Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 24, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-13779 | |
Entity Registrant Name | W. P. Carey Inc. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 45-4549771 | |
Entity Address, Street Address | 50 Rockefeller Plaza | |
Entity Address, City | New York, | |
Entity Address, State | NY | |
Entity Address, Postal Zip Code | 10020 | |
City Area Code | 212 | |
Local Phone Number | 492-1100 | |
Title of each class | Common Stock, $0.001 Par Value | |
Trading Symbol | WPC | |
Name of each exchange on which registered | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 172,402,516 | |
Entity Central Index Key | 0001025378 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | |
Investments in real estate: | |||
Land, buildings and improvements | $ 10,019,597 | $ 9,856,191 | |
Net investments in direct financing leases | 844,945 | 896,549 | |
In-place lease intangible assets and other | 2,182,896 | 2,186,851 | |
Above-market rent intangible assets | 897,965 | 909,139 | |
Investments in real estate | 13,945,403 | 13,848,730 | |
Accumulated depreciation and amortization | (2,144,252) | (2,035,995) | |
Assets held for sale, net | 0 | 104,010 | |
Net investments in real estate | 11,801,151 | 11,916,745 | |
Equity investments in the Managed Programs and real estate | 276,109 | 324,004 | |
Cash and cash equivalents | 220,929 | 196,028 | |
Due from affiliates | 39,051 | 57,816 | |
Other assets, net | 623,181 | 631,637 | |
Goodwill | 929,887 | 934,688 | |
Total assets | [1] | 13,890,308 | 14,060,918 |
Debt: | |||
Senior unsecured notes, net | 4,323,063 | 4,390,189 | |
Unsecured term loans, net | 289,725 | 0 | |
Unsecured revolving credit facility | 75,483 | 201,267 | |
Non-recourse mortgages, net | 1,433,372 | 1,462,487 | |
Debt, net | 6,121,643 | 6,053,943 | |
Accounts payable, accrued expenses and other liabilities | 479,408 | 487,405 | |
Below-market rent and other intangible liabilities, net | 202,508 | 210,742 | |
Deferred income taxes | 132,041 | 179,309 | |
Dividends payable | 181,632 | 181,346 | |
Total liabilities | [1] | 7,117,232 | 7,112,745 |
Commitments and contingencies (Note 11) | |||
Preferred stock, $0.001 par value, 50,000,000 shares authorized; none issued | 0 | 0 | |
Common stock, $0.001 par value, 450,000,000 shares authorized; 172,402,516 and 172,278,242 shares, respectively, issued and outstanding | 172 | 172 | |
Additional paid-in capital | 8,712,244 | 8,717,535 | |
Distributions in excess of accumulated earnings | (1,688,744) | (1,557,374) | |
Deferred compensation obligation | 42,291 | 37,263 | |
Accumulated other comprehensive loss | (295,018) | (255,667) | |
Total stockholders’ equity | 6,770,945 | 6,941,929 | |
Noncontrolling interests | 2,131 | 6,244 | |
Total equity | 6,773,076 | 6,948,173 | |
Total liabilities and equity | $ 13,890,308 | $ 14,060,918 | |
[1] | See Note 2 for details related to variable interest entities (“VIEs”). |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
W. P. Carey stockholders’ equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (shares) | 450,000,000 | 450,000,000 |
Common stock, shares outstanding (shares) | 172,402,516 | 172,278,242 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Investment Management: | ||
Revenues | $ 308,999 | $ 298,323 |
Operating Expenses | ||
Depreciation and amortization | 116,194 | 112,379 |
General and administrative | 20,745 | 21,285 |
Impairment charges | 19,420 | 0 |
Reimbursable tenant costs | 13,175 | 13,171 |
Property expenses, excluding reimbursable tenant costs | 10,075 | 9,912 |
Operating property expenses | 5,223 | 10,594 |
Reimbursable costs from affiliates | 4,030 | 3,868 |
Stock-based compensation expense | 2,661 | 4,165 |
Subadvisor fees | 1,277 | 2,202 |
Merger and other expenses | 187 | 146 |
Total operating expenses | 192,987 | 177,722 |
Other Income and Expenses | ||
Interest expense | (52,540) | (61,313) |
Equity in (losses) earnings of equity method investments in the Managed Programs and real estate | (45,790) | 5,491 |
Gain on sale of real estate, net | 11,751 | 933 |
Other gains and (losses) | (4,423) | 955 |
Total other income and expenses | (91,002) | (53,934) |
Income before income taxes | 25,010 | 66,667 |
Benefit from income taxes | 41,692 | 2,129 |
Net Income | 66,702 | 68,796 |
Net income attributable to noncontrolling interests | (612) | (302) |
Net Income Attributable to W. P. Carey | $ 66,090 | $ 68,494 |
Basic Earnings Per Share (usd per share) | $ 0.38 | $ 0.41 |
Diluted Earnings Per Share (usd per share) | $ 0.38 | $ 0.41 |
Weighted-Average Shares Outstanding | ||
Basic (in shares) | 173,249,236 | 167,234,121 |
Diluted (in shares) | 173,460,053 | 167,434,740 |
Real Estate | ||
Real Estate: | ||
Lease revenues | $ 282,110 | $ 262,939 |
Lease termination income and other | 6,509 | 3,270 |
Gross contract revenue | 5,967 | 15,996 |
Investment Management: | ||
Gross contract revenue | 5,967 | 15,996 |
Revenues | 294,586 | 282,205 |
Operating Expenses | ||
Depreciation and amortization | 115,207 | 111,413 |
General and administrative | 14,922 | 15,188 |
Impairment charges | 19,420 | 0 |
Reimbursable tenant costs | 13,175 | 13,171 |
Property expenses, excluding reimbursable tenant costs | 10,075 | 9,912 |
Operating property expenses | 5,223 | 10,594 |
Stock-based compensation expense | 1,970 | 2,800 |
Merger and other expenses | (132) | 146 |
Total operating expenses | 179,860 | 163,224 |
Other Income and Expenses | ||
Interest expense | (52,540) | (61,313) |
Equity in (losses) earnings of equity method investments in the Managed Programs and real estate | 1,565 | (78) |
Gain on sale of real estate, net | 11,751 | 933 |
Other gains and (losses) | (5,776) | 970 |
Total other income and expenses | (45,000) | (59,488) |
Income before income taxes | 69,726 | 59,493 |
Benefit from income taxes | 31,800 | (6,159) |
Net Income | 101,526 | 53,334 |
Net income attributable to noncontrolling interests | (612) | 74 |
Net Income Attributable to W. P. Carey | 100,914 | 53,408 |
Investment Management | ||
Real Estate: | ||
Gross contract revenue | 14,413 | 16,118 |
Investment Management: | ||
Gross contract revenue | 14,413 | 16,118 |
Operating Expenses | ||
Depreciation and amortization | 987 | 966 |
General and administrative | 5,823 | 6,097 |
Reimbursable costs from affiliates | 4,030 | 3,868 |
Stock-based compensation expense | 691 | 1,365 |
Subadvisor fees | 1,277 | 2,202 |
Merger and other expenses | 319 | 0 |
Total operating expenses | 13,127 | 14,498 |
Other Income and Expenses | ||
Equity in (losses) earnings of equity method investments in the Managed Programs and real estate | (47,355) | 5,569 |
Other gains and (losses) | 1,353 | (15) |
Total other income and expenses | (46,002) | 5,554 |
Income before income taxes | (44,716) | 7,174 |
Benefit from income taxes | 9,892 | 8,288 |
Net Income | (34,824) | 15,462 |
Net income attributable to noncontrolling interests | 0 | (376) |
Net Income Attributable to W. P. Carey | (34,824) | 15,086 |
Investment Management | Asset management revenue | ||
Real Estate: | ||
Gross contract revenue | 9,889 | 9,732 |
Investment Management: | ||
Gross contract revenue | 9,889 | 9,732 |
Investment Management | Reimbursable costs from affiliates | ||
Real Estate: | ||
Gross contract revenue | 4,030 | 3,868 |
Investment Management: | ||
Gross contract revenue | 4,030 | 3,868 |
Investment Management | Structuring and other advisory revenue | ||
Real Estate: | ||
Gross contract revenue | 494 | 2,518 |
Investment Management: | ||
Gross contract revenue | $ 494 | $ 2,518 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net Income | $ 66,702 | $ 68,796 |
Other Comprehensive (Loss) Income | ||
Foreign currency translation adjustments | (52,200) | (173) |
Unrealized gain on derivative instruments | 12,849 | 1,949 |
Unrealized gain on investments | 0 | 537 |
Net current period other comprehensive (loss) income | (39,351) | 2,313 |
Comprehensive Income | 27,351 | 71,109 |
Amounts Attributable to Noncontrolling Interests | ||
Net income | (612) | (302) |
Comprehensive income attributable to noncontrolling interests | (612) | (302) |
Comprehensive Income Attributable to W. P. Carey | $ 26,739 | $ 70,807 |
Consolidated Statement of Equit
Consolidated Statement of Equity (Unaudited) - USD ($) $ in Thousands | Total | Cumulative-effect adjustment for the adoption of new accounting pronouncement | Total W.P. Carey Stockholders | Total W.P. Carey StockholdersCumulative-effect adjustment for the adoption of new accounting pronouncement | $0.001 Par Value Common Stock | Additional Paid-in Capital | Distributions in Excess of Accumulated Earnings | Distributions in Excess of Accumulated EarningsCumulative-effect adjustment for the adoption of new accounting pronouncement | Deferred Compensation Obligation | Accumulated Other Comprehensive Loss | Noncontrolling interests |
Beginning equity balance at Dec. 31, 2018 | $ 6,830,055 | $ 6,824,278 | $ 165 | $ 8,187,335 | $ (1,143,992) | $ 35,766 | $ (254,996) | $ 5,777 | |||
Beginning equity balance, shares at Dec. 31, 2018 | 165,279,642 | ||||||||||
W.P. Carey Stockholders | |||||||||||
Shares issued upon delivery of vested restricted share awards, value | (15,565) | (15,565) | $ 1 | (15,566) | |||||||
Shares issued upon delivery of vested restricted share awards, shares | 303,261 | ||||||||||
Shares issued under ATM Program, net, value | 303,831 | 303,831 | $ 4 | 303,827 | |||||||
Shares issued under ATM Program, net, shares | 4,053,623 | ||||||||||
Deferral of vested shares, net | (1,445) | 1,445 | |||||||||
Amortization of stock-based compensation expense | 4,165 | 4,165 | 4,165 | ||||||||
Contributions from noncontrolling interests | 849 | 849 | |||||||||
Distributions to noncontrolling interests | (496) | (496) | |||||||||
Dividends declared | (176,219) | (176,219) | 4,985 | (181,256) | 52 | ||||||
Net Income | 68,796 | 68,494 | 68,494 | 302 | |||||||
Other comprehensive loss: | |||||||||||
Foreign currency translation adjustments | (173) | (173) | (173) | ||||||||
Unrealized gain on derivative instruments | 1,949 | 1,949 | 1,949 | ||||||||
Unrealized gain on investments | 537 | 537 | 537 | ||||||||
Ending equity balance at Mar. 31, 2019 | 7,017,729 | 7,011,297 | $ 170 | 8,483,301 | (1,256,754) | 37,263 | (252,683) | 6,432 | |||
Ending equity balance, shares at Mar. 31, 2019 | 169,636,526 | ||||||||||
Beginning equity balance at Dec. 31, 2019 | $ 6,948,173 | $ (14,812) | 6,941,929 | $ (14,812) | $ 172 | 8,717,535 | (1,557,374) | $ (14,812) | 37,263 | (255,667) | 6,244 |
Beginning equity balance, shares at Dec. 31, 2019 | 172,278,242 | 172,278,242 | |||||||||
W.P. Carey Stockholders | |||||||||||
Shares issued upon delivery of vested restricted share awards, value | $ (5,012) | (5,012) | (5,012) | ||||||||
Shares issued upon delivery of vested restricted share awards, shares | 124,274 | ||||||||||
Deferral of vested shares, net | (4,131) | 4,131 | |||||||||
Amortization of stock-based compensation expense | 2,661 | 2,661 | 2,661 | ||||||||
Distributions to noncontrolling interests | (4,725) | (4,725) | |||||||||
Dividends declared | (180,560) | (180,560) | 1,191 | (182,648) | 897 | ||||||
Net Income | 66,702 | 66,090 | 66,090 | 612 | |||||||
Other comprehensive loss: | |||||||||||
Foreign currency translation adjustments | (52,200) | (52,200) | (52,200) | ||||||||
Unrealized gain on derivative instruments | 12,849 | 12,849 | 12,849 | ||||||||
Unrealized gain on investments | 0 | ||||||||||
Ending equity balance at Mar. 31, 2020 | $ 6,773,076 | $ 6,770,945 | $ 172 | $ 8,712,244 | $ (1,688,744) | $ 42,291 | $ (295,018) | $ 2,131 | |||
Ending equity balance, shares at Mar. 31, 2020 | 172,402,516 | 172,402,516 |
Consolidated Statement of Equ_2
Consolidated Statement of Equity (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared (in dollars per share) | $ 1.04 | $ 1.032 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash Flows — Operating Activities | ||
Net income | $ 66,702 | $ 68,796 |
Adjustments to net income: | ||
Depreciation and amortization, including intangible assets and deferred financing costs | 119,483 | 115,400 |
Equity in losses (earnings) of equity method investments in the Managed Programs and real estate | 45,790 | (5,491) |
Deferred income tax benefit | (41,487) | (1,829) |
Impairment charges | 19,420 | 0 |
Amortization of rent-related intangibles and deferred rental revenue | 12,794 | 15,925 |
Gain on sale of real estate, net | (11,751) | (933) |
Straight-line rent adjustments | (11,619) | (11,192) |
Realized and unrealized losses on foreign currency transactions, derivatives, and other | 7,275 | 7,504 |
Asset management revenue received in shares of Managed REITs | (7,056) | (7,681) |
Allowance for credit losses | 5,499 | 0 |
Stock-based compensation expense | 2,661 | 4,165 |
Distributions of earnings from equity method investments | 2,656 | 7,080 |
Changes in assets and liabilities: | ||
Net changes in other operating assets and liabilities | (32,119) | (50,939) |
Deferred structuring revenue received | 1,537 | 2,581 |
Increase in deferred structuring revenue receivable | (88) | (540) |
Net Cash Provided by Operating Activities | 179,697 | 142,846 |
Cash Flows — Investing Activities | ||
Purchases of real estate | (197,626) | (164,929) |
Proceeds from sales of real estate | 105,154 | 4,851 |
Funding for real estate construction, redevelopments, and other capital expenditures on real estate | (53,392) | (27,076) |
Proceeds from repayment of short-term loans to affiliates | 20,973 | 0 |
Proceeds from repayment of loans receivable | 11,000 | 161 |
Other investing activities, net | 6,591 | 16,674 |
Funding of short-term loans to affiliates | (5,433) | 0 |
Return of capital from equity method investments | 3,496 | 18,750 |
Capital contributions to equity method investments | (595) | (2,594) |
Net Cash Used in Investing Activities | (109,832) | (154,163) |
Cash Flows — Financing Activities | ||
Repayments of Unsecured Revolving Credit Facility | (466,643) | (128,452) |
Proceeds from Unsecured Revolving Credit Facility | 348,977 | 145,225 |
Proceeds from Unsecured Term Loans | 298,974 | 0 |
Dividends paid | (180,274) | (171,408) |
Scheduled payments of mortgage principal | (21,117) | (40,360) |
Payment of financing costs | (9,993) | 0 |
Other financing activities, net | 7,269 | 1,238 |
Payments for withholding taxes upon delivery of equity-based awards | (5,011) | (15,565) |
Distributions paid to noncontrolling interests | (4,725) | (496) |
Proceeds from shares issued under ATM Program, net of selling costs | 0 | 303,831 |
Prepayments of mortgage principal | 0 | (199,579) |
Contributions from noncontrolling interests | 0 | 849 |
Net Cash Used in Financing Activities | (32,543) | (104,717) |
Change in Cash and Cash Equivalents and Restricted Cash During the Period | ||
Effect of exchange rate changes on cash and cash equivalents and restricted cash | (4,550) | (2,350) |
Net increase (decrease) in cash and cash equivalents and restricted cash | 32,772 | (118,384) |
Cash and cash equivalents and restricted cash, beginning of period | 251,518 | 424,063 |
Cash and cash equivalents and restricted cash, end of period | $ 284,290 | $ 305,679 |
Business and Organization
Business and Organization | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Organization | Business and Organization W. P. Carey Inc. (“W. P. Carey”) is a REIT that, together with our consolidated subsidiaries, invests primarily in operationally-critical, single-tenant commercial real estate properties located in the United States and Northern and Western Europe on a long-term basis. We earn revenue principally by leasing the properties we own to companies on a triple-net lease basis, which generally requires each tenant to pay the costs associated with operating and maintaining the property. Founded in 1973, our shares of common stock are listed on the New York Stock Exchange under the symbol “WPC.” We elected to be taxed as a REIT under Section 856 through 860 of the Internal Revenue Code effective as of February 15, 2012. As a REIT, we are not subject to federal income taxes on income and gains that we distribute to our stockholders as long as we satisfy certain requirements, principally relating to the nature of our income and the level of our distributions, as well as other factors. We also own real property in jurisdictions outside the United States through foreign subsidiaries and are subject to income taxes on our pre-tax income earned from properties in such countries. Through our taxable REIT subsidiaries (“TRSs”), we also earn revenue as the advisor to certain publicly owned, non-traded investment programs. We hold all of our real estate assets attributable to our Real Estate segment under the REIT structure, while the activities conducted by our Investment Management segment subsidiaries have been organized under TRSs. At March 31, 2020 , we were the advisor to the following entities: • Corporate Property Associates 18 – Global Incorporated (“CPA:18 – Global”), a publicly owned, non-traded REIT that primarily invests in commercial real estate properties; • Carey Watermark Investors Incorporated (“CWI 1”) and Carey Watermark Investors 2 Incorporated (“CWI 2”), two publicly owned, non-traded REITs that invest in lodging and lodging-related properties; we refer to CWI 1 and CWI 2 together as the “CWI REITs” and, together with CPA:18 – Global, as the “Managed REITs” (as used throughout this Report, the term “Managed REITs” does not include CWI 1 and CWI 2 following the closing of the CWI 1 and CWI 2 Merger described below) ( Note 3 ); and • Carey European Student Housing Fund I, L.P. (“CESH”), a limited partnership formed for the purpose of developing, owning, and operating student housing properties and similar investments in Europe ( Note 3 ); we refer to the Managed REITs and CESH collectively as the “Managed Programs.” On October 22, 2019, CWI 1 and CWI 2 announced that they had entered into a definitive merger agreement under which the two companies intended to merge in an all-stock transaction, with CWI 2 as the surviving entity (the “CWI 1 and CWI 2 Merger”). The CWI 1 and CWI 2 Merger was approved by the stockholders of CWI 1 and CWI 2 on April 8, 2020 and closed on April 13, 2020, as described in Note 16 . Following the close of the merger, the advisory agreements with CWI 1 and CWI 2 were terminated, CWI 2 was renamed Watermark Lodging Trust, Inc., and we provide certain management services to Watermark Lodging Trust, Inc. pursuant to a transition services agreement. We no longer raise capital for new or existing funds, but currently expect to continue managing CPA:18 – Global and CESH through the end of their respective life cycles ( Note 3 ). Reportable Segments Real Estate — Lease revenues from our real estate investments generate the vast majority of our earnings. We invest primarily in commercial properties located in the United States and Northern and Western Europe, which are leased to companies on a triple-net lease basis. At March 31, 2020 , our owned portfolio was comprised of our full or partial ownership interests in 1,215 properties, totaling approximately 141.1 million square feet, substantially all of which were net leased to 352 tenants, with a weighted-average lease term of 10.7 years and an occupancy rate of 98.8% . In addition, at March 31, 2020 , our portfolio was comprised of full or partial ownership interests in 20 operating properties, including 19 self-storage properties and one hotel, totaling approximately 1.4 million square feet. Investment Management — Through our TRSs, we structure and negotiate investments for the Managed Programs, for which we earn structuring revenue, and manage their portfolios of real estate investments, for which we earn asset management revenue. We may earn disposition revenue when we negotiate and structure the sale of properties on behalf of the Managed REITs, and we may also earn incentive revenue and receive other compensation through our advisory agreements with certain of the Managed Programs, including in connection with providing liquidity events for the Managed REITs’ stockholders. In addition, we include equity income generated through our (i) ownership of shares and limited partnership units of the Managed Programs ( Note 7 ) and (ii) special general partner interests in the operating partnerships of the Managed REITs, through which we participate in their cash flows ( Note 3 ), in our Investment Management segment. At March 31, 2020 , the Managed Programs owned all or a portion of 50 net-leased properties (including certain properties in which we also have an ownership interest), totaling approximately 10.1 million square feet, substantially all of which were leased to 65 tenants, with an occupancy rate of approximately 99.3% . The Managed Programs also had interests in 104 operating properties (totaling approximately 14.9 million square feet in the aggregate) and 16 active build-to-suit projects. |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Basis of Presentation Our interim consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not necessarily include all information and footnotes necessary for a fair statement of our consolidated financial position, results of operations, and cash flows in accordance with generally accepted accounting principles in the United States (“GAAP”). In the opinion of management, the unaudited financial information for the interim periods presented in this Report reflects all normal and recurring adjustments necessary for a fair statement of financial position, results of operations, and cash flows. Our interim consolidated financial statements should be read in conjunction with our audited consolidated financial statements and accompanying notes for the year ended December 31, 2019 , which are included in the 2019 Annual Report, as certain disclosures that would substantially duplicate those contained in the audited consolidated financial statements have not been included in this Report. Operating results for interim periods are not necessarily indicative of operating results for an entire year. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in our consolidated financial statements and the accompanying notes. Actual results could differ from those estimates. Basis of Consolidation Our consolidated financial statements reflect all of our accounts, including those of our controlled subsidiaries. The portions of equity in consolidated subsidiaries that are not attributable, directly or indirectly, to us are presented as noncontrolling interests. All significant intercompany accounts and transactions have been eliminated. When we obtain an economic interest in an entity, we evaluate the entity to determine if it should be deemed a VIE and, if so, whether we are the primary beneficiary and are therefore required to consolidate the entity. There have been no significant changes in our VIE policies from what was disclosed in the 2019 Annual Report. During the three months ended March 31, 2020 , we had a net decrease of four entities considered to be consolidated VIEs, primarily related to disposition activity and certain lease amendments. At March 31, 2020 and December 31, 2019 , we considered 14 and 18 entities to be VIEs, respectively, of which we consolidated seven and 11 , respectively, as we are considered the primary beneficiary. The following table presents a summary of selected financial data of the consolidated VIEs included in our consolidated balance sheets (in thousands): March 31, 2020 December 31, 2019 Land, buildings and improvements $ 458,092 $ 493,714 Net investments in direct financing leases 15,508 15,584 In-place lease intangible assets and other 48,054 56,915 Above-market rent intangible assets 32,177 34,576 Accumulated depreciation and amortization (141,408 ) (151,017 ) Assets held for sale, net — 104,010 Total assets 425,426 596,168 Non-recourse mortgages, net $ 24,353 $ 32,622 Total liabilities 70,590 98,671 At both March 31, 2020 and December 31, 2019 , our seven unconsolidated VIEs included our interests in five unconsolidated real estate investments, which we account for under the equity method of accounting, and two unconsolidated entities, which we accounted for at fair value. We do not consolidate these entities because we are not the primary beneficiary and the nature of our involvement in the activities of these entities allows us to exercise significant influence on, but does not give us power over, decisions that significantly affect the economic performance of these entities. As of March 31, 2020 and December 31, 2019 , the net carrying amount of our investments in these entities was $293.9 million and $298.3 million , respectively, and our maximum exposure to loss in these entities was limited to our investments. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. Revenue Recognition Revenue from contracts under Accounting Standards Codification (“ASC”) 606 is recognized when, or as, control of promised goods or services is transferred to customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. At contract inception, we assess the services promised in our contracts with customers and identify a performance obligation for each promise to transfer to the customer a good or service (or bundle of goods or services) that is distinct. To identify the performance obligations, we consider all of the services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. ASC 606 does not apply to our lease revenues, which constitute a majority of our revenues, but primarily applies to revenues generated from our hotel operating properties and our Investment Management segment. Revenue from contracts for our Real Estate segment primarily represented operating property revenues of $4.6 million and $6.3 million for the three months ended March 31, 2020 and 2019 , respectively. Such operating property revenues are primarily comprised of revenues from room rentals and from food and beverage services at our hotel operating properties during those periods. We identified a single performance obligation for each distinct service. Performance obligations are typically satisfied at a point in time, at the time of sale, or at the rendering of the service. Fees are generally determined to be fixed. Payment is typically due immediately following the delivery of the service. Revenue from contracts under ASC 606 from our Investment Management segment is discussed in Note 3 . Lease revenue (including straight-line lease revenue) is only recognized when deemed probable of collection. Collectibility is assessed for each tenant receivable using various criteria including credit ratings ( Note 5 ), guarantees, past collection issues, and the current economic and business environment affecting the tenant. If collectibility of the contractual rent stream is not deemed probable, revenue will only be recognized upon receipt of cash from the tenant. Restricted Cash The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets to the consolidated statements of cash flows (in thousands): March 31, 2020 December 31, 2019 Cash and cash equivalents $ 220,929 $ 196,028 Restricted cash (a) 63,361 55,490 Total cash and cash equivalents and restricted cash $ 284,290 $ 251,518 __________ (a) Restricted cash is included within Other assets, net on our consolidated balance sheets. Recent Accounting Pronouncements Pronouncements Adopted as of March 31, 2020 In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments — Credit Losses . ASU 2016-13 replaces the “incurred loss” model with an “expected loss” model, resulting in the earlier recognition of credit losses even if the risk of loss is remote. This standard applies to financial assets measured at amortized cost and certain other instruments, including loans receivable and net investments in direct financing leases. This standard does not apply to receivables arising from operating leases, which are within the scope of Topic 842 . We adopted ASU 2016-13 on January 1, 2020 using the modified retrospective method, which requires applying changes in loss reserves through a cumulative-effect adjustment to retained earnings. Upon adoption, we recorded a net decrease in retained earnings of $14.8 million , which is reflected within our consolidated statement of equity. The allowance for credit losses, which is recorded as a reduction to Net investments in direct financing leases on our consolidated balance sheets, was measured on a pool basis by credit ratings ( Note 5 ), using a probability of default method based on the lessees’ respective credit ratings, the expected value of the underlying collateral upon its repossession, and our historical loss experience related to other direct financing leases. Included in our model are factors that incorporate forward-looking information. Allowance for credit losses is included in our consolidated statements of income within Other gains and (losses). In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . ASU 2020-04 contains practical expedients for reference rate reform-related activities that impact debt, leases, derivatives, and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the first quarter of 2020, we elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future London Interbank Offered Rate (“LIBOR”) indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. We will continue to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur. |
Agreements and Transactions wit
