Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2014 | 14-May-14 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'Cole Credit Property Trust Inc | ' |
Entity Central Index Key | '0001289272 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Mar-14 | ' |
Amendment Flag | 'false | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 10,090,951 |
Condensed_Consolidated_Unaudit
Condensed Consolidated Unaudited Balance Sheets (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Investment in real estate assets: | ' | ' |
Land | $43,175 | $43,175 |
Buildings and improvements, less accumulated depreciation of $26,545 and $25,782, respectively | 78,540 | 78,885 |
Intangible lease assets, less accumulated amortization of $13,161 and $12,821, respectively | 7,825 | 8,165 |
Total investment in real estate assets, net | 129,540 | 130,225 |
Cash and cash equivalents | 432 | 652 |
Restricted cash | 2,301 | 2,327 |
Rents and tenant receivables, prepaid expenses and other assets | 1,187 | 1,273 |
Deferred financing costs, less accumulated amortization of $2,355 and $2,217, respectively | 674 | 812 |
Total assets | 134,134 | 135,289 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ' | ' |
Notes payable | 85,409 | 85,606 |
Lines of credit with affiliate | 300 | 300 |
Accounts payable and accrued expenses | 1,189 | 662 |
Due to affiliates | 71 | 39 |
Acquired below market lease intangibles, less accumulated amortization of $1,847 and $1,802, respectively | 350 | 395 |
Distributions payable | 429 | 429 |
Deferred rent | 254 | 517 |
Total liabilities | 88,002 | 87,948 |
Commitments and contingencies | ' | ' |
STOCKHOLDERS’ EQUITY: | ' | ' |
Preferred stock, $0.01 par value; 10,000,000 shares authorized, none issued and outstanding | 0 | 0 |
Common stock, $0.01 par value; 90,000,000 shares authorized, 10,090,951 shares issued and outstanding | 101 | 101 |
Capital in excess of par value | 90,424 | 90,424 |
Accumulated distributions in excess of earnings | -44,393 | -43,184 |
Total stockholders’ equity | 46,132 | 47,341 |
Total liabilities and stockholders’ equity | $134,134 | $135,289 |
Condensed_Consolidated_Unaudit1
Condensed Consolidated Unaudited Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ' | ' |
Accumulated depreciation on buildings and improvements | $26,545 | $25,782 |
Accumulated amortization on acquired intangible lease assets | 13,161 | 12,821 |
Accumulated amortization on deferred financing costs | 2,355 | 2,217 |
Accumulated amortization on acquired below market lease intangibles | $1,847 | $1,802 |
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 90,000,000 | 90,000,000 |
Common stock, shares issued | 10,090,951 | 10,090,951 |
Common stock, shares outstanding | 10,090,951 | 10,090,951 |
Condensed_Consolidated_Unaudit2
Condensed Consolidated Unaudited Statements of Operations (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Revenues: | ' | ' |
Rental and other property income | $3,268 | $3,187 |
Tenant reimbursement income | 136 | 120 |
Total revenue | 3,404 | 3,307 |
Expenses: | ' | ' |
General and administrative expenses | 180 | 208 |
Property operating expenses | 164 | 154 |
Property management expenses | 104 | 97 |
Merger and acquisition related expenses | 330 | 94 |
Depreciation | 763 | 769 |
Amortization | 336 | 372 |
Total operating expenses | 1,877 | 1,694 |
Operating income | 1,527 | 1,613 |
Other income (expense): | ' | ' |
Interest expense, net | -1,491 | -1,493 |
Total other expense | -1,491 | -1,493 |
Net income | $36 | $120 |
Weighted average number of common shares outstanding: | ' | ' |
Basic and diluted (in shares) | 10,090,951 | 10,090,951 |
Net income per common share: | ' | ' |
Basic and diluted (in dollars per share) | $0 | $0.01 |
Distributions declared per common share | $0.12 | $0.12 |
Condensed_Consolidated_Unaudit3
Condensed Consolidated Unaudited Statement of Stockholders' Equity (USD $) | Total | Common Stock | Capital in Excess of Par Value | Accumulated Distributions in Excess of Earnings |
In Thousands, except Share data, unless otherwise specified | ||||
Beginning balance at Dec. 31, 2013 | $47,341 | $101 | $90,424 | ($43,184) |
Beginning balance, shares at Dec. 31, 2013 | 10,090,951 | 10,090,951 | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' |
Distributions | -1,245 | ' | ' | -1,245 |
Net income | 36 | ' | ' | 36 |
Ending balance at Mar. 31, 2014 | $46,132 | $101 | $90,424 | ($44,393) |
Ending balance, shares at Mar. 31, 2014 | 10,090,951 | 10,090,951 | ' | ' |
Condensed_Consolidated_Unaudit4
Condensed Consolidated Unaudited Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Cash flows from operating activities: | ' | ' |
Net income | $36 | $120 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation | 763 | 769 |
Amortization of intangible lease assets and below market lease intangibles, net | 295 | 324 |
Amortization of deferred financing costs | 138 | 139 |
Changes in assets and liabilities: | ' | ' |
Rents and tenant receivables, prepaid expenses and other assets | 86 | 119 |
Accounts payable and accrued expenses | 118 | -178 |
Deferred rent | -263 | -312 |
Due to affiliates | 32 | -2 |
Net cash provided by operating activities | 1,205 | 979 |
Cash flows from investing activities: | ' | ' |
Investment in capital expenditures and real estate assets | -9 | -1,771 |
Change in restricted cash | 26 | 32 |
Net cash provided by (used in) investing activities | 17 | -1,739 |
Cash flows from financing activities: | ' | ' |
Distributions to investors | -1,245 | -1,243 |
Repayment of notes payable | -197 | -188 |
Net cash used in financing activities | -1,442 | -1,431 |
Net decrease in cash and cash equivalents | -220 | -2,191 |
Cash and cash equivalents, beginning of period | 652 | 7,788 |
Cash and cash equivalents, end of period | 432 | 5,597 |
Supplemental disclosures of non-cash investing and financing activities: | ' | ' |
Distributions declared and unpaid | 429 | 429 |
Accrued capital expenditures | 409 | 0 |
Supplemental cash flow disclosures: | ' | ' |
Interest paid | $1,355 | $1,359 |
Organization_and_Business
Organization and Business | 3 Months Ended |
Mar. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
ORGANIZATION AND BUSINESS | ' |
ORGANIZATION AND BUSINESS | |
Cole Credit Property Trust, Inc. (the “Company”) is a Maryland corporation that was formed on March 29, 2004, which has elected to be taxed, and currently qualifies, as a real estate investment trust (“REIT”) for federal income tax purposes. The Company is the sole general partner of, and owns, directly or indirectly, 100% of the partnership interest in, Cole Operating Partnership I, LP, a Delaware limited partnership (“Cole OP I”). The Company is externally managed by Cole REIT Advisors, LLC (“Cole Advisors”), an affiliate of the Company’s sponsor, Cole Capital™, which is a trade name used to refer to a group of affiliated entities directly or indirectly controlled by American Realty Capital Properties, Inc. (“ARCP”), a self-managed publicly traded Maryland corporation listed on The NASDAQ Global Select Market. On February 7, 2014, ARCP acquired Cole Real Estate Investments, Inc. (“Cole”), which, prior to its acquisition, indirectly owned and/or controlled Cole Advisors, the Company’s dealer manager, Cole Capital Corporation (“CCC”), the Company’s property manager, Cole Realty Advisors, LLC (“Cole Realty”), and Cole Capital. As a result of ARCP’s acquisition of Cole, ARCP indirectly owns and/or controls Cole Advisors, CCC, Cole Realty and Cole Capital. | |
On March 17, 2014, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), among the Company, ARCP and Desert Acquisition, Inc., a Delaware corporation and direct wholly-owned subsidiary of ARCP (“Merger Sub”), pursuant to which, among other things, Merger Sub commenced a cash tender offer (the “Offer”) to purchase all of the outstanding shares of the Company’s common stock. See Note 2 for a further explanation of the Offer. | |
As of March 31, 2014, the Company owned 39 properties comprising 956,000 square feet of single-tenant retail and commercial space located in 19 states. As of March 31, 2014, these properties were 100% leased. | |
