Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 4-May-15 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | GOOD | |
Entity Registrant Name | GLADSTONE COMMERCIAL CORP | |
Entity Central Index Key | 1234006 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 20,731,094 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | ||
In Thousands, unless otherwise specified | ||||
ASSETS | ||||
Real estate, at cost | $740,842 | $722,565 | ||
Less: accumulated depreciation | 96,760 | 92,133 | ||
Total real estate, net | 644,082 | 630,432 | ||
Lease intangibles, net | 102,808 | 98,814 | ||
Real estate and related assets held for sale, net | 2,980 | |||
Mortgage note receivable | 5,600 | 5,600 | ||
Cash and cash equivalents | 5,760 | 8,599 | ||
Restricted cash | 3,860 | 3,547 | ||
Funds held in escrow | 11,091 | 11,096 | ||
Deferred rent receivable, net | 23,447 | 21,728 | ||
Deferred financing costs, net | 5,990 | 6,213 | ||
Other assets | 1,664 | 1,765 | ||
TOTAL ASSETS | 807,282 | 787,794 | ||
LIABILITIES | ||||
Redeemable preferred stock | 2 | 2 | ||
Mortgage notes payable | 469,048 | 459,299 | ||
Borrowings under line of credit | 41,300 | 43,300 | ||
Deferred rent liability, net | 8,374 | 8,594 | ||
Asset retirement obligation | 3,675 | 3,616 | ||
Accounts payable and accrued expenses | 7,362 | 8,285 | ||
Other liabilities related to assets held for sale | 2,587 | |||
Due to Adviser and Administrator | 1,721 | [1] | 916 | [1] |
Other liabilities | 7,558 | 7,612 | ||
Total Liabilities | 580,125 | 570,122 | ||
Commitments and contingencies | [2] | [2] | ||
STOCKHOLDERS' EQUITY | ||||
Redeemable preferred stock | 2 | 2 | ||
Senior common stock, par value $0.001 per share; 7,500,000 shares authorized and 1,001,957 and 809,411 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively | 1 | 1 | ||
Common stock, par value $0.001 per share, 38,500,000 shares authorized and 20,459,687 and 19,589,606 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively | 20 | 20 | ||
Additional paid in capital | 387,392 | 369,748 | ||
Notes receivable - employee | -375 | -375 | ||
Distributions in excess of accumulated earnings | -159,883 | -151,724 | ||
Total Stockholders' Equity | 227,157 | 217,672 | ||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 807,282 | 787,794 | ||
Mandatorily Redeemable Preferred Stock [Member] | ||||
LIABILITIES | ||||
Redeemable preferred stock | 38,500 | 38,500 | ||
STOCKHOLDERS' EQUITY | ||||
Redeemable preferred stock | $38,500 | $38,500 | ||
[1] | Refer to Note 2 "Related-Party Transactions" | |||
[2] | Refer to Note 9 "Commitments and Contingencies" |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
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 | 1,001,957 | 809,411 |
Senior common stock, shares outstanding | 1,001,957 | 809,411 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 38,500,000 | 38,500,000 |
Common stock, shares issued | 20,459,687 | 19,589,606 |
Common stock, shares outstanding | 20,459,687 | 19,589,606 |
Series C Preferred Stock [Member] | Mandatorily Redeemable 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, 2015 | Mar. 31, 2014 | ||
Operating revenues | ||||
Rental revenue | $19,288 | $16,585 | ||
Tenant recovery revenue | 324 | 551 | ||
Interest income from mortgage note receivable | 268 | |||
Total operating revenues | 19,880 | 17,136 | ||
Operating expenses | ||||
Depreciation and amortization | 8,207 | 6,720 | ||
Property operating expenses | 962 | 1,330 | ||
Acquisition related expenses | 196 | 110 | ||
Base management fee | 852 | [1] | 625 | [1] |
Incentive fee | 1,673 | [1] | 1,240 | [1] |
Administration fee | 362 | [1] | 492 | [1] |
General and administrative | 690 | 466 | ||
Impairment charge | 13,958 | |||
Total operating expenses before credit to incentive fee | 12,942 | 24,941 | ||
Credit to incentive fee | -1,185 | [1] | -1,205 | [1] |
Total operating expenses | 11,757 | 23,736 | ||
Other income (expense) | ||||
Interest expense | -6,771 | -6,275 | ||
Other income | 28 | 47 | ||
Total other expense | -7,429 | -6,914 | ||
Net income (loss) | 694 | -13,514 | ||
Distributions attributable to senior common stock | -224 | -100 | ||
Net loss attributable to common stockholders | -553 | -14,637 | ||
Loss per weighted average share of common stock-basic & diluted | ||||
Loss attributable to common shareholders | ($0.03) | ($0.93) | ||
Weighted average shares of common stock outstanding | ||||
Basic and Diluted | 20,210,975 | 15,746,714 | ||
Earnings per weighted average share of senior common stock | $0.26 | $0.26 | ||
Weighted average shares of senior common stock outstanding-basic | 866,201 | 385,875 | ||
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, 2015 | Mar. 31, 2014 |
Cash flows from operating activities: | ||
Net income (loss) | $694 | ($13,514) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 8,207 | 6,720 |
Impairment charge | 13,958 | |
Amortization of deferred financing costs | 431 | 386 |
Amortization of deferred rent asset and liability, net | -141 | -92 |
Amortization of discount and premium on assumed debt | -77 | -44 |
Asset retirement obligation expense | 38 | -180 |
(Increase) decrease in other assets | -2 | 298 |
Increase in deferred rent receivable | -856 | -906 |
Increase (decrease) in accounts payable, accrued expenses, and amount due Adviser and Administrator | 1,008 | -372 |
Decrease in other liabilities | -301 | -41 |
Leasing commissions paid | -65 | -54 |
Net cash provided by operating activities | 8,936 | 6,159 |
Cash flows from investing activities: | ||
Acquisition of real estate and related intangible assets | -28,348 | -3,718 |
Improvements of existing real estate | -1,697 | -1,673 |
Receipts from lenders for funds held in escrow | 68 | 496 |
Payments to lenders for funds held in escrow | -801 | -1,260 |
Receipts from tenants for reserves | 795 | 790 |
Payments to tenants from reserves | -511 | -2,335 |
(Increase) decrease in restricted cash | -314 | 1,545 |
Deposits on future acquisitions | -150 | -250 |
Deposits applied against real estate investments | 250 | 127 |
Net cash used in investing activities | -30,708 | -6,278 |
Cash flows from financing activities: | ||
Proceeds from issuance of equity | 18,135 | 7,707 |
Offering costs | -542 | -503 |
Borrowings under mortgage notes payable | 14,573 | |
Payments for deferred financing costs | -216 | -360 |
Principal repayments on mortgage notes payable | -2,245 | -2,172 |
Borrowings from line of credit | 22,000 | 12,700 |
Repayments on line of credit | -24,000 | -13,000 |
Increase in security deposits | 30 | |
Distributions paid for common, senior common and preferred stock | -8,802 | -6,986 |
Net cash provided by (used in) financing activities | 18,933 | -2,614 |
Net decrease in cash and cash equivalents | -2,839 | -2,733 |
Cash and cash equivalents, beginning of period | 8,599 | 8,546 |
Cash and cash equivalents, end of period | 5,760 | 5,813 |
NON-CASH INVESTING AND FINANCING INFORMATION | ||
Increase in asset retirement obligation | 21 | |
Fixed rate principal debt assumed in connection with acquisition | 6,330 | |
Senior common dividend issued in the dividend reinvestment program | 51 | 39 |
Capital improvements included in accounts payable and accrued expenses | $4,402 | $671 |
Organization_Basis_of_Presenta
Organization, Basis of Presentation and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2015 | |
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. | |
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. All references to the number of properties and square footage are unaudited. | |
Subsidiaries | |
Gladstone Commercial Corporation conducts substantially all of its operations through a subsidiary, Gladstone Commercial Limited Partnership, a Delaware limited partnership, or the Operating Partnership. As Gladstone Commercial Corporation currently owns all of the general and limited partnership interests of the Operating Partnership through two of its subsidiaries, GCLP Business Trust I and II, the financial position and results of operations of the Operating Partnership are consolidated within Gladstone Commercial Corporation’s financial statements. | |
GCLP Business Trust I and GCLP Business Trust II, each a subsidiary and business trust of Gladstone Commercial Corporation, were formed under the laws of the Commonwealth of Massachusetts on December 28, 2005. Gladstone Commercial Corporation transferred its 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. | |
Gladstone Commercial Lending, LLC, a Delaware limited liability company, or Gladstone Commercial Lending, a subsidiary of Gladstone Commercial Corporation, was created to conduct all operations related to Gladstone Commercial Corporation’s real estate mortgage loans. 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 Gladstone Commercial Corporation. | |
Gladstone Commercial Advisers, Inc., a Delaware corporation, or Commercial Advisers, and a wholly-owned subsidiary of Gladstone Commercial Corporation, 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 Gladstone Commercial Corporation owns 100% of the voting securities of Commercial Advisers, the financial position and results of operations of Commercial Advisers are consolidated within Gladstone Commercial Corporation’s financial statements. | |
Interim Financial Information | |
Our interim financial statements are prepared in accordance with U.S. generally accepted accounting principles, 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, 2014, as filed with the U.S. Securities and Exchange Commission on February 18, 2015. The results of operations for the three months ended March 31, 2015 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 properties, 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 acquired and liabilities assumed. In estimating carrying costs, management also includes lost reimbursement of real estate taxes, insurance and other operating expenses as well as 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 on the date of acquisition. Real estate depreciation expense on these tangible assets was $5.2 million and $4.4 million for the three months ended March 31, 2015 and 2014, 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 which 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, 2015 and 2014, 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, 2015 and 2014, 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. Total amortization expense related to these intangible assets and liabilities was $3.0 million and $2.3 million for the three months ended March 31, 2015 and 2014, respectively. | |
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 would be immediately charged to amortization expense. | |
Real Estate Held for Sale and Discontinued Operations | |
ASC 360-10, “Property, Plant, and Equipment,” requires that any properties which 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. | |
Under 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,” 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. We evaluated our held for sale assets according to this criteria, and determined we were not required to present our assets classified as held for sale during the quarter ended March 31, 2015 as discontinued operations. | |
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 whether 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 each tenant’s 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 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. We performed this evaluation and analysis and concluded that none of our properties were impaired as of March 31, 2015; however, we determined that our property located in Dayton, Ohio is at risk to become impaired in the future. The lease with the tenant in this property terminates on June 30, 2015. There is a possibility we may have to impair this property during 2015 if we do not find a replacement tenant. | |
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 $0.2 million and $0.4 million for deferred financing costs during the three months ended March 31, 2015 and 2014, 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, 2015 and 2014, 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 or 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 were recorded during the three months ended March 31, 2015, and 2014, respectively. | |
Tenant recovery revenue includes payments from tenants as reimbursements for franchise taxes, management fees, insurance, maintenance and repairs, utilities, and ground lease payments. We recognize tenant recovery revenue in the same periods that we incur the related expenses. | |
Mortgage Note Receivable | |
Management considers its loans and other lending investments to be held-for-investment. We reflect our loans classified as long-term investments at amortized cost, less allowance for loan losses, acquisition premiums or discounts, and deferred loan fees. On occasion, we may acquire loans at small premiums or discounts based on the credit characteristics of such loans. These premiums or discounts would be recognized as yield adjustments over the lives of the related loans. Loan origination fees, as well as direct loan origination costs, are also deferred and recognized over the lives of the related loans as yield adjustments. If loans with premiums, discounts, or loan origination fees are prepaid, we would immediately recognize the unamortized portion as a decrease or increase in the prepayment gain or loss. Interest income is recognized using the effective interest method applied on a loan-by-loan basis. Prepayment penalties or yield maintenance payments from borrowers are recognized as additional income when received. | |
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 at the present value of the estimated payments expected to be made 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 to their estimated obligation over the life of the leases for the respective properties. We accrued approximately $20,000 in liabilities in connection with acquisitions during the three months ended March 31, 2015. There were no liabilities accrued during the three months ended March 31, 2014. We recorded expense of $0.04 million and $0.03 million during the three months ended March 31, 2015 and 2014 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 $9.4 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, 2015 and 2014, 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. | |
Segment Reporting | |
We manage our operations on an aggregated, single segment basis for purposes of assessing performance and making operating decisions, and, accordingly, have only one reporting and operating segment. | |
Recently Issued Accounting Pronouncements | |
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which supersedes or replaces nearly all GAAP revenue recognition guidance. The new guidance establishes a new control-based revenue recognition model, changes the basis for deciding when revenue is recognized over time or at a point in time and will expand disclosures about revenue. We are currently assessing the impact of ASU 2014-09. ASU 2014-09 is effective for annual reporting periods that begin after December 15, 2016 and interim periods within those years. Early adoption is not permitted. | |