Agreements and Transactions with Related Parties | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Agreements and Transactions with Related Parties | Agreements and Transactions with Related Parties CWI 1 and CWI 2 Merger On October 22, 2019, CWI 1 and CWI 2 announced that they had entered into a definitive merger agreement under which the two companies intended to merge in an all-stock transaction, with CWI 2 as the surviving entity. The CWI 1 and CWI 2 Merger was approved by the stockholders of CWI 1 and CWI 2 on April 8, 2020 and closed on April 13, 2020, as described in Note 16 . Advisory Agreements and Partnership Agreements with the Managed Programs As of March 31, 2020 , we had advisory agreements with each of the Managed Programs, pursuant to which we earned fees and were entitled to receive reimbursement for certain fund management expenses. Upon completion of the CWI 1 and CWI 2 Merger on April 13, 2020 ( Note 16 ), the advisory agreements with CWI 1 and CWI 2 were terminated, and we no longer receive fees, reimbursements, or distributions of Available Cash from CWI 1 and CWI 2. We no longer raise capital for new or existing funds, but we currently expect to continue to manage CPA:18 – Global and CESH and earn various fees (as described below) through the end of their respective life cycles ( Note 1 ). As of March 31, 2020 , we had partnership agreements with each of the Managed Programs, and under the partnership agreements with the Managed REITs, we are entitled to receive certain cash distributions from their respective operating partnerships. The following tables present a summary of revenue earned and distributions of Available Cash received from the Managed Programs for the periods indicated, included in the consolidated financial statements (in thousands): Three Months Ended March 31, 2020 2019 Asset management revenue (a) $ 9,889 $ 9,732 Reimbursable costs from affiliates (a) 4,030 3,868 Distributions of Available Cash (b) 1,916 5,685 Structuring and other advisory revenue (a) 494 2,518 Interest income on deferred acquisition fees and loans to affiliates (c) 278 520 $ 16,607 $ 22,323 Three Months Ended March 31, 2020 2019 CPA:18 – Global $ 5,912 $ 7,961 CWI 1 5,040 7,501 CWI 2 4,200 5,746 CESH 1,455 1,115 $ 16,607 $ 22,323 __________ (a) Amounts represent revenues from contracts under ASC 606. (b) Included within Equity in earnings of equity method investments in the Managed Programs and real estate in the consolidated statements of income. (c) Included within Other gains and (losses) in the consolidated statements of income. The following table presents a summary of amounts included in Due from affiliates in the consolidated financial statements (in thousands): March 31, 2020 December 31, 2019 Short-term loans to affiliates, including accrued interest $ 30,760 $ 47,721 Deferred acquisition fees receivable, including accrued interest 3,000 4,450 Reimbursable costs 2,759 3,129 Asset management fees receivable 1,388 1,267 Accounts receivable 908 1,118 Current acquisition fees receivable 236 131 $ 39,051 $ 57,816 Performance Obligations and Significant Judgments The fees earned pursuant to our advisory agreements are considered variable consideration. For the agreements that include multiple performance obligations, including asset management and investment structuring services, revenue is allocated to each performance obligation based on estimates of the price that we would charge for each promised service if it were sold on a standalone basis. Judgment is applied in assessing whether there should be a constraint on the amount of fees recognized, such as amounts in excess of certain threshold limits with respect to the contract price or any potential clawback provisions included in certain of our arrangements. We exclude fees subject to such constraints to the extent it is probable that a significant reversal of those amounts will occur. Asset Management Revenue Under the advisory agreements with the Managed Programs, we earn asset management revenue for managing their investment portfolios. The following table presents a summary of our asset management fee arrangements with the Managed Programs: Managed Program Rate Payable Description CPA:18 – Global 0.5% – 1.5% In shares of its Class A common stock and/or cash, at the option of CPA:18 – Global; payable 50% in cash and 50% in shares of its Class A common stock for 2020 and 2019 Rate depends on the type of investment and is based on the average market or average equity value, as applicable CWI 1 (a) 0.5% In shares of its common stock and/or cash, at our election; payable in shares of its common stock for 2020 and 2019 Rate was based on the average market value of the investment; we were required to pay 20% of the asset management revenue we received to the subadvisor CWI 2 (a) 0.55% In shares of its Class A common stock and/or cash, at our election; payable in shares of its Class A common stock for 2020 and 2019 Rate was based on the average market value of the investment; we were required to pay 25% of the asset management revenue we received to the subadvisor CESH 1.0% In cash Based on gross assets at fair value __________ (a) Advisory agreement terminated on April 13, 2020. The performance obligation for asset management services is satisfied over time as services are rendered. The time-based output method is used to measure progress over time, as this is representative of the transfer of the services. We are compensated for our services on a monthly or quarterly basis. However, these services represent a series of distinct daily services under ASU 2014-09. Accordingly, we satisfy the performance obligation and resolve the variability associated with our fees on a daily basis. We apply the practical expedient and, as a result, do not disclose variable consideration attributable to wholly or partially unsatisfied performance obligations as of the end of the reporting period. In providing asset management services, we are reimbursed for certain costs. Direct reimbursement of these costs does not represent a separate performance obligation. Payment for asset management services is typically due on the first business day following the month of the delivery of the service. Structuring and Other Advisory Revenue Under the terms of the advisory agreements with the Managed Programs, we earn revenue for structuring and negotiating investments and related financing. For the Managed REITs, the combined total of acquisition fees and other acquisition expenses are limited to 6% of the contract prices in aggregate. The following table presents a summary of our structuring fee arrangements with the Managed Programs: Managed Program Rate Payable Description CPA:18 – Global 4.5% In cash; for all investments, other than readily marketable real estate securities for which we will not receive any acquisition fees, 2.5% upon completion, with 2% deferred and payable in three interest-bearing annual installments Based on the total aggregate cost of the investments or commitments made CWI REITs (a) 1% – 2.5% In cash upon completion; loan refinancing transactions up to 1% of the principal amount; 2.5% of the total investment cost of the properties acquired Based on the total aggregate cost of the lodging investments or commitments made; we were required to pay 20% and 25% to the subadvisors of CWI 1 and CWI 2, respectively CESH 2.0% In cash upon acquisition Based on the total aggregate cost of investments or commitments made, including the acquisition, development, construction, or redevelopment of the investments __________ (a) Advisory agreements terminated on April 13, 2020. The performance obligation for investment structuring services is satisfied at a point in time upon the closing of an investment acquisition, when there is an enforceable right to payment, and control (as well as the risks and rewards) has been transferred. Determining when control transfers requires management to make judgments that affect the timing of revenue recognized. Payment is due either on the day of acquisition (current portion) or deferred, as described above ( Note 5 ). We do not believe the deferral of the fees represents a significant financing component. In addition, we may earn fees for dispositions and mortgage loan refinancings completed on behalf of the Managed Programs. Reimbursable Costs from Affiliates The Managed Programs reimburse us for certain personnel and overhead costs that we incur on their behalf, a summary of which is presented in the table below: Managed Program Payable Description CPA:18 – Global In cash Personnel and overhead costs, excluding those related to our legal transactions group, our senior management, and our investments team, are charged to CPA:18 – Global based on the average of the trailing 12-month aggregate reported revenues of the Managed Programs and us, and personnel costs are capped at 1.0% of CPA:18 – Global’s pro rata lease revenues for both 2020 and 2019; for the legal transactions group, costs are charged according to a fee schedule CWI REITs (a) In cash Actual expenses incurred, excluding those related to our senior management; allocated between the CWI REITs based on the percentage of their total pro rata hotel revenues for the most recently completed quarter CESH In cash Actual expenses incurred __________ (a) Advisory agreements terminated on April 13, 2020. Distributions of Available Cash We are entitled to receive distributions of up to 10% of the Available Cash (as defined in the respective partnership agreements) from the operating partnerships of each of the Managed REITs, payable quarterly in arrears. After completion of the CWI 1 and CWI 2 Merger on April 13, 2020 ( Note 16 ), we no longer receive distributions of Available Cash from CWI 1 and CWI 2. Prior to the closing of the CWI 1 and CWI 2 Merger, we were required to pay 20% and 25% of such distributions to the subadvisors of CWI 1 and CWI 2, respectively. Back-End Fees and Interests in the Managed Programs Under our advisory agreements with certain of the Managed Programs, we may also receive compensation in connection with providing liquidity events for their stockholders. For the Managed REITs, the timing and form of such liquidity events are at the discretion of each REIT’s board of directors. Therefore, there can be no assurance as to whether or when any of these back-end fees or interests will be realized. Such back-end fees or interests include or may include consideration for the redemption of the special general partnership interests that we held in CWI 1 and CWI 2 ( Note 16 ), disposition fees, interests in disposition proceeds, and distributions related to ownership of shares or limited partnership units in the Managed Programs. Other Transactions with Affiliates Loans to Affiliates From time to time, our Board has approved the making of secured and unsecured loans or lines of credit from us to certain of the Managed Programs, at our sole discretion, with each loan at a rate equal to the rate at which we are able to borrow funds under our Unsecured Revolving Credit Facility (which was LIBOR plus 0.85% as of March 31, 2020 ) ( Note 10 ), generally for the purpose of facilitating acquisitions or for working capital purposes. The principal outstanding balance on our loans to CESH was $30.7 million and $46.3 million as of March 31, 2020 and December 31, 2019 , respectively, excluding accrued interest of less than $0.1 million and $1.5 million , respectively. The maximum loan amount authorized to CESH at March 31, 2020 was $65.0 million and the maturity date is October 1, 2020. In April 2020, CESH repaid approximately $16.3 million to us. In addition, the loan agreements with CWI 1 and CWI 2 were terminated upon completion of the CWI 1 and CWI 2 Merger on April 13, 2020 ( Note 16 ). Other At March 31, 2020 , we owned interests in eight jointly owned investments in real estate, with the remaining interests held by affiliates or third parties. We account for seven such investments under the equity method of accounting ( Note 7 ) and consolidate the remaining investment. In addition, we owned stock of each of the Managed REITs and limited partnership units of CESH at that date. We accounted for these investments under the equity method of accounting or at fair value ( Note 7 ). |
Land, Buildings and Improvement
Land, Buildings and Improvements and Assets Held for Sale | 3 Months Ended |
Mar. 31, 2020 | |
Real Estate [Abstract] | |
Land, Buildings and Improvements and Assets Held for Sale | Land, Buildings and Improvements and Assets Held for Sale Land, Buildings and Improvements — Operating Leases Land and buildings leased to others, which are subject to operating leases, and real estate under construction, are summarized as follows (in thousands): March 31, 2020 December 31, 2019 Land $ 1,868,126 $ 1,875,065 Buildings and improvements 7,960,373 7,828,439 Real estate under construction 107,977 69,604 Less: Accumulated depreciation (1,005,110 ) (950,452 ) $ 8,931,366 $ 8,822,656 During the three months ended March 31, 2020 , the U.S. dollar strengthened against the euro, as the end-of-period rate for the U.S. dollar in relation to the euro decreased by 2.5% to $1.0956 from $1.1234 . As a result of this fluctuation in foreign currency exchange rates, the carrying value of our Land, buildings and improvements subject to operating leases decreased by $107.1 million from December 31, 2019 to March 31, 2020 . In connection with changes in lease classifications due to extensions of the underlying leases, we reclassified 36 properties with an aggregate carrying value of $17.5 million from Net investments in direct financing leases to Land, buildings and improvements during the three months ended March 31, 2020 ( Note 5 ). Depreciation expense, including the effect of foreign currency translation, on our buildings and improvements subject to operating leases was $65.9 million and $55.1 million for the three months ended March 31, 2020 and 2019 , respectively. Acquisitions of Real Estate During the three months ended March 31, 2020 , we entered into the following investments, which were deemed to be real estate asset acquisitions, at a total cost of $204.6 million , including land of $30.7 million , buildings of $145.9 million (including capitalized acquisition-related costs of $8.6 million ), and net lease intangibles of $28.0 million (dollars in thousands): Property Location(s) Number of Properties Date of Acquisition Property Type Total Capitalized Costs Newark, United Kingdom (a) 1 1/6/2020 Warehouse $ 111,546 Aurora, Oregon (b) 1 1/24/2020 Industrial 28,755 Vojens, Denmark (a) (c) 1 1/31/2020 Warehouse 10,611 Kitzingen, Germany (a) 1 3/9/2020 Office 53,666 $ 204,578 __________ (a) Amount reflects the applicable exchange rate on the date of acquisition. (b) Amount includes approximately $5.0 million in contingent consideration that will be released to the tenant/seller upon the tenant securing an easement on the property. (c) We also recorded an estimated deferred tax liability of $0.5 million , with a corresponding increase to the asset value, since we assumed the tax basis of the acquired property. The acquired net lease intangibles are comprised of (i) in-place lease intangible assets totaling $26.5 million , which have a weighted-average expected life of 18.3 years and (ii) an above-market rent intangible asset of $1.5 million , which has an expected life of 13.5 years . As of March 31, 2020 , we committed to purchase a warehouse and distribution facility in Knoxville, Tennessee, for approximately $68.0 million upon completion of construction of the property, which is expected to take place during the second quarter of 2020. Real Estate Under Construction During the three months ended March 31, 2020 , we capitalized real estate under construction totaling $91.5 million . The number of construction projects in progress with balances included in real estate under construction was four and three as of March 31, 2020 and December 31, 2019 , respectively. Aggregate unfunded commitments totaled approximately $201.3 million and $227.8 million as of March 31, 2020 and December 31, 2019 , respectively. During the three months ended March 31, 2020 , we completed a redevelopment project at a laboratory facility in Westborough, Massachusetts, in January 2020 at a cost totaling $53.1 million , including capitalized interest. During the three months ended March 31, 2020 , we committed to fund $26.2 million (based on the exchange rate of the euro at March 31, 2020 ) for an expansion project for an existing tenant at a warehouse facility in Azambuja, Portugal, which we currently expect to complete in the third quarter of 2020. Dispositions of Properties During the three months ended March 31, 2020 , we sold three properties, which were classified as Land, buildings and improvements subject to operating leases. As a result, the carrying value of our Land, buildings and improvements subject to operating leases decreased by $2.1 million from December 31, 2019 to March 31, 2020 . Leases Operating Lease Income Lease income related to operating leases recognized and included in the consolidated statements of income is as follows (in thousands): Three Months Ended March 31, 2020 2019 Lease income — fixed $ 238,969 $ 215,118 Lease income — variable (a) 23,080 21,263 Total operating lease income (b) $ 262,049 $ 236,381 __________ (a) Includes (i) rent increases based on changes in the CPI and other comparable indices and (ii) reimbursements for property taxes, insurance, and common area maintenance services. (b) Excludes $20.1 million and $26.6 million for the three months ended March 31, 2020 and 2019 , respectively, of interest income from direct financing leases that is included in Lease revenues in the consolidated statements of income. Land, Buildings and Improvements — Operating Properties At both March 31, 2020 , and December 31, 2019 , Land, buildings and improvements attributable to operating properties consisted of our investments in ten consolidated self-storage properties and one consolidated hotel. As of December 31, 2019 , we reclassified another consolidated hotel to Assets held for sale, net and sold it in January 2020, as described below. Below is a summary of our Land, buildings and improvements attributable to operating properties (in thousands): March 31, 2020 December 31, 2019 Land $ 10,452 $ 10,452 Buildings and improvements 72,669 72,631 Less: Accumulated depreciation (11,917 ) (11,241 ) $ 71,204 $ 71,842 Depreciation expense on our buildings and improvements attributable to operating properties was $0.7 million and $2.8 million for the three months ended March 31, 2020 and 2019 , respectively. For the three months ended March 31, 2020 , Operating property revenues totaling $6.0 million were comprised of $4.4 million in lease revenues and $1.6 million in other income (such as food and beverage revenue) from ten consolidated self-storage properties and two consolidated hotels. For the three months ended March 31, 2019 , Operating property revenues totaling $16.0 million were comprised of $13.2 million in lease revenues and $2.8 million in other income from 37 consolidated self-storage properties and two consolidated hotels. We sold one of our two hotel operating properties in January 2020, as described below. We derive self-storage revenue primarily from rents received from customers who rent storage space under month-to-month leases for personal or business use. We derive hotel revenue primarily from room rentals, as well as food, beverage, and other services. Assets Held for Sale, Net Below is a summary of our properties held for sale (in thousands): March 31, 2020 December 31, 2019 Land, buildings and improvements $ — $ 105,573 Accumulated depreciation and amortization — (1,563 ) Assets held for sale, net $ — $ 104,010 At December 31, 2019 , we had one hotel operating property classified as Assets held for sale, net, with an aggregate carrying value of $104.0 million . The property was sold in January 2020 ( Note 14 ). |
Finance Receivables
Finance Receivables | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Finance Receivables | Finance Receivables Assets representing rights to receive money on demand or at fixed or determinable dates are referred to as finance receivables. Our finance receivables portfolio consists of our Net investments in direct financing leases (net of allowance for credit losses), loans receivable, and deferred acquisition fees. Operating leases are not included in finance receivables. Net Investments in Direct Financing Leases Net investments in direct financing leases is summarized as follows (in thousands): March 31, 2020 December 31, 2019 Lease payments receivable $ 655,174 $ 686,149 Unguaranteed residual value 798,929 828,206 1,454,103 1,514,355 Less: unearned income (588,847 ) (617,806 ) Less: allowance for credit losses (a) (20,311 ) — $ 844,945 $ 896,549 __________ (a) In accordance with ASU 2016-13 ( Note 2 ), we applied changes in loss reserves through a cumulative-effect adjustment to retained earnings totaling $14.8 million . In addition, during the three months ended March 31, 2020 , we recorded an allowance for credit losses of $5.5 million due to changes in expected economic conditions, which was included within Other gains and (losses) in our consolidated statements of income. Interest income from direct financing leases, which was included in Lease revenues in the consolidated financial statements, was $20.1 million and $26.6 million for the three months ended March 31, 2020 and 2019 , respectively. During the three months ended March 31, 2020 , we reclassified 36 properties with an aggregate carrying value of $17.5 million from Net investments in direct financing leases to Land, buildings and improvements subject to operating leases in connection with changes in lease classifications due to extensions of the underlying leases ( Note 4 ). During the three months ended March 31, 2020 , we sold one property accounted for as a direct financing lease that had a net carrying value of $0.3 million . During the three months ended March 31, 2020 , the U.S. dollar strengthened against the euro, resulting in a $12.5 million decrease in the carrying value of Net investments in direct financing leases from December 31, 2019 to March 31, 2020 . Loans Receivable At December 31, 2019 , we had two loans receivable related to a domestic investment with an aggregate carrying value of $47.7 million . In March 2020, one of these loans was partially repaid to us for $11.0 million . Our loans receivable are included in Other assets, net in the consolidated financial statements and had a carrying value of $36.7 million at March 31, 2020 . Earnings from our loans receivable are included in Lease termination income and other in the consolidated financial statements, and totaled $1.0 million and $1.7 million for the three months ended March 31, 2020 and 2019 , respectively. Deferred Acquisition Fees Receivable As described in Note 3 , we earn revenue in connection with structuring and negotiating investments and related mortgage financing for CPA:18 – Global. A portion of this revenue is due in equal annual installments over three years . Unpaid deferred installments, including accrued interest, from CPA:18 – Global were included in Due from affiliates in the consolidated financial statements. Credit Quality of Finance Receivables We generally invest in facilities that we believe are critical to a tenant’s business and therefore have a lower risk of tenant default. At both March 31, 2020 and December 31, 2019 , none of the balances of our finance receivables were past due. Other than the lease extensions noted under Net Investments in Direct Financing Leases above, there were no material modifications of finance receivables during the three months ended March 31, 2020 . We evaluate the credit quality of our finance receivables utilizing an internal five -point credit rating scale, with one representing the highest credit quality and five representing the lowest. A credit quality of one through three indicates a range of investment grade to stable. A credit quality of four through five indicates a range of inclusion on the watch list to risk of default. The credit quality evaluation of our finance receivables is updated quarterly. We believe the credit quality of our deferred acquisition fees receivable falls under category one , as CPA:18 – Global is expected to have the available cash to make such payments. A summary of our finance receivables by internal credit quality rating, excluding our deferred acquisition fees receivable, is as follows (dollars in thousands): Number of Tenants / Obligors at Carrying Value at Internal Credit Quality Indicator March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019 1 – 3 21 28 $ 652,628 $ 798,108 4 15 8 249,365 146,178 5 — — — — $ 901,993 $ 944,286 |
Goodwill and Other Intangibles
Goodwill and Other Intangibles | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill And Intangible Assets Liabilities Disclosure [Abstract] | |
Goodwill and Other Intangibles | Goodwill and Other Intangibles We have recorded net lease, internal-use software development, and trade name intangibles that are being amortized over periods ranging from two years to 48 years . In-place lease intangibles, at cost are included in In-place lease intangible assets and other in the consolidated financial statements. Above-market rent intangibles, at cost are included in Above-market rent intangible assets in the consolidated financial statements. Accumulated amortization of in-place lease and above-market rent intangibles is included in Accumulated depreciation and amortization in the consolidated financial statements. Internal-use software development and trade name intangibles are included in Other assets, net in the consolidated financial statements. Below-market rent and below-market purchase option intangibles are included in Below-market rent and other intangible liabilities, net in the consolidated financial statements. The following table presents a reconciliation of our goodwill (in thousands): Real Estate Investment Management Total Balance at December 31, 2019 $ 871,081 $ 63,607 $ 934,688 Foreign currency translation adjustments (4,801 ) — (4,801 ) Balance at March 31, 2020 $ 866,280 $ 63,607 $ 929,887 Intangible assets, intangible liabilities, and goodwill are summarized as follows (in thousands): March 31, 2020 December 31, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Finite-Lived Intangible Assets Internal-use software development costs $ 19,632 $ (14,233 ) $ 5,399 $ 19,582 $ (13,491 ) $ 6,091 Trade name 3,975 (2,190 ) 1,785 3,975 (1,991 ) 1,984 23,607 (16,423 ) 7,184 23,557 (15,482 ) 8,075 Lease Intangibles: In-place lease 2,071,324 (714,713 ) 1,356,611 2,072,642 (676,008 ) 1,396,634 Above-market rent 897,965 (412,512 ) 485,453 909,139 (398,294 ) 510,845 2,969,289 (1,127,225 ) 1,842,064 2,981,781 (1,074,302 ) 1,907,479 Indefinite-Lived Goodwill Goodwill 929,887 — 929,887 934,688 — 934,688 Total intangible assets $ 3,922,783 $ (1,143,648 ) $ 2,779,135 $ 3,940,026 $ (1,089,784 ) $ 2,850,242 Finite-Lived Intangible Liabilities Below-market rent $ (266,099 ) $ 80,302 $ (185,797 ) $ (268,515 ) $ 74,484 $ (194,031 ) Indefinite-Lived Intangible Liabilities Below-market purchase option (16,711 ) — (16,711 ) (16,711 ) — (16,711 ) Total intangible liabilities $ (282,810 ) $ 80,302 $ (202,508 ) $ (285,226 ) $ 74,484 $ (210,742 ) During the three months ended March 31, 2020 , the U.S. dollar strengthened against the euro, resulting in a decrease of $22.9 million in the carrying value of our net intangible assets from December 31, 2019 to March 31, 2020 . Net amortization of intangibles, including the effect of foreign currency translation, was $60.5 million and $69.4 million for the three months ended March 31, 2020 and 2019 , respectively. Amortization of below-market rent and above-market rent intangibles is recorded as an adjustment to Lease revenues and amortization of internal-use software development, trade name, and in-place lease intangibles is included in Depreciation and amortization. |
Equity Investments in the Manag
Equity Investments in the Managed Programs and Real Estate | 3 Months Ended |
