Press Release

VEREIT® Announces Closing of New Office Partnership and Fourth Quarter 2019 Activity

Company Release - 1/14/2020 4:15 PM ET

PHOENIX, Jan. 14, 2020 /PRNewswire/ -- VEREIT, Inc. (NYSE: VER) ("VEREIT" or the "Company") announced today it has closed on an office partnership which will include three VEREIT office assets totaling approximately $137.5 million and 582,000 square feet. This partnership allows VEREIT to reduce balance sheet office exposure while utilizing the Company's in-house infrastructure to manage and increase the value of the enterprise.

VEREIT is a full-service real estate operating company which owns and manages one of the largest portfolios of single-tenant commercial properties in the U.S. (PRNewsfoto/VEREIT, Inc.)

The office partnership was formed with an institutional client of Arch Street Capital Advisors. VEREIT was represented by Mark Penrod, Managing Director, and Daniel Prendiville, Vice President, at Eastdil Secured L.L.C. ("Eastdil Secured"). Two of the three properties were contributed to the partnership at the time of closing totaling $87.7 million with the last property expected to be added to the partnership in the first quarter of 2020 for $49.8 million.

The partnership has a traditional 80/20 equity structure. The three VEREIT office assets being contributed to the partnership have a weighted average lease term of approximately eight years, are located in three different states, and have a capitalization rate of approximately 7.8%.

Fourth Quarter 2019 Transaction Highlights

  • Acquisitions in the fourth quarter were $166.2 million bringing the total for 2019 to $425.6 million
  • Portfolio dispositions in the fourth quarter were $225.5 million bringing the total for 2019 to $1.1 billion comprised of $739.5 million portfolio dispositions and $326.0 million from the industrial partnership
  • Issued 9.0 million shares under the Company's "at the market" ("ATM") equity offering program for gross proceeds of $86.7 million at a weighted average price of $9.60 per share
  • Issued $600.0 million aggregate principal amount of 3.10% senior notes due 2029
  • Proceeds from the senior notes along with borrowings under the Company's revolving credit facility and cash on hand were used to fund the redemption of all $400.0 million of the 4.125% senior notes due 2021, repurchase of $80.7 million of the 3.75% convertible senior notes due 2020, redemption of $200.0 million of VEREIT's 6.7% Series F preferred stock, and repayment of $185.6 million of mortgage debt

Fourth Quarter 2019 Litigation Update

  • As previously disclosed, VEREIT reached an agreement, which is subject to documentation and approval by the Commissioners of the Securities & Exchange Commission ("SEC"), to settle the SEC investigation for $8.0 million as a civil penalty
  • The court issued an order granting preliminary approval of both the class action settlement and derivative action settlement with a hearing scheduled for January 21, 2020 to consider final approval of both settlements
  • Deadline of December 31, 2019 to file objections to the class action or derivative action settlements passed with no objections filed

Glenn Rufrano, VEREIT's Chief Executive Officer, stated, "We began 2019 with dispositions expected to outpace acquisitions. This goal was achieved, and along with our fourth quarter ATM activity, debt levels have been reduced. Portfolio dispositions to date in 2020 have been minimal; however, approximately $90.0 million of acquisitions have already closed and we have a strong pipeline for the rest of the year. In addition, in early 2020, the industrial partnership is expected to close on an approximately $250.0 million property and the office partnership is expected to close on a $33.0 million property."

About the Company
VEREIT is a full-service real estate operating company which owns and manages one of the largest portfolios of single-tenant commercial properties in the U.S. The Company has total real estate investments of $14.9 billion including approximately 3,900 properties and 90.7 million square feet. VEREIT's business model provides equity capital to creditworthy corporations in return for long-term leases on their properties. VEREIT is a publicly traded Maryland corporation listed on the New York Stock Exchange. VEREIT uses, and intends to continue to use, its Investor Relations website, which can be found at www.vereit.com, as a means of disclosing material nonpublic information and for complying with its disclosure obligations under Regulation FD. Additional information about VEREIT can be found through social media platforms such as Twitter and LinkedIn.

About Arch Street Capital Advisors
Arch Street Capital Advisors, L.L.C. is a full-service real estate investment advisory firm. Arch Street specializes in assisting investors with their U.S. real estate strategies including acquisition and joint venture advisory, financing advisory, and asset management and disposition services. Since 2003, Arch Street has advised clients on more than $7.5 billion of acquisitions, dispositions and financings. Arch Street manages, on behalf of its clients, a diverse portfolio of investments across multiple sectors of the U.S. real estate market. Learn more about Arch Street Capital Advisors by visiting www.archstreetcapital.com.

About Eastdil Secured
Eastdil Secured is a provider of financial advisory services to real estate owners. Eastdil Secured combines superior capital markets expertise with an understanding of real estate fundamentals to execute a wide range of real estate transactions. Find more information online at www.eastdilsecured.com.

Forward-Looking Statements
Information set forth herein contains "forward-looking statements" (within the meaning of the federal securities laws, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended), which reflect the Company's expectations and projections regarding future events and plans, including statements regarding our acquisition pipeline, the newly formed office partnership, including its effect on the Company's portfolio and the Company's role managing the partnership, our industrial partnership's and office partnership's expected property acquisitions, the negotiation of definitive documentation regarding, and approval of, the settlement of the SEC investigation and the court hearing to consider final approval of the class action settlement and the derivative action settlement. Generally, the words "expects," "anticipates," "assumes," "targets," "goals," "projects," "intends," "plans," "believes," "seeks," "estimates," "may," "will," "should," "could," "continues," variations of such words and similar expressions identify forward-looking statements. These forward-looking statements are based on information currently available to us and involve a number of known and unknown assumptions, risks, uncertainties and other factors, which may be difficult to predict and beyond the Company's control, that could cause actual events, plans or results to differ materially from those contained in the forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: the Company's plans, market and other expectations, objectives, intentions and other statements that are not historical facts; the developments disclosed herein; risks accompanying the management of its industrial and office partnerships; competition in the acquisition and disposition of properties and in the leasing of properties; the inability to acquire, dispose of, or lease properties on advantageous terms; and risks associated with obtaining final court approval of the class action and derivative settlements and with obtaining approval of the settlement with the SEC by the Commissioners of the SEC. Additional factors include the risks and uncertainties detailed from time to time in the Company's filings with the SEC, which are available at the SEC's website at www.sec.gov. The Company disclaims any obligation to publicly update or revise any forward-looking statements contained in this press release whether as a result of changes in underlying assumptions or factors, new information, future events or otherwise, except as required by law.

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SOURCE VEREIT, Inc.

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