Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2014 | Apr. 28, 2014 | |
Document And Entity Information [Abstract] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 31-Mar-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Entity Registrant Name | 'GLADSTONE COMMERCIAL CORP | ' |
Entity Central Index Key | '0001234006 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 16,105,958 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
ASSETS | ' | ' | ||
Real estate, at cost | $627,993 | $642,353 | ||
Less: accumulated depreciation | 84,008 | 81,241 | ||
Total real estate, net | 543,985 | 561,112 | ||
Lease intangibles, net | 78,284 | 79,632 | ||
Real estate and related assets held for sale, net | 9,932 | ' | ||
Cash and cash equivalents | 5,813 | 8,546 | ||
Restricted cash | 3,506 | 5,051 | ||
Funds held in escrow | 9,417 | 8,653 | ||
Deferred rent receivable, net | 19,520 | 18,905 | ||
Deferred financing costs, net | 6,814 | 6,840 | ||
Other assets | 1,611 | 1,786 | ||
TOTAL ASSETS | 678,882 | 690,525 | ||
LIABILITIES | ' | ' | ||
Mortgage notes payable | 426,847 | 422,602 | ||
Borrowings under line of credit | 24,100 | 24,400 | ||
Series C mandatorily redeemable preferred stock, par value $0.001 per share; $25 per share liquidation preference; 1,700,000 shares authorized; and 1,540,000 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively | 38,500 | 38,500 | ||
Deferred rent liability, net | 5,862 | 6,015 | ||
Asset retirement obligation | 3,704 | 3,884 | ||
Accounts payable and accrued expenses | 2,186 | 2,359 | ||
Other liabilities related to assets held for sale | 178 | ' | ||
Due to Adviser and Administrator | 1,160 | [1] | 1,360 | [1] |
Other liabilities | 6,495 | 8,259 | ||
Total Liabilities | 509,032 | 507,379 | ||
Commitments and contingencies | ' | [2] | ' | [2] |
STOCKHOLDERS' EQUITY | ' | ' | ||
Series A and B redeemable preferred stock, par value $0.001 per share; $25 per share liquidation preference; 2,300,000 shares authorized and 2,150,000 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively | 2 | 2 | ||
Senior common stock, par value $0.001 per share; 7,500,000 shares authorized and 402,811 and 374,484 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively | ' | ' | ||
Common stock, par value $0.001 per share, 38,500,000 shares authorized and 16,081,365 and 15,662,414 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively | 16 | 16 | ||
Additional paid in capital | 305,994 | 298,751 | ||
Notes receivable - employee | -375 | -375 | ||
Distributions in excess of accumulated earnings | -135,787 | -115,248 | ||
Total Stockholders' Equity | 169,850 | 183,146 | ||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $678,882 | $690,525 | ||
[1] | Refer to Note 2 "Related-Party Transactions" | |||
[2] | Refer to Note 8 "Commitments and Contigencies" |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Redeemable preferred stock, par value | $0.00 | $0.00 |
Redeemable preferred stock, liquidation preference | $25 | $25 |
Redeemable preferred stock, shares authorized | 2,300,000 | 2,300,000 |
Redeemable preferred stock, shares issued | 2,150,000 | 2,150,000 |
Redeemable preferred stock, shares outstanding | 2,150,000 | 2,150,000 |
Senior common stock, par value | $0.00 | $0.00 |
Senior common stock, shares authorized | 7,500,000 | 7,500,000 |
Senior common stock, shares issued | 402,811 | 374,484 |
Senior common stock, shares outstanding | 402,811 | 374,484 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 38,500,000 | 38,500,000 |
Common stock, shares issued | 16,081,365 | 15,662,414 |
Common stock, shares outstanding | 16,081,365 | 15,662,414 |
Mandatorily Redeemable Preferred Stock [Member] | Series C Preferred Stock [Member] | ' | ' |
Redeemable preferred stock, par value | $0.00 | $0.00 |
Redeemable preferred stock, liquidation preference | $25 | $25 |
Redeemable preferred stock, shares authorized | 1,700,000 | 1,700,000 |
Redeemable preferred stock, shares issued | 1,540,000 | 1,540,000 |
Redeemable preferred stock, shares outstanding | 1,540,000 | 1,540,000 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | ||
Operating revenues | ' | ' | ||
Rental revenue | $16,585 | $13,666 | ||
Tenant recovery revenue | 551 | 369 | ||
Income from real estate and related assets held for sale | 17,136 | 14,035 | ||
Operating expenses | ' | ' | ||
Depreciation and amortization | 6,720 | 4,901 | ||
Property operating expenses | 1,330 | 737 | ||
Acquisition related expenses | 110 | 185 | ||
Base management fee | 625 | [1] | 353 | [1] |
Incentive fee | 1,240 | [1] | 931 | [1] |
Administration fee | 492 | [1] | 362 | [1] |
General and administrative | 466 | 389 | ||
Impairment charge | 13,958 | ' | ||
Total operating expenses before credit to incentive fee | 24,941 | 7,858 | ||
Credit to incentive fee | -1,205 | [1] | -585 | [1] |
Total operating expenses | 23,736 | 7,273 | ||
Other income (expense) | ' | ' | ||
Interest expense | -6,275 | -5,661 | ||
Other income | 47 | 18 | ||
Total other expense | -6,914 | -6,329 | ||
Net (loss) income | -13,514 | 433 | ||
Distributions attributable to senior common stock | -100 | -53 | ||
Net loss attributable to common stockholders | -14,637 | -643 | ||
Earnings per weighted average share of common stock - basic & diluted | ($0.93) | ($0.06) | ||
Weighted average shares of common stock outstanding - basic & diluted | 15,746,714 | 11,230,647 | ||
Earnings per weighted average share of senior common stock | $0.26 | $0.26 | ||
Weighted average shares of senior common stock outstanding - basic | 385,875 | 204,582 | ||
Series C Preferred Stock [Member] | ' | ' | ||
Other income (expense) | ' | ' | ||
Distributions attributable to Series C mandatorily redeemable preferred stock | -686 | -686 | ||
Series A and B Preferred Stock [Member] | ' | ' | ||
Other income (expense) | ' | ' | ||
Distributions attributable to Series A and B preferred stock | ($1,023) | ($1,023) | ||
[1] | Refer to Note 2 "Related-Party Transactions" |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Cash flows from operating activities: | ' | ' |
Net (loss) income | ($13,514) | $433 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 6,720 | 4,901 |
Impairment charge | 13,958 | ' |
Amortization of deferred financing costs | 386 | 405 |
Amortization of deferred rent asset and liability, net | -92 | -98 |
Amortization of discount and premium on assumed debt | -44 | -42 |
Asset retirement obligation expense | -180 | 31 |
Increase (decrease) in other assets | 298 | -465 |
Increase in deferred rent receivable | -906 | -826 |
Decrease in accounts payable, accrued expenses, and amount due Adviser and Administrator | -372 | -637 |
Decrease in other liabilities | -41 | -264 |
Leasing commissions paid | -54 | -384 |
Net cash provided by operating activities | 6,159 | 3,054 |
Cash flows from investing activities: | ' | ' |
Acquisition of real estate and related intangible assets | -3,718 | -5,650 |
Improvements of existing real estate | -1,673 | -121 |
Receipts from lenders for funds held in escrow | 496 | 1,228 |
Payments to lenders for funds held in escrow | -1,260 | -830 |
Receipts from tenants for reserves | 790 | 1,456 |
Payments to tenants from reserves | -2,335 | -541 |
Decrease (increase) in restricted cash | 1,545 | -915 |
Deposits on future acquisitions | -250 | ' |
Deposits applied against real estate investments | 127 | 50 |
Net cash used in investing activities | -6,278 | -5,323 |
Cash flows from financing activities: | ' | ' |
Proceeds from issuance of equity | 7,707 | 6,484 |
Offering costs | -503 | -398 |
Borrowings under mortgage notes payable | ' | 3,700 |
Payments for deferred financing costs | -360 | -141 |
Principal repayments on mortgage notes payable | -2,172 | -1,808 |
Principal repayments on employee notes receivable | ' | 35 |
Borrowings from line of credit | 12,700 | 7,900 |
Repayments on line of credit | -13,000 | -6,500 |
Distributions paid for common, senior common and preferred stock | -6,986 | -5,270 |
Net cash (used in) provided by financing activities | -2,614 | 4,002 |
Net (decrease) increase in cash and cash equivalents | -2,733 | 1,733 |
Cash and cash equivalents, beginning of period | 8,546 | 5,546 |
Cash and cash equivalents, end of period | 5,813 | 7,279 |
NON-CASH OPERATING, INVESTING AND FINANCING INFORMATION | ' | ' |
Fixed rate debt assumed in connection with acquisitions | 6,330 | ' |
Senior common dividend issued in the dividend reinvestment program | 39 | 22 |
Capital improvements included in accounts payable | $671 | ' |
Organization_Basis_of_Presenta
Organization, Basis of Presentation and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2014 | |
Accounting Policies [Abstract] | ' |
Organization, Basis of Presentation and Significant Accounting Policies | ' |
1. Organization, Basis of Presentation and Significant Accounting Policies | |
Gladstone Commercial Corporation, is a real estate investment trust, or REIT, that was incorporated under the General Corporation Laws of the State of Maryland on February 14, 2003 primarily for the purpose of investing in and owning net leased industrial, commercial and retail real property and selectively making long-term industrial and commercial mortgage loans. Subject to certain restrictions and limitations, our business is managed by Gladstone Management Corporation, a Delaware corporation, or the Adviser, and administrative services are provided by Gladstone Administration, LLC, a Delaware limited liability company, or the Administrator, each pursuant to a contractual arrangement with us. Our Adviser and Administrator collectively employ all of our personnel and pay their salaries, benefits, and general expenses directly. | |
Subsidiaries | |
We conduct substantially all of our operations through a subsidiary, Gladstone Commercial Limited Partnership, a Delaware limited partnership, or the Operating Partnership. As we currently own all of the general and limited partnership interests of the Operating Partnership through two of our subsidiaries, GCLP Business Trust I and II, the financial position and results of operations of the Operating Partnership are consolidated with those of the Company. | |
Gladstone Commercial Lending, LLC, a Delaware limited liability company, or Gladstone Commercial Lending, a subsidiary of ours, was created to conduct all operations related to real estate mortgage loans of the Company. As the Operating Partnership currently owns all of the membership interests of Gladstone Commercial Lending, the financial position and results of operations of Gladstone Commercial Lending are consolidated with those of the Company. | |
Gladstone Commercial Advisers, Inc., a Delaware corporation, or Commercial Advisers, and a wholly-owned subsidiary of the Company, is a taxable REIT subsidiary, or TRS, which was created to collect any non-qualifying income related to our real estate portfolio. There has been no such income earned to date. Since the Company owns 100% of the voting securities of Commercial Advisers, the financial position and results of operations of Commercial Advisers are consolidated with those of the Company. | |
GCLP Business Trust I and GCLP Business Trust II, each a subsidiary and business trust of the Company, were formed under the laws of the Commonwealth of Massachusetts on December 28, 2005. We transferred our 99% limited partnership interest in the Operating Partnership to GCLP Business Trust I in exchange for 100 shares of the trust. Gladstone Commercial Partners, LLC transferred its 1% general partnership interest in the Operating Partnership to GCLP Business Trust II in exchange for 100 trust shares. | |
All further references herein to “we,” “our,” “us” and the “Company” mean Gladstone Commercial Corporation and its consolidated subsidiaries, except where it is made clear that the term means only Gladstone Commercial Corporation. | |
Interim Financial Information | |
Our interim financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, for interim financial information and pursuant to the requirements for reporting on Form 10-Q and in accordance with Article 10 of Regulation S-X. Accordingly, certain disclosures accompanying annual financial statements prepared in accordance with GAAP are omitted. The year-end balance sheet data presented herein was derived from audited financial statements, but does not include all disclosures required by GAAP. In the opinion of our management, all adjustments, consisting solely of normal recurring accruals, necessary for the fair presentation of financial statements for the interim period have been included. The interim financial statements and notes thereto should be read in conjunction with the financial statements and notes thereto included in our Form 10-K for the year ended December 31, 2013, as filed with the Securities and Exchange Commission on February 18, 2014. The results of operations for the three months ended March 31, 2014 are not necessarily indicative of the results that may be expected for other interim periods or for the full fiscal year. | |
Use of Estimates | |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could materially differ from those estimates. | |
Real Estate and Lease Intangibles | |
We record investments in real estate at cost and capitalize improvements and replacements when they extend the useful life or improve the efficiency of the asset. We expense costs of repairs and maintenance as such costs are incurred. We compute depreciation using the straight-line method over the estimated useful life or 39 years for buildings and improvements, 5 to 20 years for equipment and fixtures, and the shorter of the useful life or the remaining lease term for tenant improvements and leasehold interests. | |
Certain of our acquisitions involve sale-leaseback transactions with newly-originated leases, which we account for as asset acquisitions under Accounting Standards Codification, or ASC, 805, “Business Combinations.” In the case of an asset acquisition, we will capitalize the transaction costs incurred in connection with the acquisition. Other of our acquisitions involve the acquisition of properties that are already being operated as rental property, which we will generally consider to be a business combination under ASC 805. Business combination guidance is generally applicable to us when properties are acquired with leases in place at the time of acquisition. When an acquisition is considered a business combination, ASC 805 requires that the purchase price of real estate be allocated to the acquired tangible assets and liabilities, consisting of land, building, tenant improvements, long-term debt assumed and identified intangible assets and liabilities, typically the value of above-market and below-market leases, the value of in-place leases, the value of unamortized lease origination costs and the value of tenant relationships, based in each case on their fair values. ASC 805 also requires that all expenses related to an acquisition accounted for as a business combination to be expensed as incurred, rather than capitalized into the cost of the acquisition. | |
Management’s estimates of fair value are made using methods similar to those used by independent appraisers (e.g. discounted cash flow analysis). Factors considered by management in its analysis include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions and costs to execute similar leases. We also consider information obtained about each property as a result of our pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets and liabilities acquired. In estimating carrying costs, management also includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the hypothetical expected lease-up periods, which primarily range from 9 to 18 months, depending on specific local market conditions. Management also estimates costs to execute similar leases, including leasing commissions, legal and other related expenses to the extent that such costs are not already incurred in connection with a new lease origination as part of the transaction. | |
We allocate purchase price to the fair value of the tangible assets of an acquired property by valuing the property as if it were vacant. The “as-if-vacant” value is allocated to land, building and tenant improvements based on management’s determination of the relative fair values of these assets. Real estate depreciation expense on these tangible assets was $4.4 million and $3.4 million for the three months ended March 31, 2014 and 2013, respectively | |
Above-market and below-market in-place lease fair values for owned properties are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease. When determining the non-cancelable term of the lease, we evaluate if fixed-rate renewal options, if any, should be included. The capitalized above-market lease values, included in the accompanying condensed consolidated balance sheets as part of deferred rent receivable, are amortized as a reduction of rental income over the remaining non-cancelable terms of the respective leases. Total amortization related to above-market lease values was $0.1 million, for both the three months ended March 31, 2014 and 2013, respectively. The capitalized below-market lease values, included in the accompanying condensed consolidated balance sheets as part of deferred rent liability, are amortized as an increase to rental income over the remaining non-cancelable terms of the respective leases including any below market renewal periods. Total amortization related to below-market lease values was $0.2 million for both the three months ended March 31, 2014 and 2013, respectively. | |
The total amount of the remaining intangible assets acquired, which consists of in-place lease values, unamortized lease origination costs, and customer relationship intangible values, are allocated based on management’s evaluation of the specific characteristics of each tenant’s lease and our overall relationship with that respective tenant. Characteristics to be considered by management in determining these values include the nature and extent of our existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and our expectations of lease renewals (including those existing under the terms of the lease agreement), among other factors. | |
The value of in-place leases and lease origination costs are amortized to expense over the remaining term of the respective leases, which generally range from 10 to 15 years. The value of customer relationship intangibles, which is the benefit to us resulting from the likelihood of an existing tenant renewing its lease, are amortized to expense over the remaining term and any anticipated renewal periods in the respective leases, but in no event does the amortization period for intangible assets exceed the remaining depreciable life of the building. Should a tenant terminate its lease, the unamortized portion of the above-market and below-market lease values would be charged to rental income and the unamortized portion of in-place lease values, lease origination costs and customer relationship intangibles will be immediately charged to amortization expense. Total amortization expense related to these intangible assets and liabilities was $2.3 million and $1.5 million for the three months ended March 31, 2014 and 2013, respectively. | |
