8-K
Peakstone Realty Trust (PKST)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 25, 2021
Griffin Capital Essential Asset REIT, Inc.
(Exact name of registrant as specified in its charter)
Commission File Number: 000-55605
| Maryland | 46-4654479 |
|---|---|
| (State or other jurisdiction of incorporation) | (IRS Employer Identification No.) |
1520 E. Grand Avenue, El Segundo, CA 90245
(Address of principal executive offices, including zip code)
(310) 469-6100
(Registrant's telephone number, including area code)
None
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities to be registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| ____________________ | _________________ | ____________________ |
| None | None | None |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ¨
Item 2.01. Completion of Acquisition or Disposition of Assets
On March 1, 2021, Griffin Capital Essential Asset REIT, Inc., a Maryland corporation (the “Registrant”) completed its previously announced merger with Cole Office & Industrial REIT (CCIT II), Inc., a Maryland corporation (“CCIT II”), pursuant to the Agreement and Plan of Merger, dated as of October 29, 2020 (the “Merger Agreement”), by and among the Registrant, GRT (Cardinal REIT Merger Sub), LLC, a Maryland limited liability company and a wholly owned subsidiary of the Registrant (“Merger Sub”), Griffin Capital Essential Asset Operating Partnership, L.P., a Delaware limited partnership and a subsidiary of the Registrant (the “GCEAR Operating Partnership”), GRT OP (Cardinal New GP Sub), LLC, a Delaware limited liability company and a wholly owned subsidiary of the GCEAR Operating Partnership (“New GP Sub”), GRT OP (Cardinal LP Merger Sub), LLC, a Delaware limited liability company and a wholly owned subsidiary of the GCEAR Operating Partnership (“LP Merger Sub”), GRT OP (Cardinal OP Merger Sub), LLC, a Delaware limited liability company and a subsidiary of LP Merger Sub and New GP Sub (“OP Merger Sub”), CCIT II, Cole Corporate Income Operating Partnership II, LP, a Delaware limited partnership and a wholly owned subsidiary of CCIT II (the “CCIT II Operating Partnership”), and CRI CCIT II, LLC, a Delaware limited liability company and a wholly owned subsidiary of CCIT II (“CCIT II LP”).
Pursuant to the Merger Agreement, (i) CCIT II merged with and into Merger Sub (the “REIT Merger”), with Merger Sub continuing as the surviving entity after the REIT Merger, (ii) OP Merger Sub merged with and into the CCIT II Operating Partnership (the “Partnership Merger”), with the CCIT II Operating Partnership continuing as the surviving entity after the Partnership Merger, and (iii) CCIT II LP merged with and into LP Merger Sub (the “LP Merger” and, together with the REIT Merger and the Partnership Merger, the “Mergers”) with LP Merger Sub continuing as the surviving entity after the LP Merger.
As previously disclosed, pursuant to the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the REIT Merger:
•each issued and outstanding share of CCIT II’s Class A common stock, $0.01 par value per share (“CCIT II Class A Common Stock”), and Class T common stock, $0.01 par value per share, was converted into the right to receive 1.392 shares of the Registrant’s Class E common stock, $0.001 par value per share, subject to the treatment of fractional shares in accordance with the Merger Agreement (the “REIT Merger Consideration”); and
•each issued and outstanding share of CCIT II Class A Common Stock granted under CCIT II’s 2018 Equity Incentive Plan, whether vested or unvested, was cancelled in exchange for an amount equal to the REIT Merger Consideration.
As previously disclosed, pursuant to the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Partnership Merger:
•each issued and outstanding partnership unit of the CCIT II Operating Partnership (“CCIT II Operating Partnership Units”) held by CCIT II was converted into the right to receive 1.392 Class E units of the GCEAR Operating Partnership, subject to the treatment of fractional units in accordance with the Merger Agreement, and CCIT II was admitted as a limited partner of the GCEAR Operating Partnership; and
•each issued and outstanding CCIT II Operating Partnership Unit held by CCIT II LP was automatically cancelled and ceased to exist, and no consideration was paid, in connection with or as a consequence of the Partnership Merger.
As previously disclosed, pursuant to the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the LP Merger, all of the issued and outstanding limited liability company interests in CCIT II LP were automatically cancelled and ceased to exist, and no consideration was paid, in connection with or as a consequence of the LP Merger.
The foregoing description of the Merger and the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, which was attached as Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on November 2, 2020, and is incorporated by reference herein.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
On December 18, 2020, as previously disclosed on the Registrant’s Current Report on Form 8-K, filed with the SEC on December 23, 2020 (the “Term Loan 8-K”), the Registrant, through the GCEAR Operating Partnership, as borrower, various lending institutions and KeyBank, National Association, as administrative agent, entered into the Second Amendment (the “Second Amendment”) to that certain Second Amended and Restated Credit Agreement dated as of April 30, 2019, as amended by that certain First Amendment to Second Amended and Restated Credit Agreement dated as of October 1, 2020 (collectively, the “Existing Credit Agreement”; and the Existing Credit Agreement as amended by the Second Amendment, the “Amended Credit Agreement”).