Mar. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Investments in the Managed Programs and Real Estate | Equity Investments in the Managed Programs and Real Estate We own interests in certain unconsolidated real estate investments with CPA:18 – Global and third parties, and also own interests in the Managed Programs. We account for our interests in these investments under the equity method of accounting (i.e., at cost, increased or decreased by our share of earnings or losses, less distributions, plus contributions and other adjustments required by equity method accounting, such as basis differences) or at fair value by electing the equity method fair value option available under GAAP. We classify distributions received from equity method investments using the cumulative earnings approach. Distributions received are considered returns on the investment and classified as cash inflows from operating activities. If, however, the investor’s cumulative distributions received, less distributions received in prior periods determined to be returns of investment, exceeds cumulative equity in earnings recognized, the excess is considered a return of investment and is classified as cash inflows from investing activities. The following table presents Equity in (losses) earnings of equity method investments in the Managed Programs and real estate, which represents our proportionate share of the income or losses of these investments, as well as certain adjustments related to other-than-temporary impairment charges and amortization of basis differences related to purchase accounting adjustments (in thousands): Three Months Ended March 31, 2020 2019 Other-than-temporary impairment charges on our equity method investments in CWI 1 and CWI 2 ( Note 8 ) $ (47,112 ) $ — Distributions of Available Cash ( Note 3 ) 1,916 5,685 Proportionate share of equity in (losses) earnings of equity investments in the Managed Programs (1,715 ) 213 Amortization of basis differences on equity method investments in the Managed Programs (444 ) (329 ) Total equity in (losses) earnings of equity method investments in the Managed Programs (47,355 ) 5,569 Equity in earnings of equity method investments in real estate 1,804 562 Amortization of basis differences on equity method investments in real estate (239 ) (640 ) Total equity in earnings (losses) of equity method investments in real estate 1,565 (78 ) Equity in (losses) earnings of equity method investments in the Managed Programs and real estate $ (45,790 ) $ 5,491 Managed Programs We own interests in the Managed Programs and account for these interests under the equity method because, as their advisor, we do not exert control over, but we do have the ability to exercise significant influence over, the Managed Programs. Operating results of the Managed Programs are included in the Investment Management segment. The following table sets forth certain information about our investments in the Managed Programs (dollars in thousands): % of Outstanding Interests Owned at Carrying Amount of Investment at Fund March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019 CPA:18 – Global (a) 3.951 % 3.851 % $ 42,378 $ 42,644 CPA:18 – Global operating partnership 0.034 % 0.034 % 209 209 CWI 1 (a) (b) (c) 4.186 % 3.943 % 21,899 49,032 CWI 1 operating partnership (b) 0.015 % 0.015 % 186 186 CWI 2 (a) (b) (c) 4.035 % 3.755 % 15,497 33,669 CWI 2 operating partnership (b) 0.015 % 0.015 % 300 300 CESH (d) 2.430 % 2.430 % 4,912 3,527 $ 85,381 $ 129,567 __________ (a) During the three months ended March 31, 2020 , we received asset management revenue from the Managed REITs primarily in shares of their common stock, which increased our ownership percentage in each of the Managed REITs ( Note 3 ). (b) The CWI 1 and CWI 2 Merger closed on April 13, 2020, as described in Note 16 . (c) We recognized other-than-temporary impairment charges on these investments during the three months ended March 31, 2020 , as described in Note 8 . (d) Investment is accounted for at fair value. CPA:18 – Global — The c arrying value of our investment in CPA:18 – Global at March 31, 2020 includes asset management fees receivable, for which 55,975 shares of CPA:18 – Global Class A common stock were issued during the second quarter of 2020 . We received distributions from this investment during the three months ended March 31, 2020 and 2019 of $0.9 million and $0.8 million , respectively. We received distributions from our investment in the CPA:18 – Global operating partnership during the three months ended March 31, 2020 and 2019 of $1.9 million and $1.8 million , respectively ( Note 3 ). CWI 1 — We received distributions from this investment during the three months ended March 31, 2020 and 2019 of $0.8 million and $0.6 million , respectively. We received a distribution from our investment in the CWI 1 operating partnership during the three months ended March 31, 2019 of $1.9 million ( Note 3 ). We did no t receive such a distribution during the three months ended March 31, 2020 , as a result of the adverse effect of COVID-19 on the lodging industry and, therefore, the operations of CWI 1. CWI 2 — We received distributions from this investment during the three months ended March 31, 2020 and 2019 of $0.5 million and $0.4 million , respectively. We received a distribution from our investment in the CWI 2 operating partnership during the three months ended March 31, 2019 of $1.9 million ( Note 3 ). We did no t receive such a distribution during the three months ended March 31, 2020 , as a result of the adverse effect of COVID-19 on the lodging industry and, therefore, the operations of CWI 2. CESH — We have elected to account for our investment in CESH at fair value by selecting the equity method fair value option available under GAAP. We record our investment in CESH on a one quarter lag; therefore, the balance of our equity method investment in CESH recorded as of March 31, 2020 is based on the estimated fair value of our investment as of December 31, 2019 . We did not receive distributions from this investment during the three months ended March 31, 2020 or 2019 . At March 31, 2020 and December 31, 2019 , the aggregate unamortized basis differences on our equity investments in the Managed Programs were $13.4 million and $47.0 million , respectively. This decrease was primarily due to the other-than-temporary impairment charges that we recognized on our equity investments in CWI 1 and CWI 2 during the three months ended March 31, 2020 , as described in Note 8 . Interests in Other Unconsolidated Real Estate Investments We own equity interests in properties that are generally leased to companies through noncontrolling interests in partnerships and limited liability companies that we do not control but over which we exercise significant influence. The underlying investments are jointly owned with affiliates or third parties. We account for these investments under the equity method of accounting. Operating results of our unconsolidated real estate investments are included in the Real Estate segment. The following table sets forth our ownership interests in our equity investments in real estate, excluding the Managed Programs, and their respective carrying values (dollars in thousands): Carrying Value at Lessee Co-owner Ownership Interest March 31, 2020 December 31, 2019 Johnson Self Storage Third Party 90% $ 70,309 $ 70,690 Kesko Senukai (a) Third Party 70% 45,803 46,475 Bank Pekao (a) CPA:18 – Global 50% 26,107 26,388 BPS Nevada, LLC (b) Third Party 15% 22,904 22,900 State Farm Mutual Automobile Insurance Co. CPA:18 – Global 50% 16,781 17,232 Apply Sørco AS (c) CPA:18 – Global 49% 5,906 8,040 Fortenova Grupa d.d. (formerly Konzum d.d.) (a) CPA:18 – Global 20% 2,918 2,712 $ 190,728 $ 194,437 __________ (a) The carrying value of this investment is affected by fluctuations in the exchange rate of the euro. (b) This investment is reported using the hypothetical liquidation at book value model, which may be different than pro rata ownership percentages, primarily due to the capital structure of the partnership agreement. (c) The carrying value of this investment is affected by fluctuations in the exchange rate of the Norwegian krone. We received aggregate distributions of $2.0 million and $3.4 million from our other unconsolidated real estate investments for the three months ended March 31, 2020 and 2019 , respectively. At March 31, 2020 and December 31, 2019 , the aggregate unamortized basis differences on our unconsolidated real estate investments were $25.0 million and $25.2 million , respectively. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The fair value of an asset is defined as the exit price, which is the amount that would either be received when an asset is sold or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance establishes a three-tier fair value hierarchy based on the inputs used in measuring fair value. These tiers are: Level 1, for which quoted market prices for identical instruments are available in active markets, such as money market funds, equity securities, and U.S. Treasury securities; Level 2, for which there are inputs other than quoted prices included within Level 1 that are observable for the instrument, such as certain derivative instruments including interest rate caps, interest rate swaps, foreign currency forward contracts, and foreign currency collars; and Level 3, for securities that do not fall into Level 1 or Level 2 and for which little or no market data exists, therefore requiring us to develop our own assumptions. Items Measured at Fair Value on a Recurring Basis The methods and assumptions described below were used to estimate the fair value of each class of financial instrument. For significant Level 3 items, we have also provided the unobservable inputs. Derivative Assets and Liabilities — Our derivative assets and liabilities, which are included in Other assets, net and Accounts payable, accrued expenses and other liabilities, respectively, in the consolidated financial statements, are comprised of foreign currency forward contracts, foreign currency collars, interest rate swaps, interest rate caps, and stock warrants ( Note 9 ). The valuation of our derivative instruments (excluding stock warrants) is determined using a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves, spot and forward rates, and implied volatilities. We incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative instruments for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. These derivative instruments were classified as Level 2 as these instruments are custom, over-the-counter contracts with various bank counterparties that are not traded in an active market. The stock warrants were measured at fair value using valuation models that incorporate market inputs and our own assumptions about future cash flows. We classified these assets as Level 3 because these assets are not traded in an active market. Equity Investment in CESH — We have elected to account for our investment in CESH, which is included in Equity investments in the Managed Programs and real estate in the consolidated financial statements, at fair value by selecting the equity method fair value option available under GAAP ( Note 7 ). We classified this investment as Level 3 because we primarily used valuation models that incorporate unobservable inputs to determine its fair value. The fair value of our equity investment in CESH approximated its carrying value as of March 31, 2020 and December 31, 2019 . Investment in Shares of a Cold Storage Operator — We have elected to apply the measurement alternative under ASU 2016-01, Financial Instruments — Overall (Subtopic 825-10) to account for our investment in shares of a cold storage operator, which is included in Other assets, net in the consolidated financial statements. Under this alternative, the carrying value is adjusted for any impairments or changes in fair value resulting from observable transactions for similar or identical investments in the issuer. We classified this investment as Level 3 because it is not traded in an active market. See Note 13 for further discussion of the impact of this cold storage operator’s conversion to a REIT during the first quarter of 2020. The fair value of this investment approximated its carrying value, which was $146.2 million at both March 31, 2020 and December 31, 2019 . Investment in Shares of GCIF — We account for our investment in shares of Guggenheim Credit Income Fund (“GCIF”), which is included in Other assets, net in the consolidated financial statements, at fair value. We classified this investment as Level 2 because we used a quoted price from an inactive market to determine its fair value. During the three months ended March 31, 2020 , we redeemed a portion of our investment in shares of GCIF for approximately $3.2 million and recognized a net loss of $0.3 million , which was included within Other gains and (losses) in the consolidated statements of income. Distributions of earnings from GCIF and unrealized gains or losses recognized on GCIF are recorded within Other gains and (losses) in the consolidated financial statements. The fair value of our investment in shares of GCIF approximated its carrying value, which was $8.7 million and $12.2 million at March 31, 2020 and December 31, 2019 , respectively. We did not have any transfers into or out of Level 1, Level 2, and Level 3 category of measurements during either the three months ended March 31, 2020 or 2019 . Gains and losses (realized and unrealized) recognized on items measured at fair value on a recurring basis included in earnings are reported within Other gains and (losses) on our consolidated financial statements. Our other material financial instruments had the following carrying values and fair values as of the dates shown (dollars in thousands): March 31, 2020 December 31, 2019 Level Carrying Value Fair Value Carrying Value Fair Value Senior Unsecured Notes, net (a) (b) (c) 2 $ 4,323,063 $ 4,212,628 $ 4,390,189 $ 4,682,432 Non-recourse mortgages, net (a) (b) (d) 3 1,433,372 1,426,786 1,462,487 1,487,892 __________ (a) The carrying value of Senior Unsecured Notes, net ( Note 10 ) includes unamortized deferred financing costs of $21.6 million and $22.8 million at March 31, 2020 and December 31, 2019 , respectively. The carrying value of Non-recourse mortgages, net includes unamortized deferred financing costs of $0.5 million and $0.6 million at March 31, 2020 and December 31, 2019 , respectively. (b) The carrying value of Senior Unsecured Notes, net includes unamortized discount of $19.3 million and $20.5 million at March 31, 2020 and December 31, 2019 , respectively. The carrying value of Non-recourse mortgages, net includes unamortized discount of $5.6 million and $6.2 million at March 31, 2020 and December 31, 2019 , respectively. (c) We determined the estimated fair value of the Senior Unsecured Notes using observed market prices in an open market with limited trading volume. (d) We determined the estimated fair value of our non-recourse mortgage loans using a discounted cash flow model that estimates the present value of the future loan payments by discounting such payments at current estimated market interest rates. The estimated market interest rates consider interest rate risk and the value of the underlying collateral, which includes quality of the collateral, the credit quality of the tenant/obligor, and the time until maturity. We estimated that our other financial assets and liabilities, including amounts outstanding under our Senior Unsecured Credit Facility ( Note 10 ) and our loans receivable, but excluding net investments in direct financing leases, had fair values that approximated their carrying values at both March 31, 2020 and December 31, 2019 . Items Measured at Fair Value on a Non-Recurring Basis (Including Impairment Charges) We periodically assess whether there are any indicators that the value of our real estate investments may be impaired or that their carrying value may not be recoverable. There have been no significant changes in our impairment policies from what was disclosed in the 2019 Annual Report. The following table presents information about assets for which we recorded an impairment charge and that were measured at fair value on a non-recurring basis (in thousands): Three Months Ended March 31, 2020 Three Months Ended March 31, 2019 Fair Value Total Impairment Fair Value Total Impairment Impairment Charges Equity investments in the Managed Programs $ 37,396 $ 47,112 $ — $ — Land, buildings and improvements and intangibles 12,148 19,420 — — $ 66,532 $ — Impairment charges, and their related triggering events and fair value measurements, recognized during the three months ended March 31, 2020 were as follows (we did not recognize any impairment charges during the three months ended March 31, 2019 ): Equity Investments in the Managed Programs During the three months ended March 31, 2020 , we recognized other-than-temporary impairment charges of $27.8 million and $19.3 million on our equity investments in CWI 1 and CWI 2, respectively, to reduce the carrying values of our investments to their estimated fair values, due to the COVID-19 outbreak during the first quarter of 2020, which is having an adverse effect on the lodging industry and, therefore, the operations of CWI 1 and CWI 2. The fair value measurements were estimated based on implied asset value changes and changes in market capitalizations for publicly traded lodging REITS, all of which was obtained from third-party market data. These other-than-temporary impairment charges are reflected within Equity in (losses) earnings of equity method investments in the Managed Programs and real estate in our consolidated statements of income. Land, Buildings and Improvements and Intangibles During the three months ended March 31, 2020 , we recognized impairment charges totaling $16.0 million on two properties leased to the same tenant in order to reduce the carrying values of the properties to their estimated fair values, due to potential property vacancies. The fair value measurements for the properties were determined by a direct capitalization rate analysis. In addition, we recognized an impairment charge of $3.4 million on a property in order to reduce the carrying value of the property to its estimated fair value. The fair value measurement for this property approximated its estimated selling price. |
Risk Management and Use of Deri
Risk Management and Use of Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Risk Management and Use of Derivative Financial Instruments | Risk Management and Use of Derivative Financial Instruments Risk Management In the normal course of our ongoing business operations, we encounter economic risk. There are four main components of economic risk that impact us: interest rate risk, credit risk, market risk, and foreign currency risk. We are primarily subject to interest rate risk on our interest-bearing liabilities, including our Senior Unsecured Credit Facility and Senior Unsecured Notes ( Note 10 ). Credit risk is the risk of default on our operations and our tenants’ inability or unwillingness to make contractually required payments. Market risk includes changes in the value of our properties and related loans, as well as changes in the value of our other securities and the shares or limited partnership units we hold in the Managed Programs due to changes in interest rates or other market factors. We own investments in North America, Europe, and Japan and are subject to risks associated with fluctuating foreign currency exchange rates. Derivative Financial Instruments There have been no significant changes in our derivative financial instrument policies from what was disclosed in the 2019 Annual Report. At both March 31, 2020 and December 31, 2019 , no cash collateral had been posted nor received for any of our derivative positions. The following table sets forth certain information regarding our derivative instruments (in thousands): Derivatives Designated as Hedging Instruments Balance Sheet Location Derivative Assets Fair Value at Derivative Liabilities Fair Value at March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019 Foreign currency collars Other assets, net $ 30,734 $ 14,460 $ — $ — Foreign currency forward contracts Other assets, net 4,706 9,689 — — Interest rate caps Other assets, net 2 1 — — Interest rate swaps Accounts payable, accrued expenses and other liabilities — — (6,599 ) (4,494 ) Foreign currency collars Accounts payable, accrued expenses and other liabilities — — — (1,587 ) 35,442 24,150 (6,599 ) (6,081 ) Derivatives Not Designated as Hedging Instruments Stock warrants Other assets, net 5,100 5,000 — — Interest rate swap (a) Other assets, net — 8 — — Interest rate swaps (a) Accounts payable, accrued expenses and other liabilities — — (84 ) (93 ) 5,100 5,008 (84 ) (93 ) Total derivatives $ 40,542 $ 29,158 $ (6,683 ) $ (6,174 ) __________ (a) These interest rate swaps do not qualify for hedge accounting; however, they do protect against fluctuations in interest rates related to the underlying variable-rate debt. The following tables present the impact of our derivative instruments in the consolidated financial statements (in thousands): Amount of Gain Recognized on Derivatives in Other Comprehensive (Loss) Income (a) Three Months Ended March 31, Derivatives in Cash Flow Hedging Relationships 2020 2019 Foreign currency collars $ 17,816 $ 3,616 Foreign currency forward contracts (2,329 ) 1,119 Interest rate swaps (2,237 ) (1,815 ) Interest rate caps 2 (27 ) Derivatives in Net Investment Hedging Relationships (b) Foreign currency collars 45 — Total $ 13,297 $ 2,893 Amount of Gain on Derivatives Reclassified from Other Comprehensive (Loss) Income Derivatives in Cash Flow Hedging Relationships Location of Gain (Loss) Recognized in Income Three Months Ended March 31, 2020 2019 Foreign currency forward contracts Other gains and (losses) $ 2,799 $ 2,434 Foreign currency collars Other gains and (losses) 984 1,088 Interest rate swaps and caps Interest expense (238 ) (67 ) Total $ 3,545 $ 3,455 __________ (a) Excludes net losses of $0.4 million and $0.9 million recognized on unconsolidated jointly owned investments for the three months ended March 31, 2020 and 2019 , respectively. (b) The changes in fair value of these contracts are reported in the foreign currency translation adjustment section of Other comprehensive (loss) income . Amounts reported in Other comprehensive (loss) income related to interest rate derivative contracts will be reclassified to Interest expense as interest is incurred on our variable-rate debt. Amounts reported in Other comprehensive (loss) income related to foreign currency derivative contracts will be reclassified to Other gains and (losses) when the hedged foreign currency contracts are settled. As of March 31, 2020 , we estimate that an additional $2.8 million and $11.8 million will be reclassified as interest expense and other gains, respectively, during the next 12 months. The following table presents the impact of our derivative instruments in the consolidated financial statements (in thousands): Amount of Gain (Loss) on Derivatives Recognized in Income Derivatives Not in Cash Flow Hedging Relationships Location of Gain (Loss) Recognized in Income Three Months Ended March 31, 2020 2019 Foreign currency collars Other gains and (losses) $ 639 $ 41 Foreign currency forward contracts Other gains and (losses) 224 (230 ) Stock warrants Other gains and (losses) 100 — Interest rate swaps Interest expense 15 — Derivatives in Cash Flow Hedging Relationships Interest rate swaps Interest expense 317 (114 ) Foreign currency forward contracts Other gains and (losses) — (132 ) Foreign currency collars Other gains and (losses) — 7 Total $ 1,295 $ (428 ) See below for information on our purposes for entering into derivative instruments. Interest Rate Swaps and Caps We are exposed to the impact of interest rate changes primarily through our borrowing activities. To limit this exposure, we generally seek long-term debt financing on a fixed-rate basis. However, from time to time, we or our investment partners have obtained, and may in the future obtain, variable-rate, non-recourse mortgage loans and, as a result, we have entered into, and may continue to enter into, interest rate swap agreements or interest rate cap agreements with counterparties. Interest rate swaps, which effectively convert the variable-rate debt service obligations of a loan to a fixed rate, are agreements in which one party exchanges a stream of interest payments for a counterparty’s stream of cash flow over a specific period. The notional, or face, amount on which the swaps are based is not exchanged. Interest rate caps limit the effective borrowing rate of variable-rate debt obligations while allowing participants to share in downward shifts in interest rates. Our objective in using these derivatives is to limit our exposure to interest rate movements. The interest rate swaps and caps that our consolidated subsidiaries had outstanding at March 31, 2020 are summarized as follows (currency in thousands): Interest Rate Derivatives Number of Instruments Notional Fair Value at (a) Designated as Cash Flow Hedging Instruments Interest rate swaps 5 75,543 USD $ (5,226 ) Interest rate swaps 2 49,348 EUR (1,373 ) Interest rate cap 1 11,310 EUR 2 Interest rate cap 1 6,394 GBP — Not Designated as Hedging Instruments Interest rate swap (b) 1 4,578 EUR (78 ) Interest rate swap (b) 1 7,658 USD (6 ) $ (6,681 ) __________ (a) Fair value amounts are based on the exchange rate of the euro or British pound sterling at March 31, 2020 , as applicable. (b) These interest rate swaps do not qualify for hedge accounting; however, they do protect against fluctuations in interest rates related to the underlying variable-rate debt. Foreign Currency Forward Contracts and Collars We are exposed to foreign currency exchange rate movements, primarily in the euro and, to a lesser extent, the British pound sterling, the Danish krone, the Norwegian krone, and certain other currencies. In order to hedge certain of our foreign currency cash flow exposures, we enter into foreign currency forward contracts and collars. A foreign currency forward contract is a commitment to deliver a certain amount of currency at a certain price on a specific date in the future. A foreign currency collar consists of a written call option and a purchased put option to sell the foreign currency at a range of predetermined exchange rates. By entering into forward contracts and holding them to maturity, we are locked into a future currency exchange rate for the term of the contract. A foreign currency collar guarantees that the exchange rate of the currency will not fluctuate beyond the range of the options’ strike prices. Our foreign currency forward contracts and foreign currency collars have maturities of 73 months or less. The following table presents the foreign currency derivative contracts we had outstanding at March 31, 2020 (currency in thousands): Foreign Currency Derivatives Number of Instruments Notional Fair Value at March 31, 2020 Designated as Cash Flow Hedging Instruments Foreign currency collars 88 295,049 EUR $ 25,692 Foreign currency collars 63 44,000 GBP 4,947 Foreign currency forward contracts 3 12,951 EUR 4,706 Foreign currency collars 3 2,000 NOK 42 Designated as Net Investment Hedging Instruments Foreign currency collar 1 2,500 NOK 53 $ 35,440 Credit Risk-Related Contingent Features We measure our credit exposure on a counterparty basis as the net positive aggregate estimated fair value of our derivatives, net of any collateral received. No collateral was received as of March 31, 2020 . At March 31, 2020 , our total credit exposure and the maximum exposure to any single counterparty was $34.1 million and $9.3 million , respectively. Some of the agreements we have with our derivative counterparties contain cross-default provisions that could trigger a declaration of default on our derivative obligations if we default, or are capable of being declared in default, on certain of our indebtedness. At March 31, 2020 , we had not been declared in default on any of our derivative obligations. The estimated fair value of our derivatives in a net liability position was $10.2 million and $9.6 million at March 31, 2020 and December 31, 2019 , respectively, which included accrued interest and any nonperformance risk adjustments. If we had breached any of these provisions at March 31, 2020 or December 31, 2019 , we could have been required to settle our obligations under these agreements at their aggregate termination value of $10.8 million and $9.9 million , respectively. Net Investment Hedges We have completed five offerings of euro-denominated senior notes, each with a principal amount of €500.0 million , which we refer to as the 2.0% Senior Notes due 2023, 2.25% Senior Notes due 2024, 2.250% Senior Notes due 2026, 2.125% Senior Notes due 2027, and 1.350% Senior Notes due 2028 ( Note 10 ). In addition, at March 31, 2020 , the amounts borrowed in euro and Japanese yen outstanding under our Unsecured Revolving Credit Facility ( Note 10 ) were €39.5 million and ¥2.4 billion , respectively. Also, at March 31, 2020 , the amounts borrowed in British pound sterling and euro outstanding under our Unsecured Term Loans ( Note 10 ) were £150.0 million and €96.5 million , respectively. These borrowings are designated as, and are effective as, economic hedges of our net investments in foreign entities. Exchange rate variations impact our financial results because the financial results of our foreign subsidiaries are translated to U.S. dollars each period, with the effect of exchange rate variations being recorded in Other comprehensive (loss) income as part of the cumulative foreign currency translation adjustment. As a result, changes in the value of our borrowings under our euro-denominated senior notes and changes in the value of our euro, Japanese yen, and British pound sterling borrowings under our Senior Unsecured Credit Facility, related to changes in the spot rates, will be reported in the same manner as foreign currency translation adjustments, which are recorded in Other comprehensive (loss) income as part of the cumulative foreign currency translation adjustment. Such gains related to non-derivative net investment hedges were $84.9 million and $44.1 million for the three months ended March 31, 2020 and 2019 , respectively. At March 31, 2020 , we also had foreign currency forward contracts that were designated as net investment hedges, as discussed in |
Debt
Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt Senior Unsecured Credit Facility As of December 31, 2019, we had a senior credit facility (as amended, the “Credit Agreement”), which provided for a $1.5 billion unsecured revolving credit facility (our “Unsecured Revolving Credit Facility”), a €236.3 million term loan, and a $100.0 million delayed draw term loan, which we refer to collectively as the “Senior Unsecured Credit Facility.” At December 31, 2019, the Senior Unsecured Credit Facility also permitted the aggregate principal amount (of revolving and term loans) available under the Credit Agreement to be increased up to an amount not to exceed the U.S. dollar equivalent of $2.35 billion , subject to the conditions to increase provided in the Credit Agreement. On February 20, 2020, we amended and restated our Senior Unsecured Credit Facility to increase its capacity to approximately $2.1 billion , which is comprised of $1.8 billion under our Unsecured Revolving Credit Facility, a £150.0 million term loan (our “Term Loan”), and a €96.5 million delayed draw term loan (our “Delayed Draw Term Loan”). We refer to our Term Loan and Delayed Draw Term Loan collectively as the “Unsecured Term Loans.” On that date, we drew down our Term Loan in full by borrowing £150.0 million (equivalent to $193.1 million ). On March 27, 2020, we drew down our Delayed Draw Term Loan in full by borrowing €96.5 million (equivalent to $105.9 million ). The aggregate principal amount (of revolving and term loans) available under the Senior Unsecured Credit Facility may be increased up to an amount not to exceed the U.S. dollar equivalent of $2.75 billion , subject to the conditions to increase set forth in the Credit Agreement. In connection with the amendment and restatement our Senior Unsecured Credit Facility, we capitalized deferred financing costs totaling $10.0 million , which are being amortized to Interest expense over the remaining term of the Senior Unsecured Credit Facility. The maturity date of the Senior Unsecured Credit Facility is February 20, 2025. The Unsecured Revolving Credit Facility is being used for working capital needs, for acquisitions, and for other general corporate purposes. The Credit Agreement permits borrowing under the Unsecured Revolving Credit Facility in certain currencies other than U.S. dollars. At March 31, 2020 , our Unsecured Revolving Credit Facility had available capacity of $1.7 billion . We incur an annual facility fee of 0.20% of the total commitment on our Unsecured Revolving Credit Facility, which is included within Interest expense in our consolidated statements of income. The following table presents a summary of our Senior Unsecured Credit Facility (dollars in thousands): Interest Rate at (a) Maturity Date at March 31, 2020 Principal Outstanding Balance at Senior Unsecured Credit Facility March 31, 2020 December 31, 2019 Unsecured Term Loans: Term Loan — borrowing in British pounds sterling (b) GBP LIBOR + 0.95% 2/20/2025 $ 185,395 $ — Delayed Draw Term Loan — borrowing in euros (c) EURIBOR + 0.95% 2/20/2025 105,726 — 291,121 — Unsecured Revolving Credit Facility: Borrowing in euros (c) EURIBOR + 0.85% 2/20/2025 43,276 131,438 Borrowing in Japanese yen JPY LIBOR + 0.85% 2/20/2025 22,207 22,295 Borrowing in U.S. dollars USD LIBOR + 0.85% 2/20/2025 10,000 — Borrowing in British pounds sterling N/A N/A — 47,534 75,483 201,267 $ 366,604 $ 201,267 __________ (a) The applicable interest rate at March 31, 2020 was based on the credit rating for our Senior Unsecured Notes of BBB/Baa2 . (b) Balance excludes unamortized discount of $1.4 million at March 31, 2020 . (c) EURIBOR means Euro Interbank Offered Rate. Senior Unsecured Notes As set forth in the table below, we have euro and U.S. dollar-denominated senior unsecured notes outstanding with an aggregate principal balance outstanding of $4.4 billion at March 31, 2020 (the “Senior Unsecured Notes”). Interest on the Senior Unsecured Notes is payable annually in arrears for our euro-denominated senior notes and semi-annually for U.S. dollar-denominated senior notes. The Senior Unsecured Notes can be redeemed at par within three months of their respective maturities, or we can call the notes at any time for the principal, accrued interest, and a make-whole amount based upon the applicable government bond yield plus 30 to 35 basis points. The following table presents a summary of our Senior Unsecured Notes outstanding at March 31, 2020 (currency in millions): Original Issue Discount Effective Interest Rate Principal Outstanding Balance at Senior Unsecured Notes, net (a) Issue Date Principal Amount Price of Par Value Coupon Rate Maturity Date March 31, 2020 December 31, 2019 2.0% Senior Notes due 2023 1/21/2015 € 500.0 99.220 % $ 4.6 2.107 % 2.0 % 1/20/2023 $ 547.8 $ 561.7 4.6% Senior Notes due 2024 3/14/2014 $ 500.0 99.639 % $ 1.8 4.645 % 4.6 % 4/1/2024 500.0 500.0 2.25% Senior Notes due 2024 1/19/2017 € 500.0 99.448 % $ 2.9 2.332 % 2.25 % 7/19/2024 547.8 561.7 4.0% Senior Notes due 2025 1/26/2015 $ 450.0 99.372 % $ 2.8 4.077 % 4.0 % 2/1/2025 450.0 450.0 2.250% Senior Notes due 2026 10/9/2018 € 500.0 99.252 % $ 4.3 2.361 % 2.250 % 4/9/2026 547.8 561.7 4.25% Senior Notes due 2026 9/12/2016 $ 350.0 99.682 % $ 1.1 4.290 % 4.25 % 10/1/2026 350.0 350.0 2.125% Senior Notes due 2027 3/6/2018 € 500.0 99.324 % $ 4.2 2.208 % 2.125 % 4/15/2027 547.8 561.7 1.350% Senior Notes due 2028 9/19/2019 € 500.0 99.266 % $ 4.1 1.442 % 1.350 % 4/15/2028 547.8 561.7 3.850% Senior Notes due 2029 6/14/2019 $ 325.0 98.876 % $ 3.7 3.986 % 3.850 % 7/15/2029 325.0 325.0 $ 4,364.0 $ 4,433.5 __________ (a) Aggregate balance excludes unamortized deferred financing costs totaling $21.6 million and $22.8 million , and unamortized discount totaling $19.3 million and $20.5 million , at March 31, 2020 and December 31, 2019 , respectively. Proceeds from the issuances of each of these notes were used primarily to partially pay down the amounts then outstanding under the senior unsecured credit facility that we had in place at that time and/or to repay certain non-recourse mortgage loans. Covenants The Credit Agreement, each of the Senior Unsecured Notes, and certain of our non-recourse mortgage loan agreements include customary financial maintenance covenants that require us to maintain certain ratios and benchmarks at the end of each quarter. There have been no significant changes in our debt covenants from what was disclosed in the 2019 Annual Report. We were in compliance with all of these covenants at March 31, 2020 . Non-Recourse Mortgages At March 31, 2020 , the weighted-average interest rates for our fixed-rate and variable-rate non-recourse mortgage notes payable were 5.0% and 2.9% , respectively, with maturity dates ranging from June 2020 to September 2031 . Repayments During the Three Months Ended March 31, 2020 During the three months ended March 31, 2020 , we repaid a non-recourse mortgage loan at maturity with a principal balance of approximately $7.7 million and an interest rate of 4.5% . Repayments During the Three Months Ended March 31, 2019 During the three months ended March 31, 2019 , we (i) prepaid non-recourse mortgage loans totaling $199.6 million , and (ii) repaid non-recourse mortgage loans at maturity with an aggregate principal balance of approximately $18.8 million . The weighted-average interest rate for these non-recourse mortgage loans on their respective dates of repayment was 5.0% . Amounts are based on the exchange rate of the related foreign currency as of the date of repayment, as applicable. We primarily used proceeds from issuances of common stock under our ATM Program ( Note 12 ) to fund these prepayments. Foreign Currency Exchange Rate Impact During the three months ended March 31, 2020 , the U.S. dollar strengthened against the euro, resulting in an aggregate decrease of $93.5 million in the aggregate carrying values of our Non-recourse mortgages, net, Senior Unsecured Credit Facility, and Senior Unsecured Notes, net from December 31, 2019 to March 31, 2020 . Scheduled Debt Principal Payments Scheduled debt principal payments as of March 31, 2020 are as follows (in thousands): Years Ending December 31, Total (a) 2020 (remainder) $ 142,494 2021 242,810 2022 460,033 2023 882,209 2024 1,169,686 Thereafter through 2031 3,272,903 Total principal payments 6,170,135 Unamortized discount, net (b) (26,344 ) Unamortized deferred financing costs (22,148 ) Total $ 6,121,643 __________ (a) Certain amounts are based on the applicable foreign currency exchange rate at March 31, 2020 . (b) Represents the unamortized discount on the Senior Unsecured Notes of $19.3 million in aggregate, unamortized discount, net, of $5.6 million in aggregate primarily resulting from the assumption of property-level debt in connection with business combinations, and unamortized discount of $1.4 million on the Term Loan. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies At March 31, 2020 , we were not involved in any material litigation. Various claims and lawsuits arising in the normal course of business are pending against us. The results of these proceedings are not expected to have a material adverse effect on our consolidated financial position or results of operations. |
Stock-Based Compensation and Eq
Stock-Based Compensation and Equity | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Stock-Based Compensation and Equity | Stock-Based Compensation and Equity Stock-Based Compensation We maintain several stock-based compensation plans, which are more fully described in the 2019 Annual Report. There have been no significant changes to the terms and conditions of any of our stock-based compensation plans or arrangements during the three months ended March 31, 2020 . We recorded stock-based compensation expense of $2.7 million and $4.2 million during the three months ended March 31, 2020 and 2019 , respectively, which was included in Stock-based compensation expense in the consolidated financial statements. Restricted and Conditional Awards Nonvested restricted share awards (“RSAs”), restricted share units (“RSUs”), and performance share units (“PSUs”) at March 31, 2020 and changes during the three months ended March 31, 2020 were as follows: RSA and RSU Awards PSU Awards Shares Weighted-Average Grant Date Fair Value Shares Weighted-Average Nonvested at January 1, 2020 283,977 $ 68.51 331,242 $ 80.90 Granted (a) 123,944 83.26 90,518 104.65 Vested (b) (127,879 ) 65.67 (156,838 ) 80.42 Forfeited (4,430 ) 69.87 (6,432 ) 88.89 Adjustment (c) — — 21,611 91.84 Nonvested at March 31, 2020 (d) 275,612 $ 76.44 280,101 $ 87.90 __________ (a) The grant date fair value of RSAs and RSUs reflect our stock price on the date of grant on a one-for-one basis. The grant date fair value of PSUs was determined utilizing (i) a Monte Carlo simulation model to generate an estimate of our future stock price over the three -year performance period and (ii) future financial performance projections. To estimate the fair value of PSUs granted during the three months ended March 31, 2020 , we used a risk-free interest rate of 1.6% , an expected volatility rate of 15.2% , and assumed a dividend yield of zero . (b) The grant date fair value of shares vested during the three months ended March 31, 2020 was $21.0 million . Employees have the option to take immediate delivery of the shares upon vesting or defer receipt to a future date pursuant to previously made deferral elections. At March 31, 2020 and December 31, 2019 , we had an obligation to issue 995,380 and 893,713 shares, respectively, of our common stock underlying such deferred awards, which is recorded within Total stockholders’ equity as a Deferred compensation obligation of $42.3 million and $37.3 million , respectively. (c) Vesting and payment of the PSUs is conditioned upon certain company and/or market performance goals being met during the relevant three -year performance period. The ultimate number of PSUs to be vested will depend on the extent to which the performance goals are met and can range from zero to three times the original awards. As a result, we recorded adjustments at March 31, 2020 to reflect the number of shares expected to be issued when the PSUs vest. (d) At March 31, 2020 , total unrecognized compensation expense related to these awards was approximately $32.4 million , with an aggregate weighted-average remaining term of 2.2 years . Earnings Per Share Under current authoritative guidance for determining earnings per share, all nonvested share-based payment awards that contain non-forfeitable rights to dividends are considered to be participating securities and therefore are included in the computation of earnings per share under the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common shares and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. During the prior year period, certain of our nonvested RSUs contained rights to receive non-forfeitable dividend equivalents or dividends, respectively, and therefore we apply the two-class method of computing earnings per share. The calculation of earnings per share below excludes the income attributable to the nonvested participating RSUs from the numerator and such nonvested shares in the denominator. The following table summarizes basic and diluted earnings (in thousands, except share amounts): Three Months Ended March 31, 2020 2019 Net income attributable to W. P. Carey $ 66,090 $ 68,494 Net income attributable to nonvested participating RSUs — (19 ) Net income — basic and diluted $ 66,090 $ 68,475 Weighted-average shares outstanding — basic 173,249,236 167,234,121 Effect of dilutive securities 210,817 200,619 Weighted-average shares outstanding — diluted 173,460,053 167,434,740 For the three months ended March 31, 2020 and 2019 , there were no potentially dilutive securities excluded from the computation of diluted earnings per share. ATM Program During the three months ended March 31, 2020 , we did no t issue any shares of our common stock under our ATM Program, which is discussed in the 2019 Annual Report. During the three months ended March 31, 2019 , we issued 4,053,623 shares of our common stock under our former ATM Program at a weighted-average price of $76.17 per share for net proceeds of $303.8 million . As of March 31, 2020 , $616.6 million remained available for issuance under our current ATM Program. Reclassifications Out of Accumulated Other Comprehensive Loss The following tables present a reconciliation of changes in Accumulated other comprehensive loss by component for the periods presented (in thousands): Three Months Ended March 31, 2020 Gains and (Losses) on Derivative Instruments Foreign Currency Translation Adjustments Gains and (Losses) on Investments Total Beginning balance $ 13,048 $ (268,715 ) $ — $ (255,667 ) Other comprehensive loss before reclassifications 16,394 (52,200 ) — (35,806 ) Amounts reclassified from accumulated other comprehensive loss to: Other gains and (losses) (3,783 ) — — (3,783 ) Interest expense 238 — — 238 Total (3,545 ) — — (3,545 ) Net current period other comprehensive loss 12,849 (52,200 ) — (39,351 ) Ending balance $ 25,897 $ (320,915 ) $ — $ (295,018 ) Three Months Ended March 31, 2019 Gains and (Losses) on Derivative Instruments Foreign Currency Translation Adjustments Gains and (Losses) on Investments Total Beginning balance $ 14,102 $ (269,091 ) $ (7 ) $ (254,996 ) Other comprehensive income before reclassifications 5,404 (173 ) 537 5,768 Amounts reclassified from accumulated other comprehensive loss to: Other gains and (losses) (3,522 ) — — (3,522 ) Interest expense 67 — — 67 Total (3,455 ) — — (3,455 ) Net current period other comprehensive income 1,949 (173 ) 537 2,313 Ending balance $ 16,051 $ (269,264 ) $ 530 $ (252,683 ) See Note 9 for additional information on our derivatives activity recognized within Other comprehensive (loss) income for the periods presented. Dividends Declared During the first quarter of 2020 , our Board declared a quarterly dividend of $1.04 per share, which was paid on April 15, 2020 to stockholders of record as of March 31, 2020. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We elected to be treated as a REIT and believe that we have been organized and have operated in such a manner to maintain our qualification as a REIT for federal and state income tax purposes. As a REIT, we are generally not subject to corporate level federal income taxes on earnings distributed to our stockholders. Since inception, we have distributed at least 100% of our taxable income annually and intend to do so for the tax year ending December 31, 2020 . Accordingly, we have not included any provisions for federal income taxes related to the REIT in the accompanying consolidated financial statements for the three months ended March 31, 2020 and 2019 . In light of the COVID-19 outbreak during the first quarter of 2020, we are monitoring domestic and international tax considerations and the potential impact on our consolidated financial statements. The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) (U.S. federal legislation enacted on March 27, 2020 in response to COVID-19) provides that net operating losses incurred in 2018, 2019, or 2020 may be carried back to offset taxable income earned during the five-year period prior to the year in which the net operating loss was incurred. As a result, we recognized a $7.2 million current tax benefit during the three months ended March 31, 2020 by carrying back certain net operating losses, which is included within current tax benefit described below. Certain of our subsidiaries have elected TRS status. A TRS may provide certain services considered impermissible for REITs and may hold assets that REITs may not hold directly. We also own real property in jurisdictions outside the United States through foreign subsidiaries and are subject to income taxes on our pre-tax income earned from properties in such countries. The accompanying consolidated financial statements include an interim tax provision for our TRSs and foreign subsidiaries, as necessary, for the three months ended March 31, 2020 and 2019 . Current income tax benefit was $0.2 million and $0.3 million for the three months ended March 31, 2020 and 2019 , respectively. Provision for income taxes for the three months ended March 31, 2019 included a current tax benefit of approximately $6.3 million due to a change in tax position for state and local taxes. Our TRSs and foreign subsidiaries are subject to U.S. federal, state, and foreign income taxes. As such, deferred tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of assets and liabilities at the enacted tax rates expected to be in effect when the temporary differences reverse. A valuation allowance for deferred tax assets is provided if we believe that it is more likely than not that we will not realize the tax benefit of deferred tax assets based on available evidence at the time the determination is made. A change in circumstances may cause us to change our judgment about whether the tax benefit of a deferred tax asset will more likely than not be realized. We generally report any change in the valuation allowance through our income statement in the period in which such changes in circumstances occur. The majority of our deferred tax assets relate to the timing difference between the financial reporting basis and tax basis for stock-based compensation expense. The majority of our deferred tax liabilities relate to differences between the tax basis and financial reporting basis of the assets acquired in acquisitions in which the tax basis of such assets was not stepped up to fair value for income tax purposes. Deferred income tax benefit was $41.5 million and $1.8 million for the three months ended March 31, 2020 and 2019 , respectively. Benefit from income taxes for the three months ended March 31, 2020 included a deferred tax benefit of $37.2 million as a result of the release of a deferred tax liability relating to our investment in shares of a cold storage operator ( Note 8 ), which converted to a REIT during the current year period and is therefore no longer subject to federal income taxes, as well as a deferred tax benefit of $6.5 million as a result of the other-than-temporary impairment charges that we recognized on our equity investments in CWI 1 and CWI 2 during the period ( Note 8 ). |
Property Dispositions
Property Dispositions | 3 Months Ended |
Mar. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Property Dispositions | Property Dispositions We have an active capital recycling program, with a goal of extending the average lease term through reinvestment, improving portfolio credit quality through dispositions and acquisitions of assets, increasing the asset criticality factor in our portfolio, and/or executing strategic dispositions of assets. We may make a decision to dispose of a property when it is vacant as a result of tenants vacating space, tenants electing not to renew their leases, tenant insolvency, or lease rejection in the bankruptcy process. In such cases, we assess whether we can obtain the highest value from the property by selling it, as opposed to re-leasing it. We may also sell a property when we receive an unsolicited offer or negotiate a price for an investment that is consistent with our strategy for that investment. When it is appropriate to do so, we classify the property as an asset held for sale on our consolidated balance sheet. All property dispositions are recorded within our Real Estate segment. 2020 — During the three months ended March 31, 2020 , we sold four properties for total proceeds of $105.2 million , net of selling costs (inclusive of $4.7 million attributable to a noncontrolling interest), and recognized a net gain on these sales totaling $11.8 million (inclusive of $0.6 million attributable to a noncontrolling interest and income taxes totaling less than $0.1 million recognized upon sale). Disposition activity included the sale of one of our two hotel operating properties in January 2020 for total proceeds of $103.5 million , net of selling costs (inclusive of $4.7 million attributable to a noncontrolling interest), which was held for sale as of December 31, 2019 ( Note 4 ). 2019 — During the three months ended March 31, 2019 , we sold one property for proceeds of $4.9 million , net of selling costs, and recognized a net gain on the sale of $0.9 million . |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting We evaluate our results from operations through our two major business segments: Real Estate and Investment Management. The following tables present a summary of comparative results and assets for these business segments (in thousands): Real Estate Three Months Ended March 31, 2020 2019 Revenues Lease revenues $ 282,110 $ 262,939 Lease termination income and other 6,509 3,270 Operating property revenues (a) 5,967 15,996 294,586 282,205 Operating Expenses Depreciation and amortization 115,207 111,413 Impairment charges 19,420 — General and administrative 14,922 15,188 Reimbursable tenant costs 13,175 13,171 Property expenses, excluding reimbursable tenant costs 10,075 9,912 Operating property expenses 5,223 10,594 Stock-based compensation expense 1,970 2,800 Merger and other expenses (132 ) 146 179,860 163,224 Other Income and Expenses Interest expense (52,540 ) (61,313 ) Gain on sale of real estate, net 11,751 933 Other gains and (losses) (5,776 ) 970 Equity in earnings (losses) of equity method investments in real estate 1,565 (78 ) (45,000 ) (59,488 ) Income before income taxes 69,726 59,493 Benefit from (provision for) income taxes 31,800 (6,159 ) Net Income from Real Estate 101,526 53,334 Net (income) loss attributable to noncontrolling interests (612 ) 74 Net Income from Real Estate Attributable to W. P. Carey $ 100,914 $ 53,408 __________ (a) Operating property revenues from our hotels include (i) $2.7 million and $3.4 million for the three months ended March 31, 2020 and 2019 , respectively, generated from a hotel in Bloomington, Minnesota, and (ii) $1.9 million and $2.9 million for the three months ended March 31, 2020 and 2019 , respectively, generated from a hotel in Miami, Florida, which was sold in January 2020 ( Note 14 ). Investment Management Three Months Ended March 31, 2020 2019 Revenues Asset management revenue $ 9,889 $ 9,732 Reimbursable costs from affiliates 4,030 3,868 Structuring and other advisory revenue 494 2,518 14,413 16,118 Operating Expenses General and administrative 5,823 6,097 Reimbursable costs from affiliates 4,030 3,868 Subadvisor fees 1,277 2,202 Depreciation and amortization 987 966 Stock-based compensation expense 691 1,365 Merger and other expenses 319 — 13,127 14,498 Other Income and Expenses Equity in (losses) earnings of equity method investments in the Managed Programs (47,355 ) 5,569 Other gains and (losses) 1,353 (15 ) (46,002 ) 5,554 (Loss) income before income taxes (44,716 ) 7,174 Benefit from income taxes 9,892 8,288 Net (Loss) Income from Investment Management (34,824 ) 15,462 Net income attributable to noncontrolling interests — (376 ) Net (Loss) Income from Investment Management Attributable to W. P. Carey $ (34,824 ) $ 15,086 Total Company Three Months Ended March 31, 2020 2019 Revenues $ 308,999 $ 298,323 Operating expenses 192,987 177,722 Other income and (expenses) (91,002 ) (53,934 ) Benefit from income taxes 41,692 2,129 Net income attributable to noncontrolling interests (612 ) (302 ) Net income attributable to W. P. Carey $ 66,090 $ 68,494 Total Assets at March 31, 2020 December 31, 2019 Real Estate $ 13,686,006 $ 13,811,403 Investment Management 204,302 249,515 Total Company $ 13,890,308 $ 14,060,918 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events COVID-19 The global spread of COVID-19 has created significant uncertainty and economic disruption, both in the near-term and potentially longer-term. The extent to which this pandemic could affect our financial condition, liquidity, and results of operations is difficult to predict and depends on evolving factors, including: duration, scope, government actions, and other social responses. We are closely monitoring the impact of COVID-19 on all aspects of our business, including the safety and health of our employees, our portfolio, and tenant credit health (including our tenants’ ability to pay rent), as well as our liquidity, capital allocation, and balance sheet management. We continue to actively engage in discussions with our tenants regarding the impact of COVID-19 on their business operations, liquidity, prospects, and financial position. The extent to which the COVID-19 pandemic impacts our operations and those of our tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity, and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others. CWI 1 and CWI 2 Merger On October 22, 2019, CWI 1 and CWI 2 announced that they had entered into a definitive merger agreement under which the two companies intended to merge in an all-stock transaction, with CWI 2 as the surviving entity. The CWI 1 and CWI 2 Merger was approved by the stockholders of CWI 1 and CWI 2 on April 8, 2020 and closed on April 13, 2020. Subsequently, CWI 2 was renamed Watermark Lodging Trust, Inc. (“WLT”). In connection with the CWI 1 and CWI 2 Merger, we entered into an internalization agreement and a transition services agreement, which were filed by us as exhibits to a Form 8-K filed with the SEC on October 22, 2019. Immediately following the closing of the CWI 1 and CWI 2 Merger: (i) the advisory agreements with each of CWI 1 and CWI 2 and each of their respective operating partnerships terminated; (ii) pursuant to the internalization agreement, the operating partnerships of each of CWI 1 and CWI 2 redeemed the special general partnership interests that we previously held, for which we received 1,300,000 shares of CWI 2 preferred stock with a liquidation preference of $50.00 per share and 2,840,549 shares in CWI 2 common stock (as of the date of this Report, we have not completed the determination of the fair value of consideration received in connection with the CWI 1 and CWI 2 Merger); (iii) pursuant to the internalization agreement, two of our representatives were appointed to the board of directors of WLT, however both representatives resigned from the board of directors of WLT on April 29, 2020; and (iv) we provide certain transition services at cost to Watermark Lodging Trust, Inc. for, what is currently expected to be, a period of approximately 12 months from closing, pursuant to the transition services agreement. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Our interim consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not necessarily include all information and footnotes necessary for a fair statement of our consolidated financial position, results of operations, and cash flows in accordance with generally accepted accounting principles in the United States (“GAAP”). |
Basis of Consolidation | Basis of Consolidation Our consolidated financial statements reflect all of our accounts, including those of our controlled subsidiaries. The portions of equity in consolidated subsidiaries that are not attributable, directly or indirectly, to us are presented as noncontrolling interests. All significant intercompany accounts and transactions have been eliminated. |
Variable Interest Entity | When we obtain an economic interest in an entity, we evaluate the entity to determine if it should be deemed a VIE and, if so, whether we are the primary beneficiary and are therefore required to consolidate the entity. There have been no significant changes in our VIE policies from what was disclosed in the 2019 Annual Report. During the three months ended March 31, 2020 , we had a net decrease of four entities considered to be consolidated VIEs, primarily related to disposition activity and certain lease amendments. At March 31, 2020 and December 31, 2019 , we considered 14 and 18 entities to be VIEs, respectively, of which we consolidated seven and 11 , respectively, as we are considered the primary beneficiary. The following table presents a summary of selected financial data of the consolidated VIEs included in our consolidated balance sheets (in thousands): March 31, 2020 December 31, 2019 Land, buildings and improvements $ 458,092 $ 493,714 Net investments in direct financing leases 15,508 15,584 In-place lease intangible assets and other 48,054 56,915 Above-market rent intangible assets 32,177 34,576 Accumulated depreciation and amortization (141,408 ) (151,017 ) Assets held for sale, net — 104,010 Total assets 425,426 596,168 Non-recourse mortgages, net $ 24,353 $ 32,622 Total liabilities 70,590 98,671 At both March 31, 2020 and December 31, 2019 , our seven unconsolidated VIEs included our interests in five unconsolidated real estate investments, which we account for under the equity method of accounting, and two unconsolidated entities, which we accounted for at fair value. We do not consolidate these entities because we are not the primary beneficiary and the nature of our involvement in the activities of these entities allows us to exercise significant influence on, but does not give us power over, decisions that significantly affect the economic performance of these entities. As of March 31, 2020 and December 31, 2019 , the net carrying amount of our investments in these entities was $293.9 million and $298.3 million , respectively, and our maximum exposure to loss in these entities was limited to our investments. |