In February 2015, the FASB issued ASU 2015-02, “Amendments to the Consolidation Analysis” (“ASU-2015-02”), which amends or supersedes the scope and consolidation guidance under existing GAAP. The new standard changes the way a reporting entity evaluates whether a) limited partnerships and similar entities should be consolidated, b) fees paid to decision makers or service provides are variable interests in a variable interest entity, or VIE, and c) variable interests in a VIE held by related parties require the reporting entity to consolidate the VIE. ASU 2015-02 also eliminates the VIE consolidation model based on majority exposure to variability that applied to certain investment companies and similar entities. We are currently assessing the impact of ASU 2015-02, which is effective for annual and interim reporting periods beginning after December 15, 2015. Early adoption is permitted. | |
In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs” (“ASU-2015-03”), which simplifies the presentation of debt issuance costs. We are currently assessing the impact of ASU 2015-03 and do not anticipate a material impact on our financial position, results of operations or cash flows from adopting this standard. ASU 2015-03 is effective for annual and interim reporting periods beginning after December 15, 2015. Early adoption is permitted. |
RelatedParty_Transactions
Related-Party Transactions | 3 Months Ended |
Mar. 31, 2015 | |
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. Both our Adviser and Administrator are affiliates of ours, as their parent company is controlled by Mr. David Gladstone, our chairman and chief executive officer. 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, 2015 and December 31, 2014, $1.7 million and $0.9 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, 2015 and 2014, we recorded a base management fee of $0.9 million, and $0.6 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, 2015, and 2014, we recorded an incentive fee of $1.7 million, and $1.2 million, respectively, offset by credits related to unconditional, voluntary and irrevocable waivers issued by the Adviser of $1.2 million and $1.2 million, respectively, resulting in a net incentive fee for the three months ended March 31, 2015, and 2014, of $0.5 million, and $40,000, 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, 2015, and 2014, in order to support the current level of distributions to 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 expenses in performing services to us, including, but not limited to, rent and the salaries and benefits of its personnel, including our chief financial officer, treasurer, chief compliance officer, general counsel and secretary (who also serves as our Administrator’s president), and their respective staffs. Prior to July 1, 2014, our allocable portion was generally derived by multiplying that portion of the Administrator’s expenses allocable to all funds managed by the Adviser by the percentage of our total assets at the beginning of each quarter in comparison to the total assets of all funds managed by the Adviser. As approved by our Board of Directors, effective July 1, 2014, our allocable portion of the Administrator’s expenses is derived by multiplying our Administrator’s total expenses by the approximate percentage of time the Administrator’s employees perform services for us in relation to their time spent performing services for all companies serviced by our Administrator under contractual agreements. For the three months ended March 31, 2015, and 2014, we recorded an administration fee of $0.4 million, and $0.5 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 10, “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 was 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, was permitted to re-allocate all of its selling commissions attributable to a participating broker-dealer and 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 agreed to indemnify Gladstone Securities against various liabilities, including certain liabilities arising under the federal securities laws. We made approximately $0.3 million, and $40,000 of payments during the three months ended March 31, 2015, and 2014 respectively, to Gladstone Securities pursuant to this agreement, which are reflected as a component of Senior Common Stock costs in the condensed consolidated statement of stockholders’ equity. The Dealer Manager Agreement terminated according to its terms on March 28, 2015, and we wrote-off $0.1 million of deferred offering costs related to the termination of the agreement to general and administrative expense. | |
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 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, are based on a percentage of the amount of the mortgage, generally ranging from 0.15% 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 paid financing fees to Gladstone Securities of $38,000 during the three months ended March 31, 2015, which are reflected as deferred financing costs in the condensed consolidated balance sheets, on total mortgages secured of $14.6 million, or 0.26%. We did not pay any financing fees to Gladstone Securities during the three months ended March 31, 2014. The agreement is scheduled to terminate on August 31, 2015, 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, 2015 | |||||||||
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 each of the three months ended March 31, 2015 and 2014. We computed basic loss per share for the three months ended March 31, 2015 and 2014 using the weighted average number of shares outstanding during the periods. Diluted loss per share for the three months ended March 31, 2015 and 2014, reflects additional shares of common stock related to our convertible Senior Common Stock (if the effect would be dilutive), 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 (dollars in thousands, except per share amounts). | |||||||||
For the three months ended March 31, | |||||||||
2015 | 2014 | ||||||||
Calculation of basic loss per share of common stock: | |||||||||
Net loss attributable to common stockholders | $ | (553 | ) | $ | (14,637 | ) | |||
Denominator for basic weighted average shares of common stock | 20,210,975 | 15,746,714 | |||||||
Basic loss per share of common stock | $ | (0.03 | ) | $ | (0.93 | ) | |||
Calculation of diluted loss per share of common stock: | |||||||||
Net loss attributable to common stockholders | $ | (553 | ) | $ | (14,637 | ) | |||
Add: Income impact of assumed conversion of senior common stock (1) | — | — | |||||||
Net loss attributable to common stockholders plus assumed conversions | $ | (553 | ) | $ | (14,637 | ) | |||
Denominator for basic weighted average shares of common stock | 20,210,975 | 15,746,714 | |||||||
Effect of convertible senior common stock (1) | — | — | |||||||
Denominator for diluted weighted average shares of common stock | 20,210,975 | 15,746,714 | |||||||
Diluted loss per share of common stock | $ | (0.03 | ) | $ | (0.93 | ) | |||
-1 | We excluded convertible senior common shares of 723,631 and 316,979, from the calculation of diluted earnings per share for the three months ended March 31, 2015 and 2014, respectively, because it was anti-dilutive. |
Real_Estate_and_Intangible_Ass
Real Estate and Intangible Assets | 3 Months Ended | ||||||||||||||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||||||||||||||
Text Block [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, 2015 and December 31, 2014 (dollars in thousands): | |||||||||||||||||||||||||||||||||||||
March 31, 2015(1) | December 31, 2014 | ||||||||||||||||||||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||||||||||||
Land | $ | 91,343 | $ | 88,394 | |||||||||||||||||||||||||||||||||
Building and improvements | 605,375 | 593,155 | |||||||||||||||||||||||||||||||||||
Tenant improvements | 44,124 | 41,016 | |||||||||||||||||||||||||||||||||||
Accumulated depreciation | (96,760 | ) | (92,133 | ) | |||||||||||||||||||||||||||||||||
Real estate, net | $ | 644,082 | $ | 630,432 | |||||||||||||||||||||||||||||||||
-1 | Does not include real estate held for sale as of March 31, 2015. | ||||||||||||||||||||||||||||||||||||
2015 Real Estate Activity | |||||||||||||||||||||||||||||||||||||
During the three months ended March 31, 2015, we acquired two properties, which are summarized below (dollars in thousands): | |||||||||||||||||||||||||||||||||||||
Location | Acquisition Date | Square Footage | Lease | Renewal Options | Total Purchase | Acquisition | Annualized Straight | Debt Issued | |||||||||||||||||||||||||||||
(unaudited) | Term | Price/Expansion | Expenses | Line Rent | |||||||||||||||||||||||||||||||||
Funded | |||||||||||||||||||||||||||||||||||||
Richardson, TX (1) | 3/6/15 | 155,984 | 9.5 Years | 2 (5 years each) | $ | 24,700 | $ | 103 | $ | 2,708 | $ | 14,573 | |||||||||||||||||||||||||
Birmingham, AL | 3/20/15 | 30,850 | 8.5 Years | 1 (5 years) | 3,648 | 66 | 333 | N/A | |||||||||||||||||||||||||||||
Total | 186,834 | $ | 28,348 | $ | 169 | $ | 3,041 | $ | 14,573 | ||||||||||||||||||||||||||||
-1 | The tenant occupying this property is subject to a gross lease. | ||||||||||||||||||||||||||||||||||||
In accordance with ASC 805, we determined the fair value of the acquired assets and assumed liabilities related to the two properties acquired during the three months ended March 31, 2015, as follows (dollars in thousands): | |||||||||||||||||||||||||||||||||||||
Land | Building | Tenant | In-place | Leasing Costs | Customer | Above Market | Total Purchase | ||||||||||||||||||||||||||||||
Improvements | Leases | Relationships | Leases | Price | |||||||||||||||||||||||||||||||||
Richardson, TX | $ | 2,709 | $ | 12,503 | $ | 2,761 | $ | 2,046 | $ | 1,791 | $ | 1,915 | $ | 975 | $ | 24,700 | |||||||||||||||||||||
Birmingham, AL | 650 | 1,683 | 351 | 458 | 146 | 360 | — | 3,648 | |||||||||||||||||||||||||||||
$ | 3,359 | $ | 14,186 | $ | 3,112 | $ | 2,504 | $ | 1,937 | $ | 2,275 | $ | 975 | $ | 28,348 | ||||||||||||||||||||||
Below is a summary of the total revenue and earnings recognized on the two properties acquired during the three months ended March 31, 2015 (dollars in thousands): | |||||||||||||||||||||||||||||||||||||
For the three months ended March 31, | |||||||||||||||||||||||||||||||||||||
2015 | |||||||||||||||||||||||||||||||||||||
Location | Acquisition | Rental Revenue | Earnings (1) | ||||||||||||||||||||||||||||||||||
Date | |||||||||||||||||||||||||||||||||||||
Richardson, TX | 3/6/15 | $ | 182 | $ | 51 | ||||||||||||||||||||||||||||||||
Birmingham, AL | 3/20/15 | 11 | 4 | ||||||||||||||||||||||||||||||||||
$ | 193 | $ | 55 | ||||||||||||||||||||||||||||||||||
-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 properties acquired during the three months ended March 31, 2015 and the twelve months ended December 31, 2014, respectively were acquired as of January 1, 2014. The pro-forma earnings for the three months ended March 31, 2015 and 2014 were adjusted to assume that acquisition-related costs were incurred as of the previous period (dollars in thousands, except per share amounts): | |||||||||||||||||||||||||||||||||||||
For the three months ended March 31, | |||||||||||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||||||||||||||||
Operating Data: | |||||||||||||||||||||||||||||||||||||
Total operating revenue | $ | 20,318 | $ | 20,789 | |||||||||||||||||||||||||||||||||
Total operating expenses | (11,920 | ) | (26,282 | ) (1) | |||||||||||||||||||||||||||||||||
Other expenses | (7,546 | ) | (7,914 | ) | |||||||||||||||||||||||||||||||||
Net income (loss) | 852 | (13,407 | ) | ||||||||||||||||||||||||||||||||||
Dividends attributable to preferred and senior common stock | (1,247 | ) | (1,123 | ) | |||||||||||||||||||||||||||||||||
Net loss attributable to common stockholders | $ | (395 | ) | $ | (14,530 | ) | |||||||||||||||||||||||||||||||
Share and Per Share Data: | |||||||||||||||||||||||||||||||||||||
Basic and diluted loss per share of common stock | $ | (0.02 | ) | $ | (0.92 | ) | |||||||||||||||||||||||||||||||
Weighted average shares outstanding-basic and diluted | 20,210,975 | 15,746,714 | |||||||||||||||||||||||||||||||||||
-1 | $14.0 million relates to the impairment charge recorded in operating expenses during the three months ended March 31, 2014. | ||||||||||||||||||||||||||||||||||||
Significant Real Estate Activity on Existing Assets | |||||||||||||||||||||||||||||||||||||
On January 29, 2015, we modified leases with two tenants occupying space in our Indianapolis, Indiana property. One tenant, occupying 3,546 square feet, extended its lease term for an additional seven years, through March 2023. The original lease term would have expired in February 2016. This lease contains prescribed rent escalations over its life with annualized straight line rents of approximately $0.06 million, unchanged from the previous lease. In connection with the extension of the lease and modification of certain of its terms, we provided $0.06 million in tenant improvements. The other tenant, previously occupying 7,639 square feet, added an additional suite to its lease, increasing its leased square footage to 8,275. The lease expiration date is unchanged at January 2018. The new lease contains prescribed rent escalations over the life of the lease with annualized straight line rents of approximately $0.1 million, a slight increase over the previous lease. | |||||||||||||||||||||||||||||||||||||
On February 9, 2015, we modified the leases with the tenant occupying two of our properties, both located in Raleigh, North Carolina. The leases covering these properties were extended for an additional five years each, through July 2020. Both leases were originally set to expire in July 2015. The tenant was previously fully occupying both buildings, totaling 174,426 square feet, but had reduced its space requirement in the industrial building by 94,200 square feet. Both leases contain prescribed rent escalations over the life of the lease, with annualized straight line rents of approximately $0.9 million, as compared to annualized straight line rents of $1.3 million under the previous terms of the lease. The tenant has two options to renew both leases for an additional period of five years each. In connection with the extension of the lease and modification of certain terms of the lease, we paid $0.2 million in leasing commissions, and paid $0.1 million in tenant improvements. | |||||||||||||||||||||||||||||||||||||
On February 20, 2015, we entered into a purchase and sale agreement with a third party to acquire our Columbus, Ohio property for $2.8 million, which is greater than the current carrying value of the property of $2.4 million. The lease on this property is scheduled to terminate in October 2015 and the current tenant has notified us of its plan to vacate. We anticipate the sale to be completed in November 2015. We considered this asset to be non-core to our long term strategy, and we will re-deploy the proceeds from this sale into future acquisitions. | |||||||||||||||||||||||||||||||||||||
On February 27, 2015, we modified the lease with the tenant occupying our property located in San Antonio, Texas. The modification provided the tenant a termination option, which allows the tenant to terminate its lease effective December 31, 2017, upon paying a termination penalty of approximately $1.0 million on or before March 31, 2017. All other terms and conditions of the lease remain in full force and effect. | |||||||||||||||||||||||||||||||||||||
