American Finance Trust Announces Third Quarter 2021 Results

NEW YORK, Nov. 3, 2021 /PRNewswire/ — American Finance Belief, Inc. (Nasdaq: AFIN) (“AFIN” or the “Firm”), an actual property funding belief centered on buying and managing a diversified portfolio of primarily service-oriented and conventional retail and distribution associated business actual property properties within the U.S., introduced immediately its monetary and working outcomes for the third quarter ended September 30, 2021.

Third Quarter 2021 Highlights        

• Income grew 17.1% to $91.9 million from $78.5 million for the third quarter 2020, inclusive of a $10.Four million lease buyout charge for 12 leases with Truist Financial institution
• Internet loss attributable to widespread stockholders was $6.Four million as in comparison with $7.1 million for the third quarter 2020
• Money web working revenue (“NOI”) grew 37.9% to $75.7 million from $54.9 million for the third quarter 2020
• Funds from Operations (“FFO”) of $30.Three million, or $0.25 per diluted share elevated from $25.6 million, or $0.24 per diluted share, for the third quarter 2020
• Adjusted Funds from Operations (“AFFO”) grew 41.4% to $36.Zero million¹ from $25.5 million, or 30.4% to $0.30 per share from $0.23 per diluted share, within the prior yr third quarter
• Dividends of $25.2 million or $0.21 per share
• Improved Internet Debt to adjusted earnings earlier than curiosity, taxes, depreciation and amortization (“Adjusted EBITDA”) to six.8x ²
• Enhanced steadiness sheet, with weighted common rate of interest of three.6%, in comparison with 3.8% and 89.7% of debt fixed-rate versus 83.4% a yr in the past
• Collected roughly 100% of unique money hire in third quarter 2021, together with 100% in single tenant portfolio, 100% within the multi-tenant portfolio, and 100% among the many high 20 tenants^3,4
• Multi-tenant Executed Occupancy⁵ and Leasing Pipeline⁶ are anticipated so as to add $2.1 million of annualized straight-line hire and 141,000 sq. toes to the portfolio over time as executed leases start
• Accomplished $86.5 million⁷ of acquisitions with a money capitalization charge⁸ of 8.58% and a weighted common capitalization charge⁹ of 8.79%
• Accomplished 25 multi-tenant lease renewals with a weighted-average new lease time period of 5 years
• Prime quality portfolio with 58% of tenants in single-tenant portfolio¹⁰ and 66% of the highest 20 tenants portfolio-wide rated as funding grade or implied funding grade¹¹
• Annual hire escalators¹² with a weighted-average of 1.2% per yr present contractually embedded hire development

“Our third quarter outcomes mirror the continued success of the final yr, as we proceed to execute on our initiatives to develop earnings and optimize our steadiness sheet,” mentioned Michael Weil, CEO of AFIN. “We grew quarterly AFFO greater than 30% year-over-year to $0.30 per share and continued reducing our ratio of Internet Debt to Adjusted EBITDA, which is now 6.8x down from 8.1x final yr. Subsequent to quarter finish we additionally accomplished a $500 million unsecured company notes providing with favorable pricing, together with a recast and upsizing of our company credit score facility. All of this progress gives further flexibility to help future development. Throughout the quarter, we closed on over $86 million in acquisitions and we anticipate to finish the yr with over $200 million in acquisitions primarily based on our ahead pipeline. For the reason that fourth quarter of final yr, we’ve got elevated income by 19%, grown money NOI by 29% and elevated AFFO per share whereas efficiently navigating the pandemic, growing occupancy in our multi-tenant portfolio, and enhancing each our group and our world-class portfolio.”

