Document and Entity Information
Document and Entity Information Document - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 04, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | KBS Real Estate Investment Trust, Inc. | |
Entity Central Index Key | 1,330,622 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 185,150,475 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Real estate held for investment: | ||
Land | $ 117,674 | $ 122,857 |
Buildings and improvements | 444,918 | 467,569 |
Tenant origination and absorption costs | 17,248 | 21,962 |
Total real estate held for investment, at cost and net of impairment charges | 579,840 | 612,388 |
Less accumulated depreciation and amortization | (86,861) | (95,320) |
Total real estate held for investment, net | 492,979 | 517,068 |
Real estate held for sale, net | 8,839 | 343,812 |
Total real estate, net | 501,818 | 860,880 |
Real estate loans receivable, net | 22,580 | 27,281 |
Total real estate and real estate-related investments, net | 524,398 | 888,161 |
Cash and cash equivalents | 219,590 | 46,605 |
Restricted cash | 14,554 | 39,874 |
Rents and other receivables, net | 24,318 | 25,864 |
Above-market leases, net | 775 | 1,341 |
Assets related to real estate held for sale | 313 | 32,321 |
Prepaid expenses and other assets, net | 32,112 | 20,699 |
Total assets | 816,060 | 1,054,865 |
Notes payable: | ||
Notes payable, net | 178,524 | 238,681 |
Notes payable related to real estate held for sale, net | 0 | 189,541 |
Total notes payable, net | 178,524 | 428,222 |
Accounts payable and accrued liabilities | 13,012 | 19,152 |
Due to affiliates | 90 | 68 |
Below-market leases, net | 8,606 | 12,697 |
Liabilities related to real estate held for sale | 1,526 | 15,417 |
Other liabilities | 40,594 | 49,646 |
Total liabilities | 242,352 | 525,202 |
Commitments and contingencies (Note 12) | ||
Redeemable common stock | 5,273 | 10,000 |
Stockholders’ equity | ||
Preferred stock, $.01 par value; 10,000,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Common stock, $.01 par value; 1,000,000,000 shares authorized, 185,214,437 and 186,414,147 shares issued and outstanding as of September 30, 2016 and December 31, 2015, respectively | 1,852 | 1,864 |
Additional paid-in capital | 1,656,149 | 1,656,137 |
Cumulative distributions and net losses | (1,089,566) | (1,138,338) |
Total stockholders’ equity | 568,435 | 519,663 |
Total liabilities and stockholders’ equity | $ 816,060 | $ 1,054,865 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 185,214,437 | 186,414,147 |
Common stock, shares outstanding | 185,214,437 | 186,414,147 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues: | ||||
Rental income | $ 21,364 | $ 31,242 | $ 75,710 | $ 99,038 |
Tenant reimbursements | 4,758 | 12,242 | 23,604 | 35,929 |
Interest income from real estate loans receivable | 644 | 756 | 2,193 | 2,223 |
Parking revenues and other operating income | 524 | 604 | 1,693 | 2,197 |
Total revenues | 27,290 | 44,844 | 103,200 | 139,387 |
Expenses: | ||||
Operating, maintenance, and management | 11,497 | 17,699 | 42,062 | 57,531 |
Real estate taxes, property-related taxes, and insurance | 3,203 | 5,404 | 13,299 | 18,050 |
Asset management fees to affiliate | 1,653 | 2,386 | 6,098 | 7,152 |
Foreclosure fees and expenses | 0 | 0 | 275 | 0 |
General and administrative expenses | 7,755 | 7,591 | 14,003 | 15,868 |
Depreciation and amortization | 7,554 | 13,911 | 28,597 | 43,721 |
Interest expense | 2,089 | 7,025 | 9,969 | 23,842 |
Impairment charges on real estate | 4,080 | 34,933 | 29,574 | 34,933 |
Provision for loan losses | 0 | 2,504 | 0 | 2,504 |
Total expenses | 37,831 | 91,453 | 143,877 | 203,601 |
Other income and loss | ||||
Gain on sales of real estate, net | 7,910 | 806 | 128,845 | 49,865 |
Gain on sales of foreclosed real estate held for sale | 0 | 0 | 0 | 2,509 |
Loss from extinguishment of debt | (7,023) | (2,189) | (26,343) | (8,565) |
Other interest income | 283 | 167 | 623 | 409 |
Other income | 77 | 109 | 183 | 458 |
Total other income (loss) | 1,247 | (1,107) | 103,308 | 44,676 |
(Loss) income from continuing operations | (9,294) | (47,716) | 62,631 | (19,538) |
Discontinued operations: | ||||
Gain on sales of real estate, net | 0 | 0 | 0 | 124 |
Income from discontinued operations | 0 | 305 | 75 | 343 |
Total income from discontinued operations | 0 | 305 | 75 | 467 |
Net (loss) income | $ (9,294) | $ (47,411) | $ 62,706 | $ (19,071) |
Basic and diluted income per common share: | ||||
Continuing operations (in dollars per share) | $ (0.05) | $ (0.25) | $ 0.34 | $ (0.10) |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | 0 |
Net (loss) income per common share (in dollars per share) | $ (0.05) | $ (0.25) | $ 0.34 | $ (0.10) |
Weighted-average number of common shares outstanding, basic and diluted (in shares) | 185,473,509 | 187,058,110 | 185,892,361 | 187,386,137 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Cumulative Distributions and Net Income (Loss) [Member] |
Balance, shares at Dec. 31, 2014 | 187,845,515 | |||
Balance at Dec. 31, 2014 | $ 602,773 | $ 1,879 | $ 1,662,483 | $ (1,061,589) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | (11,387) | (11,387) | ||
Redemptions of common stock, shares | (1,431,368) | |||
Redemptions of common stock | (6,361) | $ (15) | (6,346) | |
Distributions declared | $ (65,362) | (65,362) | ||
Balance, shares at Dec. 31, 2015 | 186,414,147 | 186,414,147 | ||
Balance at Dec. 31, 2015 | $ 519,663 | $ 1,864 | 1,656,137 | (1,138,338) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | 62,706 | 62,706 | ||
Redemptions of common stock, shares | (1,199,710) | |||
Redemptions of common stock | (4,727) | $ (12) | (4,715) | |
Transfers from redeemable common stock | 4,727 | 4,727 | ||
Distributions declared | $ (13,934) | (13,934) | ||
Balance, shares at Sep. 30, 2016 | 185,214,437 | 185,214,437 | ||
Balance at Sep. 30, 2016 | $ 568,435 | $ 1,852 | $ 1,656,149 | $ (1,089,566) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash Flows from Operating Activities: | ||
Net income (loss) | $ 62,706 | $ (19,071) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 28,597 | 43,721 |
Impairment charges on real estate | 29,574 | 34,933 |
Loss due to property damages | 1,033 | 0 |
Noncash interest income on real estate-related investments | (841) | (750) |
Provision for loan losses | 0 | 2,504 |
Deferred rent | (1,175) | (1,767) |
Bad debt expense (recovery) | 121 | (169) |
Amortization of deferred financing costs | 273 | 1,568 |
Amortization of above- and below-market leases, net | (4,020) | (5,707) |
Gain on sales of foreclosed real estate held for sale | 0 | (2,509) |
Gain on sales of real estate, net | (128,845) | (49,989) |
Loss on extinguishment of debt | 26,343 | 8,565 |
Amortization of discounts and premiums on notes payable, net | 227 | 1,128 |
Changes in operating assets and liabilities: | ||
Restricted cash for operational expenditures | 13,971 | 10,530 |
Rents and other receivables | 2,364 | 1,690 |
Prepaid expenses and other assets | (14,441) | (5,776) |
Accounts payable and accrued liabilities | 17 | 5,514 |
Due to affiliates | 22 | (41) |
Other liabilities | (9,042) | 1,861 |
Net cash provided by operating activities | 6,884 | 26,235 |
