UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number
(Exact name of registrant as specified in its charter)
| ||
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) | |
(Address of principal executive offices) | (Zip Code) |
(
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: |
| Trading Symbol |
| Name of each exchange on which registered: |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer | ☐ | Accelerated Filer | ☐ | |
☒ | Smaller Reporting Company | |||
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.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
The number of shares of the registrant’s common stock outstanding on October 14, 2021 was
INDEX
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PART I—FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ALPINE INCOME PROPERTY TRUST, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
As of | |||||
(Unaudited) September 30, 2021 |
| December 31, 2020 | |||
ASSETS | |||||
Real Estate: | |||||
Land, at cost | $ | | $ | | |
Building and Improvements, at cost | | | |||
Total Real Estate, at cost | | | |||
Less, Accumulated Depreciation | ( | ( | |||
Real Estate—Net | | | |||
Cash and Cash Equivalents | | | |||
Restricted Cash | | — | |||
Intangible Lease Assets—Net | | | |||
Straight-Line Rent Adjustment | | | |||
Other Assets | | | |||
Total Assets | $ | | $ | | |
LIABILITIES AND EQUITY | |||||
Liabilities: | |||||
Accounts Payable, Accrued Expenses, and Other Liabilities | $ | | $ | | |
Prepaid Rent and Deferred Revenue | | | |||
Intangible Lease Liabilities—Net | | | |||
Long-Term Debt | | | |||
Total Liabilities | | | |||
Commitments and Contingencies—See Note 15 | |||||
Equity: | |||||
Preferred Stock, $ | |||||
Common Stock, $ | | | |||
Additional Paid-in Capital | | | |||
Dividends in Excess of Net Income | ( | ( | |||
Accumulated Other Comprehensive Income (Loss) | | ( | |||
Stockholders' Equity | | | |||
Noncontrolling Interest | | | |||
Total Equity | | | |||
Total Liabilities and Equity | $ | | $ | | |
The accompanying notes are an integral part of these consolidated financial statements.
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ALPINE INCOME PROPERTY TRUST, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except share, per share and dividend data)
Three Months Ended | Nine Months Ended | |||||||||||
September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | |||||||||
Revenues: | ||||||||||||
Lease Income | $ | | $ | | $ | | $ | | ||||
Total Revenues | | | | | ||||||||
Operating Expenses: | ||||||||||||
Real Estate Expenses | | | | | ||||||||
General and Administrative Expenses | | | | | ||||||||
Depreciation and Amortization | | | | | ||||||||
Total Operating Expenses | | | | | ||||||||
Gain on Disposition of Assets | | | | | ||||||||
Net Income from Operations | | | | | ||||||||
Interest Expense | | | | | ||||||||
Net Income | | | | | ||||||||
Less: Net Income Attributable to Noncontrolling Interest | ( | ( | ( | ( | ||||||||
Net Income Attributable to Alpine Income Property Trust, Inc. | $ | | $ | | $ | | $ | | ||||
Per Common Share Data: | ||||||||||||
Net Income Attributable to Alpine Income Property Trust, Inc. | ||||||||||||
Basic | $ | | $ | | $ | | $ | | ||||
Diluted | $ | | $ | | $ | | $ | | ||||
Weighted Average Number of Common Shares: | ||||||||||||
Basic | | | | | ||||||||
Diluted | | | | | ||||||||
Dividends Declared and Paid | $ | | $ | | $ | | $ | | ||||
The accompanying notes are an integral part of these consolidated financial statements.
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ALPINE INCOME PROPERTY TRUST, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited, in thousands)
Three Months Ended | Nine Months Ended | |||||||||||
September 30, 2021 |
| September 30, 2020 | September 30, 2021 |
| September 30, 2020 | |||||||
Net Income Attributable to Alpine Income Property Trust, Inc. | $ | | $ | | $ | | $ | | ||||
Other Comprehensive Income (Loss) | ||||||||||||
Cash Flow Hedging Derivative - Interest Rate Swaps | | | | ( | ||||||||
Total Other Comprehensive Income (Loss) | | | | ( | ||||||||
Total Comprehensive Income | $ | | $ | | $ | | $ | | ||||
The accompanying notes are an integral part of these consolidated financial statements.
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ALPINE INCOME PROPERTY TRUST, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited, in thousands, except per share data)
For the three months ended September 30, 2021:
| Common Stock at Par |
| Additional Paid-in Capital |
| Dividends in Excess of Net Income | Accumulated Other Comprehensive Income (Loss) |
| Stockholders' Equity |
| Noncontrolling Interest |
| Total Equity | |||||||||
Balance July 1, 2021 | $ | | $ | | $ | ( | $ | | $ | | $ | | $ | | |||||||
Net Income | — | — | | — | | | | ||||||||||||||
Stock Issuance to Directors | — | | — | — | | — | | ||||||||||||||
Stock Issuance, Net of Equity Issuance Costs | — | ( | — | — | ( | — | ( | ||||||||||||||
Operating Units Issued | — | — | — | — | — | | | ||||||||||||||
Cash Dividend ($ | — | — | ( | — | ( | ( | ( | ||||||||||||||
Other Comprehensive Income | — | — | — | | | — | | ||||||||||||||
Balance September 30, 2021 | $ | | $ | | $ | ( | $ | | $ | | $ | | $ | | |||||||
For the three months ended September 30, 2020:
Common Stock at Par |
| Additional Paid-in Capital |
| Dividends in Excess of Net Income |
| Accumulated Other Comprehensive Income (Loss) | Stockholders' Equity |
| Noncontrolling Interest |
| Total Equity | ||||||||||
Balance July 1, 2020 |
| $ | | $ | | $ | ( | $ | ( | $ | | $ | | $ | | ||||||
Net Income | — | — | | — | | | | ||||||||||||||
Stock Issuance to Directors | — | | — | — | | — | | ||||||||||||||
Cash Dividend ($ | — | — | ( | — | ( | ( | ( | ||||||||||||||
Other Comprehensive Income | — | — | — | | | — | | ||||||||||||||
Balance September 30, 2020 | $ | | $ | | $ | ( | $ | ( | $ | | $ | | $ | | |||||||
For the nine months ended September 30, 2021:
Common Stock at Par |
| Additional Paid-in Capital |
| Dividends in Excess of Net Income | Accumulated Other Comprehensive Income (Loss) |
| Stockholders' Equity |
| Noncontrolling Interest |
| Total Equity | ||||||||||
Balance January 1, 2021 |
| $ | | $ | | $ | ( | $ | ( | $ | | $ | | $ | | ||||||
Net Income | — | — | | — | | | | ||||||||||||||
Stock Issuance to Directors | — | | — | — | | — | | ||||||||||||||
Stock Issuance, Net of Equity Issuance Costs | | | — | — | | — | | ||||||||||||||
Operating Units Issued | — | — | — | — | — | | | ||||||||||||||
Cash Dividend ($ | — | — | ( | — | ( | ( | ( | ||||||||||||||
Other Comprehensive Income | — | — | — | | | — | | ||||||||||||||
Balance September 30, 2021 | $ | | $ | | $ | ( | $ | | $ | | $ | | $ | | |||||||
For the nine months ended September 30, 2020:
| Common Stock at Par |
| Additional Paid-in Capital |
| Dividends in Excess of Net Income |
| Accumulated Other Comprehensive Income (Loss) | Stockholders' Equity |
| Noncontrolling Interest |
| Total Equity | |||||||||
Balance January 1, 2020 | $ | | $ | | $ | ( | $ | — | $ | | $ | | $ | | |||||||
Net Income | — | — | | — | | | | ||||||||||||||
Stock Repurchase | — | ( | — | — | ( | — | ( | ||||||||||||||
Stock Issuance to Directors | — | | — | — | | — | | ||||||||||||||
Cash Dividend ($ | — | — | ( | — | ( | ( | ( | ||||||||||||||
Other Comprehensive Loss | — | — | — | ( | ( | — | ( | ||||||||||||||
Balance September 30, 2020 | $ | | $ | | $ | ( | $ | ( | $ | | $ | | $ | | |||||||
The accompanying notes are an integral part of these consolidated financial statements.
6
ALPINE INCOME PROPERTY TRUST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Nine Months Ended | ||||||
September 30, 2021 | September 30, 2020 | |||||
Cash Flow from Operating Activities: | ||||||
Net Income | $ | | $ | | ||
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: | ||||||
Depreciation and Amortization | | | ||||
Amortization of Intangible Lease Assets and Liabilities to Lease Income | ( | ( | ||||
Amortization of Deferred Financing Costs to Interest Expense | | | ||||
Gain on Disposition of Assets | ( | ( | ||||
Non-Cash Compensation | | | ||||
Decrease (Increase) in Assets: | ||||||
Straight-Line Rent Adjustment | ( | ( | ||||
COVID-19 Rent Repayments | | ( | ||||
Other Assets | ( | ( | ||||
Increase (Decrease) in Liabilities: | ||||||
Accounts Payable, Accrued Expenses, and Other Liabilities | | | ||||
Prepaid Rent and Deferred Revenue | | | ||||
Net Cash Provided By Operating Activities | | | ||||
Cash Flow from Investing Activities: | ||||||
Acquisition of Real Estate, Including Capitalized Expenditures | ( | ( | ||||
Proceeds from Disposition of Assets | | | ||||
Net Cash Used In Investing Activities | ( | ( | ||||
Cash Flow from Financing Activities: | ||||||
Proceeds from Long-Term Debt | | | ||||
Payments on Long-Term Debt | ( | ( | ||||
Cash Paid for Loan Fees | ( | ( | ||||
Repurchase of Common Stock | — | ( | ||||
Proceeds From Stock Issuance, net | | — | ||||
Dividends Paid | ( | ( | ||||
Net Cash Provided By Financing Activities | | | ||||
Net Increase (Decrease) in Cash and Cash Equivalents | | ( | ||||
Cash and Cash Equivalents, Beginning of Period | | | ||||
Cash and Cash Equivalents, End of Period | $ | | $ | | ||
Reconciliation of Cash to the Consolidated Balance Sheets: | ||||||
Cash and Cash Equivalents | $ | | $ | | ||
Restricted Cash | | — | ||||
Total Cash | $ | | $ | | ||
The accompanying notes are an integral part of these consolidated financial statements.
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ALPINE INCOME PROPERTY TRUST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited, in thousands)
Nine Months Ended | ||||||
September 30, 2021 | September 30, 2020 | |||||
Supplemental Disclosure of Cash Flow Information: | ||||||
Cash Paid for Interest | $ | | $ | | ||
Supplemental Disclosure of Non-Cash Investing and Financing Activities: | ||||||
Unrealized Gain (Loss) on Cash Flow Hedge | $ | | $ | ( | ||
Operating Units Issued in Exchange for Real Estate | $ | $ | — | |||
Assumption of Mortgage Note Payable | $ | $ | — | |||
The accompanying notes are an integral part of these consolidated financial statements.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1. BUSINESS AND ORGANIZATION
BUSINESS
Alpine Income Property Trust, Inc. (the “Company” or “PINE”) is a real estate company that owns and operates a high-quality portfolio of commercial net lease properties. The terms “us,” “we,” “our,” and “the Company” as used in this report refer to Alpine Income Property Trust, Inc. together with our consolidated subsidiaries.
Our portfolio consists of
The Company has
ORGANIZATION
The Company is a Maryland corporation that was formed on August 19, 2019. On November 26, 2019, the Company closed its initial public offering (“IPO”) of shares of its common stock (the “Offering”) as well as a concurrent private placement of shares of common stock to CTO. Net proceeds from the Offering and the concurrent CTO Private Placement (defined below) were used to purchase
The price per share paid in the Offering and the concurrent private placement was $
We conduct the substantial majority of our operations through, and substantially all of our assets are held by, the Operating Partnership. Our wholly owned subsidiary, Alpine Income Property GP, LLC (“PINE GP”), is the sole general partner of the Operating Partnership. As of September 30, 2021, we have a total ownership interest in the Operating Partnership of
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the partnership agreement to manage and conduct the business and affairs of the Operating Partnership, subject to certain approval and voting rights of the limited partners. Our Board of Directors (the “Board”) manages our business and affairs.
The Company has elected to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes under the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). To qualify as a REIT, the Company must meet certain organizational and operational requirements, including a requirement to distribute at least
COVID-19 PANDEMIC
In March 2020, the World Health Organization declared the outbreak of the novel coronavirus as a pandemic (the “COVID-19 Pandemic”), which has spread throughout the United States. The spread of the COVID-19 Pandemic and its variants have continued to cause significant volatility in the U.S. and international markets, and in many industries, business activity has experienced periods of almost complete shutdown. There continues to be uncertainty around the duration and severity of business disruptions related to the COVID-19 Pandemic and its variants, as well as their impact on the U.S. economy and international economies.
Contractual Base Rent (“CBR”) represents the amount owed to the Company under the current terms of its lease agreements. As a result of the COVID-19 Pandemic, during the year ended December 31, 2020, the Company agreed to defer or abate certain CBR in exchange for additional lease term or other lease enhancing additions. Repayments of the remaining balance of deferred CBR began in the third quarter of 2020, with payments continuing, in some cases, through mid-year 2022.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“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 presented. Actual results could differ from those estimates.
Among other factors, fluctuating market conditions that can exist in the national real estate markets and the volatility and uncertainty in the financial and credit markets make it possible that the estimates and assumptions, most notably those related to PINE’s investment in income properties, could change materially due to continued volatility in the real estate and financial markets, or as a result of a significant dislocation in those markets.
LONG-LIVED ASSETS
The Company follows Financial Accounting Standards Board (“FASB”) ASC Topic 360-10, Property, Plant, and Equipment in conducting its impairment analyses. The Company reviews the recoverability of long-lived assets, primarily real estate, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Examples of situations considered to be triggering events include: a substantial decline in operating cash flows during the period, a current or projected loss from operations, an income property not fully leased or leased at
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rates that are less than current market rates, and any other quantitative or qualitative events deemed significant by management. Long-lived assets are evaluated for impairment by using an undiscounted cash flow approach, which considers future estimated capital expenditures. Impairment of long-lived assets is measured at fair value less cost to sell.
PURCHASE ACCOUNTING FOR ACQUISITIONS OF REAL ESTATE SUBJECT TO A LEASE
Investments in real estate are carried at cost less accumulated depreciation and impairment losses, if any. The cost of investments in real estate reflects their purchase price or development cost. We evaluate each acquisition transaction to determine whether the acquired asset meets the definition of a business. Under Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, an acquisition does not qualify as a business when there is no substantive process acquired or substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets or the acquisition does not include a substantive process in the form of an acquired workforce or an acquired contract that cannot be replaced without significant cost, effort or delay. Transaction costs related to acquisitions that are asset acquisitions are capitalized as part of the cost basis of the acquired assets, while transaction costs for acquisitions that are deemed to be acquisitions of a business are expensed as incurred. Improvements and replacements are capitalized when they extend the useful life or improve the productive capacity of the asset. Costs of repairs and maintenance are expensed as incurred.
In accordance with FASB guidance, the fair value of the real estate acquired with in-place leases is allocated to the acquired tangible assets, consisting of land, building and tenant improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, the value of in-place leases, and the value of leasing costs, based in each case on their relative fair values. In allocating the fair value of the identified intangible assets and liabilities of an acquired property, above-market and below-market in-place lease values are recorded as other assets or liabilities based on the present value. The capitalized above-market lease values are amortized as a reduction of rental income over the remaining terms of the respective leases. The capitalized below-market lease values are amortized as an increase to rental income over the initial term unless the management believes that it is likely that the tenant will renew the lease upon expiration, in which case the Company amortizes the value attributable to the renewal over the renewal period. The value of in-place leases and leasing costs are amortized to expense over the remaining non-cancelable periods of the respective leases. If a lease were to be terminated prior to its stated expiration, all unamortized amounts relating to that lease would be written off.
INCOME PROPERTY LEASE REVENUE
The rental arrangements associated with the Company’s income property portfolio are classified as operating leases. The Company recognizes lease income on these properties on a straight-line basis over the term of the lease. Accordingly, contractual lease payment increases are recognized evenly over the term of the lease. The periodic difference between lease income recognized under this method and contractual lease payment terms (i.e., straight-line rent) is recorded as a deferred operating lease receivable and is included in straight-line rent adjustment on the accompanying consolidated balance sheets. The Company’s leases provide for reimbursement from tenants for variable lease payments including common area maintenance, insurance, real estate taxes and other operating expenses. A portion of our variable lease payment revenue is estimated each period and is recognized as rental income in the period the recoverable costs are incurred and accrued.
The collectability of tenant receivables and straight-line rent adjustments is determined based on, among other things, the aging of the tenant receivable, management’s evaluation of credit risk associated with the tenant and industry of the tenant, and a review of specifically identified accounts using judgment. As of September 30, 2021 and December 31, 2020, the Company had recorded an allowance for doubtful accounts of $
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash on hand, bank demand accounts, and money market accounts having original maturities of 90 days or less. The Company’s bank balances as of September 30, 2021 and December 31, 2020 include certain amounts over the Federal Deposit Insurance Corporation limits. The carrying value of cash and cash equivalents is
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reported at Level 1 in the fair value hierarchy, which represents valuation based upon quoted prices in active markets for identical assets or liabilities.
RESTRICTED CASH
Restricted cash totaled $
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITY
Interest Rate Swaps. The Company accounts for its cash flow hedging derivatives in accordance with FASB ASC Topic 815-20, Derivatives and Hedging. Depending upon the hedge’s value at each balance sheet date, the derivatives are included in either other assets or accounts payable, accrued expenses, and other liabilities on the consolidated balance sheet at its fair value. On the date each interest rate swap was entered into, the Company designated the derivatives as a hedge of the variability of cash flows to be paid related to the recognized long-term debt liabilities.
The Company documented the relationship between the hedging instruments and the hedged item, as well as its risk-management objective and strategy for undertaking the hedge transactions. At the hedges’ inception, the Company formally assessed whether the derivatives that are used in hedging the transactions are highly effective in offsetting changes in cash flows of the hedged items, and we will continue to do so on an ongoing basis. As the terms of the interest rate swaps and the associated debts are identical, both hedging instruments qualify for the shortcut method, therefore, it is assumed that there is no hedge ineffectiveness throughout the entire term of the hedging instruments.
Changes in fair value of the hedging instruments that are highly effective and designated and qualified as cash-flow hedges are recorded in other comprehensive income and loss, until earnings are affected by the variability in cash flows of the designated hedged items (see Note 9, “Interest Rate Swaps”).
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts of the Company’s financial assets and liabilities including cash and cash equivalents, restricted cash, accounts receivable included in other assets, accounts payable, and accrued expenses and other liabilities at September 30, 2021 and December 31, 2020, approximate fair value because of the short maturity of these instruments. The carrying value of the Company’s Credit Facility, hereinafter defined, as of September 30, 2021 and December 31, 2020, approximates current market rates for revolving credit arrangements with similar risks and maturities. The Company estimates the fair value of its mortgage note payable and term loans based on incremental borrowing rates for similar types of borrowing arrangements with the same remaining maturity and on the discounted estimated future cash payments to be made for other debt. The discount rate used to calculate the fair value of debt approximates current lending rates for loans and assumes the debt is outstanding through maturity. Since such amounts are estimates that are based on limited available market information for similar transactions, which is a Level 2 non-recurring measurement, there can be no assurance that the disclosed value of any financial instrument could be realized by immediate settlement of the instrument.
FAIR VALUE MEASUREMENTS
The Company’s estimates of fair value of financial and non-financial assets and liabilities is based on the framework established by GAAP. The framework specifies a hierarchy of valuation inputs which was established to increase consistency, clarity and comparability in fair value measurements and related disclosures. GAAP describes a fair value hierarchy based upon three levels of inputs that may be used to measure fair value, two of which are considered observable and one that is considered unobservable. The following describes the three levels:
| ● | Level 1 – Valuation is based upon quoted prices in active markets for identical assets or liabilities. |
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| ● | Level 2 – Valuation is based upon inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
| ● | Level 3 – Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include option pricing models, discounted cash flow models and similar techniques. |
CONCENTRATION OF RISK
Certain of the tenants in the portfolio of
During the nine months ended September 30, 2021, the property leased to Wells Fargo Bank, NA represented
As of September 30, 2021 and December 31, 2020, based on square footage,
RECLASSIFICATIONS
Certain items in the consolidated balance sheet as of December 31, 2020 have been reclassified to conform to the presentation as of September 30, 2021. Specifically, in the first quarter of 2021, the Company reclassified deferred financing costs, net of accumulated amortization, as a component of other assets on the accompanying consolidated balance sheet. Accordingly, deferred financing costs of $
NOTE 3. INCOME PROPERTY PORTFOLIO
As of September 30, 2021, the Company’s income property portfolio consisted of
Leasing revenue consists of long-term rental revenue from retail and office income properties, which is recognized as earned, using the straight-line method over the life of each lease.
The components of leasing revenue are as follows (in thousands):
Three Months Ended |
| Nine Months Ended | ||||||||||
September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | |||||||||
Lease Income | ||||||||||||
Lease Payments | $ | | $ | | $ | | $ | | ||||
Variable Lease Payments | | | | | ||||||||
Total Lease Income | $ | | $ | | $ | | $ | | ||||
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Minimum Future Rental Receipts. Minimum future rental receipts under non-cancelable operating leases, excluding percentage rent and other lease payments that are not fixed and determinable, having remaining terms in excess of one year subsequent to September 30, 2021, are summarized as follows (in thousands):
Year Ending December 31, |
| Amounts | |
Remainder of 2021 | $ | | |
2022 | | ||
2023 | | ||
2024 | | ||
2025 | | ||
2026 and thereafter (cumulative) | | ||
Total | $ | | |
2021 Activity. During the nine months ended September 30, 2021, the Company acquired
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The leases attributable to the income properties acquired during the nine months ended September 30, 2021 are described below:
Description | Location | Date of Acquisition | Square-Feet | Purchase Price ($000's) | Remaining Lease Term at Acquisition Date (in years) | ||||||
Dollar General | Cut and Shoot, TX | $ | |||||||||
Dollar General | Del Rio, TX | ||||||||||
Dollar General | Seguin, TX | ||||||||||
At Home | Canton, OH | ||||||||||
Pet Supplies Plus | Canton, OH | ||||||||||
Salon Lofts | Canton, OH | ||||||||||
Sportsman Warehouse | Albuquerque, NM | ||||||||||
Burlington Stores, Inc. | North Richland Hills, TX | ||||||||||
Academy Sports | Florence, SC | ||||||||||
Big Lots | Durant, OK | ||||||||||
Orscheln | Durant, OK | ||||||||||
Lowe's | Katy, TX | ||||||||||
Harris Teeter | Charlotte, NC | ||||||||||
Rite Aid | Renton, WA | ||||||||||
Walgreens | Clermont, FL | ||||||||||
Big Lots | Germantown, MD | ||||||||||
Big Lots | Phoenix, AZ | ||||||||||
Circle K | Indianapolis, IN | (1) | |||||||||
Burger King | Plymouth, NC | (1) | |||||||||
Dollar Tree | Demopolis, AL | (1) | |||||||||
Firestone | Pittsburgh, PA | (1) | |||||||||
Advance Auto Parts | Ware, MA | (1) | |||||||||
Grease Monkey | Stockbridge, GA | (1) | |||||||||
Hardee's | Boaz, AL | (1) | |||||||||
Schlotzsky's | Sweetwater, TX | (1) | |||||||||
Advance Auto Parts | Athens, GA | (1) | |||||||||
Family Dollar | Burlington, NC | ||||||||||
O'Reilly Auto Parts | Duluth, MN | (1) | |||||||||
Tractor Supply | Washington Court House, OH | ||||||||||
Harbor Freight | Midland, MI | ||||||||||
Camping World | Duluth, MN | ||||||||||
Advance Auto Parts | Ludington, MI | ||||||||||
Advance Auto Parts | New Baltimore, MI | ||||||||||
Dollar Tree | Stillwell, OK | ||||||||||
O'Reilly Auto Parts | Angels Camp, CA | ||||||||||
Walmart | Hempstead, TX | ||||||||||
7-Eleven | Olathe, KS | ||||||||||
At Home | Turnersville, NJ | ||||||||||
Boston Market | Turnersville, NJ | ||||||||||
Verizon | Turnersville, NJ | ||||||||||
Advance Auto Parts | St. Paul, MN | ||||||||||
Hobby Lobby | Aberdeen, SD | ||||||||||
Dollar Tree | Albuquerque, NM | ||||||||||
Office Depot | Albuquerque, NM | ||||||||||
Valero (2) | Jackson, MS | ||||||||||
Valero (2) | Leland, MS | ||||||||||
Total / Weighted Average | $ | ||||||||||
| (1) | The aggregate purchase price of $ |
| (2) | Subject to a master lease agreement. |
15
On July 21, 2021, the Company disposed of
2020 Activity. During the nine months ended September 30, 2020, the Company acquired
The net lease income properties acquired during the nine months ended September 30, 2020 are described below:
Description | Location | Date of Acquisition | Square-Feet | Purchase Price ($000's) | Remaining Lease Term at Acquisition Date (in years) | ||||||
Conn's HomePlus | Hurst, TX | $ | |||||||||
7-Eleven | Austin, TX | ||||||||||
7-Eleven | Georgetown, TX | ||||||||||
Lehigh Gas Wholesale Services, Inc. | Highland Heights, KY | ||||||||||
American Multi-Cinema, Inc. | Tyngsborough, MA | ||||||||||
Hobby Lobby | Tulsa, OK | ||||||||||
Long John Silver's | Tulsa, OK | N/A | |||||||||
Old Time Pottery | Orange Park, FL | ||||||||||
Freddy's Frozen Custard | Orange Park, FL | ||||||||||
Hobby Lobby | Arden, NC | ||||||||||
Walmart | Howell, MI | ||||||||||
Advanced Auto Parts | Severn, MD | ||||||||||
Dollar General | Heuvelton, NY | ||||||||||
Dollar General | Winthrop, NY | ||||||||||
Dollar General | Salem, NY | ||||||||||
Dollar General | Harrisville, NY | ||||||||||
Dollar General | Newtonsville, OH | ||||||||||
Dollar General | Hammond, NY | ||||||||||
Dollar General | Barker, NY | ||||||||||
Dollar General | Chazy, NY | ||||||||||
Dollar General | Milford, ME | ||||||||||
Dollar General | Limestone, ME | ||||||||||
Dollar General | Bingham, ME | ||||||||||
Dollar General | Willis, TX | ||||||||||
Dollar General | Somerville, TX | ||||||||||
Dollar General | Odessa, TX | ||||||||||
Total / Weighted Average | $ | ||||||||||
On September 25, 2020, the Company disposed of
16
NOTE 4. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following table presents the carrying value and estimated fair value of the Company’s financial instruments not carried at fair value on the consolidated balance sheets at September 30, 2021 and December 31, 2020 (in thousands):
September 30, 2021 | December 31, 2020 | |||||||||||
| Carrying Value |
| Estimated Fair Value |
| Carrying Value |
| Estimated Fair Value | |||||
Cash and Cash Equivalents - Level 1 | $ | | $ | | $ | | $ | | ||||
Restricted Cash - Level 1 | $ | | $ | | $ | — | $ | — | ||||
Long-Term Debt - Level 2 | $ | | $ | | $ | | $ | | ||||
The estimated fair values are not necessarily indicative of the amount the Company could realize on disposition of the financial instruments. The use of different market assumptions or estimation methodologies could have a material effect on the estimated fair value amounts.