The Company’s stock is not currently listed on a national securities exchange. In the event the Company does not complete the CCPT Merger and does not list its stock for trading on a national securities exchange prior to February 1, 2016, its charter requires that it either: (1) seek stockholder approval of an extension or amendment of this listing deadline; or (2) seek stockholder approval to adopt a plan of liquidation. |
Merger_Agreement
Merger Agreement | 3 Months Ended |
Mar. 31, 2014 | |
Business Combinations [Abstract] | ' |
MERGER AGREEMENT | ' |
MERGER AGREEMENT | |
On March 17, 2014, the Company entered into the Merger Agreement among the Company, ARCP, and Merger Sub pursuant to which, among other things, Merger Sub commenced the Offer to purchase all of the outstanding shares of the Company’s common stock at a price of $7.25 per share in cash, without interest, subject to applicable tax withholding. If that number of shares of Company common stock which, together with any shares of Company common stock beneficially owned by ARCP or Merger Sub, represents at least a majority of the shares of Company common stock outstanding as of immediately prior to the expiration of the Offer (as it may be extended pursuant to its terms) are validly tendered in the Offer and not validly withdrawn (the “Minimum Condition”), subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement and, if necessary, the exercise of the Top-Up Option described below, the Company will merge with and into Merger Sub, with Merger Sub surviving as a direct wholly-owned subsidiary of ARCP (the “CCPT Merger”). In the CCPT Merger, each share of Company common stock not purchased in the Offer (other than shares held by ARCP, any of its subsidiaries or any wholly-owned subsidiaries of the Company, which will automatically be canceled and retired and will cease to exist) will be converted into the right to receive the same cash consideration paid in the Offer. | |
Pursuant to the terms of the Merger Agreement, beginning on the date of the Merger Agreement and ending at 11:59 p.m., New York City time, on April 16, 2014 (the “Go-Shop Period”), the Company and its representatives had the right (acting under the direction of the Company’s board of directors or any committee thereof) to initiate, solicit and encourage any alternative acquisition proposals from third parties, and to provide non-public information to and engage in discussions with third parties with respect to acquisition proposals. Prior to the expiration of the Go-Shop Period, the Company had not received, in writing or orally, any such alternative acquisition proposals. | |
Completion of the Offer is subject to various conditions, including the satisfaction of the Minimum Condition, the accuracy of the Company’s representations and warranties (subject to customary qualifications), the Company’s material compliance with its covenants and agreements contained in the Merger Agreement, receipt of certain third party consents and the absence of any Company Material Adverse Effect (as defined in the Merger Agreement) with respect to the Company’s business. The Offer is not subject to a financing condition. The closing of the CCPT Merger is subject to various additional conditions. The Merger Agreement includes certain termination rights for both the Company and ARCP and provides that, in connection with the termination of the Merger Agreement, under specified circumstances, the Company may be required to pay ARCP a termination fee in the amount of $1.463 million and reimburse ARCP’s transaction expenses in an amount up to $500,000. | |
If, after completion of the Offer, ARCP, Merger Sub and their respective subsidiaries own at least 90% of the outstanding shares of Company common stock, the CCPT Merger will be consummated in accordance with the “short-form” merger provisions under Maryland law without the approval of the CCPT Merger by the Company’s stockholders. If, after completion of the Offer, ARCP, Merger Sub and their respective subsidiaries own less than 90% of the outstanding shares of Company Common Stock, Merger Sub will have the right to exercise an irrevocable option (the “Top-Up Option”) granted to it by the Company under the Merger Agreement to purchase from the Company that number of additional shares of Company common stock that will result in ARCP, Merger Sub and their respective subsidiaries owning one share more than 90% of the outstanding shares of Company common stock (after giving effect to the issuance of shares pursuant to the Top-Up Option). Following the issuance of shares of Company common stock to Merger Sub pursuant to the Top-Up Option, the CCPT Merger will be consummated in accordance with the short-form merger provisions under Maryland law without the approval of the CCPT Merger by the Company’s stockholders. | |
As of March 31, 2014, the Company had incurred $330,000 for legal, consulting and other expenses related to the CCPT Merger, which is included in merger and acquisition related expenses in the condensed consolidated unaudited statements of operations. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended | |
Mar. 31, 2014 | ||
Accounting Policies [Abstract] | ' | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Principles of Consolidation and Basis of Presentation | ||
The condensed consolidated unaudited financial statements of the Company have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting, including the instructions to Form 10-Q and Article 8 of Regulation S-X, and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. In the opinion of management, the statements for the interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair presentation of the results for such periods. Results for these interim periods are not necessarily indicative of full year results. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended December 31, 2013 and related notes thereto set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. The condensed consolidated unaudited financial statements should also be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this Quarterly Report on Form 10-Q. | ||
The condensed consolidated unaudited financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. | ||
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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | ||
Investment in and Valuation of Real Estate Assets | ||
Real estate assets are stated at cost, less accumulated depreciation and amortization. Amounts capitalized to real estate assets consist of the cost of acquisition, including acquisition related expenses incurred prior to January 1, 2009, construction and any tenant improvements, major improvements and betterments that extend the useful life of the real estate assets. All repairs and maintenance costs are expensed as incurred. | ||
The Company is required to make subjective assessments as to the useful lives of its depreciable assets. The Company considers the period of future benefit of each respective asset to determine the appropriate useful life of the assets. Real estate assets, other than land, are depreciated or amortized on a straight-line basis. The estimated useful lives of the Company’s real estate assets by class are generally as follows: | ||
Buildings | 40 years | |
Tenant improvements | Lesser of useful life or lease term | |
Intangible lease assets | Lease term | |
The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate assets may not be recoverable. Impairment indicators that the Company considers include, but are not limited to, bankruptcy or other credit concerns of a property’s major tenant, such as a history of late payments, rental concessions and other factors, a significant decrease in a property’s revenues due to lease terminations, vacancies, co-tenancy clauses, reduced lease rates or other circumstances. When indicators of potential impairment are present, the Company assesses the recoverability of the assets by determining whether the carrying amount of the assets will be recovered through the undiscounted future cash flows expected from the use of the assets and their eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying amount, the Company will adjust the real estate assets to their respective fair values and recognize an impairment loss. Generally, fair value is determined using a discounted cash flow analysis and recent comparable sales transactions. No impairment losses were recorded during the three months ended March 31, 2014 or 2013. | ||
