Note 11 – Subsequent Events

Management Internalization Transaction

On July 9, 2020, the Company completed the Internalization by acquiring all the outstanding shares of capital stock of the parent company of our Advisor for a purchase price of $17.6 million, after working capital adjustments. A special committee of the Board of Directors, consisting solely of independent and disinterested directors (the “Special Committee”), negotiated the terms of the Internalization on behalf of the Company. The Internalization was unanimously approved by the Special Committee, and, upon recommendation by the Special Committee, by the Company’s independent and disinterested directors.

Closing of Credit Facility Accordion and Related Hedge Transaction

On July 24, 2020, the Company received aggregate commitments of up to $100 million from certain of its lenders pursuant to the accordion feature (the “Accordion”) under its Credit Facility. The Subsidiary Guarantors and the Company are guarantors of the obligations under the Accordion. The amount available to borrow from time to time under the Accordion is limited according to a quarterly borrowing base valuation of certain properties owned by the Subsidiary Guarantors. The remaining terms of the Credit Facility were unchanged. With the closing of the Accordion, the borrowing capacity under the Company’s Credit Facility was increased to $600 million, consisting of a $250 million capacity revolver, a $350 million term loan, and a remaining $50 million accordion.

In connection with the closing of the Accordion, on July 27, 2020, the Company entered into an interest rate swap with Wells Fargo Bank, N.A. with a notional amount of $50 million (the term component of the Accordion commitments), a fixed interest rate of 0.158% and a maturity date of August 8, 2023.

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