Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 07, 2016 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | Dividend Capital Diversified Property Fund Inc. | |
Entity Central Index Key | 1,327,978 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Class E | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 120,027,239 | |
Class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 1,950,529 | |
Class W | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 2,231,661 | |
Class I | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 30,777,232 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | |
ASSETS | |||
Investments in real property | $ 2,201,127 | $ 2,380,174 | |
Accumulated depreciation and amortization | (473,211) | (505,957) | |
Total net investments in real property | 1,727,916 | 1,874,217 | |
Debt related investments, net | 15,340 | 15,722 | |
Total net investments | 1,743,256 | 1,889,939 | |
Cash and cash equivalents | 34,403 | 15,769 | |
Restricted cash | 7,836 | 18,394 | |
Other assets, net | 36,166 | 36,789 | |
Total Assets | 1,821,661 | 1,960,891 | |
Liabilities: | |||
Accounts payable and accrued expenses | [1] | 38,740 | 39,645 |
Mortgage notes | 386,861 | 585,864 | |
Unsecured borrowings | 663,849 | 511,905 | |
Intangible lease liabilities, net | 61,357 | 63,874 | |
Other liabilities | 43,228 | 33,652 | |
Total Liabilities | 1,194,035 | 1,234,940 | |
Stockholders' equity: | |||
Common stock, $0.01 par value; 1,000,000,000 shares authorized; 153,068,872 and 164,124,057 shares issued and outstanding, as of September 30, 2016 and December 31, 2015, respectively (2) | [2] | 1,531 | 1,641 |
Additional paid-in capital | 1,383,191 | 1,470,859 | |
Distributions in excess of earnings | (829,162) | (832,681) | |
Accumulated other comprehensive loss | (20,166) | (11,014) | |
Total stockholders' equity | 535,394 | 628,805 | |
Noncontrolling interests | 92,232 | 97,146 | |
Total Equity | 627,626 | 725,951 | |
Total Liabilities and Equity | $ 1,821,661 | $ 1,960,891 | |
[1] | Includes approximately $2.7 million and $5.1 million that we owed to our Advisor and affiliates of our Advisor for services and reimbursement of certain expenses as of September 30, 2016 and December 31, 2015, respectively. | ||
[2] | See Note 8 for the number of shares outstanding of each class of common stock as of September 30, 2016 and December 31, 2015. |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | |
Accounts payable and accrued expenses | [1] | $ 38,740 | $ 39,645 |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 | |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 | |
Common stock, shares issued | 153,068,872 | 164,124,057 | |
Common stock, shares outstanding | 153,068,872 | 164,124,057 | |
Advisor And Advisor Affiliates [Member] | |||
Accounts payable and accrued expenses | $ 2,700 | $ 5,100 | |
[1] | Includes approximately $2.7 million and $5.1 million that we owed to our Advisor and affiliates of our Advisor for services and reimbursement of certain expenses as of September 30, 2016 and December 31, 2015, respectively. |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
REVENUE: | |||||
Rental revenue | $ 53,258 | $ 52,854 | $ 161,504 | $ 163,308 | |
Debt related income | 235 | 807 | 710 | 5,594 | |
Total Revenue | 53,493 | 53,661 | 162,214 | 168,902 | |
EXPENSES: | |||||
Rental expense | 16,437 | 14,877 | 48,388 | 43,412 | |
Real estate depreciation and amortization expense | 19,989 | 20,851 | 60,022 | 61,404 | |
General and administrative expenses | [1] | 2,234 | 2,477 | 7,192 | 8,157 |
Advisory fees, related party | 3,681 | 4,225 | 11,118 | 13,021 | |
Acquisition-related expenses | 136 | 476 | 661 | 1,259 | |
Impairment of real estate property | [2] | 2,090 | 6,500 | 2,677 | 8,124 |
Total Operating Expenses | 44,567 | 49,406 | 130,058 | 135,377 | |
Other Income (Expenses): | |||||
Interest and other income | 2,308 | 704 | 2,297 | 1,500 | |
Interest expense | (10,011) | (10,951) | (31,394) | (36,208) | |
Gain (loss) on extinguishment of debt and financing commitments | 0 | 0 | 5,136 | (1,168) | |
Gain on sale of real property | [3] | 2,095 | 4,567 | 43,495 | 133,234 |
Net Income (Loss) | 3,318 | (1,425) | 51,690 | 130,883 | |
Net (income) loss attributable to noncontrolling interests | (353) | 1,297 | (4,826) | (7,358) | |
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ 2,965 | $ (128) | $ 46,864 | $ 123,525 | |
NET INCOME PER BASIC AND DILUTED COMMON SHARE (usd per share) | $ 0.02 | $ 0 | $ 0.29 | $ 0.69 | |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | |||||
Basic (shares) | 158,688 | 174,290 | 161,274 | 179,168 | |
Diluted (shares) | 170,952 | 187,279 | 173,760 | 192,020 | |
Distributions declared per common share (usd per share) | $ 0.0892 | $ 0.0895 | $ 0.2677 | $ 0.2688 | |
[1] | Includes approximately $1.4 million and $1.8 million of reimbursable expenses incurred by our Advisor and its affiliates during the three months ended September 30, 2016 and 2015, respectively, and approximately $4.9 million and $5.3 million of reimbursable expenses incurred by our Advisor and its affiliates during the nine months ended September 30, 2016 and 2015. | ||||
[2] | Includes approximately $186,000 paid to our Advisor for advisory fees associated with the disposition of real properties during the three months ended September 30, 2016, and $265,000 and $125,000 paid to our Advisor for advisory fees associated with the disposition of real properties during the nine months ended September 30, 2016 and 2015, respectively. | ||||
[3] | Includes approximately $85,000 and $201,000 paid to our Advisor for advisory fees associated with the disposition of real properties during the three months ended September 30, 2016 and 2015, respectively, and $1.8 million and $4.6 million paid to our Advisor for advisory fees associated with the disposition of real properties during the nine months ended September 30, 2016 and 2015, respectively |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
General and administrative expenses | [1] | $ 2,234 | $ 2,477 | $ 7,192 | $ 8,157 |
Impairment charges | [2] | 2,090 | 6,500 | 2,677 | 8,124 |
Gain on sale of real property | [3] | 2,095 | 4,567 | 43,495 | 133,234 |
Affiliated Entity [Member] | |||||
General and administrative expenses | 1,400 | 1,800 | 4,900 | 5,300 | |
Advisory Fees Related to the Disposition Of Real Properties | |||||
Impairment charges | 186 | 265 | 125 | ||
Gain on sale of real property | $ 85 | $ 201 | $ 1,800 | $ 4,600 | |
[1] | Includes approximately $1.4 million and $1.8 million of reimbursable expenses incurred by our Advisor and its affiliates during the three months ended September 30, 2016 and 2015, respectively, and approximately $4.9 million and $5.3 million of reimbursable expenses incurred by our Advisor and its affiliates during the nine months ended September 30, 2016 and 2015. | ||||
[2] | Includes approximately $186,000 paid to our Advisor for advisory fees associated with the disposition of real properties during the three months ended September 30, 2016, and $265,000 and $125,000 paid to our Advisor for advisory fees associated with the disposition of real properties during the nine months ended September 30, 2016 and 2015, respectively. | ||||
[3] | Includes approximately $85,000 and $201,000 paid to our Advisor for advisory fees associated with the disposition of real properties during the three months ended September 30, 2016 and 2015, respectively, and $1.8 million and $4.6 million paid to our Advisor for advisory fees associated with the disposition of real properties during the nine months ended September 30, 2016 and 2015, respectively |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income | $ 3,318 | $ (1,425) | $ 51,690 | $ 130,883 |
Other Comprehensive Income (Loss): | ||||
Change from cash flow hedging derivatives | 2,901 | (6,016) | (9,880) | (5,251) |
Comprehensive income (loss) | 6,219 | (7,441) | 41,810 | 125,632 |
Comprehensive (income) loss attributable to noncontrolling interests | (571) | 1,732 | (4,098) | (6,972) |
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ 5,648 | $ (5,709) | $ 37,712 | $ 118,660 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENT OF EQUITY - 9 months ended Sep. 30, 2016 - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Distributions in Excess of Earnings | Accumulated Other Comprehensive (Loss) Income | Noncontrolling Interests |
Beginning Balances, shares at Dec. 31, 2015 | 164,124,057 | 164,124,000 | ||||
Beginning Balances at Dec. 31, 2015 | $ 725,951 | $ 1,641 | $ 1,470,859 | $ (832,681) | $ (11,014) | $ 97,146 |
Comprehensive income (loss): | ||||||
Net income | 51,690 | 46,864 | 4,826 | |||
Unrealized change from cash flow hedging derivatives | (9,880) | (9,152) | (728) | |||
Common stock: | ||||||
Issuance of common stock, net of offering costs, shares | 9,027,000 | |||||
Issuance of common stock, net of offering costs | 59,918 | $ 91 | 59,827 | |||
Issuance of common stock, stock-based compensation plans, shares | 32,000 | |||||
Issuance of common stock, stock-based compensation plans | $ 306 | 306 | ||||
Redemptions of common stock, shares | (17,400,000) | (20,114,000) | ||||
Redemptions of common stock | $ (148,243) | $ (201) | (148,042) | |||
Amortization of stock-based compensation | 776 | 776 | ||||
Distributions declared on common stock | (43,230) | (43,230) | ||||
Distributions on unvested Advisor RSUs | (115) | (115) | ||||
Noncontrolling interests: | ||||||
Contributions of noncontrolling interests | 3,204 | 3,204 | ||||
Distributions declared to noncontrolling interests | (7,874) | (7,874) | ||||
Redemptions of noncontrolling interests | $ (4,877) | (535) | 0 | (4,342) | ||
Ending Balances, shares at Sep. 30, 2016 | 153,068,872 | 153,069,000 | ||||
Ending Balances at Sep. 30, 2016 | $ 627,626 | $ 1,531 | $ 1,383,191 | $ (829,162) | $ (20,166) | $ 92,232 |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | ||
OPERATING ACTIVITIES: | |||
Net income | $ 51,690 | $ 130,883 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Real estate depreciation and amortization expense | 60,022 | 61,404 | |
Gain on disposition of real property | (43,495) | (133,234) | |
Impairment of real estate property | [1] | 2,677 | 8,124 |
Collection of accrued interest from debt investment | 0 | 6,421 | |
(Gain) loss on extinguishment of debt and financing commitments | (5,136) | 1,168 | |
Other adjustments to reconcile net income to net cash provided by operating activities | 5,663 | 3,016 | |
Changes in operating assets and liabilities | (3,583) | 119 | |
Net cash provided by operating activities | 67,838 | 77,901 | |
INVESTING ACTIVITIES: | |||
Acquisition of real property | (65,861) | (200,447) | |
Capital expenditures in real property | (18,598) | (22,043) | |
Proceeds from disposition of real property | 202,665 | 342,157 | |
Principal collections on debt related investments | 349 | 52,945 | |
Other investing activities | 7,788 | (4,931) | |
Net cash provided by investing activities | 126,343 | 167,681 | |
FINANCING ACTIVITIES: | |||
Mortgage note proceeds | 84,045 | 0 | |
Mortgage note principal repayments | (270,215) | (110,405) | |
Defeasance of mortgage note borrowings | 0 | (53,267) | |
Net proceeds from revolving line of credit borrowings | 151,000 | 34,000 | |
Net proceeds from term loan borrowings | 0 | 80,000 | |
Other secured borrowing repayments | 0 | (25,796) | |
Redemption of common shares | (150,588) | (190,019) | |
Distributions on common stock | (28,698) | (32,080) | |
Proceeds from sale of common stock | 51,968 | 68,851 | |
Offering costs for issuance of common stock | (5,160) | (3,487) | |
Distributions to noncontrolling interest holders | (5,498) | (3,394) | |
Redemption of OP Unit holder interests | (4,316) | (2,478) | |
Other financing activities | 1,915 | (6,782) | |
Net cash used in financing activities | (175,547) | (244,857) | |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 18,634 | 725 | |
CASH AND CASH EQUIVALENTS, beginning of period | 15,769 | 14,461 | |
CASH AND CASH EQUIVALENTS, end of period | 34,403 | 15,186 | |
Supplemental Disclosure of Cash Flow Information: | |||
Cash paid for interest | 29,782 | 34,486 | |
Supplemental Disclosure of Noncash Investing and Financing Activities: | |||
Common stock issued pursuant to the distribution reinvestment plan | 15,313 | 16,090 | |
Issuances of OP Units for beneficial interests | 0 | 7,324 | |
Assumed mortgage | 0 | 11,869 | |
Non-cash investment in real property | 0 | 11,869 | |
Non-cash principal collection on debt related investments | [2] | 0 | 11,228 |
Non-cash disposition of real property | [2] | 7,830 | 128,008 |
Non-cash repayment of mortgage note and other secured borrowings | [2] | $ 0 | $ 139,236 |
[1] | Includes approximately $186,000 paid to our Advisor for advisory fees associated with the disposition of real properties during the three months ended September 30, 2016, and $265,000 and $125,000 paid to our Advisor for advisory fees associated with the disposition of real properties during the nine months ended September 30, 2016 and 2015, respectively. | ||
[2] | Represents the amount of sales proceeds and debt repayments from the disposition of real property or the repayment of borrowings that we did not receive or pay in cash, primarily due to the repayment or assumption of related borrowings by the purchaser or borrower at closing. |
Organization
Organization | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | ORGANIZATION Dividend Capital Diversified Property Fund Inc. is a Maryland corporation formed on April 11, 2005 to invest in a diverse portfolio of real property and real estate related investments. As used herein, “the Company,” “we,” “our” and “us” refer to Dividend Capital Diversified Property Fund Inc. and its consolidated subsidiaries and partnerships except where the context otherwise requires. We operate in such a manner so as to qualify as a real estate investment trust (“REIT”) for federal income tax purposes, and we utilize an Umbrella Partnership Real Estate Investment Trust (“UPREIT”) organizational structure to hold all or substantially all of our assets through our operating partnership, Dividend Capital Total Realty Operating Partnership, L.P. (our “Operating Partnership”). We are the sole general partner of our Operating Partnership. In addition, we have contributed 100% of the proceeds received from our offerings of common stock to our Operating Partnership in exchange for partnership units (“OP Units”) representing our interest as a limited partner of our Operating Partnership. Our Operating Partnership qualifies as a variable interest entity for accounting purposes and substantially all of the assets of the Company are held by our Operating Partnership, which, subject to certain Operating Partnership and subsidiary level financing restrictions, can be used to settle its obligations. Creditors of certain liabilities of our Operating Partnership have recourse to the Company. Under our Operating Partnership, we have variable interest entities that are joint ventures in which we have real estate investments. The accompanying condensed consolidated balance sheets included approximately $46.4 million and $76.9 million , after accumulated depreciation and amortization, in net investments in real property in these consolidated variable interest entities as of September 30, 2016 and December 31, 2015 , respectively. The accompanying condensed consolidated balance sheets include approximately $50.1 million in mortgage notes in these consolidated variable interest entities as of December 31, 2015 . The accompanying condensed consolidated balance sheets did not include any mortgage notes in these consolidated variable interest entities as of September 30, 2016 . As of September 30, 2016 and December 31, 2015 , we owned approximately 92.6% and 92.8% , respectively, of the limited partnership interests in our Operating Partnership, and the remaining limited partnership interests in our Operating Partnership were owned by third-party investors. Our Operating Partnership has classes of OP Units that correspond to our four classes of common stock: Class E OP Units, Class A OP Units, Class W OP Units, and Class I OP Units. As of September 30, 2016 and December 31, 2015 , our Operating Partnership had issued and outstanding approximately 12.1 million and 12.8 million Class E OP Units held by third party investors, respectively, which represent limited partnership interests issued in connection with its private placement offerings. As of September 30, 2016 and December 31, 2015 , such Class E OP Units had a maximum approximate redemption value of $90.8 million and $95.6 million , respectively, based on the most recent selling price of our common stock pursuant to our primary offering. Dividend Capital Total Advisors LLC (our “Advisor”), a related party, manages our day-to-day activities under the terms and conditions of an advisory agreement (as amended from time to time, the “Advisory Agreement”). Our Advisor and its affiliates receive various forms of compensation, reimbursements and fees for services relating to the investment and management of our real estate assets. On July 12, 2012, the Securities and Exchange Commission (the “Commission”) declared effective our Registration Statement on Form S-11 (Registration Number 333-175989) (as amended, the “Prior Registration Statement”). The Prior Registration Statement applied to the offer and sale (the “Prior Offering”) of up to $3,000,000,000 of our shares of common stock, of which $2,250,000,000 of shares were expected to be offered to the public in a primary offering and $750,000,000 of shares were expected to be offered to our stockholders pursuant to an amended and restated distribution reinvestment plan (subject to our right to reallocate such amounts). In the Prior Offering, we offered to the public three classes of shares: Class A shares, Class W shares and Class I shares with net asset value (“NAV”) based pricing. On September 15, 2015, we terminated the Prior Offering. Through September 15, 2015, the date our Prior Offering terminated, we had raised gross proceeds of approximately $183.0 million from the sale of approximately 25.8 million shares in the Prior Offering, including approximately $3.4 million through our distribution reinvestment plan. On September 16, 2015, the Commission declared effective our Registration Statement on Form S-11 (Registration Number 333-197767) (the “Follow-On Registration Statement”). The Follow-On Registration Statement applies to the Company’s follow-on “best efforts” offering of up to $1,000,000,000 of the Company’s Class A, Class I and Class W shares of common stock, of which $750,000,000 of shares are expected to be offered to the public in a primary offering and $250,000,000 of shares are expected to be offered to stockholders of the Company pursuant to its distribution reinvestment plan (subject to the Company’s right to reallocate such amounts) (the “Follow-On Offering”). As of September 30, 2016 , we had raised gross proceeds of approximately $69.2 million from the sale of approximately 9.3 million shares in the Follow-On Offering. We are offering to sell any combination of Class A shares, Class W shares and Class I shares with a dollar value up to the maximum offering amount pursuant to the Follow-On Offering. We also sell shares of our unclassified common stock, which we refer to as “Class E” shares, pursuant to our distribution reinvestment plan offering registered on our Registration Statement on Form S-3 (Registration Number 333-162636). In the event of a liquidation event, our assets, or the proceeds therefrom, will be distributed ratably in proportion to the respective NAV for each class until the NAV for each class has been paid. Other than differing allocable fees and liquidation rights, Class E shares, Class A shares, Class W shares, and Class I shares have identical rights and privileges. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Interim Financial Statements The accompanying interim condensed consolidated financial statements (herein referred to as “financial statements,” “balance sheets,” “statements of operations,” “statements of comprehensive income (loss),” “statement of equity,” or “statements of cash flows”) have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and with the Commission instructions to Form 10-Q and Rule 10-01 of Regulation S-X for interim financial statements. Accordingly, these financial statements do not include all the information and disclosure required by GAAP for complete financial statements. In the opinion of management, the accompanying financial statements include all adjustments and eliminations, consisting only of normal recurring items necessary for their fair presentation in conformity with GAAP. Interim results are not necessarily indicative of operating results for a full year. The unaudited information included in this Quarterly Report on Form 10-Q should be read in conjunction with our audited financial statements and notes thereto, included in our Annual Report on Form 10-K for the year ended December 31, 2015, filed with the Commission on March 3, 2016. There have been no significant changes to the Company’s significant accounting policies during the nine months ended September 30, 2016 other than the updates described below. Dealer Manager and Distribution Fees We record a liability for dealer manager and distribution fees that we estimate that we may pay to Dividend Capital Securities LLC (our "Dealer Manager") in future periods for shares of our common stock sold pursuant to the Prior Offering and the Follow-On Offering with a corresponding reduction in proceeds received from the sale of our common stock. Accordingly, as of September 30, 2016 , we recorded a liability for estimated future dealer manager and distribution fees of approximately $3.4 million . This liability included an immaterial amount related to shares issued prior to March 31, 2016. See Note 9 for further discussion of our Dealer Manager and the dealer manager and distribution fees. Reclassifications Certain previously reported amounts have been reclassified to conform to the current period financial statement presentation. In April 2015, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update 2015-03 (“ASU 2015-03”), which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The guidance is effective for all reporting periods beginning after December 15, 2015 and requires retrospective application. As a result of adopting this guidance, we reclassified approximately $5.1 million and $1.2 million of net debt issuance costs to “unsecured borrowings” and “mortgage notes”, respectively, in the accompanying condensed consolidated balance sheet as of December 31, 2015 . We recorded approximately $4.2 million and $1.9 million of net debt issuance costs into “unsecured borrowings” and “mortgage notes”, respectively, in the accompanying condensed consolidated balance sheet as of September 30, 2016 . New Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update 2016-13, which introduces a new model for recognizing credit losses for certain financial instruments, including loans, accounts receivable and debt securities. The new model requires an estimate of expected credit losses over the life of exposure to be recorded through the establishment of an allowance account, which is presented as an offset to the related financial asset. The expected credit loss is recorded upon the initial recognition of the financial asset. The guidance will be effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2019. Earlier application is permitted. The guidance will generally be adopted on a modified retrospective basis, with exceptions for certain types of financial assets. We do not anticipate the adoption will have a significant impact on our financial statements. In March 2016, the FASB issued Accounting Standards Update 2016-05, which clarifies the effect of derivative contract novations on existing hedge accounting relationships. The guidance states that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under ASC Topic 815, Derivatives and Hedging (“ASC Topic 815”) does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. The guidance will be effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016. The guidance can be adopted on either a prospective basis or a modified retrospective basis. Earlier application is permitted. We do not anticipate the adoption will have a significant impact on our financial statements. In February 2016, the FASB issued Accounting Standards Update 2016-02 (“ASU 2016-02”), which amends the accounting guidance regarding lessees accounting, leveraged leases, and sale and leaseback transactions. The accounting applied by a lessor is largely unchanged under ASU 2016-02. The guidance will be effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2018. The guidance should be adopted using a modified retrospective transition, which will require application of ASU 2016-02 at the beginning of the earliest comparative period presented. Earlier application is permitted. We do not anticipate the adoption will have a significant impact on our financial statements. Newly Adopted Accounting Pronouncements In February 2015, the FASB issued Accounting Standards Update 2015-02 (“ASU 2015-02”), which amends certain guidance applicable to the consolidation of various legal entities, including variable interest entities. The amendments in ASU 2015-02 are effective for annual and interim periods in fiscal years beginning after December 15, 2015, with earlier adoption permitted. As a result of adopting this guidance as of January 1, 2016, our Operating Partnership qualifies as a variable interest entity. |