When developing estimates of expected future cash flows, the Company makes certain assumptions regarding future market rental income amounts subsequent to the expiration of current lease agreements, property operating expenses, terminal capitalization and discount rates, the expected number of months it takes to re-lease the property, required tenant improvements and the number of years the property will be held for investment. The use of alternative assumptions in estimating expected future cash flows could result in a different determination of the property’s expected future cash flows and a different conclusion regarding the existence of an impairment, the extent of such loss, if any, as well as the fair value of the real estate assets. | ||
When a real estate asset is identified by the Company as held for sale, the Company ceases depreciation and amortization of the assets related to the property and estimates the fair value, net of selling costs. If, in management’s opinion, the fair value of the asset, net of selling costs, is less than the carrying amount of the asset, an adjustment to the carrying amount would be recorded to reflect the estimated fair value of the property, net of selling costs. There were no assets identified as held for sale as of March 31, 2014 or December 31, 2013. | ||
Allocation of Purchase Price of Real Estate Assets | ||
Upon the acquisition of real properties, the Company allocates the purchase price to acquired tangible assets, consisting of land, buildings and improvements, and identified intangible assets and liabilities, consisting of the value of above market and below market leases and the value of in-place leases, based in each case on their respective fair values. Acquisition related expenses are expensed as incurred. The Company utilizes independent appraisals to assist in the determination of the fair values of the tangible assets of an acquired property (which includes land and building). The Company obtains an independent appraisal for each real property acquisition. The information in the appraisal, along with any additional information available to the Company’s management, is used in estimating the amount of the purchase price that is allocated to land. Other information in the appraisal, such as building value and market rents, may be used by the Company’s management in estimating the allocation of purchase price to the building and to intangible lease assets and liabilities. The appraisal firm has no involvement in management’s allocation decisions other than providing this market information. | ||
The fair values of above market and below market lease intangibles are recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (1) the contractual amounts to be paid pursuant to the in-place leases and (2) an estimate of fair market lease rates for the corresponding in-place leases, which is generally obtained from independent appraisals, measured over a period equal to the remaining non-cancelable term of the lease including any bargain renewal periods, with respect to a below market lease. The above market and below market lease intangibles are capitalized as intangible lease assets or liabilities, respectively. Above market leases are amortized as a reduction to rental income over the remaining terms of the respective leases. Below market leases are amortized as an increase to rental income over the remaining terms of the respective leases, including any bargain renewal periods. In considering whether or not the Company expects a tenant to execute a bargain renewal option, the Company evaluates economic factors and certain qualitative factors at the time of acquisition, such as the financial strength of the tenant, remaining lease term, the tenant mix of the leased property, the Company’s relationship with the tenant and the availability of competing tenant space. If a lease were to be terminated prior to its stated expiration, all unamortized amounts of above market or below market lease intangibles relating to that lease would be recorded as an adjustment to rental income. | ||
The fair values of in-place leases include estimates of direct costs associated with obtaining a new tenant and opportunity costs associated with lost rental and other property income, which are avoided by acquiring a property with an in-place lease. Direct costs associated with obtaining a new tenant include commissions and other direct costs and are estimated in part by utilizing information obtained from independent appraisals and management’s consideration of current market costs to execute a similar lease. The intangible values of opportunity costs, which are calculated using the contractual amounts to be paid pursuant to the in-place leases over a market absorption period for a similar lease, are capitalized as intangible lease assets and are amortized to expense over the remaining term of the respective leases. If a lease were to be terminated prior to its stated expiration, all unamortized amounts of in-place lease assets relating to that lease would be expensed. | ||
The determination of the fair values of the real estate assets and liabilities acquired requires the use of significant assumptions with regard to the current market rental rates, rental growth rates, capitalization and discount rates, interest rates and other variables. The use of alternative estimates may result in a different allocation of the Company’s purchase price, which could impact the Company’s results of operations. | ||
Restricted Cash | ||
As of March 31, 2014, $2.2 million was included in restricted cash, which was held by lenders in escrow accounts primarily for tenant and capital improvements, leasing commissions and repairs and maintenance for certain properties, in accordance with the respective lender’s loan agreement. In addition, as of March 31, 2014, the Company had $147,000 in restricted cash held by lenders in a lockbox account. As part of certain debt agreements, rents from the encumbered properties are deposited directly into a lockbox account, from which the monthly debt service payment is disbursed to the lender and the excess funds are disbursed to the Company. | ||
Revenue Recognition | ||
Certain properties have leases where minimum rental payments increase during the term of the lease. The Company records rental income for the full term of each lease on a straight-line basis. When the Company acquires a property, the terms of existing leases are considered to commence as of the acquisition date for the purpose of this calculation. The Company defers the recognition of contingent rental income, such as percentage rents, until the specific target that triggers the contingent rental income is achieved. Expected reimbursements from tenants for recoverable real estate taxes and operating expenses are included in tenant reimbursement income in the period when such costs are incurred. | ||
Income Taxes | ||
The Company currently qualifies as a REIT for federal income tax purposes under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. The Company will generally not be subject to federal corporate income tax to the extent it distributes its taxable income to its stockholders, and so long as it, among other things, distributes at least 90% of its annual taxable income (computed without regard to the dividends paid deduction and excluding net capital gains). REITs are subject to a number of other organizational and operational requirements. Even if the Company maintains its qualification for taxation as a REIT, it or its subsidiaries may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income. | ||
Redemptions of Common Stock | ||
The Company’s share redemption program provides that the Company’s board of directors must determine at the beginning of each fiscal year the maximum amount of shares that the Company may redeem during that year. The Company’s board of directors determined that no amounts are to be made available for redemption during the year ending December 31, 2014. | ||
Recent Accounting Pronouncements | ||