Monetary Outcomes               

Actual Property Portfolio

The Firm’s portfolio consisted of 968 web lease properties positioned in 47 states and the District of Columbia and comprised 20.1 million rentable sq. toes as of September 30, 2021. Portfolio metrics embrace:

• 93.2% leased, with 8.7 years remaining weighted-average lease time period¹³
• 77.5% of leases have weighted-average contractual hire will increase of 1.2% primarily based on annualized straight-line hire
• 58% of single-tenant portfolio and 31% of multi-tenant anchor tenants annualized straight-line hire derived from funding grade or implied funding grade tenants
• 82% retail properties, 11% distribution properties and seven% workplace properties (primarily based on an annualized straight-line hire)
• 71% of the retail portfolio centered on both service¹⁴ or experiential retail¹⁵ giving the Firm robust alignment with “e-commerce resistant” actual property

Property Acquisitions

Throughout the three months ended September 30, 2021, the Firm acquired 32 properties for an mixture contract buy worth of $86.5 million at a weighted common capitalization charge of 8.79%.

Property Tendencies

Throughout the three months ended September 30, 2021, the Firm disposed of three properties, for an mixture contract worth of $3.Zero million. Additional, as of October 31, 2021, the Firm has executed eight PSAs to promote a further eight properties for an mixture contract worth of $16.0 million and three LOIs to eliminate three properties for $2.2 million.

Capital Construction and Liquidity Sources

As of September 30, 2021 the Firm had a complete borrowing capability underneath the credit score facility of $494.1 million primarily based on the worth of the borrowing base underneath the credit score facility, and, of this quantity, $186.2 million was excellent underneath the credit score facility as of September 30, 2021 and $307.9 million remained out there for future borrowings. As of September 30, 2021, the Firm had $99.Zero million of money and money equivalents. The Firm’s web debt¹⁶ to gross asset worth¹⁷ was 38.9%, with web debt of $1.7 billion.

The Firm’s proportion of fastened charge debt was 89.7% as of September 30, 2021. The Firm’s whole mixed debt had a weighted-average rate of interest value of three.6%¹⁸, leading to an curiosity protection ratio of three.6 instances¹⁹.

Hire Assortment Replace

Third Quarter of 2021

For the third quarter of 2021, AFIN collected roughly 100% of the unique money rents that had been due throughout the portfolio, together with 100% of the unique money hire payable from the highest 20 tenants within the portfolio (primarily based on the full of third quarter unique money hire due throughout our portfolio) and 100% of the unique money hire payable within the single tenant portfolio and 100% of the unique money hire payable within the multi-tenant portfolio. Money hire collected contains each contractual rents and deferred rents paid throughout the interval⁴.

Footnotes/Definitions

Webcast and Convention Name

AFIN will host a webcast and name on November 4, 2021 at 11:00 a.m. ET to debate its monetary and working outcomes. This webcast shall be broadcast dwell over the Web and could be accessed by all events by means of the AFIN web site, www.americanfinancetrust.com, within the “Investor Relations” part.

Dial-in directions for the convention name and the replay are outlined under.

To hearken to the dwell name, please go to AFIN’s “Investor Relations” part of the web site not less than 15 minutes previous to the beginning of the decision to register and obtain any mandatory audio software program. For many who will not be capable of hearken to the dwell broadcast, a replay shall be out there shortly after the decision on the AFIN web site at www.americanfinancetrust.com.

Reside Name
Dial-In (Toll Free): 1-877-407-0792
Worldwide Dial-In: 1-201-689-8263

Convention Replay*
Home Dial-In (Toll Free): 1-844-512-2921
Worldwide Dial-In: 1-412-317-6671
Convention Quantity: 13724121
*Out there from 2:00 p.m. ET on November 4, 2021 by means of February 4, 2022.

About American Finance Belief, Inc.

American Finance Belief, Inc. (Nasdaq: AFIN) is a publicly traded actual property funding belief listed on the Nasdaq centered on buying and managing a diversified portfolio of primarily service-oriented and conventional retail and distribution associated business actual property properties within the U.S. Extra details about AFIN could be discovered on its web site at www.americanfinancetrust.com.  