The following tables present the fair value of assets (liabilities) measured on a recurring basis by Level as of September 30, 2021 and December 31, 2020 (in thousands):
Fair Value at Reporting Date Using | ||||||||||||
| Fair Value |
| Quoted Prices in Active Markets for Identical Assets (Level 1) |
| Significant Other Observable Inputs (Level 2) |
| Significant Unobservable Inputs (Level 3) | |||||
September 30, 2021 | ||||||||||||
2026 Term Loan Interest Rate Swap (1) | $ | | $ | — | $ | | $ | — | ||||
2027 Term Loan Interest Rate Swap (2) | $ | | $ | — | $ | | $ | — | ||||
December 31, 2020 | ||||||||||||
Credit Facility Interest Rate Swap (3) | $ | ( | $ | — | $ | ( | $ | — | ||||
2026 Term Loan Interest Rate Swap (1) | $ | — | $ | — | $ | — | $ | — | ||||
2027 Term Loan Interest Rate Swap (2) | $ | — | $ | — | $ | — | $ | — | ||||
| (1) | Effective May 21, 2021, the Company utilized interest rate swaps to fix LIBOR and achieve a weighted average fixed interest rate of |
| (2) | Effective September 30, 2021, the Company utilized interest rate swaps, inclusive of its redesignation of the existing $ |
| (3) | Effective April 30, 2020, the Company utilized an interest rate swap to fix LIBOR and achieve a fixed interest rate of |
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NOTE 5. INTANGIBLE ASSETS AND LIABILITIES
Intangible assets and liabilities consist of the value of above-market and below-market leases, the value of in-place leases, and the value of leasing costs, based in each case on their fair values. Intangible assets and liabilities consisted of the following as of September 30, 2021 and December 31, 2020 (in thousands):
As of | ||||||
September 30, 2021 | December 31, 2020 | |||||
Intangible Lease Assets: | ||||||
Value of In-Place Leases | $ | | $ | | ||
Value of Above Market In-Place Leases | | | ||||
Value of Intangible Leasing Costs | | | ||||
Sub-total Intangible Lease Assets | | | ||||
Accumulated Amortization | ( | ( | ||||
Sub-total Intangible Lease Assets—Net | | | ||||
Intangible Lease Liabilities: | ||||||
Value of Below Market In-Place Leases | ( | ( | ||||
Sub-total Intangible Lease Liabilities | ( | ( | ||||
Accumulated Amortization | | | ||||
Sub-total Intangible Lease Liabilities—Net | ( | ( | ||||
Total Intangible Assets and Liabilities—Net | $ | | $ | | ||
The following table reflects the net amortization of intangible assets and liabilities during the three and nine months ended September 30, 2021 and 2020 (in thousands):
Three Months Ended | Nine Months Ended | |||||||||||
September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | |||||||||
Amortization Expense | $ | | $ | | $ | | $ | | ||||
Increase to Income Properties Revenue | ( | ( | ( | ( | ||||||||
Net Amortization of Intangible Assets and Liabilities | $ | | $ | | $ | | $ | | ||||
The estimated future amortization expense (income) related to net intangible assets and liabilities is as follows (in thousands):
Year Ending December 31, | Future Amortization Expense | Future Accretion to Income Property Revenue | Net Future Amortization of Intangible Assets and Liabilities | ||||||
Remainder of 2021 | $ | | $ | ( | $ | | |||
2022 | | ( | | ||||||
2023 | | ( | | ||||||
2024 | | ( | | ||||||
2025 | | ( | | ||||||
2026 and thereafter | | ( | | ||||||
Total | $ | | $ | ( | $ | | |||
As of September 30, 2021, the weighted average amortization period of both the total intangible assets and liabilities was
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NOTE 6. OTHER ASSETS
Other assets consisted of the following (in thousands):
As of | ||||||
September 30, 2021 | December 31, 2020 | |||||
Tenant Receivables | $ | | $ | | ||
Accrued Unbilled Tenant Receivables—Net of Allowance for Doubtful Accounts (1) | | | ||||
Prepaid Insurance | | | ||||
Deposits on Acquisitions | | | ||||
Prepaid and Deposits—Other | | | ||||
Deferred Financing Costs—Net | | | ||||
Interest Rate Swaps | | — | ||||
Total Other Assets | $ | | $ | | ||
| (1) | As of September 30, 2021 and December 31, 2020, includes $ |
NOTE 7. ACCOUNTS PAYABLE, ACCRUED EXPENSES, AND OTHER LIABILITIES
Accounts payable, accrued expenses and other liabilities consisted of the following (in thousands):
As of | ||||||
September 30, 2021 | December 31, 2020 | |||||
Accounts Payable | $ | | $ | | ||
Accrued Expenses | | | ||||
Due to CTO | | | ||||
Interest Rate Swap | | | ||||
Total Accounts Payable, Accrued Expenses, and Other Liabilities | $ | | $ | | ||
NOTE 8. LONG-TERM DEBT
As of September 30, 2021, the Company’s outstanding indebtedness, at face value, was as follows (in thousands):
Face Value Debt | Stated Interest Rate | Maturity Date | |||||
Credit Facility | $ | | 30-Day LIBOR + | November 2023 | |||
2026 Term Loan (1) | | 30-Day LIBOR + | May 2026 | ||||
2027 Term Loan (2) | | 30-Day LIBOR + | January 2027 | ||||
Mortgage Note Payable – CMBS Portfolio | | October 2034 | |||||
Total Debt/Weighted – Average Rate | $ | | |||||
| (1) | Effective May 21, 2021, the Company utilized interest rate swaps to fix LIBOR and achieve a weighted average fixed interest rate of |
| (2) | Effective September 30, 2021, the Company utilized interest rate swaps, inclusive of the existing $ |
19
Credit Facility. On November 26, 2019, the Company and the Operating Partnership entered into a credit agreement (the “Credit Facility Credit Agreement”) with a group of lenders for a senior unsecured revolving credit facility (the “Credit Facility”) in the maximum aggregate initial original principal amount of up to $
On June 30, 2020, the Company and the Operating Partnership executed the first amendment to the Credit Facility Credit Agreement whereby the tangible net worth covenant was adjusted to be more reflective of market terms.
On October 16, 2020, the Company and the Operating Partnership executed the second amendment to the Credit Facility (the “Second Amendment”), with the addition of
On May 19, 2021, the Company and the Operating Partnership executed the third amendment to the Credit Facility (the “Third Amendment”). Among other things, the Third Amendment revised the Credit Facility Credit Agreement to provide that as of the last day of each fiscal quarter, the Operating Partnership shall not permit the ratio of Unsecured Indebtedness to Borrowing Base Value (as defined in the Credit Facility Credit Agreement) to be greater than
Pursuant to the Credit Facility Credit Agreement, the indebtedness outstanding under the Credit Facility accrues at a rate ranging from the 30-day LIBOR plus
The Operating Partnership is subject to customary restrictive covenants under the Credit Facility Credit Agreement, the 2026 Term Loan Credit Agreement (hereinafter defined), and the 2027 Term Loan Credit Agreement (hereinafter defined), collectively referred to herein as the “Credit Agreements”, including, but not limited to, limitations on the Operating Partnership’s ability to: (a) incur indebtedness; (b) make certain investments; (c) incur certain liens; (d) engage in certain affiliate transactions; and (e) engage in certain major transactions such as mergers. The Credit Agreements also contain financial covenants covering the Operating Partnership, including but not limited to, tangible net worth and fixed charge coverage ratios.
At September 30, 2021, the current commitment level under the Credit Facility was $
2026 Term Loan. On May 21, 2021, the Operating Partnership, the Company and certain subsidiaries of the Company entered into a term loan credit agreement (the “2026 Term Loan Credit Agreement”) for a term loan (the “2026 Term Loan”) in an aggregate principal amount of $
20
2027 Term Loan. On September 30, 2021, the Operating Partnership, the Company and certain subsidiaries of the Company entered into a term loan credit agreement (the “2027 Term Loan Credit Agreement”) for a term loan (the “2027 Term Loan”) in an aggregate principal amount of $
Mortgage Notes Payable. On June 30, 2021, in connection with the acquisition of the CMBS Portfolio from CTO, the Company assumed an existing $
Long-term debt as of September 30, 2021 and December 31, 2020 consisted of the following (in thousands):
September 30, 2021 | December 31, 2020 | |||||||||||
| Total |
| Due Within One Year |
| Total |
| Due Within One Year | |||||
Credit Facility | $ | | $ | — | $ | | $ | — | ||||
2026 Term Loan | | — | — | — | ||||||||
2027 Term Loan | | — | — | — | ||||||||
Mortgage Note Payable – CMBS Portfolio | | — | — | — | ||||||||
Financing Costs, net of accumulated amortization | ( | — | — | — | ||||||||
Total Long-Term Debt | $ | | $ | — | $ | | $ | — | ||||
Payments applicable to reduction of principal amounts as of September 30, 2021 will be required as follows (in thousands):
Year Ending December 31, |
| Amount | |
Remainder of 2021 | $ | | |
2022 | | ||
2023 | | ||
2024 | | ||
2025 | | ||
2026 and thereafter | | ||
Total Long-Term Debt - Face Value | $ | | |
The carrying value of long-term debt as of September 30, 2021 consisted of the following (in thousands):
| Total | ||
Current Face Amount | $ | | |
Financing Costs, net of accumulated amortization | ( | ||
Total Long-Term Debt | $ | | |
In addition to the $
21
The following table reflects a summary of interest expense incurred and paid during the three and nine months ended September 30, 2021 and 2020 (in thousands):
Three Months Ended | Nine Months Ended | |||||||||||
September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | |||||||||
Interest Expense | $ | | $ | | $ | | $ | | ||||
Amortization of Deferred Financing Costs to Interest Expense | | | | | ||||||||
Total Interest Expense | $ | | $ | | $ | | $ | | ||||
Total Interest Paid | $ | | $ | | $ | | $ | | ||||
The Company was in compliance with all of its debt covenants as of September 30, 2021.
NOTE 9. INTEREST RATE SWAPS
The Company has entered into interest rate swap agreements to hedge against changes in future cash flows resulting from fluctuating interest rates related to the below noted borrowings. The interest rate agreements were
Hedged Item | Effective Date | Maturity Date | Rate | Amount | Fair Value as of September 30, 2021 | |||||||
2026 Term Loan (1) | 5/21/2021 | 5/21/2026 | $ | | $ | | ||||||
2027 Term Loan (2) | 9/30/2021 | 11/26/2024 | $ | | $ | | ||||||
2027 Term Loan (3) | 11/26/2024 | 1/31/2027 | $ | | $ | ( | ||||||
| (1) | Effective May 21, 2021, the Company utilized interest rate swaps to fix LIBOR and achieve a weighted average fixed interest rate of |
| (2) | Effective September 30, 2021, the Company utilized interest rate swaps, inclusive of its redesignation of the existing $ |
| (3) | The interest rate swap agreement hedges the $ |
NOTE 10. EQUITY
SHELF REGISTRATION
On December 1, 2020, the Company filed a shelf registration statement on Form S-3, relating to the registration and potential issuance of its common stock, preferred stock, warrants, rights, and units with a maximum aggregate offering price of up to $
ATM PROGRAM
On December 14, 2020, the Company implemented a $
22
FOLLOW-ON PUBLIC OFFERING
In June 2021, the Company completed a follow-on public offering of
NONCONTROLLING INTEREST
As of September 30, 2021, CTO holds, directly and indirectly, a
DIVIDENDS
The Company has elected to be taxed as a REIT for U.S. federal income tax purposes under the Internal Revenue Code. To qualify as a REIT, the Company must annually distribute, at a minimum, an amount equal to
23
NOTE 11. COMMON STOCK AND EARNINGS PER SHARE
Basic earnings per common share are computed by dividing net income attributable to the Company for the period by the weighted average number of shares of common stock outstanding for the period. Diluted earnings per common share are determined based on the assumption of the conversion of OP Units on a one-for-one basis using the treasury stock method at average market prices for the periods.
The following is a reconciliation of basic and diluted earnings per common share (in thousands, except share and per share data):
Three Months Ended | Nine Months Ended | |||||||||||
September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | |||||||||
Net Income Attributable to Alpine Income Property Trust, Inc. | $ | | $ | | $ | | $ | | ||||
Weighted Average Number of Common Shares Outstanding | | | | | ||||||||
Weighted Average Number of Common Shares Applicable to OP Units using Treasury Stock Method (1) | | | | | ||||||||
Total Shares Applicable to Diluted Earnings per Share | | | | | ||||||||
Per Common Share Data: | ||||||||||||
Net Income Attributable to Alpine Income Property Trust, Inc. | ||||||||||||
Basic | $ | | $ | | $ | | $ | | ||||
Diluted | $ | | $ | | $ | | $ | | ||||
| (1) | Represents shares underlying OP units including (i) |
NOTE 12. SHARE REPURCHASES
In March 2020, the Board approved a $
NOTE 13. STOCK-BASED COMPENSATION
In connection with the closing of the IPO, the Company adopted the Individual Equity Incentive Plan (the “Individual Plan”) and the Manager Equity Incentive Plan (the “Manager Plan”), which are collectively referred to herein as the Equity Incentive Plans. The purpose of the Equity Incentive Plans is to provide equity incentive opportunities to members of the Manager’s management team and employees who perform services for the Company, the Company’s independent directors, advisers, consultants and other personnel, either individually or via grants of incentive equity to the Manager.
On November 26, 2019, in connection with the closing of the IPO, the Company granted restricted shares of common stock to each of the non-employee directors under the Individual Plan. Each of the non-employee directors received an award of
24
transferred by the grantee. Except for the grant of these
A summary of activity for these awards during the nine months ended September 30, 2021 is presented below:
Non-Vested Restricted Shares |
| Shares |
| Wtd. Avg. Fair Value | ||
Outstanding at January 1, 2021 | | $ | | |||
Granted | | | ||||
Vested | | | ||||
Expired | | | ||||
Forfeited | | | ||||
Non-Vested at September 30, 2021 | | $ | | |||
As of September 30, 2021, there was $
Each member of the Board has the option to receive his or her annual retainer in shares of Company common stock rather than cash. The number of shares awarded to the directors making such election is calculated quarterly by dividing the amount of the quarterly retainer payment due to such director by the trailing
Stock compensation expense for the three and nine months ended September 30, 2021 and 2020 is summarized as follows (in thousands):
Three Months Ended | Nine Months Ended | |||||||||||
September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | |||||||||
Stock Compensation Expense – Director Restricted Stock | $ | | $ | | $ | | $ | | ||||
Stock Compensation Expense – Director Retainers Paid in Stock | | | | | ||||||||
Total Stock Compensation Expense (1) | $ | | $ | | $ | | $ | | ||||
| (1) | Director retainers are issued through additional paid in capital in arrears. Therefore, the change in additional paid in capital during the nine months ended September 30, 2021 reported on the consolidated statements of stockholders’ equity does not agree to the total non-cash compensation reported on the consolidated statements of cash flows. |
25
NOTE 14. RELATED PARTY MANAGEMENT COMPANY
We are externally managed by the Manager, a wholly owned subsidiary of CTO. In addition to the CTO Private Placement, CTO purchased from us $
On November 26, 2019, we entered into the Management Agreement with the Manager (the “Management Agreement”). Pursuant to the terms of the Management Agreement, our Manager manages, operates and administers our day-to-day operations, business and affairs, subject to the direction and supervision of the Board and in accordance with the investment guidelines approved and monitored by the Board. We pay our Manager a base management fee equal to
Our Manager has the ability to earn an annual incentive fee based on our total stockholder return exceeding an
The initial term of the Management Agreement will expire on November 26, 2024 and will automatically renew for an unlimited number of successive
Our independent directors will review our Manager’s performance and the management fees annually and, following the initial term, the Management Agreement may be terminated annually upon the affirmative vote of -thirds of our independent directors or upon a determination by the holders of a majority of the outstanding shares of our common stock, based upon (i) unsatisfactory performance by the Manager that is materially detrimental to us or (ii) a determination that the management fees payable to our Manager are not fair, subject to our Manager’s right to prevent such termination due to unfair fees by accepting a reduction of management fees agreed to by -thirds of our independent directors. We may also terminate the Management Agreement for cause at any time, including during the initial term, without the payment of any termination fee, with
We will pay directly or reimburse our Manager for certain expenses, if incurred by our Manager. We will not reimburse any compensation expenses incurred by our Manager or its affiliates. Expense reimbursements to our Manager will be made in cash on a quarterly basis following the end of each quarter. In addition, we will pay all of our operating expenses, except those specifically required to be borne by our Manager pursuant to the Management Agreement.
During the three and nine months ended September 30, 2021, the Company incurred management fee expenses which totaled $
The following table represents amounts due from the Company to CTO (in thousands):
As of | ||||||
Description |
| September 30, 2021 |
| December 31, 2020 | ||
Management Fee due to CTO | $ | | $ | | ||
Other | | ( | ||||
Total (1) | $ | | $ | | ||
| (1) | Included in Accrued Expenses, see Note 7, “Accounts Payable, Accrued Expenses, and Other Liabilities”. |
26
Exclusivity and ROFO Agreement
On November 26, 2019, we also entered into an exclusivity and right of first offer (“ROFO”) agreement with CTO. During the term of the exclusivity and ROFO agreement, CTO will not, and will cause each of its affiliates (which for purposes of the exclusivity and ROFO agreement will not include our company and our subsidiaries) not to, acquire, directly or indirectly, a single-tenant, net leased property, unless CTO has notified us of the opportunity and we have affirmatively rejected the opportunity to acquire the applicable property or properties.
The terms of the exclusivity and ROFO agreement do not restrict CTO or any of its affiliates from providing financing for a third party’s acquisition of single-tenant, net leased properties or from developing and owning any single-tenant, net leased property.
Pursuant to the exclusivity and ROFO agreement, neither CTO nor any of its affiliates (which for purposes of the exclusivity and ROFO agreement does not include our company and our subsidiaries) may sell to any third party any single-tenant, net leased property that was owned by CTO or any of its affiliates as of the closing date of the IPO or that is developed and owned by CTO or any of its affiliates after the closing date of the IPO, without first offering us the right to purchase such property.
The term of the exclusivity and ROFO agreement will continue for so long as the Management Agreement with our Manager is in effect.
On April 6, 2021, the Company entered into a purchase and sale agreement with a certain subsidiary of CTO for the purchase of
On April 2, 2021, the Company entered into a separate purchase and sale agreement with certain subsidiaries of CTO for the purchase of the CMBS Portfolio. The terms of the purchase and sale agreement, as amended on April 20, 2021, provided a total purchase price of $
The entry into the purchase and sale agreements, and subsequent completion of acquisitions, are a result of the Company exercising its right to purchase the Single Property and CMBS Portfolio under the ROFO agreement.
Conflicts of Interest
Conflicts of interest may exist or could arise in the future with CTO and its affiliates, including our Manager, the individuals who serve as our executive officers and executive officers of CTO, any individual who serves as a director of our company and as a director of CTO and any limited partner of the Operating Partnership. Conflicts may include, without limitation: conflicts arising from the enforcement of agreements between us and CTO or our Manager; conflicts in the amount of time that executive officers and employees of CTO, who are provided to us through our Manager, will spend on our affairs versus CTO’s affairs; and conflicts in future transactions that we may pursue with CTO and its affiliates. We do not generally expect to enter into joint ventures with CTO, but if we do so, the terms and conditions of our joint venture investment will be subject to the approval of a majority of disinterested directors of the Board.
In addition, we are subject to conflicts of interest arising out of our relationships with our Manager. Pursuant to the Management Agreement, our Manager is obligated to supply us with our senior management team. However, our Manager is not obligated to dedicate any specific CTO personnel exclusively to us, nor are the CTO personnel provided to us by our Manager obligated to dedicate any specific portion of their time to the management of our business. Additionally, our Manager is a wholly owned subsidiary of CTO. All of our executive officers are executive officers and employees of CTO and one of our officers (John P. Albright) is also a member of CTO’s board of directors. As a result, our Manager and the CTO personnel it provides to us may have conflicts between their duties to us and their duties to, and interests in, CTO.
We may acquire or sell single-tenant, net leased properties in which our Manager or its affiliates have or may have an interest. Similarly, our Manager or its affiliates may acquire or sell single-tenant, net leased properties in which we have or may have an interest. Although such acquisitions or dispositions may present conflicts of interest, we nonetheless may pursue and consummate such transactions. Additionally, we may engage in transactions directly with our Manager or its affiliates, including the purchase and sale of all or a portion of a portfolio asset. If we acquire a single-tenant, net leased
27
property from CTO or one of its affiliates or sell a single-tenant, net leased property to CTO or one of its affiliates, the purchase price we pay to CTO or one of its affiliates or the purchase price paid to us by CTO or one of its affiliates may be higher or lower, respectively, than the purchase price that would have been paid to or by us if the transaction were the result of arms’ length negotiations with an unaffiliated third party.
In deciding whether to issue additional debt or equity securities, we will rely, in part, on recommendations made by our Manager. While such decisions are subject to the approval of the Board, our Manager is entitled to be paid a base management fee that is based on our “total equity” (as defined in the Management Agreement). As a result, our Manager may have an incentive to recommend that we issue additional equity securities at dilutive prices.
All of our executive officers are executive officers and employees of CTO. These individuals and other CTO personnel provided to us through our Manager devote as much time to us as our Manager deems appropriate. However, our executive officers and other CTO personnel provided to us through our Manager may have conflicts in allocating their time and services between us, on the one hand, and CTO and its affiliates, on the other. During a period of prolonged economic weakness or another economic downturn affecting the real estate industry or at other times when we need focused support and assistance from our Manager and the CTO executive officers and other personnel provided to us through our Manager, we may not receive the necessary support and assistance we require or that we would otherwise receive if we were self-managed.
Additionally, the exclusivity and ROFO agreement does contain exceptions to CTO’s exclusivity for opportunities that include only an incidental interest in single-tenant, net leased properties. Accordingly, the exclusivity and ROFO agreement will not prevent CTO from pursuing certain acquisition opportunities that otherwise satisfy our then-current investment criteria.
Our directors and executive officers have duties to our company under applicable Maryland law in connection with their management of our company. At the same time, PINE GP has fiduciary duties, as the general partner, to the Operating Partnership and to the limited partners under Delaware law in connection with the management of the Operating Partnership. These duties as a general partner to the Operating Partnership and its partners may come into conflict with the duties of our directors and executive officers to us. Unless otherwise provided for in the relevant partnership agreement, Delaware law generally requires a general partner of a Delaware limited partnership to adhere to fiduciary duty standards under which it owes its limited partners the highest duties of loyalty and care and which generally prohibits such general partner from taking any action or engaging in any transaction as to which it has a conflict of interest. The partnership agreement provides that in the event of a conflict between the interests of our stockholders on the one hand and the limited partners of the Operating Partnership on the other hand, PINE GP will endeavor in good faith to resolve the conflict in a manner not adverse to either our stockholders or the limited partners; provided, however, that so long as we own a controlling interest in the Operating Partnership, any such conflict that we, in our sole and absolute discretion, determine cannot be resolved in a manner not adverse to either our stockholders or the limited partners of the Operating Partnership shall be resolved in favor of our stockholders, and we shall not be liable for monetary damages for losses sustained, liabilities incurred or benefits not derived by the limited partners in connection with such decisions.
NOTE 15. COMMITMENTS AND CONTINGENCIES
LEGAL PROCEEDINGS
From time to time, the Company may be a party to certain legal proceedings, incidental to the normal course of business. The Company is not currently a party to any pending or threatened legal proceedings that we believe could have a material adverse effect on the Company’s business or financial condition.
NOTE 16. SUBSEQUENT EVENTS
The Company reviewed all subsequent events and transactions through October 21, 2021, the date the consolidated financial statements were issued. There were no reportable subsequent events or transactions.
28
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
When we refer to “we,” “us,” “our,” “PINE,” or “the Company,” we mean Alpine Income Property Trust, Inc. and its consolidated subsidiaries. References to “Notes to Financial Statements” refer to the Notes to the Consolidated Financial Statements of Alpine Income Property Trust, Inc. included in this Quarterly Report on Form 10-Q. Some of the comments we make in this section are forward-looking statements within the meaning of the federal securities laws. For a complete discussion of forward-looking statements, see the section below entitled “Special Note Regarding Forward-Looking Statements.” Certain factors that could cause actual results or events to differ materially from those the Company anticipates or projects are described in “Item 1A. Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 and of this Quarterly Report on Form 10-Q.
Special Note Regarding Forward-Looking Statements
This Report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Certain statements contained in this report (other than statements of historical fact) are forward-looking statements. The words “believe,” “estimate,” “expect,” “intend,” “anticipate,” “will,” “could,” “may,” “should,” “plan,” “potential,” “predict,” “forecast,” “project,” and similar expressions and variations thereof identify certain of such forward-looking statements, which speak only as of the dates on which they were made. Forward-looking statements are made based upon management’s expectations and beliefs concerning future developments and their potential effect upon the Company. There can be no assurance that future developments will be in accordance with management’s expectations or that the effect of future developments on the Company will be those anticipated by management.
Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. These risks and uncertainties include, but are not limited to, the strength of the real estate market; the impact of a prolonged recession or downturn in economic conditions; our ability to successfully execute acquisition or development strategies; any loss of key management personnel; changes in local, regional, and national economic conditions affecting the real estate development business and income properties; the impact of competitive real estate activity; the loss of any major income property tenants; the ultimate geographic spread, severity and duration of pandemics such as the outbreak of COVID-19 and its variants, actions that may be taken by governmental authorities to contain or address the impact of such pandemics, and the potential negative impacts of such pandemics on the global economy and our financial condition and results of operations; and the availability of capital. These risks and uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements.
See “Item 1A. Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 and of this Quarterly Report on Form 10-Q. for further discussion of these risks. Given these uncertainties, readers are cautioned not to place undue reliance on such statements, which speak only as of the date of this Quarterly Report on Form 10-Q. The Company undertakes no obligation to publicly release any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q.
OVERVIEW
We are a real estate company that owns and operates a high-quality portfolio of commercial properties located in the United States. Our properties are generally leased on a long-term basis and located primarily in, or in close proximity to major metropolitan statistical areas, or MSAs, and in growth markets and other markets in the United States with favorable economic and demographic conditions. Our properties are primarily leased to industry leading, creditworthy tenants, many of which operate in industries we believe are resistant to the impact of e-commerce or defensive in nature against economic uncertainty or disruption. The properties in our portfolio are primarily triple-net leases which generally require the tenant to pay all of the property operating expenses such as real estate taxes, insurance, assessments and other governmental fees, utilities, repairs and maintenance and certain capital expenditures. Our portfolio consists of 89 net leased retail and office properties located in 62 markets in 28 states. Twenty of these properties, representing our initial portfolio, were acquired
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from CTO Realty Growth, Inc. (“CTO”) in the formation transactions, utilizing $125.9 million of proceeds from our initial public offering of our common stock (the “IPO”) and the issuance of 1,223,854 units of our operating partnership (the “OP Units”) that had an initial value of $23.3 million based on the IPO price of $19.00 per share (the “IPO Price”). The remaining 69 properties were acquired subsequent to the year ended December 31, 2019. Six properties in our portfolio are long-term ground leases where we are the lessor to the tenant.
We seek to acquire, own and operate primarily freestanding, commercial real estate properties primarily located in our target markets leased primarily pursuant to triple-net, long-term leases. Within our target markets, we will focus on investments primarily in retail properties. We will target tenants in industries that we believe are favorably impacted by current macroeconomic trends that support consumer spending, such as strong and growing employment and positive consumer sentiment, as well as tenants in industries that have demonstrated resistance to the impact of the growing e-commerce retail sector. We also will seek to invest in properties that are net leased to tenants that we determine have attractive credit characteristics, stable operating histories and healthy rent coverage levels, are well-located within their market and have rent levels at or below market rent levels. Furthermore, we believe that the size of our company will, for at least the near term, allow us to focus our investment activities on the acquisition of single properties or smaller portfolios of properties that represent a transaction size that most of our publicly-traded net lease REIT peers will not pursue on a consistent basis.
Our objective is to maximize cash flow and value per share by generating stable and growing cash flows and attractive risk-adjusted returns through owning, operating and growing a diversified portfolio of high-quality net leased commercial properties with strong long-term real estate fundamentals. The 89 properties in our portfolio are 100% occupied and represent 2.7 million of gross rentable square feet. As of September 30, 2021, our leases have a weighted-average remaining lease term of 7.8 years based on annualized base rent.