In April 2014, the U.S. Financial Accounting Standards Board issued Accounting Standards Update, 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 (“ASU 2014-08”), which amends the reporting requirements for discontinued operations by updating the definition of a discontinued operation to be a component of an entity that represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results, resulting in fewer disposals that qualify for discontinued operations reporting; yet, the pronouncement also requires expanded disclosures for discontinued operations. The adoption of ASU 2014-08 did not have a material impact on the Company’s condensed consolidated unaudited financial statements because the Company did not have any discontinued operations. |
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2014 | |
Fair Value Disclosures [Abstract] | ' |
FAIR VALUE MEASUREMENTS | ' |
FAIR VALUE MEASUREMENTS | |
GAAP defines fair value, establishes a framework for measuring fair value and requires disclosures about fair value measurements. GAAP emphasizes that fair value is intended to be a market-based measurement, as opposed to a transaction-specific measurement. | |
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Depending on the nature of the asset or liability, various techniques and assumptions can be used to estimate the fair value. Assets and liabilities are measured using inputs from three levels of the fair value hierarchy, as follows: | |
Level 1 – Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. An active market is defined as a market in which transactions for the assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis. | |
Level 2 – Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active (markets with few transactions), inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data correlation or other means (market corroborated inputs). | |
Level 3 – Unobservable inputs, which are only used to the extent that observable inputs are not available, reflect the Company’s assumptions about the pricing of an asset or liability. | |
The following describes the methods the Company uses to estimate the fair value of the Company’s financial assets and liabilities: | |
Cash and cash equivalents and restricted cash – The Company considers the carrying values of these financial assets to approximate fair value because of the short period of time between their origination and their expected realization. | |
Notes payable and lines of credit – The fair value is estimated by discounting the expected cash flows based on estimated borrowing rates available to the Company as of the measurement date. The estimated fair value of the Company’s debt was $87.9 million and $88.6 million as of March 31, 2014 and December 31, 2013, respectively, compared to the carrying value of $85.7 million and $85.9 million as of March 31, 2014 and December 31, 2013, respectively. The fair value of the Company’s debt is estimated using Level 2 inputs. | |
Considerable judgment is necessary to develop estimated fair values of financial assets and liabilities. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize, or be liable for, on disposition of the financial assets and liabilities. As of March 31, 2014, there have been no transfers of financial assets or liabilities between fair value hierarchy levels. |
Real_Estate_Acquisitions
Real Estate Acquisitions | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Business Combinations [Abstract] | ' | |||||||
REAL ESTATE ACQUISITIONS | ' | |||||||
REAL ESTATE ACQUISITIONS | ||||||||
No properties were acquired during the three months ended March 31, 2014. During the three months ended March 31, 2013, the Company acquired a 100% interest in one commercial property for a purchase price of $1.8 million (the “2013 Acquisition”). The Company purchased the 2013 Acquisition with net cash proceeds from the sale of five properties during the year ended December 31, 2012. The Company allocated the purchase price of the 2013 Acquisition to the fair value of the assets acquired. The following table summarizes the purchase price allocation (in thousands): | ||||||||
31-Mar-13 | ||||||||
Land | $ | 296 | ||||||
Building and improvements | 1,303 | |||||||
Acquired in-place leases | 172 | |||||||
Total purchase price | $ | 1,771 | ||||||
The Company recorded revenue of $33,000 and a net loss of $55,000 for the three months ended March 31, 2013 related to the 2013 Acquisition. In addition, the Company recorded $94,000 of acquisition related expenses for the three months ended March 31, 2013. | ||||||||
The following table summarizes selected financial information of the Company as if the 2013 Acquisition was completed on January 1, 2012 for each period presented below. The table below presents the Company’s estimated revenue and net income, on a pro forma basis, for the three months ended March 31, 2013 and 2012 (in thousands): | ||||||||
Three Months Ended March 31, | ||||||||
Pro forma basis: | 2013 | 2012 | ||||||
Revenue | $ | 3,308 | $ | 3,696 | ||||
Net income | $ | 198 | $ | 35 | ||||
The pro forma information for the three months ended March 31, 2013 was adjusted to exclude acquisition related expenses recorded during such period relating to the 2013 Acquisition. These expenses were recognized in the pro forma information for the three months ended March 31, 2012. The pro forma revenue presented for the three months ended March 31, 2012 includes revenue related to properties sold in 2012. The pro forma information is presented for informational purposes only and may not be indicative of what actual results of operations would have been had the transactions occurred at the beginning of 2012, nor does it purport to represent the results of future operations. |
Notes_Payable_and_Lines_of_Cre
Notes Payable and Lines of Credit | 3 Months Ended |
Mar. 31, 2014 | |
Debt Disclosure [Abstract] | ' |
NOTES PAYABLE AND LINES OF CREDIT | ' |
NOTES PAYABLE AND LINES OF CREDIT | |
As of March 31, 2014, the Company had $85.7 million of debt outstanding, consisting of $79.4 million of fixed rate mortgage loans (the “Fixed Rate Notes”), a $6.0 million variable rate mortgage loan (the “Variable Rate Note”) and $300,000 of borrowings on one of the Company’s two revolving Lines of Credit with an affiliate of Cole Advisors (the “Lines of Credit”). The Fixed Rate Notes have interest rates ranging from 5.27% to 6.96%, with a weighted average interest rate of 6.53%, and mature on various dates from March 2015 through September 2017, with a weighted average remaining term of 1.3 years. The Variable Rate Note had an interest rate of 2.54% at March 31, 2014 and matures in December 2015. The Lines of Credit provide for total borrowings of up to $2.9 million and both mature on March 31, 2015. The Lines of Credit bear interest at 5.75%. During the three months ended March 31, 2014, the Company repaid $197,000 of monthly principal payments on the Fixed Rate Notes. The aggregate balance of gross real estate and related assets, net of gross intangible lease liabilities, securing the debt outstanding was $156.8 million as of March 31, 2014. | |
Each of the mortgage notes payable and Lines of Credit are secured by the respective properties and their related leases on which the debt was placed. The mortgage notes and Lines of Credit are generally non-recourse to the Company and Cole OP I, but both are liable for customary non-recourse carve-outs. The mortgage notes payable and Lines of Credit contain customary default provisions. Generally, upon the occurrence of an event of default, interest on the mortgage notes will accrue at an annual default interest rate equal to the lesser of (1) the maximum rate permitted by applicable law or (2) the then-current interest rate plus a percentage specified in the respective loan agreement. Certain mortgage notes payable contain customary affirmative, negative and financial covenants, such as requirements for minimum net worth, debt service coverage ratios, limitations on leverage ratios and variable rate debt. Based on the Company’s analysis and review of its results and related requirements, the Company believes it was in compliance with the covenants of such mortgage notes payable as of March 31, 2014. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