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 | Acquisition | 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. | ||||||||||||||||||||||||||||||||||||
Future Lease Payments | |||||||||||||||||||||||||||||||||||||
Future operating lease payments from tenants under non-cancelable leases, excluding tenant reimbursement of expenses, for the remainder of 2015 and each of the five succeeding fiscal years and thereafter is as follows (dollars in thousands): | |||||||||||||||||||||||||||||||||||||
Year | Tenant | ||||||||||||||||||||||||||||||||||||
Lease Payments | |||||||||||||||||||||||||||||||||||||
Nine Months ending December 31, 2015 | $ | 55,082 | (1) | ||||||||||||||||||||||||||||||||||
2016 | 72,558 | ||||||||||||||||||||||||||||||||||||
2017 | 72,269 | ||||||||||||||||||||||||||||||||||||
2018 | 71,974 | ||||||||||||||||||||||||||||||||||||
2019 | 72,429 | ||||||||||||||||||||||||||||||||||||
2020 | 64,164 | ||||||||||||||||||||||||||||||||||||
Thereafter | 254,615 | ||||||||||||||||||||||||||||||||||||
-1 | Does not include real estate held for sale as of March 31, 2015. | ||||||||||||||||||||||||||||||||||||
Intangible Assets | |||||||||||||||||||||||||||||||||||||
The following table summarizes the carrying value of intangible assets and the accumulated amortization for each intangible asset class as of March 31, 2015 and December 31, 2014 respectively (in thousands): | |||||||||||||||||||||||||||||||||||||
March 31, 2015 (1) | December 31, 2014 | ||||||||||||||||||||||||||||||||||||
Lease Intangibles | Accumulated | Lease Intangibles | Accumulated | ||||||||||||||||||||||||||||||||||
Amortization | Amortization | ||||||||||||||||||||||||||||||||||||
In-place leases | $ | 61,622 | $ | (18,583 | ) | $ | 59,233 | $ | (17,379 | ) | |||||||||||||||||||||||||||
Leasing costs | 40,361 | (12,119 | ) | 38,305 | (11,411 | ) | |||||||||||||||||||||||||||||||
Customer relationships | 43,518 | (11,991 | ) | 41,243 | (11,177 | ) | |||||||||||||||||||||||||||||||
$ | 145,501 | $ | (42,693 | ) | $ | 138,781 | $ | (39,967 | ) | ||||||||||||||||||||||||||||
Deferred Rent | Accumulated | Deferred Rent | Accumulated | ||||||||||||||||||||||||||||||||||
Receivable/Liability | Amortization | Receivable/Liability | Amortization | ||||||||||||||||||||||||||||||||||
Above market leases | $ | 8,894 | $ | (6,096 | ) | $ | 8,314 | $ | (6,384 | ) | |||||||||||||||||||||||||||
Below market leases | 15,938 | (7,564 | ) | 15,939 | (7,345 | ) | |||||||||||||||||||||||||||||||
$ | 24,832 | $ | (13,660 | ) | $ | 24,253 | $ | (13,729 | ) | ||||||||||||||||||||||||||||
Total | $ | 170,333 | $ | (56,353 | ) | $ | 163,034 | $ | (53,696 | ) | |||||||||||||||||||||||||||
-1 | Does not include real estate held for sale as of March 31, 2015. | ||||||||||||||||||||||||||||||||||||
The weighted average amortization periods in years for the intangible assets acquired and liabilities assumed during the three months ended March 31, 2015 and 2014, respectively, were as follows: | |||||||||||||||||||||||||||||||||||||
Intangible Assets & Liabilities | 2015 | 2014 | |||||||||||||||||||||||||||||||||||
In-place leases | 9.1 | 11.9 | |||||||||||||||||||||||||||||||||||
Leasing costs | 9.1 | 11.9 | |||||||||||||||||||||||||||||||||||
Customer relationships | 14.1 | 16.9 | |||||||||||||||||||||||||||||||||||
Above market leases | 9.7 | — | |||||||||||||||||||||||||||||||||||
Below market leases | — | 11.9 | |||||||||||||||||||||||||||||||||||
All intangible assets & liabilities | 10.5 | 13.3 | |||||||||||||||||||||||||||||||||||
The estimated aggregate amortization expense to be recorded for in-place leases, leasing costs, customer relationships and amortization of both above and below market leases for the remainder of 2015 and for each of the five succeeding fiscal years and thereafter is as follows (dollars in thousands): | |||||||||||||||||||||||||||||||||||||
Year | Estimated | Net Increase to Rental | |||||||||||||||||||||||||||||||||||
Amortization Expense | Income Related to Above | ||||||||||||||||||||||||||||||||||||
of In-Place Leases, | and Below Market Leases | ||||||||||||||||||||||||||||||||||||
Leasing Costs and | |||||||||||||||||||||||||||||||||||||
Customer | |||||||||||||||||||||||||||||||||||||
Relationships | |||||||||||||||||||||||||||||||||||||
Nine Months Ending December 31, 2015 (1) | $ | 13,962 | $ | 228 | |||||||||||||||||||||||||||||||||
2016 | 13,648 | 307 | |||||||||||||||||||||||||||||||||||
2017 | 12,167 | 429 | |||||||||||||||||||||||||||||||||||
2018 | 12,058 | 429 | |||||||||||||||||||||||||||||||||||
2019 | 12,051 | 429 | |||||||||||||||||||||||||||||||||||
Thereafter | 38,922 | 3,754 | |||||||||||||||||||||||||||||||||||
Total | $ | 102,808 | $ | 5,576 | |||||||||||||||||||||||||||||||||
-1 | Does not include real estate held for sale as of March 31, 2015. |
Real_Estate_Held_for_Sale
Real Estate Held for Sale | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Real Estate [Abstract] | |||||||||
Real Estate Held for Sale | 5. Real Estate Held for Sale | ||||||||
Real Estate Held for Sale | |||||||||
As of March 31, 2015, we classified one of our properties located in Columbus, Ohio as held for sale under the provisions of ASC 360-10, which requires that the assets and liabilities of any such properties, be presented separately in our condensed consolidated balance sheet in the current period presented. We executed a purchase and sale agreement with the third party purchaser, and we anticipate the sale to close during November 2015. The agreed upon purchase price, net of expected costs to sell, is in excess of the carrying value of the property as of March 31, 2015, and thus the property was measured at its carrying value in our condensed consolidated balance sheet as of March 31, 2015 in accordance with ASC 360-10. | |||||||||
The table below summarizes the components of income from real estate and related assets held for sale: | |||||||||
For the three months ended March 31, | |||||||||
2015 | 2014 | ||||||||
Operating revenue | $ | 83 | $ | 77 | |||||
Operating expense | 14 | 23 | |||||||
Other expense | 39 | 40 | |||||||
Income from real estate and related assets held for sale | $ | 30 | $ | 14 | |||||
The table below summarizes the components of the assets and liabilities held for sale reflected on the accompanying condensed consolidated balance sheet: | |||||||||
March 31, 2015 | |||||||||
ASSETS HELD FOR SALE | |||||||||
Real estate, at cost | $ | 2,795 | |||||||
Less: accumulated depreciation | (615 | ) | |||||||
Total real estate held for sale, net | 2,180 | ||||||||
Lease intangibles, net | 17 | ||||||||
Funds held in escrow | 739 | ||||||||
Deferred rent receivable, net | 32 | ||||||||
Deferred financing costs, net | 9 | ||||||||
Other assets | 3 | ||||||||
TOTAL ASSETS HELD FOR SALE | $ | 2,980 | |||||||
LIABILITIES HELD FOR SALE | |||||||||
Mortgage notes payable | 2,503 | ||||||||
Other liabilities | 84 | ||||||||
TOTAL LIABILITIES HELD FOR SALE | $ | 2,587 | |||||||
Mortgage_Note_Receivable
Mortgage Note Receivable | 3 Months Ended |
Mar. 31, 2015 | |
Text Block [Abstract] | |
Mortgage Note Receivable | 6. Mortgage Note Receivable |
On July 25, 2014, we closed a $5.6 million second mortgage development loan for the construction of an 81,371 square foot, build-to-suit transitional care facility located on a major hospital campus in Phoenix, Arizona. Construction is scheduled to be completed in September 2015 and we will earn 9.0% interest, paid currently in cash, on the loan during construction and through maturity. Prior to completion of the facility, we will be granted a right of first offer to purchase the property at fair value. If we do not purchase the property we will receive an exit fee upon maturity of the loan in an amount sufficient for us to earn an internal rate of return of 22% on the second mortgage development loan, inclusive of interest earned. The loan is scheduled to mature in July 2016, but has a one-year extension option. We have recognized approximately $0.3 million in both cash interest income and accrued exit fee revenue during the three months ended March 31, 2015. |
Mortgage_Notes_Payable_and_Lin
Mortgage Notes Payable and Line of Credit | 3 Months Ended | ||||||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||
Mortgage Notes Payable and Line of Credit | 7. Mortgage Notes Payable and Line of Credit | ||||||||||||||||||||||||||||
Our mortgage notes payable and line of credit as of March 31, 2015 and December 31, 2014 are summarized below (dollars in thousands): | |||||||||||||||||||||||||||||
Carrying Value at | |||||||||||||||||||||||||||||
Encumbered | March 31, 2015 | December 31, 2014 | Stated Interest | Scheduled Maturity | |||||||||||||||||||||||||
properties at | Rates at March 31, | Dates at March 31, | |||||||||||||||||||||||||||
March 31, 2015 | 2015 (4) | 2015 | |||||||||||||||||||||||||||
Mortgage and Other Secured Loans: | |||||||||||||||||||||||||||||
Fixed rate mortgage loans | 74 | $ | 460,218 | (5) | $ | 450,392 | -1 | -2 | |||||||||||||||||||||
Variable rate mortgage loans | 4 | 8,200 | 8,200 | LIBOR + 2.15%(3) | 12/1/16 | ||||||||||||||||||||||||
Premiums and discounts (net) | N/A | 630 | 707 | N/A | N/A | ||||||||||||||||||||||||
Total Mortgage Notes Payable | 78 | $ | 469,048 | $ | 459,299 | ||||||||||||||||||||||||
Variable rate Line of Credit | 18 | 41,300 | 43,300 | LIBOR + 2.75%(3) | 8/1/17 | ||||||||||||||||||||||||
Total Mortgage Notes Payable and Line of Credit | 96 | $ | 510,348 | $ | 502,599 | ||||||||||||||||||||||||
-1 | Interest rates on our fixed rate mortgage notes payable vary from 3.86% to 6.80%. | ||||||||||||||||||||||||||||
-2 | We have 42 mortgage notes payable with maturity dates ranging from 9/1/2015 through 1/6/2039. | ||||||||||||||||||||||||||||
-3 | At March 31, 2015, one month LIBOR was approximately 0.18%. | ||||||||||||||||||||||||||||
-4 | The weighted average interest rate on all debt outstanding at March 31, 2015, was approximately 5.07%. | ||||||||||||||||||||||||||||
-5 | Does not include mortgage notes payable related to assets held for sale of $2.5 million. | ||||||||||||||||||||||||||||
N/A—Not Applicable | |||||||||||||||||||||||||||||
Mortgage Notes Payable | |||||||||||||||||||||||||||||
As of March 31, 2015, we had 42 mortgage notes payable, collateralized by a total of 78 properties and the net book value of these collateralized properties was $669.6 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, 2015 was 5.26%. | |||||||||||||||||||||||||||||
During the three months ended March 31, 2015, we issued one long-term mortgage, collateralized by a single property, which is summarized below (dollars in thousands): | |||||||||||||||||||||||||||||
Date of Issuance | Issuing Bank | Debt Issued | Interest Rate | Maturity Date | |||||||||||||||||||||||||
3/6/15 | PNC Bank, NA | $14,573 | 3.86% | 4/1/25 | |||||||||||||||||||||||||
Scheduled principal payments of mortgage notes payable for the remainder of 2015, 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, 2015 | $ | 40,343 | (1) | ||||||||||||||||||||||||||
2016 | 96,812 | (2) | |||||||||||||||||||||||||||
2017 | 67,924 | ||||||||||||||||||||||||||||
2018 | 20,543 | ||||||||||||||||||||||||||||
2019 | 35,235 | ||||||||||||||||||||||||||||
2020 | 7,307 | ||||||||||||||||||||||||||||
Thereafter | 200,254 | ||||||||||||||||||||||||||||
$ | 468,418 | (3) | |||||||||||||||||||||||||||
-1 | We plan to refinance the 3 balloon principal payments that mature in the second half of 2015 with a combination of new mortgage debt and equity. | ||||||||||||||||||||||||||||
-2 | Does not include mortgage notes payable related to assets held for sale of $2.5 million. | ||||||||||||||||||||||||||||
-3 | This figure is exclusive of premiums of premiums and discounts (net) on assumed debt, which were $630 as of March 31, 2015. | ||||||||||||||||||||||||||||
Interest Rate Cap | |||||||||||||||||||||||||||||
We have entered into an interest rate cap agreement with Wells Fargo that caps the interest rate on the note payable for our Champaign, Illinois property 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, 2015 and December 31, 2014, our interest rate cap agreement was valued using Level 3 inputs. The following table summarizes the key terms of each interest rate cap agreement (dollars in thousands): | |||||||||||||||||||||||||||||
As of March 31, | As of December 31, | ||||||||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||||||||
Notional | LIBOR Cap | Maturity Date | Cost | Fair Value | Cost | Fair Value | |||||||||||||||||||||||
Interest Rate Cap | Amount | ||||||||||||||||||||||||||||
26-Nov-13 | $ | 8,200 | 3 | % | 16-Dec | $ | 31 | $ | 1 | $ | 31 | $ | 4 | ||||||||||||||||
Fair Value | |||||||||||||||||||||||||||||
The fair value of all mortgage notes payable outstanding as of March 31, 2015, excluding mortgage notes payable on real estate held for sale, was $485.2 million, as compared to the carrying value stated above of $469.0 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, which was expanded to $75.0 million in November 2014, with KeyBank National Association (serving as a revolving lender, a letter of credit issuer and an administrative agent) and added Citizens Bank of Pennsylvania as an additional lender. Comerica Bank was subsequently added as another lender in December 2013. In March 2014, we amended our Line of Credit to extend the maturity date by one 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 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 $100.0 million upon satisfaction of certain conditions 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 London Interbank Offered Rate, or LIBOR, plus an applicable margin of up to 3.25%, 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, 2015, there was $41.3 million outstanding under our Line of Credit at an interest rate of approximately 2.93% and $4.5 million outstanding under letters of credit at a weighted average interest rate of 2.75%. As of May 4, 2015, 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, 2015. |
Mandatorily_Redeemable_Preferr
Mandatorily Redeemable Preferred Stock | 3 Months Ended |
Mar. 31, 2015 | |
Text Block [Abstract] | |
Mandatorily Redeemable Preferred Stock | 8. 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 through interest expense 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, 2015, was $39.9 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, 2015 of $25.92. 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, 2015 | |||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||
Commitments and Contingencies | 9. 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 2015 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 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | Thereafter | |||||||||||||||||||||||||
Tulsa, OK | 21-Apr | $ | 127 | $ | 169 | $ | 169 | $ | 169 | $ | 169 | $ | 169 | $ | 85 | ||||||||||||||||||
Dartmouth, MA | May-36 | 131 | 174 | 174 | 174 | 174 | 174 | 3,126 | |||||||||||||||||||||||||
Springfield, MA | Feb-30 | 64 | 86 | 89 | 90 | 90 | 90 | 884 | |||||||||||||||||||||||||
$ | 322 | $ | 429 | $ | 432 | $ | 433 | $ | 433 | $ | 433 | $ | 4,095 | ||||||||||||||||||||
Expenses recorded in connection to rental expense incurred for the properties listed above during both the three months ended March 31, 2015 and 2014 were $0.1 million, respectively. Rental expenses are reflected in property operating expenses on the condensed consolidated statements of operations. |