Investments in Real Property
Investments in Real Property | 9 Months Ended |
Sep. 30, 2016 | |
Real Estate [Abstract] | |
Investments in Real Property | INVESTMENTS IN REAL PROPERTY Currently, our consolidated investments in real property consist of investments in office, industrial and retail properties. The following tables summarize our consolidated investments in real property as of September 30, 2016 and December 31, 2015 (amounts in thousands): Real Property Land Building and Improvements Intangible Lease Assets Total Investment Amount Intangible Lease Liabilities Net Investment Amount As of September 30, 2016: Office $ 171,176 $ 696,652 $ 236,915 $ 1,104,743 $ (15,121 ) $ 1,089,622 Industrial 8,821 63,803 16,307 88,931 (344 ) 88,587 Retail 294,735 599,071 113,647 1,007,453 (76,003 ) 931,450 Total gross book value 474,732 1,359,526 366,869 2,201,127 (91,468 ) 2,109,659 Accumulated depreciation/amortization — (200,907 ) (272,304 ) (473,211 ) 30,111 (443,100 ) Total net book value $ 474,732 $ 1,158,619 $ 94,565 $ 1,727,916 $ (61,357 ) $ 1,666,559 As of December 31, 2015: Office $ 203,889 $ 833,655 $ 310,629 $ 1,348,173 $ (18,923 ) $ 1,329,250 Industrial 9,572 65,307 16,436 91,315 (344 ) 90,971 Retail 260,761 570,700 109,225 940,686 (74,282 ) 866,404 Total gross book value 474,222 1,469,662 436,290 2,380,174 (93,549 ) 2,286,625 Accumulated depreciation/amortization — (208,281 ) (297,676 ) (505,957 ) 29,675 (476,282 ) Total net book value $ 474,222 $ 1,261,381 $ 138,614 $ 1,874,217 $ (63,874 ) $ 1,810,343 ]] ]] Acquisition The following table summarizes our acquisition of real property during the nine months ended September 30, 2016 (dollar amounts and square footage in thousands): Real Property Property Type Market Date of Acquisition Acquired Ownership Contract Price Net Rentable Square Feet Percent Leased Suniland Shopping Center Retail South Florida 5/27/2016 100% $ 66,500 82 93.2 % The following table summarizes the allocation of the fair value of the real property we acquired during the nine months ended September 30, 2016 to land, building and improvements, intangible lease assets, and intangible lease liabilities (dollar amounts in thousands). We have not made any material adjustments related to this allocation. Weighted-average Amortization Period (Years) Real Property Land Building and Improvements Intangible Lease Assets Intangible Lease Liabilities Total Fair Value Prorations and Credits Contract Price Intangible Lease Assets Intangible Lease Liabilities Suniland Shopping Center $ 34,804 $ 28,022 $ 5,880 $ (2,113 ) $ 66,593 $ (93 ) $ 66,500 5.8 2.5 For the three and nine months ended September 30, 2016 , our consolidated statements of operations include revenue of approximately $1.0 million and $1.4 million , respectively, and net operating income (“NOI”) of approximately $0.7 million and $1.0 million , respectively, attributable to the real property acquired during the three and nine months ended September 30, 2016 . Dispositions During the the nine months ended September 30, 2016 and 2015 , we disposed of the following properties (dollar amounts and square footage in thousands): Property Type Market Ownership Net Rentable Square Feet Percentage Leased Disposition Date Contract Sales Price Gain on Sale For the nine months ended September 30, 2016 Office Washington, DC 100% 574 100 % 2/18/2016 $ 158,400 $ 41,241 Office Chicago, IL 80% 107 66 % 3/1/2016 9,850 — Office Chicago, IL 80% 199 81 % 3/1/2016 18,000 159 Retail Greater Boston 100% 39 100 % 8/5/2016 3,625 975 Industrial Louisville, KY 90% 126 33 % 9/2/2016 5,400 1,120 Office Washington, DC 100% 178 — % 9/30/2016 18,600 — Total/ Weighted Average 1,223 73 % $ 213,875 $ 43,495 For the nine months ended September 30, 2015 Office Dallas, TX 100% 177 88 % 1/16/2015 $ 46,600 $ 23,125 Office and Industrial Portfolio (1) Various (1) 100% 2,669 100 % 3/11/2015 398,635 105,542 Retail Pittsburgh, PA 100% 103 93 % 5/5/2015 12,500 — Office Los Angeles, CA 100% 111 — % 7/20/2015 12,549 2,866 Land Parcel Denver, CO 100% N/A N/A 8/12/2015 7,577 1,701 Total/ Weighted Average 3,060 95 % $ 477,861 $ 133,234 (1) The portfolio includes six office properties comprising 1.1 million net rentable square feet located in the following markets: Los Angeles, CA ( three properties, of which one disposed property was a single building from a two-building office property), Northern New Jersey, Miami, FL, and Dallas, TX, and six industrial properties comprising 1.6 million net rentable square feet located in the following markets: Los Angeles, CA, Dallas, TX, Cleveland, OH, Chicago, IL, Houston, TX, and Denver, CO. Real Property Impairment During the nine months ended September 30, 2016 , we recorded a $2.1 million impairment charge related to a consolidated office property located in the Washington, DC market, which we acquired in June 2010. We sold the Washington, DC property in September 2016. Prior to the disposition, the net book value of the Washington, DC property exceeded the contract sales price less the cost to sell by $2.1 million . Accordingly, we recorded an impairment charge to reduce the net book value of the property to our estimate of its fair value less the cost to sell. Additionally, we recorded a $587,000 impairment charge related to a consolidated office property located in the Chicago, IL market (" 40 Boulevard "), which we acquired in January 2007 and we held through a joint venture in which we were not the managing partner. We held an 80% ownership interest in 40 Boulevard . We sold 40 Boulevard in March 2016. Prior to the disposition, the net book value of 40 Boulevard exceeded the contract sales price less the cost to sell by approximately $587,000 . Accordingly, we recorded an impairment charge to reduce the net book value of 40 Boulevard to our estimate of its fair value less the cost to sell. The fair value measurements for the impairment charges related to the Washington, DC property and 40 Boulevard were based on the contract sales price less selling costs. We considered the Level 3 inputs used in determining the fair value of these real property investments to be significant. As such, these investments fall under the Level 3 category of the fair value hierarchy as defined in ASC Topic 820, Fair Value Measurements and Disclosures ("ASC Topic 820"). During the nine months ended September 30, 2015 , we recorded $1.6 million of impairment charges related to a wholly owned retail property that we acquired in May 2007 in the Pittsburgh, PA market, which was disposed of in May 2015. Accordingly, we recorded an impairment charge to reduce the net book value of the Pittsburgh property to our estimate of its fair value less the cost to sell. The fair value measurement was based on the contract sales price less selling costs. We considered the Level 3 inputs used in determining the fair value of this real property investment to be significant. As such, this investment falls under the Level 3 category of the fair value hierarchy. Additionally, we recorded a $6.5 million impairment charge related to a consolidated office property located in the Chicago, IL market (" Washington Commons "), which we acquired in February 2007 and we held through a joint venture in which we are not the managing partner. We held an 80% ownership interest in Washington Commons . As of September 30, 2015, the net book value of Washington Commons exceeded our estimate of the fair value of Washington Commons less the cost to sell by $6.5 million . Accordingly, we recorded an impairment charge to reduce the net book value of Washington Commons to our estimate of its fair value less the cost to sell. The impairment charge was based on a reduction of our estimated holding period for Washington Commons , triggering impairment recognition with the related fair value measurement based on our estimate of future cash flows from the operation and disposition of Washington Commons . We considered the Level 3 inputs used in determining the fair value of this real property investment to be significant. As such, this investment falls under the Level 3 category of the fair value hierarchy. The key assumption used in determining the fair value of Washington Commons was our expectation of the sales price of the property. Our expectation of the sales price was developed based on the valuation provided by a third-party broker quote. In the calculation of our daily NAV, our real estate assets are carried at fair value using valuation methodologies consistent with ASC Topic 820. As a result, the timing of valuation changes recorded in our NAV will not necessarily be the same as for impairment charges recorded to our consolidated financial statements prepared pursuant to GAAP. Since we determine our NAV daily, impairment charges pursuant to GAAP will likely always be delayed and potentially significantly delayed compared to the change in fair value of our properties included in the calculation of our daily NAV. Rental Revenue The following table summarizes the adjustments to rental revenue related to the amortization of above-market lease assets, below-market lease liabilities, and straight-line rental adjustments for the three and nine months ended September 30, 2016 and 2015 . In addition, the following table summarizes tenant recovery income received from tenants for real estate taxes, insurance and other property operating expenses and recognized as rental revenue (amounts in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Straight-line rent adjustments $ (296 ) $ (286 ) $ (742 ) $ (684 ) Above-market lease assets (1,402 ) (1,307 ) (3,930 ) (3,923 ) Below-market lease liabilities 1,529 1,437 4,608 4,539 Total increase to rental revenue $ (169 ) $ (156 ) $ (64 ) $ (68 ) Tenant recovery income (1) $ 10,623 $ 9,293 $ 31,183 $ 28,031 (1) Tenant recovery income presented in this table excludes real estate taxes that were paid directly by our tenants that are subject to triple net lease contracts. Such payments totaled approximately $1.0 million and $1.4 million during the three months ended September 30, 2016 and 2015 , respectively, and approximately $3.3 million and $5.5 million during the nine months ended September 30, 2016 and 2015 , respectively. Concentration of Credit Risk Concentration of credit risk with respect to our sources of revenue currently exists due to a small number of tenants whose rental payments to us make up a relatively high percentage of our rental revenue. Rental revenue from our lease with Charles Schwab & Co., Inc., as master tenant of one of our office properties, represented approximately $19.0 million , or 11.7% , of our total revenue for the nine months ended September 30, 2016 . The following is a summary of amounts related to the top five tenants based on annualized base rent, as of September 30, 2016 (dollar amounts and square feet in thousands): Tenant Locations Industry Annualized Base Rent (1) % of Total Annualized Base Rent Square Feet % of Total Portfolio Square Feet Charles Schwab & Co., Inc. 2 Securities, Commodities, Fin. Inv./Rel. Activities $ 23,645 13.8 % 602 7.3 % Sybase 1 Publishing Information (except Internet) 18,692 10.9 % 405 4.9 % Stop & Shop 14 Food and Beverage Stores 13,980 8.2 % 853 10.4 % Novo Nordisk 1 Chemical Manufacturing 4,627 2.7 % 167 2.0 % Seton Health Care 1 Hospitals 4,339 2.5 % 156 1.9 % 19 $ 65,283 38.1 % 2,183 26.5 % (1) Annualized base rent represents the annualized monthly base rent of executed leases as of September 30, 2016 . Our properties in New Jersey, Massachusetts, California, and Texas accounted for approximately 20% , 20% , 14% , and 12% respectively, of our total gross investment in real property portfolio as of September 30, 2016 . A deterioration of general economic or other relevant conditions, changes in governmental laws and regulations, acts of nature, demographics or other factors in any of those states or the geographical region in which they are located could result in the loss of tenants, a decrease in the demand for our properties and a decrease in our revenues from those markets, which in turn may have a disproportionate and material adverse effect on our results of operations and financial condition. |
Debt Related Investments
Debt Related Investments | 9 Months Ended |
Sep. 30, 2016 | |
Receivables [Abstract] | |
Debt Related Investments | DEBT RELATED INVESTMENTS As of both September 30, 2016 and December 31, 2015 , we had invested in three debt related investments. The weighted average maturity of our debt related investments structured as mortgage notes as of September 30, 2016 was 2.5 years, based on our recorded net investments. The following table describes our debt related income for the three and nine months ended September 30, 2016 and 2015 (dollar amounts in thousands): Three Months Ended Nine Months Ended Weighted Average Yield as of September 30, 2016 (1) Investment Type 2016 2015 2016 2015 Mortgage notes (2) $ 235 $ 666 $ 710 $ 3,808 6.1% Mezzanine debt — 141 — 1,786 N/A Total $ 235 $ 807 $ 710 $ 5,594 6.1% (1) Weighted average yield is calculated on an unlevered basis using the amount invested, current interest rates and accretion of premiums or discounts realized upon the initial investment for each investment type as of September 30, 2016 . As of September 30, 2016 , all of our debt related investments bear interest at fixed rates. (2) We had three debt related investments structured as mortgage notes repaid in full during the nine months ended September 30, 2015 . During the nine months ended September 30, 2015 , amounts recorded include early repayment fees received and accelerated amortization of deferred due diligence costs related to certain of these repayments. Impairment As of September 30, 2016 and December 31, 2015 , we did not have any allowance for loan loss. During the nine months ended September 30, 2016 , we did not record any current period provision for loan loss or recoveries of amounts previously charged off. We did not have any debt related investments on non-accrual status as of September 30, 2016 or December 31, 2015 . We did not record any interest income related to our impaired debt related investment during the nine months ended September 30, 2015 . We did not have any impaired debt related investment as of September 30, 2016 . |
Debt Obligations
Debt Obligations | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Debt Obligations | DEBT OBLIGATIONS The following table describes our borrowings as of September 30, 2016 and December 31, 2015 (dollar amounts in thousands): Principal Balance as of Weighted Average Stated Interest Rate as of Gross Investment Amount Securing Borrowings as of (1) September 30, December 31, September 30, December 31, September 30, December 31, Fixed-rate mortgages (2) $ 335,570 $ 580,959 5.0% 5.6% $ 528,457 $ 1,016,560 Floating-rate mortgages (3) 52,500 7,890 2.2% 3.4% 70,355 16,618 Total secured borrowings 388,070 588,849 4.6% 5.5% 598,812 1,033,178 Line of credit (4) 318,000 167,000 2.0% 1.9% N/A N/A Term loans (5) 350,000 350,000 2.6% 2.6% N/A N/A Total unsecured borrowings 668,000 517,000 2.3% 2.4% N/A N/A Total borrowings $ 1,056,070 $ 1,105,849 3.2% 4.1% N/A N/A Less: net debt issuance costs (6) (6,019 ) (6,317 ) Add: mark-to-market adjustment on assumed debt 659 1,304 Less: GAAP principal amortization on restructured debt — (3,067 ) Total borrowings (net basis) $ 1,050,710 $ 1,097,769 (1) “Gross Investment Amount” as used here and throughout this document represents the allocated gross basis of real property after certain adjustments. Gross Investment Amount for real property (i) includes the effect of intangible lease liabilities, (ii) excludes accumulated depreciation and amortization, and (iii) includes the impact of impairments. (2) Amount as of September 30, 2016 includes a floating-rate mortgage note that was subject to an interest rate spread of 1.60% over one-month LIBOR, which we have effectively fixed using an interest rate swap at 3.051% for the term of the borrowing. (3) As of September 30, 2016 , our floating rate mortgage note was subject to an interest rate spread of 1.65% over one-month LIBOR. As of December 31, 2015 , our floating rate mortgage note was subject to an interest rate spread of 3.00% over one-month LIBOR. (4) As of September 30, 2016 and December 31, 2015 , borrowings under our line of credit were subject to interest at a floating rate of 1.40% over one-month LIBOR. However, as of September 30, 2016 , we have effectively fixed the interest rate of approximately $12.2 million of the total of $318.0 million in borrowings using interest rate swaps, resulting in a weighted average interest rate on the total line of credit of 1.97% . As of December 31, 2015 , we had effectively fixed the interest rate of approximately $25.4 million of the total of $167.0 million in borrowings using interest rate swaps, resulting in a weighted average interest rate on the total line of credit of 1.88% . (5) As of September 30, 2016 and December 31, 2015 , borrowings under our term loans were subject to interest at a weighted average floating rate of 1.52% over one-month LIBOR. However, we had effectively fixed the interest rates of the borrowings using interest rate swaps at 2.62% and 2.59% as of September 30, 2016 and December 31, 2015 , respectively. (6) See Note 2 for additional information related to the reclassification of net debt issuance costs in accordance with ASU 2015-03. Mortgage Notes As of September 30, 2016 , nine mortgage notes were interest-only and four mortgage notes were fully amortizing with outstanding principal balances of approximately $360.5 million and $27.6 million , respectively. None of our mortgage notes are recourse to us. Credit Facility On January 13, 2015 , we entered into a senior unsecured term loan and revolving line of credit (the “Facility”) with a syndicate of 14 lenders led by Bank of America, N.A., as Administrative Agent. The Facility provides us with the ability from time to time to increase the size of the Facility up to a total of $900 million less the amount of any prepayments under the term loan component of the Facility, subject to receipt of lender commitments and other conditions. The Facility includes a $400 million revolving credit facility (the “Revolving Credit Facility”). The Revolving Credit Facility contains a sublimit of $50 million for letters of credit and a sublimit of $50 million for swing line loans. The primary interest rate for the Revolving Credit Facility is based on LIBOR, plus a margin ranging from 1.40% to 2.30% , depending on our consolidated leverage ratio. The maturity date of the Revolving Credit Facility is January 31, 2019 and contains one 12 -month extension option that we may exercise upon (i) payment of an extension fee equal to 0.15% of the sum of the amount outstanding under the Revolving Credit Facility and the unused portion of the Revolving Credit Facility at the time of the extension, and (ii) compliance with the other conditions set forth in the credit agreement. Borrowings under the Facility are available for general business purposes including, but not limited to, refinancing of existing indebtedness and financing the acquisition of permitted investments, including commercial properties. As of September 30, 2016 and December 31, 2015 , the unused portion of the Facility was approximately $79.8 million and $230.8 million , respectively. As of both September 30, 2016 and December 31, 2015 , we were in compliance with all of our debt covenants and had full access to the unused portion of the Facility. Mortgage Note Borrowings During the nine months ended September 30, 2016 , we entered into two mortgage note borrowings. The following table describes the new borrowings in more detail (dollar amounts in thousands): Borrowings Date Borrowed Principal Balance Fixed or Floating Interest Rate Stated Interest Rate Contractual Maturity Date Extension Options Collateral Type Collateral Market Preston Sherry Plaza (1) 4/13/2016 $ 33,000 Fixed 3.05% 3/1/2023 None Office Property Dallas, TX 1300 Connecticut (2) 8/5/2016 52,500 Floating 2.17% 8/5/2023 None Office Property Washington, DC Total borrowings $ 85,500 2.51% (1) As of September 30, 2016 , the Preston Sherry Plaza term loan was subject to an interest rate spread of 1.60% over one-month LIBOR, which we have effectively fixed using an interest rate swap at 3.051% for the term of the borrowing. (2) As of September 30, 2016 , the 1300 Connecticut term loan was subject to an interest rate spread of 1.65% over one-month LIBOR. However, we entered into interest rate swaps which will effectively fix the interest rate of the borrowing at 2.852% from July 1, 2018 to July 1, 2021. Repayment of Mortgage Notes During the nine months ended September 30, 2016 , we repaid seven mortgage note borrowings in full during the respective free-prepayment periods prior to their scheduled maturities using proceeds from the Facility and the disposition of real properties. The following table describes these repayments in more detail (dollar amounts in thousands): Debt Obligation Repayment Date Balance Repaid/Extinguished Interest Rate Fixed or Floating Stated Interest Rate Contractual Maturity Date Collateral Type Collateral Market 1300 Connecticut 1/12/2016 $ 44,979 Fixed 6.81% 4/10/2016 Office Property Washington, DC Washington Commons (1) 2/1/2016 21,300 Fixed 5.94% 2/1/2016 Office Property Chicago, IL 40 Boulevard (2) 3/1/2016 7,830 Floating 3.44% 3/11/2016 Office Property Chicago, IL Jay Street 4/11/2016 23,500 Fixed 6.05% 7/11/2016 Office Property Silicon Valley, CA 655 Montgomery 4/11/2016 55,683 Fixed 6.01% 6/11/2016 Office Property San Francisco, CA Bala Pointe 7/1/2016 24,000 Fixed 5.89% 9/1/2016 Office Property Philadelphia, PA Harborside 9/9/2016 104,675 Fixed 5.50% 12/10/2016 Office Property Northern New Jersey Total/weighted average borrowings $ 281,967 5.87% (1) Amount presented includes a $5.1 million contingently payable mortgage note that was not ultimately required to be repaid. As a result of the transaction, we recognized a gain on extinguishment of debt and financing commitments of approximately $5.1 million during the nine months ended September 30, 2016 . (2) The mortgage note was subject to an interest rate of 3.0% over one-month LIBOR. The following table reflects our contractual debt maturities as of September 30, 2016 , specifically our obligations under our mortgage notes and unsecured borrowings (dollar amounts in thousands): As of September 30, 2016 Mortgage Notes Unsecured Borrowings Total Year Ending December 31, Number of Borrowings Maturing Outstanding Principal Balance Number of Borrowings Maturing Outstanding Principal Balance Outstanding Principal Balance 2016 — $ 400 — $ — $ 400 2017 6 206,660 — — 206,660 2018 — 2,698 1 150,000 152,698 2019 — 3,698 1 318,000 321,698 2020 — 3,860 — — 3,860 2021 1 12,764 — — 12,764 2022 1 3,660 1 200,000 203,660 2023 2 77,899 — — 77,899 2024 — 1,034 — — 1,034 2025 1 71,094 — — 71,094 Thereafter 2 4,303 — — 4,303 Total 13 $ 388,070 3 $ 668,000 $ 1,056,070 Less: net debt issuance costs (1) (1,868 ) (4,151 ) Add: mark-to-market adjustment on assumed debt 659 — Total borrowings (net basis) $ 386,861 $ 663,849 (1) See Note 2 for additional information related to the reclassification of net debt issuance costs in accordance with ASU 2015-03. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities | DERIVATIVES AND HEDGING ACTIVITIES Risk Management Objective of Using Derivatives We maintain risk management control systems to monitor interest rate risk attributable to both our outstanding and forecasted debt obligations. We generally seek to limit the impact of interest rate changes on earnings and cash flows by selectively utilizing derivative instruments to hedge exposures to changes in interest rates on our secured and unsecured floating rate borrowings. While this hedging strategy is designed to minimize the impact on our net income (loss) and cash provided by operating activities from changes in interest rates, the overall returns on our investments may be reduced. Our board of directors has established policies and procedures regarding our use of derivative instruments for hedging or other purposes to achieve these risk management objectives. Cash Flow Hedges of Interest Rate Risk Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to interest rate movements. To accomplish this objective, we primarily use interest rate swaps as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from counterparties in exchange for us making fixed-rate payments over the life of the agreements without exchange of the underlying notional amounts. We have entered into and plan to enter into certain interest rate derivatives with the goal of mitigating our exposure to adverse fluctuations in the interest payments on our one-month LIBOR-indexed debt. Certain of our floating rate borrowings are not hedged and therefore, to an extent, we have ongoing exposure to interest rate movements. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges under ASC Topic 815 is recorded in accumulated other comprehensive income (loss) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the next 12 months, we estimate that approximately $3.8 million will be reclassified as an increase to interest expense related to active effective hedges of existing floating-rate debt, and we estimate that approximately $2.0 million will be reclassified as an increase to interest expense related to effective forward started interest rate swaps where the hedging instrument has been terminated. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. The table below presents a reconciliation of the beginning and ending balances, between December 31, 2015 and September 30, 2016 , of our accumulated other comprehensive loss (“OCI”), net of amounts attributable to noncontrolling interests, related to the effective portion of our cash flow hedges as presented on our condensed consolidated financial statements, as well as amounts related to our available-for-sale securities (amounts in thousands): Gains and Losses on Cash Flow Hedges Unrealized Losses on Available-For-Sale Securities Accumulated Other Comprehensive Loss Beginning balance as of December 31, 2015 $ (9,967 ) $ (1,047 ) $ (11,014 ) Other comprehensive income: Amount of loss reclassified from OCI into 3,470 — 3,470 Change in fair value recognized in OCI (13,350 ) — (13,350 ) Net current-period other comprehensive income (9,880 ) — (9,880 ) Attribution of and other adjustments to OCI attributable to noncontrolling interests 737 (9 ) 728 Ending balance as of September 30, 2016 $ (19,110 ) $ (1,056 ) $ (20,166 ) Fair Values of Derivative Instruments The valuation of interest rate derivatives is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. To comply with the provisions of ASC 820, we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees. The majority of the inputs used to value our derivative instruments fall within Level 2 of the fair value hierarchy. However, the credit valuation adjustments associated with our derivative instruments utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of potential default by us and our counterparties. As of September 30, 2016 , we had assessed the significance of the impact of the credit valuation adjustments and had determined that it was not significant to the overall valuation of our derivative instruments. As a result, we have determined that our derivative valuations are classified in Level 2 of the fair value hierarchy. Designated Derivatives As of September 30, 2016 and December 31, 2015 , we had 13 and 12 outstanding interest rate swaps, respectively, that were designated as cash flow hedges of interest rate risk, with a total notional amount of $395.2 million and $375.4 million , respectively. In addition, as of September 30, 2016 , we had (i) two interest rate swaps with a total notional amount of $100.0 million that will become effective in December 2016 and mature in January 2020, (ii) two interest rate swaps with a total notional amount of $100.0 million that will become effective in December 2016 and mature in February 2022, and (iii) one interest rate swap with a total notional amount of $52.5 million that will become effective in July 2018 and mature in July 2021, all of which were designated as cash flow hedges of interest rate risk. The table below presents the gross fair value of our designated derivative financial instruments as well as their classification on our accompanying condensed consolidated balance sheets as of September 30, 2016 and December 31, 2015 (amounts in thousands, except for footnoted information): Fair Value of Asset Derivatives as of Fair Value of Liability Derivatives as of Balance Sheet Location September 30, 2016 December 31, 2015 Balance Sheet Location September 30, 2016 December 31, 2015 Interest rate contracts Other assets, net (1) $ 15 $ 197 Other liabilities (1) $ (14,453 ) $ (3,303 ) (1) Although our derivative contracts are subject to master netting arrangements which serve as credit mitigants to both us and our counterparties under certain situations, we do not net our derivative fair values or any existing rights or obligations to cash collateral on our accompanying condensed consolidated balance sheets. If we did net our derivative fair values on our accompanying condensed consolidated balance sheets, the derivative fair values would be lowered by approximately $12,000 and $157,000 as of September 30, 2016 and December 31, 2015 , respectively, resulting in net fair values of our asset derivatives of approximately $3,000 and $40,000 as of September 30, 2016 and December 31, 2015 , respectively, and net fair values of our liability derivatives of approximately $14.4 million and $3.1 million as of September 30, 2016 and December 31, 2015 , respectively. Effect of Derivative Instruments on the Statements of Comprehensive Income (Loss) The table below presents the effect of our derivative financial instruments on our accompanying financial statements for the three and nine months ended September 30, 2016 and 2015 (amounts in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2016 2015 2016 2015 Derivatives Designated as Hedging Instruments Derivative type Interest rate contracts Interest rate contracts Interest rate contracts Interest rate contracts Amount of gain (loss) recognized in OCI (effective portion) $ 1,747 $ (7,236 ) $ (13,350 ) $ (8,789 ) Location of loss reclassified from accumulated OCI into income (effective portion) Interest Interest Interest Interest Amount of loss reclassified from accumulated OCI into income (effective portion) $ 1,154 $ 1,220 $ 3,470 $ 3,538 Location of loss recognized in income (ineffective portion and amount excluded from effectiveness testing) Interest and other income (expense) Interest and other income (expense) Interest and other income (expense) Interest and other income (expense) Amount of loss recognized in income (ineffective portion and amount excluded from effectiveness testing) $ — $ (117 ) $ — $ — Credit-Risk-Related Contingent Features We have agreements with certain of our derivative counterparties that contain a provision where we could be declared in default on our derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to our default on the indebtedness. We have agreements with certain other derivative counterparties that contain a provision whereby if we default on any of our indebtedness held by our Operating Partnership, including default where repayment of the indebtedness has not been accelerated by the lender, then we could also be declared in default on our derivative obligations. As of September 30, 2016 , the fair value of derivatives in a net liability position, which included accrued interest but excluded any credit valuation adjustments related to these agreements, was approximately $15.0 million . As of September 30, 2016 , we have not posted any collateral related to these agreements. If we had breached any of these provisions at September 30, 2016 , we could have been required to settle our obligations under the agreements at their termination value of $15.0 million . |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2016 | |
Financial Instruments, Owned, at Fair Value [Abstract] | |
Fair Value of Financial Instruments | FAIR VALUE OF FINANCIAL INSTRUMENTS We use the framework established in ASC Topic 820, to measure the fair value of our financial instruments as disclosed in the table below. The fair values estimated below are indicative of certain interest rate and other assumptions as of September 30, 2016 and December 31, 2015 , and may not take into consideration the effects of subsequent interest rate or other assumption fluctuations, or changes in the values of underlying collateral. The fair values of cash and cash equivalents, restricted cash, accounts receivable, and accounts payable and accrued expenses approximate their carrying values because of the short-term nature of these instruments. The table below presents the carrying amounts and estimated fair values of our other financial instruments, other than derivatives which are disclosed in Note 6, as of September 30, 2016 and December 31, 2015 (amounts in thousands): As of September 30, 2016 As of December 31, 2015 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Assets: Fixed-rate debt related investments, net $ 15,340 $ 16,170 $ 15,722 $ 16,526 Liabilities: Fixed-rate mortgage notes (1) $ 334,916 $ 342,163 $ 577,978 $ 576,432 Floating-rate mortgage notes 51,945 51,356 7,886 7,883 Floating-rate unsecured borrowings 663,849 668,000 511,905 517,000 (1) Amount includes a floating-rate mortgage note of approximately $32.5 million as of September 30, 2016 that was subject to an interest rate spread of 1.60% over one-month LIBOR, which we have effectively fixed using an interest rate swap at 3.051% for the term of the borrowing. The methodologies used and key assumptions made to estimate fair values of the financial instruments, other than derivatives disclosed in Note 6, described in the above table are as follows: Debt Related Investments — The fair value of our performing debt related investments are estimated using a discounted cash flow methodology. This method discounts estimated future cash flows using rates management determines best reflect current market interest rates that would be offered for loans with similar characteristics and credit quality. Credit spreads and market interest rates used to determine the fair value of these instruments are based on unobservable Level 3 inputs which management has determined to be its best estimate of current market values. Mortgage Notes and Other Borrowings — The fair value of our mortgage notes and other borrowings are estimated using a discounted cash flow analysis, based on our estimate of market interest rates. Credit spreads relating to the underlying instruments are based on unobservable Level 3 inputs, which we have determined to be our best estimate of current market spreads of similar instruments. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2016 | |
Stockholders' Equity Attributable to Parent [Abstract] | |
Stockholders' Equity | STOCKHOLDERS’ EQUITY Common Stock During the nine months ended September 30, 2016 , we completed three self-tender offers pursuant to which we accepted for purchase approximately 17.4 million unclassified shares of common stock, which we refer to as “Class E” shares, at a weighted average purchase price of $7.34 per share for an aggregate cost of approximately $128.0 million . During the nine months ended September 30, 2016 , we raised approximately $33.9 million pursuant to a managed offering, in which we paid a primary dealer fee in the amount of up to 5.0% of the gross proceeds raised from the sale of Class I shares in the primary portion of the Follow-On Offering from May 11, 2016 through June 30, 2016, but only with respect to sales made by participating broker-dealers that we specifically approved as being eligible. The following table describes the changes in each class of common shares during the nine months ended September 30, 2016 (shares and dollar amounts in thousands): Class E Class A Class W Class I Total Shares Amount (1) Shares Amount (1) Shares Amount (1) Shares Amount (1) Shares Amount (1) Balances, 137,275 $ 1,482,140 1,703 $ 12,438 1,812 $ 12,952 23,334 $ 162,283 164,124 1,669,813 Issuance of common stock: Shares sold — — 321 2,449 742 5,499 5,892 43,533 6,955 51,481 Distribution reinvestment plan 1,521 11,247 30 224 31 229 490 3,613 2,072 15,313 Stock-based compensation — — — — — — 32 1,083 32 1,083 Redemptions and repurchases of common stock (18,897 ) (138,853 ) (162 ) (1,193 ) (337 ) (2,480 ) (718 ) (5,312 ) (20,114 ) (147,838 ) Balances, 119,899 $ 1,354,534 1,892 $ 13,918 2,248 $ 16,200 29,030 $ 205,200 153,069 $ 1,589,852 (1) Dollar amounts presented in this table represent the gross amount of proceeds from the sale of common shares, or the amount paid to stockholders to redeem or repurchase common shares, and do not include other costs and expenses accounted for within additional paid-in capital, such as selling commissions, dealer manager and distribution fees, offering and organizational costs, and other costs associated with our distribution reinvestment plans, share redemption programs, and self-tender offers. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS Advisory Agreement Our day-to-day activities are managed by our Advisor, a related party, under the terms and conditions of the Advisory Agreement. Our Advisor is considered to be a related party as certain indirect owners and employees of our Advisor serve as two of our directors and all of our executive officers. The responsibilities of our Advisor cover all facets of our business, and include the selection and underwriting of our real property and debt related investments, the negotiations for these investments, the asset management and financing of these investments and the oversight of real property dispositions. On June 23, 2016, we, our Operating Partnership and our Advisor entered into the Tenth Amended and Restated Advisory Agreement. Per the Advisory Agreement, in consideration for asset management services performed, we pay our Advisor an advisory fee comprised of two separate components: (1) a fixed amount that accrues daily in an amount equal to 1/365th of 1.15% of (a) the “Aggregate Fund NAV” (i.e., the aggregate net asset value or “NAV” of our Class E shares, Class A shares, Class W shares and Class I shares, along with the OP Units held by third parties) for such day and (b) the consideration received by us or our affiliate for selling Interests (defined below) in DST Properties (defined below) to third party investors, net of up-front fees and expense reimbursements payable out of gross sale proceeds from the sale of such Interests, including but not limited to sales commissions, dealer manager fees and non-accountable expense allowances, and (2) a performance component that is based on the annual non-compounded investment return provided to holders of “Fund Interests” (defined as our Class E shares, Class A shares, Class W shares, Class I shares, and OP Units held by third parties) such that our Advisor will receive 25% of the overall return in excess of 6% ; provided that in no event may the performance condition exceed 10% of the overall return for such year, and subject to certain other limitations. Additionally, our Advisor will provide us with a waiver of a portion of its fees generally equal to the amount of the performance component that would have been payable with respect to the Class E shares and the Class E OP Units held by third parties until the NAV of such shares or units exceeds $10.00 per share or unit, the benefit of which will be shared among all holders of Fund Interests. In addition, we will pay our Advisor a fee of 1.0% of the total consideration we receive upon the sale of real property assets (excluding DST Properties). For these purposes, a “sale” means any transaction or series of transactions whereby we or our Operating Partnership directly or indirectly (including through the sale of any interest in a joint venture or through a sale by a joint venture in which we hold an interest) sells, grants, transfers, conveys, or relinquishes its ownership of any real property or portion thereof, including the lease of any real property consisting of a building only, and including any event with respect to any real property which gives rise to a significant amount of insurance proceeds or condemnation awards. Further, for providing a substantial amount of services in connection with the sale of a property (excluding DST Properties), as determined by a majority of our independent directors, we will pay our Advisor up to 50.0% of the reasonable, customary and competitive commission paid for the sale of a comparable real property, provided that such amount shall not exceed 1.0% of the contract price of the property sold and, when added to all other real estate commissions paid to unaffiliated parties in connection with the sale, may not exceed the lesser of a competitive real estate commission or 6.0% of the sales price of the property. In addition, pursuant to the Advisory Agreement, we will pay directly, or reimburse our Advisor and our Dealer Manager if they pay on our behalf any organizational and offering expenses (other than selling commissions, the dealer manager fee, distribution fees and non-transaction based compensation allocated to sales-related activities of employees of our Dealer Manager in connection with the offering) relating to any public offerings as and when incurred. After the termination of the primary portion of the offering and again after termination of the distribution reinvestment plan portion of the offering, our Advisor has agreed to reimburse us to the extent that total cumulative organization and offering expenses (including selling commissions, the dealer manager fee and distribution fees) that we incur exceed 15% of our gross proceeds from the applicable offering. The Advisory Agreement also provides that we must reimburse our Advisor for any private offering organization and offering expenses, such as those of the DST Program, it incurs on our behalf, including Advisor personnel costs, unless it has agreed to receive a fee in lieu of reimbursement. Subject to certain limitations, we reimburse our Advisor for all of the costs it incurs in connection with the services it provides to us, including, without limitation, our allocable share of the personnel (and related employment) costs and overhead (including, but not limited to, allocated rent paid to both third parties and an affiliate of the advisor, equipment, utilities, insurance, travel and entertainment, and other costs) incurred by our Advisor or its affiliates, including, but not limited to, total compensation, benefits and other overhead of all employees involved in the performance of such services. The Advisory Agreement may be renewed for an unlimited number of successive one -year terms. The current term of the Advisory Agreement expires on June 30, 2017. Public Offering Dealer Manager Agreement Our Dealer Manager is distributing the shares of our common stock in our public offering on a “best efforts” basis. The Dealer Manager is an entity related to our Advisor and is a member of the Financial Industry Regulatory Authority, Inc., or FINRA. The Dealer Manager coordinates our distribution effort and manages our relationships with participating broker-dealers and financial advisors and provides assistance in connection with compliance matters relating to marketing our public offering. On September 16, 2015, we entered into a Second Amended and Restated Dealer Manager Agreement (the “Second Amended Dealer Manager Agreement”) with our Dealer Manager. The Dealer Manager served as dealer manager for the Prior Offering and will serve as dealer manager for the Follow-On Offering. The Second Amended Dealer Manager Agreement is an amendment and restatement of the dealer manager agreement entered into by the Company and our Dealer Manager on February 8, 2013 in connection with the Prior Offering, as amended by Amendment No. 1 dated May 31, 2013, Amendment No. 2 dated June 26, 2013 and Amendment No. 3 dated March 20, 2014. The purpose of the Second Amended Dealer Manager