COMMITMENTS AND CONTINGENCIES | ' |
COMMITMENTS AND CONTINGENCIES | |
Litigation | |
In the ordinary course of business, the Company may become subject to litigation or claims. The Company is not aware of any pending legal proceedings of which the outcome is reasonably possible to have a material effect on its results of operations, financial condition or liquidity. | |
Environmental Matters | |
In connection with the ownership and operation of real estate, the Company potentially may be liable for costs and damages related to environmental matters. The Company carries environmental liability insurance on its properties that provides limited coverage for remediation liability and pollution liability for third-party bodily injury and property damage claims. The Company is not aware of any environmental condition that it believes will have a material effect on its results of operations, financial condition or liquidity. | |
Lease Commitments | |
During the year ended December 31, 2013, the Company executed two lease amendments extending the non-cancelable lease terms by five and ten years, respectively. In accordance with the lease amendments, the Company is obligated to fund up to $1.1 million of capital improvements, of which the Company funded $333,000 as of March 31, 2014. In addition, during the three months ended March 31, 2014, the Company incurred an additional $409,000 related to the capital improvements that will be funded in the three months ending June 30, 2014. |
RelatedParty_Transactions_and_
Related-Party Transactions and Arrangements | 3 Months Ended |
Mar. 31, 2014 | |
Related Party Transactions [Abstract] | ' |
RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS | ' |
RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS | |
Certain affiliates of the Company’s advisor received fees and compensation in connection with the Company’s private placement of shares of its common stock. Certain affiliates of the Company’s advisor have received, and may continue to receive, fees and compensation in connection with the acquisition, financing, management and disposition of the assets of the Company. Other transactions may result in the receipt of commissions, fees and other compensation by Cole Advisors and its affiliates, including subordinated participation in net sale proceeds and subordinated performance fees. | |
If Cole Advisors provides substantial services, as determined by the Company, in connection with the origination or refinancing of any debt financing obtained by the Company that is used to acquire properties or to make other permitted investments, or that is assumed, directly or indirectly, in connection with the acquisition of properties, the Company will pay Cole Advisors a financing coordination fee equal to 1% of the amount available under such financing; provided, however, that Cole Advisors shall not be entitled to a financing coordination fee in connection with the refinancing of any loan secured by any particular property that was previously subject to a refinancing in which Cole Advisors received such a fee. Financing coordination fees payable on loan proceeds from permanent financing will be paid to Cole Advisors as the Company acquires such permanent financing. However, no fees will be paid on loan proceeds from any lines of credit until such time as all net offering proceeds have been invested by the Company. No such fees were incurred by the Company during the three months ended March 31, 2014 or 2013. | |
The Company paid, and expects to continue to pay, Cole Realty, its property manager and an affiliate of the Company’s advisor, fees for the management and leasing of the Company’s properties. Property management fees are equal to 3% of gross revenues, and leasing fees are at prevailing market rates, not to exceed the greater of $4.50 per square foot or 7.5% of the total lease obligation. During the three months ended March 31, 2014 and 2013, the Company incurred $104,000 and $97,000, respectively, for property management fees. As of March 31, 2014 and December 31, 2013, $71,000 and $39,000, respectively, of such costs had been incurred but not paid by the Company, and are included in due to affiliates on the condensed consolidated unaudited balance sheets. Pursuant to a waiver of the leasing fee by Cole Realty, no leasing fees were incurred by the Company during the three months ended March 31, 2014 or 2013. The Company is not obligated to pay any amounts for such period. However, Cole Realty may elect to charge leasing fees in future periods at prevailing market rates. | |
Cole Realty, or its affiliates, also receives acquisition and advisory fees of up to 3% of the contract purchase price of each property. No such fees were incurred by the Company during the three months ended March 31, 2014. During the three months ended March 31, 2013, the Company incurred $53,000 for acquisition fees. | |
The Company is obligated to pay Cole Advisors an annualized asset management fee of up to 0.25% of the aggregate asset value of the Company’s assets. Pursuant to a waiver of the fee by Cole Advisors, no asset management fees were incurred by the Company during the three months ended March 31, 2014 or 2013. The Company is not obligated to pay any amounts for such periods. However, Cole Advisors may elect to charge asset management fees in future periods up to the 0.25% fee. | |
If Cole Advisors, or its affiliates, provides a substantial amount of services, as determined by the Company, in connection with the sale of one or more properties, the Company will pay Cole Advisors an amount up to 3% of the contract price of each asset sold. In no event will the combined disposition fee paid to Cole Advisors, its affiliates and unaffiliated third parties exceed the reasonable, customary and competitive amount for such services. In addition, after investors have received a return of their net capital contributions and a 7.5% annual cumulative, non-compounded return, then Cole Advisors is entitled to receive 20% of the remaining net sale proceeds. No such fees were incurred by the Company during the three months ended March 31, 2014 or 2013 relating to the sale of properties. In addition, no fees are expected to be incurred by the Company relating to the CCPT Merger. | |
In the event the Company does not complete the CCPT Merger and the Company’s common stock is listed in the future on a national securities exchange, a subordinated incentive listing fee equal to 20% of the amount by which the market value of the Company’s outstanding stock plus all distributions paid by the Company prior to listing exceeds the sum of the total amount of capital raised from investors and the amount of cash flow necessary to generate a 7.5% annual cumulative, non-compounded return to investors, will be paid to Cole Advisors. | |
The Company may reimburse Cole Advisors for expenses it incurs in connection with its provision of administrative services, including related personnel costs. The Company does not reimburse for personnel costs in connection with services for which Cole Advisors receives acquisition or disposition fees. Pursuant to a waiver by Cole Advisors, no such costs were incurred by the Company during the three months ended March 31, 2014 or 2013. | |
As of March 31, 2014, the Company had $300,000 outstanding on one of its Lines of Credit with an affiliate of Cole Advisors and available borrowings of $2.6 million. Both of the Lines of Credit mature on March 31, 2015 and bear fixed interest rates of 5.75%. No financing coordination fee was paid, or will be paid, to Cole Advisors or its affiliates in connection with the Lines of Credit. During the three months ended March 31, 2014, the Company incurred $4,000 of interest expense related to the Lines of Credit. During the three months ended March 31, 2013, no interest expense related to the Lines of Credit was incurred. |
Economic_Dependency
Economic Dependency | 3 Months Ended |
Mar. 31, 2014 | |
Economic Dependency [Abstract] | ' |
ECONOMIC DEPENDENCY | ' |
ECONOMIC DEPENDENCY | |