Our strategy for investing in income-producing properties is focused on factors including, but not limited to, long-term real estate fundamentals and target markets, including major markets or those markets experiencing significant economic growth. We employ a methodology for evaluating targeted investments in income-producing properties which includes an evaluation of: (i) the attributes of the real estate (e.g., location, market demographics, comparable properties in the market, etc.); (ii) an evaluation of the existing tenant(s) (e.g., credit-worthiness, property level sales, tenant rent levels compared to the market, etc.); (iii) other market-specific conditions (e.g., tenant industry, job and population growth in the market, local economy, etc.); and (iv) considerations relating to the Company’s business and strategy (e.g., strategic fit of the asset type, property management needs, alignment with the Company’s structure, etc.).
The Company has no employees and is externally managed by Alpine Income Property Manager, LLC, a Delaware limited liability company and a wholly owned subsidiary of CTO (our “Manager”). CTO is a Maryland corporation that is a publicly traded diversified REIT and the sole member of our Manager.
COVID-19 PANDEMIC
In March 2020, the World Health Organization declared the outbreak of the novel coronavirus as a pandemic (the “COVID-19 Pandemic”), which has spread throughout the United States. The spread of the COVID-19 Pandemic and its variants have continued to cause significant volatility in the U.S. and international markets, and in many industries, business activity has experienced periods of almost complete shutdown. There continues to be uncertainty around the duration and severity of business disruptions related to the COVID-19 Pandemic and its variants, as well as their impact on the U.S. economy and international economies.
Contractual Base Rent (“CBR”) represents the amount owed to the Company under the current terms of its lease agreements. As a result of the COVID-19 Pandemic, during the year ended December 31, 2020, the Company agreed to defer or abate certain CBR in exchange for additional lease term or other lease enhancing additions. Repayments of the remaining balance of deferred CBR began in the third quarter of 2020, with payments continuing, in some cases, through mid-year 2022.
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As of September 30, 2021, the Company owned 89 income properties in 28 states. The following is a summary of the leases attributable to these properties:
Type | Description | Location | Rentable Square Feet | Remaining Term (Years) | Contractual Rent Escalations | Annualized Base Rent ($000's) (1) | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Office | Wells Fargo | Portland, OR | 212,363 | 4.3 | No | $ | 3,137 | ||||||
Office | Hilton Grand Vacations | Orlando, FL | 102,019 | 5.2 | Yes | 1,825 | |||||||
Retail | Walmart | Howell, MI | 214,172 | 5.3 | No | 1,369 | |||||||
Retail | LA Fitness | Brandon, FL | 45,000 | 10.6 | Yes | 958 | |||||||
Retail | Lowe's | Katy, TX | 131,644 | 10.8 | No | 917 | |||||||
Retail | Burlington Stores, Inc. | North Richland Hills, TX | 70,891 | 7.3 | Yes | 859 | |||||||
Retail | Kohl's | Glendale, AZ | 87,875 | 8.3 | Yes | 844 | |||||||
Retail | Hobby Lobby | Tulsa, OK | 84,180 | 9.3 | Yes | 842 | |||||||
Retail | At Home | Canton, OH | 89,902 | 7.8 | Yes | 801 | |||||||
Retail | Harris Teeter | Charlotte, NC | 45,089 | 6.6 | Yes | 768 | |||||||
Retail | At Home | Raleigh, NC | 116,334 | 11.0 | Yes | 732 | |||||||
Retail | Container Store | Phoenix, AZ | 23,329 | 8.4 | Yes | 726 | |||||||
Retail | Camping World | Duluth, MN | 66,033 | 12.3 | Yes | 705 | |||||||
Retail | Cinemark | Reno, NV | 52,474 | 3.0 | Yes | 695 | |||||||
Office | Hilton Grand Vacations | Orlando, FL | 31,895 | 5.2 | Yes | 684 | |||||||
Retail | At Home | Turnersville, NJ | 89,460 | 8.1 | Yes | 641 | |||||||
Retail | Live Nation Entertainment, Inc. | East Troy, WI | — | (2) | 11.5 | Yes | 634 | ||||||
Retail | Academy Sports | Florence, SC | 58,410 | 7.6 | Yes | 628 | |||||||
Retail | Sportsman Warehouse | Albuquerque, NM | 48,974 | 7.9 | Yes | 573 | |||||||
Retail | Hobby Lobby | Winston-Salem, NC | 55,000 | 8.5 | Yes | 562 | |||||||
Retail | Rite Aid | Renton, WA | 16,280 | 4.8 | Yes | 558 | |||||||
Retail | Hobby Lobby | Arden, NC | 55,000 | 9.9 | Yes | 546 | |||||||
Retail | American Multi-Cinema, Inc. | Tyngsborough, MA | 39,474 | 11.5 | Yes | 507 | |||||||
Retail | Dick's Sporting Goods | McDonough, GA | 46,315 | 2.3 | No | 473 | |||||||
Retail | Jo-Ann Fabric | Saugus, MA | 22,500 | 7.3 | Yes | 468 | |||||||
Retail | Conn's HomePlus | Hurst, TX | 37,957 | 9.9 | Yes | 452 | |||||||
Retail | Old Time Pottery | Orange Park, FL | 84,180 | 8.8 | Yes | 439 | |||||||
Retail | 7-Eleven | Austin, TX | 6,400 | 13.5 | Yes | 377 | |||||||
Retail | Walgreens | Birmingham, AL | 14,516 | 7.5 | No | 364 | |||||||
Retail | Walgreens | Alpharetta, GA | 15,120 | 4.1 | No | 363 | |||||||
Retail | Best Buy | McDonough, GA | 30,038 | 4.5 | Yes | 338 | |||||||
Retail | Big Lots | Germantown, MD | 25,589 | 9.3 | Yes | 334 | |||||||
Retail | Big Lots | Phoenix, AZ | 34,512 | 9.3 | Yes | 329 | |||||||
Retail | Lehigh Gas Wholesale Services, Inc. | Highland Heights, KY | 2,578 | 9.2 | Yes | 329 | |||||||
Retail | Walgreens | Clermont, FL | 13,650 | 7.5 | No | 328 | |||||||
Retail | Verizon | Turnersville, NJ | 6,027 | 5.8 | Yes | 326 | |||||||
Retail | Office Depot | Albuquerque, NM | 30,346 | 2.3 | Yes | 300 | |||||||
Retail | 7-Eleven | Georgetown, TX | 7,726 | 14.3 | Yes | 276 | |||||||
Retail | Walgreens | Tacoma, WA | 14,125 | 8.8 | No | 259 | |||||||
Retail | Walgreens | Albany, GA | 14,770 | 11.3 | No | 258 | |||||||
Retail | Walmart | Hempstead, TX | 52,190 | 5.3 | Yes | 253 | |||||||
Retail | Hobby Lobby | Aberdeen, SD | 49,034 | 3.4 | Yes | 221 | |||||||
Retail | 7-Eleven (3) | Olathe, KS | 4,146 | 5.8 | Yes | 219 | |||||||
Retail | Circle K | Indianapolis, IN | 4,283 | 3.2 | Yes | 210 | |||||||
Retail | Scrubbles Car Wash (3) | Jacksonville, FL | 4,512 | 16.1 | Yes | 189 | |||||||
Retail | Cheddar's (3) | Jacksonville, FL | 8,146 | 6.0 | Yes | 186 | |||||||
Retail | Family Dollar | Lynn, MA | 9,228 | 2.5 | Yes | 160 | |||||||
Retail | Orscheln | Durant, OK | 37,965 | 1.4 | Yes | 160 | |||||||
Retail | Advance Auto Parts | St. Paul, MN | 7,201 | 7.1 | Yes | 150 | |||||||
Retail | Tractor Supply | Washington Court House, OH | 39,984 | 10.8 | Yes | 149 | |||||||
Retail | Advanced Auto Parts | Severn, MD | 6,876 | 13.4 | Yes | 148 | |||||||
Retail | Big Lots | Durant, OK | 36,794 | 5.3 | Yes | 142 | |||||||
Retail | O'Reilly Auto Parts | Angels Camp, CA | 7,066 | 4.5 | Yes | 128 | |||||||
Retail | Dollar General | Kermit, TX | 10,920 | 13.9 | Yes | 126 | |||||||
Retail | Burger King | Plymouth, NC | 3,142 | 6.6 | Yes | 125 | |||||||
Retail | Harbor Freight | Midland, MI | 14,624 | 4.8 | Yes | 124 | |||||||
Retail | Dollar General | Chazy, NY | 9,277 | 10.0 | Yes | 119 | |||||||
Retail | Dollar General | Odessa, TX | 9,127 | 13.8 | Yes | 117 | |||||||
Retail | Dollar General | Willis, TX | 9,138 | 13.8 | Yes | 115 | |||||||
Retail | Dollar General | Winthrop, NY | 9,167 | 9.9 | Yes | 113 | |||||||
Retail | Family Dollar | Burlington, NC | 11,394 | 9.5 | Yes | 113 | |||||||
Retail | Advance Auto Parts | Ware, MA | 6,889 | 3.3 | Yes | 112 | |||||||
Retail | Dollar General | Cut and Shoot, TX | 9,096 | 14.1 | Yes | 112 | |||||||
Retail | Dollar General | Milford, ME | 9,128 | 12.1 | Yes | 110 | |||||||
Retail | Dollar Tree | Demopolis, AL | 10,159 | 8.3 | Yes | 110 | |||||||
Retail | Pet Supplies Plus | Canton, OH | 8,400 | 6.1 | Yes | 110 | |||||||
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Type | Description | Location | Rentable Square Feet | Remaining Term (Years) | Contractual Rent Escalations | Annualized Base Rent ($000's) (1) | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Retail | Dollar General | Salem, NY | 9,199 | 11.9 | Yes | 105 | |||||||
Retail | Dollar Tree | Stillwell, OK | 9,828 | 10.5 | Yes | 105 | |||||||
Retail | Dollar General | Bingham, ME | 9,345 | 12.1 | Yes | 104 | |||||||
Retail | Dollar General | Harrisville, NY | 9,309 | 12.3 | Yes | 104 | |||||||
Retail | Dollar General | Heuvelton, NY | 9,342 | 11.1 | Yes | 104 | |||||||
Retail | Firestone | Pittsburgh, PA | 10,629 | 7.5 | Yes | 103 | |||||||
Retail | Dollar General | Barker, NY | 9,275 | 12 | Yes | 102 | |||||||
Retail | Boston Market (3) | Turnersville, NJ | 2,627 | 8.3 | Yes | 101 | |||||||
Retail | Dollar General | Limestone, ME | 9,167 | 12.1 | Yes | 100 | |||||||
Retail | Freddy's Frozen Custard (3) | Orange Park, FL | 3,200 | 5.2 | Yes | 99 | |||||||
Retail | Dollar General | Hammond, NY | 9,219 | 11.3 | Yes | 98 | |||||||
Retail | Dollar General | Somerville, TX | 9,252 | 13.8 | Yes | 96 | |||||||
Retail | Dollar General | Seguin, TX | 9,155 | 13.4 | Yes | 91 | |||||||
Retail | Grease Monkey | Stockbridge, GA | 1,846 | 12.0 | Yes | 90 | |||||||
Retail | Schlotzsky's | Sweetwater, TX | 2,431 | 13.8 | Yes | 85 | |||||||
Retail | Dollar Tree | Albuquerque, NM | 10,023 | 9.4 | Yes | 85 | |||||||
Retail | Valero (5) | Jackson, MS | 1,920 | 20.0 | Yes | 85 | |||||||
Retail | Dollar General | Newtonsville, OH | 9,290 | 8.7 | Yes | 83 | |||||||
Retail | Dollar General | Del Rio, TX | 9,219 | 13.3 | Yes | 83 | |||||||
Retail | Hardee's | Boaz, AL | 3,542 | 9.1 | Yes | 80 | |||||||
Retail | Advance Auto Parts | Athens, GA | 6,871 | 3.3 | Yes | 79 | |||||||
Retail | Valero (5) | Leland, MS | 3,375 | 20.0 | Yes | 78 | |||||||
Retail | Salon Lofts | Canton, OH | 4,000 | 6.4 | Yes | 72 | |||||||
Retail | O'Reilly Auto Parts | Duluth, MN | 11,182 | 6.4 | Yes | 72 | |||||||
Retail | Advance Auto Parts | Ludington, MI | 6,604 | 10.3 | Yes | 63 | |||||||
Retail | Advance Auto Parts | New Baltimore, MI | 6,784 | 10.3 | Yes | 63 | |||||||
Retail | Long John Silver's (3) | Tulsa, OK | 3,000 | — | (4) | No | 24 | ||||||
2,719,667 | 7.8 | $ | 32,699 | ||||||||||
| (1) | Annualized straight-line base rental income in place as of September 30, 2021. |
| (2) | The Alpine Valley Music Theatre, leased to Live Nation Entertainment, Inc., is an entertainment venue consisting of a two-sided, open-air, 7,500-seat pavilion; an outdoor amphitheater with a capacity for 37,000; and over 150 acres of green space. |
| (3) | We are the lessor in a ground lease with the tenant. Rentable square feet represents improvements on the property that revert to us at the expiration of the lease. |
| (4) | Current lease agreement is month-to-month (“MTM”). |
| (5) | Subject to a master lease agreement. |
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COMPARISON OF THE THREE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
The following presents the Company’s results of operations for the three months ended September 30, 2021, as compared to the three months ended September 30, 2020 (in thousands):
Three Months Ended | |||||||||||
September 30, 2021 | September 30, 2020 | $ Variance | % Variance | ||||||||
Revenues: | |||||||||||
Lease Income | $ | 8,171 | $ | 5,101 | $ | 3,070 | 60.2% | ||||
Total Revenues | 8,171 | 5,101 | 3,070 | 60.2% | |||||||
Operating Expenses: | |||||||||||
Real Estate Expenses | 914 | 555 | 359 | 64.7% | |||||||
General and Administrative Expenses | 1,371 | 1,119 | 252 | 22.5% | |||||||
Depreciation and Amortization | 4,308 | 2,694 | 1,614 | 59.9% | |||||||
Total Operating Expenses | 6,593 | 4,368 | 2,225 | 50.9% | |||||||
Gain on Disposition of Assets | 544 | 287 | 257 | 89.5% | |||||||
Net Income from Operations | 2,122 | 1,020 | 1,102 | 108.0% | |||||||
Interest Expense | 1,066 | 384 | 682 | 177.6% | |||||||
Net Income | 1,056 | 636 | 420 | 66.0% | |||||||
Less: Net Income Attributable to Noncontrolling Interest | (138) | (90) | (48) | 53.3% | |||||||
Net Income Attributable to Alpine Income Property Trust, Inc. | $ | 918 | $ | 546 | $ | 372 | 68.1% | ||||
Revenue and Direct Cost of Revenues
Revenue from our income property operations during the three months ended September 30, 2021 and 2020, totaled $8.2 million and $5.1 million, respectively. The $3.1 million increase in revenues is reflective of the Company’s volume of acquisitions. The direct costs of revenues for our income property operations totaled $0.9 million and $0.5 million for the three months ended September 30, 2021 and 2020, respectively. The $0.4 million increase in the direct cost of revenues is also attributable to the Company’s expanded income property portfolio.
General and Administrative Expenses
The following table represents the Company’s general and administrative expenses for the three months ended September 30, 2021, as compared to the three months ended September 30, 2020 (in thousands):
Three Months Ended | |||||||||||
September 30, 2021 | September 30, 2020 | $ Variance | % Variance | ||||||||
Management Fee to Manager | $ | 910 | $ | 631 | $ | 279 | 44.2% | ||||
Director Stock Compensation Expense | 79 | 66 | 13 | 19.7% | |||||||
Director & Officer Insurance Expense | 127 | 111 | 16 | 14.4% | |||||||
Additional General and Administrative Expense | 255 | 311 | (56) | (18.0)% | |||||||
Total General and Administrative Expenses | $ | 1,371 | $ | 1,119 | $ | 252 | 22.5% | ||||
General and administrative expenses totaled $1.4 million and $1.1 million during the three months ended September 30, 2021 and 2020, respectively. The $0.3 million increase is primarily attributable to growth in the Company’s equity base, which led to increased management fee expenses totaling $0.3 million.
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Depreciation and Amortization
Depreciation and amortization expense totaled $4.3 million and $2.7 million during the three months ended September 30, 2021 and 2020, respectively. The $1.6 million increase in the depreciation and amortization expense is reflective of the Company’s expanded income property portfolio.
Interest Expense
Interest expense totaled $1.1 million and $0.4 million during the three months ended September 30, 2021 and 2020, respectively. The $0.7 million increase in interest expense is attributable to the higher average outstanding debt balance during the three months ended September 30, 2021 as compared to the same period in 2020. The overall increase in the Company’s long-term debt was primarily utilized to fund the acquisition of income properties during 2021 and 2020.
Net Income
Net income totaled $1.1 million and $0.6 million during the three months ended September 30, 2021 and 2020, respectively. The increase in net income is attributable to the factors described above in addition to the $0.5 million gain on disposition of assets during the three months ended September 30, 2021, an increase of $0.3 million from the comparable prior year period.
COMPARISON OF THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
The following presents the Company’s results of operations for the nine months ended September 30, 2021, as compared to the nine months ended September 30, 2020 (in thousands):
Nine Months Ended | |||||||||||
September 30, 2021 | September 30, 2020 | $ Variance | % Variance | ||||||||
Revenues: | |||||||||||
Lease Income | $ | 20,658 | $ | 13,863 | $ | 6,795 | 49.0% | ||||
Total Revenues | 20,658 | 13,863 | 6,795 | 49.0% | |||||||
Operating Expenses: | |||||||||||
Real Estate Expenses | 2,389 | 1,705 | 684 | 40.1% | |||||||
General and Administrative Expenses | 3,687 | 3,535 | 152 | 4.3% | |||||||
Depreciation and Amortization | 10,914 | 7,003 | 3,911 | 55.8% | |||||||
Total Operating Expenses | 16,990 | 12,243 | 4,747 | 38.8% | |||||||
Gain on Disposition of Assets | 544 | 287 | 257 | 89.5% | |||||||
Net Income from Operations | 4,212 | 1,907 | 2,305 | 120.9% | |||||||
Interest Expense | 2,299 | 977 | 1,322 | 135.3% | |||||||
Net Income | 1,913 | 930 | 983 | 105.7% | |||||||
Less: Net Income Attributable to Noncontrolling Interest | (251) | (131) | (120) | 91.6% | |||||||
Net Income Attributable to Alpine Income Property Trust, Inc. | $ | 1,662 | $ | 799 | $ | 863 | 108.0% | ||||
Revenue and Direct Cost of Revenues
Revenue from our income property operations during the nine months ended September 30, 2021 and 2020, totaled $20.7 million and $13.9 million, respectively. The $6.8 million increase in revenues is reflective of the Company’s volume of acquisitions. The direct costs of revenues for our income property operations totaled $2.4 million and $1.7 million for the nine months ended September 30, 2021 and 2020, respectively. The $0.7 million increase in the direct cost of revenues is also attributable to the Company’s expanded income property portfolio.
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General and Administrative Expenses
The following table represents the Company’s general and administrative expenses for the nine months ended September 30, 2021, as compared to the nine months ended September 30, 2020 (in thousands):
Nine Months Ended | |||||||||||
September 30, 2021 | September 30, 2020 | $ Variance | % Variance | ||||||||
Management Fee to Manager | $ | 2,269 | $ | 1,923 | $ | 346 | 18.0% | ||||
Director Stock Compensation Expense | 231 | 201 | 30 | 14.9% | |||||||
Director & Officer Insurance Expense | 385 | 340 | 45 | 13.2% | |||||||
Additional General and Administrative Expense | 802 | 1,071 | (269) | (25.1)% | |||||||
Total General and Administrative Expenses | $ | 3,687 | $ | 3,535 | $ | 152 | 4.3% | ||||
General and administrative expenses totaled $3.7 million and $3.5 million during the nine months ended September 30, 2021 and 2020, respectively. The $0.2 million increase is primarily related to an increase in management fee expenses of $0.3 million attributable to growth in the Company’s equity base, partially offset by an additional $0.3 million of costs incurred, during the first quarter of 2020, associated with audit services related to the 2019 annual audit.
Depreciation and Amortization
Depreciation and amortization expense totaled $10.9 million and $7.0 million during the nine months ended September 30, 2021 and 2020, respectively. The $3.9 million increase in the depreciation and amortization expense is reflective of the Company’s expanded income property portfolio.
Interest Expense
Interest expense totaled $2.3 million and $1.0 million during the nine months ended September 30, 2021 and 2020, respectively. The $1.3 million increase in interest expense is attributable to the higher average outstanding debt balance during the nine months ended September 30, 2021 as compared to the same period in 2020. The overall increase in the Company’s long-term debt was primarily utilized to fund the acquisition of income properties during 2021 and 2020.
Net Income
Net income totaled $1.9 million and $0.9 million for the nine months ended September 30, 2021 and 2020, respectively. The increase in net income is attributable to the factors described above in addition to the $0.5 million gain on disposition of assets during the nine months ended September 30, 2021, an increase of $0.3 million from the comparable prior year period.
LIQUIDITY AND CAPITAL RESOURCES
Cash totaled $7.3 million at September 30, 2021, including restricted cash of $0.6 million, see Note 2 “Summary of Significant Accounting Policies” under the heading Restricted Cash for the Company’s disclosure related to its restricted cash balance at September 30, 2021.
Long-Term Debt. As of September 30, 2021, the Company had $128.5 million available on the Credit Facility. See Note 8, “Long-Term Debt” for the Company’s disclosure related to its long-term debt balance at September 30, 2021.
Acquisitions and Investments. As noted previously, the Company acquired 42 income properties during the nine months ended September 30, 2021 for an aggregate purchase price of $158.7 million, as further described in Note 3, “Income Property Portfolio”.
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Dispositions. During the nine months ended September 30, 2021, the Company disposed of one income property, classified as held for sale as of June 30, 2021, leased to Outback Steakhouse located in Huntersville, North Carolina, for a sales price of $3.8 million, generating a gain on sale of $0.5 million, as described in Note 3, “Income Property Portfolio”.
Capital Expenditures. As of September 30, 2021 the Company had no commitments related to capital expenditures.
We believe we will have sufficient liquidity to fund our operations, capital requirements, maintenance, and debt service requirements over the next twelve months and into the foreseeable future, with cash on hand, cash flow from our operations and $128.5 million of available capacity on the existing $150.0 million Credit Facility, based on our current borrowing base of income properties, as of September 30, 2021.
The Board and management consistently review the allocation of capital with the goal of providing the best long-term return for our stockholders. These reviews consider various alternatives, including increasing or decreasing regular dividends, repurchasing the Company’s securities, and retaining funds for reinvestment. Annually, the Board reviews our business plan and corporate strategies, and makes adjustments as circumstances warrant. Management’s focus is to continue our strategy of investing in net leased income properties by utilizing the capital we raised in the IPO and available borrowing capacity from the Credit Facility to increase our portfolio of income-producing properties, providing stabilized cash flows with strong risk-adjusted returns primarily in larger metropolitan areas and growth markets.
Non-GAAP Financial Measures
Our reported results are presented in accordance with GAAP. We also disclose Funds From Operations (“FFO”) and Adjusted Funds From Operations (“AFFO”) both of which are non-GAAP financial measures. We believe these two non-GAAP financial measures are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of REITs.
FFO and AFFO do not represent cash generated from operating activities and are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net income as a performance measure or cash flows from operations as reported on our statement of cash flows as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures.
We compute FFO in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT. NAREIT defines FFO as GAAP net income or loss adjusted to exclude extraordinary items (as defined by GAAP), net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets and real estate related depreciation and amortization, including the pro rata share of such adjustments of unconsolidated subsidiaries. To derive AFFO, we modify the NAREIT computation of FFO to include other adjustments to GAAP net income related to non-cash revenues and expenses such as straight-line rental revenue, amortization of deferred financing costs, amortization of capitalized lease incentives and above- and below-market lease related intangibles, and non-cash compensation. Such items may cause short-term fluctuations in net income but have no impact on operating cash flows or long-term operating performance. We use AFFO as one measure of our performance when we formulate corporate goals.
FFO is used by management, investors and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers primarily because it excludes the effect of real estate depreciation and amortization and net gains or losses on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. We believe that AFFO is an additional useful supplemental measure for investors to consider because it will help them to better assess our operating performance without the distortions created by other non-cash revenues or expenses. FFO and AFFO may not be comparable to similarly titled measures employed by other companies.
36
Reconciliation of Non-GAAP Measures (in thousands, except share data):
Three Months Ended | Nine Months Ended | |||||||||||
September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | |||||||||
Net Income | $ | 1,056 | $ | 636 | $ | 1,913 | $ | 930 | ||||
Depreciation and Amortization | 4,308 | 2,694 | 10,914 | 7,003 | ||||||||
Gain on Disposition of Assets | (544) | (287) | (544) | (287) | ||||||||
Funds from Operations | $ | 4,820 | $ | 3,043 | $ | 12,283 | $ | 7,646 | ||||
Adjustments: | ||||||||||||
Straight-Line Rent Adjustment | (129) | (300) | (393) | (1,237) | ||||||||
COVID-19 Rent Repayments (Deferrals), Net | 23 | 87 | 408 | (538) | ||||||||
Non-Cash Compensation | 79 | 66 | 231 | 201 | ||||||||
Amortization of Deferred Financing Costs to Interest Expense | 87 | 45 | 236 | 133 | ||||||||
Amortization of Intangible Assets and Liabilities to Lease Income | (77) | (30) | (168) | (78) | ||||||||
Accretion of Tenant Contribution | (6) | (3) | (17) | (10) | ||||||||
Recurring Capital Expenditures | — | (1) | (41) | (34) | ||||||||
Adjusted Funds from Operations | $ | 4,797 | $ | 2,907 | $ | 12,539 | $ | 6,083 | ||||
Weighted Average Number of Common Shares: | ||||||||||||
Basic | 11,299,548 | 7,455,281 | 9,253,090 | 7,632,660 | ||||||||
Diluted | 12,996,503 | 8,679,135 | 10,637,934 | 8,856,514 | ||||||||
Other Data (in thousands, except per share data):
Three Months Ended | Nine Months Ended | |||||||||||
September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | |||||||||
FFO | $ | 4,820 | $ | 3,043 | $ | 12,283 | $ | 7,646 | ||||
FFO per Diluted Share | $ | 0.37 | $ | 0.35 | $ | 1.15 | $ | 0.86 | ||||
AFFO | $ | 4,797 | $ | 2,907 | $ | 12,539 | $ | 6,083 | ||||
AFFO per Diluted Share | $ | 0.37 | $ | 0.34 | $ | 1.18 | $ | 0.69 | ||||
OFF-BALANCE SHEET ARRANGEMENTS
None.
CRITICAL ACCOUNTING POLICIES
The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses. Actual results could differ from those estimates.
Our significant accounting policies are summarized in Note 2, “Summary of Significant Accounting Policies” included in this Quarterly Report on Form 10-Q and more fully described in the notes to the consolidated and combined financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020. Judgments and estimates of uncertainties are required in applying our accounting policies in many areas. During the nine months ended
37
September 30, 2021, there have been no material changes to the critical accounting policies affecting the application of those accounting policies as noted in our Annual Report on Form 10-K for the year ended December 31, 2020.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined in Item 10(f)(1) of Regulation S-K. As a result, pursuant to Item 305(e) of Regulation S-K, we are not required to provide the information required by this Item.