Agreement is to engage our Dealer Manager with respect to the Follow-On Offering. As amended, the Second Amended Dealer Manager Agreement may be made to apply to future offerings by naming them in a schedule to the agreement, with the consent of the Company and our Dealer Manager. Pursuant to the Second Amended Dealer Manager Agreement, we pay (i) selling commissions on Class A shares sold in the primary offering of up to 3.0% of the public offering price per share, (ii) a dealer manager fee which accrues daily in an amount equal to 1/365th of 0.6% of our NAV per share of Class A and Class W shares outstanding and an amount equal to 1/365th of 0.1% of our NAV per share of Class I shares outstanding on such day on a continuous basis, and (iii) a distribution fee which accrues daily in an amount equal to 1/365th of 0.5% of our NAV per Class A share outstanding on such day on a continuous basis. Subject to FINRA limitations on underwriting compensation, we will continue to pay the dealer manager fee and distribution fee until the earlier to occur of the following: (i) a listing of the class of such shares on a national securities exchange or (ii) such shares no longer being outstanding. Pursuant to the Second Amended Dealer Manager Agreement, we may pay to our Dealer Manager a primary dealer fee in the amount of up to 5.0% of the gross proceeds raised from the sale of Class I shares in the primary offering, provided that (i) the total gross proceeds raised with respect to which the primary dealer fee will apply may not exceed $100,000,000 , subject to further increase by our board of directors, in its discretion; (ii) the primary dealer fee will only be paid with respect to sales made by participating broker-dealers specifically approved by us as being eligible; and (iii) the primary dealer fee will only be paid with respect to sales made at times approved by us. Our Dealer Manager may reallow a portion of the primary dealer fee to the participating broker-dealers involved in selling such Class I shares based on the portion of the gross proceeds raised from their customers. Our Dealer Manager will consider the primary dealer fee to be underwriting compensation. The primary dealer fee will be paid by us and will not be considered to be a class-specific expense. On May 11, 2016, we notified our Dealer Manager that we would pay a primary dealer fee in the amount of up to 5.0% of the gross proceeds raised from the sale of Class I shares in the primary portion of the Follow-On Offering from May 11, 2016 through June 30, 2016, but only with respect to sales made by participating broker-dealers that we specifically approved as being eligible (the "2Q Managed Offering"). On September 19, 2016, we notified our Dealer Manager that we would pay a primary dealer fee in the amount of up to 5.0% of the gross proceeds raised from the sale of Class I shares in the primary portion of the Follow-On Offering from September 19, 2016 through November 30, 2016 (the “3Q Managed Offering”), but only with respect to sales made by participating broker-dealers that we specifically approved as being eligible. The maximum primary dealer fee we will pay our Dealer Manager is now $7.5 million , although in the future we may provide for additional primary dealer fee payments. During the nine months ended September 30, 2016 , we raised approximately $33.9 million pursuant to the 2Q Managed Offering. The closings for the 3Q Managed Offering occurred subsequent to September 30, 2016 . We conducted three distinct similar “managed offerings” in 2015, 2014, and 2013, in which we raised approximately $50.8 million , $44.0 million , and $27.1 million , respectively. During the nine months ended September 30, 2016 , we incurred primary dealer fees earned from the gross proceeds raised pursuant to the 2Q Managed Offering of approximately $1.7 million , of which approximately $170,000 was retained by our Dealer Manager. During the nine months ended September 30, 2015 , we incurred primary dealer fees of approximately $2.5 million , of which approximately $254,000 was retained by our Dealer Manager. Property Management Agreement On June 23, 2016, we and Dividend Capital Property Management LLC (the “Property Manager”) agreed to terminate the property management agreement dated January 9, 2006, with the Property Manager (the “Property Management Agreement”) as no services were being provided by the Property Manager under the Property Management Agreement. The Property Manager waived the notice period for termination so that the Property Management Agreement terminated immediately. Restricted Stock Unit Agreements We have entered into Restricted Stock Unit Agreements (the “Advisor RSU Agreements”) with our Advisor. The purposes of our Advisor RSU Agreements are to promote an alignment of interests among our stockholders, our Advisor and the personnel of our Advisor and its affiliates, and to promote retention of the personnel of our Advisor and its affiliates. Each restricted stock unit that we grant pursuant to our Advisor RSU Agreements (the "Company RSUs") will, upon vesting, be settled in one share of our Class I common stock. The Company RSUs are subject to specified vesting and settlement provisions and, upon settlement in Class I shares of Company common stock, require offsets of advisory fees and expenses otherwise payable from the Company to our Advisor based on the NAV per Class I share on the grant date of the applicable Company RSU. As of September 30, 2016 , our Advisor had approximately 76,000 shares of Class I common stock issued upon settlement of Company RSUs that remained subject to fee offset. Vesting and Payment Offset Following specified vesting provisions, an equal percentage of the Company RSUs vest on each of the applicable vesting dates. On each vesting date, an offset amount (each, an “Offset Amount”) will be calculated and deducted on a pro rata basis over the next 12 months from the cash payments otherwise due and payable to our Advisor under our then-current Advisory Agreement for any fees or expense reimbursements. Each Offset Amount equals the number of Company RSUs vesting on such date multiplied by the NAV per Class I share publicly disclosed by us (“the “Class I NAV”) as of the end of the applicable grant date (the “Grant Date NAV per Class I Share”). Each Offset Amount will always be calculated based on the Grant Date NAV per Class I Share, even beyond the initial grant and vesting date. At the end of each 12-month period following each vesting date, if the Offset Amount has not been fully realized by offsets from the cash payments otherwise due and payable to our Advisor under the Advisory Agreement, our Advisor shall promptly pay any shortfall to us. The chart below shows the grant dates, vesting dates, number of unvested and unsettled shares as of September 30, 2016 , and Grant Date NAV per Class I Share (share amounts in thousands). Award Grant Date Vesting Dates Number of Unvested Shares Grant Date NAV per Class I Share Company RSU 4/7/2014 4/14/2017 123 $ 6.96 Company RSU 2/25/2015 4/14/2017 30 7.18 Company RSU 2/25/2015 4/13/2018 135 7.18 Company RSU 2/4/2016 4/15/2019 124 7.41 Total/ weighted average 412 $ 7.18 Termination The Advisor RSU Agreements will automatically terminate upon termination or non-renewal of the Advisory Agreement by any party for any reason. In addition, upon a change in control of us, then either our Advisor or we may immediately terminate the Advisor RSU Agreements. Further, our Advisor may immediately terminate the Advisor RSU Agreements if we exercise certain rights under the Advisor RSU Agreements to replace the Company RSUs with another form of compensation. Upon termination of the Advisor RSU Agreements, our Advisor will promptly pay any unused offset amounts to us or, at our Advisor’s election, return Class I shares in equal value based on the Class I NAV as of the date of termination of the Advisor RSU Agreements. In addition, upon termination of the Advisor RSU Agreements, all unvested Company RSUs will be forfeited except that, unless the Advisor RSU Agreements were terminated at the election of our Advisor following a change in control of us or as a result of a premature termination of the Advisory Agreement at our election for cause (as defined in the Advisory Agreement) or upon the bankruptcy of our Advisor, then following such forfeiture of Company RSUs, our Advisor will have the right to acquire from us the number of Class I shares equal to the number of Company RSUs forfeited, in return for a purchase price equal to such number of Class I shares multiplied by the Grant Date NAV per Class I Share. Our Advisor must notify us of its election to exercise the foregoing acquisition right within 30 days following the termination of the Advisor RSU Agreements, and the parties will close the transaction within 60 days following the termination of the Advisor RSU Agreements. Dividend Equivalent Payments If our board of directors declares and we pay a cash dividend on Class I shares for any period in which the Company RSUs are outstanding (regardless of whether such Company RSUs are then vested), our Advisor will be entitled to dividend equivalents (the “Dividend Equivalents”) with respect to that cash dividend equal to the cash dividends that would have been payable on the same number of Class I shares as the number of Company RSUs subject to the Advisor RSU Agreements had such Class I shares been outstanding during the same portion of such period as the Company RSUs were outstanding. Any such Dividend Equivalents may be paid in cash or Class I shares, at our Advisor’s election. Restricted Stock Grant Effective February 4, 2016, we granted 49,340 restricted shares of Class I common stock to certain employees of our Advisor and its affiliates at a price of $7.41 per share, which will vest ratably over four years. During the nine months ended September 30, 2016 , 27,290 shares vested at a weighted average price of $7.39 , based on our NAV per share as of the vesting dates. Private Placements of Delaware Statutory Trust Interests Private Placements In March 2016, we, through our Operating Partnership, initiated a program to raise capital in private placements exempt from registration under the Securities Act of 1933, as amended (“Private Placements”), through the sale of beneficial interests (“Interests”) in specific Delaware statutory trusts holding real properties, including properties currently indirectly owned by our Operating Partnership (the “DST Program”). From 2006 through 2009, we, through our subsidiaries, conducted similar private placement offerings of fractional interests in which it raised a total of $183.1 million in gross proceeds. These fractional interests were all subsequently acquired by our Operating Partnership in exchange for an aggregate of 17.7 million OP Units. As of September 30, 2016 , we had sold approximately $1.3 million in Interests, which we include in "other liabilities" in our accompanying balance sheets. Each Private Placement will offer Interests in one or more real properties placed into one or more Delaware statutory trust(s) by our Operating Partnership or its affiliates (“DST Properties”). We anticipate that these Interests may serve as replacement properties for investors seeking to complete like-kind exchange transactions under Section 1031 of the Internal Revenue Code of 1986, as amended (the “Code”). Additionally, properties underlying Interests sold to investors pursuant to such Private Placements will be leased-back by an indirect wholly owned subsidiary of our Operating Partnership on a long term basis of up to 29 years. The lease agreements are expected to be fully guaranteed by our Operating Partnership. Additionally, our Operating Partnership will retain a fair market value purchase option (“FMV Option”) giving it the right, but not the obligation, to acquire the Interests from the investors at a later time in exchange for OP Units. DST Program Dealer Manager Agreement In connection with the DST Program, in March 2016, Dividend Capital Exchange LLC (“DCX”), a wholly owned subsidiary of our taxable REIT subsidiary that is wholly owned by our Operating Partnership, entered into a Dealer Manager Agreement with our Dealer Manager, pursuant to which our Dealer Manager agreed to conduct Private Placements for Interests reflecting an indirect ownership of up to $500 million of Interests. DCX will pay certain up-front fees and reimburse certain related expenses to the Dealer Manager with respect to capital raised through any such Private Placements. DCX is obligated to pay our Dealer Manager a dealer manager fee of up to 1.5% of gross equity proceeds raised and a commission of up to 5% of gross equity proceeds raised through the Private Placements. The Dealer Manager may re-allow such commissions and a portion of such dealer manager fee to participating broker dealers. In addition, we, or our subsidiaries, are obligated to pay directly or reimburse our Advisor and our Dealer Manager if they pay on our behalf, any organization and offering expenses (other than selling commissions and the dealer manager fee) as and when incurred. These expenses may include reimbursements for the bona fide due diligence expenses of participating broker-dealers, supported by detailed and itemized invoices, and similar diligence expenses of investment advisers, legal fees of our Dealer Manager, reimbursements for customary travel, lodging, meals and reasonable entertainment expenses of registered persons associated with our Dealer Manager, the cost of educational conferences held by us, including costs reimbursement for registered persons associated with our Dealer Manager and registered representatives of participating broker-dealers to attend educational conferences sponsored by us, and attendance fees and costs reimbursement for registered persons associated with our Dealer Manager to attend seminars conducted by participating broker-dealers and promotional items. We intend to recoup the costs of the selling commissions and dealer manager fees described above through a purchase price “mark-up” of the initial estimated fair value of the DST Properties to be sold to investors, thereby placing the economic burden of these up-front fees on the investors purchasing such Interests. In addition, to offset some or all of our organization and offering expenses associated with the Private Placements, we will add a purchase price mark-up of the estimated fair value of the DST Properties to be sold to investors in the amount of 1.5% of the gross equity proceeds. Collectively, these purchase price mark-ups total up to 8% of the gross equity proceeds raised in the Private Placements. Additionally, we will be paid, by investors purchasing Interests, a non-accountable reimbursement equal to 1.0% of gross equity proceeds for real estate transaction costs that we expect to incur in selling or buying these Interests. Also, investors purchasing Interests will be required to pay their own respective closing costs upon the initial sale of the interests. Limited Partnership Agreement In connection with the launch of the DST Program, the Company, on behalf of itself as general partner and on behalf of all the limited partners thereto, entered into the Fifth Amended and Restated Limited Partnership Agreement of our Operating Partnership, dated as of March 2, 2016, which was further amended on August 2, 2016 (the “Amended and Restated Operating Partnership Agreement”). The Amended and Restated Operating Partnership Agreement amends the prior operating partnership agreement by establishing two series of Class E OP Units, with different redemption and registration rights. The currently existing third-party holders of Class E OP Units will now hold Series 1 Class E OP Units, and will continue to have the same redemption and registration rights they had previously, which include the right, in certain circumstances to require our Operating Partnership to redeem the OP Units for Class E shares of the Company or cash. Any purchasers of Interests in the DST Program that ultimately acquire OP Units through the FMV Option will acquire Series 2 Class E OP Units, which will have similar redemption and registration rights to those of the holders of Series 1 Class E OP Units, except that their redemption rights will in certain circumstances require our Operating Partnership to redeem the OP Units for either Class I shares of the Company or cash (as determined by our Operating Partnership in its sole discretion). In addition, the Amended and Restated Operating Partnership Agreement provides that a redemption fee of 1.5% of the shares otherwise payable to a limited partner upon redemption of Series 2 Class E Units will be paid to an affiliate of the Manager (defined below). Holders of Series 1 or Series 2 Class E OP Units cannot require us to redeem their Series 1 or Series 2 Class E OP Units with cash. Delaware Statutory Trust Agreement DCX Manager LLC (the “Manager”), an affiliate of our Advisor, will be engaged to act as the manager of each Delaware statutory trust holding a DST Property. Although the intention is to sell 100% of the interests to third parties, DCX may hold an interest for a period of time and therefore could be subject to the following description of fees and reimbursements paid to the Manager. The Manager will have primary responsibility for performing administrative actions in connection with the trust and any DST Property and has the sole power to determine when it is appropriate for a trust to sell a DST Property. The Manager will be entitled to the following payments from the trust: (i) a management fee equal to a stated percentage (e.g., 1.0%) of the gross rents payable to the trust, with such amount to be set on a deal-by-deal basis, (ii) a disposition fee of 1.0% of the gross sales price of any DST Property sold to a third party, and (iii) reimbursement of certain expenses associated with the establishment, maintenance and operation of the trust and DST Properties. Additionally, the Manager or its affiliate may earn a 1.0% loan fee for any financing arrangement sourced, negotiated and executed in connection with the DST Program. This loan fee only is payable to the Manager by new investors that purchase Interests and therefore is not paid by the Company or its affiliates. Summary of Fees and Other Amounts The following table summarizes fees and other amounts earned by our Advisor and its related parties in connection with services performed for us during the three and nine months ended September 30, 2016 and 2015 (amounts in thousands, except footnoted information): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2016 2015 2016 2015 Advisory fees (1) $ 3,681 $ 4,225 $ 11,118 $ 13,021 Other reimbursements paid to our Advisor (2) 1,928 2,176 6,232 6,590 Other reimbursements paid to our Dealer Manager 155 33 237 310 Advisory fees related to the disposition of real properties 271 201 2,078 4,779 Development management fee (3) — 18 31 52 Primary dealer fee (4) — — 1,697 2,540 Selling commissions, dealer manager, and distribution fees 124 102 399 271 Total $ 6,159 $ 6,755 $ 21,792 $ 27,563 (1) Amounts reported for the three months ended September 30, 2016 and 2015 include approximately $284,000 and $283,000 , respectively, that we were not obligated to pay in consideration of the issuance of Company RSUs to our Advisor. Amounts reported for the nine months ended September 30, 2016 and 2015 include approximately $849,000 and $786,000 , respectively, that we were not obligated to pay in consideration of the issuance of Company RSUs to our Advisor. (2) Other reimbursements paid to our Advisor include reimbursements for a portion of compensation costs of employees of our Advisor related to activities for which our Advisor does not otherwise receive a separate fee. We reimbursed our Advisor approximately $1.6 million and $1.8 million for the three months ended September 30, 2016 and 2015 , respectively, and $5.2 million and $5.4 million for the nine months ended September 30, 2016 and 2015 , respectively, for such compensation costs. These reimbursements include a portion of compensation costs for certain of our named executive officers. The balance of such reimbursements are made up primarily of other general overhead and administrative expenses, including, but not limited to, allocated rent paid to both third parties and affiliates of our advisor, equipment, utilities, insurance, travel and entertainment, and other costs. (3) Pursuant to our amended Advisory Agreement effective as of June 23, 2016, our Advisor will no longer receive a development management fee in exchange for providing development management services. (4) Amounts reported represent primary dealer fees we paid to our Dealer Manager based on the gross proceeds raised by participating broker-dealers pursuant to certain selected dealer agreements. Of the primary dealer fee earned during the nine months ended September 30, 2016 and 2015 , our Dealer Manager reallowed approximately $1.5 million and $2.3 million , respectively, to participating third-party broker-dealers and retained approximately $170,000 and $254,000 , respectively. See the accompanying condensed consolidated balance sheets for the amounts we owed to our Advisor and affiliates of our Advisor for such services and reimbursement of certain expenses as of September 30, 2016 and December 31, 2015 . Pursuant to the Advisory Agreement, we accrue the advisory fee on a daily basis and pay our Advisor amounts due subsequent to each month-end. In addition, we recorded a liability of approximately $3.4 million for dealer manager and distribution fees that we estimate that we may pay to our Dealer Manager in future periods for shares of our common stock sold in our Follow-On Offering as of September 30, 2016 . We anticipate that our Dealer Manager will reallow a significant portion of such fees to third-party broker dealers. |
Net Income (Loss) Per Common Sh