Lease Revenue | Lease revenue (including straight-line lease revenue) is only recognized when deemed probable of collection. Collectibility is assessed for each tenant receivable using various criteria including credit ratings ( Note 5 ), guarantees, past collection issues, and the current economic and business environment affecting the tenant. If collectibility of the contractual rent stream is not deemed probable, revenue will only be recognized upon receipt of cash from the tenant. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Pronouncements Adopted as of March 31, 2020 In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments — Credit Losses . ASU 2016-13 replaces the “incurred loss” model with an “expected loss” model, resulting in the earlier recognition of credit losses even if the risk of loss is remote. This standard applies to financial assets measured at amortized cost and certain other instruments, including loans receivable and net investments in direct financing leases. This standard does not apply to receivables arising from operating leases, which are within the scope of Topic 842 . We adopted ASU 2016-13 on January 1, 2020 using the modified retrospective method, which requires applying changes in loss reserves through a cumulative-effect adjustment to retained earnings. Upon adoption, we recorded a net decrease in retained earnings of $14.8 million , which is reflected within our consolidated statement of equity. The allowance for credit losses, which is recorded as a reduction to Net investments in direct financing leases on our consolidated balance sheets, was measured on a pool basis by credit ratings ( Note 5 ), using a probability of default method based on the lessees’ respective credit ratings, the expected value of the underlying collateral upon its repossession, and our historical loss experience related to other direct financing leases. Included in our model are factors that incorporate forward-looking information. Allowance for credit losses is included in our consolidated statements of income within Other gains and (losses). In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting |
Intangible Assets and Liabilities and Goodwill | We have recorded net lease, internal-use software development, and trade name intangibles that are being amortized over periods ranging from two years to 48 years . In-place lease intangibles, at cost are included in In-place lease intangible assets and other in the consolidated financial statements. Above-market rent intangibles, at cost are included in Above-market rent intangible assets in the consolidated financial statements. Accumulated amortization of in-place lease and above-market rent intangibles is included in Accumulated depreciation and amortization in the consolidated financial statements. Internal-use software development and trade name intangibles are included in Other assets, net in the consolidated financial statements. Below-market rent and below-market purchase option intangibles are included in Below-market rent and other intangible liabilities, net in the consolidated financial statements. |
Fair Value Measurement | The fair value of an asset is defined as the exit price, which is the amount that would either be received when an asset is sold or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance establishes a three-tier fair value hierarchy based on the inputs used in measuring fair value. These tiers are: Level 1, for which quoted market prices for identical instruments are available in active markets, such as money market funds, equity securities, and U.S. Treasury securities; Level 2, for which there are inputs other than quoted prices included within Level 1 that are observable for the instrument, such as certain derivative instruments including interest rate caps, interest rate swaps, foreign currency forward contracts, and foreign currency collars; and Level 3, for securities that do not fall into Level 1 or Level 2 and for which little or no market data exists, therefore requiring us to develop our own assumptions. |
Earnings Per Share | Under current authoritative guidance for determining earnings per share, all nonvested share-based payment awards that contain non-forfeitable rights to dividends are considered to be participating securities and therefore are included in the computation of earnings per share under the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common shares and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. During the prior year period, certain of our nonvested RSUs contained rights to receive non-forfeitable dividend equivalents or dividends, respectively, and therefore we apply the two-class method of computing earnings per share. The calculation of earnings per share below excludes the income attributable to the nonvested participating RSUs from the numerator and such nonvested shares in the denominator |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Variable Interest Entities | The following table presents a summary of selected financial data of the consolidated VIEs included in our consolidated balance sheets (in thousands): March 31, 2020 December 31, 2019 Land, buildings and improvements $ 458,092 $ 493,714 Net investments in direct financing leases 15,508 15,584 In-place lease intangible assets and other 48,054 56,915 Above-market rent intangible assets 32,177 34,576 Accumulated depreciation and amortization (141,408 ) (151,017 ) Assets held for sale, net — 104,010 Total assets 425,426 596,168 Non-recourse mortgages, net $ 24,353 $ 32,622 Total liabilities 70,590 98,671 |
Reconciliation of Cash and Cash Equivalents | The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets to the consolidated statements of cash flows (in thousands): March 31, 2020 December 31, 2019 Cash and cash equivalents $ 220,929 $ 196,028 Restricted cash (a) 63,361 55,490 Total cash and cash equivalents and restricted cash $ 284,290 $ 251,518 __________ (a) Restricted cash is included within Other assets, net on our consolidated balance sheets. |
Reconciliation of Restrictions on Cash and Cash Equivalents | The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets to the consolidated statements of cash flows (in thousands): March 31, 2020 December 31, 2019 Cash and cash equivalents $ 220,929 $ 196,028 Restricted cash (a) 63,361 55,490 Total cash and cash equivalents and restricted cash $ 284,290 $ 251,518 __________ (a) Restricted cash is included within Other assets, net on our consolidated balance sheets. |
Agreements and Transactions w_2
Agreements and Transactions with Related Parties (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The following tables present a summary of revenue earned and distributions of Available Cash received from the Managed Programs for the periods indicated, included in the consolidated financial statements (in thousands): Three Months Ended March 31, 2020 2019 Asset management revenue (a) $ 9,889 $ 9,732 Reimbursable costs from affiliates (a) 4,030 3,868 Distributions of Available Cash (b) 1,916 5,685 Structuring and other advisory revenue (a) 494 2,518 Interest income on deferred acquisition fees and loans to affiliates (c) 278 520 $ 16,607 $ 22,323 Three Months Ended March 31, 2020 2019 CPA:18 – Global $ 5,912 $ 7,961 CWI 1 5,040 7,501 CWI 2 4,200 5,746 CESH 1,455 1,115 $ 16,607 $ 22,323 __________ (a) Amounts represent revenues from contracts under ASC 606. (b) Included within Equity in earnings of equity method investments in the Managed Programs and real estate in the consolidated statements of income. (c) Included within Other gains and (losses) in the consolidated statements of income. |
Schedule of Balances Due to and From Related Party | The following table presents a summary of amounts included in Due from affiliates in the consolidated financial statements (in thousands): March 31, 2020 December 31, 2019 Short-term loans to affiliates, including accrued interest $ 30,760 $ 47,721 Deferred acquisition fees receivable, including accrued interest 3,000 4,450 Reimbursable costs 2,759 3,129 Asset management fees receivable 1,388 1,267 Accounts receivable 908 1,118 Current acquisition fees receivable 236 131 $ 39,051 $ 57,816 |
Schedule of Related Party Fees | The Managed Programs reimburse us for certain personnel and overhead costs that we incur on their behalf, a summary of which is presented in the table below: Managed Program Payable Description CPA:18 – Global In cash Personnel and overhead costs, excluding those related to our legal transactions group, our senior management, and our investments team, are charged to CPA:18 – Global based on the average of the trailing 12-month aggregate reported revenues of the Managed Programs and us, and personnel costs are capped at 1.0% of CPA:18 – Global’s pro rata lease revenues for both 2020 and 2019; for the legal transactions group, costs are charged according to a fee schedule CWI REITs (a) In cash Actual expenses incurred, excluding those related to our senior management; allocated between the CWI REITs based on the percentage of their total pro rata hotel revenues for the most recently completed quarter CESH In cash Actual expenses incurred __________ (a) Advisory agreements terminated on April 13, 2020. Managed Program Rate Payable Description CPA:18 – Global 0.5% – 1.5% In shares of its Class A common stock and/or cash, at the option of CPA:18 – Global; payable 50% in cash and 50% in shares of its Class A common stock for 2020 and 2019 Rate depends on the type of investment and is based on the average market or average equity value, as applicable CWI 1 (a) 0.5% In shares of its common stock and/or cash, at our election; payable in shares of its common stock for 2020 and 2019 Rate was based on the average market value of the investment; we were required to pay 20% of the asset management revenue we received to the subadvisor CWI 2 (a) 0.55% In shares of its Class A common stock and/or cash, at our election; payable in shares of its Class A common stock for 2020 and 2019 Rate was based on the average market value of the investment; we were required to pay 25% of the asset management revenue we received to the subadvisor CESH 1.0% In cash Based on gross assets at fair value __________ (a) Advisory agreement terminated on April 13, 2020. Managed Program Rate Payable Description CPA:18 – Global 4.5% In cash; for all investments, other than readily marketable real estate securities for which we will not receive any acquisition fees, 2.5% upon completion, with 2% deferred and payable in three interest-bearing annual installments Based on the total aggregate cost of the investments or commitments made CWI REITs (a) 1% – 2.5% In cash upon completion; loan refinancing transactions up to 1% of the principal amount; 2.5% of the total investment cost of the properties acquired Based on the total aggregate cost of the lodging investments or commitments made; we were required to pay 20% and 25% to the subadvisors of CWI 1 and CWI 2, respectively CESH 2.0% In cash upon acquisition Based on the total aggregate cost of investments or commitments made, including the acquisition, development, construction, or redevelopment of the investments __________ (a) Advisory agreements terminated on April 13, 2020. |
Land, Buildings and Improveme_2
Land, Buildings and Improvements and Assets Held for Sale (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Real Estate [Abstract] | |
Schedule of Land, Building and Improvements | Land and buildings leased to others, which are subject to operating leases, and real estate under construction, are summarized as follows (in thousands): March 31, 2020 December 31, 2019 Land $ 1,868,126 $ 1,875,065 Buildings and improvements 7,960,373 7,828,439 Real estate under construction 107,977 69,604 Less: Accumulated depreciation (1,005,110 ) (950,452 ) $ 8,931,366 $ 8,822,656 March 31, 2020 December 31, 2019 Land $ 10,452 $ 10,452 Buildings and improvements 72,669 72,631 Less: Accumulated depreciation (11,917 ) (11,241 ) $ 71,204 $ 71,842 |
Real Estate Acquired | During the three months ended March 31, 2020 , we entered into the following investments, which were deemed to be real estate asset acquisitions, at a total cost of $204.6 million , including land of $30.7 million , buildings of $145.9 million (including capitalized acquisition-related costs of $8.6 million ), and net lease intangibles of $28.0 million (dollars in thousands): Property Location(s) Number of Properties Date of Acquisition Property Type Total Capitalized Costs Newark, United Kingdom (a) 1 1/6/2020 Warehouse $ 111,546 Aurora, Oregon (b) 1 1/24/2020 Industrial 28,755 Vojens, Denmark (a) (c) 1 1/31/2020 Warehouse 10,611 Kitzingen, Germany (a) 1 3/9/2020 Office 53,666 $ 204,578 __________ (a) Amount reflects the applicable exchange rate on the date of acquisition. (b) Amount includes approximately $5.0 million in contingent consideration that will be released to the tenant/seller upon the tenant securing an easement on the property. (c) We also recorded an estimated deferred tax liability of $0.5 million |
Operating Lease Income | Lease income related to operating leases recognized and included in the consolidated statements of income is as follows (in thousands): Three Months Ended March 31, 2020 2019 Lease income — fixed $ 238,969 $ 215,118 Lease income — variable (a) 23,080 21,263 Total operating lease income (b) $ 262,049 $ 236,381 __________ (a) Includes (i) rent increases based on changes in the CPI and other comparable indices and (ii) reimbursements for property taxes, insurance, and common area maintenance services. (b) Excludes $20.1 million and $26.6 million for the three months ended March 31, 2020 and 2019 , respectively, of interest income from direct financing leases that is included in Lease revenues in the consolidated statements of income. |
Disclosure of Long Lived Assets Held-for-sale | Below is a summary of our properties held for sale (in thousands): March 31, 2020 December 31, 2019 Land, buildings and improvements $ — $ 105,573 Accumulated depreciation and amortization — (1,563 ) Assets held for sale, net $ — $ 104,010 |
Finance Receivables (Tables)
Finance Receivables (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Capital Leases Net Investment In Direct Financing Leases | Net investments in direct financing leases is summarized as follows (in thousands): March 31, 2020 December 31, 2019 Lease payments receivable $ 655,174 $ 686,149 Unguaranteed residual value 798,929 828,206 1,454,103 1,514,355 Less: unearned income (588,847 ) (617,806 ) Less: allowance for credit losses (a) (20,311 ) — $ 844,945 $ 896,549 __________ (a) In accordance with ASU 2016-13 ( Note 2 ), we applied changes in loss reserves through a cumulative-effect adjustment to retained earnings totaling $14.8 million . In addition, during the three months ended March 31, 2020 , we recorded an allowance for credit losses of $5.5 million due to changes in expected economic conditions, which was included within Other gains and (losses) in our consolidated statements of income. |
Finance Receivables Credit Quality Indicators | A summary of our finance receivables by internal credit quality rating, excluding our deferred acquisition fees receivable, is as follows (dollars in thousands): Number of Tenants / Obligors at Carrying Value at Internal Credit Quality Indicator March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019 1 – 3 21 28 $ 652,628 $ 798,108 4 15 8 249,365 146,178 5 — — — — $ 901,993 $ 944,286 |
Goodwill and Other Intangibles
Goodwill and Other Intangibles (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill And Intangible Assets Liabilities Disclosure [Abstract] | |
Schedule of Reconciliation Goodwill | The following table presents a reconciliation of our goodwill (in thousands): Real Estate Investment Management Total Balance at December 31, 2019 $ 871,081 $ 63,607 $ 934,688 Foreign currency translation adjustments (4,801 ) — (4,801 ) Balance at March 31, 2020 $ 866,280 $ 63,607 $ 929,887 |
Schedule Of Intangible Assets And Goodwill | Intangible assets, intangible liabilities, and goodwill are summarized as follows (in thousands): March 31, 2020 December 31, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Finite-Lived Intangible Assets Internal-use software development costs $ 19,632 $ (14,233 ) $ 5,399 $ 19,582 $ (13,491 ) $ 6,091 Trade name 3,975 (2,190 ) 1,785 3,975 (1,991 ) 1,984 23,607 (16,423 ) 7,184 23,557 (15,482 ) 8,075 Lease Intangibles: In-place lease 2,071,324 (714,713 ) 1,356,611 2,072,642 (676,008 ) 1,396,634 Above-market rent 897,965 (412,512 ) 485,453 909,139 (398,294 ) 510,845 2,969,289 (1,127,225 ) 1,842,064 2,981,781 (1,074,302 ) 1,907,479 Indefinite-Lived Goodwill Goodwill 929,887 — 929,887 934,688 — 934,688 Total intangible assets $ 3,922,783 $ (1,143,648 ) $ 2,779,135 $ 3,940,026 $ (1,089,784 ) $ 2,850,242 Finite-Lived Intangible Liabilities Below-market rent $ (266,099 ) $ 80,302 $ (185,797 ) $ (268,515 ) $ 74,484 $ (194,031 ) Indefinite-Lived Intangible Liabilities Below-market purchase option (16,711 ) — (16,711 ) (16,711 ) — (16,711 ) Total intangible liabilities $ (282,810 ) $ 80,302 $ (202,508 ) $ (285,226 ) $ 74,484 $ (210,742 ) |
Equity Investments in the Man_2
Equity Investments in the Managed Programs and Real Estate (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Equity Method Investments | The following table sets forth our ownership interests in our equity investments in real estate, excluding the Managed Programs, and their respective carrying values (dollars in thousands): Carrying Value at Lessee Co-owner Ownership Interest March 31, 2020 December 31, 2019 Johnson Self Storage Third Party 90% $ 70,309 $ 70,690 Kesko Senukai (a) Third Party 70% 45,803 46,475 Bank Pekao (a) CPA:18 – Global 50% 26,107 26,388 BPS Nevada, LLC (b) Third Party 15% 22,904 22,900 State Farm Mutual Automobile Insurance Co. CPA:18 – Global 50% 16,781 17,232 Apply Sørco AS (c) CPA:18 – Global 49% 5,906 8,040 Fortenova Grupa d.d. (formerly Konzum d.d.) (a) CPA:18 – Global 20% 2,918 2,712 $ 190,728 $ 194,437 __________ (a) The carrying value of this investment is affected by fluctuations in the exchange rate of the euro. (b) This investment is reported using the hypothetical liquidation at book value model, which may be different than pro rata ownership percentages, primarily due to the capital structure of the partnership agreement. (c) The carrying value of this investment is affected by fluctuations in the exchange rate of the Norwegian krone. The following table presents Equity in (losses) earnings of equity method investments in the Managed Programs and real estate, which represents our proportionate share of the income or losses of these investments, as well as certain adjustments related to other-than-temporary impairment charges and amortization of basis differences related to purchase accounting adjustments (in thousands): Three Months Ended March 31, 2020 2019 Other-than-temporary impairment charges on our equity method investments in CWI 1 and CWI 2 ( Note 8 ) $ (47,112 ) $ — Distributions of Available Cash ( Note 3 ) 1,916 5,685 Proportionate share of equity in (losses) earnings of equity investments in the Managed Programs (1,715 ) 213 Amortization of basis differences on equity method investments in the Managed Programs (444 ) (329 ) Total equity in (losses) earnings of equity method investments in the Managed Programs (47,355 ) 5,569 Equity in earnings of equity method investments in real estate 1,804 562 Amortization of basis differences on equity method investments in real estate (239 ) (640 ) Total equity in earnings (losses) of equity method investments in real estate 1,565 (78 ) Equity in (losses) earnings of equity method investments in the Managed Programs and real estate $ (45,790 ) $ 5,491 The following table sets forth certain information about our investments in the Managed Programs (dollars in thousands): % of Outstanding Interests Owned at Carrying Amount of Investment at Fund March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019 CPA:18 – Global (a) 3.951 % 3.851 % $ 42,378 $ 42,644 CPA:18 – Global operating partnership 0.034 % 0.034 % 209 209 CWI 1 (a) (b) (c) 4.186 % 3.943 % 21,899 49,032 CWI 1 operating partnership (b) 0.015 % 0.015 % 186 186 CWI 2 (a) (b) (c) 4.035 % 3.755 % 15,497 33,669 CWI 2 operating partnership (b) 0.015 % 0.015 % 300 300 CESH (d) 2.430 % 2.430 % 4,912 3,527 $ 85,381 $ 129,567 __________ (a) During the three months ended March 31, 2020 , we received asset management revenue from the Managed REITs primarily in shares of their common stock, which increased our ownership percentage in each of the Managed REITs ( Note 3 ). (b) The CWI 1 and CWI 2 Merger closed on April 13, 2020, as described in Note 16 . (c) We recognized other-than-temporary impairment charges on these investments during the three months ended March 31, 2020 , as described in Note 8 . (d) Investment is accounted for at fair value. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule Of Other Financial Instruments In Carrying Values And Fair Values | Our other material financial instruments had the following carrying values and fair values as of the dates shown (dollars in thousands): March 31, 2020 December 31, 2019 Level Carrying Value Fair Value Carrying Value Fair Value Senior Unsecured Notes, net (a) (b) (c) 2 $ 4,323,063 $ 4,212,628 $ 4,390,189 $ 4,682,432 Non-recourse mortgages, net (a) (b) (d) 3 1,433,372 1,426,786 1,462,487 1,487,892 __________ (a) The carrying value of Senior Unsecured Notes, net ( Note 10 ) includes unamortized deferred financing costs of $21.6 million and $22.8 million at March 31, 2020 and December 31, 2019 , respectively. The carrying value of Non-recourse mortgages, net includes unamortized deferred financing costs of $0.5 million and $0.6 million at March 31, 2020 and December 31, 2019 , respectively. (b) The carrying value of Senior Unsecured Notes, net includes unamortized discount of $19.3 million and $20.5 million at March 31, 2020 and December 31, 2019 , respectively. The carrying value of Non-recourse mortgages, net includes unamortized discount of $5.6 million and $6.2 million at March 31, 2020 and December 31, 2019 , respectively. (c) We determined the estimated fair value of the Senior Unsecured Notes using observed market prices in an open market with limited trading volume. (d) We determined the estimated fair value of our non-recourse mortgage loans using a discounted cash flow model that estimates the present value of the future loan payments by discounting such payments at current estimated market interest rates. The estimated market interest rates consider interest rate risk and the value of the underlying collateral, which includes quality of the collateral, the credit quality of the tenant/obligor, and the time until maturity. |
Schedule Of Fair Value Impairment Charges Using Unobservable Inputs Nonrecurring Basis | The following table presents information about assets for which we recorded an impairment charge and that were measured at fair value on a non-recurring basis (in thousands): Three Months Ended March 31, 2020 Three Months Ended March 31, 2019 Fair Value Total Impairment Fair Value Total Impairment Impairment Charges Equity investments in the Managed Programs $ 37,396 $ 47,112 $ — $ — Land, buildings and improvements and intangibles 12,148 19,420 — — $ 66,532 $ — |
Risk Management and Use of De_2
Risk Management and Use of Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following table sets forth certain information regarding our derivative instruments (in thousands): Derivatives Designated as Hedging Instruments Balance Sheet Location Derivative Assets Fair Value at Derivative Liabilities Fair Value at March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019 Foreign currency collars Other assets, net $ 30,734 $ 14,460 $ — $ — Foreign currency forward contracts Other assets, net 4,706 9,689 — — Interest rate caps Other assets, net 2 1 — — Interest rate swaps Accounts payable, accrued expenses and other liabilities — — (6,599 ) (4,494 ) Foreign currency collars Accounts payable, accrued expenses and other liabilities — — — (1,587 ) 35,442 24,150 (6,599 ) (6,081 ) Derivatives Not Designated as Hedging Instruments Stock warrants Other assets, net 5,100 5,000 — — Interest rate swap (a) Other assets, net — 8 — — Interest rate swaps (a) Accounts payable, accrued expenses and other liabilities — — (84 ) (93 ) 5,100 5,008 (84 ) (93 ) Total derivatives $ 40,542 $ 29,158 $ (6,683 ) $ (6,174 ) __________ (a) These interest rate swaps do not qualify for hedge accounting; however, they do protect against fluctuations in interest rates related to the underlying variable-rate debt. |
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) | The following tables present the impact of our derivative instruments in the consolidated financial statements (in thousands): Amount of Gain Recognized on Derivatives in Other Comprehensive (Loss) Income (a) Three Months Ended March 31, Derivatives in Cash Flow Hedging Relationships 2020 2019 Foreign currency collars $ 17,816 $ 3,616 Foreign currency forward contracts (2,329 ) 1,119 Interest rate swaps (2,237 ) (1,815 ) Interest rate caps 2 (27 ) Derivatives in Net Investment Hedging Relationships (b) Foreign currency collars 45 — Total $ 13,297 $ 2,893 Amount of Gain on Derivatives Reclassified from Other Comprehensive (Loss) Income Derivatives in Cash Flow Hedging Relationships Location of Gain (Loss) Recognized in Income Three Months Ended March 31, 2020 2019 Foreign currency forward contracts Other gains and (losses) $ 2,799 $ 2,434 Foreign currency collars Other gains and (losses) 984 1,088 Interest rate swaps and caps Interest expense (238 ) (67 ) Total $ 3,545 $ 3,455 __________ (a) Excludes net losses of $0.4 million and $0.9 million recognized on unconsolidated jointly owned investments for the three months ended March 31, 2020 and 2019 , respectively. (b) The changes in fair value of these contracts are reported in the foreign currency translation adjustment section of Other comprehensive (loss) income . |
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | The following table presents the impact of our derivative instruments in the consolidated financial statements (in thousands): Amount of Gain (Loss) on Derivatives Recognized in Income Derivatives Not in Cash Flow Hedging Relationships Location of Gain (Loss) Recognized in Income Three Months Ended March 31, 2020 2019 Foreign currency collars Other gains and (losses) $ 639 $ 41 Foreign currency forward contracts Other gains and (losses) 224 (230 ) Stock warrants Other gains and (losses) 100 — Interest rate swaps Interest expense 15 — Derivatives in Cash Flow Hedging Relationships Interest rate swaps Interest expense 317 (114 ) Foreign currency forward contracts Other gains and (losses) — (132 ) Foreign currency collars Other gains and (losses) — 7 Total $ 1,295 $ (428 ) |
Schedule of Derivative Instruments | The following table presents the foreign currency derivative contracts we had outstanding at March 31, 2020 (currency in thousands): Foreign Currency Derivatives Number of Instruments Notional Fair Value at March 31, 2020 Designated as Cash Flow Hedging Instruments Foreign currency collars 88 295,049 EUR $ 25,692 Foreign currency collars 63 44,000 GBP 4,947 Foreign currency forward contracts 3 12,951 EUR 4,706 Foreign currency collars 3 2,000 NOK 42 Designated as Net Investment Hedging Instruments Foreign currency collar 1 2,500 NOK 53 $ 35,440 The interest rate swaps and caps that our consolidated subsidiaries had outstanding at March 31, 2020 are summarized as follows (currency in thousands): Interest Rate Derivatives Number of Instruments Notional Fair Value at (a) Designated as Cash Flow Hedging Instruments Interest rate swaps 5 75,543 USD $ (5,226 ) Interest rate swaps 2 49,348 EUR (1,373 ) Interest rate cap 1 11,310 EUR 2 Interest rate cap 1 6,394 GBP — Not Designated as Hedging Instruments Interest rate swap (b) 1 4,578 EUR (78 ) Interest rate swap (b) 1 7,658 USD (6 ) $ (6,681 ) __________ (a) Fair value amounts are based on the exchange rate of the euro or British pound sterling at March 31, 2020 , as applicable. (b) These interest rate swaps do not qualify for hedge accounting; however, they do protect against fluctuations in interest rates related to the underlying variable-rate debt. |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Senior Unsecured Credit Facilities | The following table presents a summary of our Senior Unsecured Credit Facility (dollars in thousands): Interest Rate at (a) Maturity Date at March 31, 2020 Principal Outstanding Balance at Senior Unsecured Credit Facility March 31, 2020 December 31, 2019 Unsecured Term Loans: Term Loan — borrowing in British pounds sterling (b) GBP LIBOR + 0.95% 2/20/2025 $ 185,395 $ — Delayed Draw Term Loan — borrowing in euros (c) EURIBOR + 0.95% 2/20/2025 105,726 — 291,121 — Unsecured Revolving Credit Facility: Borrowing in euros (c) EURIBOR + 0.85% 2/20/2025 43,276 131,438 Borrowing in Japanese yen JPY LIBOR + 0.85% 2/20/2025 22,207 22,295 Borrowing in U.S. dollars USD LIBOR + 0.85% 2/20/2025 10,000 — Borrowing in British pounds sterling N/A N/A — 47,534 75,483 201,267 $ 366,604 $ 201,267 __________ (a) The applicable interest rate at March 31, 2020 was based on the credit rating for our Senior Unsecured Notes of BBB/Baa2 . (b) Balance excludes unamortized discount of $1.4 million at March 31, 2020 . (c) EURIBOR means Euro Interbank Offered Rate. |
