Quarterly report pursuant to Section 13 or 15(d)

Equity and Mezzanine Equity

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Equity and Mezzanine Equity
 9 Months Ended
Sep. 30, 2023
Equity [Abstract]  
Equity and Mezzanine Equity Equity and Mezzanine Equity
Stockholders’ Equity

The following table summarizes the changes in our equity for the three and nine months ended September 30, 2023 and 2022 (in thousands):
 
Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
Senior Common Stock
Balance, beginning of period $ 1  $ 1  $ 1  $ 1 
Issuance of senior common stock, net —  —  —  — 
Balance, end of period $ 1  $ 1  $ 1  $ 1 
Common Stock
Balance, beginning of period $ 39  $ 39  $ 39  $ 37 
Issuance of common stock, net —  —  1  2 
Repurchase of common stock, net —  —  (1) — 
Balance, end of period $ 39  $ 39  $ 39  $ 39 
Series F Preferred Stock
Balance, beginning of period $ 1  $ 1  $ 1  $ — 
Issuance of Series F preferred stock, net —  —  —  1 
Balance, end of period $ 1  $ 1  $ 1  $ 1 
Additional Paid in Capital
Balance, beginning of period $ 728,580  $ 705,629  $ 721,327  $ 671,134 
Issuance of common stock and Series F preferred stock, net 690  9,856  6,725  44,513 
Repurchase of common stock, net —  —  998  — 
Redemption of Series F preferred stock, net 183  —  401  55 
Retirement of senior common stock, net —  —  52  — 
Adjustment to OP Units held by Non-controlling OP Unitholders resulting from changes in ownership of the Operating Partnership (53) 1,613  (103) 1,396 
Balance, end of period $ 729,400  $ 717,098  $ 729,400  $ 717,098 
Accumulated Other Comprehensive Income
Balance, beginning of period $ 14,297  $ 5,524  $ 11,640  $ (1,346)
Comprehensive income 5,089  6,790  7,218  13,660 
Reclassification into interest expense 409  52  937  52 
Balance, end of period $ 19,795  $ 12,366  $ 19,795  $ 12,366 
Distributions in Excess of Accumulated Earnings
Balance, beginning of period $ (560,719) $ (498,856) $ (529,104) $ (468,908)
Distributions declared to common, senior common, and preferred stockholders (15,182) (17,984) (45,445) (53,000)
Redemption of Series F preferred stock, net (1) —  (12) (5)
Net income attributable to the Company 1,789  2,791  448  7,864 
Balance, end of period $ (574,113) $ (514,050) $ (574,113) $ (514,050)
Total Stockholders' Equity
Balance, beginning of period $ 182,199  $ 212,338  $ 203,904  $ 200,918 
Issuance of common stock and Series F preferred stock, net 690  9,856  6,726  44,516 
Repurchase of common stock, net —  —  997  — 
Redemption of Series F preferred stock, net 182  —  389  50 
Retirement of senior common stock, net —  —  52  — 
Distributions declared to common, senior common, and preferred stockholders (15,182) (17,984) (45,445) (53,000)
Comprehensive income 5,089  6,790  7,218  13,660 
Reclassification into interest expense 409  52  937  52 
Adjustment to OP Units held by Non-controlling OP Unitholders resulting from changes in ownership of the Operating Partnership (53) 1,613  (103) 1,396 
Net income attributable to the Company 1,789  2,791  448  7,864 
Balance, end of period $ 175,123  $ 215,455  $ 175,123  $ 215,455 
Non-Controlling Interest
Balance, beginning of period $ 1,524  $ 1,275  $ 1,790  $ 1,259 
Distributions declared to Non-controlling OP Unit holders (117) (114) (352) (307)
Issuance of Non-controlling OP Units as consideration in real estate acquisitions, net —  2,394  —  2,394 
Adjustment to OP Units held by Non-controlling OP Unitholders resulting from changes in ownership of the Operating Partnership 53  (1,613) 103  (1,396)
Net income (loss) available (attributable) to OP units held by Non-controlling OP Unitholders 3  (4) (78) (12)
Balance, end of period $ 1,463  $ 1,938  $ 1,463  $ 1,938 
Total Equity $ 176,586  $ 217,393  $ 176,586  $ 217,393 

Distributions

We paid the following distributions per share for the three and nine months ended September 30, 2023 and 2022:

For the three months ended September 30, For the nine months ended September 30,
2023 2022 2023 2022
Common Stock and Non-controlling OP Units $ 0.30000  $ 0.37620  $ 0.90000  $ 1.12860 
Senior Common Stock 0.2625  0.2625  0.7875  0.7875 
Series E Preferred Stock 0.414063  0.414063  1.242189  1.242189 
Series F Preferred Stock 0.375  0.375  1.125  1.125 
Series G Preferred Stock 0.375  0.375  1.125  1.125 