Net Income (Loss) Per Common Share | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Common Share | NET INCOME (LOSS) PER COMMON SHARE Reconciliations of the numerator and denominator used to calculate basic net income (loss) per common share to the numerator and denominator used to calculate diluted net income (loss) per common share for the three and nine months ended September 30, 2016 and 2015 are described in the following table (amounts in thousands, except per share information): For the Three Months Ended September 30, For the Nine Months Ended September 30, Numerator 2016 2015 2016 2015 Net income (loss) $ 3,318 $ (1,425 ) $ 51,690 $ 130,883 Net (income) loss attributable to noncontrolling interests (353 ) 1,297 (4,826 ) (7,358 ) Net income (loss) attributable to common stockholders 2,965 (128 ) 46,864 123,525 Dilutive noncontrolling interests share of net income (loss) 230 (10 ) 3,639 8,575 Numerator for diluted earnings per share – adjusted net income (loss) 3,195 (138 ) 50,503 132,100 Denominator Weighted average shares outstanding-basic 158,688 174,290 161,274 179,168 Incremental weighted average shares effect of conversion of OP units 12,264 12,989 12,486 12,852 Weighted average shares outstanding-diluted 170,952 187,279 173,760 192,020 INCOME (LOSS) PER COMMON SHARE -BASIC AND DILUTED $ 0.02 $ (0.00 ) $ 0.29 $ 0.69 |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION We have three reportable operating segments, which include our three real property operating sectors (office, industrial, and retail), and we measure our profit and loss of our operating segments based on net operating income (“NOI”). We organize and analyze the operations and results of each of these segments independently, due to inherently different considerations for each segment. Such considerations include, but are not limited to, the nature and characteristics of the investment, investment strategies and objectives. Specifically, the physical characteristics of our buildings, the related operating characteristics, the geographic markets, and the type of tenants are inherently different for each of our segments. The following tables set forth revenue and the components of NOI of our segments for the three and nine months ended September 30, 2016 and 2015 (amounts in thousands): For the Three Months Ended September 30, Revenues NOI 2016 2015 2016 2015 Office $ 31,082 $ 34,418 $ 20,657 $ 23,937 Industrial 1,449 1,358 968 885 Retail 20,727 17,078 15,196 13,155 Total $ 53,258 $ 52,854 $ 36,821 $ 37,977 For the Nine Months Ended September 30, Revenues NOI 2016 2015 2016 2015 Office $ 96,034 $ 102,631 $ 64,785 $ 74,056 Industrial 4,694 7,147 3,345 5,656 Retail 60,776 53,530 44,986 40,184 Total $ 161,504 $ 163,308 $ 113,116 $ 119,896 We consider NOI to be an appropriate supplemental financial performance measure because NOI reflects the specific operating performance of our real properties and debt related investments, and excludes certain items that are not considered to be controllable in connection with the management of each property, such as depreciation and amortization, general and administrative expenses, advisory fees, acquisition-related expenses, interest and other income, interest expense, loss on extinguishment of debt and financing commitments, gain on the sale of real property and noncontrolling interests. However, NOI should not be viewed as an alternative measure of our financial performance as a whole, since it excludes such items that could materially impact our results of operations. Further, our NOI may not be comparable to that of other real estate companies, as they may use different methodologies for calculating NOI. Therefore, we believe net income (loss), as defined by GAAP, to be the most appropriate measure to evaluate our overall financial performance. As of September 30, 2016 , we had approximately $15.3 million in net debt related investments, which was not material relative to our total investments. Our management currently is not seeking to increase our investment in our debt related investments portfolio due to its less desirable return when compared to our other investment options. As such, we no longer consider debt related investments to be a material reportable operating segment. Accordingly, we have not presented debt related investments as a separate segment for the three and nine months ended September 30, 2016 and we have revised the prior period to conform to the presentation of the current period. The following table is a reconciliation of our NOI to our reported net income (loss) attributable to common stockholders for the three and nine months ended September 30, 2016 and 2015 (amounts in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2016 2015 2016 2015 Net operating income $ 36,821 $ 37,977 $ 113,116 $ 119,896 Debt related income 235 807 710 5,594 Real estate depreciation and amortization expense (19,989 ) (20,851 ) (60,022 ) (61,404 ) General and administrative expenses (2,234 ) (2,477 ) (7,192 ) (8,157 ) Advisory fees, related party (3,681 ) (4,225 ) (11,118 ) (13,021 ) Acquisition-related expenses (136 ) (476 ) (661 ) (1,259 ) Impairment of real estate property (2,090 ) (6,500 ) (2,677 ) (8,124 ) Interest and other income 2,308 704 2,297 1,500 Interest expense (10,011 ) (10,951 ) (31,394 ) (36,208 ) Gain (loss) on extinguishment of debt and financing commitments — — 5,136 (1,168 ) Gain on sale of real property 2,095 4,567 43,495 133,234 Net (income) loss attributable to noncontrolling interests (353 ) 1,297 (4,826 ) (7,358 ) Net income (loss) attributable to common stockholders $ 2,965 $ (128 ) $ 46,864 $ 123,525 The following table reflects our total assets by business segment as of September 30, 2016 and December 31, 2015 (amounts in thousands): As of September 30, December 31, Segment assets: Office $ 835,272 $ 1,027,132 Industrial 58,147 61,231 Retail 834,497 785,854 Total segment assets, net 1,727,916 1,874,217 Non-segment assets: Debt related investments, net 15,340 15,722 Cash and cash equivalents 34,403 15,769 Other non-segment assets (1) 44,002 55,183 Total assets $ 1,821,661 $ 1,960,891 (1) Other non-segment assets primarily consist of corporate assets including restricted cash and receivables, including straight-line rent receivable. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS We have evaluated subsequent events for the period from September 30, 2016 , the date of these financial statements, through the date these financial statements are issued, and determined that there have been no significant subsequent events. For information regarding acquisitions, dispositions, and financing transactions that occurred subsequent to September 30, 2016 , see “Subsequent Events” in “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this Quarterly Report on Form 10-Q. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Policy) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Interim Financial Statements | Interim Financial Statements The accompanying interim condensed consolidated financial statements (herein referred to as “financial statements,” “balance sheets,” “statements of operations,” “statements of comprehensive income (loss),” “statement of equity,” or “statements of cash flows”) have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and with the Commission instructions to Form 10-Q and Rule 10-01 of Regulation S-X for interim financial statements. Accordingly, these financial statements do not include all the information and disclosure required by GAAP for complete financial statements. In the opinion of management, the accompanying financial statements include all adjustments and eliminations, consisting only of normal recurring items necessary for their fair presentation in conformity with GAAP. Interim results are not necessarily indicative of operating results for a full year. The unaudited information included in this Quarterly Report on Form 10-Q should be read in conjunction with our audited financial statements and notes thereto, included in our Annual Report on Form 10-K for the year ended December 31, 2015, filed with the Commission on March 3, 2016. There have been no significant changes to the Company’s significant accounting policies during the nine months ended September 30, 2016 other than the updates described below. |
Dealer Manager and Distribution Fees | Dealer Manager and Distribution Fees We record a liability for dealer manager and distribution fees that we estimate that we may pay to Dividend Capital Securities LLC (our "Dealer Manager") in future periods for shares of our common stock sold pursuant to the Prior Offering and the Follow-On Offering with a corresponding reduction in proceeds received from the sale of our common stock. Accordingly, as of September 30, 2016 , we recorded a liability for estimated future dealer manager and distribution fees of approximately $3.4 million . This liability included an immaterial amount related to shares issued prior to March 31, 2016. See Note 9 for further discussion of our Dealer Manager and the dealer manager and distribution fees. |
Reclassifications | Reclassifications Certain previously reported amounts have been reclassified to conform to the current period financial statement presentation. In April 2015, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update 2015-03 (“ASU 2015-03”), which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The guidance is effective for all reporting periods beginning after December 15, 2015 and requires retrospective application. As a result of adopting this guidance, we reclassified approximately $5.1 million and $1.2 million of net debt issuance costs to “unsecured borrowings” and “mortgage notes”, respectively, in the accompanying condensed consolidated balance sheet as of December 31, 2015 . We recorded approximately $4.2 million and $1.9 million of net debt issuance costs into “unsecured borrowings” and “mortgage notes”, respectively, in the accompanying condensed consolidated balance sheet as of September 30, 2016 . |
New Accounting Pronouncements | New Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update 2016-13, which introduces a new model for recognizing credit losses for certain financial instruments, including loans, accounts receivable and debt securities. The new model requires an estimate of expected credit losses over the life of exposure to be recorded through the establishment of an allowance account, which is presented as an offset to the related financial asset. The expected credit loss is recorded upon the initial recognition of the financial asset. The guidance will be effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2019. Earlier application is permitted. The guidance will generally be adopted on a modified retrospective basis, with exceptions for certain types of financial assets. We do not anticipate the adoption will have a significant impact on our financial statements. In March 2016, the FASB issued Accounting Standards Update 2016-05, which clarifies the effect of derivative contract novations on existing hedge accounting relationships. The guidance states that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under ASC Topic 815, Derivatives and Hedging (“ASC Topic 815”) does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. The guidance will be effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016. The guidance can be adopted on either a prospective basis or a modified retrospective basis. Earlier application is permitted. We do not anticipate the adoption will have a significant impact on our financial statements. In February 2016, the FASB issued Accounting Standards Update 2016-02 (“ASU 2016-02”), which amends the accounting guidance regarding lessees accounting, leveraged leases, and sale and leaseback transactions. The accounting applied by a lessor is largely unchanged under ASU 2016-02. The guidance will be effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2018. The guidance should be adopted using a modified retrospective transition, which will require application of ASU 2016-02 at the beginning of the earliest comparative period presented. Earlier application is permitted. We do not anticipate the adoption will have a significant impact on our financial statements. |
Newly Adopted Accounting Pronouncements | Newly Adopted Accounting Pronouncements In February 2015, the FASB issued Accounting Standards Update 2015-02 (“ASU 2015-02”), which amends certain guidance applicable to the consolidation of various legal entities, including variable interest entities. The amendments in ASU 2015-02 are effective for annual and interim periods in fiscal years beginning after December 15, 2015, with earlier adoption permitted. As a result of adopting this guidance as of January 1, 2016, our Operating Partnership qualifies as a variable interest entity. |
Investments in Real Property (T
Investments in Real Property (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Real Estate [Abstract] | |
Schedule of Consolidated Investments in Real Property | The following tables summarize our consolidated investments in real property as of September 30, 2016 and December 31, 2015 (amounts in thousands): Real Property Land Building and Improvements Intangible Lease Assets Total Investment Amount Intangible Lease Liabilities Net Investment Amount As of September 30, 2016: Office $ 171,176 $ 696,652 $ 236,915 $ 1,104,743 $ (15,121 ) $ 1,089,622 Industrial 8,821 63,803 16,307 88,931 (344 ) 88,587 Retail 294,735 599,071 113,647 1,007,453 (76,003 ) 931,450 Total gross book value 474,732 1,359,526 366,869 2,201,127 (91,468 ) 2,109,659 Accumulated depreciation/amortization — (200,907 ) (272,304 ) (473,211 ) 30,111 (443,100 ) Total net book value $ 474,732 $ 1,158,619 $ 94,565 $ 1,727,916 $ (61,357 ) $ 1,666,559 As of December 31, 2015: Office $ 203,889 $ 833,655 $ 310,629 $ 1,348,173 $ (18,923 ) $ 1,329,250 Industrial 9,572 65,307 16,436 91,315 (344 ) 90,971 Retail 260,761 570,700 109,225 940,686 (74,282 ) 866,404 Total gross book value 474,222 1,469,662 436,290 2,380,174 (93,549 ) 2,286,625 Accumulated depreciation/amortization — (208,281 ) (297,676 ) (505,957 ) 29,675 (476,282 ) Total net book value $ 474,222 $ 1,261,381 $ 138,614 $ 1,874,217 $ (63,874 ) $ 1,810,343 ]] ]] |
Schedule of Real Property Acquired | The following table summarizes our acquisition of real property during the nine months ended September 30, 2016 (dollar amounts and square footage in thousands): Real Property Property Type Market Date of Acquisition Acquired Ownership Contract Price Net Rentable Square Feet Percent Leased Suniland Shopping Center Retail South Florida 5/27/2016 100% $ 66,500 82 93.2 % |
Schedule of Allocation of Fair Value of Acquired Real Properties | The following table summarizes the allocation of the fair value of the real property we acquired during the nine months ended September 30, 2016 to land, building and improvements, intangible lease assets, and intangible lease liabilities (dollar amounts in thousands). We have not made any material adjustments related to this allocation. Weighted-average Amortization Period (Years) Real Property Land Building and Improvements Intangible Lease Assets Intangible Lease Liabilities Total Fair Value Prorations and Credits Contract Price Intangible Lease Assets Intangible Lease Liabilities Suniland Shopping Center $ 34,804 $ 28,022 $ 5,880 $ (2,113 ) $ 66,593 $ (93 ) $ 66,500 5.8 2.5 |
Schedule Of Disposed Properties | During the the nine months ended September 30, 2016 and 2015 , we disposed of the following properties (dollar amounts and square footage in thousands): Property Type Market Ownership Net Rentable Square Feet Percentage Leased Disposition Date Contract Sales Price Gain on Sale For the nine months ended September 30, 2016 Office Washington, DC 100% 574 100 % 2/18/2016 $ 158,400 $ 41,241 Office Chicago, IL 80% 107 66 % 3/1/2016 9,850 — Office Chicago, IL 80% 199 81 % 3/1/2016 18,000 159 Retail Greater Boston 100% 39 100 % 8/5/2016 3,625 975 Industrial Louisville, KY 90% 126 33 % 9/2/2016 5,400 1,120 Office Washington, DC 100% 178 — % 9/30/2016 18,600 — Total/ Weighted Average 1,223 73 % $ 213,875 $ 43,495 For the nine months ended September 30, 2015 Office Dallas, TX 100% 177 88 % 1/16/2015 $ 46,600 $ 23,125 Office and Industrial Portfolio (1) Various (1) 100% 2,669 100 % 3/11/2015 398,635 105,542 Retail Pittsburgh, PA 100% 103 93 % 5/5/2015 12,500 — Office Los Angeles, CA 100% 111 — % 7/20/2015 12,549 2,866 Land Parcel Denver, CO 100% N/A N/A 8/12/2015 7,577 1,701 Total/ Weighted Average 3,060 95 % $ 477,861 $ 133,234 (1) The portfolio includes six office properties comprising 1.1 million net rentable square feet located in the following markets: Los Angeles, CA ( three properties, of which one disposed property was a single building from a two-building office property), Northern New Jersey, Miami, FL, and Dallas, TX, and six industrial properties comprising 1.6 million net rentable square feet located in the following markets: Los Angeles, CA, Dallas, TX, Cleveland, OH, Chicago, IL, Houston, TX, and Denver, CO. |
Schedule of Adjustments to Rental Revenue Related to Amortization of Above-Market Lease Assets, Below-Market Lease Liabilities, and for Straight-Line Rental Adjustments | In addition, the following table summarizes tenant recovery income received from tenants for real estate taxes, insurance and other property operating expenses and recognized as rental revenue (amounts in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Straight-line rent adjustments $ (296 ) $ (286 ) $ (742 ) $ (684 ) Above-market lease assets (1,402 ) (1,307 ) (3,930 ) (3,923 ) Below-market lease liabilities 1,529 1,437 4,608 4,539 Total increase to rental revenue $ (169 ) $ (156 ) $ (64 ) $ (68 ) Tenant recovery income (1) $ 10,623 $ 9,293 $ 31,183 $ 28,031 (1) Tenant recovery income presented in this table excludes real estate taxes that were paid directly by our tenants that are subject to triple net lease contracts. Such payments totaled approximately $1.0 million and $1.4 million during the three months ended September 30, 2016 and 2015 , respectively, and approximately $3.3 million and $5.5 million during the nine months ended September 30, 2016 and 2015 , respectively |
Schedule of Top Five Tenants as Percentage of Consolidated Annual Base Rent and Square Feet | The following is a summary of amounts related to the top five tenants based on annualized base rent, as of September 30, 2016 (dollar amounts and square feet in thousands): Tenant Locations Industry Annualized Base Rent (1) % of Total Annualized Base Rent Square Feet % of Total Portfolio Square Feet Charles Schwab & Co., Inc. 2 Securities, Commodities, Fin. Inv./Rel. Activities $ 23,645 13.8 % 602 7.3 % Sybase 1 Publishing Information (except Internet) 18,692 10.9 % 405 4.9 % Stop & Shop 14 Food and Beverage Stores 13,980 8.2 % 853 10.4 % Novo Nordisk 1 Chemical Manufacturing 4,627 2.7 % 167 2.0 % Seton Health Care 1 Hospitals 4,339 2.5 % 156 1.9 % 19 $ 65,283 38.1 % 2,183 26.5 % (1) Annualized base rent represents the annualized monthly base rent of executed leases as of September 30, 2016 . |
Debt Related Investments (Table
Debt Related Investments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Receivables [Abstract] | |
Details of Debt Related Income | The following table describes our debt related income for the three and nine months ended September 30, 2016 and 2015 (dollar amounts in thousands): Three Months Ended Nine Months Ended Weighted Average Yield as of September 30, 2016 (1) Investment Type 2016 2015 2016 2015 Mortgage notes (2) $ 235 $ 666 $ 710 $ 3,808 6.1% Mezzanine debt — 141 — 1,786 N/A Total $ 235 $ 807 $ 710 $ 5,594 6.1% (1) Weighted average yield is calculated on an unlevered basis using the amount invested, current interest rates and accretion of premiums or discounts realized upon the initial investment for each investment type as of September 30, 2016 . As of September 30, 2016 , all of our debt related investments bear interest at fixed rates. (2) We had three debt related investments structured as mortgage notes repaid in full during the nine months ended September 30, 2015 . During the nine months ended September 30, 2015 , amounts recorded include early repayment fees received and accelerated amortization of deferred due diligence costs related to certain of these repayments. |
Debt Obligations (Tables)
Debt Obligations (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Borrowings | During the nine months ended September 30, 2016 , we entered into two mortgage note borrowings. The following table describes the new borrowings in more detail (dollar amounts in thousands): Borrowings Date Borrowed Principal Balance Fixed or Floating Interest Rate Stated Interest Rate Contractual Maturity Date Extension Options Collateral Type Collateral Market Preston Sherry Plaza (1) 4/13/2016 $ 33,000 Fixed 3.05% 3/1/2023 None Office Property Dallas, TX 1300 Connecticut (2) 8/5/2016 52,500 Floating 2.17% 8/5/2023 None Office Property Washington, DC Total borrowings $ 85,500 2.51% (1) As of September 30, 2016 , the Preston Sherry Plaza term loan was subject to an interest rate spread of 1.60% over one-month LIBOR, which we have effectively fixed using an interest rate swap at 3.051% for the term of the borrowing. (2) As of September 30, 2016 , the 1300 Connecticut term loan was subject to an interest rate spread of 1.65% over one-month LIBOR. However, we entered into interest rate swaps which will effectively fix the interest rate of the borrowing at 2.852% from July 1, 2018 to July 1, 2021. The following table describes our borrowings as of September 30, 2016 and December 31, 2015 (dollar amounts in thousands): Principal Balance as of Weighted Average Stated Interest Rate as of Gross Investment Amount Securing Borrowings as of (1) September 30, December 31, September 30, December 31, September 30, December 31, Fixed-rate mortgages (2) $ 335,570 $ 580,959 5.0% 5.6% $ 528,457 $ 1,016,560 Floating-rate mortgages (3) 52,500 7,890 2.2% 3.4% 70,355 16,618 Total secured borrowings 388,070 588,849 4.6% 5.5% 598,812 1,033,178 Line of credit (4) 318,000 167,000 2.0% 1.9% N/A N/A Term loans (5) 350,000 350,000 2.6% 2.6% N/A N/A Total unsecured borrowings 668,000 517,000 2.3% 2.4% N/A N/A Total borrowings $ 1,056,070 $ 1,105,849 3.2% 4.1% N/A N/A Less: net debt issuance costs (6) (6,019 ) (6,317 ) Add: mark-to-market adjustment on assumed debt 659 1,304 Less: GAAP principal amortization on restructured debt — (3,067 ) Total borrowings (net basis) $ 1,050,710 $ 1,097,769 (1) “Gross Investment Amount” as used here and throughout this document represents the allocated gross basis of real property after certain adjustments. Gross Investment Amount for real property (i) includes the effect of intangible lease liabilities, (ii) excludes accumulated depreciation and amortization, and (iii) includes the impact of impairments. (2) Amount as of September 30, 2016 includes a floating-rate mortgage note that was subject to an interest rate spread of 1.60% over one-month LIBOR, which we have effectively fixed using an interest rate swap at 3.051% for the term of the borrowing. (3) As of September 30, 2016 , our floating rate mortgage note was subject to an interest rate spread of 1.65% over one-month LIBOR. As of December 31, 2015 , our floating rate mortgage note was subject to an interest rate spread of 3.00% over one-month LIBOR. (4) As of September 30, 2016 and December 31, 2015 , borrowings under our line of credit were subject to interest at a floating rate of 1.40% over one-month LIBOR. However, as of September 30, 2016 , we have effectively fixed the interest rate of approximately $12.2 million of the total of $318.0 million in borrowings using interest rate swaps, resulting in a weighted average interest rate on the total line of credit of 1.97% . As of December 31, 2015 , we had effectively fixed the interest rate of approximately $25.4 million of the total of $167.0 million in borrowings using interest rate swaps, resulting in a weighted average interest rate on the total line of credit of 1.88% . (5) As of September 30, 2016 and December 31, 2015 , borrowings under our term loans were subject to interest at a weighted average floating rate of 1.52% over one-month LIBOR. However, we had effectively fixed the interest rates of the borrowings using interest rate swaps at 2.62% and 2.59% as of September 30, 2016 and December 31, 2015 , respectively. (6) See Note 2 for additional information related to the reclassification of net debt issuance costs in accordance with ASU 2015-03. |