ITEM 4. CONTROLS AND PROCEDURES
As of the end of the period covered by this report, an evaluation, as required by Rules 13a-15 and 15d-15 under the Exchange Act, was carried out under the supervision and with the participation of the Company’s management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act). Based on that evaluation, our CEO and CFO have concluded that the design and operation of the Company’s disclosure controls and procedures were effective as of September 30, 2021, to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and to provide reasonable assurance that information required to be disclosed by the Company in such reports is accumulated and communicated to the Company’s management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) during the three months ended September 30, 2021, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II—OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, the Company may be a party to certain legal proceedings, incidental to the normal course of our business. We are not currently a party to any pending or threatened legal proceedings that we believe could have a material adverse effect on our business or financial condition.
ITEM 1A. RISK FACTORS
As of September 30, 2021, there have been no material changes in our risk factors from those set forth under the heading Part I, “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (the “Form 10-K”). However, the following risk factors expand upon and supplement those risk factors disclosed in the Form 10-K to provide additional specificity to the matters covered by such risk factors and should be read in conjunction with the risk factors set forth in the Form 10-K. These are not the only risks facing the Company. Additional risks and uncertainties not currently known to the Company or that the Company currently deems to be immaterial also may materially adversely affect the Company.
Risks Related to Our Business
We may be unable to renew leases, lease vacant space or re-lease space as leases expire on favorable terms or at all.
Our results of operations depend on our ability to lease our properties, including renewing expiring leases, leasing vacant space, re-leasing space in properties where leases are expiring, and leasing space related to new project development. In leasing or re-leasing our properties, we may be unable to optimize our tenant mix or execute leases on more economically favorable terms than the prior in-place lease. Our tenants may decline, or may not have the financial resources available, to renew their leases, and there can be no assurance that leases that are renewed will have terms that are as economically favorable to us as the expiring lease terms. If tenants do not renew their leases as they expire, we will have to source new tenants to lease our properties, and there can be no assurance that we will be able to find new tenants or that our properties will be re-leased at rental rates equal to or above the previous in-place lease or current average rental
38
rates or that substantial rent abatements, tenant improvement allowances, early termination rights or below-market renewal options will not be offered to attract new tenants. We may experience increased costs in connection with re-leasing our properties, which could materially and adversely affect us.
We may be unable to identify and complete suitable property acquisitions or developments, which may impede our growth, and our future acquisitions and developments may not yield the returns we expect.
Our ability to expand through acquisitions and developments requires us to identify and complete acquisitions and new property developments that are consistent with our investment and growth strategy and our investment criteria and to successfully integrate newly acquired properties into our portfolio. Our Manager continually evaluates investment opportunities for us, but our ability to acquire or develop new properties on favorable terms and successfully operate them may be constrained by the following significant risks:
| ● | we face competition from commercial developers and other real estate investors with significant capital, including REITs and institutional investment funds, which may be able to accept more risk than we can prudently manage, including risks associated with paying higher acquisition prices; |
| ● | we face competition from other potential acquirers which may significantly increase the purchase price for a property we acquire, which could reduce our growth prospects; |
| ● | we may incur significant costs and divert management attention in connection with evaluating and negotiating potential acquisitions and developments, including ones that we are unable to complete; |
| ● | we may acquire properties that are not accretive to our results of operations upon acquisition, and we may be unsuccessful in managing and leasing such properties in accordance with our expectations; |
| ● | our cash flow from an acquired or developed property may be insufficient to meet our required principal and interest payments with respect to debt used to finance the acquisition or development of such property; |
| ● | we may discover unexpected issues, such as unknown liabilities, during our due diligence investigation of a potential acquisition or other customary closing conditions may not be satisfied, causing us to abandon an investment opportunity after incurring expenses related thereto; |
| ● | we may fail to obtain financing for an acquisition or new property development on favorable terms or at all; |
| ● | we may spend more than budgeted amounts to make necessary improvements or renovations to acquired properties; |
| ● | market conditions may result in higher than expected vacancy rates and lower than expected rental rates; and |
| ● | we may acquire properties subject to (i) liabilities without any recourse, or with only limited recourse, with respect to unknown liabilities such as liabilities for clean-up of undisclosed environmental contamination not revealed in Phase I environmental site assessments or otherwise through due diligence, (ii) claims by tenants, vendors or other persons dealing with the former owners of the properties, (iii) liabilities incurred in the ordinary course of business and (iv) claims for indemnification by general partners, directors, officers and others indemnified by the former owners of the properties. |
If any of these risks are realized, we may be materially and adversely affected.
The development of new projects and/or properties may cause us to experience unexpected costs and have other risks that could materially and adversely affect us.
We may develop new projects to enhance the opportunity for achieving attractive risk-adjusted returns. New project development is subject to a number of risks, including risks associated with the availability and timely receipt of zoning and other regulatory approvals, the timely completion of construction (including risks from factors beyond our control, such as weather, labor conditions or material shortages) and risks of cost overruns due to construction delays or other factors that may increase the expected costs of a project. These risks could result in substantial unanticipated delays and, under certain circumstances, provide a tenant the opportunity to delay rent commencement, reduce rent or terminate a lease. In addition, we may incur costs in connection with projects that are ultimately not pursued to completion. Any new development projects may be financed. If such financing is not available on acceptable terms, our development activities may not be pursued or may be curtailed. In addition, such activities would likely reduce the available borrowing capacity on the revolving credit facility or any other credit facilities that we may have in place in the future, which would limit our ability to use those sources of capital for the acquisition of properties and other operating needs. The risks associated with
39
new project development activities, including but not necessarily limited to those noted above, could materially and adversely affect us.
The success of our activities related to new project development in which we will retain an ownership interest is partly dependent on the availability of suitable undeveloped land at acceptable prices.
Our success in developing projects that we will retain an ownership interest in is partly dependent upon the availability of undeveloped land suitable for the intended development. The availability of undeveloped land for purchase at acceptable prices depends on a number of factors outside of our control, including the risk of competitive over-bidding on land and governmental regulations that restrict the potential uses of land. If the availability of suitable land opportunities decreases, the number of development projects we may be able to undertake could be reduced. Thus, the lack of availability of suitable land opportunities could have a material adverse effect on our results of operations and growth prospects.
Risks Related to Other Aspects of our Operation and as a Public Company
Compliance with the Americans with Disabilities Act and fire, safety and other regulations may require us to make unanticipated expenditures that materially and adversely affect us.
Our properties are and will be subject to the Americans with Disabilities Act, or the ADA. Under the ADA, all public accommodations must meet federal requirements related to access and use by disabled persons. Compliance with the ADA requirements could require removal of access barriers and non-compliance could result in imposition of fines by the U.S. government or an award of damages to private litigants, or both. While our tenants are and will be obligated by law to comply with the ADA and typically obligated under our leases to cover costs associated with compliance, if required changes involve greater expenditures than anticipated or if the changes must be made on a more accelerated basis than anticipated, the ability of our tenants to cover costs could be adversely affected. We could be required to expend our own funds to comply with the provisions of the ADA, which could materially and adversely affect us.
In addition, we are and will be required to operate our properties in compliance with fire and safety regulations, building codes and other land use regulations, as they may be adopted by governmental agencies and bodies and become applicable to our properties. We may be required to make substantial capital expenditures to comply with those requirements and may be required to obtain approvals from various authorities with respect to our properties, including prior to acquiring a property or when undertaking renovations of any of our existing properties. There can be no assurance that existing laws and regulatory policies will not adversely affect us or the timing or cost of any future acquisitions, developments or renovations, or that additional regulations will not be adopted that increase such delays or result in additional costs. Additionally, failure to comply with any of these requirements could result in the imposition of fines by governmental authorities or awards of damages to private litigants. While we intend to only acquire properties that we believe are currently in substantial compliance with all regulatory requirements, these requirements may change, and new requirements may be imposed which would require significant unanticipated expenditures by us and could materially and adversely affect us.
Risks Related to Our Financing Activities
Our growth depends on external sources of capital, including debt financings, that are outside of our control and may not be available to us on commercially reasonable terms or at all.
In order to maintain our qualification as a REIT, we are required under the Code, among other things, to distribute annually at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gain. In addition, we are subject to income tax at the U.S. federal corporate income tax rate to the extent that we distribute less than 100% of our net taxable income. Because of these distribution requirements, we may not have sufficient liquidity from our operating cash flows to fund future capital needs, including any acquisition financing. Consequently, we may rely on third-party sources, including lenders, to fund our capital needs. We may not be able to obtain debt financing on favorable terms or at all. Any additional debt we incur will increase our leverage and likelihood of default. Our access to third-party sources of capital depends, in part, on:
40
| ● | general market conditions; |
| ● | the market’s perception of our growth potential; |
| ● | our current debt levels; |
| ● | our current and expected future earnings; |
| ● | our cash flow and cash distributions; and |
| ● | the market price per share of our common stock. |
If we cannot obtain capital from third-party sources, we may not be able to acquire or develop properties when strategic opportunities exist, meet the capital and operating needs of our existing properties, satisfy our debt service obligations or make the cash distributions to our stockholders necessary to maintain our qualification as a REIT, which would materially and adversely affect us.
Our organizational documents have no limitation on the amount of additional indebtedness that we may incur in the future. As a result, we may become highly leveraged in the future, which could materially and adversely affect us.
We have entered into the Credit Facility and, in the future, we may incur additional indebtedness to finance future acquisitions and development, redevelopment and renovation projects and for general corporate purposes. There are no restrictions in our charter or bylaws that limit the amount or percentage of indebtedness that we may incur nor restrict the form in which our indebtedness will be incurred (including recourse or non-recourse debt or cross-collateralized debt). A substantial level of indebtedness in the future could have adverse consequences for our business and otherwise materially and adversely affect us because it could, among other things:
| ● | require us to dedicate a substantial portion of our cash flow from operations to make principal and interest payments on our indebtedness, thereby reducing our cash flow available to fund working capital, capital expenditures and other general corporate purposes, including to pay dividends on our common stock as currently contemplated or necessary to satisfy the requirements for qualification as a REIT; |
| ● | increase our vulnerability to general adverse economic and industry conditions and limit our flexibility in planning for, or reacting to, changes in our business and our industry; |
| ● | limit our ability to borrow additional funds or refinance indebtedness on favorable terms or at all to expand our business or ease liquidity constraints; and |
| ● | place us at a competitive disadvantage relative to competitors that have less indebtedness. |
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Not applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable
ITEM 5. OTHER INFORMATION
Not applicable
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ITEM 6. EXHIBITS
| (a) | Exhibits: |
Exhibit 3.1 | ||
Exhibit 3.2 | ||
Exhibit 4.1 | ||
Exhibit 10.1 | ||
Exhibit 31.1 | Certification filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
Exhibit 31.2 | Certification filed pursuant to Section 302 of Sarbanes-Oxley Act of 2002. | |
Exhibit 32.1 | ||
Exhibit 32.2 | ||
Exhibit 101.INS | Inline XBRL Instance Document | |
Exhibit 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
Exhibit 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
Exhibit 101.DEF | Inline XBRL Taxonomy Definition Linkbase Document | |
Exhibit 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
Exhibit 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
Exhibit 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| ALPINE INCOME PROPERTY TRUST, INC. | |||
| (Registrant) | |||
October 21, 2021 |
| By: | /s/ John P. Albright | |
| John P. Albright President and Chief Executive Officer (Principal Executive Officer) | |||
October 21, 2021 |
| By: |
| /s/ Matthew M. Partridge |
| Matthew M. Partridge, Senior Vice President and Chief Financial Officer and Treasurer (Principal Financial Officer) | |||
October 21, 2021 |
| By: | /s/ Lisa M. Vorakoun | |
| Lisa M. Vorakoun, Vice President and Chief Accounting Officer (Principal Accounting Officer) | |||
43
Exhibit 10.1
Execution Version
Credit Agreement
Dated as of September 30, 2021
among
Alpine Income Property OP, LP,
Alpine Income Property Trust, Inc., as Guarantor
The Other Guarantors From Time to Time Parties Hereto,
the Lenders from time to time parties hereto,
KeyBank National Association
as Administrative Agent,
Regions Bank and U.S. Bank National Association,
as Co-Syndication Agents
KeyBanc Capital Markets Inc., Regions Capital Markets, and U.S. Bank National Association,
as Joint Lead Arrangers
KeyBanc Capital Markets Inc.
as Sole Book Runner
2796527.12
Table of Contents
Page
- i -
-ii-
-iii-
Exhibit A—Reserved
Exhibit B—Notice of Borrowing
Exhibit C—Notice of Continuation/Conversion
Exhibit D—Term Note
Exhibit E—Compliance Certificate
Exhibit F—Assignment and Acceptance
-iv-
Exhibit G—Additional Guarantor Supplement
Exhibit H—Commitment Amount Increase Request
Exhibit I—Borrowing Base Certificate
Schedule 1—Term Loan Commitments
Schedule 1.1—Initial Properties
Schedule 6.2—Subsidiaries
Schedule 6.6—Material Adverse Effect
Schedule 6.11—Litigation
Schedule 6.12—Tax Returns
Schedule 6.17—Environmental Issues
Schedule 6.23—Maintenance and Condition
Schedule 8.7—Existing Liens
-v-
THE LOAN EVIDENCED BY THIS CREDIT AGREEMENT IS NOT SECURED BY AN INTEREST IN FLORIDA REAL PROPERTY AND HAS BEEN EXECUTED AND DELIVERED OUTSIDE OF THE STATE OF FLORIDA. CONSEQUENTLY, NO FLORIDA DOCUMENTARY STAMP TAX IS DUE AND PAYABLE WITH RESPECT TO THIS CREDIT AGREEMENT.
Credit Agreement
This Credit Agreement (this “Agreement”) is entered into as of September 30, 2021, by and among Alpine Income Property OP, LP, a Delaware limited partnership (the “Borrower”), Alpine Income Property Trust, Inc., a Maryland corporation, as a Guarantor (“Parent”), and each Material Subsidiary from time to time party to this Agreement, as Guarantors, the several financial institutions from time to time party to this Agreement, as Lenders, and KeyBank National Association, as Administrative Agent as provided herein. All capitalized terms used herein without definition shall have the same meanings herein as such terms are defined in Section 5.1 hereof.
Preliminary Statement
The Borrower has requested, and the Lenders have agreed to extend, certain credit facilities on the terms and conditions of this Agreement.
Now, Therefore, in consideration of the mutual agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
- 1 -
“Base Rate” means, for any day, the rate per annum equal to the greatest of: (a) the rate of interest announced or otherwise established by the Administrative Agent from time to time as its prime commercial rate, or its equivalent, for U.S. Dollar loans to borrowers located in the United States as in effect on such day, with any change in the Base Rate resulting from a change in said prime commercial rate to be effective as of the date of the relevant change in said prime commercial rate (it being acknowledged and agreed that such rate may not be the Administrative Agent’s best or lowest rate), (b) the sum of (i) the Federal Funds Rate for such day, plus (ii) 1/2 of 1%, and (c) the LIBOR Quoted Rate for such day plus 1.00%. As used herein, the term “LIBOR Quoted Rate” means, for any day, the rate per annum equal to the quotient of (i) the rate per annum (rounded upwards, if necessary, to the next higher one hundred-thousandth of a percentage point) for deposits in U.S. Dollars for a one-month interest period as reported on the applicable Bloomberg screen page (or such other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time) as of 11:00 a.m. (London, England time) on such day (or, if such day is not a Business Day, on the immediately preceding Business Day) divided by (ii) one (1) minus the Eurodollar Reserve Percentage, provided that in no event shall the “LIBOR Quoted Rate” be less than 0.00%. If the Base Rate is being used as an alternate rate of interest pursuant to Section 10.6 hereof, then the Base Rate shall be the greater of clauses (a) and (b) above and shall be determined without reference to clause (c) above.
“Federal Funds Rate” means, for any day, the rate per annum (rounded upward to the nearest one one-hundredth of one percent (1/100 of 1%)) announced by the Federal Reserve Bank of Cleveland on such day as being the weighted average of the rates on overnight federal funds transactions arranged by federal funds brokers on the previous trading day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to the Administrative Agent on such day on such transactions as
-2-
determined by the Administrative Agent; provided that in no event shall the Federal Funds Rate be less than 0.00%.
“Adjusted LIBOR” means, for any Borrowing of Eurodollar Loans, a rate per annum determined in accordance with the following formula:
Adjusted LIBOR= LIBOR
1 - Eurodollar Reserve Percentage
“Eurodollar Reserve Percentage” means the maximum reserve percentage, expressed as a decimal, at which reserves (including, without limitation, any emergency, marginal, special, and supplemental reserves) are imposed by the Board of Governors of the Federal Reserve System (or any successor) on “eurocurrency liabilities”, as defined in such Board’s Regulation D (or any successor thereto), subject to any amendments of such reserve requirement by such Board or its successor, taking into account any transitional adjustments thereto. For purposes of this definition, the relevant Loans shall be deemed to be “eurocurrency liabilities” as defined in Regulation D without benefit or credit for any prorations, exemptions or offsets under Regulation D. The Eurodollar Reserve Percentage shall be adjusted automatically on and as of the effective date of any change in any such reserve percentage.
“LIBOR” means, subject to implementation of a Benchmark Replacement in accordance with Section 10.6, for an Interest Period for a Borrowing of Eurodollar Loans, (a) the LIBOR Index Rate for such Interest Period, if such rate is available, and (b) if the LIBOR Index Rate cannot be determined, the arithmetic average of the rates of interest per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) at which deposits in U.S. Dollars in immediately available funds are offered by first class banks in the London interbank market to the Administrative Agent at 11:00 a.m. (London, England time) two (2) Business Days before the beginning of such Interest Period for delivery on the first day of and for a period equal to such Interest Period and in an amount equal or comparable to the principal amount of the Eurodollar Loan scheduled to be made as part of such Borrowing; provided, that in no event shall “LIBOR” be less than 0%, unless such Loan is subject to a Hedging Agreement consisting of an interest rate swap and the Borrower has provided notice thereof to the Administrative Agent in writing on or prior to such date.
“LIBOR Index Rate” means, for any Interest Period, the rate per annum (rounded upwards, if necessary, to the next higher one hundred-thousandth of a percentage point) determined on the basis of the rate for deposits in Dollars for a period equal to the applicable Interest Period as published by the ICE Benchmark Administration Limited, a United Kingdom company, or a comparable or successor quoting service approved by the Administrative Agent, as of 11:00 a.m.
-3-
(London, England time) on the day two (2) Business Days before the commencement of such Interest Period, provided, that in no event shall “LIBOR Index Rate” be less than 0% unless the applicable Loan is subject to a Hedging Agreement consisting of an interest rate swap and Borrower has provided notice thereof to the Administrative Agent in writing on or prior to such date.
-4-
-5-
-6-
provided, however, that in the absence of acceleration, any adjustments pursuant to this Section 1.9 shall be made by the Administrative Agent, acting at the request or with the consent of the Required Lenders, with written notice to the Borrower. While any Event of Default exists or after acceleration, interest shall be paid on the demand of the Administrative Agent at the request or with the consent of the Required Lenders.
-7-
then, upon the demand of such Lender, the Borrower shall pay to such Lender such amount as will reimburse such Lender for such loss, cost or reasonable expense. If any Lender makes such a claim for compensation, it shall provide to the Borrower, with a copy to the Administrative Agent, a certificate setting forth the amount of such loss, cost or reasonable expense in reasonable detail and the amounts shown on such certificate shall be conclusive if reasonably determined absent manifest error.
-8-
to any other rights the Borrower may have hereunder or under applicable law, require, at its expense, any such Affected Lender to assign, at par, without recourse (other than with respect to claims or Liens arising by, through or under such Affected Lender), all of its interest, rights, and obligations hereunder (including all of its Commitments, Loans and other amounts at any time owing to it hereunder and the other Loan Documents) to an Eligible Assignee specified by the Borrower, provided that (i) such assignment shall not conflict with or violate any law, rule or regulation or order of any court or other governmental authority, (ii) the Borrower shall have paid to the Affected Lender all monies (together with amounts due such Affected Lender under Section 1.11 hereof as if the Loans owing to it were prepaid rather than assigned) other than such principal owing to it hereunder, and (iii) the assignment is entered into in accordance with, and subject to the consents required by, Section 12.12 hereof (provided any reimbursable expenses due thereunder shall be paid by the Borrower and any assignment fees shall be waived).
-9-
-10-
Anything contained herein to the contrary notwithstanding (including, without limitation, Section 1.8(b) hereof), all payments and collections received in respect of the Obligations by the Administrative Agent or any of the Lenders after acceleration or the final maturity of the Obligations or termination of the Commitments as a result of an Event of Default shall be remitted to the Administrative Agent and distributed as follows:
-11-
“1031 Cash Proceeds” means cash proceeds from the sale of Property in a transaction under Section 1031 of the Code held by a qualifying intermediary; provided, that, such proceeds
-12-
shall cease to be 1031 Cash Proceeds as of the last day on which Borrower or the applicable Subsidiary can consummate a tax-deferred transaction under Section 1031 of the Code.
“1031 Property” means, as of any Borrowing Base Determination Date, any Property owned by a 1031 Property Holder which is intended to qualify for tax treatment under, Section 1031 of the Code and which satisfies the following conditions:
(i)the Property meets all of the requirements of the definition of Eligible Property; and
(ii)the Borrower or a Guarantor has the unconditional contractual right to require and cause fee simple title to such Property to be transferred at any time to any Person as directed by the Borrower or a Guarantor.
For purposes of determining Total Asset Value, such 1031 Property shall be deemed to have been owned or leased by the Borrower or a Guarantor from the date acquired by the 1031 Property Holder that owns such 1031 Property.
“1031 Property Holder” means the “qualified intermediary” or “exchange accommodation titleholder” with respect to a 1031 Property as contemplated under Section 1031 of the Code, the regulations of the U.S. Department of Treasury adopted thereunder and related revenue procedures related thereto.
“Additional Guarantor Supplement” is defined in Section 4.2 hereof.
“Adjusted Borrowing Base” means, at any time of determination, an amount equal to (x) the Borrowing Base most recently delivered to the Lender minus (y) the aggregate Other Unsecured Indebtedness outstanding on such date.
“Adjusted EBITDA” means EBITDA minus the Annual Capital Expenditure Reserve.
“Adjusted FFO” means for any period, “funds from operations” as defined in accordance with resolutions adopted by the Board of Governors of the National Association of Real Estate Investment Trusts as in effect from time to time; provided that Adjusted FFO shall (i) be based on net income after payment of distributions to holders of preferred partnership units in Parent and distributions necessary to pay holders of preferred stock of Parent, and (ii) at all times exclude (a) charges for impairment losses from property sales, (b) stock-based compensation, (c) write-offs or reserves of straight-line rent related to sold assets, (d) amortization of debt costs, and (e) non-recurring charges, including, without limitation, acquisition expenses, non-cash charges related to the write-off of deferred equity and financing costs and one-time charges related to the transition to self-management.
“Adjusted LIBOR” is defined in Section 1.4(b) hereof.
“Administrative Agent” means KeyBank National Association, in its capacity as Administrative Agent hereunder, and any successor in such capacity pursuant to Section 11.6 hereof.
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“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.
“Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.
“Affected Lender” is defined in Section 1.13 hereof.
“Affiliate” means any Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, another Person. A Person shall be deemed to control another Person for purposes of this definition if such Person possesses, directly or indirectly, the power to direct, or cause the direction of, the management and policies of the other Person, whether through the ownership of voting securities, common directors, trustees or officers, by contract or otherwise; provided that, in any event for purposes of this definition, any Person that owns, directly or indirectly, 20% or more of the securities having the ordinary voting power for the election of directors or governing body of a corporation or 20% or more of the partnership or other ownership interest of any other Person (other than as a limited partner of such other Person) will be deemed to control such corporation or other Person.
“Aggregate Term Facility Amount” means $80,000,000.00.
“Agreement” means this Credit Agreement, as the same may be amended, modified, restated or supplemented from time to time pursuant to the terms hereof.
“Annual Capital Expenditure Reserve” means the sum of (a) an amount equal to the product of (i) $0.15 multiplied by (ii) the aggregate net rentable area, determined on a square footage basis, for retail and industrial properties, plus (b) an amount equal to the product of (i) $0.50 multiplied by (ii) the aggregate net rentable area, determined on a square footage basis, for office properties; provided, however, this definition of Annual Capital Expenditure Reserve shall not apply to any Land Assets or any Ground Leases; provided that the Borrower is not obligated for Capital Expenditures.
“Anti-Corruption Law” means the FCPA and any law, rule or regulation of any jurisdiction concerning or relating to bribery or corruption that are applicable to Borrower or any Subsidiary or Affiliate.
“Applicable Margin” means, with respect to the Closing Date Term Loan, until the first Pricing Date, the rates shown opposite Level II below, and thereafter, from one Pricing Date to the next the rates per annum determined in accordance with the following schedule:
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Level | Total Indebtedness to Total Asset Value Ratio for Such Pricing Date | Applicable Margin for Base Rate Loans shall be: | Applicable Margin for Eurodollar Loans Shall Be: |
|---|---|---|---|
I | Less than or equal to 0.40 to 1.00 | 0.25% | 1.25% |
II | Less than or equal to 0.45 to 1.00, but greater than 0.40 to 1.00 | 0.30% | 1.30% |
III | Less than or equal to 0.50 to 1.00, but greater than 0.45 to 1.00 | 0.45% | 1.45% |
IV | Less than or equal to 0.55 to 1.00, but greater than 0.50 to 1.00 | 0.60% | 1.60% |
V | Greater than 0.55 to 1.00 | 0.90% | 1.90% |
For purposes hereof, the term “Pricing Date” means, for any fiscal quarter of the Borrower, the last date on which the Borrower’s most recent Compliance Certificate and financial statements (and, in the case of the year-end financial statements, audit report) for the fiscal quarter then ended are due, pursuant to Section 8.5 hereof. The Applicable Margin shall be established based on the Total Indebtedness to Total Asset Value ratio for the most recently completed fiscal quarter and the Applicable Margin established on a Pricing Date shall remain in effect until the next Pricing Date. If the Borrower has not delivered its Compliance Certificate and financial statements by the date the Compliance Certificate and financial statements (and, in the case of the year-end financial statements, audit report) are required to be delivered under Section 8.5 hereof, then until such Compliance Certificate and financial statements and/or audit report are delivered, the Applicable Margin shall be the highest Applicable Margin (i.e., Level V shall apply). If the Borrower subsequently delivers such Compliance Certificate and financial statements before the next Pricing Date, the Applicable Margin established by such late delivered Compliance Certificate and financial statements shall take effect from the date of delivery until the next Pricing Date. In all other circumstances, the Applicable Margin established by such Compliance Certificate and financial statements shall be in effect from the Pricing Date that occurs immediately after the end of the fiscal quarter covered by such financial statements until the next Pricing Date. Borrower, Administrative Agent, and Lenders understand that the applicable interest rate for the Obligations and certain fees set forth herein may be determined and/or adjusted from time to time based upon certain financial ratios and/or other information to be provided or certified to the Administrative
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Agent and Lenders by Borrower (the "Borrower Information"). If it is subsequently determined that any such Borrower Information was incorrect (for whatever reason, including, without limitation, because of a subsequent restatement of earnings by the Borrower or Parent) at the time it was delivered to the Administrative Agent, and if the applicable interest rate or fees calculated for any period were lower than they should have been had the correct information been timely provided, then, such interest rate and such fees for such period shall be automatically recalculated using correct Borrower Information; provided that no recalculation shall be done for any period that is more than 2 years earlier than the date of recalculation. The Administrative Agent shall promptly notify Borrower in writing of any additional interest and fees due because of such recalculation, and the Borrower shall pay such additional interest or fees due to the Administrative Agent, for the account of each Lender, within five (5) Business Days of receipt of such written notice. Any recalculation of interest or fees required by this provision shall survive the termination of this Agreement, and this provision shall not in any way limit any of the Administrative Agent's or any Lender's other rights under this Agreement. Each determination of the Applicable Margin made by the Administrative Agent in accordance with the foregoing shall be conclusive, absent manifest error, and binding on the Borrower and the Lenders if reasonably determined. Any Incremental Term Loan shall bear interest at an “applicable margin” based upon the then determined Applicable Rate set forth in each Incremental Term Loan Amendment for each Incremental Term Loan Facility.
