Quarterly report pursuant to Section 13 or 15(d)

Equity and Mezzanine Equity

v3.22.2.2
Equity and Mezzanine Equity
 9 Months Ended
Sep. 30, 2022
Equity [Abstract]  
Equity and Mezzanine Equity Equity and Mezzanine Equity
Stockholders’ Equity

The following table summarizes the changes in our equity for the three and nine months ended September 30, 2022 and 2021 (in thousands):
 
Three Months Ended September 30, Nine Months Ended September 30,
2022 2021 2022 2021
Senior Common Stock
Balance, beginning of period $ 1  $ 1  $ 1  $ 1 
Issuance of senior common stock, net —  —  —  — 
Balance, end of period $ 1  $ 1  $ 1  $ 1 
Common Stock
Balance, beginning of period $ 39  $ 36  $ 37  $ 35 
Issuance of common stock, net —  1  2  2 
Balance, end of period $ 39  $ 37  $ 39  $ 37 
Series F Preferred Stock
Balance, beginning of period $ 1  $ —  $ —  $ — 
Issuance of Series F preferred stock, net —  —  1  — 
Redemption of Series F preferred stock, net —  —  —  — 
Balance, end of period $ 1  $ —  $ 1  $ — 
Additional Paid in Capital
Balance, beginning of period $ 705,629  $ 648,112  $ 671,134  $ 626,533 
Issuance of common stock and Series F preferred stock, net 9,856  8,699  44,513  29,110 
Redemption of OP Units —  —  —  4,812 
Redemption of Series F preferred stock, net —  —  55  — 
Adjustment to OP Units held by Non-controlling OP Unitholders resulting from changes in ownership of the Operating Partnership 1,613  (21) 1,396  (3,665)
Balance, end of period $ 717,098  $ 656,790  $ 717,098  $ 656,790 
Accumulated Other Comprehensive Income
Balance, beginning of period $ 5,524  $ (2,641) $ (1,346) $ (4,345)
Comprehensive income 6,790  421  13,660  2,125 
Reclassification into interest expense 52  145  52  145 
Balance, end of period $ 12,366  $ (2,075) $ 12,366  $ (2,075)
Distributions in Excess of Accumulated Earnings
Balance, beginning of period $ (498,574) $ (442,122) $ (468,523) $ (409,041)
Distributions declared to common, senior common, and preferred stockholders (17,984) (16,849) (53,000) (50,011)
Redemption of Series D preferred stock, net —  —  —  (2,141)
Redemption of Series F preferred stock, net —  —  (5) — 
Net income attributable to the Company 2,501  4,477  7,471  6,699 
Balance, end of period $ (514,057) $ (454,494) $ (514,057) $ (454,494)
Total Stockholders' Equity
Balance, beginning of period $ 212,620  $ 203,386  $ 201,303  $ 213,183 
Issuance of common stock and Series F preferred stock, net 9,856  8,700  44,516  29,112 
Redemption of OP Units —  —  —  4,812 
Redemption of Series D preferred stock, net —  —  —  (2,141)
Redemption of Series F preferred stock, net —  —  50  — 
Distributions declared to common, senior common, and preferred stockholders (17,984) (16,849) (53,000) (50,011)
Comprehensive income 6,790  421  13,660  2,125 
Reclassification into interest expense 52  145  52  145 
Adjustment to OP Units held by Non-controlling OP Unitholders resulting from changes in ownership of the Operating Partnership 1,613  (21) 1,396  (3,665)
Net income attributable to the Company 2,501  4,477  7,471  6,699 
Balance, end of period $ 215,448  $ 200,259  $ 215,448  $ 200,259 
Non-Controlling Interest
Balance, beginning of period $ 1,275  $ 1,338  $ 1,259  $ 2,854 
Distributions declared to Non-controlling OP Unit holders (114) (97) (307) (382)
Issuance of Non-controlling OP Units as consideration in real estate acquisitions, net 2,394  —  2,394  — 
Redemptions of OP Units —  —  —  (4,812)
Adjustment to OP Units held by Non-controlling OP Unitholders resulting from changes in ownership of the Operating Partnership (1,613) 21  (1,396) 3,665 
Net (loss) income (attributable) available to OP units held by Non-controlling OP Unitholders (4) 21  (12) (42)
Balance, end of period $ 1,938  $ 1,283  $ 1,938  $ 1,283 
Total Equity $ 217,386  $ 201,542  $ 217,386  $ 201,542 
Distributions

We paid the following distributions per share for the three and nine months ended September 30, 2022 and 2021:

For the three months ended September 30, For the nine months ended September 30,
2022 2021 2022 2021
Common Stock and Non-controlling OP Units $ 0.37620  $ 0.37545  $ 1.12860  $ 1.12635 
Senior Common Stock 0.2625  0.2625  0.7875  0.7875 
Series D Preferred Stock —  —  (1) —  0.8749998  (1)
Series E Preferred Stock 0.414063  0.414063  1.242189  1.242189 
Series F Preferred Stock 0.375  0.375  1.125  1.125 
Series G Preferred Stock 0.375  0.375  (2) 1.125  0.375  (2)
(1)We redeemed all outstanding shares of our Series D Preferred Stock on June 30, 2021.
(2)Our shares of Series G Preferred Stock were issued on June 28, 2021.