Schedule Of Repayment Of Mortgage Notes And Repurchase Facility | The following table describes these repayments in more detail (dollar amounts in thousands): Debt Obligation Repayment Date Balance Repaid/Extinguished Interest Rate Fixed or Floating Stated Interest Rate Contractual Maturity Date Collateral Type Collateral Market 1300 Connecticut 1/12/2016 $ 44,979 Fixed 6.81% 4/10/2016 Office Property Washington, DC Washington Commons (1) 2/1/2016 21,300 Fixed 5.94% 2/1/2016 Office Property Chicago, IL 40 Boulevard (2) 3/1/2016 7,830 Floating 3.44% 3/11/2016 Office Property Chicago, IL Jay Street 4/11/2016 23,500 Fixed 6.05% 7/11/2016 Office Property Silicon Valley, CA 655 Montgomery 4/11/2016 55,683 Fixed 6.01% 6/11/2016 Office Property San Francisco, CA Bala Pointe 7/1/2016 24,000 Fixed 5.89% 9/1/2016 Office Property Philadelphia, PA Harborside 9/9/2016 104,675 Fixed 5.50% 12/10/2016 Office Property Northern New Jersey Total/weighted average borrowings $ 281,967 5.87% (1) Amount presented includes a $5.1 million contingently payable mortgage note that was not ultimately required to be repaid. As a result of the transaction, we recognized a gain on extinguishment of debt and financing commitments of approximately $5.1 million during the nine months ended September 30, 2016 . (2) The mortgage note was subject to an interest rate of 3.0% over one-month LIBOR. |
Schedule of Borrowings Reflects Contractual Debt Maturities | The following table reflects our contractual debt maturities as of September 30, 2016 , specifically our obligations under our mortgage notes and unsecured borrowings (dollar amounts in thousands): As of September 30, 2016 Mortgage Notes Unsecured Borrowings Total Year Ending December 31, Number of Borrowings Maturing Outstanding Principal Balance Number of Borrowings Maturing Outstanding Principal Balance Outstanding Principal Balance 2016 — $ 400 — $ — $ 400 2017 6 206,660 — — 206,660 2018 — 2,698 1 150,000 152,698 2019 — 3,698 1 318,000 321,698 2020 — 3,860 — — 3,860 2021 1 12,764 — — 12,764 2022 1 3,660 1 200,000 203,660 2023 2 77,899 — — 77,899 2024 — 1,034 — — 1,034 2025 1 71,094 — — 71,094 Thereafter 2 4,303 — — 4,303 Total 13 $ 388,070 3 $ 668,000 $ 1,056,070 Less: net debt issuance costs (1) (1,868 ) (4,151 ) Add: mark-to-market adjustment on assumed debt 659 — Total borrowings (net basis) $ 386,861 $ 663,849 (1) See Note 2 for additional information related to the reclassification of net debt issuance costs in accordance with ASU 2015-03. |
Derivatives And Hedging Activ25
Derivatives And Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Reconciliation of Accumulated Other Comprehensive Loss | The table below presents a reconciliation of the beginning and ending balances, between December 31, 2015 and September 30, 2016 , of our accumulated other comprehensive loss (“OCI”), net of amounts attributable to noncontrolling interests, related to the effective portion of our cash flow hedges as presented on our condensed consolidated financial statements, as well as amounts related to our available-for-sale securities (amounts in thousands): Gains and Losses on Cash Flow Hedges Unrealized Losses on Available-For-Sale Securities Accumulated Other Comprehensive Loss Beginning balance as of December 31, 2015 $ (9,967 ) $ (1,047 ) $ (11,014 ) Other comprehensive income: Amount of loss reclassified from OCI into 3,470 — 3,470 Change in fair value recognized in OCI (13,350 ) — (13,350 ) Net current-period other comprehensive income (9,880 ) — (9,880 ) Attribution of and other adjustments to OCI attributable to noncontrolling interests 737 (9 ) 728 Ending balance as of September 30, 2016 $ (19,110 ) $ (1,056 ) $ (20,166 ) |
Gross Fair Value of Derivative Financial Instruments as Well as Their Classification | The table below presents the gross fair value of our designated derivative financial instruments as well as their classification on our accompanying condensed consolidated balance sheets as of September 30, 2016 and December 31, 2015 (amounts in thousands, except for footnoted information): Fair Value of Asset Derivatives as of Fair Value of Liability Derivatives as of Balance Sheet Location September 30, 2016 December 31, 2015 Balance Sheet Location September 30, 2016 December 31, 2015 Interest rate contracts Other assets, net (1) $ 15 $ 197 Other liabilities (1) $ (14,453 ) $ (3,303 ) (1) Although our derivative contracts are subject to master netting arrangements which serve as credit mitigants to both us and our counterparties under certain situations, we do not net our derivative fair values or any existing rights or obligations to cash collateral on our accompanying condensed consolidated balance sheets. If we did net our derivative fair values on our accompanying condensed consolidated balance sheets, the derivative fair values would be lowered by approximately $12,000 and $157,000 as of September 30, 2016 and December 31, 2015 , respectively, resulting in net fair values of our asset derivatives of approximately $3,000 and $40,000 as of September 30, 2016 and December 31, 2015 , respectively, and net fair values of our liability derivatives of approximately $14.4 million and $3.1 million as of September 30, 2016 and December 31, 2015 , respectively. |
Effect of Derivative Financial Instruments on Financial Statements | The table below presents the effect of our derivative financial instruments on our accompanying financial statements for the three and nine months ended September 30, 2016 and 2015 (amounts in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2016 2015 2016 2015 Derivatives Designated as Hedging Instruments Derivative type Interest rate contracts Interest rate contracts Interest rate contracts Interest rate contracts Amount of gain (loss) recognized in OCI (effective portion) $ 1,747 $ (7,236 ) $ (13,350 ) $ (8,789 ) Location of loss reclassified from accumulated OCI into income (effective portion) Interest Interest Interest Interest Amount of loss reclassified from accumulated OCI into income (effective portion) $ 1,154 $ 1,220 $ 3,470 $ 3,538 Location of loss recognized in income (ineffective portion and amount excluded from effectiveness testing) Interest and other income (expense) Interest and other income (expense) Interest and other income (expense) Interest and other income (expense) Amount of loss recognized in income (ineffective portion and amount excluded from effectiveness testing) $ — $ (117 ) $ — $ — |
Fair Value of Financial Instr26
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Financial Instruments, Owned, at Fair Value [Abstract] | |
Schedule of Carrying Amount and Fair Values of Other Financial Instruments | The table below presents the carrying amounts and estimated fair values of our other financial instruments, other than derivatives which are disclosed in Note 6, as of September 30, 2016 and December 31, 2015 (amounts in thousands): As of September 30, 2016 As of December 31, 2015 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Assets: Fixed-rate debt related investments, net $ 15,340 $ 16,170 $ 15,722 $ 16,526 Liabilities: Fixed-rate mortgage notes (1) $ 334,916 $ 342,163 $ 577,978 $ 576,432 Floating-rate mortgage notes 51,945 51,356 7,886 7,883 Floating-rate unsecured borrowings 663,849 668,000 511,905 517,000 (1) Amount includes a floating-rate mortgage note of approximately $32.5 million as of September 30, 2016 that was subject to an interest rate spread of 1.60% over one-month LIBOR, which we have effectively fixed using an interest rate swap at 3.051% for the term of the borrowing. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Stockholders' Equity Attributable to Parent [Abstract] | |
Information of Share Transactions | The following table describes the changes in each class of common shares during the nine months ended September 30, 2016 (shares and dollar amounts in thousands): Class E Class A Class W Class I Total Shares Amount (1) Shares Amount (1) Shares Amount (1) Shares Amount (1) Shares Amount (1) Balances, 137,275 $ 1,482,140 1,703 $ 12,438 1,812 $ 12,952 23,334 $ 162,283 164,124 1,669,813 Issuance of common stock: Shares sold — — 321 2,449 742 5,499 5,892 43,533 6,955 51,481 Distribution reinvestment plan 1,521 11,247 30 224 31 229 490 3,613 2,072 15,313 Stock-based compensation — — — — — — 32 1,083 32 1,083 Redemptions and repurchases of common stock (18,897 ) (138,853 ) (162 ) (1,193 ) (337 ) (2,480 ) (718 ) (5,312 ) (20,114 ) (147,838 ) Balances, 119,899 $ 1,354,534 1,892 $ 13,918 2,248 $ 16,200 29,030 $ 205,200 153,069 $ 1,589,852 (1) Dollar amounts presented in this table represent the gross amount of proceeds from the sale of common shares, or the amount paid to stockholders to redeem or repurchase common shares, and do not include other costs and expenses accounted for within additional paid-in capital, such as selling commissions, dealer manager and distribution fees, offering and organizational costs, and other costs associated with our distribution reinvestment plans, share redemption programs, and self-tender offers. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Schedule Of RSU Grants | The chart below shows the grant dates, vesting dates, number of unvested and unsettled shares as of September 30, 2016 , and Grant Date NAV per Class I Share (share amounts in thousands). Award Grant Date Vesting Dates Number of Unvested Shares Grant Date NAV per Class I Share Company RSU 4/7/2014 4/14/2017 123 $ 6.96 Company RSU 2/25/2015 4/14/2017 30 7.18 Company RSU 2/25/2015 4/13/2018 135 7.18 Company RSU 2/4/2016 4/15/2019 124 7.41 Total/ weighted average 412 $ 7.18 |
Schedule of Fees and Other Amounts Earned by Advisor | The following table summarizes fees and other amounts earned by our Advisor and its related parties in connection with services performed for us during the three and nine months ended September 30, 2016 and 2015 (amounts in thousands, except footnoted information): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2016 2015 2016 2015 Advisory fees (1) $ 3,681 $ 4,225 $ 11,118 $ 13,021 Other reimbursements paid to our Advisor (2) 1,928 2,176 6,232 6,590 Other reimbursements paid to our Dealer Manager 155 33 237 310 Advisory fees related to the disposition of real properties 271 201 2,078 4,779 Development management fee (3) — 18 31 52 Primary dealer fee (4) — — 1,697 2,540 Selling commissions, dealer manager, and distribution fees 124 102 399 271 Total $ 6,159 $ 6,755 $ 21,792 $ 27,563 (1) Amounts reported for the three months ended September 30, 2016 and 2015 include approximately $284,000 and $283,000 , respectively, that we were not obligated to pay in consideration of the issuance of Company RSUs to our Advisor. Amounts reported for the nine months ended September 30, 2016 and 2015 include approximately $849,000 and $786,000 , respectively, that we were not obligated to pay in consideration of the issuance of Company RSUs to our Advisor. (2) Other reimbursements paid to our Advisor include reimbursements for a portion of compensation costs of employees of our Advisor related to activities for which our Advisor does not otherwise receive a separate fee. We reimbursed our Advisor approximately $1.6 million and $1.8 million for the three months ended September 30, 2016 and 2015 , respectively, and $5.2 million and $5.4 million for the nine months ended September 30, 2016 and 2015 , respectively, for such compensation costs. These reimbursements include a portion of compensation costs for certain of our named executive officers. The balance of such reimbursements are made up primarily of other general overhead and administrative expenses, including, but not limited to, allocated rent paid to both third parties and affiliates of our advisor, equipment, utilities, insurance, travel and entertainment, and other costs. (3) Pursuant to our amended Advisory Agreement effective as of June 23, 2016, our Advisor will no longer receive a development management fee in exchange for providing development management services. (4) Amounts reported represent primary dealer fees we paid to our Dealer Manager based on the gross proceeds raised by participating broker-dealers pursuant to certain selected dealer agreements. Of the primary dealer fee earned during the nine months ended September 30, 2016 and 2015 , our Dealer Manager reallowed approximately $1.5 million and $2.3 million , respectively, to participating third-party broker-dealers and retained approximately $170,000 and $254,000 , respectively. |
Net Income Per Common Share (Ta
Net Income Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Details of Numerator and Denominator Used to Calculate Basic and Diluted Net Income (Loss) Per Common Share | Reconciliations of the numerator and denominator used to calculate basic net income (loss) per common share to the numerator and denominator used to calculate diluted net income (loss) per common share for the three and nine months ended September 30, 2016 and 2015 are described in the following table (amounts in thousands, except per share information): For the Three Months Ended September 30, For the Nine Months Ended September 30, Numerator 2016 2015 2016 2015 Net income (loss) $ 3,318 $ (1,425 ) $ 51,690 $ 130,883 Net (income) loss attributable to noncontrolling interests (353 ) 1,297 (4,826 ) (7,358 ) Net income (loss) attributable to common stockholders 2,965 (128 ) 46,864 123,525 Dilutive noncontrolling interests share of net income (loss) 230 (10 ) 3,639 8,575 Numerator for diluted earnings per share – adjusted net income (loss) 3,195 (138 ) 50,503 132,100 Denominator Weighted average shares outstanding-basic 158,688 174,290 161,274 179,168 Incremental weighted average shares effect of conversion of OP units 12,264 12,989 12,486 12,852 Weighted average shares outstanding-diluted 170,952 187,279 173,760 192,020 INCOME (LOSS) PER COMMON SHARE -BASIC AND DILUTED $ 0.02 $ (0.00 ) $ 0.29 $ 0.69 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Revenue and Components of Net Operating Income | The following tables set forth revenue and the components of NOI of our segments for the three and nine months ended September 30, 2016 and 2015 (amounts in thousands): For the Three Months Ended September 30, Revenues NOI 2016 2015 2016 2015 Office $ 31,082 $ 34,418 $ 20,657 $ 23,937 Industrial 1,449 1,358 968 885 Retail 20,727 17,078 15,196 13,155 Total $ 53,258 $ 52,854 $ 36,821 $ 37,977 For the Nine Months Ended September 30, Revenues NOI 2016 2015 2016 2015 Office $ 96,034 $ 102,631 $ 64,785 $ 74,056 Industrial 4,694 7,147 3,345 5,656 Retail 60,776 53,530 44,986 40,184 Total $ 161,504 $ 163,308 $ 113,116 $ 119,896 |
Reconciliation of Net Operating Income to Reported Net Income | The following table is a reconciliation of our NOI to our reported net income (loss) attributable to common stockholders for the three and nine months ended September 30, 2016 and 2015 (amounts in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2016 2015 2016 2015 Net operating income $ 36,821 $ 37,977 $ 113,116 $ 119,896 Debt related income 235 807 710 5,594 Real estate depreciation and amortization expense (19,989 ) (20,851 ) (60,022 ) (61,404 ) General and administrative expenses (2,234 ) (2,477 ) (7,192 ) (8,157 ) Advisory fees, related party (3,681 ) (4,225 ) (11,118 ) (13,021 ) Acquisition-related expenses (136 ) (476 ) (661 ) (1,259 ) Impairment of real estate property (2,090 ) (6,500 ) (2,677 ) (8,124 ) Interest and other income 2,308 704 2,297 1,500 Interest expense (10,011 ) (10,951 ) (31,394 ) (36,208 ) Gain (loss) on extinguishment of debt and financing commitments — — 5,136 (1,168 ) Gain on sale of real property 2,095 4,567 43,495 133,234 Net (income) loss attributable to noncontrolling interests (353 ) 1,297 (4,826 ) (7,358 ) Net income (loss) attributable to common stockholders $ 2,965 $ (128 ) $ 46,864 $ 123,525 |
Summary of Total Assets by Business Segment | The following table reflects our total assets by business segment as of September 30, 2016 and December 31, 2015 (amounts in thousands): As of September 30, December 31, Segment assets: Office $ 835,272 $ 1,027,132 Industrial 58,147 61,231 Retail 834,497 785,854 Total segment assets, net 1,727,916 1,874,217 Non-segment assets: Debt related investments, net 15,340 15,722 Cash and cash equivalents 34,403 15,769 Other non-segment assets (1) 44,002 55,183 Total assets $ 1,821,661 $ 1,960,891 (1) Other non-segment assets primarily consist of corporate assets including restricted cash and receivables, including straight-line rent receivable. |
Organization (Details)
Organization (Details) - USD ($) shares in Millions | 7 Months Ended | 9 Months Ended | 38 Months Ended | |||||
Mar. 31, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 15, 2015 | Dec. 31, 2015 | Sep. 16, 2015 | Jul. 12, 2012 | ||
Organization [Line Items] | ||||||||
Percentage of proceeds received from public offerings of common stock contributed to our Operating Partnership | 100.00% | |||||||
Net investments in real property | $ 1,727,916,000 | $ 1,874,217,000 | ||||||
Redemption value | [1] | 1,531,000 | $ 1,641,000 | |||||
Proceeds from issuance, DRIP | $ 15,313,000 | $ 16,090,000 | ||||||
Class E OP Units | ||||||||
Organization [Line Items] | ||||||||
Operating Partnership units issued | 12.1 | 12.8 | ||||||
Operating Partnership units outstanding | 12.1 | 12.8 | ||||||
Redemption value | $ 90,800,000 | $ 95,600,000 | ||||||
NAV Offering | ||||||||
Organization [Line Items] | ||||||||
Maximum NAV share value total | $ 3,000,000,000 | |||||||
Maximum NAV share value primary offering | 2,250,000,000 | |||||||
Maximum share value, DRIP | $ 750,000,000 | |||||||
Gross proceeds from sale of shares in the Offering | $ 183,000,000 | |||||||
Shares issued, shares | 25.8 | |||||||
Proceeds from issuance, DRIP | $ 3,400,000 | |||||||
Follow-On Offering | ||||||||
Organization [Line Items] | ||||||||
Maximum NAV share value total | $ 1,000,000,000 | |||||||
Maximum NAV share value primary offering | 750,000,000 | |||||||
Maximum share value, DRIP | $ 250,000,000 | |||||||
Gross proceeds from sale of shares in the Offering | $ 69,200,000 | |||||||
Shares issued, shares | 9.3 | |||||||
Operating Partnership Units | ||||||||
Organization [Line Items] | ||||||||
Limited partnership interest owned in Operating Partnership | 92.60% | 92.80% | ||||||
Variable interest entity investments | ||||||||
Organization [Line Items] | ||||||||
Net investments in real property | $ 46,400,000 | $ 76,900,000 | ||||||
Mortgage loans on real estate | $ 50,100,000 | |||||||
[1] | See Note 8 for the number of shares outstanding of each class of common stock as of September 30, 2016 and December 31, 2015. |
Summary Of Significant Accoun32
Summary Of Significant Accounting Policies (Narrative) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Significant Accounting Policies [Line Items] | ||
Net debt issuance costs | $ 6,019 | $ 6,317 |
Restatement adjustment | Unsecured Borrowings | ||
Significant Accounting Policies [Line Items] | ||
Net debt issuance costs | 4,200 | 5,100 |
Restatement adjustment | Mortgages | ||
Significant Accounting Policies [Line Items] | ||
Net debt issuance costs | 1,900 | $ 1,200 |
Dealer Manager | ||
Significant Accounting Policies [Line Items] | ||
Dealer manager and distribution fees liability | $ 3,400 |
Investments In Real Property (S
Investments In Real Property (Schedule of Consolidated Investments in Real Property) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Real Estate Properties [Line Items] | ||
Investment in real property, Gross book value | $ 2,201,127 | $ 2,380,174 |
Intangible lease liabilities, Gross book value | (91,468) | (93,549) |
Real estate investments, Gross book value | 2,109,659 | 2,286,625 |
Accumulated depreciation and amortization | (473,211) | (505,957) |
Intangible lease liabilities, accumulated amortization | 30,111 | 29,675 |
Accumulated depreciation/amortization | (443,100) | (476,282) |
Investment in real property | 1,727,916 | 1,874,217 |
Intangible lease liabilities, Net book value | (61,357) | (63,874) |
Real estate investments, Net book value | 1,666,559 | 1,810,343 |
Land | ||
Real Estate Properties [Line Items] | ||
Land | 474,732 | 474,222 |
Building and Building Improvements | ||
Real Estate Properties [Line Items] | ||
Building and Improvements | 1,359,526 | 1,469,662 |
Accumulated depreciation and amortization | (200,907) | (208,281) |
Real estate investments, Net book value | 1,158,619 | 1,261,381 |
Intangible Lease Assets | ||
Real Estate Properties [Line Items] | ||
Intangible Lease Assets | 366,869 | 436,290 |
Accumulated depreciation and amortization | (272,304) | (297,676) |
Real estate investments, Net book value | 94,565 | 138,614 |
Office | ||
Real Estate Properties [Line Items] | ||
Investment in real property, Gross book value | 1,104,743 | 1,348,173 |
Intangible lease liabilities, Gross book value | (15,121) | (18,923) |
Real estate investments, Net book value | 1,089,622 | 1,329,250 |
Office | Land | ||
Real Estate Properties [Line Items] | ||
Land | 171,176 | 203,889 |
Office | Building and Building Improvements | ||
Real Estate Properties [Line Items] | ||
Building and Improvements | 696,652 | 833,655 |
Office | Intangible Lease Assets | ||
Real Estate Properties [Line Items] | ||
Intangible Lease Assets | 236,915 | 310,629 |
Industrial | ||
Real Estate Properties [Line Items] | ||
Investment in real property, Gross book value | 88,931 | 91,315 |
Intangible lease liabilities, Gross book value | (344) | (344) |
Real estate investments, Net book value | 88,587 | 90,971 |
Industrial | Land | ||
Real Estate Properties [Line Items] | ||
Land | 8,821 | 9,572 |
Industrial | Building and Building Improvements | ||
Real Estate Properties [Line Items] | ||
Building and Improvements | 63,803 | 65,307 |
Industrial | Intangible Lease Assets | ||
Real Estate Properties [Line Items] | ||
Intangible Lease Assets | 16,307 | 16,436 |
Retail | ||
Real Estate Properties [Line Items] | ||
Investment in real property, Gross book value | 1,007,453 | 940,686 |
Intangible lease liabilities, Gross book value | (76,003) | (74,282) |
Real estate investments, Net book value | 931,450 | 866,404 |
Retail | Land | ||
Real Estate Properties [Line Items] | ||
Land | 294,735 | 260,761 |
Retail | Building and Building Improvements | ||
Real Estate Properties [Line Items] | ||
Building and Improvements | 599,071 | 570,700 |
Retail | Intangible Lease Assets | ||
Real Estate Properties [Line Items] | ||
Intangible Lease Assets | $ 113,647 | $ 109,225 |
Investments in Real Property 34
Investments in Real Property (Schedule of Acquisitions of Real Property) (Details) - Land, Buildings and Improvements - Retail Property, Suniland Shopping Center ft² in Thousands, $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($)ft² | |
Business Acquisition [Line Items] | |
Acquired Ownership | 100.00% |
Contract Price | $ | $ 66,500 |
Net Rentable Square Feet | ft² | 82 |
Percent Leased | 93.20% |
Investments in Real Property 35
Investments in Real Property (Summary of Fair Value of Acquired Real Properties) (Details) - Land, Buildings and Improvements - Retail Property, Suniland Shopping Center $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Real Estate Properties [Line Items] | |
Land | $ 34,804 |
Building and Improvements | 28,022 |
Intangible Lease Assets | 5,880 |
Intangible Lease Liabilities | (2,113) |
Total Fair Value | 66,593 |
Prorations and Credits | (93) |
Contract Price | $ 66,500 |