Under various agreements, the Company has engaged or will engage Cole Advisors and its affiliates to provide certain services that are essential to the Company, including asset management services, supervision of the management and leasing of properties owned by the Company, asset acquisition and disposition decisions, the sale of shares of the Company’s common stock available for issuance, as well as other administrative responsibilities for the Company including accounting services and investor relations. As a result of these relationships, the Company is dependent upon Cole Advisors and its affiliates. In the event that these companies are unable to provide the Company with these services, the Company would be required to find alternative providers of these services. |
Subsequent_Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2014 | |
Subsequent Events [Abstract] | ' |
SUBSEQUENT EVENTS | ' |
SUBSEQUENT EVENTS | |
CCPT Merger | |
Subsequent to March 31, 2014, ARCP, Merger Sub and the Company disclosed that the Offer was extended and is scheduled to expire at 5:00 p.m., New York City time, on May 16, 2014 unless further extended or terminated. Merger Sub extended the Offer because the condition to the Offer that certain lender consents under mortgage loans secured by certain of the Company’s properties was not satisfied by the previously scheduled expiration date of the Offer. As of April 25, 2014, preliminary results indicated that approximately 63% of the Company’s outstanding shares had been tendered and not withdrawn in the Offer. | |
Lines of Credit | |
Subsequent to March 31, 2014, the Company borrowed $500,000 on one of the Lines of Credit. As of May 9, 2014, the Company had $800,000 outstanding under the Lines of Credit and $2.1 million available for borrowing. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | |
Mar. 31, 2014 | ||
Accounting Policies [Abstract] | ' | |
Basis of presentation | ' | |
The condensed consolidated unaudited financial statements of the Company have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting, including the instructions to Form 10-Q and Article 8 of Regulation S-X, and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. In the opinion of management, the statements for the interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair presentation of the results for such periods. Results for these interim periods are not necessarily indicative of full year results. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended December 31, 2013 and related notes thereto set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. The condensed consolidated unaudited financial statements should also be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this Quarterly Report on Form 10-Q. | ||
Principles of consolidation | ' | |
The condensed consolidated unaudited financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. | ||
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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | ||
Investment in and valuation of real estate assets | ' | |
Investment in and Valuation of Real Estate Assets | ||
Real estate assets are stated at cost, less accumulated depreciation and amortization. Amounts capitalized to real estate assets consist of the cost of acquisition, including acquisition related expenses incurred prior to January 1, 2009, construction and any tenant improvements, major improvements and betterments that extend the useful life of the real estate assets. All repairs and maintenance costs are expensed as incurred. | ||
The Company is required to make subjective assessments as to the useful lives of its depreciable assets. The Company considers the period of future benefit of each respective asset to determine the appropriate useful life of the assets. Real estate assets, other than land, are depreciated or amortized on a straight-line basis. The estimated useful lives of the Company’s real estate assets by class are generally as follows: | ||
Buildings | 40 years | |
Tenant improvements | Lesser of useful life or lease term | |
Intangible lease assets | Lease term | |
The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate assets may not be recoverable. Impairment indicators that the Company considers include, but are not limited to, bankruptcy or other credit concerns of a property’s major tenant, such as a history of late payments, rental concessions and other factors, a significant decrease in a property’s revenues due to lease terminations, vacancies, co-tenancy clauses, reduced lease rates or other circumstances. When indicators of potential impairment are present, the Company assesses the recoverability of the assets by determining whether the carrying amount of the assets will be recovered through the undiscounted future cash flows expected from the use of the assets and their eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying amount, the Company will adjust the real estate assets to their respective fair values and recognize an impairment loss. Generally, fair value is determined using a discounted cash flow analysis and recent comparable sales transactions. No impairment losses were recorded during the three months ended March 31, 2014 or 2013. | ||
When developing estimates of expected future cash flows, the Company makes certain assumptions regarding future market rental income amounts subsequent to the expiration of current lease agreements, property operating expenses, terminal capitalization and discount rates, the expected number of months it takes to re-lease the property, required tenant improvements and the number of years the property will be held for investment. The use of alternative assumptions in estimating expected future cash flows could result in a different determination of the property’s expected future cash flows and a different conclusion regarding the existence of an impairment, the extent of such loss, if any, as well as the fair value of the real estate assets. | ||
When a real estate asset is identified by the Company as held for sale, the Company ceases depreciation and amortization of the assets related to the property and estimates the fair value, net of selling costs. If, in management’s opinion, the fair value of the asset, net of selling costs, is less than the carrying amount of the asset, an adjustment to the carrying amount would be recorded to reflect the estimated fair value of the property, net of selling costs. There were no assets identified as held for sale as of March 31, 2014 or December 31, 2013. | ||
Allocation of purchase price of real estate assets | ' | |
Allocation of Purchase Price of Real Estate Assets | ||
Upon the acquisition of real properties, the Company allocates the purchase price to acquired tangible assets, consisting of land, buildings and improvements, and identified intangible assets and liabilities, consisting of the value of above market and below market leases and the value of in-place leases, based in each case on their respective fair values. Acquisition related expenses are expensed as incurred. The Company utilizes independent appraisals to assist in the determination of the fair values of the tangible assets of an acquired property (which includes land and building). The Company obtains an independent appraisal for each real property acquisition. The information in the appraisal, along with any additional information available to the Company’s management, is used in estimating the amount of the purchase price that is allocated to land. Other information in the appraisal, such as building value and market rents, may be used by the Company’s management in estimating the allocation of purchase price to the building and to intangible lease assets and liabilities. The appraisal firm has no involvement in management’s allocation decisions other than providing this market information. | ||