On March 1, 2021, the GCEAR Operating Partnership borrowed $400,000,000 under the new five-year senior unsecured delayed draw term loan provided by the Amended Credit Agreement in connection with the closing of the Mergers. The disclosure set forth in the Term Loan 8-K under “Item 1.01. Entry into a Material Definitive Agreement – Second Amendment to Second Amended and Restated Credit Agreement” is incorporated by reference herein.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On February 25, 2021, pursuant to the terms of the Merger Agreement, the board of directors of the Registrant (the “Board”) approved an increase in the size of the Board from seven to ten members and the appointments of Mr. Richard H. Dozer, Mr. P. Anthony Nissley and Mr. James F. Risoleo to fill the vacancies created by the increase, in each case subject to consummation of the REIT Merger and effective immediately following the effective time of the REIT Merger. These appointments became effective on March 1, 2021. Each new director will serve until the 2021 annual meeting of the Registrant’s stockholders and until his successor is duly elected and qualified. The directors of the Registrant as of immediately prior to the effective time of the REIT Merger continued as directors following the effective time of the REIT Merger.
In connection with their service as directors, each of Messrs. Dozer, Nissley and Risoleo will receive non-employee director compensation commensurate with the Registrant’s other non-employee directors, which is described in more detail in the Registrant’s definitive proxy statement on Schedule 14A filed with the SEC on April 15, 2020, prorated for their remaining terms.
The Board determined that Messrs. Dozer, Nissley and Risoleo are independent directors. None of Messrs. Dozer, Nissley and Risoleo have been assigned to any Board committees at this time. There are no transactions in which Messrs. Dozer, Nissley or Risoleo had or will have an interest that require disclosure under Item 404(a) of Regulation S-K.
Item 7.01. Regulation FD Disclosure
On March 1, 2021, the Registrant issued a press release announcing the closing of the Mergers. A copy of the press release is attached hereto as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein solely for purposes of this Item 7.01 disclosure.
The Registrant also sent a letter dated March 1, 2021 to the former stockholders of CCIT II. A copy of the letter is attached hereto as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein solely for purposes of this Item 7.01 disclosure.
Pursuant to the rules and regulations of the SEC, the information in this Item 7.01 disclosure, including Exhibit 99.1 and Exhibit 99.2 and information set forth therein, is deemed to have been furnished and shall not be deemed to be “filed” under the Securities Exchange Act of 1934, as amended.
Item 9.01. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired.
The Registrant intends to file the financial statements of CCIT II required by Item 9.01(a) as part of an amendment to this Current Report on Form 8-K no later than 71 calendar days after the required filing date for this Current Report on Form 8-K.
(b) Pro Forma Financial Information.
The Registrant intends to file the pro forma financial information required by Item 9.01(b) as part of an amendment to this Current Report on Form 8-K no later than 71 calendar days after the required filing date for this Current Report on Form 8-K.
(d) Exhibits
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release dated March 1, 2021 |
| 99.2 | Letter to Former CCIT II Stockholders |
Signature(s)
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 hereunto duly authorized.
| Griffin Capital Essential Asset REIT, Inc. | ||
|---|---|---|
| Date: March 1, 2021 | By: | /s/ Javier F. Bitar |
| Javier F. Bitar | ||
| Chief Financial Officer, Treasurer and Interim Chief Investment Officer |
Document
Exhibit 99.1
For Immediate Release: March 01, 2021
Investor Services
888-926-2688
Media Contacts:
Scott Street
310-469-6135
Griffin Capital Essential Asset REIT, Inc. and Cole Office & Industrial REIT (CCIT II), Inc. Complete Merger
El Segundo, Calif. (March 01, 2021) – Griffin Capital Essential Asset REIT, Inc. (“GCEAR” or the “Company”) announced the completion of its previously announced merger with Cole Office & Industrial REIT (CCIT II), Inc. (“CCIT II”), whereby GCEAR acquired CCIT II in a stock-for-stock transaction.
The transaction combines two high-quality portfolios of corporate office and industrial properties with long-term, net leases to creditworthy tenants. The GCEAR portfolio now consists of 123 properties across 26 states and has a total asset value of $5.8 billion.1
“We are excited to welcome the CCIT II stockholders to GCEAR,” said Michael J. Escalante, Chief Executive Officer and President of GCEAR. “Joining our two highly-complementary portfolios materially enhances the scale and diversification of the combined enterprise while reducing overall operating costs. As a result, we believe we are well-positioned to capitalize on future value-enhancing opportunities for both groups of stockholders.”
Advisors
Goldman Sachs & Co. LLC acted as the lead financial advisor to GCEAR; BofA Securities, Inc. also served as a financial advisor to GCEAR. Hogan Lovells US LLP acted as the legal advisor to GCEAR.
Additional information is available at www.gcear.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains statements that constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company intends for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions. The forward-looking statements contained in this press release reflect the Company's current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause the Company's actual results to differ significantly from those expressed in any forward-looking statement.