Real Estate Held for Sale | |
ASC 360-10, “Property, Plant, and Equipment,” requires that any properties which have are held for sale, be presented separately in the condensed consolidated balance sheet. Real estate assets held for sale are measured at the lower of the carrying amount or the fair value, less the cost to sell, and are listed separately on our condensed consolidated balance sheet. Once properties are classified as held for sale, no further depreciation is recorded. | |
Impairment Charges | |
We account for the impairment of real estate, including intangible assets, in accordance with ASC 360-10-35, “Property, Plant, and Equipment,” which requires us to periodically review the carrying value of each property to determine if circumstances indicate impairment of the carrying value of the investment exists or that depreciation periods should be modified. If circumstances indicate the possibility of impairment, we prepare a projection of the undiscounted future cash flows, without interest charges, of the specific property and determine if the carrying value of the investment in such property is recoverable. In performing the analysis, we consider such factors as the tenants’ payment history and financial condition, the likelihood of lease renewal, business conditions in the industry in which the tenants operate, whether there are indications that the fair value of the real estate has decreased and our intended holding period of the property. If the carrying amount is more than the aggregate undiscounted future cash flows, we would recognize an impairment loss to the extent the carrying amount exceeds the estimated fair value, less cost to sell, of the property. We evaluate our entire portfolio of properties each quarter for any impairment indicators and perform an impairment analysis on those select properties that have an indication of impairment. | |
Deferred Financing Costs | |
Deferred financing costs consist of costs incurred to obtain financing, including legal fees, origination fees and administrative fees. The costs are deferred and amortized using the straight-line method, which approximates the effective interest method, over the term of the secured financing. We made payments of $0.4 million and $0.1 million for deferred financing costs during the three months ended March 31, 2014 and 2013, respectively. Total amortization expense related to deferred financing costs is included in interest expense and was $0.4 million for both the three months ended March 31, 2014 and 2013, respectively. | |
Revenue Recognition | |
Rental revenue includes rents that each tenant pays in accordance with the terms of its respective lease reported evenly over the non-cancelable term of the lease. Most of our leases contain rental increases at specified intervals. We recognize such revenues on a straight-line basis. Deferred rent receivable in the accompanying condensed consolidated balance sheet includes the cumulative difference between rental revenue, as recorded on a straight-line basis, and rents received from the tenants in accordance with the lease terms, along with the capitalized above-market in-place lease values of certain acquired properties. Accordingly, we determine, in our judgment, to what extent the deferred rent receivable applicable to each specific tenant is collectable. We review deferred rent receivable, as it relates to straight line rents, on a quarterly basis and take into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the geographic area in which the property is located. In the event that the collectability of deferred rent with respect to any given tenant is in doubt, we record an allowance for uncollectable accounts or record a direct write-off of the specific rent receivable. No such reserves or direct write-offs have been recorded to date. | |
Tenant recovery revenue includes payments from tenants as reimbursements for franchise taxes, management fees, insurance, and ground lease payments. We recognize tenant recovery revenue in the same periods that we incur the related expenses. | |
Asset Retirement Obligations | |
ASC 410, “Asset Retirement and Environmental Obligation,” requires an entity to recognize a liability for a conditional asset retirement obligation when incurred if the liability can be reasonably estimated. ASC 410-20-20 clarifies that the term “Conditional Asset Retirement Obligation” refers to a legal obligation (pursuant to existing laws or by contract) to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the entity. ASC 410-20-25-6 clarifies when an entity would have sufficient information to reasonably estimate the fair value of an asset retirement obligation. We have accrued a liability and corresponding increase to the cost of the related properties for disposal related to all properties constructed prior to 1985 that have, or may have, asbestos present in the building. The liabilities are accreted over the life of the leases for the respective properties. There were no liabilities accrued during the three months ended March 31, 2014 and 2013, respectively. We recorded expenses of $0.03 million during both the three months ended March 31, 2014 and 2013, respectively, to general and administrative expense. Costs of future expenditures for obligations are discounted to their present value. The aggregate undiscounted obligation on all properties is $9.2 million and the discount rates used in the calculations range from 2.5% to 7.6%. We do not expect to make any payments in conjunction with these obligations in each of the next five years. | |
Comprehensive Income (Loss) | |
For the three months ended March 31, 2014 and 2013, comprehensive income (loss) equaled net income (loss); therefore, a separate statement of comprehensive income (loss) is not included in the accompanying condensed consolidated financial statements. | |
Recently Issued Accounting Guidance | |
The Financial Accounting Standards Board, or FASB, issued Accounting Standards Update No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” Under this revised guidance, only disposals representing a strategic shift in operations, such as a disposal of a major geographic area, a major line of business or a major equity method investment, will be presented as discontinued operations. This standard is effective for our fiscal year beginning January 1, 2015; however, the FASB has permitted early adoption beginning with the first quarter of 2014. We adopted this standard during the quarter ended March 31, 2014, and accordingly we did not present our assets classified as held for sale during the quarter ended March 31, 2014 as discontinued operations. |
RelatedParty_Transactions
Related-Party Transactions | 3 Months Ended |
Mar. 31, 2014 | |
Related Party Transactions [Abstract] | ' |
Related-Party Transactions | ' |
2. Related-Party Transactions | |
Gladstone Management and Gladstone Administration | |
We are externally managed pursuant to contractual arrangements with our Adviser and our Administrator which collectively employ all of our personnel and pay their salaries, benefits, and general expenses directly. We have an advisory agreement with our Adviser, or the Advisory Agreement, and an administration agreement with our Administrator, or the Administration Agreement. The management and administrative services and fees under the Advisory and Administration Agreements are described below. At March 31, 2014 and December 31, 2013, $1.2 million and $1.4 million, respectively, was collectively due to our Adviser and Administrator. | |
Advisory Agreement | |
The Advisory Agreement provides for an annual base management fee equal to 2% of our total stockholders’ equity, less the recorded value of any preferred stock and adjusted to exclude the effect of any unrealized gains, losses or other items that do not affect realized net income (including impairment charges), or common stockholders’ equity, and an incentive fee based on funds from operations, or FFO. For the three months ended March 31, 2014 and 2013, we recorded a base management fee of $0.6 million and $0.4 million, respectively. | |
For purposes of calculating the incentive fee, FFO includes any realized capital gains and capital losses, less any distributions paid on preferred stock and senior common stock, but FFO does not include any unrealized capital gains or losses (including impairment charges). The incentive fee rewards the Adviser if our quarterly FFO, before giving effect to any incentive fee, or pre-incentive fee FFO, exceeds 1.75%, or 7% annualized, or the hurdle rate, of total common stockholders’ equity. The Adviser receives 100% of the amount of the pre-incentive fee FFO that exceeds the hurdle rate, but is less than 2.1875% of our common stockholders’ equity. The Adviser also receives an incentive fee of 20% of the amount of our pre-incentive fee FFO that exceeds 2.1875% of common stockholders’ equity. | |
For the three months ended March 31, 2014 and 2013, we recorded an incentive fee of $1.2 million and $0.9 million, respectively, offset by credits related to unconditional, voluntary and irrevocable waivers issued by the Adviser of $1.2 million and $0.6 million, respectively, resulting in a net incentive fee for the three months ended March 31, 2014 and 2013, of $40,000 and $0.3 million, respectively. Our Board of Directors accepted the Adviser’s offer to waive, on a quarterly basis, a portion of the incentive fee for the three months ended March 31, 2014 and 2013, in order to support the current level of distributions to all classes of our stockholders. This waiver may not be recouped by the Adviser in the future. | |
Administration Agreement | |
Pursuant to the Administration Agreement, we pay for our allocable portion of the Administrator’s overhead expenses in performing its obligations to us, including, but not limited to, rent and the salaries and benefits of its personnel, including our chief financial officer and treasurer, chief compliance officer, internal counsel and secretary and their respective staffs. Our allocable portion of expenses is derived by multiplying the Administrator’s total allocable expenses by the percentage of our total assets at the beginning of each quarter in comparison to the total assets of all companies managed by the Adviser under similar agreements. For the three months ended March 31, 2014 and 2013, we recorded an administration fee of $0.5 million and $0.4 million, respectively. | |
Gladstone Securities | |
Gladstone Securities, LLC, or Gladstone Securities, is a privately held broker dealer registered with The Financial Industry Regulatory Authority and insured by the Securities Investor Protection Corporation. Gladstone Securities is an affiliate of ours, as its parent company is controlled by Mr. David Gladstone, our chairman and chief executive officer. Mr. Gladstone also serves on the board of managers of Gladstone Securities. | |
Dealer Manager Agreement | |
In connection with the offering of our senior common stock (see Note 9, “Stockholders’ Equity,” for further details) we entered into a Dealer Manager Agreement, dated March 25, 2011, or the Dealer Manager Agreement, with Gladstone Securities pursuant to which Gladstone Securities agreed to act as our exclusive dealer manager in connection with the offering. Pursuant to the terms of the Dealer Manager Agreement, Gladstone Securities is entitled to receive a sales commission in the amount of 7.0% of the gross proceeds of the shares of senior common stock sold, plus a dealer manager fee in the amount of 3.0% of the gross proceeds of the shares of senior common stock sold. Gladstone Securities, in its sole and absolute discretion, may re-allocate all of its selling commissions attributable to a participating broker-dealer and may also re-allocate a portion of its dealer manager fee earned in respect of the proceeds generated by the participating broker-dealer to any participating broker-dealer as a non-accountable marketing allowance. In addition, we have agreed to indemnify Gladstone Securities against various liabilities, including certain liabilities arising under the federal securities laws. We made approximately $40,000 and $60,000 of payments during the three months ended March 31, 2014 and 2013 respectively, to Gladstone Securities pursuant to this agreement, which are reflected as a component of senior common stock costs in the statement of stockholders’ equity. The Dealer Manager Agreement currently is scheduled to terminate on the earlier of (i) March 28, 2015 or (ii) the date on which 3,000,000 shares of senior common stock are sold pursuant to the Dealer Manager Agreement. | |
Mortgage Financing Arrangement Agreement | |
We also entered into an agreement with Gladstone Securities, effective June 18, 2013, for it to act as our non-exclusive agent to assist us with arranging mortgage financing for properties we own. In connection with this engagement, Gladstone Securities may from time to time solicit the interest of various commercial real estate lenders or recommend to us third party lenders offering credit products or packages that are responsive to our needs. We will pay Gladstone Securities a financing fee in connection with the services it provides to us for securing mortgage financing on any of our properties. The amount of these financing fees which are payable upon closing of the financing, will be based on a percentage of the amount of the mortgage, generally ranging from 0.5% to a maximum of 1.0% of the mortgage obtained. The amount of the financing fees may be reduced or eliminated, as determined by us and Gladstone Securities, after taking into consideration various factors, including, but not limited to, the involvement of any third party brokers and market conditions. We did not pay any financing fees to Gladstone Securities during the three months ended March 31, 2014 or 2013. The agreement is scheduled to terminate on August 31, 2014, unless renewed or earlier terminated pursuant to the provisions contained therein. |
Loss_Per_Share_of_Common_Stock
Loss Per Share of Common Stock | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Loss Per Share of Common Stock | ' | ||||||||
3. Loss per Share of Common Stock | |||||||||
The following tables set forth the computation of basic and diluted loss per share of common stock for the three months ended March 31, 2014 and 2013, respectively. We computed basic loss per share for the three months ended March 31, 2014 and 2013, respectively, using the weighted average number of shares outstanding during the periods. Diluted loss per share for the three months ended March 31, 2014 and 2013, would have reflected additional shares of common stock, related to our convertible senior common stock, that would have been outstanding if dilutive potential shares of common stock had been issued, as well as | |||||||||
an adjustment to net income available to common stockholders as applicable to common stockholders that would result from their assumed issuance; however, the convertible senior common stock was excluded from the calculation of diluted loss per share for the three months ended March 31, 2014, and 2013 respectively, because it was anti-dilutive (dollars in thousands, except share or per share amounts). | |||||||||
For the three months ended March 31, | |||||||||
2014 | 2013 | ||||||||
Calculation of basic and diluted loss per share of common stock: | |||||||||
Net loss attributable to common stockholders | $ | (14,637 | ) | $ | (643 | ) | |||
Denominator for basic and diluted weighted average shares of common stock | 15,746,714 | 11,230,647 | |||||||
Basic and diluted loss per share of common stock | $ | (0.93 | ) | $ | (0.06 | ) | |||
Real_Estate_and_Intangible_Ass
Real Estate and Intangible Assets | 3 Months Ended | ||||||||||||||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||||||||||||||
Property Plant And Equipment [Abstract] | ' | ||||||||||||||||||||||||||||||||||||
Real Estate and Intangible Assets | ' | ||||||||||||||||||||||||||||||||||||
4. Real Estate and Intangible Assets | |||||||||||||||||||||||||||||||||||||
Real Estate | |||||||||||||||||||||||||||||||||||||
The following table sets forth the components of our investments in real estate as of March 31, 2014 and December 31, 2013 (dollars in thousands): | |||||||||||||||||||||||||||||||||||||
March 31, 2014 (1) | December 31, 2013 | ||||||||||||||||||||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||||||||||||
Land | $ | 78,570 | $ | 79,153 | |||||||||||||||||||||||||||||||||
Building and improvements | 526,117 | 527,230 | |||||||||||||||||||||||||||||||||||
Tenant improvements | 36,212 | 35,970 | |||||||||||||||||||||||||||||||||||
Accumulated depreciation | (96,914 | ) | (81,241 | ) | |||||||||||||||||||||||||||||||||
Real estate, net | $ | 543,985 | $ | 561,112 | |||||||||||||||||||||||||||||||||
-1 | Does not include real estate held for sale as of March 31, 2014. | ||||||||||||||||||||||||||||||||||||
2014 Real Estate Activity | |||||||||||||||||||||||||||||||||||||
During the three months ended March 31, 2014, we acquired two properties, which are summarized in the table below (dollars in thousands): | |||||||||||||||||||||||||||||||||||||
Location | Acquisition Date | Square Footage | Lease | Renewal Options | Total Purchase | Acquistion | Annualized Straight | Debt Assumed | |||||||||||||||||||||||||||||
Term | Price | Expenses | Line Rent | ||||||||||||||||||||||||||||||||||
Allen, TX | 3/27/14 | 21,154 | 12 Years | 4 (5 years each) | $ | 5,525 | $ | 26 | $ | 570 | $ | 3,481 | |||||||||||||||||||||||||
Colleyville, TX | 3/27/14 | 20,355 | 12 Years | 4 (5 years each) | 4,523 | 26 | 467 | 2,849 | |||||||||||||||||||||||||||||
Total | 41,509 | $ | 10,048 | $ | 52 | $ | 1,037 | $ | 6,330 | ||||||||||||||||||||||||||||
In accordance with ASC 805, we determined the fair value of the acquired assets related to the two properties acquired during the three months ended March 31, 2014 as follows (in thousands): | |||||||||||||||||||||||||||||||||||||
Land | Building | Tenant | In-place | Leasing Costs | Customer | Below Market | Discount on | Total Purchase | |||||||||||||||||||||||||||||
Improvements | Leases | Relationships | Leases | Assumed Debt | Price | ||||||||||||||||||||||||||||||||
Allen, TX | $ | 874 | $ | 3,509 | $ | 125 | $ | 598 | $ | 273 | $ | 218 | $ | — | $ | 72 | $ | 5,525 | |||||||||||||||||||
Colleyville, TX | 1,277 | 2,307 | 117 | 486 | 220 | 181 | 6 | 59 | $ | 4,523 | |||||||||||||||||||||||||||
$ | 2,151 | $ | 5,816 | $ | 242 | $ | 1,084 | $ | 493 | $ | 399 | $ | 6 | $ | 131 | $ | 10,048 | ||||||||||||||||||||
Below is a summary of the total revenue and earnings recognized on the two properties acquired during the three months ended March 31, 2014 (dollars in thousands): | |||||||||||||||||||||||||||||||||||||
For the three months ended March 31, | |||||||||||||||||||||||||||||||||||||
2014 | |||||||||||||||||||||||||||||||||||||
Location | Acquisition | Rental Revenue | Earnings (1) | ||||||||||||||||||||||||||||||||||
Date | |||||||||||||||||||||||||||||||||||||