The fair values of above market and below market lease intangibles are recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (1) the contractual amounts to be paid pursuant to the in-place leases and (2) an estimate of fair market lease rates for the corresponding in-place leases, which is generally obtained from independent appraisals, measured over a period equal to the remaining non-cancelable term of the lease including any bargain renewal periods, with respect to a below market lease. The above market and below market lease intangibles are capitalized as intangible lease assets or liabilities, respectively. Above market leases are amortized as a reduction to rental income over the remaining terms of the respective leases. Below market leases are amortized as an increase to rental income over the remaining terms of the respective leases, including any bargain renewal periods. In considering whether or not the Company expects a tenant to execute a bargain renewal option, the Company evaluates economic factors and certain qualitative factors at the time of acquisition, such as the financial strength of the tenant, remaining lease term, the tenant mix of the leased property, the Company’s relationship with the tenant and the availability of competing tenant space. If a lease were to be terminated prior to its stated expiration, all unamortized amounts of above market or below market lease intangibles relating to that lease would be recorded as an adjustment to rental income. | ||
The fair values of in-place leases include estimates of direct costs associated with obtaining a new tenant and opportunity costs associated with lost rental and other property income, which are avoided by acquiring a property with an in-place lease. Direct costs associated with obtaining a new tenant include commissions and other direct costs and are estimated in part by utilizing information obtained from independent appraisals and management’s consideration of current market costs to execute a similar lease. The intangible values of opportunity costs, which are calculated using the contractual amounts to be paid pursuant to the in-place leases over a market absorption period for a similar lease, are capitalized as intangible lease assets and are amortized to expense over the remaining term of the respective leases. If a lease were to be terminated prior to its stated expiration, all unamortized amounts of in-place lease assets relating to that lease would be expensed. | ||
The determination of the fair values of the real estate assets and liabilities acquired requires the use of significant assumptions with regard to the current market rental rates, rental growth rates, capitalization and discount rates, interest rates and other variables. The use of alternative estimates may result in a different allocation of the Company’s purchase price, which could impact the Company’s results of operations. | ||
Restricted cash | ' | |
Restricted Cash | ||
As of March 31, 2014, $2.2 million was included in restricted cash, which was held by lenders in escrow accounts primarily for tenant and capital improvements, leasing commissions and repairs and maintenance for certain properties, in accordance with the respective lender’s loan agreement. In addition, as of March 31, 2014, the Company had $147,000 in restricted cash held by lenders in a lockbox account. As part of certain debt agreements, rents from the encumbered properties are deposited directly into a lockbox account, from which the monthly debt service payment is disbursed to the lender and the excess funds are disbursed to the Company. | ||
Revenue recognition | ' | |
Revenue Recognition | ||
Certain properties have leases where minimum rental payments increase during the term of the lease. The Company records rental income for the full term of each lease on a straight-line basis. When the Company acquires a property, the terms of existing leases are considered to commence as of the acquisition date for the purpose of this calculation. The Company defers the recognition of contingent rental income, such as percentage rents, until the specific target that triggers the contingent rental income is achieved. Expected reimbursements from tenants for recoverable real estate taxes and operating expenses are included in tenant reimbursement income in the period when such costs are incurred. | ||
Income taxes | ' | |
Income Taxes | ||
The Company currently qualifies as a REIT for federal income tax purposes under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. The Company will generally not be subject to federal corporate income tax to the extent it distributes its taxable income to its stockholders, and so long as it, among other things, distributes at least 90% of its annual taxable income (computed without regard to the dividends paid deduction and excluding net capital gains). REITs are subject to a number of other organizational and operational requirements. Even if the Company maintains its qualification for taxation as a REIT, it or its subsidiaries may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income. | ||
Redemptions of common stock | ' | |
Redemptions of Common Stock | ||
The Company’s share redemption program provides that the Company’s board of directors must determine at the beginning of each fiscal year the maximum amount of shares that the Company may redeem during that year. The Company’s board of directors determined that no amounts are to be made available for redemption during the year ending December 31, 2014. | ||
Recent accounting pronouncements | ' | |
Recent Accounting Pronouncements | ||
In April 2014, the U.S. Financial Accounting Standards Board issued Accounting Standards Update, 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 (“ASU 2014-08”), which amends the reporting requirements for discontinued operations by updating the definition of a discontinued operation to be a component of an entity that represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results, resulting in fewer disposals that qualify for discontinued operations reporting; yet, the pronouncement also requires expanded disclosures for discontinued operations. The adoption of ASU 2014-08 did not have a material impact on the Company’s condensed consolidated unaudited financial statements because the Company did not have any discontinued operations. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 3 Months Ended | |
Mar. 31, 2014 | ||
Accounting Policies [Abstract] | ' | |
Investment in and valuation of real estate and related assets | ' | |
The estimated useful lives of the Company’s real estate assets by class are generally as follows: | ||
Buildings | 40 years | |
Tenant improvements | Lesser of useful life or lease term | |
Intangible lease assets | Lease term |
Real_Estate_Acquisitions_Table
Real Estate Acquisitions (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Business Combinations [Abstract] | ' | |||||||
Schedule of purchase price allocation | ' | |||||||
The Company allocated the purchase price of the 2013 Acquisition to the fair value of the assets acquired. The following table summarizes the purchase price allocation (in thousands): | ||||||||
31-Mar-13 | ||||||||
Land | $ | 296 | ||||||
Building and improvements | 1,303 | |||||||
Acquired in-place leases | 172 | |||||||
Total purchase price | $ | 1,771 | ||||||
Business acquisition, pro forma information | ' | |||||||
The table below presents the Company’s estimated revenue and net income, on a pro forma basis, for the three months ended March 31, 2013 and 2012 (in thousands): | ||||||||
Three Months Ended March 31, | ||||||||
Pro forma basis: | 2013 | 2012 | ||||||
Revenue | $ | 3,308 | $ | 3,696 | ||||
Net income | $ | 198 | $ | 35 | ||||
Organization_and_Business_Deta
Organization and Business (Details) | 3 Months Ended |
Mar. 31, 2014 | |
Organization and business [Line Items] | ' |
Number of states in which entity owns properties (in number of states) | 19 |
Percentage of rentable space leased | 100.00% |
Consolidated properties | ' |
Organization and business [Line Items] | ' |
Number of owned properties (in number of properties) | 39 |
Rentable square feet (in square feet) | 956,000 |
CCPT I OP | ' |
Organization and business [Line Items] | ' |
General partner partnership interest percentage | 100.00% |
Merger_Agreement_Details
Merger Agreement (Details) (USD $) | 3 Months Ended | 0 Months Ended | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 17, 2014 | Mar. 31, 2014 | |
Merger of the Cole Credit Property Trust, Inc., ARCP and Desert Merger Subsidiary | Merger of the Cole Credit Property Trust, Inc., ARCP and Desert Merger Subsidiary | |||
Business Acquisition [Line Items] | ' | ' | ' | ' |
