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| EQUITY | EQUITY Amendment to Articles of Incorporation
On January 13, 2021, we filed with the State Department of Assessments and Taxation of Maryland (“SDAT”) the Articles Supplementary (i) setting forth the rights, preferences and terms of the Series D Term Preferred Stock and (ii) reclassifying and designating 3,600,000 shares of our authorized and unissued shares of common stock as shares of Series D Term Preferred Stock.
Amendment to Operating Partnership Agreement
On January 13, 2021, the Operating Partnership adopted the Fifth Amendment to its First Amended and Restated Agreement of Limited Partnership, including Exhibit SD thereto (collectively, the “Amendment”), as amended from time to time, establishing
the rights, privileges, and preferences of 5.00% Series D Cumulative Term Preferred Units, a newly-designated class of limited partnership interests (the “Series D Term Preferred Units”). The Amendment provides for the Operating Partnership’s establishment and issuance of an equal number of Series D Term Preferred Units as are issued shares of Series D Term Preferred Stock by the Company in connection with the offering of Series D Term Preferred Stock upon the Company’s contribution to the Operating Partnership of the net proceeds of the offering of Series D Term Preferred Stock. Generally, the Series D Term Preferred Units provided for under the Amendment have preferences, distribution rights, and other provisions substantially equivalent to those of the Series D Term Preferred Stock.
Non-Controlling Interests in Operating Partnership
We consolidate our Operating Partnership, which is a majority-owned partnership. As of March 31, 2021, and December 31, 2020, we owned approximately 99.3% and 100.0%, respectively, of the outstanding OP Units. As of March 31, 2021, and December 31, 2020, there were 204,778 and 0 OP Units held by non-controlling OP Unitholders, respectively.
On or after 12 months after becoming a holder of OP Units, each limited partner, other than the Company, has the right, subject to the terms and conditions set forth in the partnership agreement of the Operating Partnership, to require the Operating Partnership to redeem all or a portion of such units in exchange for cash or, at the Company’s option, shares of our common stock on a one-for-one basis. The cash redemption per OP Unit would be based on the market price of our common stock at the time of redemption. A limited partner will not be entitled to exercise redemption rights if the delivery of common stock to the redeeming limited partner would breach restrictions on the ownership of common stock imposed under our charter and other limitations thereof.
Information regarding OP Units issued to noncontrolling OP Unitholders during the three months ended March 31, 2021, is provided in the following table (dollars in thousands, except per-unit amounts):
(1)Based on the closing stock price of the Company’s common stock on the date of issuance.
No OP Units were tendered for redemption during the three months ended March 31, 2021.
Regardless of the rights described above, the Operating Partnership will not have an obligation to issue cash to a unitholder upon a redemption request if the Company elects to redeem the OP Units for shares of its common stock. When a non-controlling unitholder redeems OP Units and the Company elects to satisfy that redemption through the issuance of common stock, non-controlling interest in the Operating Partnership is reduced, and stockholders’ equity is increased.
The Operating Partnership is required to make distributions on each OP Unit in the same amount as those paid on each share of the Company’s common stock, with the distributions on the OP Units held by the Company being utilized to make distributions to the Company’s common stockholders.
Registration Statement
On March 6, 2020, we filed a universal registration statement on Form S-3 (File No. 333-236943) with the SEC (the “Registration Statement”) to replace our prior universal registration statement. The Registration Statement, which was declared effective by the SEC on April 1, 2020, permits us to issue up to an aggregate of $1.0 billion in securities, consisting of common stock, preferred stock, warrants, debt securities, depository shares, subscription rights, and units, including through separate, concurrent offerings of two or more of such securities. Through March 31, 2021, we had issued a total of 1,624,251 shares of Series C Preferred Stock for gross proceeds of approximately $40.3 million, 2,415,000 shares of Series D Term Preferred Stock for gross proceeds of approximately $60.4 million, and 5,897,190 shares of common stock (excluding 288,303 shares of common stock issued in exchange for certain OP Units that were tendered for redemption) for gross proceeds of approximately $90.3 million under the Registration Statement.
Equity Issuances
Series B Preferred Stock
On May 31, 2018, we filed a prospectus supplement with the SEC for a continuous public offering of up to 6,000,000 shares (the “Series B Offering”) of our 6.00% Series B Cumulative Redeemable Preferred Stock, par value $0.001 per share (the “Series B Preferred Stock”) at an offering price of $25.00 per share for gross proceeds of up to $150.0 million. The Series B Preferred Stock was offered on a continuous, “reasonable best efforts” basis by Gladstone Securities, the dealer-manager for the Series B Offering.
