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Equity | 12 Months Ended
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Dec. 31, 2023
Equity [Abstract] |
Equity | Equity Common Equity On April 13, 2023, the Company listed its common shares on the New York Stock Exchange (the “Listing”). On March 10, 2023, the Company completed a one-for-nine reverse share split with respect to each class of its common shares, converting every nine shares of the Company’s issued and outstanding shares of each class into one share of such class (the “Reverse Share Split”). On April 13, 2023, the Company’s common shares, other than Class E, were converted into Class E common shares and all Class E common shares became listed on the New York Stock Exchange as “common shares”. As of December 31, 2023, there were 36,304,145 common shares outstanding. Prior to the Listing, the Company had received aggregate gross offering proceeds of approximately $2.8 billion from the sale of shares in private offerings, public offerings, the DRP (defined below) offerings and mergers (includes offerings by our predecessor, Griffin Capital Essential Asset REIT, Inc. (our “Predecessor”), our Predecessor’s merger with Signature Office REIT, Inc., and our Predecessor’s merger with certain other related entities (the “Predecessor Mergers”) and the acquisition of Cole Office & Industrial REIT (“CCIT II”) in a stock-for-stock transaction (the “CCIT II Merger”). As part of the $2.8 billion from the sale of shares, the Company issued (i) 4,863,623 Class E shares in June 2015 upon the consummation of the merger with Signature Office REIT, Inc., (ii) 19,442,394 Class E shares in April 2019 upon consummation of the Predecessor Mergers in exchange for all outstanding shares of our Predecessor’s common stock at the time of the Predecessor Mergers, and (iii) 10,384,185 Class E shares in exchange for all the outstanding shares of CCIT II's common stock at the time of the CCIT II Merger. ATM Program In August 2023, the Company entered into an at-the-market equity offering (the “ATM”) pursuant to which the Company may sell common shares up to an aggregate purchase price of $200.0 million. The Company may sell such shares in amounts and at times to be determined by the Company from time to time, but the Company has no obligation to sell any of such shares. Actual sales, if any, will depend on a variety of factors to be determined by us from time to time, including, among other things, market conditions, the trading price of the Company’s common shares, and the Company’s determinations of its capital needs and the appropriate sources of funding. During the year ended December 31, 2023, the Company did not sell shares under the ATM program. Distribution Reinvestment Plan Prior to the Listing, the Company had adopted a distribution reinvestment plan (the “DRP”), which allowed shareholders to have dividends and other distributions otherwise distributable to them invested in additional common shares. No sales commissions or dealer manager fees were paid on shares sold through the DRP, but the DRP shares were charged the applicable distribution fee payable with respect to all shares of the applicable class. The purchase price per share under the DRP was equal to the net asset value (“NAV”) per share applicable to the class of shares purchased, calculated using the most recently published NAV available at the time of reinvestment. On May 22, 2023, the Company filed a post-effective amendment to the registration statement for the Company’s DRP to deregister all of the common shares registered for sales that were not sold pursuant to such registration statement. As of December 31, 2023 and 2022, the Company had issued approximately $341.1 million in shares pursuant to the DRP offerings. Share Redemption Program Prior to the Listing, the Company had adopted a share redemption program (the “SRP”) that enabled shareholders to sell their shares to the Company in limited circumstances. The SRP was suspended on October 1, 2021 but resumed on a limited basis (i.e., limited to redemptions in connection with a holder’s death, disability, or incompetence) on August 5, 2022 with quarterly redemptions capped at $5.0 million. In addition, pursuant to the terms of the SRP during any calendar year, with respect to each share class, the Company was permitted to redeem no more than 5% of the weighted-average number of shares of such class outstanding during the prior calendar year. Under the SRP, the Company would redeem shares as of the last business day of each quarter at a price equal to the most recently published NAV per share for the applicable class prior to quarter end. During the year ended December 31, 2023, the Company redeemed 941 shares. The SRP was suspended again on March 7, 2023 and terminated in connection with the Listing. The following table summarizes share redemption activity under the SRP during the years ended December 31, 2023 and 2022:
| Year Ended December 31,
| 2023 |  | 2022
Common shares redeemed | 941 |  |  | 149,730 |
Weighted average price per share | $ | 66.87 |  |  | $ | 66.79 |