Supplemental Schedules

The Firm will file supplemental info packages with the Securities and Change Fee (the “SEC”) to supply further disclosure and monetary info. As soon as posted, the supplemental bundle could be discovered underneath the “Displays” tab within the Investor Relations part of AFIN’s web site at www.americanfinancetrust.com and on the SEC web site at www.sec.gov.

Necessary Discover

The statements on this press launch that aren’t historic details could also be forward-looking statements. These forward-looking statements contain dangers and uncertainties that might trigger precise outcomes or occasions to be materially totally different. The phrases “anticipates,” “believes,” “expects,” “estimates,” “tasks,” “plans,” “intends,” “might,” “will,” “would” and related expressions are supposed to establish forward-looking statements, though not all forward-looking statements comprise these figuring out phrases. These forward-looking statements are topic to dangers, uncertainties and different components, lots of that are outdoors of the Firm’s management, which may trigger precise outcomes to vary materially from the outcomes contemplated by the forward-looking statements. These dangers and uncertainties embrace the potential opposed results of the continued international COVID-19 pandemic, together with actions taken to comprise or deal with COVID-19, on the Firm, the Firm’s tenants and the worldwide financial system and monetary markets and that any potential future acquisition is topic to market circumstances and capital availability and will not be recognized or accomplished on favorable phrases, or in any respect, in addition to these dangers and uncertainties set forth within the Danger Components part of the Firm’s Annual Report on Kind 10-Okay for the yr ended December 31, 2020 filed on February 25, 2021 and all different filings with the SEC after that date, as such dangers, uncertainties and different essential components could also be up to date every now and then within the Firm’s subsequent studies. Additional, ahead trying statements converse solely as of the date they’re made, and the Firm undertakes no obligation to replace or revise any forward-looking assertion to mirror modified assumptions, the prevalence of unanticipated occasions or adjustments to future working outcomes, until required to take action by regulation.

Accounting Remedy of Hire Deferrals/Abatements  

Nearly all of the concessions granted to the Firm’s tenants because of the COVID-19 pandemic are hire deferrals or non permanent hire abatements with the unique lease time period unchanged and assortment of deferred hire deemed possible. The Firm’s income recognition coverage requires that it should be possible that the Firm will acquire just about all the lease funds due and doesn’t present for partial reserves, or the power to imagine partial restoration. In gentle of the COVID-19 pandemic, the FASB and SEC agreed that for leases the place the full lease money flows will stay considerably the identical or lower than these after the COVID-19 associated results, firms might select to forgo the analysis of the enforceable rights and obligations of the unique lease contract as a sensible expedient and account for hire concessions as in the event that they had been a part of the enforceable rights and obligations of the events underneath the prevailing lease contract. Because of this, rental income used to calculate Internet Earnings and NAREIT FFO has not been, and the Firm doesn’t anticipate it to be, considerably impacted by these kind of deferrals. As well as, because the Firm at the moment believes that these deferral quantities are collectable, they’ve been excluded from the rise in straight-line hire for AFFO functions the quantities acknowledged underneath GAAP regarding these kind of hire deferrals. Conversely, for abatements the place contractual hire has been diminished, the discount in income is mirrored over the remaining lease time period for accounting functions however represents a everlasting discount in income and the Firm has, accordingly, diminished its AFFO.

Contacts:
Traders and Media:
Electronic mail: [email protected]
Cellphone: (866) 902-0063

Non-GAAP Monetary Measures

This launch discusses the non-GAAP monetary measures we use to judge our efficiency, together with Funds from Operations (“FFO”), Adjusted Funds from Operations (“AFFO”), Adjusted Earnings earlier than Curiosity, Taxes, Depreciation and Amortization (“Adjusted EBITDA”), Internet Working Earnings (“NOI”) and Money Internet Working Earnings (“Money NOI”). Whereas NOI is a property-level measure, AFFO relies on our whole efficiency and subsequently displays the influence of different objects not particularly related to NOI similar to, curiosity expense, common and administrative bills and working charges to associated events. Moreover, NOI as outlined herein, doesn’t mirror an adjustment for straight-line hire however AFFO does. An outline of those non-GAAP measures and reconciliations to essentially the most immediately comparable GAAP measure, which is web revenue, is offered under. Changes for unconsolidated partnerships and joint ventures are calculated to exclude the proportionate share of the non-controlling curiosity to reach at FFO, AFFO and NOI attributable to stockholders.

