0001568162 false true 0001568162 2022-01-11 2022-01-11 0001568162 us-gaap:CommonStockMember 2022-01-11 2022-01-11 0001568162 us-gaap:SeriesAPreferredStockMember 2022-01-11 2022-01-11 0001568162 us-gaap:SeriesCPreferredStockMember 2022-01-11 2022-01-11 0001568162 AFIN:PreferredStockPurchaseRightsMember 2022-01-11 2022-01-11 iso4217:USD xbrli:shares iso4217:USD xbrli:shares

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): January 11, 2022

 

American Finance Trust, Inc.

(Exact Name of Registrant as Specified in Charter)

 

Maryland   001-38597   90-0929989

(State or other jurisdiction

of incorporation)

  (Commission File Number)  

(I.R.S. Employer

Identification No.)

 

650 Fifth Avenue, 30th Floor
New York, New York 10019

(Address, including zip code, of Principal Executive Offices)

 

Registrant’s telephone number, including area code: (212) 415-6500

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to section 12(b) of the Act:

 

Title of each class:   Trading Symbol(s)   Name of each exchange on which registered:
Class A Common Stock, $0.01 par value per share   AFIN   The Nasdaq Global Select Market
7.50% Series A Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share   AFINP   The Nasdaq Global Select Market
7.375% Series C Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share   AFINO   The Nasdaq Global Select Market
Preferred Stock Purchase Rights   true   The Nasdaq Global Select Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

Item 7.01. Regulation FD Disclosure.

 

On January 11, 2022, American Finance Trust, Inc. (the “Company”) issued a press release, a copy of which is attached hereto as Exhibit 99.1. The information set forth in Item 7.01 of this Current Report on Form 8-K and in the attached Exhibit 99.1 is deemed to be “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information set forth in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed incorporated by reference into any filing under the Exchange Act or the Securities Act of 1933, as amended, regardless of any general incorporation language in such filing.

 

Item 8.01. Other Events.

 

Recent Acquisition Activity

 

During the quarter ended December 31, 2021, the Company acquired 13 properties for an aggregate contract purchase price of approximately $28.1 million. During the year ended December 31, 2021, the Company acquired 69 properties for an aggregate contract purchase price of approximately $179.9 million.

 

Forward-Looking Statements

 

The statements in this Current Report on Form 8-K that are not historical facts may be forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results or events to be materially different. The words “anticipates,” “believes,” “expects,” “estimates,” “projects,” “plans,” “intends,” “may,” “will,” “seek,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of the Company’s control, which could cause actual results to differ materially from the results contemplated by the forward-looking statements. These risks and uncertainties include the potential adverse effects of the ongoing global COVID-19 pandemic, including actions taken to contain or treat COVID-19, on the Company, the Company’s tenants, the assets under contract to be acquired including their respective tenants and the global economy and financial markets and that any potential future acquisition of property is subject to market conditions and capital availability and may not be identified or completed on favorable terms, or at all, as well as those risks and uncertainties set forth in the Risk Factors section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed on February 25, 2021 and all other filings with the SEC after that date as such risks, uncertainties and other important factors may be updated from time to time in the Company’s subsequent reports including in particular the Company’s Current Report on Form 8-K dated December 20, 2021 and describing additional facts and risk factors relating to the transaction entered into with certain subsidiaries of CIM Real Estate Finance Trust, Inc. (the “Transaction”) and referenced in this release. In particular, the Transaction is subject to closing conditions, including conditions that are outside of the Company’s control, and the Transaction described in this release may not be completed on the contemplated terms, or at all, or may be delayed. The Company may not be able to obtain financing to complete the Transaction on favorable terms or at all. Forward looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise any forward-looking statement to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results, unless required to do so by law. 

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit No   Description
99.1   Press Release dated January 11, 2022
104   Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

  AMERICAN FINANCE TRUST, INC.
     
  By: /s/ Edward M. Weil, Jr.
    Edward M. Weil, Jr.
    Chief Executive Officer and President
(Principal Executive Officer)

 

Dated: January 11, 2022

 

   

 

 

Exhibit 99.1

 

   

 

AMERICAN FINANCE TRUST COMPLETES $180 MILLION IN ACQUISITIONS, 1.7 MILLION SQUARE FEET OF NEW OR RENEWED LEASING IN 2021

 

 

NEW YORK –January 11, 2022 –American Finance Trust, Inc. (Nasdaq: AFIN) (“AFIN” or the “Company”) announced today that it acquired 69 retail properties for a total of $179.9 million1 during the year ended December 31, 2021, based on contract purchase price. The Company also announced that leases at nine properties in its single tenant portfolio were extended during 2021, adding approximately $7.2 million in net straight-line rent over the new lease terms. Additionally, the Company signed 167 new leases or lease renewals2 totaling 1.7 million square feet with tenants in its open-air shopping center portfolio.