Share price | ' | ' | $7.25 | ' |
Business combination, termination fee | ' | ' | $1,463,000 | ' |
Business combination, termination expense reimbursement | ' | ' | 500,000 | ' |
Business combination, minimum ownership percentage before irrevocable option to purchase additional shares | ' | ' | 90.00% | ' |
Merger and acquisition related expenses | $330,000 | $94,000 | ' | $330,000 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Narrative (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | Restricted cash, tenant and capital improvements, leasing commissions, repairs and maintenance and other lender reserves for certain properties | Restricted cash, rents from certain encumbered properties | Buildings | ||
Valuation of real estate and related assets [Line Items] | ' | ' | ' | ' | ' |
Acquired real estate asset, useful life | ' | ' | ' | ' | '40 years |
Restricted cash | $2,301 | $2,327 | $2,200 | $147 | ' |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (Notes payable, USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Carrying value | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Notes payable and lines of credit | $85.70 | $85.90 |
Fair value, inputs, level 2 | Estimate of fair value | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Notes payable and lines of credit | $87.90 | $88.60 |
Real_Estate_Acquisitions_Detai
Real Estate Acquisitions (Details) (USD $) | 3 Months Ended | 3 Months Ended | |||||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2012 | Mar. 31, 2013 | |
2012 dispositions | 2013 Acquisitions | 2013 Acquisitions | 2013 Acquisitions | 2013 Acquisitions | |||
Property | Property | Commercial_Property | Acquired in-place leases | ||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Number of businesses acquired (in properties) | ' | ' | ' | 0 | 1 | ' | ' |
Business acquisition, percentage of voting interests acquired | ' | ' | ' | ' | 100.00% | ' | ' |
Aggregate purchase price | ' | ' | ' | ' | $1,800,000 | ' | ' |
Number of properties sold (in properties) | ' | ' | 5 | ' | ' | ' | ' |
Business Acquisition, Purchase Price Allocation [Abstract] | ' | ' | ' | ' | ' | ' | ' |
Land | ' | ' | ' | ' | 296,000 | ' | ' |
Buildings and improvements | ' | ' | ' | ' | 1,303,000 | ' | ' |
Acquired finite-lived intangible asset - leases, amount | ' | ' | ' | ' | ' | ' | 172,000 |
Total purchase price | ' | ' | ' | ' | 1,771,000 | ' | ' |
Revenue since acquisition date | ' | ' | ' | ' | 33,000 | ' | ' |
Net loss since acquisition date | ' | ' | ' | ' | -55,000 | ' | ' |
Acquisition related expenses | 330,000 | 94,000 | ' | ' | 94,000 | ' | ' |
Business Acquisition, Pro Forma Information [Abstract] | ' | ' | ' | ' | ' | ' | ' |
Revenue | ' | ' | ' | ' | 3,308,000 | 3,696,000 | ' |
Net income | ' | ' | ' | ' | $198,000 | $35,000 | ' |
Notes_Payable_and_Lines_of_Cre1
Notes Payable and Lines of Credit (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
Debt Instrument [Line Items] | ' | ' | ' |
Long-term debt | $85,709,000 | ' | ' |
Notes payable | 85,409,000 | ' | 85,606,000 |
Lines of credit with affiliate | 300,000 | ' | 300,000 |
Repayment of notes payable | 197,000 | 188,000 | ' |
Assets Securing Debt | 156,800,000 | ' | ' |
Fixed rate debt | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Notes payable | 79,400,000 | ' | ' |
Long-term debt, percentage bearing variable interest, amount [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Notes payable | 6,000,000 | ' | ' |
Long-term debt, percentage bearing variable interest, percentage rate | 2.54% | ' | ' |
Fixed rate debt | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Weighted average years to maturity | '1 year 3 months 18 days | ' | ' |
Debt, weighted average interest rate | 6.53% | ' | ' |
Fixed rate debt | Minimum | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Fixed rate debt, interest rate | 5.27% | ' | ' |
Fixed rate debt | Maximum | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Fixed rate debt, interest rate | 6.96% | ' | ' |
Lines of credit | Revolving credit facility | Cole advisors | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Number of credit facilities (in line of credit agreements) | 2 | ' | ' |
Fixed rate debt, interest rate | 5.75% | ' | ' |
Line of credit facility, current borrowing capacity | $2,900,000 | ' | ' |
Commitments_and_Contingencies_
Commitments and Contingencies Commitments and Contingencies (Details) (USD $) | 12 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 |
2013 Lease commitments | 2014 Lease commitments | Minimum | Maximum | |
lease_amendment | 2013 Lease commitments | 2013 Lease commitments | ||
Long-term Purchase Commitment [Line Items] | ' | ' | ' | ' |
Number of lease amendments | 2 | ' | ' | ' |
Lease amendment, term | ' | ' | '5 years | '10 years |
Lease amendment, obligation to fund capital improvements, amount | $1,100 | $409 | ' | ' |
Lease amendment, payments for capital improvements | $333 | ' | ' | ' |
RelatedParty_Transactions_and_1
Related-Party Transactions and Arrangements (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
Related Party Transaction [Line Items] | ' | ' | ' |
Due to affiliate | $71,000 | ' | $39,000 |
Acquisition related expenses | 330,000 | 94,000 | ' |
Interest expense, net | 1,491,000 | 1,493,000 | ' |
2013 Acquisitions | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Acquisition related expenses | ' | 94,000 | ' |
Advisors | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Cumulative noncompounded annual return | 7.50% | ' | ' |
Advisors | Listing commission | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Commissions performance and other fees percent | 20.00% | ' | ' |
Cole realty advisors, inc. | 2013 Acquisitions | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Acquisition related expenses | 0 | 53,000 | ' |
Cole advisors | Lines of credit | Revolving credit facility | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Line of credit facility, amount outstanding | 300,000 | ' | ' |
Line of credit facility, remaining borrowing capacity | 2,600,000 | ' | ' |
Fixed rate debt, interest rate | 5.75% | ' | ' |
Interest expense, net | 4,000 | ' | ' |
Financing coordination fees | Advisors | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Finance coordination fee percent | 1.00% | ' | ' |
Property management and leasing fees and expense | Cole realty advisors, inc. | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Property and asset management fees percent | 3.00% | ' | ' |
Related party transaction, expenses from transactions with related party | 104,000 | 97,000 | ' |
Due to affiliate | $71,000 | ' | $39,000 |
Property management and leasing fees and expense | Cole realty advisors, inc. | Maximum | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Amount per square foot of the total leased obligation (in usd per square foot) | 4.5 | ' | ' |
Percent of the total lease obligation | 7.50% | ' | ' |
Acquisition fees and expenses | Cole realty advisors, inc. | Maximum | Contract purchase price of each asset | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Acquisition and advisory fee | 3.00% | ' | ' |
Monthly asset management fees and expenses | Advisors | Maximum | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Asset based related party fee percent | 0.25% | ' | ' |
Property sales commission | Advisors | Contract sale price of each property | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Commissions performance and other fees percent | 3.00% | ' | ' |
Remaining net sale proceeds | Advisors | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Commissions performance and other fees percent | 20.00% | ' | ' |
Subsequent_Events_Subsequent_E
Subsequent Events Subsequent Events (Details) (Subsequent event, USD $) | 1 Months Ended | |
9-May-14 | Apr. 25, 2014 | |
Revolving credit facility | Merger of the Cole Credit Property Trust, Inc., ARCP and Desert Merger Subsidiary | |
Lines of credit | ||
Subsequent Event [Line Items] | ' | ' |
Percentage of outstanding shares tendered and not withdrawn | ' | 63.00% |
Proceeds from lines of credit | $500,000 | ' |
Line of credit facility, amount outstanding | 800,000 | ' |
Line of credit facility, current borrowing capacity | $2,100,000 | ' |