“Applicable Percentage” means, (a) with respect to any Term Lender at any time, the percentage of the Term Facility represented by such Term Lender’s Term Commitment at such time, and (b) with respect to any Incremental Term Lender at any time, the percentage of the applicable Incremental Term Loan Facility represented by the sum of such Incremental Term Lender’s unfunded Incremental Term Loan Commitments (if any) for the applicable Incremental Term Facility and the principal amount of such Incremental Term Lender’s Incremental Term Loans for the applicable Incremental Term Loan Facility at such time. The initial Applicable Percentage of each Lender in respect of the Term Facility is set forth opposite the name of such Lender on Schedule 1 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.
“Applicable Rate” means, a rate per annum equal to (a) in respect of the Term Facility, (i) the Applicable Margin with respect to Eurodollar Loans and (ii) and the Applicable Margin with respect to Base Rate Loans, and (ii) in respect of any Incremental Term Loan Facility, the interest rate set forth in the applicable Incremental Term Loan Amendment.
“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
“Assets Under Development” means any real property under construction (excluding any completed Property under minor renovation) until such property has received a certificate of occupancy.
“Assignment and Acceptance” means an assignment and acceptance entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by
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Section 12.12 hereof), and accepted by the Administrative Agent, in substantially the form of Exhibit F or any other form approved by the Administrative Agent.
“Authorized Representative” means those persons shown on the list of officers provided by the Borrower pursuant to Section 7.2 hereof or on any update of any such list provided by the Borrower to the Administrative Agent, or any further or different officers of the Borrower so named by any Authorized Representative of the Borrower in a written notice to the Administrative Agent.
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.
“Bail-In Legislation” means, (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, rule, regulation or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule; and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).
“Bankruptcy Event” means, with respect to any Person, any event of the type described in clause (j) or (k) of Section 9.1 hereof with respect to such Person.
“Base Rate” is defined in Section 1.4(a) hereof.
“Base Rate Loan” means a Loan bearing interest at a rate specified in Section 1.4(a) hereof.
“Beneficial Ownership Certification” means a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.
“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.
“Borrower” is defined in the introductory paragraph of this Agreement.
“Borrowing” means the total of Loans of a single type advanced, continued for an additional Interest Period, or converted from a different type into such type by the Lenders on a single date and, in the case of Eurodollar Loans, for a single Interest Period. Borrowings of Loans are made and maintained ratably from each of the Lenders according to their Applicable Percentages. A Borrowing is “advanced” on the day Lenders advance funds comprising such Borrowing to the Borrower, is “continued” on the date a new Interest Period for the same type of Loans commences for such Borrowing, and is “converted” when such Borrowing is changed from one type of Loans to the other, all as determined pursuant to Section 1.6 hereof.
“Borrowing Base” means, at any date of its determination, an amount equal to the lesser of (A) 60% of the Borrowing Base Value of all Eligible Properties on such date and (B) the Debt Service Coverage Amount of all Eligible Properties on such date.
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“Borrowing Base Certificate” means the certificate in the form of Exhibit I hereto, or in such other form acceptable to the Administrative Agent, to be delivered to the Administrative Agent pursuant to Sections 7.2(i), 7.3 and 8.5(d) hereof.
“Borrowing Base Determination Date” means each date on which the Borrowing Base is certified in writing to the Administrative Agent, as follows:
(a)Quarterly. As of the last day of each Fiscal Quarter.
(b)Property Adjustments. Following each addition or deletion of an Eligible Property, the Borrowing Base Value shall be adjusted accordingly.
“Borrowing Base NOI” means for the most recent Rolling Period, the aggregate Property NOI attributable to the Eligible Properties.
“Borrowing Base Requirements” means with respect to the calculation of the Borrowing Base, collectively that (a) at all times such calculation shall be based on no less than ten (10) Eligible Properties; (b) the Borrowing Base Value shall at all times be equal to or in excess of $100,000,000; (c) no more than 20% of the Borrowing Base Value may be comprised of Eligible Properties which are not used as retail (provided entertainment Properties shall not constitute retail), office or mixed-use retail/office Properties; (d) no more than 25% of the Borrowing Base Value may be comprised of any one Eligible Property (for the avoidance of doubt, an Eligible Property that exceeds this sublimit may be included in the calculation of Borrowing Base Value; provided, that any amount over 25% of the Borrowing Base Value is excluded from the calculation of the Borrowing Base Value); (e) no more than 20% of Borrowing Base Value may be from (i) Eligible Properties that derive less than 80% of their Property NOI from a single Tenant (for the avoidance of doubt, to the extent such Eligible Properties exceed this sublimit, they may be included in the calculation of Borrowing Base Value in an amount of up to 20% of the Borrowing Base Value), or (ii) from any single Tenant, unless such Tenant’s Rating is equal to or better than BBB-/Baa3 from S&P or Moody’s (a “Prime Tenant”), respectively (for the avoidance of doubt, to the extent that any single Tenant, other than a Prime Tenant, exceeds this sublimit, the related Eligible Properties may be included in the calculation of Borrowing Base Value in an amount of up to 20% of the Borrowing Base Value); (f) no more than 30% of Borrowing Base Value may be comprised of Permitted Ground Lease Investments; (g) the Eligible Properties (other than Permitted Ground Lease Investments) must have an aggregate Occupancy Rate of at least 85%; and (h) no more than 35% of the Borrowing Base Value may be comprised of Eligible Properties which are located in the same MSA (for the avoidance of doubt, an Eligible Property that exceeds this sublimit may be included in the calculation of Borrowing Base Value, provided, that any amount over 35% of the Borrowing Base Value is excluded from the calculation of the Borrowing Base Value).
“Borrowing Base Value” means an amount equal to the sum of (a) for all Eligible Properties owned for more than twelve (12) months, the quotient of (i) the Borrowing Base NOI divided by (ii) the Capitalization Rate plus (b) for all Eligible Properties owned for twelve (12) months or less, the lesser of (i) the book value (as defined by GAAP) of any such Eligible Property and (ii), the value of any such Eligible Property as determined by the calculation in clause (a) above measured on an annualized basis rather than for the most recently ended period of four
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quarters; provided that Borrowing Base Value shall be reduced by excluding a portion of the Property NOI or book value of any Eligible Properties attributable to any Eligible Properties that exceed the concentration limits in the Borrowing Base Requirements.
“Business Day” means any day (other than a Saturday or Sunday) on which banks are not authorized or required to close in New York, New York or Cleveland, Ohio and, if the applicable Business Day relates to the advance or continuation of, or conversion into, or payment of a Eurodollar Loan, on which banks are dealing in U.S. Dollar deposits in the interbank eurodollar market in London, England.
“Capital Expenditures” means, with respect to any Person for any period, the aggregate amount of all expenditures (whether paid in cash or accrued as a liability) by such Person during that period for the acquisition or leasing (pursuant to a Capital Lease) of fixed or capital assets or additions to property, plant, or equipment (including replacements, capitalized repairs, and improvements) which are required to be capitalized on the balance sheet of such Person in accordance with GAAP.
“Capital Lease” means any lease of Property which in accordance with GAAP is required to be capitalized on the balance sheet of the lessee.
“Capitalization Rate” means (i) 6.25% for single-tenant Properties occupied by tenants maintaining a BBB- or Baa3 Rating or better from S&P’s or Moody’s, respectively, (ii) 7.00% for all retail (provided entertainment Properties shall not constitute retail) Properties, including mixed-use retail/office Properties not covered under the foregoing clause (i), (iii) 7.50% for all office and entertainment Properties not covered under the foregoing clause (i), and (iv) 10% for all other Properties not covered under the foregoing clauses (i), (ii), or (iii); provided, for all Properties that are subject to Permitted Ground Lease Investments, the applicable Capitalization Rate shall be determined as if Borrower was the owner of the fully-completed building located on such Property.
“Capitalized Lease Obligation” means, for any Person, the amount of the liability shown on the balance sheet of such Person in respect of a Capital Lease determined in accordance with GAAP.
“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§9601 et seq., and any future amendments.
“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority, or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, regulations, guidelines or directives thereunder or issued in connection therewith shall be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking
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Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.
“Change of Control” means any of (a) the acquisition by any “person” or “group” (as such terms are used in sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) at any time that causes such person or group to become the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended) of 51% or more of the outstanding capital stock or other equity interests of Parent on a fully-diluted basis, other than acquisitions of such interests by any party who is an officer or director of Parent as of the Closing Date, (b) the failure of individuals who are members of the board of directors (or similar governing body) of Parent on the Closing Date (together with any new or replacement directors whose initial nomination for election was approved by a majority of the directors who were either directors on the Closing Date or previously so approved) to constitute a majority of the board of directors (or similar governing body) of Parent, or (c) the failure of Parent or a Wholly-owned Subsidiary of Parent to (i) serve as the sole general partner of Borrower and (ii) to directly own 51% of the Equity Interests of Borrower.
“Closing Date” means the date of this Agreement or such later Business Day upon which each condition described in Section 7.2 shall be satisfied or waived in a manner acceptable to the Administrative Agent in its discretion.
“Closing Date Term Borrowing” means a Borrowing of Closing Date Term Loans.
“Closing Date Term Loan” means an advance made by a Term Lender pursuant to Section 1.1(a).
“Code” means the Internal Revenue Code of 1986, as amended, and any successor statute thereto.
“Collateral Account” is defined in Section 9.4(b) hereof.
“Commitment” means a Term Commitment or an Incremental Term Loan Commitment, as the context may require.
“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.
“Compliance Certificate” is defined in Section 8.5(e) hereof.
“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profit Taxes.
“Controlled Group” means all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Borrower, are treated as a single employer under Section 414 of the Code.
“Covered Entity” has the meaning specified in Section 12.29.
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“Debt Service Coverage Amount” means the principal amount of Unsecured Indebtedness that would be serviced by the Borrowing Base NOI for the Rolling Period most recently ended for which financial statements have been delivered pursuant to Section 8.5 hereof at a debt service coverage ratio of 1.50 to 1.00 with interest and principal payments of Unsecured Indebtedness (in each case assuming a 30-year amortization) at the greater of (i) 6.5% per annum, (ii) a Eurodollar Loan with an Interest Period of one (1) month (including the Applicable Margin) and (iii) the 10-year treasury rate on the last day of such period plus 2.5%; provided that Borrowing Base NOI shall be reduced by excluding a portion of Property NOI attributable to Eligible Properties that exceed the concentration limits in the Borrowing Base Requirements.
“Debtor Relief Laws” means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect.
“Default” means any event or condition the occurrence of which would, with the passage of time or the giving of notice, or both, constitute an Event of Default.
“Defaulted Loan” is defined in the definition of “Defaulting Lender” in this Section 5.1.
“Defaulting Lender” means any Lender that (a) has failed to fund any portion of the Loans required to be funded by it hereunder (herein, a “Defaulted Loan”) within two (2) Business Days of the date required to be funded by it hereunder unless such failure has been cured, (b) has otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder (except for up to $25,000 in the aggregate from a Lender which is owing for less than five (5) Business Days) within two (2) Business Days of the date when due, unless the subject of a good faith dispute or unless such failure has been cured, (c) has experienced a Bankruptcy Event or (d) a receiver or conservator has been appointed for such Lender or (e) has become the subject of a Bail-In Action.
“Defaulting Lender Excess” means, with respect to any Defaulting Lender, the excess, if any, of such Defaulting Lender’s Applicable Percentage of the aggregate outstanding principal amount of Loans of all Lenders (calculated as if all Defaulting Lenders other than such Defaulting Lender had funded all of their respective Defaulted Loans) over the aggregate outstanding principal amount of all Loans of such Defaulting Lender.
“Defaulting Lender Period” means, with respect to any Defaulting Lender, the period commencing on the date upon which such Lender first became a Defaulting Lender and ending on the earliest of the following dates: the date on which (a) such Defaulting Lender is no longer the subject of a Bankruptcy Event or, if applicable, under the direction of a receiver or conservator, (b) the Defaulting Lender Excess with respect to such Defaulting Lender shall have been reduced to zero (whether by the funding by such Defaulting Lender of any Defaulted Loans of such Defaulting Lender or otherwise), and (c) such Defaulting Lender shall have delivered to Borrower and the Administrative Agent a written reaffirmation of its intention to honor its obligations hereunder, including with respect to its Commitments.
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“Dividends” means any dividend paid (or declared and then payable), as the case may be, in cash on any equity security issued by the Borrower.
“Division” means the division of the assets, liabilities and/or obligations of a Person (the “Dividing Person”) among two or more Persons, whether pursuant to a “plan of division” or similar arrangement pursuant to Section 18-217 of the Delaware Limited Liability Company Act or any similar provision under the laws of any other applicable jurisdiction and pursuant to which the Dividing Person may or may not survive.
“EBITDA” means, for any period, determined on a consolidated basis of the Parent and its Subsidiaries, in accordance with GAAP, the sum of net income (or loss) plus: (i) depreciation and amortization expense, to the extent included as an expense in the calculation of net income (or loss); (ii) Interest Expense; (iii) income tax expense, to the extent included as an expense in the calculation of net income (or loss); (iv) extraordinary, unrealized or non-recurring losses, including (A) impairment charges, (B) losses from the sale of real property, and (v) non-cash compensation paid to employees of Parent in the form of Parent’s equity securities, minus: (a) extraordinary, unrealized or non-recurring gains, including (x) the write-up of assets and (y) gains from the sale of real property and (b) income tax benefits. Pro forma adjustments shall be made for any Property acquired or sold during any period as if the acquisition or disposition occurred on the first day of the applicable period.
“EEA Financial Institution” means (a) any institution established in any EEA Member Country which is subject to the supervision of an applicable Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) have responsibility for the resolution of any EEA Financial Institution.
“Electronic Copy” has the meaning specified in Section 8.22.
“Electronic Record” has the meaning specified in Section 8.22
“Electronic Signature” has the meaning specified in Section 8.22.
“Eligible Assignee” means (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund, and (d) any other Person (other than a natural person) approved by (i) the Administrative Agent, and (ii) unless an Event of Default has occurred and is continuing, the Borrower (each such approval not to be unreasonably withheld or delayed); provided that notwithstanding the foregoing, “Eligible Assignee” shall not include the Borrower or any Guarantor or any of the Borrower’s or such Guarantor’s Affiliates or Subsidiaries.
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“Eligible Property” means, as of any Borrowing Base Determination Date, any Property owned by the Borrower, a Guarantor or a 1031 Property Holder which satisfies the following conditions:
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“Environmental Claim” means any investigation, notice, violation, demand, allegation, action, suit, injunction, judgment, order, consent decree, penalty, fine, lien, proceeding or claim (whether administrative, judicial or private in nature) arising (a) pursuant to, or in connection with an actual or alleged violation of, any Environmental Law, (b) in connection with any Hazardous Material, (c) from any abatement, removal, remedial, corrective or response action in connection with a Hazardous Material, Environmental Law or order of a governmental authority or (d) from any actual or alleged damage, injury, threat or harm to health, safety, natural resources or the environment.
“Environmental Law” means any current or future Legal Requirement pertaining to (a) the protection of health, safety and the indoor or outdoor environment, (b) the conservation, management or use of natural resources and wildlife, (c) the protection or use of surface water or groundwater, (d) the management, manufacture, possession, presence, use, generation, transportation, treatment, storage, disposal, Release, threatened Release, abatement, removal, remediation or handling of, or exposure to, any Hazardous Material or (e) pollution (including any Release to air, land, surface water or groundwater), and any amendment, rule, regulation, order or directive issued thereunder.
“Equity Interests” means with respect to any Person, any share of capital stock of (or other ownership or profit interests in) such Person, any warrant, option or other right for the purchase or other acquisition from such Person of any share of capital stock of (or other ownership or profit interests in) such Person whether or not certificated, any security convertible into or exchangeable for any share of capital stock of (or other ownership or profit interests in) such Person or warrant, right or option for the purchase or other acquisition from such Person of such shares (or such other interests), and any other ownership or profit interest in such Person (including, without limitation, partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such share, warrant, option, right or other interest is authorized or otherwise existing on any date of determination.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, or any successor statute thereto.
“Erroneous Payment” has the meaning assigned to such term in Section 12.30.
“Erroneous Payment Deficiency Assignment” has the meaning assigned to such term in Section 12.30.
“Erroneous Payment Impacted Class” has the meaning assigned to such term in Section 12.30(d).
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“Erroneous Payment Return Deficiency” has the meaning assigned to such term in Section 12.30(d).
“Erroneous Payment Subrogation Rights” has the meaning assigned to such term in Section 12.30(d).
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.
“Eurodollar Loan” means a Loan bearing interest at the rate specified in Section 1.4(b) hereof.
“Eurodollar Reserve Percentage” is defined in Section 1.4(b) hereof.
“Event of Default” means any event or condition identified as such in Section 9.1 hereof.
“Excluded Swap Obligation” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the guarantee of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason not to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the guarantee of such Guarantor or the grant of such security interest becomes effective with respect to such related Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such guarantee or security interest is or becomes illegal.
“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section 1.13 hereof) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 12.1 amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 12.1(b) or Section 12.1(d), and (d) any U.S. federal withholding Taxes imposed under FATCA.
“Existing Credit Agreement” means that certain Credit Agreement dated as of November 26, 2019, among Borrower, the Bank of Montreal, a syndicate of lenders and the other parties party
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thereto, as amended by that certain First Amendment to Credit Agreement dated June 30, 2020, that certain Second Amendment Credit Agreement dated October 16, 2020, that certain Third Amendment Credit Agreement dated May 19, 2021, and as may be further amended, restated, supplemented or otherwise modified.
“Facility” means the Term Facility or any Incremental Term Loan Facility, as the context may require.
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, and any agreements entered into pursuant to Section 1471(b)(1) of the Code.
“FCPA” means the Foreign Corrupt Practices Act, 15 U.S.C. §§78dd-1, et seq.
“Federal Funds Rate” is defined in Section 1.4(a) hereof.
“Federal Reserve Bank of New York’s Website” means the website of the Federal Reserve Bank of New York at http://www.newyorkfed.org, or any successor source.
“Fee Letter” means the letter agreement, dated September 30, 2021, among Borrower, KBCM, and KeyBank.
“Fiscal Quarter” means each of the three-month periods ending on March 31, June 30, September 30 and December 31.
“Fiscal Year” means the twelve-month period ending on December 31.
“Fixed Charges” means, for any Rolling Period, (a) Interest Expense, plus (b) scheduled principal amortization paid on Total Indebtedness (exclusive of any balloon payments or prepayments of principal paid on such Total Indebtedness), plus (c) Dividends and required distributions on the Parent’s preferred equity securities for such Rolling Period plus (d) all income taxes (federal, state and local) paid by Parent and its Subsidiaries in cash during such Rolling Period. Pro forma adjustments shall be made for any Property acquired or sold during any period as if the acquisition or disposition occurred on the first day of the applicable period.
“Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.
“Funds Transfer and Deposit Account Liability” means the liability of the Borrower, or any Subsidiary owing to any of the Lenders, or any Affiliates of such Lenders, arising out of (a) the execution or processing of electronic transfers of funds by automatic clearing house transfer, wire transfer or otherwise to or from deposit accounts of the Borrower and/or any Subsidiary now or hereafter maintained with any of the Lenders or their Affiliates, (b) the acceptance for deposit or the honoring for payment of any check, draft or other item with respect to any such deposit accounts, and (c) any other deposit, disbursement, and cash management services afforded to the Borrower or any Subsidiary by any of such Lenders or their Affiliates.
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“GAAP” means generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the U.S. accounting profession), which are applicable to the circumstances as of the date of determination.
“Governmental Authority” means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).
“Ground Lease” means a long term lease of real Property granted by the fee owner of the real Property.
“Guarantor” and “Guarantors” are defined in Section 4.1 hereof.
“Guaranty” and “Guaranties” are defined in Section 4.1 hereof.
“Hazardous Material” means any substance, chemical, compound, product, solid, gas, liquid, waste, byproduct, pollutant, contaminant or material which is hazardous or toxic, and includes, without limitation, (a) asbestos, polychlorinated biphenyls and petroleum (including crude oil or any fraction thereof) and (b) any material classified or regulated as “hazardous” or “toxic” or words of like import pursuant to an Environmental Law.
“Hazardous Material Activity” means any activity, event or occurrence involving a Hazardous Material, including, without limitation, the manufacture, possession, presence, use, generation, transportation, treatment, storage, disposal, Release, threatened Release, abatement, removal, remediation, handling of or corrective or response action to any Hazardous Material other than any activity, event or occurrence performed in compliance with or allowed under applicable law.
“Hedging Agreement” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of Borrower or any Subsidiary shall be a Hedging Agreement.
“Hedging Liability” means the liability of the Borrower or any Subsidiary to any Qualifying Counterparty, in respect of any Hedging Agreement as the Borrower or such Subsidiary, as the case may be, may from time to time enter into with any one or more Qualifying Counterparties.
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“Incremental Term Lender” means, at any time, any Lender that has an Incremental Term Loan Commitment or holds Incremental Term Loans at such time.
“Incremental Term Loan” has the meaning assigned to such term in Section 1.15.
“Incremental Term Loan Amendment” has the meaning assigned to such term in Section 1.15.
“Incremental Term Loan Commitment” has the meaning assigned to such term in Section 1.15.
“Incremental Term Loan Facility” has the meaning assigned to such term in Section 1.15. Unless otherwise specified herein, each tranche of Incremental Term Loan Commitments or Incremental Term Loans shall constitute a separate Incremental Term Loan Facility.
“Indebtedness for Borrowed Money” means for any Person (without duplication) (a) all indebtedness created, assumed or incurred in any manner by such Person representing money borrowed (including by the issuance of debt securities), (b) all indebtedness for the deferred purchase price of property or services (other than trade accounts payable arising in the ordinary course of business), (c) all indebtedness secured by any Lien upon Property of such Person, whether or not such Person has assumed or become liable for the payment of such indebtedness, (d) all Capitalized Lease Obligations of such Person, (e) all obligations of such Person on or with respect to letters of credit, bankers’ acceptances and other extensions of credit whether or not representing obligations for borrowed money and (f) all net obligations of such Person under any interest rate, foreign currency, and/or commodity swap, exchange, cap, collar, floor, forward, future or option agreement, or any similar interest rate, currency or commodity hedging arrangement.
“Indemnified Taxes” means (a) all Taxes other than Excluded Taxes and (b) to the extent not otherwise described in (a), Other Taxes.
“Initial Properties” means collectively the Properties listed on Schedule 1.1 and “Initial Property” means any of such Properties.
“Interest Expense” means, with respect to a Person for any period of time, the interest expense whether paid, accrued or capitalized (without deduction of consolidated interest income) of such Person for such period. Interest Expense shall exclude any amortization of (i) deferred financing fees, including the write-off such fees relating to the early retirement of such related Indebtedness for Borrowed Money, and (ii) debt discounts (but only to the extent such discounts do not exceed 3.0% of the initial face principal amount of such debt).
“Interest Payment Date” means (a) with respect to any Eurodollar Loan, the last day of each Interest Period with respect to such Eurodollar Loan and on the maturity date and, if the applicable Interest Period is longer than (3) three months, on each day occurring every three (3) months after the commencement of such Interest Period, (b) with respect to any Base Rate Loan, the last day of every calendar quarter, and (c) with respect to any Eurodollar Loan or Base Rate Loan, the maturity date.
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“Interest Period” means the period commencing on the date a Borrowing of Eurodollar Loans is advanced, continued, or created by conversion and ending one (1), three (3), or six (6) months thereafter, provided, however, that:
“KBCM” means, KeyBanc Capital Markets Inc. and its successors.
“KeyBank” means, KeyBank National Association and its successors.
“Land Assets” means any real property which is not an Asset Under Development and on which no significant improvements have been constructed; provided, that real property that is adjacent to an Eligible Property but is undeveloped shall not constitute “Land Assets”.
“Lease” means each existing or future lease, sublease, license, or other agreement under the terms of which any Person has or acquires any right to occupy or use any Property of the Borrower or any Subsidiary, or any part thereof, or interest therein, as the same may be amended, supplemented or modified.
“Legal Requirement” means any treaty, convention, statute, law, regulation, ordinance, license, permit, governmental approval, injunction, judgment, order, consent decree or other requirement of any governmental authority, whether federal, state, or local.
“Lenders” means and includes KeyBank and the other financial institutions from time to time party to this Agreement, including each assignee Lender pursuant to Section 12.12 hereof and each Incremental Term Lender.
“Lending Office” is defined in Section 10.4 hereof.
“LIBOR” is defined in Section 1.4(b) hereof.
“LIBOR Index Rate” is defined in Section 1.4(b) hereof.
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“LIBOR Quoted Rate” is defined in Section 1.4(a) hereof.
“Lien” means any mortgage, lien, security interest, pledge, charge or encumbrance of any kind in respect of any Property, including the interests of a vendor or lessor under any conditional sale, Capital Lease or other title retention arrangement.
“Loan” means any Term Loan or Incremental Term Loan whether outstanding as a Base Rate Loan or Eurodollar Loan, each of which is a “type” of Loan hereunder.
“Loan Documents” means this Agreement, the Notes (if any), the Guaranties, each Incremental Term Loan Amendment, and each other instrument or document to be delivered hereunder or thereunder or otherwise in connection therewith. Deposit account agreements, cash management agreements and other documents executed in connection with Funds Transfer and Deposit Account Liability (other than deposit account control agreements, if any) are not Loan Documents hereunder.
“Material Adverse Effect” means (a) a material adverse change in, or material adverse effect upon, the operations, business, Property, or financial condition of the Parent or of the Parent and its Subsidiaries taken as a whole, (b) a material impairment of the ability of the Borrower or any Guarantor to perform its obligations under any Loan Document or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against the Borrower or any Guarantor of any Loan Document or the rights and remedies of the Administrative Agent and the Lenders thereunder.
“Material Subsidiary” means, each Subsidiary that owns an Eligible Property included in the Borrowing Base Value.
“Maturity Date” means (a) with respect to the Term Facility, January 31, 2027, and (b) with respect to any Incremental Term Loan Facility, the maturity date for such Incremental Term Loan Facility as set forth in the applicable Incremental Term Loan Amendment; provided, however, that, in each case, if such date is not a Business Day, the Maturity Date shall be the next preceding Business Day.
“Moody’s” means Moody’s Investors Service, Inc., or any successor thereof.
“MSA” means any major metropolitan area of the United States of America that has a population size that is in the fifty (50) largest metropolitan areas of the United States of America.
“Note” and “Notes” are defined in Section 1.10(d) hereof.
“NYFRB” means the Federal Reserve Bank of New York.
“NYFRB’s Website” means the website of the Federal Reserve Bank of New York at http://www.newyorkfed.org, or any successor source.
“Obligations” means all obligations of the Borrower to pay principal and interest on the Loans, all fees and charges payable hereunder, all other payment obligations of the Borrower or any of its Subsidiaries arising under or in relation to any Loan Document and all Hedging Liability,
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in each case whether now existing or hereafter arising, due or to become due, direct or indirect, absolute or contingent, and howsoever evidenced, held or acquired. For the avoidance of doubt, Obligations shall not include any Funds Transfer and Deposit Account Liability.
“Occupancy Rate” means for any Property, the percentage of the rentable square footage of such Property occupied by bona fide Tenants of such Property or leased by such Tenants pursuant to bona fide Tenant Leases, in each case, which Tenants (a) are not more than 60 days in arrears on base rental or other similar payments due under the Leases and (b) are not subject to a then continuing Bankruptcy Event, or if subject to a then continuing Bankruptcy Event (i) the trustee in bankruptcy of such tenant shall have accepted and assumed such Lease or the Tenant shall be in compliance with the rental payments described above in clause (a); (ii) to the extent that the Tenant shall have filed and the bankruptcy court shall have approved the Tenant’s plan for reorganization, the Tenant shall be performing its obligations pursuant to the approved plan of reorganization; or (iii) is otherwise reasonably acceptable to the Administrative Agent.