Stockholders_Equity
Stockholders' Equity | 3 Months Ended | ||||||||||||||||||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | 10. Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||
The following table summarizes the changes in our stockholders’ equity for the three months ended March 31, 2015 (dollars in thousands): | |||||||||||||||||||||||||||||||||||||||||
Distributions in | |||||||||||||||||||||||||||||||||||||||||
Shares Issued | Additional | Notes | Excess of | Total | |||||||||||||||||||||||||||||||||||||
Preferred | Senior Common | Common | Preferred | Senior Common | Common | Paid in | Receivable | Accumulated | Stockholders’ | ||||||||||||||||||||||||||||||||
Stock | Stock | Stock | Stock | Stock | Stock | Capital | from Employees | Earnings | Equity | ||||||||||||||||||||||||||||||||
Balance at December 31, 2014 | 2,150,000 | 809,411 | 19,589,606 | $ | 2 | $ | 1 | $ | 20 | $ | 369,748 | $ | (375 | ) | $ | (151,724 | ) | $ | 217,672 | ||||||||||||||||||||||
Issuance of senior common stock and common stock, net | — | 192,546 | 870,081 | — | — | — | 17,644 | — | — | 17,644 | |||||||||||||||||||||||||||||||
Distributions declared to common, senior common and preferred stockholders | — | — | — | — | — | — | — | — | (8,853 | ) | (8,853 | ) | |||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | — | 694 | 694 | |||||||||||||||||||||||||||||||
Balance at March 31, 2015 | 2,150,000 | 1,001,957 | 20,459,687 | $ | 2 | $ | 1 | $ | 20 | $ | 387,392 | $ | (375 | ) | $ | (159,883 | ) | $ | 227,157 | ||||||||||||||||||||||
Distributions | |||||||||||||||||||||||||||||||||||||||||
Our Board of Directors declared the following distributions per share for the three months ended March 31, 2015 and 2014: | |||||||||||||||||||||||||||||||||||||||||
For the three months ended March 31, | |||||||||||||||||||||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||||||||||||||||||||
Common Stock | $ | 0.375 | $ | 0.375 | |||||||||||||||||||||||||||||||||||||
Senior Common Stock | 0.2625 | 0.2625 | |||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||||||
On September 2, 2014 we entered into an open market sale agreement, or the ATM Program, with Cantor Fitzgerald & Co., or Cantor Fitzgerald, pursuant to which we may, from time to time, offer to sell shares of our common stock with an aggregate sales price of up to $100.0 million on the open market through Cantor Fitzgerald, acting as sales agent and/or principal. During the three months ended March 31, 2015, we raised approximately $15.1 million in net proceeds under the ATM Program. As of March 31, 2015, under the existing program, we have sold a total of 2.7 million shares with aggregate gross proceeds of $47.8 million, and have a remaining capacity to sell up to $52.2 million of common stock under the ATM Program with Cantor Fitzgerald. | |||||||||||||||||||||||||||||||||||||||||
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 were intended to be offered pursuant to the primary offering and 500,000 shares were intended to be offered pursuant to our senior common distribution reinvestment plan, or the DRIP. We elected not to extend this offering, which terminated according to its terms on March 28, 2015. During the three months ended March 31, 2015, we sold 189,052 shares of our Senior Common Stock at $15.00 per share and issued 5,239 shares of our Senior Common Stock under the Dividend Reinvestment Plan, or DRIP, program. The net proceeds, after deducting the underwriting discount and commission, were $2.6 million. At the conclusion of the offering on March 28, 2015, we had sold 927,994 shares of Senior Common Stock, for gross proceeds of $13.9 million, and issued an additional 27,861 shares of Senior Common Stock under the DRIP program. | |||||||||||||||||||||||||||||||||||||||||
Note to Employee | |||||||||||||||||||||||||||||||||||||||||
The following table is a summary of the outstanding note issued to 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 at | of Employee Loan at | of Note | on Note | ||||||||||||||||||||||||||||||||||||||
March 31, 2015 | December 31, 2014 | ||||||||||||||||||||||||||||||||||||||||
Nov-06 | $ | 375 | $ | 375 | Nov 2015 | 8.15 | % | ||||||||||||||||||||||||||||||||||
The employee stock option program terminated in 2006. 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, 2015, this loan maintained its full recourse status. |
Subsequent_Events
Subsequent Events | 3 Months Ended | ||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||
Subsequent Events [Abstract] | |||||||||||||||||||
Subsequent Events | 11. Subsequent Events | ||||||||||||||||||
On April 14, 2015, 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 | ||||||||||||||||
24-Apr-15 | May 5, 2015 | $ | 0.125 | $ | 0.1614583 | $ | 0.15625 | $ | 0.1484375 | ||||||||||
19-May-15 | May 29, 2015 | 0.125 | 0.1614583 | 0.15625 | 0.1484375 | ||||||||||||||
19-Jun-15 | 30-Jun-15 | 0.125 | 0.1614583 | 0.15625 | 0.1484375 | ||||||||||||||
Total | $ | 0.375 | $ | 0.4843749 | $ | 0.46875 | $ | 0.4453125 | |||||||||||
Senior Common Stock Distributions | |||||||||||||||||||
Payable to the Holders of Record During the Month of: | Payment Date | Distribution per Share | |||||||||||||||||
April | May 7, 2015 | $ | 0.0875 | ||||||||||||||||
May | 5-Jun-15 | 0.0875 | |||||||||||||||||
June | 8-Jul-15 | 0.0875 | |||||||||||||||||
Total | $ | 0.2625 | |||||||||||||||||
Phoenix, Arizona: On April 14, 2015, we closed a $0.3 million interim financing loan for the acquisition of land to be used for redevelopment and expansion of a medical center campus in Phoenix, Arizona. This loan is collateralized by proceeds from the sale of the transitional care facility for which we provided a mortgage development loan on July 25, 2014 (see Note 6). We will earn interest of 22% per annum through the maturity date, with all accrued interest and principal payable upon maturity. This loan matures upon the earlier of April 2016 or the sale of the transitional care facility, which is anticipated to occur in November 2015. | |||||||||||||||||||
Austin, Texas: On April, 28 2015, we modified the lease with the tenant occupying one of our properties located in Austin, Texas. The modification provided the tenant a termination option, which allows the tenant to terminate its lease effective December 31, 2017, upon paying a termination penalty of approximately $1.1 million on or before March 31, 2017. This modification forfeits the tenant’s right to $0.6 million in tenant improvement allowance, provided in an earlier amendment. All other terms and conditions of the lease remain in full force and effect. |
Organization_Basis_of_Presenta1
Organization, Basis of Presentation and Significant Accounting Policies (Policies) | 3 Months Ended | ||||||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||
Subsidiaries | Subsidiaries | ||||||||||||||||||||||||||||
Gladstone Commercial Corporation conducts substantially all of its operations through a subsidiary, Gladstone Commercial Limited Partnership, a Delaware limited partnership, or the Operating Partnership. As Gladstone Commercial Corporation currently owns all of the general and limited partnership interests of the Operating Partnership through two of its subsidiaries, GCLP Business Trust I and II, the financial position and results of operations of the Operating Partnership are consolidated within Gladstone Commercial Corporation’s financial statements. | |||||||||||||||||||||||||||||
GCLP Business Trust I and GCLP Business Trust II, each a subsidiary and business trust of Gladstone Commercial Corporation, were formed under the laws of the Commonwealth of Massachusetts on December 28, 2005. Gladstone Commercial Corporation transferred its 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. | |||||||||||||||||||||||||||||
Gladstone Commercial Lending, LLC, a Delaware limited liability company, or Gladstone Commercial Lending, a subsidiary of Gladstone Commercial Corporation, was created to conduct all operations related to Gladstone Commercial Corporation’s real estate mortgage loans. 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 Gladstone Commercial Corporation. | |||||||||||||||||||||||||||||
Gladstone Commercial Advisers, Inc., a Delaware corporation, or Commercial Advisers, and a wholly-owned subsidiary of Gladstone Commercial Corporation, 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 Gladstone Commercial Corporation owns 100% of the voting securities of Commercial Advisers, the financial position and results of operations of Commercial Advisers are consolidated within Gladstone Commercial Corporation’s financial statements. | |||||||||||||||||||||||||||||
Interim Financial Information | Interim Financial Information | ||||||||||||||||||||||||||||
Our interim financial statements are prepared in accordance with U.S. generally accepted accounting principles, 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, 2014, as filed with the U.S. Securities and Exchange Commission on February 18, 2015. The results of operations for the three months ended March 31, 2015 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 properties, 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 acquired and liabilities assumed. In estimating carrying costs, management also includes lost reimbursement of real estate taxes, insurance and other operating expenses as well as 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 on the date of acquisition. Real estate depreciation expense on these tangible assets was $5.2 million and $4.4 million for the three months ended March 31, 2015 and 2014, 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 which 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, 2015 and 2014, 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, 2015 and 2014, 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. Total amortization expense related to these intangible assets and liabilities was $3.0 million and $2.3 million for the three months ended March 31, 2015 and 2014, respectively. | |||||||||||||||||||||||||||||
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 would be immediately charged to amortization expense. | |||||||||||||||||||||||||||||
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 properties, 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 and Discontinued Operations | Real Estate Held for Sale and Discontinued Operations | ||||||||||||||||||||||||||||
ASC 360-10, “Property, Plant, and Equipment,” requires that any properties which 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. | |||||||||||||||||||||||||||||
Under 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,” 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. We evaluated our held for sale assets according to this criteria, and determined we were not required to present our assets classified as held for sale during the quarter ended March 31, 2015 as discontinued operations. | |||||||||||||||||||||||||||||
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 whether 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 each tenant’s 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 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. We performed this evaluation and analysis and concluded that none of our properties were impaired as of March 31, 2015; however, we determined that our property located in Dayton, Ohio is at risk to become impaired in the future. The lease with the tenant in this property terminates on June 30, 2015. There is a possibility we may have to impair this property during 2015 if we do not find a replacement tenant. | |||||||||||||||||||||||||||||
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 $0.2 million and $0.4 million for deferred financing costs during the three months ended March 31, 2015 and 2014, 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, 2015 and 2014, 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 or 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 were recorded during the three months ended March 31, 2015, and 2014, respectively. | |||||||||||||||||||||||||||||
Tenant recovery revenue includes payments from tenants as reimbursements for franchise taxes, management fees, insurance, maintenance and repairs, utilities, and ground lease payments. We recognize tenant recovery revenue in the same periods that we incur the related expenses. | |||||||||||||||||||||||||||||
Mortgage Note Receivable | Mortgage Note Receivable | ||||||||||||||||||||||||||||
Management considers its loans and other lending investments to be held-for-investment. We reflect our loans classified as long-term investments at amortized cost, less allowance for loan losses, acquisition premiums or discounts, and deferred loan fees. On occasion, we may acquire loans at small premiums or discounts based on the credit characteristics of such loans. These premiums or discounts would be recognized as yield adjustments over the lives of the related loans. Loan origination fees, as well as direct loan origination costs, are also deferred and recognized over the lives of the related loans as yield adjustments. If loans with premiums, discounts, or loan origination fees are prepaid, we would immediately recognize the unamortized portion as a decrease or increase in the prepayment gain or loss. Interest income is recognized using the effective interest method applied on a loan-by-loan basis. Prepayment penalties or yield maintenance payments from borrowers are recognized as additional income when received. | |||||||||||||||||||||||||||||
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 at the present value of the estimated payments expected to be made 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 to their estimated obligation over the life of the leases for the respective properties. We accrued approximately $20,000 in liabilities in connection with acquisitions during the three months ended March 31, 2015. There were no liabilities accrued during the three months ended March 31, 2014. We recorded expense of $0.04 million and $0.03 million during the three months ended March 31, 2015 and 2014 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 $9.4 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, 2015 and 2014, 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. | |||||||||||||||||||||||||||||
Segment Reporting | Segment Reporting | ||||||||||||||||||||||||||||
We manage our operations on an aggregated, single segment basis for purposes of assessing performance and making operating decisions, and, accordingly, have only one reporting and operating segment. | |||||||||||||||||||||||||||||
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements | ||||||||||||||||||||||||||||
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which supersedes or replaces nearly all GAAP revenue recognition guidance. The new guidance establishes a new control-based revenue recognition model, changes the basis for deciding when revenue is recognized over time or at a point in time and will expand disclosures about revenue. We are currently assessing the impact of ASU 2014-09. ASU 2014-09 is effective for annual reporting periods that begin after December 15, 2016 and interim periods within those years. Early adoption is not permitted. | |||||||||||||||||||||||||||||
