Broad Street Realty, Inc. - Annual Report: 2021 (Form 10-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

For the fiscal year ended December 31, 2021

OR

Commission File Number 001-09043

BROAD STREET REALTY, INC.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: (301) 828-1200

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.01 par value per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of June 30, 2021, the aggregate market value of the voting and non-voting common stock held by non-affiliates of the Registrant was $101,727,891, based on the closing sales price per share of $4.35 as reported on the OTC Markets, Inc.

The number of shares of the registrant’s common stock outstanding as of April 8, 2022 was 32,247,204.

BROAD STREET REALTY, INC.

TABLE OF CONTENTS

FORWARD-LOOKING STATEMENTS

We make statements in this Annual Report on Form 10‑K (this "report") that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in 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”)). These forward-looking statements include, without limitation, statements about our estimates, expectations, predictions and forecasts of our future business plans and financial and operating performance and/or results, as well as statements of management’s goals and objectives and other similar expressions concerning matters that are not historical facts. When we use the words “may,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” "project," "seek," or similar expressions or their negatives, as well as statements in future tense, we intend to identify forward-looking statements. Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, beliefs and expectations, such forward-looking statements are not predictions of future events or guarantees of future performance, and our actual financial and operating results could differ materially from those set forth in the forward-looking statements. Some factors that might cause such differences are described in the section entitled “Risk Factors” in this report and in other documents that we file from time to time with the Securities and Exchange Commission (the “SEC”), which factors include, without limitation, the following:

Given these uncertainties, undue reliance should not be placed on our forward-looking statements. We assume no duty or responsibility to publicly update or revise any forward-looking statement that may be made to reflect future events or circumstances or to reflect the occurrence of unanticipated events. We urge you to review the disclosures concerning risks in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this report and in other filings we make with the SEC from time to time.

Summary Risk Factors

Our business is subject to a number of risks, including risks that may prevent us from achieving our business objectives or may adversely affect our business, financial condition, results of operations, cash flows and prospects. These risks are discussed more fully in Item 1A. Risk Factors herein. These risks include, but are not limited to, the following:

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PART I

Unless the context indicates otherwise, references to "Broad Street," "we," "the Company," "our," and "us" refer to Broad Street Realty, Inc., together with its consolidated subsidiaries, including Broad Street Operating Partnership, LP (the or our "Operating Partnership"), of which we are the sole member of the sole general partner.

ITEM 1. BUSINESS

Overview

We are focused on owning and managing essential grocery-anchored and mixed-use assets located in densely populated technology employment hubs and higher education centers within the Mid-Atlantic, Southeast and Colorado markets. As of December 31, 2021, we owned 15 properties with an additional three properties under contract to be acquired. The properties in our portfolio and the properties we have under contract are dispersed in sub-markets that we believe generally have high population densities, high traffic counts, good visibility and accessibility, which provide our tenants with attractive locations to serve the necessity-based needs of the surrounding communities. We intend to focus on acquiring additional strategically positioned properties in established and developing neighborhoods primarily leased to necessity-based tenants that meet the needs of the surrounding communities in our existing markets, as well as acquiring properties in new markets that meet our investment criteria, including the Southeastern United States. In addition, we provide commercial real estate brokerage services for our own portfolio and third-party office, industrial and retail operators and tenants.

The table below provides certain information regarding our portfolio as of December 31, 2021. For additional information, see "—Our Portfolio."

We are structured as an “Up-C” corporation with substantially all of our operations conducted through our Operating Partnership and its direct and indirect subsidiaries. As of December 31, 2021, we owned 91.9% of the units of limited partnership interest in the Operating Partnership, and we are the sole member of the sole general partner of the Operating Partnership. We began operating in our current structure on December 27, 2019 upon the completion of certain Mergers (as defined below) on such date, and we operate as a single reporting segment.

2021 Highlights

Below are some of our significant activities during 2021:

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Impact of COVID-19

For information regarding the impact of COVID-19 on our business and measures we have taken in response, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Impact of COVID-19” and “Risk Factors—Risks Related to Our Business and Properties—The ongoing COVID-19 pandemic and measures intended to mitigate its spread could have a material adverse effect on our business, results of operations, cash flows and financial condition."

2021 Acquisitions

In 2021 we acquired Highlandtown Village Shopping Center, Cromwell Field Shopping Center, Spotswood Valley Square Shopping Center and The Shops at Greenwood Village on May 21, 2021, May 26, 2021, June 4, 2021 and October 6, 2021, respectively, which were part of the previously announced series of mergers (collectively, the "Mergers") pursuant to which we previously acquired our other properties. For additional information regarding the Mergers, see "Merger with MedAmerica Properties Inc." in Note 1 to our Consolidated Financial Statements included in this report.

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Our Portfolio

As of December 31, 2021, we owned 15 retail properties, of which 13 are located in the Mid-Atlantic region and two are located in Colorado, consisting of 1,736,657 total square feet of gross leasable area (“GLA”). The following table provides additional information about the properties in our portfolio as of December 31, 2021.

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Tenant Diversification

The following table sets forth information about the 20 largest tenants in our portfolio, based upon annualized base rent, as of December 31, 2021.

