative | | | | | | (19,683) | | Depreciation and amortization | | | | | | (137,459) | | | | | | | | | Gain on sale/exchange of real estate investments | | | | | | 6,456 | | Interest expense | | | | | | (78,467) | | Other income | | | | | | 1,024 | | Loss on non-designated derivatives | | | | | | (9) | | Net loss attributable to non-controlling interests | | | | | | 44 | | Allocation for preferred stock | | | | | | (14,788) | | Net loss attributable to common stockholders | | | | | | $ | (46,650) | |
| | | | | | | | | | | | | | | | | | | | | | | Year Ended December 31, 2019 | (In thousands) | | Single-Tenant Properties | | Multi-Tenant Properties | | Consolidated | Revenue from tenants | | $ | 169,206 | | | $ | 130,538 | | | $ | 299,744 | | Property operating expense | | 6,796 | | | 45,919 | | | 52,715 | | NOI | | $ | 162,410 | | | $ | 84,619 | | | 247,029 | | Asset management fees to related party | | | | | | (25,695) | | Impairment of real estate investments | | | | | | (827) | | Acquisition, transaction and other costs | | | | | | (6,257) | | Equity-based compensation | | | | | | (12,717) | | General and administrative | | | | | | (20,375) | | Depreciation and amortization | | | | | | (124,713) | | Goodwill impairment | | | | | | (1,605) | | Gain on sale/exchange of real estate investments | | | | | | 23,690 | | Interest expense | | | | | | (77,994) | | Other income | | | | | | 3,627 | | | | | | | | | Net income attributable to non-controlling interests | | | | | | (16) | | Allocation for preferred stock | | | | | | (7,248) | | Net loss attributable to common stockholders | | | | | | $ | (3,101) | |
THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 The following table reconciles the segment activity to consolidated total assets as of the periods presented: | | | | | | | | | | | | | | | | | December 31, | (In thousands) | | 2021 | | 2020 | ASSETS | | | | | Investments in real estate, net: | | | | | Single-tenant properties | | $ | 1,973,743 | | | $ | 2,106,868 | | Multi-tenant properties | | 1,233,030 | | | 1,261,834 | | Total investments in real estate, net | | 3,206,773 | | | 3,368,702 | | Cash and cash equivalents | | 214,853 | | | 102,860 | | Restricted cash | | 21,996 | | | 10,537 | | Deposits for real estate investments | | 41,928 | | | 137 | | | | | | | Deferred costs, net | | 25,587 | | | 16,663 | | Straight-line rent receivable | | 70,789 | | | 66,581 | | Operating lease right-of-use assets | | 18,194 | | | 18,546 | | Prepaid expenses and other assets | | 26,877 | | | 23,941 | | Assets held for sale | | 187,213 | | | — | | Total assets | | $ | 3,814,210 | | | $ | 3,607,967 | |
The following table reconciles capital expenditures by reportable business segment, excluding corporate non-real estate expenditures, for the periods presented: | | | | | | | | | | | | | | | | | | | | | | | Year Ended December 31, | (In thousands) | | 2021 | | 2020 | | 2019 | Single-tenant properties | | $ | 2,179 | | | $ | 508 | | | $ | 396 | | Multi-tenant properties | | 12,781 | | | 10,246 | | | 13,611 | | Total capital expenditures | | $ | 14,960 | | | $ | 10,754 | | | $ | 14,007 | |
Note 1516 — Subsequent Events The Company has evaluated subsequent events through the filing of this Annual Report on Form 10-K, and determined that there have not been any events that have occurred that would require adjustments to, or disclosures in, the consolidated financial statements except for the following disclosures: Amendment to the Advisory AgreementCIM Portfolio Acquisition
On January 13,December 17, 2021, the Company signed a purchase and sale agreement (“PSA”) to acquire 79 multi-tenant retail centers and 2 single-tenant properties for $1.3 billion (the “CIM Portfolio Acquisition”). The Company has determined that the CIM Portfolio Acquisition will be accounted for as an asset acquisition. The Company expects to fund the CIM Portfolio Acquisition through a combination, to be determined at each closing, of cash, which includes the net proceeds from the approximately $260.7 million sale of its Sanofi asset, borrowings under its Credit Facility, as well as debt currently encumbering certain of the properties that it will assume, and the issuance of up to $53.4 million in value of Class A common stock or OP entered into Amendment No. 4Units to the Advisory Agreement withsellers. The number of shares or units to be issued at the Advisorapplicable closing (limited to extend the expiration4.9% of the previously disclosed modified quarterly thresholdsCompany’s outstanding Class A Common Stock at the Company must reachtime on a quarterly basis forfully diluted basis) will be based on the Advisor to receive the variable management fee from the endvalue of the fiscal quarter ended December 31, 2020 toshares or units that may be issued at such closing divided by the end of the fiscal quarter ending December 31, 2021. Dispositions
Subsequent to December 31, 2020, the Company sold 2 properties with an aggregate contract sale price of $0.6 million.
ATM Program — Series A Preferred Stock
On January 13, 2021, the Company and the OP entered into a third amendment to the equity distribution agreement related to the Series A Preferred Stock ATM Program, solely for the purpose of increasing the maximum aggregate offeringper share volume weighted average price of the SeriesCompany’s Class A PreferredCommon Stock that may be offered and sold bymeasured over a five consecutive trading day period immediately preceding (but not including) the date on which the written notice indicating the Sellers’ election to receive shares or units is delivered to the Company (the price to be limited by a 7.5% collar in either direction from time to time from $100.0 million to $200.0 million.
ATM Program — Series C Preferred Stock
On January 13, 2021, the Company established the Series C Preferred Stock ATM Program pursuant to which the Company may, from time to time, offer, issue and sell to the public, through sales agents, shares of the Series C Preferred Stock having an aggregate offering price of up to $200.0 million.
Stockholder Rights Plan Amendmentper share volume weighted
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 20202021 average price of the Company’s Class A Common Stock measured over the ten consecutive trading day period immediately preceding (but not including) the effective date of the PSA, which was $8.34 per share). Further, the number of shares of the Class A Common Stock or OP Units, as applicable, that may be issued at the closing of the first tranche were not to exceed approximately $26.7 million in value, with the remainder to be issued in a form to be determined by the sellers at the closing of the remaining tranches. On February 11, 2022, the first tranche of the CIM Portfolio Acquisition closed, which included the acquisition of 44 multi-tenant retail centers located across 17 states and aggregating approximately 4.5 million square feet. The Company funded the closing of the first tranche with cash of $350.7 million, which included the net proceeds from the approximately $260.7 million sale of its Sanofi asset and remaining proceeds from its Senior Notes issuance, borrowings under the Credit Facility of $170.0 million and the issuance of 3,264,693 shares of its Class A common stock for consideration of $26.7 million, which were issued at a price of $8.18 per share. The Company currently expects to close on all the remaining properties in successive tranches by the end of March 2022. The Company expects to fund the remaining closings with additional borrowings under the Credit Facility of approximately $320.0 million, assumed mortgages of $348.7 million, the issuance of $26.7 million of its Class A common stock, the application of the Company’s security deposit of $40.0 million and the remainder with cash on hand. Sanofi Disposition On January 6, 2022, the Company sold its Sanofi property in Bridgewater, NJ for a contract sales price of $260.7 million. This property was classified as held-for-sale on the Company’s consolidated balance sheet as of December 31, 2021. The Sanofi property represented a concentration of over 5% of the Company’s total annualized straight-line rent for the year ended December 31, 2021 as well as the majority of the Company’s annualized straight-line rent derived from the state of New Jersey, which was a state with a concentration of over 5% of the Company’s total annualized straight-line rent for the year ended December 31, 2021. The Sanofi property was pledged to the unencumbered asset pool comprising the borrowing base of the Credit Facility as of December 31, 2021. Other Acquisitions Subsequent to December 31, 2021, excluding the CIM Portfolio Acquisition, the Company acquired 3 properties for an aggregate contract purchase price of $40.9 million. Other Dispositions Subsequent to December 31, 2021, excluding the Sanofi disposition described above, the Company sold 5 properties with an aggregate contract sale price of $4.6 million. Name Change On February 10, 2022, the Company changed its name to “The Necessity Retail REIT, Inc.” Column Financial Mortgage Note Repayment In FebruaryJanuary 2022, the Company repaid $7.9 million of amounts outstanding under its Column Financial Mortgage Note after disposing of two properties formerly encumbered by the mortgage in December 2021. ATM Program — Common Stock Subsequent to December 31, 2021, the Company amended the rights agreement related tosold 2,761,711 shares of its stockholder rights plan to extend the expiration dateClass A common stock through its Class A Common Stock ATM Program for gross proceeds of the rights under the plan from April 2021 to April 2024 unless earlier exercised, exchanged, amended, redeemed or terminated.$24.9 million.
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
Schedule III — Real Estate and Accumulated Depreciation — Part I December 31, 20202021
| (In thousands) | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2020 [12] [13] | | | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2021 [9] [10] | | | Property | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2020 | | Land | | Building and Improvements | | Land [11] | | Building and Improvements [11] | | Accumulated Depreciation [14] [15] | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2021 | | Land | | Building and Improvements | | Land | | Building and Improvements | | Accumulated Depreciation [11] [12] | Dollar General I | Dollar General I | | Retail | | Mission | | TX | | 4/29/2013 | | $ | 0 | | (1) | $ | 142 | | | $ | 807 | | | $ | 0 | | | $ | 0 | | | $ | 949 | | | $ | 287 | | Dollar General I | | Retail | | Mission | | TX | | 4/29/2013 | | $ | — | | (1) | $ | 142 | | | $ | 807 | | | $ | — | | | $ | — | | | $ | 949 | | | $ | 310 | | Dollar General I | Dollar General I | | Retail | | Sullivan | | MO | | 5/3/2013 | | 0 | | (1) | 146 | | | 825 | | | 0 | | | 0 | | | 971 | | | 293 | | Dollar General I | | Retail | | Sullivan | | MO | | 5/3/2013 | | — | | (1) | 146 | | | 825 | | | — | | | — | | | 971 | | | 317 | | Walgreens I | Walgreens I | | Retail | | Pine Bluff | | AR | | 7/8/2013 | | 0 | | — | 159 | | | 3,016 | | | 0 | | | 0 | | | 3,175 | | | 1,131 | | Walgreens I | | Retail | | Pine Bluff | | AR | | 7/8/2013 | | — | | (6) | 159 | | | 3,016 | | | — | | | — | | | 3,175 | | | 1,221 | | Dollar General II | Dollar General II | | Retail | | Bogalusa | | LA | | 7/12/2013 | | 0 | | (1) | 107 | | | 965 | | | 0 | | | 1 | | | 1,073 | | | 339 | | Dollar General II | | Retail | | Bogalusa | | LA | | 7/12/2013 | | — | | (1) | 107 | | | 965 | | | — | | | 1 | | | 1,073 | | | 367 | | Dollar General II | Dollar General II | | Retail | | Donaldsonville | | LA | | 7/12/2013 | | 0 | | (1) | 97 | | | 871 | | | 0 | | | 0 | | | 968 | | | 306 | | Dollar General II | | Retail | | Donaldsonville | | LA | | 7/12/2013 | | — | | (1) | 97 | | | 871 | | | — | | | — | | | 968 | | | 330 | | AutoZone I | AutoZone I | | Retail | | Cut Off | | LA | | 7/16/2013 | | 0 | | (1) | 67 | | | 1,282 | | | 0 | | | 0 | | | 1,349 | | | 447 | | AutoZone I | | Retail | | Cut Off | | LA | | 7/16/2013 | | — | | (1) | 67 | | | 1,282 | | | — | | | — | | | 1,349 | | | 483 | | Dollar General III | Dollar General III | | Retail | | Athens | | MI | | 7/16/2013 | | 0 | | (1) | 48 | | | 907 | | | 0 | | | 0 | | | 955 | | | 317 | | Dollar General III | | Retail | | Athens | | MI | | 7/16/2013 | | — | | (1) | 48 | | | 907 | | | — | | | — | | | 955 | | | 342 | | Dollar General III | Dollar General III | | Retail | | Fowler | | MI | | 7/16/2013 | | 0 | | (1) | 49 | | | 940 | | | 0 | | | 0 | | | 989 | | | 328 | | Dollar General III | | Retail | | Fowler | | MI | | 7/16/2013 | | — | | (1) | 49 | | | 940 | | | — | | | — | | | 989 | | | 355 | | Dollar General III | Dollar General III | | Retail | | Hudson | | MI | | 7/16/2013 | | 0 | | (1) | 102 | | | 922 | | | 0 | | | 0 | | | 1,024 | | | 322 | | Dollar General III | | Retail | | Hudson | | MI | | 7/16/2013 | | — | | (1) | 102 | | | 922 | | | — | | | — | | | 1,024 | | | 348 | | Dollar General III | Dollar General III | | Retail | | Muskegon | | MI | | 7/16/2013 | | 0 | | (1) | 49 | | | 939 | | | 0 | | | 0 | | | 988 | | | 328 | | Dollar General III | | Retail | | Muskegon | | MI | | 7/16/2013 | | — | | (1) | 49 | | | 939 | | | — | | | — | | | 988 | | | 354 | | Dollar General III | Dollar General III | | Retail | | Reese | | MI | | 7/16/2013 | | 0 | | (1) | 150 | | | 848 | | | 0 | | | 0 | | | 998 | | | 296 | | Dollar General III | | Retail | | Reese | | MI | | 7/16/2013 | | — | | (1) | 150 | | | 848 | | | — | | | — | | | 998 | | | 320 | | BSFS I | BSFS I | | Retail | | Fort Myers | | FL | | 7/18/2013 | | 0 | | (1) | 1,215 | | | 1,822 | | | 0 | | | 0 | | | 3,037 | | | 687 | | BSFS I | | Retail | | Fort Myers | | FL | | 7/18/2013 | | — | | (1) | 1,215 | | | 1,822 | | | — | | | — | | | 3,037 | | | 753 | | Dollar General IV | Dollar General IV | | Retail | | Bainbridge | | GA | | 7/29/2013 | | 0 | | (1) | 233 | | | 700 | | | 0 | | | 0 | | | 933 | | | 244 | | Dollar General IV | | Retail | | Bainbridge | | GA | | 7/29/2013 | | — | | (1) | 233 | | | 700 | | | — | | | — | | | 933 | | | 264 | | Dollar General IV | Dollar General IV | | Retail | | Vanleer | | TN | | 7/29/2013 | | 0 | | (1) | 78 | | | 705 | | | 0 | | | 0 | | | 783 | | | 246 | | Dollar General IV | | Retail | | Vanleer | | TN | | 7/29/2013 | | — | | (1) | 78 | | | 705 | | | — | | | — | | | 783 | | | 266 | | Tractor Supply I | Tractor Supply I | | Retail | | Vernon | | CT | | 8/1/2013 | | 0 | | (1) | 358 | | | 3,220 | | | 0 | | | 0 | | | 3,578 | | | 1,030 | | Tractor Supply I | | Retail | | Vernon | | CT | | 8/1/2013 | | — | | (1) | 358 | | | 3,220 | | | — | | | — | | | 3,578 | | | 1,138 | | Dollar General V | Dollar General V | | Retail | | Meraux | | LA | | 8/2/2013 | | 0 | | (1) | 708 | | | 1,315 | | | 0 | | | 0 | | | 2,023 | | | 459 | | Dollar General V | | Retail | | Meraux | | LA | | 8/2/2013 | | — | | (1) | 708 | | | 1,315 | | | — | | | — | | | 2,023 | | | 496 | | Mattress Firm I | Mattress Firm I | | Retail | | Tallahassee | | FL | | 8/7/2013 | | 0 | | — | 1,015 | | | 1,241 | | | 0 | | | 0 | | | 2,256 | | | 433 | | Mattress Firm I | | Retail | | Tallahassee | | FL | | 8/7/2013 | | — | | (7) | 1,015 | | | 1,241 | | | — | | | — | | | 2,256 | | | 468 | | Family Dollar I | Family Dollar I | | Retail | | Butler | | KY | | 8/12/2013 | | 0 | | (1) | 126 | | | 711 | | | 0 | | | 0 | | | 837 | | | 248 | | Family Dollar I | | Retail | | Butler | | KY | | 8/12/2013 | | — | | (1) | 126 | | | 711 | | | — | | | — | | | 837 | | | 268 | | Lowe's I | Lowe's I | (16) | Retail | | Fayetteville | | NC | | 8/19/2013 | | 0 | | (1) | 0 | | | 6,422 | | | 0 | | | 0 | | | 6,422 | | | 2,072 | | Lowe's I | (13) | Retail | | Fayetteville | | NC | | 8/19/2013 | | — | | (1) | — | | | 6,422 | | | — | | | — | | | 6,422 | | | 2,311 | | Lowe's I | Lowe's I | (16) | Retail | | Macon | | GA | | 8/19/2013 | | 0 | | (1) | 0 | | | 8,420 | | | 0 | | | 0 | | | 8,420 | | | 2,716 | | Lowe's I | (13) | Retail | | Macon | | GA | | 8/19/2013 | | — | | (1) | — | | | 8,420 | | | — | | | — | | | 8,420 | | | 3,030 | | Lowe's I | Lowe's I | | Retail | | New Bern | | NC | | 8/19/2013 | | 0 | | (1) | 1,812 | | | 10,269 | | | 0 | | | 0 | | | 12,081 | | | 3,313 | | Lowe's I | | Retail | | New Bern | | NC | | 8/19/2013 | | — | | (1) | 1,812 | | | 10,269 | | | — | | | — | | | 12,081 | | | 3,695 | | Lowe's I | Lowe's I | | Retail | | Rocky Mount | | NC | | 8/19/2013 | | 0 | | (1) | 1,931 | | | 10,940 | | | 0 | | | 0 | | | 12,871 | | | 3,529 | | Lowe's I | | Retail | | Rocky Mount | | NC | | 8/19/2013 | | — | | (1) | 1,931 | | | 10,940 | | | — | | | — | | | 12,871 | | | 3,937 | | O'Reilly Auto Parts I | O'Reilly Auto Parts I | | Retail | | Manitowoc | | WI | | 8/19/2013 | | 0 | | (1) | 85 | | | 761 | | | 0 | | | 0 | | | 846 | | | 264 | | O'Reilly Auto Parts I | | Retail | | Manitowoc | | WI | | 8/19/2013 | | — | | (1) | 85 | | | 761 | | | — | | | — | | | 846 | | | 285 | | Food Lion I | Food Lion I | | Retail | | Charlotte | | NC | | 8/20/2013 | | 0 | | (1) | 3,132 | | | 4,697 | | | 0 | | | 0 | | | 7,829 | | | 1,496 | | Food Lion I | | Retail | | Charlotte | | NC | | 8/20/2013 | | — | | (1) | 3,132 | | | 4,697 | | | — | | | — | | | 7,829 | | | 1,641 | | Family Dollar II | Family Dollar II | | Retail | | Danville | | AR | | 8/21/2013 | | 0 | | (1) | 170 | | | 679 | | | 0 | | | 0 | | | 849 | | | 235 | | Family Dollar II | | Retail | | Danville | | AR | | 8/21/2013 | | — | | (1) | 170 | | | 679 | | | — | | | — | | | 849 | | | 254 | | Lowe's I | Lowe's I | (16) | Retail | | Aiken | | SC | | 8/22/2013 | | 0 | | (1) | 1,764 | | | 7,056 | | | 0 | | | 0 | | | 8,820 | | | 2,272 | | Lowe's I | (13) | Retail | | Aiken | | SC | | 8/22/2013 | | — | | (1) | 1,764 | | | 7,056 | | | — | | | — | | | 8,820 | | | 2,533 | | Dollar General VII | Dollar General VII | | Retail | | Gasburg | | VA | | 8/23/2013 | | 0 | | (1) | 52 | | | 993 | | | 0 | | | 0 | | | 1,045 | | | 344 | | Dollar General VII | | Retail | | Gasburg | | VA | | 8/23/2013 | | — | | (1) | 52 | | | 993 | | | — | | | — | | | 1,045 | | | 372 | | Dollar General VI | Dollar General VI | | Retail | | Natalbany | | LA | | 8/23/2013 | | 0 | | (1) | 379 | | | 883 | | | 0 | | | 0 | | | 1,262 | | | 306 | | Dollar General VI | | Retail | | Natalbany | | LA | | 8/23/2013 | | — | | (1) | 379 | | | 883 | | | — | | | — | | | 1,262 | | | 331 | | Walgreens II | Walgreens II | (16) | Retail | | Tucker | | GA | | 8/23/2013 | | 0 | | (1) | 0 | | | 2,524 | | | 0 | | | 0 | | | 2,524 | | | 934 | | Walgreens II | (13) | Retail | | Tucker | | GA | | 8/23/2013 | | — | | (1) | — | | | 2,524 | | | — | | | — | | | 2,524 | | | 1,010 | | Family Dollar III | Family Dollar III | | Retail | | Challis | | ID | | 8/27/2013 | | 0 | | (1) | 44 | | | 828 | | | 0 | | | 0 | | | 872 | | | 287 | | Family Dollar III | | Retail | | Challis | | ID | | 8/27/2013 | | — | | (1) | 44 | | | 828 | | | — | | | — | | | 872 | | | 310 | | Chili's I | Chili's I | | Retail | | Lake Jackson | | TX | | 8/30/2013 | | 0 | | (1) | 746 | | | 1,741 | | | 0 | | | 0 | | | 2,487 | | | 736 | | Chili's I | | Retail | | Lake Jackson | | TX | | 8/30/2013 | | — | | (1) | 746 | | | 1,741 | | | — | | | — | | | 2,487 | | | 789 | | Chili's I | Chili's I | | Retail | | Victoria | | TX | | 8/30/2013 | | 0 | | (1) | 813 | | | 1,897 | | | 0 | | | 0 | | | 2,710 | | | 802 | | Chili's I | | Retail | | Victoria | | TX | | 8/30/2013 | | — | | (1) | 813 | | | 1,897 | | | — | | | — | | | 2,710 | | | 860 | | CVS I | CVS I | | Retail | | Anniston | | AL | | 8/30/2013 | | 0 | | (1) | 472 | | | 1,887 | | | 0 | | | 0 | | | 2,359 | | | 698 | | CVS I | | Retail | | Anniston | | AL | | 8/30/2013 | | — | | (1) | 472 | | | 1,887 | | | — | | | — | | | 2,359 | | | 755 | | Joe's Crab Shack I | Joe's Crab Shack I | | Retail | | Westminster | | CO | | 8/30/2013 | | 0 | | — | 1,136 | | | 2,650 | | | 0 | | | 0 | | | 3,786 | | | 1,121 | | Joe's Crab Shack I | | Retail | | Westminster | | CO | | 8/30/2013 | | — | | (7) | 1,136 | | | 2,650 | | | — | | | — | | | 3,786 | | | 1,202 | | Tire Kingdom I | Tire Kingdom I | | Retail | | Lake Wales | | FL | | 9/4/2013 | | 0 | | (1) | 556 | | | 1,296 | | | 0 | | | 0 | | | 1,852 | | | 485 | | Tire Kingdom I | | Retail | | Lake Wales | | FL | | 9/4/2013 | | — | | (1) | 556 | | | 1,296 | | | — | | | — | | | 1,852 | | | 532 | |
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
Schedule III — Real Estate and Accumulated Depreciation — Part I December 31, 20202021
| (In thousands) | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2020 [12] [13] | | | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2021 [9] [10] | | | Property | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2020 | | Land | | Building and Improvements | | Land [11] | | Building and Improvements [11] | | Accumulated Depreciation [14] [15] | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2021 | | Land | | Building and Improvements | | Land | | Building and Improvements | | Accumulated Depreciation [11] [12] | AutoZone II | AutoZone II | | Retail | | Temple | | GA | | 9/6/2013 | | 0 | | (1) | 569 | | | 854 | | | 0 | | | 0 | | | 1,423 | | | 296 | | AutoZone II | | Retail | | Temple | | GA | | 9/6/2013 | | — | | (1) | 569 | | | 854 | | | — | | | — | | | 1,423 | | | 320 | | Dollar General VIII | Dollar General VIII | | Retail | | Stanleytown | | VA | | 9/6/2013 | | 0 | | (1) | 185 | | | 1,049 | | | 0 | | | 0 | | | 1,234 | | | 364 | | Dollar General VIII | | Retail | | Stanleytown | | VA | | 9/6/2013 | | — | | (1) | 185 | | | 1,049 | | | — | | | — | | | 1,234 | | | 393 | | Family Dollar IV | Family Dollar IV | | Retail | | Oil City | | LA | | 9/9/2013 | | 0 | | (1) | 76 | | | 685 | | | 0 | | | 0 | | | 761 | | | 237 | | Family Dollar IV | | Retail | | Oil City | | LA | | 9/9/2013 | | — | | (1) | 76 | | | 685 | | | — | | | — | | | 761 | | | 257 | | Fresenius I | Fresenius I | | Retail | | Montevallo | | AL | | 9/12/2013 | | 0 | | (1) | 300 | | | 1,699 | | | 0 | | | 0 | | | 1,999 | | | 514 | | Fresenius I | | Retail | | Montevallo | | AL | | 9/12/2013 | | — | | (1) | 300 | | | 1,699 | | | — | | | — | | | 1,999 | | | 563 | | Dollar General IX | Dollar General IX | | Retail | | Mabelvale | | AR | | 9/13/2013 | | 0 | | (1) | 38 | | | 723 | | | 0 | | | 0 | | | 761 | | | 250 | | Dollar General IX | | Retail | | Mabelvale | | AR | | 9/13/2013 | | — | | (1) | 38 | | | 723 | | | — | | | — | | | 761 | | | 271 | | Advance Auto I | Advance Auto I | | Retail | | Angola | | IN | | 9/19/2013 | | 0 | | (1) | 35 | | | 671 | | | 0 | | | 0 | | | 706 | | | 231 | | Advance Auto I | | Retail | | Angola | | IN | | 9/19/2013 | | — | | (1) | 35 | | | 671 | | | — | | | — | | | 706 | | | 250 | | Arby's I | Arby's I | | Retail | | Hernando | | MS | | 9/19/2013 | | 0 | | (1) | 624 | | | 1,455 | | | 0 | | | 0 | | | 2,079 | | | 612 | | Arby's I | | Retail | | Hernando | | MS | | 9/19/2013 | | — | | (1) | 624 | | | 1,455 | | | — | | | — | | | 2,079 | | | 656 | | CVS II | CVS II | (16) | Retail | | Holyoke | | MA | | 9/19/2013 | | 0 | | (1) | 0 | | | 2,258 | | | 0 | | | 0 | | | 2,258 | | | 830 | | CVS II | (13) | Retail | | Holyoke | | MA | | 9/19/2013 | | — | | (1) | — | | | 2,258 | | | — | | | — | | | 2,258 | | | 897 | | Walgreens III | Walgreens III | | Retail | | Lansing | | MI | | 9/19/2013 | | 0 | | (1) | 216 | | | 4,099 | | | 0 | | | 0 | | | 4,315 | | | 1,507 | | Walgreens III | | Retail | | Lansing | | MI | | 9/19/2013 | | — | | (1) | 216 | | | 4,099 | | | — | | | — | | | 4,315 | | | 1,630 | | Walgreens IV | Walgreens IV | | Retail | | Beaumont | | TX | | 9/20/2013 | | 0 | | (1) | 499 | | | 1,995 | | | 0 | | | 0 | | | 2,494 | | | 733 | | Walgreens IV | | Retail | | Beaumont | | TX | | 9/20/2013 | | — | | (1) | 499 | | | 1,995 | | | — | | | — | | | 2,494 | | | 793 | | AmeriCold I | AmeriCold I | | Distribution | | Belvidere | | IL | | 9/24/2013 | | 0 | | (1) | 2,170 | | | 17,843 | | | 0 | | | 0 | | | 20,013 | | | 6,928 | | AmeriCold I | | Distribution | | Belvidere | | IL | | 9/24/2013 | | — | | (1) | 2,170 | | | 17,843 | | | — | | | — | | | 20,013 | | | 7,588 | | AmeriCold I | AmeriCold I | | Distribution | | Brooklyn Park | | MN | | 9/24/2013 | | 0 | | (1) | 1,590 | | | 11,940 | | | 0 | | | 0 | | | 13,530 | | | 4,636 | | AmeriCold I | | Distribution | | Brooklyn Park | | MN | | 9/24/2013 | | — | | (1) | 1,590 | | | 11,940 | | | — | | | — | | | 13,530 | | | 5,078 | | AmeriCold I | AmeriCold I | | Distribution | | Cartersville | | GA | | 9/24/2013 | | 0 | | (1) | 1,640 | | | 14,533 | | | 0 | | | 0 | | | 16,173 | | | 5,643 | | AmeriCold I | | Distribution | | Cartersville | | GA | | 9/24/2013 | | — | | (1) | 1,640 | | | 14,533 | | | — | | | — | | | 16,173 | | | 6,180 | | AmeriCold I | AmeriCold I | | Distribution | | Douglas | | GA | | 9/24/2013 | | 0 | | (1) | 750 | | | 7,076 | | | 0 | | | 0 | | | 7,826 | | | 2,747 | | AmeriCold I | | Distribution | | Douglas | | GA | | 9/24/2013 | | — | | (1) | 750 | | | 7,076 | | | — | | | — | | | 7,826 | | | 3,009 | | AmeriCold I | AmeriCold I | | Distribution | | Gaffney | | SC | | 9/24/2013 | | 0 | | (1) | 1,360 | | | 5,666 | | | 0 | | | 0 | | | 7,026 | | | 2,200 | | AmeriCold I | | Distribution | | Gaffney | | SC | | 9/24/2013 | | — | | (1) | 1,360 | | | 5,666 | | | — | | | — | | | 7,026 | | | 2,409 | | AmeriCold I | AmeriCold I | | Distribution | | Gainesville | | GA | | 9/24/2013 | | 0 | | (1) | 1,580 | | | 13,838 | | | 0 | | | 0 | | | 15,418 | | | 5,372 | | AmeriCold I | | Distribution | | Gainesville | | GA | | 9/24/2013 | | — | | (1) | 1,580 | | | 13,838 | | | — | | | 8 | | | 15,426 | | | 5,884 | | AmeriCold I | AmeriCold I | | Distribution | | Pendergrass | | GA | | 9/24/2013 | | 0 | | (1) | 2,810 | | | 26,572 | | | 0 | | | 0 | | | 29,382 | | | 10,317 | | AmeriCold I | | Distribution | | Pendergrass | | GA | | 9/24/2013 | | — | | (1) | 2,810 | | | 26,572 | | | — | | | — | | | 29,382 | | | 11,300 | | AmeriCold I | AmeriCold I | | Distribution | | Piedmont | | SC | | 9/24/2013 | | 0 | | (1) | 3,030 | | | 24,067 | | | 0 | | | 0 | | | 27,097 | | | 9,344 | | AmeriCold I | | Distribution | | Piedmont | | SC | | 9/24/2013 | | — | | (1) | 3,030 | | | 24,067 | | | — | | | — | | | 27,097 | | | 10,235 | | AmeriCold I | AmeriCold I | | Distribution | | Zumbrota | | MN | | 9/24/2013 | | 0 | | (1) | 2,440 | | | 18,152 | | | 0 | | | 0 | | | 20,592 | | | 7,048 | | AmeriCold I | | Distribution | | Zumbrota | | MN | | 9/24/2013 | | — | | (1) | 2,440 | | | 18,152 | | | — | | | — | | | 20,592 | | | 7,719 | | Dollar General X | Dollar General X | | Retail | | Greenwell Springs | | LA | | 9/24/2013 | | 0 | | (1) | 114 | | | 1,029 | | | 0 | | | 0 | | | 1,143 | | | 354 | | Dollar General X | | Retail | | Greenwell Springs | | LA | | 9/24/2013 | | — | | (1) | 114 | | | 1,029 | | | — | | | — | | | 1,143 | | | 383 | | Home Depot I | Home Depot I | | Distribution | | Birmingham | | AL | | 9/24/2013 | | 0 | | (1) | 3,660 | | | 33,667 | | | 0 | | | 0 | | | 37,327 | | | 10,735 | | Home Depot I | | Distribution | | Birmingham | | AL | | 9/24/2013 | | — | | (1) | 3,660 | | | 33,667 | | | — | | | — | | | 37,327 | | | 11,983 | | Home Depot I | Home Depot I | | Distribution | | Valdosta | | GA | | 9/24/2013 | | 0 | | (1) | 2,930 | | | 30,538 | | | 0 | | | 0 | | | 33,468 | | | 9,737 | | Home Depot I | | Distribution | | Valdosta | | GA | | 9/24/2013 | | — | | (1) | 2,930 | | | 30,538 | | | — | | | — | | | 33,468 | | | 10,870 | | National Tire & Battery I | National Tire & Battery I | | Retail | | San Antonio | | TX | | 9/24/2013 | | 0 | | — | 577 | | | 577 | | | 0 | | | 0 | | | 1,154 | | | 214 | | National Tire & Battery I | | Retail | | San Antonio | | TX | | 9/24/2013 | | — | | — | 577 | | | 577 | | | — | | | — | | | 1,154 | | | 235 | | New Breed Logistics I | New Breed Logistics I | | Distribution | | Hanahan | | SC | | 9/24/2013 | | 0 | | (1) | 2,940 | | | 19,171 | | | 0 | | | 0 | | | 22,111 | | | 7,443 | | New Breed Logistics I | | Distribution | | Hanahan | | SC | | 9/24/2013 | | — | | (1) | 2,940 | | | 19,171 | | | — | | | — | | | 22,111 | | | 8,153 | | Truist Bank I | Truist Bank I | | Retail | | Atlanta | | GA | | 9/24/2013 | | 0 | | (1) | 570 | | | 1,152 | | | 0 | | | 0 | | | 1,722 | | | 380 | | Truist Bank I | | Retail | | Atlanta | | GA | | 9/24/2013 | | — | | (1) | 570 | | | 1,152 | | | — | | | — | | | 1,722 | | | 412 | | Truist Bank I | Truist Bank I | | Retail | | Cary | | NC | | 9/24/2013 | | 0 | | (1) | 370 | | | 841 | | | 0 | | | 0 | | | 1,211 | | | 277 | | Truist Bank I | | Retail | | Cary | | NC | | 9/24/2013 | | — | | (1) | 370 | | | 841 | | | (13) | | | (214) | | | 984 | | | 109 | | Truist Bank I | Truist Bank I | | Retail | | Chattanooga | | TN | | 9/24/2013 | | 0 | | (1) | 220 | | | 781 | | | 0 | | | 10 | | | 1,011 | | | 258 | | Truist Bank I | | Retail | | Doswell | | VA | | 9/24/2013 | | — | | (1) | 190 | | | 510 | | | — | | | — | | | 700 | | | 182 | | Truist Bank I | Truist Bank I | | Retail | | Doswell | | VA | | 9/24/2013 | | 0 | | (1) | 190 | | | 510 | | | 0 | | | 0 | | | 700 | | | 168 | | Truist Bank I | | Retail | | Fort Pierce | | FL | | 9/24/2013 | | — | | (1) | 720 | | | 1,434 | | | (161) | | | (248) | | | 1,745 | | | 480 | | Truist Bank I | Truist Bank I | | Retail | | Fort Pierce | | FL | | 9/24/2013 | | 0 | | (1) | 720 | | | 1,434 | | | (161) | | | (248) | | | 1,745 | | | 441 | | Truist Bank I | | Retail | | Nashville | | TN | | 9/24/2013 | | — | | (1) | 190 | | | 666 | | | — | | | — | | | 856 | | | 238 | | Truist Bank I | Truist Bank I | | Retail | | Nashville | | TN | | 9/24/2013 | | 0 | | (1) | 190 | | | 666 | | | 0 | | | 0 | | | 856 | | | 220 | | Truist Bank I | | Retail | | New Market | | VA | | 9/24/2013 | | — | | (1) | 330 | | | 948 | | | — | | | — | | | 1,278 | | | 339 | | Truist Bank I | Truist Bank I | | Retail | | New Market | | VA | | 9/24/2013 | | 0 | | (1) | 330 | | | 948 | | | 0 | | | 0 | | | 1,278 | | | 313 | | Truist Bank I | | Retail | | New Smyrna Beach | | FL | | 9/24/2013 | | — | | (1) | 740 | | | 2,859 | | | — | | | — | | | 3,599 | | | 1,022 | | Truist Bank I | Truist Bank I | | Retail | | New Smyrna Beach | | FL | | 9/24/2013 | | 0 | | (1) | 740 | | | 2,859 | | | 0 | | | 0 | | | 3,599 | | | 943 | | Truist Bank I | | Retail | | Oak Ridge | | TN | | 9/24/2013 | | — | | (1) | 500 | | | 1,277 | | | — | | | 9 | | | 1,786 | | | 457 | | Truist Bank I | Truist Bank I | | Retail | | Oak Ridge | | TN | | 9/24/2013 | | 0 | | (1) | 500 | | | 1,277 | | | 0 | | | 9 | | | 1,786 | | | 421 | | Truist Bank I | | Retail | | Orlando | | FL | | 9/24/2013 | | — | | (1) | 410 | | | 2,078 | | | — | | | — | | | 2,488 | | | 743 | | Truist Bank I | Truist Bank I | | Retail | | Orlando | | FL | | 9/24/2013 | | 0 | | (1) | 410 | | | 2,078 | | | 0 | | | 0 | | | 2,488 | | | 686 | | Truist Bank I | | Retail | | Orlando | | FL | | 9/24/2013 | | — | | (1) | 540 | | | 3,069 | | | — | | | — | | | 3,609 | | | 1,097 | | Truist Bank I | Truist Bank I | | Retail | | Orlando | | FL | | 9/24/2013 | | 0 | | (1) | 540 | | | 3,069 | | | 0 | | | 0 | | | 3,609 | | | 1,013 | | Truist Bank I | | Retail | | Savannah | | TN | | 9/24/2013 | | — | | (1) | 390 | | | 1,179 | | | — | | | — | | | 1,569 | | | 422 | |
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
Schedule III — Real Estate and Accumulated Depreciation — Part I December 31, 20202021
| (In thousands) | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2020 [12] [13] | | | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2021 [9] [10] | | | Property | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2020 | | Land | | Building and Improvements | | Land [11] | | Building and Improvements [11] | | Accumulated Depreciation [14] [15] | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2021 | | Land | | Building and Improvements | | Land | | Building and Improvements | | Accumulated Depreciation [11] [12] | Truist Bank I | | Retail | | Savannah | | TN | | 9/24/2013 | | 0 | | (1) | 390 | | | 1,179 | | | 0 | | | 0 | | | 1,569 | | | 389 | | | Truist Bank I | Truist Bank I | | Retail | | Stokesdale | | NC | | 9/24/2013 | | 0 | | (1) | 230 | | | 581 | | | 0 | | | 0 | | | 811 | | | 192 | | Truist Bank I | | Retail | | Stokesdale | | NC | | 9/24/2013 | | — | | (1) | 230 | | | 581 | | | — | | | — | | | 811 | | | 208 | | Truist Bank I | Truist Bank I | | Retail | | Summerfield | | NC | | 9/24/2013 | | 0 | | (1) | 210 | | | 605 | | | 0 | | | 0 | | | 815 | | | 199 | | Truist Bank I | | Retail | | Summerfield | | NC | | 9/24/2013 | | — | | (1) | 210 | | | 605 | | | — | | | — | | | 815 | | | 216 | | Truist Bank I | Truist Bank I | | Retail | | Thomson | | GA | | 9/24/2013 | | 0 | | (1) | 480 | | | 1,015 | | | 0 | | | 0 | | | 1,495 | | | 335 | | Truist Bank I | | Retail | | Thomson | | GA | | 9/24/2013 | | — | | (1) | 480 | | | 1,015 | | | — | | | — | | | 1,495 | | | 363 | | Truist Bank I | Truist Bank I | | Retail | | Vinton | | VA | | 9/24/2013 | | 0 | | (1) | 120 | | | 366 | | | 0 | | | 0 | | | 486 | | | 121 | | Truist Bank I | | Retail | | Vinton | | VA | | 9/24/2013 | | — | | (1) | 120 | | | 366 | | | — | | | — | | | 486 | | | 131 | | Truist Bank I | Truist Bank I | | Retail | | Washington | | DC | | 9/24/2013 | | 0 | | (1) | 590 | | | 2,366 | | | 0 | | | 0 | | | 2,956 | | | 781 | | Truist Bank I | | Retail | | Washington | | DC | | 9/24/2013 | | — | | (1) | 590 | | | 2,366 | | | — | | | — | | | 2,956 | | | 846 | | Truist Bank I | Truist Bank I | | Retail | | Waycross | | GA | | 9/24/2013 | | 0 | | (1) | 300 | | | 1,425 | | | 0 | | | 0 | | | 1,725 | | | 470 | | Truist Bank I | | Retail | | Waycross | | GA | | 9/24/2013 | | — | | (1) | 300 | | | 1,425 | | | — | | | — | | | 1,725 | | | 509 | | Truist Bank I | Truist Bank I | | Retail | | Waynesville | | NC | | 9/24/2013 | | 0 | | (1) | 200 | | | 874 | | | 0 | | | 0 | | | 1,074 | | | 288 | | Truist Bank I | | Retail | | Waynesville | | NC | | 9/24/2013 | | — | | (1) | 200 | | | 874 | | | — | | | — | | | 1,074 | | | 312 | | Circle K I | Circle K I | | Retail | | Aledo | | IL | | 9/25/2013 | | 0 | | (1) | 427 | | | 1,709 | | | 0 | | | 0 | | | 2,136 | | | 588 | | Circle K I | | Retail | | Aledo | | IL | | 9/25/2013 | | — | | (1) | 427 | | | 1,709 | | | — | | | — | | | 2,136 | | | 636 | | Circle K I | Circle K I | | Retail | | Bedford | | OH | | 9/25/2013 | | 0 | | (1) | 702 | | | 702 | | | 0 | | | 0 | | | 1,404 | | | 242 | | Circle K I | | Retail | | Bedford | | OH | | 9/25/2013 | | — | | (1) | 702 | | | 702 | | | — | | | — | | | 1,404 | | | 261 | | Circle K I | Circle K I | | Retail | | Bloomington | | IL | | 9/25/2013 | | 0 | | (1) | 395 | | | 592 | | | 0 | | | 0 | | | 987 | | | 204 | | Circle K I | | Retail | | Bloomington | | IL | | 9/25/2013 | | — | | (1) | 395 | | | 592 | | | — | | | — | | | 987 | | | 221 | | Circle K I | Circle K I | | Retail | | Bloomington | | IL | | 9/25/2013 | | 0 | | (1) | 316 | | | 586 | | | 0 | | | 0 | | | 902 | | | 202 | | Circle K I | | Retail | | Bloomington | | IL | | 9/25/2013 | | — | | (1) | 316 | | | 586 | | | — | | | — | | | 902 | | | 218 | | Circle K I | Circle K I | | Retail | | Burlington | | IA | | 9/25/2013 | | 0 | | (1) | 224 | | | 523 | | | 0 | | | 0 | | | 747 | | | 180 | | Circle K I | | Retail | | Burlington | | IA | | 9/25/2013 | | — | | (1) | 224 | | | 523 | | | — | | | — | | | 747 | | | 195 | | Circle K I | Circle K I | | Retail | | Champaign | | IL | | 9/25/2013 | | 0 | | (1) | 412 | | | 504 | | | 0 | | | 0 | | | 916 | | | 173 | | Circle K I | | Retail | | Champaign | | IL | | 9/25/2013 | | — | | (1) | 412 | | | 504 | | | — | | | — | | | 916 | | | 188 | | Circle K I | Circle K I | | Retail | | Clinton | | IA | | 9/25/2013 | | 0 | | (1) | 334 | | | 779 | | | 0 | | | 0 | | | 1,113 | | | 268 | | Circle K I | | Retail | | Clinton | | IA | | 9/25/2013 | | — | | (1) | 334 | | | 779 | | | — | | | — | | | 1,113 | | | 290 | | Circle K I | Circle K I | | Retail | | Galesburg | | IL | | 9/25/2013 | | 0 | | (1) | 355 | | | 829 | | | 0 | | | 0 | | | 1,184 | | | 285 | | Circle K I | | Retail | | Galesburg | | IL | | 9/25/2013 | | — | | (1) | 355 | | | 829 | | | — | | | — | | | 1,184 | | | 309 | | Circle K I | Circle K I | | Retail | | Jacksonville | | IL | | 9/25/2013 | | 0 | | (1) | 316 | | | 474 | | | 0 | | | 0 | | | 790 | | | 163 | | Circle K I | | Retail | | Jacksonville | | IL | | 9/25/2013 | | — | | (1) | 316 | | | 474 | | | — | | | — | | | 790 | | | 176 | | Circle K I | Circle K I | | Retail | | Jacksonville | | IL | | 9/25/2013 | | 0 | | (1) | 351 | | | 818 | | | 0 | | | 0 | | | 1,169 | | | 282 | | Circle K I | | Retail | | Jacksonville | | IL | | 9/25/2013 | | — | | (1) | 351 | | | 818 | | | — | | | — | | | 1,169 | | | 305 | | Circle K I | Circle K I | | Retail | | Lafayette | | IN | | 9/25/2013 | | 0 | | (1) | 401 | | | 746 | | | 0 | | | 0 | | | 1,147 | | | 257 | | Circle K I | | Retail | | Lafayette | | IN | | 9/25/2013 | | — | | (1) | 401 | | | 746 | | | — | | | — | | | 1,147 | | | 278 | | Circle K I | Circle K I | | Retail | | Mattoon | | IL | | 9/25/2013 | | 0 | | (1) | 608 | | | 1,129 | | | 0 | | | 0 | | | 1,737 | | | 389 | | Circle K I | | Retail | | Mattoon | | IL | | 9/25/2013 | | — | | (1) | 608 | | | 1,129 | | | — | | | — | | | 1,737 | | | 420 | | Circle K I | Circle K I | | Retail | | Morton | | IL | | 9/25/2013 | | 0 | | (1) | 350 | | | 525 | | | 0 | | | 0 | | | 875 | | | 181 | | Circle K I | | Retail | | Morton | | IL | | 9/25/2013 | | — | | (1) | 350 | | | 525 | | | — | | | — | | | 875 | | | 195 | | Circle K I | Circle K I | | Retail | | Muscatine | | IA | | 9/25/2013 | | 0 | | (1) | 274 | | | 821 | | | 0 | | | 0 | | | 1,095 | | | 283 | | Circle K I | | Retail | | Muscatine | | IA | | 9/25/2013 | | — | | (1) | 274 | | | 821 | | | — | | | — | | | 1,095 | | | 306 | | Circle K I | Circle K I | | Retail | | Paris | | IL | | 9/25/2013 | | 0 | | (1) | 429 | | | 797 | | | 0 | | | 0 | | | 1,226 | | | 275 | | Circle K I | | Retail | | Paris | | IL | | 9/25/2013 | | — | | (1) | 429 | | | 797 | | | — | | | — | | | 1,226 | | | 297 | | Circle K I | Circle K I | | Retail | | Staunton | | IL | | 9/25/2013 | | 0 | | (1) | 467 | | | 1,867 | | | 0 | | | 0 | | | 2,334 | | | 643 | | Circle K I | | Retail | | Staunton | | IL | | 9/25/2013 | | — | | (1) | 467 | | | 1,867 | | | — | | | — | | | 2,334 | | | 695 | | Circle K I | Circle K I | | Retail | | Streetsboro | | OH | | 9/25/2013 | | 0 | | (1) | 540 | | | 540 | | | 0 | | | 0 | | | 1,080 | | | 186 | | Circle K I | | Retail | | Streetsboro | | OH | | 9/25/2013 | | — | | (1) | 540 | | | 540 | | | — | | | — | | | 1,080 | | | 201 | | Circle K I | Circle K I | | Retail | | Vandalia | | IL | | 9/25/2013 | | 0 | | (1) | 529 | | | 983 | | | 0 | | | 0 | | | 1,512 | | | 338 | | Circle K I | | Retail | | Vandalia | | IL | | 9/25/2013 | | — | | (1) | 529 | | | 983 | | | — | | | — | | | 1,512 | | | 366 | | Circle K I | Circle K I | | Retail | | Virden | | IL | | 9/25/2013 | | 0 | | (1) | 302 | | | 1,208 | | | 0 | | | 0 | | | 1,510 | | | 416 | | Circle K I | | Retail | | Virden | | IL | | 9/25/2013 | | — | | (1) | 302 | | | 1,208 | | | — | | | — | | | 1,510 | | | 450 | | Walgreens VI | Walgreens VI | | Retail | | Gillette | | WY | | 9/27/2013 | | 0 | | (1) | 1,198 | | | 2,796 | | | 0 | | | 0 | | | 3,994 | | | 1,027 | | Walgreens VI | | Retail | | Gillette | | WY | | 9/27/2013 | | — | | (1) | 1,198 | | | 2,796 | | | — | | | — | | | 3,994 | | | 1,111 | | Walgreens V | Walgreens V | | Retail | | Oklahoma City | | OK | | 9/27/2013 | | 0 | | (1) | 1,295 | | | 3,884 | | | 0 | | | 0 | | | 5,179 | | | 1,427 | | Walgreens V | | Retail | | Oklahoma City | | OK | | 9/27/2013 | | — | | (1) | 1,295 | | | 3,884 | | | — | | | — | | | 5,179 | | | 1,544 | | 1st Constitution Bancorp I | 1st Constitution Bancorp I | | Retail | | Hightstown | | NJ | | 9/30/2013 | | 0 | | (1) | 260 | | | 1,471 | | | 0 | | | 0 | | | 1,731 | | | 485 | | 1st Constitution Bancorp I | | Retail | | Hightstown | | NJ | | 9/30/2013 | | — | | (1) | 260 | | | 1,471 | | | — | | | — | | | 1,731 | | | 526 | | American Tire Distributors I | | Distribution | | Chattanooga | | TN | | 9/30/2013 | | 0 | | (1) | 401 | | | 7,626 | | | 0 | | | 0 | | | 8,027 | | | 2,961 | | | FedEx Ground I | FedEx Ground I | | Distribution | | Watertown | | SD | | 9/30/2013 | | 0 | | (1) | 136 | | | 2,581 | | | 0 | | | 0 | | | 2,717 | | | 1,002 | | FedEx Ground I | | Distribution | | Watertown | | SD | | 9/30/2013 | | — | | (1) | 136 | | | 2,581 | | | — | | | — | | | 2,717 | | | 1,097 | | Krystal I | Krystal I | | Retail | | Chattanooga | | TN | | 9/30/2013 | | 0 | | — | 285 | | | 855 | | | 0 | | | 0 | | | 1,140 | | | 360 | | Krystal I | | Retail | | Chattanooga | | TN | | 9/30/2013 | | — | | (7) | 285 | | | 855 | | | — | | | — | | | 1,140 | | | 386 | | Krystal I | Krystal I | | Retail | | Cleveland | | TN | | 9/30/2013 | | 0 | | — | 207 | | | 1,171 | | | 0 | | | 0 | | | 1,378 | | | 493 | | Krystal I | | Retail | | Cleveland | | TN | | 9/30/2013 | | — | | (7) | 207 | | | 1,171 | | | — | | | — | | | 1,378 | | | 528 | | Krystal I | Krystal I | | Retail | | Columbus | | GA | | 9/30/2013 | | 0 | | — | 143 | | | 1,288 | | | 0 | | | 0 | | | 1,431 | | | 542 | | Krystal I | | Retail | | Columbus | | GA | | 9/30/2013 | | — | | (7) | 143 | | | 1,288 | | | — | | | — | | | 1,431 | | | 581 | | Krystal I | | Krystal I | | Retail | | Ft. Oglethorpe | | GA | | 9/30/2013 | | — | | (7) | 181 | | | 1,024 | | | — | | | — | | | 1,205 | | | 462 | | Krystal I | | Krystal I | | Retail | | Jacksonville | | FL | | 9/30/2013 | | — | | (7) | 533 | | | 799 | | | — | | | — | | | 1,332 | | | 360 | |