Cash Flows from Investing Activities: | ||
Acquisition of real estate | 0 | (2,297) |
Improvements to real estate | (23,957) | (27,499) |
Proceeds from sales of real estate, net | 472,821 | 206,106 |
Proceeds from sales of foreclosed real estate held for sale | 0 | 14,155 |
Insurance proceeds received for property damage | 1,028 | 0 |
Principal repayments on real estate loans receivable | 62 | 124 |
Net change in restricted cash for capital expenditures | 1,463 | 4,042 |
Net cash provided by investing activities | 451,417 | 194,631 |
Cash Flows from Financing Activities: | ||
Principal payments on notes payable | (85,235) | (142,930) |
Purchase of treasury securities in connection with defeasance of notes payable | (184,772) | 0 |
Prepayment premium on the repayment of debt | (6,534) | (6,619) |
Net change in restricted cash for debt service obligations | 9,886 | 1,084 |
Payments to redeem common stock | (4,727) | (4,558) |
Distributions paid to common stockholders | (13,934) | (18,745) |
Net cash used in financing activities | (285,316) | (171,768) |
Net increase in cash and cash equivalents | 172,985 | 49,098 |
Cash and cash equivalents, beginning of period | 46,605 | 58,675 |
Cash and cash equivalents, end of period | $ 219,590 | $ 107,773 |
ORGANIZATION
ORGANIZATION | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | ORGANIZATION KBS Real Estate Investment Trust, Inc. (the “Company”) was formed on June 13, 2005 as a Maryland corporation and has elected to be taxed as a real estate investment trust (“REIT”). Substantially all of the Company’s assets are held by, and the Company conducts substantially all of its operations through, KBS Limited Partnership, a Delaware limited partnership (the “Operating Partnership”), and its subsidiaries. The Company is the sole general partner of and directly owns a 99% partnership interest in the Operating Partnership. The Company’s wholly owned subsidiary, KBS REIT Holdings LLC, a Delaware limited liability company (“KBS REIT Holdings”), owns the remaining 1% partnership interest in the Operating Partnership and is its sole limited partner. The Company invested in a diverse portfolio of real estate and real estate-related investments. As of September 30, 2016 , the Company owned or, with respect to a limited number of properties, held a leasehold interest in, 186 real estate properties (of which 12 properties were held for sale, all of which were GKK Properties (defined below)), including the GKK Properties. In addition, as of September 30, 2016 , the Company owned three real estate loans receivable and a participation interest with respect to a real estate joint venture. On September 1, 2011, the Company, through indirect wholly owned subsidiaries (collectively, “KBS”), entered into a Collateral Transfer and Settlement Agreement (the “Settlement Agreement”) with, among other parties, GKK Stars Acquisition LLC (“GKK Stars”), the wholly owned subsidiary of Gramercy Property Trust, Inc. (“Gramercy”) that indirectly owned the Gramercy real estate portfolio, to effect the orderly transfer of certain assets and liabilities of the Gramercy real estate portfolio to KBS in satisfaction of certain debt obligations under a mezzanine loan owed by wholly owned subsidiaries of Gramercy to KBS (the “GKK Mezzanine Loan”). The Settlement Agreement resulted in the transfer of the equity interests in certain subsidiaries of Gramercy (the “Equity Interests”) that indirectly owned or, with respect to a limited number of properties, held a leasehold interest in, 867 properties (the “GKK Properties”), consisting of 576 bank branch properties and 291 office buildings, operations centers and other properties. As of December 15, 2011, GKK Stars had transferred all of the Equity Interests to the Company, giving the Company title to or, with respect to a limited number of GKK Properties, a leasehold interest in, 867 GKK Properties as of that date. Subject to certain restrictions and limitations, the business of the Company is managed by KBS Capital Advisors LLC (the “Advisor”), an affiliate of the Company, pursuant to an advisory agreement with the Company (the “Advisory Agreement”) in effect through November 8, 2017. The Advisory Agreement may be renewed for an unlimited number of one -year periods upon the mutual consent of the Advisor and the Company. Either party may terminate the Advisory Agreement upon 60 days written notice. The Advisor owns 20,000 shares of the Company’s common stock. Upon commencing its initial public offering (the “Offering”), the Company retained KBS Capital Markets Group LLC (the “Dealer Manager”), an affiliate of the Advisor, to serve as the dealer manager of the Offering pursuant to a dealer manager agreement dated January 27, 2006 (the “Dealer Manager Agreement”). The Company ceased offering shares of common stock in its primary offering on May 30, 2008. The Company terminated its dividend reinvestment plan effective April 10, 2012. The Company sold 171,109,494 shares of common stock in its primary offering for gross offering proceeds of $1.7 billion . The Company sold 28,306,086 shares of common stock under its dividend reinvestment plan for gross offering proceeds of $233.7 million . As of September 30, 2016 , the Company had redeemed 14,221,143 of the shares sold in the Offering for $96.5 million . Asset Management Services Agreement Related to the GKK Properties On December 19, 2013, the Company, through an indirect wholly owned subsidiary (“KBS Acquisition Sub”), entered into an amended and restated asset management services agreement (the “Amended Services Agreement”) with GKK Realty Advisors LLC (the “Property Manager”), an affiliate of Gramercy, with respect to the GKK Properties. The effective date of the Amended Services Agreement was December 1, 2013. Pursuant to the Amended Services Agreement, the Property Manager agreed to provide, among other services: standard asset management services, assistance related to dispositions, accounting services and budgeting and business plans for the GKK Properties (the “Services”). The Property Manager is not affiliated with the Company or KBS Acquisition Sub. As compensation for the Services, the Company agreed to pay the Property Manager: (i) an annual fee of $7.5 million plus all GKK Property-related expenses incurred by the Property Manager, (ii) subject to certain terms and conditions in the Amended Services Agreement, a profit participation interest based on a percentage (ranging from 10% to 30% ) of the amount by which the gross fair market value or gross sales price of certain identified portfolios of GKK Properties exceeds the sum of (a) an agreed-upon baseline value for such GKK Property portfolios plus (b) new capital expended to increase the value of GKK Properties within the portfolios and expenditures made to pay for tenant improvements and leasing commissions related to these GKK Properties as of the measurement date, and (iii) a monthly construction oversight fee equal to a percentage of construction costs for certain construction projects at the GKK Properties overseen by the Property Manager. On June 29, 2016, KBS Acquisition Sub entered into two agreements, a second amended and restated asset management