Schedule of Senior Unsecured Notes | The following table presents a summary of our Senior Unsecured Notes outstanding at March 31, 2020 (currency in millions): Original Issue Discount Effective Interest Rate Principal Outstanding Balance at Senior Unsecured Notes, net (a) Issue Date Principal Amount Price of Par Value Coupon Rate Maturity Date March 31, 2020 December 31, 2019 2.0% Senior Notes due 2023 1/21/2015 € 500.0 99.220 % $ 4.6 2.107 % 2.0 % 1/20/2023 $ 547.8 $ 561.7 4.6% Senior Notes due 2024 3/14/2014 $ 500.0 99.639 % $ 1.8 4.645 % 4.6 % 4/1/2024 500.0 500.0 2.25% Senior Notes due 2024 1/19/2017 € 500.0 99.448 % $ 2.9 2.332 % 2.25 % 7/19/2024 547.8 561.7 4.0% Senior Notes due 2025 1/26/2015 $ 450.0 99.372 % $ 2.8 4.077 % 4.0 % 2/1/2025 450.0 450.0 2.250% Senior Notes due 2026 10/9/2018 € 500.0 99.252 % $ 4.3 2.361 % 2.250 % 4/9/2026 547.8 561.7 4.25% Senior Notes due 2026 9/12/2016 $ 350.0 99.682 % $ 1.1 4.290 % 4.25 % 10/1/2026 350.0 350.0 2.125% Senior Notes due 2027 3/6/2018 € 500.0 99.324 % $ 4.2 2.208 % 2.125 % 4/15/2027 547.8 561.7 1.350% Senior Notes due 2028 9/19/2019 € 500.0 99.266 % $ 4.1 1.442 % 1.350 % 4/15/2028 547.8 561.7 3.850% Senior Notes due 2029 6/14/2019 $ 325.0 98.876 % $ 3.7 3.986 % 3.850 % 7/15/2029 325.0 325.0 $ 4,364.0 $ 4,433.5 __________ (a) Aggregate balance excludes unamortized deferred financing costs totaling $21.6 million and $22.8 million , and unamortized discount totaling $19.3 million and $20.5 million , at March 31, 2020 and December 31, 2019 , respectively. |
Scheduled Debt Principal Payments | Scheduled debt principal payments as of March 31, 2020 are as follows (in thousands): Years Ending December 31, Total (a) 2020 (remainder) $ 142,494 2021 242,810 2022 460,033 2023 882,209 2024 1,169,686 Thereafter through 2031 3,272,903 Total principal payments 6,170,135 Unamortized discount, net (b) (26,344 ) Unamortized deferred financing costs (22,148 ) Total $ 6,121,643 __________ (a) Certain amounts are based on the applicable foreign currency exchange rate at March 31, 2020 . (b) Represents the unamortized discount on the Senior Unsecured Notes of $19.3 million in aggregate, unamortized discount, net, of $5.6 million in aggregate primarily resulting from the assumption of property-level debt in connection with business combinations, and unamortized discount of $1.4 million on the Term Loan. |
Stock-Based Compensation and _2
Stock-Based Compensation and Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Restricted and Conditional Award Activity | Nonvested restricted share awards (“RSAs”), restricted share units (“RSUs”), and performance share units (“PSUs”) at March 31, 2020 and changes during the three months ended March 31, 2020 were as follows: RSA and RSU Awards PSU Awards Shares Weighted-Average Grant Date Fair Value Shares Weighted-Average Nonvested at January 1, 2020 283,977 $ 68.51 331,242 $ 80.90 Granted (a) 123,944 83.26 90,518 104.65 Vested (b) (127,879 ) 65.67 (156,838 ) 80.42 Forfeited (4,430 ) 69.87 (6,432 ) 88.89 Adjustment (c) — — 21,611 91.84 Nonvested at March 31, 2020 (d) 275,612 $ 76.44 280,101 $ 87.90 __________ (a) The grant date fair value of RSAs and RSUs reflect our stock price on the date of grant on a one-for-one basis. The grant date fair value of PSUs was determined utilizing (i) a Monte Carlo simulation model to generate an estimate of our future stock price over the three -year performance period and (ii) future financial performance projections. To estimate the fair value of PSUs granted during the three months ended March 31, 2020 , we used a risk-free interest rate of 1.6% , an expected volatility rate of 15.2% , and assumed a dividend yield of zero . (b) The grant date fair value of shares vested during the three months ended March 31, 2020 was $21.0 million . Employees have the option to take immediate delivery of the shares upon vesting or defer receipt to a future date pursuant to previously made deferral elections. At March 31, 2020 and December 31, 2019 , we had an obligation to issue 995,380 and 893,713 shares, respectively, of our common stock underlying such deferred awards, which is recorded within Total stockholders’ equity as a Deferred compensation obligation of $42.3 million and $37.3 million , respectively. (c) Vesting and payment of the PSUs is conditioned upon certain company and/or market performance goals being met during the relevant three -year performance period. The ultimate number of PSUs to be vested will depend on the extent to which the performance goals are met and can range from zero to three times the original awards. As a result, we recorded adjustments at March 31, 2020 to reflect the number of shares expected to be issued when the PSUs vest. (d) At March 31, 2020 , total unrecognized compensation expense related to these awards was approximately $32.4 million , with an aggregate weighted-average remaining term of 2.2 years . |
Earnings Per Share Reconciliation | The following table summarizes basic and diluted earnings (in thousands, except share amounts): Three Months Ended March 31, 2020 2019 Net income attributable to W. P. Carey $ 66,090 $ 68,494 Net income attributable to nonvested participating RSUs — (19 ) Net income — basic and diluted $ 66,090 $ 68,475 Weighted-average shares outstanding — basic 173,249,236 167,234,121 Effect of dilutive securities 210,817 200,619 Weighted-average shares outstanding — diluted 173,460,053 167,434,740 |
Reclassification Out of Accumulated Other Comprehensive Income | The following tables present a reconciliation of changes in Accumulated other comprehensive loss by component for the periods presented (in thousands): Three Months Ended March 31, 2020 Gains and (Losses) on Derivative Instruments Foreign Currency Translation Adjustments Gains and (Losses) on Investments Total Beginning balance $ 13,048 $ (268,715 ) $ — $ (255,667 ) Other comprehensive loss before reclassifications 16,394 (52,200 ) — (35,806 ) Amounts reclassified from accumulated other comprehensive loss to: Other gains and (losses) (3,783 ) — — (3,783 ) Interest expense 238 — — 238 Total (3,545 ) — — (3,545 ) Net current period other comprehensive loss 12,849 (52,200 ) — (39,351 ) Ending balance $ 25,897 $ (320,915 ) $ — $ (295,018 ) Three Months Ended March 31, 2019 Gains and (Losses) on Derivative Instruments Foreign Currency Translation Adjustments Gains and (Losses) on Investments Total Beginning balance $ 14,102 $ (269,091 ) $ (7 ) $ (254,996 ) Other comprehensive income before reclassifications 5,404 (173 ) 537 5,768 Amounts reclassified from accumulated other comprehensive loss to: Other gains and (losses) (3,522 ) — — (3,522 ) Interest expense 67 — — 67 Total (3,455 ) — — (3,455 ) Net current period other comprehensive income 1,949 (173 ) 537 2,313 Ending balance $ 16,051 $ (269,264 ) $ 530 $ (252,683 ) |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | The following tables present a summary of comparative results and assets for these business segments (in thousands): Real Estate Three Months Ended March 31, 2020 2019 Revenues Lease revenues $ 282,110 $ 262,939 Lease termination income and other 6,509 3,270 Operating property revenues (a) 5,967 15,996 294,586 282,205 Operating Expenses Depreciation and amortization 115,207 111,413 Impairment charges 19,420 — General and administrative 14,922 15,188 Reimbursable tenant costs 13,175 13,171 Property expenses, excluding reimbursable tenant costs 10,075 9,912 Operating property expenses 5,223 10,594 Stock-based compensation expense 1,970 2,800 Merger and other expenses (132 ) 146 179,860 163,224 Other Income and Expenses Interest expense (52,540 ) (61,313 ) Gain on sale of real estate, net 11,751 933 Other gains and (losses) (5,776 ) 970 Equity in earnings (losses) of equity method investments in real estate 1,565 (78 ) (45,000 ) (59,488 ) Income before income taxes 69,726 59,493 Benefit from (provision for) income taxes 31,800 (6,159 ) Net Income from Real Estate 101,526 53,334 Net (income) loss attributable to noncontrolling interests (612 ) 74 Net Income from Real Estate Attributable to W. P. Carey $ 100,914 $ 53,408 __________ (a) Operating property revenues from our hotels include (i) $2.7 million and $3.4 million for the three months ended March 31, 2020 and 2019 , respectively, generated from a hotel in Bloomington, Minnesota, and (ii) $1.9 million and $2.9 million for the three months ended March 31, 2020 and 2019 , respectively, generated from a hotel in Miami, Florida, which was sold in January 2020 ( Note 14 ). Investment Management Three Months Ended March 31, 2020 2019 Revenues Asset management revenue $ 9,889 $ 9,732 Reimbursable costs from affiliates 4,030 3,868 Structuring and other advisory revenue 494 2,518 14,413 16,118 Operating Expenses General and administrative 5,823 6,097 Reimbursable costs from affiliates 4,030 3,868 Subadvisor fees 1,277 2,202 Depreciation and amortization 987 966 Stock-based compensation expense 691 1,365 Merger and other expenses 319 — 13,127 14,498 Other Income and Expenses Equity in (losses) earnings of equity method investments in the Managed Programs (47,355 ) 5,569 Other gains and (losses) 1,353 (15 ) (46,002 ) 5,554 (Loss) income before income taxes (44,716 ) 7,174 Benefit from income taxes 9,892 8,288 Net (Loss) Income from Investment Management (34,824 ) 15,462 Net income attributable to noncontrolling interests — (376 ) Net (Loss) Income from Investment Management Attributable to W. P. Carey $ (34,824 ) $ 15,086 Total Company Three Months Ended March 31, 2020 2019 Revenues $ 308,999 $ 298,323 Operating expenses 192,987 177,722 Other income and (expenses) (91,002 ) (53,934 ) Benefit from income taxes 41,692 2,129 Net income attributable to noncontrolling interests (612 ) (302 ) Net income attributable to W. P. Carey $ 66,090 $ 68,494 |
Reconciliation of Assets from Segment to Consolidated | Total Assets at March 31, 2020 December 31, 2019 Real Estate $ 13,686,006 $ 13,811,403 Investment Management 204,302 249,515 Total Company $ 13,890,308 $ 14,060,918 |
Business and Organization - Nar
Business and Organization - Narratives (Details) ft² in Millions | 3 Months Ended | ||
Mar. 31, 2020ft²propertytenant | Mar. 30, 2020property | Mar. 31, 2019property | |
Real Estate | |||
Additional disclosures | |||
Number of real estate properties (property) | 1,215 | ||
Square footage of real estate properties | ft² | 141.1 | ||
Number of tenants | tenant | 352 | ||
Weighted average lease term | 10 years 8 months 12 days | ||
Occupancy rate | 98.80% | ||
Real Estate | Operating properties | |||
Additional disclosures | |||
Number of real estate properties (property) | 20 | ||
Square footage of real estate properties | ft² | 1.4 | ||
Real Estate | Self-storage | |||
Additional disclosures | |||
Number of real estate properties (property) | 19 | ||
Real Estate | Hotel | |||
Additional disclosures | |||
Number of real estate properties (property) | 1 | 2 | 2 |
Investment Management | Affiliated Entity | CPA:18 – Global | |||
Additional disclosures | |||
Number of real estate properties (property) | 50 | ||
Square footage of real estate properties | ft² | 10.1 | ||
Number of tenants | tenant | 65 | ||
Occupancy rate | 99.30% | ||
Investment Management | Affiliated Entity | Managed Programs | |||
Additional disclosures | |||
Number of real estate properties (property) | 104 | ||
Square footage of real estate properties | ft² | 14.9 | ||
Investment Management | Affiliated Entity | Managed Programs | Built-to-suit | |||
Additional disclosures | |||
Number of real estate properties (property) | 16 |
Basis of Presentation - Narrati
Basis of Presentation - Narratives (Details) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2020USD ($)vie | Mar. 31, 2019USD ($) | Jan. 01, 2020USD ($) | Dec. 31, 2019USD ($)vie | |
Basis of Consolidation | ||||
Decrease in variable interest entity, count | vie | 4 | |||
Variable interest entities, count | vie | 14 | 18 | ||
Variable interest entities consolidated, count | vie | 7 | 11 | ||
Variable interest entities unconsolidated, count | vie | 7 | 7 | ||
Equity investments in real estate | $ 276,109 | $ 324,004 | ||
Distributions in excess of accumulated earnings | 1,688,744 | 1,557,374 | ||
Cumulative effect of Adoption | ||||
Basis of Consolidation | ||||
Distributions in excess of accumulated earnings | $ 14,800 | |||
Real Estate | ||||
Basis of Consolidation | ||||
Gross contract revenue | 5,967 | $ 15,996 | ||
Real Estate | Hotel | ||||
Basis of Consolidation | ||||
Gross contract revenue | 4,600 | $ 6,300 | ||
Variable Interest Entity | ||||
Basis of Consolidation | ||||
Equity investments in real estate | $ 293,900 | $ 298,300 | ||
Managed Programs | ||||
Basis of Consolidation | ||||
Variable interest entities unconsolidated, count | vie | 2 | 2 | ||
Real Estate | ||||
Basis of Consolidation | ||||
Variable interest entities unconsolidated, count | vie | 5 | 5 | ||
Equity investments in real estate | $ 190,728 | $ 194,437 |
Basis of Presentation - Variabl
Basis of Presentation - Variable Interest Entity Disclosure (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | |
Assets | |||
Land, buildings and improvements | $ 10,019,597 | $ 9,856,191 | |
Net investments in direct financing leases | 844,945 | 896,549 | |
In-place lease intangible assets and other | 2,182,896 | 2,186,851 | |
Above-market rent intangible assets | 897,965 | 909,139 | |
Accumulated depreciation and amortization | (2,144,252) | (2,035,995) | |
Assets held for sale, net | 0 | 104,010 | |
Total assets | [1] | 13,890,308 | 14,060,918 |
Liabilities | |||
Non-recourse mortgages, net | 1,433,372 | 1,462,487 | |
Total liabilities | [1] | 7,117,232 | 7,112,745 |
Variable Interest Entity | |||
Assets | |||
Land, buildings and improvements | 458,092 | 493,714 | |
Net investments in direct financing leases | 15,508 | 15,584 | |
In-place lease intangible assets and other | 48,054 | 56,915 | |
Above-market rent intangible assets | 32,177 | 34,576 | |
Accumulated depreciation and amortization | (141,408) | (151,017) | |
Assets held for sale, net | 0 | 104,010 | |
Total assets | 425,426 | 596,168 | |
Liabilities | |||
Non-recourse mortgages, net | 24,353 | 32,622 | |
Total liabilities | $ 70,590 | $ 98,671 | |
[1] | See Note 2 for details related to variable interest entities (“VIEs”). |
Basis of Presentation - Cash an
Basis of Presentation - Cash and Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 220,929 | $ 196,028 | ||
Restricted cash | 63,361 | 55,490 | ||
Total cash and cash equivalents and restricted cash | $ 284,290 | $ 251,518 | $ 305,679 | $ 424,063 |
Agreements and Transactions w_3
Agreements and Transactions with Related Parties - Narratives (Details) | 1 Months Ended | 3 Months Ended | |||
Apr. 30, 2020USD ($) | Mar. 31, 2020USD ($)investment | Mar. 31, 2019USD ($) | Feb. 20, 2020USD ($) | Dec. 31, 2019USD ($) | |
Distributions Of Available Cash and Deferred Revenue Earned | |||||
Percentage of Available Cash distribution to advisor | 10.00% | ||||
Accrued interest | $ 100,000 | $ 1,500,000 | |||
Maximum borrowing capacity | 2,750,000,000 | $ 2,100,000,000 | 2,350,000,000 | ||
Proceeds from repayment of short-term loans to affiliates | $ 20,973,000 | $ 0 | |||
Other Transactions with Affiliates | |||||
Jointly owned investments | investment | 8 | ||||
Jointly owned investments, consolidated | investment | 1 | ||||
Jointly owned investment, accounted for under the equity method investments | investment | 7 | ||||
Affiliated Entity | CWI 1 | |||||
Distributions Of Available Cash and Deferred Revenue Earned | |||||
Percentage of Available Cash distribution to advisor | 20.00% | ||||
Affiliated Entity | CWI 2 | |||||
Distributions Of Available Cash and Deferred Revenue Earned | |||||
Percentage of Available Cash distribution to advisor | 25.00% | ||||
Affiliated Entity | Managed Programs | LIBOR | |||||
Distributions Of Available Cash and Deferred Revenue Earned | |||||
Variable interest rate (percentage) | 0.85% | ||||
Affiliated Entity | CESH | |||||
Distributions Of Available Cash and Deferred Revenue Earned | |||||
Loans receivable, related party | $ 30,700,000 | $ 46,300,000 | |||
Maximum borrowing capacity | $ 65,000,000 | ||||
Contract sales price of investment | Affiliated Entity | CESH | |||||
Related Party Transaction | |||||
Percentage of acquisition fees earned (structuring revenue percentage) | 2.00% | ||||
Maximum | Contract sales price of investment | Affiliated Entity | Managed Reits | |||||
Related Party Transaction | |||||
Percentage of acquisition fees earned (structuring revenue percentage) | 6.00% | ||||
Subsequent Events | Affiliated Entity | CESH | |||||
Distributions Of Available Cash and Deferred Revenue Earned | |||||
Proceeds from repayment of short-term loans to affiliates | $ 16,300,000 |
Agreements and Transactions w_4
Agreements and Transactions with Related Parties - Related Party Income (Details) - Affiliated Entity - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Related Party Transaction | ||
Distributions of Available Cash | $ 1,916 | $ 5,685 |
Interest income on deferred acquisition fees and loans to affiliates | 278 | 520 |
Revenue from related parties | 16,607 | 22,323 |
Asset management revenue | ||
Related Party Transaction | ||
Gross contract revenue | 9,889 | 9,732 |
Reimbursable costs from affiliates | ||
Related Party Transaction | ||
Gross contract revenue | 4,030 | 3,868 |
Structuring and other advisory revenue | ||
Related Party Transaction | ||
Gross contract revenue | $ 494 | $ 2,518 |
Agreements and Transactions w_5
Agreements and Transactions with Related Parties - Related Party Income, by Program (Details) - Affiliated Entity - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Related Party Transaction | ||
Revenue from related parties | $ 16,607 | $ 22,323 |
CPA:18 – Global | ||
Related Party Transaction | ||
Revenue from related parties | 5,912 | 7,961 |
CWI 1 | ||
Related Party Transaction | ||
Revenue from related parties | 5,040 | 7,501 |
CWI 2 | ||
Related Party Transaction | ||
Revenue from related parties | 4,200 | 5,746 |
CESH | ||
Related Party Transaction | ||
Revenue from related parties | $ 1,455 | $ 1,115 |
Agreements and Transactions w_6
Agreements and Transactions with Related Parties - Due from Affiliates (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Due from affiliates | ||
Short-term loans to affiliates, including accrued interest | $ 30,760 | $ 47,721 |
Deferred acquisition fees receivable, including accrued interest | 3,000 | 4,450 |
Reimbursable costs | 2,759 | 3,129 |
Asset management fees receivable | 1,388 | 1,267 |
Accounts receivable | 908 | 1,118 |
Current acquisition fees receivable | 236 | 131 |
Due from affiliates | $ 39,051 | $ 57,816 |
Agreements and Transactions w_7
Agreements and Transactions with Related Parties - Asset Management, Structuring and Other Revenue (Details) - Affiliated Entity | 3 Months Ended |
Mar. 31, 2020 | |
CPA:18 – Global | Long-term net lease | |
Structuring revenue | |
Percentage of acquisition fees earned (structuring revenue percentage) | 4.50% |
CPA:18 – Global | Upon Completion | Long-term net lease | |
Structuring revenue | |
Percentage of acquisition fees earned (structuring revenue percentage) | 2.50% |
CPA:18 – Global | Deferred | Long-term net lease | |
Structuring revenue | |
Percentage of acquisition fees earned (structuring revenue percentage) | 2.00% |
CPA:18 – Global | Average equity value | |
Related Party Transaction | |
Percentage of asset management fees paid in cash (percentage) | 50.00% |
CPA:18 – Global | Average equity value | Class A | |
Related Party Transaction | |
Percentage of asset management fees paid in shares (percentage) | 50.00% |
CPA:18 – Global | Average equity value | Minimum | Class A | |
Related Party Transaction | |
Asset management fees earned (percentage) | 0.50% |
CPA:18 – Global | Average equity value | Maximum | Class A | |
Related Party Transaction | |
Asset management fees earned (percentage) | 1.50% |
CWI 1 | Lodging-related investments | |
Related Party Transaction | |
Asset management fees earned (percentage) | 0.50% |
CWI 1 | Average market value of investment | |
Related Party Transaction | |
Fees earned by advisor paid to subadvisor (percentage) | 20.00% |
CWI 2 | Lodging-related investments | |
Related Party Transaction | |
Asset management fees earned (percentage) | 0.55% |
CWI 2 | Average market value of investment | |
Related Party Transaction | |
Fees earned by advisor paid to subadvisor (percentage) | 25.00% |
CESH | Gross assets fair value | |
Related Party Transaction | |
Asset management fees earned (percentage) | 1.00% |
CESH | Contract sales price of investment | |
Structuring revenue | |
Percentage of acquisition fees earned (structuring revenue percentage) | 2.00% |
CWI REITs | |
Structuring revenue | |
Loan refinancing fee (percentage) | 1.00% |
CWI REITs | Lodging-related investments | Minimum | |
Structuring revenue | |
Percentage of acquisition fees earned (structuring revenue percentage) | 1.00% |
CWI REITs | Lodging-related investments | Maximum | |
Structuring revenue | |
Percentage of acquisition fees earned (structuring revenue percentage) | 2.50% |
Agreements and Transactions w_8
Agreements and Transactions with Related Parties - Personnel, Overhead Costs, Organization and Offering (Details) | Mar. 31, 2020 | Dec. 31, 2019 |
Affiliated Entity | CPA:18 – Global | Maximum | ||
Reimbursed Costs | ||
Personnel and overhead reimbursement (percentage) | 1.00% | 1.00% |
Land, Buildings and Improveme_3
Land, Buildings and Improvements and Assets Held for Sale - Narratives (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Jan. 31, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($)property$ / € | Mar. 31, 2019USD ($)property | Dec. 31, 2019USD ($)property$ / € | Mar. 30, 2020property | |
Real Estate Properties | ||||||
Decrease in value of balance sheet item due to foreign currency translation | $ 52,200 | $ 173 | ||||
Direct financing lease, net investments reclassified | (844,945) | $ (896,549) | ||||
Investments in real estate | ||||||
Purchases of real estate | 197,626 | 164,929 | ||||
Capitalized construction cost | $ 91,500 | |||||
Number of construction projects | property | 4 | 3 | ||||
Unfunded commitment | $ 201,300 | $ 227,800 | ||||
Interest income from direct financing leases | 20,100 | 26,600 | ||||
Assets held for sale, net | $ 0 | $ 104,010 | ||||
Real Estate | ||||||
Real Estate Properties | ||||||
Number of real estate properties (property) | property | 1,215 | |||||
Investments in real estate | ||||||
Gross contract revenue | $ 5,967 | 15,996 | ||||
Real Estate | Lease revenue | ||||||
Investments in real estate | ||||||
Gross contract revenue | 4,400 | 13,200 | ||||
Real Estate | Food, bevarge and other | ||||||
Investments in real estate | ||||||
Gross contract revenue | $ 1,600 | $ 2,800 | ||||
Properties disposed of by sale | ||||||
Investments in real estate | ||||||
Number of properties sold | property | 4 | 1 | ||||
Asset held for sale, not in discontinued operations | ||||||
Real Estate Properties | ||||||
Number of real estate properties (property) | property | 1 | |||||
Investments in real estate | ||||||
Assets held for sale, net | $ 104,000 | |||||
In-place lease | ||||||
Investments in real estate | ||||||
Purchases of real estate | $ 26,500 | |||||
Finite lived intangible assets useful life | 18 years 3 months 18 days | |||||
Above-market rent | ||||||
Investments in real estate | ||||||
Purchases of real estate | $ 1,500 | |||||
Finite lived intangible assets useful life | 13 years 6 months | |||||
Net investments in direct financing lease | ||||||
Investments in real estate | ||||||
Number of properties sold | property | 1 | |||||
Land | ||||||
Investments in real estate | ||||||
Purchases of real estate | $ 30,700 | |||||
Building | ||||||
Investments in real estate | ||||||
Purchases of real estate | 145,900 | |||||
Net Lease Intangible | ||||||
Investments in real estate | ||||||
Purchases of real estate | 28,000 | |||||
Construction in progress | Facility in Westborough, MA | ||||||
Investments in real estate | ||||||
Construction in progress placed into service | $ 53,100 | |||||
Construction in progress | Facility in Azambuja, Portugal | ||||||
Investments in real estate | ||||||
Funding commitment | 26,200 | |||||
Land, buildings and improvements | ||||||
Investments in real estate | ||||||
Assets held for sale, net | $ 0 | $ 105,573 | ||||
Land, buildings and improvements | Properties disposed of by sale | ||||||
Investments in real estate | ||||||
Number of properties sold | property | 3 | |||||
Decrease in carrying value of real estate | $ 2,100 | |||||
Operating Lease | ||||||
Real Estate Properties | ||||||
Decrease in value of balance sheet item due to foreign currency translation | 107,100 | |||||
Depreciation | 65,900 | $ 55,100 | ||||
Investments in real estate | ||||||
Purchases of real estate | 204,578 | |||||
Acquisition related costs | 8,600 | |||||
Operating Properties | ||||||
Real Estate Properties | ||||||
Depreciation | $ 700 | $ 2,800 | ||||
Hotel | Real Estate | ||||||
Real Estate Properties | ||||||
Number of real estate properties (property) | property | 1 | 2 | 2 | |||
Self-storage | Operating Properties | ||||||
Real Estate Properties | ||||||
Number of real estate properties (property) | property | 10 | 37 | 10 | |||
Hotel | Operating Properties | ||||||
Real Estate Properties | ||||||
Number of real estate properties (property) | property | 1 | 1 | ||||
Reclassification | ||||||
Real Estate Properties | ||||||
Direct financing lease, net investments reclassified | $ 17,500 | |||||
Reclassification | Net investments in direct financing lease | ||||||
Real Estate Properties | ||||||
Number of real estate properties (property) | property | 36 | |||||
Forecast | Operating Lease | Warehouse And Distribution Facility In Knoxville, TN | ||||||
Investments in real estate | ||||||
Purchases of real estate | $ 68,000 | |||||
EUR | ||||||
Real Estate Properties | ||||||
Decrease in exchange rate | 2.50% | |||||
Foreign currency exchange rate | $ / € | 1.0956 | 1.1234 |
Land, Buildings and Improveme_4
Land, Buildings and Improvements and Assets Held for Sale - Property Plant and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Real Estate Investment Property At Cost | ||
Less: Accumulated depreciation | $ (2,144,252) | $ (2,035,995) |
Investments in real estate | 13,945,403 | 13,848,730 |
Operating Properties | ||
Real Estate Investment Property At Cost | ||
Land | 10,452 | 10,452 |
Buildings and improvements | 72,669 | 72,631 |
Less: Accumulated depreciation | (11,917) | (11,241) |
Investments in real estate | 71,204 | 71,842 |
Assets Leased to Others | ||
Real Estate Investment Property At Cost | ||
Land | 1,868,126 | 1,875,065 |
Buildings and improvements | 7,960,373 | 7,828,439 |
Real estate under construction | 107,977 | 69,604 |
Less: Accumulated depreciation | (1,005,110) | (950,452) |
Investments in real estate | $ 8,931,366 | $ 8,822,656 |
Land, Buildings and Improveme_5
Land, Buildings and Improvements and Assets Held for Sale - Acquisition of Real Estate (Details) $ in Thousands | Mar. 09, 2020USD ($)property | Jan. 31, 2020USD ($)property | Jan. 24, 2020USD ($)property | Jan. 06, 2020USD ($)property | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) |
Property, Plant and Equipment | ||||||
Purchases of real estate | $ 197,626 | $ 164,929 | ||||
Operating Lease | ||||||
Property, Plant and Equipment | ||||||
Purchases of real estate | $ 204,578 | |||||
Operating Lease | Newark-on-Trent, United Kingdom | ||||||
Property, Plant and Equipment | ||||||
Purchases of real estate | $ 111,546 | |||||
Number of real estate properties (property) | property | 1 | |||||
Operating Lease | Aurora, Oregon | ||||||
Property, Plant and Equipment | ||||||
Purchases of real estate | $ 28,755 | |||||
Number of real estate properties (property) | property | 1 | |||||
Contingent cosideration | $ 5,000 | |||||
Operating Lease | Vojens, Denmark | ||||||
Property, Plant and Equipment | ||||||
Purchases of real estate | $ 10,611 | |||||
Number of real estate properties (property) | property | 1 | |||||
Deferred tax liability assumed in real estate acquisitions | $ 500 | |||||
Operating Lease | Kitzingen, Germany | ||||||
Property, Plant and Equipment | ||||||
Purchases of real estate | $ 53,666 | |||||
Number of real estate properties (property) | property | 1 |
Land, Buildings and Improveme_6
Land, Buildings and Improvements and Assets Held for Sale - Operating Lease Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating Lease, Lease Income [Abstract] | ||
Lease income — fixed | $ 238,969 | $ 215,118 |
Lease income – variable | 23,080 | 21,263 |
Total operating lease income | $ 262,049 | $ 236,381 |
Land, Buildings and Improveme_7
Land, Buildings and Improvements and Assets Held for Sale - Summary of Assets Held for Sale (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Real Estate Properties | ||
Assets held for sale, net | $ 0 | $ 104,010 |
Land, buildings and improvements | ||
Real Estate Properties | ||
Assets held for sale, net | 0 | 105,573 |
Accumulated depreciation and amortization | ||
Real Estate Properties | ||
Assets held for sale, net | $ 0 | $ 1,563 |
Finance Receivables - Net Inves
Finance Receivables - Net Investments in Direct Financing Lease (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Lease payments receivable | $ 655,174 | $ 686,149 |
Unguaranteed residual value | 798,929 | 828,206 |
Net investment in finance leases, excluding unearned income | 1,454,103 | 1,514,355 |
Less: unearned income | (588,847) | (617,806) |
Less: allowance for credit losses | (20,311) | 0 |
Net receivables (difference between undiscounted cash flows and discounted cash flows) | $ 844,945 | $ 896,549 |
Finance Receivables - Narrative
Finance Receivables - Narratives (Details) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2020USD ($)property | Mar. 31, 2019USD ($) | Jan. 01, 2020USD ($) | Dec. 31, 2019USD ($)loan | |
Finance Receivables | ||||
Distributions in excess of accumulated earnings | $ 1,688,744 | $ 1,557,374 | ||
Allowance for credit losses | 5,499 | $ 0 | ||
Interest income from direct financing leases | 20,100 | 26,600 | ||
Direct financing lease, net investments reclassified | (844,945) | $ (896,549) | ||
Decrease in value of balance sheet item due to foreign currency translation | 52,200 | 173 | ||
Number of loans receivable (loans) | loan | 2 | |||
Loans receivable | 36,700 | $ 47,700 | ||
Proceeds from repayment of loans receivable | 11,000 | 161 | ||
Interest income from loans receivables | $ 1,000 | $ 1,700 | ||
