Equity | 7. Equity The following table summarizes the changes in our stockholders’ equity for the three months ended March 31, 2019 and 2018 (amounts in thousands, except share amounts): Shares Common Stock Par Value Additional Paid-in Capital Retained Earnings (Deficit) Cumulative Dividends Accumulated Other Comprehensive Income (Loss) Non- controlling Interest in Operating Partnership Total Equity Three months ended March 31, 2019 Balance at December 31, 2018 60,849,206 $ 608 $ 1,017,415 $ 12,831 $ (139,103 ) $ 2,412 $ 131,090 $ 1,025,253 Cumulative effect adjustment related to adoption of Leases (Topic 842) — — (34 ) — — — (34 ) Stock based compensation — 183 — — — 551 734 Dividends and distributions paid ($0.26 per share) — — — (15,841 ) — (2,592 ) (18,433 ) Grant of unvested restricted stock 57,121 1 (1 ) — — — — — Redemption of common units for shares of common stock 33,125 — 493 — — — (493 ) — Issuance of common stock 7,066,455 71 125,653 — — — — 125,724 Unrealized loss on interest rate swaps, net — — — — (2,631 ) (386 ) (3,017 ) Net loss — — (416 ) (65 ) (481 ) Allocation of non-controlling interest in Operating Partnership — (15,805 ) — — — 15,805 — Balance at March 31, 2019 68,005,907 $ 680 $ 1,127,938 $ 12,381 $ (154,944 ) $ (219 ) $ 143,910 $ 1,129,746 Three months ended March 31, 2018 Balance at December 31, 2017 44,787,040 $ 448 $ 740,546 $ 7,127 $ (83,718 ) $ 3,403 $ 123,283 $ 791,089 Stock based compensation — 81 — — — 783 864 Dividends and distributions paid ($0.26 per share) — — — (11,729 ) — (2,695 ) (14,424 ) Issuance of common stock 671,666 7 13,482 — — — — 13,489 Unrealized gain on interest rate swaps, net — — — — 1,486 373 1,859 Net income — — 1,519 — — 296 1,815 Allocation of non-controlling interest in Operating Partnership — (13,020 ) — — — 13,020 — Balance at March 31, 2018 45,458,706 $ 455 $ 741,089 $ 8,646 $ (95,447 ) $ 4,889 $ 135,060 $ 794,692 During the quarter ending March 31, 2019, the Company granted an aggregate of 143,538 performance-based long term incentive plan units in the Operating Partnership (“LTIP units”) to members of management pursuant to the 2015 Equity Incentive Plan, as amended (the “2015 Equity Incentive Plan”) subject to the Company achieving certain absolute and relative total shareholder returns through the performance period. The awards consist of two separate tranches of 45,238 LTIP units and 98,300 LTIP units with performance periods ending on December 31, 2020 and December 31, 2021, respectively. Fifty percent of the LTIP Units vest when earned following the end of the applicable performance period and 50% of the earned award is subject to an additional one year of vesting. The Company also granted, during the quarter ending March 31, 2019, an aggregate of 54,041 shares of restricted common stock to members of management pursuant to the 2015 Equity Incentive Plan, of which an aggregate of 17,645 shares will vest on January 18, 2021 and an aggregate of 36,396 shares will vest on January 18, 2022. On March 11, 2019, the Company issued an aggregate of 3,080 shares of restricted common stock to certain employees pursuant to the 2015 Equity Incentive Plan. The shares of restricted common stock will vest upon the second anniversary of the grant date so long as the grantee remains an employee of the Company on such date. A summary of our shares of restricted common stock and LTIP unit awards at March 31, 2019 is as follows: Restricted Shares Restricted Shares Weighted Average Grant Date Fair Value Per Share LTIP Units LTIP Units Weighted Average Grant Date Fair Value Per Share Outstanding, December 31, 2018 24,020 $ 20.74 636,381 $ 11.47 Granted 57,121 17.04 143,538 19.20 Vested (2,692 ) 19.79 (463,000 ) 8.91 Forfeited — — (32,448 ) 19.15 Outstanding, March 31, 2019 78,449 $ 18.08 284,471 $ 18.66 We recognized $0.7 million in compensation expense related to our shares of restricted common stock and the LTIP unit awards for the three months ended March 31, 2019. As of March 31, 2019, unrecognized compensation expense for both sets of awards was $5.1 million, which will be amortized