services agreement (the “Second Amended Services Agreement”) and an accounting/construction services agreement (the “Accounting/Construction Services Agreement”), with the Property Manager. The effective date of both the Second Amended Services Agreement and the Accounting/Construction Services Agreement was June 1, 2016. Combined, the Services and the key terms and compensation for the Services under the Second Amended Services Agreement and the Accounting/Construction Services Agreement are the same as those of the prior Amended Services Agreement; the two agreements allocate the Services and the compensation between asset management services and accounting/construction services. The Second Amended Services Agreement and the Accounting/Construction Services Agreement supersede and replace all prior agreements related to the Services among the Company and its affiliates and the Property Manager and its affiliates. The Second Amended Services Agreement and the Accounting/Construction Services Agreement will terminate on December 31, 2016, with a one -year extension option at the Company’s option, subject to certain terms and conditions contained in the agreements. On June 29, 2016, the Property Manager assigned the Second Amended Services Agreement to an affiliate, GPT Realty Management LP, an entity controlled by Gramercy. As of September 30, 2016 , the Company accrued $19.1 million of estimated profit participation interest related to the GKK Properties under the Second Amended Services Agreement. |
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 There have been no significant changes to the Company’s accounting policies since it filed its audited financial statements in its Annual Report on Form 10-K for the year ended December 31, 2015 . For further information about the Company’s accounting policies, refer to the Company’s consolidated financial statements and notes thereto for the year ended December 31, 2015 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”). Principles of Consolidation and Basis of Presentation The accompanying unaudited consolidated financial statements and condensed notes thereto have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair and consistent presentation of the results for such periods. Operating results for the three and nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016 . The unaudited consolidated financial statements include the accounts of the Company, KBS REIT Holdings, the Operating Partnership and their direct and indirect wholly owned subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation. Use of Estimates The preparation of the unaudited consolidated financial statements and condensed notes thereto in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited consolidated financial statements and condensed notes. Actual results could materially differ from those estimates. Reclassifications Certain amounts in the Company’s prior period consolidated financial statements have been reclassified to conform to the current period presentation. These reclassifications have not changed the results of operations of prior periods. During the nine months ended September 30, 2016 , the Company sold 179 properties ( 177 of which were GKK Properties). As of September 30, 2016 , the Company had classified 12 properties as held for sale, all of which were GKK Properties. As a result, certain assets and liabilities were reclassified to held for sale on the consolidated balance sheets for all periods presented. Per Share Data Basic net income (loss) per share of common stock is calculated by dividing net income (loss) by the weighted-average number of shares of common stock issued and outstanding during such period. Diluted net income (loss) per share of common stock equals basic net income (loss) per share of common stock, as there were no potentially dilutive securities outstanding during the nine months ended September 30, 2016 and 2015 , respectively. Distributions declared per share of common stock were $0.025 and $0.075 for the three and nine months ended September 30, 2016 , respectively, and $0.025 and $0.075 for the three and nine months ended September 30, 2015 , respectively. Distributions per share of common stock were based on a quarterly record date for each quarter ended September 30, 2016 and 2015 , respectively. Segments The Company’s segments are based on the Company’s method of internal reporting, which classifies its operations by investment type: (i) real estate, (ii) real estate-related and (iii) commercial properties primarily leased to financial institutions received under the Settlement Agreement, the GKK Properties. For financial data by segment, see Note 11, “Segment Information.” Square Footage, Occupancy and Other Measures Any references to square footage, occupancy or annualized base rent are unaudited and outside the scope of the Company’s independent registered public accounting firm’s review of the Company’s financial statements in accordance with the standards of the United States Public Company Accounting Oversight Board. Recently Issued Accounting Standards Update In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU No. 2014-09”). ASU No. 2014-09 requires an entity to recognize the revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. ASU No. 2014-09 supersedes the revenue requirements in Revenue Recognition (Topic 605) and most industry-specific guidance throughout the Industry Topics of the Codification. ASU No. 2014-09 does not apply to lease contracts within the scope of Leases (Topic 840). ASU No. 2014-09 was to be effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and is to be applied retrospectively, with early application not permitted. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (“ASU No. 2015-14”), which defers the effective date of ASU No. 2014-09 by one year. Early adoption is permitted but not before the original effective date. The Company is still evaluating the impact of adopting ASU No. 2014-09 on its financial statements. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements (Subtopic 205-40) , Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU No. 2014-15”). The amendments in ASU No. 2014-15 require management to evaluate, for each annual and interim reporting period, whether there are conditions or events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or are available to be issued when applicable) and, if so, provide related disclosures. ASU No. 2014-15 is effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early adoption is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. The Company does not expect the adoption of ASU No. 2014-15 to have a significant impact on its financial statements. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU No. 2016-01”). The amendments in ASU No. 2016-01 address certain aspects of recognition, measurement, presentation and disclosure of financial instruments. ASU No. 2016-01 primarily affects accounting for equity investments and financial liabilities where the fair value option has been elected. ASU No. 2016-01 also requires entities to present financial assets and financial liabilities separately, grouped by measurement category and form of financial asset in the balance sheet or in the accompanying notes to the financial statements. ASU No. 2016-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. Early application is permitted for financial statements that have not been previously issued. The Company does not expect the adoption of ASU No. 2016-01 to have a significant impact on its financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU No. 2016-02”). The amendments in ASU No. 2016-02 change the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU No. 2016-02 is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption of ASU No. 2016-02 as of its issuance is permitted. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company is currently evaluating the impact of adopting the new leases standard on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) (“ASU No. 2016-13”). ASU No. 2016-13 affects entities holding financial assets and net investments in leases that are not accounted for at fair value through net income. The amendments in ASU No. 2016-13 require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. ASU No. 2016-13 also amends the impairment model for available-for-sale securities. An entity will recognize an allowance for credit losses on available-for-sale debt securities as a contra-account to the amortized cost basis rather than as a direct reduction of the amortized cost basis of the investment, as is currently required. ASU No. 2016-13 also requires new disclosures. For financial assets measured at amortized cost, an entity will be required to disclose information about how it developed its allowance for credit losses, including changes in the factors that influenced management’s estimate of expected credit losses and the reasons for those changes. For financing receivables and net investments in leases measured at amortized cost, an entity will be required to further disaggregate the information it currently discloses about the credit quality of these assets by year of the asset’s origination for as many as five annual periods. For available for sale securities, an entity will be required to provide a roll-forward of the allowance for credit losses and an aging analysis for securities that are past due. ASU No. 2016-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is still evaluating the impact of adopting ASU No. 2016-13 on its financial statements, but does not expect the adoption of ASU No. 2016-13 to have a material impact on its financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments (“ASU No. 2016-15”). ASU No. 2016-15 is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. The amendments in ASU No. 2016-15 provide guidance on eight specific cash flow issues, including the following that are or may be relevant to the Company: (a) Cash payments for debt prepayment or debt extinguishment costs should be classified as cash outflows for financing activities; (b) Cash payments relating to contingent consideration made soon after an acquisition’s consummation date (i.e., approximately three months or less) should be classified as cash outflows for investing activities. Payments made thereafter should be classified as cash outflows for financing activities up to the amount of the original contingent consideration liability. Payments made in excess of the amount of the original contingent consideration liability should be classified as cash outflows for operating activities; (c) Cash payments received from the settlement of insurance claims should be classified on the basis of the nature of the loss (or each component loss, if an entity receives a lump-sum settlement); (d) In the absence of specific guidance, an entity should classify each separately identifiable cash source and use on the basis of the nature of the underlying cash flows. For cash flows with aspects of more than one class that cannot be separated, the classification should be based on the activity that is likely to be the predominant source or use of cash flow. ASU No. 2016-15 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The Company is still evaluating the impact of adopting ASU No. 2016-15 on its financial statements, but does not expect the adoption of ASU No. 2016-15 to have a material impact on its financial statements. |
REAL ESTATE HELD FOR INVESTMENT
REAL ESTATE HELD FOR INVESTMENT | 9 Months Ended |
Sep. 30, 2016 | |
Real Estate Held for Investment [Abstract] | |
REAL ESTATE HELD FOR INVESTMENT | REAL ESTATE HELD FOR INVESTMENT As of September 30, 2016 , the Company’s portfolio of real estate held for investment, including the GKK Properties, was composed of approximately 4.0 million rentable square feet and was 88% occupied. These properties are located in 23 states and include office properties, industrial properties, bank branch properties and a retail property. Included in the Company’s portfolio of real estate held for investment was 1.7 million rentable square feet related to the GKK Properties held for investment, which were 86% occupied as of September 30, 2016 . The following table summarizes the Company’s real estate held for investment as of September 30, 2016 and December 31, 2015 (in thousands): Land Buildings and Improvements Tenant Origination and Absorption Costs Total Real Estate Held for Investment As of September 30, 2016: Office $ 55,335 $ 292,005 $ 525 $ 347,865 Industrial 10,975 57,416 1,835 70,226 Retail (1) 1,607 2,930 753 5,290 GKK Properties 49,757 92,567 14,135 156,459 Real estate held for investment, at cost and net of impairment charges 117,674 444,918 17,248 579,840 Accumulated depreciation/amortization — (77,176 ) (9,685 ) (86,861 ) Real estate held for investment, net $ 117,674 $ 367,742 $ 7,563 $ 492,979 As of December 31, 2015: Office $ 56,745 $ 294,979 $ 525 $ 352,249 Industrial 10,974 56,451 1,835 69,260 GKK Properties 55,138 116,139 19,602 190,879 Real estate held for investment, at cost and net of impairment charges 122,857 467,569 21,962 612,388 Accumulated depreciation/amortization — (82,877 ) (12,443 ) (95,320 ) Real estate held for investment, net $ 122,857 $ 384,692 $ 9,519 $ 517,068 _____________________ (1) On May 13, 2016, the Company received a deed-in-lieu of foreclosure in satisfaction of all amounts due to it under its investment in the Lawrence Village Plaza Loan Origination and received title to the collateral that secured the loan. See Note 5, “Real Estate Loans Receivable.” Operating Leases The Company’s real estate assets are leased to tenants under operating leases for which the terms and expirations vary. As of September 30, 2016 , the Company’s leases, including those related to the GKK Properties, held for investment and excluding options to extend, had remaining terms of up to 13.8 years with a weighted-average remaining term of 3.9 years. As of September 30, 2016 , leases related to the GKK Properties, excluding options to extend, had remaining terms of up to 9.8 years with a weighted-average remaining term of 3.1 years. Some of the Company’s leases have provisions to extend the term of the leases, options for early termination for all or a part of the leased premises after paying a specified penalty, rights of first refusal to purchase the property at competitive market rates, and other terms and conditions as negotiated. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. Generally, upon the execution of a lease, the Company requires a security deposit from the tenant in the form of a cash deposit and/or a letter of credit. The amount required as a security deposit varies depending upon the terms of the respective lease and the creditworthiness of the tenant, but generally is not a significant amount. Therefore, exposure to credit risk exists to the extent that a receivable from a tenant exceeds the amount of its security deposit. Security deposits received in cash related to tenant leases are included in other liabilities in the accompanying consolidated balance sheets and totaled $2.7 million and $3.2 million as of September 30, 2016 and December 31, 2015 , respectively. During the nine months ended September 30, 2016 and 2015 , the Company recognized deferred rent from tenants of $1.2 million and $1.8 million , respectively. These amounts for the nine months ended September 30, 2016 and 2015 were net of $0.9 million and $1.0 million of lease incentive amortization, respectively. As of September 30, 2016 and December 31, 2015 , the cumulative deferred rent balance was $21.3 million and $19.4 million , respectively, and is included in rents and other receivables on the accompanying balance sheets. The cumulative deferred rent balance included $4.8 million and $4.7 million of unamortized lease incentives as of September 30, 2016 and December 31, 2015 , respectively. The Company records property operating expense reimbursements due from tenants for common area maintenance, real estate taxes and other recoverable costs in the period the related expenses are incurred. The future minimum rental income from the Company’s properties held for investment under non-cancelable operating leases, including leases subject to shedding rights and excluding options to extend, as of September 30, 2016 for the years ending December 31 is as follows (in thousands): October 1, 2016 through December 31, 2016 $ 14,045 2017 55,444 2018 45,897 2019 42,090 2020 37,123 Thereafter 132,090 $ 326,689 Under certain of the Company’s leases, tenants reimburse the Company for their proportionate share of the costs the Company incurs to manage, operate and maintain the buildings and properties where they rent space. These leases often limit the types and amounts of expenses the Company can pass through to its tenants and allow the tenants to audit and contest the determination of the operating expenses they are required to pay. As of September 30, 2016 , the Company had recorded liabilities of approximately $3.2 million related to potential loss contingencies associated with certain claimed amounts relating to tenant reimbursement audits. As of September 30, 2016 , the Company’s highest tenant industry concentrations (greater than 10% of annualized base rent) were as follows: Industry Number of Annualized Base Rent (1) (in thousands) Percentage of Finance 36 $ 22,082 30.2 % Legal 19 8,662 11.8 % _____________________ (1) Annualized base rent represents annualized contractual base rental income as of September 30, 2016 , adjusted to straight-line any contractual tenant concessions (including free rent), rent increases and rent decreases from the lease's inception through the balance of the lease term. As of September 30, 2016 , no other tenant industries accounted for more than 10% of the Company’s annualized base rent. The Company currently has over 200 tenants over a diverse range of industries and geographical regions. As of September 30, 2016 and December 31, 2015 , the Company had a bad debt expense reserve of $0.5 million and $0.5 million , respectively. During the nine months ended September 30, 2016 and 2015 , the Company recorded bad debt expense related to its tenant receivables of $0.1 million and $38,000 , respectively. As of September 30, 2016 , the Company had a concentration of credit risk related to leases with the following tenant that represented more than 10% of the Company’s annualized base rent: Annualized Base Rent Statistics Tenant Property Tenant Industry Rentable Square Feet % of Portfolio Rentable Square Feet Annualized Base Rent (1) (in thousands) % of Portfolio Annualized Base Rent Annualized Base Rent per Square Foot Lease Expirations Bank of America, N.A. Various Finance 773,524 19.5 % $ 7,944 10.9 % $ 10.27 (2) _____________________ (1) Annualized base rent represents annualized contractual base rental income as of September 30, 2016 , adjusted to straight-line any contractual tenant concessions (including free rent), rent increases and rent decreases from the lease’s inception through the balance of the lease term. (2) As of September 30, 2016 , lease expiration dates ranged from 2019 through 2023 with a weighted-average remaining term of 4.6 years. No other tenant represented more than 10% of the Company’s annualized base rent. Geographic Concentration Risk As of September 30, 2016 , the Company’s net investments in real estate in Virginia represented 14.6% of the Company’s total assets. As a result, the geographic concentration of the Company’s portfolio makes it particularly susceptible to adverse economic developments in Virginia’s real estate market. Any adverse economic or real estate developments in this market, such as business layoffs or downsizing, industry slowdowns, relocations of businesses, changing demographics and other factors, or any decrease in demand for office or bank branch space resulting from the local business climate, could adversely affect the Company’s operating results. Impairment of Real Estate During the three months ended September 30, 2016 , the Company recorded non-cash impairment charges of $4.1 million , of which $3.7 million relates to 15 GKK properties classified as real estate held for investment, to write-down the carrying values of these real estate investments to their estimated fair values and $0.4 million with respect to three GKK Properties that were held for sale to write-down the carrying values of these real estate investments to their estimated sales price less estimated costs to sell. During the nine months ended September 30, 2016 , the Company recorded non-cash impairment charges of $29.6 million , of which $25.4 million related to 47 properties classified as real estate held for investment (including 44 GKK Properties), to write-down the carrying values of these real estate investments to their estimated fair values and $4.2 million with respect to 13 GKK Properties that were held for sale or sold to write-down the carrying values of these real estate investments to their estimated sales price less estimated costs to sell. See Note 6, “Real Estate Held for Sale and Discontinued Operations,” for information regarding impairments of assets related to real estate held for sale or sold. The facts and circumstances leading to the impairments on the Company’s real estate held for investment are as follows: City Gate Plaza The Company recognized an impairment charge during the nine months ended September 30, 2016 of $3.3 million to reduce the carrying value of the Company’s investment in City Gate Plaza, an office