CPA:18 – Global | ||||
Finance Receivables | ||||
Deferred acquisitions fees payment period | 3 years | |||
Direct financing lease | ||||
Finance Receivables | ||||
Decrease in value of balance sheet item due to foreign currency translation | $ 12,500 | |||
Adjustments | ||||
Finance Receivables | ||||
Direct financing lease, net investments reclassified | $ 17,500 | |||
Direct financing lease | ||||
Finance Receivables | ||||
Number of properties sold | property | 1 | |||
Decrease in direct financing lease related to sales | $ 300 | |||
Direct financing lease | Adjustments | ||||
Finance Receivables | ||||
Direct financing lease, number of properties reclassified | property | 36 | |||
Cumulative effect of Adoption | ||||
Finance Receivables | ||||
Distributions in excess of accumulated earnings | $ 14,800 |
Finance Receivables - Internal
Finance Receivables - Internal Credit Quality Rating (Details) $ in Thousands | Mar. 31, 2020USD ($)tenant | Dec. 31, 2019USD ($)tenant |
Credit Quality Of Finance Receivables | ||
Net investments in direct financing leases | $ 901,993 | $ 944,286 |
Internally Assigned Grade1-3 | ||
Credit Quality Of Finance Receivables | ||
Number of tenants | tenant | 21 | 28 |
Net investments in direct financing leases | $ 652,628 | $ 798,108 |
Internally Assigned Grade 4 | ||
Credit Quality Of Finance Receivables | ||
Number of tenants | tenant | 15 | 8 |
Net investments in direct financing leases | $ 249,365 | $ 146,178 |
Internally Assigned Grade 5 | ||
Credit Quality Of Finance Receivables | ||
Number of tenants | tenant | 0 | 0 |
Net investments in direct financing leases | $ 0 | $ 0 |
Goodwill and Other Intangible_2
Goodwill and Other Intangibles - Narratives (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Finite-Lived Intangible Assets, Net | ||
Decrease in value of balance sheet item due to foreign currency translation | $ 52,200 | $ 173 |
Amortization of intangible assets | 60,500 | $ 69,400 |
Net intangible assets | ||
Finite-Lived Intangible Assets, Net | ||
Decrease in value of balance sheet item due to foreign currency translation | $ 22,900 | |
Minimum | ||
Finite-Lived Intangible Assets, Net | ||
Finite lived intangible assets useful life | 2 years | |
Maximum | ||
Finite-Lived Intangible Assets, Net | ||
Finite lived intangible assets useful life | 48 years |
Goodwill and Other Intangible_3
Goodwill and Other Intangibles - Goodwill Rollforward (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Goodwill | |
Goodwill, beginning balance | $ 934,688 |
Foreign currency translation adjustments | (4,801) |
Goodwill, ending balance | 929,887 |
Real Estate | |
Goodwill | |
Goodwill, beginning balance | 871,081 |
Foreign currency translation adjustments | (4,801) |
Goodwill, ending balance | 866,280 |
Investment Management | |
Goodwill | |
Goodwill, beginning balance | 63,607 |
Foreign currency translation adjustments | 0 |
Goodwill, ending balance | $ 63,607 |
Goodwill and Other Intangible_4
Goodwill and Other Intangibles - Intangible Assets and Liabilities Summary (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Amortizable Intangible Assets | ||
Less: accumulated amortization | $ (1,143,648) | $ (1,089,784) |
Indefinite Lived Intangible Assets Including Goodwill | ||
Total intangible assets, gross | 3,922,783 | 3,940,026 |
Total intangible assets, net | 2,779,135 | 2,850,242 |
Amortizable Intangible Liabilities | ||
Less: accumulated amortization | 80,302 | 74,484 |
Indefinite Lived Intangible Liabilities | ||
Total intangible liabilities, gross | (282,810) | (285,226) |
Total intangible liabilities, net | (202,508) | (210,742) |
Below-market purchase option | ||
Indefinite Lived Intangible Liabilities | ||
Indefinite-lived intangible liabilities | (16,711) | (16,711) |
Below-market rent | ||
Amortizable Intangible Liabilities | ||
Finite-lived intangible liabilities, gross | (266,099) | (268,515) |
Less: accumulated amortization | 80,302 | 74,484 |
Net amortizable intangible liabilities | (185,797) | (194,031) |
Goodwill | ||
Indefinite Lived Intangible Assets Including Goodwill | ||
Indefinite-lived intangible assets | 929,887 | 934,688 |
Contracts including internal software development costs | ||
Amortizable Intangible Assets | ||
Finite lived intangible assets, gross | 23,607 | 23,557 |
Less: accumulated amortization | (16,423) | (15,482) |
Amortizable intangible assets | 7,184 | 8,075 |
Internal-use software development costs | ||
Amortizable Intangible Assets | ||
Finite lived intangible assets, gross | 19,632 | 19,582 |
Less: accumulated amortization | (14,233) | (13,491) |
Amortizable intangible assets | 5,399 | 6,091 |
Trade name | ||
Amortizable Intangible Assets | ||
Finite lived intangible assets, gross | 3,975 | 3,975 |
Less: accumulated amortization | (2,190) | (1,991) |
Amortizable intangible assets | 1,785 | 1,984 |
Lease intangibles | ||
Amortizable Intangible Assets | ||
Finite lived intangible assets, gross | 2,969,289 | 2,981,781 |
Less: accumulated amortization | (1,127,225) | (1,074,302) |
Amortizable intangible assets | 1,842,064 | 1,907,479 |
In-place lease | ||
Amortizable Intangible Assets | ||
Finite lived intangible assets, gross | 2,071,324 | 2,072,642 |
Less: accumulated amortization | (714,713) | (676,008) |
Amortizable intangible assets | 1,356,611 | 1,396,634 |
Above-market rent | ||
Amortizable Intangible Assets | ||
Finite lived intangible assets, gross | 897,965 | 909,139 |
Less: accumulated amortization | (412,512) | (398,294) |
Amortizable intangible assets | $ 485,453 | $ 510,845 |
Equity Investments in the Man_3
Equity Investments in the Managed Programs and Real Estate - Narratives (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Investments in REITs | |||
Distributions of earnings from equity method investments | $ 2,656,000 | $ 7,080,000 | |
Real Estate | Unconsolidated Real Estate Investment | |||
Investments in REITs | |||
Distributions of earnings from equity method investments | 2,000,000 | 3,400,000 | |
Aggregate unamortized basis difference on equity investments | 25,000,000 | $ 25,200,000 | |
Managed Programs | |||
Investments in REITs | |||
Distributions of earnings from equity method investments | 1,916,000 | 5,685,000 | |
Affiliated Entity | CPA:18 – Global | |||
Investments in REITs | |||
Distributions of earnings from equity method investments | $ 900,000 | 800,000 | |
Affiliated Entity | CPA:18 – Global | Class A | |||
Investments in REITs | |||
Asset management fees receivable, shares | 55,975 | ||
Affiliated Entity | CPA:18 – Global operating partnership | |||
Investments in REITs | |||
Distributions of earnings from equity method investments | $ 1,900,000 | 1,800,000 | |
Affiliated Entity | CWI 1 | |||
Investments in REITs | |||
Distributions of earnings from equity method investments | 800,000 | 600,000 | |
Affiliated Entity | CWI 1 operating partnership | |||
Investments in REITs | |||
Distributions of earnings from equity method investments | 0 | 1,900,000 | |
Affiliated Entity | CWI 2 | |||
Investments in REITs | |||
Distributions of earnings from equity method investments | 500,000 | 400,000 | |
Affiliated Entity | CWI 2 operating partnership | |||
Investments in REITs | |||
Distributions of earnings from equity method investments | 0 | $ 1,900,000 | |
Affiliated Entity | Managed Programs | |||
Investments in REITs | |||
Aggregate unamortized basis difference on equity investments | $ 13,400,000 | $ 47,000,000 |
Equity Investments in the Man_4
Equity Investments in the Managed Programs and Real Estate - Summary of Earnings from Equity Method Investments in the Managed Programs and Real Estate (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Schedule Of Equity Method Investments | ||
Distributions of Available Cash (Note 3) | $ 2,656 | $ 7,080 |
Equity in (losses) earnings of equity method investments in the Managed Programs and real estate | (45,790) | 5,491 |
Managed Programs | ||
Schedule Of Equity Method Investments | ||
Other-than-temporary impairment charges on our equity method investments in CWI 1 and CWI 2 (Note 8) | (47,112) | 0 |
Distributions of Available Cash (Note 3) | 1,916 | 5,685 |
Proportionate share of equity in (losses) earnings of equity investments | (1,715) | 213 |
Amortization of basis differences on equity method investments in the Managed Programs | (444) | (329) |
Equity in (losses) earnings of equity method investments in the Managed Programs and real estate | (47,355) | 5,569 |
Investment in real estate | ||
Schedule Of Equity Method Investments | ||
Proportionate share of equity in (losses) earnings of equity investments | 1,804 | 562 |
Amortization of basis differences on equity method investments in the Managed Programs | (239) | (640) |
Equity in (losses) earnings of equity method investments in the Managed Programs and real estate | $ 1,565 | $ (78) |
Equity Investments in the Man_5
Equity Investments in the Managed Programs and Real Estate - Summary of Investments in Managed Programs (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Investments in Programs | ||
Equity investments in real estate | $ 276,109 | $ 324,004 |
Affiliated Entity | Managed Programs | ||
Investments in Programs | ||
Equity investments in real estate | $ 85,381 | $ 129,567 |
Affiliated Entity | CPA:18 – Global | ||
Investments in Programs | ||
Equity method investment, ownership percentage | 3.951% | 3.851% |
Equity investments in real estate | $ 42,378 | $ 42,644 |
Affiliated Entity | CPA:18 – Global operating partnership | ||
Investments in Programs | ||
Equity method investment, ownership percentage | 0.034% | 0.034% |
Equity investments in real estate | $ 209 | $ 209 |
Affiliated Entity | CWI 1 | ||
Investments in Programs | ||
Equity method investment, ownership percentage | 4.186% | 3.943% |
Equity investments in real estate | $ 21,899 | $ 49,032 |
Affiliated Entity | CWI 1 operating partnership | ||
Investments in Programs | ||
Equity method investment, ownership percentage | 0.015% | 0.015% |
Equity investments in real estate | $ 186 | $ 186 |
Affiliated Entity | CWI 2 | ||
Investments in Programs | ||
Equity method investment, ownership percentage | 4.035% | 3.755% |
Equity investments in real estate | $ 15,497 | $ 33,669 |
Affiliated Entity | CWI 2 operating partnership | ||
Investments in Programs | ||
Equity method investment, ownership percentage | 0.015% | 0.015% |
Equity investments in real estate | $ 300 | $ 300 |
Affiliated Entity | CESH | ||
Investments in Programs | ||
Equity method investment, ownership percentage | 2.43% | 2.43% |
Equity investments in real estate | $ 4,912 | $ 3,527 |
Equity Investments in the Man_6
Equity Investments in the Managed Programs and Real Estate - Equity Method Investments Excluding the Managed Programs (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Investments in Programs | ||
Equity investments in real estate | $ 276,109 | $ 324,004 |
Real Estate | ||
Investments in Programs | ||
Equity investments in real estate | $ 190,728 | 194,437 |
Real Estate | Third Party | Kesko Senukai | ||
Investments in Programs | ||
Equity method investment, ownership percentage | 70.00% | |
Equity investments in real estate | $ 45,803 | 46,475 |
Real Estate | Third Party | BPS Nevada, LLC | ||
Investments in Programs | ||
Equity method investment, ownership percentage | 15.00% | |
Equity investments in real estate | $ 22,904 | 22,900 |
Real Estate | Third Party | Affiliated Entity | Johnson Self Storage | ||
Investments in Programs | ||
Equity method investment, ownership percentage | 90.00% | |
Equity investments in real estate | $ 70,309 | 70,690 |
Real Estate | CPA:18 – Global | Affiliated Entity | Bank Pekao S.A. | ||
Investments in Programs | ||
Equity method investment, ownership percentage | 50.00% | |
Equity investments in real estate | $ 26,107 | 26,388 |
Real Estate | CPA:18 – Global | Affiliated Entity | State Farm Mutual Automobile Insurance Co. | ||
Investments in Programs | ||
Equity method investment, ownership percentage | 50.00% | |
Equity investments in real estate | $ 16,781 | 17,232 |
Real Estate | CPA:18 – Global | Affiliated Entity | Apply Sorco AS | ||
Investments in Programs | ||
Equity method investment, ownership percentage | 49.00% | |
Equity investments in real estate | $ 5,906 | 8,040 |
Real Estate | CPA:18 – Global | Affiliated Entity | Fortenova Grupa d.d.( formerly Konzum d.d.) | ||
Investments in Programs | ||
Equity method investment, ownership percentage | 20.00% | |
Equity investments in real estate | $ 2,918 | $ 2,712 |
Fair Value Measurements - Narra
Fair Value Measurements - Narratives (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020USD ($)property | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | |
Fair Value Inputs, Assets | |||
Proceeds from the redemption of investment in shares | $ 3,496 | $ 18,750 | |
Equity investments in real estate | 276,109 | $ 324,004 | |
Unamortized discount | 26,344 | ||
Unsecured senior notes | |||
Fair Value Inputs, Assets | |||
Unamortized discount | 19,300 | ||
GCIF | Other assets, net | |||
Fair Value Inputs, Assets | |||
Proceeds from the redemption of investment in shares | 3,200 | ||
Loss on redemption of shares | 300 | ||
Equity investments in real estate | 8,700 | 12,200 | |
Level 3 | Fair Value, Measurements, Nonrecurring | |||
Fair Value Inputs, Assets | |||
Recognized impairment costs | 66,532 | 0 | |
Level 3 | Carrying Value | Non-Recourse Debt | |||
Fair Value Inputs, Assets | |||
Unamortized discount | 5,600 | 6,200 | |
Level 3 | Carrying Value | Non recourse mortgage | |||
Fair Value Inputs, Assets | |||
Debt instrument, unamortized discount and debt issuance costs, net | 500 | 600 | |
Level 3 | Land, buildings and improvements and intangibles | Fair Value, Measurements, Nonrecurring | |||
Fair Value Inputs, Assets | |||
Recognized impairment costs | 19,420 | 0 | |
Level 3 | Land, buildings and improvements and intangibles | Fair Value, Measurements, Nonrecurring | Potentially vacant properties | |||
Fair Value Inputs, Assets | |||
Recognized impairment costs | $ 16,000 | ||
Number of real estate properties (property) | property | 2 | ||
Level 3 | Land, buildings and improvements and intangibles | Fair Value, Measurements, Nonrecurring | Impaired property | |||
Fair Value Inputs, Assets | |||
Recognized impairment costs | $ 3,400 | ||
Level 3 | Equity investments in the Managed Programs | Fair Value, Measurements, Nonrecurring | |||
Fair Value Inputs, Assets | |||
Recognized impairment costs | 47,112 | $ 0 | |
Level 2 | Carrying Value | Unsecured senior notes | |||
Fair Value Inputs, Assets | |||
Debt instrument, unamortized discount and debt issuance costs, net | 21,600 | 22,800 | |
Unamortized discount | 19,300 | 20,500 | |
Investment in a Cold Storage Operator | Level 3 | |||
Fair Value Inputs, Assets | |||
Fair value of investments | 146,200 | 146,200 | |
CWI 1 | Affiliated Entity | |||
Fair Value Inputs, Assets | |||
Equity investments in real estate | 21,899 | 49,032 | |
CWI 1 | Level 3 | Equity investments in the Managed Programs | Fair Value, Measurements, Nonrecurring | Affiliated Entity | |||
Fair Value Inputs, Assets | |||
Recognized impairment costs | 27,800 | ||
CWI 2 | Affiliated Entity | |||
Fair Value Inputs, Assets | |||
Equity investments in real estate | 15,497 | $ 33,669 | |
CWI 2 | Level 3 | Equity investments in the Managed Programs | Fair Value, Measurements, Nonrecurring | Affiliated Entity | |||
Fair Value Inputs, Assets | |||
Recognized impairment costs | $ 19,300 |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying Value and Fair Value Measurements (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Level 2 | Carrying Value | Unsecured senior notes | ||
Liabilities: | ||
Debt instrument, fair value | $ 4,323,063 | $ 4,390,189 |
Level 2 | Fair Value | Unsecured senior notes | ||
Liabilities: | ||
Debt instrument, fair value | 4,212,628 | 4,682,432 |
Level 3 | Carrying Value | ||
Liabilities: | ||
Debt instrument, fair value | 1,433,372 | 1,462,487 |
Level 3 | Fair Value | ||
Liabilities: | ||
Debt instrument, fair value | $ 1,426,786 | $ 1,487,892 |
Fair Value Measurements - Impai
Fair Value Measurements - Impairment of Assets Measured on a Non-Recurring Basis (Details) - Fair Value, Measurements, Nonrecurring - Level 3 - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Total Impairment Charges | $ 66,532 | $ 0 |
Equity investments in the Managed Programs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Fair Value Measurements | 37,396 | 0 |
Total Impairment Charges | 47,112 | 0 |
Land, buildings and improvements and intangibles | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Fair Value Measurements | 12,148 | 0 |
Total Impairment Charges | $ 19,420 | $ 0 |
Risk Management and Use of De_3
Risk Management and Use of Derivative Financial Instruments - Narratives (Details) £ in Millions, ¥ in Billions | 3 Months Ended | ||||||||
Mar. 31, 2020USD ($)offering | Mar. 31, 2019USD ($) | Mar. 31, 2020JPY (¥) | Mar. 31, 2020EUR (€) | Mar. 31, 2020GBP (£) | Mar. 27, 2020USD ($) | Feb. 20, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 19, 2019 | |
Summary of Derivative Instruments | |||||||||
Net collateral posted for derivatives | $ 0 | $ 0 | |||||||
Derivative, remaining maturity | 73 months | ||||||||
Total credit exposure on derivatives | $ 34,100,000 | ||||||||
Derivatives, net liability position | 10,200,000 | 9,600,000 | |||||||
Aggregate termination value for immediate settlement | 10,800,000 | 9,900,000 | |||||||
Debt outstanding | 366,604,000 | 201,267,000 | |||||||
Other comprehensive income foreign currency gain (loss) | 84,900,000 | $ 44,100,000 | |||||||
Unsecured Revolving Credit Facility | |||||||||
Summary of Derivative Instruments | |||||||||
Debt outstanding | 75,483,000 | 201,267,000 | |||||||
Unsecured Term Loans | |||||||||
Summary of Derivative Instruments | |||||||||
Debt outstanding | 291,121,000 | 0 | |||||||
EUR | Unsecured Revolving Credit Facility | |||||||||
Summary of Derivative Instruments | |||||||||
Debt outstanding | 43,276,000 | € 39,500,000 | 131,438,000 | ||||||
EUR | Unsecured Term Loans | |||||||||
Summary of Derivative Instruments | |||||||||
Debt outstanding | 105,726,000 | 96,500,000 | $ 105,900,000 | 0 | |||||
JPY | Unsecured Revolving Credit Facility | |||||||||
Summary of Derivative Instruments | |||||||||
Debt outstanding | 22,207,000 | ¥ 2.4 | 22,295,000 | ||||||
GBP | Unsecured Revolving Credit Facility | |||||||||
Summary of Derivative Instruments | |||||||||
Debt outstanding | 0 | 47,534,000 | |||||||
GBP | Unsecured Term Loans | |||||||||
Summary of Derivative Instruments | |||||||||
Debt outstanding | $ 185,395,000 | £ 150 | $ 193,100,000 | $ 0 | |||||
Unsecured senior notes | |||||||||
Summary of Derivative Instruments | |||||||||
Number of offerings completed | offering | 5 | ||||||||
Principal amount | $ 4,400,000,000 | ||||||||
Unsecured senior notes | 2.0% Senior Notes due 2023 | |||||||||
Summary of Derivative Instruments | |||||||||
Principal amount | € | € 500,000,000 | ||||||||
Coupon rate (percentage) | 2.00% | 2.00% | 2.00% | 2.00% | |||||
Unsecured senior notes | 2.25% Senior Notes due 2024 | |||||||||
Summary of Derivative Instruments | |||||||||
Principal amount | € | € 500,000,000 | ||||||||
Coupon rate (percentage) | 2.25% | 2.25% | 2.25% | 2.25% | |||||
Unsecured senior notes | 2.250% Senior Notes due 2026 | |||||||||
Summary of Derivative Instruments | |||||||||
Principal amount | € | € 500,000,000 | ||||||||
Coupon rate (percentage) | 2.25% | 2.25% | 2.25% | 2.25% | |||||
Unsecured senior notes | 2.125% Senior Notes due 2027 | |||||||||
Summary of Derivative Instruments | |||||||||
Principal amount | € | € 500,000,000 | ||||||||
Coupon rate (percentage) | 2.125% | 2.125% | 2.125% | 2.125% | |||||
Unsecured senior notes | 1.350% Senior Notes due 2028 | |||||||||
Summary of Derivative Instruments | |||||||||
Principal amount | € | € 500,000,000 | ||||||||
Coupon rate (percentage) | 1.35% | 1.35% | 1.35% | 1.35% | 1.35% | ||||
Individual Counterparty | |||||||||
Summary of Derivative Instruments | |||||||||
Total credit exposure on derivatives | $ 9,300,000 | ||||||||
Interest expense | |||||||||
Summary of Derivative Instruments | |||||||||
Estimated amount reclassified from OCI to expense (gain) | 2,800,000 | ||||||||
Other gains | |||||||||
Summary of Derivative Instruments | |||||||||
Estimated amount reclassified from OCI to expense (gain) | $ (11,800,000) |
Risk Management and Use of De_4
Risk Management and Use of Derivative Financial Instruments - Information Regarding Derivative Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Derivatives, Fair Value | ||
Derivative assets, fair value | $ 40,542 | $ 29,158 |
Liability derivatives, fair value | (6,683) | (6,174) |
Derivatives Designated as Hedging Instruments | ||
Derivatives, Fair Value | ||
Derivative assets, fair value | 35,442 | 24,150 |
Liability derivatives, fair value | (6,599) | (6,081) |
Derivatives Designated as Hedging Instruments | Foreign currency collars | Other assets, net | ||
Derivatives, Fair Value | ||
Derivative assets, fair value | 30,734 | 14,460 |
Derivatives Designated as Hedging Instruments | Foreign currency collars | Accounts payable, accrued expenses and other liabilities | ||
Derivatives, Fair Value | ||
Liability derivatives, fair value | 0 | (1,587) |
Derivatives Designated as Hedging Instruments | Foreign currency forward contracts | Other assets, net | ||
Derivatives, Fair Value | ||
Derivative assets, fair value | 4,706 | 9,689 |
Derivatives Designated as Hedging Instruments | Interest rate caps | Other assets, net | ||
Derivatives, Fair Value | ||
Derivative assets, fair value | 2 | 1 |
Derivatives Designated as Hedging Instruments | Interest rate swaps | Accounts payable, accrued expenses and other liabilities | ||
Derivatives, Fair Value | ||
Liability derivatives, fair value | (6,599) | (4,494) |
Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value | ||
Derivative assets, fair value | 5,100 | 5,008 |
Liability derivatives, fair value | (84) | (93) |
Derivatives Not Designated as Hedging Instruments | Interest rate swaps | Other assets, net | ||
Derivatives, Fair Value | ||
Derivative assets, fair value | 0 | 8 |
Derivatives Not Designated as Hedging Instruments | Interest rate swaps | Accounts payable, accrued expenses and other liabilities | ||
Derivatives, Fair Value | ||
Liability derivatives, fair value | (84) | (93) |
Derivatives Not Designated as Hedging Instruments | Stock warrants | Other assets, net | ||
Derivatives, Fair Value | ||
Derivative assets, fair value | $ 5,100 | $ 5,000 |
Risk Management and Use of De_5
Risk Management and Use of Derivative Financial Instruments - Derivative Gain Loss Recognized in OCI (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Derivative Instruments, Gain (Loss) | ||
Amount of Gain Recognized on Derivatives in Other Comprehensive (Loss) Income | $ 13,297 | $ 2,893 |
Derivatives in Cash Flow Hedging Relationships | Equity method investments | ||
Derivative Instruments, Gain (Loss) | ||
Amount of Gain Recognized on Derivatives in Other Comprehensive (Loss) Income | (400) | (900) |
Derivatives in Cash Flow Hedging Relationships | Foreign currency collars | ||
Derivative Instruments, Gain (Loss) | ||
Amount of Gain Recognized on Derivatives in Other Comprehensive (Loss) Income | 17,816 | 3,616 |
Derivatives in Cash Flow Hedging Relationships | Foreign currency forward contracts | ||
Derivative Instruments, Gain (Loss) | ||
Amount of Gain Recognized on Derivatives in Other Comprehensive (Loss) Income | (2,329) | 1,119 |
Derivatives in Cash Flow Hedging Relationships | Interest rate swaps | ||
Derivative Instruments, Gain (Loss) | ||
Amount of Gain Recognized on Derivatives in Other Comprehensive (Loss) Income | (2,237) | (1,815) |
Derivatives in Cash Flow Hedging Relationships | Interest rate caps | ||
Derivative Instruments, Gain (Loss) | ||
Amount of Gain Recognized on Derivatives in Other Comprehensive (Loss) Income | 2 | (27) |
Derivatives in Net Investment Hedging Relationships | Foreign currency collars | ||
Derivative Instruments, Gain (Loss) | ||
Amount of Gain Recognized on Derivatives in Other Comprehensive (Loss) Income | $ 45 | $ 0 |
Risk Management and Use of De_6
Risk Management and Use of Derivative Financial Instruments - Derivative Gain Loss Reclassified From OCI (Details) - Derivatives in Cash Flow Hedging Relationships - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Amount of Gain on Derivatives Reclassified from Other Comprehensive (Loss) Income | ||
Amount of Gain on Derivatives Reclassified from Other Comprehensive (Loss) Income | $ 3,545 | $ 3,455 |
Foreign currency forward contracts | Other gains and (losses) | ||
Amount of Gain on Derivatives Reclassified from Other Comprehensive (Loss) Income | ||
Amount of Gain on Derivatives Reclassified from Other Comprehensive (Loss) Income | 2,799 | 2,434 |
Foreign currency collars | Other gains and (losses) | ||
Amount of Gain on Derivatives Reclassified from Other Comprehensive (Loss) Income | ||
Amount of Gain on Derivatives Reclassified from Other Comprehensive (Loss) Income | 984 | 1,088 |
Interest rate swaps and caps | Interest expense | ||
Amount of Gain on Derivatives Reclassified from Other Comprehensive (Loss) Income | ||
Amount of Gain on Derivatives Reclassified from Other Comprehensive (Loss) Income | $ (238) | $ (67) |
Risk Management and Use of De_7
Risk Management and Use of Derivative Financial Instruments - Derivative Gain Loss Recognized in Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Amount of Gain (Loss) on Derivatives Recognized in Income | ||
Gain (Loss) on Derivative Instruments, Net, Pretax | $ 1,295 | $ (428) |
Derivatives Not Designated as Hedging Instruments | Foreign currency collars | Other gains and (losses) | ||
Amount of Gain (Loss) on Derivatives Recognized in Income | ||
Amount of Gain (Loss) on Derivatives Recognized in Income | 639 | 41 |
Derivatives Not Designated as Hedging Instruments | Foreign currency forward contracts | Other gains and (losses) | ||
Amount of Gain (Loss) on Derivatives Recognized in Income | ||
Amount of Gain (Loss) on Derivatives Recognized in Income | 224 | (230) |
Derivatives Not Designated as Hedging Instruments | Stock warrants | Other gains and (losses) | ||
Amount of Gain (Loss) on Derivatives Recognized in Income | ||
Amount of Gain (Loss) on Derivatives Recognized in Income | 100 | 0 |
Derivatives Not Designated as Hedging Instruments | Interest rate swaps | Interest expense | ||
Amount of Gain (Loss) on Derivatives Recognized in Income | ||
Amount of Gain (Loss) on Derivatives Recognized in Income | 15 | 0 |
Derivatives in Cash Flow Hedging Relationships | Foreign currency collars | Other gains and (losses) | ||
Amount of Gain (Loss) on Derivatives Recognized in Income | ||
Gain (Loss) on Hedging Activity | 0 | 7 |
Derivatives in Cash Flow Hedging Relationships | Foreign currency forward contracts | Other gains and (losses) | ||
Amount of Gain (Loss) on Derivatives Recognized in Income | ||
Gain (Loss) on Hedging Activity | 0 | (132) |
Derivatives in Cash Flow Hedging Relationships | Interest rate swaps | Interest expense | ||
Amount of Gain (Loss) on Derivatives Recognized in Income | ||
Gain (Loss) on Hedging Activity | $ 317 | $ (114) |
Risk Management and Use of De_8
Risk Management and Use of Derivative Financial Instruments - Interest Rate Swap and Caps Summary (Details) € in Thousands, £ in Thousands, $ in Thousands | Mar. 31, 2020USD ($)instrument | Mar. 31, 2020EUR (€)instrument | Mar. 31, 2020GBP (£)instrument |
Derivative Disclosure | |||
Fair value | $ (6,681) | ||
Derivatives Designated as Hedging Instruments | Designated as Cash Flow Hedging Instruments | Interest rate swaps | USD | |||
Derivative Disclosure | |||
Derivative number of instruments | instrument | 5 | 5 | 5 |
Notional Amount | $ 75,543 | ||
Fair value | $ (5,226) | ||
Derivatives Designated as Hedging Instruments | Designated as Cash Flow Hedging Instruments | Interest rate swaps | EUR | |||
Derivative Disclosure | |||
Derivative number of instruments | instrument | 2 | 2 | 2 |
Notional Amount | € | € 49,348 | ||
Fair value | $ (1,373) | ||
Derivatives Designated as Hedging Instruments | Designated as Cash Flow Hedging Instruments | Interest rate caps | EUR | |||
Derivative Disclosure | |||
Derivative number of instruments | instrument | 1 | 1 | 1 |
Notional Amount | € | € 11,310 | ||
Fair value | $ 2 | ||
Derivatives Designated as Hedging Instruments | Designated as Cash Flow Hedging Instruments | Interest rate caps | GBP | |||
Derivative Disclosure | |||
Derivative number of instruments | instrument | 1 | 1 | 1 |
Notional Amount | £ | £ 6,394 | ||
Fair value | $ 0 | ||
Not Designated as Hedging Instruments | Interest rate swaps | USD | |||
Derivative Disclosure | |||
Derivative number of instruments | instrument | 1 | 1 | 1 |
Notional Amount | $ 7,658 | ||
Fair value | $ (6) | ||
Not Designated as Hedging Instruments | Interest rate swaps | EUR | |||
Derivative Disclosure | |||
Derivative number of instruments | instrument | 1 | 1 | 1 |
Notional Amount | € | € 4,578 | ||
Fair value | $ (78) |
Risk Management and Use of De_9
Risk Management and Use of Derivative Financial Instruments - Foreign Currency Derivatives Details (Details) € in Thousands, £ in Thousands, kr in Thousands, $ in Thousands | Mar. 31, 2020USD ($)instrument | Mar. 31, 2020NOK (kr)instrument | Mar. 31, 2020EUR (€)instrument | Mar. 31, 2020GBP (£)instrument |
Derivative Disclosure | ||||
Fair value, foreign currency derivatives | $ 35,440 | |||
Derivatives Designated as Hedging Instruments | Designated as Cash Flow Hedging Instruments | Foreign currency collars | EUR | ||||
Derivative Disclosure | ||||
Derivative number of instruments | instrument | 88 | 88 | 88 | 88 |
Notional Amount | € | € 295,049 | |||
Fair value, foreign currency derivatives | $ 25,692 | |||
Derivatives Designated as Hedging Instruments | Designated as Cash Flow Hedging Instruments | Foreign currency collars | GBP | ||||