In February 2015, the FASB issued ASU 2015-02, “Amendments to the Consolidation Analysis” (“ASU-2015-02”), which amends or supersedes the scope and consolidation guidance under existing GAAP. The new standard changes the way a reporting entity evaluates whether a) limited partnerships and similar entities should be consolidated, b) fees paid to decision makers or service provides are variable interests in a variable interest entity, or VIE, and c) variable interests in a VIE held by related parties require the reporting entity to consolidate the VIE. ASU 2015-02 also eliminates the VIE consolidation model based on majority exposure to variability that applied to certain investment companies and similar entities. We are currently assessing the impact of ASU 2015-02, which is effective for annual and interim reporting periods beginning after December 15, 2015. Early adoption is permitted. | |||||||||||||||||||||||||||||
In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs” (“ASU-2015-03”), which simplifies the presentation of debt issuance costs. We are currently assessing the impact of ASU 2015-03 and do not anticipate a material impact on our financial position, results of operations or cash flows from adopting this standard. ASU 2015-03 is effective for annual and interim reporting periods beginning after December 15, 2015. Early adoption is permitted. | |||||||||||||||||||||||||||||
Fair Value Measurements and Disclosures | We have entered into an interest rate cap agreement with Wells Fargo that caps the interest rate on the note payable for our Champaign, Illinois property 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, 2015 and December 31, 2014, our interest rate cap agreement was valued using Level 3 inputs. The following table summarizes the key terms of each interest rate cap agreement (dollars in thousands): | ||||||||||||||||||||||||||||
As of March 31, | As of December 31, | ||||||||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||||||||
Notional | LIBOR Cap | Maturity Date | Cost | Fair Value | Cost | Fair Value | |||||||||||||||||||||||
Interest Rate Cap | Amount | ||||||||||||||||||||||||||||
26-Nov-13 | $ | 8,200 | 3 | % | 16-Dec | $ | 31 | $ | 1 | $ | 31 | $ | 4 | ||||||||||||||||
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, 2015, 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, 2015 | |||||||||
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 each of the three months ended March 31, 2015 and 2014. We computed basic loss per share for the three months ended March 31, 2015 and 2014 using the weighted average number of shares outstanding during the periods. Diluted loss per share for the three months ended March 31, 2015 and 2014, reflects additional shares of common stock related to our convertible Senior Common Stock (if the effect would be dilutive), 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 (dollars in thousands, except per share amounts). | ||||||||
For the three months ended March 31, | |||||||||
2015 | 2014 | ||||||||
Calculation of basic loss per share of common stock: | |||||||||
Net loss attributable to common stockholders | $ | (553 | ) | $ | (14,637 | ) | |||
Denominator for basic weighted average shares of common stock | 20,210,975 | 15,746,714 | |||||||
Basic loss per share of common stock | $ | (0.03 | ) | $ | (0.93 | ) | |||
Calculation of diluted loss per share of common stock: | |||||||||
Net loss attributable to common stockholders | $ | (553 | ) | $ | (14,637 | ) | |||
Add: Income impact of assumed conversion of senior common stock (1) | — | — | |||||||
Net loss attributable to common stockholders plus assumed conversions | $ | (553 | ) | $ | (14,637 | ) | |||
Denominator for basic weighted average shares of common stock | 20,210,975 | 15,746,714 | |||||||
Effect of convertible senior common stock (1) | — | — | |||||||
Denominator for diluted weighted average shares of common stock | 20,210,975 | 15,746,714 | |||||||
Diluted loss per share of common stock | $ | (0.03 | ) | $ | (0.93 | ) | |||
-1 | We excluded convertible senior common shares of 723,631 and 316,979, from the calculation of diluted earnings per share for the three months ended March 31, 2015 and 2014, respectively, because it was anti-dilutive. |
Real_Estate_and_Intangible_Ass1
Real Estate and Intangible Assets (Tables) | 3 Months Ended | ||||||||||||||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||||||||||||||
Text Block [Abstract] | |||||||||||||||||||||||||||||||||||||
Company's Investments in Real Estate | The following table sets forth the components of our investments in real estate as of March 31, 2015 and December 31, 2014 (dollars in thousands): | ||||||||||||||||||||||||||||||||||||
March 31, 2015(1) | December 31, 2014 | ||||||||||||||||||||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||||||||||||
Land | $ | 91,343 | $ | 88,394 | |||||||||||||||||||||||||||||||||
Building and improvements | 605,375 | 593,155 | |||||||||||||||||||||||||||||||||||
Tenant improvements | 44,124 | 41,016 | |||||||||||||||||||||||||||||||||||
Accumulated depreciation | (96,760 | ) | (92,133 | ) | |||||||||||||||||||||||||||||||||
Real estate, net | $ | 644,082 | $ | 630,432 | |||||||||||||||||||||||||||||||||
-1 | Does not include real estate held for sale as of March 31, 2015. | ||||||||||||||||||||||||||||||||||||
Summary of Properties Acquired | 2015 Real Estate Activity | ||||||||||||||||||||||||||||||||||||
During the three months ended March 31, 2015, we acquired two properties, which are summarized below (dollars in thousands): | |||||||||||||||||||||||||||||||||||||
Location | Acquisition Date | Square Footage | Lease | Renewal Options | Total Purchase | Acquisition | Annualized Straight | Debt Issued | |||||||||||||||||||||||||||||
(unaudited) | Term | Price/Expansion | Expenses | Line Rent | |||||||||||||||||||||||||||||||||
Funded | |||||||||||||||||||||||||||||||||||||
Richardson, TX (1) | 3/6/15 | 155,984 | 9.5 Years | 2 (5 years each) | $ | 24,700 | $ | 103 | $ | 2,708 | $ | 14,573 | |||||||||||||||||||||||||
Birmingham, AL | 3/20/15 | 30,850 | 8.5 Years | 1 (5 years) | 3,648 | 66 | 333 | N/A | |||||||||||||||||||||||||||||
Total | 186,834 | $ | 28,348 | $ | 169 | $ | 3,041 | $ | 14,573 | ||||||||||||||||||||||||||||
-1 | The tenant occupying this property is subject to a gross lease. | ||||||||||||||||||||||||||||||||||||
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 | Acquisition | 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 | ||||||||||||||||||||||||||||
Fair Value of Acquired Assets and Liabilities Assumed | In accordance with ASC 805, we determined the fair value of the acquired assets and assumed liabilities related to the two properties acquired during the three months ended March 31, 2015, as follows (dollars in thousands): | ||||||||||||||||||||||||||||||||||||
Land | Building | Tenant | In-place | Leasing Costs | Customer | Above Market | Total Purchase | ||||||||||||||||||||||||||||||
Improvements | Leases | Relationships | Leases | Price | |||||||||||||||||||||||||||||||||
Richardson, TX | $ | 2,709 | $ | 12,503 | $ | 2,761 | $ | 2,046 | $ | 1,791 | $ | 1,915 | $ | 975 | $ | 24,700 | |||||||||||||||||||||
Birmingham, AL | 650 | 1,683 | 351 | 458 | 146 | 360 | — | 3,648 | |||||||||||||||||||||||||||||
$ | 3,359 | $ | 14,186 | $ | 3,112 | $ | 2,504 | $ | 1,937 | $ | 2,275 | $ | 975 | $ | 28,348 | ||||||||||||||||||||||
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 | ||||||||||||||||||||
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, 2015 (dollars in thousands): | ||||||||||||||||||||||||||||||||||||
For the three months ended March 31, | |||||||||||||||||||||||||||||||||||||
2015 | |||||||||||||||||||||||||||||||||||||
Location | Acquisition | Rental Revenue | Earnings (1) | ||||||||||||||||||||||||||||||||||
Date | |||||||||||||||||||||||||||||||||||||
Richardson, TX | 3/6/15 | $ | 182 | $ | 51 | ||||||||||||||||||||||||||||||||
Birmingham, AL | 3/20/15 | 11 | 4 | ||||||||||||||||||||||||||||||||||
$ | 193 | $ | 55 | ||||||||||||||||||||||||||||||||||
-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 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 Condensed Consolidated Statements of Operations | The following table reflects pro-forma consolidated statements of operations as if the properties acquired during the three months ended March 31, 2015 and the twelve months ended December 31, 2014, respectively were acquired as of January 1, 2014. The pro-forma earnings for the three months ended March 31, 2015 and 2014 were adjusted to assume that acquisition-related costs were incurred as of the previous period (dollars in thousands, except per share amounts): | ||||||||||||||||||||||||||||||||||||
For the three months ended March 31, | |||||||||||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||||||||||||||||
Operating Data: | |||||||||||||||||||||||||||||||||||||
Total operating revenue | $ | 20,318 | $ | 20,789 | |||||||||||||||||||||||||||||||||
Total operating expenses | (11,920 | ) | (26,282 | ) (1) | |||||||||||||||||||||||||||||||||
Other expenses | (7,546 | ) | (7,914 | ) | |||||||||||||||||||||||||||||||||
Net income (loss) | 852 | (13,407 | ) | ||||||||||||||||||||||||||||||||||
Dividends attributable to preferred and senior common stock | (1,247 | ) | (1,123 | ) | |||||||||||||||||||||||||||||||||
Net loss attributable to common stockholders | $ | (395 | ) | $ | (14,530 | ) | |||||||||||||||||||||||||||||||
Share and Per Share Data: | |||||||||||||||||||||||||||||||||||||
Basic and diluted loss per share of common stock | $ | (0.02 | ) | $ | (0.92 | ) | |||||||||||||||||||||||||||||||
Weighted average shares outstanding-basic and diluted | 20,210,975 | 15,746,714 | |||||||||||||||||||||||||||||||||||
-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 2015 and each of the five succeeding fiscal years and thereafter is as follows (dollars in thousands): | ||||||||||||||||||||||||||||||||||||
Year | Tenant | ||||||||||||||||||||||||||||||||||||
Lease Payments | |||||||||||||||||||||||||||||||||||||
Nine Months ending December 31, 2015 | $ | 55,082 | (1) | ||||||||||||||||||||||||||||||||||
2016 | 72,558 | ||||||||||||||||||||||||||||||||||||
2017 | 72,269 | ||||||||||||||||||||||||||||||||||||
2018 | 71,974 | ||||||||||||||||||||||||||||||||||||
2019 | 72,429 | ||||||||||||||||||||||||||||||||||||
2020 | 64,164 | ||||||||||||||||||||||||||||||||||||
Thereafter | 254,615 | ||||||||||||||||||||||||||||||||||||
-1 | Does not include real estate held for sale as of March 31, 2015. | ||||||||||||||||||||||||||||||||||||
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 as of March 31, 2015 and December 31, 2014 respectively (in thousands): | ||||||||||||||||||||||||||||||||||||
March 31, 2015 (1) | December 31, 2014 | ||||||||||||||||||||||||||||||||||||
Lease Intangibles | Accumulated | Lease Intangibles | Accumulated | ||||||||||||||||||||||||||||||||||
Amortization | Amortization | ||||||||||||||||||||||||||||||||||||
In-place leases | $ | 61,622 | $ | (18,583 | ) | $ | 59,233 | $ | (17,379 | ) | |||||||||||||||||||||||||||
Leasing costs | 40,361 | (12,119 | ) | 38,305 | (11,411 | ) | |||||||||||||||||||||||||||||||
Customer relationships | 43,518 | (11,991 | ) | 41,243 | (11,177 | ) | |||||||||||||||||||||||||||||||
$ | 145,501 | $ | (42,693 | ) | $ | 138,781 | $ | (39,967 | ) | ||||||||||||||||||||||||||||
Deferred Rent | Accumulated | Deferred Rent | Accumulated | ||||||||||||||||||||||||||||||||||
Receivable/Liability | Amortization | Receivable/Liability | Amortization | ||||||||||||||||||||||||||||||||||
Above market leases | $ | 8,894 | $ | (6,096 | ) | $ | 8,314 | $ | (6,384 | ) | |||||||||||||||||||||||||||
Below market leases | 15,938 | (7,564 | ) | 15,939 | (7,345 | ) | |||||||||||||||||||||||||||||||
$ | 24,832 | $ | (13,660 | ) | $ | 24,253 | $ | (13,729 | ) | ||||||||||||||||||||||||||||
Total | $ | 170,333 | $ | (56,353 | ) | $ | 163,034 | $ | (53,696 | ) | |||||||||||||||||||||||||||
-1 | Does not include real estate held for sale as of March 31, 2015. | ||||||||||||||||||||||||||||||||||||
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, 2015 and 2014, respectively, were as follows: | ||||||||||||||||||||||||||||||||||||
Intangible Assets & Liabilities | 2015 | 2014 | |||||||||||||||||||||||||||||||||||
In-place leases | 9.1 | 11.9 | |||||||||||||||||||||||||||||||||||
Leasing costs | 9.1 | 11.9 | |||||||||||||||||||||||||||||||||||
Customer relationships | 14.1 | 16.9 | |||||||||||||||||||||||||||||||||||
Above market leases | 9.7 | — | |||||||||||||||||||||||||||||||||||
Below market leases | — | 11.9 | |||||||||||||||||||||||||||||||||||
All intangible assets & liabilities | 10.5 | 13.3 | |||||||||||||||||||||||||||||||||||
Estimated Aggregate Amortization Expense and Net Increase to Rental Income | The estimated aggregate amortization expense to be recorded for in-place leases, leasing costs, customer relationships and amortization of both above and below market leases for the remainder of 2015 and for each of the five succeeding fiscal years and thereafter is as follows (dollars in thousands): | ||||||||||||||||||||||||||||||||||||
Year | Estimated | Net Increase to Rental | |||||||||||||||||||||||||||||||||||
Amortization Expense | Income Related to Above | ||||||||||||||||||||||||||||||||||||
of In-Place Leases, | and Below Market Leases | ||||||||||||||||||||||||||||||||||||
Leasing Costs and | |||||||||||||||||||||||||||||||||||||
Customer | |||||||||||||||||||||||||||||||||||||
Relationships | |||||||||||||||||||||||||||||||||||||
Nine Months Ending December 31, 2015 (1) | $ | 13,962 | $ | 228 | |||||||||||||||||||||||||||||||||
2016 | 13,648 | 307 | |||||||||||||||||||||||||||||||||||
2017 | 12,167 | 429 | |||||||||||||||||||||||||||||||||||
2018 | 12,058 | 429 | |||||||||||||||||||||||||||||||||||
2019 | 12,051 | 429 | |||||||||||||||||||||||||||||||||||
Thereafter | 38,922 | 3,754 | |||||||||||||||||||||||||||||||||||
Total | $ | 102,808 | $ | 5,576 | |||||||||||||||||||||||||||||||||
-1 | Does not include real estate held for sale as of March 31, 2015. |
Real_Estate_Held_for_Sale_Tabl
Real Estate Held for Sale (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
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, | |||||||||
2015 | 2014 | ||||||||
Operating revenue | $ | 83 | $ | 77 | |||||
Operating expense | 14 | 23 | |||||||
Other expense | 39 | 40 | |||||||
Income from real estate and related assets held for sale | $ | 30 | $ | 14 | |||||
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 condensed consolidated balance sheet: | ||||||||
March 31, 2015 | |||||||||
ASSETS HELD FOR SALE | |||||||||
Real estate, at cost | $ | 2,795 | |||||||
Less: accumulated depreciation | (615 | ) | |||||||
Total real estate held for sale, net | 2,180 | ||||||||
Lease intangibles, net | 17 | ||||||||
Funds held in escrow | 739 | ||||||||
Deferred rent receivable, net | 32 | ||||||||
Deferred financing costs, net | 9 | ||||||||
Other assets | 3 | ||||||||
TOTAL ASSETS HELD FOR SALE | $ | 2,980 | |||||||
LIABILITIES HELD FOR SALE | |||||||||
Mortgage notes payable | 2,503 | ||||||||
Other liabilities | 84 | ||||||||
TOTAL LIABILITIES HELD FOR SALE | $ | 2,587 | |||||||
Mortgage_Notes_Payable_and_Lin1
Mortgage Notes Payable and Line of Credit (Tables) | 3 Months Ended | ||||||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||