“OFAC” means the United States Department of Treasury Office of Foreign Assets Control.
“OFAC Event” means the event specified in Section 8.13(c) hereof.
“OFAC Sanctions Programs” means all laws, regulations, and Executive Orders administered by OFAC, including without limitation, the Bank Secrecy Act, anti-money laundering laws (including, without limitation, the Patriot Act), and all economic and trade sanction programs administered by OFAC, any and all similar United States federal laws, regulations or Executive Orders (whether administered by OFAC or otherwise), and any similar laws, regulators or orders adopted by any State within the United States.
“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).
“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 1.13 hereof).
“Other Unsecured Indebtedness” means any Unsecured Indebtedness (not including the Obligations) that is pari passu with or structurally senior to the Obligations and is recourse to the Borrower, including, without limitation, all Indebtedness under the Existing Credit Agreement and the Truist Term Loan Agreement.
“Parent” is defined in the introductory paragraph of this Agreement.
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“Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56.
“Payment Recipient” has the meaning assigned to such term in Section 12.30(a).
“PBGC” means the Pension Benefit Guaranty Corporation or any Person succeeding to any or all of its functions under ERISA.
“Permitted Ground Lease Investments” means a Ground Lease where the Borrower or a Wholly-owned Subsidiary is the lessor under such Ground Lease and which is a Ground Lease (a) of unencumbered land located in a MSA that is owned in fee simple by the Borrower or a Wholly-owned Subsidiary and on which a fully completed building is located (all such improvements to be unencumbered), (b) which may not be transferred, mortgaged or assigned to an alternate lessee without the prior written consent of the lessor and (c) which may be transferred and assigned to an alternate lessor without the consent of the lessee; provided, however, that any Ground Lease may be designated as a Permitted Ground Lease Investment upon written request by the Borrower to the Administrative Agent and written approval of such request by the Required Lenders. Ground Leases of Land Assets or on which an Asset under Development is located shall not be a Permitted Ground Lease Investment.
“Permitted Liens” means each of the following: (a) Liens for taxes, assessments and governmental charges or levies to the extent not required to be paid under Section 8.3; (b) Liens imposed by law, such as materialmen’s, mechanics’, carriers’, workmen’s and repairmen’s Liens and other similar Liens arising in the ordinary course of business securing obligations that are not overdue or that are being contested in good faith and by proper proceedings and as to which appropriate reserves are being maintained; (c) pledges or deposits to secure obligations under workers’ compensation laws or similar legislation or to secure public or statutory obligations; (d) easements, zoning restrictions, rights of way and other encumbrances on title to real property that, in the aggregate, do not materially and adversely affect the value of such property or the use of such property for its present purposes; (e) deposits to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of like nature incurred in the ordinary course of business; (f) Liens in favor of the United States of America for amounts paid to the Borrower or any Subsidiary as progress payments under government contracts entered into by it; (g) attachment, judgment and other similar Liens arising in connection with court, reference or arbitration proceedings, provided that the same have been in existence less than twenty (20) days, that the same have been discharged or that execution or enforcement thereof has been stayed pending appeal; (h) the rights of tenants or lessees under leases or subleases not interfering with the ordinary conduct of business of such Person; (i) Liens in favor of the Administrative Agent for its benefit and the benefit of the Lenders; (j) Liens in favor of the Borrower or a Guarantor securing obligations owing by a Subsidiary to the Borrower or a Guarantor, which obligations have been subordinated to the obligations owing by the Borrower and the Guarantors under the Loan Documents on terms satisfactory to the Administrative Agent; (k) Liens in existence as of the Closing Date and set forth in Schedule 8.7; and (l) Liens on Properties that are not Eligible Properties and whose Borrowing Base Values are not included in the calculation of the Borrowing Base.
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“Person” means an individual, partnership, corporation, limited liability company, association, trust, unincorporated organization or any other entity or organization, including a government or agency or political subdivision thereof.
“Plan” means any employee pension benefit plan covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code that either (a) is maintained by a member of the Controlled Group for employees of a member of the Controlled Group or (b) is maintained pursuant to a collective bargaining agreement or any other arrangement under which more than one employer makes contributions and to which a member of the Controlled Group is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions.
“Property” or “Properties” means, as to any Person, all types of real, personal, tangible, intangible or mixed property, including property encumbered by Ground Leases, owned by such Person whether or not included in the most recent balance sheet of such Person and its subsidiaries under GAAP, including any Eligible Property owned by the Borrower or any of its Subsidiaries.
“Property Expenses” means the costs (including, but not limited to, payroll, taxes, assessments, insurance, utilities, landscaping and other similar charges) of operating and maintaining any Property, which are the responsibility of the Borrower or the applicable Guarantor that are not paid directly by the tenant, including without limitation, the Annual Capital Expenditure Reserve and the greater of (a) 3% of rents and (b) actual management fees paid in cash, but excluding depreciation, amortization and interest costs.
“Property Income” means cash rents (excluding non-cash straight-line rent) and other cash revenues received by the Borrower or a Guarantor in the ordinary course for any Property, but excluding security deposits and prepaid rent except to the extent applied in satisfaction of tenants’ obligations for rent.
“Property Net Operating Income” or “Property NOI” means, with respect to any Property for any Rolling Period (without duplication), the aggregate amount of (i) Property Income for such period minus (ii) Property Expenses for such period. Pro forma adjustments shall be made for any Property acquired or sold during any period as if the acquisition or disposition occurred on the first day of the applicable period.
“Property Owner” means the Person who owns fee title interest in and to a Property.
“Qualifying Counterparty” means, with respect to any Hedging Liability, any party that was a Lender or an Affiliate of a Lender under this Agreement at the time the hedging arrangement giving rise to such Hedging Liability was entered into.
“Qualified ECP Guarantor” means, in respect of any Swap Obligation, each Guarantor that has total assets exceeding $10,000,000 at the time the relevant guarantee or grant of the relevant security interest becomes effective with respect to such Swap Obligation or such other person as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another person to qualify as an “eligible contract participant” at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
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“Rating” means the debt rating provided by S&P or Moody’s with respect to the unsecured senior long-term non-credit enhanced debt of a Person.
“RCRA” means the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976 and Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§6901 et seq., and any future amendments.
“Recipient” means (a) the Administrative Agent, and (b) any Lender, as applicable.
“REIT” means a “real estate investment trust” in accordance with Section 856 et. seq. of the Code.
“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.
“Release” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, migration, dumping, or disposing into the indoor or outdoor environment, including, without limitation, the abandonment or discarding of barrels, drums, containers, tanks or other receptacles containing or previously containing any Hazardous Material.
“Required Lenders” means, as of the date of determination thereof, (i) at any time in which there are only two Lenders, both Lenders and (ii) at any other time Lenders whose outstanding Loans constitute 66 2/3% or more of the sum of the Total Outstandings. The outstanding Loans of any Defaulting Lender shall be disregarded in determining Required Lenders at any time.
“Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
“Responsible Officer” means, with respect to the Parent or any of its Subsidiaries, the chief executive officer, the chief financial officer, chief legal officer or the chief operating officer of the Parent or such Subsidiary.
“Restricted Payments” means dividends on or other distributions in respect of any class or series of Stock, Stock Equivalents or other Equity Interests of Parent, the Borrower or its Subsidiaries or the direct or indirect purchase, redemption, acquisition, or retirement of any of the Parent’s, the Borrower’s or a Subsidiaries’ Stock, Stock Equivalents or other Equity Interest.
“Rolling Period” means, as of any date, the four Fiscal Quarters ending on or immediately preceding such date.
“S&P” means S&P Global, Inc. or any successor thereof.
“Secured Indebtedness” means all Indebtedness for Borrowed Money of the Parent and its Subsidiaries, that is secured by a Lien, other than the Obligations.
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“Secured Recourse Indebtedness” means Secured Indebtedness for which recourse for payment (except for customary exceptions for fraud, misapplication of funds, environmental indemnities and other similar exceptions to recourse liability) is to Parent, Borrower or any Guarantor, other than the Obligations.
“Significant Lease” means, as to any particular Property, each Lease which constitutes 20% or more of all base rent revenue of such Property.
“Stock” means shares of capital stock, beneficial or partnership interests, participations or other equivalents (regardless of how designated) of or in a corporation or equivalent entity, whether voting or non-voting, and includes, without limitation, common stock.
“Stock Equivalents” means all securities (other than Stock) convertible into or exchangeable for Stock at the option of the holder, and all warrants, options or other rights to purchase or subscribe for any stock, whether or not presently convertible, exchangeable or exercisable.
“Subsidiary” means, as to any particular parent corporation or organization, any other corporation or organization more than 50% of the outstanding Voting Stock of which is at the time directly or indirectly owned by such parent corporation or organization or by any one or more other entities which are themselves subsidiaries of such parent corporation or organization. Unless otherwise expressly noted herein, the term “Subsidiary” means a Subsidiary of Parent or the Borrower or of any of their direct or indirect Subsidiaries.
“Swap Obligation” means, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.
“Tangible Net Worth” means for each applicable period, total shareholder’s equity and any non-controlling equity interests on the Parent’s consolidated balance sheet as reported in its Form 10-K or 10-Q for such period, plus (i) accumulated depreciation and amortization and (ii) unrealized losses related to marketable securities, minus, to the extent included when determining stockholders’ equity, (x) all unrealized gains related to marketable securities and (y) all amounts appearing on the assets side of the Parent’s consolidated balance sheet representing an intangible asset under GAAP (other than lease intangibles, net of lease liabilities) net of all amounts appearing on the liabilities side of its consolidated balance sheet representing an intangible liability under GAAP, in each case as determined on a consolidated basis in accordance with GAAP.
“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including back up withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Tenant” means any Person leasing, subleasing or otherwise occupying any portion of a Property under a Lease or other occupancy agreement with the Borrower or a Subsidiary that is the direct owner of such Property.
“Term Commitment” means, as to each Term Lender, its obligation to make a Closing Date Term Loan to Borrower pursuant to Section 1.1(a) in an aggregate principal amount not to exceed
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the amount set forth opposite such Lender’s name on Schedule 1 or opposite such caption in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.
“Term Facility” means (a) on the Closing Date, the aggregate amount of the Term Commitments at such time and (b) thereafter, the aggregate principal amount of the Term Loans of all Term Lenders outstanding at such time.
“Term Lender” means (a) on the Closing Date, any Lender that has a Term Commitment at such time and (b) at any time after the Closing Date, any Lender that has a Term Commitment or holds Term Loans at such time.
“Term Loan” means an advance made by any Term Lender under the Term Facility in the form of a Closing Date Term Loan.
“Total Asset Value” means, as of the end of any Rolling Period, an amount equal to the sum of (a) for all Properties owned by the Borrower and its Subsidiaries for more than twelve (12) months, the quotient of (i) the Property NOI from such Properties divided by (ii) the Capitalization Rate plus (b) for all Properties owned by the Borrower and its Subsidiaries for twelve (12) months or less, the lesser of (i) the book value (as defined in GAAP) of any such property or (ii), the value of any such Property as determined by the calculation in clause (a) above measured on an annualized basis rather than for the most recently ended period of four quarters plus (c) the aggregate book value of all unimproved land holdings and/or construction in progress owned by the Borrower and its Subsidiaries plus (d) cash, 1031 Cash Proceeds, cash equivalents and marketable securities owned by the Borrower and its Subsidiaries that are not (other than 1031 Cash Proceeds) then being held in or subject to escrow in connection with funding commitments of the Borrower or such Subsidiary.
“Total Indebtedness” means, as of a given date, all liabilities of Parent and its Subsidiaries which would, in conformity with GAAP, be properly classified as a liability on a consolidated balance sheet of Parent and its Subsidiaries as of such date, excluding any amounts categorized as accrued expenses, accrued dividends, deposits held, deferred revenues, minority interests and other liabilities not directly associated with the borrowing of money.
“Total Outstandings” means the aggregate Outstanding Amount of all Loans for all Facilities.
“Truist Term Loan Agreement” means that certain Term Loan Agreement, dated as of May 21, 2021, by and among Borrower, Parent, Truist Bank, N.A., as administrative agent, and the lenders party thereto from time to time.
“UCC” means the Uniform Commercial Code as in effect in the State of New York.
“UK Financial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended form time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person subject to IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which
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includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.
“UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.
“Unfunded Vested Liabilities” means, for any Plan at any time, the amount (if any) by which the present value of all vested nonforfeitable accrued benefits under such Plan exceeds the fair market value of all Plan assets allocable to such benefits, all determined as of the then most recent valuation date for such Plan, but only to the extent that such excess represents a potential liability of a member of the Controlled Group to the PBGC or the Plan under Title IV of ERISA.
“Unsecured Indebtedness” means, all Indebtedness for Borrowed Money of the Parent and its Subsidiaries that does not constitute Secured Indebtedness.
“U.S. Dollars” and “$” each means the lawful currency of the United States of America.
“Voting Stock” of any Person means capital stock or other equity interests of any class or classes (however designated) having ordinary power for the election of directors or other similar governing body of such Person, other than stock or other equity interests having such power only by reason of the happening of a contingency.
“Welfare Plan” means a “welfare plan” as defined in Section 3(1) of ERISA.
“Wholly-owned Subsidiary” means a Subsidiary of which all of the issued and outstanding shares of capital stock (other than directors’ qualifying shares as required by law) or other equity interests are owned by the Borrower and/or one or more Wholly-owned Subsidiaries within the meaning of this definition.
“Write-Down and Conversion Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.
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purposes of this Agreement, it shall be done in accordance with GAAP except where such principles are inconsistent with the specific provisions of this Agreement. Whenever reference is made to the Borrower’s knowledge or awareness, or a similar qualification, knowledge or awareness means the actual knowledge of the Borrower’s Responsible Officers.
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The Borrower represents and warrants to the Administrative Agent, and the Lenders as follows:
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Subsidiary of any of the matters and things herein or therein provided for, (a) contravene or constitute a default under any provision of law or any judgment, injunction, order or decree binding upon the Borrower or any Subsidiary or any provision of the organizational documents (e.g., charter, certificate or articles of incorporation and by-laws, certificate or articles of association and operating agreement, partnership agreement, or other similar organizational documents) of the Borrower or any Material Subsidiary, (b) contravene or constitute a default under any covenant, indenture or agreement of or affecting the Borrower or any Material Subsidiary or any of their Property, in each case where such contravention or default, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, or (c) result in the creation or imposition of any Lien on any Property of the Borrower or any Material Subsidiary (other than in favor of the Administrative Agent for its benefit and the benefit of the Lenders).
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financing contemplated hereby do not contain any untrue statements (known by Borrower to be untrue) of a material fact known to Borrower or omit a material fact necessary to make the material statements contained herein or therein, in light of the circumstances under which they were made, not misleading, the Administrative Agent and the Lenders acknowledging that (a) as to any projections or forward looking information furnished to the Administrative Agent and the Lenders, the Borrower only represents that the same were prepared on the basis of information and estimates the Borrower believed to be reasonable and (b) the financial information provided to the Administrative Agent and the Lenders is governed by Section 6.5 hereof. The information included in the Beneficial Ownership Certification, as updated in accordance with Section 6.5(k), is true and correct in all respects.
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Subsidiaries for which adequate provisions in accordance with GAAP have not been made on their accounts. Adequate provisions in accordance with GAAP for taxes on the books of Parent and each Subsidiary have been made for all open years, and for its current fiscal period.
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No condemnation or other like proceedings that has had, or could reasonably be expected to result in, a Material Adverse Effect, are pending and served nor threatened against any Property owned by it in any manner whatsoever. No casualty has occurred to any such Property that could reasonably be expected to have a Material Adverse Effect. Promptly after the reasonable request of the Administrative Agent, the Borrower shall deliver a current property condition report in form and substance acceptable to Administrative Agent from an independent engineering or architectural firm acceptable to Administrative Agent with respect to any (i) Eligible Property specified by Administrative Agent that has a material maintenance or structural issue that would materially affect the value or use of such Eligible Property and (ii) Property that is not an Eligible Property that has a material maintenance or structural issue associated with such Property that could reasonably be expected to have a Material Adverse Effect; provided that the Administrative Agent shall be entitled to make only one (1) such request during the initial term of this Agreement unless an Event of Default has occurred and is continuing.
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Each request for a Borrowing hereunder shall be deemed to be a representation and warranty by the Borrower on the date of such Borrowing as to the facts specified in subsections (a) through (c), inclusive, of this Section 7.1; provided, however, that the Lenders may advance a Loan, in the sole discretion of the Lenders with Commitments, notwithstanding the failure of the Borrower to satisfy one or more of the conditions set forth above and any such advances so made shall not be deemed a waiver of any Default or Event of Default or other condition set forth above that may then exist.
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Upon not less than 10 Business Days prior written notice from the Borrower to the Administrative Agent, the Borrower can designate that a Property be added (subject to the other requirements for a Property qualifying as an Eligible Property) or deleted as an Eligible Property included in calculating the Borrowing Base and the Adjusted Borrowing Base, as applicable. Such notice shall be accompanied by a Borrowing Base Certificate setting forth the components of the Borrowing Base and the Adjusted Borrowing Base, as applicable, as of the addition or deletion of the designated Property as an Eligible Property, and with respect to a deletion, Borrower’s certification in such detail as reasonably required by the Administrative Agent that no Default or Event of Default exists under this Agreement and such deletion shall not (A) cause the Eligible Properties to violate the Borrowing Base Requirements, (B) cause a Default, or (C) cause or result in the Borrower failing to comply with any of the financial covenants contained in Section 8.20 hereof. Each addition shall be an Eligible Property in a minimum amount equal to $500,000 Borrowing Base Value or $500,000 Debt Service Coverage Amount, or shall be comprised of more than one qualifying Eligible Properties that in the aggregate have a minimum amount equal to $1,000,000 Borrowing Base Value or $1,000,000 Debt Service Coverage Amount, and all such additions shall be subject to reasonable approval by the Administrative Agent. Borrower shall provide Administrative Agent with copies of all documentation related to the inclusion of an Eligible Property or a Subsidiary Guarantor which it provides to lenders under the Existing Credit Agreement simultaneously therewith.
If no Default exists at the time of any deletion of a Property from qualifying as an Eligible Property included in calculating the Borrowing Base and the Adjusted Borrowing Base, as applicable, any Material Subsidiary which owned such Property, but that does not otherwise own any other Eligible Property, shall be released from its obligations under its Guaranty.
The Borrower agrees that, so long as any Loan is outstanding by the Borrower hereunder, except to the extent compliance in any case or cases is cured or waived in writing pursuant to the terms of Section 12.13 hereof:
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(ii)(a) At least one class of common stock of Parent shall at all times be duly listed on the New York Stock Exchange, the NYSE American or The NASDAQ Stock Market and (b) the Parent shall timely file all reports required to be filed by it with the New York Stock Exchange, the NYSE American or The NASDAQ Stock Market, as applicable, and the Securities and Exchange Commission, unless such failure to timely file could not reasonably be expected to have a Material Adverse Effect.
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and the Lenders a certificate setting forth in summary form the nature and extent of the insurance maintained pursuant to this Section 8.4.
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provided, however, to the extent such items set forth above are filed with the Securities and Exchange Commission or otherwise are publicly available, the Borrower shall be deemed to have satisfied this covenant once it provides notice to the Administrative Agent of such availability.
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Investments of the type described in clauses (i), (j) and (k) immediately preceding shall at no time exceed in the aggregate at any one time outstanding 30% of the Total Asset Value of Parent and its Subsidiaries at such time. In determining the amount of investments, acquisitions, loans, and advances permitted under this Section, investments and acquisitions shall always be taken at the book value (as defined in GAAP) thereof, and loans and advances shall be taken at the principal amount thereof then remaining unpaid.
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qualifying, and to the extent legally necessary to qualify, such person as a director of such Subsidiary, and (c) any transaction permitted by Section 8.9(b) above.
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limitations on transfers comparable to those in Section 8.9 in any documentation evidencing any Other Unsecured Indebtedness); provided however, that the foregoing does not apply to any limitation on transfers of property that is subject to a Permitted Lien or (e) guarantee the Obligations, Hedging Liability, and Funds Transfer and Deposit Account Liability and/or grant Liens on its assets to the Administrative Agent.
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immediately due and payable together with all other amounts payable under the Loan Documents without further demand, presentment, protest or notice of any kind. The Administrative Agent, after giving notice to the Borrower pursuant to Section 9.1(c) or this Section 9.2, shall also promptly send a copy of such notice to the other Lenders, but the failure to do so shall not impair or annul the effect of such notice.
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then the Administrative Agent shall forthwith give notice thereof to the Borrower and the Lenders, whereupon until the Administrative Agent notifies the Borrower that the circumstances giving rise to such suspension no longer exist, the obligations of the Lenders to make Eurodollar Loans shall be suspended.
and the result of any of the foregoing is to increase the cost to such Lender (or its Lending Office) or to reduce the amount of any sum received or receivable by such Lender (or its Lending Office) or under any other Loan Document with respect thereto, by an amount deemed by such Lender to be material, then, within 15 days after demand by such Lender (with a copy to the Administrative Agent), the Borrower shall be obligated to pay to such Lender such additional amount or amounts as will compensate such Lender for such increased cost or reduction.
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“Available Tenor” means, as of any date of determination and with respect to the then-current Benchmark, as applicable, (x) if the then-current Benchmark is a term rate, any tenor for such Benchmark that is or may be used for determining the length of an Interest Period or (y) otherwise, any payment period for interest calculated with reference to such Benchmark, as applicable, pursuant to this Agreement as of such date.
“Benchmark” means, initially, USD LIBOR; provided that if a replacement for the Benchmark has occurred pursuant to this Section, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate. Any reference to “Benchmark” shall include, as applicable, the published component used in the calculation thereof.
“Benchmark Replacement” means, for any Available Tenor:
(a) the sum of: (i) Term SOFR and (ii) 0.11448% (11.448 basis points) for an Available Tenor of one-month’s duration, 0.26161% (26.161 basis points) for an Available Tenor of three-months’ duration, and 0.42826% (42.826 basis points) for an Available Tenor of six-months’ duration; provided, that, if the Borrower has provided a notification to the Administrative Agent in writing on or prior to the date on which the Benchmark Replacement will become effective that the Borrower has a Hedging Agreement in place with respect to any of the Loans as of the date of such notice (which such notification the Administrative Agent shall be entitled to rely upon and shall have no duty or obligation to ascertain the correctness or completeness of), then the Administrative Agent will not determine the Benchmark Replacement pursuant to this clause (1)(a) for such Benchmark Transition Event or Early Opt-in Election, as applicable; or
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(b) the sum of: (i) Daily Simple SOFR and (ii) the spread adjustment for an Available Tenor of one-month’s duration (0.11448% (11.448 basis points));
provided, however, that if an Early Opt-in Election has been made, the Benchmark Replacement will be the benchmark selected in connection with such Early Opt-in Election; and
provided that, if the Benchmark Replacement as determined pursuant to clause (1) or (2) above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for all purposes of this Agreement and the other Loan Documents.
“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Base Rate,” the definition of “Business Day,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).
“Benchmark Transition Event” means, with respect to any then-current Benchmark (other than USD LIBOR), the occurrence of a public statement or publication of information by or on behalf of the administrator of the then-current Benchmark, the regulatory supervisor for the administrator of such Benchmark, the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark, a resolution authority with jurisdiction over the administrator for such Benchmark or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark, announcing or stating that (a) such administrator has ceased or will cease on a specified date to provide all Available Tenors of such Benchmark, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue
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to provide any Available Tenor of such Benchmark or (b) all Available Tenors of such Benchmark are or will no longer be representative of the underlying market and economic reality that such Benchmark is intended to measure and that representativeness will not be restored.
“Daily Simple SOFR” means, for any day, SOFR, with the conventions for this rate (which will include a lookback) being established by the Administrative Agent in accordance with the conventions for this rate recommended by the Relevant Governmental Body for determining “Daily Simple SOFR” for syndicated business loans; provided, that if the Administrative Agent decides that any such convention is not administratively feasible for the Administrative Agent, then the Administrative Agent may establish another convention in its reasonable discretion.
“Early Opt-in Effective Date” means, with respect to any Early Opt-in Election, the sixth (6th) Business Day after the date notice of such Early Opt-in Election is provided to the Lenders, so long as the Administrative Agent has not received, by 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Early Opt-in Election is provided to the Lenders, written notice of objection to such Early Opt-in Election from Lenders comprising the Required Lenders.
“Early Opt-in Election” means the occurrence of:
“Floor” means the benchmark rate floor, if any, provided in this Agreement initially (as of the execution of this Agreement, the modification, amendment or renewal of this Agreement or otherwise) with respect to USD LIBOR. As of the Closing Date, the Floor is 0%; provided, that the Floor will not apply if the applicable Loan is subject to a Hedging Agreement consisting of an interest rate swap and Borrower has provided notice thereof to the Administrative Agent in writing on or prior to such date.
“Relevant Governmental Body” means the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or any successor thereto.
“SOFR” means, for any Business Day, a rate per annum equal to the secured overnight financing rate for such Business Day published by the Federal Reserve Bank of
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New York (or a successor administrator of the secured overnight financing rate) on the website of the Federal Reserve Bank of New York, currently at http://www.newyorkfed.org. (or any successor source for the secured overnight financing rate identified as such by the administrator of the secured overnight financing rate from time to time), on the immediately succeeding Business Day.
“Term SOFR” means, for the applicable corresponding tenor, the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.
“USD LIBOR” means the London interbank offered rate for U.S. dollars, including, without limitation, LIBOR.
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Upon a Lender’s written request, the Administrative Agent agrees to forward to such Lender, when complete, copies of any field audit, examination, or appraisal report prepared by or for the Administrative Agent with respect to the Borrower or any Material Subsidiary (herein, “Reports”). Each Lender hereby agrees that (a) it has requested a copy of each Report prepared by or on behalf of the Administrative Agent; (b) the Administrative Agent (i) makes no representation or warranty, express or implied, as to the completeness or accuracy of any Report or any of the information contained therein or any inaccuracy or omission contained in or relating to a Report and (ii) shall not be liable for any information contained in any Report; (c) the Reports are not comprehensive audits or examinations, and that any Person performing any field examination will inspect only specific information regarding the Borrower and the other Material Subsidiaries and will rely significantly upon the books and records of Borrower and the other Material Subsidiaries, as well as on representations of personnel of the Borrower and the other Material Subsidiaries, and that the Administrative Agent undertakes no obligation to update, correct or supplement the Reports; (d) it will keep all Reports confidential and strictly for its internal use, not share the Report with any other Person except as otherwise permitted pursuant to
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this Agreement; and (e) without limiting the generality of any other indemnification provision contained in this Agreement, it will pay and protect, and indemnify, defend, and hold the Administrative Agent and any such other Person preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including reasonable attorney fees) incurred by as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.
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but such designation shall have no substantive effect, and such Lenders and their Affiliates shall have no additional powers, duties or responsibilities as a result thereof.
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.1 and 12.15. Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.
