American Finance Trust

Transcription

1 American 4Q Q 2013 American, Inc.

2 American Dear Fellow Shareholder, This letter offers us the opportunity to welcome our newest shareholders, those who joined the American, Inc. ( AFIN ) family earlier this year following our merger with American Realty Capital Retail Centers of America, Inc. ( ARC Retail ). This report provides you with information about the AFIN portfolio and performance. We have continued to deliver on our core investment objectives of acquiring and managing a diversified portfolio of net lease real estate located across the U.S. AFIN continued to benefit from the stability of its long term leases during the fourth quarter of We also sold three assets during the period, for total proceeds of $148 million, demonstrating our commitment to optimization of portfolio value through an ongoing focus on proactive asset management. In February 2017, after receiving shareholder approvals we closed on our merger with ARC Retail. This transaction enhances the size and scale of AFIN s portfolio with the addition of 35 institutional quality multitenant retail properties, bringing our portfolio to 487 owned assets, representing 20.3 million square feet. The transaction significantly diversifies the portfolio, adding high quality tenants, while expanding AFIN s national footprint and presence in key markets. The addition of ARC Retail s multi-tenant portfolio offers a value-add component to AFIN s strategy, with the potential to pursue lease up opportunities in this retail segment. Meanwhile, AFIN continues to benefit from our characteristically long lease terms and consistent high occupancy rates. The portfolio s weighted average lease term stood at 9.1 years as of December 31, 2016, with 100.0% overall occupancy. Given our well-balanced portfolio of retail, office, and distribution properties, we re confident that with the addition of ARC Retail s portfolio we have now reached a size and scale that will enhance AFIN s position in the net lease REIT market and better position the company for a future full-cycle liquidity event. Our results reflect the dedication of AFIN s management team, and that of the parent of our sponsor, AR Global Investments, LLC ( AR Global ), to maximize shareholder value. In particular, we aim to deliver this through three core investment features - sustainable current distributions, protection and preservation of invested capital and the potential for capital appreciation. All AR Global sponsored investment programs create value in the same way; through the thoughtful selection, intelligent acquisition, and experienced management of owned real estate, structured in a public, non-traded investment vehicle. We believe that this long-term, practiced approach to real estate ownership serves our investors well, particularly in an environment marked by political uncertainty and market instability. Looking to the year ahead, we remain committed to acquiring and managing a diversified portfolio of real estate across the U.S., and to maximizing value for you, our shareholders. Together with AR Global, we look forward to continuing to serve you with these goals in mind. As always, please feel free to contact us at to speak with a member of AR Global s client services group. Sincerely, Michael Weil Chief Executive Officer and President 2

3 4Q 2016 Factsheet Overview (as of April 2017) Net Lease Portfolio Highlights (as of December 31, 2016) AFIN is designed to protect shareholder capital and provide attractive, stable cash distributions. AFIN currently seeks to achieve these objectives through the acquisition and management of a diversified portfolio of commercial properties which are net leased primarily to investment grade and other creditworthy tenants, as well as a portfolio of stabilized core retail properties, consisting primarily of power centers and lifestyle centers. Distribution Information Distribution Rate 1 (as of December 31, 2016) 6.6% Distribution Frequency Monthly Key Facts (as of December 31, 2016) Total Capital Raised 2 $1.6 billion Geographic Diversification Top States* (Annualized GAAP 3 SLR 4 Income %) Other 41.3% Alabama 5.4% New Jersey 20.0% North Carolina 6.6% Georgia 11.0% Florida 7.6% Massachusetts 8.1% Financial Highlights Property Purchase Price 5 Property Highlights Number of Properties 455 Rentable Square Feet 13,319,348 Percentage Leased 100.0% Weighted-Average Remaining Lease Term (Yrs.) $2.2 billion Corporate Leverage Ratio % Weighted-Average Effective Interest Rate States with AFIN properties 4.75% 9.1 Tenant Quality (as of December 31, 2016) Top 5 Tenants Industry * As of December 31, 2016, we had tenants in 36 states + DC. Credit Rating Details Annualized GAAP SLR Income % SunTrust Bank Retail Banking S&P: BBB+ 17.7% Sanofi US Healthcare S&P: AA 11.4% C&S Wholesale Grocer Distribution S&P: BB 10.2% AmeriCold Refrigerated Warehousing S&P: B+ 7.7% Merrill Lynch, Pierce, Fenner & Smith 7 Financial Services S&P: A+ 7.7% Total 54.7% Other 45.3% 7.7% 17.7% 11.4% 10.2% 7.7% Top 5 Tenants 54.7% 1 Distribution rate of 6.6% represents per annum distributions of $1.65 per share based on initial IPO price per share of $ Distribution rate is 7.1% based on $23.37 per share, AFIN s estimated per-share net asset value ( Estimated Per-Share NAV ) as of December 31, Includes proceeds raised through the sale of common stock and shares issued pursuant to the distribution reinvestment plan, net of share repurchases. 3 Accounting principles generally accepted in the United States of America. 4 Straight-line rental. 5 Aggregate contract purchase price of properties acquired, excluding acquisition related costs and mortgage premiums resulting from debt assumed in connection with property acquisitions. 6 Total debt to total assets. 7 The properties leased to Merrill Lynch, Pierce, Fenner & Smith were held for sale as of December 31, 2016 and subsequently sold on January 31, 2017 for a purchase price of $148 million. 3