Allen, TX | 3/27/14 | $ | 8 | $ | 5 | ||||||||||||||||||||||||||||||||
Colleyville, TX | 3/27/14 | 6 | 4 | ||||||||||||||||||||||||||||||||||
$ | 14 | $ | 9 | ||||||||||||||||||||||||||||||||||
(1) | Earnings is calculated as net income exclusive of both interest expense and acquisition related costs that are required to be expensed under ASC 805. | ||||||||||||||||||||||||||||||||||||
Pro Forma | |||||||||||||||||||||||||||||||||||||
The following table reflects pro-forma consolidated statements of operations as if the two properties acquired during the three months ended March 31, 2014 were acquired as of the beginning of the previous period. The pro-forma earnings for the three months ended March 31, 2014 and 2013 were adjusted to assume that acquisition-related costs were incurred as of the beginning of the previous period (dollars in thousands, except per share amounts): | |||||||||||||||||||||||||||||||||||||
For the three months ended March 31, | |||||||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||||||||||
Operating Data: | |||||||||||||||||||||||||||||||||||||
Total operating revenue | $ | 17,436 | $ | 17,297 | |||||||||||||||||||||||||||||||||
Total operating expenses | (23,831 | )(1) | (9,586 | ) | |||||||||||||||||||||||||||||||||
Other expenses | (7,000 | ) | (7,327 | ) | |||||||||||||||||||||||||||||||||
Net (loss) income | (13,395 | ) | 384 | ||||||||||||||||||||||||||||||||||
Dividends attributable to preferred and senior common stock | (1,123 | ) | (1,076 | ) | |||||||||||||||||||||||||||||||||
Net loss attributable to common stockholders | $ | (14,518 | ) | $ | (692 | ) | |||||||||||||||||||||||||||||||
Share and Per Share Data: | |||||||||||||||||||||||||||||||||||||
Basic & diluted loss per share of common stock | $ | (0.92 | ) | $ | (0.06 | ) | |||||||||||||||||||||||||||||||
Weighted average shares outstanding-basic & diluted | 15,746,714 | 11,230,647 | |||||||||||||||||||||||||||||||||||
(1) | $14.0 million relates to the impairment charge recorded in operating expenses during the three months ended March 31, 2014. | ||||||||||||||||||||||||||||||||||||
2013 Real Estate Activity | |||||||||||||||||||||||||||||||||||||
During the three months ended March 31, 2013, we acquired one property, which is summarized below (dollars in thousands): | |||||||||||||||||||||||||||||||||||||
Location | Acquisition Date | Square Footage | Lease | Renewal Options | Total | Acquistion | Annualized Straight | Debt Issued | |||||||||||||||||||||||||||||
Purchase | Expenses | Line Rent | |||||||||||||||||||||||||||||||||||
Term | Price | ||||||||||||||||||||||||||||||||||||
Egg Harbor Township, NJ | 3/28/13 | 29,257 | 10 years | 1 (5 years) | $ | 5,650 | $ | 149 | $ | 490 | $ | 3,700 | |||||||||||||||||||||||||
In accordance with ASC 805, we determined the fair value of acquired assets related to the one property acquired during the three months ended March 31, 2013 as follows (in thousands): | |||||||||||||||||||||||||||||||||||||
Land | Building | Tenant | In-place | Leasing Costs | Customer | Total Purchase | |||||||||||||||||||||||||||||||
Improvements | Leases | Relationships | Price | ||||||||||||||||||||||||||||||||||
Egg Harbor Township, NJ | $ | 1,627 | $ | 2,735 | $ | 282 | $ | 558 | $ | 189 | $ | 259 | $ | 5,650 | |||||||||||||||||||||||
Below is a summary of the total revenue and earnings recognized on the one property acquired during the three months ended March 31, 2013 (dollars in thousands): | |||||||||||||||||||||||||||||||||||||
For the three months ended March 31, 2013 | |||||||||||||||||||||||||||||||||||||
Location | Acquisition | Rental Revenue | Earnings (1) | ||||||||||||||||||||||||||||||||||
Date | |||||||||||||||||||||||||||||||||||||
Egg Harbor Township, NJ | 3/28/13 | $ | 5 | $ | 3 | ||||||||||||||||||||||||||||||||
$ | 5 | $ | 3 | ||||||||||||||||||||||||||||||||||
-1 | Earnings is calculated as net income less interest expense and acquisition related costs that are required to be expensed under ASC 805. | ||||||||||||||||||||||||||||||||||||
Future Lease Payments | |||||||||||||||||||||||||||||||||||||
Future operating lease payments from tenants under non-cancelable leases, excluding tenant reimbursement of expenses, for the remainder of 2014 and each of the five succeeding fiscal years and thereafter is as follows (dollars in thousands): | |||||||||||||||||||||||||||||||||||||
Year | Tenant | ||||||||||||||||||||||||||||||||||||
Lease Payments (1) | |||||||||||||||||||||||||||||||||||||
Nine Months ending December 31, 2014 | $ | 46,572 | |||||||||||||||||||||||||||||||||||
2015 | 59,564 | ||||||||||||||||||||||||||||||||||||
2016 | 55,853 | ||||||||||||||||||||||||||||||||||||
2017 | 55,356 | ||||||||||||||||||||||||||||||||||||
2018 | 53,551 | ||||||||||||||||||||||||||||||||||||
2019 | 53,776 | ||||||||||||||||||||||||||||||||||||
Thereafter | 240,010 | ||||||||||||||||||||||||||||||||||||
-1 | Does not include real estate held for sale as of March 31, 2014. | ||||||||||||||||||||||||||||||||||||
In accordance with the lease terms, substantially all operating expenses are required to be paid by the tenant; however, we would be required to pay property taxes on the respective properties in the event the tenants fail to pay them. The total annual property taxes for all properties owned by us as of March 31, 2014, were $11.0 million. | |||||||||||||||||||||||||||||||||||||
Intangible Assets | |||||||||||||||||||||||||||||||||||||
The following table summarizes the carrying value of intangible assets and the accumulated amortization for each intangible asset class (dollars in thousands): | |||||||||||||||||||||||||||||||||||||
March 31, 2014 | December 31, 2013 | ||||||||||||||||||||||||||||||||||||
Lease Intangibles (1) | Accumulated | Lease Intangibles | Accumulated | ||||||||||||||||||||||||||||||||||
Amortization (1) | Amortization | ||||||||||||||||||||||||||||||||||||
In-place leases | $ | 48,526 | $ | (16,352 | ) | $ | 47,442 | $ | (15,158 | ) | |||||||||||||||||||||||||||
Leasing costs | 31,864 | (10,460 | ) | 31,339 | (9,323 | ) | |||||||||||||||||||||||||||||||
Customer relationships | 36,138 | (11,432 | ) | 35,739 | (10,407 | ) | |||||||||||||||||||||||||||||||
$ | 116,528 | $ | (38,244 | ) | $ | 114,520 | $ | (34,888 | ) | ||||||||||||||||||||||||||||
-1 | Does not include real estate held for sale as of March 31, 2014. | ||||||||||||||||||||||||||||||||||||
The weighted average amortization periods in years for the intangible assets acquired and liabilities assumed during the three months ended March 31, 2014 and 2013, respectively, were as follows | |||||||||||||||||||||||||||||||||||||
Intangible Assets & Liabilities | 2014 | 2013 | |||||||||||||||||||||||||||||||||||
In-place leases | 11.9 | 10.2 | |||||||||||||||||||||||||||||||||||
Leasing costs | 11.9 | 10.2 | |||||||||||||||||||||||||||||||||||
Customer relationships | 16.9 | 15.2 | |||||||||||||||||||||||||||||||||||
Below market leases | 11.9 | — | |||||||||||||||||||||||||||||||||||
All intangible assets & liabilities | 13.3 | 11.9 | |||||||||||||||||||||||||||||||||||
The estimated aggregate amortization expense for the remainder of 2014 and for each of the five succeeding fiscal years and thereafter is as follows (dollars in thousands): | |||||||||||||||||||||||||||||||||||||
Year | Estimated | ||||||||||||||||||||||||||||||||||||
Amortization Expense | |||||||||||||||||||||||||||||||||||||
Nine Months ending December 31, 2014 | $ | 7,880 | |||||||||||||||||||||||||||||||||||
2015 | 9,892 | ||||||||||||||||||||||||||||||||||||
2016 | 8,995 | ||||||||||||||||||||||||||||||||||||
2017 | 8,811 | ||||||||||||||||||||||||||||||||||||
2018 | 8,523 | ||||||||||||||||||||||||||||||||||||
2019 | 8,515 | ||||||||||||||||||||||||||||||||||||
Thereafter | 25,668 |
Real_Estate_Held_for_Sale_and_
Real Estate Held for Sale and Impairment Charges | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Real Estate [Abstract] | ' | ||||||||
Real Estate Held for Sale and Impairment Charges | ' | ||||||||
5. Real Estate Held for Sale and Impairment Charges | |||||||||
Real Estate Held for Sale | |||||||||
As of March 31, 2014, we classified our property located in Sterling Heights, Michigan as held for sale under the provisions of ASC 360-10, which requires that the assets and liabilities of any properties which are held for sale, be presented separately in our condensed consolidated balance sheet in the current period presented. We received an unsolicited offer from a buyer for this property and the tenant in this building had a right of first refusal. The tenant exercised their right to purchase the building and we are currently negotiating a purchase and sale agreement for this property and we anticipate the sale to close during the second quarter of 2014. In accordance with ASC 360-10, the agreed upon purchase price with the current tenant is in excess of the carrying value of the property as of March 31, 2104, and thus the property was measured at its carrying value in our condensed consolidated balance sheet as of March 31, 2014. | |||||||||
The table below summarizes the components of income from real estate and related assets held for sale: | |||||||||
For the three months ended March 31, | |||||||||
2014 | 2013 | ||||||||
Operating revenue | $ | 292 | $ | 292 | |||||
Operating expense | 39 | 57 | |||||||
Income from real estate and related assets held for sale | $ | 253 | $ | 235 | |||||
The table below summarizes the components of the assets and liabilities held for sale reflected on the accompanying consolidated balance sheet: | |||||||||
March 31, 2014 | |||||||||
Land | $ | 2,735 | |||||||
Building and improvements | $ | 8,619 | |||||||
Less: Accumulated depreciation | $ | (1,645 | ) | ||||||
Total real estate held for sale, net | $ | 9,709 | |||||||
Deferred rent receivable | 223 | ||||||||
Real estate and related assets held for sale, net | $ | 9,932 | |||||||
Other liabilities related to assets held for sale | $ | 178 | |||||||
Impairment Charges | |||||||||
We performed the evaluation and analysis of our portfolio and concluded that our Roseville, Minnesota property was impaired as of March 31, 2014. We determined that the expected undiscounted cash flows based upon a revised estimated holding period of this property was below the current carrying value. The estimated holding period was revised after a potential tenant that we were anticipating to lease a large portion of the vacant space, during the three months ended March 31, 2014, did not execute a lease on the property. Consequently, we revised the holding period to coincide with the maturity of the mortgage loan in June 2014. Accordingly, we reduced the carrying value of this property to its estimated fair value, less cost to sell, and we recognized an impairment loss of $14.0 million during the three months ended March 31, 2014. | |||||||||
We also determined our property located in South Hadley, Massachusetts is at risk to become impaired in the future. We recently extended the lease on the property in South Hadley Massachusetts for one year, and it now expires in January 2015. There is a possibility we may have to impair this property in 2014 if we do not negotiate another lease extension on this building or find a replacement tenant. | |||||||||
We will continue to monitor our portfolio for any other indicators of impairment. |
Mortgage_Notes_Payable_and_Lin
Mortgage Notes Payable and Line of Credit | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||
Debt Disclosure [Abstract] | ' | ||||||||||||||||||||||||
Mortgage Notes Payable and Line of Credit | ' | ||||||||||||||||||||||||
6. Mortgage Notes Payable and Line of Credit | |||||||||||||||||||||||||
Our mortgage notes payable and line of credit as of March 31, 2014 and December 31, 2013 are summarized below (dollars in thousands): | |||||||||||||||||||||||||
Carrying Value at | |||||||||||||||||||||||||
Encumbered | March 31, 2014 | December 31, 2013 | Stated Interest | Scheduled Maturity | |||||||||||||||||||||
properties at | Rates at March 31, | Dates at March 31, | |||||||||||||||||||||||
March 31, 2014 | 2014 (4) | 2014 | |||||||||||||||||||||||
Mortgage and Other Secured Loans: | |||||||||||||||||||||||||
Fixed rate mortgage loans | 68 | $ | 417,837 | $ | 413,678 | -1 | -2 | ||||||||||||||||||
Variable rate mortgage loans | 4 | 8,200 | 8,200 | LIBOR + 2.15%(3) | 12/1/16 | ||||||||||||||||||||
Premiums and discounts (net) | N/A | 810 | 724 | N/A | N/A | ||||||||||||||||||||
Total Mortgage Notes Payable | 72 | $ | 426,847 | $ | 422,602 | ||||||||||||||||||||
Variable rate Line of Credit | 16 | 24,100 | 24,400 | LIBOR + 3.00%(3) | 8/1/17 | ||||||||||||||||||||
Total Mortgage Notes Payable and Line of Credit | 88 | $ | 450,947 | $ | 447,002 | ||||||||||||||||||||
-1 | Interest rates on our fixed rate mortgage notes payable vary from 4.04% to 6.80%. | ||||||||||||||||||||||||
-2 | We have 37 mortgage notes payable with maturity dates ranging from 6/30/2014 through 1/06/2039. | ||||||||||||||||||||||||
-3 | At March 31, 2014, one month LIBOR was approximately 0.152%. | ||||||||||||||||||||||||
-4 | The weighted average interest rate on all debt outstanding at March 31, 2014, was approximately 5.30%. | ||||||||||||||||||||||||
N/A | - Not Applicable | ||||||||||||||||||||||||
Mortgage Notes Payable | |||||||||||||||||||||||||
As of March 31, 2014, we had 37 mortgage notes payable, which were collateralized by a total of 72 with a net book value of $553.4 million. Gladstone Commercial Corporation has limited recourse liabilities that could result from any one or more of the following circumstances: a borrower voluntarily filing for bankruptcy, improper conveyance of a property, fraud or material misrepresentation, misapplication or misappropriation of rents, security deposits, insurance proceeds or condemnation proceeds, or physical waste or damage to the property resulting from a borrower’s gross negligence or willful misconduct. We will also indemnify lenders against claims resulting from the presence of hazardous substances or activity involving hazardous substances in violation of environmental laws on a property. The weighted-average interest rate on the mortgage notes payable as of March 31, 2014 was 5.4%. | |||||||||||||||||||||||||
During the three months ended March 31, 2014, we assumed one long-term mortgage, collateralized by two properties, which is summarized below (dollars in thousands): | |||||||||||||||||||||||||
Date of Issuance | Issuing Bank | Borrowings | Interest Rate | Maturity Date | |||||||||||||||||||||
3/27/14 | Wells Fargo N.A. | $6,330 | 5.58% | 2/1/16 | |||||||||||||||||||||
Scheduled principal payments of mortgage notes payable for the remainder of 2014, and each of the five succeeding fiscal years and thereafter are as follows (dollars in thousands): | |||||||||||||||||||||||||
Year | Scheduled Principal | ||||||||||||||||||||||||
Payments | |||||||||||||||||||||||||
Nine Months ending December 31, 2014 | $ | 22,764 | |||||||||||||||||||||||
2015 | 42,564 | ||||||||||||||||||||||||
2016 | 94,787 | ||||||||||||||||||||||||
2017 | 66,749 | ||||||||||||||||||||||||
2018 | 19,317 | ||||||||||||||||||||||||
2019 | 12,681 | ||||||||||||||||||||||||
Thereafter | 167,175 | ||||||||||||||||||||||||
$ | 426,037 | ||||||||||||||||||||||||
Interest Rate Cap | |||||||||||||||||||||||||
In November 2013, we entered into an interest rate cap agreement with Wells Fargo that caps the interest rate on the note payable for our Champaign, Illinois property. The agreement provides that the interest rate on the note payable for our Champaign, Illinois property is capped at a certain interest rate when one-month LIBOR is in excess of 3.0%. The fair value of the interest rate cap agreement is recorded in other assets on our accompanying condensed consolidated balance sheets. We record changes in the fair value of the interest rate cap agreement quarterly based on the current market valuations at quarter end as other income (loss) on our accompanying condensed consolidated statements of operations. Generally, we will estimate the fair value of our interest rate cap using estimates of value provided by the counterparty and our own assumptions in the absence of observable market data, including estimated remaining life, counterparty credit risk, current market yield and interest rate spreads of similar securities as of the measurement date. At March 31, 2014, our interest rate cap agreement was valued using Level 3 inputs of the hierarchy established by ASC 820, “Fair Value Measurements and Disclosures.” The following table summarizes the key terms of each interest rate cap agreement (dollars in thousands): | |||||||||||||||||||||||||
As of March 31, | |||||||||||||||||||||||||
2014 | |||||||||||||||||||||||||
Interest Rate Cap | Notional | LIBOR Cap | Effective Date | Maturity Date | Cost | Fair | |||||||||||||||||||
Amount | Value | ||||||||||||||||||||||||
26-Nov-13 | $ | 8,200 | 3 | % | March 31, 2014 | December 1, 2016 | $ | 31 | $ | 18 | |||||||||||||||
Fair Value | |||||||||||||||||||||||||
The fair value of all mortgage notes payable outstanding as of March 31, 2014, was $429.6 million, as compared to the carrying value stated above of $426.8 million. The fair value is calculated based on a discounted cash flow analysis, using interest rates based on management’s estimate of market interest rates on long-term debt with comparable terms and loan to value ratios. The fair value was calculated using Level 3 inputs of the hierarchy established by ASC 820, “Fair Value Measurements and Disclosures.” | |||||||||||||||||||||||||
Line of Credit | |||||||||||||||||||||||||
In August 2013, we procured a $60.0 million senior unsecured revolving credit facility, or the Line of Credit, with Keybank National Association serving as a revolving lender, a letter of credit issuer and administrative agent and Citizens Bank of Pennsylvania as an additional lender. On December 16, 2013, Comerica Bank was also added as an additional lender. On March 28, 2014, we amended our Line of Credit to extend the maturity date one additional year to August 2017. We also modified certain terms under the Line of Credit, including the calculation of the total asset value and unencumbered asset value. The applicable LIBOR margins were also reduced by 25 basis points at each pricing level. As a result of these modifications, the availability under our line of credit increased by $1.3 million. | |||||||||||||||||||||||||
The Line of Credit initially matures in August 2017; however, we have a one-year extension option subject to the payment of an extension fee equal to 25 basis points on the initial maturity date and certain other customary conditions. | |||||||||||||||||||||||||