Company's Mortgage Notes Payable and Line of Credit | Our mortgage notes payable and line of credit as of March 31, 2015 and December 31, 2014 are summarized below (dollars in thousands): | ||||||||||||||||||||||||||||
Carrying Value at | |||||||||||||||||||||||||||||
Encumbered | March 31, 2015 | December 31, 2014 | Stated Interest | Scheduled Maturity | |||||||||||||||||||||||||
properties at | Rates at March 31, | Dates at March 31, | |||||||||||||||||||||||||||
March 31, 2015 | 2015 (4) | 2015 | |||||||||||||||||||||||||||
Mortgage and Other Secured Loans: | |||||||||||||||||||||||||||||
Fixed rate mortgage loans | 74 | $ | 460,218 | (5) | $ | 450,392 | -1 | -2 | |||||||||||||||||||||
Variable rate mortgage loans | 4 | 8,200 | 8,200 | LIBOR + 2.15%(3) | 12/1/16 | ||||||||||||||||||||||||
Premiums and discounts (net) | N/A | 630 | 707 | N/A | N/A | ||||||||||||||||||||||||
Total Mortgage Notes Payable | 78 | $ | 469,048 | $ | 459,299 | ||||||||||||||||||||||||
Variable rate Line of Credit | 18 | 41,300 | 43,300 | LIBOR + 2.75%(3) | 8/1/17 | ||||||||||||||||||||||||
Total Mortgage Notes Payable and Line of Credit | 96 | $ | 510,348 | $ | 502,599 | ||||||||||||||||||||||||
-1 | Interest rates on our fixed rate mortgage notes payable vary from 3.86% to 6.80%. | ||||||||||||||||||||||||||||
-2 | We have 42 mortgage notes payable with maturity dates ranging from 9/1/2015 through 1/6/2039. | ||||||||||||||||||||||||||||
-3 | At March 31, 2015, one month LIBOR was approximately 0.18%. | ||||||||||||||||||||||||||||
-4 | The weighted average interest rate on all debt outstanding at March 31, 2015, was approximately 5.07%. | ||||||||||||||||||||||||||||
-5 | Does not include mortgage notes payable related to assets held for sale of $2.5 million. | ||||||||||||||||||||||||||||
Summary of Long-Term Mortgage | During the three months ended March 31, 2015, we issued one long-term mortgage, collateralized by a single property, which is summarized below (dollars in thousands): | ||||||||||||||||||||||||||||
Date of Issuance | Issuing Bank | Debt Issued | Interest Rate | Maturity Date | |||||||||||||||||||||||||
3/6/15 | PNC Bank, NA | $14,573 | 3.86% | 4/1/25 | |||||||||||||||||||||||||
Schedule of Principal Payments of Mortgage Notes Payable | Scheduled principal payments of mortgage notes payable for the remainder of 2015, 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, 2015 | $ | 40,343 | (1) | ||||||||||||||||||||||||||
2016 | 96,812 | (2) | |||||||||||||||||||||||||||
2017 | 67,924 | ||||||||||||||||||||||||||||
2018 | 20,543 | ||||||||||||||||||||||||||||
2019 | 35,235 | ||||||||||||||||||||||||||||
2020 | 7,307 | ||||||||||||||||||||||||||||
Thereafter | 200,254 | ||||||||||||||||||||||||||||
$ | 468,418 | (3) | |||||||||||||||||||||||||||
-1 | We plan to refinance the 3 balloon principal payments that mature in the second half of 2015 with a combination of new mortgage debt and equity. | ||||||||||||||||||||||||||||
-2 | Does not include mortgage notes payable related to assets held for sale of $2.5 million. | ||||||||||||||||||||||||||||
-3 | This figure is exclusive of premiums of premiums and discounts (net) on assumed debt, which were $630 as of March 31, 2015. | ||||||||||||||||||||||||||||
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, | As of December 31, | ||||||||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||||||||
Notional | LIBOR Cap | Maturity Date | Cost | Fair Value | Cost | Fair Value | |||||||||||||||||||||||
Interest Rate Cap | Amount | ||||||||||||||||||||||||||||
26-Nov-13 | $ | 8,200 | 3 | % | 16-Dec | $ | 31 | $ | 1 | $ | 31 | $ | 4 |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 3 Months Ended | ||||||||||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||
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 2015 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 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | Thereafter | |||||||||||||||||||||||||
Tulsa, OK | 21-Apr | $ | 127 | $ | 169 | $ | 169 | $ | 169 | $ | 169 | $ | 169 | $ | 85 | ||||||||||||||||||
Dartmouth, MA | May-36 | 131 | 174 | 174 | 174 | 174 | 174 | 3,126 | |||||||||||||||||||||||||
Springfield, MA | Feb-30 | 64 | 86 | 89 | 90 | 90 | 90 | 884 | |||||||||||||||||||||||||
$ | 322 | $ | 429 | $ | 432 | $ | 433 | $ | 433 | $ | 433 | $ | 4,095 | ||||||||||||||||||||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 3 Months Ended | ||||||||||||||||||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||
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, 2015 (dollars in thousands): | ||||||||||||||||||||||||||||||||||||||||
Distributions in | |||||||||||||||||||||||||||||||||||||||||
Shares Issued | Additional | Notes | Excess of | Total | |||||||||||||||||||||||||||||||||||||
Preferred | Senior Common | Common | Preferred | Senior Common | Common | Paid in | Receivable | Accumulated | Stockholders’ | ||||||||||||||||||||||||||||||||
Stock | Stock | Stock | Stock | Stock | Stock | Capital | from Employees | Earnings | Equity | ||||||||||||||||||||||||||||||||
Balance at December 31, 2014 | 2,150,000 | 809,411 | 19,589,606 | $ | 2 | $ | 1 | $ | 20 | $ | 369,748 | $ | (375 | ) | $ | (151,724 | ) | $ | 217,672 | ||||||||||||||||||||||
Issuance of senior common stock and common stock, net | — | 192,546 | 870,081 | — | — | — | 17,644 | — | — | 17,644 | |||||||||||||||||||||||||||||||
Distributions declared to common, senior common and preferred stockholders | — | — | — | — | — | — | — | — | (8,853 | ) | (8,853 | ) | |||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | — | 694 | 694 | |||||||||||||||||||||||||||||||
Balance at March 31, 2015 | 2,150,000 | 1,001,957 | 20,459,687 | $ | 2 | $ | 1 | $ | 20 | $ | 387,392 | $ | (375 | ) | $ | (159,883 | ) | $ | 227,157 | ||||||||||||||||||||||
Dividends Declared | Our Board of Directors declared the following distributions per share for the three months ended March 31, 2015 and 2014: | ||||||||||||||||||||||||||||||||||||||||
For the three months ended March 31, | |||||||||||||||||||||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||||||||||||||||||||
Common Stock | $ | 0.375 | $ | 0.375 | |||||||||||||||||||||||||||||||||||||
Senior Common Stock | 0.2625 | 0.2625 | |||||||||||||||||||||||||||||||||||||||
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 Issued to Employee for Exercise of Stock Options | The following table is a summary of the outstanding note issued to 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 at | of Employee Loan at | of Note | on Note | ||||||||||||||||||||||||||||||||||||||
March 31, 2015 | December 31, 2014 | ||||||||||||||||||||||||||||||||||||||||
Nov-06 | $ | 375 | $ | 375 | Nov 2015 | 8.15 | % |
Subsequent_Events_Tables
Subsequent Events (Tables) | 3 Months Ended | ||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||
Subsequent Events [Abstract] | |||||||||||||||||||
Monthly Distributions Declared by Company's Board of Directors | On April 14, 2015, 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 | ||||||||||||||||
24-Apr-15 | May 5, 2015 | $ | 0.125 | $ | 0.1614583 | $ | 0.15625 | $ | 0.1484375 | ||||||||||
19-May-15 | May 29, 2015 | 0.125 | 0.1614583 | 0.15625 | 0.1484375 | ||||||||||||||
19-Jun-15 | 30-Jun-15 | 0.125 | 0.1614583 | 0.15625 | 0.1484375 | ||||||||||||||
Total | $ | 0.375 | $ | 0.4843749 | $ | 0.46875 | $ | 0.4453125 | |||||||||||
Senior Common Stock Distributions | |||||||||||||||||||
Payable to the Holders of Record During the Month of: | Payment Date | Distribution per Share | |||||||||||||||||
April | May 7, 2015 | $ | 0.0875 | ||||||||||||||||
May | 5-Jun-15 | 0.0875 | |||||||||||||||||
June | 8-Jul-15 | 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, 2015 | Mar. 31, 2014 | |
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 | |
Amortization related to below-market lease | 200,000 | 200,000 |
Total amortization expense related to intangible assets | 3,000,000 | 2,300,000 |
Agreement termination date | 31-Aug-15 | |
Payments of deferred financing costs | 216,000 | 360,000 |
Total amortization expense related to deferred financing costs is included in interest expense | 431,000 | 386,000 |
Liabilities accrued | 20,000 | 0 |
Expenses recorded to general and administrative expense | 40,000 | 30,000 |
Aggregate undiscounted obligation on properties | 9,400,000 | |
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 | |
Real Estate [Member] | ||
Organization And Significant Accounting Policies [Line Items] | ||
Real estate depreciation expense | 5,200,000 | 4,400,000 |
Minimum [Member] | ||
Organization And Significant Accounting Policies [Line Items] | ||
Expected lease up period for estimating carrying costs | 9 months | |
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 | |
Remaining term of in-place leases and unamortized lease | 15 years | |
Percentage of discount rate for calculating undiscounted obligation | 7.60% | |
Above Market Leases [Member] | ||
Organization And Significant Accounting Policies [Line Items] | ||
Amortization related to above-market lease | $100,000 | $100,000 |
Ohio [Member] | ||
Organization And Significant Accounting Policies [Line Items] | ||
Agreement termination date | 30-Jun-15 | |
Buildings 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 | |
Gladstone Commercial Advisers, Inc. [Member] | ||
Organization And Significant Accounting Policies [Line Items] | ||
Company ownership percentage of voting securities of Commercial Advisers | 100.00% | |
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 |
RelatedParty_Transactions_Addi
Related-Party Transactions - Additional Information (Detail) (USD $) | 3 Months Ended | |||||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | ||||
Related Party Transaction [Line Items] | ||||||
Due to Adviser and Administrator | $1,721,000 | [1] | $916,000 | [1] | ||
Annual base management fee, in percentage of stockholders' equity, in excess of recorded value of preferred stock | 2.00% | |||||
Base management fee | 852,000 | [1] | 625,000 | [1] | ||
Pre-incentive quarterly fee FFO in percentage of common stockholders' equity that will reward the Adviser | 1.75% | |||||
Pre-incentive annual fee FFO in percentage of common stockholders' equity that will reward the Adviser | 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 | 1,673,000 | [1] | 1,240,000 | [1] | ||
Credits related to unconditional and irrevocable voluntary waivers issued by the Adviser | 1,185,000 | [1] | 1,205,000 | [1] | ||
Related-party transactions incentive fee, net | 500,000 | 40,000 | ||||
Administration fee | 362,000 | [1] | 492,000 | [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-15 | |||||
Fees paid | 38,000 | 0 | ||||
Total secured mortgages subject to financing fee | 14,600,000 | |||||
Financing fee on secured mortgages percentage | 0.26% | |||||
Minimum [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Percentage of the amount of the mortgage | 0.15% | |||||
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 | 300,000 | 40,000 | ||||
Agreement termination date | 28-Mar-15 | |||||
Wrote-off of deferred offering costs | $100,000 | |||||
[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, 2015 | Mar. 31, 2014 |
Calculation of basic loss per share of common stock: | ||
Net loss attributable to common stockholders | ($553) | ($14,637) |
Denominator for basic weighted average shares of common stock | 20,210,975 | 15,746,714 |
Basic loss per share of common stock | ($0.03) | ($0.93) |
Calculation of diluted loss per share of common stock: | ||
Net loss attributable to common stockholders | -553 | -14,637 |
Add: Income impact of assumed conversion of senior common stock | 0 | 0 |
Net loss attributable to common stockholders plus assumed conversions | ($553) | ($14,637) |
Denominator for basic weighted average shares of common stock | 20,210,975 | 15,746,714 |
Effect of convertible senior common stock | 0 | 0 |
Denominator for diluted weighted average shares of common stock | 20,210,975 | 15,746,714 |
Diluted loss per share of common stock | ($0.03) | ($0.93) |
Loss_per_Share_of_Common_Stock3
Loss per Share of Common Stock - Basic and Diluted Loss Per Share of Common Stock (Parenthetical) (Detail) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Earnings Per Share [Abstract] | ||
Anti-dilutive convertible senior common shares excluded from calculation of diluted earnings per share | 723,631 | 316,979 |
Real_Estate_and_Intangible_Ass2
Real Estate and Intangible Assets - Company's Investments in Real Estate (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Real estate: | ||
Land | $91,343 | $88,394 |
Building and improvements | 605,375 | 593,155 |
Tenant improvements | 44,124 | 41,016 |
Accumulated depreciation | -96,760 | -92,133 |
Total real estate, net | $644,082 | $630,432 |
Real_Estate_and_Intangible_Ass3
Real Estate and Intangible Assets - Summary of Properties Acquired (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
sqft | sqft | |
Business Acquisition [Line Items] | ||
Square Footage (unaudited) | 186,834 | 41,509 |
Total Purchase Price | $28,348 | $10,048 |
Acquisition Expenses | 169 | 52 |
Annualized Straight Line Rent | 3,041 | 1,037 |
Debt Issued & Assumed | 14,573 | 6,330 |
Richardson, TX [Member] | ||
Business Acquisition [Line Items] | ||
Acquisition Date | 6-Mar-15 | |
Square Footage (unaudited) | 155,984 | |
Lease Term | 9 years 6 months | |
Renewal Options | 2 | |
Renewal Options Period | 5 years | |
Total Purchase Price | 24,700 | |
Acquisition Expenses | 103 | |
Annualized Straight Line Rent | 2,708 | |
Debt Issued & Assumed | 14,573 | |
Birmingham, AL [Member] | ||
Business Acquisition [Line Items] | ||
Acquisition Date | 20-Mar-15 | |
Square Footage (unaudited) | 30,850 | |
Lease Term | 8 years 6 months | |
Renewal Options | 1 | |
Renewal Options Period | 5 years | |
Total Purchase Price | 3,648 | |
Acquisition Expenses | 66 | |
Annualized Straight Line Rent | 333 | |
Allen, TX [Member] | ||
Business Acquisition [Line Items] | ||
Acquisition Date | 27-Mar-14 | |
Square Footage (unaudited) | 21,154 | |
Lease Term | 12 years | |
Renewal Options | 4 | |
Renewal Options Period | 5 years | |
Total Purchase Price | 5,525 | |
Acquisition Expenses | 26 | |
Annualized Straight Line Rent | 570 | |
Debt Issued & Assumed | 3,481 | |
Colleyville, TX [Member] | ||
Business Acquisition [Line Items] | ||
Acquisition Date | 27-Mar-14 | |
Square Footage (unaudited) | 20,355 | |
Lease Term | 12 years | |
Renewal Options | 4 | |
Renewal Options Period | 5 years | |
Total Purchase Price | 4,523 | |
Acquisition Expenses | 26 | |
Annualized Straight Line Rent | 467 | |
Debt Issued & Assumed | $2,849 |
Real_Estate_and_Intangible_Ass4
Real Estate and Intangible Assets - Fair Value of Acquired Assets and Liabilities Assumed (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Business Acquisition [Line Items] | ||
Total Purchase Price | $28,348 | $10,048 |
Customer Relationships [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 2,275 | 399 |
Above Market Leases [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 975 | |
Below Market Leases [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 6 | |
Discount on Assumed Debt [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 131 | |
Richardson, TX [Member] | ||
Business Acquisition [Line Items] | ||
Total Purchase Price | 24,700 | |
Richardson, TX [Member] | Customer Relationships [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 1,915 | |
