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): August 23, 2013 (August 19, 2013)

 

American Realty Capital Trust V, Inc.

(Exact Name of Registrant as Specified in Charter)

 

Maryland   333-187092   90-0929989

(State or other jurisdiction

of incorporation or organization)

  (Commission File Number)  

(I.R.S. Employer

Identification No.)

 

405 Park Avenue

New York, New York 10022

(Address, including zip code, of Principal Executive Offices)

Registrant's telephone number, including area code: (212) 415-6500

 

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))

  

 
 

 

Item 1.01. Entry into a Material Definitive Agreement.

 

Lowe’s Home Centers – 4 Pack

 

On August 19, 2013, following the completion of its due diligence review of four Lowe’s home centers located in North Carolina (Fayetteville, New Bern and Rocky Mount) and Macon, Georgia, American Realty Capital Trust V, Inc. (the “Company”) finalized the prerequisite conditions to acquire, and subsequently acquired, leasehold and fee simple interests in the properties on that same date. Pursuant to the terms of the purchase and sale agreement dated as of July 19, 2013, the Company’s obligation to close upon the acquisition was subject to the satisfactory completion of a due diligence review of the properties, among other conditions. The purchase and sale agreement contains customary representations and warranties by the seller.

 

The description of the four Lowe’s home centers located in the locations described above set forth in Item 2.01 of this Current Report on Form 8-K is incorporated by reference into this Item 1.01 in its entirety.

 

Food Lion Grocery Store – Charlotte, North Carolina

 

On August 19, 2013, following the completion of its due diligence review of a Food Lion grocery store located in Charlotte, North Carolina, the Company finalized the prerequisite conditions to acquire, and subsequently acquired, the fee simple interest in the property on that same date. Pursuant to the terms of the purchase and sale agreement dated as of July 11, 2013, the Company’s obligation to close upon the acquisition was subject to the satisfactory completion of a due diligence review of the property, among other conditions. The purchase and sale agreement contains customary representations and warranties by the seller.

 

The description of the Food Lion grocery store located in Charlotte, North Carolina described above set forth in Item 2.01 of this Current Report on Form 8-K is incorporated by reference into this Item 1.01 in its entirety.

 

Lowe’s Home Center – Aiken, South Carolina

 

On August 21, 2013, following the completion of its due diligence review of a Lowe’s home center located in Aiken, South Carolina, the Company finalized the prerequisite conditions to acquire, and subsequently acquired, a partial leasehold interest in the property on that same date. Pursuant to the terms of the purchase and sale agreement dated as of July 19, 2013, the Company’s obligation to close upon the acquisition was subject to the satisfactory completion of a due diligence review of the property, among other conditions. The purchase and sale agreement contains customary representations and warranties by the seller.

 

The description of the Lowe’s home center located in Aiken, South Carolina described above set forth in Item 2.01 of this Current Report on Form 8-K is incorporated by reference into this Item 1.01 in its entirety.

 

Item 2.01. Completion of Acquisition or Disposition of Assets.

  

Lowe’s Home Centers – 4 Pack

 

On August 19, 2013, the Company, through wholly owned subsidiaries of its operating partnership, closed its acquisition of leasehold and fee simple interests in four Lowe’s home centers located in North Carolina (Fayetteville, New Bern and Rocky Mount) and Macon, Georgia for a contract purchase price of $48.1 million, exclusive of closing costs. The sellers have no material relationship with the Company and the acquisitions were not affiliated transactions.

 

The Company funded 100% of the acquisition with cash from its ongoing initial public offering. 

 

The properties are 100% leased to Lowe’s Home Centers, Inc. and the leases are guaranteed by Lowe’s Companies, Inc. (NYSE: “LOW”), which carries an investment grade credit rating as determined by major credit rating agencies. The leases are net whereby the tenants are required to pay substantially all operating expenses, excluding all costs to maintain and repair the roof and structure of the building, in addition to base rent.

 

 
 

 

The following table provides information about each of the properties relating to the seller, type of ownership interest, lease commencement and termination dates, rentable square feet, annualized rental income, rental escalations and renewal options. 

 

 

 

Property

Seller

 

Ownership

Interest

Lease
Commencement

Date

Lease
Termination

Date

Rentable
Square
Feet
Annualized
Rental
Income

 Rental

Escalations

Renewal
Options
Fayetteville, NC RSH, LLC Leasehold  June 2000 May 2030 135,197 $0.9 million 3% increase in Year 21   Six Five-Year Options
New Bern, NC H/S Newlo, LLC Fee Simple July 1999 July 2029 135,406 $0.9 million 5% increase in Year 21 Six Five-Year Options
Rocky Mount, NC H/S Roclo, LLC Fee Simple December 1997 November 2027 130,316 $1.0 million 5% increase in Year 21 Six Five-Year Options
Macon, GA H/S Maclo Two, LLC Leasehold October 2000 September 2030 135,197 $1.0 million 5% increase in Year 21   Six Five-Year Options

 

Food Lion Grocery Store – Charlotte, North Carolina

 

On August 19, 2013, the Company, through a wholly owned subsidiary of its operating partnership, closed its acquisition of a fee simple interest in a Food Lion grocery store located in Charlotte, North Carolina for a contract purchase price of $8.9 million, exclusive of closing costs. The seller has no material relationship with the Company and the acquisition was not an affiliated transaction.