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
Schedule III — Real Estate and Accumulated Depreciation — Part I December 31, 20202021
| (In thousands) | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2020 [12] [13] | | | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2021 [9] [10] | | | Property | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2020 | | Land | | Building and Improvements | | Land [11] | | Building and Improvements [11] | | Accumulated Depreciation [14] [15] | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2021 | | Land | | Building and Improvements | | Land | | Building and Improvements | | Accumulated Depreciation [11] [12] | Krystal I | | Retail | | Ft. Oglethorpe | | GA | | 9/30/2013 | | 0 | | — | 181 | | | 1,024 | | | 0 | | | 0 | | | 1,205 | | | 431 | | | Krystal I | | Retail | | Jacksonville | | FL | | 9/30/2013 | | 0 | | — | 533 | | | 799 | | | 0 | | | 0 | | | 1,332 | | | 336 | | | Krystal I | | Retail | | Madison | | TN | | 9/30/2013 | | 0 | | — | 416 | | | 624 | | | 0 | | | 0 | | | 1,040 | | | 263 | | | O'Charley's I | O'Charley's I | | Retail | | Carrollton | | GA | | 9/30/2013 | | 0 | | (1) | 457 | | | 1,067 | | | 0 | | | 0 | | | 1,524 | | | 449 | | O'Charley's I | | Retail | | Carrollton | | GA | | 9/30/2013 | | — | | (1) | 457 | | | 1,067 | | | — | | | — | | | 1,524 | | | 481 | | O'Charley's I | O'Charley's I | | Retail | | Champaign | | IL | | 9/30/2013 | | 0 | | (1) | 256 | | | 1,449 | | | 0 | | | 0 | | | 1,705 | | | 610 | | O'Charley's I | | Retail | | Champaign | | IL | | 9/30/2013 | | — | | (1) | 256 | | | 1,449 | | | — | | | — | | | 1,705 | | | 654 | | O'Charley's I | O'Charley's I | | Retail | | Clarksville | | TN | | 9/30/2013 | | 0 | | (1) | 917 | | | 1,376 | | | 0 | | | 0 | | | 2,293 | | | 579 | | O'Charley's I | | Retail | | Clarksville | | TN | | 9/30/2013 | | — | | (1) | 917 | | | 1,376 | | | — | | | — | | | 2,293 | | | 620 | | O'Charley's I | O'Charley's I | | Retail | | Columbus | | OH | | 9/30/2013 | | 0 | | (1) | 271 | | | 1,533 | | | 0 | | | 0 | | | 1,804 | | | 645 | | O'Charley's I | | Retail | | Columbus | | OH | | 9/30/2013 | | — | | (1) | 271 | | | 1,533 | | | — | | | — | | | 1,804 | | | 691 | | O'Charley's I | O'Charley's I | | Retail | | Conyers | | GA | | 9/30/2013 | | 0 | | (1) | 373 | | | 2,113 | | | 0 | | | 0 | | | 2,486 | | | 888 | | O'Charley's I | | Retail | | Conyers | | GA | | 9/30/2013 | | — | | (1) | 373 | | | 2,113 | | | — | | | — | | | 2,486 | | | 953 | | O'Charley's I | O'Charley's I | | Retail | | Corydon | | IN | | 9/30/2013 | | 0 | | (1) | 260 | | | 1,473 | | | 0 | | | 0 | | | 1,733 | | | 619 | | O'Charley's I | | Retail | | Corydon | | IN | | 9/30/2013 | | — | | (1) | 260 | | | 1,473 | | | — | | | — | | | 1,733 | | | 664 | | O'Charley's I | O'Charley's I | | Retail | | Daphne | | AL | | 9/30/2013 | | 0 | | (1) | 142 | | | 1,275 | | | 0 | | | 0 | | | 1,417 | | | 536 | | O'Charley's I | | Retail | | Daphne | | AL | | 9/30/2013 | | — | | (1) | 142 | | | 1,275 | | | — | | | — | | | 1,417 | | | 575 | | O'Charley's I | O'Charley's I | | Retail | | Foley | | AL | | 9/30/2013 | | 0 | | (1) | 264 | | | 1,495 | | | 0 | | | 0 | | | 1,759 | | | 629 | | O'Charley's I | | Retail | | Foley | | AL | | 9/30/2013 | | — | | (1) | 264 | | | 1,495 | | | — | | | — | | | 1,759 | | | 674 | | O'Charley's I | O'Charley's I | | Retail | | Greenfield | | IN | | 9/30/2013 | | 0 | | (1) | 507 | | | 1,184 | | | 0 | | | 0 | | | 1,691 | | | 498 | | O'Charley's I | | Retail | | Greenfield | | IN | | 9/30/2013 | | — | | (1) | 507 | | | 1,184 | | | — | | | — | | | 1,691 | | | 534 | | O'Charley's I | O'Charley's I | | Retail | | Grove City | | OH | | 9/30/2013 | | 0 | | (1) | 387 | | | 1,546 | | | 0 | | | 0 | | | 1,933 | | | 650 | | O'Charley's I | | Retail | | Grove City | | OH | | 9/30/2013 | | — | | (1) | 387 | | | 1,546 | | | — | | | — | | | 1,933 | | | 697 | | O'Charley's I | O'Charley's I | | Retail | | Hattiesburg | | MS | | 9/30/2013 | | 0 | | (1) | 413 | | | 1,651 | | | 0 | | | 0 | | | 2,064 | | | 694 | | O'Charley's I | | Retail | | Hattiesburg | | MS | | 9/30/2013 | | — | | (1) | 413 | | | 1,651 | | | — | | | 6 | | | 2,070 | | | 745 | | O'Charley's I | O'Charley's I | | Retail | | Lake Charles | | LA | | 9/30/2013 | | 0 | | (1) | 1,118 | | | 1,367 | | | 0 | | | 0 | | | 2,485 | | | 575 | | O'Charley's I | | Retail | | Lake Charles | | LA | | 9/30/2013 | | — | | (1) | 1,118 | | | 1,367 | | | — | | | — | | | 2,485 | | | 616 | | O'Charley's I | O'Charley's I | | Retail | | Mcdonough | | GA | | 9/30/2013 | | 0 | | (1) | 335 | | | 1,898 | | | 0 | | | 0 | | | 2,233 | | | 798 | | O'Charley's I | | Retail | | Mcdonough | | GA | | 9/30/2013 | | — | | (1) | 335 | | | 1,898 | | | — | | | — | | | 2,233 | | | 856 | | O'Charley's I | O'Charley's I | | Retail | | Murfreesboro | | TN | | 9/30/2013 | | 0 | | (1) | 597 | | | 1,109 | | | 0 | | | 0 | | | 1,706 | | | 466 | | O'Charley's I | | Retail | | Murfreesboro | | TN | | 9/30/2013 | | — | | (1) | 597 | | | 1,109 | | | — | | | — | | | 1,706 | | | 500 | | O'Charley's I | O'Charley's I | | Retail | | Salisbury | | NC | | 9/30/2013 | | 0 | | (1) | 439 | | | 1,024 | | | 0 | | | 0 | | | 1,463 | | | 431 | | O'Charley's I | | Retail | | Salisbury | | NC | | 9/30/2013 | | — | | (1) | 439 | | | 1,024 | | | — | | | — | | | 1,463 | | | 462 | | O'Charley's I | O'Charley's I | | Retail | | Simpsonville | | SC | | 9/30/2013 | | 0 | | (1) | 349 | | | 1,395 | | | 0 | | | 0 | | | 1,744 | | | 586 | | O'Charley's I | | Retail | | Simpsonville | | SC | | 9/30/2013 | | — | | (1) | 349 | | | 1,395 | | | — | | | — | | | 1,744 | | | 629 | | O'Charley's I | O'Charley's I | | Retail | | Southaven | | MS | | 9/30/2013 | | 0 | | (1) | 836 | | | 1,553 | | | 0 | | | 0 | | | 2,389 | | | 653 | | O'Charley's I | | Retail | | Southaven | | MS | | 9/30/2013 | | — | | (1) | 836 | | | 1,553 | | | — | | | — | | | 2,389 | | | 700 | | O'Charley's I | O'Charley's I | | Retail | | Springfield | | OH | | 9/30/2013 | | 0 | | (1) | 262 | | | 1,484 | | | 0 | | | 0 | | | 1,746 | | | 624 | | O'Charley's I | | Retail | | Springfield | | OH | | 9/30/2013 | | — | | (1) | 262 | | | 1,484 | | | — | | | — | | | 1,746 | | | 669 | | Walgreens VII | Walgreens VII | | Retail | | Alton | | IL | | 9/30/2013 | | 0 | | (1) | 1,158 | | | 3,474 | | | 0 | | | 0 | | | 4,632 | | | 1,277 | | Walgreens VII | | Retail | | Alton | | IL | | 9/30/2013 | | — | | (1) | 1,158 | | | 3,474 | | | — | | | — | | | 4,632 | | | 1,381 | | Walgreens VII | Walgreens VII | | Retail | | Florissant | | MO | | 9/30/2013 | | 0 | | (1) | 561 | | | 1,309 | | | 0 | | | 0 | | | 1,870 | | | 481 | | Walgreens VII | | Retail | | Florissant | | MO | | 9/30/2013 | | — | | (1) | 561 | | | 1,309 | | | — | | | — | | | 1,870 | | | 520 | | Walgreens VII | Walgreens VII | | Retail | | Florissant | | MO | | 9/30/2013 | | 0 | | (1) | 474 | | | 1,422 | | | 0 | | | 0 | | | 1,896 | | | 523 | | Walgreens VII | | Retail | | Florissant | | MO | | 9/30/2013 | | — | | (1) | 474 | | | 1,422 | | | — | | | — | | | 1,896 | | | 565 | | Walgreens VII | Walgreens VII | | Retail | | Mahomet | | IL | | 9/30/2013 | | 0 | | (1) | 1,432 | | | 2,659 | | | 0 | | | 0 | | | 4,091 | | | 977 | | Walgreens VII | | Retail | | Mahomet | | IL | | 9/30/2013 | | — | | (1) | 1,432 | | | 2,659 | | | — | | | — | | | 4,091 | | | 1,057 | | Walgreens VII | Walgreens VII | | Retail | | Monroe | | MI | | 9/30/2013 | | 0 | | (1) | 1,149 | | | 2,680 | | | 0 | | | 0 | | | 3,829 | | | 985 | | Walgreens VII | | Retail | | Monroe | | MI | | 9/30/2013 | | — | | (1) | 1,149 | | | 2,680 | | | — | | | — | | | 3,829 | | | 1,065 | | Walgreens VII | Walgreens VII | | Retail | | Springfield | | IL | | 9/30/2013 | | 0 | | (1) | 1,319 | | | 3,077 | | | 0 | | | 0 | | | 4,396 | | | 1,131 | | Walgreens VII | | Retail | | Springfield | | IL | | 9/30/2013 | | — | | (1) | 1,319 | | | 3,077 | | | — | | | — | | | 4,396 | | | 1,223 | | Walgreens VII | Walgreens VII | | Retail | | St Louis | | MO | | 9/30/2013 | | 0 | | (1) | 903 | | | 2,107 | | | 0 | | | 0 | | | 3,010 | | | 774 | | Walgreens VII | | Retail | | St Louis | | MO | | 9/30/2013 | | — | | (1) | 903 | | | 2,107 | | | — | | | — | | | 3,010 | | | 838 | | Walgreens VII | Walgreens VII | | Retail | | Washington | | IL | | 9/30/2013 | | 0 | | (1) | 964 | | | 2,893 | | | 0 | | | 0 | | | 3,857 | | | 1,063 | | Walgreens VII | | Retail | | Washington | | IL | | 9/30/2013 | | — | | (1) | 964 | | | 2,893 | | | — | | | — | | | 3,857 | | | 1,150 | | Tractor Supply II | Tractor Supply II | | Retail | | Houghton | | MI | | 10/3/2013 | | 0 | | (1) | 204 | | | 1,158 | | | 0 | | | 0 | | | 1,362 | | | 364 | | Tractor Supply II | | Retail | | Houghton | | MI | | 10/3/2013 | | — | | (1) | 204 | | | 1,158 | | | — | | | — | | | 1,362 | | | 403 | | National Tire & Battery II | National Tire & Battery II | (16) | Retail | | Mundelein | | IL | | 10/4/2013 | | 0 | | — | 0 | | | 1,742 | | | 0 | | | 0 | | | 1,742 | | | 646 | | National Tire & Battery II | (13) | Retail | | Mundelein | | IL | | 10/4/2013 | | — | | — | — | | | 1,742 | | | — | | | — | | | 1,742 | | | 709 | | United Healthcare I | United Healthcare I | | Office | | Howard (Green Bay) | | WI | | 10/7/2013 | | 0 | | — | 3,805 | | | 47,565 | | | 0 | | | 0 | | | 51,370 | | | 9,186 | | United Healthcare I | | Office | | Howard (Green Bay) | | WI | | 10/7/2013 | | — | | — | 3,805 | | | 47,565 | | | (2,507) | | | (34,885) | | | 13,978 | | | — | | Tractor Supply III | Tractor Supply III | | Retail | | Harlan | | KY | | 10/16/2013 | | 0 | | (1) | 248 | | | 2,232 | | | 0 | | | 0 | | | 2,480 | | | 695 | | Tractor Supply III | | Retail | | Harlan | | KY | | 10/16/2013 | | — | | (1) | 248 | | | 2,232 | | | — | | | — | | | 2,480 | | | 770 | |
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
Schedule III — Real Estate and Accumulated Depreciation — Part I December 31, 20202021
| (In thousands) | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2020 [12] [13] | | | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2021 [9] [10] | | | Property | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2020 | | Land | | Building and Improvements | | Land [11] | | Building and Improvements [11] | | Accumulated Depreciation [14] [15] | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2021 | | Land | | Building and Improvements | | Land | | Building and Improvements | | Accumulated Depreciation [11] [12] | Mattress Firm II | Mattress Firm II | | Retail | | Knoxville | | TN | | 10/18/2013 | | 0 | | (1) | 189 | | | 754 | | | 0 | | | 0 | | | 943 | | | 258 | | Mattress Firm II | | Retail | | Knoxville | | TN | | 10/18/2013 | | — | | (1) | 189 | | | 754 | | | — | | | — | | | 943 | | | 279 | | Dollar General XI | Dollar General XI | | Retail | | Greenville | | MS | | 10/23/2013 | | 0 | | (1) | 192 | | | 769 | | | 0 | | | 0 | | | 961 | | | 263 | | Dollar General XI | | Retail | | Greenville | | MS | | 10/23/2013 | | — | | (1) | 192 | | | 769 | | | — | | | — | | | 961 | | | 285 | | Talecris Plasma Resources I | Talecris Plasma Resources I | | Office | | Eagle Pass | | TX | | 10/29/2013 | | 0 | | (1) | 286 | | | 2,577 | | | 0 | | | 0 | | | 2,863 | | | 767 | | Talecris Plasma Resources I | | Office | | Eagle Pass | | TX | | 10/29/2013 | | — | | (1) | 286 | | | 2,577 | | | — | | | — | | | 2,863 | | | 842 | | Amazon I | Amazon I | | Office | | Winchester | | KY | | 10/30/2013 | | 0 | | (1) | 362 | | | 8,070 | | | 0 | | | 2 | | | 8,434 | | | 2,688 | | Amazon I | | Office | | Winchester | | KY | | 10/30/2013 | | — | | (1) | 362 | | | 8,070 | | | — | | | 2 | | | 8,434 | | | 2,977 | | Fresenius II | Fresenius II | | Retail | | Montclair | | NJ | | 10/31/2013 | | 0 | | (1) | 1,214 | | | 2,255 | | | 0 | | | 0 | | | 3,469 | | | 672 | | Fresenius II | | Retail | | Montclair | | NJ | | 10/31/2013 | | — | | (1) | 1,214 | | | 2,255 | | | — | | | 38 | | | 3,507 | | | 737 | | Fresenius II | Fresenius II | | Retail | | Sharon Hill | | PA | | 10/31/2013 | | 0 | | (1) | 345 | | | 1,956 | | | 0 | | | 0 | | | 2,301 | | | 582 | | Fresenius II | | Retail | | Sharon Hill | | PA | | 10/31/2013 | | — | | (1) | 345 | | | 1,956 | | | — | | | — | | | 2,301 | | | 639 | | Dollar General XII | Dollar General XII | | Retail | | Le Center | | MN | | 11/1/2013 | | 0 | | (1) | 47 | | | 886 | | | 0 | | | 0 | | | 933 | | | 303 | | Dollar General XII | | Retail | | Le Center | | MN | | 11/1/2013 | | — | | (1) | 47 | | | 886 | | | — | | | — | | | 933 | | | 328 | | Advance Auto II | Advance Auto II | | Retail | | Bunnell | | FL | | 11/7/2013 | | 0 | | (1) | 92 | | | 1,741 | | | 0 | | | 0 | | | 1,833 | | | 595 | | Advance Auto II | | Retail | | Bunnell | | FL | | 11/7/2013 | | — | | (1) | 92 | | | 1,741 | | | — | | | — | | | 1,833 | | | 644 | | Advance Auto II | Advance Auto II | | Retail | | Washington | | GA | | 11/7/2013 | | 0 | | (1) | 55 | | | 1,042 | | | 0 | | | 0 | | | 1,097 | | | 356 | | Advance Auto II | | Retail | | Washington | | GA | | 11/7/2013 | | — | | (1) | 55 | | | 1,042 | | | — | | | — | | | 1,097 | | | 386 | | Dollar General XIII | Dollar General XIII | | Retail | | Vidor | | TX | | 11/7/2013 | | 0 | | (1) | 46 | | | 875 | | | 0 | | | 0 | | | 921 | | | 299 | | Dollar General XIII | | Retail | | Vidor | | TX | | 11/7/2013 | | — | | (1) | 46 | | | 875 | | | — | | | — | | | 921 | | | 324 | | FedEx Ground II | FedEx Ground II | | Distribution | | Leland | | MS | | 11/12/2013 | | 0 | | (1) | 220 | | | 4,186 | | | 0 | | | 0 | | | 4,406 | | | 1,612 | | FedEx Ground II | | Distribution | | Leland | | MS | | 11/12/2013 | | — | | (1) | 220 | | | 4,186 | | | — | | | — | | | 4,406 | | | 1,767 | | Burger King I | Burger King I | | Retail | | Algonquin | | IL | | 11/14/2013 | | 0 | | (1) | 798 | | | 798 | | | (142) | | | 0 | | | 1,454 | | | 282 | | Burger King I | | Retail | | Algonquin | | IL | | 11/14/2013 | | — | | (1) | 798 | | | 798 | | | (142) | | | — | | | 1,454 | | | 311 | | Burger King I | Burger King I | | Retail | | Antioch | | IL | | 11/14/2013 | | 0 | | (1) | 706 | | | 471 | | | 0 | | | 0 | | | 1,177 | | | 167 | | Burger King I | | Retail | | Antioch | | IL | | 11/14/2013 | | — | | (1) | 706 | | | 471 | | | — | | | — | | | 1,177 | | | 183 | | Burger King I | Burger King I | | Retail | | Austintown | | OH | | 11/14/2013 | | 0 | | (1) | 221 | | | 1,251 | | | 0 | | | 0 | | | 1,472 | | | 443 | | Burger King I | | Retail | | Austintown | | OH | | 11/14/2013 | | — | | (1) | 221 | | | 1,251 | | | — | | | — | | | 1,472 | | | 487 | | Burger King I | Burger King I | | Retail | | Beavercreek | | OH | | 11/14/2013 | | 0 | | (1) | 410 | | | 761 | | | 0 | | | 0 | | | 1,171 | | | 269 | | Burger King I | | Retail | | Beavercreek | | OH | | 11/14/2013 | | — | | (1) | 410 | | | 761 | | | — | | | — | | | 1,171 | | | 296 | | Burger King I | Burger King I | | Retail | | Bethel Park | | PA | | 11/14/2013 | | 0 | | (1) | 342 | | | 634 | | | 0 | | | 0 | | | 976 | | | 224 | | Burger King I | | Retail | | Bethel Park | | PA | | 11/14/2013 | | — | | (1) | 342 | | | 634 | | | — | | | — | | | 976 | | | 247 | | Burger King I | Burger King I | | Retail | | Celina | | OH | | 11/14/2013 | | 0 | | (1) | 233 | | | 932 | | | 0 | | | 0 | | | 1,165 | | | 330 | | Burger King I | | Retail | | Celina | | OH | | 11/14/2013 | | — | | (1) | 233 | | | 932 | | | — | | | — | | | 1,165 | | | 363 | | Burger King I | Burger King I | | Retail | | Chardon | | OH | | 11/14/2013 | | 0 | | (1) | 332 | | | 497 | | | 0 | | | 0 | | | 829 | | | 176 | | Burger King I | | Retail | | Chardon | | OH | | 11/14/2013 | | — | | (1) | 332 | | | 497 | | | — | | | — | | | 829 | | | 194 | | Burger King I | Burger King I | | Retail | | Chesterland | | OH | | 11/14/2013 | | 0 | | (1) | 320 | | | 747 | | | 0 | | | 0 | | | 1,067 | | | 264 | | Burger King I | | Retail | | Chesterland | | OH | | 11/14/2013 | | — | | (1) | 320 | | | 747 | | | — | | | — | | | 1,067 | | | 291 | | Burger King I | Burger King I | | Retail | | Columbiana | | OH | | 11/14/2013 | | 0 | | (1) | 581 | | | 871 | | | 0 | | | 0 | | | 1,452 | | | 308 | | Burger King I | | Retail | | Columbiana | | OH | | 11/14/2013 | | — | | (1) | 581 | | | 871 | | | — | | | — | | | 1,452 | | | 339 | | Burger King I | Burger King I | | Retail | | Cortland | | OH | | 11/14/2013 | | 0 | | (1) | 118 | | | 1,063 | | | 0 | | | 0 | | | 1,181 | | | 376 | | Burger King I | | Retail | | Cortland | | OH | | 11/14/2013 | | — | | (1) | 118 | | | 1,063 | | | — | | | — | | | 1,181 | | | 414 | | Burger King I | Burger King I | | Retail | | Crystal Lake | | IL | | 11/14/2013 | | 0 | | (1) | 541 | | | 232 | | | 0 | | | 0 | | | 773 | | | 82 | | Burger King I | | Retail | | Crystal Lake | | IL | | 11/14/2013 | | — | | (1) | 541 | | | 232 | | | — | | | — | | | 773 | | | 90 | | Burger King I | Burger King I | | Retail | | Dayton | | OH | | 11/14/2013 | | 0 | | (1) | 464 | | | 862 | | | 0 | | | 0 | | | 1,326 | | | 305 | | Burger King I | | Retail | | Dayton | | OH | | 11/14/2013 | | — | | (1) | 464 | | | 862 | | | — | | | — | | | 1,326 | | | 335 | | Burger King I | Burger King I | | Retail | | Fairborn | | OH | | 11/14/2013 | | 0 | | (1) | 421 | | | 982 | | | 0 | | | 0 | | | 1,403 | | | 347 | | Burger King I | | Retail | | Fairborn | | OH | | 11/14/2013 | | — | | (1) | 421 | | | 982 | | | — | | | — | | | 1,403 | | | 382 | | Burger King I | Burger King I | | Retail | | Girard | | OH | | 11/14/2013 | | 0 | | (1) | 421 | | | 1,264 | | | 0 | | | 0 | | | 1,685 | | | 447 | | Burger King I | | Retail | | Girard | | OH | | 11/14/2013 | | — | | (1) | 421 | | | 1,264 | | | — | | | — | | | 1,685 | | | 492 | | Burger King I | Burger King I | | Retail | | Grayslake | | IL | | 11/14/2013 | | 0 | | (1) | 582 | | | 476 | | | 0 | | | 0 | | | 1,058 | | | 169 | | Burger King I | | Retail | | Grayslake | | IL | | 11/14/2013 | | — | | (1) | 582 | | | 476 | | | — | | | — | | | 1,058 | | | 185 | | Burger King I | Burger King I | | Retail | | Greenville | | OH | | 11/14/2013 | | 0 | | (1) | 248 | | | 993 | | | 0 | | | 0 | | | 1,241 | | | 351 | | Burger King I | | Retail | | Greenville | | OH | | 11/14/2013 | | — | | (1) | 248 | | | 993 | | | — | | | — | | | 1,241 | | | 387 | | Burger King I | Burger King I | | Retail | | Gurnee | | IL | | 11/14/2013 | | 0 | | (1) | 931 | | | 931 | | | 0 | | | 0 | | | 1,862 | | | 329 | | Burger King I | | Retail | | Gurnee | | IL | | 11/14/2013 | | — | | (1) | 931 | | | 931 | | | — | | | — | | | 1,862 | | | 362 | | Burger King I | Burger King I | | Retail | | Madison | | OH | | 11/14/2013 | | 0 | | (1) | 282 | | | 845 | | | 0 | | | 0 | | | 1,127 | | | 299 | | Burger King I | | Retail | | Madison | | OH | | 11/14/2013 | | — | | (1) | 282 | | | 845 | | | — | | | — | | | 1,127 | | | 329 | | Burger King I | Burger King I | | Retail | | McHenry | | IL | | 11/14/2013 | | 0 | | (1) | 742 | | | 318 | | | 0 | | | 0 | | | 1,060 | | | 113 | | Burger King I | | Retail | | McHenry | | IL | | 11/14/2013 | | — | | (1) | 742 | | | 318 | | | — | | | — | | | 1,060 | | | 124 | | Burger King I | Burger King I | | Retail | | Mentor | | OH | | 11/14/2013 | | 0 | | (1) | 196 | | | 786 | | | 0 | | | 0 | | | 982 | | | 278 | | Burger King I | | Retail | | Mentor | | OH | | 11/14/2013 | | — | | (1) | 196 | | | 786 | | | — | | | — | | | 982 | | | 306 | | Burger King I | Burger King I | | Retail | | Niles | | OH | | 11/14/2013 | | 0 | | (1) | 304 | | | 1,214 | | | 0 | | | 0 | | | 1,518 | | | 430 | | Burger King I | | Retail | | Niles | | OH | | 11/14/2013 | | — | | (1) | 304 | | | 1,214 | | | — | | | — | | | 1,518 | | | 473 | | Burger King I | Burger King I | | Retail | | North Fayette | | PA | | 11/14/2013 | | 0 | | (1) | 463 | | | 1,388 | | | 0 | | | 0 | | | 1,851 | | | 491 | | Burger King I | | Retail | | North Fayette | | PA | | 11/14/2013 | | — | | (1) | 463 | | | 1,388 | | | — | | | — | | | 1,851 | | | 540 | | Burger King I | Burger King I | | Retail | | North Royalton | | OH | | 11/14/2013 | | 0 | | (1) | 156 | | | 886 | | | 0 | | | 0 | | | 1,042 | | | 314 | | Burger King I | | Retail | | North Royalton | | OH | | 11/14/2013 | | — | | (1) | 156 | | | 886 | | | — | | | — | | | 1,042 | | | 345 | |
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
Schedule III — Real Estate and Accumulated Depreciation — Part I December 31, 20202021
| (In thousands) | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2020 [12] [13] | | | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2021 [9] [10] | | | Property | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2020 | | Land | | Building and Improvements | | Land [11] | | Building and Improvements [11] | | Accumulated Depreciation [14] [15] | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2021 | | Land | | Building and Improvements | | Land | | Building and Improvements | | Accumulated Depreciation [11] [12] | Burger King I | Burger King I | | Retail | | North Versailles | | PA | | 11/14/2013 | | 0 | | (1) | 553 | | | 1,659 | | | 0 | | | 0 | | | 2,212 | | | 587 | | Burger King I | | Retail | | North Versailles | | PA | | 11/14/2013 | | — | | (1) | 553 | | | 1,659 | | | — | | | — | | | 2,212 | | | 646 | | Burger King I | Burger King I | | Retail | | Painesville | | OH | | 11/14/2013 | | 0 | | (1) | 170 | | | 965 | | | 0 | | | 0 | | | 1,135 | | | 341 | | Burger King I | | Retail | | Painesville | | OH | | 11/14/2013 | | — | | (1) | 170 | | | 965 | | | — | | | — | | | 1,135 | | | 376 | | Burger King I | Burger King I | | Retail | | Poland | | OH | | 11/14/2013 | | 0 | | (1) | 212 | | | 847 | | | 0 | | | 0 | | | 1,059 | | | 300 | | Burger King I | | Retail | | Poland | | OH | | 11/14/2013 | | — | | (1) | 212 | | | 847 | | | — | | | — | | | 1,059 | | | 330 | | Burger King I | Burger King I | | Retail | | Ravenna | | OH | | 11/14/2013 | | 0 | | (1) | 391 | | | 1,172 | | | 0 | | | 0 | | | 1,563 | | | 415 | | Burger King I | | Retail | | Ravenna | | OH | | 11/14/2013 | | — | | (1) | 391 | | | 1,172 | | | — | | | — | | | 1,563 | | | 456 | | Burger King I | Burger King I | | Retail | | Round Lake Beach | | IL | | 11/14/2013 | | 0 | | (1) | 1,273 | | | 1,042 | | | 0 | | | 0 | | | 2,315 | | | 369 | | Burger King I | | Retail | | Round Lake Beach | | IL | | 11/14/2013 | | — | | (1) | 1,273 | | | 1,042 | | | — | | | — | | | 2,315 | | | 406 | | Burger King I | Burger King I | | Retail | | Salem | | OH | | 11/14/2013 | | 0 | | (1) | 352 | | | 1,408 | | | 0 | | | 0 | | | 1,760 | | | 498 | | Burger King I | | Retail | | Salem | | OH | | 11/14/2013 | | — | | (1) | 352 | | | 1,408 | | | — | | | — | | | 1,760 | | | 548 | | Burger King I | Burger King I | | Retail | | Trotwood | | OH | | 11/14/2013 | | 0 | | (1) | 266 | | | 798 | | | 0 | | | 0 | | | 1,064 | | | 282 | | Burger King I | | Retail | | Trotwood | | OH | | 11/14/2013 | | — | | (1) | 266 | | | 798 | | | — | | | — | | | 1,064 | | | 311 | | Burger King I | Burger King I | | Retail | | Twinsburg | | OH | | 11/14/2013 | | 0 | | (1) | 458 | | | 850 | | | 0 | | | 0 | | | 1,308 | | | 301 | | Burger King I | | Retail | | Twinsburg | | OH | | 11/14/2013 | | — | | (1) | 458 | | | 850 | | | — | | | — | | | 1,308 | | | 331 | | Burger King I | Burger King I | | Retail | | Vandalia | | OH | | 11/14/2013 | | 0 | | (1) | 182 | | | 728 | | | 0 | | | 0 | | | 910 | | | 258 | | Burger King I | | Retail | | Vandalia | | OH | | 11/14/2013 | | — | | (1) | 182 | | | 728 | | | — | | | — | | | 910 | | | 284 | | Burger King I | Burger King I | | Retail | | Warren | | OH | | 11/14/2013 | | 0 | | (1) | 168 | | | 1,516 | | | 0 | | | 0 | | | 1,684 | | | 536 | | Burger King I | | Retail | | Warren | | OH | | 11/14/2013 | | — | | (1) | 168 | | | 1,516 | | | — | | | — | | | 1,684 | | | 590 | | Burger King I | Burger King I | | Retail | | Warren | | OH | | 11/14/2013 | | 0 | | (1) | 176 | | | 997 | | | 0 | | | 0 | | | 1,173 | | | 353 | | Burger King I | | Retail | | Warren | | OH | | 11/14/2013 | | — | | (1) | 176 | | | 997 | | | — | | | — | | | 1,173 | | | 388 | | Burger King I | Burger King I | | Retail | | Waukegan | | IL | | 11/14/2013 | | 0 | | (1) | 611 | | | 611 | | | 0 | | | 0 | | | 1,222 | | | 216 | | Burger King I | | Retail | | Waukegan | | IL | | 11/14/2013 | | — | | (1) | 611 | | | 611 | | | — | | | — | | | 1,222 | | | 238 | | Burger King I | Burger King I | | Retail | | Willoughby | | OH | | 11/14/2013 | | 0 | | (1) | 394 | | | 920 | | | 0 | | | 0 | | | 1,314 | | | 325 | | Burger King I | | Retail | | Willoughby | | OH | | 11/14/2013 | | — | | (1) | 394 | | | 920 | | | — | | | — | | | 1,314 | | | 358 | | Burger King I | Burger King I | | Retail | | Woodstock | | IL | | 11/14/2013 | | 0 | | (1) | 869 | | | 290 | | | 0 | | | 0 | | | 1,159 | | | 103 | | Burger King I | | Retail | | Woodstock | | IL | | 11/14/2013 | | — | | (1) | 869 | | | 290 | | | — | | | — | | | 1,159 | | | 113 | | Burger King I | Burger King I | | Retail | | Youngstown | | OH | | 11/14/2013 | | 0 | | (1) | 147 | | | 1,324 | | | 0 | | | 0 | | | 1,471 | | | 468 | | Burger King I | | Retail | | Youngstown | | OH | | 11/14/2013 | | — | | (1) | 147 | | | 1,324 | | | — | | | — | | | 1,471 | | | 515 | | Burger King I | Burger King I | | Retail | | Youngstown | | OH | | 11/14/2013 | | 0 | | (1) | 186 | | | 1,675 | | | 0 | | | 0 | | | 1,861 | | | 593 | | Burger King I | | Retail | | Youngstown | | OH | | 11/14/2013 | | — | | (1) | 186 | | | 1,675 | | | — | | | — | | | 1,861 | | | 652 | | Burger King I | Burger King I | | Retail | | Youngstown | | OH | | 11/14/2013 | | 0 | | (1) | 370 | | | 1,481 | | | 0 | | | 0 | | | 1,851 | | | 524 | | Burger King I | | Retail | | Youngstown | | OH | | 11/14/2013 | | — | | (1) | 370 | | | 1,481 | | | — | | | — | | | 1,851 | | | 576 | | Burger King I | Burger King I | | Retail | | Youngstown | | OH | | 11/14/2013 | | 0 | | (1) | 300 | | | 901 | | | 0 | | | 0 | | | 1,201 | | | 319 | | Burger King I | | Retail | | Youngstown | | OH | | 11/14/2013 | | — | | (1) | 300 | | | 901 | | | — | | | — | | | 1,201 | | | 351 | | Dollar General XIV | Dollar General XIV | | Retail | | Fort Smith | | AR | | 11/20/2013 | | 0 | | (1) | 184 | | | 1,042 | | | 0 | | | 0 | | | 1,226 | | | 354 | | Dollar General XIV | | Retail | | Fort Smith | | AR | | 11/20/2013 | | — | | (1) | 184 | | | 1,042 | | | — | | | — | | | 1,226 | | | 383 | | Dollar General XIV | Dollar General XIV | | Retail | | Hot Springs | | AR | | 11/20/2013 | | 0 | | (1) | 287 | | | 862 | | | 0 | | | 0 | | | 1,149 | | | 293 | | Dollar General XIV | | Retail | | Hot Springs | | AR | | 11/20/2013 | | — | | (1) | 287 | | | 862 | | | — | | | — | | | 1,149 | | | 317 | | Dollar General XIV | Dollar General XIV | | Retail | | Royal | | AR | | 11/20/2013 | | 0 | | (1) | 137 | | | 777 | | | 0 | | | 0 | | | 914 | | | 264 | | Dollar General XIV | | Retail | | Royal | | AR | | 11/20/2013 | | — | | (1) | 137 | | | 777 | | | — | | | — | | | 914 | | | 286 | | Dollar General XV | Dollar General XV | | Retail | | Wilson | | NY | | 11/20/2013 | | 0 | | (1) | 172 | | | 972 | | | 0 | | | 0 | | | 1,144 | | | 330 | | Dollar General XV | | Retail | | Wilson | | NY | | 11/20/2013 | | — | | (1) | 172 | | | 972 | | | — | | | — | | | 1,144 | | | 357 | | Mattress Firm I | Mattress Firm I | | Retail | | McDonough | | GA | | 11/22/2013 | | 0 | | — | 185 | | | 1,663 | | | 0 | | | 0 | | | 1,848 | | | 565 | | Mattress Firm I | | Retail | | McDonough | | GA | | 11/22/2013 | | — | | (7) | 185 | | | 1,663 | | | — | | | — | | | 1,848 | | | 611 | | FedEx Ground III | FedEx Ground III | | Distribution | | Bismarck | | ND | | 11/25/2013 | | 0 | | (1) | 554 | | | 3,139 | | | 0 | | | 0 | | | 3,693 | | | 1,199 | | FedEx Ground III | | Distribution | | Bismarck | | ND | | 11/25/2013 | | — | | (1) | 554 | | | 3,139 | | | — | | | — | | | 3,693 | | | 1,315 | | Dollar General XVI | Dollar General XVI | | Retail | | LaFollette | | TN | | 11/27/2013 | | 0 | | (1) | 43 | | | 824 | | | 0 | | | 0 | | | 867 | | | 280 | | Dollar General XVI | | Retail | | LaFollette | | TN | | 11/27/2013 | | — | | (1) | 43 | | | 824 | | | — | | | — | | | 867 | | | 303 | | Family Dollar V | Family Dollar V | | Retail | | Carrollton | | MO | | 11/27/2013 | | 0 | | (1) | 37 | | | 713 | | | 1 | | | 1 | | | 752 | | | 242 | | Family Dollar V | | Retail | | Carrollton | | MO | | 11/27/2013 | | — | | (1) | 37 | | | 713 | | | 1 | | | 1 | | | 752 | | | 262 | | CVS III | CVS III | | Retail | | Detroit | | MI | | 12/10/2013 | | 0 | | — | 447 | | | 2,533 | | | 0 | | | 0 | | | 2,980 | | | 918 | | CVS III | | Retail | | Detroit | | MI | | 12/10/2013 | | — | | (7) | 447 | | | 2,533 | | | — | | | — | | | 2,980 | | | 994 | | Family Dollar VI | Family Dollar VI | | Retail | | Walden | | CO | | 12/10/2013 | | 0 | | (1) | 100 | | | 568 | | | 0 | | | 0 | | | 668 | | | 193 | | Family Dollar VI | | Retail | | Walden | | CO | | 12/10/2013 | | — | | (1) | 100 | | | 568 | | | — | | | — | | | 668 | | | 209 | | Mattress Firm III | Mattress Firm III | | Retail | | Valdosta | | GA | | 12/17/2013 | | 0 | | — | 169 | | | 1,522 | | | 0 | | | 0 | | | 1,691 | | | 513 | | Mattress Firm III | | Retail | | Valdosta | | GA | | 12/17/2013 | | — | | (7) | 169 | | | 1,522 | | | — | | | — | | | 1,691 | | | 556 | | Arby's II | Arby's II | | Retail | | Virginia | | MN | | 12/23/2013 | | 0 | | (1) | 117 | | | 1,056 | | | 0 | | | 0 | | | 1,173 | | | 368 | | Arby's II | | Retail | | Virginia | | MN | | 12/23/2013 | | — | | (1) | 117 | | | 1,056 | | | — | | | — | | | 1,173 | | | 405 | | Family Dollar VI | Family Dollar VI | | Retail | | Kremmling | | CO | | 12/23/2013 | | 0 | | (1) | 194 | | | 778 | | | 0 | | | 0 | | | 972 | | | 262 | | Family Dollar VI | | Retail | | Kremmling | | CO | | 12/23/2013 | | — | | (1) | 194 | | | 778 | | | — | | | — | | | 972 | | | 284 | | SAAB Sensis I | SAAB Sensis I | | Office | | Syracuse | | NY | | 12/23/2013 | | 6,217 | | | 2,516 | | | 12,570 | | | 0 | | | 0 | | | 15,086 | | | 2,499 | | SAAB Sensis I | | Office | | Syracuse | | NY | | 12/23/2013 | | — | | | 2,516 | | | 12,570 | | | — | | | — | | | 15,086 | | | 2,856 | | Citizens Bank I | Citizens Bank I | | Retail | | Doylestown | | PA | | 12/27/2013 | | 0 | | (1) | 588 | | | 1,373 | | | 0 | | | 0 | | | 1,961 | | | 444 | | Citizens Bank I | | Retail | | Doylestown | | PA | | 12/27/2013 | | — | | (1) | 588 | | | 1,373 | | | — | | | — | | | 1,961 | | | 481 | | Citizens Bank I | Citizens Bank I | | Retail | | Lansdale | | PA | | 12/27/2013 | | 0 | | (1) | 531 | | | 1,238 | | | 0 | | | 0 | | | 1,769 | | | 400 | | Citizens Bank I | | Retail | | Lansdale | | PA | | 12/27/2013 | | — | | (1) | 531 | | | 1,238 | | | — | | | — | | | 1,769 | | | 434 | | Citizens Bank I | Citizens Bank I | | Retail | | Lima | | PA | | 12/27/2013 | | 0 | | (1) | 1,376 | | | 1,682 | | | 0 | | | 0 | | | 3,058 | | | 543 | | Citizens Bank I | | Retail | | Lima | | PA | | 12/27/2013 | | — | | (1) | 1,376 | | | 1,682 | | | — | | | — | | | 3,058 | | | 590 | |
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
Schedule III — Real Estate and Accumulated Depreciation — Part I December 31, 20202021