 

“We recorded a strong year with nearly $180 million of retail acquisitions, expanding our necessity-retail focused portfolio of net-leased properties with long-term leases,” said Michael Weil, CEO of the Company. “The properties we acquired last year had a weighted-average cap rate of 8.3%3 and a weighted-average remaining lease term of 13.3 years as of each closing date. Additionally, we continued to be successful in our portfolio-wide leasing initiatives, executing over 175 new or renewed leases representing approximately 8.7% of our portfolio by square feet.”

 

Mr. Weil continued, “As we look forward to the previously announced $1.3 billion acquisition of open-air shopping centers that we expect to close this quarter, we believe that the superior execution from our team in 2021 plays a critical role in the transformation of the Company into the Necessity Retail REIT: Where America Shops.”

 

Acquisitions

 

During the fourth quarter, the Company acquired 13 properties for an aggregate contract purchase price of $28.1 million at a cash cap rate4 of 7.1% and a weighted-average cap rate of 8.0% with an average remaining lease term of 18.4 years as of the closing dates, weighted based on square feet. For the year ended December 31, 2021, the Company acquired 69 properties for a contract purchase price of $179.9 million at a going-in cap rate of approximately 7.6% and a weighted-average cap rate of 8.3%.

 

Leasing

 

For the year ended December 31, 2021, the Company executed nine lease extensions in the single tenant segment of its portfolio. The leases extended the weighted average remaining lease term for these tenants to 9.8 years from 2.7 years at the time of signing and added net straight-line rent of approximately $7.2 million over the new lease terms. Total straight-line-rent expected over the duration of these leases is $9.7 million as of the date each lease was executed. The Company also signed 167 new leases or lease renewals associated its open-air shopping centers during the year ended December 31, 2021, totaling 1.7 million square feet.

 

 

 

 

 

Footnotes/Definitions

 

1 Includes two land parcels adjacent to a property the Company owns

 

2 Includes short-term leases, license agreements, and deferral and abatement agreements when coupled with an extension

 

3 Capitalization rate is a rate of return on a real estate investment property based on the expected, annualized straight-line rental income that the property will generate under its existing lease or leases. Capitalization rate is calculated by dividing the annualized straight-lined rental income the property will generate (before debt service and depreciation and after fixed costs and variable costs) by the purchase price of the property, excluding acquisition costs. The weighted-average capitalization rate is based upon square feet.

 

4 Cash capitalization rate is a rate of return on a real estate investment property based on the expected, annualized cash rental income during the first year of ownership that the property will generate under its existing lease or leases. Cash capitalization rate is calculated by dividing this annualized cash rental income the property will generate (before debt service and depreciation and after fixed costs and variable costs) by the purchase price of the property. excluding acquisition costs. The weighted-average cash capitalization rate is based upon square feet

 

About American Finance Trust, Inc. soon to be rebranded The Necessity Retail REIT Where America Shops

 

American Finance Trust, Inc. (Nasdaq: AFIN) is a publicly traded real estate investment trust listed on Nasdaq focused on acquiring and managing a diversified portfolio of primarily service-oriented and traditional retail and distribution related commercial real estate properties in the U.S. Additional information about AFIN can be found on its website at www.americanfinancetrust.com.

 

Important Notice

 

The statements in this press release that are not historical facts may be forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results or events to be materially different. The words “anticipates,” “believes,” “expects,” “estimates,” “projects,” “plans,” “intends,” “may,” “will,” “seek,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of the Company’s control, which could cause actual results to differ materially from the results contemplated by the forward-looking statements. These risks and uncertainties include the potential adverse effects of the ongoing global COVID-19 pandemic, including actions taken to contain or treat COVID-19, on the Company, the Company’s tenants, the assets under contract to be acquired including their respective tenants and the global economy and financial markets and that any potential future acquisition of property is subject to market conditions and capital availability and may not be identified or completed on favorable terms, or at all, as well as those risks and uncertainties set forth in the Risk Factors section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed on February 25, 2021 and all other filings with the SEC after that date as such risks, uncertainties and other important factors may be updated from time to time in the Company’s subsequent reports including in particular the Company’s Current Report on Form 8-K dated December 20, 2021 and describing additional facts and risk factors relating to the transaction entered into with certain subsidiaries of CIM Real Estate Finance Trust, Inc. (the “Transaction”) and referenced in this release. In particular, the Transaction is subject to closing conditions, including conditions that are outside of the Company’s control, and the Transaction described in this release may not be completed on the contemplated terms, or at all, or may be delayed. The Company may not be able to obtain financing to complete the Transaction on favorable terms or at all. Forward looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise any forward-looking statement to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results, unless required to do so by law. 

 

Contacts:

Investor Relations

investorrelations@americanfinancetrust.com

(866) 902-0063