 

The Company funded 100% of the acquisition with cash from its ongoing initial public offering. 

 

The property is 100% leased to Food Lion, LLC and the lease is guaranteed by Delhaize America, Inc. The lease is net whereby the tenant is required to pay substantially all operating expenses, excluding all costs to maintain and repair the roof and structure of the building, in addition to base rent.

 

The following table provides information about the property relating to the seller, lease commencement and termination dates, rentable square feet, annualized rental income, rental escalations and renewal options. 

 

Seller

Lease
Commencement

Date

Lease
Termination

Date

Rentable
Square
Feet
Annualized
Rental
Income

 Rental

Escalations

Renewal
Options
Lilly Claire Company, LLC  October 2009 October 2029 44,549 $0.6 million None   Six Five-Year Options

 

 
 

 

Lowe’s Home Center – Aiken, South Carolina

 

On August 21, 2013, the Company, through a wholly owned subsidiary of its operating partnership, closed its acquisition of a partial leasehold interest in a Lowe’s home center located in Aiken, South Carolina for a contract purchase price of $10.6 million, exclusive of closing costs. The seller has no material relationship with the Company and the acquisition was not an affiliated transaction.

 

The Company funded 100% of the acquisition with cash from its ongoing initial public offering. 

 

The property is 100% leased to Lowe’s Home Centers, Inc. and the lease is guaranteed by Lowe’s Companies, Inc. (NYSE: “LOW”), which carries an investment grade credit rating as determined by major credit rating agencies. The lease is net whereby the tenant is required to pay substantially all operating expenses, excluding all costs to maintain and repair the roof and structure of the building, in addition to base rent.

 

The following table provides information about the property relating to the seller, lease commencement and termination dates, rentable square feet, annualized rental income, rental escalations and renewal options. 

 

Seller

Lease
Commencement

Date

Lease
Termination

Date

Rentable
Square
Feet
Annualized
Rental
Income

 Rental

Escalations

Renewal
Options
H/S Aiklo, LLC  September 1998 August 2028 135,197 $0.8 million 5% increase in Year 21   Six Five-Year Options

 

Item 9.01. Financial Statements and Exhibits.

 

(a) Financial Statements of Business Acquired (Lessees)

 

Set forth in this Item 9.01(a) are summary audited and unaudited financial statements of Lowe’s Companies, Inc. described under Item 2.01 of this Current Report on Form 8-K.

 

Lowe’s Companies, Inc. currently files its audited and unaudited financial statements in reports filed with the U.S. Securities and Exchange Commission, and the following summary audited and unaudited financial data regarding Lowe’s Companies, Inc. are taken from such filings:

 

(Amounts in Millions)         Fiscal Year Ended  
    Three Months Ended
May,
2013
(Unaudited)
    February 1,
2013
(Audited)
    February 3,
2012
(Audited)
    January 28,
2011
(Audited)
 
Statement of Operations Data                                
Net sales   $ 13,088     $ 50,521     $ 50,208     $ 48,815  
Gross margin     4,555       17,327       17,350       17,152  
Net earnings     540       1,959       1,839       2,010  
Condensed Consolidated Balance Sheets                                
Total assets     34,731       32,666       33,559       33,699  
Long-term debt     9,073       9,077       7,627       6,573  
Total stockholders’ equity     13,252       13,857       16,533       18,112  

 

 
 

 

Also set forth in this Item 9.01(a) are summary audited and unaudited financial statements of Delhaize Group, the parent of the guarantor of the lease to Food Lion, LLC described under Item 2.01 of this Current Report on Form 8-K.

 

Delhaize Group currently files its audited and unaudited financial statements in reports filed with the U.S. Securities and Exchange Commission, and the following summary audited and unaudited financial data regarding Delhaize Group are taken from such filings:

 

(Amounts in Millions)         Year Ended  
    Six Months Ended
June 30,
2013
(Unaudited)
    December 31,
2012
(Audited)
    December 31,
2011
(Audited)
    December 31,
2010
(Audited)
 
Statement of Operations Data                                
Revenues   10,451     22,737     21,110     20,850  
Operating profit     348       390       813       1,024  
Net profit     165       103       475       575  
Condensed Consolidated Balance Sheets                                
Total assets     11,784       11,917       12,292       10,902  
Long-term debt     2,312       2,469       2,413       2,006  
Total equity     5,241       5,188       5,419       5,069  

 

 
 

 

SIGNATURES

 

 

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.

 

  AMERICAN REALTY CAPITAL TRUST V, INC.
     
Date: August 23, 2013 By:   /s/ Nicholas S. Schorsch
 

Nicholas S. Schorsch

Chief Executive Officer and Chairman of the Board of Directors