| (In thousands) | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2020 [12] [13] | | | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2021 [9] [10] | | | Property | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2020 | | Land | | Building and Improvements | | Land [11] | | Building and Improvements [11] | | Accumulated Depreciation [14] [15] | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2021 | | Land | | Building and Improvements | | Land | | Building and Improvements | | Accumulated Depreciation [11] [12] | Citizens Bank I | Citizens Bank I | | Retail | | Philadelphia | | PA | | 12/27/2013 | | 0 | | (1) | 388 | | | 1,551 | | | 0 | | | 0 | | | 1,939 | | | 501 | | Citizens Bank I | | Retail | | Philadelphia | | PA | | 12/27/2013 | | — | | (1) | 388 | | | 1,551 | | | — | | | — | | | 1,939 | | | 544 | | Citizens Bank I | Citizens Bank I | | Retail | | Philadelphia | | PA | | 12/27/2013 | | 0 | | (1) | 412 | | | 2,337 | | | 0 | | | 0 | | | 2,749 | | | 755 | | Citizens Bank I | | Retail | | Philadelphia | | PA | | 12/27/2013 | | — | | (1) | 412 | | | 2,337 | | | — | | | — | | | 2,749 | | | 820 | | Citizens Bank I | Citizens Bank I | | Retail | | Philadelphia | | PA | | 12/27/2013 | | 0 | | (1) | 321 | | | 2,889 | | | 0 | | | 0 | | | 3,210 | | | 933 | | Citizens Bank I | | Retail | | Philadelphia | | PA | | 12/27/2013 | | — | | (1) | 321 | | | 2,889 | | | — | | | — | | | 3,210 | | | 1,013 | | Citizens Bank I | Citizens Bank I | | Retail | | Philadelphia | | PA | | 12/27/2013 | | 0 | | (1) | 473 | | | 2,680 | | | 0 | | | 0 | | | 3,153 | | | 866 | | Citizens Bank I | | Retail | | Philadelphia | | PA | | 12/27/2013 | | — | | (1) | 473 | | | 2,680 | | | — | | | — | | | 3,153 | | | 940 | | Citizens Bank I | Citizens Bank I | | Retail | | Richboro | | PA | | 12/27/2013 | | 0 | | (1) | 642 | | | 1,193 | | | 0 | | | 0 | | | 1,835 | | | 385 | | Citizens Bank I | | Retail | | Richboro | | PA | | 12/27/2013 | | — | | (1) | 642 | | | 1,193 | | | — | | | — | | | 1,835 | | | 418 | | Citizens Bank I | Citizens Bank I | | Retail | | Wayne | | PA | | 12/27/2013 | | 0 | | (1) | 1,923 | | | 1,923 | | | 0 | | | 0 | | | 3,846 | | | 621 | | Citizens Bank I | | Retail | | Wayne | | PA | | 12/27/2013 | | — | | (1) | 1,923 | | | 1,923 | | | — | | | — | | | 3,846 | | | 674 | | Truist Bank II | | Retail | | Arden | | NC | | 1/8/2014 | | 0 | | (2) | 374 | | | 216 | | | 0 | | | 0 | | | 590 | | | 53 | | | Truist Bank II | Truist Bank II | | Retail | | Bushnell | | FL | | 1/8/2014 | | 0 | | (2) | 385 | | | 1,216 | | | 0 | | | 0 | | | 1,601 | | | 225 | | Truist Bank II | | Retail | | Arden | | NC | | 1/8/2014 | | — | | (7) | 374 | | | 216 | | | — | | | — | | | 590 | | | 60 | | Truist Bank II | Truist Bank II | | Retail | | Chattanooga | | TN | | 1/8/2014 | | 0 | | (2) | 358 | | | 564 | | | 0 | | | 0 | | | 922 | | | 117 | | Truist Bank II | | Retail | | Bushnell | | FL | | 1/8/2014 | | — | | (7) | 385 | | | 1,216 | | | — | | | — | | | 1,601 | | | 257 | | Truist Bank II | Truist Bank II | | Retail | | Chesapeake | | VA | | 1/8/2014 | | 0 | | (2) | 490 | | | 695 | | | 0 | | | 0 | | | 1,185 | | | 148 | | Truist Bank II | | Retail | | Chattanooga | | TN | | 1/8/2014 | | — | | (7) | 358 | | | 564 | | | — | | | — | | | 922 | | | 133 | | Truist Bank II | Truist Bank II | | Retail | | Cockeysville | | MD | | 1/8/2014 | | 0 | | (2) | 2,184 | | | 479 | | | 0 | | | 0 | | | 2,663 | | | 96 | | Truist Bank II | | Retail | | Chesapeake | | VA | | 1/8/2014 | | — | | — | 490 | | | 695 | | | (248) | | | (437) | | | 500 | | | — | | Truist Bank II | Truist Bank II | | Retail | | Douglasville | | GA | | 1/8/2014 | | 0 | | (2) | 410 | | | 749 | | | 0 | | | 0 | | | 1,159 | | | 155 | | Truist Bank II | | Retail | | Douglasville | | GA | | 1/8/2014 | | — | | (7) | 410 | | | 749 | | | — | | | — | | | 1,159 | | | 177 | | Truist Bank II | Truist Bank II | | Retail | | Duluth | | GA | | 1/8/2014 | | 0 | | (2) | 1,081 | | | 2,111 | | | 0 | | | 0 | | | 3,192 | | | 417 | | Truist Bank II | | Retail | | Duluth | | GA | | 1/8/2014 | | — | | (7) | 1,081 | | | 2,111 | | | — | | | — | | | 3,192 | | | 477 | | Truist Bank II | Truist Bank II | | Retail | | East Ridge | | TN | | 1/8/2014 | | 0 | | (2) | 276 | | | 475 | | | 0 | | | 0 | | | 751 | | | 110 | | Truist Bank II | | Retail | | East Ridge | | TN | | 1/8/2014 | | — | | (7) | 276 | | | 475 | | | — | | | — | | | 751 | | | 126 | | Truist Bank II | Truist Bank II | | Retail | | Lynchburg | | VA | | 1/8/2014 | | 0 | | (2) | 584 | | | 1,255 | | | 0 | | | 0 | | | 1,839 | | | 258 | | Truist Bank II | | Retail | | Lynchburg | | VA | | 1/8/2014 | | — | | (7) | 584 | | | 1,255 | | | — | | | — | | | 1,839 | | | 295 | | Truist Bank II | Truist Bank II | | Retail | | Mauldin | | SC | | 1/8/2014 | | 0 | | (2) | 542 | | | 704 | | | 0 | | | 0 | | | 1,246 | | | 162 | | Truist Bank II | | Retail | | Mauldin | | SC | | 1/8/2014 | | — | | (7) | 542 | | | 704 | | | — | | | — | | | 1,246 | | | 185 | | Truist Bank II | Truist Bank II | | Retail | | Okeechobee | | FL | | 1/8/2014 | | 0 | | (2) | 339 | | | 1,569 | | | 0 | | | 0 | | | 1,908 | | | 397 | | Truist Bank II | | Retail | | Okeechobee | | FL | | 1/8/2014 | | — | | (7) | 339 | | | 1,569 | | | — | | | — | | | 1,908 | | | 454 | | Truist Bank II | Truist Bank II | | Retail | | Panama City | | FL | | 1/8/2014 | | 0 | | (2) | 484 | | | 1,075 | | | 0 | | | 0 | | | 1,559 | | | 229 | | Truist Bank II | | Retail | | Panama City | | FL | | 1/8/2014 | | — | | (7) | 484 | | | 1,075 | | | — | | | — | | | 1,559 | | | 262 | | Truist Bank II | Truist Bank II | | Retail | | Plant City | | FL | | 1/8/2014 | | 0 | | (2) | 499 | | | 1,139 | | | 0 | | | 0 | | | 1,638 | | | 247 | | Truist Bank II | | Retail | | Plant City | | FL | | 1/8/2014 | | — | | (7) | 499 | | | 1,139 | | | — | | | — | | | 1,638 | | | 282 | | Truist Bank II | Truist Bank II | | Retail | | Salisbury | | NC | | 1/8/2014 | | 0 | | (2) | 264 | | | 293 | | | 0 | | | 0 | | | 557 | | | 78 | | Truist Bank II | | Retail | | Salisbury | | NC | | 1/8/2014 | | — | | (7) | 264 | | | 293 | | | — | | | — | | | 557 | | | 89 | | Truist Bank II | Truist Bank II | | Retail | | Seminole | | FL | | 1/8/2014 | | 0 | | (2) | 1,329 | | | 3,486 | | | 0 | | | 0 | | | 4,815 | | | 667 | | Truist Bank II | | Retail | | Seminole | | FL | | 1/8/2014 | | — | | — | 1,329 | | | 3,486 | | | (624) | | | (2,042) | | | 2,149 | | | — | | Mattress Firm IV | Mattress Firm IV | | Retail | | Meridian | | ID | | 1/10/2014 | | 0 | | — | 691 | | | 1,193 | | | 0 | | | 0 | | | 1,884 | | | 249 | | Mattress Firm IV | | Retail | | Meridian | | ID | | 1/10/2014 | | — | | (7) | 691 | | | 1,193 | | | — | | | — | | | 1,884 | | | 285 | | Dollar General XII | Dollar General XII | | Retail | | Sunrise Beach | | MO | | 1/15/2014 | | 0 | | (1) | 105 | | | 795 | | | 0 | | | 0 | | | 900 | | | 233 | | Dollar General XII | | Retail | | Sunrise Beach | | MO | | 1/15/2014 | | — | | (1) | 105 | | | 795 | | | — | | | — | | | 900 | | | 266 | | FedEx Ground IV | FedEx Ground IV | | Distribution | | Council Bluffs | | IA | | 1/24/2014 | | 0 | | (1) | 768 | | | 3,908 | | | 0 | | | 0 | | | 4,676 | | | 867 | | FedEx Ground IV | | Distribution | | Council Bluffs | | IA | | 1/24/2014 | | — | | (1) | 768 | | | 3,908 | | | — | | | — | | | 4,676 | | | 992 | | Mattress Firm V | Mattress Firm V | | Retail | | Florence | | AL | | 1/28/2014 | | 0 | | — | 299 | | | 1,478 | | | 0 | | | 1 | | | 1,778 | | | 303 | | Mattress Firm V | | Retail | | Florence | | AL | | 1/28/2014 | | — | | (7) | 299 | | | 1,478 | | | — | | | 1 | | | 1,778 | | | 347 | | Mattress Firm I | Mattress Firm I | | Retail | | Aiken | | SC | | 2/5/2014 | | 0 | | — | 426 | | | 1,029 | | | 0 | | | 0 | | | 1,455 | | | 245 | | Mattress Firm I | | Retail | | Aiken | | SC | | 2/5/2014 | | — | | (7) | 426 | | | 1,029 | | | — | | | — | | | 1,455 | | | 280 | | Family Dollar VII | Family Dollar VII | | Retail | | Bernice | | LA | | 2/7/2014 | | 0 | | (1) | 51 | | | 527 | | | 0 | | | 0 | | | 578 | | | 113 | | Family Dollar VII | | Retail | | Bernice | | LA | | 2/7/2014 | | — | | (1) | 51 | | | 527 | | | — | | | — | | | 578 | | | 129 | | Aaron's I | Aaron's I | | Retail | | Erie | | PA | | 2/10/2014 | | 0 | | (1) | 126 | | | 708 | | | 0 | | | 0 | | | 834 | | | 138 | | Aaron's I | | Retail | | Erie | | PA | | 2/10/2014 | | — | | (1) | 126 | | | 708 | | | — | | | — | | | 834 | | | 158 | | AutoZone III | AutoZone III | | Retail | | Caro | | MI | | 2/13/2014 | | 0 | | (1) | 135 | | | 855 | | | 0 | | | 0 | | | 990 | | | 172 | | AutoZone III | | Retail | | Caro | | MI | | 2/13/2014 | | — | | (1) | 135 | | | 855 | | | — | | | — | | | 990 | | | 197 | | C&S Wholesale Grocer I | C&S Wholesale Grocer I | | Distribution | | Hatfield (South) | | MA | | 2/21/2014 | | 0 | | (10) | 1,420 | | | 14,169 | | | 0 | | | 0 | | | 15,589 | | | 2,524 | | C&S Wholesale Grocer I | | Distribution | | Hatfield (South) | | MA | | 2/21/2014 | | — | | (7) | 1,420 | | | 14,169 | | | — | | | — | | | 15,589 | | | 2,894 | | Advance Auto III | Advance Auto III | | Retail | | Taunton | | MA | | 2/25/2014 | | 0 | | (1) | 404 | | | 1,148 | | | 0 | | | 0 | | | 1,552 | | | 212 | | Advance Auto III | | Retail | | Taunton | | MA | | 2/25/2014 | | — | | (1) | 404 | | | 1,148 | | | — | | | — | | | 1,552 | | | 242 | | Family Dollar VIII | Family Dollar VIII | | Retail | | Dexter | | NM | | 3/3/2014 | | 0 | | (1) | 79 | | | 745 | | | 0 | | | 0 | | | 824 | | | 178 | | Family Dollar VIII | | Retail | | Dexter | | NM | | 3/3/2014 | | — | | (1) | 79 | | | 745 | | | — | | | — | | | 824 | | | 204 | | Family Dollar VIII | Family Dollar VIII | | Retail | | Hale Center | | TX | | 3/3/2014 | | 0 | | (1) | 111 | | | 624 | | | 0 | | | 0 | | | 735 | | | 150 | | Family Dollar VIII | | Retail | | Hale Center | | TX | | 3/3/2014 | | — | | (1) | 111 | | | 624 | | | — | | | — | | | 735 | | | 172 | | Family Dollar VIII | Family Dollar VIII | | Retail | | Plains | | TX | | 3/3/2014 | | 0 | | (1) | 100 | | | 624 | | | 0 | | | 0 | | | 724 | | | 148 | | Family Dollar VIII | | Retail | | Plains | | TX | | 3/3/2014 | | — | | (1) | 100 | | | 624 | | | — | | | — | | | 724 | | | 170 | | Dollar General XVII | | Dollar General XVII | | Retail | | Tullos | | LA | | 3/6/2014 | | — | | (1) | 114 | | | 736 | | | — | | | — | | | 850 | | | 174 | |
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
Schedule III — Real Estate and Accumulated Depreciation — Part I December 31, 20202021
| (In thousands) | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2020 [12] [13] | | | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2021 [9] [10] | | | Property | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2020 | | Land | | Building and Improvements | | Land [11] | | Building and Improvements [11] | | Accumulated Depreciation [14] [15] | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2021 | | Land | | Building and Improvements | | Land | | Building and Improvements | | Accumulated Depreciation [11] [12] | Dollar General XVII | | Retail | | Tullos | | LA | | 3/6/2014 | | 0 | | (1) | 114 | | | 736 | | | 0 | | | 0 | | | 850 | | | 151 | | | Truist Bank III | | Retail | | Asheboro | | NC | | 3/10/2014 | | 0 | | (3) | 458 | | | 774 | | | 0 | | | 0 | | | 1,232 | | | 164 | | | Truist Bank III | Truist Bank III | | Retail | | Athens | | GA | | 3/10/2014 | | 0 | | (3) | 427 | | | 472 | | | 0 | | | 0 | | | 899 | | | 144 | | Truist Bank III | | Retail | | Asheboro | | NC | | 3/10/2014 | | — | | (7) | 458 | | | 774 | | | — | | | — | | | 1,232 | | | 188 | | Truist Bank III | Truist Bank III | | Retail | | Atlanta | | GA | | 3/10/2014 | | 0 | | (3) | 3,027 | | | 4,873 | | | 0 | | | 0 | | | 7,900 | | | 885 | | Truist Bank III | | Retail | | Athens | | GA | | 3/10/2014 | | — | | (6) | 427 | | | 472 | | | — | | | — | | | 899 | | | 165 | | Truist Bank III | Truist Bank III | | Retail | | Atlanta | | GA | | 3/10/2014 | | 0 | | (3) | 4,422 | | | 1,559 | | | 0 | | | 0 | | | 5,981 | | | 313 | | Truist Bank III | | Retail | | Atlanta | | GA | | 3/10/2014 | | — | | (7) | 3,027 | | | 4,873 | | | — | | | — | | | 7,900 | | | 1,014 | | Truist Bank III | Truist Bank III | | Retail | | Avondale | | MD | | 3/10/2014 | | 0 | | (3) | 1,760 | | | 485 | | | 0 | | | 0 | | | 2,245 | | | 100 | | Truist Bank III | | Retail | | Atlanta | | GA | | 3/10/2014 | | — | | (6) | 4,422 | | | 1,559 | | | — | | | — | | | 5,981 | | | 358 | | Truist Bank III | Truist Bank III | | Retail | | Brentwood | | TN | | 3/10/2014 | | 0 | | (3) | 996 | | | 1,536 | | | 0 | | | 0 | | | 2,532 | | | 303 | | Truist Bank III | | Retail | | Avondale | | MD | | 3/10/2014 | | — | | (6) | 1,760 | | | 485 | | | — | | | — | | | 2,245 | | | 115 | | Truist Bank III | Truist Bank III | | Retail | | Brentwood | | TN | | 3/10/2014 | | 0 | | (3) | 885 | | | 1,987 | | | 0 | | | 0 | | | 2,872 | | | 386 | | Truist Bank III | | Retail | | Brentwood | | TN | | 3/10/2014 | | — | | (6) | 996 | | | 1,536 | | | — | | | — | | | 2,532 | | | 347 | | Truist Bank III | Truist Bank III | | Retail | | Brunswick | | GA | | 3/10/2014 | | 0 | | (3) | 384 | | | 888 | | | (267) | | | (636) | | | 369 | | | 14 | | Truist Bank III | | Retail | | Brentwood | | TN | | 3/10/2014 | | — | | (6) | 885 | | | 1,987 | | | — | | | — | | | 2,872 | | | 442 | | Truist Bank III | Truist Bank III | | Retail | | Casselberry | | FL | | 3/10/2014 | | 0 | | (3) | 609 | | | 2,443 | | | 0 | | | 0 | | | 3,052 | | | 469 | | Truist Bank III | | Retail | | Casselberry | | FL | | 3/10/2014 | | — | | (7) | 609 | | | 2,443 | | | — | | | — | | | 3,052 | | | 538 | | Truist Bank IV | Truist Bank IV | | Retail | | Chamblee | | GA | | 3/10/2014 | | 0 | | (4) | 1,029 | | | 813 | | | 0 | | | 0 | | | 1,842 | | | 174 | | Truist Bank IV | | Retail | | Chamblee | | GA | | 3/10/2014 | | — | | (6) | 1,029 | | | 813 | | | — | | | — | | | 1,842 | | | 199 | | Truist Bank III | Truist Bank III | | Retail | | Chattanooga | | TN | | 3/10/2014 | | 0 | | (3) | 419 | | | 811 | | | 0 | | | 0 | | | 1,230 | | | 156 | | Truist Bank III | | Retail | | Chattanooga | | TN | | 3/10/2014 | | — | | (6) | 419 | | | 811 | | | — | | | — | | | 1,230 | | | 179 | | Truist Bank III | Truist Bank III | | Retail | | Chattanooga | | TN | | 3/10/2014 | | 0 | | (3) | 191 | | | 335 | | | 0 | | | 0 | | | 526 | | | 66 | | Truist Bank III | | Retail | | Chattanooga | | TN | | 3/10/2014 | | — | | (7) | 191 | | | 335 | | | — | | | — | | | 526 | | | 76 | | First Horizon Bank | First Horizon Bank | | Retail | | Collinsville | | VA | | 3/10/2014 | | 0 | | (4) | 215 | | | 555 | | | 0 | | | 0 | | | 770 | | | 112 | | First Horizon Bank | | Retail | | Collinsville | | VA | | 3/10/2014 | | — | | (6) | 215 | | | 555 | | | — | | | — | | | 770 | | | 129 | | Truist Bank IV | Truist Bank IV | | Retail | | Columbus | | GA | | 3/10/2014 | | 0 | | (4) | 417 | | | 1,395 | | | 0 | | | 1 | | | 1,813 | | | 276 | | Truist Bank IV | | Retail | | Columbus | | GA | | 3/10/2014 | | — | | (6) | 417 | | | 1,395 | | | — | | | 1 | | | 1,813 | | | 316 | | Truist Bank III | Truist Bank III | | Retail | | Conyers | | GA | | 3/10/2014 | | 0 | | (3) | 205 | | | 1,334 | | | 0 | | | 0 | | | 1,539 | | | 254 | | Truist Bank III | | Retail | | Conyers | | GA | | 3/10/2014 | | — | | (6) | 205 | | | 1,334 | | | — | | | — | | | 1,539 | | | 291 | | Truist Bank IV | Truist Bank IV | | Office | | Creedmoor | | NC | | 3/10/2014 | | 0 | | (4) | 306 | | | 789 | | | (128) | | | (300) | | | 667 | | | 124 | | Truist Bank IV | | Office | | Creedmoor | | NC | | 3/10/2014 | | — | | (7) | 306 | | | 789 | | | (128) | | | (300) | | | 667 | | | 147 | | Truist Bank III | Truist Bank III | | Retail | | Daytona Beach | | FL | | 3/10/2014 | | 0 | | (3) | 443 | | | 1,586 | | | 0 | | | 0 | | | 2,029 | | | 331 | | Truist Bank III | | Retail | | Daytona Beach | | FL | | 3/10/2014 | | — | | (7) | 443 | | | 1,586 | | | — | | | — | | | 2,029 | | | 380 | | Truist Bank III | Truist Bank III | | Retail | | Dunn | | NC | | 3/10/2014 | | 0 | | (3) | 384 | | | 616 | | | 0 | | | 0 | | | 1,000 | | | 137 | | Truist Bank III | | Retail | | Dunn | | NC | | 3/10/2014 | | — | | (6) | 384 | | | 616 | | | — | | | — | | | 1,000 | | | 157 | | First Horizon Bank | First Horizon Bank | | Retail | | Durham | | NC | | 3/10/2014 | | 0 | | (3) | 284 | | | 506 | | | 0 | | | 0 | | | 790 | | | 124 | | First Horizon Bank | | Retail | | Durham | | NC | | 3/10/2014 | | — | | (6) | 284 | | | 506 | | | — | | | — | | | 790 | | | 142 | | First Horizon Bank | First Horizon Bank | | Retail | | Durham | | NC | | 3/10/2014 | | 0 | | (3) | 488 | | | 742 | | | 0 | | | 0 | | | 1,230 | | | 144 | | First Horizon Bank | | Retail | | Durham | | NC | | 3/10/2014 | | — | | (6) | 488 | | | 742 | | | — | | | — | | | 1,230 | | | 165 | | Truist Bank III | Truist Bank III | | Retail | | Fairfax | | VA | | 3/10/2014 | | 0 | | (3) | 2,835 | | | 1,081 | | | 0 | | | 0 | | | 3,916 | | | 208 | | Truist Bank III | | Retail | | Fairfax | | VA | | 3/10/2014 | | — | | (6) | 2,835 | | | 1,081 | | | — | | | — | | | 3,916 | | | 238 | | Truist Bank III | Truist Bank III | | Retail | | Gainesville | | FL | | 3/10/2014 | | 0 | | (3) | 457 | | | 816 | | | 0 | | | 0 | | | 1,273 | | | 177 | | Truist Bank III | | Retail | | Gainesville | | FL | | 3/10/2014 | | — | | (7) | 457 | | | 816 | | | — | | | — | | | 1,273 | | | 203 | | Truist Bank III | Truist Bank III | | Retail | | Gainesville | | FL | | 3/10/2014 | | 0 | | (3) | 458 | | | 2,139 | | | 0 | | | 0 | | | 2,597 | | | 409 | | Truist Bank III | | Retail | | Gainesville | | FL | | 3/10/2014 | | — | | (7) | 458 | | | 2,139 | | | — | | | — | | | 2,597 | | | 469 | | Truist Bank III | Truist Bank III | | Retail | | Greenville | | SC | | 3/10/2014 | | 0 | | (3) | 590 | | | 1,007 | | | 0 | | | 0 | | | 1,597 | | | 215 | | Truist Bank III | | Retail | | Greenville | | SC | | 3/10/2014 | | — | | (7) | 590 | | | 1,007 | | | — | | | — | | | 1,597 | | | 247 | | Truist Bank III | Truist Bank III | | Retail | | Greenville | | SC | | 3/10/2014 | | 0 | | (3) | 449 | | | 1,640 | | | 0 | | | 0 | | | 2,089 | | | 405 | | Truist Bank III | | Retail | | Greenville | | SC | | 3/10/2014 | | — | | (6) | 449 | | | 1,640 | | | — | | | — | | | 2,089 | | | 464 | | Truist Bank III | Truist Bank III | | Retail | | Greenville | | SC | | 3/10/2014 | | 0 | | (3) | 377 | | | 871 | | | 0 | | | 0 | | | 1,248 | | | 175 | | Truist Bank III | | Retail | | Greenville | | SC | | 3/10/2014 | | — | | (7) | 377 | | | 871 | | | — | | | — | | | 1,248 | | | 201 | | Truist Bank III | Truist Bank III | | Retail | | Greenville | | SC | | 3/10/2014 | | 0 | | (3) | 264 | | | 684 | | | 0 | | | 0 | | | 948 | | | 140 | | Truist Bank III | | Retail | | Greenville | | SC | | 3/10/2014 | | — | | (6) | 264 | | | 684 | | | — | | | — | | | 948 | | | 160 | | Truist Bank III | Truist Bank III | | Retail | | Gulf Breeze | | FL | | 3/10/2014 | | 0 | | (3) | 1,092 | | | 1,569 | | | 0 | | | 0 | | | 2,661 | | | 323 | | Truist Bank III | | Retail | | Gulf Breeze | | FL | | 3/10/2014 | | — | | (7) | 1,092 | | | 1,569 | | | — | | | — | | | 2,661 | | | 370 | | Truist Bank III | Truist Bank III | | Retail | | Hendersonville | | NC | | 3/10/2014 | | 0 | | (3) | 468 | | | 945 | | | 0 | | | 0 | | | 1,413 | | | 190 | | Truist Bank III | | Retail | | Hendersonville | | NC | | 3/10/2014 | | — | | (7) | 468 | | | 945 | | | — | | | — | | | 1,413 | | | 218 | | Truist Bank III | Truist Bank III | | Retail | | Indian Harbour Beach | | FL | | 3/10/2014 | | 0 | | (3) | 914 | | | 1,181 | | | 0 | | | 0 | | | 2,095 | | | 332 | | Truist Bank III | | Retail | | Indian Harbour Beach | | FL | | 3/10/2014 | | — | | (7) | 914 | | | 1,181 | | | — | | | — | | | 2,095 | | | 380 | |
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
Schedule III — Real Estate and Accumulated Depreciation — Part I December 31, 20202021
| (In thousands) | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2020 [12] [13] | | | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2021 [9] [10] | | | Property | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2020 | | Land | | Building and Improvements | | Land [11] | | Building and Improvements [11] | | Accumulated Depreciation [14] [15] | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2021 | | Land | | Building and Improvements | | Land | | Building and Improvements | | Accumulated Depreciation [11] [12] | Truist Bank III | | Retail | | Inverness | | FL | | 3/10/2014 | | 0 | | (3) | 867 | | | 2,559 | | | 0 | | | 0 | | | 3,426 | | | 507 | | | Truist Bank III | Truist Bank III | | Retail | | Jacksonville | | FL | | 3/10/2014 | | 0 | | (3) | 871 | | | 372 | | | 0 | | | 0 | | | 1,243 | | | 89 | | Truist Bank III | | Retail | | Inverness | | FL | | 3/10/2014 | | — | | (7) | 867 | | | 2,559 | | | — | | | — | | | 3,426 | | | 581 | | Truist Bank III | Truist Bank III | | Retail | | Jacksonville | | FL | | 3/10/2014 | | 0 | | (3) | 366 | | | 1,136 | | | 0 | | | 0 | | | 1,502 | | | 229 | | Truist Bank III | | Retail | | Jacksonville | | FL | | 3/10/2014 | | — | | (7) | 871 | | | 372 | | | — | | | — | | | 1,243 | | | 102 | | Truist Bank III | Truist Bank III | | Retail | | Lakeland | | FL | | 3/10/2014 | | 0 | | (3) | 927 | | | 1,594 | | | 0 | | | 0 | | | 2,521 | | | 374 | | Truist Bank III | | Retail | | Jacksonville | | FL | | 3/10/2014 | | — | | (7) | 366 | | | 1,136 | | | — | | | — | | | 1,502 | | | 262 | | Truist Bank III | Truist Bank III | | Retail | | Lenoir | | NC | | 3/10/2014 | | 0 | | (3) | 1,021 | | | 3,980 | | | 0 | | | 0 | | | 5,001 | | | 729 | | Truist Bank III | | Retail | | Lakeland | | FL | | 3/10/2014 | | — | | — | 927 | | | 1,594 | | | — | | | — | | | 2,521 | | | 428 | | Truist Bank III | Truist Bank III | | Retail | | Lexington | | VA | | 3/10/2014 | | 0 | | (3) | 122 | | | 385 | | | 0 | | | 0 | | | 507 | | | 86 | | Truist Bank III | | Retail | | Lenoir | | NC | | 3/10/2014 | | — | | (7) | 1,021 | | | 3,980 | | | — | | | — | | | 5,001 | | | 836 | | Truist Bank III | Truist Bank III | | Retail | | Lithonia | | GA | | 3/10/2014 | | 0 | | (3) | 212 | | | 770 | | | 0 | | | 0 | | | 982 | | | 154 | | Truist Bank III | | Retail | | Lithonia | | GA | | 3/10/2014 | | — | | (7) | 212 | | | 770 | | | — | | | — | | | 982 | | | 177 | | Truist Bank III | Truist Bank III | | Retail | | Lutz | | FL | | 3/10/2014 | | 0 | | (3) | 438 | | | 1,477 | | | 0 | | | 0 | | | 1,915 | | | 281 | | Truist Bank III | | Retail | | Lutz | | FL | | 3/10/2014 | | — | | (7) | 438 | | | 1,477 | | | — | | | — | | | 1,915 | | | 322 | | Truist Bank III | Truist Bank III | | Retail | | Macon | | GA | | 3/10/2014 | | 0 | | (3) | 214 | | | 771 | | | 0 | | | 0 | | | 985 | | | 172 | | Truist Bank III | | Retail | | Macon | | GA | | 3/10/2014 | | — | | (7) | 214 | | | 771 | | | — | | | — | | | 985 | | | 198 | | Truist Bank IV | Truist Bank IV | | Retail | | Madison | | GA | | 3/10/2014 | | 0 | | (4) | 304 | | | 612 | | | 0 | | | 0 | | | 916 | | | 113 | | Truist Bank IV | | Retail | | Madison | | GA | | 3/10/2014 | | — | | (7) | 304 | | | 612 | | | — | | | — | | | 916 | | | 130 | | Truist Bank III | Truist Bank III | | Retail | | Marietta | | GA | | 3/10/2014 | | 0 | | (3) | 2,168 | | | 1,169 | | | 0 | | | 0 | | | 3,337 | | | 249 | | Truist Bank III | | Retail | | Marietta | | GA | | 3/10/2014 | | — | | (6) | 2,168 | | | 1,169 | | | — | | | — | | | 3,337 | | | 286 | | Truist Bank III | Truist Bank III | | Retail | | Marietta | | GA | | 3/10/2014 | | 0 | | (3) | 1,087 | | | 2,056 | | | 0 | | | 0 | | | 3,143 | | | 383 | | Truist Bank III | | Retail | | Marietta | | GA | | 3/10/2014 | | — | | (7) | 1,087 | | | 2,056 | | | — | | | — | | | 3,143 | | | 439 | | Truist Bank III | Truist Bank III | | Retail | | Mebane | | NC | | 3/10/2014 | | 0 | | (3) | 500 | | | 887 | | | 0 | | | 0 | | | 1,387 | | | 172 | | Truist Bank III | | Retail | | Mebane | | NC | | 3/10/2014 | | — | | (7) | 500 | | | 887 | | | — | | | — | | | 1,387 | | | 197 | | Truist Bank III | Truist Bank III | | Retail | | Melbourne | | FL | | 3/10/2014 | | 0 | | (3) | 772 | | | 1,927 | | | 0 | | | 0 | | | 2,699 | | | 381 | | Truist Bank III | | Retail | | Melbourne | | FL | | 3/10/2014 | | — | | (7) | 772 | | | 1,927 | | | — | | | — | | | 2,699 | | | 437 | | Truist Bank III | Truist Bank III | | Retail | | Melbourne | | FL | | 3/10/2014 | | 0 | | (3) | 788 | | | 1,888 | | | 0 | | | 0 | | | 2,676 | | | 360 | | Truist Bank III | | Retail | | Melbourne | | FL | | 3/10/2014 | | — | | (7) | 788 | | | 1,888 | | | — | | | — | | | 2,676 | | | 413 | | Truist Bank III | Truist Bank III | | Retail | | Morristown | | TN | | 3/10/2014 | | 0 | | (3) | 214 | | | 444 | | | 0 | | | 0 | | | 658 | | | 122 | | Truist Bank III | | Retail | | Morristown | | TN | | 3/10/2014 | | — | | (6) | 214 | | | 444 | | | — | | | — | | | 658 | | | 140 | | Truist Bank III | Truist Bank III | | Retail | | Mount Dora | | FL | | 3/10/2014 | | 0 | | (3) | 570 | | | 1,933 | | | 0 | | | 0 | | | 2,503 | | | 368 | | Truist Bank III | | Retail | | Mount Dora | | FL | | 3/10/2014 | | — | | (7) | 570 | | | 1,933 | | | — | | | — | | | 2,503 | | | 422 | | Truist Bank III | Truist Bank III | | Retail | | Murfreesboro | | TN | | 3/10/2014 | | 0 | | (3) | 451 | | | 847 | | | 0 | | | 0 | | | 1,298 | | | 156 | | Truist Bank III | | Retail | | Murfreesboro | | TN | | 3/10/2014 | | — | | (6) | 451 | | | 847 | | | — | | | — | | | 1,298 | | | 179 | | Truist Bank III | Truist Bank III | | Retail | | Nashville | | TN | | 3/10/2014 | | 0 | | (3) | 1,776 | | | 1,601 | | | 0 | | | 0 | | | 3,377 | | | 358 | | Truist Bank III | | Retail | | Nashville | | TN | | 3/10/2014 | | — | | (7) | 1,776 | | | 1,601 | | | — | | | — | | | 3,377 | | | 410 | | Truist Bank IV | Truist Bank IV | | Retail | | Ocala | | FL | | 3/10/2014 | | 0 | | (4) | 581 | | | 1,091 | | | 0 | | | 0 | | | 1,672 | | | 250 | | Truist Bank IV | | Retail | | Ocala | | FL | | 3/10/2014 | | — | | (6) | 581 | | | 1,091 | | | — | | | — | | | 1,672 | | | 287 | | Truist Bank III | Truist Bank III | | Retail | | Ocala | | FL | | 3/10/2014 | | 0 | | (3) | 347 | | | 1,336 | | | 0 | | | 0 | | | 1,683 | | | 365 | | Truist Bank III | | Retail | | Ocala | | FL | | 3/10/2014 | | — | | (6) | 347 | | | 1,336 | | | — | | | — | | | 1,683 | | | 418 | | First Horizon Bank | First Horizon Bank | | Retail | | Onancock | | VA | | 3/10/2014 | | 0 | | (3) | 829 | | | 1,300 | | | 0 | | | 0 | | | 2,129 | | | 240 | | First Horizon Bank | | Retail | | Onancock | | VA | | 3/10/2014 | | — | | (6) | 829 | | | 1,300 | | | — | | | — | | | 2,129 | | | 275 | | Truist Bank III | Truist Bank III | | Retail | | Orlando | | FL | | 3/10/2014 | | 0 | | (3) | 1,234 | | | 1,125 | | | 0 | | | 0 | | | 2,359 | | | 233 | | Truist Bank III | | Retail | | Orlando | | FL | | 3/10/2014 | | — | | (7) | 1,234 | | | 1,125 | | | — | | | — | | | 2,359 | | | 267 | | Truist Bank III | Truist Bank III | | Retail | | Ormond Beach | | FL | | 3/10/2014 | | 0 | | (3) | 873 | | | 2,235 | | | 0 | | | 0 | | | 3,108 | | | 428 | | Truist Bank III | | Retail | | Ormond Beach | | FL | | 3/10/2014 | | — | | (7) | 873 | | | 2,235 | | | — | | | — | | | 3,108 | | | 491 | | Truist Bank III | Truist Bank III | | Retail | | Ormond Beach | | FL | | 3/10/2014 | | 0 | | (3) | 1,047 | | | 1,566 | | | 0 | | | 0 | | | 2,613 | | | 331 | | Truist Bank III | | Retail | | Ormond Beach | | FL | | 3/10/2014 | | — | | (7) | 1,047 | | | 1,566 | | | — | | | — | | | 2,613 | | | 380 | | Truist Bank III | Truist Bank III | | Retail | | Ormond Beach | | FL | | 3/10/2014 | | 0 | | (3) | 854 | | | 1,385 | | | 0 | | | 0 | | | 2,239 | | | 283 | | Truist Bank III | | Retail | | Ormond Beach | | FL | | 3/10/2014 | | — | | (7) | 854 | | | 1,385 | | | — | | | — | | | 2,239 | | | 324 | | Truist Bank III | Truist Bank III | | Retail | | Oxford | | NC | | 3/10/2014 | | 0 | | (3) | 530 | | | 1,727 | | | 1 | | | 0 | | | 2,258 | | | 321 | | Truist Bank III | | Retail | | Oxford | | NC | | 3/10/2014 | | — | | (6) | 530 | | | 1,727 | | | 1 | | | — | | | 2,258 | | | 368 | | Truist Bank III | Truist Bank III | | Retail | | Peachtree City | | GA | | 3/10/2014 | | 0 | | (3) | 887 | | | 2,242 | | | 0 | | | 0 | | | 3,129 | | | 453 | | Truist Bank III | | Retail | | Peachtree City | | GA | | 3/10/2014 | | — | | (6) | 887 | | | 2,242 | | | — | | | — | | | 3,129 | | | 519 | | First Horizon Bank | First Horizon Bank | | Retail | | Pittsboro | | NC | | 3/10/2014 | | 0 | | (4) | 61 | | | 510 | | | 0 | | | 0 | | | 571 | | | 90 | | First Horizon Bank | | Retail | | Pittsboro | | NC | | 3/10/2014 | | — | | (6) | 61 | | | 510 | | | — | | | — | | | 571 | | | 103 | | Truist Bank III | Truist Bank III | | Retail | | Pompano Beach | | FL | | 3/10/2014 | | 0 | | (3) | 886 | | | 2,024 | | | 0 | | | 0 | | | 2,910 | | | 384 | | Truist Bank III | | Retail | | Pompano Beach | | FL | | 3/10/2014 | | — | | (7) | 886 | | | 2,024 | | | — | | | — | | | 2,910 | | | 440 | | Truist Bank III | Truist Bank III | | Retail | | Port St. Lucie | | FL | | 3/10/2014 | | 0 | | (3) | 913 | | | 1,772 | | | 0 | | | 0 | | | 2,685 | | | 369 | | Truist Bank III | | Retail | | Port St. Lucie | | FL | | 3/10/2014 | | — | | (7) | 913 | | | 1,772 | | | — | | | — | | | 2,685 | | | 423 | | Truist Bank IV | Truist Bank IV | | Retail | | Prince Frederick | | MD | | 3/10/2014 | | 0 | | (4) | 2,431 | | | 940 | | | 0 | | | 0 | | | 3,371 | | | 201 | | Truist Bank IV | | Retail | | Prince Frederick | | MD | | 3/10/2014 | | — | | (6) | 2,431 | | | 940 | | | — | | | — | | | 3,371 | | | 230 | | Truist Bank III | Truist Bank III | | Retail | | Richmond | | VA | | 3/10/2014 | | 0 | | (3) | 153 | | | 313 | | | 0 | | | 0 | | | 466 | | | 74 | | Truist Bank III | | Retail | | Richmond | | VA | | 3/10/2014 | | — | | (6) | 153 | | | 313 | | | — | | | — | | | 466 | | | 85 | | Truist Bank III | Truist Bank III | | Office | | Richmond | | VA | | 3/10/2014 | | 0 | | (3) | 3,141 | | | 7,441 | | | (804) | | | 755 | | | 10,533 | | | 1,840 | | Truist Bank III | | Office | | Richmond | | VA | | 3/10/2014 | | — | | (7) | 3,141 | | | 7,441 | | | (804) | | | 2,231 | | | 12,009 | | | 2,448 | | Truist Bank III | Truist Bank III | | Retail | | Richmond | | VA | | 3/10/2014 | | 0 | | (3) | 233 | | | 214 | | | 0 | | | 0 | | | 447 | | | 51 | | Truist Bank III | | Retail | | Richmond | | VA | | 3/10/2014 | | — | | (6) | 233 | | | 214 | | | — | | | — | | | 447 | | | 59 | | Truist Bank III | | Truist Bank III | | Retail | | Roanoke | | VA | | 3/10/2014 | | — | | (6) | 753 | | | 1,165 | | | — | | | — | | | 1,918 | | | 275 | |
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
Schedule III — Real Estate and Accumulated Depreciation — Part I December 31, 20202021
| (In thousands) | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2020 [12] [13] | | | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2021 [9] [10] | | | Property | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2020 | | Land | | Building and Improvements | | Land [11] | | Building and Improvements [11] | | Accumulated Depreciation [14] [15] | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2021 | | Land | | Building and Improvements | | Land | | Building and Improvements | | Accumulated Depreciation [11] [12] | Truist Bank III | | Retail | | Roanoke | | VA | | 3/10/2014 | | 0 | | (3) | 753 | | | 1,165 | | | 0 | | | 0 | | | 1,918 | | | 240 | | | Truist Bank III | | Retail | | Roanoke | | VA | | 3/10/2014 | | 0 | | (3) | 316 | | | 734 | | | 0 | | | 0 | | | 1,050 | | | 146 | | | Truist Bank III | Truist Bank III | | Retail | | Rockledge | | FL | | 3/10/2014 | | 0 | | (3) | 742 | | | 1,126 | | | 0 | | | 0 | | | 1,868 | | | 227 | | Truist Bank III | | Retail | | Roanoke | | VA | | 3/10/2014 | | — | | (7) | 316 | | | 734 | | | — | | | — | | | 1,050 | | | 167 | | Truist Bank III | Truist Bank III | | Retail | | Sarasota | | FL | | 3/10/2014 | | 0 | | (3) | 741 | | | 852 | | | 0 | | | 0 | | | 1,593 | | | 186 | | Truist Bank III | | Retail | | Sarasota | | FL | | 3/10/2014 | | — | | (7) | 741 | | | 852 | | | — | | | — | | | 1,593 | | | 213 | | Truist Bank III | Truist Bank III | | Retail | | Savannah | | GA | | 3/10/2014 | | 0 | | (3) | 458 | | | 936 | | | 0 | | | 0 | | | 1,394 | | | 221 | | Truist Bank III | | Retail | | Savannah | | GA | | 3/10/2014 | | — | | (7) | 458 | | | 936 | | | — | | | — | | | 1,394 | | | 253 | | Truist Bank III | Truist Bank III | | Retail | | Savannah | | GA | | 3/10/2014 | | 0 | | (3) | 224 | | | 1,116 | | | 0 | | | 0 | | | 1,340 | | | 220 | | Truist Bank III | | Retail | | Savannah | | GA | | 3/10/2014 | | — | | (6) | 224 | | | 1,116 | | | — | | | — | | | 1,340 | | | 252 | | Truist Bank III | Truist Bank III | | Retail | | Signal Mountain | | TN | | 3/10/2014 | | 0 | | (3) | 296 | | | 697 | | | 0 | | | 0 | | | 993 | | | 137 | | Truist Bank III | | Retail | | Signal Mountain | | TN | | 3/10/2014 | | — | | (6) | 296 | | | 697 | | | — | | | — | | | 993 | | | 157 | | Truist Bank III | Truist Bank III | | Retail | | Soddy Daisy | | TN | | 3/10/2014 | | 0 | | (3) | 338 | | | 624 | | | 0 | | | 0 | | | 962 | | | 118 | | Truist Bank III | | Retail | | Soddy Daisy | | TN | | 3/10/2014 | | — | | (6) | 338 | | | 624 | | | — | | | — | | | 962 | | | 136 | | Truist Bank IV | Truist Bank IV | | Retail | | Spring Hill | | FL | | 3/10/2014 | | 0 | | (4) | 673 | | | 2,550 | | | 0 | | | 0 | | | 3,223 | | | 476 | | Truist Bank IV | | Retail | | Spring Hill | | FL | | 3/10/2014 | | — | | (6) | 673 | | | 2,550 | | | — | | | — | | | 3,223 | | | 546 | | Truist Bank III | Truist Bank III | | Retail | | St. Cloud | | FL | | 3/10/2014 | | 0 | | (3) | 1,046 | | | 1,887 | | | 0 | | | 0 | | | 2,933 | | | 374 | | Truist Bank III | | Retail | | St. Cloud | | FL | | 3/10/2014 | | — | | — | 1,046 | | | 1,887 | | | (568) | | | (1,215) | | | 1,150 | | | 14 | | Truist Bank III | Truist Bank III | | Retail | | St. Petersburg | | FL | | 3/10/2014 | | 0 | | (3) | 803 | | | 1,043 | | | 0 | | | 0 | | | 1,846 | | | 207 | | Truist Bank III | | Retail | | St. Petersburg | | FL | | 3/10/2014 | | — | | (7) | 803 | | | 1,043 | | | — | | | — | | | 1,846 | | | 237 | | Truist Bank III | Truist Bank III | | Retail | | Stafford | | VA | | 3/10/2014 | | 0 | | (3) | 2,130 | | | 1,714 | | | 0 | | | 0 | | | 3,844 | | | 333 | | Truist Bank III | | Retail | | Stafford | | VA | | 3/10/2014 | | — | | (6) | 2,130 | | | 1,714 | | | — | | | — | | | 3,844 | | | 382 | | Truist Bank III | Truist Bank III | | Retail | | Stockbridge | | GA | | 3/10/2014 | | 0 | | (3) | 358 | | | 760 | | | 0 | | | 0 | | | 1,118 | | | 159 | | Truist Bank III | | Retail | | Stockbridge | | GA | | 3/10/2014 | | — | | (6) | 358 | | | 760 | | | — | | | — | | | 1,118 | | | 182 | | Truist Bank III | Truist Bank III | | Retail | | Stone Mountain | | GA | | 3/10/2014 | | 0 | | (3) | 605 | | | 522 | | | 0 | | | 0 | | | 1,127 | | | 104 | | Truist Bank III | | Retail | | Stone Mountain | | GA | | 3/10/2014 | | — | | (6) | 605 | | | 522 | | | — | | | — | | | 1,127 | | | 119 | | First Horizon Bank | First Horizon Bank | | Retail | | Stuart | | VA | | 3/10/2014 | | 0 | | (4) | 374 | | | 1,532 | | | 0 | | | 0 | | | 1,906 | | | 294 | | First Horizon Bank | | Retail | | Stuart | | VA | | 3/10/2014 | | — | | (6) | 374 | | | 1,532 | | | — | | | — | | | 1,906 | | | 337 | | Truist Bank III | Truist Bank III | | Retail | | Sylvester | | GA | | 3/10/2014 | | 0 | | (3) | 242 | | | 845 | | | 0 | | | 0 | | | 1,087 | | | 174 | | Truist Bank III | | Retail | | Sylvester | | GA | | 3/10/2014 | | — | | (7) | 242 | | | 845 | | | — | | | — | | | 1,087 | | | 200 | | Truist Bank III | Truist Bank III | | Retail | | Tamarac | | FL | | 3/10/2014 | | 0 | | (3) | 997 | | | 1,241 | | | 1 | | | 0 | | | 2,239 | | | 253 | | Truist Bank III | | Retail | | Tamarac | | FL | | 3/10/2014 | | — | | (7) | 997 | | | 1,241 | | | 1 | | | — | | | 2,239 | | | 289 | | Truist Bank III | Truist Bank III | | Retail | | Union City | | GA | | 3/10/2014 | | 0 | | (3) | 400 | | | 542 | | | 0 | | | 0 | | | 942 | | | 116 | | Truist Bank III | | Retail | | Union City | | GA | | 3/10/2014 | | — | | (6) | 400 | | | 542 | | | — | | | — | | | 942 | | | 133 | | Truist Bank III | Truist Bank III | | Retail | | Williamsburg | | VA | | 3/10/2014 | | 0 | | (3) | 447 | | | 585 | | | 0 | | | 0 | | | 1,032 | | | 132 | | Truist Bank III | | Retail | | Williamsburg | | VA | | 3/10/2014 | | — | | — | 447 | | | 585 | | | (94) | | | (238) | | | 700 | | | 5 | | First Horizon Bank | First Horizon Bank | | Retail | | Winston-Salem | | NC | | 3/10/2014 | | 0 | | (3) | 362 | | | 513 | | | 0 | | | 0 | | | 875 | | | 108 | | First Horizon Bank | | Retail | | Winston-Salem | | NC | | 3/10/2014 | | — | | (7) | 362 | | | 513 | | | — | | | — | | | 875 | | | 124 | | First Horizon Bank | First Horizon Bank | | Retail | | Yadkinville | | NC | | 3/10/2014 | | 0 | | (3) | 438 | | | 765 | | | 0 | | | 0 | | | 1,203 | | | 148 | | First Horizon Bank | | Retail | | Yadkinville | | NC | | 3/10/2014 | | — | | (6) | 438 | | | 765 | | | — | | | — | | | 1,203 | | | 170 | | Dollar General XVIII | Dollar General XVIII | | Retail | | Deville | | LA | | 3/19/2014 | | 0 | | (1) | 93 | | | 741 | | | 0 | | | 0 | | | 834 | | | 151 | | Dollar General XVIII | | Retail | | Deville | | LA | | 3/19/2014 | | — | | (1) | 93 | | | 741 | | | — | | | — | | | 834 | | | 173 | | Mattress Firm I | Mattress Firm I | | Retail | | Holland | | MI | | 3/19/2014 | | 0 | | — | 507 | | | 1,014 | | | 0 | | | 0 | | | 1,521 | | | 229 | | Mattress Firm I | | Retail | | Holland | | MI | | 3/19/2014 | | — | | (7) | 507 | | | 1,014 | | | — | | | — | | | 1,521 | | | 263 | | Sanofi US I | | Office | | Bridgewater | | NJ | | 3/21/2014 | | 125,000 | | | 16,009 | | | 194,287 | | | 0 | | | 0 | | | 210,296 | | | 35,136 | | | Dollar General XVII | Dollar General XVII | | Retail | | Hornbeck | | LA | | 3/25/2014 | | 0 | | (1) | 82 | | | 780 | | | 0 | | | 0 | | | 862 | | | 157 | | Dollar General XVII | | Retail | | Hornbeck | | LA | | 3/25/2014 | | — | | (1) | 82 | | | 780 | | | — | | | — | | | 862 | | | 180 | | Family Dollar IX | Family Dollar IX | | Retail | | Fannettsburg | | PA | | 4/8/2014 | | 0 | | (1) | 165 | | | 803 | | | 0 | | | 0 | | | 968 | | | 158 | | Family Dollar IX | | Retail | | Fannettsburg | | PA | | 4/8/2014 | | — | | (1) | 165 | | | 803 | | | — | | | — | | | 968 | | | 181 | | Mattress Firm I | Mattress Firm I | | Retail | | Saginaw | | MI | | 4/8/2014 | | 0 | | — | 337 | | | 1,140 | | | 0 | | | 0 | | | 1,477 | | | 244 | | Mattress Firm I | | Retail | | Saginaw | | MI | | 4/8/2014 | | — | | (7) | 337 | | | 1,140 | | | — | | | — | | | 1,477 | | | 280 | | Bi-Lo I | Bi-Lo I | | Retail | | Greenville | | SC | | 5/8/2014 | | 0 | | — | 1,504 | | | 4,770 | | | 0 | | | 0 | | | 6,274 | | | 909 | | Bi-Lo I | | Retail | | Greenville | | SC | | 5/8/2014 | | — | | (7) | 1,504 | | | 4,770 | | | — | | | — | | | 6,274 | | | 1,045 | | Stop & Shop I | Stop & Shop I | | Retail | | Bristol | | RI | | 5/8/2014 | | 0 | | (5) | 2,860 | | | 10,010 | | | 0 | | | 0 | | | 12,870 | | | 1,858 | | Stop & Shop I | | Retail | | Bristol | | RI | | 5/8/2014 | | — | | (2) | 2,860 | | | 10,010 | | | — | | | — | | | 12,870 | | | 2,136 | | Stop & Shop I | Stop & Shop I | | Retail | | Cumberland | | RI | | 5/8/2014 | | 0 | | | 3,295 | | | 13,693 | | | 0 | | | 1 | | | 16,989 | | | 2,609 | | Stop & Shop I | | Retail | | Cumberland | | RI | | 5/8/2014 | | — | | | 3,295 | | | 13,693 | | | — | | | 1 | | | 16,989 | | | 3,001 | | Stop & Shop I | Stop & Shop I | | Retail | | Framingham | | MA | | 5/8/2014 | | 0 | | (5) | 3,971 | | | 12,289 | | | 0 | | | 0 | | | 16,260 | | | 2,127 | | Stop & Shop I | | Retail | | Framingham | | MA | | 5/8/2014 | | — | | (2) | 3,971 | | | 12,289 | | | — | | | — | | | 16,260 | | | 2,446 | | Stop & Shop I | Stop & Shop I | | Retail | | Malden | | MA | | 5/8/2014 | | 0 | | (5) | 4,418 | | | 15,195 | | | 0 | | | 0 | | | 19,613 | | | 2,620 | | Stop & Shop I | | Retail | | Malden | | MA | | 5/8/2014 | | — | | (2) | 4,418 | | | 15,195 | | | — | | | — | | | 19,613 | | | 3,013 | | Stop & Shop I | Stop & Shop I | | Retail | | Sicklerville | | NJ | | 5/8/2014 | | 0 | | (1) | 2,367 | | | 9,873 | | | 0 | | | 0 | | | 12,240 | | | 1,776 | | Stop & Shop I | | Retail | | Sicklerville | | NJ | | 5/8/2014 | | — | | (1) | 2,367 | | | 9,873 | | | — | | | — | | | 12,240 | | | 2,043 | | Stop & Shop I | Stop & Shop I | | Retail | | Southington | | CT | | 5/8/2014 | | 0 | | (1) | 3,238 | | | 13,169 | | | 0 | | | 0 | | | 16,407 | | | 2,399 | | Stop & Shop I | | Retail | | Southington | | CT | | 5/8/2014 | | — | | (1) | 3,238 | | | 13,169 | | | — | | | — | | | 16,407 | | | 2,759 | | Stop & Shop I | Stop & Shop I | | Retail | | Swampscott | | MA | | 5/8/2014 | | 0 | | (5) | 3,644 | | | 12,982 | | | 0 | | | 0 | | | 16,626 | | | 2,235 | | Stop & Shop I | | Retail | | Swampscott | | MA | | 5/8/2014 | | — | | (2) | 3,644 | | | 12,982 | | | — | | | — | | | 16,626 | | | 2,570 | | Dollar General XVII | | Dollar General XVII | | Retail | | Forest Hill | | LA | | 5/12/2014 | | — | | (1) | 83 | | | 728 | | | — | | | — | | | 811 | | | 169 | | Dollar General XIX | | Dollar General XIX | | Retail | | Chelsea | | OK | | 5/13/2014 | | — | | (1) | 231 | | | 919 | | | — | | | — | | | 1,150 | | | 234 | | Dollar General XX | | Dollar General XX | | Retail | | Brookhaven | | MS | | 5/14/2014 | | — | | (1) | 186 | | | 616 | | | — | | | — | | | 802 | | | 140 | |
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
Schedule III — Real Estate and Accumulated Depreciation — Part I December 31, 20202021