The Line of Credit has a letter of credit sublimit of up to $20.0 million. In addition, we may expand the Line of Credit up to a total of $75.0 million upon satisfaction of certain conditions, including obtaining commitments from any one or more lenders, whether or not currently a party to the Line of Credit, to provide such increased amounts and payment of the associated up front and arrangement fees at the time of such increase. The interest rate per annum applicable to the Line of Credit is equal to the LIBOR plus an applicable margin of up to 3.0%, depending upon our leverage. The leverage ratio used in determining the applicable margin for interest on the Line of Credit is recalculated quarterly. We are subject to an annual maintenance fee of $0.03 million per year and an unused commitment fee of 25 basis points per year, which accrues quarterly. Our ability to access this source of financing is subject to our continued ability to meet customary lending requirements, such as compliance with financial and operating covenants and our meeting certain lending limits. One such covenant requires us to limit distributions to our stockholders to 100% of our FFO, with acquisition-related costs required to be expensed under ASC 805 added back to FFO. In addition, the maximum amount we may draw under the Line of Credit is based on a percentage of the value of a pool of unencumbered properties which must meet agreed upon eligibility standards. | |||||||||||||||||||||||||
If and when long-term mortgages are arranged for properties in the unencumbered pool, the banks will reduce the availability under the Line of Credit by the amount advanced against that property’s value. Conversely, as we purchase new properties meeting the eligibility standards, we may add these new properties to the unencumbered pool to obtain additional availability under the Line of Credit. The availability under the Line of Credit is also reduced by letters of credit used in the ordinary course of business. We may use the advances under the Line of Credit for both general corporate purposes and the acquisition of new investments. | |||||||||||||||||||||||||
As of March 31, 2014, there was $24.1 million outstanding under our Line of Credit at an interest rate of approximately 3.2% and $10.3 million outstanding under letters of credit at a weighted average interest rate of 3.0%. As of March 31, 2014, the maximum additional amount we could draw was $18.9 million. We were in compliance with all covenants under the Line of Credit as of March 31, 2014. The amount outstanding on the Line of Credit as of March 31, 2014 approximates fair value, because the debt is subject to a variable interest rate, determined by market forces, as well as a recently negotiated interest rate spread. |
Mandatorily_Redeemable_Preferr
Mandatorily Redeemable Preferred Stock | 3 Months Ended |
Mar. 31, 2014 | |
Text Block [Abstract] | ' |
Mandatorily Redeemable Preferred Stock | ' |
7. Mandatorily Redeemable Preferred Stock | |
In February 2012, we completed a public offering of 1,540,000 shares of 7.125% Series C Cumulative Term Preferred Stock, par value $0.001 per share, or the Term Preferred Stock, at a public offering price of $25.00 per share. Gross proceeds of the offering totaled $38.5 million and net proceeds, after deducting offering expenses borne by us, were $36.7 million and were used to repay a portion of outstanding borrowings under our Line of Credit, for acquisitions of real estate and for working capital. The Term Preferred Stock is traded under the ticker symbol GOODN on the NASDAQ Global Select Market, or the NASDAQ. The Term Preferred Stock is not convertible into our common stock or any other security of ours. Generally, we may not redeem shares of the Term Preferred Stock prior to January 31, 2016, except in limited circumstances to preserve our status as a REIT. On or after January 31, 2016, we may redeem the shares at a redemption price of $25.00 per share, plus any accumulated and unpaid dividends to and including the date of redemption. The shares of the Term Preferred Stock have a mandatory redemption date of January 31, 2017. We incurred $1.8 million in total offering costs related to these transactions, which have been recorded as deferred financing costs on the condensed consolidated balance sheet and will be amortized over the redemption period ending January 31, 2017. | |
The Term Preferred Stock is recorded as liability in accordance with ASC 480, “Distinguishing Liabilities from Equity,” which states that mandatorily redeemable financial instruments should be classified as liabilities and therefore the related dividend payments are treated as a component of interest expense in the condensed consolidated statements of operations. | |
The fair value of our Term Preferred Stock as of March 31, 2014, was $40.7 million, as compared to the carrying value stated above of $38.5 million. The fair value is calculated based on the closing share price as of March 31, 2014 of $26.40. The fair value was calculated using Level 1 inputs of the hierarchy established by ASC 820, “Fair Value Measurements and Disclosures.” |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended | ||||||||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||||||||
Commitments And Contingencies Disclosure [Abstract] | ' | ||||||||||||||||||||||||||||||
Commitments and Contingencies | ' | ||||||||||||||||||||||||||||||
8. Commitments and Contingencies | |||||||||||||||||||||||||||||||
Ground Leases | |||||||||||||||||||||||||||||||
We are obligated as lessee under three ground leases. Future minimum rental payments due under the terms of these leases for the remainder of 2014 and each of the five succeeding years and thereafter, are as follows (dollars in thousands): | |||||||||||||||||||||||||||||||
For the year ended December 31, | |||||||||||||||||||||||||||||||
Location | Lease End Date | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | |||||||||||||||||||||||
Tulsa, OK | 21-Apr | $ | 114 | $ | 153 | $ | 153 | $ | 153 | $ | 153 | $ | 153 | $ | 229 | ||||||||||||||||
Dartmouth, MA | May-36 | 131 | 174 | 174 | 174 | 174 | 174 | 3,300 | |||||||||||||||||||||||
Springfield, MA | Feb-30 | 64 | 86 | 86 | 89 | 90 | 90 | 972 | |||||||||||||||||||||||
$ | 309 | $ | 413 | $ | 413 | $ | 416 | $ | 417 | $ | 417 | $ | 4,501 | ||||||||||||||||||
Expenses recorded in connection to rental expense incurred for the properties listed above during both the three months ended March 31, 2014 and 2013, were $0.1 million, respectively. Rental expenses are reflected in property operating expenses on the condensed consolidated statements of operations. | |||||||||||||||||||||||||||||||
Tenant Improvements | |||||||||||||||||||||||||||||||
We have committed to provide tenant improvement funding for certain properties. In addition, we have committed to provide financing to expand our building located in Canton, North Carolina. Future tenant improvement payments due on these properties for the remainder of 2014 and each of the five succeeding years and thereafter, are as follows (dollars in thousands): | |||||||||||||||||||||||||||||||
For the year ended December 31, | |||||||||||||||||||||||||||||||
Location | Lease End Date | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | |||||||||||||||||||||||
Canton, NC | Jul-24(1) | $ | 3,325 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Concord Township, OH | Aug-34 | 150 | — | — | — | — | — | — | |||||||||||||||||||||||
Austin, TX | 15-Jun | 125 | — | — | — | — | — | — | |||||||||||||||||||||||
Hialeah, FL | 27-Mar | 35 | — | — | — | — | — | — | |||||||||||||||||||||||
$ | 3,635 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
-1 | Upon completion of expansion of this property, currently projected to be September of 2014, the lease will be extended for 20 years, through September 2034. |
Stockholders_Equity
Stockholders' Equity | 3 Months Ended | ||||||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||||||
Equity [Abstract] | ' | ||||||||||||||||||||||||||||
Stockholders' Equity | ' | ||||||||||||||||||||||||||||
9. Stockholders’ Equity | |||||||||||||||||||||||||||||
The following table summarizes the changes in our stockholders’ equity for the three months ended March 31, 2014 (dollars in thousands): | |||||||||||||||||||||||||||||
Preferred | Senior Common | Common | Capital in | Notes | Distributions in | Total | |||||||||||||||||||||||
Stock | Stock | Stock | Excess of | Receivable | Excess of | Stockholders’ | |||||||||||||||||||||||
Par Value | from Employees | Accumulated | Equity | ||||||||||||||||||||||||||
Earnings | |||||||||||||||||||||||||||||
Balance at December 31, 2013 | $ | 2 | $ | — | $ | 16 | $ | 298,751 | $ | (375 | ) | $ | (115,248 | ) | $ | 183,146 | |||||||||||||
Issuance of senior common stock and common stock, net | — | — | — | 7,243 | — | — | 7,243 | ||||||||||||||||||||||
Distributions declared to common, senior common and preferred stockholders | — | — | — | — | — | (7,025 | ) | (7,025 | ) | ||||||||||||||||||||
Net loss | — | — | — | — | — | (13,514 | ) | (13,514 | ) | ||||||||||||||||||||
Balance at March 31, 2014 | $ | 2 | $ | — | $ | 16 | $ | 305,994 | $ | (375 | ) | $ | (135,787 | ) | $ | 169,850 | |||||||||||||
Distributions | |||||||||||||||||||||||||||||
Our Board of Directors declared the following distributions per share for the three months ended March 31, 2014 and 2013: | |||||||||||||||||||||||||||||
For the three months ended March 31, | |||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||
Common Stock | $ | 0.38 | $ | 0.38 | |||||||||||||||||||||||||
Senior Common Stock | 0.26 | 0.26 | |||||||||||||||||||||||||||
Series A Preferred Stock | 0.4843749 | 0.4843749 | |||||||||||||||||||||||||||
Series B Preferred Stock | 0.4688 | 0.4688 | |||||||||||||||||||||||||||
Series C Preferred Stock | 0.4453 | 0.4453 | |||||||||||||||||||||||||||
Ongoing Activity | |||||||||||||||||||||||||||||
We have an open market sale agreement, or the ATM Program, with Jefferies LLC, or Jefferies, under which we may, from time to time, offer to sell shares of our common stock with an aggregate sales price of up to $25.0 million on the open market through Jefferies, as agent, or to Jefferies, as principal. During the three months ended March 31, 2014, we raised approximately $7.2 million in net proceeds under the ATM Program. As of March 31, 2014, under the existing program, we have sold a total of 1.2 million shares with aggregate gross proceeds of $21.4 million, and have a remaining capacity to sell up to $3.6 million of common stock under the ATM Program with Jefferies. | |||||||||||||||||||||||||||||
In March 2011, we commenced an offering of an aggregate of 3,500,000 shares of our senior common stock, par value $0.001 per share, at a price to the public of $15.00 per share, of which 3,000,000 shares are intended to be offered pursuant to the primary offering and 500,000 shares are intended to be offered pursuant to our senior common distribution reinvestment plan, or the DRIP. We, however, reserve the right to reallocate the number of shares being offered between the primary offering and the DRIP. As of March 31, 2014, we had sold 333,604 shares of senior common stock in this ongoing offering, for gross proceeds of $5.0 million, and issued an additional 12,047 shares of senior common stock under the DRIP program. | |||||||||||||||||||||||||||||
Note to Employee | |||||||||||||||||||||||||||||
The following table is a summary of the outstanding note receivable from an employee of the Adviser for the exercise of stock options (dollars in thousands): | |||||||||||||||||||||||||||||
Date Issued | Outstanding Balance | Outstanding Balance | Maturity Date | Interest Rate | |||||||||||||||||||||||||
of Employee Loan | of Employee Loan at | of Note | on Note | ||||||||||||||||||||||||||
at March 31, 2014 | December 31, 2013 | ||||||||||||||||||||||||||||
Nov-06 | $ | 375 | $ | 375 | Nov 2015 | 8.15 | % | ||||||||||||||||||||||
In accordance with ASC 505-10-45-2, “Equity,” receivables from employees for the issuance of capital stock to employees prior to the receipt of cash payment should be reflected in the balance sheet as a reduction to stockholders’ equity. Therefore, this note was recorded as a full recourse loan to the employee and is included in the equity section of the accompanying condensed consolidated balance sheets. As of March 31, 2014, this loan maintained its full recourse status. |
Subsequent_Events
Subsequent Events | 3 Months Ended | ||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||
Subsequent Events [Abstract] | ' | ||||||||||||||||||
Subsequent Events | ' | ||||||||||||||||||
10. Subsequent Events | |||||||||||||||||||
On April 4, 2014, our tenant occupying our Newburyport, Massachusetts property notified us of their intention not to exercise their renewal option. The tenant will continue paying rent and operating expenses through the lease termination date of April 30, 2015. | |||||||||||||||||||
On April 8, 2014, our Board of Directors declared the following monthly distributions: | |||||||||||||||||||
Record Date | Payment Date | Common Stock | Series A Preferred | Series B Preferred | Series C Preferred | ||||||||||||||
Distributions per Share | Distributions per Share | Distributions per Share | Distributions per Share | ||||||||||||||||
21-Apr-14 | 30-Apr-14 | $ | 0.125 | $ | 0.1614583 | $ | 0.15625 | $ | 0.1484375 | ||||||||||
20-May-14 | 30-May-14 | 0.125 | 0.1614583 | 0.15625 | 0.1484375 | ||||||||||||||
19-Jun-14 | 30-Jun-14 | 0.125 | 0.1614583 | 0.15625 | 0.1484375 | ||||||||||||||
Total | $ | 0.375 | $ | 0.4843749 | $ | 0.46875 | $ | 0.4453125 | |||||||||||
Senior Common Stock Distributions | |||||||||||||||||||
Payable to the | Payment Date | Distribution per Share | |||||||||||||||||
Holders of Record | |||||||||||||||||||
During the Month of: | |||||||||||||||||||
April | 7-May-14 | $ | 0.0875 | ||||||||||||||||
May | 6-Jun-14 | 0.0875 | |||||||||||||||||
June | 8-Jul-14 | 0.0875 | |||||||||||||||||
Total | $ | 0.2625 | |||||||||||||||||
On April 22, 2014, we acquired a 61,358 square foot office building located in Rancho Cordova, California for $8.2 million, excluding related acquisition expenses of $0.05 million. We funded this acquisition with existing cash on hand and the issuance of $4.9 million of mortgage debt on the property. The tenant has leased the property for 10 years and has 1 option to renew the lease for an additional 5 years. The lease provides for prescribed rent escalations over the life of the lease, with annualized straight line rents of $0.7 million. |
Organization_Basis_of_Presenta1
Organization, Basis of Presentation and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2014 | |
Accounting Policies [Abstract] | ' |
Subsidiaries | ' |
Subsidiaries | |
We conduct substantially all of our operations through a subsidiary, Gladstone Commercial Limited Partnership, a Delaware limited partnership, or the Operating Partnership. As we currently own all of the general and limited partnership interests of the Operating Partnership through two of our subsidiaries, GCLP Business Trust I and II, the financial position and results of operations of the Operating Partnership are consolidated with those of the Company. | |
Gladstone Commercial Lending, LLC, a Delaware limited liability company, or Gladstone Commercial Lending, a subsidiary of ours, was created to conduct all operations related to real estate mortgage loans of the Company. As the Operating Partnership currently owns all of the membership interests of Gladstone Commercial Lending, the financial position and results of operations of Gladstone Commercial Lending are consolidated with those of the Company. | |
Gladstone Commercial Advisers, Inc., a Delaware corporation, or Commercial Advisers, and a wholly-owned subsidiary of the Company, is a taxable REIT subsidiary, or TRS, which was created to collect any non-qualifying income related to our real estate portfolio. There has been no such income earned to date. Since the Company owns 100% of the voting securities of Commercial Advisers, the financial position and results of operations of Commercial Advisers are consolidated with those of the Company. | |
GCLP Business Trust I and GCLP Business Trust II, each a subsidiary and business trust of the Company, were formed under the laws of the Commonwealth of Massachusetts on December 28, 2005. We transferred our 99% limited partnership interest in the Operating Partnership to GCLP Business Trust I in exchange for 100 shares of the trust. Gladstone Commercial Partners, LLC transferred its 1% general partnership interest in the Operating Partnership to GCLP Business Trust II in exchange for 100 trust shares. | |
All further references herein to “we,” “our,” “us” and the “Company” mean Gladstone Commercial Corporation and its consolidated subsidiaries, except where it is made clear that the term means only Gladstone Commercial Corporation. | |
Interim Financial Information | ' |
Interim Financial Information | |
Our interim financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, for interim financial information and pursuant to the requirements for reporting on Form 10-Q and in accordance with Article 10 of Regulation S-X. Accordingly, certain disclosures accompanying annual financial statements prepared in accordance with GAAP are omitted. The year-end balance sheet data presented herein was derived from audited financial statements, but does not include all disclosures required by GAAP. In the opinion of our management, all adjustments, consisting solely of normal recurring accruals, necessary for the fair presentation of financial statements for the interim period have been included. The interim financial statements and notes thereto should be read in conjunction with the financial statements and notes thereto included in our Form 10-K for the year ended December 31, 2013, as filed with the Securities and Exchange Commission on February 18, 2014. The results of operations for the three months ended March 31, 2014 are not necessarily indicative of the results that may be expected for other interim periods or for the full fiscal year. | |
Use of Estimates | ' |
Use of Estimates | |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could materially differ from those estimates. | |
Real Estate and Lease Intangibles | ' |
Real Estate and Lease Intangibles | |
We record investments in real estate at cost and capitalize improvements and replacements when they extend the useful life or improve the efficiency of the asset. We expense costs of repairs and maintenance as such costs are incurred. We compute depreciation using the straight-line method over the estimated useful life or 39 years for buildings and improvements, 5 to 20 years for equipment and fixtures, and the shorter of the useful life or the remaining lease term for tenant improvements and leasehold interests. | |
Certain of our acquisitions involve sale-leaseback transactions with newly-originated leases, which we account for as asset acquisitions under Accounting Standards Codification, or ASC, 805, “Business Combinations.” In the case of an asset acquisition, we will capitalize the transaction costs incurred in connection with the acquisition. Other of our acquisitions involve the acquisition of properties that are already being operated as rental property, which we will generally consider to be a business combination under ASC 805. Business combination guidance is generally applicable to us when properties are acquired with leases in place at the time of acquisition. When an acquisition is considered a business combination, ASC 805 requires that the purchase price of real estate be allocated to the acquired tangible assets and liabilities, consisting of land, building, tenant improvements, long-term debt assumed and identified intangible assets and liabilities, typically the value of above-market and below-market leases, the value of in-place leases, the value of unamortized lease origination costs and the value of tenant relationships, based in each case on their fair values. ASC 805 also requires that all expenses related to an acquisition accounted for as a business combination to be expensed as incurred, rather than capitalized into the cost of the acquisition. | |