property located in Sacramento, California, to its estimated fair value. The Company revised its cash flow projections to account for higher projected leasing costs to stabilize the property. The continued lack of demand in the Sacramento office rental market also resulted in higher capitalization rates. University Park Buildings The Company recognized an impairment charge during the nine months ended September 30, 2016 of $3.2 million to reduce the carrying value of the Company’s investment in the University Park Buildings, an office property located in Sacramento, California, to its estimated fair value. The Company revised its cash flow projections primarily to account for higher projected capital costs for general building upgrades and to address certain maintenance issues. The continued lack of demand in the Sacramento office rental market also resulted in higher capitalization rates. ADP Plaza The Company recognized an impairment charge during the nine months ended September 30, 2016 of $1.7 million to reduce the carrying value of the Company’s investment in ADP Plaza, an office property located in Portland, Oregon, to its estimated fair value. The Company revised its cash flow projections due to an increase in projected vacancy as a tenant occupying 48.6% of the building’s rentable square feet notified the Company that it will exercise its contraction option as early as January 2017, resulting in a decrease in projected cash flows. GKK Properties Citizens Bank Portfolio The Company recognized an impairment charge during the nine months ended September 30, 2016 of $10.8 million relating to 20 properties in the Citizens Bank Portfolio due to a decrease in cash flow projections primarily due to an increase in projected vacancy, thus decreasing the projected cash flows the properties would generate. Pitney Bowes - Bank of America Portfolio The Company recognized an impairment charge during the nine months ended September 30, 2016 of $3.0 million relating to 13 properties in the Pitney Bowes - Bank of America Portfolio due to a decrease in cash flow projections primarily due to an increase in projected vacancy, thus decreasing the projected cash flows the properties would generate. Other Properties The Company recognized an impairment charge during the nine months ended September 30, 2016 of $3.4 million relating to 11 other GKK Properties classified as held for investment. No impairment charge related to any individual property was greater than $800,000 . These impairments generally resulted from changes in lease projections, including longer estimated lease-up periods and lower projected rental rates, thus decreasing the projected cash flows the properties would generate. |
TENANT ORIGINATION AND ABSORPTI
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES | 9 Months Ended |
Sep. 30, 2016 | |
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Abstract] | |
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES | TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES As of September 30, 2016 and December 31, 2015 , the Company’s tenant origination and absorption costs, above-market lease assets, and below-market lease liabilities (excluding fully amortized assets and liabilities and accumulated amortization) were as follows (in thousands): Tenant Origination and Absorption Costs Above-Market Lease Assets Below-Market Lease Liabilities September 30, 2016 December 31, 2015 September 30, 2016 December 31, 2015 September 30, 2016 December 31, 2015 Cost, net of impairments $ 17,248 $ 21,962 $ 4,309 $ 5,024 $ (37,337 ) $ (38,012 ) Accumulated amortization (9,685 ) (12,443 ) (3,534 ) (3,683 ) 28,731 25,315 Net amount $ 7,563 $ 9,519 $ 775 $ 1,341 $ (8,606 ) $ (12,697 ) Increases (decreases) in net income as a result of amortization of the Company’s tenant origination and absorption costs, above-market lease assets and below-market lease liabilities for the three and nine months ended September 30, 2016 and 2015 were as follows (in thousands): Tenant Origination and Absorption Costs Above-Market Lease Assets Below-Market Lease Liabilities For the Three Months Ended September 30, For the Three Months Ended September 30, For the Three Months Ended September 30, 2016 2015 2016 2015 2016 2015 Amortization $ (791 ) $ (2,409 ) $ (384 ) $ (843 ) $ 1,573 $ 2,460 Tenant Origination and Absorption Costs Above-Market Lease Assets Below-Market Lease Liabilities For the Nine Months Ended September 30, For the Nine Months Ended September 30, For the Nine Months Ended September 30, 2016 2015 2016 2015 2016 2015 Amortization $ (3,621 ) $ (7,814 ) $ (1,688 ) $ (3,001 ) $ 5,708 $ 8,699 |
REAL ESTATE LOANS RECEIVABLE
REAL ESTATE LOANS RECEIVABLE | 9 Months Ended |
Sep. 30, 2016 | |
Receivables [Abstract] | |
REAL ESTATE LOANS RECEIVABLE | REAL ESTATE LOANS RECEIVABLE As of September 30, 2016 and December 31, 2015 , the Company, through indirect wholly owned subsidiaries, had invested in or originated real estate loans receivable as follows (dollars in thousands): Loan Name Location of Related Property or Collateral Date Acquired/ Originated Property Type Loan Type Outstanding Principal Balance as of September 30, 2016 (1) Book Value as of September 30, 2016 (2) Book Value as of December 31, 2015 (2) Contractual Interest Rate (3) Annualized Effective Interest Rate (3) Maturity Date Sandmar Mezzanine Loan Southeast U.S. (4) 01/09/2007 Retail Mezzanine $ 5,074 $ 5,096 $ 5,096 5.4% — % 01/01/2017 Lawrence Village Plaza Loan Origination New Castle, Pennsylvania (5) 08/06/2007 Retail Mortgage — — 6,903 (5) (5) (5) San Diego Office Portfolio B-Note San Diego, California (6) 10/26/2007 Office B-Note 20,000 18,962 18,277 5.8% 11.2 % 10/11/2017 4929 Wilshire B-Note Los Angeles, California 11/19/2007 Office B-Note 3,794 3,618 3,503 6.1% 12.4 % 07/11/2017 $ 28,868 $ 27,676 $ 33,779 Reserve for Loan Losses (7) — (5,096 ) (6,498 ) $ 28,868 $ 22,580 $ 27,281 _____________________ (1) Outstanding principal balance as of September 30, 2016 represents original principal balance outstanding under the loan, increased for any subsequent fundings and reduced for any principal paydowns. (2) Book value represents outstanding principal balance, adjusted for unamortized acquisition discounts, origination fees and direct origination and acquisition costs. Loan balances are presented gross of any asset-specific reserves. (3) Contractual interest rate is the stated interest rate on the face of the loan. Annualized effective interest rate is calculated as the actual interest income recognized in 2016, using the interest method, annualized and divided by the average amortized cost basis of the investment during 2016. The contractual interest rates and annualized effective interest rates presented are as of September 30, 2016 . (4) The Company had recorded an asset-specific loan loss reserve against this investment as of September 30, 2016 . See “—Reserve for Loan Losses.” (5) On September 1, 2015, the Lawrence Village Plaza Loan Origination matured without repayment. On May 13, 2016, the Company received a deed-in-lieu of foreclosure in satisfaction of all amounts due to it under its investment in the Lawrence Village Plaza Loan Origination and received title