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to the Borrower: Alpine Income Property OP, LP 1140 Williamson Boulevard Suite 140 Daytona Beach, Florida 32114 Attention:Matthew Partridge Telephone:386-944-5643 Email: mpartridge@alpinereit.com Fax:386-274-1223 Alpine Income Property OP, LP 1140 Williamson Boulevard Suite 140 Daytona Beach, Florida 32114 Attention:Lisa Vorkoun Telephone:386-944-5641 Email: lvorkoun@alpinereit.com Fax:386-274-1223 With copy to: Vinson & Elkins LLP | to the Administrative Agent: KeyBank National Association 4910 Tiedeman Rd., 3rd Floor Mail Code OH-01-51-0311 Brooklyn, Ohio 44144 Attn: Real Estate Capital Servicing Reference: Alpine Income Property OP, LP & Loan No. 10228590 And KeyBank National Association 1200 Abernathy Road NE, Suite 1550 Atlanta, GA 30328 Attention: Tom Schmitt Telephone:770-510-2109 Email: tom_schmitt@keybank.com With a copy to: Riemer & Braunstein LP 100 Cambridge Street Boston, MA 02114 Attention: Saúl De La Guardia Email: sdelaguardia@riemerlaw.com Telephone: 617-880-3533 |
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1001 Fannin Street, Suite 2500 Houston, TX 77002 Attention: Noelle C. Alix Telephone: 713-758-1124 Email: nalix@velaw.com | |
| |
Each such notice, request or other communication shall be effective (i) if given by telecopier, when such telecopy is delivered to the telecopier number specified in this Section 12.8 or in the relevant Administrative Questionnaire and a confirmation of such telecopy has been received by the sender, (ii) if given by mail, upon receipt or first refusal of delivery or (iii) if given by any other means, when delivered at the addresses specified in this Section 12.8 or in the relevant Administrative Questionnaire; provided that any notice given pursuant to Section 1 hereof shall be effective only upon receipt.
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agreement may provide that such Lender will not agree to any modification, amendment or waiver of the Loan Documents that would reduce the amount of or postpone any fixed date for payment of any Obligation in which such participant has an interest. Any party to which such a participation has been granted shall have the benefits of Section 1.11 and Section 10.3 hereof. The Borrower and each Guarantor authorizes each Lender to disclose to any participant or prospective participant under this Section 12.11 any financial or other information pertaining to each Guarantor, the Borrower or any Subsidiary; provided that prior to any such disclosure any such participant or prospective participant shall agree in writing to be subject to the confidentiality provisions contained herein. No participation may be granted or sold to the Borrower, any Guarantor, any Affiliate or Subsidiary of Borrower or Guarantor, any Defaulting Lender or any natural person.
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Subject to acceptance and recording thereof by the Administrative Agent pursuant to Section 12.12(b) hereof, from and after the effective date specified in each Assignment and Acceptance, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 12.6 and 12.15 with respect to facts and circumstances occurring prior to the effective date of such assignment. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 12.11 hereof.
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provided in this Agreement and the other Loan Documents may be exercised only to the extent that the exercise thereof does not violate any applicable mandatory provisions of law, and all the provisions of this Agreement and other Loan Documents are intended to be subject to all applicable mandatory provisions of law which may be controlling and to be limited to the extent necessary so that they will not render this Agreement or the other Loan Documents invalid or unenforceable.
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the Southern District of New York and of any New York State court sitting in the City of New York for purposes of all legal proceedings arising out of or relating to this Agreement, the other Loan Documents or the transactions contemplated hereby or thereby. The Borrower and each Guarantor irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. The Borrower, each Guarantor, the Administrative Agent and the Lenders hereby irrevocably waive any and all right to trial by jury in any legal proceeding arising out of or relating to any Loan Document or the transactions contemplated thereby.
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provided that the Administrative Agent, any Lender may use such Information as permitted by clause (a) above, but the Administrative Agent, any Lender shall not otherwise disclose such Information except as permitted by clauses (b) - (g), (i), (j) or (k) of this Section 12.25, (i) to rating agencies if requested or required by such agencies in connection with a rating relating to the Loans or the Commitments hereunder, (j) to Gold Sheets and other similar bank trade publications (such information to consist of deal terms and other information regarding the credit facilities evidenced by this Agreement customarily found in such publications), or (k) to entities which compile and publish information about the syndicated loan market, provided that only basic information about the pricing and structure of the transaction evidenced hereby may be disclosed pursuant to this subsection (j). For purposes of this Section 12.25, “Information” means all information received from the Borrower or any of the Subsidiaries or from any other Person on behalf of the Borrower or any Subsidiary relating to the Borrower or any Subsidiary or any of their respective businesses, other than any such information that is available to the Administrative Agent, any Lender on a non-confidential basis prior to disclosure by the Borrower or any of its Subsidiaries or from any other Person on behalf of the Borrower or any of the Subsidiaries. Each of the Administrative Agent, the Lenders specifically acknowledges that the common stock of Parent is traded on the New York Stock Exchange under the trading symbol “PINE.” Each of the Administrative Agent, the Lenders further expressly acknowledges that it is aware that the securities laws of the United States prohibit any person who has received from an issuer material, non-public information, including information concerning the matters that are the subject of this Agreement, from purchasing or selling securities of such issuer on the basis of material, non-public information concerning the issuer of such securities or, subject to certain limited exceptions, from communicating such information to any other Person.
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“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.
“Covered Entity” means any of the following:
“Default Rights” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§252.81, 47.2 or 382.1, as applicable.
“QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).
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(i)it acknowledges and agrees that (A) in the case of immediately preceding clauses (x) or (y), an error and mistake shall be presumed to have been made (absent written confirmation from Administrative Agent to the contrary) or (B) an error and mistake has been made (in the case of immediately preceding clause (z)), in each case, with respect to such payment, prepayment or repayment; and
(ii)such Lender shall (and shall cause any other recipient that receives funds on its respective behalf to) promptly (and, in all events, within one Business Day of its knowledge of such error) notify Administrative Agent of its receipt of such payment, prepayment or repayment, the details thereof (in reasonable detail) and that it is so notifying Administrative Agent pursuant to this Section 12.30(b).
For the avoidance of doubt, the failure to deliver a notice to the Administrative Agent pursuant to this Section 12.30(b) shall not have any effect on a Payment Recipient’s obligations pursuant to Section 12.30(b) or on whether or not an Erroneous Payment has been made.
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(ii) Subject to this Section 12.30, the Administrative Agent may, in its discretion, sell any Loans acquired pursuant to an Erroneous Payment Deficiency Assignment and upon receipt of the proceeds of such sale, the Erroneous Payment Return Deficiency owing by the applicable Lender shall be reduced by the net proceeds of the sale of such Loan (or portion thereof), and Administrative Agent shall retain all other rights, remedies and claims against such Lender (and/or against any recipient that receives funds on its respective behalf). In addition, an Erroneous Payment Return Deficiency owing by the applicable Lender (x) shall be reduced by the proceeds of prepayments or repayments of principal and interest, or other distribution in respect of principal and interest, received by the Administrative Agent on or with respect to any such Loans acquired from such Lender pursuant to an Erroneous Payment Deficiency Assignment (to the extent that any such Loans are then owned by the Administrative Agent) and (y) may, in the sole discretion of the Administrative Agent, be reduced by any amount specified by the Administrative Agent in writing to the applicable Lender from time to time.
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this Guaranty, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations of each Qualified ECP Guarantor under this Section shall remain in full force and effect until discharged in accordance with Section 13.3. Each Qualified ECP Guarantor intends that this Section constitute, and this Section shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Guarantor for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
[Signature Pages to Follow]
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This Credit Agreement is entered into between us for the uses and purposes hereinabove set forth as of the date first above written.
“Borrower”
Alpine Income Property OP, LP,
a Delaware limited partnership
By: | Alpine Income Property GP, LLC, a Delaware limited liability company, its General Partner |
By: | Alpine Income Property Trust, Inc., a Maryland corporation, its sole member |
By | /s/ Matthew M. Partridge |
Name: Matthew M. Partridge
Title: | Senior Vice President, Chief Financial Officer and Treasurer |
[Signatures Continue on Next Page]
[Signature Page to Credit Agreement-Alpine Income Property OP, LP]
“Guarantors”
“Parent”
Alpine Income Property Trust, Inc.,
a Maryland corporation
By: /s/ Matthew M. Partridge
Name: Matthew M. Partridge
Title: | Senior Vice President, Chief Financial Officer and Treasurer |
“Material Subsidiaries”
Cto16 Raleigh LLC,
Cto17 Saugus LLC,
Indigo Henry LLC
By: | Alpine Income Property OP, LP, |
By: | Alpine Income Property GP, LLC, a Delaware limited liability company, its General Partner, |
By: | Alpine Income Property Trust, Inc., a Maryland corporation, its sole member |
By:/s/ Matthew M. Partridge
Name: | Matthew M. Partridge |
Title: | Senior Vice President, Chief Financial Officer, and Treasurer |
[Signatures Continue on Next Page]
[Signature Page to Credit Agreement-Alpine Income Property OP, LP]
Cto17 Hillsboro OR LLC,
Bluebird Metrowest Orlando LLC,
Lhc15 Glendale AZ LLC,
Cto19 Troy WI LLC,
Cto17 Brandon FL LLC,
Cto19 Albany GA LLC,
Pine20 Blanding LLC,
Pine19 Georgetown TX LLC,
Pine20 Hurst TX LLC,
Pine19 Slaughter Austin TX LLC,
Pine20 Tulsa LLC,
Pine20 Highland KY LLC,
Pine20 Tyn LLC,
Pine20 Arden NC LLC,
Pine20 Barker LLC,
Pine20 Bingham LLC,
Pine20 Chazy LLC,
Pine20 Hammond LLC,
Pine20 Harrisville LLC,
Pine20 Heuvelton LLC,
Pine20 Howell MI LLC,
Pine20 Limestone LLC,
Pine20 Milford LLC,
Pine20 Newtonsville Llc,
Pine20 Odessa LLC
By: | Alpine Income Property OP, LP, |
By: | Alpine Income Property GP, LLC, a Delaware limited liability company, its General Partner, |
By: | Alpine Income Property Trust, Inc., a Maryland corporation, its sole member |
By:/s/ Matthew M. Partridge
Name: | Matthew M. Partridge |
Title: | Senior Vice President, Chief Financial Officer, and Treasurer |
[Signatures Continue on Next Page]
[Signature Page to Credit Agreement-Alpine Income Property OP, LP]
Cto16 Reno LLC,
Cto19 Winston Salem NC LLC,
Ctlc18 Lynn MA LLC,
Cto19 Birmingham LLC,
Pine19 Alpharetta GA LLC,
Pine19 Jacksonville FL LLC
Pine20 Salem LLC,
Pine20 Severn LLC,
Pine20 Somerville LLC,
Pine20 Willis LLC,
Pine20 Winthrop LLC,
Pine20 Glendale LLC,
Pine20 Kermit LLC,
Pine20 Tacoma LLC,
Pine20 Cut & Shoot LLC,
Pine20 Del Rio LLC,
Pine20 Seguin LLC,
Pine21 Acquisitions IV LLC
By: | Alpine Income Property OP, LP, |
By: | Alpine Income Property GP, LLC, a Delaware limited liability company, its General Partner, |
By: | Alpine Income Property Trust, Inc., a Maryland corporation, its sole member |
By:/s/ Matthew M. Partridge
Name: | Matthew M. Partridge |
Title: | Senior Vice President, Chief Financial Officer, and Treasurer |
[Signatures Continue on Next Page]
[Signature Page to Credit Agreement-Alpine Income Property OP, LP]
“Administrative Agent”
KeyBank National Association,
as Administrative Agent
By: /s/ Thomas Z. Schmitt
Name: Thomas Z. Schmitt
Title: Vice President
“Lenders”
KeyBank National Association,
as a Lender
By: /s/ Thomas Z. Schmitt
Name: Thomas Z. Schmitt
Title: Vice President
[Signatures Continue on Next Page]
[Signature Page to Credit Agreement-Alpine Income Property OP, LP]
U.S. BANK NATIONAL ASSOCIATION,
as a Lender
By: /s/ Lori Y. Jensen
Name: Lori Y. Jensen
Title: Senior Vice President
[Signatures Continue on Next Page]
[Signature Page to Credit Agreement-Alpine Income Property OP, LP]
RAYMOND JAMES BANK,
as a Lender
By: /s/ Ted Long
Name: Ted Long
Title: Senior Vice President
[Signatures Continue on Next Page]
[Signature Page to Credit Agreement-Alpine Income Property OP, LP]
THE HUNTINGTON NATIONAL BANK,
as a Lender
By: /s/ Joe White
Name: Joe White
Title: Vice President
[Signatures Continue on Next Page]
[Signature Page to Credit Agreement-Alpine Income Property OP, LP]
REGIONS BANK,
as a Lender
By: /s/ Ghi S. Gavin
Name: Ghi S. Gavin
Title: Senior Vice President
[Signatures Continue on Next Page]
[Signature Page to Credit Agreement-Alpine Income Property OP, LP]
BANK OF MONTREAL,
as a Lender
By: /s/ Gwendolyn Gatz
Name: Gwendolyn Gatz
Title: Director
[Signatures Continue on Next Page]
[Signature Page to Credit Agreement-Alpine Income Property OP, LP]
Exhibit A
Reserved.
[Exhibit A]
Exhibit B
Notice of Borrowing
To: | KeyBank National Association, as Administrative Agent for the Lenders from time to time parties to the Credit Agreement dated as of September 30, 2021 (as extended, renewed, amended or restated from time to time, the “Credit Agreement”), among Alpine Income Property OP, LP, certain Guarantors which are signatories thereto, certain Lenders which are from time to time parties thereto, and the Administrative Agent |
Ladies and Gentlemen:
The undersigned, Alpine Income Property OP, LP (the “Borrower”), refers to the Credit Agreement, the terms defined therein being used herein as therein defined, and hereby gives you notice irrevocably, pursuant to Section 1.6 of the Credit Agreement, of the Borrowing specified below:
1.The Business Day of the proposed Borrowing is ___________, ____.
2.The aggregate amount of the proposed Borrowing is $______________.
3.The Borrowing is being advanced as a Term Loan.
4.The Borrowing is to be comprised of $___________ of [Base Rate] [Eurodollar] Loans.
[5.The duration of the Interest Period for the Eurodollar Loans included in the Borrowing shall be ____________ months.]
The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the date of the proposed Borrowing, before and after giving effect thereto and to the application of the proceeds therefrom:
(a)the representations and warranties of the Borrower contained in Section 6 of the Credit Agreement are true and correct as though made on and as of such date (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date); and
[Exhibit B-1]
(b)no Default or Event of Default has occurred and is continuing or would result from such proposed Borrowing.
Alpine Income Property OP, LP
By:
Name:
Title:
[Exhibit B-2]
Exhibit C
Notice of Continuation/Conversion
Date: ____________, ____
To:KeyBank National Association, as Administrative Agent for the Lenders from time to time parties to the Credit Agreement dated as of September 30, 2021 (as extended, renewed, amended or restated from time to time, the “Credit Agreement”) among Alpine Income Property OP, LP, certain Guarantors which are from time to time signatories thereto, certain Lenders which are from time to time parties thereto, and the Administrative Agent
Ladies and Gentlemen:
The undersigned, Alpine Income Property OP, LP (the “Borrower”), refers to the Credit Agreement, the terms defined therein being used herein as therein defined, and hereby gives you notice irrevocably, pursuant to Section 1.6 of the Credit Agreement, of the [conversion] [continuation] of the Loans specified herein, that:
1.The conversion/continuation Date is __________, ____.
2.The aggregate amount of the Term Loans to be [converted] [continued] is $______________.
3.The Term Loans are to be [converted into] [continued as] [Eurodollar] [Base Rate] Loans.
4.[If applicable:] The duration of the Interest Period for the Term Loans included in the [conversion] [continuation] shall be _________ months.
The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the proposed conversion/continuation date, before and after giving effect thereto and to the application of the proceeds therefrom:
(a)the representations and warranties of the Borrower contained in Section 6 of the Credit Agreement are true and correct as though made on and as of such date (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date); provided, however, that this condition shall not apply to the conversion of an outstanding Eurodollar Loan to a Base Rate Loan; and
[Exhibit C-1]
(b)no Default or Event of Default has occurred and is continuing, or would result from such proposed [conversion] [continuation].
Alpine Income Property OP, LP
By:
Name:
Title:
[Exhibit C-2]
Exhibit D
Term Note
For Value Received, the undersigned, Alpine Income Property OP, LP, a Delaware limited partnership (the “Borrower”), hereby promises to pay to ____________________ (the “Lender”) or its permitted assigns on the Maturity Date of the hereinafter defined Credit Agreement, at the principal office of the Administrative Agent in New York, New York (or such other location as the Administrative Agent may designate to the Borrower), in immediately available funds, the principal sum of ___________________ Dollars ($__________) or, if less, the aggregate unpaid principal amount of all Term Loans made by the Lender to the Borrower pursuant to the Credit Agreement, together with interest on the principal amount of each Term Loan from time to time outstanding hereunder at the rates, and payable in the manner and on the dates, specified in the Credit Agreement.
This Note is one of the Term Notes referred to in the Credit Agreement dated as of September 30, 2021, among the Borrower, the Guarantors party thereto, the Lenders parties thereto, and KeyBank National Association, as Administrative Agent (as extended, renewed, amended or restated from time to time, the “Credit Agreement”), and this Note and the holder hereof are entitled to all the benefits provided for thereby or referred to therein, to which Credit Agreement reference is hereby made for a statement thereof. All defined terms used in this Note, except terms otherwise defined herein, shall have the same meaning as in the Credit Agreement. This Note shall be governed by and construed in accordance with the internal laws of the State of New York.
Voluntary prepayments may be made hereon, certain prepayments are required to be made hereon, and this Note may be declared due prior to the expressed maturity hereof, all in the events, on the terms and in the manner as provided for in the Credit Agreement.
The Borrower hereby waives demand, presentment, protest or notice of any kind hereunder.
Alpine Income Property OP, LP
By:
Name:
Title:
THE LOAN EVIDENCED BY THIS TERM NOTE IS NOT SECURED BY AN INTEREST IN FLORIDA REAL PROPERTY AND HAS BEEN EXECUTED AND DELIVERED OUTSIDE OF THE STATE OF FLORIDA. CONSEQUENTLY, NO FLORIDA DOCUMENTARY STAMP TAX IS DUE AND PAYABLE WITH RESPECT TO THIS TERM NOTE.
[Exhibit D]
Exhibit E
Compliance Certificate
To: | KeyBank National Association, as Administrative Agent under, and the Lenders party to, the Credit Agreement described below |
This Compliance Certificate is furnished to the Administrative Agent and the Lenders pursuant to that certain Credit Agreement dated as of September 30, 2021, as amended, among Alpine Income Property OP, LP, as Borrower, the Guarantors signatory thereto, the Administrative Agent and the Lenders party thereto (the “Credit Agreement”). Unless otherwise defined herein, the terms used in this Compliance Certificate have the meanings ascribed thereto in the Credit Agreement
The Undersigned hereby certifies that:
1.I am the duly elected ____________ of Alpine Income Property OP, LP;
2.I have reviewed the terms of the Credit Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of the Borrower and its Subsidiaries during the accounting period covered by the attached financial statements;
3.The examinations described in paragraph 2 did not disclose, and I have no knowledge of, the existence of any condition or the occurrence of any event which constitutes a Default or Event of Default during or at the end of the accounting period covered by the attached financial statements or as of the date of this Compliance Certificate, except as set forth below;
4.The financial statements required by Section 8.5 of the Credit Agreement and being furnished to you concurrently with this Compliance Certificate are true, correct and complete as of the date and for the periods covered thereby; and
5.The Schedule I hereto sets forth financial data and computations evidencing the Borrower’s compliance with certain covenants of the Credit Agreement, all of which data and computations are, to the best of my knowledge, true, complete and correct and have been made in accordance with the relevant Sections of the Credit Agreement.
Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which the Borrower has taken, is taking, or proposes to take with respect to each such condition or event:
[Exhibit E-1]
The foregoing certifications, together with the computations set forth in Schedule I hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered this ______ day of __________________, 20___.
Alpine Income Property OP, LP
By: Alpine Income Property GP, LLC, a Delaware limited liability company, its General Partner
By: Alpine Income Property Trust, Inc., a Maryland corporation, its sole member
By:
Name:
Title:
[Exhibit E-2]
Schedule I
to Compliance Certificate
_________________________________________________
Compliance Calculations
for Credit Agreement
dated as of September 30, 2021, as amended
Calculations as of _____________, _______
A. Maximum Total Indebtedness to Total Asset Value Ratio (Section 8.20(a)) | | |
1. Total Indebtedness | $___________ | |
2. Total Asset Value as calculated on Exhibit A hereto | ___________ | |
3. Ratio of Line A1 to A2 | ____:1.0 | |
4. Line A3 must not exceed | 0.60:1.0 | |
5. The Borrower is in compliance (circle yes or no) | yes/no | |
B. Maximum Secured Indebtedness to Total Asset Value Ratio (Section 8.20(b)) | | |
1. Secured Indebtedness | $___________ | |
2. Total Asset Value as calculated on Exhibit A hereto | ___________ | |
3. Ratio of Line B1 to B2 | ____:1.0 | |
4. Line B3 must not exceed | 0.40:1.0 | |
5. The Borrower is in compliance (circle yes or no) | yes/no | |
C. Minimum Adjusted EBITDA to Fixed Charges Ratio (Section 8.20(c)) | | |
1. Net Income | $___________ | |
2. Depreciation and amortization expense | ___________ | |
3. Interest Expense | ___________ | |
4. Income tax expense | ___________ | |
5. Extraordinary, unrealized or non-recurring losses | ___________ | |
6. Non-Cash Compensation Paid in Equity Securities | ___________ | |
7. Extraordinary, unrealized or non-recurring gains | ___________ | |
8. Income tax benefits | ___________ | |
9. Sum of Lines C2, C3, C4, C5 and C6 | ___________ | |
10. Sum of Lines C7 and C8 | ___________ | |
11. Line C1 plus Line C9 minus Line C10 (“EBITDA”) | ___________ | |
12. Annual Capital Expenditure Reserve | ___________ | |
13. Line C11 minus Line C12 (“Adjusted EBITDA”) | ___________ | |
14. Interest Expense | ___________ | |
15. Principal Amortization Payments | ___________ | |
16. Dividends on Preferred Stock | ___________ | |
17. Income Taxes Paid | ___________ | |
18. Sum of Lines C14, C15, C16 and C17 (“Fixed Charges”) | ___________ | |
19. Ratio of Line C13 to Line C18 | ____:1.0 | |
[Exhibit E-2]
20. Line C19 shall not be less than | 1.50:1.0 | |
21. The Borrower is in compliance (circle yes or no) | yes/no | |
D. Maximum Secured Recourse Indebtedness to Total Asset Value Ratio (Section 8.20(d)) | | |
1. Secured Recourse Indebtedness | $___________ | |
2. Total Asset Value as calculated on Exhibit A hereto | ___________ | |
3. Ratio of Line D1 to Line D2 | ____:1.0 | |
4. Line D3 shall not exceed | 0.05:1.0 | |
5. The Borrower is in compliance (circle yes or no) | yes/no | |
E. Maximum Unsecured Indebtedness to Borrowing Base Value Ratio (Section 8.20(e)) | | |
1. Total Unsecured Indebtedness | $___________ | |
2. Borrowing Base Value as calculated on Exhibit A hereto | ___________ | |
3. Ratio of Line E1 to E2 | ____:1.0 | |
4. Line E3 must not exceed | 0.60:1.0 | |
5. The Borrower is in compliance (circle yes or no) | yes/no | |
F. Tangible Net Worth (Section 8.20(f)) | | |
1. Tangible Net Worth | $___________ | |
2. Aggregate net proceeds of Stock and Stock Equivalent offerings after June 30, 2021 | ___________ | |
3. 75% of Line F2 | ___________ | |
4. $163,830,000 plus Line F3 | ___________ | |
[Exhibit E-3]
5. Line F1 shall not be less than Line F4 | | |
6. The Borrower is in compliance (circle yes or no) | yes/no | |
G. Investments (Joint Ventures) (Section 8.8(i)) | | |
1. Cash Investments in Joint Ventures | $___________ | |
2. Total Asset Value | $___________ | |
3. Line G1 divided by Line G2 | ___________ | |
4. Line G3 shall not exceed 10% | | |
5. The Borrower is in compliance (circle yes or no) | yes/no | |
H. Investments (Assets Under Development) (Section 8.8(j)) | | |
1. Assets Under Development | $___________ | |
2. Total Asset Value | $___________ | |
3. Line H1 divided by Line H2 | ___________ | |
4. Line H3 shall not exceed 10% | | |
5. The Borrower is in compliance (circle yes or no) | yes/no | |
I. Investments (Stock Repurchases) (Section 8.8(k)) | | |
1. Stock Repurchases | $___________ | |
2. Total Asset Value | $___________ | |
3. Line I1 divided by Line I2 | ___________ | |
4. Line I3 shall not exceed 10% | $___________ | |
[Exhibit E-4]
5. The Borrower is in compliance (circle yes or no) | yes/no | |
J. Aggregate Investment Limitation to Total Asset Value (Section 8.8) | | |
1. Sum of Lines G1, H1 and I1 | $___________ | |
2. Total Asset Value | ____________ | |
3. Line J1 divided by Line J2 | ___________ | |
4. Line J3 shall not exceed 30% | | |
5. The Borrower is in compliance (circle yes or no) | yes/no | |
K. Restricted Payments (Section 8.25(a)) | |
1. Aggregate amount of cash distributions made by the Parent to its equity holders during such period | $___________ |
2. Parent’s Adjusted FFO for such period | ____________ |
3. 95% of Line K2 | ____________ |
4. Amount necessary for the Parent to be able to make distributions required to maintain its status as a REIT (i.e., to satisfy the distribution requirements set forth in Section 4981 of the Code) | ____________ |
5. Greater of Line K3 and Line K4 | ____________ |
6. Line K1 shall not exceed Line K5 | |
7. The Borrower is in compliance (circle yes or no) | yes/no |
[Exhibit E-5]
Exhibit A to Schedule I
to Compliance Certificate
of Alpine Income Property OP, LP
This Exhibit A, with a calculation date of __________,______, is attached to Schedule I to the Compliance Certificate of Alpine Income Property OP, LP dated ___________, 2021, as amended, and delivered to KeyBank National Association, as Administrative Agent, and the Lenders party to the Credit Agreement, as amended, referred to therein. The undersigned hereby certifies that the following is a true, correct and complete calculation of Total Asset Value for Rolling Period most recently ended:
[Insert Calculation]
Alpine Income Property OP, LP
By: Alpine Income Property GP, LLC, a Delaware limited liability company, its General Partner
By: Alpine Income Property Trust, Inc., a Maryland corporation, its sole member
By:
Name:
Title:
[Exhibit E-6]
Exhibit B to Schedule I
to Compliance Certificate
of Alpine Income Property OP, LP
This Exhibit B, with a calculation date of __________,______, is attached to Schedule I to the Compliance Certificate of Alpine Income Property OP, LP dated _________, 2021, as amended, and delivered to KeyBank National Association, as Administrative Agent, and the Lenders party to the Credit Agreement, as amended, referred to therein. The undersigned hereby certifies that the following is a true, correct and complete calculation of Property NOI for all Properties for Rolling Period most recently ended:
Property | Property Income | Minus | Property Expenses (without Cap. Ex. Reserve or Management Fees) | Minus | Annual Capital Expenditure Reserve | Minus | Greater of 3% of rents or actual management fees | equals | Property NOI |
| $________ | - | $___________ | | | | | = | $________ |
| $________ | - | $___________ | | | | | = | $________ |
| $________ | - | $___________ | | | | | = | $________ |
| $_______ | - | $___________ | | | | | = | $________ |
Total Property NOI for all Properties:$_____________
Alpine Income Property OP, LP
By: Alpine Income Property GP, LLC, a Delaware limited liability company, its General Partner
By: Alpine Income Property Trust, Inc., a Maryland corporation, its sole member
By:
Name:
Title:
[Exhibit E-7]
Exhibit F
Assignment and Acceptance
Dated _____________, _______
Reference is made to the Credit Agreement dated as of September 30, 2021, as extended, renewed, amended or restated from time to time, the “Credit Agreement”) among Alpine Income Property OP, LP, the Guarantors from time to time party thereto, the Lenders and KeyBank National Association, as Administrative Agent (the “Administrative Agent”). Terms defined in the Credit Agreement are used herein with the same meaning.