Management’s estimates of fair value are made using methods similar to those used by independent appraisers (e.g. discounted cash flow analysis). Factors considered by management in its analysis include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions and costs to execute similar leases. We also consider information obtained about each property as a result of our pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets and liabilities acquired. In estimating carrying costs, management also includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the hypothetical expected lease-up periods, which primarily range from 9 to 18 months, depending on specific local market conditions. Management also estimates costs to execute similar leases, including leasing commissions, legal and other related expenses to the extent that such costs are not already incurred in connection with a new lease origination as part of the transaction. | |
We allocate purchase price to the fair value of the tangible assets of an acquired property by valuing the property as if it were vacant. The “as-if-vacant” value is allocated to land, building and tenant improvements based on management’s determination of the relative fair values of these assets. Real estate depreciation expense on these tangible assets was $4.4 million and $3.4 million for the three months ended March 31, 2014 and 2013, respectively | |
Above-market and below-market in-place lease fair values for owned properties are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease. When determining the non-cancelable term of the lease, we evaluate if fixed-rate renewal options, if any, should be included. The capitalized above-market lease values, included in the accompanying condensed consolidated balance sheets as part of deferred rent receivable, are amortized as a reduction of rental income over the remaining non-cancelable terms of the respective leases. Total amortization related to above-market lease values was $0.1 million, for both the three months ended March 31, 2014 and 2013, respectively. The capitalized below-market lease values, included in the accompanying condensed consolidated balance sheets as part of deferred rent liability, are amortized as an increase to rental income over the remaining non-cancelable terms of the respective leases including any below market renewal periods. Total amortization related to below-market lease values was $0.2 million for both the three months ended March 31, 2014 and 2013, respectively. | |
The total amount of the remaining intangible assets acquired, which consists of in-place lease values, unamortized lease origination costs, and customer relationship intangible values, are allocated based on management’s evaluation of the specific characteristics of each tenant’s lease and our overall relationship with that respective tenant. Characteristics to be considered by management in determining these values include the nature and extent of our existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and our expectations of lease renewals (including those existing under the terms of the lease agreement), among other factors. | |
The value of in-place leases and lease origination costs are amortized to expense over the remaining term of the respective leases, which generally range from 10 to 15 years. The value of customer relationship intangibles, which is the benefit to us resulting from the likelihood of an existing tenant renewing its lease, are amortized to expense over the remaining term and any anticipated renewal periods in the respective leases, but in no event does the amortization period for intangible assets exceed the remaining depreciable life of the building. Should a tenant terminate its lease, the unamortized portion of the above-market and below-market lease values would be charged to rental income and the unamortized portion of in-place lease values, lease origination costs and customer relationship intangibles will be immediately charged to amortization expense. Total amortization expense related to these intangible assets and liabilities was $2.3 million and $1.5 million for the three months ended March 31, 2014 and 2013, respectively. | |
Business Combinations | ' |
Certain of our acquisitions involve sale-leaseback transactions with newly-originated leases, which we account for as asset acquisitions under Accounting Standards Codification, or ASC, 805, “Business Combinations.” In the case of an asset acquisition, we will capitalize the transaction costs incurred in connection with the acquisition. Other of our acquisitions involve the acquisition of properties that are already being operated as rental property, which we will generally consider to be a business combination under ASC 805. Business combination guidance is generally applicable to us when properties are acquired with leases in place at the time of acquisition. When an acquisition is considered a business combination, ASC 805 requires that the purchase price of real estate be allocated to the acquired tangible assets and liabilities, consisting of land, building, tenant improvements, long-term debt assumed and identified intangible assets and liabilities, typically the value of above-market and below-market leases, the value of in-place leases, the value of unamortized lease origination costs and the value of tenant relationships, based in each case on their fair values. ASC 805 also requires that all expenses related to an acquisition accounted for as a business combination to be expensed as incurred, rather than capitalized into the cost of the acquisition. | |
Real Estate Held for Sale | ' |
Real Estate Held for Sale | |
ASC 360-10, “Property, Plant, and Equipment,” requires that any properties which have are held for sale, be presented separately in the condensed consolidated balance sheet. Real estate assets held for sale are measured at the lower of the carrying amount or the fair value, less the cost to sell, and are listed separately on our condensed consolidated balance sheet. Once properties are classified as held for sale, no further depreciation is recorded. | |
Impairment Charges | ' |
Impairment Charges | |
We account for the impairment of real estate, including intangible assets, in accordance with ASC 360-10-35, “Property, Plant, and Equipment,” which requires us to periodically review the carrying value of each property to determine if circumstances indicate impairment of the carrying value of the investment exists or that depreciation periods should be modified. If circumstances indicate the possibility of impairment, we prepare a projection of the undiscounted future cash flows, without interest charges, of the specific property and determine if the carrying value of the investment in such property is recoverable. In performing the analysis, we consider such factors as the tenants’ payment history and financial condition, the likelihood of lease renewal, business conditions in the industry in which the tenants operate, whether there are indications that the fair value of the real estate has decreased and our intended holding period of the property. If the carrying amount is more than the aggregate undiscounted future cash flows, we would recognize an impairment loss to the extent the carrying amount exceeds the estimated fair value, less cost to sell, of the property. We evaluate our entire portfolio of properties each quarter for any impairment indicators and perform an impairment analysis on those select properties that have an indication of impairment. | |
Deferred Financing Costs | ' |
Deferred Financing Costs | |
Deferred financing costs consist of costs incurred to obtain financing, including legal fees, origination fees and administrative fees. The costs are deferred and amortized using the straight-line method, which approximates the effective interest method, over the term of the secured financing. We made payments of $0.4 million and $0.1 million for deferred financing costs during the three months ended March 31, 2014 and 2013, respectively. Total amortization expense related to deferred financing costs is included in interest expense and was $0.4 million for both the three months ended March 31, 2014 and 2013, respectively. | |
Revenue Recognition | ' |
Revenue Recognition | |
Rental revenue includes rents that each tenant pays in accordance with the terms of its respective lease reported evenly over the non-cancelable term of the lease. Most of our leases contain rental increases at specified intervals. We recognize such revenues on a straight-line basis. Deferred rent receivable in the accompanying condensed consolidated balance sheet includes the cumulative difference between rental revenue, as recorded on a straight-line basis, and rents received from the tenants in accordance with the lease terms, along with the capitalized above-market in-place lease values of certain acquired properties. Accordingly, we determine, in our judgment, to what extent the deferred rent receivable applicable to each specific tenant is collectable. We review deferred rent receivable, as it relates to straight line rents, on a quarterly basis and take into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the geographic area in which the property is located. In the event that the collectability of deferred rent with respect to any given tenant is in doubt, we record an allowance for uncollectable accounts or record a direct write-off of the specific rent receivable. No such reserves or direct write-offs have been recorded to date. | |
Tenant recovery revenue includes payments from tenants as reimbursements for franchise taxes, management fees, insurance, and ground lease payments. We recognize tenant recovery revenue in the same periods that we incur the related expenses. | |
Asset Retirement Obligations | ' |
Asset Retirement Obligations | |
ASC 410, “Asset Retirement and Environmental Obligation,” requires an entity to recognize a liability for a conditional asset retirement obligation when incurred if the liability can be reasonably estimated. ASC 410-20-20 clarifies that the term “Conditional Asset Retirement Obligation” refers to a legal obligation (pursuant to existing laws or by contract) to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the entity. ASC 410-20-25-6 clarifies when an entity would have sufficient information to reasonably estimate the fair value of an asset retirement obligation. We have accrued a liability and corresponding increase to the cost of the related properties for disposal related to all properties constructed prior to 1985 that have, or may have, asbestos present in the building. The liabilities are accreted over the life of the leases for the respective properties. There were no liabilities accrued during the three months ended March 31, 2014 and 2013, respectively. We recorded expenses of $0.03 million during both the three months ended March 31, 2014 and 2013, respectively, to general and administrative expense. Costs of future expenditures for obligations are discounted to their present value. The aggregate undiscounted obligation on all properties is $9.2 million and the discount rates used in the calculations range from 2.5% to 7.6%. We do not expect to make any payments in conjunction with these obligations in each of the next five years. | |
Comprehensive Income (Loss) | ' |
Comprehensive Income (Loss) | |
For the three months ended March 31, 2014 and 2013, comprehensive income (loss) equaled net income (loss); therefore, a separate statement of comprehensive income (loss) is not included in the accompanying condensed consolidated financial statements. | |
Recently Issued Accounting Guidance | ' |
Recently Issued Accounting Guidance | |
The Financial Accounting Standards Board, or FASB, issued Accounting Standards Update No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” Under this revised guidance, only disposals representing a strategic shift in operations, such as a disposal of a major geographic area, a major line of business or a major equity method investment, will be presented as discontinued operations. This standard is effective for our fiscal year beginning January 1, 2015; however, the FASB has permitted early adoption beginning with the first quarter of 2014. We adopted this standard during the quarter ended March 31, 2014, and accordingly we did not present our assets classified as held for sale during the quarter ended March 31, 2014 as discontinued operations. | |
Fair Value Measurements and Disclosures | ' |
In November 2013, we entered into an interest rate cap agreement with Wells Fargo that caps the interest rate on the note payable for our Champaign, Illinois property. The agreement provides that the interest rate on the note payable for our Champaign, Illinois property is capped at a certain interest rate when one-month LIBOR is in excess of 3.0%. The fair value of the interest rate cap agreement is recorded in other assets on our accompanying condensed consolidated balance sheets. We record changes in the fair value of the interest rate cap agreement quarterly based on the current market valuations at quarter end as other income (loss) on our accompanying condensed consolidated statements of operations. Generally, we will estimate the fair value of our interest rate cap using estimates of value provided by the counterparty and our own assumptions in the absence of observable market data, including estimated remaining life, counterparty credit risk, current market yield and interest rate spreads of similar securities as of the measurement date. At March 31, 2014, our interest rate cap agreement was valued using Level 3 inputs of the hierarchy established by ASC 820, “Fair Value Measurements and Disclosures.” The following table summarizes the key terms of each interest rate cap agreement (dollars in thousands): | |
Distinguishing Liabilities from Equity | ' |
The Term Preferred Stock is recorded as liability in accordance with ASC 480, “Distinguishing Liabilities from Equity,” which states that mandatorily redeemable financial instruments should be classified as liabilities and therefore the related dividend payments are treated as a component of interest expense in the condensed consolidated statements of operations. | |
Equity | ' |
In accordance with ASC 505-10-45-2, “Equity,” receivables from employees for the issuance of capital stock to employees prior to the receipt of cash payment should be reflected in the balance sheet as a reduction to stockholders’ equity. Therefore, this note was recorded as a full recourse loan to the employee and is included in the equity section of the accompanying condensed consolidated balance sheets. As of March 31, 2014, this loan maintained its full recourse status. |
Loss_Per_Share_of_Common_Stock1
Loss Per Share of Common Stock (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Basic and Diluted Loss Per Share of Common Stock | ' | ||||||||
The following tables set forth the computation of basic and diluted loss per share of common stock for the three months ended March 31, 2014 and 2013, respectively. We computed basic loss per share for the three months ended March 31, 2014 and 2013, respectively, using the weighted average number of shares outstanding during the periods. Diluted loss per share for the three months ended March 31, 2014 and 2013, would have reflected additional shares of common stock, related to our convertible senior common stock, that would have been outstanding if dilutive potential shares of common stock had been issued, as well as | |||||||||
an adjustment to net income available to common stockholders as applicable to common stockholders that would result from their assumed issuance; however, the convertible senior common stock was excluded from the calculation of diluted loss per share for the three months ended March 31, 2014, and 2013 respectively, because it was anti-dilutive (dollars in thousands, except share or per share amounts). | |||||||||
For the three months ended March 31, | |||||||||
2014 | 2013 | ||||||||
Calculation of basic and diluted loss per share of common stock: | |||||||||
Net loss attributable to common stockholders | $ | (14,637 | ) | $ | (643 | ) | |||
Denominator for basic and diluted weighted average shares of common stock | 15,746,714 | 11,230,647 | |||||||
Basic and diluted loss per share of common stock | $ | (0.93 | ) | $ | (0.06 | ) | |||
Real_Estate_and_Intangible_Ass1
Real Estate and Intangible Assets (Tables) | 3 Months Ended | ||||||||||||||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||||||||||||||
Property Plant And Equipment [Abstract] | ' | ||||||||||||||||||||||||||||||||||||
Company's Investments in Real Estate | ' | ||||||||||||||||||||||||||||||||||||
The following table sets forth the components of our investments in real estate as of March 31, 2014 and December 31, 2013 (dollars in thousands): | |||||||||||||||||||||||||||||||||||||
March 31, 2014 (1) | December 31, 2013 | ||||||||||||||||||||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||||||||||||
Land | $ | 78,570 | $ | 79,153 | |||||||||||||||||||||||||||||||||
Building and improvements | 526,117 | 527,230 | |||||||||||||||||||||||||||||||||||
Tenant improvements | 36,212 | 35,970 | |||||||||||||||||||||||||||||||||||
Accumulated depreciation | (96,914 | ) | (81,241 | ) | |||||||||||||||||||||||||||||||||
Real estate, net | $ | 543,985 | $ | 561,112 | |||||||||||||||||||||||||||||||||
-1 | Does not include real estate held for sale as of March 31, 2014. | ||||||||||||||||||||||||||||||||||||
Summary of Properties Acquired | ' | ||||||||||||||||||||||||||||||||||||
2014 Real Estate Activity | |||||||||||||||||||||||||||||||||||||
During the three months ended March 31, 2014, we acquired two properties, which are summarized in the table below (dollars in thousands): | |||||||||||||||||||||||||||||||||||||
Location | Acquisition Date | Square Footage | Lease | Renewal Options | Total Purchase | Acquistion | Annualized Straight | Debt Assumed | |||||||||||||||||||||||||||||
Term | Price | Expenses | Line Rent | ||||||||||||||||||||||||||||||||||
Allen, TX | 3/27/14 | 21,154 | 12 Years | 4 (5 years each) | $ | 5,525 | $ | 26 | $ | 570 | $ | 3,481 | |||||||||||||||||||||||||
Colleyville, TX | 3/27/14 | 20,355 | 12 Years | 4 (5 years each) | 4,523 | 26 | 467 | 2,849 | |||||||||||||||||||||||||||||
Total | 41,509 | $ | 10,048 | $ | 52 | $ | 1,037 | $ | 6,330 | ||||||||||||||||||||||||||||
