9. Subsequent Events

On July 3, 2013, through a wholly-owned subsidiary, we borrowed $8.2 million pursuant to a long-term note payable from Prudential Mortgage Capital Company, LLC, which is collateralized by a security interest in one of our properties. The note accrues interest at a fixed rate of 5.0% per year and we may not repay this note prior to the last three months of the term, without being subject to a prepayment penalty. The note has a maturity date of August 1, 2023. We used the proceeds from the note to acquire real estate.

On July 9, 2013, we acquired a 320,000 square foot office building located in Austin, Texas for $57.0 million, excluding related acquisition expenses of $0.2 million. We funded this acquisition with existing cash on hand and the issuance of $35.3 million of mortgage debt on the property. The tenant has leased the property for 7 years and has 3 options to renew the lease for additional periods of 3 years each. The lease provides for prescribed rent escalations over the life of the lease, with annualized straight line rents of $4.7 million.

On July 9, 2013, our Board of Directors declared the following monthly distributions:

On July 9, 2013, our Board of Directors resolved to clarify the terms of our Share Redemption Program for our senior common stock, specifically in the case of a redemption request due to death, disability or bankruptcy of a shareholder, or Special Redemptions. The Board of Directors resolved that Special Redemptions are not limited by the restrictions on the amount of shares of senior common stock available to be redeemed that affect other redemptions, namely, that Special Redemptions are exempt from the following limitations: (i) during any calendar year, redemptions may not be in excess of 5% of the weighted average number of shares of senior common stock outstanding during the prior calendar year, and (ii) cash available for redemptions is limited to the proceeds of sales of shares of senior common stock pursuant to the DRIP. The terms of our Share Redemption Program were originally disclosed in the prospectus supplement for our senior common stock offering, filed with the Securities and Exchange Commission on March 28, 2011.

On July 10, 2013, we acquired an 115,200 square foot office building located in Allen, Texas for $15.2 million, excluding related acquisition expenses of $0.1 million. We funded this acquisition with existing cash on hand and the issuance of $8.9 million of mortgage debt on the property. There are two tenants in this property, the largest of which occupies 73% of the space and has 9 years remaining on the lease and has 2 options to renew the lease for additional periods of 5 years each. The other tenant has 8 years remaining on the lease and also has 2 options to renew the lease for additional periods of 5 years each. These two leases provide for prescribed rent escalations over the life of the leases, with annualized straight line rents of $1.4 million.

On July 11, 2013, in connection with our underwritten offering of common stock that closed in June 2013, the underwriters partially exercised their option to purchase an additional 158,000 shares of common stock at the previously established public offering price of $18.82. Gross proceeds of the partial exercise totaled $3.0 million and net proceeds, after deducting offering expenses borne by us, were $2.8 million and were used for general working capital.

On July 17, 2013, we executed a revised lease with a tenant to occupy our previously vacant property located in Hazelwood, Missouri. The lease commences on August 1, 2013 and expires in May 2023. The tenant has two options to purchase the property: one option in March 2017 and the other option in May 2023. The lease provides for prescribed rent escalations over the life of the lease, with annualized straight line rents of approximately $0.2 million. In connection with the extension of the lease and the modification of certain terms under the lease, we will pay $0.1 million in leasing commissions and $0.3 million in tenant improvements.