Weighted average Amortization Period, Intangible Lease Assets (years) | 5 years 9 months 18 days |
Weighted average Amortization Period, Intangible Lease Liabilities (years) | 2 years 6 months |
Investments in Real Property 36
Investments in Real Property (Schedule Of Disposed Properties) (Details) ft² in Thousands, $ in Thousands | 9 Months Ended | |
Sep. 30, 2016USD ($)ft² | Sep. 30, 2015USD ($)ft²property | |
Business Acquisition [Line Items] | ||
Net Rentable Square Feet | ft² | 2,183 | |
Dispositions | ||
Business Acquisition [Line Items] | ||
Net Rentable Square Feet | ft² | 1,223 | 3,060 |
Percentage Leased | 73.00% | 95.00% |
Contract Sales Price | $ 213,875 | $ 477,861 |
Gain on Sale | $ 43,495 | $ 133,234 |
Dispositions | Office Property, Washington, DC Market | ||
Business Acquisition [Line Items] | ||
Ownership | 100.00% | |
Net Rentable Square Feet | ft² | 574 | |
Percentage Leased | 100.00% | |
Contract Sales Price | $ 158,400 | |
Gain on Sale | $ 41,241 | |
Dispositions | Office Property, Chicago, IL Market | ||
Business Acquisition [Line Items] | ||
Ownership | 80.00% | |
Net Rentable Square Feet | ft² | 107 | |
Percentage Leased | 66.00% | |
Contract Sales Price | $ 9,850 | |
Gain on Sale | $ 0 | |
Dispositions | Office Property, Chicago, IL (2) Market | ||
Business Acquisition [Line Items] | ||
Ownership | 80.00% | |
Net Rentable Square Feet | ft² | 199 | |
Percentage Leased | 81.00% | |
Contract Sales Price | $ 18,000 | |
Gain on Sale | $ 159 | |
Dispositions | Retail Property, Greater Boston Market | ||
Business Acquisition [Line Items] | ||
Ownership | 100.00% | |
Net Rentable Square Feet | ft² | 39 | |
Percentage Leased | 100.00% | |
Contract Sales Price | $ 3,625 | |
Gain on Sale | $ 975 | |
Dispositions | Industrial Property, Louisville, KY Market | ||
Business Acquisition [Line Items] | ||
Ownership | 90.00% | |
Net Rentable Square Feet | ft² | 126 | |
Percentage Leased | 33.00% | |
Contract Sales Price | $ 5,400 | |
Gain on Sale | $ 1,120 | |
Dispositions | Office Property, Washington DC Market (2) | ||
Business Acquisition [Line Items] | ||
Ownership | 100.00% | |
Net Rentable Square Feet | ft² | 178 | |
Percentage Leased | 0.00% | |
Contract Sales Price | $ 18,600 | |
Gain on Sale | $ 0 | |
Dispositions | Office Property, Dallas, TX Market | ||
Business Acquisition [Line Items] | ||
Ownership | 100.00% | |
Net Rentable Square Feet | ft² | 177 | |
Percentage Leased | 88.00% | |
Contract Sales Price | $ 46,600 | |
Gain on Sale | $ 23,125 | |
Dispositions | Office and Industrial Portfolio, Various Markets | ||
Business Acquisition [Line Items] | ||
Ownership | 100.00% | |
Net Rentable Square Feet | ft² | 2,669 | |
Percentage Leased | 100.00% | |
Contract Sales Price | $ 398,635 | |
Gain on Sale | $ 105,542 | |
Dispositions | Office and Industrial Portfolio, Various Markets | Office | ||
Business Acquisition [Line Items] | ||
Net Rentable Square Feet | ft² | 1,100 | |
Number of Properties | property | 6 | |
Dispositions | Office and Industrial Portfolio, Various Markets | Office | California | ||
Business Acquisition [Line Items] | ||
Number of Properties | property | 3 | |
Dispositions | Office and Industrial Portfolio, Various Markets | Industrial | ||
Business Acquisition [Line Items] | ||
Net Rentable Square Feet | ft² | 1,600 | |
Number of Properties | property | 6 | |
Dispositions | Retail Property, Pittsburgh, PA Market | ||
Business Acquisition [Line Items] | ||
Ownership | 100.00% | |
Net Rentable Square Feet | ft² | 103 | |
Percentage Leased | 93.00% | |
Contract Sales Price | $ 12,500 | |
Gain on Sale | $ 0 | |
Dispositions | Office Property, Los Angeles, CA Market | ||
Business Acquisition [Line Items] | ||
Ownership | 100.00% | |
Net Rentable Square Feet | ft² | 111 | |
Percentage Leased | 0.00% | |
Contract Sales Price | $ 12,549 | |
Gain on Sale | $ 2,866 | |
Dispositions | Land Parcel, Denver, CO | ||
Business Acquisition [Line Items] | ||
Ownership | 100.00% | |
Contract Sales Price | $ 7,577 | |
Gain on Sale | $ 1,701 |
Investments in Real Property (N
Investments in Real Property (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Real Estate Properties [Line Items] | |||||
Revenue of real property acquired | $ 1,000 | $ 1,400 | |||
Net operating income (NOI) of real property acquired | 700 | 1,000 | |||
Impairment charges | [1] | 2,090 | $ 6,500 | 2,677 | $ 8,124 |
Rental revenue | $ 53,258 | 52,854 | $ 161,504 | 163,308 | |
Massachusetts | |||||
Real Estate Properties [Line Items] | |||||
Gross investments, real property portfolio percentage | 20.00% | 20.00% | |||
New Jersey | |||||
Real Estate Properties [Line Items] | |||||
Gross investments, real property portfolio percentage | 20.00% | 20.00% | |||
California | |||||
Real Estate Properties [Line Items] | |||||
Gross investments, real property portfolio percentage | 14.00% | 14.00% | |||
Texas | |||||
Real Estate Properties [Line Items] | |||||
Gross investments, real property portfolio percentage | 12.00% | 12.00% | |||
Charles Schwab and Company, Inc. | |||||
Real Estate Properties [Line Items] | |||||
Rental revenue | $ 19,000 | ||||
Charles Schwab and Company, Inc. | Rental revenue | |||||
Real Estate Properties [Line Items] | |||||
Concentration percentage | 11.70% | ||||
Office Property, Chicago, IL Market | |||||
Real Estate Properties [Line Items] | |||||
Impairment charges | $ 6,500 | $ 587 | |||
Ownership interest in property | 80.00% | 80.00% | |||
Retail Property, Pittsburgh, PA Market | |||||
Real Estate Properties [Line Items] | |||||
Impairment charges | $ 1,600 | ||||
[1] | Includes approximately $186,000 paid to our Advisor for advisory fees associated with the disposition of real properties during the three months ended September 30, 2016, and $265,000 and $125,000 paid to our Advisor for advisory fees associated with the disposition of real properties during the nine months ended September 30, 2016 and 2015, respectively. |
Investments in Real Property 38
Investments in Real Property (Schedule of Adjustments to Rental Revenue Related to Amortization of Above-Market Lease Assets, Below-Market Lease Liabilities, and for Straight-Line Rental Adjustments) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Real Estate [Abstract] | ||||
Straight-line rent adjustments | $ (296) | $ (286) | $ (742) | $ (684) |
Above-market lease assets | (1,402) | (1,307) | (3,930) | (3,923) |
Below-market lease liabilities | 1,529 | 1,437 | 4,608 | 4,539 |
Total increase to rental revenue | (169) | (156) | (64) | (68) |
Tenant recovery income | 10,623 | 9,293 | 31,183 | 28,031 |
Real estate taxes paid directly by tenants subject to triple net lease Contracts | $ 1,000 | $ 1,400 | $ 3,300 | $ 5,500 |
Investments in Real Property 39
Investments in Real Property (Schedule of Top Five Tenants as Percentage of Consolidated Annual Base Rent and Square Feet) (Details) ft² in Thousands, $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($)ft²property | |
Revenue, Major Customer [Line Items] | |
Number of Tenant Locations | property | 19 |
Annualized Base Rent | $ | $ 65,283 |
Percent of Total Annualized Rental Revenue | 38.10% |
Square Feet | ft² | 2,183 |
Percent of Total Portfolio Square Feet | 26.50% |
Charles Schwab and Company, Inc. | |
Revenue, Major Customer [Line Items] | |
Number of Tenant Locations | property | 2 |
Annualized Base Rent | $ | $ 23,645 |
Percent of Total Annualized Rental Revenue | 13.80% |
Square Feet | ft² | 602 |
Percent of Total Portfolio Square Feet | 7.30% |
Sybase | |
Revenue, Major Customer [Line Items] | |
Number of Tenant Locations | property | 1 |
Annualized Base Rent | $ | $ 18,692 |
Percent of Total Annualized Rental Revenue | 10.90% |
Square Feet | ft² | 405 |
Percent of Total Portfolio Square Feet | 4.90% |
Stop and Shop | |
Revenue, Major Customer [Line Items] | |
Number of Tenant Locations | property | 14 |
Annualized Base Rent | $ | $ 13,980 |
Percent of Total Annualized Rental Revenue | 8.20% |
Square Feet | ft² | 853 |
Percent of Total Portfolio Square Feet | 10.40% |
Novo Nordisk | |
Revenue, Major Customer [Line Items] | |
Number of Tenant Locations | property | 1 |
Annualized Base Rent | $ | $ 4,627 |
Percent of Total Annualized Rental Revenue | 2.70% |
Square Feet | ft² | 167 |
Percent of Total Portfolio Square Feet | 2.00% |
Seton Health Care | |
Revenue, Major Customer [Line Items] | |
Number of Tenant Locations | property | 1 |
Annualized Base Rent | $ | $ 4,339 |
Percent of Total Annualized Rental Revenue | 2.50% |
Square Feet | ft² | 156 |
Percent of Total Portfolio Square Feet | 1.90% |
Debt Related Investments (Narra
Debt Related Investments (Narrative) (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016USD ($)securityloan | Sep. 30, 2015security | Dec. 31, 2015USD ($)securityloan | |
Receivables [Abstract] | |||
Number of debt investments | security | 3 | 3 | 3 |
Weighted average maturity of our debt investments (years) | 2 years 5 months 26 days | ||
Allowance for loan loss | $ 0 | $ 0 | |
Provision for loan losses | $ 0 | ||
Number of nonaccrual loans receivable | loan | 0 | 0 | |
Impaired financing receivable interest income accrual method | $ 0 | $ 0 |
Debt Related Investments (Detai
Debt Related Investments (Details of Debt Related Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Investment [Line Items] | ||||
Debt related income | $ 235 | $ 807 | $ 710 | $ 5,594 |
Weighted Average Yield | 6.10% | 6.10% | ||
Mortgage notes | ||||
Investment [Line Items] | ||||
Debt related income | $ 235 | 666 | $ 710 | 3,808 |
Weighted Average Yield | 6.10% | 6.10% | ||
Mezzanine debt | ||||
Investment [Line Items] | ||||
Debt related income | $ 141 | $ 1,786 |
Debt Obligations (Narrative) (D
Debt Obligations (Narrative) (Details) | Jan. 13, 2015lender | Sep. 30, 2016USD ($)loanextension | Dec. 31, 2015USD ($) |
Debt Instrument [Line Items] | |||
Number of interest-only mortgage notes | loan | 9 | ||
Number of fully amortizing mortgage notes payable outstanding | loan | 4 | ||
Interest-only mortgage notes, outstanding balance | $ 360,500,000 | ||
Amortizing mortgage notes outstanding balance | $ 27,600,000 | ||
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Debt issuance date | Jan. 13, 2015 | ||
Number of lenders | lender | 14 | ||
Potential maximum borrowing capacity | $ 900,000,000 | ||
Credit facility, maximum borrowing capacity | $ 400,000,000 | ||
Credit facility expiration date | Jan. 31, 2019 | ||
Number of one year extensions | extension | 1 | ||
Revolving credit facility extension period | 12 months | ||
Percentage of extension fee to outstanding principal balance | 0.15% | ||
Current borrowing capacity | $ 79,800,000 | $ 230,800,000 | |
Revolving Credit Facility | Minimum | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings spread over LIBOR | 1.40% | ||
Revolving Credit Facility | Maximum | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings spread over LIBOR | 2.30% | ||
Letter of Credit | |||
Debt Instrument [Line Items] | |||
Credit facility, maximum borrowing capacity | $ 50,000,000 | ||
Swing Line Loan | |||
Debt Instrument [Line Items] | |||
Credit facility, maximum borrowing capacity | $ 50,000,000 |
Debt Obligations (Schedule of B
Debt Obligations (Schedule of Borrowings) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | ||
Total borrowings | $ 1,056,070 | $ 1,105,849 |
Less: net debt issuance costs | (6,019) | (6,317) |
Add: mark-to-market adjustment on assumed debt | 659 | 1,304 |
Less: GAAP principal amortization on restructured debt | 0 | (3,067) |
Total borrowings (GAAP basis) | $ 1,050,710 | $ 1,097,769 |
Weighted Average Stated Interest Rate | 3.20% | 4.10% |
Fixed-Rate Mortgage Notes | ||
Debt Instrument [Line Items] | ||
Total borrowings | $ 335,570 | $ 580,959 |
Weighted Average Stated Interest Rate | 5.00% | 5.60% |
Gross Investment Amount Securing Borrowings | $ 528,457 | $ 1,016,560 |
Floating-Rate Mortgage Notes | ||
Debt Instrument [Line Items] | ||
Total borrowings | $ 52,500 | $ 7,890 |
Weighted Average Stated Interest Rate | 2.20% | 3.40% |
Gross Investment Amount Securing Borrowings | $ 70,355 | $ 16,618 |
Outstanding borrowings spread over LIBOR | 1.65% | 3.00% |
Floating-Rate Mortgage Notes, Effectively Fixed-Rate Mortgage Notes | ||
Debt Instrument [Line Items] | ||
Outstanding borrowings spread over LIBOR | 1.60% | |
Effective interest rate on debt | 3.051% | |
Total Secured Borrowings | ||
Debt Instrument [Line Items] | ||
Total borrowings | $ 388,070 | $ 588,849 |
Weighted Average Stated Interest Rate | 4.60% | 5.50% |
Gross Investment Amount Securing Borrowings | $ 598,812 | $ 1,033,178 |
Line of Credit | ||
Debt Instrument [Line Items] | ||
Total borrowings | $ 318,000 | $ 167,000 |
Weighted average interest rate | 2.00% | 1.90% |
Term Loan | ||
Debt Instrument [Line Items] | ||
Total borrowings | $ 350,000 | $ 350,000 |
Weighted Average Stated Interest Rate | 2.60% | 2.60% |
Outstanding borrowings spread over LIBOR | 1.52% | 1.52% |
Effective interest rate on debt | 2.62% | 2.59% |
Unsecured Borrowings | ||
Debt Instrument [Line Items] | ||
Total borrowings | $ 668,000 | $ 517,000 |
Weighted Average Stated Interest Rate | 2.30% | 2.40% |
LIBOR | Line of Credit | ||
Debt Instrument [Line Items] | ||
Outstanding borrowings spread over LIBOR | 1.40% | 1.40% |
Line of credit, amount outstanding | $ 12,200 | |
Weighted average interest rate | 1.97% | |
Interest rate swap | Line of Credit | ||
Debt Instrument [Line Items] | ||
Total borrowings | $ 25,400 | |
Weighted average interest rate | 1.88% |
Debt Obligations (Schedule of M
Debt Obligations (Schedule of Mortgage Note Borrowings) (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016USD ($)loan | Dec. 31, 2015USD ($) | |
Debt Instrument [Line Items] | ||
Number of new mortgage note borrowings during period | loan | 2 | |
Principal Balance | $ 1,056,070 | $ 1,105,849 |
Mortgages | ||
Debt Instrument [Line Items] | ||
Principal Balance | $ 85,500 | |
Stated Interest Rate | 2.51% | |
Mortgages | Mortgage Note, Preston Sherry Plaza | ||
Debt Instrument [Line Items] | ||
Principal Balance | $ 33,000 | |
Stated Interest Rate | 3.05% | |
Outstanding borrowings spread over LIBOR | 1.60% | |
Effective interest rate on debt | 3.051% | |
Mortgages | Mortgage Note, 1300 Connecticut (2) | ||
Debt Instrument [Line Items] | ||
Principal Balance | $ 52,500 | |
Stated Interest Rate | 2.17% | |
Outstanding borrowings spread over LIBOR | 1.65% | |
Fixed interest during the period | 2.852% |
Debt Obligations (Schedule Of R
Debt Obligations (Schedule Of Repayment Of Mortgage Notes And Repurchase Facility) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)loan | Sep. 30, 2015USD ($) | ||
Debt Instrument [Line Items] | |||||
Number of mortgage notes repaid | loan | 7 | ||||
Gain on extinguishment of debt and financing commitments | $ 0 | $ 0 | $ 5,136 | $ (1,168) | |
Mortgage Note, Washington Commons | |||||
Debt Instrument [Line Items] | |||||
Contingently payable mortgage note | 5,100 | ||||
Gain on extinguishment of debt and financing commitments | $ 5,100 | ||||
Mortgage Note, 40 Boulevard | |||||
Debt Instrument [Line Items] | |||||
Outstanding borrowings spread over LIBOR | 3.00% | ||||
Mortgages | |||||
Debt Instrument [Line Items] | |||||
Balance Repaid/Extinguished | $ 281,967 | ||||
Stated Interest Rate | 2.51% | 2.51% | |||
Stated Interest Rate, Weighted Average | 5.87% | 5.87% | |||
Mortgages | Mortgage Note, 1300 Connecticut | |||||
Debt Instrument [Line Items] | |||||
Repayment Date | Jan. 12, 2016 | ||||
Balance Repaid/Extinguished | $ 44,979 | ||||
Stated Interest Rate | 6.81% | 6.81% | |||
Contractual Maturity Date | Apr. 10, 2016 | ||||
Mortgages | Mortgage Note, Washington Commons | |||||
Debt Instrument [Line Items] | |||||
Repayment Date | [1] | Feb. 1, 2016 | |||
Balance Repaid/Extinguished | [1] | $ 21,300 | |||
Stated Interest Rate | [1] | 5.94% | 5.94% | ||
Contractual Maturity Date | [1] | Feb. 1, 2016 | |||
Mortgages | Mortgage Note, 40 Boulevard | |||||
Debt Instrument [Line Items] | |||||
Repayment Date | [2] | Mar. 1, 2016 | |||
Balance Repaid/Extinguished | [2] | $ 7,830 | |||
Stated Interest Rate | [2] | 3.44% | 3.44% | ||
Contractual Maturity Date | [2] | Mar. 11, 2016 | |||
Mortgages | Mortgage Note, Jay Street | |||||
Debt Instrument [Line Items] | |||||
Repayment Date | Apr. 11, 2016 | ||||
Balance Repaid/Extinguished | $ 23,500 | ||||
Stated Interest Rate | 6.05% | 6.05% | |||
Contractual Maturity Date | Jul. 11, 2016 | ||||
Mortgages | Mortgage Note, 655 Montgomery | |||||
Debt Instrument [Line Items] | |||||
Repayment Date | Apr. 11, 2016 | ||||
Balance Repaid/Extinguished | $ 55,683 | ||||
Stated Interest Rate | 6.01% | 6.01% | |||
Contractual Maturity Date | Jun. 11, 2016 | ||||
Mortgages | Mortgage Note, Bala Pointe | |||||
Debt Instrument [Line Items] | |||||
Repayment Date | Jul. 1, 2016 | ||||
Balance Repaid/Extinguished | $ 24,000 | ||||
Stated Interest Rate | 5.89% | 5.89% | |||
Contractual Maturity Date | Sep. 1, 2016 | ||||
Mortgages | Mortgage Note, Harborside | |||||
Debt Instrument [Line Items] | |||||
Repayment Date | Sep. 9, 2016 | ||||
Balance Repaid/Extinguished | $ 104,675 | ||||
Stated Interest Rate | 5.50% | 5.50% | |||
Contractual Maturity Date | Dec. 10, 2016 | ||||
[1] | Amount presented includes a $5.1 million contingently payable mortgage note that was not ultimately required to be repaid. As a result of the transaction, we recognized a gain on extinguishment of debt and financing commitments of approximately $5.1 million during the nine months ended September 30, 2016. | ||||
[2] | The mortgage note was subject to an interest rate of 3.0% over one-month LIBOR. |
Debt Obligations (Summary of Bo
Debt Obligations (Summary of Borrowings Reflects Contractual Debt Maturities Footnote) (Details) $ in Thousands | Sep. 30, 2016USD ($)loan | Dec. 31, 2015USD ($) |
Debt Instrument [Line Items] | ||
Total | $ 1,056,070 | $ 1,105,849 |
Less: net debt issuance costs | (6,019) | (6,317) |
Add: mark-to-market adjustment on assumed debt | 659 | 1,304 |
Total borrowings (GAAP basis) | 1,050,710 | $ 1,097,769 |
2,016 | ||
Debt Instrument [Line Items] | ||
Outstanding Balance, 2016 | 400 | |
2,017 | ||
Debt Instrument [Line Items] | ||
Outstanding Balance, 2017 | 206,660 | |
2,018 | ||
Debt Instrument [Line Items] | ||
Outstanding Balance, 2018 | 152,698 | |
2,019 | ||
Debt Instrument [Line Items] | ||
Outstanding Balance, 2019 | 321,698 | |
2,020 | ||
Debt Instrument [Line Items] | ||
Outstanding Balance, 2020 | 3,860 | |
2,021 | ||
Debt Instrument [Line Items] | ||
Outstanding Balance, 2021 | 12,764 | |
2,022 | ||
Debt Instrument [Line Items] | ||
Outstanding Balance, 2022 | 203,660 | |
2,023 | ||
Debt Instrument [Line Items] | ||
Outstanding Balance, 2023 | 77,899 | |
2,024 | ||
Debt Instrument [Line Items] | ||
Outstanding Balance, 2024 | 1,034 | |
2,025 | ||
Debt Instrument [Line Items] | ||
Outstanding Balance, 2025 | 71,094 | |
Thereafter | ||
Debt Instrument [Line Items] | ||
Outstanding Balance, Thereafter | $ 4,303 | |
Mortgage Notes | ||
Debt Instrument [Line Items] | ||
Number of Borrowings Maturing | loan | 13 | |
Total | $ 388,070 | |
Less: net debt issuance costs | (1,868) | |
Add: mark-to-market adjustment on assumed debt | 659 | |
Total borrowings (GAAP basis) | $ 386,861 | |
Mortgage Notes | 2016 | ||
Debt Instrument [Line Items] | ||
Number of Borrowings Maturing | loan | 0 | |
Outstanding Balance, 2016 | $ 400 | |
Mortgage Notes | 2017 | ||
Debt Instrument [Line Items] | ||
Number of Borrowings Maturing | loan | 6 | |
Outstanding Balance, 2017 | $ 206,660 | |
Mortgage Notes | 2018 | ||
Debt Instrument [Line Items] | ||
Outstanding Balance, 2018 | 2,698 | |
Mortgage Notes | 2019 | ||
Debt Instrument [Line Items] | ||
Outstanding Balance, 2019 | 3,698 | |
Mortgage Notes | 2020 | ||
Debt Instrument [Line Items] | ||
Outstanding Balance, 2020 | $ 3,860 | |
Mortgage Notes | 2021 | ||
Debt Instrument [Line Items] | ||
Number of Borrowings Maturing | loan | 1 | |
Outstanding Balance, 2021 | $ 12,764 | |
Mortgage Notes | 2022 | ||
Debt Instrument [Line Items] | ||
Number of Borrowings Maturing | loan | 1 | |
Outstanding Balance, 2022 | $ 3,660 | |
Mortgage Notes | 2023 | ||
Debt Instrument [Line Items] | ||
Number of Borrowings Maturing | loan | 2 | |
Outstanding Balance, 2023 | $ 77,899 | |
Mortgage Notes | 2024 | ||
Debt Instrument [Line Items] | ||
Outstanding Balance, 2024 | $ 1,034 | |
Mortgage Notes | 2025 | ||
Debt Instrument [Line Items] | ||
Number of Borrowings Maturing | loan | 1 | |
Outstanding Balance, 2025 | $ 71,094 | |
Mortgage Notes | Thereafter | ||
Debt Instrument [Line Items] | ||
Number of Borrowings Maturing | loan | 2 | |
Outstanding Balance, Thereafter | $ 4,303 | |
Unsecured Borrowings | ||
Debt Instrument [Line Items] | ||
Number of Borrowings Maturing | loan | 3 | |
Total | $ 668,000 | |
Less: net debt issuance costs | (4,151) | |
Total borrowings (GAAP basis) | $ 663,849 | |
Unsecured Borrowings | 2018 | ||
Debt Instrument [Line Items] | ||
Number of Borrowings Maturing | loan | 1 | |
Outstanding Balance, 2018 | $ 150,000 | |
Unsecured Borrowings | 2019 | ||
Debt Instrument [Line Items] | ||
Number of Borrowings Maturing | loan | 1 | |
Outstanding Balance, 2019 | $ 318,000 | |
Unsecured Borrowings | 2022 | ||
Debt Instrument [Line Items] | ||
Number of Borrowings Maturing | loan | 1 | |
Outstanding Balance, 2022 | $ 200,000 |
Derivatives and Hedging Activ47
Derivatives and Hedging Activities (Narrative) (Details) | 9 Months Ended | |
Sep. 30, 2016USD ($)security | Dec. 31, 2015USD ($)security | |
Derivative [Line Items] | ||
Estimated increase to interest expense related to active effective hedges of floating rate debt | $ 3,800,000 | |
Derivative liability | $ 14,400,000 | $ 3,100,000 |
Designated Hedges | ||
Derivative [Line Items] | ||
Number of derivatives | security | 13 | 12 |
Total notional amount | $ 395,200,000 | $ 375,400,000 |
Interest rate swap | ||
Derivative [Line Items] | ||
Estimated increase to interest expense related to termination of hedging instrument | $ 2,000,000 | |
Interest Rate Swap Maturing January 2020 | Designated Hedges | ||
Derivative [Line Items] | ||
Number of derivatives | security | 2 | |
Total notional amount | $ 100,000,000 | |
Interest Rate Swap Maturing February 2022 | Designated Hedges | ||
Derivative [Line Items] | ||
Number of derivatives | security | 2 | |
Total notional amount | $ 100,000,000 | |
Interest Rate Swap Maturing July 2021 | Designated Hedges | ||
Derivative [Line Items] | ||
Number of derivatives | security | 1 | |
Total notional amount | $ 52,500,000 | |
Other Liabilities | ||
Derivative [Line Items] | ||
Derivative liability | (15,000,000) | |
Posted collateral related to agreements | $ 0 |
Derivatives and Hedging Activ48
Derivatives and Hedging Activities (Reconciliation of Accumulated Other Comprehensive Loss, Net of Amounts Attributable to Noncontrolling Interests) (Details) | 9 Months Ended |
Sep. 30, 2016USD ($) | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning balance as of December 31, 2015 | $ 628,805,000 |
Ending balance as of June 30, 2016 | 535,394,000 |
Amounts reclassified from accumulated other comprehensive income, tax benefit | 0 |
Change in fair value recognized in OCI, Tax | 0 |
Gains And Losses On Cash Flow Hedges, Parent | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning balance as of December 31, 2015 | (9,967,000) |
Ending balance as of June 30, 2016 | (19,110,000) |