2013 Real Estate Activity | |||||||||||||||||||||||||||||||||||||
During the three months ended March 31, 2013, we acquired one property, which is summarized below (dollars in thousands): | |||||||||||||||||||||||||||||||||||||
Location | Acquisition Date | Square Footage | Lease | Renewal Options | Total | Acquistion | Annualized Straight | Debt Issued | |||||||||||||||||||||||||||||
Purchase | Expenses | Line Rent | |||||||||||||||||||||||||||||||||||
Term | Price | ||||||||||||||||||||||||||||||||||||
Egg Harbor Township, NJ | 3/28/13 | 29,257 | 10 years | 1 (5 years) | $ | 5,650 | $ | 149 | $ | 490 | $ | 3,700 | |||||||||||||||||||||||||
Fair Value of Acquired Assets and Assumed Liabilities | ' | ||||||||||||||||||||||||||||||||||||
In accordance with ASC 805, we determined the fair value of the acquired assets related to the two properties acquired during the three months ended March 31, 2014 as follows (in thousands): | |||||||||||||||||||||||||||||||||||||
Land | Building | Tenant | In-place | Leasing Costs | Customer | Below Market | Discount on | Total Purchase | |||||||||||||||||||||||||||||
Improvements | Leases | Relationships | Leases | Assumed Debt | Price | ||||||||||||||||||||||||||||||||
Allen, TX | $ | 874 | $ | 3,509 | $ | 125 | $ | 598 | $ | 273 | $ | 218 | $ | — | $ | 72 | $ | 5,525 | |||||||||||||||||||
Colleyville, TX | 1,277 | 2,307 | 117 | 486 | 220 | 181 | 6 | 59 | $ | 4,523 | |||||||||||||||||||||||||||
$ | 2,151 | $ | 5,816 | $ | 242 | $ | 1,084 | $ | 493 | $ | 399 | $ | 6 | $ | 131 | $ | 10,048 | ||||||||||||||||||||
In accordance with ASC 805, we determined the fair value of acquired assets related to the one property acquired during the three months ended March 31, 2013 as follows (in thousands): | |||||||||||||||||||||||||||||||||||||
Land | Building | Tenant | In-place | Leasing Costs | Customer | Total Purchase | |||||||||||||||||||||||||||||||
Improvements | Leases | Relationships | Price | ||||||||||||||||||||||||||||||||||
Egg Harbor Township, NJ | $ | 1,627 | $ | 2,735 | $ | 282 | $ | 558 | $ | 189 | $ | 259 | $ | 5,650 | |||||||||||||||||||||||
Schedule of Revenue and Earnings Recognized on Properties Acquired | ' | ||||||||||||||||||||||||||||||||||||
Below is a summary of the total revenue and earnings recognized on the two properties acquired during the three months ended March 31, 2014 (dollars in thousands): | |||||||||||||||||||||||||||||||||||||
For the three months ended March 31, | |||||||||||||||||||||||||||||||||||||
2014 | |||||||||||||||||||||||||||||||||||||
Location | Acquisition | Rental Revenue | Earnings (1) | ||||||||||||||||||||||||||||||||||
Date | |||||||||||||||||||||||||||||||||||||
Allen, TX | 3/27/14 | $ | 8 | $ | 5 | ||||||||||||||||||||||||||||||||
Colleyville, TX | 3/27/14 | 6 | 4 | ||||||||||||||||||||||||||||||||||
$ | 14 | $ | 9 | ||||||||||||||||||||||||||||||||||
(1) | Earnings is calculated as net income exclusive of both interest expense and acquisition related costs that are required to be expensed under ASC 805. | ||||||||||||||||||||||||||||||||||||
Below is a summary of the total revenue and earnings recognized on the one property acquired during the three months ended March 31, 2013 (dollars in thousands): | |||||||||||||||||||||||||||||||||||||
For the three months ended March 31, 2013 | |||||||||||||||||||||||||||||||||||||
Location | Acquisition | Rental Revenue | Earnings (1) | ||||||||||||||||||||||||||||||||||
Date | |||||||||||||||||||||||||||||||||||||
Egg Harbor Township, NJ | 3/28/13 | $ | 5 | $ | 3 | ||||||||||||||||||||||||||||||||
$ | 5 | $ | 3 | ||||||||||||||||||||||||||||||||||
-1 | Earnings is calculated as net income less interest expense and acquisition related costs that are required to be expensed under ASC 805. | ||||||||||||||||||||||||||||||||||||
Pro-Forma Condensed Consolidated Statements of Operations | ' | ||||||||||||||||||||||||||||||||||||
The following table reflects pro-forma consolidated statements of operations as if the two properties acquired during the three months ended March 31, 2014 were acquired as of the beginning of the previous period. The pro-forma earnings for the three months ended March 31, 2014 and 2013 were adjusted to assume that acquisition-related costs were incurred as of the beginning of the previous period (dollars in thousands, except per share amounts): | |||||||||||||||||||||||||||||||||||||
For the three months ended March 31, | |||||||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||||||||||
Operating Data: | |||||||||||||||||||||||||||||||||||||
Total operating revenue | $ | 17,436 | $ | 17,297 | |||||||||||||||||||||||||||||||||
Total operating expenses | (23,831 | )(1) | (9,586 | ) | |||||||||||||||||||||||||||||||||
Other expenses | (7,000 | ) | (7,327 | ) | |||||||||||||||||||||||||||||||||
Net (loss) income | (13,395 | ) | 384 | ||||||||||||||||||||||||||||||||||
Dividends attributable to preferred and senior common stock | (1,123 | ) | (1,076 | ) | |||||||||||||||||||||||||||||||||
Net loss attributable to common stockholders | $ | (14,518 | ) | $ | (692 | ) | |||||||||||||||||||||||||||||||
Share and Per Share Data: | |||||||||||||||||||||||||||||||||||||
Basic & diluted loss per share of common stock | $ | (0.92 | ) | $ | (0.06 | ) | |||||||||||||||||||||||||||||||
Weighted average shares outstanding-basic & diluted | 15,746,714 | 11,230,647 | |||||||||||||||||||||||||||||||||||
(1) | $14.0 million relates to the impairment charge recorded in operating expenses during the three months ended March 31, 2014. | ||||||||||||||||||||||||||||||||||||
Future Operating Lease Payments from Tenants under Non-Cancelable Leases | ' | ||||||||||||||||||||||||||||||||||||
Future operating lease payments from tenants under non-cancelable leases, excluding tenant reimbursement of expenses, for the remainder of 2014 and each of the five succeeding fiscal years and thereafter is as follows (dollars in thousands): | |||||||||||||||||||||||||||||||||||||
Year | Tenant | ||||||||||||||||||||||||||||||||||||
Lease Payments (1) | |||||||||||||||||||||||||||||||||||||
Nine Months ending December 31, 2014 | $ | 46,572 | |||||||||||||||||||||||||||||||||||
2015 | 59,564 | ||||||||||||||||||||||||||||||||||||
2016 | 55,853 | ||||||||||||||||||||||||||||||||||||
2017 | 55,356 | ||||||||||||||||||||||||||||||||||||
2018 | 53,551 | ||||||||||||||||||||||||||||||||||||
2019 | 53,776 | ||||||||||||||||||||||||||||||||||||
Thereafter | 240,010 | ||||||||||||||||||||||||||||||||||||
-1 | Does not include real estate held for sale as of March 31, 2014. | ||||||||||||||||||||||||||||||||||||
Carrying Value of Intangible Assets and Accumulated Amortization | ' | ||||||||||||||||||||||||||||||||||||
The following table summarizes the carrying value of intangible assets and the accumulated amortization for each intangible asset class (dollars in thousands): | |||||||||||||||||||||||||||||||||||||
March 31, 2014 | December 31, 2013 | ||||||||||||||||||||||||||||||||||||
Lease Intangibles (1) | Accumulated | Lease Intangibles | Accumulated | ||||||||||||||||||||||||||||||||||
Amortization (1) | Amortization | ||||||||||||||||||||||||||||||||||||
In-place leases | $ | 48,526 | $ | (16,352 | ) | $ | 47,442 | $ | (15,158 | ) | |||||||||||||||||||||||||||
Leasing costs | 31,864 | (10,460 | ) | 31,339 | (9,323 | ) | |||||||||||||||||||||||||||||||
Customer relationships | 36,138 | (11,432 | ) | 35,739 | (10,407 | ) | |||||||||||||||||||||||||||||||
$ | 116,528 | $ | (38,244 | ) | $ | 114,520 | $ | (34,888 | ) | ||||||||||||||||||||||||||||
-1 | Does not include real estate held for sale as of March 31, 2014. | ||||||||||||||||||||||||||||||||||||
Weighted Average Amortization Period for Intangible Assets Acquired and Liabilities Assumed | ' | ||||||||||||||||||||||||||||||||||||
The weighted average amortization periods in years for the intangible assets acquired and liabilities assumed during the three months ended March 31, 2014 and 2013, respectively, were as follows | |||||||||||||||||||||||||||||||||||||
Intangible Assets & Liabilities | 2014 | 2013 | |||||||||||||||||||||||||||||||||||
In-place leases | 11.9 | 10.2 | |||||||||||||||||||||||||||||||||||
Leasing costs | 11.9 | 10.2 | |||||||||||||||||||||||||||||||||||
Customer relationships | 16.9 | 15.2 | |||||||||||||||||||||||||||||||||||
Below market leases | 11.9 | — | |||||||||||||||||||||||||||||||||||
All intangible assets & liabilities | 13.3 | 11.9 | |||||||||||||||||||||||||||||||||||
Estimated Aggregate Amortization Expense | ' | ||||||||||||||||||||||||||||||||||||
The estimated aggregate amortization expense for the remainder of 2014 and for each of the five succeeding fiscal years and thereafter is as follows (dollars in thousands): | |||||||||||||||||||||||||||||||||||||
Year | Estimated | ||||||||||||||||||||||||||||||||||||
Amortization Expense | |||||||||||||||||||||||||||||||||||||
Nine Months ending December 31, 2014 | $ | 7,880 | |||||||||||||||||||||||||||||||||||
2015 | 9,892 | ||||||||||||||||||||||||||||||||||||
2016 | 8,995 | ||||||||||||||||||||||||||||||||||||
2017 | 8,811 | ||||||||||||||||||||||||||||||||||||
2018 | 8,523 | ||||||||||||||||||||||||||||||||||||
2019 | 8,515 | ||||||||||||||||||||||||||||||||||||
Thereafter | 25,668 |
Real_Estate_Held_for_Sale_and_1
Real Estate Held for Sale and Impairment Charges (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Real Estate [Abstract] | ' | ||||||||
Components of Income from Real Estate and Related Assets Held for Sale | ' | ||||||||
The table below summarizes the components of income from real estate and related assets held for sale: | |||||||||
For the three months ended March 31, | |||||||||
2014 | 2013 | ||||||||
Operating revenue | $ | 292 | $ | 292 | |||||
Operating expense | 39 | 57 | |||||||
Income from real estate and related assets held for sale | $ | 253 | $ | 235 | |||||
Components of Assets and Liabilities Held for Sale | ' | ||||||||
The table below summarizes the components of the assets and liabilities held for sale reflected on the accompanying consolidated balance sheet: | |||||||||
March 31, 2014 | |||||||||
Land | $ | 2,735 | |||||||
Building and improvements | $ | 8,619 | |||||||
Less: Accumulated depreciation | $ | (1,645 | ) | ||||||
Total real estate held for sale, net | $ | 9,709 | |||||||
Deferred rent receivable | 223 | ||||||||
Real estate and related assets held for sale, net | $ | 9,932 | |||||||
Other liabilities related to assets held for sale | $ | 178 | |||||||
Mortgage_Notes_Payable_and_Lin1
Mortgage Notes Payable and Line of Credit (Tables) | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||
Debt Disclosure [Abstract] | ' | ||||||||||||||||||||||||
Company's Mortgage Notes Payable and Line of Credit | ' | ||||||||||||||||||||||||
Our mortgage notes payable and line of credit as of March 31, 2014 and December 31, 2013 are summarized below (dollars in thousands): | |||||||||||||||||||||||||
Carrying Value at | |||||||||||||||||||||||||
Encumbered | March 31, 2014 | December 31, 2013 | Stated Interest | Scheduled Maturity | |||||||||||||||||||||
properties at | Rates at March 31, | Dates at March 31, | |||||||||||||||||||||||
March 31, 2014 | 2014 (4) | 2014 | |||||||||||||||||||||||
Mortgage and Other Secured Loans: | |||||||||||||||||||||||||
Fixed rate mortgage loans | 68 | $ | 417,837 | $ | 413,678 | -1 | -2 | ||||||||||||||||||
Variable rate mortgage loans | 4 | 8,200 | 8,200 | LIBOR + 2.15%(3) | 12/1/16 | ||||||||||||||||||||
Premiums and discounts (net) | N/A | 810 | 724 | N/A | N/A | ||||||||||||||||||||
Total Mortgage Notes Payable | 72 | $ | 426,847 | $ | 422,602 | ||||||||||||||||||||
Variable rate Line of Credit | 16 | 24,100 | 24,400 | LIBOR + 3.00%(3) | 8/1/17 | ||||||||||||||||||||
Total Mortgage Notes Payable and Line of Credit | 88 | $ | 450,947 | $ | 447,002 | ||||||||||||||||||||
-1 | Interest rates on our fixed rate mortgage notes payable vary from 4.04% to 6.80%. | ||||||||||||||||||||||||
-2 | We have 37 mortgage notes payable with maturity dates ranging from 6/30/2014 through 1/06/2039. | ||||||||||||||||||||||||
-3 | At March 31, 2014, one month LIBOR was approximately 0.152%. | ||||||||||||||||||||||||
-4 | The weighted average interest rate on all debt outstanding at March 31, 2014, was approximately 5.30%. | ||||||||||||||||||||||||
Summary of Long Term Mortgage | ' | ||||||||||||||||||||||||
During the three months ended March 31, 2014, we assumed one long-term mortgage, collateralized by two properties, which is summarized below (dollars in thousands): | |||||||||||||||||||||||||
Date of Issuance | Issuing Bank | Borrowings | Interest Rate | Maturity Date | |||||||||||||||||||||
3/27/14 | Wells Fargo N.A. | $6,330 | 5.58% | 2/1/16 | |||||||||||||||||||||
Principal Payments of Mortgage Notes Payable | ' | ||||||||||||||||||||||||
Scheduled principal payments of mortgage notes payable for the remainder of 2014, and each of the five succeeding fiscal years and thereafter are as follows (dollars in thousands): | |||||||||||||||||||||||||
Year | Scheduled Principal | ||||||||||||||||||||||||
Payments | |||||||||||||||||||||||||
Nine Months ending December 31, 2014 | $ | 22,764 | |||||||||||||||||||||||
2015 | 42,564 | ||||||||||||||||||||||||
2016 | 94,787 | ||||||||||||||||||||||||
2017 | 66,749 | ||||||||||||||||||||||||
2018 | 19,317 | ||||||||||||||||||||||||
2019 | 12,681 | ||||||||||||||||||||||||
Thereafter | 167,175 | ||||||||||||||||||||||||
$ | 426,037 | ||||||||||||||||||||||||
Summary of Interest Rate Cap Agreement | ' | ||||||||||||||||||||||||
The following table summarizes the key terms of each interest rate cap agreement (dollars in thousands): | |||||||||||||||||||||||||
As of March 31, | |||||||||||||||||||||||||
2014 | |||||||||||||||||||||||||
Interest Rate Cap | Notional | LIBOR Cap | Effective Date | Maturity Date | Cost | Fair | |||||||||||||||||||
Amount | Value | ||||||||||||||||||||||||
26-Nov-13 | $ | 8,200 | 3 | % | March 31, 2014 | December 1, 2016 | $ | 31 | $ | 18 |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 3 Months Ended | ||||||||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||||||||
Future Minimum Rental Payments Due under Terms of Leases | ' | ||||||||||||||||||||||||||||||
We are obligated as lessee under three ground leases. Future minimum rental payments due under the terms of these leases for the remainder of 2014 and each of the five succeeding years and thereafter, are as follows (dollars in thousands): | |||||||||||||||||||||||||||||||
For the year ended December 31, | |||||||||||||||||||||||||||||||
Location | Lease End Date | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | |||||||||||||||||||||||
Tulsa, OK | 21-Apr | $ | 114 | $ | 153 | $ | 153 | $ | 153 | $ | 153 | $ | 153 | $ | 229 | ||||||||||||||||
Dartmouth, MA | May-36 | 131 | 174 | 174 | 174 | 174 | 174 | 3,300 | |||||||||||||||||||||||
Springfield, MA | Feb-30 | 64 | 86 | 86 | 89 | 90 | 90 | 972 | |||||||||||||||||||||||
$ | 309 | $ | 413 | $ | 413 | $ | 416 | $ | 417 | $ | 417 | $ | 4,501 | ||||||||||||||||||
Tenant Improvements [Member] | ' | ||||||||||||||||||||||||||||||
Future Tenant Improvement Payments Due on Properties | ' | ||||||||||||||||||||||||||||||
Future tenant improvement payments due on these properties for the remainder of 2014 and each of the five succeeding years and thereafter, are as follows (dollars in thousands): | |||||||||||||||||||||||||||||||
For the year ended December 31, | |||||||||||||||||||||||||||||||
Location | Lease End Date | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | |||||||||||||||||||||||
Canton, NC | Jul-24(1) | $ | 3,325 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Concord Township, OH | Aug-34 | 150 | — | — | — | — | — | — | |||||||||||||||||||||||
Austin, TX | 15-Jun | 125 | — | — | — | — | — | — | |||||||||||||||||||||||
Hialeah, FL | 27-Mar | 35 | — | — | — | — | — | — | |||||||||||||||||||||||
$ | 3,635 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
-1 | Upon completion of expansion of this property, currently projected to be September of 2014, the lease will be extended for 20 years, through September 2034. |
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 3 Months Ended | ||||||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||||||
Equity [Abstract] | ' | ||||||||||||||||||||||||||||
Summary of Changes in Stockholders' Equity | ' | ||||||||||||||||||||||||||||
The following table summarizes the changes in our stockholders’ equity for the three months ended March 31, 2014 (dollars in thousands): | |||||||||||||||||||||||||||||
Preferred | Senior Common | Common | Capital in | Notes | Distributions in | Total | |||||||||||||||||||||||
Stock | Stock | Stock | Excess of | Receivable | Excess of | Stockholders’ | |||||||||||||||||||||||
Par Value | from Employees | Accumulated | Equity | ||||||||||||||||||||||||||
Earnings | |||||||||||||||||||||||||||||
Balance at December 31, 2013 | $ | 2 | $ | — | $ | 16 | $ | 298,751 | $ | (375 | ) | $ | (115,248 | ) | $ | 183,146 | |||||||||||||
Issuance of senior common stock and common stock, net | — | — | — | 7,243 | — | — | 7,243 | ||||||||||||||||||||||
Distributions declared to common, senior common and preferred stockholders | — | — | — | — | — | (7,025 | ) | (7,025 | ) | ||||||||||||||||||||
Net loss | — | — | — | — | — | (13,514 | ) | (13,514 | ) | ||||||||||||||||||||
Balance at March 31, 2014 | $ | 2 | $ | — | $ | 16 | $ | 305,994 | $ | (375 | ) | $ | (135,787 | ) | $ | 169,850 | |||||||||||||
Dividends Declared | ' | ||||||||||||||||||||||||||||
Our Board of Directors declared the following distributions per share for the three months ended March 31, 2014 and 2013: | |||||||||||||||||||||||||||||
For the three months ended March 31, | |||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||
Common Stock | $ | 0.38 | $ | 0.38 | |||||||||||||||||||||||||
Senior Common Stock | 0.26 | 0.26 | |||||||||||||||||||||||||||
Series A Preferred Stock | 0.4843749 | 0.4843749 | |||||||||||||||||||||||||||
Series B Preferred Stock | 0.4688 | 0.4688 | |||||||||||||||||||||||||||
Series C Preferred Stock | 0.4453 | 0.4453 | |||||||||||||||||||||||||||
Summary of Outstanding Note Receivable from an Employee for the Exercise of Stock Options | ' | ||||||||||||||||||||||||||||
The following table is a summary of the outstanding note receivable from an employee of the Adviser for the exercise of stock options (dollars in thousands): | |||||||||||||||||||||||||||||
Date Issued | Outstanding Balance | Outstanding Balance | Maturity Date | Interest Rate | |||||||||||||||||||||||||
of Employee Loan | of Employee Loan at | of Note | on Note | ||||||||||||||||||||||||||
at March 31, 2014 | December 31, 2013 | ||||||||||||||||||||||||||||
Nov-06 | $ | 375 | $ | 375 | Nov 2015 | 8.15 | % |
Subsequent_Events_Tables
Subsequent Events (Tables) | 3 Months Ended | ||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||
Subsequent Events [Abstract] | ' | ||||||||||||||||||
Monthly Distributions Declared by Company's Board of Directors | ' | ||||||||||||||||||
On April 8, 2014, our Board of Directors declared the following monthly distributions: | |||||||||||||||||||