over the vesting period. A summary of dividends declared by the Company’s board of directors per share of common stock and per common unit at the date of record is as follows: Quarter Declaration Date Record Date Pay Date Dividend (1) Q1 2019 May 2, 2019 June 10, 2019 June 27, 2019 $ 0.26 (1) Prior to the end of the performance period as set forth in the applicable LTIP unit award, holders of LTIP units are entitled to receive dividends per LTIP unit equal to 10% of the dividend paid per common unit. After the end of the performance period, the number of LTIP units, both vested and unvested, that LTIP award recipients have earned, if any, are entitled to receive dividends in an amount per LTIP unit equal to dividends, both regular and special, payable per common unit. ATM Programs On March 3, 2017, we entered into separate equity distribution agreements with each of Citigroup Global Markets Inc., BTIG, LLC, Jefferies LLC, Raymond James & Associates, Inc., RBC Capital Markets, LLC and SunTrust Robinson Humphrey, Inc., pursuant to which we may issue and sell shares of our common stock having an aggregate offering price of up to $100.0 million from time to time (the “2017 ATM Program”) in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act of 1933 as amended (the “Securities Act”). On March 4, 2019, we entered into separate equity distribution agreements with each of Citigroup Global Markets Inc., BMO Capital Markets Corp., BTIG, LLC, Capital One Securities, Inc., Jefferies LLC, Raymond James & Associates, Inc., RBC Capital Markets, LLC, SunTrust Robinson Humphrey, Inc. and Wells Fargo Securities, LLC pursuant to which we may issue and sell shares of our common stock having an aggregate offering price of up to $200.0 million from time to time (the “2019 ATM Program” and together with the 2017 ATM Program, the “ATM Programs”) in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act. Under the 2019 ATM Program, we may also enter into one or more forward transactions under separate master forward sale confirmations and related supplemental confirmations with each of Citibank, N.A., Bank of Montreal, Jefferies LLC, Raymond James & Associates, Inc., Royal Bank of Canada and Wells Fargo Bank, National Association for the sale of shares of our common stock on a forward basis. No sales of shares of our common stock were made under the 2019 ATM Program during the quarter ending March 31, 2019. The following table sets forth certain information with respect to sales made under the 2017 ATM Program as of March 31, 2019 (amounts in thousands except share amounts) : For the Three Months Ended: Number of Shares Sold Net Proceeds March 31, 2019 366,455 $ 6,504 We have used the proceeds from such sales for general corporate purposes. As of March 31, 2019, we had approximately $225.8 million of gross sales of our common stock available under the ATM Programs, including approximately $25.8 million of gross sales available under the 2017 ATM Program. Offering of Common Stock on a Forward Basis On June 21, 2018, we completed an underwritten public offering of an aggregate of 20,700,000 The public offering included 13,700,000 shares sold by us directly to the underwriters (including 2,700,000 shares pursuant to the underwriters’ exercise of their option to purchase additional shares), resulting in net proceeds to us of approximately $252.9 million, after deducting underwriting discounts and commissions and our offering expenses. In connection with the public offering, we also entered into forward sale agreements On March 27, 2019, we physically settled a portion of the forward sale agreements by issuing an aggregate of 6,700,000 shares of our common stock in exchange for approximately $119.2 million in net proceeds after deducting underwriting discounts and commissions and our offering expenses. The Company accounted for the forward sale agreements as equity. Subject to our right to elect cash or net share settlement, we expect to physically settle the remaining 300,000 shares underlying the forward sale agreements no later than June 21, 2019. |