| (In thousands) | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2020 [12] [13] | | | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2021 [9] [10] | | | Property | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2020 | | Land | | Building and Improvements | | Land [11] | | Building and Improvements [11] | | Accumulated Depreciation [14] [15] | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2021 | | Land | | Building and Improvements | | Land | | Building and Improvements | | Accumulated Depreciation [11] [12] | Dollar General XVII | | Retail | | Forest Hill | | LA | | 5/12/2014 | | 0 | | (1) | 83 | | | 728 | | | 0 | | | 0 | | | 811 | | | 147 | | | Dollar General XIX | | Retail | | Chelsea | | OK | | 5/13/2014 | | 0 | | (1) | 231 | | | 919 | | | 0 | | | 0 | | | 1,150 | | | 203 | | | Dollar General XX | | Retail | | Brookhaven | | MS | | 5/14/2014 | | 0 | | (1) | 186 | | | 616 | | | 0 | | | 0 | | | 802 | | | 121 | | | Dollar General XX | Dollar General XX | | Retail | | Columbus | | MS | | 5/14/2014 | | 0 | | (1) | 370 | | | 491 | | | 0 | | | 0 | | | 861 | | | 110 | | Dollar General XX | | Retail | | Columbus | | MS | | 5/14/2014 | | — | | (1) | 370 | | | 491 | | | — | | | — | | | 861 | | | 127 | | Dollar General XX | Dollar General XX | | Retail | | Forest | | MS | | 5/14/2014 | | 0 | | (1) | 72 | | | 856 | | | 0 | | | 0 | | | 928 | | | 160 | | Dollar General XX | | Retail | | Forest | | MS | | 5/14/2014 | | — | | (1) | 72 | | | 856 | | | — | | | — | | | 928 | | | 184 | | Dollar General XX | Dollar General XX | | Retail | | Rolling Fork | | MS | | 5/14/2014 | | 0 | | (1) | 244 | | | 929 | | | 0 | | | 0 | | | 1,173 | | | 178 | | Dollar General XX | | Retail | | Rolling Fork | | MS | | 5/14/2014 | | — | | (1) | 244 | | | 929 | | | — | | | — | | | 1,173 | | | 204 | | Dollar General XX | Dollar General XX | | Retail | | West Point | | MS | | 5/14/2014 | | 0 | | (1) | 318 | | | 506 | | | 0 | | | 0 | | | 824 | | | 121 | | Dollar General XX | | Retail | | West Point | | MS | | 5/14/2014 | | — | | (1) | 318 | | | 506 | | | — | | | — | | | 824 | | | 139 | | Dollar General XXI | Dollar General XXI | | Retail | | Huntington | | WV | | 5/29/2014 | | 0 | | (1) | 101 | | | 1,101 | | | 0 | | | 0 | | | 1,202 | | | 233 | | Dollar General XXI | | Retail | | Huntington | | WV | | 5/29/2014 | | — | | (1) | 101 | | | 1,101 | | | — | | | — | | | 1,202 | | | 268 | | Dollar General XXII | Dollar General XXII | | Retail | | Warren | | IN | | 5/30/2014 | | 0 | | (1) | 88 | | | 962 | | | 0 | | | 0 | | | 1,050 | | | 172 | | Dollar General XXII | | Retail | | Warren | | IN | | 5/30/2014 | | — | | (1) | 88 | | | 962 | | | — | | | — | | | 1,050 | | | 198 | | FedEx Ground V | FedEx Ground V | (16) | Distribution | | Sioux City | | IA | | 2/18/2016 | | 0 | | (1) | 199 | | | 5,638 | | | 55 | | | 0 | | | 5,892 | | | 794 | | FedEx Ground V | (13) | Distribution | | Sioux City | | IA | | 2/18/2016 | | — | | (1) | 199 | | | 5,638 | | | 56 | | | — | | | 5,893 | | | 958 | | FedEx Ground VII | FedEx Ground VII | | Distribution | | Eagle River | | WI | | 2/19/2016 | | 0 | | (1) | 40 | | | 6,022 | | | 0 | | | 0 | | | 6,062 | | | 910 | | FedEx Ground VII | | Distribution | | Eagle River | | WI | | 2/19/2016 | | — | | (1) | 40 | | | 6,022 | | | — | | | — | | | 6,062 | | | 1,099 | | FedEx Ground VI | FedEx Ground VI | | Distribution | | Grand Forks | | ND | | 2/19/2016 | | 0 | | (1) | 1,288 | | | 8,988 | | | 0 | | | 146 | | | 10,422 | | | 1,438 | | FedEx Ground VI | | Distribution | | Grand Forks | | ND | | 2/19/2016 | | — | | (1) | 1,288 | | | 8,988 | | | — | | | 75 | | | 10,351 | | | 1,745 | | FedEx Ground VIII | FedEx Ground VIII | | Distribution | | Mosinee | | WI | | 2/23/2016 | | 0 | | (1) | 203 | | | 9,017 | | | 0 | | | 0 | | | 9,220 | | | 1,449 | | FedEx Ground VIII | | Distribution | | Mosinee | | WI | | 2/23/2016 | | — | | (1) | 203 | | | 9,017 | | | — | | | — | | | 9,220 | | | 1,749 | | Anderson Station | Anderson Station | (11) | Multi-tenant Retail | | Anderson | | SC | | 2/16/2017 | | 0 | | (7) | 5,201 | | | 27,100 | | | 0 | | | 832 | | | 33,133 | | | 3,381 | | Anderson Station | (8) | Multi-tenant Retail | | Anderson | | SC | | 2/16/2017 | | — | | (4) | 5,201 | | | 27,100 | | | — | | | 1,487 | | | 33,788 | | | 4,342 | | Riverbend Marketplace | Riverbend Marketplace | (11) | Multi-tenant Retail | | Asheville | | NC | | 2/16/2017 | | 0 | | (7) | 4,949 | | | 18,213 | | | 0 | | | 0 | | | 23,162 | | | 2,047 | | Riverbend Marketplace | (8) | Multi-tenant Retail | | Asheville | | NC | | 2/16/2017 | | — | | (4) | 4,949 | | | 18,213 | | | — | | | 37 | | | 23,199 | | | 2,576 | | Northlake Commons | Northlake Commons | (11) | Multi-tenant Retail | | Charlotte | | NC | | 2/16/2017 | | 0 | | (10) | 17,539 | | | 16,342 | | | 0 | | | 66 | | | 33,947 | | | 2,067 | | Northlake Commons | (8) | Multi-tenant Retail | | Charlotte | | NC | | 2/16/2017 | | — | | (7) | 17,539 | | | 16,342 | | | — | | | 129 | | | 34,010 | | | 2,606 | | Shops at Rivergate South | Shops at Rivergate South | (11) | Multi-tenant Retail | | Charlotte | | NC | | 2/16/2017 | | 0 | | (7) | 5,202 | | | 28,378 | | | 0 | | | 162 | | | 33,742 | | | 3,156 | | Shops at Rivergate South | (8) | Multi-tenant Retail | | Charlotte | | NC | | 2/16/2017 | | — | | (4) | 5,202 | | | 28,378 | | | — | | | 1,391 | | | 34,971 | | | 3,985 | | Cross Pointe Centre | Cross Pointe Centre | (11) | Multi-tenant Retail | | Fayetteville | | NC | | 2/16/2017 | | 0 | | (7) | 8,075 | | | 19,717 | | | 0 | | | 534 | | | 28,326 | | | 2,249 | | Cross Pointe Centre | (8) | Multi-tenant Retail | | Fayetteville | | NC | | 2/16/2017 | | — | | (4) | 8,075 | | | 19,717 | | | — | | | 558 | | | 28,350 | | | 2,852 | | Parkside Shopping Center | Parkside Shopping Center | (11) | Multi-tenant Retail | | Frankfort | | KY | | 2/16/2017 | | 0 | | (10) | 9,978 | | | 29,996 | | | 695 | | | 1,155 | | | 41,824 | | | 3,823 | | Parkside Shopping Center | (8) | Multi-tenant Retail | | Frankfort | | KY | | 2/16/2017 | | — | | (7) | 9,978 | | | 29,996 | | | 695 | | | 1,155 | | | 41,824 | | | 4,879 | | Patton Creek | Patton Creek | (11) | Multi-tenant Retail | | Hoover | | AL | | 2/16/2017 | | 34,000 | | | 15,799 | | | 79,150 | | | 0 | | | 309 | | | 95,258 | | | 8,597 | | Patton Creek | (8) | Multi-tenant Retail | | Hoover | | AL | | 2/16/2017 | | — | | | 15,799 | | | 79,150 | | | — | | | 405 | | | 95,354 | | | 10,844 | | Southway Shopping Center | Southway Shopping Center | (11) | Multi-tenant Retail | | Houston | | TX | | 2/16/2017 | | 0 | | (10) | 10,260 | | | 24,440 | | | 0 | | | 26 | | | 34,726 | | | 2,627 | | Southway Shopping Center | (8) | Multi-tenant Retail | | Houston | | TX | | 2/16/2017 | | — | | (7) | 10,260 | | | 24,440 | | | — | | | 74 | | | 34,774 | | | 3,308 | | Northpark Center | Northpark Center | (11) | Multi-tenant Retail | | Huber Heights | | OH | | 2/16/2017 | | 0 | | (7) | 8,975 | | | 28,552 | | | 0 | | | 1,302 | | | 38,829 | | | 3,362 | | Northpark Center | (8) | Multi-tenant Retail | | Huber Heights | | OH | | 2/16/2017 | | — | | (4) | 8,975 | | | 28,552 | | | — | | | 1,422 | | | 38,949 | | | 4,278 | | Tiffany Springs MarketCenter | Tiffany Springs MarketCenter | (11) | Multi-tenant Retail | | Kansas City | | MO | | 2/16/2017 | | 0 | | (10) | 10,154 | | | 50,832 | | | 0 | | | 3,396 | | | 64,382 | | | 6,614 | | Tiffany Springs MarketCenter | (8) | Multi-tenant Retail | | Kansas City | | MO | | 2/16/2017 | | — | | (7) | 10,154 | | | 50,832 | | | — | | | 3,399 | | | 64,385 | | | 8,397 | | North Lakeland Plaza | North Lakeland Plaza | (11) | Multi-tenant Retail | | Lakeland | | FL | | 2/16/2017 | | 0 | | (7) | 2,599 | | | 12,652 | | | 0 | | | 172 | | | 15,423 | | | 1,450 | | North Lakeland Plaza | (8) | Multi-tenant Retail | | Lakeland | | FL | | 2/16/2017 | | — | | (4) | 2,599 | | | 12,652 | | | — | | | 172 | | | 15,423 | | | 1,831 | | Best on the Boulevard | Best on the Boulevard | (11) | Multi-tenant Retail | | Las Vegas | | NV | | 2/16/2017 | | 0 | | (7) | 10,046 | | | 32,706 | | | 0 | | | 255 | | | 43,007 | | | 3,669 | | Best on the Boulevard | (8) | Multi-tenant Retail | | Las Vegas | | NV | | 2/16/2017 | | — | | (4) | 10,046 | | | 32,706 | | | — | | | 1,064 | | | 43,816 | | | 4,665 | | Montecito Crossing | Montecito Crossing | (11) | Multi-tenant Retail | | Las Vegas | | NV | | 2/16/2017 | | 0 | | (7) | 16,204 | | | 36,477 | | | 0 | | | 12 | | | 52,693 | | | 4,196 | | Montecito Crossing | (8) | Multi-tenant Retail | | Las Vegas | | NV | | 2/16/2017 | | — | | (4) | 16,204 | | | 36,477 | | | — | | | 1,421 | | | 54,102 | | | 5,293 | | Pine Ridge Plaza | Pine Ridge Plaza | (11) | Multi-tenant Retail | | Lawrence | | KS | | 2/16/2017 | | 0 | | (10) | 14,008 | | | 20,935 | | | 0 | | | 576 | | | 35,519 | | | 2,614 | | Pine Ridge Plaza | (8) | Multi-tenant Retail | | Lawrence | | KS | | 2/16/2017 | | — | | (7) | 14,008 | | | 20,935 | | | — | | | 576 | | | 35,519 | | | 3,298 | | Jefferson Commons | Jefferson Commons | (11) | Multi-tenant Retail | | Louisville | | KY | | 2/16/2017 | | 0 | | (7) | 5,110 | | | 29,432 | | | 0 | | | 2,643 | | | 37,185 | | | 3,618 | | Jefferson Commons | (8) | Multi-tenant Retail | | Louisville | | KY | | 2/16/2017 | | — | | (4) | 5,110 | | | 29,432 | | | — | | | 2,643 | | | 37,185 | | | 4,744 | | Towne Centre Plaza | Towne Centre Plaza | (11) | Multi-tenant Retail | | Mesquite | | TX | | 2/16/2017 | | 0 | | (10) | 3,553 | | | 11,992 | | | 0 | | | 835 | | | 16,380 | | | 1,483 | | Towne Centre Plaza | (8) | Multi-tenant Retail | | Mesquite | | TX | | 2/16/2017 | | — | | (7) | 3,553 | | | 11,992 | | | — | | | 835 | | | 16,380 | | | 1,909 | | Township Marketplace | | Township Marketplace | (8) | Multi-tenant Retail | | Monaca | | PA | | 2/16/2017 | | — | | (7) | 8,146 | | | 39,267 | | | — | | | 957 | | | 48,370 | | | 5,348 | | Northwoods Marketplace | | Northwoods Marketplace | (8) | Multi-tenant Retail | | North Charleston | | SC | | 2/16/2017 | | — | | (7) | 13,474 | | | 28,362 | | | — | | | 487 | | | 42,323 | | | 4,050 | |
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
Schedule III — Real Estate and Accumulated Depreciation — Part I December 31, 20202021
| (In thousands) | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2020 [12] [13] | | | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2021 [9] [10] | | | Property | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2020 | | Land | | Building and Improvements | | Land [11] | | Building and Improvements [11] | | Accumulated Depreciation [14] [15] | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2021 | | Land | | Building and Improvements | | Land | | Building and Improvements | | Accumulated Depreciation [11] [12] | Township Marketplace | (11) | Multi-tenant Retail | | Monaca | | PA | | 2/16/2017 | | 0 | | (10) | 8,146 | | | 39,267 | | | 0 | | | 285 | | | 47,698 | | | 4,211 | | | Northwoods Marketplace | (11) | Multi-tenant Retail | | North Charleston | | SC | | 2/16/2017 | | 0 | | (10) | 13,474 | | | 28,362 | | | 0 | | | 431 | | | 42,267 | | | 3,182 | | | Centennial Plaza | Centennial Plaza | (11) | Multi-tenant Retail | | Oklahoma City | | OK | | 2/16/2017 | | 0 | | (7) | 3,488 | | | 30,054 | | | 0 | | | 64 | | | 33,606 | | | 3,221 | | Centennial Plaza | (8) | Multi-tenant Retail | | Oklahoma City | | OK | | 2/16/2017 | | — | | (4) | 3,488 | | | 30,054 | | | — | | | 157 | | | 33,699 | | | 4,062 | | Village at Quail Springs | Village at Quail Springs | (11) | Multi-tenant Retail | | Oklahoma City | | OK | | 2/16/2017 | | 0 | | (10) | 2,307 | | | 9,983 | | | 0 | | | 2,210 | | | 14,500 | | | 1,581 | | Village at Quail Springs | (8) | Multi-tenant Retail | | Oklahoma City | | OK | | 2/16/2017 | | — | | (7) | 2,307 | | | 9,983 | | | — | | | 2,210 | | | 14,500 | | | 2,094 | | Colonial Landing (16) | (11) | Multi-tenant Retail | | Orlando | | FL | | 2/16/2017 | | 0 | | (10) | 0 | | | 44,255 | | | 0 | | | 2,682 | | | 46,937 | | | 4,813 | | | Colonial Landing (13) | | Colonial Landing (13) | (8) | Multi-tenant Retail | | Orlando | | FL | | 2/16/2017 | | — | | (7) | — | | | 44,255 | | | — | | | 2,682 | | | 46,937 | | | 6,207 | | The Centrum | The Centrum | (11) | Multi-tenant Retail | | Pineville | | NC | | 2/16/2017 | | 0 | | — | 12,013 | | | 26,242 | | | 0 | | | 1,441 | | | 39,696 | | | 3,221 | | The Centrum | (8) | Multi-tenant Retail | | Pineville | | NC | | 2/16/2017 | | — | | — | 12,013 | | | 26,242 | | | — | | | 3,059 | | | 41,314 | | | 4,135 | | Liberty Crossing | Liberty Crossing | (11) | Multi-tenant Retail | | Rowlett | | TX | | 2/16/2017 | | 0 | | (10) | 6,285 | | | 20,700 | | | 0 | | | 51 | | | 27,036 | | | 2,383 | | Liberty Crossing | (8) | Multi-tenant Retail | | Rowlett | | TX | | 2/16/2017 | | — | | (7) | 6,285 | | | 20,700 | | | — | | | 674 | | | 27,659 | | | 3,006 | | San Pedro Crossing | San Pedro Crossing | (11) | Multi-tenant Retail | | San Antonio | | TX | | 2/16/2017 | | 0 | | (7) | 10,118 | | | 38,655 | | | 0 | | | 5,563 | | | 54,336 | | | 4,446 | | San Pedro Crossing | (8) | Multi-tenant Retail | | San Antonio | | TX | | 2/16/2017 | | — | | (4) | 10,118 | | | 38,655 | | | — | | | 5,635 | | | 54,408 | | | 6,043 | | Prairie Towne Center | Prairie Towne Center | (11) | Multi-tenant Retail | | Schaumburg | | IL | | 2/16/2017 | | 0 | | (10) | 11,070 | | | 19,528 | | | 0 | | | 6,191 | | | 36,789 | | | 5,609 | | Prairie Towne Center | (8) | Multi-tenant Retail | | Schaumburg | | IL | | 2/16/2017 | | — | | (7) | 11,070 | | | 19,528 | | | — | | | 6,209 | | | 36,807 | | | 6,435 | | Shops at Shelby Crossing | Shops at Shelby Crossing | (11) | Multi-tenant Retail | | Sebring | | FL | | 2/16/2017 | | 21,677 | | | 4,478 | | | 32,316 | | | 0 | | | 324 | | | 37,118 | | | 4,239 | | Shops at Shelby Crossing | (8) | Multi-tenant Retail | | Sebring | | FL | | 2/16/2017 | | — | | | 4,478 | | | 32,316 | | | — | | | 3,598 | | | 40,392 | | | 5,382 | | Stirling Slidell Centre | Stirling Slidell Centre | (11) | Multi-tenant Retail | | Slidell | | LA | | 2/16/2017 | | 0 | | — | 3,495 | | | 18,113 | | | (2,028) | | | (11,262) | | | 8,318 | | | 112 | | Stirling Slidell Centre | (8) | Multi-tenant Retail | | Slidell | | LA | | 2/16/2017 | | — | | — | 3,495 | | | 18,113 | | | (342) | | | (8,468) | | | 12,798 | | | 375 | | The Shops at West End | The Shops at West End | (11) | Multi-tenant Retail | | St. Louis Park | | MN | | 2/16/2017 | | 0 | | (10) | 12,831 | | | 107,807 | | | 0 | | | 904 | | | 121,542 | | | 10,968 | | The Shops at West End | (8) | Multi-tenant Retail | | St. Louis Park | | MN | | 2/16/2017 | | — | | (7) | 12,831 | | | 107,807 | | | — | | | 1,264 | | | 121,902 | | | 13,888 | | Bison Hollow | Bison Hollow | (11) | Multi-tenant Retail | | Traverse City | | MI | | 2/16/2017 | | 0 | | (10) | 4,346 | | | 15,944 | | | 0 | | | 0 | | | 20,290 | | | 1,723 | | Bison Hollow | (8) | Multi-tenant Retail | | Traverse City | | MI | | 2/16/2017 | | — | | (7) | 4,346 | | | 15,944 | | | — | | | — | | | 20,290 | | | 2,168 | | Southroads Shopping Center | Southroads Shopping Center | (11) | Multi-tenant Retail | | Tulsa | | OK | | 2/16/2017 | | 0 | | (10) | 6,663 | | | 60,721 | | | 30 | | | 1,477 | | | 68,891 | | | 7,485 | | Southroads Shopping Center | (8) | Multi-tenant Retail | | Tulsa | | OK | | 2/16/2017 | | — | | (7) | 6,663 | | | 60,721 | | | 31 | | | 1,478 | | | 68,893 | | | 9,585 | | The Streets of West Chester | The Streets of West Chester | (11) | Multi-tenant Retail | | West Chester | | OH | | 2/16/2017 | | 0 | | (10) | 11,313 | | | 34,305 | | | 517 | | | 363 | | | 46,498 | | | 3,930 | | The Streets of West Chester | (8) | Multi-tenant Retail | | West Chester | | OH | | 2/16/2017 | | — | | (7) | 11,313 | | | 34,305 | | | 517 | | | 363 | | | 46,498 | | | 4,964 | | Shoppes of West Melbourne | Shoppes of West Melbourne | (11) | Multi-tenant Retail | | West Melbourne | | FL | | 2/16/2017 | | 0 | | (7) | 4,258 | | | 19,138 | | | 0 | | | 865 | | | 24,261 | | | 2,257 | | Shoppes of West Melbourne | (8) | Multi-tenant Retail | | West Melbourne | | FL | | 2/16/2017 | | — | | (4) | 4,258 | | | 19,138 | | | — | | | 865 | | | 24,261 | | | 2,854 | | Shoppes at Wyomissing | Shoppes at Wyomissing | (11) | Multi-tenant Retail | | Wyomissing | | PA | | 2/16/2017 | | 0 | | (10) | 4,108 | | | 32,446 | | | 0 | | | 83 | | | 36,637 | | | 3,589 | | Shoppes at Wyomissing | (8) | Multi-tenant Retail | | Wyomissing | | PA | | 2/16/2017 | | — | | (7) | 4,108 | | | 32,446 | | | — | | | 83 | | | 36,637 | | | 4,522 | | Dollar General XXIII | Dollar General XXIII | | Retail | | Dewitt | | NY | | 3/31/2017 | | 0 | | (8) | 233 | | | 1,044 | | | 0 | | | 0 | | | 1,277 | | | 126 | | Dollar General XXIII | | Retail | | Dewitt | | NY | | 3/31/2017 | | — | | (5) | 233 | | | 1,044 | | | — | | | — | | | 1,277 | | | 160 | | Dollar General XXIII | Dollar General XXIII | | Retail | | Farmington | | NY | | 3/31/2017 | | 0 | | (8) | 374 | | | 1,037 | | | 0 | | | 0 | | | 1,411 | | | 127 | | Dollar General XXIII | | Retail | | Farmington | | NY | | 3/31/2017 | | — | | (5) | 374 | | | 1,037 | | | — | | | — | | | 1,411 | | | 161 | | Dollar General XXIII | Dollar General XXIII | | Retail | | Geddes | | NY | | 3/31/2017 | | 0 | | (8) | 191 | | | 1,018 | | | 0 | | | 0 | | | 1,209 | | | 125 | | Dollar General XXIII | | Retail | | Geddes | | NY | | 3/31/2017 | | — | | (5) | 191 | | | 1,018 | | | — | | | — | | | 1,209 | | | 159 | | Dollar General XXIII | Dollar General XXIII | | Retail | | Otego | | NY | | 3/31/2017 | | 0 | | (8) | 285 | | | 1,070 | | | 0 | | | 0 | | | 1,355 | | | 132 | | Dollar General XXIII | | Retail | | Otego | | NY | | 3/31/2017 | | — | | (5) | 285 | | | 1,070 | | | — | | | — | | | 1,355 | | | 167 | | Dollar General XXIII | Dollar General XXIII | | Retail | | Parish | | NY | | 3/31/2017 | | 0 | | (8) | 164 | | | 1,071 | | | 0 | | | 0 | | | 1,235 | | | 136 | | Dollar General XXIII | | Retail | | Parish | | NY | | 3/31/2017 | | — | | (5) | 164 | | | 1,071 | | | — | | | — | | | 1,235 | | | 172 | | Dollar General XXIII | Dollar General XXIII | | Retail | | Utica | | NY | | 3/31/2017 | | 0 | | (8) | 301 | | | 1,034 | | | 0 | | | 0 | | | 1,335 | | | 135 | | Dollar General XXIII | | Retail | | Utica | | NY | | 3/31/2017 | | — | | (5) | 301 | | | 1,034 | | | — | | | — | | | 1,335 | | | 170 | | Jo-Ann Fabrics I | Jo-Ann Fabrics I | | Retail | | Freeport | | IL | | 4/17/2017 | | 0 | | (8) | 119 | | | 1,663 | | | 0 | | | 0 | | | 1,782 | | | 181 | | Jo-Ann Fabrics I | | Retail | | Freeport | | IL | | 4/17/2017 | | — | | (5) | 119 | | | 1,663 | | | — | | | — | | | 1,782 | | | 231 | | Bob Evans I | Bob Evans I | | Retail | | Ashland | | KY | | 4/28/2017 | | 0 | | (6) | 446 | | | 1,771 | | | 0 | | | 0 | | | 2,217 | | | 186 | | Bob Evans I | | Retail | | Ashland | | KY | | 4/28/2017 | | — | | (3) | 446 | | | 1,771 | | | — | | | — | | | 2,217 | | | 236 | | Bob Evans I | Bob Evans I | | Retail | | Bloomington | | IN | | 4/28/2017 | | 0 | | (6) | 405 | | | 1,351 | | | 0 | | | 0 | | | 1,756 | | | 144 | | Bob Evans I | | Retail | | Bloomington | | IN | | 4/28/2017 | | — | | (3) | 405 | | | 1,351 | | | — | | | — | | | 1,756 | | | 183 | | Bob Evans I | Bob Evans I | | Retail | | Bucyrus | | OH | | 4/28/2017 | | 0 | | (6) | 224 | | | 1,450 | | | 0 | | | 0 | | | 1,674 | | | 159 | | Bob Evans I | | Retail | | Bucyrus | | OH | | 4/28/2017 | | — | | (3) | 224 | | | 1,450 | | | — | | | — | | | 1,674 | | | 203 | | Bob Evans I | Bob Evans I | | Retail | | Columbia City | | IN | | 4/28/2017 | | 0 | | (6) | 333 | | | 594 | | | 0 | | | 0 | | | 927 | | | 79 | | Bob Evans I | | Retail | | Columbia City | | IN | | 4/28/2017 | | — | | (3) | 333 | | | 594 | | | — | | | — | | | 927 | | | 101 | | Bob Evans I | Bob Evans I | | Retail | | Coshocton | | OH | | 4/28/2017 | | 0 | | (6) | 386 | | | 1,326 | | | 0 | | | 0 | | | 1,712 | | | 162 | | Bob Evans I | | Retail | | Coshocton | | OH | | 4/28/2017 | | — | | (3) | 386 | | | 1,326 | | | — | | | — | | | 1,712 | | | 206 | | Bob Evans I | Bob Evans I | | Retail | | Dublin | | OH | | 4/28/2017 | | 0 | | (6) | 701 | | | 645 | | | 0 | | | 0 | | | 1,346 | | | 88 | | Bob Evans I | | Retail | | Dublin | | OH | | 4/28/2017 | | — | | (3) | 701 | | | 645 | | | — | | | — | | | 1,346 | | | 112 | |
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
Schedule III — Real Estate and Accumulated Depreciation — Part I December 31, 20202021
| (In thousands) | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2020 [12] [13] | | | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2021 [9] [10] | | | Property | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2020 | | Land | | Building and Improvements | | Land [11] | | Building and Improvements [11] | | Accumulated Depreciation [14] [15] | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2021 | | Land | | Building and Improvements | | Land | | Building and Improvements | | Accumulated Depreciation [11] [12] | Bob Evans I | | Retail | | Ellicott City | | MD | | 4/28/2017 | | 0 | | (6) | 507 | | | 1,083 | | | 0 | | | 0 | | | 1,590 | | | 136 | | | Bob Evans I | Bob Evans I | | Retail | | Elyria | | OH | | 4/28/2017 | | 0 | | (6) | 540 | | | 1,003 | | | 0 | | | 0 | | | 1,543 | | | 123 | | Bob Evans I | | Retail | | Elyria | | OH | | 4/28/2017 | | — | | (3) | 540 | | | 1,003 | | | — | | | — | | | 1,543 | | | 157 | | Bob Evans I | Bob Evans I | | Retail | | Franklin | | OH | | 4/28/2017 | | 0 | | (6) | 620 | | | 1,581 | | | 0 | | | 0 | | | 2,201 | | | 178 | | Bob Evans I | | Retail | | Franklin | | OH | | 4/28/2017 | | — | | (3) | 620 | | | 1,581 | | | — | | | — | | | 2,201 | | | 227 | | Bob Evans I | Bob Evans I | | Retail | | Kettering | | OH | | 4/28/2017 | | 0 | | (6) | 264 | | | 1,493 | | | 0 | | | 0 | | | 1,757 | | | 168 | | Bob Evans I | | Retail | | Kettering | | OH | | 4/28/2017 | | — | | (3) | 264 | | | 1,493 | | | — | | | — | | | 1,757 | | | 214 | | Bob Evans I | Bob Evans I | | Retail | | Lansing | | MI | | 4/28/2017 | | 0 | | (6) | 817 | | | 1,093 | | | 0 | | | 0 | | | 1,910 | | | 144 | | Bob Evans I | | Retail | | Lansing | | MI | | 4/28/2017 | | — | | (3) | 817 | | | 1,093 | | | — | | | — | | | 1,910 | | | 183 | | Bob Evans I | Bob Evans I | | Retail | | Lebanon | | OH | | 4/28/2017 | | 0 | | (6) | 628 | | | 1,328 | | | 0 | | | 0 | | | 1,956 | | | 161 | | Bob Evans I | | Retail | | Lebanon | | OH | | 4/28/2017 | | — | | (3) | 628 | | | 1,328 | | | — | | | — | | | 1,956 | | | 205 | | Bob Evans I | Bob Evans I | | Retail | | Lewes | | DE | | 4/28/2017 | | 0 | | (6) | 660 | | | 1,016 | | | 0 | | | 0 | | | 1,676 | | | 122 | | Bob Evans I | | Retail | | Lewes | | DE | | 4/28/2017 | | — | | (3) | 660 | | | 1,016 | | | — | | | — | | | 1,676 | | | 155 | | Bob Evans I | Bob Evans I | | Retail | | Marietta | | OH | | 4/28/2017 | | 0 | | (6) | 631 | | | 1,890 | | | 0 | | | 0 | | | 2,521 | | | 208 | | Bob Evans I | | Retail | | Marietta | | OH | | 4/28/2017 | | — | | (3) | 631 | | | 1,890 | | | — | | | — | | | 2,521 | | | 265 | | Bob Evans I | Bob Evans I | | Retail | | Miamisburg | | OH | | 4/28/2017 | | 0 | | (6) | 339 | | | 1,791 | | | 0 | | | 0 | | | 2,130 | | | 195 | | Bob Evans I | | Retail | | Miamisburg | | OH | | 4/28/2017 | | — | | (3) | 339 | | | 1,791 | | | — | | | — | | | 2,130 | | | 248 | | Bob Evans I | Bob Evans I | | Retail | | Paducah | | KY | | 4/28/2017 | | — | | (6) | 296 | | | 697 | | | 0 | | | 0 | | | 993 | | | 90 | | Bob Evans I | | Retail | | Paducah | | KY | | 4/28/2017 | | — | | (3) | 296 | | | 697 | | | — | | | — | | | 993 | | | 115 | | Bob Evans I | Bob Evans I | | Retail | | Plymouth | | IN | | 4/28/2017 | | 0 | | (6) | 172 | | | 1,023 | | | 0 | | | 0 | | | 1,195 | | | 117 | | Bob Evans I | | Retail | | Plymouth | | IN | | 4/28/2017 | | — | | (3) | 172 | | | 1,023 | | | — | | | — | | | 1,195 | | | 149 | | Bob Evans I | Bob Evans I | | Retail | | Roseville | | MI | | 4/28/2017 | | 0 | | (6) | 861 | | | 854 | | | 0 | | | 0 | | | 1,715 | | | 119 | | Bob Evans I | | Retail | | Roseville | | MI | | 4/28/2017 | | — | | (3) | 861 | | | 854 | | | — | | | — | | | 1,715 | | | 151 | | Bob Evans I | Bob Evans I | | Retail | | Steubenville | | OH | | 4/28/2017 | | 0 | | (6) | 641 | | | 1,638 | | | 0 | | | 0 | | | 2,279 | | | 205 | | Bob Evans I | | Retail | | Steubenville | | OH | | 4/28/2017 | | — | | (3) | 641 | | | 1,638 | | | — | | | — | | | 2,279 | | | 260 | | Bob Evans I | Bob Evans I | | Retail | | Streetsboro | | OH | | 4/28/2017 | | 0 | | (6) | 1,078 | | | 780 | | | 0 | | | 0 | | | 1,858 | | | 106 | | Bob Evans I | | Retail | | Streetsboro | | OH | | 4/28/2017 | | — | | (3) | 1,078 | | | 780 | | | — | | | — | | | 1,858 | | | 135 | | Bob Evans I | Bob Evans I | | Retail | | Taylor | | MI | | 4/28/2017 | | 0 | | (6) | 542 | | | 1,210 | | | 0 | | | 0 | | | 1,752 | | | 145 | | Bob Evans I | | Retail | | Taylor | | MI | | 4/28/2017 | | — | | (3) | 542 | | | 1,210 | | | — | | | — | | | 1,752 | | | 185 | | Bob Evans I | Bob Evans I | | Retail | | Uniontown | | PA | | 4/28/2017 | | 0 | | (6) | 494 | | | 1,104 | | | 0 | | | 0 | | | 1,598 | | | 144 | | Bob Evans I | | Retail | | Uniontown | | PA | | 4/28/2017 | | — | | (3) | 494 | | | 1,104 | | | — | | | — | | | 1,598 | | | 183 | | Bob Evans I | Bob Evans I | | Retail | | Weirton | | WV | | 4/28/2017 | | 0 | | (6) | 305 | | | 900 | | | 0 | | | 0 | | | 1,205 | | | 123 | | Bob Evans I | | Retail | | Weirton | | WV | | 4/28/2017 | | — | | (3) | 305 | | | 900 | | | — | | | — | | | 1,205 | | | 157 | | FedEx Ground IX | FedEx Ground IX | | Distribution | | Brainerd | | MN | | 5/3/2017 | | 0 | | (8) | 587 | | | 3,415 | | | 0 | | | 0 | | | 4,002 | | | 449 | | FedEx Ground IX | | Distribution | | Brainerd | | MN | | 5/3/2017 | | — | | (5) | 587 | | | 3,415 | | | — | | | — | | | 4,002 | | | 571 | | Chili's II | Chili's II | | Retail | | McHenry | | IL | | 5/10/2017 | | 0 | | (8) | 973 | | | 2,557 | | | 0 | | | 0 | | | 3,530 | | | 275 | | Chili's II | | Retail | | McHenry | | IL | | 5/10/2017 | | — | | (5) | 973 | | | 2,557 | | | — | | | — | | | 3,530 | | | 350 | | Dollar General XXIII | Dollar General XXIII | | Retail | | Kingston | | NY | | 5/10/2017 | | 0 | | (8) | 432 | | | 1,027 | | | 0 | | | 0 | | | 1,459 | | | 129 | | Dollar General XXIII | | Retail | | Kingston | | NY | | 5/10/2017 | | — | | (5) | 432 | | | 1,027 | | | — | | | — | | | 1,459 | | | 165 | | Sonic Drive In I | Sonic Drive In I | | Retail | | Robertsdale | | AL | | 6/2/2017 | | 0 | | (8) | 358 | | | 1,043 | | | 0 | | | 0 | | | 1,401 | | | 119 | | Sonic Drive In I | | Retail | | Robertsdale | | AL | | 6/2/2017 | | — | | (5) | 358 | | | 1,043 | | | — | | | — | | | 1,401 | | | 153 | | Sonic Drive In I | Sonic Drive In I | | Retail | | Tuscaloosa | | AL | | 6/2/2017 | | 0 | | (8) | 1,808 | | | 841 | | | 0 | | | 0 | | | 2,649 | | | 97 | | Sonic Drive In I | | Retail | | Tuscaloosa | | AL | | 6/2/2017 | | — | | (5) | 1,808 | | | 841 | | | — | | | — | | | 2,649 | | | 124 | | Bridgestone HOSEpower I | Bridgestone HOSEpower I | | Distribution | | Columbia | | SC | | 6/8/2017 | | 0 | | (8) | 307 | | | 1,973 | | | 0 | | | 0 | | | 2,280 | | | 215 | | Bridgestone HOSEpower I | | Distribution | | Columbia | | SC | | 6/8/2017 | | — | | (5) | 307 | | | 1,973 | | | — | | | — | | | 2,280 | | | 275 | | Bridgestone HOSEpower I | Bridgestone HOSEpower I | | Distribution | | Elko | | NV | | 6/8/2017 | | 0 | | (8) | 358 | | | 1,642 | | | 0 | | | 0 | | | 2,000 | | | 193 | | Bridgestone HOSEpower I | | Distribution | | Elko | | NV | | 6/8/2017 | | — | | (5) | 358 | | | 1,642 | | | — | | | — | | | 2,000 | | | 247 | | Dollar General XXIII | Dollar General XXIII | | Retail | | Kerhonkson | | NY | | 6/16/2017 | | 0 | | (8) | 247 | | | 953 | | | 0 | | | 0 | | | 1,200 | | | 112 | | Dollar General XXIII | | Retail | | Kerhonkson | | NY | | 6/16/2017 | | — | | (5) | 247 | | | 953 | | | — | | | — | | | 1,200 | | | 144 | | Bridgestone HOSEpower II | Bridgestone HOSEpower II | | Distribution | | Jacksonville | | FL | | 7/3/2017 | | 0 | | (8) | 236 | | | 1,762 | | | 0 | | | 0 | | | 1,998 | | | 183 | | Bridgestone HOSEpower II | | Distribution | | Jacksonville | | FL | | 7/3/2017 | | — | | (5) | 236 | | | 1,762 | | | — | | | — | | | 1,998 | | | 235 | | FedEx Ground X | FedEx Ground X | | Distribution | | Rolla | | MO | | 7/14/2017 | | 0 | | (8) | 469 | | | 9,653 | | | 0 | | | 0 | | | 10,122 | | | 1,207 | | FedEx Ground X | | Distribution | | Rolla | | MO | | 7/14/2017 | | — | | (5) | 469 | | | 9,653 | | | — | | | — | | | 10,122 | | | 1,552 | | Chili's III | Chili's III | | Retail | | Machesney Park | | IL | | 8/9/2017 | | 0 | | (8) | 1,254 | | | 2,922 | | | 0 | | | 0 | | | 4,176 | | | 296 | | Chili's III | | Retail | | Machesney Park | | IL | | 8/9/2017 | | — | | (5) | 1,254 | | | 2,922 | | | — | | | — | | | 4,176 | | | 383 | | FedEx Ground XI | FedEx Ground XI | | Distribution | | Casper | | WY | | 9/15/2017 | | 0 | | (8) | 386 | | | 3,469 | | | 0 | | | 0 | | | 3,855 | | | 350 | | FedEx Ground XI | | Distribution | | Casper | | WY | | 9/15/2017 | | — | | (5) | 386 | | | 3,469 | | | — | | | — | | | 3,855 | | | 454 | | Hardee's I | Hardee's I | | Retail | | Ashland | | AL | | 9/26/2017 | | 0 | | (9) | 170 | | | 827 | | | 0 | | | 0 | | | 997 | | | 89 | | Hardee's I | | Retail | | Ashland | | AL | | 9/26/2017 | | — | | — | 170 | | | 827 | | | — | | | — | | | 997 | | | 116 | | Hardee's I | Hardee's I | | Retail | | Jasper | | AL | | 9/26/2017 | | 0 | | (9) | 171 | | | 527 | | | 0 | | | 0 | | | 698 | | | 56 | | Hardee's I | | Retail | | Jasper | | AL | | 9/26/2017 | | — | | — | 171 | | | 527 | | | — | | | — | | | 698 | | | 74 | | Hardee's I | | Retail | | Jesup | | GA | | 9/26/2017 | | 0 | | (9) | 231 | | | 1,236 | | | (96) | | | (584) | | | 787 | | | 0 | | | Hardee's I | | Retail | | Waycross | | GA | | 9/26/2017 | | 0 | | (9) | 261 | | | 1,217 | | | (109) | | | (582) | | | 787 | | | 0 | | | Tractor Supply IV | Tractor Supply IV | | Retail | | Flandreau | | SD | | 10/30/2017 | | 0 | | (8) | 194 | | | 1,110 | | | 0 | | | 0 | | | 1,304 | | | 103 | | Tractor Supply IV | | Retail | | Flandreau | | SD | | 10/30/2017 | | — | | (5) | 194 | | | 1,110 | | | — | | | — | | | 1,304 | | | 135 | | Tractor Supply IV | Tractor Supply IV | | Retail | | Hazen | | ND | | 10/30/2017 | | 0 | | (8) | 242 | | | 1,290 | | | 0 | | | 0 | | | 1,532 | | | 130 | | Tractor Supply IV | | Retail | | Hazen | | ND | | 10/30/2017 | | — | | (5) | 242 | | | 1,290 | | | — | | | — | | | 1,532 | | | 171 | | Circle K II | Circle K II | | Retail | | Harlingen | | TX | | 11/2/2017 | | 0 | | (9) | 575 | | | 945 | | | 0 | | | 0 | | | 1,520 | | | 93 | | Circle K II | | Retail | | Harlingen | | TX | | 11/2/2017 | | — | | (6) | 575 | | | 945 | | | — | | | — | | | 1,520 | | | 123 | | Circle K II | Circle K II | | Retail | | Laredo | | TX | | 11/2/2017 | | 0 | | (9) | 734 | | | 1,294 | | | 0 | | | 0 | | | 2,028 | | | 126 | | Circle K II | | Retail | | Laredo | | TX | | 11/2/2017 | | — | | (6) | 734 | | | 1,294 | | | — | | | — | | | 2,028 | | | 166 | | Circle K II | Circle K II | | Retail | | Laredo | | TX | | 11/2/2017 | | 0 | | (9) | 675 | | | 1,250 | | | 0 | | | 0 | | | 1,925 | | | 138 | | Circle K II | | Retail | | Laredo | | TX | | 11/2/2017 | | — | | (6) | 675 | | | 1,250 | | | — | | | — | | | 1,925 | | | 182 | | Circle K II | Circle K II | | Retail | | Laredo | | TX | | 11/2/2017 | | 0 | | (9) | 226 | | | 443 | | | 0 | | | 0 | | | 669 | | | 44 | | Circle K II | | Retail | | Laredo | | TX | | 11/2/2017 | | — | | (6) | 226 | | | 443 | | | — | | | — | | | 669 | | | 58 | | Circle K II | Circle K II | | Retail | | Rio Grande | | TX | | 11/2/2017 | | 0 | | (9) | 625 | | | 1,257 | | | 0 | | | 0 | | | 1,882 | | | 123 | | Circle K II | | Retail | | Rio Grande | | TX | | 11/2/2017 | | — | | (6) | 625 | | | 1,257 | | | — | | | — | | | 1,882 | | | 162 | | Circle K II | Circle K II | | Retail | | Weslaco | | TX | | 11/2/2017 | | 0 | | (9) | 547 | | | 1,183 | | | 0 | | | 0 | | | 1,730 | | | 119 | | Circle K II | | Retail | | Weslaco | | TX | | 11/2/2017 | | — | | (6) | 547 | | | 1,183 | | | — | | | — | | | 1,730 | | | 156 | | Sonic Drive In II | Sonic Drive In II | | Retail | | Biloxi | | MS | | 11/3/2017 | | 0 | | (9) | 397 | | | 621 | | | 0 | | | 0 | | | 1,018 | | | 64 | | Sonic Drive In II | | Retail | | Biloxi | | MS | | 11/3/2017 | | — | | (6) | 397 | | | 621 | | | — | | | — | | | 1,018 | | | 84 | | Sonic Drive In II | | Sonic Drive In II | | Retail | | Collins | | MS | | 11/3/2017 | | — | | (6) | 272 | | | 992 | | | — | | | — | | | 1,264 | | | 133 | | Sonic Drive In II | | Sonic Drive In II | | Retail | | Ellisville | | MS | | 11/3/2017 | | — | | (6) | 251 | | | 1,114 | | | — | | | — | | | 1,365 | | | 135 | | Sonic Drive In II | | Sonic Drive In II | | Retail | | Gulfport | | MS | | 11/3/2017 | | — | | (6) | 100 | | | 930 | | | — | | | — | | | 1,030 | | | 130 | |
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
Schedule III — Real Estate and Accumulated Depreciation — Part I December 31, 20202021