The Series B Offering was completed on March 9, 2020 (the “Series B Termination Date”), with the full 6,000,000 allotted shares being sold, and, exclusive of redemptions, resulted in total gross proceeds of approximately $147.5 million and net proceeds, after deducting Series B Selling Commissions, Series B Dealer-Manager Fees, and offering expenses payable by us, of approximately $133.4 million. See Note 6, “Related-Party Transactions—Gladstone Securities—Series B Dealer-Manager Agreement,” for a discussion of the fees and commissions to be paid to Gladstone Securities in connection with the Series B Offering.
During the year ended December 31, 2020, we listed the Series B Preferred Stock on Nasdaq under the ticker “LANDO.” Trading of the Series B Preferred Stock on Nasdaq commenced on October 19, 2020.
Series C Preferred Stock
On April 3, 2020, we filed a new prospectus supplement (which superseded and replaced a previously-filed prospectus supplement) with the SEC for a continuous public offering (the “Series C Offering”) of up to 26,000,000 shares of our newly-designated 6.00% Series C Cumulative Redeemable Preferred Stock, par value $0.001 per share (the “Series C Preferred Stock”). The Series C Offering permits us to sell up to 20,000,000 shares (the “Primary Series C Offering”) of our Series C Preferred Stock on a “reasonable best efforts” basis through Gladstone Securities at an offering price of $25.00 per share and up to 6,000,000 shares of our Series C Preferred Stock pursuant to the DRIP at a price of $22.75 per share.
The following table provides information on equity sales that have occurred during the three months ended March 31, 2021 (dollars in thousands, except per-share amounts):
(1)Excludes shares issued pursuant to the DRIP. During the three months ended March 31, 2021, we issued approximately 707 shares of the Series C Preferred Stock pursuant to the DRIP.
(2)Net of Series C Selling Commissions and Series C Dealer-Manager Fees.
As of March 31, 2021, excluding Series C Selling Commissions and Series C Dealer-Manager Fees, we have incurred approximately $301,000 of costs related to the Series C Offering, which are initially recorded as deferred offering costs (included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets) and are applied against gross proceeds received from the offering through additional paid-in capital as shares of the Series C Preferred Stock are sold. See Note 6, “Related-Party Transactions—Gladstone Securities—Series C Dealer-Manager Agreement,” for a discussion of the commissions and fees to be paid to Gladstone Securities in connection with the Series C Offering.
The Series C Offering will terminate on the date (the “Series C Termination Date”) that is the earlier of either June 1, 2025 (unless terminated earlier or extended by our Board of Directors), or the date on which all 20,000,000 shares in the Primary Series C Offering are sold. There is currently no public market for shares of the Series C Preferred Stock; however, we intend to apply to list the Series C Preferred Stock on Nasdaq or another national securities exchange within one calendar year after the Series C Termination Date, though there can be no assurance that a listing will be achieved in such timeframe, or at all.
See Note 11, “Subsequent Events—Equity Activity—Equity Issuances,” for sales of Series C Preferred Stock completed subsequent to March 31, 2021.
Common Stock
At-the-Market Program
On May 12, 2020, we entered into equity distribution agreements with Virtu Americas, LLC, and Ladenburg & Co., Inc., under which we may issue and sell, from time to time and through the current Sales Agents, shares of our common stock having an aggregate offering price of up to $100.0 million (the “ATM Program”).
The following table provides information on shares of common stock sold by the Sales Agents under the ATM Program during the three months ended March 31, 2021 (dollars in thousands, except per-share amounts):
(1)Net of underwriting commissions and discounts.
See Note 11, “Subsequent Events—Equity Activity—Equity Issuances,” for sales of sales of common stock completed under the ATM Program subsequent to March 31, 2021.
Distributions
The per-share distributions to preferred and common stockholders declared by our Board of Directors and paid by us (except as noted) during the three months ended March 31, 2021 and 2020 are reflected in the table below.
(1)Dividends are treated similar to interest expense on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income.
(2)The Series A Term Preferred Stock was redeemed in full on February 12, 2021.
(3)Of the aggregate dividends declared on the Series B Preferred Stock, Series C Preferred Stock, and Series D Term Preferred Stock by our Board of Directors on January 12, 2021, approximately $1.2 million was paid (as scheduled) by us on April 5, 2021.
(4)The Series D Term Preferred Stock was issued on January 19, 2021.
(5)The same amounts were paid as distributions on each OP Unit held by non-controlling OP Unitholders.
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