4 American 4Q 2016 Portfolio Details (as of December 31, 2016) Tenant Tenant Industry No. of Properties Rentable Square Feet Weighted-Average Remaining Lease Term (Years) 1st Constitution Bancorp Retail Banking 1 4, Aaron's Specialty Retail 1 7, Academy Sports Specialty Retail 1 71, Advance Auto Auto Retail 4 30, Amazon Consumer Products 1 79, American Express Travel Related Services Financial Services 2 785, American Tire Distributors Auto Retail 1 125, AmeriCold Refrigerated Warehousing 9 1,407, Arby's Restaurant 2 6, AutoZone Auto Retail 3 21, Bi-Lo Supermarket 1 55, BSFS Auto Services 1 8, Burger King Restaurant , C&S Wholesale Grocer Distribution 5 3,044, Chili's Restaurant 2 12, Circle K Gas/Convenience 19 54, Citizens Bank Retail Banking 9 34, CVS Pharmacy 3 34, Dollar General Discount Retail , Family Dollar Discount Retail 12 99, FedEx Ground Distribution 8 441, Food Lion Supermarket 1 44, Fresenius Healthcare 3 21, Home Depot Home Maintenance 2 1,315, Joe's Crab Shack Restaurant 2 16, Krystal Restaurant 6 12, L.A. Fitness Fitness 1 45, Lowe's Home Maintenance 5 671, Mattress Firm Specialty Retail 9 43, Merrill Lynch, Pierce, Fenner & Smith Financial Services 3 553, National Tire & Battery Auto Services 2 18, New Breed Logistics Freight 1 390, O'Charley's Restaurant , O'Reilly Auto Parts Auto Retail 1 10, SAAB Sensis Aerospace 1 90, Sanofi US Healthcare 1 736, Stop & Shop Supermarket 8 544, SunTrust Bank Retail Banking 201 1,072, Talecris Plasma Resources Healthcare 1 22, Tire Kingdom Auto Services 1 6, Tractor Supply Specialty Retail 3 61, United Healthcare Healthcare 1 400, Walgreens Pharmacy , Total ,319,

5 4Q 2016 Executive Management Team Michael Weil Chief Executive Officer and President Founding partner of AR Global Supervised the origination of investment opportunities for all AR Global-sponsored investment programs Previously served as Senior VP of Sales and Leasing for American Financial Realty Trust (AFRT) Served as president of the Board of Directors of the Real Estate Investment Securities Association (REISA) Nick Radesca Chief Financial Officer, Secretary and Treasurer Formerly CFO & Corporate Secretary for Solar Capital Ltd. and Solar Senior Capital Ltd. Previously served as Chief Accounting Officer at istar Financial, Inc. Jason Slear Senior Vice President of Real Estate Acquisitions/Dispositions Responsible for sourcing, negotiating, and closing AR Global s real estate acquisitions and dispositions Formerly east coast territory director for AFRT where he was responsible for the disposition and leasing activity for a portion of AFRT s 37.3 million square foot portfolio Kase Abusharkh Managing Director - Multi-Tenant Portfolio 15 years of experience in commercial real estate finance, acquisition, disposition and development Facilitated over $2 billion in commercial real estate transactions 5

6 American Investor Inquiries For more information on AFIN, please visit the company website listed below or call our Investor Services department at The information included herein should be read in connection with your review of AFIN s Annual Report on Form 10-K as of and for the year ended December 31, 2016, as filed with the U.S. Securities and Exchange Commission ( SEC ) on March 13, Forward-Looking Statement Disclosure The statements in this report that are not historical facts may be forwardlooking statements. These forward-looking statements involve risks and uncertainties that could cause the outcome to be materially different. In addition, words such as will, should, may, anticipate, believe, expect and intend indicate a forward-looking statement, although not all forward-looking statements include these words. Actual results may differ materially from those contemplated by such forwardlooking statements due to certain factors, including those set forth in the Risk Factors section of AFIN s Annual Report on Form 10-K filed on March 13, 2017 and any subsequent Quarterly Reports on Form 10-Q, which are available at the SEC s website at Further, forward-looking statements speak only as of the date they are made, and AFIN undertakes no obligation to update or revise forwardlooking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law.