Richardson, TX [Member] | Above Market Leases [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 975 | |
Birmingham, AL [Member] | ||
Business Acquisition [Line Items] | ||
Total Purchase Price | 3,648 | |
Birmingham, AL [Member] | Customer Relationships [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 360 | |
Allen, TX [Member] | ||
Business Acquisition [Line Items] | ||
Total Purchase Price | 5,525 | |
Allen, TX [Member] | Customer Relationships [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 218 | |
Allen, TX [Member] | Discount on Assumed Debt [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 72 | |
Colleyville, TX [Member] | ||
Business Acquisition [Line Items] | ||
Total Purchase Price | 4,523 | |
Colleyville, TX [Member] | Customer Relationships [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 181 | |
Colleyville, TX [Member] | Below Market Leases [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 6 | |
Colleyville, TX [Member] | Discount on Assumed Debt [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 59 | |
Land [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 3,359 | 2,151 |
Land [Member] | Richardson, TX [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 2,709 | |
Land [Member] | Birmingham, AL [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 650 | |
Land [Member] | Allen, TX [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 874 | |
Land [Member] | Colleyville, TX [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 1,277 | |
Building [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 14,186 | 5,816 |
Building [Member] | Richardson, TX [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 12,503 | |
Building [Member] | Birmingham, AL [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 1,683 | |
Building [Member] | Allen, TX [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 3,509 | |
Building [Member] | Colleyville, TX [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 2,307 | |
Tenant Improvements [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 3,112 | 242 |
Tenant Improvements [Member] | Richardson, TX [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 2,761 | |
Tenant Improvements [Member] | Birmingham, AL [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 351 | |
Tenant Improvements [Member] | Allen, TX [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 125 | |
Tenant Improvements [Member] | Colleyville, TX [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 117 | |
In-Place Leases [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 2,504 | 1,084 |
In-Place Leases [Member] | Richardson, TX [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 2,046 | |
In-Place Leases [Member] | Birmingham, AL [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 458 | |
In-Place Leases [Member] | Allen, TX [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 598 | |
In-Place Leases [Member] | Colleyville, TX [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 486 | |
Leasing Costs [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 1,937 | 493 |
Leasing Costs [Member] | Richardson, TX [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 1,791 | |
Leasing Costs [Member] | Birmingham, AL [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 146 | |
Leasing Costs [Member] | Allen, TX [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | 273 | |
Leasing Costs [Member] | Colleyville, TX [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of acquired assets related to the properties acquired | $220 |
Real_Estate_and_Intangible_Ass5
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, 2015 | Mar. 31, 2014 |
Business Acquisition [Line Items] | ||
Rental Revenue | $193 | $14 |
Earnings | 55 | 9 |
Richardson, TX [Member] | ||
Business Acquisition [Line Items] | ||
Acquisition Date | 6-Mar-15 | |
Rental Revenue | 182 | |
Earnings | 51 | |
Birmingham, AL [Member] | ||
Business Acquisition [Line Items] | ||
Acquisition Date | 20-Mar-15 | |
Rental Revenue | 11 | |
Earnings | 4 | |
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 |
Real_Estate_and_Intangible_Ass6
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, 2015 | Mar. 31, 2014 |
Operating Data: | ||
Total operating revenue | $20,318 | $20,789 |
Total operating expenses | -11,920 | -26,282 |
Other expenses | -7,546 | -7,914 |
Net income (loss) | 852 | -13,407 |
Dividends attributable to preferred and senior common stock | -1,247 | -1,123 |
Net loss attributable to common stockholders | ($395) | ($14,530) |
Share and Per Share Data: | ||
Basic and diluted loss per share of common stock | ($0.02) | ($0.92) |
Weighted average shares outstanding-basic and diluted | 20,210,975 | 15,746,714 |
Real_Estate_and_Intangible_Ass7
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_Ass8
Real Estate and Intangible Assets - Additional Information (Detail) (USD $) | 0 Months Ended | 3 Months Ended | 0 Months Ended | ||||
Feb. 27, 2015 | Feb. 20, 2015 | Mar. 31, 2015 | Mar. 31, 2014 | Feb. 09, 2015 | Jan. 29, 2015 | Jul. 25, 2014 | |
sqft | sqft | Option | sqft | sqft | |||
Property | |||||||
sqft | |||||||
Real Estate Properties [Line Items] | |||||||
Area of real estate properties | 186,834 | 41,509 | |||||
Previously occupied space | 81,371 | ||||||
Lease commission paid | $65,000 | $54,000 | |||||
Proceeds from sale of property | 2,800,000 | ||||||
Carrying value of property | 2,400,000 | ||||||
Early termination penalty | 1,000,000 | ||||||
Effective termination date | 31-Dec-17 | ||||||
Lease termination description | Termination option, which allows the tenant to terminate their lease effective December 31, 2017, upon paying a termination penalty of approximately $1.0 million on or before March 31, 2017. All other terms and conditions of the lease remain in full force and effect. | ||||||
Indianapolis, Indiana [Member] | |||||||
Real Estate Properties [Line Items] | |||||||
Number of lease agreements modified | 2 | ||||||
Raleigh, North Carolina [Member] | |||||||
Real Estate Properties [Line Items] | |||||||
Extended lease expiration | 2020-07 | ||||||
Amount paid for tenant Improvements | 100,000 | ||||||
Number of properties expanded | 2 | ||||||
Number of properties occupied by tenant | 2 | ||||||
Renew the lease for additional periods | 5 years | ||||||
Previously occupied space | 174,426 | ||||||
Reduced space by tenant | 94,200 | ||||||
Annualized straight line rent escalations | 900,000 | ||||||
Lease commission paid | 200,000 | ||||||
Number of options for renewal of lease | 2 | ||||||
Number of years under additional periods for lease renewal option | 5 years | ||||||
Raleigh, North Carolina [Member] | Previously Reported [Member] | |||||||
Real Estate Properties [Line Items] | |||||||
Annualized straight line rent escalations | 1,300,000 | ||||||
Raleigh, North Carolina [Member] | Lease One [Member] | |||||||
Real Estate Properties [Line Items] | |||||||
Original lease expiration | 2015-07 | ||||||
Raleigh, North Carolina [Member] | Lease Two [Member] | |||||||
Real Estate Properties [Line Items] | |||||||
Original lease expiration | 2015-07 | ||||||
Tenant One [Member] | Indianapolis, Indiana [Member] | |||||||
Real Estate Properties [Line Items] | |||||||
Area of real estate properties | 3,546 | ||||||
Option to extend lease term | 7 years | ||||||
Extended lease expiration | 2023-03 | ||||||
Original lease expiration | 2016-02 | ||||||
Amount of annualized straight line rents over the life of the lease | 60,000 | ||||||
Amount paid for tenant Improvements | 60,000 | ||||||
Tenant Two [Member] | Indianapolis, Indiana [Member] | |||||||
Real Estate Properties [Line Items] | |||||||
Area of real estate properties | 7,639 | ||||||
Original lease expiration | 2018-01 | ||||||
Amount of annualized straight line rents over the life of the lease | $100,000 | ||||||
Extended area of real estate property leased | 8,275 |
Real_Estate_and_Intangible_Ass9
Real Estate and Intangible Assets - Future Operating Lease Payments from Tenants under Non-Cancelable Leases (Detail) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Leases [Abstract] | |
Nine Months ending December 31, 2015 | $55,082 |
2016 | 72,558 |
2017 | 72,269 |
2018 | 71,974 |
2019 | 72,429 |
2020 | 64,164 |
Thereafter | $254,615 |
Recovered_Sheet1
Real Estate and Intangible Assets - Carrying Value of Intangible Assets and Accumulated Amortization (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | $170,333 | $163,034 |
Finite-lived intangible assets, accumulated amortization | -56,353 | -53,696 |
Below market leases, gross | 15,938 | 15,939 |
Below market leases, accumulated amortization | -7,564 | -7,345 |
In-Place Leases [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 61,622 | 59,233 |
Finite-lived intangible assets, accumulated amortization | -18,583 | -17,379 |
Leasing Costs [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 40,361 | 38,305 |
Finite-lived intangible assets, accumulated amortization | -12,119 | -11,411 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 43,518 | 41,243 |
Finite-lived intangible assets, accumulated amortization | -11,991 | -11,177 |
Lease Intangibles [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 145,501 | 138,781 |
Finite-lived intangible assets, accumulated amortization | -42,693 | -39,967 |
Above and Below Market Leases [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 24,832 | 24,253 |
Finite-lived intangible assets, accumulated amortization | -13,660 | -13,729 |
Above Market Leases [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 8,894 | 8,314 |
Finite-lived intangible assets, accumulated amortization | ($6,096) | ($6,384) |
Recovered_Sheet2
Real Estate and Intangible Assets - Weighted Average Amortization Period for Intangible Assets Acquired and Liabilities Assumed (Detail) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Finite-Lived Intangible Assets [Line Items] | ||
Period for intangible assets and liabilities | 10 years 6 months | 13 years 3 months 18 days |
In-Place Leases [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Period for intangible assets and liabilities | 9 years 1 month 6 days | 11 years 10 months 24 days |
Leasing Costs [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Period for intangible assets and liabilities | 9 years 1 month 6 days | 11 years 10 months 24 days |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Period for intangible assets and liabilities | 14 years 1 month 6 days | 16 years 10 months 24 days |
Above Market Leases [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Period for intangible assets and liabilities | 9 years 8 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 and Net Increase to Rental Income (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Expected Amortization Expense [Line Items] | ||
Nine Months Ending December 31, 2015 | $13,962 | |
2016 | 13,648 | |
2017 | 12,167 | |
2018 | 12,058 | |
2019 | 12,051 | |
Thereafter | 38,922 | |
Total | 102,808 | 98,814 |
Above and Below Market Leases [Member] | ||
Expected Amortization Expense [Line Items] | ||
Nine Months Ending December 31, 2015 | 228 | |
2016 | 307 | |
2017 | 429 | |
2018 | 429 | |
2019 | 429 | |
Thereafter | 3,754 | |
Total | $5,576 |
Real_Estate_Held_for_Sale_Comp
Real Estate Held for Sale - Components of Income from Real Estate and Related Assets Held for Sale (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Real Estate Properties [Line Items] | ||
Other expense | $7,546 | $7,914 |
Total operating revenues | 19,880 | 17,136 |
Real Estate Held for Sale [Member] | ||
Real Estate Properties [Line Items] | ||
Operating revenue | 83 | 77 |
Operating expense | 14 | 23 |
Other expense | 39 | 40 |
Total operating revenues | $30 | $14 |
Real_Estate_Held_for_Sale_Comp1
Real Estate Held for Sale - Components of Assets and Liabilities Held for Sale (Detail) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
ASSETS HELD FOR SALE | |
TOTAL ASSETS HELD FOR SALE | $2,980 |
LIABILITIES HELD FOR SALE | |
TOTAL LIABILITIES HELD FOR SALE | 2,587 |
Real Estate Held for Sale [Member] | |
ASSETS HELD FOR SALE | |
Real estate, at cost | 2,795 |
Less: accumulated depreciation | -615 |
Total real estate held for sale, net | 2,180 |
Lease intangibles, net | 17 |
Funds held in escrow | 739 |
Deferred rent receivable, net | 32 |
Deferred financing costs, net | 9 |
Other assets | 3 |
TOTAL ASSETS HELD FOR SALE | 2,980 |
LIABILITIES HELD FOR SALE | |
Mortgage notes payable | 2,503 |
Other liabilities | 84 |
TOTAL LIABILITIES HELD FOR SALE | $2,587 |
Mortgage_Note_Receivable_Addit
Mortgage Note Receivable - Additional Information (Detail) (USD $) | 0 Months Ended | 3 Months Ended | |
Jul. 25, 2014 | Mar. 31, 2015 | Jul. 25, 2014 | |
sqft | |||
Debt Disclosure [Abstract] | |||
Second mortgage development loan | $5,600,000 | ||
Acquisition of our property, area | 81,371 | ||
Construction loans scheduled maturity | 2015-09 | ||
Percentage of Interest earned in cash | 9.00% | ||
Estimated percentage of rate of Interest | 22.00% | ||
Mortgage development loan scheduled maturity | 2016-07 | ||
Mortgage development loan scheduled maturity extension period option | 1 year | ||
Cash interest income and accrued exit fee revenue recognized | $268,000 |
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, 2015 | Dec. 31, 2014 |
Property | ||
Debt Instrument [Line Items] | ||
Encumbered properties | 96 | |
Carrying value | $510,348 | $502,599 |
Stated Interest Rates | One month LIBOR was approximately 0.18%. | |
Variable Rate Line of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Encumbered properties | 18 | |
Carrying value | 41,300 | 43,300 |
Stated Interest Rates | LIBOR + 2.75% | |
Libor rate | 2.75% | |
Scheduled Maturity Dates | 1-Aug-17 | |
Premiums and Discounts (Net) [Member] | ||
Debt Instrument [Line Items] | ||
Carrying value | 630 | 707 |
Fixed Rate Mortgage Loans [Member] | ||
Debt Instrument [Line Items] | ||
Encumbered properties | 74 | |
Carrying value | 460,218 | 450,392 |
Variable Rate Mortgage Loans [Member] | ||
Debt Instrument [Line Items] | ||
Encumbered properties | 4 | |
Carrying value | 8,200 | 8,200 |
Stated Interest Rates | LIBOR + 2.15% | |
Libor rate | 2.15% | |
Scheduled Maturity Dates | 1-Dec-16 | |
Mortgage Notes Payable [Member] | ||
Debt Instrument [Line Items] | ||
Encumbered properties | 78 | |
Carrying value | $469,048 | $459,299 |
Mortgage_Notes_Payable_and_Lin3
Mortgage Notes Payable and Line of Credit - Company's Mortgage Notes Payable and Line of Credit (Parenthetical) (Detail) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 |
Mortgages | |
Debt Instrument [Line Items] | |
Number of mortgage notes payable | 42 |
Libor rate description | One month LIBOR was approximately 0.18%. |
Libor rate | 0.18% |
Weighted average interest rate on debt outstanding | 5.07% |
Fixed Rate Mortgage Loans [Member] | |
Debt Instrument [Line Items] | |
Number of mortgage notes payable | 42 |
Maturity date of mortgage notes payable, start date | 1-Sep-15 |
Maturity date of mortgage notes payable, end date | 6-Jan-39 |
Mortgage Notes Payable [Member] | |
Debt Instrument [Line Items] | |
Weighted average interest rate on debt outstanding | 5.26% |
Mortgage notes payable related to assets held for sale | 2,500 |
Minimum [Member] | Fixed Rate Mortgage Loans [Member] | |
Debt Instrument [Line Items] | |