Unrealized Losses On Available-For-Sale Securities, Parent | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning balance as of December 31, 2015 | (1,047,000) |
Ending balance as of June 30, 2016 | (1,056,000) |
Accumulated Other Comprehensive Loss, Parent | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning balance as of December 31, 2015 | (11,014,000) |
Ending balance as of June 30, 2016 | (20,166,000) |
Gains and Losses on Cash Flow Hedges, including noncontrolling interest | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Amount of loss reclassified from OCI into interest expense (effective portion) (net of tax benefit of $0) | 3,470,000 |
Change in fair value recognized in OCI (effective portion) (net of tax benefit of $0) | (13,350,000) |
Net current-period other comprehensive income | (9,880,000) |
Accumulated Other Comprehensive Loss, including noncontrolling interest | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Amount of loss reclassified from OCI into interest expense (effective portion) (net of tax benefit of $0) | 3,470,000 |
Change in fair value recognized in OCI (effective portion) (net of tax benefit of $0) | (13,350,000) |
Net current-period other comprehensive income | (9,880,000) |
Gains and Losses on Cash Flow Hedges, Noncontrolling interest | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Attribution of and other adjustments to OCI attributable to noncontrolling interests | 737,000 |
Unrealized Losses On Available-For-Sale Securities, Noncontrolling interest | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Attribution of and other adjustments to OCI attributable to noncontrolling interests | (9,000) |
Accumulated Other Comprehensive Loss, Noncontrolling interest | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Attribution of and other adjustments to OCI attributable to noncontrolling interests | $ 728,000 |
Derivatives and Hedging Activ49
Derivatives and Hedging Activities (Gross Fair Value of Derivative Financial Instruments as Well as Their Classification) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Derivatives, Fair Value [Line Items] | ||
Derivative fair values, net, decrease | $ 12 | $ 157 |
Derivative Asset | 3 | 40 |
Derivative liability | 14,400 | 3,100 |
Other Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability | (15,000) | |
Designated Hedges | Interest Rate Contract | Other Assets | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives, Fair value, Gross asset | 15 | 197 |
Designated Hedges | Interest Rate Contract | Other Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative instruments | $ (14,453) | $ (3,303) |
Derivatives and Hedging Activ50
Derivatives and Hedging Activities (Effect of Derivative Financial Instruments on Financial Statements) (Details) - Designated Hedges - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Interest Expense [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of loss reclassified from accumulated OCI into income (effective portion) | $ 1,154 | $ 1,220 | $ 3,470 | $ 3,538 |
Other Nonoperating Income (Expense) [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of loss recognized in income (ineffective portion and amount excluded from effectiveness testing) | 0 | (117) | 0 | 0 |
Interest Rate Contract | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of (loss) gain recognized in OCI (effective portion) | $ 1,747 | $ (7,236) | $ (13,350) | $ (8,789) |
Fair Value of Financial Instr51
Fair Value of Financial Instruments (Schedule of Carrying Amount and Fair Values of Other Financial Instruments) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Carrying Amount | Fixed-Rate Mortgage Notes | ||
Liabilities: | ||
Fixed-rate mortgage notes | $ 334,916 | $ 577,978 |
Carrying Amount | Floating-Rate Mortgage Notes | ||
Liabilities: | ||
Floating-rate mortgage notes | 51,945 | 7,886 |
Carrying Amount | Floating-Rate Unsecured Borrowings | ||
Liabilities: | ||
Floating-rate unsecured borrowings | 663,849 | 511,905 |
Carrying Amount | Fixed-Rate Debt Related Investments, Net | ||
Assets: | ||
Fixed-rate debt related investments, net | 15,340 | 15,722 |
Estimated Fair Value | Fixed-Rate Mortgage Notes | ||
Liabilities: | ||
Fixed-rate mortgage notes | 342,163 | 576,432 |
Estimated Fair Value | Floating-Rate Mortgage Notes | ||
Liabilities: | ||
Floating-rate mortgage notes | 51,356 | 7,883 |
Estimated Fair Value | Floating-Rate Unsecured Borrowings | ||
Liabilities: | ||
Floating-rate unsecured borrowings | 668,000 | 517,000 |
Estimated Fair Value | Fixed-Rate Debt Related Investments, Net | ||
Assets: | ||
Fixed-rate debt related investments, net | $ 16,170 | $ 16,526 |
Floating-Rate Mortgage Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Outstanding borrowings spread over LIBOR | 1.65% | 3.00% |
Floating-Rate Mortgage Notes, Effectively Fixed-Rate Mortgage Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Outstanding borrowings spread over LIBOR | 1.60% | |
Liabilities: | ||
Effective interest rate on debt | 3.051% | |
Floating-Rate Mortgage Notes, Effectively Fixed-Rate Mortgage Notes | Floating-Rate Mortgage Notes | ||
Liabilities: | ||
Long-term debt, fair value | $ 32,500 |
Stockholders' Equity (Narrative
Stockholders' Equity (Narrative) (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016USD ($)tender_offer$ / sharesshares | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Stockholders Equity Note Disclosure [Line Items] | |||||
Number of self-tender offers | tender_offer | 3 | ||||
Repurchase of common stock, shares | shares | 17,400 | ||||
Shares repurchased, value | $ 148,243 | ||||
Proceeds from sale of common stock | $ 51,968 | $ 68,851 | $ 50,800 | $ 44,000 | $ 27,100 |
Class E | |||||
Stockholders Equity Note Disclosure [Line Items] | |||||
Repurchase of common stock, shares | shares | 18,897 | ||||
Share price (usd per share) | $ / shares | $ 7.34 | ||||
Shares repurchased, value | $ 128,000 | ||||
Class I | |||||
Stockholders Equity Note Disclosure [Line Items] | |||||
Repurchase of common stock, shares | shares | 718 | ||||
Proceeds from sale of common stock | $ 33,900 | ||||
Dealer fee, percentage of gross proceeds of offering (up to) | 5.00% |
Stockholders' Equity (Informati
Stockholders' Equity (Information of Share Transactions) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($)shares | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |
Balance, Shares | 164,124,057 |
Redemptions of common stock, shares | (17,400,000) |
Balance, Shares | 153,068,872 |
Class E | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |
Balance, amount | $ | $ 1,482,140 |
Balance, Shares | 137,275,000 |
Distribution reinvestment plan | $ | $ 11,247 |
Distribution reinvestment plan, shares | 1,521,000 |
Redemptions of common stock | $ | $ (138,853) |
Redemptions of common stock, shares | (18,897,000) |
Balance, Shares | 119,899,000 |
Balance, amount | $ | $ 1,354,534 |
Class A | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |
Balance, amount | $ | $ 12,438 |
Balance, Shares | 1,703,000 |
Shares sold | $ | $ 2,449 |
Shares sold, shares | 321,000 |
Distribution reinvestment plan | $ | $ 224 |
Distribution reinvestment plan, shares | 30,000 |
Redemptions of common stock | $ | $ (1,193) |
Redemptions of common stock, shares | (162,000) |
Balance, Shares | 1,892,000 |
Balance, amount | $ | $ 13,918 |
Class W | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |
Balance, amount | $ | $ 12,952 |
Balance, Shares | 1,812,000 |
Shares sold | $ | $ 5,499 |
Shares sold, shares | 742,000 |
Distribution reinvestment plan | $ | $ 229 |
Distribution reinvestment plan, shares | 31,000 |
Redemptions of common stock | $ | $ (2,480) |
Redemptions of common stock, shares | (337,000) |
Balance, Shares | 2,248,000 |
Balance, amount | $ | $ 16,200 |
Class I | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |
Balance, amount | $ | $ 162,283 |
Balance, Shares | 23,334,000 |
Shares sold | $ | $ 43,533 |
Shares sold, shares | 5,892,000 |
Distribution reinvestment plan | $ | $ 3,613 |
Distribution reinvestment plan, shares | 490,000 |
Stock-based compensation | $ | $ 1,083 |
Stock-based compensation, shares | 32,000 |
Redemptions of common stock | $ | $ (5,312) |
Redemptions of common stock, shares | (718,000) |
Balance, Shares | 29,030,000 |
Balance, amount | $ | $ 205,200 |
Common Stock | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |
Balance, amount | $ | $ 1,669,813 |
Balance, Shares | 164,124,000 |
Shares sold | $ | $ 51,481 |
Shares sold, shares | 6,955,000 |
Distribution reinvestment plan | $ | $ 15,313 |
Distribution reinvestment plan, shares | 2,072,000 |
Stock-based compensation | $ | $ 1,083 |
Stock-based compensation, shares | 32,000 |
Redemptions of common stock | $ | $ (147,838) |
Redemptions of common stock, shares | (20,114,000) |
Balance, Shares | 153,069,000 |
Balance, amount | $ | $ 1,589,852 |
Related Party Transactions (Adv
Related Party Transactions (Advisory Agreement) (Details) | 9 Months Ended |
Sep. 30, 2016employee$ / shares | |
Related Party Transaction [Line Items] | |
Number of advisor employees serving as directors and officers | employee | 2 |
Component of advisory fee as percent of overall return | 25.00% |
Percentage of return not payable to advisor | 6.00% |
Maximum annual advisory fee performance condition as percentage of overall return | 10.00% |
Class E dealer manager fee portion waived under NAV per share threshold | $ / shares | $ 10 |
Maximum advisor real property disposition fee as percentage of sales price of real property assets | 1.00% |
Maximum percentage of reasonable customary and commission payable to advisor upon disposition of property | 50.00% |
Fee payable to advisor as percentage of sales price of real property assets | 1.00% |
Maximum commissions payable as percent of sales price of property sold | 6.00% |
Maximum advisor reimbursement of cumulative organization and offering costs as percentage of gross proceeds from offering | 15.00% |
Advisory Fees | |
Related Party Transaction [Line Items] | |
Advisory Agreement renewal term | 1 year |
Related Party Transactions (Pub
Related Party Transactions (Public Offering Dealer Manager Agreement) (Details) - USD ($) | Sep. 19, 2016 | Jun. 23, 2016 | May 11, 2016 | Sep. 16, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Related Party Transaction [Line Items] | |||||||||||
Related party transaction expense | $ 6,159,000 | $ 6,755,000 | $ 21,792,000 | $ 27,563,000 | |||||||
Proceeds from sale of common stock | 51,968,000 | 68,851,000 | $ 50,800,000 | $ 44,000,000 | $ 27,100,000 | ||||||
Amended Advisory Agreement | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Dealer management fee daily accrual, percentage | 0.315% | ||||||||||
Dealer Manager | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Related party transaction expense | 170,000 | 254,000 | |||||||||
Primary Dealer Fee | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Related party transaction expense | $ 0 | $ 0 | $ 1,697,000 | $ 2,540,000 | |||||||
Class A and Class W | Follow-On Offering | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Dealer management fee daily accrual, percentage | 0.164% | ||||||||||
Follow-On Offering | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Maximum primary dealer fee as percentage of gross proceeds from sale of class shares | 5.00% | 5.00% | 5.00% | ||||||||
Class I | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Proceeds from sale of common stock | $ 33,900,000 | ||||||||||
Class I | Follow-On Offering | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Dealer management fee daily accrual, percentage | 0.274% | ||||||||||
Class A | Follow-On Offering | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Class A distribution fee | 0.137% | ||||||||||
Maximum | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Related party transaction expense | 7,500,000 | ||||||||||
Proceeds from sale of common stock | $ 100,000,000 | ||||||||||
Maximum | Follow-On Offering | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Class A Dealer Manager selling commission | 3.00% |
Related Party Transactions (Res
Related Party Transactions (Restricted Stock) (Details) - $ / shares | Feb. 04, 2016 | Sep. 30, 2016 |
Related Party Transaction [Line Items] | ||
Advisor agreement termination, notification period | 30 days | |
Advisor agreement termination, transaction close period | 60 days | |
Class I | ||
Related Party Transaction [Line Items] | ||
Number of shares subject to fee offset | 76,000 | |
Restricted Stock Units (RSUs) | ||
Related Party Transaction [Line Items] | ||
Offset period | 12 months | |
Restricted Stock [Member] | Class I | ||
Related Party Transaction [Line Items] | ||
Awards granted (shares) | 49,340 | |
Grants in period, weighted average price per share (usd per share) | $ 7.41 | |
Vesting period | 4 years | |
Awards vested (shares) | 27,290 | |
Vested in period, weighted average price per share | $ 7.39 |
Related Party Transactions (Pri
Related Party Transactions (Private Placements of Delaware Statutory Trust Interests) (Details) - USD ($) $ in Thousands, shares in Millions | 1 Months Ended | 9 Months Ended | 12 Months Ended | |||
Mar. 31, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Related Party Transaction [Line Items] | ||||||
Proceeds from Issuance of Common Stock | $ 51,968 | $ 68,851 | $ 50,800 | $ 44,000 | $ 27,100 | |
DST Properties | ||||||
Related Party Transaction [Line Items] | ||||||
Percent of interests intended to sell to third parties | 100.00% | |||||
Management fee upon disposition, percent of gross sale price | 1.00% | |||||
Management loan fee, percent of financing arranged | 1.00% | |||||
Amended And Restated Operating Partnership Agreement | ||||||
Related Party Transaction [Line Items] | ||||||
Redemption fee, payable to manager | 1.50% | |||||
Private Placements | ||||||
Related Party Transaction [Line Items] | ||||||
Lease-back term period | 29 years | |||||
Private Placements | Operating Parnership (DST Program) | ||||||
Related Party Transaction [Line Items] | ||||||
Proceeds from Issuance of Common Stock | $ 183,100 | $ 1,300 | ||||
Units exchanged | 17.7 | |||||
Private Placements | DST Properties | ||||||
Related Party Transaction [Line Items] | ||||||
Private placement, offering expense mark-up, percent of gross equity proceeds | 1.50% | |||||
Private placement, purchase price mark-up, percent of gross equity proceeds | 8.00% | |||||
Non-accountable reimbursement by investors, percent of gross equity proceeds for real estate transaction costs | 1.00% | |||||
Private Placements | Dividend Capital Exchange LLC (DCX) | Dealer Manager Agreement | ||||||
Related Party Transaction [Line Items] | ||||||
Private placement, amount of interests placed with dealer | $ 500,000 | |||||
Private placement, dealer fee, percent of gross equity proceeds | 1.50% | |||||
Private placement, commission, percent of gross equity proceeds | 5.00% |
Related Party Transactions (Sch
Related Party Transactions (Schedule Of RSU Grants) (Details) - Restricted Stock Units (RSUs) shares in Thousands | Sep. 30, 2016$ / sharesshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Unvested Shares (shares) | shares | 412 |
Grant Date NAV per Class I share (usd per share) | $ / shares | $ 7.18 |
April 7, 2014 Grant | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Unvested Shares (shares) | shares | 123 |
Grant Date NAV per Class I share (usd per share) | $ / shares | $ 6.96 |
February 25, 2015 Grant | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Unvested Shares (shares) | shares | 30 |
Grant Date NAV per Class I share (usd per share) | $ / shares | $ 7.18 |
February 25, 2015 Grant | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Unvested Shares (shares) | shares | 135 |
Grant Date NAV per Class I share (usd per share) | $ / shares | $ 7.18 |
February 4, 2016 Grant | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Unvested Shares (shares) | shares | 124 |
Grant Date NAV per Class I share (usd per share) | $ / shares | $ 7.41 |
Related Party Transactions (Sum
Related Party Transactions (Summary of Fees and Other Amounts Earned by Advisor and Its Related Parties) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Related Party Transaction [Line Items] | ||||
Related party transaction expense | $ 6,159,000 | $ 6,755,000 | $ 21,792,000 | $ 27,563,000 |
Advisory Fees | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction expense | 3,681,000 | 4,225,000 | 11,118,000 | 13,021,000 |
Advisory Fees | Restricted Stock Units (RSUs) | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction expense | 284,000 | 283,000 | 849,000 | 786,000 |
Other reimbursements paid to our Advisor | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction expense | 1,928,000 | 2,176,000 | 6,232,000 | 6,590,000 |
Other Reimbursements Paid To Our Dealer Manager | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction expense | 155,000 | 33,000 | 237,000 | 310,000 |
Advisory Fees Related to the Disposition Of Real Properties | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction expense | 271,000 | 201,000 | 2,078,000 | 4,779,000 |
Development Management Fees | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction expense | 0 | 18,000 | 31,000 | 52,000 |
Primary Dealer Fee | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction expense | 0 | 0 | 1,697,000 | 2,540,000 |
Reallowed amount to third party brokers | 1,500,000 | 2,300,000 | ||
Dealer Manager | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction expense | 170,000 | 254,000 | ||
Retained amount to third party brokers | 170,000 | 254,000 | ||
Dealer manager and distribution fees liability | 3,400,000 | 3,400,000 | ||
Dealer Manager And Distribution Fees | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction expense | 124,000 | 102,000 | 399,000 | 271,000 |
Reimbursements For Portion Of Compensation Costs | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction expense | $ 1,600,000 | $ 1,800,000 | $ 5,200,000 | $ 5,400,000 |
Net Income Per Common Share (De
Net Income Per Common Share (Details of Numerator and Denominator Used to Calculate Basic and Diluted Net Income Per Common Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Numerator | ||||
Net income | $ 3,318 | $ (1,425) | $ 51,690 | $ 130,883 |
Net (income) loss attributable to noncontrolling interests | (353) | 1,297 | (4,826) | (7,358) |
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | 2,965 | (128) | 46,864 | 123,525 |
Dilutive noncontrolling interests share of net income | 230 | (10) | 3,639 | 8,575 |
Numerator for diluted earnings per share - adjusted net income | $ 3,195 | $ (138) | $ 50,503 | $ 132,100 |
Denominator | ||||
Weighted average shares outstanding-basic (shares) | 158,688 | 174,290 | 161,274 | 179,168 |
Incremental weighted average shares effect of conversion of OP units (shares) | 12,264 | 12,989 | 12,486 | 12,852 |
Weighted average shares outstanding-diluted (shares) | 170,952 | 187,279 | 173,760 | 192,020 |
INCOME PER COMMON SHARE-BASIC AND DILUTED (usd per share) | $ 0.02 | $ 0 | $ 0.29 | $ 0.69 |
Segment Information (Revenue an
Segment Information (Revenue and Components of Net Operating Income) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)segment | Sep. 30, 2015USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of operating segments | segment | 3 | |||
Revenues | $ 53,258 | $ 52,854 | $ 161,504 | $ 163,308 |
NOI | 36,821 | 37,977 | $ 113,116 | 119,896 |
Real property operating sector | ||||
Segment Reporting Information [Line Items] | ||||
Number of operating segments | segment | 3 | |||
Office | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 31,082 | 34,418 | $ 96,034 | 102,631 |
NOI | 20,657 | 23,937 | 64,785 | 74,056 |
Industrial | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 1,449 | 1,358 | 4,694 | 7,147 |
NOI | 968 | 885 | 3,345 | 5,656 |
Retail | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 20,727 | 17,078 | 60,776 | 53,530 |
NOI | $ 15,196 | $ 13,155 | $ 44,986 | $ 40,184 |
Segment Information (Reconcilia
Segment Information (Reconciliation of Net Operating Income to Reported Net Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Reconciliation of net operating income attributable to common shareholders | |||||
Net operating income | $ 36,821 | $ 37,977 | $ 113,116 | $ 119,896 | |
Debt related income | 235 | 807 | 710 | 5,594 | |
Real estate depreciation and amortization expense | (19,989) | (20,851) | (60,022) | (61,404) | |
General and administrative expenses | [1] | (2,234) | (2,477) | (7,192) | (8,157) |
Advisory fees, related party | (3,681) | (4,225) | (11,118) | (13,021) | |
Acquisition-related expenses | (136) | (476) | (661) | (1,259) | |
Impairment of real estate property | [2] | (2,090) | (6,500) | (2,677) | (8,124) |
Interest and other income | 2,308 | 704 | 2,297 | 1,500 | |
Interest expense | (10,011) | (10,951) | (31,394) | (36,208) | |
(Loss) gain on extinguishment of debt and financing commitments | 0 | 0 | 5,136 | (1,168) | |
Gain on sale of real property | [3] | 2,095 | 4,567 | 43,495 | 133,234 |
Net (income) loss attributable to noncontrolling interests | (353) | 1,297 | (4,826) | (7,358) | |
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ 2,965 | $ (128) | $ 46,864 | $ 123,525 | |
[1] | Includes approximately $1.4 million and $1.8 million of reimbursable expenses incurred by our Advisor and its affiliates during the three months ended September 30, 2016 and 2015, respectively, and approximately $4.9 million and $5.3 million of reimbursable expenses incurred by our Advisor and its affiliates during the nine months ended September 30, 2016 and 2015. | ||||
[2] | Includes approximately $186,000 paid to our Advisor for advisory fees associated with the disposition of real properties during the three months ended September 30, 2016, and $265,000 and $125,000 paid to our Advisor for advisory fees associated with the disposition of real properties during the nine months ended September 30, 2016 and 2015, respectively. | ||||
[3] | Includes approximately $85,000 and $201,000 paid to our Advisor for advisory fees associated with the disposition of real properties during the three months ended September 30, 2016 and 2015, respectively, and $1.8 million and $4.6 million paid to our Advisor for advisory fees associated with the disposition of real properties during the nine months ended September 30, 2016 and 2015, respectively |
Segment Information (Schedule o
Segment Information (Schedule of Total Assets by Business Segment) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Segment assets: | ||||
Total segment assets, net | $ 1,727,916 | $ 1,874,217 | ||
Non-segment assets: | ||||
Debt related investments, net | 15,340 | 15,722 | ||
Cash and cash equivalents | 34,403 | 15,769 | $ 15,186 | $ 14,461 |
Total Assets | 1,821,661 | 1,960,891 | ||
Non-segment | ||||
Non-segment assets: | ||||
Debt related investments, net | 15,340 | 15,722 | ||
Cash and cash equivalents | 34,403 | 15,769 | ||
Other non-segment assets | 44,002 | 55,183 | ||
Office | Operating segments | ||||
Segment assets: | ||||
Total segment assets, net | 835,272 | 1,027,132 | ||
Retail | Operating segments | ||||
Segment assets: | ||||
Total segment assets, net | 834,497 | 785,854 | ||
Industrial | Operating segments | ||||
Segment assets: | ||||
Total segment assets, net | $ 58,147 | $ 61,231 |