Recent Activity

Common Stock ATM Programs

On February 22, 2022, we entered into Amendment No. 1 to the At-the-Market Equity Offering Sales Agreement, dated December 3, 2019 (together, the “Prior Common Stock Sales Agreement”). The amendment permitted shares of common stock to be issued pursuant to the Prior Common Stock Sales Agreement under the 2020 Registration Statement, and future registration statements on Form S-3 (the “Prior Common Stock ATM Program”). During the nine months ended September 30, 2023, we sold 0.2 million shares of common stock, raising approximately $4.0 million in net proceeds under our At-the-Market Equity Offering Sales Agreement with sales agents Robert W. Baird & Co. Incorporated (“Baird”), Goldman Sachs & Co. LLC (“Goldman Sachs”), Stifel, Nicolaus & Company, Incorporated, (“Stifel”) BTIG, LLC, and Fifth Third Securities, Inc. (“Fifth Third”). We terminated the Prior Common Stock Sales Agreement effective as of February 10, 2023 in connection with the expiration of the 2020 Registration Statement on February 11, 2023.
On March 3, 2023, we entered into an At-the-Market Equity Offering Sales Agreement (the “2023 Common Stock Sales Agreement”), with BofA Securities, Inc. (“BofA”), Goldman Sachs, Baird, KeyBanc Capital Markets Inc. (“KeyBanc”), and Fifth Third (collectively the “Common Stock Sales Agents”). In connection with the 2023 Common Stock Sales Agreement, we filed prospectus supplements dated March 3, 2023 and March 7, 2023, to the prospectus dated November 23, 2022, with the SEC, for the offer and sale of an aggregate offering amount of up to $250.0 million of common stock. During the nine months ended September 30, 2023, we did not sell any shares of common stock under the 2023 Common Stock Sales Agreement.

Common Stock Buyback Program

During the nine months ended September 30, 2023, we repurchased $1.0 million worth of our common stock through our common stock repurchase program.

Mezzanine Equity

Our 6.625% Series E Cumulative Redeemable Preferred Stock (“Series E Preferred Stock”), and our 6.00% Series G Cumulative Redeemable Preferred Stock (“Series G Preferred Stock”) are classified as mezzanine equity in our condensed consolidated balance sheets because both are redeemable at the option of the shareholder upon a change of control of greater than 50%. A change in control of our company, outside of our control, is only possible if a tender offer is accepted by over 90% of our shareholders. All other change in control situations would require input from our Board of Directors. In addition, our Series E Preferred Stock and Series G Preferred Stock are redeemable at the option of the applicable shareholder in the event a delisting event occurs. We will periodically evaluate the likelihood that a delisting event or change of control of greater than 50% will take place, and if we deem this probable, we adjust the Series E Preferred Stock, and Series G Preferred Stock presented in mezzanine equity to their redemption value, with the offset to gain (loss) on extinguishment. We currently believe the likelihood of a change of control of greater than 50%, or a delisting event, is remote.

Prior to February 10, 2023, we had an At-the-Market Equity Offering Sales Agreement (the “Series E Preferred Stock Sales Agreement”) with sales agents Baird, Goldman Sachs, Stifel, Fifth Third, and U.S. Bancorp Investments, Inc., pursuant to which we could, from time to time, offer to sell shares of our Series E Preferred Stock, in an aggregate offering price of up to $100.0 million. We did not sell any shares of our Series E Preferred Stock pursuant to the Series E Preferred Stock Sales Agreement during the nine months ended September 30, 2023. However, we terminated the agreement effective as of February 10, 2023.

Universal Shelf Registration Statements

On January 29, 2020, we filed the 2020 Registration Statement. The 2020 Registration Statement was declared effective on February 11, 2020. The 2020 Registration Statement allowed us to issue up to $800.0 million of securities. Of the $800.0 million of available capacity under our 2020 Registration Statement, approximately $636.5 million was reserved for the sale of our Series F Preferred Stock, and $63.0 million was reserved for our Prior Common Stock ATM Program. The 2020 Registration Statement expired on February 11, 2023.

On November 23, 2022, we filed the 2022 Registration Statement. There is no limit on the aggregate amount of the securities that we may offer pursuant to the 2022 Registration Statement.

Series F Preferred Stock

On February 20, 2020, we filed with the Maryland Department of Assessments and Taxation Articles Supplementary (i) setting forth the rights, preferences and terms of the Series F Preferred Stock and (ii) reclassifying and designating 26,000,000 shares of our authorized and unissued shares of common stock as shares of Series F Preferred Stock. The reclassification decreased the number of shares classified as common stock from 86,290,000 shares immediately prior to the reclassification to 60,290,000 shares immediately after the reclassification. We sold 229,677 shares of our Series F Preferred Stock, raising $5.2 million in net proceeds, during the nine months ended September 30, 2023.

Non-controlling Interest in Operating Partnership

As of September 30, 2023 and December 31, 2022, we owned approximately 99.0% and 99.0%, respectively, of the outstanding OP Units.
The Operating Partnership is required to make distributions on each OP Unit in the same amount as those paid on each share of our common stock, with the distributions on the OP Units held by us being utilized to make distributions to our common stockholders. As of September 30, 2023 and December 31, 2022, there were 391,468 and 391,468 outstanding OP Units held by Non-controlling OP Unitholders, respectively.