| (In thousands) | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2020 [12] [13] | | | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2021 [9] [10] | | | Property | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2020 | | Land | | Building and Improvements | | Land [11] | | Building and Improvements [11] | | Accumulated Depreciation [14] [15] | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2021 | | Land | | Building and Improvements | | Land | | Building and Improvements | | Accumulated Depreciation [11] [12] | Sonic Drive In II | | Retail | | Collins | | MS | | 11/3/2017 | | 0 | | (9) | 272 | | | 992 | | | 0 | | | 0 | | | 1,264 | | | 101 | | | Sonic Drive In II | | Retail | | Ellisville | | MS | | 11/3/2017 | | 0 | | (9) | 251 | | | 1,114 | | | 0 | | | 0 | | | 1,365 | | | 103 | | | Sonic Drive In II | | Retail | | Gulfport | | MS | | 11/3/2017 | | 0 | | (9) | 100 | | | 930 | | | 0 | | | 0 | | | 1,030 | | | 99 | | | Sonic Drive In II | Sonic Drive In II | | Retail | | Gulfport | | MS | | 11/3/2017 | | 0 | | (9) | 199 | | | 660 | | | 0 | | | 0 | | | 859 | | | 61 | | Sonic Drive In II | | Retail | | Gulfport | | MS | | 11/3/2017 | | — | | (6) | 199 | | | 660 | | | — | | | — | | | 859 | | | 81 | | Sonic Drive In II | Sonic Drive In II | | Retail | | Gulfport | | MS | | 11/3/2017 | | 0 | | (9) | 232 | | | 746 | | | 0 | | | 0 | | | 978 | | | 78 | | Sonic Drive In II | | Retail | | Gulfport | | MS | | 11/3/2017 | | — | | (6) | 232 | | | 746 | | | — | | | — | | | 978 | | | 102 | | Sonic Drive In II | Sonic Drive In II | | Retail | | Hattiesburg | | MS | | 11/3/2017 | | 0 | | (9) | 351 | | | 788 | | | 0 | | | 0 | | | 1,139 | | | 84 | | Sonic Drive In II | | Retail | | Hattiesburg | | MS | | 11/3/2017 | | — | | (6) | 351 | | | 788 | | | — | | | — | | | 1,139 | | | 110 | | Sonic Drive In II | Sonic Drive In II | | Retail | | Lithia | | FL | | 11/3/2017 | | 0 | | (9) | 352 | | | 478 | | | 0 | | | 0 | | | 830 | | | 56 | | Sonic Drive In II | | Retail | | Lithia | | FL | | 11/3/2017 | | — | | (6) | 352 | | | 478 | | | — | | | — | | | 830 | | | 74 | | Sonic Drive In II | Sonic Drive In II | | Retail | | Long Beach | | MS | | 11/3/2017 | | 0 | | (9) | 210 | | | 840 | | | 0 | | | 0 | | | 1,050 | | | 89 | | Sonic Drive In II | | Retail | | Long Beach | | MS | | 11/3/2017 | | — | | (6) | 210 | | | 840 | | | — | | | — | | | 1,050 | | | 117 | | Sonic Drive In II | Sonic Drive In II | | Retail | | Magee | | MS | | 11/3/2017 | | 0 | | (9) | 300 | | | 740 | | | 0 | | | 0 | | | 1,040 | | | 80 | | Sonic Drive In II | | Retail | | Magee | | MS | | 11/3/2017 | | — | | (6) | 300 | | | 740 | | | — | | | — | | | 1,040 | | | 105 | | Sonic Drive In II | Sonic Drive In II | | Retail | | Petal | | MS | | 11/3/2017 | | 0 | | (9) | 100 | | | 1,053 | | | 0 | | | 0 | | | 1,153 | | | 98 | | Sonic Drive In II | | Retail | | Petal | | MS | | 11/3/2017 | | — | | (6) | 100 | | | 1,053 | | | — | | | — | | | 1,153 | | | 129 | | Sonic Drive In II | Sonic Drive In II | | Retail | | Plant City | | FL | | 11/3/2017 | | 0 | | (9) | 250 | | | 525 | | | 0 | | | 0 | | | 775 | | | 67 | | Sonic Drive In II | | Retail | | Plant City | | FL | | 11/3/2017 | | — | | (6) | 250 | | | 525 | | | — | | | — | | | 775 | | | 88 | | Sonic Drive In II | Sonic Drive In II | | Retail | | Purvis | | MS | | 11/3/2017 | | 0 | | (9) | 129 | | | 896 | | | 0 | | | 0 | | | 1,025 | | | 84 | | Sonic Drive In II | | Retail | | Purvis | | MS | | 11/3/2017 | | — | | (6) | 129 | | | 896 | | | — | | | — | | | 1,025 | | | 111 | | Sonic Drive In II | Sonic Drive In II | | Retail | | Riverview | | FL | | 11/3/2017 | | 0 | | (9) | 267 | | | 502 | | | 0 | | | 0 | | | 769 | | | 57 | | Sonic Drive In II | | Retail | | Riverview | | FL | | 11/3/2017 | | — | | (6) | 267 | | | 502 | | | — | | | — | | | 769 | | | 75 | | Sonic Drive In II | Sonic Drive In II | | Retail | | Riverview | | FL | | 11/3/2017 | | 0 | | (9) | 392 | | | 679 | | | 0 | | | 0 | | | 1,071 | | | 71 | | Sonic Drive In II | | Retail | | Riverview | | FL | | 11/3/2017 | | — | | (6) | 392 | | | 679 | | | — | | | — | | | 1,071 | | | 93 | | Sonic Drive In II | Sonic Drive In II | | Retail | | Tylertown | | MS | | 11/3/2017 | | 0 | | (9) | 191 | | | 1,197 | | | 0 | | | 0 | | | 1,388 | | | 120 | | Sonic Drive In II | | Retail | | Tylertown | | MS | | 11/3/2017 | | — | | (6) | 191 | | | 1,197 | | | — | | | — | | | 1,388 | | | 158 | | Sonic Drive In II | Sonic Drive In II | | Retail | | Wauchula | | FL | | 11/3/2017 | | 0 | | (9) | 191 | | | 346 | | | 0 | | | 0 | | | 537 | | | 39 | | Sonic Drive In II | | Retail | | Wauchula | | FL | | 11/3/2017 | | — | | (6) | 191 | | | 346 | | | — | | | — | | | 537 | | | 52 | | Sonic Drive In II | Sonic Drive In II | | Retail | | Waveland | | MS | | 11/3/2017 | | 0 | | (9) | 322 | | | 594 | | | 0 | | | 0 | | | 916 | | | 64 | | Sonic Drive In II | | Retail | | Waveland | | MS | | 11/3/2017 | | — | | (6) | 322 | | | 594 | | | — | | | — | | | 916 | | | 85 | | Sonic Drive In II | Sonic Drive In II | | Retail | | Waynesboro | | MS | | 11/3/2017 | | 0 | | (9) | 188 | | | 517 | | | 0 | | | 0 | | | 705 | | | 55 | | Sonic Drive In II | | Retail | | Waynesboro | | MS | | 11/3/2017 | | — | | (6) | 188 | | | 517 | | | — | | | — | | | 705 | | | 73 | | Sonic Drive In II | Sonic Drive In II | | Retail | | Woodville | | MS | | 11/3/2017 | | 0 | | (9) | 160 | | | 1,179 | | | 0 | | | 0 | | | 1,339 | | | 108 | | Sonic Drive In II | | Retail | | Woodville | | MS | | 11/3/2017 | | — | | (6) | 160 | | | 1,179 | | | — | | | — | | | 1,339 | | | 142 | | Bridgestone HOSEpower III | Bridgestone HOSEpower III | | Distribution | | Sulphur | | LA | | 12/20/2017 | | 0 | | (8) | 882 | | | 2,176 | | | 0 | | | 0 | | | 3,058 | | | 196 | | Bridgestone HOSEpower III | | Distribution | | Sulphur | | LA | | 12/20/2017 | | — | | (5) | 882 | | | 2,176 | | | — | | | — | | | 3,058 | | | 261 | | Sonny's BBQ I | Sonny's BBQ I | | Retail | | Tallahassee | | FL | | 1/15/2018 | | 0 | | (9) | 521 | | | 1,561 | | | 0 | | | 0 | | | 2,082 | | | 141 | | Sonny's BBQ I | | Retail | | Tallahassee | | FL | | 1/15/2018 | | — | | (6) | 521 | | | 1,561 | | | — | | | — | | | 2,082 | | | 189 | | Sonny's BBQ I | Sonny's BBQ I | | Retail | | Tallahassee | | FL | | 1/15/2018 | | 0 | | (9) | 717 | | | 1,510 | | | 0 | | | 0 | | | 2,227 | | | 143 | | Sonny's BBQ I | | Retail | | Tallahassee | | FL | | 1/15/2018 | | — | | (6) | 717 | | | 1,510 | | | — | | | — | | | 2,227 | | | 192 | | Sonny's BBQ I | Sonny's BBQ I | | Retail | | Tallahassee | | FL | | 1/15/2018 | | 0 | | (9) | 491 | | | 2,281 | | | 0 | | | 0 | | | 2,772 | | | 197 | | Sonny's BBQ I | | Retail | | Tallahassee | | FL | | 1/15/2018 | | — | | (6) | 491 | | | 2,281 | | | — | | | — | | | 2,772 | | | 264 | | Mountain Express I | Mountain Express I | | Retail | | Baldwin | | GA | | 1/25/2018 | | 0 | | (9) | 861 | | | 690 | | | 0 | | | 0 | | | 1,551 | | | 70 | | Mountain Express I | | Retail | | Baldwin | | GA | | 1/25/2018 | | — | | (6) | 861 | | | 690 | | | — | | | — | | | 1,551 | | | 94 | | Mountain Express I | Mountain Express I | | Retail | | Buford | | GA | | 1/25/2018 | | 0 | | (9) | 883 | | | 1,130 | | | 0 | | | 0 | | | 2,013 | | | 119 | | Mountain Express I | | Retail | | Buford | | GA | | 1/25/2018 | | — | | (6) | 883 | | | 1,130 | | | — | | | — | | | 2,013 | | | 160 | | Mountain Express I | Mountain Express I | | Retail | | Canton | | GA | | 1/25/2018 | | 0 | | (9) | 348 | | | 1,463 | | | 0 | | | 0 | | | 1,811 | | | 154 | | Mountain Express I | | Retail | | Canton | | GA | | 1/25/2018 | | — | | (6) | 348 | | | 1,463 | | | — | | | — | | | 1,811 | | | 207 | | Mountain Express I | Mountain Express I | | Retail | | Chatsworth | | GA | | 1/25/2018 | | 0 | | (9) | 673 | | | 1,108 | | | 0 | | | 0 | | | 1,781 | | | 114 | | Mountain Express I | | Retail | | Chatsworth | | GA | | 1/25/2018 | | — | | (6) | 673 | | | 1,108 | | | — | | | — | | | 1,781 | | | 153 | | Mountain Express I | Mountain Express I | | Retail | | Douglasville | | GA | | 1/25/2018 | | 0 | | (9) | 958 | | | 808 | | | 0 | | | 0 | | | 1,766 | | | 76 | | Mountain Express I | | Retail | | Douglasville | | GA | | 1/25/2018 | | — | | (6) | 958 | | | 808 | | | — | | | — | | | 1,766 | | | 102 | | Mountain Express I | Mountain Express I | | Retail | | Jasper | | GA | | 1/25/2018 | | 0 | | (9) | 1,167 | | | 823 | | | 0 | | | 0 | | | 1,990 | | | 81 | | Mountain Express I | | Retail | | Jasper | | GA | | 1/25/2018 | | — | | (6) | 1,167 | | | 823 | | | — | | | — | | | 1,990 | | | 108 | | Mountain Express I | Mountain Express I | | Retail | | Summerville | | GA | | 1/25/2018 | | 0 | | (9) | 270 | | | 1,019 | | | 0 | | | 0 | | | 1,289 | | | 94 | | Mountain Express I | | Retail | | Summerville | | GA | | 1/25/2018 | | — | | (6) | 270 | | | 1,019 | | | — | | | — | | | 1,289 | | | 126 | | Mountain Express I | Mountain Express I | | Retail | | Trion | | GA | | 1/25/2018 | | 0 | | (9) | 379 | | | 1,077 | | | 0 | | | 0 | | | 1,456 | | | 117 | | Mountain Express I | | Retail | | Trion | | GA | | 1/25/2018 | | — | | (6) | 379 | | | 1,077 | | | — | | | — | | | 1,456 | | | 158 | | Mountain Express I | Mountain Express I | | Retail | | Woodstock | | GA | | 1/25/2018 | | 0 | | (9) | 578 | | | 804 | | | 0 | | | 0 | | | 1,382 | | | 79 | | Mountain Express I | | Retail | | Woodstock | | GA | | 1/25/2018 | | — | | (6) | 578 | | | 804 | | | — | | | — | | | 1,382 | | | 106 | | Kum & Go I | Kum & Go I | | Retail | | Omaha | | NE | | 2/27/2018 | | 0 | | (10) | 1,391 | | | 1,350 | | | 0 | | | 0 | | | 2,741 | | | 177 | | Kum & Go I | | Retail | | Omaha | | NE | | 2/27/2018 | | — | | (7) | 1,391 | | | 1,350 | | | — | | | — | | | 2,741 | | | 240 | | DaVita I | DaVita I | | Retail | | Bolivar | | TN | | 2/28/2018 | | 0 | | (9) | 101 | | | 623 | | | 0 | | | 0 | | | 724 | | | 52 | | DaVita I | | Retail | | Bolivar | | TN | | 2/28/2018 | | — | | (6) | 101 | | | 623 | | | — | | | — | | | 724 | | | 71 | | DaVita I | DaVita I | | Retail | | Brownviille | | TN | | 2/28/2018 | | 0 | | (9) | 61 | | | 1,166 | | | 0 | | | 0 | | | 1,227 | | | 92 | | DaVita I | | Retail | | Brownviille | | TN | | 2/28/2018 | | — | | (6) | 61 | | | 1,166 | | | — | | | — | | | 1,227 | | | 125 | | White Oak I | White Oak I | | Retail | | Casey | | IA | | 3/9/2018 | | 0 | | — | 512 | | | 164 | | | 0 | | | 0 | | | 676 | | | 16 | | White Oak I | | Retail | | Casey | | IA | | 3/9/2018 | | — | | (7) | 512 | | | 164 | | | — | | | 17 | | | 693 | | | 23 | | White Oak I | White Oak I | | Retail | | Hospers | | IA | | 3/9/2018 | | 0 | | — | 674 | | | 236 | | | 0 | | | 0 | | | 910 | | | 24 | | White Oak I | | Retail | | Hospers | | IA | | 3/9/2018 | | — | | (7) | 674 | | | 236 | | | — | | | 17 | | | 927 | | | 33 | | White Oak I | | White Oak I | | Retail | | Jefferson | | IA | | 3/9/2018 | | — | | — | 662 | | | 484 | | | — | | | 17 | | | 1,163 | | | 62 | | White Oak I | | White Oak I | | Retail | | Muscatine | | IA | | 3/9/2018 | | — | | — | 1,142 | | | 671 | | | — | | | 17 | | | 1,830 | | | 86 | | White Oak I | | White Oak I | | Retail | | Nevada | | IA | | 3/9/2018 | | — | | — | 347 | | | 199 | | | — | | | 17 | | | 563 | | | 28 | |
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
Schedule III — Real Estate and Accumulated Depreciation — Part I December 31, 20202021
| (In thousands) | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2020 [12] [13] | | | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2021 [9] [10] | | | Property | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2020 | | Land | | Building and Improvements | | Land [11] | | Building and Improvements [11] | | Accumulated Depreciation [14] [15] | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2021 | | Land | | Building and Improvements | | Land | | Building and Improvements | | Accumulated Depreciation [11] [12] | White Oak I | | Retail | | Jefferson | | IA | | 3/9/2018 | | 0 | | — | 662 | | | 484 | | | 0 | | | 0 | | | 1,146 | | | 45 | | | White Oak I | | Retail | | Muscatine | | IA | | 3/9/2018 | | 0 | | — | 1,142 | | | 671 | | | 0 | | | 0 | | | 1,813 | | | 63 | | | White Oak I | | Retail | | Nevada | | IA | | 3/9/2018 | | 0 | | — | 347 | | | 199 | | | 0 | | | 0 | | | 546 | | | 20 | | | White Oak I | White Oak I | | Retail | | Nevada | | IA | | 3/9/2018 | | 0 | | — | 928 | | | 377 | | | 0 | | | 0 | | | 1,305 | | | 38 | | White Oak I | | Retail | | Nevada | | IA | | 3/9/2018 | | — | | — | 928 | | | 377 | | | — | | | 17 | | | 1,322 | | | 52 | | White Oak I | White Oak I | | Retail | | Omaha | | NE | | 3/9/2018 | | 0 | | — | 867 | | | 273 | | | 0 | | | 0 | | | 1,140 | | | 30 | | White Oak I | | Retail | | Omaha | | NE | | 3/9/2018 | | — | | (7) | 867 | | | 273 | | | — | | | 17 | | | 1,157 | | | 42 | | White Oak I | White Oak I | | Retail | | Omaha | | NE | | 3/9/2018 | | 0 | | — | 885 | | | 649 | | | 0 | | | 0 | | | 1,534 | | | 57 | | White Oak I | | Retail | | Omaha | | NE | | 3/9/2018 | | — | | (7) | 885 | | | 649 | | | — | | | 17 | | | 1,551 | | | 78 | | White Oak I | White Oak I | | Retail | | Wapello | | IA | | 3/9/2018 | | 0 | | — | 708 | | | 627 | | | 0 | | | 0 | | | 1,335 | | | 58 | | White Oak I | | Retail | | Wapello | | IA | | 3/9/2018 | | — | | — | 708 | | | 627 | | | — | | | 17 | | | 1,352 | | | 79 | | Mountain Express II | Mountain Express II | | Retail | | Arley | | AL | | 6/14/2018 | | 0 | | (9) | 590 | | | 428 | | | 0 | | | 0 | | | 1,018 | | | 41 | | Mountain Express II | | Retail | | Arley | | AL | | 6/14/2018 | | — | | (6) | 590 | | | 428 | | | — | | | — | | | 1,018 | | | 57 | | Mountain Express II | Mountain Express II | | Retail | | Cullman | | AL | | 6/14/2018 | | 0 | | (9) | 669 | | | 978 | | | 0 | | | 0 | | | 1,647 | | | 80 | | Mountain Express II | | Retail | | Cullman | | AL | | 6/14/2018 | | — | | (6) | 669 | | | 978 | | | — | | | — | | | 1,647 | | | 111 | | Mountain Express II | Mountain Express II | | Retail | | Cullman | | AL | | 6/14/2018 | | 0 | | (9) | 794 | | | 858 | | | 0 | | | 0 | | | 1,652 | | | 74 | | Mountain Express II | | Retail | | Cullman | | AL | | 6/14/2018 | | — | | (6) | 794 | | | 858 | | | — | | | — | | | 1,652 | | | 103 | | Mountain Express II | Mountain Express II | | Retail | | Eva | | AL | | 6/14/2018 | | 0 | | (9) | 782 | | | 258 | | | 0 | | | 0 | | | 1,040 | | | 26 | | Mountain Express II | | Retail | | Eva | | AL | | 6/14/2018 | | — | | (6) | 782 | | | 258 | | | — | | | — | | | 1,040 | | | 36 | | Mountain Express II | Mountain Express II | | Retail | | Good Hope | | AL | | 6/14/2018 | | 0 | | (9) | 1,080 | | | 685 | | | 0 | | | 0 | | | 1,765 | | | 69 | | Mountain Express II | | Retail | | Good Hope | | AL | | 6/14/2018 | | — | | (6) | 1,080 | | | 685 | | | — | | | — | | | 1,765 | | | 95 | | Mountain Express II | Mountain Express II | | Retail | | Huntsville | | AL | | 6/14/2018 | | 0 | | (9) | 1,470 | | | 659 | | | 0 | | | 0 | | | 2,129 | | | 55 | | Mountain Express II | | Retail | | Huntsville | | AL | | 6/14/2018 | | — | | (6) | 1,470 | | | 659 | | | — | | | — | | | 2,129 | | | 77 | | Mountain Express II | Mountain Express II | | Retail | | Huntsville | | AL | | 6/14/2018 | | 0 | | (9) | 2,468 | | | 710 | | | 0 | | | 0 | | | 3,178 | | | 60 | | Mountain Express II | | Retail | | Huntsville | | AL | | 6/14/2018 | | — | | (6) | 2,468 | | | 710 | | | — | | | — | | | 3,178 | | | 83 | | Mountain Express II | Mountain Express II | | Retail | | Huntsville | | AL | | 6/14/2018 | | 0 | | (9) | 1,882 | | | 316 | | | 0 | | | 0 | | | 2,198 | | | 29 | | Mountain Express II | | Retail | | Huntsville | | AL | | 6/14/2018 | | — | | (6) | 1,882 | | | 316 | | | — | | | — | | | 2,198 | | | 40 | | Mountain Express II | Mountain Express II | | Retail | | Oneonta | | AL | | 6/14/2018 | | 0 | | (9) | 1,057 | | | 532 | | | 0 | | | 0 | | | 1,589 | | | 42 | | Mountain Express II | | Retail | | Oneonta | | AL | | 6/14/2018 | | — | | (6) | 1,057 | | | 532 | | | — | | | — | | | 1,589 | | | 58 | | Mountain Express II | Mountain Express II | | Retail | | Owens Cross | | AL | | 6/14/2018 | | 0 | | (9) | 578 | | | 1,386 | | | 0 | | | 0 | | | 1,964 | | | 105 | | Mountain Express II | | Retail | | Owens Cross | | AL | | 6/14/2018 | | — | | (6) | 578 | | | 1,386 | | | — | | | — | | | 1,964 | | | 146 | | Mountain Express II | Mountain Express II | | Retail | | Pine Campbell | | AL | | 6/14/2018 | | 0 | | (9) | 819 | | | 219 | | | 0 | | | 0 | | | 1,038 | | | 20 | | Mountain Express II | | Retail | | Pine Campbell | | AL | | 6/14/2018 | | — | | (6) | 819 | | | 219 | | | — | | | — | | | 1,038 | | | 28 | | Mountain Express II | Mountain Express II | | Retail | | Red Bay | | AL | | 6/14/2018 | | 0 | | (9) | 840 | | | 566 | | | 0 | | | 0 | | | 1,406 | | | 44 | | Mountain Express II | | Retail | | Red Bay | | AL | | 6/14/2018 | | — | | (6) | 840 | | | 566 | | | — | | | — | | | 1,406 | | | 61 | | Mountain Express II | Mountain Express II | | Retail | | Red Bay | | AL | | 6/14/2018 | | 0 | | (9) | 254 | | | 393 | | | 0 | | | 0 | | | 647 | | | 31 | | Mountain Express II | | Retail | | Red Bay | | AL | | 6/14/2018 | | — | | (6) | 254 | | | 393 | | | — | | | — | | | 647 | | | 42 | | Mountain Express II | Mountain Express II | | Retail | | Russellville | | AL | | 6/14/2018 | | 0 | | (9) | 594 | | | 378 | | | 0 | | | 0 | | | 972 | | | 32 | | Mountain Express II | | Retail | | Russellville | | AL | | 6/14/2018 | | — | | (6) | 594 | | | 378 | | | — | | | — | | | 972 | | | 44 | | Mountain Express II | Mountain Express II | | Retail | | Vina | | AL | | 6/14/2018 | | 0 | | — | 549 | | | 300 | | | 0 | | | 0 | | | 849 | | | 24 | | Mountain Express II | | Retail | | Vina | | AL | | 6/14/2018 | | — | | — | 549 | | | 300 | | | — | | | — | | | 849 | | | 33 | | Dialysis I | Dialysis I | | Retail | | Grand Rapids | | MI | | 7/20/2018 | | 0 | | (9) | 674 | | | 1,827 | | | 0 | | | 0 | | | 2,501 | | | 125 | | Dialysis I | | Retail | | Grand Rapids | | MI | | 7/20/2018 | | — | | (6) | 674 | | | 1,827 | | | — | | | — | | | 2,501 | | | 176 | | Dialysis I | Dialysis I | | Retail | | Michigan City | | IN | | 7/20/2018 | | 0 | | (1) | 360 | | | 1,726 | | | 0 | | | 0 | | | 2,086 | | | 142 | | Dialysis I | | Retail | | Michigan City | | IN | | 7/20/2018 | | — | | (1) | 360 | | | 1,726 | | | — | | | — | | | 2,086 | | | 200 | | Dialysis I | Dialysis I | | Retail | | Auburn | | ME | | 7/20/2018 | | 0 | | (9) | 78 | | | 2,766 | | | 0 | | | 0 | | | 2,844 | | | 182 | | Dialysis I | | Retail | | Auburn | | ME | | 7/20/2018 | | — | | (6) | 78 | | | 2,766 | | | — | | | — | | | 2,844 | | | 257 | | Dialysis I | Dialysis I | | Retail | | Benton Harbor | | MI | | 7/20/2018 | | 0 | | (9) | 241 | | | 1,687 | | | 0 | | | 0 | | | 1,928 | | | 127 | | Dialysis I | | Retail | | Benton Harbor | | MI | | 7/20/2018 | | — | | (6) | 241 | | | 1,687 | | | — | | | — | | | 1,928 | | | 180 | | Dialysis I | Dialysis I | | Retail | | East Knoxville | | TN | | 7/20/2018 | | 0 | | (9) | 497 | | | 1,429 | | | 0 | | | 0 | | | 1,926 | | | 105 | | Dialysis I | | Retail | | East Knoxville | | TN | | 7/20/2018 | | — | | (6) | 497 | | | 1,429 | | | — | | | — | | | 1,926 | | | 149 | | Dialysis I | Dialysis I | | Retail | | Grand Rapids | | MI | | 7/20/2018 | | 0 | | (9) | 612 | | | 412 | | | 0 | | | 0 | | | 1,024 | | | 31 | | Dialysis I | | Retail | | Grand Rapids | | MI | | 7/20/2018 | | — | | (6) | 612 | | | 412 | | | — | | | — | | | 1,024 | | | 44 | | Dialysis I | Dialysis I | | Retail | | Sikeston | | MO | | 7/20/2018 | | 0 | | (9) | 221 | | | 1,762 | | | 0 | | | 0 | | | 1,983 | | | 132 | | Dialysis I | | Retail | | Sikeston | | MO | | 7/20/2018 | | — | | (6) | 221 | | | 1,762 | | | — | | | — | | | 1,983 | | | 186 | | Children of America I | Children of America I | | Office | | New Britian | | PA | | 8/13/2018 | | 0 | | (9) | 224 | | | 3,319 | | | 0 | | | 0 | | | 3,543 | | | 222 | | Children of America I | | Office | | New Britian | | PA | | 8/13/2018 | | — | | — | 224 | | | 3,319 | | | — | | | — | | | 3,543 | | | 314 | | Children of America I | Children of America I | | Office | | Warminster | | PA | | 8/13/2018 | | 0 | | (9) | 284 | | | 3,225 | | | 0 | | | 0 | | | 3,509 | | | 215 | | Children of America I | | Office | | Warminster | | PA | | 8/13/2018 | | — | | — | 284 | | | 3,225 | | | — | | | — | | | 3,509 | | | 304 | | Burger King II | Burger King II | | Retail | | Pineville | | LA | | 8/20/2018 | | 0 | | (9) | 462 | | | 1,136 | | | 0 | | | 0 | | | 1,598 | | | 85 | | Burger King II | | Retail | | Pineville | | LA | | 8/20/2018 | | — | | (6) | 462 | | | 1,136 | | | — | | | — | | | 1,598 | | | 121 | | White Oak II | White Oak II | | Retail | | Council Bluffs | | IA | | 8/27/2018 | | 0 | | — | 111 | | | 628 | | | 0 | | | 0 | | | 739 | | | 50 | | White Oak II | | Retail | | Council Bluffs | | IA | | 8/27/2018 | | — | | (7) | 111 | | | 628 | | | — | | | 17 | | | 756 | | | 73 | | White Oak II | White Oak II | | Retail | | Council Bluffs | | IA | | 8/27/2018 | | 0 | | — | 122 | | | 566 | | | 0 | | | 0 | | | 688 | | | 42 | | White Oak II | | Retail | | Council Bluffs | | IA | | 8/27/2018 | | — | | (7) | 122 | | | 566 | | | — | | | 17 | | | 705 | | | 61 | | White Oak II | White Oak II | | Retail | | Glenwood | | IA | | 8/27/2018 | | 0 | | — | 20 | | | 351 | | | 0 | | | 0 | | | 371 | | | 22 | | White Oak II | | Retail | | Glenwood | | IA | | 8/27/2018 | | — | | — | 20 | | | 351 | | | — | | | 17 | | | 388 | | | 33 | | White Oak II | White Oak II | | Retail | | Missouri Valley | | IA | | 8/27/2018 | | 0 | | — | 40 | | | 388 | | | 0 | | | 0 | | | 428 | | | 29 | | White Oak II | | Retail | | Missouri Valley | | IA | | 8/27/2018 | | — | | — | 40 | | | 388 | | | — | | | 17 | | | 445 | | | 42 | | White Oak II | White Oak II | | Retail | | Red Oak | | IA | | 8/27/2018 | | 0 | | — | 30 | | | 543 | | | 0 | | | 0 | | | 573 | | | 39 | | White Oak II | | Retail | | Red Oak | | IA | | 8/27/2018 | | — | | — | 30 | | | 543 | | | — | | | 17 | | | 590 | | | 56 | | White Oak II | | White Oak II | | Retail | | Sioux Center | | IA | | 8/27/2018 | | — | | (7) | 20 | | | 358 | | | — | | | 17 | | | 395 | | | 35 | | White Oak II | | White Oak II | | Retail | | Sioux City | | IA | | 8/27/2018 | | — | | — | 70 | | | 339 | | | — | | | 17 | | | 426 | | | 35 | | White Oak II | | White Oak II | | Retail | | Sioux City | | IA | | 8/27/2018 | | — | | (7) | 81 | | | 396 | | | — | | | 17 | | | 494 | | | 38 | |
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
Schedule III — Real Estate and Accumulated Depreciation — Part I December 31, 20202021
| (In thousands) | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2020 [12] [13] | | | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2021 [9] [10] | | | Property | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2020 | | Land | | Building and Improvements | | Land [11] | | Building and Improvements [11] | | Accumulated Depreciation [14] [15] | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2021 | | Land | | Building and Improvements | | Land | | Building and Improvements | | Accumulated Depreciation [11] [12] | White Oak II | | Retail | | Sioux Center | | IA | | 8/27/2018 | | 0 | | — | 20 | | | 358 | | | 0 | | | 0 | | | 378 | | | 24 | | | White Oak II | | Retail | | Sioux City | | IA | | 8/27/2018 | | 0 | | — | 70 | | | 339 | | | 0 | | | 0 | | | 409 | | | 24 | | | White Oak II | | Retail | | Sioux City | | IA | | 8/27/2018 | | 0 | | — | 81 | | | 396 | | | 0 | | | 0 | | | 477 | | | 26 | | | White Oak II | White Oak II | | Retail | | Sioux City | | IA | | 8/27/2018 | | 0 | | — | 101 | | | 519 | | | 0 | | | 0 | | | 620 | | | 42 | | White Oak II | | Retail | | Sioux City | | IA | | 8/27/2018 | | — | | — | 101 | | | 519 | | | — | | | 27 | | | 647 | | | 61 | | Bob Evans II | Bob Evans II | | Retail | | Aurora | | IN | | 8/31/2018 | | 0 | | (9) | 237 | | | 1,675 | | | 0 | | | 0 | | | 1,912 | | | 122 | | Bob Evans II | | Retail | | Aurora | | IN | | 8/31/2018 | | — | | (6) | 237 | | | 1,675 | | | — | | | — | | | 1,912 | | | 174 | | Bob Evans II | Bob Evans II | | Retail | | Barboursville | | WV | | 8/31/2018 | | 0 | | (9) | 987 | | | 807 | | | 0 | | | 0 | | | 1,794 | | | 55 | | Bob Evans II | | Retail | | Barboursville | | WV | | 8/31/2018 | | — | | (6) | 987 | | | 807 | | | — | | | — | | | 1,794 | | | 79 | | Bob Evans II | Bob Evans II | | Retail | | Bay City | | MI | | 8/31/2018 | | 0 | | (9) | 796 | | | 313 | | | 0 | | | 0 | | | 1,109 | | | 26 | | Bob Evans II | | Retail | | Bay City | | MI | | 8/31/2018 | | — | | (6) | 796 | | | 313 | | | — | | | — | | | 1,109 | | | 37 | | Bob Evans II | Bob Evans II | | Retail | | Bluefield | | VA | | 8/31/2018 | | 0 | | (9) | 440 | | | 1,454 | | | 0 | | | 0 | | | 1,894 | | | 98 | | Bob Evans II | | Retail | | Bluefield | | VA | | 8/31/2018 | | — | | (6) | 440 | | | 1,454 | | | — | | | — | | | 1,894 | | | 140 | | Bob Evans II | Bob Evans II | | Retail | | Bridgeport | | OH | | 8/31/2018 | | 0 | | (9) | 335 | | | 1,301 | | | 0 | | | 0 | | | 1,636 | | | 88 | | Bob Evans II | | Retail | | Bridgeport | | OH | | 8/31/2018 | | — | | (6) | 335 | | | 1,301 | | | — | | | — | | | 1,636 | | | 125 | | Bob Evans II | Bob Evans II | | Retail | | Bridgeport | | WV | | 8/31/2018 | | 0 | | (9) | 481 | | | 1,819 | | | 0 | | | 0 | | | 2,300 | | | 125 | | Bob Evans II | | Retail | | Bridgeport | | WV | | 8/31/2018 | | — | | (6) | 481 | | | 1,819 | | | — | | | — | | | 2,300 | | | 179 | | Bob Evans II | Bob Evans II | | Retail | | Burbank | | OH | | 8/31/2018 | | 0 | | (9) | 172 | | | 1,804 | | | 0 | | | 0 | | | 1,976 | | | 136 | | Bob Evans II | | Retail | | Burbank | | OH | | 8/31/2018 | | — | | (6) | 172 | | | 1,804 | | | — | | | — | | | 1,976 | | | 194 | | Bob Evans II | Bob Evans II | | Retail | | Cadillac | | MI | | 8/31/2018 | | 0 | | (9) | 345 | | | 1,447 | | | 0 | | | 0 | | | 1,792 | | | 103 | | Bob Evans II | | Retail | | Cadillac | | MI | | 8/31/2018 | | — | | (6) | 345 | | | 1,447 | | | — | | | — | | | 1,792 | | | 147 | | Bob Evans II | Bob Evans II | | Retail | | Circleville | | OH | | 8/31/2018 | | — | | (9) | 911 | | | 1,686 | | | 0 | | | 0 | | | 2,597 | | | 124 | | Bob Evans II | | Retail | | Circleville | | OH | | 8/31/2018 | | — | | (6) | 911 | | | 1,686 | | | — | | | — | | | 2,597 | | | 177 | | Bob Evans II | Bob Evans II | | Retail | | Columbus | | OH | | 8/31/2018 | | 0 | | (9) | 615 | | | 1,252 | | | 0 | | | 0 | | | 1,867 | | | 92 | | Bob Evans II | | Retail | | Columbus | | OH | | 8/31/2018 | | — | | (6) | 615 | | | 1,252 | | | — | | | — | | | 1,867 | | | 131 | | Bob Evans II | Bob Evans II | | Retail | | E Liverpool | | OH | | 8/31/2018 | | 0 | | (9) | 399 | | | 1,533 | | | 0 | | | 0 | | | 1,932 | | | 112 | | Bob Evans II | | Retail | | E Liverpool | | OH | | 8/31/2018 | | — | | (6) | 399 | | | 1,533 | | | — | | | — | | | 1,932 | | | 160 | | Bob Evans II | Bob Evans II | | Retail | | Greenville | | OH | | 8/31/2018 | | 0 | | (9) | 460 | | | 1,900 | | | 0 | | | 0 | | | 2,360 | | | 125 | | Bob Evans II | | Retail | | Greenville | | OH | | 8/31/2018 | | — | | (6) | 460 | | | 1,900 | | | — | | | — | | | 2,360 | | | 178 | | Bob Evans II | Bob Evans II | | Retail | | Hamilton | | OH | | 8/31/2018 | | 0 | | (9) | 441 | | | 1,344 | | | 0 | | | 0 | | | 1,785 | | | 100 | | Bob Evans II | | Retail | | Hamilton | | OH | | 8/31/2018 | | — | | (6) | 441 | | | 1,344 | | | — | | | — | | | 1,785 | | | 143 | | Bob Evans II | Bob Evans II | | Retail | | Huntington | | WV | | 8/31/2018 | | 0 | | (9) | 255 | | | 1,563 | | | 0 | | | 0 | | | 1,818 | | | 102 | | Bob Evans II | | Retail | | Huntington | | WV | | 8/31/2018 | | — | | (6) | 255 | | | 1,563 | | | — | | | — | | | 1,818 | | | 146 | | Bob Evans II | Bob Evans II | | Retail | | Jackson | | OH | | 8/31/2018 | | 0 | | (9) | 596 | | | 1,487 | | | 0 | | | 0 | | | 2,083 | | | 109 | | Bob Evans II | | Retail | | Jackson | | OH | | 8/31/2018 | | — | | (6) | 596 | | | 1,487 | | | — | | | — | | | 2,083 | | | 156 | | Bob Evans II | Bob Evans II | | Retail | | Jeffersonville | | OH | | 8/31/2018 | | 0 | | (9) | 193 | | | 1,508 | | | 0 | | | 0 | | | 1,701 | | | 126 | | Bob Evans II | | Retail | | Jeffersonville | | OH | | 8/31/2018 | | — | | (6) | 193 | | | 1,508 | | | — | | | — | | | 1,701 | | | 179 | | Bob Evans II | Bob Evans II | | Retail | | Lavale | | MD | | 8/31/2018 | | 0 | | (9) | 527 | | | 2,536 | | | 0 | | | 0 | | | 3,063 | | | 168 | | Bob Evans II | | Retail | | Lavale | | MD | | 8/31/2018 | | — | | (6) | 527 | | | 2,536 | | | — | | | — | | | 3,063 | | | 240 | | Bob Evans II | Bob Evans II | | Retail | | Mt. Pleasant | | MI | | 8/31/2018 | | 0 | | (9) | 559 | | | 1,149 | | | 0 | | | 0 | | | 1,708 | | | 95 | | Bob Evans II | | Retail | | Mt. Pleasant | | MI | | 8/31/2018 | | — | | (6) | 559 | | | 1,149 | | | — | | | — | | | 1,708 | | | 136 | | Bob Evans II | Bob Evans II | | Retail | | New Martinsville | | WV | | 8/31/2018 | | 0 | | (9) | 703 | | | 1,206 | | | 0 | | | 0 | | | 1,909 | | | 87 | | Bob Evans II | | Retail | | New Martinsville | | WV | | 8/31/2018 | | — | | (6) | 703 | | | 1,206 | | | — | | | — | | | 1,909 | | | 124 | | Bob Evans II | Bob Evans II | | Retail | | Norwalk | | OH | | 8/31/2018 | | 0 | | (9) | 123 | | | 2,559 | | | 0 | | | 0 | | | 2,682 | | | 179 | | Bob Evans II | | Retail | | Norwalk | | OH | | 8/31/2018 | | — | | (6) | 123 | | | 2,559 | | | — | | | — | | | 2,682 | | | 256 | | Bob Evans II | Bob Evans II | | Retail | | South Point | | OH | | 8/31/2018 | | 0 | | (9) | 420 | | | 1,436 | | | 0 | | | 0 | | | 1,856 | | | 108 | | Bob Evans II | | Retail | | South Point | | OH | | 8/31/2018 | | — | | (6) | 420 | | | 1,436 | | | — | | | — | | | 1,856 | | | 154 | | Bob Evans II | Bob Evans II | | Retail | | White Hall | | WV | | 8/31/2018 | | 0 | | (9) | 347 | | | 1,185 | | | 0 | | | 0 | | | 1,532 | | | 81 | | Bob Evans II | | Retail | | White Hall | | WV | | 8/31/2018 | | — | | (6) | 347 | | | 1,185 | | | — | | | — | | | 1,532 | | | 115 | | Taco John's | Taco John's | | Retail | | Chanute | | KS | | 9/14/2018 | | 0 | | (9) | 81 | | | 642 | | | 0 | | | 0 | | | 723 | | | 45 | | Taco John's | | Retail | | Chanute | | KS | | 9/14/2018 | | — | | (6) | 81 | | | 642 | | | — | | | — | | | 723 | | | 65 | | Taco John's | Taco John's | | Retail | | Mountain Home | | ID | | 9/14/2018 | | 0 | | (9) | 81 | | | 561 | | | 0 | | | 0 | | | 642 | | | 40 | | Taco John's | | Retail | | Mountain Home | | ID | | 9/14/2018 | | — | | (6) | 81 | | | 561 | | | — | | | — | | | 642 | | | 57 | | Mountain Express III | Mountain Express III | | Retail | | Canton | | GA | | 9/19/2018 | | 0 | | (9) | 703 | | | 1,719 | | | 0 | | | 0 | | | 2,422 | | | 125 | | Mountain Express III | | Retail | | Canton | | GA | | 9/19/2018 | | — | | (6) | 703 | | | 1,719 | | | — | | | — | | | 2,422 | | | 180 | | Mountain Express III | Mountain Express III | | Retail | | Clinton | | SC | | 9/19/2018 | | 0 | | (9) | 581 | | | 1,113 | | | 0 | | | 0 | | | 1,694 | | | 72 | | Mountain Express III | | Retail | | Clinton | | SC | | 9/19/2018 | | — | | (6) | 581 | | | 1,113 | | | — | | | — | | | 1,694 | | | 104 | | Mountain Express III | Mountain Express III | | Retail | | Cornelia | | GA | | 9/19/2018 | | 0 | | (9) | 363 | | | 778 | | | 0 | | | 0 | | | 1,141 | | | 60 | | Mountain Express III | | Retail | | Cornelia | | GA | | 9/19/2018 | | — | | (6) | 363 | | | 778 | | | — | | | — | | | 1,141 | | | 86 | | Mountain Express III | Mountain Express III | | Retail | | Cumming | | GA | | 9/19/2018 | | 0 | | (9) | 161 | | | 1,403 | | | 0 | | | 0 | | | 1,564 | | | 96 | | Mountain Express III | | Retail | | Cumming | | GA | | 9/19/2018 | | — | | (6) | 161 | | | 1,403 | | | — | | | — | | | 1,564 | | | 139 | | Mountain Express III | Mountain Express III | | Retail | | Ellijay | | GA | | 9/19/2018 | | 0 | | (9) | 517 | | | 1,803 | | | 0 | | | 0 | | | 2,320 | | | 132 | | Mountain Express III | | Retail | | Ellijay | | GA | | 9/19/2018 | | — | | (6) | 517 | | | 1,803 | | | — | | | — | | | 2,320 | | | 191 | | Mountain Express III | Mountain Express III | | Retail | | Hogansville | | GA | | 9/19/2018 | | 0 | | (9) | 141 | | | 1,068 | | | 0 | | | 0 | | | 1,209 | | | 92 | | Mountain Express III | | Retail | | Hogansville | | GA | | 9/19/2018 | | — | | (6) | 141 | | | 1,068 | | | — | | | — | | | 1,209 | | | 133 | | Mountain Express III | Mountain Express III | | Retail | | Homer | | GA | | 9/19/2018 | | 0 | | (9) | 221 | | | 991 | | | 0 | | | 0 | | | 1,212 | | | 73 | | Mountain Express III | | Retail | | Homer | | GA | | 9/19/2018 | | — | | (6) | 221 | | | 991 | | | — | | | — | | | 1,212 | | | 105 | | Mountain Express III | Mountain Express III | | Retail | | McCaysville | | GA | | 9/19/2018 | | 0 | | (9) | 371 | | | 720 | | | 0 | | | 0 | | | 1,091 | | | 48 | | Mountain Express III | | Retail | | McCaysville | | GA | | 9/19/2018 | | — | | (6) | 371 | | | 720 | | | — | | | — | | | 1,091 | | | 69 | |
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
Schedule III — Real Estate and Accumulated Depreciation — Part I December 31, 20202021
| (In thousands) | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2020 [12] [13] | | | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2021 [9] [10] | | | Property | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2020 | | Land | | Building and Improvements | | Land [11] | | Building and Improvements [11] | | Accumulated Depreciation [14] [15] | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2021 | | Land | | Building and Improvements | | Land | | Building and Improvements | | Accumulated Depreciation [11] [12] | Mountain Express III | Mountain Express III | | Retail | | Nettleton | | MS | | 9/19/2018 | | 0 | | (9) | 212 | | | 660 | | | 0 | | | 0 | | | 872 | | | 46 | | Mountain Express III | | Retail | | Nettleton | | MS | | 9/19/2018 | | — | | (6) | 212 | | | 660 | | | — | | | — | | | 872 | | | 66 | | Mountain Express III | Mountain Express III | | Retail | | Riverdale | | GA | | 9/19/2018 | | 0 | | (9) | 1,001 | | | 1,920 | | | 0 | | | 0 | | | 2,921 | | | 137 | | Mountain Express III | | Retail | | Riverdale | | GA | | 9/19/2018 | | — | | (6) | 1,001 | | | 1,920 | | | — | | | — | | | 2,921 | | | 198 | | Mountain Express III | Mountain Express III | | Retail | | Toccoa | | GA | | 9/19/2018 | | 0 | | (9) | 315 | | | 708 | | | 0 | | | 0 | | | 1,023 | | | 52 | | Mountain Express III | | Retail | | Toccoa | | GA | | 9/19/2018 | | — | | (6) | 315 | | | 708 | | | — | | | — | | | 1,023 | | | 75 | | Mountain Express III | Mountain Express III | | Retail | | Toccoa | | GA | | 9/19/2018 | | 0 | | (9) | 262 | | | 908 | | | 0 | | | 0 | | | 1,170 | | | 66 | | Mountain Express III | | Retail | | Toccoa | | GA | | 9/19/2018 | | — | | (6) | 262 | | | 908 | | | — | | | — | | | 1,170 | | | 96 | | Mountain Express III | Mountain Express III | | Retail | | Woodstock | | GA | | 9/19/2018 | | 0 | | (9) | 913 | | | 1,628 | | | 0 | | | 0 | | | 2,541 | | | 125 | | Mountain Express III | | Retail | | Woodstock | | GA | | 9/19/2018 | | — | | (6) | 913 | | | 1,628 | | | — | | | — | | | 2,541 | | | 181 | | Mountain Express III | Mountain Express III | | Retail | | Woodstock | | GA | | 9/19/2018 | | 0 | | (9) | 2,202 | | | 1,234 | | | 0 | | | 0 | | | 3,436 | | | 93 | | Mountain Express III | | Retail | | Woodstock | | GA | | 9/19/2018 | | — | | (6) | 2,202 | | | 1,234 | | | — | | | — | | | 3,436 | | | 134 | | Taco John's | Taco John's | | Retail | | Carroll | | IA | | 9/21/2018 | | 0 | | (9) | 171 | | | 541 | | | 0 | | | 0 | | | 712 | | | 40 | | Taco John's | | Retail | | Carroll | | IA | | 9/21/2018 | | — | | (6) | 171 | | | 541 | | | — | | | — | | | 712 | | | 58 | | Taco John's | Taco John's | | Retail | | Cherokee | | IA | | 9/21/2018 | | 0 | | (9) | 131 | | | 347 | | | 0 | | | 0 | | | 478 | | | 25 | | Taco John's | | Retail | | Cherokee | | IA | | 9/21/2018 | | — | | (6) | 131 | | | 347 | | | — | | | — | | | 478 | | | 36 | | Taco John's | Taco John's | | Retail | | Independence | | MO | | 9/28/2018 | | 0 | | (9) | 242 | | | 822 | | | 0 | | | 0 | | | 1,064 | | | 61 | | Taco John's | | Retail | | Independence | | MO | | 9/28/2018 | | — | | (6) | 242 | | | 822 | | | — | | | — | | | 1,064 | | | 89 | | Taco John's | Taco John's | | Retail | | North Manakato | | MN | | 9/28/2018 | | 0 | | (9) | 213 | | | 334 | | | 0 | | | 0 | | | 547 | | | 31 | | Taco John's | | Retail | | North Manakato | | MN | | 9/28/2018 | | — | | (6) | 213 | | | 334 | | | — | | | — | | | 547 | | | 45 | | Taco John's | Taco John's | | Retail | | St. Peter | | MN | | 9/28/2018 | | 0 | | (9) | 112 | | | 559 | | | 0 | | | 0 | | | 671 | | | 38 | | Taco John's | | Retail | | St. Peter | | MN | | 9/28/2018 | | — | | (6) | 112 | | | 559 | | | — | | | — | | | 671 | | | 55 | | White Oak III | White Oak III | | Retail | | Bonham | | TX | | 10/5/2018 | | 0 | | — | 734 | | | 1,952 | | | 0 | | | 0 | | | 2,686 | | | 146 | | White Oak III | | Retail | | Bonham | | TX | | 10/5/2018 | | — | | (6) | 734 | | | 1,952 | | | — | | | — | | | 2,686 | | | 211 | | DaVita II | DaVita II | | Retail | | Houston | | TX | | 10/26/2018 | | 0 | | (9) | 246 | | | 1,982 | | | 0 | | | 0 | | | 2,228 | | | 130 | | DaVita II | | Retail | | Houston | | TX | | 10/26/2018 | | — | | (6) | 246 | | | 1,982 | | | — | | | — | | | 2,228 | | | 191 | | Pizza Hut I | Pizza Hut I | | Retail | | Charlotte | | NC | | 10/29/2018 | | 0 | | (9) | 236 | | | 916 | | | 0 | | | 0 | | | 1,152 | | | 67 | | Pizza Hut I | | Retail | | Charlotte | | NC | | 10/29/2018 | | — | | (6) | 236 | | | 916 | | | — | | | — | | | 1,152 | | | 97 | | Pizza Hut I | Pizza Hut I | | Retail | | Columbus | | OH | | 10/29/2018 | | 0 | | (9) | 305 | | | 922 | | | 0 | | | 0 | | | 1,227 | | | 63 | | Pizza Hut I | | Retail | | Columbus | | OH | | 10/29/2018 | | — | | (6) | 305 | | | 922 | | | — | | | — | | | 1,227 | | | 92 | | Pizza Hut I | Pizza Hut I | | Retail | | Columbus | | OH | | 10/29/2018 | | 0 | | (9) | 187 | | | 464 | | | 0 | | | 0 | | | 651 | | | 33 | | Pizza Hut I | | Retail | | Columbus | | OH | | 10/29/2018 | | — | | (6) | 187 | | | 464 | | | — | | | — | | | 651 | | | 48 | | Pizza Hut I | Pizza Hut I | | Retail | | Gastonia | | NC | | 10/29/2018 | | 0 | | (9) | 208 | | | 1,128 | | | 0 | | | 0 | | | 1,336 | | | 76 | | Pizza Hut I | | Retail | | Gastonia | | NC | | 10/29/2018 | | — | | (6) | 208 | | | 1,128 | | | — | | | — | | | 1,336 | | | 111 | | Pizza Hut I | Pizza Hut I | | Retail | | Midland | | TX | | 10/29/2018 | | 0 | | (9) | 207 | | | 662 | | | 0 | | | 0 | | | 869 | | | 42 | | Pizza Hut I | | Retail | | Midland | | TX | | 10/29/2018 | | — | | (6) | 207 | | | 662 | | | — | | | — | | | 869 | | | 62 | | Pizza Hut I | Pizza Hut I | | Retail | | New Lexington | | OH | | 10/29/2018 | | 0 | | (9) | 69 | | | 658 | | | 0 | | | 0 | | | 727 | | | 46 | | Pizza Hut I | | Retail | | New Lexington | | OH | | 10/29/2018 | | — | | (6) | 69 | | | 658 | | | — | | | — | | | 727 | | | 68 | | Pizza Hut I | Pizza Hut I | | Retail | | Newton | | NC | | 10/29/2018 | | 0 | | (9) | 79 | | | 755 | | | 0 | | | 0 | | | 834 | | | 49 | | Pizza Hut I | | Retail | | Newton | | NC | | 10/29/2018 | | — | | (6) | 79 | | | 755 | | | — | | | — | | | 834 | | | 71 | | Pizza Hut I | Pizza Hut I | | Retail | | Westerville | | OH | | 10/29/2018 | | 0 | | (9) | 167 | | | 830 | | | 0 | | | 0 | | | 997 | | | 58 | | Pizza Hut I | | Retail | | Westerville | | OH | | 10/29/2018 | | — | | (6) | 167 | | | 830 | | | — | | | — | | | 997 | | | 85 | | Pizza Hut I | Pizza Hut I | | Retail | | Zaneville | | OH | | 10/29/2018 | | 0 | | (9) | 99 | | | 745 | | | 0 | | | 0 | | | 844 | | | 48 | | Pizza Hut I | | Retail | | Zaneville | | OH | | 10/29/2018 | | — | | (6) | 99 | | | 745 | | | — | | | — | | | 844 | | | 71 | | Little Caesars I | Little Caesars I | | Retail | | Burton | | MI | | 12/21/2018 | | 0 | | (9) | 236 | | | 1,022 | | | 0 | | | 0 | | | 1,258 | | | 68 | | Little Caesars I | | Retail | | Burton | | MI | | 12/21/2018 | | — | | (6) | 236 | | | 1,022 | | | — | | | — | | | 1,258 | | | 102 | | Little Caesars I | Little Caesars I | | Retail | | Burton | | MI | | 12/21/2018 | | 0 | | (9) | 88 | | | 684 | | | 0 | | | 0 | | | 772 | | | 51 | | Little Caesars I | | Retail | | Burton | | MI | | 12/21/2018 | | — | | (6) | 88 | | | 684 | | | — | | | — | | | 772 | | | 77 | | Little Caesars I | Little Caesars I | | Retail | | Durand | | MI | | 12/21/2018 | | 0 | | (9) | 39 | | | 401 | | | 0 | | | 0 | | | 440 | | | 27 | | Little Caesars I | | Retail | | Durand | | MI | | 12/21/2018 | | — | | (6) | 39 | | | 401 | | | — | | | — | | | 440 | | | 40 | | Little Caesars I | Little Caesars I | | Retail | | Flint | | MI | | 12/21/2018 | | 0 | | (9) | 30 | | | 553 | | | 0 | | | 0 | | | 583 | | | 36 | | Little Caesars I | | Retail | | Flint | | MI | | 12/21/2018 | | — | | (6) | 30 | | | 553 | | | — | | | — | | | 583 | | | 54 | | Little Caesars I | Little Caesars I | | Retail | | Flint | | MI | | 12/21/2018 | | 0 | | (9) | 39 | | | 632 | | | 0 | | | 0 | | | 671 | | | 38 | | Little Caesars I | | Retail | | Flint | | MI | | 12/21/2018 | | — | | (6) | 39 | | | 632 | | | — | | | — | | | 671 | | | 57 | | Little Caesars I | Little Caesars I | | Retail | | Flint | | MI | | 12/21/2018 | | 0 | | (9) | 10 | | | 543 | | | 0 | | | 0 | | | 553 | | | 30 | | Little Caesars I | | Retail | | Flint | | MI | | 12/21/2018 | | — | | (6) | 10 | | | 543 | | | — | | | — | | | 553 | | | 44 | | Little Caesars I | Little Caesars I | | Retail | | Flint | | MI | | 12/21/2018 | | 0 | | (9) | 49 | | | 577 | | | 0 | | | 0 | | | 626 | | | 40 | | Little Caesars I | | Retail | | Flint | | MI | | 12/21/2018 | | — | | (6) | 49 | | | 577 | | | — | | | — | | | 626 | | | 59 | | Little Caesars I | Little Caesars I | | Retail | | Flint | | MI | | 12/21/2018 | | 0 | | (9) | 108 | | | 569 | | | 0 | | | 0 | | | 677 | | | 37 | | Little Caesars I | | Retail | | Flint | | MI | | 12/21/2018 | | — | | (6) | 108 | | | 569 | | | — | | | — | | | 677 | | | 56 | | Little Caesars I | Little Caesars I | | Retail | | Flint | | MI | | 12/21/2018 | | 0 | | (9) | 16 | | | 653 | | | 0 | | | 0 | | | 669 | | | 37 | | Little Caesars I | | Retail | | Flint | | MI | | 12/21/2018 | | — | | (6) | 16 | | | 653 | | | — | | | — | | | 669 | | | 56 | | Little Caesars I | Little Caesars I | | Retail | | Flint | | MI | | 12/21/2018 | | 0 | | (9) | 30 | | | 781 | | | 0 | | | 0 | | | 811 | | | 45 | | Little Caesars I | | Retail | | Flint | | MI | | 12/21/2018 | | — | | (6) | 30 | | | 781 | | | — | | | — | | | 811 | | | 67 | | Little Caesars I | Little Caesars I | | Retail | | Swartz Creek | | MI | | 12/21/2018 | | 0 | | (9) | 79 | | | 492 | | | 0 | | | 0 | | | 571 | | | 35 | | Little Caesars I | | Retail | | Swartz Creek | | MI | | 12/21/2018 | | — | | (6) | 79 | | | 492 | | | — | | | — | | | 571 | | | 52 | | Tractor Supply V | Tractor Supply V | | Retail | | Americus | | GA | | 12/27/2018 | | 0 | | (9) | 329 | | | 2,522 | | | 0 | | | 0 | | | 2,851 | | | 160 | | Tractor Supply V | | Retail | | Americus | | GA | | 12/27/2018 | | — | | (6) | 329 | | | 2,522 | | | — | | | — | | | 2,851 | | | 240 | | Tractor Supply V | Tractor Supply V | | Retail | | Cadiz | | OH | | 12/27/2018 | | 0 | | (9) | 179 | | | 2,546 | | | 0 | | | 0 | | | 2,725 | | | 168 | | Tractor Supply V | | Retail | | Cadiz | | OH | | 12/27/2018 | | — | | (6) | 179 | | | 2,546 | | | — | | | — | | | 2,725 | | | 252 | | Tractor Supply V | Tractor Supply V | | Retail | | Catalina | | AZ | | 12/27/2018 | | 0 | | (9) | 953 | | | 3,061 | | | 0 | | | 0 | | | 4,014 | | | 197 | | Tractor Supply V | | Retail | | Catalina | | AZ | | 12/27/2018 | | — | | (6) | 953 | | | 3,061 | | | — | | | — | | | 4,014 | | | 296 | |