(1) Does not include shares withheld (i.e., forfeited) by employees to satisfy minimum statutory tax withholding requirements associated with the vesting of RSUs. Since July 31, 2014 and through December 31, 2023, the Company had redeemed 3,295,618 shares (excluding the Self-Tender Offer) of common shares for approximately $275.5 million at a weighted average price per share of $83.60 pursuant to the SRP. Perpetual Convertible Preferred Shares Prior to the Listing, the Company redeemed all 5,000,000 shares of Series A Cumulative Perpetual Convertible Preferred Shares (the “Series A Preferred Shares”) held by SHBNPP Global Professional Investment Type Private Real Estate Trust No. 13(H) (the “Preferred Holder”) in exchange for a redemption payment of $125.0 million, plus accumulated and unpaid distributions of $2.4 million (the “Preferred Redemption”). The Preferred Holder initially purchased the 5,000,000 Series A Preferred Shares at a price of $25.00 per share pursuant to that certain purchase agreement (the “Purchase Agreement”) that our Predecessor entered into August 8, 2018 with the Preferred Holder (acting through Kookmin Bank as trustee) and Shinhan BNP Paribas Asset Management Corporation, as an asset manager of the Preferred Holder. On April 10, 2023, the Company entered into a Redemption Agreement (the “Redemption Agreement”) with the Preferred Holder and Shinhan Asset Management Co., Ltd. Pursuant to the Redemption Agreement, the Company effectuated the Preferred Redemption in accordance with the Articles Supplementary filed by the Company on April 30, 2019 (the “Articles Supplementary”). The Preferred Holder agreed to waive the Redemption Fee (as defined in the Articles Supplementary) in the amount of $1.9 million and any other payments in connection with the Series A Preferred Shares. The Redemption Agreement also terminated the Purchase Agreement and provided that any rights and privileges afforded to the Preferred Holder under the Purchase Agreement were terminated and canceled and of no further force or effect, and no party to the Purchase Agreement has any further obligations thereunder. Additionally, the Company had $5.0 million of capitalized offering costs related to the initial issuance of the preferred shares, which were previously recorded to equity and were written off during the year as a non-cash expense to preferred units redemption charge on the statement of operations. During the year ended December 31, 2023, the Company paid dividends in quarterly arrears at a rate of $2.4 million. As of December 31, 2023, no further distributions to the holders of the Series A Preferred Shares were due in light of the Preferred Redemption. Issuance of Restricted Share Units to Executive Officers, Employees and Board of Trustees On April 5, 2023, the Compensation Committee of the Board approved the Peakstone Realty Trust Second Amended and Restated Employee and Long-Term Incentive Plan (the “Plan”) which amended and restated the Amended and Restated Employee and Trustee Long-Term Incentive Plan (the “Prior Plan”) to (1) change the name of the Prior Plan in connection with the Company’s name change, (2) expressly provide for the grants of profits interests (or “LTIP Units”) in the Operating Partnership and (3) make conforming entity name changes throughout. Otherwise, the Plan contains the same material terms as the Prior Plan. The Plan provides for the grant of share-based awards to the Company’s trustees, full-time employees and certain consultants that provide services to the Company or affiliated entities. Awards granted under the Plan may consist of stock options, restricted shares, share appreciation rights, distribution equivalent rights, LTIP Units, and other equity-based awards. The share-based awards are measured at fair value at issuance and recognized as compensation expense over the vesting period. The maximum number of shares authorized under the Plan is 777,778 shares. As of December 31, 2023, approximately 167,185 shares were available for future issuance under the Plan. As of December 31, 2023, there was $8.2 million of unrecognized compensation expense remaining, which vests between one and two years. Total compensation expense related to RSUs for the year ended December 31, 2023 and 2022 was approximately $12.0 million and $9.6 million, respectively. The following table summarizes the activity of unvested shares of RSU awards for the periods presented:
|  | Number of Unvested Shares of RSU Awards |  | Weighted-Average Grant Date Fair Value per Share
Balance at December 31, 2021 |  | 172,602 |  |  |
Granted |  | 123,481 |  |  | $ | 66.87 |
Forfeited |  | (9,404) |  |  | $ | 80.38 |
Vested |  | (125,178) |  |  | $ | 77.68 |
Balance at December 31, 2022 |  | 161,501 |  |  |
Granted |  | 166,321 |  |  | $ | 56.53 |
Forfeited |  | (485) |  |  | $ | 63.70 |
Vested(1) |  | (167,784) |  |  | $ | 69.02 |
Balance at December 31, 2023 |  | 159,553 |  |  |
(1) Total shares vested include 114,420 common shares withheld (i.e., forfeited) by employees during the year ended December 31, 2023 to satisfy minimum statutory tax withholding requirements associated with the vesting of RSUs. Dividends Earnings and profits, which determine the taxability of dividends paid to shareholders, may differ from income reported for financial reporting purposes due to the differences for federal income tax purposes in the treatment of loss on debt, revenue recognition and compensation expense and in the basis of depreciable assets and estimated useful lives used to compute depreciation expense. The following unaudited table summarizes the federal income tax treatment for all distributions and dividends declared for the years ended December 31, 2023, 2022, and 2021 reported for federal tax purposes and serves as a designation of capital gain distributions, if applicable, pursuant to Code Section 857(b)(3)(C) and Treasury Regulation §1.857-6(e).
| Year Ended December 31,
| 2023 |  | 2022 | 2021
Ordinary income |  | — | % |  | — | % |  | 9 | %
Capital gain |  | — | % |  | — | % |  | — | %
Return of capital |  | 100 | % |  | 100 | % |  | 91 | %
Total |  | 100 | % |  | 100 | % |  | 100 | %
Dividends declared |  | $ | 1.09 |  |  | $ | 3.15 |  |  | $ | 3.15 |

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