Record Date | Payment Date | Common Stock | Series A Preferred | Series B Preferred | Series C Preferred | ||||||||||||||
Distributions per Share | Distributions per Share | Distributions per Share | Distributions per Share | ||||||||||||||||
21-Apr-14 | 30-Apr-14 | $ | 0.125 | $ | 0.1614583 | $ | 0.15625 | $ | 0.1484375 | ||||||||||
20-May-14 | 30-May-14 | 0.125 | 0.1614583 | 0.15625 | 0.1484375 | ||||||||||||||
19-Jun-14 | 30-Jun-14 | 0.125 | 0.1614583 | 0.15625 | 0.1484375 | ||||||||||||||
Total | $ | 0.375 | $ | 0.4843749 | $ | 0.46875 | $ | 0.4453125 | |||||||||||
Senior Common Stock Distributions | |||||||||||||||||||
Payable to the | Payment Date | Distribution per Share | |||||||||||||||||
Holders of Record | |||||||||||||||||||
During the Month of: | |||||||||||||||||||
April | 7-May-14 | $ | 0.0875 | ||||||||||||||||
May | 6-Jun-14 | 0.0875 | |||||||||||||||||
June | 8-Jul-14 | 0.0875 | |||||||||||||||||
Total | $ | 0.2625 | |||||||||||||||||
Organization_Basis_of_Presenta2
Organization, Basis of Presentation and Significant Accounting Policies - Additional Information (Detail) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Subsidiary | ||
Organization And Significant Accounting Policies [Line Items] | ' | ' |
Number of subsidiaries interest owned in general and limited partnership | 2 | ' |
Non-qualifying income related to real estate portfolio | $0 | ' |
Total amortization expense related to intangible assets | 2,300,000 | 1,500,000 |
Payments of deferred financing costs | 360,000 | 141,000 |
Total amortization expense related to deferred financing costs included in interest expense | 386,000 | 405,000 |
Liabilities accrued | 0 | 0 |
Expenses recorded to general and administrative expense | 30,000 | 30,000 |
Aggregate undiscounted obligation on properties | 9,200,000 | ' |
Expected payment to be made in next twelve months | 0 | ' |
Expected payment to be made in second year | 0 | ' |
Expected payment to be made in third year | 0 | ' |
Expected payment to be made in fourth year | 0 | ' |
Expected payment to be made in fifth year | 0 | ' |
Minimum [Member] | ' | ' |
Organization And Significant Accounting Policies [Line Items] | ' | ' |
Expected lease up period for estimating carrying costs | '9 months | ' |
Amortization related to below-market lease | 200,000 | 200,000 |
Remaining term of in-place leases and unamortized lease | '10 years | ' |
Percentage of discount rate for calculating undiscounted obligation | 2.50% | ' |
Maximum [Member] | ' | ' |
Organization And Significant Accounting Policies [Line Items] | ' | ' |
Expected lease up period for estimating carrying costs | '18 months | ' |
Amortization related to above-market lease | 100,000 | 100,000 |
Remaining term of in-place leases and unamortized lease | '15 years | ' |
Percentage of discount rate for calculating undiscounted obligation | 7.60% | ' |
Real Estate [Member] | ' | ' |
Organization And Significant Accounting Policies [Line Items] | ' | ' |
Real estate depreciation expense | $4,400,000 | $3,400,000 |
Building and Improvements [Member] | ' | ' |
Organization And Significant Accounting Policies [Line Items] | ' | ' |
Estimated useful life | '39 years | ' |
Equipment and Fixtures [Member] | Minimum [Member] | ' | ' |
Organization And Significant Accounting Policies [Line Items] | ' | ' |
Estimated useful life | '5 years | ' |
Equipment and Fixtures [Member] | Maximum [Member] | ' | ' |
Organization And Significant Accounting Policies [Line Items] | ' | ' |
Estimated useful life | '20 years | ' |
GCLP Business Trust I [Member] | ' | ' |
Organization And Significant Accounting Policies [Line Items] | ' | ' |
Percentage of limited partnership interest transferred to business unit | 99.00% | ' |
Number of trust shares exchanged for limited partnership interest | 100 | ' |
Subsidiary and business trust of the Company, formed under the laws of the Commonwealth of Massachusetts, date | 28-Dec-05 | ' |
GCLP Business Trust II [Member] | ' | ' |
Organization And Significant Accounting Policies [Line Items] | ' | ' |
Percentage of limited partnership interest transferred to business unit | 1.00% | ' |
Number of trust shares exchanged for general partnership interest | 100 | ' |
Subsidiary and business trust of the Company, formed under the laws of the Commonwealth of Massachusetts, date | 28-Dec-05 | ' |
Gladstone Commercial Advisers, Inc. [Member] | ' | ' |
Organization And Significant Accounting Policies [Line Items] | ' | ' |
Company ownership percentage of voting securities of Commercial Advisers | 100.00% | ' |
RelatedParty_Transactions_Addi
Related-Party Transactions - Additional Information (Detail) (USD $) | 3 Months Ended | |||||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | ||||
Related Party Transaction [Line Items] | ' | ' | ' | |||
Due to Adviser and Administrator | $1,160,000 | [1] | ' | $1,360,000 | [1] | |
Annual base management fee, in percentage of stockholders' equity, in excess of recorded value of preferred stock | 2.00% | ' | ' | |||
Base management fee | 625,000 | [1] | 353,000 | [1] | ' | |
Pre-incentive quarterly fee FFO in percentage of common stockholders equity that will reward the advisor | 1.75% | ' | ' | |||
Pre-incentive annual fee FFO in percentage of common stockholders equity that will reward the advisor | 7.00% | ' | ' | |||
Amount to be paid to Adviser in percentage of pre-incentive fee condition one | 100.00% | ' | ' | |||
Pre-incentive fee in percentage of common stockholders equity that awards adviser hundred percent of amount of pre-incentive fee, maximum percentage | 2.19% | ' | ' | |||
Amount to be paid to Adviser in percentage of pre-incentive fee condition two | 20.00% | ' | ' | |||
Pre-incentive fee in percentage of common stockholders' equity that awards the adviser 20% of the amount of the pre-incentive fee, minimum percentage | 2.19% | ' | ' | |||
Incentive fee | 1,240,000 | [1] | 931,000 | [1] | ' | |
Credits related to unconditional and irrevocable voluntary waivers issued by the Adviser | 1,205,000 | [1] | 585,000 | [1] | ' | |
Related-party transactions incentive fee, net | 40,000 | 300,000 | ' | |||
Administration fee | 492,000 | [1] | 362,000 | [1] | ' | |
Dealer manager fee in percentage of gross proceeds of shares of senior common stock sold | 7.00% | ' | ' | |||
Sales commission fee in percentage of gross proceeds of shares of senior common stock sold | 3.00% | ' | ' | |||
Agreement termination date | 31-Aug-14 | ' | ' | |||
Fees paid | 0 | 0 | ' | |||
Minimum [Member] | ' | ' | ' | |||
Related Party Transaction [Line Items] | ' | ' | ' | |||
Percentage of the amount of the mortgage | 0.50% | ' | ' | |||
Maximum [Member] | ' | ' | ' | |||
Related Party Transaction [Line Items] | ' | ' | ' | |||
Percentage of the amount of the mortgage | 1.00% | ' | ' | |||
Dealer Manager [Member] | ' | ' | ' | |||
Related Party Transaction [Line Items] | ' | ' | ' | |||
Payments made to the Dealer Manager pursuant to Dealer Manager Agreement | $40,000 | $60,000 | ' | |||
Agreement termination date | 28-Mar-15 | ' | ' | |||
Agreement termination on senior common stock shares issued | 3,000,000 | ' | ' | |||
[1] | Refer to Note 2 "Related-Party Transactions" |
Loss_Per_Share_of_Common_Stock2
Loss Per Share of Common Stock - Basic and Diluted Loss Per Share of Common Stock (Detail) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Calculation of basic and diluted loss per share of common stock: | ' | ' |
Net loss attributable to common stockholders | ($14,637) | ($643) |
Denominator for basic and diluted weighted average shares of common stock | 15,746,714 | 11,230,647 |
Basic and diluted loss per share of common stock | ($0.93) | ($0.06) |
Real_Estate_and_Intangible_Ass2
Real Estate and Intangible Assets - Company's Investments in Real Estate (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Real estate: | ' | ' |
Land | $77,062 | $79,153 |
Building and improvements | 514,719 | 527,230 |
Tenant improvements | 36,212 | 35,970 |
Accumulated depreciation | -84,008 | -81,241 |
Total real estate, net | $543,985 | $561,112 |
Real_Estate_and_Intangible_Ass3
Real Estate and Intangible Assets - Additional Information (Detail) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 |
2014 Real Estate Activity [Member] | 2013 Real Estate Activity [Member] | ||
Property | Property | ||
Real Estate Properties [Line Items] | ' | ' | ' |
Number of properties acquired | ' | 2 | 1 |
Total annual property taxes for all properties not paid by tenants | $11 | ' | ' |
Real_Estate_and_Intangible_Ass4
Real Estate and Intangible Assets - Summary of Properties Acquired (Detail) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 |
sqft | Allen, TX [Member] | Colleyville, TX [Member] | Egg Harbor Township, NJ [Member] | |
sqft | sqft | sqft | ||
Option | Option | Option | ||
Business Acquisition [Line Items] | ' | ' | ' | ' |
Acquisition Date | ' | 27-Mar-14 | 27-Mar-14 | 28-Mar-13 |
Square Footage | 41,509 | 21,154 | 20,355 | 29,257 |
Lease Term | ' | '12 years | '12 years | '10 years |
Renewal Options | ' | 4 | 4 | 1 |
Renewal Options Period | ' | '5 years | '5 years | '5 years |
Total Purchase Price | $10,048 | $5,525 | $4,523 | $5,650 |
Acquisition Expenses | 52 | 26 | 26 | 149 |
Annualized Straight Line Rent | 1,037 | 570 | 467 | 490 |
Debt Assumed | $6,330 | $3,481 | $2,849 | $3,700 |
Real_Estate_and_Intangible_Ass5
Real Estate and Intangible Assets - Fair Value of Acquired Assets and Assumed Liabilities (Detail) (USD $) | 3 Months Ended | ||||||||||||||||||||||||||||||||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2013 | Mar. 31, 2013 | Mar. 31, 2013 | Mar. 31, 2013 | Mar. 31, 2013 | Mar. 31, 2013 |
Customer Relationships [Member] | Below Market Leases [Member] | Discount on Assumed Debt [Member] | Land [Member] | Building [Member] | Tenant Improvements [Member] | In-Place Leases [Member] | Leasing Costs [Member] | Allen, TX [Member] | Allen, TX [Member] | Allen, TX [Member] | Allen, TX [Member] | Allen, TX [Member] | Allen, TX [Member] | Allen, TX [Member] | Allen, TX [Member] | Colleyville, TX [Member] | Colleyville, TX [Member] | Colleyville, TX [Member] | Colleyville, TX [Member] | Colleyville, TX [Member] | Colleyville, TX [Member] | Colleyville, TX [Member] | Colleyville, TX [Member] | Colleyville, TX [Member] | Egg Harbor Township, NJ [Member] | Egg Harbor Township, NJ [Member] | Egg Harbor Township, NJ [Member] | Egg Harbor Township, NJ [Member] | Egg Harbor Township, NJ [Member] | Egg Harbor Township, NJ [Member] | Egg Harbor Township, NJ [Member] | ||
Customer Relationships [Member] | Discount on Assumed Debt [Member] | Land [Member] | Building [Member] | Tenant Improvements [Member] | In-Place Leases [Member] | Leasing Costs [Member] | Customer Relationships [Member] | Below Market Leases [Member] | Discount on Assumed Debt [Member] | Land [Member] | Building [Member] | Tenant Improvements [Member] | In-Place Leases [Member] | Leasing Costs [Member] | Customer Relationships [Member] | Land [Member] | Building [Member] | Tenant Improvements [Member] | In-Place Leases [Member] | Leasing Costs [Member] | |||||||||||||
Loans At Acquisition Date [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of acquired assets related to the properties acquired | ' | $399 | $6 | $131 | $2,151 | $5,816 | $242 | $1,084 | $493 | ' | $218 | $72 | $874 | $3,509 | $125 | $598 | $273 | ' | $181 | $6 | $59 | $1,277 | $2,307 | $117 | $486 | $220 | ' | $259 | $1,627 | $2,735 | $282 | $558 | $189 |
Total Purchase Price | $10,048 | ' | ' | ' | ' | ' | ' | ' | ' | $5,525 | ' | ' | ' | ' | ' | ' | ' | $4,523 | ' | ' | ' | ' | ' | ' | ' | ' | $5,650 | ' | ' | ' | ' | ' | ' |
Real_Estate_and_Intangible_Ass6
Real Estate and Intangible Assets - Schedule of Revenue and Earnings Recognized on Properties Acquired (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Business Acquisition [Line Items] | ' | ' |
Rental Revenue | $14 | $5 |
Earnings | 9 | 3 |
Allen, TX [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Acquisition Date | 27-Mar-14 | ' |
Rental Revenue | 8 | ' |
Earnings | 5 | ' |
Colleyville, TX [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Acquisition Date | 27-Mar-14 | ' |
Rental Revenue | 6 | ' |
Earnings | 4 | ' |
Egg Harbor Township, NJ [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Acquisition Date | ' | 28-Mar-13 |
Rental Revenue | ' | 5 |
Earnings | ' | $3 |
Real_Estate_and_Intangible_Ass7
Real Estate and Intangible Assets - Pro-Forma Condensed Consolidated Statements of Operations (Detail) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Operating Data: | ' | ' |
Total operating revenue | $17,436 | $17,297 |
Total operating expenses | -23,831 | -9,586 |
Other expenses | -7,000 | -7,327 |
Net (loss) income | -13,395 | 384 |
Dividends attributable to preferred and senior common stock | -1,123 | -1,076 |
Net loss attributable to common stockholders | ($14,518) | ($692) |
Share and Per Share Data: | ' | ' |
Basic & diluted loss per share of common stock | ($0.92) | ($0.06) |
Weighted average shares outstanding-basic & diluted | 15,746,714 | 11,230,647 |
Real_Estate_and_Intangible_Ass8
Real Estate and Intangible Assets - Pro-Forma Condensed Consolidated Statements of Operations (Parenthetical) (Detail) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2014 |
Business Combinations [Abstract] | ' |
Impairment charge | $13,958 |
Real_Estate_and_Intangible_Ass9
Real Estate and Intangible Assets - Future Operating Lease Payments from Tenants under Non-Cancelable Leases (Detail) (USD $) | Mar. 31, 2014 |
In Thousands, unless otherwise specified | |
Leases [Abstract] | ' |
Nine Months ending December 31, 2014 | $46,572 |
2015 | 59,564 |
2016 | 55,853 |
2017 | 55,356 |
2018 | 53,551 |
2019 | 53,776 |
Thereafter | $240,010 |
Recovered_Sheet1
Real Estate and Intangible Assets - Carrying Value of Intangible Assets and Accumulated Amortization (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Lease Intangibles | $115,476 | $114,520 |
Accumulated Amortization | -37,192 | -34,888 |
In-Place Leases [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Lease Intangibles | 48,418 | 47,442 |
Accumulated Amortization | -16,166 | -15,158 |
Leasing Costs [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Lease Intangibles | 31,529 | 31,339 |
Accumulated Amortization | -10,005 | -9,323 |
Customer Relationships [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Lease Intangibles | 35,529 | 35,739 |
Accumulated Amortization | ($11,021) | ($10,407) |
Recovered_Sheet2
Real Estate and Intangible Assets - Weighted Average Amortization Period for Intangible Assets Acquired and Liabilities Assumed (Detail) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Period for intangible assets and liabilities | '13 years 3 months 18 days | '11 years 10 months 24 days |
In-Place Leases [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Period for intangible assets and liabilities | '11 years 10 months 24 days | '10 years 2 months 12 days |
Leasing Costs [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Period for intangible assets and liabilities | '11 years 10 months 24 days | '10 years 2 months 12 days |
Customer Relationships [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Period for intangible assets and liabilities | '16 years 10 months 24 days | '15 years 2 months 12 days |
Below Market Leases [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Period for intangible assets and liabilities | '11 years 10 months 24 days | ' |
Recovered_Sheet3
Real Estate and Intangible Assets - Estimated Aggregate Amortization Expense (Detail) (USD $) | Mar. 31, 2014 |
In Thousands, unless otherwise specified | |
Goodwill And Intangible Assets Disclosure [Abstract] | ' |
Nine Months ending December 31, 2014 | $7,880 |
2015 | 9,892 |
2016 | 8,995 |
2017 | 8,811 |
2018 | 8,523 |
2019 | 8,515 |
Thereafter | $25,668 |
Real_Estate_Held_for_Sale_and_2
Real Estate Held for Sale and Impairment Charges - Components of Income from Real Estate and Related Assets Held for Sale (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Schedule Of Components Of Income From Real Estate And Related Assets Held For Sale [Line Items] | ' | ' |
Income from real estate and related assets held for sale | $17,136 | $14,035 |
Real Estate Held for Sale [Member] | ' | ' |
Schedule Of Components Of Income From Real Estate And Related Assets Held For Sale [Line Items] | ' | ' |
Operating revenue | 292 | 292 |
Operating expense | 39 | 57 |
Income from real estate and related assets held for sale | $253 | $235 |
Real_Estate_Held_for_Sale_and_3
Real Estate Held for Sale and Impairment Charges - Components of Assets and Liabilities Held for Sale (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Schedule Of Real Estate Owned Held For Sale [Line Items] | ' | ' |
Real estate held for sale, cost | $627,993 | $642,353 |
Less: Accumulated depreciation | -84,008 | -81,241 |
Total real estate, net | 543,985 | 561,112 |
Deferred rent receivable | 19,520 | 18,905 |
Other liabilities related to assets held for sale | 178 | ' |
Real Estate Held for Sale [Member] | ' | ' |
Schedule Of Real Estate Owned Held For Sale [Line Items] | ' | ' |
Less: Accumulated depreciation | -1,645 | ' |
Total real estate, net | 9,709 | ' |
Deferred rent receivable | 223 | ' |
Real estate and related assets held for sale, net | 9,932 | ' |
Other liabilities related to assets held for sale | 178 | ' |
Land [Member] | Real Estate Held for Sale [Member] | ' | ' |
Schedule Of Real Estate Owned Held For Sale [Line Items] | ' | ' |
Real estate held for sale, cost | 2,735 | ' |
Building and Improvements [Member] | Real Estate Held for Sale [Member] | ' | ' |
Schedule Of Real Estate Owned Held For Sale [Line Items] | ' | ' |
Real estate held for sale, cost | $8,619 | ' |
Real_Estate_Held_for_Sale_and_4
Real Estate Held for Sale and Impairment Charges - Additional Information (Detail) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2014 |
Real Estate [Abstract] | ' |
Impairment loss | $13,958 |
Expiration period of property lease | '2015-01 |
Extended period of lease on property | '1 year |
Mortgage_Notes_Payable_and_Lin2
Mortgage Notes Payable and Line of Credit - Company's Mortgage Notes Payable and Line of Credit (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 |
Property | ||
Debt Instrument [Line Items] | ' | ' |
Encumbered properties | 88 | ' |
Carrying value | $450,947 | $447,002 |
Stated Interest Rates | 'One month LIBOR was approximately 0.152%. | ' |
Fixed Rate Mortgage Loans [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Encumbered properties | 68 | ' |
Carrying value | 417,837 | 413,678 |
Variable Rate Mortgage Loans [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Encumbered properties | 4 | ' |
Carrying value | 8,200 | 8,200 |
Stated Interest Rates | 'LIBOR + 2.15% | ' |
Scheduled Maturity Dates | 1-Dec-16 | ' |
Premiums and Discounts (Net) [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Carrying value | 810 | 724 |
Stated Interest Rates | ' | ' |
Mortgages Notes Payable [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Encumbered properties | 72 | ' |
Carrying value | 426,847 | 422,602 |
Variable Rate Line of Credit [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Encumbered properties | 16 | ' |