Warning on Use of Non-GAAP Measures

FFO, AFFO, Adjusted EBITDA, NOI and Money NOI shouldn’t be construed to be extra related or correct than the present GAAP methodology in calculating web revenue or in its applicability in evaluating our working efficiency. The strategy utilized to judge the worth and efficiency of actual property underneath GAAP needs to be construed as a extra related measure of operational efficiency and regarded extra prominently than the non-GAAP measures.

Different REITs might not outline FFO in accordance with the present Nationwide Affiliation of Actual Property Funding Trusts (“NAREIT”), an trade commerce group, definition (as we do), or might interpret the present NAREIT definition in a different way than we do, or might calculate AFFO in a different way than we do. Consequently, our presentation of FFO and AFFO will not be akin to different equally titled measures introduced by different REITs.

We think about FFO and AFFO helpful indicators of our efficiency. As a result of FFO and AFFO calculations exclude such components as depreciation and amortization of actual property property and positive factors or losses from gross sales of working actual property property (which might differ amongst homeowners of an identical property in related circumstances primarily based on historic value accounting and useful-life estimates), FFO and AFFO shows facilitate comparisons of working efficiency between intervals and between different REITs in our peer group.

Because of this, we imagine that using FFO and AFFO, along with the required GAAP shows, present a extra full understanding of our efficiency, together with relative to our friends and a extra knowledgeable and acceptable foundation on which to make selections involving working, financing, and investing actions. Nonetheless, FFO and AFFO will not be indicative of money out there to fund ongoing money wants, together with the power to pay money dividends. Traders are cautioned that FFO and AFFO ought to solely be used to evaluate the sustainability of our working efficiency excluding these actions, as they exclude sure prices which have a adverse impact on our working efficiency throughout the intervals by which these prices are incurred.

Funds from Operations and Adjusted Funds from Operations

Funds from Operations

On account of sure distinctive working traits of actual property firms, as mentioned under, the NAREIT, an trade commerce group, has promulgated a efficiency measure often known as FFO, which we imagine to be an acceptable supplemental measure to mirror the working efficiency of a REIT. FFO shouldn’t be equal to web revenue or loss as decided underneath GAAP.

We calculate FFO, a non-GAAP measure, in step with the requirements established over time by the Board of Governors of NAREIT, as restated in a White Paper and authorised by the Board of Governors of NAREIT efficient in December 2018 (the “White Paper”). The White Paper defines FFO as web revenue or loss computed in accordance with GAAP, excluding depreciation and amortization associated to actual property, positive factors and losses from gross sales of sure actual property property, acquire and losses from change in management and impairment write-downs of sure actual property property and investments in entities when the impairment is immediately attributable to decreases within the worth of depreciable actual property held by the entity. Changes for consolidated partially-owned entities (together with our Working Partnership) and fairness in earnings of unconsolidated associates are made to reach at our proportionate share of FFO attributable to our stockholders. Our FFO calculation complies with NAREIT’s definition.

The historic accounting conference used for actual property property requires straight-line depreciation of buildings and enhancements, and straight-line amortization of intangibles. We imagine that, as a result of actual property values traditionally rise and fall with market circumstances, together with inflation, rates of interest, unemployment and client spending, shows of working outcomes for a REIT utilizing historic accounting for depreciation and sure different objects could also be much less informative. Historic accounting for actual property includes using GAAP. Every other technique of accounting for actual property such because the honest worth technique can’t be construed to be any extra correct or related than the comparable methodologies of actual property valuation present in GAAP. However, we imagine that using FFO, which excludes the influence of actual property associated depreciation and amortization, amongst different issues, gives a extra full understanding of our efficiency to traders and to administration, and in comparison yr over yr, displays the influence on our operations from tendencies in occupancy charges, rental charges, working prices, common and administrative bills, and curiosity prices, which will not be instantly obvious from web revenue.