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
Schedule III — Real Estate and Accumulated Depreciation — Part I December 31, 20202021
| (In thousands) | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2020 [12] [13] | | | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2021 [9] [10] | | | Property | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2020 | | Land | | Building and Improvements | | Land [11] | | Building and Improvements [11] | | Accumulated Depreciation [14] [15] | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2021 | | Land | | Building and Improvements | | Land | | Building and Improvements | | Accumulated Depreciation [11] [12] | Tractor Supply V | Tractor Supply V | | Retail | | Sorocco | | NM | | 12/27/2018 | | 0 | | (9) | 413 | | | 2,602 | | | 0 | | | 0 | | | 3,015 | | | 166 | | Tractor Supply V | | Retail | | Sorocco | | NM | | 12/27/2018 | | — | | (6) | 413 | | | 2,602 | | | — | | | — | | | 3,015 | | | 249 | | Caliber Collision I | Caliber Collision I | | Retail | | Fayetteville | | NC | | 12/28/2018 | | 0 | | (1) | 372 | | | 1,269 | | | 0 | | | 0 | | | 1,641 | | | 71 | | Caliber Collision I | | Retail | | Fayetteville | | NC | | 12/28/2018 | | — | | (1) | 372 | | | 1,269 | | | — | | | — | | | 1,641 | | | 107 | | Caliber Collision I | Caliber Collision I | | Retail | | Lutz | | FL | | 12/28/2018 | | 0 | | (1) | 1,745 | | | 2,696 | | | 0 | | | 0 | | | 4,441 | | | 174 | | Caliber Collision I | | Retail | | Lutz | | FL | | 12/28/2018 | | — | | (1) | 1,745 | | | 2,696 | | | — | | | — | | | 4,441 | | | 261 | | Caliber Collision I | Caliber Collision I | | Retail | | Nolansville | | TX | | 12/28/2018 | | 0 | | (1) | 360 | | | 973 | | | 0 | | | 0 | | | 1,333 | | | 61 | | Caliber Collision I | | Retail | | Nolansville | | TX | | 12/28/2018 | | — | | (1) | 360 | | | 973 | | | — | | | — | | | 1,333 | | | 91 | | Fresenius III | Fresenius III | | Retail | | Cumming | | GA | | 1/2/2019 | | 0 | | (9) | 141 | | | 1,206 | | | 0 | | | 0 | | | 1,347 | | | 71 | | Fresenius III | | Retail | | Cumming | | GA | | 1/2/2019 | | — | | (6) | 141 | | | 1,206 | | | — | | | — | | | 1,347 | | | 107 | | Fresenius III | Fresenius III | | Retail | | Enterprise | | AL | | 1/2/2019 | | 0 | | (9) | 523 | | | 2,854 | | | 0 | | | 0 | | | 3,377 | | | 179 | | Fresenius III | | Retail | | Enterprise | | AL | | 1/2/2019 | | — | | (6) | 523 | | | 2,854 | | | — | | | — | | | 3,377 | | | 268 | | Fresenius III | Fresenius III | | Retail | | Gulf Breeze | | FL | | 1/2/2019 | | 0 | | (9) | 306 | | | 2,399 | | | 0 | | | 0 | | | 2,705 | | | 140 | | Fresenius III | | Retail | | Gulf Breeze | | FL | | 1/2/2019 | | — | | (6) | 306 | | | 2,399 | | | — | | | — | | | 2,705 | | | 211 | | Fresenius III | Fresenius III | | Retail | | Monrowville | | AL | | 1/2/2019 | | 0 | | (9) | 219 | | | 1,330 | | | 0 | | | 12 | | | 1,561 | | | 88 | | Fresenius III | | Retail | | Monroeville | | AL | | 1/2/2019 | | — | | (6) | 219 | | | 1,330 | | | — | | | 31 | | | 1,580 | | | 133 | | Fresenius III | Fresenius III | | Retail | | Pendleton | | SC | | 1/2/2019 | | 0 | | (9) | 151 | | | 1,248 | | | 0 | | | 0 | | | 1,399 | | | 74 | | Fresenius III | | Retail | | Pendleton | | SC | | 1/2/2019 | | — | | (6) | 151 | | | 1,248 | | | — | | | — | | | 1,399 | | | 111 | | Fresenius III | Fresenius III | | Retail | | Thomasville | | AL | | 1/2/2019 | | 0 | | (9) | 482 | | | 1,045 | | | 0 | | | 0 | | | 1,527 | | | 70 | | Fresenius III | | Retail | | Thomasville | | AL | | 1/2/2019 | | — | | (6) | 482 | | | 1,045 | | | — | | | — | | | 1,527 | | | 105 | | Pizza Hut II | Pizza Hut II | | Retail | | Afton | | WY | | 1/28/2019 | | 0 | | (9) | 50 | | | 870 | | | 0 | | | 0 | | | 920 | | | 49 | | Pizza Hut II | | Retail | | Afton | | WY | | 1/28/2019 | | — | | (6) | 50 | | | 870 | | | — | | | — | | | 920 | | | 74 | | Pizza Hut II | Pizza Hut II | | Retail | | Alva | | OK | | 1/28/2019 | | 0 | | (9) | 191 | | | 1,129 | | | 0 | | | 0 | | | 1,320 | | | 67 | | Pizza Hut II | | Retail | | Alva | | OK | | 1/28/2019 | | — | | (6) | 191 | | | 1,129 | | | — | | | — | | | 1,320 | | | 102 | | Pizza Hut II | Pizza Hut II | | Retail | | Buffalo | | WY | | 1/28/2019 | | 0 | | (9) | 162 | | | 588 | | | 0 | | | 0 | | | 750 | | | 40 | | Pizza Hut II | | Retail | | Buffalo | | WY | | 1/28/2019 | | — | | (6) | 162 | | | 588 | | | — | | | — | | | 750 | | | 60 | | Pizza Hut II | Pizza Hut II | | Retail | | Canadian | | TX | | 1/28/2019 | | 0 | | (9) | 139 | | | 729 | | | 0 | | | 0 | | | 868 | | | 43 | | Pizza Hut II | | Retail | | Canadian | | TX | | 1/28/2019 | | — | | (6) | 139 | | | 729 | | | — | | | — | | | 868 | | | 65 | | Pizza Hut II | Pizza Hut II | | Retail | | Cherokee | | OK | | 1/28/2019 | | 0 | | (9) | 101 | | | 474 | | | 0 | | | 0 | | | 575 | | | 31 | | Pizza Hut II | | Retail | | Cherokee | | OK | | 1/28/2019 | | — | | (6) | 101 | | | 474 | | | — | | | — | | | 575 | | | 47 | | Pizza Hut II | Pizza Hut II | | Retail | | Cut Bank | | MT | | 1/28/2019 | | 0 | | (9) | 131 | | | 808 | | | 0 | | | 0 | | | 939 | | | 48 | | Pizza Hut II | | Retail | | Cut Bank | | MT | | 1/28/2019 | | — | | (6) | 131 | | | 808 | | | — | | | — | | | 939 | | | 72 | | Pizza Hut II | Pizza Hut II | | Retail | | Deer Lodge | | MT | | 1/28/2019 | | 0 | | (9) | 181 | | | 449 | | | 0 | | | 0 | | | 630 | | | 31 | | Pizza Hut II | | Retail | | Dillion | | MT | | 1/28/2019 | | — | | (6) | 71 | | | 760 | | | — | | | — | | | 831 | | | 65 | | Pizza Hut II | Pizza Hut II | | Retail | | Dillion | | MT | | 1/28/2019 | | 0 | | (9) | 71 | | | 760 | | | 0 | | | 0 | | | 831 | | | 43 | | Pizza Hut II | | Retail | | Douglas | | WY | | 1/28/2019 | | — | | (6) | 322 | | | 1,085 | | | — | | | — | | | 1,407 | | | 99 | | Pizza Hut II | Pizza Hut II | | Retail | | Douglas | | WY | | 1/28/2019 | | 0 | | (9) | 322 | | | 1,085 | | | 0 | | | 0 | | | 1,407 | | | 65 | | Pizza Hut II | | Retail | | Elkhart | | KS | | 1/28/2019 | | — | | (6) | 179 | | | 611 | | | — | | | — | | | 790 | | | 58 | | Pizza Hut II | Pizza Hut II | | Retail | | Elkhart | | KS | | 1/28/2019 | | 0 | | (9) | 179 | | | 611 | | | 0 | | | 0 | | | 790 | | | 38 | | Pizza Hut II | | Retail | | Fairview | | OK | | 1/28/2019 | | — | | (6) | 120 | | | 789 | | | — | | | — | | | 909 | | | 73 | | Pizza Hut II | Pizza Hut II | | Retail | | Fairview | | OK | | 1/28/2019 | | 0 | | (9) | 120 | | | 789 | | | 0 | | | 0 | | | 909 | | | 48 | | Pizza Hut II | | Retail | | Havre | | MT | | 1/28/2019 | | — | | (6) | 175 | | | 2,061 | | | — | | | — | | | 2,236 | | | 171 | | Pizza Hut II | Pizza Hut II | | Retail | | Havre | | MT | | 1/28/2019 | | 0 | | (9) | 175 | | | 2,061 | | | 0 | | | 0 | | | 2,236 | | | 113 | | Pizza Hut II | | Retail | | Helena | | MT | | 1/28/2019 | | — | | (6) | 132 | | | 887 | | | — | | | — | | | 1,019 | | | 77 | | Pizza Hut II | Pizza Hut II | | Retail | | Helena | | MT | | 1/28/2019 | | 0 | | (9) | 132 | | | 887 | | | 0 | | | 0 | | | 1,019 | | | 51 | | Pizza Hut II | | Retail | | Hennessey | | OK | | 1/28/2019 | | — | | (6) | 81 | | | 743 | | | — | | | — | | | 824 | | | 62 | | Pizza Hut II | Pizza Hut II | | Retail | | Hennessey | | OK | | 1/28/2019 | | 0 | | (9) | 81 | | | 743 | | | 0 | | | 0 | | | 824 | | | 40 | | Pizza Hut II | | Retail | | Hugoton | | KS | | 1/28/2019 | | — | | (6) | 112 | | | 948 | | | — | | | — | | | 1,060 | | | 78 | | Pizza Hut II | Pizza Hut II | | Retail | | Hugoton | | KS | | 1/28/2019 | | 0 | | (9) | 112 | | | 948 | | | 0 | | | 0 | | | 1,060 | | | 51 | | Pizza Hut II | | Retail | | Larned | | KS | | 1/28/2019 | | — | | (6) | 159 | | | 633 | | | — | | | — | | | 792 | | | 67 | | Pizza Hut II | Pizza Hut II | | Retail | | Larned | | KS | | 1/28/2019 | | 0 | | (9) | 159 | | | 633 | | | 0 | | | 0 | | | 792 | | | 44 | | Pizza Hut II | | Retail | | Lewistown | | MT | | 1/28/2019 | | — | | (6) | 131 | | | 793 | | | — | | | — | | | 924 | | | 69 | | Pizza Hut II | Pizza Hut II | | Retail | | Lewistown | | MT | | 1/28/2019 | | 0 | | (9) | 131 | | | 793 | | | 0 | | | 0 | | | 924 | | | 45 | | Pizza Hut II | | Retail | | Libby | | MT | | 1/28/2019 | | — | | (6) | 50 | | | 1,011 | | | — | | | — | | | 1,061 | | | 87 | | Pizza Hut II | Pizza Hut II | | Retail | | Libby | | MT | | 1/28/2019 | | 0 | | (9) | 50 | | | 1,011 | | | 0 | | | 0 | | | 1,061 | | | 57 | | Pizza Hut II | | Retail | | Liberal | | KS | | 1/28/2019 | | — | | (6) | 20 | | | 956 | | | — | | | — | | | 976 | | | 71 | | Pizza Hut II | Pizza Hut II | | Retail | | Liberal | | KS | | 1/28/2019 | | 0 | | (9) | 20 | | | 956 | | | 0 | | | 0 | | | 976 | | | 47 | | Pizza Hut II | | Retail | | Meade | | KS | | 1/28/2019 | | — | | (6) | 121 | | | 637 | | | — | | | — | | | 758 | | | 56 | | Pizza Hut II | Pizza Hut II | | Retail | | Meade | | KS | | 1/28/2019 | | 0 | | (9) | 121 | | | 637 | | | 0 | | | 0 | | | 758 | | | 37 | | Pizza Hut II | | Retail | | Newcastle | | WY | | 1/28/2019 | | — | | (6) | 71 | | | 735 | | | — | | | — | | | 806 | | | 61 | | Pizza Hut II | Pizza Hut II | | Retail | | Newcastle | | WY | | 1/28/2019 | | 0 | | (9) | 71 | | | 735 | | | 0 | | | 0 | | | 806 | | | 40 | | Pizza Hut II | | Retail | | Polson | | MT | | 1/28/2019 | | — | | (6) | 151 | | | 1,090 | | | — | | | — | | | 1,241 | | | 94 | | Pizza Hut II | Pizza Hut II | | Retail | | Polson | | MT | | 1/28/2019 | | 0 | | (9) | 151 | | | 1,090 | | | 0 | | | 0 | | | 1,241 | | | 62 | | Pizza Hut II | | Retail | | Roosevelt | | UT | | 1/28/2019 | | — | | (6) | 220 | | | 960 | | | — | | | — | | | 1,180 | | | 85 | | Pizza Hut II | Pizza Hut II | | Retail | | Roosevelt | | UT | | 1/28/2019 | | 0 | | (9) | 220 | | | 960 | | | 0 | | | 0 | | | 1,180 | | | 56 | | Pizza Hut II | | Retail | | Shattuck | | OK | | 1/28/2019 | | — | | (6) | 100 | | | 531 | | | — | | | — | | | 631 | | | 51 | | Pizza Hut II | Pizza Hut II | | Retail | | Shattuck | | OK | | 1/28/2019 | | 0 | | (9) | 100 | | | 531 | | | 0 | | | 0 | | | 631 | | | 33 | | Pizza Hut II | | Retail | | Shelby | | MT | | 1/28/2019 | | — | | (6) | 150 | | | 502 | | | — | | | — | | | 652 | | | 52 | | Pizza Hut II | Pizza Hut II | | Retail | | Shelby | | MT | | 1/28/2019 | | 0 | | (9) | 150 | | | 502 | | | 0 | | | 0 | | | 652 | | | 34 | | Pizza Hut II | | Retail | | Spearman | | TX | | 1/28/2019 | | — | | (6) | 230 | | | 869 | | | — | | | — | | | 1,099 | | | 84 | | Pizza Hut II | Pizza Hut II | | Retail | | Spearman | | TX | | 1/28/2019 | | 0 | | (9) | 230 | | | 869 | | | 0 | | | 0 | | | 1,099 | | | 55 | | Pizza Hut II | | Retail | | Thermpolis | | WY | | 1/28/2019 | | — | | (6) | 70 | | | 863 | | | — | | | — | | | 933 | | | 76 | | Pizza Hut II | Pizza Hut II | | Retail | | Thermpolis | | WY | | 1/28/2019 | | 0 | | (9) | 70 | | | 863 | | | 0 | | | 0 | | | 933 | | | 50 | | Pizza Hut II | | Retail | | Ulyses | | KS | | 1/28/2019 | | — | | (6) | 121 | | | 1,108 | | | — | | | — | | | 1,229 | | | 98 | |
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
Schedule III — Real Estate and Accumulated Depreciation — Part I December 31, 20202021
| (In thousands) | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2020 [12] [13] | | | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2021 [9] [10] | | | Property | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2020 | | Land | | Building and Improvements | | Land [11] | | Building and Improvements [11] | | Accumulated Depreciation [14] [15] | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2021 | | Land | | Building and Improvements | | Land | | Building and Improvements | | Accumulated Depreciation [11] [12] | Pizza Hut II | | Retail | | Ulyses | | KS | | 1/28/2019 | | 0 | | (9) | 121 | | | 1,108 | | | 0 | | | 0 | | | 1,229 | | | 64 | | | Pizza Hut II | Pizza Hut II | | Retail | | Vernal | | UT | | 1/28/2019 | | 0 | | (9) | 211 | | | 733 | | | 0 | | | 0 | | | 944 | | | 44 | | Pizza Hut II | | Retail | | Vernal | | UT | | 1/28/2019 | | — | | (6) | 211 | | | 733 | | | — | | | — | | | 944 | | | 67 | | Pizza Hut II | Pizza Hut II | | Retail | | Watonga | | OK | | 1/28/2019 | | 0 | | (9) | 70 | | | 939 | | | 0 | | | 0 | | | 1,009 | | | 53 | | Pizza Hut II | | Retail | | Watonga | | OK | | 1/28/2019 | | — | | (6) | 70 | | | 939 | | | — | | | — | | | 1,009 | | | 81 | | Pizza Hut II | Pizza Hut II | | Retail | | Wheatland | | WY | | 1/28/2019 | | 0 | | (9) | 153 | | | 825 | | | 0 | | | 0 | | | 978 | | | 49 | | Pizza Hut II | | Retail | | Wheatland | | WY | | 1/28/2019 | | — | | (6) | 153 | | | 825 | | | — | | | — | | | 978 | | | 74 | | Mountain Express IV | Mountain Express IV | | Retail | | Cabot | | AR | | 2/25/2019 | | 0 | | (9) | 206 | | | 816 | | | 0 | | | 0 | | | 1,022 | | | 61 | | Mountain Express IV | | Retail | | Cabot | | AR | | 2/25/2019 | | — | | (6) | 206 | | | 816 | | | — | | | — | | | 1,022 | | | 94 | | Mountain Express IV | Mountain Express IV | | Retail | | Corning | | AR | | 2/25/2019 | | 0 | | (9) | 283 | | | 865 | | | 0 | | | 0 | | | 1,148 | | | 41 | | Mountain Express IV | | Retail | | Corning | | AR | | 2/25/2019 | | — | | (6) | 283 | | | 865 | | | — | | | — | | | 1,148 | | | 64 | | Mountain Express IV | Mountain Express IV | | Retail | | El Dorado | | AR | | 2/25/2019 | | 0 | | (9) | 371 | | | 1,180 | | | 0 | | | 0 | | | 1,551 | | | 75 | | Mountain Express IV | | Retail | | El Dorado | | AR | | 2/25/2019 | | — | | (6) | 371 | | | 1,180 | | | — | | | — | | | 1,551 | | | 116 | | Mountain Express IV | Mountain Express IV | | Retail | | El Dorado | | AR | | 2/25/2019 | | 0 | | (9) | 217 | | | 668 | | | 0 | | | 0 | | | 885 | | | 39 | | Mountain Express IV | | Retail | | El Dorado | | AR | | 2/25/2019 | | — | | (6) | 217 | | | 668 | | | — | | | — | | | 885 | | | 61 | | Mountain Express IV | Mountain Express IV | | Retail | | El Dorado | | AR | | 2/25/2019 | | 0 | | (9) | 1,258 | | | 1,475 | | | 0 | | | 0 | | | 2,733 | | | 101 | | Mountain Express IV | | Retail | | El Dorado | | AR | | 2/25/2019 | | — | | (6) | 1,258 | | | 1,475 | | | — | | | — | | | 2,733 | | | 156 | | Mountain Express IV | Mountain Express IV | | Retail | | Fordyce | | AR | | 2/25/2019 | | 0 | | (9) | 548 | | | 1,530 | | | 0 | | | 0 | | | 2,078 | | | 75 | | Mountain Express IV | | Retail | | Fordyce | | AR | | 2/25/2019 | | — | | (6) | 548 | | | 1,530 | | | — | | | — | | | 2,078 | | | 116 | | Mountain Express IV | Mountain Express IV | | Retail | | Hope | | AR | | 2/25/2019 | | 0 | | (9) | 705 | | | 783 | | | 0 | | | 0 | | | 1,488 | | | 38 | | Mountain Express IV | | Retail | | Hope | | AR | | 2/25/2019 | | — | | (6) | 705 | | | 783 | | | — | | | — | | | 1,488 | | | 59 | | Mountain Express IV | Mountain Express IV | | Retail | | Searcy | | AR | | 2/25/2019 | | 0 | | (9) | 1,007 | | | 787 | | | 0 | | | 0 | | | 1,794 | | | 39 | | Mountain Express IV | | Retail | | Searcy | | AR | | 2/25/2019 | | — | | (6) | 1,007 | | | 787 | | | — | | | — | | | 1,794 | | | 60 | | Mountain Express V | Mountain Express V | | Retail | | Buford | | GA | | 2/28/2019 | | 0 | | (1) | 436 | | | 1,695 | | | 0 | | | 0 | | | 2,131 | | | 91 | | Mountain Express V | | Retail | | Buford | | GA | | 2/28/2019 | | — | | (1) | 436 | | | 1,695 | | | — | | | — | | | 2,131 | | | 141 | | Mountain Express V | Mountain Express V | | Retail | | Buford | | GA | | 2/28/2019 | | 0 | | (1) | 337 | | | 1,715 | | | 0 | | | 0 | | | 2,052 | | | 101 | | Mountain Express V | | Retail | | Buford | | GA | | 2/28/2019 | | — | | (1) | 337 | | | 1,715 | | | — | | | — | | | 2,052 | | | 155 | | Mountain Express V | Mountain Express V | | Retail | | Canton | | GA | | 2/28/2019 | | 0 | | (1) | 198 | | | 1,821 | | | 0 | | | 0 | | | 2,019 | | | 93 | | Mountain Express V | | Retail | | Canton | | GA | | 2/28/2019 | | — | | (1) | 198 | | | 1,821 | | | — | | | — | | | 2,019 | | | 144 | | Mountain Express V | Mountain Express V | | Retail | | Conyers | | GA | | 2/28/2019 | | 0 | | (1) | 199 | | | 2,220 | | | 0 | | | 0 | | | 2,419 | | | 126 | | Mountain Express V | | Retail | | Conyers | | GA | | 2/28/2019 | | — | | (1) | 199 | | | 2,220 | | | — | | | — | | | 2,419 | | | 195 | | Mountain Express V | Mountain Express V | | Retail | | Dahlonega | | GA | | 2/28/2019 | | 0 | | (1) | 687 | | | 942 | | | 0 | | | 0 | | | 1,629 | | | 52 | | Mountain Express V | | Retail | | Dahlonega | | GA | | 2/28/2019 | | — | | (1) | 687 | | | 942 | | | — | | | — | | | 1,629 | | | 80 | | Mountain Express V | Mountain Express V | | Retail | | Elberton | | GA | | 2/28/2019 | | 0 | | (1) | 268 | | | 1,760 | | | 0 | | | 0 | | | 2,028 | | | 110 | | Mountain Express V | | Retail | | Elberton | | GA | | 2/28/2019 | | — | | (1) | 268 | | | 1,760 | | | — | | | — | | | 2,028 | | | 170 | | Mountain Express V | Mountain Express V | | Retail | | Forest Park | | GA | | 2/28/2019 | | 0 | | (1) | 983 | | | 1,118 | | | 0 | | | 0 | | | 2,101 | | | 59 | | Mountain Express V | | Retail | | Forest Park | | GA | | 2/28/2019 | | — | | (1) | 983 | | | 1,118 | | | — | | | — | | | 2,101 | | | 91 | | Mountain Express V | Mountain Express V | | Retail | | Jonesboro | | GA | | 2/28/2019 | | 0 | | (1) | 456 | | | 1,960 | | | 0 | | | 0 | | | 2,416 | | | 106 | | Mountain Express V | | Retail | | Jonesboro | | GA | | 2/28/2019 | | — | | (1) | 456 | | | 1,960 | | | — | | | — | | | 2,416 | | | 163 | | Mountain Express V | Mountain Express V | | Retail | | Lithia Springs | | GA | | 2/28/2019 | | 0 | | (1) | 776 | | | 1,282 | | | 0 | | | 0 | | | 2,058 | | | 72 | | Mountain Express V | | Retail | | Lithia Springs | | GA | | 2/28/2019 | | — | | (1) | 776 | | | 1,282 | | | — | | | — | | | 2,058 | | | 112 | | Mountain Express V | Mountain Express V | | Retail | | Lithia Springs | | GA | | 2/28/2019 | | 0 | | (1) | 905 | | | 1,267 | | | 0 | | | 0 | | | 2,172 | | | 71 | | Mountain Express V | | Retail | | Lithia Springs | | GA | | 2/28/2019 | | — | | (1) | 905 | | | 1,267 | | | — | | | — | | | 2,172 | | | 110 | | Mountain Express V | Mountain Express V | | Retail | | Loganville | | GA | | 2/28/2019 | | 0 | | (1) | 258 | | | 2,102 | | | 0 | | | 0 | | | 2,360 | | | 115 | | Mountain Express V | | Retail | | Loganville | | GA | | 2/28/2019 | | — | | (1) | 258 | | | 2,102 | | | — | | | — | | | 2,360 | | | 177 | | Mountain Express V | Mountain Express V | | Retail | | Macon | | GA | | 2/28/2019 | | 0 | | (1) | 543 | | | 908 | | | 0 | | | 0 | | | 1,451 | | | 52 | | Mountain Express V | | Retail | | Macon | | GA | | 2/28/2019 | | — | | (1) | 543 | | | 908 | | | — | | | — | | | 1,451 | | | 80 | | Mountain Express V | Mountain Express V | | Retail | | Stockbridge | | GA | | 2/28/2019 | | 0 | | (1) | 129 | | | 1,938 | | | 0 | | | 0 | | | 2,067 | | | 100 | | Mountain Express V | | Retail | | Stockbridge | | GA | | 2/28/2019 | | — | | (1) | 129 | | | 1,938 | | | — | | | — | | | 2,067 | | | 155 | | Fresenius IV | Fresenius IV | | Retail | | Alexandria | | LA | | 3/21/2019 | | 0 | | (9) | 342 | | | 2,505 | | | 0 | | | 0 | | | 2,847 | | | 121 | | Fresenius IV | | Retail | | Alexandria | | LA | | 3/21/2019 | | — | | (6) | 342 | | | 2,505 | | | — | | | — | | | 2,847 | | | 190 | | Mountain Express V | Mountain Express V | | Retail | | Forest Park | | GA | | 3/22/2019 | | 0 | | (1) | 1,473 | | | 720 | | | 0 | | | 0 | | | 2,193 | | | 44 | | Mountain Express V | | Retail | | Forest Park | | GA | | 3/22/2019 | | — | | (1) | 1,473 | | | 720 | | | — | | | — | | | 2,193 | | | 69 | | Tractor Supply V | Tractor Supply V | | Retail | | New Cordell | | OK | | 3/27/2019 | | 0 | | (9) | 332 | | | 2,246 | | | 0 | | | 0 | | | 2,578 | | | 135 | | Tractor Supply V | | Retail | | New Cordell | | OK | | 3/27/2019 | | — | | (6) | 332 | | | 2,246 | | | — | | | — | | | 2,578 | | | 211 | | Mountain Express V | Mountain Express V | | Retail | | Macon | | GA | | 3/29/2019 | | 0 | | (1) | 1,085 | | | 872 | | | 0 | | | 0 | | | 1,957 | | | 50 | | Mountain Express V | | Retail | | Macon | | GA | | 3/29/2019 | | — | | (1) | 1,085 | | | 872 | | | — | | | — | | | 1,957 | | | 79 | | Mountain Express V | Mountain Express V | | Retail | | Norcross | | GA | | 3/29/2019 | | 0 | | (1) | 710 | | | 2,722 | | | 0 | | | 0 | | | 3,432 | | | 143 | | Mountain Express V | | Retail | | Norcross | | GA | | 3/29/2019 | | — | | (1) | 710 | | | 2,722 | | | — | | | — | | | 3,432 | | | 225 | | Mountain Express V | Mountain Express V | | Retail | | Snellville | | GA | | 3/29/2019 | | 0 | | (1) | 548 | | | 688 | | | 0 | | | 0 | | | 1,236 | | | 38 | | Mountain Express V | | Retail | | Snellville | | GA | | 3/29/2019 | | — | | (1) | 548 | | | 688 | | | — | | | — | | | 1,236 | | | 60 | | Mountain Express V | Mountain Express V | | Retail | | Covington | | GA | | 4/4/2019 | | 0 | | (1) | 119 | | | 2,325 | | | 0 | | | 0 | | | 2,444 | | | 113 | | Mountain Express V | | Retail | | Covington | | GA | | 4/4/2019 | | — | | (1) | 119 | | | 2,325 | | | — | | | — | | | 2,444 | | | 177 | | IMTAA | IMTAA | | Retail | | Baton Rouge | | LA | | 5/16/2019 | | 0 | | (1) | 255 | | | 1,772 | | | 0 | | | 0 | | | 2,027 | | | 89 | | IMTAA | | Retail | | Baton Rouge | | LA | | 5/16/2019 | | — | | (1) | 255 | | | 1,772 | | | — | | | — | | | 2,027 | | | 145 | | IMTAA | IMTAA | | Retail | | Bridge City | | TX | | 5/16/2019 | | 0 | | (1) | 196 | | | 1,975 | | | 0 | | | 0 | | | 2,171 | | | 103 | | IMTAA | | Retail | | Bridge City | | TX | | 5/16/2019 | | — | | (1) | 196 | | | 1,975 | | | — | | | — | | | 2,171 | | | 168 | | IMTAA | IMTAA | | Retail | | Gonzales | | LA | | 5/16/2019 | | 0 | | (1) | 367 | | | 1,622 | | | 0 | | | 0 | | | 1,989 | | | 87 | | IMTAA | | Retail | | Gonzales | | LA | | 5/16/2019 | | — | | (1) | 367 | | | 1,622 | | | — | | | — | | | 1,989 | | | 143 | | IMTAA | IMTAA | | Retail | | Gonzales | | LA | | 5/16/2019 | | 0 | | (1) | 246 | | | 1,622 | | | 0 | | | 0 | | | 1,868 | | | 82 | | IMTAA | | Retail | | Gonzales | | LA | | 5/16/2019 | | — | | (1) | 246 | | | 1,622 | | | — | | | — | | | 1,868 | | | 133 | | IMTAA | IMTAA | | Retail | | Kenner | | LA | | 5/16/2019 | | 0 | | (1) | 469 | | | 1,409 | | | 0 | | | 0 | | | 1,878 | | | 70 | | IMTAA | | Retail | | Kenner | | LA | | 5/16/2019 | | — | | (1) | 469 | | | 1,409 | | | — | | | — | | | 1,878 | | | 115 | | IMTAA | | IMTAA | | Retail | | Lake Charles | | LA | | 5/16/2019 | | — | | (1) | 534 | | | 1,411 | | | — | | | — | | | 1,945 | | | 123 | |
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
Schedule III — Real Estate and Accumulated Depreciation — Part I December 31, 20202021
| (In thousands) | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2020 [12] [13] | | | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2021 [9] [10] | | | Property | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2020 | | Land | | Building and Improvements | | Land [11] | | Building and Improvements [11] | | Accumulated Depreciation [14] [15] | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2021 | | Land | | Building and Improvements | | Land | | Building and Improvements | | Accumulated Depreciation [11] [12] | IMTAA | | Retail | | Lake Charles | | LA | | 5/16/2019 | | 0 | | (1) | 534 | | | 1,411 | | | 0 | | | 0 | | | 1,945 | | | 75 | | | IMTAA | IMTAA | | Retail | | Lake Charles | | LA | | 5/16/2019 | | 0 | | (1) | 349 | | | 1,525 | | | 0 | | | 0 | | | 1,874 | | | 87 | | IMTAA | | Retail | | Lake Charles | | LA | | 5/16/2019 | | — | | (1) | 349 | | | 1,525 | | | — | | | — | | | 1,874 | | | 141 | | IMTAA | IMTAA | | Retail | | Lake Charles | | LA | | 5/16/2019 | | 0 | | (1) | 508 | | | 1,246 | | | 0 | | | 0 | | | 1,754 | | | 65 | | IMTAA | | Retail | | Lake Charles | | LA | | 5/16/2019 | | — | | (1) | 508 | | | 1,246 | | | — | | | — | | | 1,754 | | | 105 | | IMTAA | IMTAA | | Retail | | Lake Charles | | LA | | 5/16/2019 | | 0 | | (1) | 472 | | | 1,523 | | | 0 | | | 0 | | | 1,995 | | | 73 | | IMTAA | | Retail | | Lake Charles | | LA | | 5/16/2019 | | — | | (1) | 472 | | | 1,523 | | | — | | | — | | | 1,995 | | | 120 | | IMTAA | IMTAA | | Retail | | Orange | | TX | | 5/16/2019 | | 0 | | (1) | 214 | | | 1,867 | | | 0 | | | 0 | | | 2,081 | | | 101 | | IMTAA | | Retail | | Orange | | TX | | 5/16/2019 | | — | | (1) | 214 | | | 1,867 | | | — | | | — | | | 2,081 | | | 165 | | IMTAA | IMTAA | | Retail | | St. Rose | | LA | | 5/16/2019 | | 0 | | (1) | 287 | | | 1,214 | | | 0 | | | 0 | | | 1,501 | | | 63 | | IMTAA | | Retail | | St. Rose | | LA | | 5/16/2019 | | — | | (1) | 287 | | | 1,214 | | | — | | | — | | | 1,501 | | | 104 | | Pizza Hut III | Pizza Hut III | | Retail | | Casper | | WY | | 5/31/2019 | | 0 | | (1) | 382 | | | 1,044 | | | 0 | | | 0 | | | 1,426 | | | 54 | | Pizza Hut III | | Retail | | Casper | | WY | | 5/31/2019 | | — | | (1) | 382 | | | 1,044 | | | — | | | — | | | 1,426 | | | 89 | | Pizza Hut III | Pizza Hut III | | Retail | | Casper | | WY | | 5/31/2019 | | 0 | | (1) | 255 | | | 1,040 | | | 0 | | | 0 | | | 1,295 | | | 47 | | Pizza Hut III | | Retail | | Casper | | WY | | 5/31/2019 | | — | | (1) | 255 | | | 1,040 | | | — | | | — | | | 1,295 | | | 77 | | Pizza Hut III | Pizza Hut III | | Retail | | Colorado Springs | | CO | | 5/31/2019 | | 0 | | (1) | 252 | | | 961 | | | 0 | | | 0 | | | 1,213 | | | 44 | | Pizza Hut III | | Retail | | Colorado Springs | | CO | | 5/31/2019 | | — | | (1) | 252 | | | 961 | | | — | | | — | | | 1,213 | | | 72 | | Pizza Hut III | Pizza Hut III | | Retail | | Dodge City | | KS | | 5/31/2019 | | 0 | | (1) | 166 | | | 1,163 | | | 0 | | | 0 | | | 1,329 | | | 57 | | Pizza Hut III | | Retail | | Dodge City | | KS | | 5/31/2019 | | — | | (1) | 166 | | | 1,163 | | | — | | | — | | | 1,329 | | | 93 | | Pizza Hut III | Pizza Hut III | | Retail | | Garden City | | KS | | 5/31/2019 | | 0 | | (1) | 197 | | | 680 | | | 0 | | | 0 | | | 877 | | | 33 | | Pizza Hut III | | Retail | | Garden City | | KS | | 5/31/2019 | | — | | (1) | 197 | | | 680 | | | — | | | — | | | 877 | | | 53 | | Pizza Hut III | Pizza Hut III | | Retail | | Great Falls | | MT | | 5/31/2019 | | 0 | | (1) | 262 | | | 633 | | | 0 | | | 0 | | | 895 | | | 30 | | Pizza Hut III | | Retail | | Great Falls | | MT | | 5/31/2019 | | — | | (1) | 262 | | | 633 | | | — | | | — | | | 895 | | | 49 | | Pizza Hut III | Pizza Hut III | | Retail | | Great Falls | | MT | | 5/31/2019 | | 0 | | (1) | 265 | | | 598 | | | 0 | | | 0 | | | 863 | | | 32 | | Pizza Hut III | | Retail | | Great Falls | | MT | | 5/31/2019 | | — | | (1) | 265 | | | 598 | | | — | | | — | | | 863 | | | 52 | | Pizza Hut III | Pizza Hut III | | Retail | | Guymon | | OK | | 5/31/2019 | | 0 | | (1) | 155 | | | 1,208 | | | 0 | | | 0 | | | 1,363 | | | 54 | | Pizza Hut III | | Retail | | Guymon | | OK | | 5/31/2019 | | — | | (1) | 155 | | | 1,208 | | | — | | | — | | | 1,363 | | | 88 | | Pizza Hut III | Pizza Hut III | | Retail | | Kalispell | | MT | | 5/31/2019 | | 0 | | (1) | 735 | | | 1,139 | | | 0 | | | 0 | | | 1,874 | | | 62 | | Pizza Hut III | | Retail | | Kalispell | | MT | | 5/31/2019 | | — | | (1) | 735 | | | 1,139 | | | — | | | — | | | 1,874 | | | 101 | | Pizza Hut III | Pizza Hut III | | Retail | | Missoula | | MT | | 5/31/2019 | | 0 | | (1) | 653 | | | 595 | | | 0 | | | 0 | | | 1,248 | | | 31 | | Pizza Hut III | | Retail | | Missoula | | MT | | 5/31/2019 | | — | | (1) | 653 | | | 595 | | | — | | | — | | | 1,248 | | | 50 | | Pizza Hut III | Pizza Hut III | | Retail | | Perryton | | TX | | 5/31/2019 | | 0 | | (1) | 309 | | | 1,429 | | | 0 | | | 0 | | | 1,738 | | | 66 | | Pizza Hut III | | Retail | | Perryton | | TX | | 5/31/2019 | | — | | (1) | 309 | | | 1,429 | | | — | | | — | | | 1,738 | | | 108 | | Pizza Hut III | Pizza Hut III | | Retail | | Sterling | | CO | | 5/31/2019 | | 0 | | (1) | 150 | | | 968 | | | 0 | | | 0 | | | 1,118 | | | 45 | | Pizza Hut III | | Retail | | Sterling | | CO | | 5/31/2019 | | — | | (1) | 150 | | | 968 | | | — | | | — | | | 1,118 | | | 73 | | Fresenius V | Fresenius V | | Retail | | Brookhaven | | MS | | 6/4/2019 | | 0 | | (1) | 581 | | | 1,548 | | | 0 | | | 16 | | | 2,145 | | | 78 | | Fresenius V | | Retail | | Brookhaven | | MS | | 6/4/2019 | | — | | (1) | 581 | | | 1,548 | | | — | | | 25 | | | 2,154 | | | 128 | | Fresenius V | Fresenius V | | Retail | | Centreville | | MS | | 6/4/2019 | | 0 | | (1) | 236 | | | 732 | | | 0 | | | 0 | | | 968 | | | 37 | | Fresenius V | | Retail | | Centreville | | MS | | 6/4/2019 | | — | | (1) | 236 | | | 732 | | | — | | | — | | | 968 | | | 61 | | Fresenius VI | Fresenius VI | | Retail | | Chicago | | IL | | 6/17/2019 | | 0 | | (1) | 313 | | | 1,110 | | | 0 | | | 0 | | | 1,423 | | | 48 | | Fresenius VI | | Retail | | Chicago | | IL | | 6/17/2019 | | — | | (1) | 313 | | | 1,110 | | | — | | | — | | | 1,423 | | | 80 | | Mountain Express VI | Mountain Express VI | | Retail | | Smackover | | AR | | 6/26/2019 | | 0 | | (1) | 1,519 | | | 841 | | | 0 | | | 0 | | | 2,360 | | | 45 | | Mountain Express VI | | Retail | | Smackover | | AR | | 6/26/2019 | | — | | (1) | 1,519 | | | 841 | | | — | | | — | | | 2,360 | | | 74 | | Pizza Hut III | Pizza Hut III | | Retail | | Woodward | | OK | | 6/27/2019 | | 0 | | (1) | 525 | | | 1,644 | | | 0 | | | 0 | | | 2,169 | | | 73 | | Pizza Hut III | | Retail | | Woodward | | OK | | 6/27/2019 | | — | | (1) | 525 | | | 1,644 | | | — | | | — | | | 2,169 | | | 122 | | Fresenius VII | Fresenius VII | | Retail | | Athens | | TX | | 6/28/2019 | | 0 | | (1) | 907 | | | 4,515 | | | 0 | | | 0 | | | 5,422 | | | 198 | | Fresenius VII | | Retail | | Athens | | TX | | 6/28/2019 | | — | | (1) | 907 | | | 4,515 | | | — | | | — | | | 5,422 | | | 329 | | Fresenius VII | Fresenius VII | | Retail | | Idabel | | OK | | 6/28/2019 | | 0 | | (1) | 298 | | | 2,319 | | | 0 | | | 0 | | | 2,617 | | | 104 | | Fresenius VII | | Retail | | Idabel | | OK | | 6/28/2019 | | — | | (1) | 298 | | | 2,319 | | | — | | | — | | | 2,617 | | | 174 | | Fresenius VII | Fresenius VII | | Retail | | Tyler | | TX | | 6/28/2019 | | 0 | | (1) | 314 | | | 1,677 | | | 0 | | | 0 | | | 1,991 | | | 78 | | Fresenius VII | | Retail | | Tyler | | TX | | 6/28/2019 | | — | | (1) | 314 | | | 1,677 | | | — | | | — | | | 1,991 | | | 130 | | Caliber Collision II | Caliber Collision II | | Retail | | Pueblo | | CO | | 8/5/2019 | | 0 | | (1) | 866 | | | 1,807 | | | 0 | | | 0 | | | 2,673 | | | 79 | | Caliber Collision II | | Retail | | Pueblo | | CO | | 8/5/2019 | | — | | (1) | 866 | | | 1,807 | | | — | | | — | | | 2,673 | | | 135 | | Dollar General XXV | Dollar General XXV | | Retail | | Brownsville | | KY | | 9/5/2019 | | 0 | | (1) | 170 | | | 915 | | | 0 | | | 0 | | | 1,085 | | | 42 | | Dollar General XXV | | Retail | | Brownsville | | KY | | 9/5/2019 | | — | | (1) | 170 | | | 915 | | | — | | | — | | | 1,085 | | | 73 | | Dollar General XXV | Dollar General XXV | | Retail | | Custer | | KY | | 9/5/2019 | | 0 | | (1) | 138 | | | 675 | | | 0 | | | 0 | | | 813 | | | 31 | | Dollar General XXV | | Retail | | Custer | | KY | | 9/5/2019 | | — | | (1) | 138 | | | 675 | | | — | | | — | | | 813 | | | 55 | | Dollar General XXV | Dollar General XXV | | Retail | | Elkton | | KY | | 9/5/2019 | | 0 | | (1) | 89 | | | 731 | | | 0 | | | 0 | | | 820 | | | 33 | | Dollar General XXV | | Retail | | Elkton | | KY | | 9/5/2019 | | — | | (1) | 89 | | | 731 | | | — | | | — | | | 820 | | | 57 | | Dollar General XXV | Dollar General XXV | | Retail | | Falls of Rough | | KY | | 9/5/2019 | | 0 | | (1) | 141 | | | 692 | | | 0 | | | 0 | | | 833 | | | 29 | | Dollar General XXV | | Retail | | Falls of Rough | | KY | | 9/5/2019 | | — | | (1) | 141 | | | 692 | | | — | | | — | | | 833 | | | 50 | | Dollar General XXV | Dollar General XXV | | Retail | | Sedalia | | KY | | 9/5/2019 | | 0 | | (1) | 177 | | | 678 | | | 0 | | | 0 | | | 855 | | | 32 | | Dollar General XXV | | Retail | | Sedalia | | KY | | 9/5/2019 | | — | | (1) | 177 | | | 678 | | | — | | | — | | | 855 | | | 56 | | Dollar General XXIV | Dollar General XXIV | | Retail | | Clarksville | | IA | | 9/6/2019 | | 0 | | (1) | 80 | | | 1,023 | | | 0 | | | 0 | | | 1,103 | | | 39 | | Dollar General XXIV | | Retail | | Clarksville | | IA | | 9/6/2019 | | — | | (1) | 80 | | | 1,023 | | | — | | | — | | | 1,103 | | | 68 | | Dollar General XXIV | Dollar General XXIV | | Retail | | Lincoln | | MI | | 9/6/2019 | | 0 | | (1) | 90 | | | 1,006 | | | 0 | | | 0 | | | 1,096 | | | 52 | | Dollar General XXIV | | Retail | | Lincoln | | MI | | 9/6/2019 | | — | | (1) | 90 | | | 1,006 | | | — | | | — | | | 1,096 | | | 91 | | Dollar General XXIV | Dollar General XXIV | | Retail | | Tabor | | IA | | 9/6/2019 | | 0 | | (9) | 101 | | | 907 | | | 0 | | | 0 | | | 1,008 | | | 51 | | Dollar General XXIV | | Retail | | Tabor | | IA | | 9/6/2019 | | — | | (6) | 101 | | | 907 | | | — | | | — | | | 1,008 | | | 90 | | Mister Carwash I | Mister Carwash I | | Retail | | Athens | | GA | | 9/12/2019 | | 0 | | (10) | 1,892 | | | 2,350 | | | 0 | | | 0 | | | 4,242 | | | 131 | | Mister Carwash I | | Retail | | Athens | | GA | | 9/12/2019 | | — | | (6) | 1,892 | | | 2,350 | | | — | | | — | | | 4,242 | | | 230 | | Mister Carwash I | Mister Carwash I | | Retail | | Cumming | | GA | | 9/12/2019 | | 0 | | (10) | 1,363 | | | 2,730 | | | 0 | | | 0 | | | 4,093 | | | 142 | | Mister Carwash I | | Retail | | Cumming | | GA | | 9/12/2019 | | — | | (6) | 1,363 | | | 2,730 | | | — | | | — | | | 4,093 | | | 249 | | Mister Carwash I | Mister Carwash I | | Retail | | Monroe | | GA | | 9/12/2019 | | 0 | | (10) | 1,376 | | | 2,120 | | | 0 | | | 0 | | | 3,496 | | | 120 | | Mister Carwash I | | Retail | | Monroe | | GA | | 9/12/2019 | | — | | (6) | 1,376 | | | 2,120 | | | — | | | — | | | 3,496 | | | 210 | | Dollar General XXIV | Dollar General XXIV | | Retail | | Assumption | | IL | | 9/20/2019 | | 0 | | (9) | 111 | | | 885 | | | 0 | | | 0 | | | 996 | | | 42 | | Dollar General XXIV | | Retail | | Assumption | | IL | | 9/20/2019 | | — | | (6) | 111 | | | 885 | | | — | | | — | | | 996 | | | 76 | | Dollar General XXIV | Dollar General XXIV | | Retail | | Curtis | | MI | | 9/20/2019 | | 0 | | (1) | 100 | | | 986 | | | 0 | | | 0 | | | 1,086 | | | 47 | | Dollar General XXIV | | Retail | | Curtis | | MI | | 9/20/2019 | | — | | (1) | 100 | | | 986 | | | — | | | — | | | 1,086 | | | 85 | | Dollar General XXIV | Dollar General XXIV | | Retail | | Harrisville | | MI | | 9/20/2019 | | 0 | | (9) | 209 | | | 964 | | | 0 | | | 0 | | | 1,173 | | | 50 | | Dollar General XXIV | | Retail | | Harrisville | | MI | | 9/20/2019 | | — | | (6) | 209 | | | 964 | | | — | | | — | | | 1,173 | | | 91 | | Dollar General XXIV | Dollar General XXIV | | Retail | | Mora | | MN | | 9/20/2019 | | 0 | | (9) | 192 | | | 976 | | | 0 | | | 0 | | | 1,168 | | | 43 | | Dollar General XXIV | | Retail | | Mora | | MN | | 9/20/2019 | | — | | (6) | 192 | | | 976 | | | — | | | — | | | 1,168 | | | 77 | |
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
Schedule III — Real Estate and Accumulated Depreciation — Part I December 31, 20202021