Stated Interest Rates | 3.86% |
Maximum [Member] | Fixed Rate Mortgage Loans [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 | ||||
Mar. 31, 2014 | Aug. 31, 2013 | Mar. 31, 2015 | Dec. 31, 2014 | Nov. 30, 2014 | 4-May-15 | |
Mortgages | ||||||
Property | ||||||
Debt Instrument [Line Items] | ||||||
Number of mortgage notes payable | 42 | |||||
Weighted average interest rate on debt outstanding | 5.07% | |||||
Number of properties collateralized in mortgage notes payable | 96 | |||||
Net book value of collateralized mortgage properties | $669,600,000 | |||||
Number of long-term mortgages issued | 1 | |||||
Fair value of mortgage notes payable outstanding, excluding mortgage notes payable on real estate held for sale | 485,200,000 | |||||
Borrowings under line of credit | 60,000,000 | 41,300,000 | 43,300,000 | |||
Line of credit facility, maximum additional amount drawn | 100,000,000 | 75,000,000 | ||||
Line of credit, maturity date | 2017-08 | |||||
Extension period subject to payment of fee | 1 year | |||||
Extension fee on the initial maturity date | 0.25% | |||||
Increase in line of credit facility | 1,300,000 | |||||
Standby letters of credit sublimit | 20,000,000 | |||||
Line of credit, variable spread on interest rate | 3.25% | |||||
Annual maintenance fee | 30,000 | |||||
Unused commitment fee | 0.25% | |||||
Line of credit covenant limit of distributions to stockholders percentage | 100.00% | |||||
Line of credit at an interest rate | 2.93% | |||||
Subsequent Event [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, maximum additional amount drawn | 18,900,000 | |||||
Letter of Credit [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average interest rate on debt outstanding | 2.75% | |||||
Letters of credit, outstanding | 4,500,000 | |||||
Mortgage Notes Payable [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average interest rate on debt outstanding | 5.26% | |||||
Number of properties collateralized in mortgage notes payable | 78 | |||||
Excess of LIBOR rate | 3.00% | |||||
Carrying value of mortgage notes payable outstanding | $468,418,000 |
Mortgage_Notes_Payable_and_Lin5
Mortgage Notes Payable and Line of Credit - Summary of Long-Term Mortgage (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Debt Instrument [Line Items] | ||
Debt Issued | $14,573 | $6,330 |
PNC Bank, NA [Member] | Maturity Date One [Member] | ||
Debt Instrument [Line Items] | ||
Date of Issuance | 6-Mar-15 | |
Issuing Bank | PNC Bank, NA | |
Debt Issued | $14,573 | |
Interest Rate | 3.86% | |
Maturity Date | 1-Apr-25 |
Mortgage_Notes_Payable_and_Lin6
Mortgage Notes Payable and Line of Credit - Schedule of Principal Payments of Mortgage Notes Payable (Detail) (Mortgage Notes Payable [Member], USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Mortgage Notes Payable [Member] | |
Debt Instrument [Line Items] | |
Nine Months ending December 31, 2015 | $40,343 |
2016 | 96,812 |
2017 | 67,924 |
2018 | 20,543 |
2019 | 35,235 |
2020 | 7,307 |
Thereafter | 200,254 |
Total Mortgage Notes Payable | $468,418 |
Mortgage_Notes_Payable_and_Lin7
Mortgage Notes Payable and Line of Credit - Schedule of Principal Payments of Mortgage Notes Payable (Parenthetical) (Detail) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 |
Debt Instrument [Line Items] | |
Refinance of principal payment maturity period, description | We plan to refinance the 3 balloon principal payments that mature in the second half of 2015 with a combination of new mortgage debt and equity. |
Liabilities related to assets held for sale | $2,587 |
Mortgage Notes Payable [Member] | |
Debt Instrument [Line Items] | |
Liabilities related to assets held for sale | 2,500 |
Premiums and discounts, net | $630 |
Mortgage_Notes_Payable_and_Lin8
Mortgage Notes Payable and Line of Credit - Summary of Interest Rate Cap Agreement (Detail) (Mortgage Notes Payable [Member], USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Mortgage Notes Payable [Member] | ||
Debt Instrument [Line Items] | ||
Date of Issuance | 26-Nov-13 | |
Notional Amount | $8,200,000 | |
LIBOR Cap | 3.00% | |
Maturity Date | 1-Dec-16 | |
Cost | 31,000 | 31,000 |
Fair Value | $1,000 | $4,000 |
Mandatorily_Redeemable_Preferr1
Mandatorily Redeemable Preferred Stock - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | |
Feb. 29, 2012 | Mar. 31, 2015 | Dec. 31, 2014 | |
Class of Stock [Line Items] | |||
Redeemable preferred stock, shares issued | 2,150,000 | 2,150,000 | |
Redeemable 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 | ||
Carrying value Term Preferred Stock | 2,000 | 2,000 | |
Mandatorily Redeemable Preferred Stock [Member] | |||
Class of Stock [Line Items] | |||
Redeemable preferred stock, shares issued | 1,540,000 | ||
Redeemable preferred stock, par value | $0.00 | ||
Public offering price | $25 | ||
Gross proceeds of the offering | 38,500,000 | ||
Net proceeds, after deducting offering expenses | 36,700,000 | ||
Fair value of Term Preferred Stock | 39,900,000 | ||
Carrying value Term Preferred Stock | $38,500,000 | $38,500,000 | |
Closing price of Term Preferred Stock | $25.92 | ||
Series C Preferred Stock [Member] | |||
Class of Stock [Line Items] | |||
Redeemable preferred stock, dividend rate percentage | 7.13% | ||
Series C Preferred Stock [Member] | Mandatorily Redeemable Preferred Stock [Member] | |||
Class of Stock [Line Items] | |||
Redeemable preferred stock, shares issued | 1,540,000 | 1,540,000 | |
Redeemable preferred stock, par value | $0.00 | $0.00 |
Commitments_and_Contingencies_1
Commitments and Contingencies - Additional Information (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Lease | ||
Commitments and Contingencies Disclosure [Abstract] | ||
Number of leases | 3 | |
Expenses incurred for the properties listed | $0.10 | $0.10 |
Commitments_and_Contingencies_2
Commitments and Contingencies - Future Minimum Rental Payments Due under Terms of Leases (Detail) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 |
Operating Leased Assets [Line Items] | |
For the year ended December 31, 2015 | $55,082 |
For the year ended December 31, 2016 | 72,269 |
For the year ended December 31, 2017 | 71,974 |
For the year ended December 31, 2018 | 72,429 |
For the year ended December 31, 2019 | 64,164 |
Ground Leases [Member] | |
Operating Leased Assets [Line Items] | |
For the year ended December 31, 2015 | 322 |
For the year ended December 31, 2016 | 429 |
For the year ended December 31, 2017 | 432 |
For the year ended December 31, 2018 | 433 |
For the year ended December 31, 2019 | 433 |
For the year ended December 31, 2020 | 433 |
Thereafter | 4,095 |
Ground Leases [Member] | Tulsa, OK [Member] | |
Operating Leased Assets [Line Items] | |
Lease End Date | 2021-04 |
For the year ended December 31, 2015 | 127 |
For the year ended December 31, 2016 | 169 |
For the year ended December 31, 2017 | 169 |
For the year ended December 31, 2018 | 169 |
For the year ended December 31, 2019 | 169 |
For the year ended December 31, 2020 | 169 |
Thereafter | 85 |
Ground Leases [Member] | Dartmouth, MA [Member] | |
Operating Leased Assets [Line Items] | |
Lease End Date | 2036-05 |
For the year ended December 31, 2015 | 131 |
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 |
For the year ended December 31, 2020 | 174 |
Thereafter | 3,126 |
Ground Leases [Member] | Springfield, MA [Member] | |
Operating Leased Assets [Line Items] | |
Lease End Date | 2030-02 |
For the year ended December 31, 2015 | 64 |
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 |
For the year ended December 31, 2020 | 90 |
Thereafter | $884 |
Stockholders_Equity_Summary_of
Stockholders' Equity - Summary of Changes in Stockholders' Equity (Detail) (USD $) | 3 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2011 | Dec. 31, 2014 |
Preferred Stock, Shares Issued, beginning balance | 2,150,000 | |||
Preferred Stock, Shares Issued, ending balance | 2,150,000 | |||
Senior Common stock, Shares Issued, beginning balance | 809,411 | |||
Senior Common stock, Shares Issued, ending balance | 1,001,957 | |||
Common Stock, Shares Issued, beginning balance | 19,589,606 | |||
Common Stock, Shares Issued, ending balance | 20,459,687 | |||
Total Stockholders' Equity, beginning balance | $217,672 | |||
Issuance of senior common stock and common stock, net | 17,644 | |||
Distributions declared to common, senior common and preferred stockholders | -8,853 | |||
Net income | 694 | -13,514 | ||
Total Stockholders' Equity, ending balance | 227,157 | |||
Senior Common Stock [Member] | ||||
Issuance of common stock, net, Shares | 192,546 | |||
Common Stock, Shares Issued, beginning balance | 3,500,000 | |||
Common Stock, Shares Issued, ending balance | 3,500,000 | |||
Total Stockholders' Equity, beginning balance | 1 | |||
Total Stockholders' Equity, ending balance | 1 | |||
Preferred Stock [Member] | ||||
Total Stockholders' Equity, beginning balance | 2 | |||
Total Stockholders' Equity, ending balance | 2 | 2 | ||
Common Stock [Member] | ||||
Issuance of common stock, net, Shares | 870,081 | |||
Total Stockholders' Equity, beginning balance | 20 | |||
Total Stockholders' Equity, ending balance | 20 | |||
Additional Paid in Capital [Member] | ||||
Total Stockholders' Equity, beginning balance | 369,748 | |||
Issuance of senior common stock and common stock, net | 17,644 | |||
Total Stockholders' Equity, ending balance | 387,392 | |||
Notes Receivable from Employees [Member] | ||||
Total Stockholders' Equity, beginning balance | -375 | |||
Total Stockholders' Equity, ending balance | -375 | -375 | ||
Distributions in Excess of Accumulated Earnings [Member] | ||||
Total Stockholders' Equity, beginning balance | -151,724 | |||
Distributions declared to common, senior common and preferred stockholders | -8,853 | |||
Net income | 694 | |||
Total Stockholders' Equity, ending balance | ($159,883) |
Stockholders_Equity_Dividends_
Stockholders' Equity - Dividends Declared (Detail) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
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 $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | |||
Mar. 28, 2015 | Mar. 31, 2011 | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Sep. 02, 2014 | |
Class of Stock [Line Items] | ||||||
Common stock, shares issued | 20,459,687 | 19,589,606 | ||||
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 | |||||
Shares of senior common stock sold in offering | 927,994 | 189,052 | ||||
Senior common stock offering, gross proceeds | $18,135,000 | $7,707,000 | ||||
Shares of senior common stock issued | 1,001,957 | 809,411 | ||||
Cantor Fitzgerald & Co [Member] | ||||||
Class of Stock [Line Items] | ||||||
Maximum aggregate sales price of shares to be issued under open market sale agreement | 100,000,000 | |||||
Net proceeds under ATM program | 15,100,000 | |||||
Number of shares sold under open market sale agreement | 2,700,000 | |||||
Gross proceeds of shares sold under open market sale agreement | 47,800,000 | |||||
Maximum remaining capacity to sell common stock under open market sale agreement | 52,200,000 | |||||
Senior Common Stock [Member] | ||||||
Class of Stock [Line Items] | ||||||
Common stock, shares issued | 3,500,000 | |||||
Common stock, par value | 0.001 | |||||
Common stock shares issued, selling price | 15 | $15 | ||||
Net proceeds after deducting underwriting discount and commission | 2,600,000 | |||||
Senior common stock offering, gross proceeds | 13,900,000 | |||||
Distribution Reinvestment Plan [Member] | ||||||
Class of Stock [Line Items] | ||||||
Shares of senior common stock issued | 27,861 | 5,239 |
Stockholders_Equity_Summary_of1
Stockholders' Equity - Summary of Outstanding Note Issued to Employee for Exercise of Stock Options (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
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_Monthly_Dist
Subsequent Events - Monthly Distributions Declared by Company's Board of Directors (Detail) (USD $) | 0 Months Ended |
Apr. 14, 2015 | |
Subsequent Event A [Member] | |
Dividends Payable [Line Items] | |
Record Date | 24-Apr-15 |
Payment Date | 5-May-15 |
Payable to the Holders of Records During the Month | April |
Subsequent Event A [Member] | Common Stock [Member] | |
Dividends Payable [Line Items] | |
Distribution per Share | 0.125 |
Subsequent Event B [Member] | |
Dividends Payable [Line Items] | |
Record Date | 19-May-15 |
Payment Date | 29-May-15 |
Payable to the Holders of Records During the Month | May |
Subsequent Event B [Member] | Common Stock [Member] | |
Dividends Payable [Line Items] | |
Distribution per Share | 0.125 |
Subsequent Event C [Member] | |
Dividends Payable [Line Items] | |
Record Date | 19-Jun-15 |
Payment Date | 30-Jun-15 |
Payable to the Holders of Records During the Month | June |
Subsequent Event C [Member] | Common Stock [Member] | |
Dividends Payable [Line Items] | |
Distribution per Share | 0.125 |
Subsequent Event [Member] | Common Stock [Member] | |
Dividends Payable [Line Items] | |
Distribution per Share | 0.375 |
Senior Common Stock [Member] | Subsequent Event A [Member] | |
Dividends Payable [Line Items] | |
Distribution per Share | 0.0875 |
Payment Date | 7-May-15 |
Senior Common Stock [Member] | Subsequent Event B [Member] | |
Dividends Payable [Line Items] | |
Distribution per Share | 0.0875 |
Payment Date | 5-Jun-15 |
Senior Common Stock [Member] | Subsequent Event C [Member] | |
Dividends Payable [Line Items] | |
Distribution per Share | 0.0875 |
Payment Date | 8-Jul-15 |
Senior Common Stock [Member] | Subsequent Event [Member] | |
Dividends Payable [Line Items] | |
Distribution per Share | 0.2625 |
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 |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (USD $) | 0 Months Ended | 3 Months Ended | 0 Months Ended | ||
In Millions, unless otherwise specified | Feb. 27, 2015 | Mar. 31, 2015 | Apr. 28, 2015 | Jul. 25, 2014 | Apr. 14, 2015 |
Subsequent Event [Line Items] | |||||
Estimated percentage of rate of Interest | 22.00% | ||||
Loan maturity description | This loan matures upon the earlier of April 2016 or the sale of the transitional care facility, which is anticipated to occur in November 2015. | ||||
Early termination penalty | $1 | ||||
Effective termination date | 31-Dec-17 | ||||
Lease termination description | Termination option, which allows the tenant to terminate their lease effective December 31, 2017, upon paying a termination penalty of approximately $1.0 million on or before March 31, 2017. All other terms and conditions of the lease remain in full force and effect. | ||||
Austin Texas [Member] | |||||
Subsequent Event [Line Items] | |||||
Effective termination date | 31-Dec-17 | ||||
Lease termination description | Termination option, which allows the tenant to terminate its lease effective December 31, 2017, upon paying a termination penalty of approximately $1.4 million on or before March 31, 2017. This modification forfeits the tenant's right to $0.6 million in tenant improvement allowance, provided in an earlier amendment. All other terms and conditions of the lease remain in full force and effect. | ||||
Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Interim financing loan | 0.3 | ||||
Estimated percentage of rate of Interest | 22.00% | ||||
Subsequent Event [Member] | Austin Texas [Member] | |||||
Subsequent Event [Line Items] | |||||
Early termination penalty | 1.1 | ||||
Forfeiture of tenant improvement allowance | $0.60 |