______________________________________________________ (the “Assignor”) and _________________________ (the “Assignee”) agree as follows:
1.The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, the amount and specified percentage interest shown on Annex I hereto of the Assignor’s rights and obligations under the Credit Agreement as of the Effective Date (as defined below), including, without limitation, the Assignor’s Term Loan Commitments as in effect on the Effective Date and the Loans, if any, owing to the Assignor on the Effective Date
2.The Assignor (i) represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim, lien, or encumbrance of any kind; (ii) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Credit Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement or any other instrument or document furnished pursuant thereto; and (iii) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower or any Subsidiary or the performance or observance by the Borrower or any Subsidiary of any of their respective obligations under the Credit Agreement or any other instrument or document furnished pursuant thereto.
3.The Assignee (i) confirms that it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered to the Lenders pursuant to Section 8.5(b) and (c) thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance; (ii) agrees that it will, independently and without reliance upon the Administrative Agent, the Assignor or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement; (iii) appoints and authorizes the Administrative Agent to take such action as Administrative Agent on its behalf and to exercise such powers under the Credit Agreement and the other
[Exhibit F-1]
Loan Documents as are delegated to the Administrative Agent by the terms thereof, together with such powers as are reasonably incidental thereto; (iv) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender; and (v) specifies as its lending office (and address for notices) the offices set forth on its Administrative Questionnaire.
4.As consideration for the assignment and sale contemplated in Annex I hereof, the Assignee shall pay to the Assignor on the Effective Date in Federal funds the amount agreed upon between them. Each of the Assignor and the Assignee hereby agrees that if it receives any amount under the Credit Agreement which is for the account of the other party hereto, it shall receive the same for the account of such other party to the extent of such other party’s interest therein and shall promptly pay the same to such other party.
5.The effective date for this Assignment and Acceptance shall be ___________ (the “Effective Date”). Following the execution of this Assignment and Acceptance, it will be delivered to the Administrative Agent for acceptance and recording by the Administrative Agent and, if required, the Borrower.
6.Upon such acceptance and recording, as of the Effective Date, (i) the Assignee shall be a party to the Credit Agreement and, to the extent provided in this Assignment and Acceptance, have the rights and obligations of a Lender thereunder and (ii) the Assignor shall, to the extent provided in this Assignment and Acceptance, relinquish its rights and be released from its obligations under the Credit Agreement.
7.Upon such acceptance and recording, from and after the Effective Date, the Administrative Agent shall make all payments under the Credit Agreement in respect of the interest assigned hereby (including, without limitation, all payments of principal and interest with respect thereto) to the Assignee. The Assignor and Assignee shall make all appropriate adjustments in payments under the Credit Agreement for periods prior to the Effective Date directly between themselves.
[Exhibit F-2]
8.This Assignment and Acceptance shall be governed by, and construed in accordance with, the internal laws of the State of New York.
[Assignor Lender]
By
Name
Title
[Assignee Lender]
By
Name
Title
Accepted and consented this
____ day of _____________
Alpine Income Property OP, LP
By
Name
Title
Accepted and consented to by the Administrative Agent this ___ day of _________
KeyBank National Association, as Administrative Agent
By
Name
Title
[Exhibit F-3]
Annex I
to Assignment and Acceptance
The assignee hereby purchases and assumes from the assignor the following interest in and to all of the Assignor’s rights and obligations under the Credit Agreement as of the effective date.
Facility Assigned | Aggregate | Amount of | Percentage Assigned |
Term Loan | $____________ | $____________ | _____% |
[Exhibit F-4]
Exhibit G
Additional Guarantor Supplement
______________, ___
KeyBank National Association, as Administrative Agent for the Lenders named in the Credit Agreement dated as of September 30, 2021, among Alpine Income Property OP, LP, as Borrower, the Guarantors signatories thereto, the Lenders from time to time party thereto, and the Administrative Agent (the “Credit Agreement”)
Ladies and Gentlemen:
Reference is made to the Credit Agreement described above. Terms not defined herein which are defined in the Credit Agreement shall have for the purposes hereof the meaning provided therein.
The undersigned, [name of Subsidiary Guarantor], a [jurisdiction of incorporation or organization] hereby elects to be a “Guarantor” for all purposes of the Credit Agreement, effective from the date hereof. The undersigned confirms that the representations and warranties set forth in Section 6 of the Credit Agreement are true and correct as to the undersigned as of the date hereof and the undersigned shall comply with each of the covenants set forth in Section 8 of the Credit Agreement applicable to it.
Without limiting the generality of the foregoing, the undersigned hereby agrees to perform all the obligations of a Guarantor under, and to be bound in all respects by the terms of, the Credit Agreement, including, without limitation, Section 13 thereof, to the same extent and with the same force and effect as if the undersigned were a signatory party thereto.
The undersigned acknowledges that this Agreement shall be effective upon its execution and delivery by the undersigned to the Administrative Agent, and it shall not be necessary for the Administrative Agent or any Lender, or any of their Affiliates entitled to the benefits hereof, to execute this Agreement or any other acceptance hereof. This Agreement shall be construed in accordance with and governed by the internal laws of the State of New York.
Very truly yours,
[Name of Subsidiary Guarantor]
By
Name
Title________________________________
[Exhibit G]
Exhibit H
Commitment Amount Increase Request
_______________, ____
To: | KeyBank National Association, as Administrative Agent for the Lenders parties to the Credit Agreement dated as of September 30, 2021 (as extended, renewed, amended or restated from time to time, the “Credit Agreement”), among Alpine Income Property OP, LP, the Guarantors which are signatories thereto, certain Lenders parties thereto, and the Administrative Agent |
Ladies and Gentlemen:
The undersigned, Alpine Income Property OP, LP (the “Borrower”) hereby refers to the Credit Agreement and requests that the Administrative Agent consent to an increase in the aggregate Commitments (the “Commitment Increase”), in accordance with Section 1.15 of the Credit Agreement, to be effected by [an increase in the Commitment of [name of existing Lender]] [the addition of [name of new Lender] (the “New Lender”) as a Lender under the terms of the Credit Agreement]. Capitalized terms used herein without definition shall have the same meanings herein as such terms have in the Credit Agreement.
After giving effect to such Commitment Increase, the Commitment of the [Lender] [New Lender] shall be $_____________.
[Include paragraphs 1-4 for a New Lender]
1.The New Lender hereby confirms that it has received a copy of the Loan Documents and the exhibits related thereto, together with copies of the documents which were required to be delivered under the Credit Agreement as a condition to the making of the Term Loans and other extensions of credit thereunder. The New Lender acknowledges and agrees that it has made and will continue to make, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, its own credit analysis and decisions relating to the Credit Agreement. The New Lender further acknowledges and agrees that the Administrative Agent has not made any representations or warranties about the credit worthiness of the Borrower or any other party to the Credit Agreement or any other Loan Document or with respect to the legality, validity, sufficiency or enforceability of the Credit Agreement or any other Loan Document or the value of any security therefor.
2.Except as otherwise provided in the Credit Agreement, effective as of the date of acceptance hereof by the Administrative Agent, the New Lender (i) shall be deemed automatically to have become a party to the Credit Agreement and have all the rights and obligations of a “Lender” under the Credit Agreement as if it were an original signatory thereto and (ii) agrees to be bound by the terms and conditions set forth in the Credit Agreement as if it were an original signatory thereto.
[Exhibit H-1]
3.The New Lender shall deliver to the Administrative Agent an Administrative Questionnaire and shall have executed an Incremental Term Loan Amendment.
[4.The New Lender has delivered, if appropriate, to the Borrower and the Administrative Agent (or is delivering to the Borrower and the Administrative Agent concurrently herewith) the tax forms referred to in [Section 12.1] of the Credit Agreement.]*
This Agreement shall be deemed to be a contractual obligation under, and shall be governed by and construed in accordance with, the internal laws of the state of New York.
The Commitment Increase shall be effective when the executed (x) Incremental Term Loan Amendment, (y) consent of the Administrative Agent is received or otherwise in accordance with Section 1.15 of the Credit Agreement, but not in any case prior to ___________________, ____. It shall be a condition to the effectiveness of the Commitment Increase that all expenses referred to in Section 1.15 of the Credit Agreement shall have been paid.
The Borrower hereby certifies that no Default or Event of Default has occurred and is continuing.
* Insert bracketed paragraph if New Lender is organized under the law of a jurisdiction other than the United States of America or a state thereof.
[Exhibit H-2]
Please indicate the Administrative Agent’s consent to such Commitment Increase by signing the enclosed copy of this letter in the space provided below.
Very truly yours,
Alpine Income Property OP, LP
By:
Name:
Title:
[New or existing Lender Increasing Commitments]
By:
Name:
Title:
The undersigned hereby consents on this __ day of _____________, _____ to the above-requested Commitment Amount Increase.
KeyBank National Association,
as Administrative Agent
By
Name
Title
[Exhibit H-3]
Exhibit I
Borrowing Base Certificate
To: | KeyBank National Association, as Administrative Agent under, and the Lenders party to, the Credit Agreement described below. |
Pursuant to the terms of the Credit Agreement dated as of September 30, 2021, as amended, among us (the “Credit Agreement”), we submit this Borrowing Base Certificate to you and certify that the calculation of the Borrowing Base set forth below and on any Exhibits to this Certificate is true, correct and complete as of the Borrowing Base Determination Date.
A.Borrowing Base Determination Date: __________________ ____, 20___.
B.The Adjusted Borrowing Base and the Borrowing Base as of the Borrowing Base Determination Date is calculated as:
1.60% of the Borrowing Base Value as calculated on Exhibit A hereto | $_________________ |
2.Debt Service Coverage Amount as calculated on Exhibit B hereto | $_________________ |
3.The lesser of Line 1 and Line 2 (the “Borrowing Base”) | $_________________ |
4. Aggregate Other Unsecured Indebtedness outstanding 5. Line 3 minus Line 4 (the “Adjusted Borrowing Base”) | $_________________ |
| $_________________ |
[Exhibit I-1]
The foregoing certifications, together with the computations set forth in Schedule I hereto are made and delivered this ______ day of __________________ 20___.
Alpine Income Property OP, LP
By:
Name:
Title:
[Exhibit I-2]
Exhibit A to Borrowing Base Certificate
of Alpine Income Property OP, LP
This Exhibit A is attached to the Borrowing Base Certificate of Alpine Income Property OP, LP for the Borrowing Base Determination Date of ___________ ____, 20___ and delivered to KeyBank National Association, as Administrative Agent, and the Lenders party to the Credit Agreement dated September 30, 2021, as amended, referred to therein. The undersigned hereby certifies that the following is a true, correct and complete calculation of Borrowing Base Value as of the Borrowing Base Determination Date set forth above:
[Insert Calculation or attach Schedule with exclusions for concentration limits]
Borrowing Base Value of all Eligible Properties:$__________
Borrowing Base Requirements:
A. Number of Properties | |
1. The number of Eligible Properties | ___________ |
2. Line A1 shall not be less than 10 | |
3. The Borrower is in compliance (circle yes or no) | yes/no |
B. Borrowing Base Value | |
1. Borrowing Base Value | $___________ |
2. Line B1 shall not be less than $100,000,000 | |
3. The Borrower is in compliance (circle yes or no) | yes/no |
C. Non-Retail, Office or Mixed-Use Retail/Office Properties | |
1. Percent of Borrowing Base Value attributable to Non-Retail, Office or Mixed-Use Retail/Office Properties | ___________% |
2. Line C1 shall not be greater than 20% | |
3. The Borrower is in compliance (circle yes or no) | yes/no |
[Exhibit I-3]
D. Individual Eligible Property Value | |
1. The Percentage of Borrowing Base Value of each Eligible Property is set forth [above or on the attached Schedule] and the largest Borrowing Base Value or any Eligible Property is $___________ for the ___________ Eligible Property. | |
2. No Eligible Property comprises more than 25% of Borrowing Base Value | |
3. The Borrower is in compliance (circle yes or no) | yes/no1 |
E. Single Tenant Borrowing Base Value | |
1. The largest amount of Borrowing Base Value from a single Tenant that does not maintain a Rating of at least BBB-/Baa3 from S&P or Moody’s, respectively, is $_____________ from _____________. | |
2. The largest amount of Borrowing Base Value from Properties that receive less than 80% of Property NOI from a single Tenant, is $_____________ from _____________. | |
3. No single Tenant that does not maintain a Rating of at least BBB-/Baa3 from S&P or Moody’s, respectively, comprises more than 20% of Borrowing Base Value | |
4. Eligible Properties that derive less than 80% of their Property NOI from a single Tenant do not comprise more than 20% of Borrowing Base Value | |
5. The Borrower is in compliance (circle yes or no) | yes/no2 |
F. Permitted Ground Lease Investments | |
1. Percent of Borrowing Base Value attributable to Permitted Ground Lease Investments | __% |
1 If applicable, the calculation of Borrowing Base Value includes an adjustment to exclude that portion of the Property NOI or book value of any Eligible Properties attributable to any Eligible Properties to the extent it exceeds the 25% concentration limit.
2 If applicable, the calculation of Borrowing Base Value includes an adjustment to exclude that portion of the Property NOI or book value of any Eligible Properties attributable to any Eligible Properties to the extent it exceeds the 20% concentration limit.
[Exhibit I-4]
2. Line F1 shall not be greater than 30% | |
3. The Borrower is in compliance (circle yes or no) | yes/no3 |
G. Occupancy Rate | |
1. Aggregate Occupancy Rate of Eligible Properties | __% |
2. Line G1 shall not be less than 85% | |
3. The Borrower is in compliance (circle yes or no) | yes/no |
H. MSA4 | |
1. Percent of Borrowing Base Value attributable to Eligible Properties in [________] MSA | __% |
2. Line H1 shall not be greater than 35% | |
3. The Borrower is in compliance (circle yes or no) | yes/no |
3 If applicable, the calculation of Borrowing Base Value includes an adjustment to exclude that portion of the Property NOI or book value of any Permitted Ground Lease Investments attributable to any Permitted Ground Lease Investments to the extent it exceeds the 35% concentration limit.
4 To be duplicated for each MSA with Eligible Properties.
[Exhibit I-5]
Exhibit B to Borrowing Base Certificate
of Alpine Income Property OP, LP
This Exhibit B is attached to the Borrowing Base Certificate of Alpine Income Property OP, LP for the Borrowing Base Determination Date of __________ ___, 20__ and delivered to KeyBank National Association, as Administrative Agent, and the Lenders party to the Credit Agreement dated September 30, 2021, as amended, referred to therein. The undersigned hereby certifies that the following is a true, correct and complete calculation of Debt Service Coverage Amount as of the Borrowing Base Determination Date set forth above:
Eligible Properties | Debt Service Coverage Amount as Calculated on Annex I to this Exhibit B |
| $__________ |
| $__________ |
| $__________ |
| $__________ |
Total Debt Service Coverage Amount of all Eligible Properties:$__________
[Exhibit I-6]
Annex I to Exhibit B to Borrowing Base Certificate
of Alpine Income Property OP, LP
[Borrower to Insert Calculation of Debt Service Coverage Amount for each Eligible Property with concentration limit exclusions]
[Exhibit I-7]
Schedule I
Commitments
Name of Lender | Term Loan Commitment |
KeyBank National Association | $18,333,334 |
Regions Bank | $18,333,333 |
U.S. Bank National Association | $18,333,333 |
Bank of Montreal | $10,000,000 |
Raymond James Bank | $10,000,000 |
The Huntington National Bank | $5,000,000 |
Total | $80,000,000 |
[Schedule 1]
Schedule 1.1
Initial Properties
Tenant (DBA) | City, State | Square Feet |
LA Fitness | Brandon, Florida | 45,000 |
JoAnn Fabrics | Saugus, Massachusetts | 22,500 |
Century Theater | Reno, Nevada | 52,474 |
At Home | Raleigh, North Carolina | 116,334 |
Dick’s Sporting Goods, Inc. | McDonough, Georgia | 46,315 |
Best Buy Stores, L.P. | McDonough, Georgia | 30,038 |
Hilton Metrowest | Orlando, Florida | 102,019 |
Hilton Cambridge | Orlando, Florida | 31,895 |
Hobby Lobby | Winston-Salem, North Carolina | 55,000 |
Wells Fargo Building | Hillsboro, Oregon | 212,363 |
Alpine Valley Music Theatre | East Troy, Wisconsin | 93,322 |
Family Dollar | Lynn, Massachusetts | 9,228 |
Walgreens | Birmingham, Alabama | 14,516 |
Walgreens | Albany, Georgia | 14,770 |
Walgreens | Alpharetta, Georgia | 15,120 |
Container Store | Glendale, Arizona | 23,329 |
Cheddar’s | Jacksonville, Florida | 8,146 |
Scrubbles Car Wash | Jacksonville, Florida | 4,512 |
Old Time Pottery | Orange Park, Florida | 84,180 |
Freddy’s Frozen Custard | Orange Park, Florida | 3,200 |
[Schedule 1.1]
7 Eleven | Georgetown, Texas | 7,726 |
Conn’s HomePlus | Hurst, Texas | 37,957 |
7 Eleven | Austin, Texas | 6,400 |
Hobby Lobby | Tulsa, Oklahoma | 84,180 |
Long John Silvers | Tulsa, Oklahoma | 3,000 |
BP Convenience Store | Highland Heights, Kentucky | 2,578 |
AMC Theatre | Tynsborough, Massachusetts | 39,474 |
Hobby Lobby | Arden, North Carolina | 55,000 |
Dollar General | Barker, New York | 9,275 |
Dollar General | Bingham, Maine | 9,345 |
Dollar General | Chazy, New York | 9,277 |
Dollar General | Hammond, New York | 9,219 |
Dollar General | Harrisville, New York | 9,309 |
Dollar General | Heuvelton, New York | 9,342 |
Walmart | Howell, Michigan | 214,172 |
Dollar General | Limestone, Maine | 9,167 |
Dollar General | Milford, Maine | 9,128 |
Dollar General | Newtonsville, Ohio | 9,290 |
Dollar General | Odessa, Texas | 9,127 |
Dollar General | Salem, New York | 9,199 |
Advance Auto Parts | Severn, Maryland | 6,876 |
Dollar General | Somerville, Texas | 9,252 |
Dollar General | Willis, Texas | 9,138 |
[Schedule 1.1]
Dollar General | Winthrop, New York | 9,167 |
Kohl’s | Glendale, Arizona | 87,875 |
Dollar General | Kermit, Texas | 10,920 |
Walgreen’s | Tacoma, Washington | 14,125 |
Dollar General | Cut & Shoot, Texas | 9,100 |
Dollar General | Del Rio, Texas | 9,219 |
Dollar General | Seguin, Texas | 9,026 |
Sportsman’s Warehouse | Albuquerque, New Mexico | 48,974 |
At Home | North Canton, Ohio | 89,902 |
Pet Supplies Plus | North Canton, Ohio | 8,400 |
Salon Lofts | North Canton, Ohio | 4,000 |
Burlington | North Richland Hills, TX | 70,891 |
Academy Sports | Florence, SC | 58,552 |
Orscheln Farm & Home | Durant, OK | 37,965 |
Big Lots | Durant, OK | 36,794 |
Circle K | Indianapolis, IN | 4,283 |
Burger King | Plymouth, NC | 3,142 |
Dollar Tree | Demopolis, AL | 10,159 |
Firestone | Pittsburgh, PA | 10,629 |
Advance Auto Parts | Ware, MA | 6,889 |
Grease Monkey | Stockbridge, GA | 1,846 |
Hardee’s | Boaz, AL | 3,542 |
Schlotzsky’s | Sweetwater, TX | 2,431 |
[Schedule 1.1]
Advance Auto Parts | Athens, GA | 6,871 |
Dollar Tree/Family Dollar | Burlington, NC | 11,342 |
O’Reilly Auto Parts | Duluth, MN | 11,182 |
Orscheln Farm & Home | Washington Court, OH | 39,858 |
Harbor Freight | Midland, MI | 14,624 |
Advance Auto Parts | Ludington, MI | 7,000 |
Advance Auto Parts | New Baltimore, MI | 7,000 |
Camping World | Hermantown, MN | 66,025 |
Family Dollar | Stilwell, OK | 9,600 |
O’Reilly Auto Parts | Angels Camp, CA | 7,086 |
Walmart | Hempstead, TX | 50,232 |
Valero | Jackson, MS | 1,860 |
Valero | Leland, MS | 4,000 |
Hobby Lobby | Aberdeen, SD | 49,000 |
Advance Auto Parts | St. Paul, MN | 7,257 |
At Home | Turnersville, NJ | 89,453 |
Boston Market | Turnersville, NJ | 3,013 |
Verizon | Turnersville, NJ | 6,000 |
Office Depot | Albuquerque, NM | 30,299 |
Dollar Tree | Albuquerque, NM | 1,006 |
7-Eleven | Olathe, KS | 4,098 |
[Schedule 1.1]
SCHEDULE 6.2
SUBSIDIARIES
Subsidiary | Date of Formation | State of Formation | Member |
PINE19 ALPHARETTA GA LLC | October 1, 2019 | Delaware | Alpine Income Property OP, LP |
BLUEBIRD METROWEST ORLANDO LLC | January 14, 2013 | Delaware | Alpine Income Property OP, LP |
INDIGO HENRY LLC | May 26, 2006 | Florida | Alpine Income Property OP, LP |
LHC15 GLENDALE AZ LLC | April 28, 2015 | Delaware | Alpine Income Property OP, LP |
CTO16 RALEIGH LLC | September 9, 2016 | Delaware | Alpine Income Property OP, LP |
CTO17 SAUGUS MA LLC | February 17, 2017 | Delaware | Alpine Income Property OP, LP |
CTO17 BRANDON FL LLC | March 27, 2017 | Delaware | Alpine Income Property OP, LP |
PINE19 JACKSONVILLE FL LLC | October 1, 2019 | Delaware | Alpine Income Property OP, LP |
CTO19 WINSTON SALEM NC LLC | March 13, 2019 | Delaware | Alpine Income Property OP, LP |
CTO19 BIRMINGHAM LLC | May 8, 2019 | Delaware | Alpine Income Property OP, LP |
CTLC18 LYNN MA LLC | May 28, 2019 | Delaware | Alpine Income Property OP, LP |
CTO19 ALBANY GA LLC | June 6, 2019 | Delaware | Alpine Income Property OP, LP |
CTO19 TROY WI LLC | August 20, 2019 | Delaware | Alpine Income Property OP, LP |
PINE20 HURST TX LLC | December 16, 2019 | Delaware | Alpine Income Property OP, LP |
PINE19 GEORGETOWN TX LLC | October 4, 2019 | Delaware | Alpine Income Property OP, LP |
PINE19 SLAUGHTER AUSTIN TX LLC | October 4, 2019 | Delaware | Alpine Income Property OP, LP |
PINE20 HIGHLAND KY LLC | January 16, 2020 | Delaware | Alpine Income Property OP, LP |
PINE20 TYN LLC | January 16, 2020 | Delaware | Alpine Income Property OP, LP |
PINE20 TULSA LLC | February 6, 2020 | Delaware | Alpine Income Property OP, LP |
[Schedule 6.2]
PINE20 BLANDING LLC | February 6, 2020 | Delaware | Alpine Income Property OP, LP |
PINE20 ARDEN NC LLC | May 28, 2020 | Delaware | Alpine Income Property OP, LP |
PINE20 HOWELL MI LLC | May 28, 2020 | Delaware | Alpine Income Property OP, LP |
PINE20 BARKER LLC | August 18, 2020 | Delaware | Alpine Income Property OP, LP |
PINE20 CHAZY LLC | August 18, 2020 | Delaware | Alpine Income Property OP, LP |
PINE20 HAMMOND LLC | August 18, 2020 | Delaware | Alpine Income Property OP, LP |
PINE20 HARRISVILLE LLC | August 18, 2020 | Delaware | Alpine Income Property OP, LP |
PINE20 HEUVELTON LLC | August 18, 2020 | Delaware | Alpine Income Property OP, LP |
PINE20 NEWTONSVILLE LLC | August 18, 2020 | Delaware | Alpine Income Property OP, LP |
PINE20 SALEM LLC | August 18, 2020 | Delaware | Alpine Income Property OP, LP |
PINE20 WINTHROP LLC | August 19, 2020 | Delaware | Alpine Income Property OP, LP |
PINE20 SEVERN LLC | August 18, 2020 | Delaware | Alpine Income Property OP, LP |
PINE20 WILLIS LLC | July 30, 2020 | Delaware | Alpine Income Property OP, LP |
PINE20 SOMERVILLE LLC | July 30, 2020 | Delaware | Alpine Income Property OP, LP |
PINE20 BINGHAM LLC | September 3, 2020 | Delaware | Alpine Income Property OP, LP |
PINE20 LIMESTONE LLC | September 3, 2020 | Delaware | Alpine Income Property OP, LP |
PINE20 MILFORD LLC | September 3, 2020 | Delaware | Alpine Income Property OP, LP |
PINE20 ODESSA LLC | July 30, 2020 | Delaware | Alpine Income Property OP, LP |
PINE20 KERMIT LLC | July 30, 2020 | Delaware | Alpine Income Property OP, LP |
PINE20 GLENDALE LLC | November 16, 2020 | Delaware | Alpine Income Property OP, LP |
PINE20 TACOMA LLC | November 16, 2020 | Delaware | Alpine Income Property OP, LP |
PINE20 DEL RIO LLC | July 30, 2020 | Delaware | Alpine Income Property OP, LP |
PINE20 SEGUIN LLC | July 30, 2020 | Delaware | Alpine Income Property OP, LP |
[Schedule 6.2]
PINE20 CUT & SHOOT LLC | July 30, 2020 | Delaware | Alpine Income Property OP, LP |
ALPINE INCOME PROPERTY OP, LP | August 20, 2019 | Delaware | Alpine Income Property OP, LP |
CTO17 HILLSBORO OR LLC | September 9, 2019 | Delaware | Alpine Income Property OP, LP |
CTO16 RENO LLC | November 1, 2016 | Delaware | Alpine Income Property OP, LP |
PINE21 ACQUISITIONS IV LLC | June 17, 2021 | Delaware | Alpine Income Property OP, LP |
[Schedule 6.2]
Schedule 6.6
Material Adverse Change
None.
[Schedule 6.6]
Schedule 6.11
Litigation
None.
[Schedule 6.11]
Schedule 6.12
Tax Returns
None.
[Schedule 6.12]
Schedule 6.17
Environmental Issues
None.
[Schedule 6.17]
Schedule 6.23
Maintenance and Condition
None.
[Schedule 6.23]
Schedule 8.7
Existing Liens
None.
[Schedule 8.7]
Exhibit 31.1
CERTIFICATIONS
I, John P. Albright, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Alpine Income Property Trust, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: October 21, 2021
By: |
| /s/ John P. Albright | | |
|
| John P. Albright | | |
|
| President and Chief Executive Officer | | |
|
| (Principal Executive Officer) | | |
Exhibit 31.2
CERTIFICATIONS
I, Matthew M. Partridge, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Alpine Income Property Trust, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: October 21, 2021
By: |
| /s/ Matthew M. Partridge | | |
|
| Matthew M. Partridge, Senior Vice President, | | |
|
| Chief Financial Officer and Treasurer | | |
|
| (Principal Financial Officer) | | |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Alpine Income Property Trust, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John P. Albright, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: October 21, 2021
By: |
| /s/ John P. Albright | | |
|
| John P. Albright | | |
|
| President and Chief Executive Officer | | |
|
| (Principal Executive Officer) | | |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Alpine Income Property Trust, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Matthew M. Partridge, Senior Vice President, Chief Financial Officer, and Treasurer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: October 21, 2021
By: |
| /s/ Matthew M. Partridge | | |
|
| Matthew M. Partridge, Senior Vice President, | | |
|
| Chief Financial Officer and Treasurer | | |
|
| (Principal Financial Officer) | | |