Carrying value | $24,100 | $24,400 |
Stated Interest Rates | 'LIBOR + 3.00% | ' |
Scheduled Maturity Dates | 1-Aug-17 | ' |
Mortgage_Notes_Payable_and_Lin3
Mortgage Notes Payable and Line of Credit - Company's Mortgage Notes Payable and Line of Credit (Parenthetical) (Detail) | 3 Months Ended |
Mar. 31, 2014 | |
Debt Instrument [Line Items] | ' |
Libor rate description | 'One month LIBOR was approximately 0.152%. |
Libor rate | 0.15% |
Weighted average interest rate on all debt outstanding | 5.30% |
Fixed Rate Mortgage Loans [Member] | ' |
Debt Instrument [Line Items] | ' |
Number of mortgage notes payable | 37 |
Maturity date of mortgage notes payable, start date | 30-Jun-14 |
Maturity date of mortgage notes payable, end date | 6-Jan-39 |
Fixed Rate Mortgage Loans [Member] | Minimum [Member] | ' |
Debt Instrument [Line Items] | ' |
Stated Interest Rates | 4.04% |
Fixed Rate Mortgage Loans [Member] | Maximum [Member] | ' |
Debt Instrument [Line Items] | ' |
Stated Interest Rates | 6.80% |
Mortgage_Notes_Payable_and_Lin4
Mortgage Notes Payable and Line of Credit - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | ||||
Mar. 28, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Aug. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Aug. 31, 2013 | Mar. 31, 2014 | |
Property | Senior Unsecured Revolving Credit Facility [Member] | Senior Unsecured Revolving Credit Facility [Member] | Letter of Credit [Member] | Senior Secured Revolving Credit Facility [Member] | Mortgage Notes Payable [Member] | |||
Mortgages | Mortgages | |||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Number of mortgage notes payable | ' | ' | ' | ' | ' | ' | ' | 37 |
Weighted average interest rate on all debt outstanding | ' | 5.30% | ' | ' | ' | ' | ' | 5.40% |
Number of properties collateralized in mortgage notes payable | ' | 72 | ' | ' | ' | ' | ' | ' |
Net book value of collateralized mortgage properties | ' | $553,400,000 | ' | ' | ' | ' | ' | ' |
Number of long-term mortgages issued | ' | 1 | ' | ' | ' | ' | ' | ' |
Number of properties to collateralized mortgage notes payable | ' | 2 | ' | ' | ' | ' | ' | ' |
Excess of LIBOR rate | ' | ' | ' | ' | ' | ' | ' | 3.00% |
Fair value of mortgage notes payable outstanding | ' | 429,600,000 | ' | ' | ' | ' | ' | ' |
Carrying value of mortgage notes payable outstanding | ' | 426,847,000 | 422,602,000 | ' | ' | ' | ' | ' |
Line of credit, outstanding | ' | ' | ' | 60,000,000 | 24,100,000 | ' | 75,000,000 | ' |
Line of credit, maturity date | '2017-08 | ' | ' | '2017-08 | ' | ' | ' | ' |
Extension period subject to payment of fee | '1 year | ' | ' | '1 year | ' | ' | ' | ' |
Extension fee on the initial maturity date | 0.25% | ' | ' | 0.25% | ' | ' | ' | ' |
Standby letters of credit sublimit | ' | ' | ' | 20,000,000 | ' | ' | ' | ' |
Line of credit facility, maximum additional amount drawn | ' | 18,900,000 | ' | 75,000,000 | ' | ' | ' | ' |
Line of credit, variable spread on interest rate | ' | ' | ' | 3.00% | ' | ' | ' | ' |
Annual maintenance fee | ' | ' | ' | 30,000 | ' | ' | ' | ' |
Unused commitment fee | ' | ' | ' | 0.25% | ' | ' | ' | ' |
Line of credit covenant limit of distributions to shareholders percentage | ' | ' | ' | 100.00% | ' | ' | ' | ' |
Line of credit facility, maximum additional amount drawn | ' | ' | ' | 1,300,000 | ' | ' | ' | ' |
Extension fee on the initial maturity date | ' | ' | ' | 0.0025 | ' | ' | ' | ' |
Line of credit at an interest rate | ' | 3.00% | ' | ' | 3.20% | ' | ' | ' |
Letters of credit, outstanding | ' | ' | ' | ' | ' | $10,300,000 | ' | ' |
Mortgage_Notes_Payable_and_Lin5
Mortgage Notes Payable and Line of Credit - Summary of Long Term Mortgage (Detail) (Wells Fargo N.A [Member], Maturity Date One [Member], USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2014 |
Wells Fargo N.A [Member] | Maturity Date One [Member] | ' |
Debt Instrument [Line Items] | ' |
Date of Issuance | 27-Mar-14 |
Issuing Bank | 'Wells Fargo N.A. |
Borrowings | $6,330 |
Interest Rate | 5.58% |
Maturity Date | 1-Feb-16 |
Mortgage_Notes_Payable_and_Lin6
Mortgage Notes Payable and Line of Credit - Principal Payments of Mortgage Notes Payable (Detail) (Mortgages Notes Payable [Member], USD $) | Mar. 31, 2014 |
In Thousands, unless otherwise specified | |
Mortgages Notes Payable [Member] | ' |
Debt Instrument [Line Items] | ' |
Nine Months ending December 31, 2014 | $22,764 |
2015 | 42,564 |
2016 | 94,787 |
2017 | 66,749 |
2018 | 19,317 |
2019 | 12,681 |
Thereafter | 167,175 |
Total Mortgage Notes Payable and Line of Credit | $426,037 |
Mortgage_Notes_Payable_and_Lin7
Mortgage Notes Payable and Line of Credit - Summary of Interest Rate Cap Agreement (Detail) (Mortgage Notes Payable [Member], Interest Rate Cap [Member], USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2014 |
Mortgage Notes Payable [Member] | Interest Rate Cap [Member] | ' |
Debt Instrument [Line Items] | ' |
Date of Issuance | 26-Nov-13 |
Notional Amount | $8,200 |
LIBOR Cap | 3.00% |
Effective Date | 31-Mar-14 |
Maturity Date | 1-Dec-16 |
Cost | 31 |
Fair Value | $18 |
Mandatorily_Redeemable_Preferr1
Mandatorily Redeemable Preferred Stock - Additional Information (Detail) (USD $) | 1 Months Ended | ||
Feb. 29, 2012 | Mar. 31, 2014 | Dec. 31, 2013 | |
Class of Stock [Line Items] | ' | ' | ' |
Public offering of preferred stock | ' | 2,150,000 | 2,150,000 |
Preferred stock, par value | ' | $0.00 | $0.00 |
Preferred shares at a redemption price | $25 | ' | ' |
Preferred Stock redemption term | 'On or after January 31, 2016, we may redeem the shares at a redemption price of $25.00 per share, plus any accumulated and unpaid dividends to and including the date of redemption. | ' | ' |
Preferred Stock mandatory redemption date | 31-Jan-17 | ' | ' |
Deferred financing costs | $1,800,000 | ' | ' |
Fair value of term preferred stock | ' | 38,500,000 | 38,500,000 |
Carrying value term preferred stock | ' | 2,000 | 2,000 |
Mandatorily Redeemable Preferred Stock [Member] | ' | ' | ' |
Class of Stock [Line Items] | ' | ' | ' |
Public offering of preferred stock | 1,540,000 | ' | ' |
Preferred stock, par value | $0.00 | ' | ' |
Public offering price | $25 | ' | ' |
Gross proceeds of the offering totaled | 38,500,000 | ' | ' |
Net proceeds, after deducting offering expenses | 36,700,000 | ' | ' |
Fair value of term preferred stock | ' | 40,700,000 | ' |
Carrying value term preferred stock | ' | $38,500,000 | ' |
Closing price of term preferred stock | ' | $26.40 | ' |
Series C Preferred Stock [Member] | ' | ' | ' |
Class of Stock [Line Items] | ' | ' | ' |
Series C preferred stock | 7.13% | ' | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies - Additional Information (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Operating Leased Assets [Line Items] | ' | ' |
Expenses incurred for the properties listed | $0.10 | $0.10 |
Ground Leases [Member] | ' | ' |
Operating Leased Assets [Line Items] | ' | ' |
Number of leases | 3 | ' |
Commitment_and_Contingencies_F
Commitment and Contingencies - Future Minimum Rental Payments Due under Terms of Leases (Detail) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2014 |
Operating Leased Assets [Line Items] | ' |
For the year ended December 31, 2014 | $46,572 |
For the year ended December 31, 2015 | 55,853 |
For the year ended December 31, 2016 | 55,356 |
For the year ended December 31, 2017 | 53,551 |
For the year ended December 31, 2018 | 53,776 |
Ground Leases [Member] | ' |
Operating Leased Assets [Line Items] | ' |
For the year ended December 31, 2014 | 309 |
For the year ended December 31, 2015 | 413 |
For the year ended December 31, 2016 | 413 |
For the year ended December 31, 2017 | 416 |
For the year ended December 31, 2018 | 417 |
For the year ended December 31, 2019 | 417 |
Thereafter | 4,501 |
Ground Leases [Member] | Tulsa, OK [Member] | ' |
Operating Leased Assets [Line Items] | ' |
Lease End Date | '2021-04 |
For the year ended December 31, 2014 | 114 |
For the year ended December 31, 2015 | 153 |
For the year ended December 31, 2016 | 153 |
For the year ended December 31, 2017 | 153 |
For the year ended December 31, 2018 | 153 |
For the year ended December 31, 2019 | 153 |
Thereafter | 229 |
Ground Leases [Member] | Dartmouth, MA [Member] | ' |
Operating Leased Assets [Line Items] | ' |
Lease End Date | '2036-05 |
For the year ended December 31, 2014 | 131 |
For the year ended December 31, 2015 | 174 |
For the year ended December 31, 2016 | 174 |
For the year ended December 31, 2017 | 174 |
For the year ended December 31, 2018 | 174 |
For the year ended December 31, 2019 | 174 |
Thereafter | 3,300 |
Ground Leases [Member] | Springfield, MA [Member] | ' |
Operating Leased Assets [Line Items] | ' |
Lease End Date | '2030-02 |
For the year ended December 31, 2014 | 64 |
For the year ended December 31, 2015 | 86 |
For the year ended December 31, 2016 | 86 |
For the year ended December 31, 2017 | 89 |
For the year ended December 31, 2018 | 90 |
For the year ended December 31, 2019 | 90 |
Thereafter | $972 |
Commitment_and_Contingencies_F1
Commitment and Contingencies - Future Tenant Improvement Payments Due on Properties (Detail) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2014 |
Operating Leased Assets [Line Items] | ' |
2014 | $46,572 |
2015 | 55,853 |
2016 | 55,356 |
2017 | 53,551 |
2018 | 53,776 |
Tenant Improvements [Member] | ' |
Operating Leased Assets [Line Items] | ' |
2014 | 3,635 |
2015 | ' |
2016 | ' |
2017 | ' |
2018 | ' |
2019 | ' |
Thereafter | ' |
Tenant Improvements [Member] | Canton, NC [Member] | ' |
Operating Leased Assets [Line Items] | ' |
Lease End Date | '2024-07 |
2014 | 3,325 |
2015 | ' |
2016 | ' |
2017 | ' |
2018 | ' |
2019 | ' |
Thereafter | ' |
Tenant Improvements [Member] | Concord Township, OH [Member] | ' |
Operating Leased Assets [Line Items] | ' |
Lease End Date | '2034-08 |
2014 | 150 |
2015 | ' |
2016 | ' |
2017 | ' |
2018 | ' |
2019 | ' |
Thereafter | ' |
Tenant Improvements [Member] | Austin, TX [Member] | ' |
Operating Leased Assets [Line Items] | ' |
Lease End Date | '2015-06 |
2014 | 125 |
2015 | ' |
2016 | ' |
2017 | ' |
2018 | ' |
2019 | ' |
Thereafter | ' |
Tenant Improvements [Member] | Hialeah, FL [Member] | ' |
Operating Leased Assets [Line Items] | ' |
Lease End Date | '2027-03 |
2014 | 35 |
2015 | ' |
2016 | ' |
2017 | ' |
2018 | ' |
2019 | ' |
Thereafter | ' |
Commitment_and_Contingencies_F2
Commitment and Contingencies - Future Tenant Improvement Payments Due on Properties (Parenthetical) (Detail) (Tenant Improvements [Member]) | 3 Months Ended |
Mar. 31, 2014 | |
Tenant Improvements [Member] | ' |
Operating Leased Assets [Line Items] | ' |
Extended lease period | '20 years |
Lease expiration year | '2034-09 |
Projected completion period of property expansion | '2034-09 |
Stockholders_Equity_Summary_of
Stockholders' Equity - Summary of Changes in Stockholders' Equity (Detail) (USD $) | 3 Months Ended | 3 Months Ended | 3 Months Ended | ||||||||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 |
Senior Common Stock [Member] | Preferred Stock [Member] | Preferred Stock [Member] | Common Stock [Member] | Common Stock [Member] | Capital in Excess of Par Value [Member] | Notes Receivable from Employees [Member] | Notes Receivable from Employees [Member] | Distributions in Excess of Accumulated Earnings [Member] | |||
Class of Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Beginning balance | $183,146 | ' | ' | $2 | $2 | $16 | $16 | $298,751 | ($375) | ($375) | ($115,248) |
Issuance of senior common stock and common stock, net | 7,243 | ' | ' | ' | ' | ' | ' | 7,243 | ' | ' | ' |
Distributions declared to common, senior common and preferred stockholders | -7,025 | ' | ' | ' | ' | ' | ' | ' | ' | ' | -7,025 |
Net loss | -13,514 | 433 | ' | ' | ' | ' | ' | ' | ' | ' | -13,514 |
Ending balance | $169,850 | ' | ' | $2 | $2 | $16 | $16 | $305,994 | ($375) | ($375) | ($135,787) |
Stockholders_Equity_Dividends_
Stockholders' Equity - Dividends Declared (Detail) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Common Stock [Member] | ' | ' |
Dividends Payable [Line Items] | ' | ' |
Common Stock, distributions declared per share | $0.38 | $0.38 |
Senior Common Stock [Member] | ' | ' |
Dividends Payable [Line Items] | ' | ' |
Common Stock, distributions declared per share | $0.26 | $0.26 |
Series A Preferred Stock [Member] | ' | ' |
Dividends Payable [Line Items] | ' | ' |
Preferred Stock, distributions declared per share | $0.48 | $0.48 |
Series B Preferred Stock [Member] | ' | ' |
Dividends Payable [Line Items] | ' | ' |
Preferred Stock, distributions declared per share | $0.47 | $0.47 |
Series C Preferred Stock [Member] | ' | ' |
Dividends Payable [Line Items] | ' | ' |
Preferred Stock, distributions declared per share | $0.45 | $0.45 |
Stockholders_Equity_Additional
Stockholders' Equity - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | ||
Mar. 31, 2011 | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
Dividends Payable [Line Items] | ' | ' | ' | ' |
Maximum aggregate sales price of shares to be issued under open market sale agreement | ' | $25,000,000 | ' | ' |
Net proceeds under ATM program | ' | 7,200,000 | ' | ' |
Number of shares sold under open market sale agreement | ' | 1,200,000 | ' | ' |
Gross proceeds of shares sold under open market sale agreement | ' | 21,400,000 | ' | ' |
Maximum remaining capacity to sell common stock under open market sale agreement | ' | 3,600,000 | ' | ' |
Common stock, shares issued | ' | 16,081,365 | ' | 15,662,414 |
Common stock, par value | ' | $0.00 | ' | $0.00 |
Shares intended to be offered pursuant to primary offering | 3,000,000 | ' | ' | ' |
Shares intended to be offered pursuant to senior common distribution reinvestment plan | 500,000 | ' | ' | ' |
Senior common stock ongoing offering, gross proceeds | ' | 7,707,000 | 6,484,000 | ' |
Senior Common Stock [Member] | ' | ' | ' | ' |
Dividends Payable [Line Items] | ' | ' | ' | ' |
Common stock, shares issued | 3,500,000 | ' | ' | ' |
Common stock, par value | 0.001 | ' | ' | ' |
Common stock shares issued, selling price | 15 | ' | ' | ' |
Shares of senior common stock sold in ongoing offering | ' | 333,604 | ' | ' |
Senior common stock ongoing offering, gross proceeds | ' | $5,000,000 | ' | ' |
Shares of senior common stock issued | ' | 12,047 | ' | ' |
Stockholders_Equity_Summary_of1
Stockholders' Equity - Summary of Outstanding Notes Receivable from an Employee for the Exercise of Stock Options (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 |
Debt Conversion [Line Items] | ' | ' |
Outstanding Balance of Employee Loan | $375 | $375 |
Note Outstanding One [Member] | ' | ' |
Debt Conversion [Line Items] | ' | ' |
Date Issued | '2006-11 | ' |
Outstanding Balance of Employee Loan | $375 | $375 |
Maturity Date of Note | '2015-11 | ' |
Interest Rate on Note | 8.15% | ' |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (USD $) | 3 Months Ended | 0 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Apr. 04, 2014 | Apr. 22, 2014 | |
sqft | Subsequent Event [Member] | Subsequent Event [Member] | ||
Rancho Cordova California [Member] | ||||
Lease | ||||
sqft | ||||
Subsequent Events [Line Items] | ' | ' | ' | ' |
Lease Expiration Date | ' | ' | 30-Apr-15 | ' |
Acquisition of our property, area | 41,509 | ' | ' | 61,358 |
Acquisition of our property, value | $10,048,000 | ' | ' | $8,200,000 |
Acquisition Expenses | 52,000 | ' | ' | 50,000 |
Mortgage repayment | 2,172,000 | 1,808,000 | ' | 4,900,000 |
Lease term | ' | ' | ' | '10 years |
Renew lease options | ' | ' | ' | 1 |
Renew the lease for additional periods | ' | ' | ' | '5 years |
Annualized straight line rent escalations | ' | ' | ' | $700,000 |
Subsequent_Events_Monthly_Dist
Subsequent Events - Monthly Distributions Declared by Company's Board of Directors (Detail) (USD $) | 0 Months Ended |
Apr. 08, 2014 | |
Subsequent Event A [Member] | ' |
Dividends Payable [Line Items] | ' |
Record Date | 21-Apr-14 |
Payment Date | 30-Apr-14 |
Payable to the Holders of Records During the Month | 'April |
Subsequent Event B [Member] | ' |
Dividends Payable [Line Items] | ' |
Record Date | 20-May-14 |
Payment Date | 30-May-14 |
Payable to the Holders of Records During the Month | 'May |
Subsequent Event C [Member] | ' |
Dividends Payable [Line Items] | ' |
Record Date | 19-Jun-14 |
Payment Date | 30-Jun-14 |
Payable to the Holders of Records During the Month | 'June |
Senior Common Stock [Member] | Subsequent Event A [Member] | ' |
Dividends Payable [Line Items] | ' |
Payment Date | 7-May-14 |
Distribution per Share | 0.0875 |
Senior Common Stock [Member] | Subsequent Event B [Member] | ' |
Dividends Payable [Line Items] | ' |
Payment Date | 6-Jun-14 |
Distribution per Share | 0.0875 |
Senior Common Stock [Member] | Subsequent Event C [Member] | ' |
Dividends Payable [Line Items] | ' |
Payment Date | 8-Jul-14 |
Distribution per Share | 0.0875 |
Senior Common Stock [Member] | Subsequent Event [Member] | ' |
Dividends Payable [Line Items] | ' |
Distribution per Share | 0.2625 |
Common Stock [Member] | Subsequent Event A [Member] | ' |
Dividends Payable [Line Items] | ' |
Distribution per Share | 0.125 |
Common Stock [Member] | Subsequent Event B [Member] | ' |
Dividends Payable [Line Items] | ' |
Distribution per Share | 0.125 |
Common Stock [Member] | Subsequent Event C [Member] | ' |
Dividends Payable [Line Items] | ' |
Distribution per Share | 0.125 |
Common Stock [Member] | Subsequent Event [Member] | ' |
Dividends Payable [Line Items] | ' |
Distribution per Share | 0.375 |
Series A Preferred Stock [Member] | Subsequent Event A [Member] | ' |
Dividends Payable [Line Items] | ' |
Distribution per Share | 0.1614583 |
Series A Preferred Stock [Member] | Subsequent Event B [Member] | ' |
Dividends Payable [Line Items] | ' |
Distribution per Share | 0.1614583 |
Series A Preferred Stock [Member] | Subsequent Event C [Member] | ' |
Dividends Payable [Line Items] | ' |
Distribution per Share | 0.1614583 |
Series A Preferred Stock [Member] | Subsequent Event [Member] | ' |
Dividends Payable [Line Items] | ' |
Distribution per Share | 0.4843749 |
Series B Preferred Stock [Member] | Subsequent Event A [Member] | ' |
Dividends Payable [Line Items] | ' |
Distribution per Share | 0.15625 |
Series B Preferred Stock [Member] | Subsequent Event B [Member] | ' |
Dividends Payable [Line Items] | ' |
Distribution per Share | 0.15625 |
Series B Preferred Stock [Member] | Subsequent Event C [Member] | ' |
Dividends Payable [Line Items] | ' |
Distribution per Share | 0.15625 |
Series B Preferred Stock [Member] | Subsequent Event [Member] | ' |
Dividends Payable [Line Items] | ' |
Distribution per Share | 0.46875 |
Series C Preferred Stock [Member] | Subsequent Event A [Member] | ' |
Dividends Payable [Line Items] | ' |
Distribution per Share | 0.1484375 |
Series C Preferred Stock [Member] | Subsequent Event B [Member] | ' |
Dividends Payable [Line Items] | ' |
Distribution per Share | 0.1484375 |
Series C Preferred Stock [Member] | Subsequent Event C [Member] | ' |
Dividends Payable [Line Items] | ' |
Distribution per Share | 0.1484375 |
Series C Preferred Stock [Member] | Subsequent Event [Member] | ' |
Dividends Payable [Line Items] | ' |
Distribution per Share | 0.4453125 |