Derivative Disclosure | ||||
Derivative number of instruments | instrument | 63 | 63 | 63 | 63 |
Notional Amount | £ | £ 44,000 | |||
Fair value, foreign currency derivatives | $ 4,947 | |||
Derivatives Designated as Hedging Instruments | Designated as Cash Flow Hedging Instruments | Foreign currency collars | NOK | ||||
Derivative Disclosure | ||||
Derivative number of instruments | instrument | 3 | 3 | 3 | 3 |
Notional Amount | kr | kr 2,000 | |||
Fair value, foreign currency derivatives | $ 42 | |||
Derivatives Designated as Hedging Instruments | Designated as Cash Flow Hedging Instruments | Foreign currency forward contracts | EUR | ||||
Derivative Disclosure | ||||
Derivative number of instruments | instrument | 3 | 3 | 3 | 3 |
Notional Amount | € | € 12,951 | |||
Fair value, foreign currency derivatives | $ 4,706 | |||
Derivatives Designated as Hedging Instruments | Derivatives in Net Investment Hedging Relationships | Foreign currency collars | NOK | ||||
Derivative Disclosure | ||||
Derivative number of instruments | instrument | 1 | 1 | 1 | 1 |
Notional Amount | kr | kr 2,500 | |||
Fair value, foreign currency derivatives | $ 53 |
Debt - Narratives (Details)
Debt - Narratives (Details) £ in Millions | 3 Months Ended | |||||||||
Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2020EUR (€) | Mar. 31, 2020GBP (£) | Mar. 27, 2020USD ($) | Mar. 27, 2020EUR (€) | Feb. 20, 2020USD ($) | Feb. 20, 2020EUR (€) | Dec. 31, 2019USD ($) | Dec. 31, 2019EUR (€) | |
Senior Unsecured Credit Facility | ||||||||||
Maximum borrowing capacity | $ 2,750,000,000 | $ 2,100,000,000 | $ 2,350,000,000 | |||||||
Debt outstanding | 366,604,000 | 201,267,000 | ||||||||
Financing cost | 22,148,000 | 10,000,000 | ||||||||
Line of credit facility, available | $ 1,700,000,000 | |||||||||
Debt Instrument borrowing capacity fee (percentage) | 0.20% | |||||||||
Non Recourse Mortgage | ||||||||||
Repayments of non recourse mortgage loan | $ 21,117,000 | $ 40,360,000 | ||||||||
Prepayments of mortgage principal | 0 | 199,579,000 | ||||||||
Decrease in value of balance sheet item due to foreign currency translation | 52,200,000 | $ 173,000 | ||||||||
Unamortized discount | 26,344,000 | |||||||||
Merged Entities | ||||||||||
Non Recourse Mortgage | ||||||||||
Unamortized discount | $ 5,600,000 | |||||||||
Fixed interest rate | ||||||||||
Non Recourse Mortgage | ||||||||||
Weighted average interest rate | 5.00% | 5.00% | 5.00% | |||||||
Variable interest rate | ||||||||||
Non Recourse Mortgage | ||||||||||
Weighted average interest rate | 2.90% | 2.90% | 2.90% | |||||||
Unsecured senior notes | ||||||||||
Senior Unsecured Credit Facility | ||||||||||
Financing cost | $ 21,600,000 | 22,800,000 | ||||||||
Principal Amount | 4,400,000,000 | |||||||||
Non Recourse Mortgage | ||||||||||
Unamortized discount | $ 19,300,000 | 20,500,000 | ||||||||
Non-Recourse Debt | ||||||||||
Non Recourse Mortgage | ||||||||||
Weighted average interest rate | 4.50% | 5.00% | 4.50% | 4.50% | ||||||
Repayments of non recourse mortgage loan | $ 7,700,000 | $ 18,800,000 | ||||||||
Revolving Credit Facility | ||||||||||
Senior Unsecured Credit Facility | ||||||||||
Maximum borrowing capacity | 1,500,000,000 | |||||||||
Delayed Draw term loan | ||||||||||
Senior Unsecured Credit Facility | ||||||||||
Maximum borrowing capacity | 100,000,000 | |||||||||
Term Loan | ||||||||||
Senior Unsecured Credit Facility | ||||||||||
Maximum borrowing capacity | € | € 236,300,000 | |||||||||
Unsecured senior notes | ||||||||||
Non Recourse Mortgage | ||||||||||
Unamortized discount | $ 19,300,000 | |||||||||
Unsecured senior notes | Government bond yield | Minimum | ||||||||||
Senior Unsecured Credit Facility | ||||||||||
Variable interest rate (percentage) | 0.30% | |||||||||
Unsecured senior notes | Government bond yield | Maximum | ||||||||||
Senior Unsecured Credit Facility | ||||||||||
Variable interest rate (percentage) | 0.35% | |||||||||
Unsecured Revolving Credit Facility | ||||||||||
Senior Unsecured Credit Facility | ||||||||||
Debt outstanding | $ 75,483,000 | 201,267,000 | ||||||||
Unsecured Revolving Credit Facility | USD | ||||||||||
Senior Unsecured Credit Facility | ||||||||||
Maximum borrowing capacity | 1,800,000,000 | |||||||||
Debt outstanding | 10,000,000 | 0 | ||||||||
Unsecured Revolving Credit Facility | GBP | ||||||||||
Senior Unsecured Credit Facility | ||||||||||
Debt outstanding | 0 | 47,534,000 | ||||||||
Unsecured Revolving Credit Facility | EUR | ||||||||||
Senior Unsecured Credit Facility | ||||||||||
Debt outstanding | 43,276,000 | € 39,500,000 | 131,438,000 | |||||||
Unsecured Term Loans | ||||||||||
Senior Unsecured Credit Facility | ||||||||||
Debt outstanding | 291,121,000 | 0 | ||||||||
Unsecured Term Loans | GBP | ||||||||||
Senior Unsecured Credit Facility | ||||||||||
Maximum borrowing capacity | € | € 150,000,000 | |||||||||
Debt outstanding | $ 185,395,000 | £ 150 | $ 193,100,000 | 0 | ||||||
Variable interest rate (percentage) | 0.95% | |||||||||
Unsecured Term Loans | EUR | ||||||||||
Senior Unsecured Credit Facility | ||||||||||
Maximum borrowing capacity | € | € 96,500,000 | |||||||||
Debt outstanding | $ 105,726,000 | € 96,500,000 | $ 105,900,000 | $ 0 | ||||||
Variable interest rate (percentage) | 0.95% | |||||||||
Non Recourse Mortgage | ||||||||||
Unamortized discount | $ (1,400,000) | |||||||||
Non-Recourse Debt | ||||||||||
Non Recourse Mortgage | ||||||||||
Prepayments of mortgage principal | $ 199,600,000 | |||||||||
Decrease in value of balance sheet item due to foreign currency translation | $ 93,500,000 |
Debt - Summary of Senior Unsecu
Debt - Summary of Senior Unsecured Credit Facility (Details) $ in Thousands, € in Millions, £ in Millions, ¥ in Billions | 3 Months Ended | ||||||
Mar. 31, 2020USD ($) | Mar. 31, 2020JPY (¥) | Mar. 31, 2020EUR (€) | Mar. 31, 2020GBP (£) | Mar. 27, 2020USD ($) | Feb. 20, 2020USD ($) | Dec. 31, 2019USD ($) | |
Senior Unsecured Credit Facility | |||||||
Debt outstanding | $ 366,604 | $ 201,267 | |||||
Unamortized discount | 26,344 | ||||||
Unamortized deferred financing costs | 22,148 | $ 10,000 | |||||
Unsecured Term Loans: | |||||||
Senior Unsecured Credit Facility | |||||||
Debt outstanding | $ 291,121 | 0 | |||||
Unsecured Term Loans: | GBP | |||||||
Senior Unsecured Credit Facility | |||||||
Variable interest rate (percentage) | 0.95% | ||||||
Debt outstanding | $ 185,395 | £ 150 | $ 193,100 | 0 | |||
Unsecured Term Loans: | EUR | |||||||
Senior Unsecured Credit Facility | |||||||
Variable interest rate (percentage) | 0.95% | ||||||
Debt outstanding | $ 105,726 | € 96.5 | $ 105,900 | 0 | |||
Unamortized discount | (1,400) | ||||||
Unsecured Revolving Credit Facility: | |||||||
Senior Unsecured Credit Facility | |||||||
Debt outstanding | 75,483 | 201,267 | |||||
Unsecured Revolving Credit Facility: | GBP | |||||||
Senior Unsecured Credit Facility | |||||||
Debt outstanding | $ 0 | 47,534 | |||||
Unsecured Revolving Credit Facility: | GBP | LIBOR | |||||||
Senior Unsecured Credit Facility | |||||||
Variable interest rate (percentage) | 0.85% | ||||||
Unsecured Revolving Credit Facility: | EUR | |||||||
Senior Unsecured Credit Facility | |||||||
Debt outstanding | $ 43,276 | € 39.5 | 131,438 | ||||
Unsecured Revolving Credit Facility: | EUR | EURIBOR | |||||||
Senior Unsecured Credit Facility | |||||||
Variable interest rate (percentage) | 0.85% | ||||||
Unsecured Revolving Credit Facility: | JPY | |||||||
Senior Unsecured Credit Facility | |||||||
Debt outstanding | $ 22,207 | ¥ 2.4 | 22,295 | ||||
Unsecured Revolving Credit Facility: | JPY | JPY LIBOR | |||||||
Senior Unsecured Credit Facility | |||||||
Variable interest rate (percentage) | 0.85% | ||||||
Unsecured Revolving Credit Facility: | USD | |||||||
Senior Unsecured Credit Facility | |||||||
Debt outstanding | $ 10,000 | $ 0 | |||||
Unsecured Revolving Credit Facility: | USD | USD LIBOR | |||||||
Senior Unsecured Credit Facility | |||||||
Variable interest rate (percentage) | 0.85% |
Debt - Summary of Senior Unse_2
Debt - Summary of Senior Unsecured Notes (Details) | Mar. 31, 2020USD ($) | Mar. 31, 2020EUR (€) | Feb. 20, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 19, 2019 |
Senior Unsecured Notes | |||||
Senior unsecured notes, net | $ 4,323,063,000 | $ 4,390,189,000 | |||
Unamortized deferred financing costs | 22,148,000 | $ 10,000,000 | |||
Unamortized discount, net | 26,344,000 | ||||
Unsecured senior notes | |||||
Senior Unsecured Notes | |||||
Principal Amount | 4,400,000,000 | ||||
Senior unsecured notes, net | 4,364,000,000 | 4,433,500,000 | |||
Unamortized deferred financing costs | 21,600,000 | 22,800,000 | |||
Unamortized discount, net | $ 19,300,000 | 20,500,000 | |||
Unsecured senior notes | 2.0% Senior Notes due 2023 | |||||
Senior Unsecured Notes | |||||
Principal Amount | € | € 500,000,000 | ||||
Price of Par Value (percentage) | 99.22% | 99.22% | |||
Original Issue Discount | $ 4,600,000 | ||||
Effective Interest Rate (percentage) | 2.107% | 2.107% | |||
Coupon rate (percentage) | 2.00% | 2.00% | |||
Senior unsecured notes, net | $ 547,800,000 | 561,700,000 | |||
Unsecured senior notes | 4.6% Senior Notes due 2024 | |||||
Senior Unsecured Notes | |||||
Principal Amount | $ 500,000,000 | ||||
Price of Par Value (percentage) | 99.639% | 99.639% | |||
Original Issue Discount | $ 1,800,000 | ||||
Effective Interest Rate (percentage) | 4.645% | 4.645% | |||
Coupon rate (percentage) | 4.60% | 4.60% | |||
Senior unsecured notes, net | $ 500,000,000 | 500,000,000 | |||
Unsecured senior notes | 2.25% Senior Notes due 2024 | |||||
Senior Unsecured Notes | |||||
Principal Amount | € | € 500,000,000 | ||||
Price of Par Value (percentage) | 99.448% | 99.448% | |||
Original Issue Discount | $ 2,900,000 | ||||
Effective Interest Rate (percentage) | 2.332% | 2.332% | |||
Coupon rate (percentage) | 2.25% | 2.25% | |||
Senior unsecured notes, net | $ 547,800,000 | 561,700,000 | |||
Unsecured senior notes | 4.0% Senior Notes due 2025 | |||||
Senior Unsecured Notes | |||||
Principal Amount | $ 450,000,000 | ||||
Price of Par Value (percentage) | 99.372% | 99.372% | |||
Original Issue Discount | $ 2,800,000 | ||||
Effective Interest Rate (percentage) | 4.077% | 4.077% | |||
Coupon rate (percentage) | 4.00% | 4.00% | |||
Senior unsecured notes, net | $ 450,000,000 | 450,000,000 | |||
Unsecured senior notes | 2.250% Senior Notes due 2026 | |||||
Senior Unsecured Notes | |||||
Principal Amount | € | € 500,000,000 | ||||
Price of Par Value (percentage) | 99.252% | 99.252% | |||
Original Issue Discount | $ 4,300,000 | ||||
Effective Interest Rate (percentage) | 2.361% | 2.361% | |||
Coupon rate (percentage) | 2.25% | 2.25% | |||
Senior unsecured notes, net | $ 547,800,000 | 561,700,000 | |||
Unsecured senior notes | 4.25% Senior Notes due 2026 | |||||
Senior Unsecured Notes | |||||
Principal Amount | $ 350,000,000 | ||||
Price of Par Value (percentage) | 99.682% | 99.682% | |||
Original Issue Discount | $ 1,100,000 | ||||
Effective Interest Rate (percentage) | 4.29% | 4.29% | |||
Coupon rate (percentage) | 4.25% | 4.25% | |||
Senior unsecured notes, net | $ 350,000,000 | 350,000,000 | |||
Unsecured senior notes | 2.125% Senior Notes due 2027 | |||||
Senior Unsecured Notes | |||||
Principal Amount | € | € 500,000,000 | ||||
Price of Par Value (percentage) | 99.324% | 99.324% | |||
Original Issue Discount | $ 4,200,000 | ||||
Effective Interest Rate (percentage) | 2.208% | 2.208% | |||
Coupon rate (percentage) | 2.125% | 2.125% | |||
Senior unsecured notes, net | $ 547,800,000 | 561,700,000 | |||
Unsecured senior notes | 1.350% Senior Notes due 2028 | |||||
Senior Unsecured Notes | |||||
Principal Amount | € | € 500,000,000 | ||||
Price of Par Value (percentage) | 99.266% | 99.266% | |||
Original Issue Discount | $ 4,100,000 | ||||
Effective Interest Rate (percentage) | 1.442% | 1.442% | |||
Coupon rate (percentage) | 1.35% | 1.35% | 1.35% | ||
Senior unsecured notes, net | $ 547,800,000 | 561,700,000 | |||
Unsecured senior notes | 3.850% Senior Notes due 2029 | |||||
Senior Unsecured Notes | |||||
Principal Amount | $ 325,000,000 | ||||
Price of Par Value (percentage) | 98.876% | 98.876% | |||
Original Issue Discount | $ 3,700,000 | ||||
Effective Interest Rate (percentage) | 3.986% | 3.986% | |||
Coupon rate (percentage) | 3.85% | 3.85% | |||
Senior unsecured notes, net | $ 325,000,000 | $ 325,000,000 |
Debt - Scheduled Debt Principal
Debt - Scheduled Debt Principal Payments (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Feb. 20, 2020 |
Long-term Debt, by Maturity | ||
2020 (remainder) | $ 142,494 | |
2021 | 242,810 | |
2022 | 460,033 | |
2023 | 882,209 | |
2024 | 1,169,686 | |
Thereafter through 2031 | 3,272,903 | |
Total principal payments | 6,170,135 | |
Unamortized discount, net | (26,344) | |
Unamortized deferred financing costs | (22,148) | $ (10,000) |
Total | $ 6,121,643 |
Stock-Based Compensation and _3
Stock-Based Compensation and Equity - Narratives (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020USD ($)multiplier$ / sharesshares | Mar. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2019USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Stock-based compensation expense | $ 2,661 | $ 4,165 | |
Fair value of vested stock | 21,000 | ||
Deferred compensation obligation | $ 42,291 | $ 37,263 | |
Proceed from issuance of stock | $ 303,831 | ||
Distributions Declared | |||
Dividends declared per share (in dollars per share) | $ / shares | $ 1.04 | $ 1.032 | |
Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Shares issued (shares) | shares | 4,053,623 | ||
Proceed from issuance of stock | $ 4 | ||
ATM Program | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Common stock maximum offering value | $ 616,600 | ||
ATM Program | Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Shares issued (shares) | shares | 0 | 4,053,623 | |
Weighted average share price (usd per share) | $ / shares | $ 76.17 | ||
Proceed from issuance of stock | $ 303,800 | ||
Long Term Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Fair value assumptions expected dividend rate (percent) | 0.00% | ||
Deferred compensation arrangement with individual, common stock reserved for future issuance (shares) | shares | 995,380 | 893,713 | |
Deferred compensation obligation | $ 42,300 | $ 37,300 | |
Unrecognized stock based compensation expense | $ 32,400 | ||
Weighted-average remaining term | 2 years 2 months 12 days | ||
Long Term Incentive Plan | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Risk free interest rate (percent) | 1.60% | ||
Fair value assumptions expected volatility rate (percent) | 15.20% | ||
PSU Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Performance period (in years) | 3 years | ||
PSU Awards | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Potential performance return rate for stock awards | multiplier | 0 | ||
PSU Awards | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Potential performance return rate for stock awards | multiplier | 3 |
Stock-Based Compensation and _4
Stock-Based Compensation and Equity - Restricted and Conditional Awards (Details) | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
RSA and RSU Awards | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares | |
Nonvested, beginning balance - shares | shares | 283,977 |
Granted - shares | shares | 123,944 |
Vested - shares | shares | (127,879) |
Forfeited - shares | shares | (4,430) |
Adjustments - shares | shares | 0 |
Nonvested, ending balance - shares | shares | 275,612 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | |
Nonvested, beginning balance, weighted average grant date fair value (in dollars per share) | $ / shares | $ 68.51 |
Granted, weighted average grant date fair value (in dollars per share) | $ / shares | 83.26 |
Vested, weighted average grant date fair value (in dollars per share) | $ / shares | 65.67 |
Forfeited, weighted average grant date fair value (in dollars per share) | $ / shares | 69.87 |
Adjustments, weighted average grant date fair value (in dollars per share) | $ / shares | 0 |
Nonvested, weighted average grant date fair value (in dollars per share) | $ / shares | $ 76.44 |
PSU Awards | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares | |
Nonvested, beginning balance - shares | shares | 331,242 |
Granted - shares | shares | 90,518 |
Vested - shares | shares | (156,838) |
Forfeited - shares | shares | (6,432) |
Adjustments - shares | shares | 21,611 |
Nonvested, ending balance - shares | shares | 280,101 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | |
Nonvested, beginning balance, weighted average grant date fair value (in dollars per share) | $ / shares | $ 80.90 |
Granted, weighted average grant date fair value (in dollars per share) | $ / shares | 104.65 |
Vested, weighted average grant date fair value (in dollars per share) | $ / shares | 80.42 |
Forfeited, weighted average grant date fair value (in dollars per share) | $ / shares | 88.89 |
Adjustments, weighted average grant date fair value (in dollars per share) | $ / shares | 91.84 |
Nonvested, weighted average grant date fair value (in dollars per share) | $ / shares | $ 87.90 |
Stock-Based Compensation and _5
Stock-Based Compensation and Equity - Earnings Per Share (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share Reconciliation | ||
Net Income Attributable to W. P. Carey | $ 66,090 | $ 68,494 |
Net income attributable to nonvested participating RSUs | 0 | (19) |
Net income — basic and diluted | $ 66,090 | $ 68,475 |
Weighted-average shares outstanding – basic (shares) | 173,249,236 | 167,234,121 |
Effect of dilutive securities (shares) | 210,817 | 200,619 |
Weighted-average shares outstanding – diluted (shares) | 173,460,053 | 167,434,740 |
Anti-dilutive shares (shares) | 0 | 0 |
Stock-Based Compensation and _6
Stock-Based Compensation and Equity - Reclassifications Out of Accumulated Other Comprehensive Loss Rollforward (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Reconciliation Of Accumulated Comprehensive Income | ||
Beginning equity balance | $ 6,948,173 | $ 6,830,055 |
Amounts reclassified from accumulated other comprehensive loss to: | ||
Other gains and (losses) | 4,423 | (955) |
Interest expense | 52,540 | 61,313 |
Net current period other comprehensive (loss) income | (39,351) | 2,313 |
Ending equity balance | 6,773,076 | 7,017,729 |
AOCI Including Portion Attributable to Noncontrolling Interest | ||
Reconciliation Of Accumulated Comprehensive Income | ||
Other comprehensive loss before reclassifications | (35,806) | 5,768 |
Amounts reclassified from accumulated other comprehensive loss to: | ||
Total | (3,545) | (3,455) |
Net current period other comprehensive (loss) income | (39,351) | 2,313 |
AOCI Including Portion Attributable to Noncontrolling Interest | Amounts reclassified from accumulated other comprehensive loss to: | ||
Amounts reclassified from accumulated other comprehensive loss to: | ||
Other gains and (losses) | (3,783) | (3,522) |
Interest expense | 238 | 67 |
Gains and (Losses) on Derivative Instruments | ||
Reconciliation Of Accumulated Comprehensive Income | ||
Other comprehensive loss before reclassifications | 16,394 | 5,404 |
Amounts reclassified from accumulated other comprehensive loss to: | ||
Total | (3,545) | (3,455) |
Net current period other comprehensive (loss) income | 12,849 | 1,949 |
Gains and (Losses) on Derivative Instruments | Amounts reclassified from accumulated other comprehensive loss to: | ||
Amounts reclassified from accumulated other comprehensive loss to: | ||
Other gains and (losses) | (3,783) | (3,522) |
Interest expense | 238 | 67 |
Foreign Currency Translation Adjustments | ||
Reconciliation Of Accumulated Comprehensive Income | ||
Other comprehensive loss before reclassifications | (52,200) | (173) |
Amounts reclassified from accumulated other comprehensive loss to: | ||
Total | 0 | 0 |
Net current period other comprehensive (loss) income | (52,200) | (173) |
Foreign Currency Translation Adjustments | Amounts reclassified from accumulated other comprehensive loss to: | ||
Amounts reclassified from accumulated other comprehensive loss to: | ||
Other gains and (losses) | 0 | 0 |
Interest expense | 0 | 0 |
Gains and (Losses) on Investments | ||
Reconciliation Of Accumulated Comprehensive Income | ||
Other comprehensive loss before reclassifications | 0 | 537 |
Amounts reclassified from accumulated other comprehensive loss to: | ||
Total | 0 | 0 |
Net current period other comprehensive (loss) income | 0 | 537 |
Gains and (Losses) on Investments | Amounts reclassified from accumulated other comprehensive loss to: | ||
Amounts reclassified from accumulated other comprehensive loss to: | ||
Other gains and (losses) | 0 | 0 |
Interest expense | 0 | 0 |
Accumulated Other Comprehensive Income (Loss) | ||
Reconciliation Of Accumulated Comprehensive Income | ||
Beginning equity balance | (255,667) | (254,996) |
Amounts reclassified from accumulated other comprehensive loss to: | ||
Ending equity balance | (295,018) | (252,683) |
Gains and (Losses) on Derivative Instruments | ||
Reconciliation Of Accumulated Comprehensive Income | ||
Beginning equity balance | 13,048 | 14,102 |
Amounts reclassified from accumulated other comprehensive loss to: | ||
Ending equity balance | 25,897 | 16,051 |
Foreign Currency Translation Adjustments | ||
Reconciliation Of Accumulated Comprehensive Income | ||
Beginning equity balance | (268,715) | (269,091) |
Amounts reclassified from accumulated other comprehensive loss to: | ||
Ending equity balance | (320,915) | (269,264) |
Gains and (Losses) on Investments | ||
Reconciliation Of Accumulated Comprehensive Income | ||
Beginning equity balance | 0 | (7) |
Amounts reclassified from accumulated other comprehensive loss to: | ||
Ending equity balance | $ 0 | $ 530 |
Income Taxes - Narratives (Deta
Income Taxes - Narratives (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Taxes | ||
Net operating loss carryforward recognized | $ 7,200 | |
Current income tax (expense) benefit | 200 | $ 300 |
Deferred income tax benefit | 41,500 | 1,800 |
Deferred income tax benefit | (41,487) | $ (1,829) |
Affiliated Entity | CWI REITs | ||
Income Taxes | ||
Deferred income tax benefit | (6,500) | |
Investment in a Cold Storage Operator | ||
Income Taxes | ||
Deferred income tax benefit | (37,200) | |
Adjustments | ||
Income Taxes | ||
Current income tax (expense) benefit | $ 6,300 |
Property Dispositions - Narrati
Property Dispositions - Narratives (Details) $ in Millions | 1 Months Ended | 3 Months Ended | ||
Jan. 31, 2020USD ($) | Mar. 31, 2020USD ($)property | Mar. 31, 2019USD ($)property | Dec. 31, 2019property | |
Properties disposed of by sale | ||||
Discontinued Operation Additional Disclosures | ||||
Number of properties sold | property | 4 | 1 | ||
Proceeds from the sale of properties | $ 103.5 | $ 105.2 | $ 4.9 | |
Gain (loss) on sale of real estate, net of tax | 11.8 | $ 0.9 | ||
Gain on sales of real estate, applicable tax | 0.1 | |||
Properties disposed of by sale | Noncontrolling interests | ||||
Discontinued Operation Additional Disclosures | ||||
Proceeds from the sale of properties | 4.7 | |||
Gain (loss) on sale of real estate, net of tax | $ 0.6 | |||
Asset held for sale, not in discontinued operations | ||||
Discontinued Operation Additional Disclosures | ||||
Number of real estate properties (property) | property | 1 |
Segment Reporting - Narratives
Segment Reporting - Narratives (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020USD ($)segment | Mar. 31, 2019USD ($) | |
Segment Reporting Information | ||
Number of business segments | segment | 2 | |
Real Estate | ||
Segment Reporting Information | ||
Gross contract revenue | $ 5,967 | $ 15,996 |
Real Estate | Hotel in Bloomington, Minnesota | ||
Segment Reporting Information | ||
Gross contract revenue | 2,700 | 3,400 |
Real Estate | Hotel in Miami, FL | ||
Segment Reporting Information | ||
Gross contract revenue | $ 1,900 | $ 2,900 |
Segment Reporting - Income From
Segment Reporting - Income From Real Estate (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues | ||
Revenues | $ 308,999 | $ 298,323 |
Operating Expenses | ||
Depreciation and amortization | 116,194 | 112,379 |
Impairment charges | 19,420 | 0 |
General and administrative | 20,745 | 21,285 |
Reimbursable tenant costs | 13,175 | 13,171 |
Property expenses, excluding reimbursable tenant costs | 10,075 | 9,912 |
Operating property expenses | 5,223 | 10,594 |
Stock-based compensation expense | 2,661 | 4,165 |
Merger and other expenses | 187 | 146 |
Total operating expenses | 192,987 | 177,722 |
Other Income and Expenses | ||
Interest expense | (52,540) | (61,313) |
Gain on sale of real estate, net | 11,751 | 933 |
Other gains and (losses) | (4,423) | 955 |
Equity in (losses) earnings of equity method investments in the Managed Programs and real estate | (45,790) | 5,491 |
Total other income and expenses | (91,002) | (53,934) |
Income before income taxes | 25,010 | 66,667 |
Benefit from (provision for) income taxes | 41,692 | 2,129 |
Net Income | 66,702 | 68,796 |
Net income attributable to noncontrolling interests | (612) | (302) |
Net Income Attributable to W. P. Carey | 66,090 | 68,494 |
Real Estate | ||
Revenues | ||
Lease revenues | 282,110 | 262,939 |
Lease termination income and other | 6,509 | 3,270 |
Gross contract revenue | 5,967 | 15,996 |
Revenues | 294,586 | 282,205 |
Operating Expenses | ||
Depreciation and amortization | 115,207 | 111,413 |
Impairment charges | 19,420 | 0 |
General and administrative | 14,922 | 15,188 |
Reimbursable tenant costs | 13,175 | 13,171 |
Property expenses, excluding reimbursable tenant costs | 10,075 | 9,912 |
Operating property expenses | 5,223 | 10,594 |
Stock-based compensation expense | 1,970 | 2,800 |
Merger and other expenses | (132) | 146 |
Total operating expenses | 179,860 | 163,224 |
Other Income and Expenses | ||
Interest expense | (52,540) | (61,313) |
Gain on sale of real estate, net | 11,751 | 933 |
Other gains and (losses) | (5,776) | 970 |
Equity in (losses) earnings of equity method investments in the Managed Programs and real estate | 1,565 | (78) |
Total other income and expenses | (45,000) | (59,488) |
Income before income taxes | 69,726 | 59,493 |
Benefit from (provision for) income taxes | 31,800 | (6,159) |
Net Income | 101,526 | 53,334 |
Net income attributable to noncontrolling interests | (612) | 74 |
Net Income Attributable to W. P. Carey | $ 100,914 | $ 53,408 |
Segment Reporting - Income Fr_2
Segment Reporting - Income From Investment Management (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating Expenses | ||
General and administrative | $ 20,745 | $ 21,285 |
Reimbursable costs from affiliates | 4,030 | 3,868 |
Subadvisor fees | 1,277 | 2,202 |
Depreciation and amortization | 116,194 | 112,379 |
Stock-based compensation expense | 2,661 | 4,165 |
Merger and other expenses | 187 | 146 |
Total operating expenses | 192,987 | 177,722 |
Other Income and Expenses | ||
Equity in (losses) earnings of equity method investments in the Managed Programs and real estate | (45,790) | 5,491 |
Other gains and (losses) | (4,423) | 955 |
Total other income and expenses | (91,002) | (53,934) |
Income before income taxes | 25,010 | 66,667 |
Benefit from (provision for) income taxes | 41,692 | 2,129 |
Net Income | 66,702 | 68,796 |
Net income attributable to noncontrolling interests | (612) | (302) |
Net Income Attributable to W. P. Carey | 66,090 | 68,494 |
Investment Management | ||
Investment Management: | ||
Gross contract revenue | 14,413 | 16,118 |
Operating Expenses | ||
General and administrative | 5,823 | 6,097 |
Reimbursable costs from affiliates | 4,030 | 3,868 |
Subadvisor fees | 1,277 | 2,202 |
Depreciation and amortization | 987 | 966 |
Stock-based compensation expense | 691 | 1,365 |
Merger and other expenses | 319 | 0 |
Total operating expenses | 13,127 | 14,498 |
Other Income and Expenses | ||
Equity in (losses) earnings of equity method investments in the Managed Programs and real estate | (47,355) | 5,569 |
Other gains and (losses) | 1,353 | (15) |
Total other income and expenses | (46,002) | 5,554 |
Income before income taxes | (44,716) | 7,174 |
Benefit from (provision for) income taxes | 9,892 | 8,288 |
Net Income | (34,824) | 15,462 |
Net income attributable to noncontrolling interests | 0 | (376) |
Net Income Attributable to W. P. Carey | (34,824) | 15,086 |
Investment Management | Asset management revenue | ||
Investment Management: | ||
Gross contract revenue | 9,889 | 9,732 |
Investment Management | Reimbursable costs from affiliates | ||
Investment Management: | ||
Gross contract revenue | 4,030 | 3,868 |
Investment Management | Structuring and other advisory revenue | ||
Investment Management: | ||
Gross contract revenue | $ 494 | $ 2,518 |
Segment Reporting - Total Compa
Segment Reporting - Total Company (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information Profit Loss | ||
Revenues | $ 308,999 | $ 298,323 |
Operating expenses | 192,987 | 177,722 |
Other income and (expenses) | (91,002) | (53,934) |
Benefit from income taxes | 41,692 | 2,129 |
Net income attributable to noncontrolling interests | (612) | (302) |
Net Income Attributable to W. P. Carey | $ 66,090 | $ 68,494 |
Segment Reporting - Segment Ass
Segment Reporting - Segment Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | |
Assets | |||
Total assets | [1] | $ 13,890,308 | $ 14,060,918 |
Real Estate | |||
Assets | |||
Total assets | 13,686,006 | 13,811,403 | |
Investment Management | |||
Assets | |||
Total assets | $ 204,302 | $ 249,515 | |
[1] | See Note 2 for details related to variable interest entities (“VIEs”). |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Events - CWI 2 - W.P. Carey - CWI 1 | Apr. 13, 2020$ / sharesshares |
Preferred Stock | |
Subsequent Event | |
Shares issued as compensation in acquisition (shares) | 1,300,000 |
Preferred stock liquidation preference (usd per share) | $ / shares | $ 50 |
Common Stock | |
Subsequent Event | |
Shares issued as compensation in acquisition (shares) | 2,840,549 |