Recent Activity

Common Stock ATM Program

During the nine months ended September 30, 2022, we sold 2.0 million shares of common stock, raising $40.6 million in net proceeds under our At-the-Market Equity Offering Sales Agreements with sales agents Robert W. Baird & Co. Incorporated, Goldman Sachs & Co. LLC, Stifel, Nicolaus & Company, Incorporated, BTIG, LLC, and Fifth Third Securities, Inc. On February 22, 2022, we entered into Amendment No. 1 to our existing At-the-Market Equity Offering Sales Agreement (the “Common Stock Sales Agreement”), dated December 3, 2019. The amendment permits shares of common stock to be issued pursuant to the Common Stock Sales Agreement under the Company’s Registration Statement on Form S-3 (File No. 333-236143) and future registration statements on Form S-3 (the “Common Stock ATM Program”). As of September 30, 2022, we had remaining capacity to sell up to $26.5 million of common stock pursuant to the Common Stock ATM Program under the 2020 Universal Shelf (as defined below).

Mezzanine Equity

Our 6.625% Series E Cumulative Redeemable Preferred Stock (“Series E Preferred Stock”), and our 6.00% Series G Cumulative Redeemable Preferred Stock (“Series G Preferred Stock”) are classified as mezzanine equity in our condensed consolidated balance sheets because both are redeemable at the option of the shareholder upon a change of control of greater than 50%. A change in control of our company, outside of our control, is only possible if a tender offer is accepted by over 90% of our shareholders. All other change in control situations would require input from our Board of Directors. In addition, our Series E Preferred Stock and Series G Preferred Stock are redeemable at the option of the applicable shareholder in the event a delisting event occurs. We will periodically evaluate the likelihood that a delisting event or change of control of greater than 50% will take place, and if we deem this probable, we adjust the Series E Preferred Stock, and Series G Preferred Stock presented in mezzanine equity to their redemption value, with the offset to gain (loss) on extinguishment. We currently believe the likelihood of a change of control of greater than 50%, or a delisting event, is remote.

Universal Shelf Registration Statement

On January 29, 2020, we filed a universal registration statement on Form S-3, File No. 333-236143 (the “2020 Universal Shelf”). The 2020 Universal Shelf was declared effective on February 11, 2020. The 2020 Universal Shelf allows us to issue up to $800.0 million of securities. Of the $800.0 million of available capacity under our 2020 Universal Shelf, approximately $636.5 million is reserved for the sale of our Series F Preferred Stock, and $63.0 million is reserved for our Common Stock ATM Program. As of September 30, 2022, we had the ability to issue up to $648.6 million of securities under the 2020 Universal Shelf.

Series F Preferred Stock

On February 20, 2020, we filed with the Maryland Department of Assessments and Taxation Articles Supplementary (i) setting forth the rights, preferences and terms of the Series F Preferred Stock and (ii) reclassifying and designating 26,000,000 shares
of our authorized and unissued shares of common stock as shares of Series F Preferred Stock. The reclassification decreased the number of shares classified as common stock from 86,290,000 shares immediately prior to the reclassification to 60,290,000 shares immediately after the reclassification. We sold 164,400 shares of our Series F Preferred Stock, raising $3.7 million in net proceeds during the nine months ended September 30, 2022. As of September 30, 2022, we had remaining capacity to sell up to $621.6 million of Series F Preferred Stock.

Non-controlling Interest in Operating Partnership

As of September 30, 2022 and December 31, 2021, we owned approximately 99.0% and 99.3%, respectively, of the outstanding OP Units. On September 20, 2022, we issued 134,474 OP Units as partial consideration to acquire our 49,375 square foot property located in Fort Payne, Alabama for $5.6 million. During the nine months ended September 30, 2021, we redeemed 246,039 OP Units for an equivalent amount of common stock.

The Operating Partnership is required to make distributions on each OP Unit in the same amount as those paid on each share of our common stock, with the distributions on the OP Units held by us being utilized to make distributions to our common stockholders.
As of September 30, 2022 and December 31, 2021, there were 391,468 and 256,994 outstanding OP Units held by Non-controlling OP Unitholders, respectively.