| (In thousands) | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2020 [12] [13] | | | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2021 [9] [10] | | | Property | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2020 | | Land | | Building and Improvements | | Land [11] | | Building and Improvements [11] | | Accumulated Depreciation [14] [15] | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2021 | | Land | | Building and Improvements | | Land | | Building and Improvements | | Accumulated Depreciation [11] [12] | Dollar General XXIV | Dollar General XXIV | | Retail | | Washburn | | IL | | 9/20/2019 | | 0 | | (9) | 140 | | | 868 | | | 0 | | | 0 | | | 1,008 | | | 38 | | Dollar General XXIV | | Retail | | Washburn | | IL | | 9/20/2019 | | — | | (6) | 140 | | | 868 | | | — | | | — | | | 1,008 | | | 68 | | Checkers I | Checkers I | | Retail | | Dublin | | GA | | 9/25/2019 | | 0 | | (1) | 161 | | | 746 | | | 0 | | | 0 | | | 907 | | | 36 | | Checkers I | | Retail | | Dublin | | GA | | 9/25/2019 | | — | | (1) | 161 | | | 746 | | | — | | | — | | | 907 | | | 62 | | DaVita III | DaVita III | | Retail | | El Paso | | TX | | 9/27/2019 | | 0 | | (1) | 331 | | | 2,954 | | | 0 | | | 0 | | | 3,285 | | | 108 | | DaVita III | | Retail | | El Paso | | TX | | 9/27/2019 | | — | | (1) | 331 | | | 2,954 | | | — | | | — | | | 3,285 | | | 195 | | Dialysis II | Dialysis II | | Retail | | Baltimore | | MD | | 9/30/2019 | | 0 | | (1) | 860 | | | 614 | | | 0 | | | 0 | | | 1,474 | | | 27 | | Dialysis II | | Retail | | Baltimore | | MD | | 9/30/2019 | | — | | (1) | 860 | | | 614 | | | — | | | — | | | 1,474 | | | 49 | | Dialysis II | Dialysis II | | Retail | | Brunswick | | OH | | 9/30/2019 | | 0 | | (1) | 429 | | | 2,327 | | | 0 | | | 0 | | | 2,756 | | | 92 | | Dialysis II | | Retail | | Brunswick | | OH | | 9/30/2019 | | — | | (1) | 429 | | | 2,327 | | | — | | | — | | | 2,756 | | | 166 | | Dialysis II | Dialysis II | | Retail | | Burgaw | | NC | | 9/30/2019 | | 0 | | (1) | 60 | | | 1,410 | | | 0 | | | 0 | | | 1,470 | | | 54 | | Dialysis II | | Retail | | Burgaw | | NC | | 9/30/2019 | | — | | (1) | 60 | | | 1,410 | | | — | | | — | | | 1,470 | | | 96 | | Dialysis II | Dialysis II | | Retail | | Detroit | | MI | | 9/30/2019 | | 0 | | (1) | 283 | | | 1,964 | | | 0 | | | 0 | | | 2,247 | | | 78 | | Dialysis II | | Retail | | Detroit | | MI | | 9/30/2019 | | — | | (1) | 283 | | | 1,964 | | | — | | | — | | | 2,247 | | | 141 | | Dialysis II | Dialysis II | | Retail | | Elizabethtown | | NC | | 9/30/2019 | | 0 | | (1) | 40 | | | 2,327 | | | 0 | | | 0 | | | 2,367 | | | 81 | | Dialysis II | | Retail | | Elizabethtown | | NC | | 9/30/2019 | | — | | (1) | 40 | | | 2,327 | | | — | | | — | | | 2,367 | | | 146 | | Dialysis II | Dialysis II | | Retail | | Goose Creek | | SC | | 9/30/2019 | | 0 | | (1) | 328 | | | 1,651 | | | 0 | | | 0 | | | 1,979 | | | 59 | | Dialysis II | | Retail | | Goose Creek | | SC | | 9/30/2019 | | — | | (1) | 328 | | | 1,651 | | | — | | | — | | | 1,979 | | | 106 | | Dialysis II | Dialysis II | | Retail | | Greenville | | SC | | 9/30/2019 | | 0 | | (1) | 1,132 | | | 1,083 | | | 0 | | | 0 | | | 2,215 | | | 50 | | Dialysis II | | Retail | | Greenville | | SC | | 9/30/2019 | | — | | (1) | 1,132 | | | 1,083 | | | — | | | — | | | 2,215 | | | 90 | | Dialysis II | Dialysis II | | Retail | | Jackson | | TN | | 9/30/2019 | | 0 | | (1) | 256 | | | 1,329 | | | 0 | | | 0 | | | 1,585 | | | 61 | | Dialysis II | | Retail | | Jackson | | TN | | 9/30/2019 | | — | | (1) | 256 | | | 1,329 | | | — | | | — | | | 1,585 | | | 111 | | Dialysis II | Dialysis II | | Retail | | Kyle | | TX | | 9/30/2019 | | 0 | | (1) | 416 | | | 2,228 | | | 0 | | | 0 | | | 2,644 | | | 88 | | Dialysis II | | Retail | | Kyle | | TX | | 9/30/2019 | | — | | (1) | 416 | | | 2,228 | | | — | | | — | | | 2,644 | | | 158 | | Dialysis II | Dialysis II | | Retail | | Las Vegas | | NV | | 9/30/2019 | | 0 | | (1) | 883 | | | 3,869 | | | 0 | | | 0 | | | 4,752 | | | 142 | | Dialysis II | | Retail | | Las Vegas | | NV | | 9/30/2019 | | — | | (1) | 883 | | | 3,869 | | | — | | | — | | | 4,752 | | | 255 | | Dialysis II | Dialysis II | | Retail | | Lexington | | TN | | 9/30/2019 | | 0 | | (1) | 111 | | | 1,128 | | | 0 | | | 0 | | | 1,239 | | | 49 | | Dialysis II | | Retail | | Lexington | | TN | | 9/30/2019 | | — | | (1) | 111 | | | 1,128 | | | — | | | — | | | 1,239 | | | 88 | | Dialysis II | Dialysis II | | Retail | | Merrillville | | IN | | 9/30/2019 | | 0 | | (1) | 639 | | | 1,128 | | | 0 | | | 0 | | | 1,767 | | | 45 | | Dialysis II | | Retail | | Merrillville | | IN | | 9/30/2019 | | — | | (1) | 639 | | | 1,128 | | | — | | | — | | | 1,767 | | | 81 | | Dialysis II | Dialysis II | | Retail | | New Orleans | | LA | | 9/30/2019 | | 0 | | (1) | 559 | | | 1,305 | | | 0 | | | 80 | | | 1,944 | | | 52 | | Dialysis II | | Retail | | New Orleans | | LA | | 9/30/2019 | | — | | (1) | 559 | | | 1,305 | | | — | | | 80 | | | 1,944 | | | 97 | | Dialysis II | Dialysis II | | Retail | | North Charleston | | SC | | 9/30/2019 | | 0 | | (1) | 424 | | | 1,564 | | | 0 | | | 0 | | | 1,988 | | | 58 | | Dialysis II | | Retail | | North Charleston | | SC | | 9/30/2019 | | — | | (1) | 424 | | | 1,564 | | | — | | | — | | | 1,988 | | | 104 | | Dialysis II | Dialysis II | | Retail | | Parma | | OH | | 9/30/2019 | | 0 | | (1) | 208 | | | 1,271 | | | 0 | | | 7 | | | 1,486 | | | 45 | | Dialysis II | | Retail | | Parma | | OH | | 9/30/2019 | | — | | (1) | 208 | | | 1,271 | | | — | | | 7 | | | 1,486 | | | 82 | | Dialysis II | Dialysis II | | Retail | | Rocky River | | OH | | 9/30/2019 | | 0 | | (1) | 327 | | | 1,782 | | | 0 | | | 0 | | | 2,109 | | | 62 | | Dialysis II | | Retail | | Rocky River | | OH | | 9/30/2019 | | — | | (1) | 327 | | | 1,782 | | | — | | | — | | | 2,109 | | | 111 | | Dialysis II | Dialysis II | | Retail | | Seguin | | TX | | 9/30/2019 | | 0 | | (1) | 91 | | | 1,889 | | | 0 | | | 0 | | | 1,980 | | | 71 | | Dialysis II | | Retail | | Seguin | | TX | | 9/30/2019 | | — | | (1) | 91 | | | 1,889 | | | — | | | — | | | 1,980 | | | 127 | | Dialysis II | Dialysis II | | Retail | | Shallotte | | NC | | 9/30/2019 | | 0 | | (1) | 174 | | | 1,308 | | | 0 | | | 0 | | | 1,482 | | | 48 | | Dialysis II | | Retail | | Shallotte | | NC | | 9/30/2019 | | — | | (1) | 174 | | | 1,308 | | | — | | | — | | | 1,482 | | | 86 | | Dialysis II | Dialysis II | | Retail | | Spartanburg | | SC | | 9/30/2019 | | 0 | | (1) | 188 | | | 1,133 | | | 0 | | | 0 | | | 1,321 | | | 47 | | Dialysis II | | Retail | | Spartanburg | | SC | | 9/30/2019 | | — | | (1) | 188 | | | 1,133 | | | — | | | — | | | 1,321 | | | 85 | | Dialysis II | Dialysis II | | Retail | | Albuquerque | | NM | | 9/30/2019 | | 0 | | (1) | 214 | | | 3,136 | | | 0 | | | 1,676 | | | 5,026 | | | 160 | | Dialysis II | | Retail | | Albuquerque | | NM | | 9/30/2019 | | — | | (1) | 214 | | | 3,136 | | | — | | | 1,676 | | | 5,026 | | | 289 | | Dialysis II | Dialysis II | | Retail | | Anchorage | | AK | | 9/30/2019 | | 0 | | (1) | 1,315 | | | 4,108 | | | 0 | | | 0 | | | 5,423 | | | 157 | | Dialysis II | | Retail | | Anchorage | | AK | | 9/30/2019 | | — | | (1) | 1,315 | | | 4,108 | | | — | | | — | | | 5,423 | | | 283 | | Dialysis II | Dialysis II | | Retail | | Anniston | | AL | | 9/30/2019 | | 0 | | (1) | 322 | | | 3,782 | | | 0 | | | 0 | | | 4,104 | | | 132 | | Dialysis II | | Retail | | Anniston | | AL | | 9/30/2019 | | — | | (1) | 322 | | | 3,782 | | | — | | | — | | | 4,104 | | | 237 | | Dialysis II | Dialysis II | | Retail | | Augusta | | GA | | 9/30/2019 | | 0 | | (1) | 364 | | | 1,803 | | | 0 | | | 0 | | | 2,167 | | | 68 | | Dialysis II | | Retail | | Augusta | | GA | | 9/30/2019 | | — | | (1) | 364 | | | 1,803 | | | — | | | — | | | 2,167 | | | 122 | | Dialysis II | Dialysis II | | Retail | | Belleville | | IL | | 9/30/2019 | | 0 | | (1) | 129 | | | 2,271 | | | 0 | | | 0 | | | 2,400 | | | 82 | | Dialysis II | | Retail | | Belleville | | IL | | 9/30/2019 | | — | | (1) | 129 | | | 2,271 | | | — | | | — | | | 2,400 | | | 147 | | Dialysis II | Dialysis II | | Retail | | Berea | | KY | | 9/30/2019 | | 0 | | (1) | 159 | | | 2,079 | | | 0 | | | 0 | | | 2,238 | | | 74 | | Dialysis II | | Retail | | Berea | | KY | | 9/30/2019 | | — | | (1) | 159 | | | 2,079 | | | — | | | — | | | 2,238 | | | 133 | | Dialysis II | Dialysis II | | Retail | | Bowling Green | | KY | | 9/30/2019 | | 0 | | (1) | 442 | | | 2,865 | | | 0 | | | 0 | | | 3,307 | | | 105 | | Dialysis II | | Retail | | Bowling Green | | KY | | 9/30/2019 | | — | | (1) | 442 | | | 2,865 | | | — | | | — | | | 3,307 | | | 188 | | Dialysis II | Dialysis II | | Retail | | Brunswick | | GA | | 9/30/2019 | | 0 | | (1) | 376 | | | 1,734 | | | 0 | | | 0 | | | 2,110 | | | 62 | | Dialysis II | | Retail | | Brunswick | | GA | | 9/30/2019 | | — | | (1) | 376 | | | 1,734 | | | — | | | — | | | 2,110 | | | 112 | | Dialysis II | Dialysis II | | Retail | | Charlotte | | NC | | 9/30/2019 | | 0 | | (1) | 906 | | | 1,894 | | | 0 | | | 10 | | | 2,810 | | | 71 | | Dialysis II | | Retail | | Charlotte | | NC | | 9/30/2019 | | — | | (1) | 906 | | | 1,894 | | | — | | | 10 | | | 2,810 | | | 129 | | Dialysis II | Dialysis II | | Retail | | Conway | | NH | | 9/30/2019 | | 0 | | (1) | 70 | | | 1,370 | | | 0 | | | 0 | | | 1,440 | | | 60 | | Dialysis II | | Retail | | Conway | | NH | | 9/30/2019 | | — | | (1) | 70 | | | 1,370 | | | — | | | — | | | 1,440 | | | 108 | | Dialysis II | Dialysis II | | Retail | | Diamondhead | | MS | | 9/30/2019 | | 0 | | (1) | 91 | | | 2,693 | | | 0 | | | 0 | | | 2,784 | | | 97 | | Dialysis II | | Retail | | Diamondhead | | MS | | 9/30/2019 | | — | | (1) | 91 | | | 2,693 | | | — | | | 13 | | | 2,797 | | | 175 | | Dialysis II | Dialysis II | | Retail | | Durham | | NC | | 9/30/2019 | | 0 | | (1) | 626 | | | 1,737 | | | 0 | | | 13 | | | 2,376 | | | 66 | | Dialysis II | | Retail | | Durham | | NC | | 9/30/2019 | | — | | (1) | 626 | | | 1,737 | | | — | | | 26 | | | 2,389 | | | 121 | | Dialysis II | | Retail | | Etters | | PA | | 9/30/2019 | | 0 | | (1) | 643 | | | 2,926 | | | 0 | | | 0 | | | 3,569 | | | 107 | | |
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
Schedule III — Real Estate and Accumulated Depreciation — Part I December 31, 20202021
| (In thousands) | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2020 [12] [13] | | | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2021 [9] [10] | | | Property | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2020 | | Land | | Building and Improvements | | Land [11] | | Building and Improvements [11] | | Accumulated Depreciation [14] [15] | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2021 | | Land | | Building and Improvements | | Land | | Building and Improvements | | Accumulated Depreciation [11] [12] | Dialysis II | | Dialysis II | | Retail | | Etters | | PA | | 9/30/2019 | | — | | (1) | 643 | | | 2,926 | | | — | | | — | | | 3,569 | | | 192 | | Dialysis II | Dialysis II | | Retail | | Gary | | IN | | 9/30/2019 | | 0 | | (1) | 241 | | | 2,023 | | | 0 | | | 0 | | | 2,264 | | | 71 | | Dialysis II | | Retail | | Gary | | IN | | 9/30/2019 | | — | | (1) | 241 | | | 2,023 | | | — | | | — | | | 2,264 | | | 128 | | Dialysis II | Dialysis II | | Retail | | Hopkinsville | | KY | | 9/30/2019 | | 0 | | (1) | 62 | | | 2,785 | | | 0 | | | 0 | | | 2,847 | | | 99 | | Dialysis II | | Retail | | Hopkinsville | | KY | | 9/30/2019 | | — | | (1) | 62 | | | 2,785 | | | — | | | — | | | 2,847 | | | 178 | | Dialysis II | Dialysis II | | Retail | | Lexington | | KY | | 9/30/2019 | | 0 | | (1) | 439 | | | 2,277 | | | 0 | | | 0 | | | 2,716 | | | 84 | | Dialysis II | | Retail | | Lexington | | KY | | 9/30/2019 | | — | | (1) | 439 | | | 2,277 | | | — | | | — | | | 2,716 | | | 152 | | Dialysis II | Dialysis II | | Retail | | Madisonville | | KY | | 9/30/2019 | | 0 | | (1) | 134 | | | 1,257 | | | 0 | | | 0 | | | 1,391 | | | 46 | | Dialysis II | | Retail | | Madisonville | | KY | | 9/30/2019 | | — | | (1) | 134 | | | 1,257 | | | — | | | — | | | 1,391 | | | 83 | | Dialysis II | Dialysis II | | Retail | | Mentor | | OH | | 9/30/2019 | | 0 | | (1) | 102 | | | 1,921 | | | 0 | | | 0 | | | 2,023 | | | 77 | | Dialysis II | | Retail | | Mentor | | OH | | 9/30/2019 | | — | | (1) | 102 | | | 1,921 | | | — | | | — | | | 2,023 | | | 139 | | Dialysis II | Dialysis II | | Retail | | Monticello | | KY | | 9/30/2019 | | 0 | | (1) | 235 | | | 2,119 | | | 0 | | | 0 | | | 2,354 | | | 79 | | Dialysis II | | Retail | | Monticello | | KY | | 9/30/2019 | | — | | (1) | 235 | | | 2,119 | | | — | | | — | | | 2,354 | | | 142 | | Dialysis II | Dialysis II | | Retail | | New Castle | | PA | | 9/30/2019 | | 0 | | (1) | 153 | | | 1,135 | | | 0 | | | 0 | | | 1,288 | | | 42 | | Dialysis II | | Retail | | New Castle | | PA | | 9/30/2019 | | — | | (1) | 153 | | | 1,135 | | | — | | | — | | | 1,288 | | | 76 | | Dialysis II | Dialysis II | | Retail | | Palmdale | | CA | | 9/30/2019 | | 0 | | (1) | 414 | | | 1,887 | | | 0 | | | 0 | | | 2,301 | | | 72 | | Dialysis II | | Retail | | Palmdale | | CA | | 9/30/2019 | | — | | (1) | 414 | | | 1,887 | | | — | | | — | | | 2,301 | | | 129 | | Dialysis II | Dialysis II | | Retail | | Radcliff | | KY | | 9/30/2019 | | 0 | | (1) | 262 | | | 2,391 | | | 0 | | | 0 | | | 2,653 | | | 87 | | Dialysis II | | Retail | | Radcliff | | KY | | 9/30/2019 | | — | | (1) | 262 | | | 2,391 | | | — | | | — | | | 2,653 | | | 156 | | Dialysis II | Dialysis II | | Retail | | Richmond | | VA | | 9/30/2019 | | 0 | | (1) | 283 | | | 2,111 | | | 0 | | | 0 | | | 2,394 | | | 75 | | Dialysis II | | Retail | | Richmond | | VA | | 9/30/2019 | | — | | (1) | 283 | | | 2,111 | | | — | | | 276 | | | 2,670 | | | 136 | | Dialysis II | Dialysis II | | Retail | | River Forest | | IL | | 9/30/2019 | | 0 | | (1) | 527 | | | 3,646 | | | 0 | | | 0 | | | 4,173 | | | 121 | | Dialysis II | | Retail | | River Forest | | IL | | 9/30/2019 | | — | | (1) | 527 | | | 3,646 | | | — | | | 26 | | | 4,199 | | | 219 | | Dialysis II | Dialysis II | | Retail | | Roanoke | | VA | | 9/30/2019 | | 0 | | (1) | 456 | | | 2,143 | | | 0 | | | 0 | | | 2,599 | | | 79 | | Dialysis II | | Retail | | Roanoke | | VA | | 9/30/2019 | | — | | (1) | 456 | | | 2,143 | | | — | | | — | | | 2,599 | | | 141 | | Dialysis II | Dialysis II | | Retail | | Rocky Mount | | NC | | 9/30/2019 | | 0 | | (1) | 143 | | | 3,515 | | | 0 | | | 0 | | | 3,658 | | | 141 | | Dialysis II | | Retail | | Rocky Mount | | NC | | 9/30/2019 | | — | | (1) | 143 | | | 3,515 | | | — | | | — | | | 3,658 | | | 254 | | Dialysis II | Dialysis II | | Retail | | Salem | | OH | | 9/30/2019 | | 0 | | (1) | 264 | | | 2,457 | | | 0 | | | 0 | | | 2,721 | | | 96 | | Dialysis II | | Retail | | Salem | | OH | | 9/30/2019 | | — | | (1) | 264 | | | 2,457 | | | — | | | 4 | | | 2,725 | | | 173 | | Dialysis II | Dialysis II | | Retail | | Salem | | VA | | 9/30/2019 | | 0 | | (1) | 326 | | | 2,083 | | | 0 | | | 7 | | | 2,416 | | | 70 | | Dialysis II | | Retail | | Salem | | VA | | 9/30/2019 | | — | | (1) | 326 | | | 2,083 | | | — | | | 17 | | | 2,426 | | | 127 | | Dialysis II | Dialysis II | | Retail | | Sarasota | | FL | | 9/30/2019 | | 0 | | (1) | 650 | | | 1,914 | | | 0 | | | 0 | | | 2,564 | | | 67 | | Dialysis II | | Retail | | Sarasota | | FL | | 9/30/2019 | | — | | (1) | 650 | | | 1,914 | | | — | | | 3 | | | 2,567 | | | 121 | | Dialysis II | Dialysis II | | Retail | | Summerville | | SC | | 9/30/2019 | | 0 | | (1) | 317 | | | 1,826 | | | 0 | | | 0 | | | 2,143 | | | 65 | | Dialysis II | | Retail | | Summerville | | SC | | 9/30/2019 | | — | | (1) | 317 | | | 1,826 | | | — | | | — | | | 2,143 | | | 117 | | Dialysis II | Dialysis II | | Retail | | Anderson | | IN | | 9/30/2019 | | 0 | | (1) | 375 | | | 1,530 | | | 0 | | | 0 | | | 1,905 | | | 58 | | Dialysis II | | Retail | | Anderson | | IN | | 9/30/2019 | | — | | (1) | 375 | | | 1,530 | | | — | | | — | | | 1,905 | | | 105 | | Dollar General XXIV | Dollar General XXIV | | Retail | | Potomac | | IL | | 10/28/2019 | | 0 | | (9) | 153 | | | 858 | | | 0 | | | 0 | | | 1,011 | | | 41 | | Dollar General XXIV | | Retail | | Potomac | | IL | | 10/28/2019 | | — | | (6) | 153 | | | 858 | | | — | | | — | | | 1,011 | | | 76 | | Mister Carwash II | Mister Carwash II | | Retail | | Canton | | GA | | 11/7/2019 | | 0 | | (10) | 3,105 | | | 2,291 | | | 0 | | | 0 | | | 5,396 | | | 121 | | Mister Carwash II | | Retail | | Canton | | GA | | 11/7/2019 | | — | | (6) | 3,105 | | | 2,291 | | | — | | | — | | | 5,396 | | | 225 | | Mister Carwash II | Mister Carwash II | | Retail | | Johns Creek | | GA | | 11/7/2019 | | 0 | | (10) | 1,664 | | | 1,833 | | | 0 | | | 0 | | | 3,497 | | | 91 | | Mister Carwash II | | Retail | | Johns Creek | | GA | | 11/7/2019 | | — | | (6) | 1,664 | | | 1,833 | | | — | | | — | | | 3,497 | | | 169 | | Advance Auto IV | Advance Auto IV | | Retail | | Burlington | | WI | | 12/11/2019 | | 0 | | (1) | 259 | | | 1,090 | | | 0 | | | 0 | | | 1,349 | | | 38 | | Advance Auto IV | | Retail | | Burlington | | WI | | 12/11/2019 | | — | | (1) | 259 | | | 1,090 | | | — | | | — | | | 1,349 | | | 72 | | Advance Auto IV | Advance Auto IV | | Retail | | Greenville | | OH | | 12/11/2019 | | 0 | | (1) | 207 | | | 438 | | | 0 | | | 0 | | | 645 | | | 18 | | Advance Auto IV | | Retail | | Greenville | | OH | | 12/11/2019 | | — | | (1) | 207 | | | 438 | | | — | | | — | | | 645 | | | 35 | | Advance Auto IV | Advance Auto IV | | Retail | | Huntingdon | | PA | | 12/11/2019 | | 0 | | (1) | 160 | | | 569 | | | 0 | | | 0 | | | 729 | | | 26 | | Advance Auto IV | | Retail | | Huntingdon | | PA | | 12/11/2019 | | — | | (1) | 160 | | | 569 | | | — | | | — | | | 729 | | | 50 | | Advance Auto IV | Advance Auto IV | | Retail | | Marshfield | | WI | | 12/11/2019 | | 0 | | (1) | 244 | | | 1,013 | | | 0 | | | 0 | | | 1,257 | | | 34 | | Advance Auto IV | | Retail | | Marshfield | | WI | | 12/11/2019 | | — | | (1) | 244 | | | 1,013 | | | — | | | — | | | 1,257 | | | 65 | | Advance Auto IV | Advance Auto IV | | Retail | | Piqua | | OH | | 12/11/2019 | | 0 | | (1) | 130 | | | 575 | | | 0 | | | 0 | | | 705 | | | 25 | | Advance Auto IV | | Retail | | Piqua | | OH | | 12/11/2019 | | — | | (1) | 130 | | | 575 | | | — | | | — | | | 705 | | | 47 | | Advance Auto IV | Advance Auto IV | | Retail | | Selma | | AL | | 12/11/2019 | | 0 | | (1) | 91 | | | 572 | | | 0 | | | 0 | | | 663 | | | 24 | | Advance Auto IV | | Retail | | Selma | | AL | | 12/11/2019 | | — | | (1) | 91 | | | 572 | | | — | | | — | | | 663 | | | 46 | | Advance Auto IV | Advance Auto IV | | Retail | | Tomah | | WI | | 12/11/2019 | | 0 | | (1) | 286 | | | 842 | | | 0 | | | 0 | | | 1,128 | | | 28 | | Advance Auto IV | | Retail | | Tomah | | WI | | 12/11/2019 | | — | | (1) | 286 | | | 842 | | | — | | | — | | | 1,128 | | | 54 | | Advance Auto IV | Advance Auto IV | | Retail | | Waynesboro | | PA | | 12/11/2019 | | 0 | | (1) | 137 | | | 832 | | | 0 | | | 0 | | | 969 | | | 30 | | Advance Auto IV | | Retail | | Waynesboro | | PA | | 12/11/2019 | | — | | (1) | 137 | | | 832 | | | — | | | — | | | 969 | | | 58 | | Advance Auto IV | Advance Auto IV | | Retail | | Waynesburg | | PA | | 12/11/2019 | | 0 | | (1) | 214 | | | 611 | | | 0 | | | 0 | | | 825 | | | 29 | | Advance Auto IV | | Retail | | Waynesburg | | PA | | 12/11/2019 | | — | | (1) | 214 | | | 611 | | | — | | | — | | | 825 | | | 56 | | Advance Auto V | Advance Auto V | | Retail | | Cedar Grove | | WV | | 12/13/2019 | | 0 | | (1) | 302 | | | 552 | | | 0 | | | 0 | | | 854 | | | 18 | | Advance Auto V | | Retail | | Cedar Grove | | WV | | 12/13/2019 | | — | | (1) | 302 | | | 552 | | | — | | | — | | | 854 | | | 35 | | Advance Auto V | Advance Auto V | | Retail | | Danville | | WV | | 12/13/2019 | | 0 | | (1) | 147 | | | 641 | | | 0 | | | 0 | | | 788 | | | 21 | | Advance Auto V | | Retail | | Danville | | WV | | 12/13/2019 | | — | | (1) | 147 | | | 641 | | | — | | | — | | | 788 | | | 40 | | Advance Auto V | Advance Auto V | | Retail | | Greenup | | KY | | 12/13/2019 | | 0 | | (1) | 263 | | | 408 | | | 0 | | | 0 | | | 671 | | | 17 | | Advance Auto V | | Retail | | Greenup | | KY | | 12/13/2019 | | — | | (1) | 263 | | | 408 | | | — | | | — | | | 671 | | | 32 | | Advance Auto V | Advance Auto V | | Retail | | Hamlin | | WV | | 12/13/2019 | | 0 | | (1) | 162 | | | 670 | | | 0 | | | 0 | | | 832 | | | 23 | | Advance Auto V | | Retail | | Hamlin | | WV | | 12/13/2019 | | — | | (1) | 162 | | | 670 | | | — | | | — | | | 832 | | | 45 | | Advance Auto V | Advance Auto V | | Retail | | Milton | | WV | | 12/13/2019 | | 0 | | (1) | 315 | | | 678 | | | 0 | | | 0 | | | 993 | | | 23 | | Advance Auto V | | Retail | | Milton | | WV | | 12/13/2019 | | — | | (1) | 315 | | | 678 | | | — | | | — | | | 993 | | | 45 | | Advance Auto V | | Retail | | Moundsville | | WV | | 12/13/2019 | | 0 | | (1) | 463 | | | 1,314 | | | 0 | | | 0 | | | 1,777 | | | 42 | | | Advance Auto V | | Retail | | Point Pleasant | | WV | | 12/13/2019 | | 0 | | (1) | 346 | | | 721 | | | 0 | | | 0 | | | 1,067 | | | 30 | | |
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
Schedule III — Real Estate and Accumulated Depreciation — Part I December 31, 20202021
| (In thousands) | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2020 [12] [13] | | | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2021 [9] [10] | | | Property | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2020 | | Land | | Building and Improvements | | Land [11] | | Building and Improvements [11] | | Accumulated Depreciation [14] [15] | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2021 | | Land | | Building and Improvements | | Land | | Building and Improvements | | Accumulated Depreciation [11] [12] | Advance Auto V | | Advance Auto V | | Retail | | Moundsville | | WV | | 12/13/2019 | | — | | (1) | 463 | | | 1,314 | | | — | | | — | | | 1,777 | | | 81 | | Advance Auto V | | Advance Auto V | | Retail | | Point Pleasant | | WV | | 12/13/2019 | | — | | (1) | 346 | | | 721 | | | — | | | — | | | 1,067 | | | 57 | | Advance Auto V | Advance Auto V | | Retail | | Sissonville | | WV | | 12/13/2019 | | 0 | | (1) | 350 | | | 923 | | | 0 | | | 0 | | | 1,273 | | | 30 | | Advance Auto V | | Retail | | Sissonville | | WV | | 12/13/2019 | | — | | (1) | 350 | | | 923 | | | — | | | — | | | 1,273 | | | 58 | | Advance Auto V | Advance Auto V | | Retail | | South Williamson | | KY | | 12/13/2019 | | 0 | | (1) | 330 | | | 891 | | | 0 | | | 0 | | | 1,221 | | | 29 | | Advance Auto V | | Retail | | South Williamson | | KY | | 12/13/2019 | | — | | (1) | 330 | | | 891 | | | — | | | — | | | 1,221 | | | 55 | | Advance Auto V | Advance Auto V | | Retail | | Wellsburg | | WV | | 12/13/2019 | | 0 | | (1) | 235 | | | 442 | | | 0 | | | 0 | | | 677 | | | 17 | | Advance Auto V | | Retail | | Wellsburg | | WV | | 12/13/2019 | | — | | (1) | 235 | | | 442 | | | — | | | — | | | 677 | | | 32 | | Advance Auto V | Advance Auto V | | Retail | | West Charleston | | WV | | 12/13/2019 | | 0 | | (1) | 224 | | | 873 | | | 0 | | | 0 | | | 1,097 | | | 29 | | Advance Auto V | | Retail | | West Charleston | | WV | | 12/13/2019 | | — | | (1) | 224 | | | 873 | | | — | | | — | | | 1,097 | | | 55 | | Advance Auto IV | Advance Auto IV | | Retail | | Indianapolis | | IN | | 12/17/2019 | | 0 | | (1) | 215 | | | 543 | | | 0 | | | 0 | | | 758 | | | 19 | | Advance Auto IV | | Retail | | Indianapolis | | IN | | 12/17/2019 | | — | | (1) | 215 | | | 543 | | | — | | | — | | | 758 | | | 38 | | Advance Auto IV | Advance Auto IV | | Retail | | Menomonie | | WI | | 12/17/2019 | | 0 | | (1) | 350 | | | 696 | | | 0 | | | 0 | | | 1,046 | | | 24 | | Advance Auto IV | | Retail | | Menomonie | | WI | | 12/17/2019 | | — | | (1) | 350 | | | 696 | | | — | | | — | | | 1,046 | | | 48 | | Advance Auto IV | Advance Auto IV | | Retail | | Montgomery | | AL | | 12/20/2019 | | 0 | | (1) | 92 | | | 710 | | | 0 | | | 0 | | | 802 | | | 23 | | Advance Auto IV | | Retail | | Montgomery | | AL | | 12/20/2019 | | — | | (1) | 92 | | | 710 | | | — | | | 4 | | | 806 | | | 46 | | Advance Auto IV | Advance Auto IV | | Retail | | Springfield | | OH | | 12/20/2019 | | 0 | | (1) | 91 | | | 607 | | | 0 | | | 0 | | | 698 | | | 20 | | Advance Auto IV | | Retail | | Springfield | | OH | | 12/20/2019 | | — | | (1) | 91 | | | 607 | | | — | | | — | | | 698 | | | 40 | | Dollar General XXVI | Dollar General XXVI | | Retail | | Brooks | | GA | | 12/20/2019 | | 0 | | (9) | 157 | | | 947 | | | 0 | | | 0 | | | 1,104 | | | 35 | | Dollar General XXVI | | Retail | | Brooks | | GA | | 12/20/2019 | | — | | (6) | 157 | | | 947 | | | — | | | — | | | 1,104 | | | 69 | | Dollar General XXVI | Dollar General XXVI | | Retail | | Daleville | | AL | | 12/20/2019 | | 0 | | (9) | 81 | | | 817 | | | 0 | | | 0 | | | 898 | | | 24 | | Dollar General XXVI | | Retail | | Daleville | | AL | | 12/20/2019 | | — | | (6) | 81 | | | 817 | | | — | | | — | | | 898 | | | 48 | | Dollar General XXVI | Dollar General XXVI | | Retail | | East Brewton | | AL | | 12/20/2019 | | 0 | | (9) | 133 | | | 831 | | | 0 | | | 0 | | | 964 | | | 24 | | Dollar General XXVI | | Retail | | East Brewton | | AL | | 12/20/2019 | | — | | (6) | 133 | | | 831 | | | — | | | — | | | 964 | | | 48 | | Dollar General XXVI | Dollar General XXVI | | Retail | | LaGrange | | GA | | 12/20/2019 | | 0 | | (9) | 364 | | | 801 | | | 0 | | | 0 | | | 1,165 | | | 32 | | Dollar General XXVI | | Retail | | LaGrange | | GA | | 12/20/2019 | | — | | (6) | 364 | | | 801 | | | — | | | — | | | 1,165 | | | 64 | | Dollar General XXVI | Dollar General XXVI | | Retail | | LaGrange | | GA | | 12/20/2019 | | 0 | | (9) | 431 | | | 850 | | | 0 | | | 0 | | | 1,281 | | | 33 | | Dollar General XXVI | | Retail | | LaGrange | | GA | | 12/20/2019 | | — | | (6) | 431 | | | 850 | | | — | | | — | | | 1,281 | | | 66 | | Dollar General XXVI | Dollar General XXVI | | Retail | | Madisonville | | TN | | 12/20/2019 | | 0 | | (9) | 468 | | | 833 | | | 0 | | | 0 | | | 1,301 | | | 24 | | Dollar General XXVI | | Retail | | Madisonville | | TN | | 12/20/2019 | | — | | (6) | 468 | | | 833 | | | — | | | — | | | 1,301 | | | 49 | | Dollar General XXVI | Dollar General XXVI | | Retail | | Maryville | | TN | | 12/20/2019 | | 0 | | (9) | 264 | | | 906 | | | 0 | | | 0 | | | 1,170 | | | 27 | | Dollar General XXVI | | Retail | | Maryville | | TN | | 12/20/2019 | | — | | (6) | 264 | | | 906 | | | — | | | — | | | 1,170 | | | 54 | | Dollar General XXVI | Dollar General XXVI | | Retail | | Mobile | | AL | | 12/20/2019 | | 0 | | (9) | 130 | | | 982 | | | 0 | | | 0 | | | 1,112 | | | 28 | | Dollar General XXVI | | Retail | | Mobile | | AL | | 12/20/2019 | | — | | (6) | 130 | | | 982 | | | — | | | — | | | 1,112 | | | 56 | | Dollar General XXVI | Dollar General XXVI | | Retail | | Newport | | TN | | 12/20/2019 | | 0 | | (9) | 255 | | | 836 | | | 0 | | | 0 | | | 1,091 | | | 25 | | Dollar General XXVI | | Retail | | Newport | | TN | | 12/20/2019 | | — | | (6) | 255 | | | 836 | | | — | | | — | | | 1,091 | | | 49 | | Dollar General XXVI | Dollar General XXVI | | Retail | | Robertsdale | | AL | | 12/20/2019 | | 0 | | (9) | 110 | | | 1,486 | | | 0 | | | 0 | | | 1,596 | | | 42 | | Dollar General XXVI | | Retail | | Robertsdale | | AL | | 12/20/2019 | | — | | (6) | 110 | | | 1,486 | | | — | | | — | | | 1,596 | | | 84 | | Dollar General XXVI | Dollar General XXVI | | Retail | | Valley | | AL | | 12/20/2019 | | 0 | | (9) | 112 | | | 884 | | | 0 | | | 0 | | | 996 | | | 27 | | Dollar General XXVI | | Retail | | Valley | | AL | | 12/20/2019 | | — | | (6) | 112 | | | 884 | | | — | | | — | | | 996 | | | 54 | | Dollar General XXVI | Dollar General XXVI | | Retail | | Wetumpka | | AL | | 12/20/2019 | | 0 | | (9) | 263 | | | 1,038 | | | 0 | | | 0 | | | 1,301 | | | 31 | | Dollar General XXVI | | Retail | | Wetumpka | | AL | | 12/20/2019 | | — | | (6) | 263 | | | 1,038 | | | — | | | — | | | 1,301 | | | 62 | | Pizza Hut IV | Pizza Hut IV | | Retail | | Black Mountain | | NC | | 12/31/2019 | | 0 | | (10) | 360 | | | 357 | | | 0 | | | 0 | | | 717 | | | 12 | | Pizza Hut IV | | Retail | | Black Mountain | | NC | | 12/31/2019 | | — | | (6) | 360 | | | 357 | | | — | | | — | | | 717 | | | 24 | | Pizza Hut IV | Pizza Hut IV | | Retail | | Canton | | NC | | 12/31/2019 | | 0 | | (10) | 176 | | | 718 | | | 0 | | | 0 | | | 894 | | | 24 | | Pizza Hut IV | | Retail | | Canton | | NC | | 12/31/2019 | | — | | (6) | 176 | | | 718 | | | — | | | — | | | 894 | | | 49 | | Pizza Hut IV | Pizza Hut IV | | Retail | | Creedmoor | | NC | | 12/31/2019 | | 0 | | (10) | 225 | | | 672 | | | 0 | | | 0 | | | 897 | | | 23 | | Pizza Hut IV | | Retail | | Creedmoor | | NC | | 12/31/2019 | | — | | (6) | 225 | | | 672 | | | — | | | — | | | 897 | | | 46 | | Pizza Hut IV | Pizza Hut IV | | Retail | | Granite Falls | | NC | | 12/31/2019 | | 0 | | (10) | 215 | | | 460 | | | 0 | | | 0 | | | 675 | | | 15 | | Pizza Hut IV | | Retail | | Granite Falls | | NC | | 12/31/2019 | | — | | (6) | 215 | | | 460 | | | — | | | — | | | 675 | | | 30 | | Pizza Hut IV | Pizza Hut IV | | Retail | | Harrisburg | | IL | | 12/31/2019 | | 0 | | (10) | 97 | | | 440 | | | 0 | | | 0 | | | 537 | | | 17 | | Pizza Hut IV | | Retail | | Harrisburg | | IL | | 12/31/2019 | | — | | (6) | 97 | | | 440 | | | — | | | — | | | 537 | | | 34 | | Pizza Hut IV | Pizza Hut IV | | Retail | | Hendersonville | | NC | | 12/31/2019 | | 0 | | (9) | 694 | | | 438 | | | 0 | | | 0 | | | 1,132 | | | 15 | | Pizza Hut IV | | Retail | | Hendersonville | | NC | | 12/31/2019 | | — | | (6) | 694 | | | 438 | | | — | | | — | | | 1,132 | | | 31 | | Pizza Hut IV | Pizza Hut IV | | Retail | | Jefferson | | NC | | 12/31/2019 | | 0 | | (10) | 185 | | | 432 | | | 0 | | | 0 | | | 617 | | | 15 | | Pizza Hut IV | | Retail | | Jefferson | | NC | | 12/31/2019 | | — | | (6) | 185 | | | 432 | | | — | | | — | | | 617 | | | 30 | | Pizza Hut IV | Pizza Hut IV | | Retail | | King | | NC | | 12/31/2019 | | 0 | | (10) | 258 | | | 634 | | | 0 | | | 0 | | | 892 | | | 20 | | Pizza Hut IV | | Retail | | King | | NC | | 12/31/2019 | | — | | (6) | 258 | | | 634 | | | — | | | — | | | 892 | | | 41 | | Pizza Hut IV | Pizza Hut IV | | Retail | | Mocksville | | NC | | 12/31/2019 | | 0 | | (10) | 399 | | | 258 | | | 0 | | | 0 | | | 657 | | | 11 | | Pizza Hut IV | | Retail | | Mocksville | | NC | | 12/31/2019 | | — | | (6) | 399 | | | 258 | | | — | | | — | | | 657 | | | 21 | | Pizza Hut IV | Pizza Hut IV | | Retail | | Mount Vernon | | IL | | 12/31/2019 | | 0 | | (10) | 245 | | | 497 | | | 0 | | | 0 | | | 742 | | | 24 | | Pizza Hut IV | | Retail | | Mount Vernon | | IL | | 12/31/2019 | | — | | (6) | 245 | | | 497 | | | — | | | — | | | 742 | | | 48 | | Pizza Hut IV | Pizza Hut IV | | Retail | | Pennington Gap | | VA | | 12/31/2019 | | 0 | | (10) | 30 | | | 434 | | | 0 | | | 0 | | | 464 | | | 13 | | Pizza Hut IV | | Retail | | Pennington Gap | | VA | | 12/31/2019 | | — | | (6) | 30 | | | 434 | | | — | | | — | | | 464 | | | 27 | | Pizza Hut IV | Pizza Hut IV | | Retail | | Pineville | | KY | | 12/31/2019 | | 0 | | (10) | 137 | | | 337 | | | 0 | | | 0 | | | 474 | | | 15 | | Pizza Hut IV | | Retail | | Pineville | | KY | | 12/31/2019 | | — | | (6) | 137 | | | 337 | | | — | | | — | | | 474 | | | 29 | | Pizza Hut IV | Pizza Hut IV | | Retail | | Robinson | | IL | | 12/31/2019 | | 0 | | (10) | 214 | | | 457 | | | 0 | | | 0 | | | 671 | | | 24 | | Pizza Hut IV | | Retail | | Robinson | | IL | | 12/31/2019 | | — | | (6) | 214 | | | 457 | | | — | | | — | | | 671 | | | 47 | | Pizza Hut IV | Pizza Hut IV | | Retail | | Yadkinville | | NC | | 12/31/2019 | | 0 | | (10) | 143 | | | 446 | | | 0 | | | 0 | | | 589 | | | 14 | | Pizza Hut IV | | Retail | | Yadkinville | | NC | | 12/31/2019 | | — | | (6) | 143 | | | 446 | | | — | | | — | | | 589 | | | 28 | | Advance Auto IV | | Retail | | Oconomowoc | | WI | | 1/2/2020 | | 0 | | (1) | 344 | | | 949 | | | 0 | | | 0 | | | 1,293 | | | 28 | | | IMTAA | | Retail | | Reserve | | LA | | 1/31/2020 | | 0 | | (1) | 627 | | | 2,790 | | | 0 | | | 0 | | | 3,417 | | | 81 | | | Pizza Hut IV | | Retail | | Clintwood | | VA | | 3/4/2020 | | 0 | | (10) | 29 | | | 478 | | | 0 | | | 0 | | | 507 | | | 12 | | |
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
Schedule III — Real Estate and Accumulated Depreciation — Part I December 31, 20202021
| (In thousands) | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2020 [12] [13] | | | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2021 [9] [10] | | | Property | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2020 | | Land | | Building and Improvements | | Land [11] | | Building and Improvements [11] | | Accumulated Depreciation [14] [15] | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2021 | | Land | | Building and Improvements | | Land | | Building and Improvements | | Accumulated Depreciation [11] [12] | Advance Auto IV | | Advance Auto IV | | Retail | | Oconomowoc | | WI | | 1/2/2020 | | — | | (1) | 344 | | | 949 | | | — | | | — | | | 1,293 | | | 57 | | IMTAA | | IMTAA | | Retail | | Reserve | | LA | | 1/31/2020 | | — | | (1) | 627 | | | 2,790 | | | — | | | — | | | 3,417 | | | 170 | | Pizza Hut IV | | Pizza Hut IV | | Retail | | Clintwood | | VA | | 3/4/2020 | | — | | (6) | 29 | | | 478 | | | — | | | — | | | 507 | | | 27 | | Pizza Hut IV | Pizza Hut IV | | Retail | | Sylva | | NC | | 3/4/2020 | | 0 | | (10) | 289 | | | 374 | | | 0 | | | 0 | | | 663 | | | 9 | | Pizza Hut IV | | Retail | | Sylva | | NC | | 3/4/2020 | | — | | (6) | 289 | | | 374 | | | — | | | — | | | 663 | | | 20 | | DaVita III | DaVita III | | Retail | | Humble | | TX | | 3/5/2020 | | 0 | | (10) | 313 | | | 2,025 | | | 0 | | | 0 | | | 2,338 | | | 51 | | DaVita III | | Retail | | Humble | | TX | | 3/5/2020 | | — | | (7) | 313 | | | 2,025 | | | — | | | — | | | 2,338 | | | 111 | | American Car Center I | American Car Center I | | Retail | | Birmingham | | AL | | 3/10/2020 | | 0 | | (10) | 494 | | | 655 | | | 0 | | | 0 | | | 1,149 | | | 26 | | American Car Center I | | Retail | | Birmingham | | AL | | 3/10/2020 | | — | | (6) | 494 | | | 655 | | | — | | | — | | | 1,149 | | | 57 | | American Car Center I | American Car Center I | | Retail | | Charleston | | SC | | 3/10/2020 | | 0 | | (10) | 526 | | | 187 | | | 0 | | | 0 | | | 713 | | | 8 | | American Car Center I | | Retail | | Charleston | | SC | | 3/10/2020 | | — | | (6) | 526 | | | 187 | | | — | | | — | | | 713 | | | 17 | | American Car Center I | American Car Center I | | Retail | | Columbia | | SC | | 3/10/2020 | | 0 | | (10) | 1,842 | | | 3,491 | | | 0 | | | 0 | | | 5,333 | | | 95 | | American Car Center I | | Retail | | Columbia | | SC | | 3/10/2020 | | — | | (6) | 1,842 | | | 3,491 | | | — | | | — | | | 5,333 | | | 210 | | American Car Center I | American Car Center I | | Retail | | Cordova | | TN | | 3/10/2020 | | 0 | | (10) | 638 | | | 807 | | | 0 | | | 0 | | | 1,445 | | | 24 | | American Car Center I | | Retail | | Cordova | | TN | | 3/10/2020 | | — | | (6) | 638 | | | 807 | | | — | | | — | | | 1,445 | | | 53 | | American Car Center I | American Car Center I | | Retail | | Jackson | | MS | | 3/10/2020 | | 0 | | (10) | 928 | | | 918 | | | 0 | | | 0 | | | 1,846 | | | 33 | | American Car Center I | | Retail | | Jackson | | MS | | 3/10/2020 | | — | | (6) | 928 | | | 918 | | | — | | | — | | | 1,846 | | | 72 | | American Car Center I | American Car Center I | | Retail | | Knoxville | | TN | | 3/10/2020 | | 0 | | (10) | 488 | | | 527 | | | 0 | | | 0 | | | 1,015 | | | 16 | | American Car Center I | | Retail | | Knoxville | | TN | | 3/10/2020 | | — | | (6) | 488 | | | 527 | | | — | | | — | | | 1,015 | | | 36 | | American Car Center I | American Car Center I | | Retail | | Lawrenceville | | GA | | 3/10/2020 | | 0 | | (10) | 181 | | | 261 | | | 0 | | | 0 | | | 442 | | | 10 | | American Car Center I | | Retail | | Lawrenceville | | GA | | 3/10/2020 | | — | | (6) | 181 | | | 261 | | | — | | | — | | | 442 | | | 23 | | American Car Center I | American Car Center I | | Retail | | Louisville | | KY | | 3/10/2020 | | 0 | | (10) | 885 | | | 4,845 | | | 0 | | | 0 | | | 5,730 | | | 117 | | American Car Center I | | Retail | | Louisville | | KY | | 3/10/2020 | | — | | (6) | 885 | | | 4,845 | | | — | | | — | | | 5,730 | | | 256 | | American Car Center I | American Car Center I | | Retail | | Madison | | TN | | 3/10/2020 | | 0 | | (10) | 419 | | | 317 | | | 0 | | | 0 | | | 736 | | | 13 | | American Car Center I | | Retail | | Madison | | TN | | 3/10/2020 | | — | | (6) | 419 | | | 317 | | | — | | | — | | | 736 | | | 29 | | American Car Center I | American Car Center I | | Retail | | Marietta | | GA | | 3/10/2020 | | 0 | | (10) | 777 | | | 1,166 | | | 0 | | | 0 | | | 1,943 | | | 28 | | American Car Center I | | Retail | | Marietta | | GA | | 3/10/2020 | | — | | (6) | 777 | | | 1,166 | | | — | | | — | | | 1,943 | | | 63 | | American Car Center I | American Car Center I | | Retail | | Pelham | | AL | | 3/10/2020 | | 0 | | (10) | 1,298 | | | 1,410 | | | 0 | | | 0 | | | 2,708 | | | 40 | | American Car Center I | | Retail | | Pelham | | AL | | 3/10/2020 | | — | | (6) | 1,298 | | | 1,410 | | | — | | | — | | | 2,708 | | | 89 | | American Car Center I | American Car Center I | | Retail | | Pensacola | | FL | | 3/10/2020 | | 0 | | (10) | 944 | | | 576 | | | 0 | | | 0 | | | 1,520 | | | 16 | | American Car Center I | | Retail | | Pensacola | | FL | | 3/10/2020 | | — | | (6) | 944 | | | 576 | | | — | | | — | | | 1,520 | | | 36 | | American Car Center I | American Car Center I | | Retail | | Riverdale | | GA | | 3/10/2020 | | 0 | | (10) | 484 | | | 722 | | | 0 | | | 0 | | | 1,206 | | | 24 | | American Car Center I | | Retail | | Riverdale | | GA | | 3/10/2020 | | — | | (6) | 484 | | | 722 | | | — | | | — | | | 1,206 | | | 53 | | American Car Center I | American Car Center I | | Retail | | Seminole | | FL | | 3/10/2020 | | 0 | | (10) | 1,513 | | | 3,796 | | | 0 | | | 0 | | | 5,309 | | | 122 | | American Car Center I | | Retail | | Seminole | | FL | | 3/10/2020 | | — | | (6) | 1,513 | | | 3,796 | | | — | | | — | | | 5,309 | | | 269 | | American Car Center I | American Car Center I | | Retail | | Springdale | | AR | | 3/10/2020 | | 0 | | (10) | 195 | | | 843 | | | 0 | | | 0 | | | 1,038 | | | 29 | | American Car Center I | | Retail | | Springdale | | AR | | 3/10/2020 | | — | | (6) | 195 | | | 843 | | | — | | | — | | | 1,038 | | | 65 | | American Car Center I | American Car Center I | | Retail | | Tupelo | | MS | | 3/10/2020 | | 0 | | (10) | 2,108 | | | 3,259 | | | 0 | | | 0 | | | 5,367 | | | 96 | | American Car Center I | | Retail | | Tupelo | | MS | | 3/10/2020 | | — | | (6) | 2,108 | | | 3,259 | | | — | | | — | | | 5,367 | | | 211 | | BJ's | BJ's | | Retail | | Middleburg Height | | OH | | 3/27/2020 | | 0 | | (10) | 2,121 | | | 6,781 | | | 0 | | | 0 | | | 8,902 | | | 139 | | BJ's | | Retail | | Middleburg Height | | OH | | 3/27/2020 | | — | | (6) | 2,121 | | | 6,781 | | | — | | | — | | | 8,902 | | | 324 | | Mammoth | Mammoth | | Retail | | Austell | | GA | | 3/31/2020 | | 0 | | (10) | 500 | | | 2,254 | | | 0 | | | 0 | | | 2,754 | | | 73 | | Mammoth | | Retail | | Austell | | GA | | 3/31/2020 | | — | | (6) | 500 | | | 2,254 | | | — | | | — | | | 2,754 | | | 171 | | Mammoth | Mammoth | | Retail | | Dalton | | GA | | 3/31/2020 | | 0 | | (10) | 496 | | | 2,772 | | | 0 | | | 0 | | | 3,268 | | | 81 | | Mammoth | | Retail | | Dalton | | GA | | 3/31/2020 | | — | | (6) | 496 | | | 2,772 | | | — | | | — | | | 3,268 | | | 188 | | Mammoth | Mammoth | | Retail | | Mobile | | AL | | 3/31/2020 | | 0 | | (10) | 353 | | | 1,986 | | | 0 | | | 0 | | | 2,339 | | | 54 | | Mammoth | | Retail | | Mobile | | AL | | 3/31/2020 | | — | | (6) | 353 | | | 1,986 | | | — | | | — | | | 2,339 | | | 126 | | Mammoth | Mammoth | | Retail | | Murray | | KY | | 3/31/2020 | | 0 | | (10) | 363 | | | 3,613 | | | 0 | | | 0 | | | 3,976 | | | 93 | | Mammoth | | Retail | | Murray | | KY | | 3/31/2020 | | — | | (6) | 363 | | | 3,613 | | | — | | | — | | | 3,976 | | | 217 | | Mammoth | Mammoth | | Retail | | Paducah | | KY | | 3/31/2020 | | 0 | | (10) | 508 | | | 1,940 | | | 0 | | | 0 | | | 2,448 | | | 60 | | Mammoth | | Retail | | Paducah | | KY | | 3/31/2020 | | — | | (6) | 508 | | | 1,940 | | | — | | | — | | | 2,448 | | | 139 | | Mammoth | Mammoth | | Retail | | Paducah | | KY | | 3/31/2020 | | 0 | | (10) | 239 | | | 766 | | | 0 | | | 0 | | | 1,005 | | | 19 | | Mammoth | | Retail | | Paducah | | KY | | 3/31/2020 | | — | | (6) | 239 | | | 766 | | | — | | | — | | | 1,005 | | | 44 | | Mammoth | Mammoth | | Retail | | Springville | | UT | | 3/31/2020 | | 0 | | (10) | 476 | | | 3,636 | | | 0 | | | 0 | | | 4,112 | | | 85 | | Mammoth | | Retail | | Springville | | UT | | 3/31/2020 | | — | | (6) | 476 | | | 3,636 | | | — | | | — | | | 4,112 | | | 198 | | Mammoth | Mammoth | | Retail | | Stockbridge | | GA | | 3/31/2020 | | 0 | | (10) | 544 | | | 2,301 | | | 0 | | | 0 | | | 2,845 | | | 60 | | Mammoth | | Retail | | Stockbridge | | GA | | 3/31/2020 | | — | | (6) | 544 | | | 2,301 | | | — | | | — | | | 2,845 | | | 139 | | Mammoth | Mammoth | | Retail | | Suwanee | | GA | | 3/31/2020 | | 0 | | (10) | 1,350 | | | 2,680 | | | 0 | | | 0 | | | 4,030 | | | 77 | | Mammoth | | Retail | | Suwanee | | GA | | 3/31/2020 | | — | | (6) | 1,350 | | | 2,680 | | | — | | | — | | | 4,030 | | | 179 | | Mammoth | Mammoth | | Retail | | Spanish Fork | | UT | | 4/2/2020 | | 0 | | (10) | 670 | | | 4,943 | | | 0 | | | 0 | | | 5,613 | | | 115 | | Mammoth | | Retail | | Spanish Fork | | UT | | 4/2/2020 | | — | | (6) | 670 | | | 4,943 | | | — | | | — | | | 5,613 | | | 267 | | Mammoth | Mammoth | | Retail | | Lawrenceville | | GA | | 4/17/2020 | | 0 | | (10) | 725 | | | 2,382 | | | 0 | | | 0 | | | 3,107 | | | 59 | | Mammoth | | Retail | | Lawrenceville | | GA | | 4/17/2020 | | — | | (6) | 725 | | | 2,382 | | | — | | | — | | | 3,107 | | | 147 | | DaVita IV | DaVita IV | | Retail | | Flint | | MI | | 4/24/2020 | | 0 | | (10) | 130 | | | 1,088 | | | 0 | | | 0 | | | 1,218 | | | 20 | | DaVita IV | | Retail | | Flint | | MI | | 4/24/2020 | | — | | (7) | 130 | | | 1,088 | | | — | | | — | | | 1,218 | | | 49 | | GPM | GPM | | Retail | | Niles | | MI | | 7/1/2020 | | 0 | | (10) | 262 | | | 599 | | | 0 | | | 0 | | | 861 | | | 8 | | GPM | | Retail | | Niles | | MI | | 7/1/2020 | | — | | (6) | 262 | | | 599 | | | — | | | — | | | 861 | | | 29 | | O'Charley's | O'Charley's | | Retail | | Gainesville | | GA | | 7/24/2020 | | 0 | | (1) | 728 | | | 1,204 | | | 0 | | | 0 | | | 1,932 | | | 16 | | O'Charley's | | Retail | | Gainesville | | GA | | 7/24/2020 | | — | | (1) | 728 | | | 1,204 | | | — | | | — | | | 1,932 | | | 56 | | O'Charley's | | Retail | | Shively | | KY | | 7/24/2020 | | 0 | | (1) | 637 | | | 1,318 | | | 0 | | | 0 | | | 1,955 | | | 18 | | | GPM | | Retail | | Allendale | | MI | | 7/31/2020 | | 0 | | (10) | 184 | | | 1,660 | | | 0 | | | 0 | | | 1,844 | | | 19 | | |