to the collateral that secured the loan. (6) The borrower under this note is a wholly owned subsidiary of The Irvine Company. Donald Bren, who is the brother of Peter Bren (one of the Company’s executive officers and sponsors), is the chairman of The Irvine Company. In addition, Charles J. Schreiber, Jr. (the Company’s Chief Executive Officer, one of the Company’s directors and one of the Company’s sponsors) has served as a member of the board of directors and executive committee of The Irvine Company since August 2016. During the nine months ended September 30, 2016 , the Company recognized $1.6 million of interest income related to its investment in this loan. (7) See “—Reserve for Loan Losses.” As of September 30, 2016 and December 31, 2015 , interest receivable from real estate loans receivable was $0.1 million and $0.1 million , respectively, and is included in rents and other receivables. The following summarizes the activity related to real estate loans receivable for the nine months ended September 30, 2016 (in thousands): Real estate loans receivable, net - December 31, 2015 $ 27,281 Principal repayments received on real estate loans receivable (62 ) Accretion of discounts on purchased real estate loans receivable 867 Amortization of origination fees and costs on purchased and originated real estate loans receivable (26 ) Deed-in-lieu foreclosure of real estate loan receivable (5,480 ) Real estate loans receivable, net - September 30, 2016 $ 22,580 For the three and nine months ended September 30, 2016 and 2015 , interest income from real estate loans receivable consisted of the following (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Contractual interest income $ 354 $ 496 $ 1,352 $ 1,473 Interest accretion 299 268 867 774 Amortization of origination fees and costs (9 ) (8 ) (26 ) (24 ) Interest income from real estate loans receivable $ 644 $ 756 $ 2,193 $ 2,223 The Company generally recognizes income on impaired loans on either a cash basis, where interest income is only recorded when received in cash, or on a cost-recovery basis, where all cash receipts are applied against the carrying value of the loan. The Company will resume the accrual of interest if it determines the collection of interest according to the contractual terms of the loan is probable. The Company considers the collectibility of the loan’s principal balance in determining whether to recognize income on impaired loans on a cash basis or a cost-recovery basis. As of September 30, 2016 , the borrower under the Sandmar Mezzanine Loan was delinquent. Beginning in July 2014, interest income received on the Sandmar Mezzanine Loan was recorded on a cost-recovery basis. As of September 30, 2015, the book value, which is net of the loan loss reserve for the Sandmar Mezzanine Loan, was $0 . Subsequent to September 30, 2015, the Company began recognizing cash receipts related to the Sandmar Mezzanine Loan as interest income. During the nine months ended September 30, 2016 and 2015 , the Company recognized interest income of $94,000 and $0 related to the Sandmar Mezzanine Loan, respectively. On September 1, 2015, the Lawrence Village Plaza Loan Origination matured without repayment and the Company began recognizing interest income on a cash basis. On May 13, 2016, the Company received a deed-in-lieu of foreclosure in satisfaction of all amounts due to it under its investment in the Lawrence Village Plaza Loan Origination and received title to the collateral that secured the loan. During the nine months ended September 30, 2016 and 2015 , the Company recognized interest income of $0.2 million and $0.4 million on the Lawrence Village Plaza Loan Origination, respectively. Reserve for Loan Losses As of September 30, 2016 , the total reserve for loan losses consisted of $5.1 million of asset-specific reserves related to the Sandmar Mezzanine Loan, which had an amortized cost basis of $5.1 million . The Company did not record additional loan loss reserves during the nine months ended September 30, 2016 . |
REAL ESTATE HELD FOR SALE AND D
REAL ESTATE HELD FOR SALE AND DISCONTINUED OPERATIONS | 9 Months Ended |
Sep. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
REAL ESTATE HELD FOR SALE AND DISCONTINUED OPERATIONS | REAL ESTATE HELD FOR SALE AND DISCONTINUED OPERATIONS In accordance with ASU No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU No. 2014-08”), operating results of properties that are classified as held for sale in the ordinary course of business on or subsequent to January 1, 2014 would generally be included in continuing operations on the Company’s consolidated statements of operations. Operating results of properties that were classified as held for sale in financial statements issued for the reporting periods prior to January 1, 2014 will remain in discontinued operations on the Company’s consolidated statement of operations. Prior to the adoption of ASU No. 2014-08, the operating results of properties held for sale or to be disposed of and the aggregate net gains recognized upon their disposition were presented as discontinued operations in the accompanying consolidated statements of operations for all periods presented. During the year ended December 31, 2015 , the Company disposed of 34 properties (of which 31 were GKK Properties) and terminated its leasehold interest in three GKK Properties. As of December 31, 2015 , the Company had classified eight properties as held for sale (all of which were GKK Properties). During the nine months ended September 30, 2016 , the Company disposed of 179 properties ( 177 of which were GKK Properties). As of September 30, 2016 , the Company had classified 12 properties as held for sale, all of which were GKK Properties. The following summary presents the major components of assets and liabilities related to real estate held for sale as of September 30, 2016 and December 31, 2015 (in thousands): September 30, 2016 December 31, 2015 Assets related to real estate held for sale Total real estate, at cost and net of impairment charges $ 11,071 $ 411,575 Accumulated depreciation and amortization (2,232 ) (67,763 ) Real estate held for sale, net 8,839 343,812 Other assets 313 32,321 Total assets related to real estate held for sale $ 9,152 $ 376,133 Liabilities related to real estate held for sale Notes payable, net — 189,541 Other liabilities 1,526 15,417 Total liabilities related to real estate held for sale $ 1,526 $ 204,958 During the nine months ended September 30, 2016 , the Company sold two historical real estate properties and 177 GKK Properties, which properties were not classified as held for sale in financial statements issued for the reporting periods prior to January 1, 2014. During the year ended December 31, 2015 , the Company sold three historical real estate properties and 30 GKK Properties, which properties were not classified as held for sale in financial statements issued for the reporting periods prior to January 1, 2014. As of September 30, 2016 , the Company had classified 12 properties as held for sale, all of which were GKK Properties. In accordance with ASU No. 2014-08, the operations of these properties are included in continuing operations on the Company’s consolidated