Lease Distribution

The following table sets forth information relating to the distribution of leases in our portfolio, based on GLA, as of December 31, 2021.

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Geographic Concentration

The following table sets forth information regarding the geographic concentration of our portfolio as of December 31, 2021.

Lease Expirations

The following table sets forth a summary schedule of the lease expirations in our portfolio for leases in place as of December 31, 2021, for the ten calendar years from 2022 to 2031 and thereafter, assuming no exercise of renewal options or early termination rights.

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Description of Properties

Avondale Shops, Washington D.C.

Avondale is a strip retail property located in the northeast region of Washington, D.C. at the signalized intersection of Michigan Avenue and Eastern Avenue. The property has 28,308 square feet of GLA and, as of December 31, 2021, was 85.3% leased and occupied by eight tenants and accounted for 2.7% of our total annualized base rent. The anchor tenant, Dollar Tree, represents approximately 28.6% of Avondale’s total annualized base rent as of December 31, 2021 and its lease expires in May 2027.

Brookhill Azalea Shopping Center, Richmond, Virginia

Brookhill is a retail center located on the border of the City of Richmond and its northern suburbs in close proximity to major transportation corridors Interstate 95, U.S. Route 1 and U.S. Route 301. The property is located adjacent to major retail demand drivers Walmart and CVS Pharmacy. The property has 163,363 square feet of GLA and, as of December 31, 2021, was 78.7% leased and occupied by 24 tenants and accounted for 6.2% of our total annualized base rent. The anchor tenant, Food Lion, represented 23.6% of Brookhill’s total annualized base rent as of December 31, 2021, and its lease expires in January 2025. Other notable national tenants include Dollar General and CitiTrends. Until December 31, 2021, the property management for Brookhill was performed by a third-party manager that was responsible for the day-to-day aspects of managing Brookhill, including collecting rents, maintaining the property in good working order and providing us with periodic property condition reports and leasing pipeline updates. As of January 1, 2022, we are performing all property management functions for the property internally.

Coral Hills Shopping Center, Capitol Heights, Maryland

Coral Hills is a retail center located in the densely populated Capitol Heights neighborhood, which is blocks from the Washington, D.C. metro line and has excellent visibility along Marlboro Pike with large pylons. The property is anchored by Compare Foods and is adjacent to McDonalds and across the street from a CVS Pharmacy. The property has 85,928 square feet of GLA and, as of December 31, 2021, was 100.0% leased and occupied by 16 tenants and accounted for 6.4% of our total annualized base rent. Compare Foods represented 25.7% of Coral Hill’s total annualized base rent as of December 31, 2021, and its lease expires in February 2026. Other notable national tenants include Family Dollar and AutoZone.

Crestview Square Shopping Center, Landover Hills, Maryland

Crestview is located in a densely populated suburban market near the Hyattsville Arts District and University of Maryland College Park campus. The property is located less than a mile from major regional transportation corridors, including Interstate 295 and U.S. Route 50. The property has prominent pylon signage at the signalized intersection for Annapolis Road and Cooper Lane and is in close proximity to national retailers Walmart and McDonalds. The property has 74,694 square feet of GLA and, as of December 31, 2021, was 100.0% leased and occupied by 20 tenants and accounted for 6.9% of our total annualized base rent. The anchor tenant, Value Village, represented 18.1% of Crestview’s total annualized base rent as of December 31, 2021, and its lease expires in January 2030.

Cromwell Field Shopping Center, Glen Burnie, Maryland

Cromwell is a retail center located near Baltimore/Washington International Thurgood Marshall Airport and the MARC train and light rail station. The property has 233,486 square feet of GLA and, as of December 31, 2021, was 65.2% leased to 19 tenants and accounted for 7.4% of our total annualized base rent. The percent occupied, which excludes leases that have been signed but not commenced, was 63.3% as of December 31, 2021. The anchor tenant, Rose's, represented 12.8% of Cromwell's total annualized base rent as of December 31, 2021, and its lease expires in January 2023.

Dekalb Plaza, East Norriton, Pennsylvania

Dekalb is a retail center located in a Philadelphia suburb. The property is located at a major signalized intersection of Dekalb Pike and West Germantown Pike and is positioned in close proximity to Walmart and T.J. Maxx and across the street from Suburban Community Hospital, part of the national Prime Healthcare system. The property has 178,356 square feet of GLA and, as of December 31, 2021, was 97.8% leased to 17 tenants and accounted for 9.5% of our total annualized base rent. The percent occupied, which excludes leases that have been signed but not commenced, was 81.7% as of December 31, 2021. Three of the signed leases will commence in the first quarter of 2022 and the fourth lease will commence in the fourth quarter of 2022. The anchor tenant, Big Lots, represented 11.4% of Dekalb’s total annualized base rent as of December 31, 2021, and its lease expires in January 2025. Other notable tenants include Urban Air, Crunch Fitness, Goodwill and Enchanted Child Care of Dekalb.

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The following tables set forth certain information with respect to Dekalb Plaza as of December 31, 2021.

Significant Tenants