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
Schedule III — Real Estate and Accumulated Depreciation — Part I December 31, 20202021
| (In thousands) | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2020 [12] [13] | | | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2021 [9] [10] | | | Property | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2020 | | Land | | Building and Improvements | | Land [11] | | Building and Improvements [11] | | Accumulated Depreciation [14] [15] | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2021 | | Land | | Building and Improvements | | Land | | Building and Improvements | | Accumulated Depreciation [11] [12] | GPM | | Retail | | Alma | | MI | | 7/31/2020 | | 0 | | (10) | 197 | | | 686 | | | 0 | | | 0 | | | 883 | | | 13 | | | O'Charley's | | O'Charley's | | Retail | | Shively | | KY | | 7/24/2020 | | — | | (1) | 637 | | | 1,318 | | | — | | | — | | | 1,955 | | | 60 | | GPM | GPM | | Retail | | Bay City | | MI | | 7/31/2020 | | 0 | | (10) | 175 | | | 853 | | | 0 | | | 0 | | | 1,028 | | | 14 | | GPM | | Retail | | Allendale | | MI | | 7/31/2020 | | — | | (6) | 184 | | | 1,660 | | | — | | | — | | | 1,844 | | | 65 | | GPM | GPM | | Retail | | Big Rapids | | MI | | 7/31/2020 | | 0 | | (10) | 239 | | | 960 | | | 0 | | | 0 | | | 1,199 | | | 13 | | GPM | | Retail | | Alma | | MI | | 7/31/2020 | | — | | (6) | 197 | | | 686 | | | — | | | — | | | 883 | | | 43 | | GPM | GPM | | Retail | | Big Rapids | | MI | | 7/31/2020 | | 0 | | (10) | 234 | | | 699 | | | 0 | | | 0 | | | 933 | | | 11 | | GPM | | Retail | | Bay City | | MI | | 7/31/2020 | | — | | (6) | 175 | | | 853 | | | — | | | — | | | 1,028 | | | 47 | | GPM | GPM | | Retail | | Caro | | MI | | 7/31/2020 | | 0 | | (10) | 256 | | | 613 | | | 0 | | | 0 | | | 869 | | | 14 | | GPM | | Retail | | Big Rapids | | MI | | 7/31/2020 | | — | | (6) | 239 | | | 960 | | | — | | | — | | | 1,199 | | | 46 | | GPM | GPM | | Retail | | Chesaning | | MI | | 7/31/2020 | | 0 | | (10) | 774 | | | 639 | | | 0 | | | 0 | | | 1,413 | | | 12 | | GPM | | Retail | | Big Rapids | | MI | | 7/31/2020 | | — | | (6) | 234 | | | 699 | | | — | | | — | | | 933 | | | 36 | | GPM | GPM | | Retail | | Coopersville | | MI | | 7/31/2020 | | 0 | | (10) | 62 | | | 460 | | | 0 | | | 0 | | | 522 | | | 7 | | GPM | | Retail | | Caro | | MI | | 7/31/2020 | | — | | (6) | 256 | | | 613 | | | — | | | — | | | 869 | | | 46 | | GPM | GPM | | Retail | | East Lansing | | MI | | 7/31/2020 | | 0 | | (10) | 259 | | | 338 | | | 0 | | | 0 | | | 597 | | | 6 | | GPM | | Retail | | Chesaning | | MI | | 7/31/2020 | | — | | (6) | 774 | | | 639 | | | — | | | — | | | 1,413 | | | 39 | | GPM | GPM | | Retail | | Escanaba | | MI | | 7/31/2020 | | 0 | | (10) | 814 | | | 573 | | | 0 | | | 0 | | | 1,387 | | | 8 | | GPM | | Retail | | Coopersville | | MI | | 7/31/2020 | | — | | (6) | 62 | | | 460 | | | — | | | — | | | 522 | | | 23 | | GPM | GPM | | Retail | | Essexville | | MI | | 7/31/2020 | | 0 | | (10) | 49 | | | 199 | | | 0 | | | 0 | | | 248 | | | 4 | | GPM | | Retail | | East Lansing | | MI | | 7/31/2020 | | — | | (6) | 259 | | | 338 | | | — | | | — | | | 597 | | | 21 | | GPM | GPM | | Retail | | Flint | | MI | | 7/31/2020 | | 0 | | (10) | 274 | | | 407 | | | 0 | | | 0 | | | 681 | | | 8 | | GPM | | Retail | | Escanaba | | MI | | 7/31/2020 | | — | | (6) | 814 | | | 573 | | | — | | | — | | | 1,387 | | | 28 | | GPM | GPM | | Retail | | Grand Rapids | | MI | | 7/31/2020 | | 0 | | (10) | 237 | | | 500 | | | 0 | | | 0 | | | 737 | | | 12 | | GPM | | Retail | | Essexville | | MI | | 7/31/2020 | | — | | (6) | 49 | | | 199 | | | — | | | — | | | 248 | | | 15 | | GPM | GPM | | Retail | | Indianapolis | | IN | | 7/31/2020 | | 0 | | (10) | 105 | | | 104 | | | 0 | | | 0 | | | 209 | | | 2 | | GPM | | Retail | | Flint | | MI | | 7/31/2020 | | — | | (6) | 274 | | | 407 | | | — | | | — | | | 681 | | | 27 | | GPM | GPM | | Retail | | Ionia | | MI | | 7/31/2020 | | 0 | | (10) | 210 | | | 871 | | | 0 | | | 0 | | | 1,081 | | | 14 | | GPM | | Retail | | Grand Rapids | | MI | | 7/31/2020 | | — | | (6) | 237 | | | 500 | | | — | | | — | | | 737 | | | 41 | | GPM | GPM | | Retail | | Lansing | | MI | | 7/31/2020 | | 0 | | (10) | 270 | | | 1,005 | | | 0 | | | 0 | | | 1,275 | | | 16 | | GPM | | Retail | | Ionia | | MI | | 7/31/2020 | | — | | (6) | 210 | | | 871 | | | — | | | — | | | 1,081 | | | 49 | | GPM | GPM | | Retail | | Lansing | | MI | | 7/31/2020 | | 0 | | (10) | 102 | | | 511 | | | 0 | | | 0 | | | 613 | | | 10 | | GPM | | Retail | | Lansing | | MI | | 7/31/2020 | | — | | (6) | 270 | | | 1,005 | | | — | | | — | | | 1,275 | | | 55 | | GPM | GPM | | Retail | | Lowell | | MI | | 7/31/2020 | | 0 | | (10) | 213 | | | 1,297 | | | 0 | | | 0 | | | 1,510 | | | 20 | | GPM | | Retail | | Lansing | | MI | | 7/31/2020 | | — | | (6) | 102 | | | 511 | | | — | | | — | | | 613 | | | 33 | | GPM | GPM | | Retail | | Muskegon | | MI | | 7/31/2020 | | 0 | | (10) | 81 | | | 550 | | | 0 | | | 0 | | | 631 | | | 9 | | GPM | | Retail | | Lowell | | MI | | 7/31/2020 | | — | | (6) | 213 | | | 1,297 | | | — | | | — | | | 1,510 | | | 69 | | GPM | GPM | | Retail | | Niles | | MI | | 7/31/2020 | | 0 | | (10) | 421 | | | 445 | | | 0 | | | 0 | | | 866 | | | 7 | | GPM | | Retail | | Muskegon | | MI | | 7/31/2020 | | — | | (6) | 81 | | | 550 | | | — | | | — | | | 631 | | | 31 | | GPM | GPM | | Retail | | Plainwell | | MI | | 7/31/2020 | | 0 | | (10) | 276 | | | 637 | | | 0 | | | 0 | | | 913 | | | 10 | | GPM | | Retail | | Niles | | MI | | 7/31/2020 | | — | | (6) | 421 | | | 445 | | | — | | | — | | | 866 | | | 24 | | GPM | GPM | | Retail | | Portage | | MI | | 7/31/2020 | | 0 | | (10) | 125 | | | 616 | | | 0 | | | 0 | | | 741 | | | 10 | | GPM | | Retail | | Plainwell | | MI | | 7/31/2020 | | — | | (6) | 276 | | | 637 | | | — | | | — | | | 913 | | | 34 | | GPM | GPM | | Retail | | Saginaw | | MI | | 7/31/2020 | | 0 | | (10) | 367 | | | 833 | | | 0 | | | 0 | | | 1,200 | | | 15 | | GPM | | Retail | | Portage | | MI | | 7/31/2020 | | — | | (6) | 125 | | | 616 | | | — | | | — | | | 741 | | | 35 | | GPM | GPM | | Retail | | Sault Ste Marie | | MI | | 7/31/2020 | | 0 | | (10) | 193 | | | 563 | | | 0 | | | 0 | | | 756 | | | 10 | | GPM | | Retail | | Saginaw | | MI | | 7/31/2020 | | — | | (6) | 367 | | | 833 | | | — | | | — | | | 1,200 | | | 52 | | GPM | GPM | | Retail | | Indianapolis | | IN | | 7/31/2020 | | 0 | | (10) | 59 | | | 34 | | | 0 | | | 0 | | | 93 | | | 0 | | GPM | | Retail | | Sault Ste Marie | | MI | | 7/31/2020 | | — | | (6) | 193 | | | 563 | | | — | | | — | | | 756 | | | 33 | | GPM | GPM | | Retail | | Spring Lake | | MI | | 7/31/2020 | | 0 | | (10) | 206 | | | 1,394 | | | 0 | | | 0 | | | 1,600 | | | 21 | | GPM | | Retail | | Spring Lake | | MI | | 7/31/2020 | | — | | (6) | 206 | | | 1,394 | | | — | | | — | | | 1,600 | | | 72 | | GPM | GPM | | Retail | | Walker | | MI | | 7/31/2020 | | 0 | | (10) | 430 | | | 508 | | | 0 | | | 0 | | | 938 | | | 11 | | GPM | | Retail | | Walker | | MI | | 7/31/2020 | | — | | (6) | 430 | | | 508 | | | — | | | — | | | 938 | | | 37 | | GPM | GPM | | Retail | | West Lafayette | | IN | | 7/31/2020 | | 0 | | (10) | 379 | | | 342 | | | 0 | | | 0 | | | 721 | | | 7 | | GPM | | Retail | | West Lafayette | | IN | | 7/31/2020 | | — | | (6) | 379 | | | 342 | | | — | | | — | | | 721 | | | 22 | | GPM | GPM | | Retail | | Whitehall | | MI | | 7/31/2020 | | 0 | | (10) | 146 | | | 368 | | | 0 | | | 0 | | | 514 | | | 7 | | GPM | | Retail | | Whitehall | | MI | | 7/31/2020 | | — | | (6) | 146 | | | 368 | | | — | | | — | | | 514 | | | 24 | | GPM | GPM | | Retail | | Wyoming | | MI | | 7/31/2020 | | 0 | | (10) | 160 | | | 638 | | | 0 | | | 0 | | | 798 | | | 11 | | GPM | | Retail | | Wyoming | | MI | | 7/31/2020 | | — | | (6) | 160 | | | 638 | | | — | | | — | | | 798 | | | 36 | | GPM | GPM | | Retail | | Wyoming | | MI | | 7/31/2020 | | 0 | | (10) | 95 | | | 562 | | | 0 | | | 0 | | | 657 | | | 9 | | GPM | | Retail | | Wyoming | | MI | | 7/31/2020 | | — | | (6) | 95 | | | 562 | | | — | | | — | | | 657 | | | 30 | | IMTAA II | IMTAA II | | Retail | | Grand Prairie | | TX | | 8/21/2020 | | 0 | | (10) | 443 | | | 3,143 | | | 0 | | | 0 | | | 3,586 | | | 33 | | IMTAA II | | Retail | | Grand Prairie | | TX | | 8/21/2020 | | — | | (6) | 443 | | | 3,143 | | | — | | | — | | | 3,586 | | | 131 | | IMTAA II | IMTAA II | | Retail | | New Orleans | | LA | | 8/21/2020 | | 0 | | (10) | 61 | | | 3,498 | | | 0 | | | 0 | | | 3,559 | | | 34 | | IMTAA II | | Retail | | New Orleans | | LA | | 8/21/2020 | | — | | (6) | 61 | | | 3,498 | | | — | | | — | | | 3,559 | | | 135 | | IMTAA II | IMTAA II | | Retail | | Chickasha | | OK | | 8/27/2020 | | 0 | | (10) | 622 | | | 2,916 | | | 0 | | | 0 | | | 3,538 | | | 31 | | IMTAA II | | Retail | | Chickasha | | OK | | 8/27/2020 | | — | | (6) | 622 | | | 2,916 | | | — | | | — | | | 3,538 | | | 125 | | IMTAA II | IMTAA II | | Retail | | Chickasha | | OK | | 8/27/2020 | | 0 | | (10) | 353 | | | 3,206 | | | 0 | | | 0 | | | 3,559 | | | 31 | | IMTAA II | | Retail | | Chickasha | | OK | | 8/27/2020 | | — | | (6) | 353 | | | 3,206 | | | — | | | — | | | 3,559 | | | 125 | | IMTAA II | IMTAA II | | Retail | | Gulfport | | MS | | 8/28/2020 | | 0 | | (10) | 370 | | | 1,677 | | | 0 | | | 0 | | | 2,047 | | | 23 | | IMTAA II | | Retail | | Gulfport | | MS | | 8/28/2020 | | — | | (6) | 370 | | | 1,677 | | | — | | | — | | | 2,047 | | | 93 | | IMTAA II | | IMTAA II | | Retail | | Gulfport | | MS | | 8/28/2020 | | — | | (6) | 248 | | | 2,897 | | | — | | | — | | | 3,145 | | | 121 | |
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
Schedule III — Real Estate and Accumulated Depreciation — Part I December 31, 20202021
| (In thousands) | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2020 [12] [13] | | | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2021 [9] [10] | | | Property | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2020 | | Land | | Building and Improvements | | Land [11] | | Building and Improvements [11] | | Accumulated Depreciation [14] [15] | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2021 | | Land | | Building and Improvements | | Land | | Building and Improvements | | Accumulated Depreciation [11] [12] | IMTAA II | | Retail | | Gulfport | | MS | | 8/28/2020 | | 0 | | (10) | 248 | | | 2,897 | | | 0 | | | 0 | | | 3,145 | | | 25 | | | Fresenius IX | Fresenius IX | | Retail | | Dadeville | | AL | | 11/19/2020 | | 0 | | (10) | 504 | | | 1,164 | | | 0 | | | 0 | | | 1,668 | | | 3 | | Fresenius IX | | Retail | | Dadeville | | AL | | 11/19/2020 | | — | | (7) | 504 | | | 1,164 | | | — | | | — | | | 1,668 | | | 41 | | Fresenius IX | Fresenius IX | | Retail | | Jackson | | AL | | 11/19/2020 | | 0 | | (10) | 851 | | | 1,383 | | | 0 | | | 0 | | | 2,234 | | | 5 | | Fresenius IX | | Retail | | Jackson | | AL | | 11/19/2020 | | — | | (7) | 851 | | | 1,383 | | | — | | | — | | | 2,234 | | | 58 | | Fresenius IX | Fresenius IX | | Retail | | Newton | | MS | | 11/19/2020 | | 0 | | (10) | 235 | | | 2,954 | | | 0 | | | 0 | | | 3,189 | | | 7 | | Fresenius IX | | Retail | | Newton | | MS | | 11/19/2020 | | — | | (6) | 235 | | | 2,954 | | | — | | | — | | | 3,189 | | | 90 | | Fresenius IX | Fresenius IX | | Retail | | Philadelphia | | MS | | 11/19/2020 | | 0 | | (10) | 335 | | | 2,512 | | | 0 | | | 0 | | | 2,847 | | | 6 | | Fresenius IX | | Retail | | Philadelphia | | MS | | 11/19/2020 | | — | | (7) | 335 | | | 2,512 | | | — | | | — | | | 2,847 | | | 82 | | Fresenius IX | Fresenius IX | | Retail | | Port Gibson | | MS | | 11/19/2020 | | 0 | | (10) | 190 | | | 1,132 | | | 0 | | | 0 | | | 1,322 | | | 3 | | Fresenius IX | | Retail | | Port Gibson | | MS | | 11/19/2020 | | — | | (6) | 190 | | | 1,132 | | | — | | | — | | | 1,322 | | | 36 | | Fresenius IX | Fresenius IX | | Retail | | Tallassee | | AL | | 11/19/2020 | | 0 | | (10) | 876 | | | 2,229 | | | 0 | | | 0 | | | 3,105 | | | 6 | | Fresenius IX | | Retail | | Tallassee | | AL | | 11/19/2020 | | — | | (7) | 876 | | | 2,229 | | | — | | | — | | | 3,105 | | | 72 | | IMTAA II | IMTAA II | | Retail | | Addis | | LA | | 11/25/2020 | | 0 | | (10) | 214 | | | 2,008 | | | 0 | | | 0 | | | 2,222 | | | 4 | | IMTAA II | | Retail | | Addis | | LA | | 11/25/2020 | | — | | (6) | 214 | | | 2,008 | | | — | | | — | | | 2,222 | | | 58 | | IMTAA II | IMTAA II | | Retail | | Picayune | | MS | | 11/25/2020 | | 0 | | (10) | 91 | | | 3,099 | | | 0 | | | 0 | | | 3,190 | | | 7 | | IMTAA II | | Retail | | Picayune | | MS | | 11/25/2020 | | — | | (6) | 91 | | | 3,099 | | | — | | | — | | | 3,190 | | | 91 | | IMTAA II | IMTAA II | | Retail | | Lake Charles | | LA | | 12/4/2020 | | 0 | | (10) | 273 | | | 2,002 | | | 0 | | | 0 | | | 2,275 | | | 5 | | IMTAA II | | Retail | | Lake Charles | | LA | | 12/4/2020 | | — | | (6) | 273 | | | 2,002 | | | — | | | — | | | 2,275 | | | 62 | | IMTAA II | IMTAA II | | Retail | | Lake Charles | | LA | | 12/4/2020 | | 0 | | (10) | 413 | | | 1,862 | | | 0 | | | 0 | | | 2,275 | | | 5 | | IMTAA II | | Retail | | Lake Charles | | LA | | 12/4/2020 | | — | | (6) | 413 | | | 1,862 | | | — | | | — | | | 2,275 | | | 65 | | Kalma Kaur | | Retail | | Albion | | IL | | 12/11/2020 | | 0 | | (10) | 30 | | | 397 | | | 0 | | | 0 | | | 427 | | | 1 | | | Kalma Kaur | | Retail | | Central City | | IL | | 12/11/2020 | | 0 | | (10) | 295 | | | 2,246 | | | 0 | | | 0 | | | 2,541 | | | 6 | | | Kalma Kaur | | Retail | | Cisne | | IL | | 12/11/2020 | | 0 | | (10) | 175 | | | 993 | | | 0 | | | 0 | | | 1,168 | | | 3 | | | Kalma Kaur | | Retail | | Harrisburg | | IL | | 12/11/2020 | | 0 | | (10) | 248 | | | 637 | | | 0 | | | 0 | | | 885 | | | 3 | | | Kalma Kaur | | Retail | | Metropolis | | IL | | 12/11/2020 | | 0 | | (10) | 264 | | | 839 | | | 0 | | | 0 | | | 1,103 | | | 3 | | | Kalma Kaur | | Retail | | Pickneyville | | IL | | 12/11/2020 | | 0 | | (10) | 337 | | | 1,097 | | | 0 | | | 0 | | | 1,434 | | | 3 | | | Kalma Kaur | | Retail | | Salem | | IL | | 12/11/2020 | | 0 | | (10) | 59 | | | 207 | | | 0 | | | 0 | | | 266 | | | 1 | | | Kalma Kaur | | Retail | | Stewardson | | IL | | 12/11/2020 | | 0 | | (10) | 30 | | | 384 | | | 0 | | | 0 | | | 414 | | | 1 | | | Kalma Kaur | | Retail | | Wayne City | | IL | | 12/11/2020 | | 0 | | (10) | 61 | | | 1,041 | | | 0 | | | 0 | | | 1,102 | | | 3 | | | Kalma Kaur | | Retail | | Xenia | | IL | | 12/11/2020 | | 0 | | (10) | 39 | | | 376 | | | 0 | | | 0 | | | 415 | | | 1 | | | Kamla Kaur | | Kamla Kaur | | Retail | | Albion | | IL | | 12/11/2020 | | — | | (6) | 30 | | | 397 | | | — | | | — | | | 427 | | | 18 | | Kamla Kaur | | Kamla Kaur | | Retail | | Central City | | IL | | 12/11/2020 | | — | | (6) | 295 | | | 2,246 | | | — | | | — | | | 2,541 | | | 79 | | Kamla Kaur | | Kamla Kaur | | Retail | | Cisne | | IL | | 12/11/2020 | | — | | (6) | 175 | | | 993 | | | — | | | — | | | 1,168 | | | 37 | | Kamla Kaur | | Kamla Kaur | | Retail | | Harrisburg | | IL | | 12/11/2020 | | — | | (6) | 248 | | | 637 | | | — | | | — | | | 885 | | | 34 | | Kamla Kaur | | Kamla Kaur | | Retail | | Metropolis | | IL | | 12/11/2020 | | — | | (6) | 264 | | | 839 | | | — | | | — | | | 1,103 | | | 33 | | Kamla Kaur | | Kamla Kaur | | Retail | | Pickneyville | | IL | | 12/11/2020 | | — | | (6) | 337 | | | 1,097 | | | — | | | — | | | 1,434 | | | 41 | | Kamla Kaur | | Kamla Kaur | | Retail | | Salem | | IL | | 12/11/2020 | | — | | (6) | 59 | | | 207 | | | — | | | — | | | 266 | | | 11 | | Kamla Kaur | | Kamla Kaur | | Retail | | Stewardson | | IL | | 12/11/2020 | | — | | (6) | 30 | | | 384 | | | — | | | — | | | 414 | | | 17 | | Kamla Kaur | | Kamla Kaur | | Retail | | Wayne City | | IL | | 12/11/2020 | | — | | (6) | 61 | | | 1,041 | | | — | | | — | | | 1,102 | | | 37 | | Kamla Kaur | | Kamla Kaur | | Retail | | Xenia | | IL | | 12/11/2020 | | — | | (6) | 39 | | | 376 | | | — | | | — | | | 415 | | | 13 | | Dialysis III | Dialysis III | | Retail | | Andrews | | SC | | 12/17/2020 | | 0 | | (10) | 72 | | | 694 | | | 0 | | | 0 | | | 766 | | | 0 | | Dialysis III | | Retail | | Andrews | | SC | | 12/17/2020 | | — | | (6) | 72 | | | 694 | | | — | | | — | | | 766 | | | 22 | | Dialysis III | Dialysis III | | Retail | | Batesburg | | SC | | 12/17/2020 | | 0 | | (10) | 72 | | | 1,127 | | | 0 | | | 0 | | | 1,199 | | | 0 | | Dialysis III | | Retail | | Batesburg | | SC | | 12/17/2020 | | — | | (6) | 72 | | | 1,127 | | | — | | | — | | | 1,199 | | | 30 | | Dialysis III | Dialysis III | | Retail | | Bishopville | | SC | | 12/17/2020 | | 0 | | (10) | 87 | | | 806 | | | 0 | | | 0 | | | 893 | | | 0 | | Dialysis III | | Retail | | Bishopville | | SC | | 12/17/2020 | | — | | (6) | 87 | | | 806 | | | — | | | — | | | 893 | | | 27 | | Dialysis III | Dialysis III | | Retail | | Cheraw | | SC | | 12/17/2020 | | 0 | | (10) | 223 | | | 708 | | | 0 | | | 0 | | | 931 | | | 0 | | Dialysis III | | Retail | | Cheraw | | SC | | 12/17/2020 | | — | | (6) | 223 | | | 708 | | | — | | | — | | | 931 | | | 18 | | Dialysis III | Dialysis III | | Retail | | Florence | | SC | | 12/17/2020 | | 0 | | (10) | 113 | | | 2,190 | | | 0 | | | 0 | | | 2,303 | | | 0 | | Dialysis III | | Retail | | Florence | | SC | | 12/17/2020 | | — | | (6) | 113 | | | 2,190 | | | — | | | 30 | | | 2,333 | | | 64 | | Dialysis III | Dialysis III | | Retail | | Florence | | SC | | 12/17/2020 | | 0 | | (10) | 120 | | | 898 | | | 0 | | | 0 | | | 1,018 | | | 0 | | Dialysis III | | Retail | | Florence | | SC | | 12/17/2020 | | — | | (6) | 120 | | | 898 | | | — | | | — | | | 1,018 | | | 24 | | Dialysis III | Dialysis III | | Retail | | Florence | | SC | | 12/17/2020 | | 0 | | (10) | 144 | | | 2,641 | | | 0 | | | 0 | | | 2,785 | | | 0 | | Dialysis III | | Retail | | Florence | | SC | | 12/17/2020 | | — | | (6) | 144 | | | 2,641 | | | — | | | — | | | 2,785 | | | 78 | | Dialysis III | Dialysis III | | Retail | | Fort Lawn | | SC | | 12/17/2020 | | 0 | | (10) | 119 | | | 1,640 | | | 0 | | | 0 | | | 1,759 | | | 0 | | Dialysis III | | Retail | | Fort Lawn | | SC | | 12/17/2020 | | — | | (6) | 119 | | | 1,640 | | | — | | | — | | | 1,759 | | | 47 | | Dialysis III | Dialysis III | | Retail | | Fountain Inn | | SC | | 12/17/2020 | | 0 | | (10) | 131 | | | 921 | | | 0 | | | 0 | | | 1,052 | | | 0 | | Dialysis III | | Retail | | Fountain Inn | | SC | | 12/17/2020 | | — | | (6) | 131 | | | 921 | | | — | | | — | | | 1,052 | | | 25 | | Dialysis III | Dialysis III | | Retail | | Johnsonville | | SC | | 12/17/2020 | | 0 | | (10) | 110 | | | 779 | | | 0 | | | 0 | | | 889 | | | 0 | | Dialysis III | | Retail | | Johnsonville | | SC | | 12/17/2020 | | — | | (6) | 110 | | | 779 | | | — | | | — | | | 889 | | | 28 | | Dialysis III | Dialysis III | | Retail | | Kingstree | | SC | | 12/17/2020 | | 0 | | (10) | 217 | | | 1,989 | | | 0 | | | 0 | | | 2,206 | | | 0 | | Dialysis III | | Retail | | Kingstree | | SC | | 12/17/2020 | | — | | (6) | 217 | | | 1,989 | | | — | | | — | | | 2,206 | | | 62 | | Dialysis III | Dialysis III | | Retail | | Lake City | | SC | | 12/17/2020 | | 0 | | (10) | 80 | | | 1,228 | | | 0 | | | 0 | | | 1,308 | | | 0 | | Dialysis III | | Retail | | Lake City | | SC | | 12/17/2020 | | — | | (6) | 80 | | | 1,228 | | | — | | | — | | | 1,308 | | | 36 | | Dialysis III | Dialysis III | | Retail | | Lugoff | | SC | | 12/17/2020 | | 0 | | (10) | 59 | | | 943 | | | 0 | | | 0 | | | 1,002 | | | 0 | | Dialysis III | | Retail | | Lugoff | | SC | | 12/17/2020 | | — | | (6) | 59 | | | 943 | | | — | | | — | | | 1,002 | | | 28 | | Dialysis III | Dialysis III | | Retail | | Manning | | SC | | 12/17/2020 | | 0 | | (10) | 121 | | | 888 | | | 0 | | | 0 | | | 1,009 | | | 0 | | Dialysis III | | Retail | | Manning | | SC | | 12/17/2020 | | — | | (6) | 121 | | | 888 | | | — | | | — | | | 1,009 | | | 32 | | Dialysis III | Dialysis III | | Retail | | Myrtle Beach | | SC | | 12/17/2020 | | 0 | | (10) | 397 | | | 1,560 | | | 0 | | | 0 | | | 1,957 | | | 0 | | Dialysis III | | Retail | | Myrtle Beach | | SC | | 12/17/2020 | | — | | (6) | 397 | | | 1,560 | | | — | | | 25 | | | 1,982 | | | 51 | | | Encumbrances allocated based on notes below | | 1,341,738 | | | | Total | | | | | | $ | 1,528,632 | | | $ | 725,751 | | | $ | 2,806,163 | | | $ | (2,435) | | | $ | 24,345 | | | $ | 3,553,824 | | | $ | 454,227 | | |
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
Schedule III — Real Estate and Accumulated Depreciation — Part I December 31, 20202021
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2021 [9] [10] | | | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2021 | | Land | | Building and Improvements | | Land | | Building and Improvements | | | Accumulated Depreciation [11] [12] | National Convenience Distributors | | Retail | | Chicopee | | MA | | 3/30/2021 | | — | | (7) | 612 | | | 12,878 | | | — | | | — | | | 13,490 | | | 249 | | National Convenience Distributors | | Retail | | Chicopee | | MA | | 3/30/2021 | | — | | (7) | 897 | | | 4,774 | | | — | | | — | | | 5,671 | | | 110 | | National Convenience Distributors | | Retail | | Chicopee | | MA | | 3/30/2021 | | — | | (7) | 82 | | | 559 | | | — | | | — | | | 641 | | | 13 | | National Convenience Distributors | | Retail | | Chicopee | | MA | | 3/30/2021 | | — | | (7) | 834 | | | 4,987 | | | — | | | — | | | 5,821 | | | 101 | | National Convenience Distributors | | Retail | | Chicopee | | MA | | 3/30/2021 | | — | | (7) | 850 | | | 4,168 | | | — | | | — | | | 5,018 | | | 83 | | Advance Auto VI | | Retail | | Columbus | | OH | | 3/31/2021 | | — | | (6) | 130 | | | 1,007 | | | — | | | — | | | 1,137 | | | 22 | | Advance Auto VI | | Retail | | Sandusky | | MI | | 3/31/2021 | | — | | (6) | 40 | | | 1,231 | | | — | | | — | | | 1,271 | | | 28 | | Dollar General XXVII | | Retail | | Buffalo | | WV | | 5/28/2021 | | — | | (7) | 338 | | | 559 | | | — | | | — | | | 897 | | | 9 | | Dollar General XXVII | | Retail | | Clendenin | | WV | | 5/28/2021 | | — | | (7) | 131 | | | 862 | | | — | | | — | | | 993 | | | 13 | | Dollar General XXVII | | Retail | | Elizabeth | | WV | | 5/28/2021 | | — | | (7) | 226 | | | 790 | | | — | | | — | | | 1,016 | | | 16 | | Dollar General XXVII | | Retail | | Gassaway | | WV | | 5/28/2021 | | — | | (7) | 263 | | | 618 | | | — | | | — | | | 881 | | | 13 | | Dollar General XXVII | | Retail | | Glenville | | WV | | 5/28/2021 | | — | | (7) | 649 | | | 829 | | | — | | | — | | | 1,478 | | | 15 | | Dollar General XXVII | | Retail | | Middlebourne | | WV | | 5/28/2021 | | — | | (7) | 227 | | | 421 | | | — | | | — | | | 648 | | | 7 | | Dollar General XXVII | | Retail | | Mt. Hope | | WV | | 5/28/2021 | | — | | (7) | 718 | | | 1,004 | | | — | | | — | | | 1,722 | | | 17 | | Dollar General XXVII | | Retail | | Parkersburg | | WV | | 5/28/2021 | | — | | (7) | 745 | | | 933 | | | — | | | — | | | 1,678 | | | 18 | | Dollar General XXVII | | Retail | | Parkersburg | | WV | | 5/28/2021 | | — | | (7) | 700 | | | 888 | | | — | | | — | | | 1,588 | | | 17 | | Dollar General XXVII | | Retail | | Pennsboro | | WV | | 5/28/2021 | | — | | (7) | 411 | | | 848 | | | — | | | — | | | 1,259 | | | 17 | | Dollar General XXVII | | Retail | | Point Pleasant | | WV | | 5/28/2021 | | — | | (7) | 1,129 | | | 1,262 | | | — | | | — | | | 2,391 | | | 23 | | Dollar General XXVII | | Retail | | Sophia | | WV | | 5/28/2021 | | — | | (7) | 451 | | | 973 | | | — | | | — | | | 1,424 | | | 20 | | Dollar General XXVII | | Retail | | St. Mary's | | WV | | 5/28/2021 | | — | | (7) | 407 | | | 405 | | | — | | | — | | | 812 | | | 8 | | Dollar General XXVII | | Retail | | Sutton | | WV | | 5/28/2021 | | — | | (7) | 218 | | | 454 | | | — | | | — | | | 672 | | | 8 | | Dollar General XXVII | | Retail | | Vienna | | WV | | 5/28/2021 | | — | | (7) | 698 | | | 822 | | | — | | | — | | | 1,520 | | | 14 | | Pick N' Save | | Retail | | Franklin | | WI | | 6/18/2021 | | — | | (7) | 1,156 | | | 7,678 | | | — | | | — | | | 8,834 | | | 106 | | Dollar General XXVII | | Retail | | New Haven | | WV | | 6/24/2021 | | — | | (7) | 384 | | | 490 | | | — | | | — | | | 874 | | | 7 | | Tidal Wave I | | Retail | | Camden | | SC | | 7/1/2021 | | — | | (7) | 202 | | | 4,234 | | | — | | | — | | | 4,436 | | | 83 | | Tidal Wave I | | Retail | | Columbus | | GA | | 7/1/2021 | | — | | (7) | 155 | | | 4,154 | | | — | | | — | | | 4,309 | | | 81 | | Tidal Wave I | | Retail | | Fayetteville | | NC | | 7/1/2021 | | — | | (7) | 684 | | | 3,605 | | | — | | | — | | | 4,289 | | | 60 | | Tidal Wave I | | Retail | | Guntersville | | AL | | 7/1/2021 | | — | | (7) | 655 | | | 3,822 | | | — | | | — | | | 4,477 | | | 63 | | Tidal Wave I | | Retail | | Hinesville | | GA | | 7/1/2021 | | — | | (7) | 1,052 | | | 3,403 | | | — | | | — | | | 4,455 | | | 65 | | Tidal Wave I | | Retail | | Macon | | GA | | 7/1/2021 | | — | | (7) | 299 | | | 3,988 | | | — | | | — | | | 4,287 | | | 75 | | Tidal Wave I | | Retail | | Marietta | | GA | | 7/1/2021 | | — | | (7) | 754 | | | 3,551 | | | — | | | — | | | 4,305 | | | 69 | | Tidal Wave I | | Retail | | Milledgeville | | GA | | 7/1/2021 | | — | | (7) | 328 | | | 3,991 | | | — | | | — | | | 4,319 | | | 71 | | Tidal Wave I | | Retail | | Moultrie | | GA | | 7/1/2021 | | — | | (7) | 599 | | | 3,876 | | | — | | | — | | | 4,475 | | | 72 | |
THE NECESSITY RETAIL REIT, INC.
Schedule III — Real Estate and Accumulated Depreciation — Part I December 31, 2021
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2021 [9] [10] | | | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2021 | | Land | | Building and Improvements | | Land | | Building and Improvements | | | Accumulated Depreciation [11] [12] | Tidal Wave I | | Retail | | Overland Park | | KS | | 7/1/2021 | | — | | (7) | 1,038 | | | 3,191 | | | — | | | — | | | 4,229 | | | 61 | | Tidal Wave I | | Retail | | Warner Robins | | GA | | 7/1/2021 | | — | | (7) | 203 | | | 4,102 | | | — | | | — | | | 4,305 | | | 86 | | Imperial Reliance | | Retail | | Coffeyville | | KS | | 7/13/2021 | | — | | (6) | 724 | | | 327 | | | — | | | — | | | 1,051 | | | 6 | | Imperial Reliance | | Retail | | Coffeyville | | KS | | 7/13/2021 | | — | | (6) | 683 | | | 310 | | | — | | | — | | | 993 | | | 7 | | Aaron's II | | Retail | | DeRidder | | LA | | 8/9/2021 | | — | | (7) | 200 | | | 849 | | | — | | | — | | | 1,049 | | | 11 | | Aaron's II | | Retail | | Buffalo | | NY | | 8/20/2021 | | — | | (6) | 203 | | | 672 | | | — | | | — | | | 875 | | | 6 | | Aaron's II | | Retail | | Buffalo | | NY | | 8/20/2021 | | — | | (6) | 328 | | | 525 | | | — | | | — | | | 853 | | | 5 | | Aaron's II | | Retail | | East Hartford | | CT | | 8/20/2021 | | — | | (6) | 431 | | | 325 | | | — | | | — | | | 756 | | | 4 | | Aaron's II | | Retail | | Elmira | | NY | | 8/20/2021 | | — | | (7) | 164 | | | 524 | | | — | | | — | | | 688 | | | 5 | | Aaron's II | | Retail | | Geneva | | NY | | 8/20/2021 | | — | | (7) | 99 | | | 556 | | | — | | | — | | | 655 | | | 5 | | Aaron's II | | Retail | | Lawrence | | MA | | 8/20/2021 | | — | | (6) | 174 | | | 897 | | | — | | | — | | | 1,071 | | | 7 | | Aaron's II | | Retail | | Presque Isle | | ME | | 8/20/2021 | | — | | — | 197 | | | 547 | | | — | | | — | | | 744 | | | 6 | | Aaron's II | | Retail | | Rutland | | VT | | 8/20/2021 | | — | | — | 102 | | | 668 | | | — | | | — | | | 770 | | | 6 | | Aaron's II | | Retail | | Springfield | | MA | | 8/20/2021 | | — | | (6) | 129 | | | 785 | | | — | | | — | | | 914 | | | 8 | | Aaron's II | | Retail | | Syracuse | | NY | | 8/20/2021 | | — | | (7) | 279 | | | 266 | | | — | | | — | | | 545 | | | 2 | | Aaron's II | | Retail | | Syracuse | | NY | | 8/20/2021 | | — | | — | 360 | | | 58 | | | — | | | — | | | 418 | | | 1 | | Aaron's II | | Retail | | Tonawanda | | NY | | 8/20/2021 | | — | | (6) | 337 | | | 376 | | | — | | | — | | | 713 | | | 3 | | Aaron's II | | Retail | | Waterbury | | CT | | 8/20/2021 | | — | | (6) | 199 | | | 895 | | | — | | | — | | | 1,094 | | | 8 | | Aaron's II | | Retail | | Woonsocket | | RI | | 8/20/2021 | | — | | — | 457 | | | 262 | | | — | | | — | | | 719 | | | 3 | | Tidal Wave I | | Retail | | Mission | | KS | | 8/31/2021 | | — | | (7) | 165 | | | 5,195 | | | — | | | — | | | 5,360 | | | 53 | | Tidal Wave I | | Retail | | Pace | | FL | | 8/31/2021 | | — | | (7) | 1,392 | | | 3,996 | | | — | | | — | | | 5,388 | | | 47 | | Dollar General XXVII | | Retail | | Matewan | | WV | | 9/15/2021 | | — | | (7) | 82 | | | 446 | | | — | | | — | | | 528 | | | 5 | | Aaron's II | | Retail | | Oxford | | ME | | 9/30/2021 | | — | | (7) | 416 | | | 478 | | | — | | | — | | | 894 | | | 4 | | Tidal Wave I | | Retail | | Kansas City | | KS | | 10/8/2021 | | — | | (7) | 472 | | | 4,931 | | | — | | | — | | | 5,403 | | | 49 | | Dialysis III | | Retail | | Marion | | SC | | 12/23/2021 | | — | | (7) | 129 | | | 1,317 | | | — | | | — | | | 1,446 | | | — | | Heritage I | | Retail | | Bellevue | | MI | | 12/29/2021 | | — | | (7) | 20 | | | 358 | | | — | | | — | | | 378 | | | — | | Heritage I | | Retail | | Cleveland | | OH | | 12/29/2021 | | — | | (7) | 50 | | | 517 | | | — | | | — | | | 567 | | | — | | Heritage I | | Retail | | Homer | | MI | | 12/29/2021 | | — | | (7) | 39 | | | 378 | | | — | | | — | | | 417 | | | — | | Heritage I | | Retail | | Louisville | | KY | | 12/29/2021 | | — | | (7) | 435 | | | 3,358 | | | — | | | — | | | 3,793 | | | — | | Heritage I | | Retail | | Marshall | | MI | | 12/29/2021 | | — | | (7) | 857 | | | 3,099 | | | — | | | — | | | 3,956 | | | — | | Fidelity I | | Retail | | Chillocothe | | MO | | 12/30/2021 | | — | | (7) | 59 | | | 2,738 | | | — | | | — | | | 2,797 | | | — | | Fidelity I | | Retail | | Columbus | | OH | | 12/30/2021 | | — | | (7) | 269 | | | 344 | | | — | | | — | | | 613 | | | — | | Fidelity I | | Retail | | Marion | | OH | | 12/30/2021 | | — | | (7) | 60 | | | 219 | | | — | | | — | | | 279 | | | — | | Fidelity I | | Retail | | Savannah | | GA | | 12/30/2021 | | — | | (7) | 348 | | | 502 | | | — | | | — | | | 850 | | | — | | Fidelity I | | Retail | | Savannah | | GA | | 12/30/2021 | | — | | (7) | 296 | | | 1,416 | | | — | | | — | | | 1,712 | | | — | | Fidelity I | | Retail | | Savannah | | GA | | 12/30/2021 | | — | | (7) | 1,028 | | | 999 | | | — | | | — | | | 2,027 | | | — | |
THE NECESSITY RETAIL REIT, INC.
Schedule III — Real Estate and Accumulated Depreciation — Part I December 31, 2021
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (In thousands) | | | | Initial Costs | | Subsequent to Acquisition | | Gross Amount Carried at December 31, 2021 [9] [10] | | | Property | | Property Type | | City | | State | | Acquisition Date | | Encumbrances at December 31, 2021 | | Land | | Building and Improvements | | Land | | Building and Improvements | | | Accumulated Depreciation [11] [12] | | | | | | | | | | | | | | | | | | | | | | | | Encumbrances allocated based on notes below | | | | | | | | | | 1,503,717 | | | | | | | | | | | | | | Total | | | | | | | | | | $ | 1,503,717 | | | $ | 733,377 | | | $ | 2,726,334 | | | $ | (4,329) | | | $ | 3,385 | | | $ | 3,458,767 | | | $ | 487,898 | |
_________ (1)These properties collateralize the Column Financial Notes, which had $715.0 million outstanding as of December 31, 2020.2021. (2)These properties collateralize the Truist Bank II mortgage note payable of $9.6 million as of December 31, 2020. (3)These properties collateralize the Truist Bank III mortgage note payable of $61.0 million as of December 31, 2020.
(4)These properties collateralize the Truist Bank IV mortgage note payable of $3.8 million as of December 31, 2020.
(5)These properties collateralize the Stop & Shop I mortgage note payable of $45.0 million as of December 31, 2020.2021.
(6)(3)These properties collateralize the Bob Evans I mortgage note payable of $24.0$22.8 million as of December 31, 2020.2021.
(7)(4)These properties collateralize the Mortgage Loan II, which had $210.0 million outstanding as of December 31, 2020.2021.
(8)(5)These properties collateralize the Mortgage Loan III, which had $33.4 million outstanding as of December 31, 2020.2021.
(9)(6)These properties collateralize the Net Lease Mortgage Notes, which had $240.1$477.5 million outstanding as of December 31, 2020.2021.
(10)(7)These properties are encumbered by the Credit Facility borrowings, in the amount of $280.9 millionif any, with no amounts outstanding as of December 31, 2020 and such amount of borrowings is excluded from the table above.2021.
(11)(8)These properties were acquired as part of the Merger with American Realty Capital — Retail Centers of America, Inc. (RCA) on February 16, 2017. These represent the multi-tenant properties in the portfolio.
(12)(9)Acquired intangible lease assets allocated to individual properties in the amount of $454.2$402.7 million are not reflected in the table above.
(13)(10)The tax basis of aggregate land, buildings and improvements as of December 31, 20202021 is $3.3$3.5 billion.
(14)(11)The accumulated depreciation column excludes $185.1$166.8 million of accumulated amortization associated with acquired intangible lease assets.
(15)(12)Depreciation is computed using the straight-line method over the estimated useful lives of up to 40 years for buildings, 15 years for land improvements and five years for fixtures.
(16)(13)Some or all of the land underlying this property is subject to a land lease. The related Right-of-use assets are separately recorded. See Note 910 — Commitments and Contingencies for additional information.
AMERICAN FINANCE TRUST,THE NECESSITY RETAIL REIT, INC.
Schedule III — Real Estate and Accumulated Depreciation — Part II December 31, 20202021
The following is a summary of activity for real estate and accumulated depreciation for the years ended December 31, 2021, 2020 2019 and 2018:2019: | | | Year Ended December 31, | | Year Ended December 31, | (In thousands) | (In thousands) | | 2020 | | 2019 | | 2018 | (In thousands) | | 2021 | | 2020 | | 2019 | Real estate investments, at cost: | Real estate investments, at cost: | | | | | | | Real estate investments, at cost: | | | | | | | Balance at beginning of year | Balance at beginning of year | | $ | 3,367,374 | | | $ | 3,070,852 | | | $ | 3,056,695 | | Balance at beginning of year | | $ | 3,553,824 | | | $ | 3,367,374 | | | $ | 3,070,852 | | Additions - acquisitions | Additions - acquisitions | | 194,565 | | | 365,159 | | | 201,896 | | Additions - acquisitions | | 164,973 | | | 194,565 | | | 365,159 | | Additions - improvements | Additions - improvements | | 10,754 | | | 14,006 | | | 13,189 | | Additions - improvements | | 14,960 | | | 10,754 | | | 14,006 | | Disposals | Disposals | | (7,059) | | | (80,631) | | | (146,109) | | Disposals | | (31,432) | | | (7,059) | | | (80,631) | | Assets received through substitution | Assets received through substitution | | 3,887 | | | 0 | | | 0 | | Assets received through substitution | | — | | | 3,887 | | | — | | Assets provided through substitution | Assets provided through substitution | | (2,787) | | | 0 | | | 0 | | Assets provided through substitution | | — | | | (2,787) | | | — | | Impairment charges | Impairment charges | | (12,910) | | | (699) | | | (9,363) | | Impairment charges | | (33,261) | | | (12,910) | | | (699) | | Reclassified to assets held for sale | Reclassified to assets held for sale | | 0 | | | (1,313) | | | (45,456) | | Reclassified to assets held for sale | | (210,297) | | | — | | | (1,313) | | Balance at end of the year | Balance at end of the year | | $ | 3,553,824 | | | $ | 3,367,374 | | | $ | 3,070,852 | | Balance at end of the year | | $ | 3,458,767 | | | $ | 3,553,824 | | | $ | 3,367,374 | | | | | | | | | | | | | | | | | Accumulated depreciation: | Accumulated depreciation: | | | | Accumulated depreciation: | | | | Balance at beginning of year | Balance at beginning of year | | $ | 369,450 | | | $ | 311,214 | | | $ | 256,771 | | Balance at beginning of year | | $ | 454,227 | | | $ | 369,450 | | | $ | 311,214 | | Depreciation expense | Depreciation expense | | 88,778 | | | 78,395 | | | 84,482 | | Depreciation expense | | 90,608 | | | 88,778 | | | 78,395 | | Disposals | Disposals | | (3,089) | | | (20,022) | | | (25,131) | | Disposals | | (16,596) | | | (3,089) | | | (20,022) | | Assets provided through substitution | Assets provided through substitution | | (912) | | | 0 | | | 0 | | Assets provided through substitution | | — | | | (912) | | | — | | Reclassified to assets held for sale | | 0 | | | (137) | | | (4,908) | | | Reclassified to assets held for sale (1) | | Reclassified to assets held for sale (1) | | (40,341) | | | — | | | (137) | | Balance at end of the year | Balance at end of the year | | $ | 454,227 | | | $ | 369,450 | | | $ | 311,214 | | Balance at end of the year | | $ | 487,898 | | | $ | 454,227 | | | $ | 369,450 | |
(1)
Excludes $29.7 million of reclassified accumulated amortization associated with acquired intangible lease assets.
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