Adjusted Funds from Operations

In calculating AFFO, we begin with FFO, then we exclude sure revenue or expense objects from AFFO that we think about to be extra reflective of investing actions, similar to non-cash revenue and expense objects and the revenue and expense results of different actions that aren’t a elementary attribute of our everyday working marketing strategy, similar to quantities associated to litigation arising out of the Merger. These quantities embrace authorized prices incurred because of the litigation, parts of which have been and will sooner or later be reimbursed underneath insurance coverage insurance policies maintained by us. Insurance coverage reimbursements are deducted from AFFO within the interval of reimbursement. We imagine that excluding the litigation prices and subsequent insurance coverage reimbursements associated to litigation arising out of the Merger helps to supply a greater understanding of the working efficiency of our enterprise. Different revenue and expense objects additionally embrace early extinguishment of debt and unrealized positive factors and losses, which can not in the end be realized, similar to positive factors or losses on spinoff devices and positive factors and losses on investments. As well as, by excluding non-cash revenue and expense objects similar to amortization of above-market and below-market leases intangibles, amortization of deferred financing prices, straight-line hire, vesting and conversion of the Class B Models and share-based compensation associated to restricted shares and the 2018 OPP from AFFO, we imagine we offer helpful info concerning these revenue and expense objects which have a direct influence on our ongoing working efficiency.

In calculating AFFO, we exclude sure bills which underneath GAAP are characterised as working bills in figuring out working web revenue (loss). All paid and accrued merger, acquisition and transaction associated charges and sure different bills negatively influence our working efficiency throughout the interval by which bills are incurred or properties are acquired will even have adverse results on returns to traders however will not be reflective of our on-going efficiency. As well as, authorized charges and expense related to COVID-19-related lease disputes involving sure tenants negatively influence our working efficiency however will not be reflective of our on-going efficiency. Additional, underneath GAAP, sure contemplated non-cash honest worth and different non-cash changes are thought-about working non-cash changes to web revenue (loss). As well as, as mentioned above, we view positive factors and losses from honest worth changes as objects that are unrealized and will not in the end be realized and never reflective of ongoing operations and are subsequently usually adjusted for when assessing working efficiency. Excluding revenue and expense objects detailed above from our calculation of AFFO gives info in step with administration’s evaluation of our working efficiency. Moreover, honest worth changes, that are primarily based on the influence of present market fluctuations and underlying assessments of common market circumstances however may also outcome from operational components similar to rental and occupancy charges, will not be immediately associated or attributable to our present working efficiency. By excluding such adjustments which will mirror anticipated and unrealized positive factors or losses, we imagine AFFO gives helpful supplemental info. By offering AFFO, we imagine we’re presenting helpful info that can be utilized, amongst different issues, to evaluate efficiency with out the influence of transactions or different objects that aren’t associated to our portfolio of properties. AFFO introduced by us will not be akin to AFFO reported by different REITs that outline AFFO in a different way. Moreover, we imagine that to be able to facilitate a transparent understanding of our working outcomes, AFFO needs to be examined together with web revenue (loss) as introduced in our consolidated monetary statements. AFFO shouldn’t be thought-about as a substitute for web revenue (loss) as a sign of our efficiency or to money flows as a measure of our liquidity or capability to pay dividends. FFO and AFFO for the three months ended September 30, 2021 contains revenue from a lease termination charge of $10.Four million, which is recorded in income from tenants within the consolidated statements of operations. Whereas such termination funds happen sometimes, they symbolize money revenue for accounting and tax functions and as such administration believes they need to be included in each FFO and AFFO. The revenue from this termination charge was earned and recorded throughout the three months ended September 30, 2021, nonetheless, we didn’t obtain the money cost till October 1, 2021. Due to this fact, the money cost shouldn’t be a part of our money flows for the interval ended September 30, 2021.