The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: statements about the benefits of the merger involving GCEAR and CCIT II and statements that address operating performance, events or developments that GCEAR expects or anticipates will occur in the future, including but not limited to statements regarding anticipated synergies and general and administrative expense savings in the merger, future financial and operating results, plans, objectives, expectations and intentions, expected sources of financing, anticipated asset dispositions, anticipated leadership and governance, creation of value for stockholders, benefits of the merger to customers, employees, stockholders and other constituents of the combined company, the integration of GCEAR and CCIT II, cost savings related to the merger and other non-historical statements; risks related to the disruption of management’s attention from ongoing business operations due to the merger; the availability of suitable investment or disposition opportunities; changes in interest rates; the availability and terms of financing; the impact of the COVID-19 pandemic on the operations and financial condition of GCEAR and the real estate industries in which it operates, including with respect to occupancy rates, rent deferrals and the financial condition of GCEAR’s tenants; general financial and economic conditions, which may be affected by government responses to the COVID-19 pandemic; market conditions; legislative and regulatory changes that could adversely affect the business of GCEAR; and other factors, including those risks disclosed in Part I, Item 1A. “Risk Factors” and Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company's most recent Annual Report on Form 10-K and Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Part II, Item 1A. “Risk Factors” of the Company's Quarterly Reports on Form 10-Q filed with the U.S. Securities and Exchange Commission. The Company cautions investors not to place undue reliance on these forward-looking statements and urge you to carefully review the disclosures it makes concerning risks. While forward-looking statements reflect the Company's good faith beliefs, assumptions and expectations, they are not guarantees of future performance. The forward-looking statements speak only as of the date of this press release. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes.
1Total asset value based on appraised values as of December 31, 2020.
ex992ccitiiinvestorwelco
A M E R I C A’ S B L U E - C H I P L A N D L O R D ™ Griffin Capital Essential Asset® REIT *All tenants, properties and data as of December 31, 2020. Dear Valued Shareholder, We are excited to welcome you as a shareholder of Griffin Capital Essential Asset REIT, Inc. (“GCEAR”). Our merger with Cole Office and Industrial REIT (CCIT II), Inc. (“CCIT II”) successfully united two cohesive portfolios of high-quality assets and tenants. As a result, you now own shares in one of the largest office and industrial, net-lease REITs in the United States. The GCEAR platform was founded in 2009, and since our inception our mission has remained the same. We seek to generate consistent, sustainable income by combining the: • Durability of creditworthy, blue-chip corporate tenants; • Stability of long-term, net leases; and • Power of proactive management. To achieve this mission, we have leveraged the skills, experience and longstanding industry relationships of our dedicated professionals. These individuals have valuable expertise across a wide range of disciplines, which allows us to proactively take advantage of opportunities to generate growth and stability in our portfolio. They are led by an accomplished senior management team, with an average of 30 years of real estate industry experience among them. We are confident the combined company is well-positioned for future opportunities. Importantly, we believe the merger has significantly enhanced potential opportunities to maximize value and liquidity for all of our shareholders. We are dedicated to achieving this outcome, and we look forward to sharing our future results with you. Sincerely, Michael J. Escalante Chief Executive Officer and President Griffin Capital Essential Asset REIT, Inc. Exhibit 99.2
P O RT F O L I O O V E R V I E W Combined Company Total Asset Value $5.8 billion Net Asset Value $3.2 billion Net Debt/Enterprise Value 43.2% Number of Properties¹ 123 Leased² 90% Size of Portfolio 30.8 million sq. ft. WALT² 7.0 years Investment Grade3 63.7% 2020 Rent Collections 100% Property Type4 C A PI TA LI ZA TI O N P O R TF O LI O Industrial/Manufacturing/Flex 13.6% Office 86.4% Source: Company filings | Note: All figures as of December 31, 2020, unless stated otherwise. 1. As of February 28, 2021. 2. Pro forma based on square feet. 3. Reflects the percentage of pro forma, 12-month forward net rent generated by properties leased and/or guaranteed, directly or indirectly, by companies that have investment-grade credit ratings or what management believes are generally equivalent ratings. 4. Pro forma based on 12-month forward net rent.
P O RT F O L I O O V E R V I E W Note: Logos shown are those of tenants, lease guarantors, or non-guarantor parent companies.
For more information on Griffin Capital Essential Asset REIT, please call 888.926.2688 or visit www.gcear.com. Experienced Executive Management Team Michael Escalante CEO, President and Director 33 Years Javier Bitar Chief Financial Officer & Treasurer 33 Years Nina Momtazee Sitzer Chief Administrative Officer & General Counsel 28 Years Louis K. Sohn Executive Vice President 20 Years Scott Tausk Executive Vice President 33 Years Bryan Yamasawa Chief Accounting Officer 30 Years * Trailing five year average as of December 31, 2020. E X P E R I E N C E D T E A M O F R E A L E S TAT E P R O F E S S I O N A L S Leveraging our professional expertise in: Asset Management | Acquisitions | Strategic Investments | Corporate Finance Senior management team with average experience of 30 Years Assets Under Management $5.8 Billion Average Leasing Volume* 1M SF/yr EA-IU110100(0121)