Adjusted Earnings earlier than Curiosity, Taxes, Depreciation and Amortization, Internet Working Earnings and Money Internet Working Earnings.

We imagine that Adjusted EBITDA, which is outlined as earnings earlier than curiosity, taxes, depreciation and amortization adjusted for acquisition and transaction-related bills, different non-cash objects such because the vesting and conversion of the Class B Models, expense associated to our multi-year outperformance settlement with the Advisor and together with our pro-rata share from unconsolidated joint ventures, is an acceptable measure of our capability to incur and repair debt. Adjusted EBITDA shouldn’t be thought-about as a substitute for money flows from working actions, as a measure of our liquidity or as a substitute for web revenue as an indicator of our working actions. Different REITs might calculate Adjusted EBITDA in a different way and our calculation shouldn’t be in comparison with that of different REITs.

NOI is a non-GAAP monetary measure utilized by us to judge the working efficiency of our actual property. NOI is the same as whole revenues, excluding contingent buy worth consideration, much less property working and upkeep expense. NOI excludes all different objects of expense and revenue included within the monetary statements in calculating web revenue (loss). We imagine NOI gives helpful and related info as a result of it displays solely these revenue and expense objects which are incurred on the property stage and presents such objects on an unleveraged foundation. We use NOI to evaluate and examine property stage efficiency and to make selections regarding the operations of the properties. Additional, we imagine NOI is helpful to traders as a efficiency measure as a result of, in comparison throughout intervals, NOI displays the influence on operations from tendencies in occupancy charges, rental charges, working bills and acquisition exercise on an unleveraged foundation, offering perspective not instantly obvious from web revenue (loss). NOI excludes sure objects included in calculating web revenue (loss) to be able to present outcomes which are extra intently associated to a property’s outcomes of operations. For instance, curiosity expense shouldn’t be essentially linked to the working efficiency of an actual property asset. As well as, depreciation and amortization, due to historic value accounting and helpful life estimates, might distort working efficiency on the property stage. NOI introduced by us will not be akin to NOI reported by different REITs that outline NOI in a different way. We imagine that to be able to facilitate a transparent understanding of our working outcomes, NOI needs to be examined together with web revenue (loss) as introduced in our consolidated monetary statements. NOI shouldn’t be thought-about as a substitute for web revenue (loss) as a sign of our efficiency or to money flows as a measure of our liquidity or our capability to pay dividends.

Money NOI, is a non-GAAP monetary measure that’s supposed to mirror the efficiency of our properties. We outline Money NOI as NOI excluding amortization of above/under market lease intangibles and straight-line changes which are included in GAAP lease revenues. We imagine that Money NOI is a useful measure that each traders and administration can use to judge the present monetary efficiency of our properties and it permits for comparability of our working efficiency between intervals and to different REITs. Money NOI shouldn’t be thought-about as a substitute for web revenue, as a sign of our monetary efficiency, or to money flows as a measure of liquidity or our capability to fund all wants. The strategy by which we calculate and current Money NOI will not be immediately akin to the best way different REITs current Money NOI.

Money Paid for Curiosity is calculated primarily based on the curiosity expense much less non-cash portion of curiosity expense and amortization of mortgage (low cost) premium, web. Administration believes that Money Paid for Curiosity gives helpful info to traders to evaluate our general solvency and monetary flexibility. Money Paid for Curiosity shouldn’t be thought-about as a substitute for curiosity expense as decided in accordance with GAAP or another GAAP monetary measures and will solely be thought-about along with and as a complement to our monetary info ready in accordance with GAAP.

SOURCE American Finance Belief, Inc.

Associated Hyperlinks

http://www.americanfinancetrust.com