statements of operations. The following table summarizes certain revenues and expenses related to all of these properties, which were included in continuing operations (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Revenues Rental income $ 1,915 $ 12,621 $ 18,691 $ 43,757 Tenant reimbursements and other operating income 1,618 8,832 13,755 26,503 Total revenues 3,533 21,453 32,446 70,260 Expenses Operating, maintenance, and management 1,687 7,732 12,040 26,675 Real estate taxes and insurance 388 3,024 5,242 10,463 Asset management fees to affiliate 41 377 699 1,216 General and administrative expenses (77 ) 1 (21 ) — Depreciation and amortization 259 6,656 6,567 22,129 Interest expense 30 4,153 3,112 14,252 Impairment of real estate 392 19,035 4,196 19,035 Total expenses 2,720 40,978 31,835 93,770 Discontinued Operations The following table summarizes operating income from discontinued operations for the three and nine months ended September 30, 2016 and 2015 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Total revenues and other income $ — $ 113 $ 6 $ 142 Total expenses — (192 ) (69 ) (201 ) Income from discontinued operations before gain on sales of real estate, net, and impairment charge — 305 75 343 Gain on sales of real estate, net — — — 124 Income from discontinued operations $ — $ 305 $ 75 $ 467 Foreclosed Real Estate Held for Sale During the nine months ended September 30, 2015 , the Company sold the remaining two condominium units of the Tribeca Building and recognized a gain on sale of $2.5 million (which gain on sale has been reduced by disposition fees to the Advisor of $0.2 million related to these two units) and recorded expenses of $0.3 million related to foreclosed real estate held for sale. Disposition of the FSI 6000 Properties On April 11, 2016, the Company sold 61 bank branch properties, containing an aggregate of 245,843 rentable square feet (the “FSI 6000 Properties”), to a buyer unaffiliated with the Company or the Advisor (the “FSI 6000 Buyer”), for an aggregate sales price, net of closing credits, of $139.6 million (which includes a payment of $6.6 million by the FSI 6000 Buyer to the Company to compensate the Company for costs and expenses the Company incurred in connection with the defeasance of the FSI 6000 Mortgage Loans, as defined below), excluding closing costs. |
NOTES PAYABLE
NOTES PAYABLE | 9 Months Ended |
Sep. 30, 2016 | |
Notes Payable [Abstract] | |
NOTES PAYABLE | NOTES PAYABLE As of September 30, 2016 and December 31, 2015 , the Company’s notes payable, including notes payable related to real estate held for sale, consisted of the following (dollars in thousands): Loan Type Book Value as of September 30, 2016 Book Value as of December 31, 2015 Contractual Interest Rate as of September 30, 2016 (1) Effective (1) Payment Type Maturity Date (2) Notes Payable Plaza in Clayton Mortgage Loan (3) $ 62,200 $ 62,200 5.9% 5.9% Interest Only 10/6/2016 Portfolio Loan 116,374 164,131 One-month LIBOR + 1.80% 2.3% Interest Only 1/1/2017 178,574 226,331 GKK Properties Notes Payable Bank of America - BBD2 Mortgage Loan (4) — 65,712 (4) (4) (4) (4) Pitney Bowes - Bank of America Mortgage Loan (5) — 36,160 (5) (5) (5) (5) FSI 6000D Mortgage Loan (6) — 28,934 (6) (6) (6) (6) FSI 6000B Mortgage Loan (6) — 27,763 (6) (6) (6) (6) FSI 6000A Mortgage Loan (6) — 24,271 (6) (6) (6) (6) FSI 6000C Mortgage Loan (6) — 21,967 (6) (6) (6) (6) — 204,807 Total notes payable principal outstanding 178,574 431,138 Discount on notes payable, net (7) — (2,487 ) Deferred financing costs, net (50 ) (429 ) Total notes payable, net $ 178,524 $ 428,222 _____________________ (1) Contractual interest rate represents the interest rate in effect under the loan as of September 30, 2016 . Effective interest rate is calculated as the actual interest rate in effect as of September 30, 2016 (consisting of the contractual interest rate), using interest rate indices as of September 30, 2016 , where applicable. (2) Represents the initial maturity date or the maturity date as extended as of September 30, 2016 ; subject to certain conditions, the maturity dates of certain loans may be extended beyond the maturity date shown. (3) On October 6, 2016, the Company repaid the entire outstanding principal balance due and all other sums due under the Plaza in Clayton Mortgage Loan. (4) On April 15, 2016, the Company, through an indirect wholly owned subsidiary, entered into a defeasance agreement with the lenders under the Bank of America - BBD2 Mortgage Loan. See “Significant Financing Transactions - Defeasance of the Bank of America - BBD2 Mortgage Loan” below. (5) On September 1, 2016, the Company repaid the entire outstanding principal balance due and all other sums due under the Pitney Bowes - Bank of America Mortgage Loan. See “Significant Financing Transactions - Early Pay-off of the Pitney Bowes - Bank of America Mortgage Loan” below. (6) On April 11, 2016, the Company, through indirect wholly owned subsidiaries, entered into a defeasance agreement with each of the lenders under these loans. See “Significant Financing Transactions - Defeasance of the FSI 6000 Mortgage Loans” below. (7) Represents the unamortized discounts and premiums on notes payable due to the above- and below-market interest rates when the loans were assumed. The discounts and premiums are amortized over the remaining life of the respective loan. During the three and nine months ended September 30, 2016 , the Company incurred interest expense of $2.1 million and $10.0 million , respectively. During the three and nine months ended September 30, 2015 , the Company incurred interest expense of $7.0 million and $23.8 million , respectively. Included in interest expense were: (i) the amortization of deferred financing costs of $0.1 million and $0.3 million for the three and nine months ended September 30, 2016 and $0.3 million and $1.6 million for the three and nine months ended September 30, 2015 , respectively, and (ii) the amortization of discounts and premiums on notes payable, which increased interest expense by $15,000 and $0.2 million for the three and nine months ended September 30, 2016 and $0.3 million and $1.1 million for the three and nine months ended September 30, 2015 , respectively. As of September 30, 2016 and December 31, 2015 , $0.5 million and $1.7 million of interest was payable, respectively. The following is a schedule of maturities, including principal amortization payments, for all notes payable outstanding as of September 30, 2016 (in thousands): October 1, 2016 through December 31, 2016 $ 62,200 (1) 2017 116,374 2018 — 2019 — 2020 — Thereafter — $ 178,574 _____________________ (1) On October 6, 2016, the Company repaid the entire $62.2 million outstanding principal balance due and all other sums due under the Plaza in Clayton Mortgage Loan. The following summarizes the activity related to notes payable for the nine months ended September 30, 2016 (in thousands): Total notes payable, net - December 31, 2015 $ 428,222 Principal repayments (85,235 ) Defeasance of notes payable (167,328 ) Write-off of discount on notes payable related to sale 2,260 Write-off of deferred financing costs 105 Amortization of discounts and premiums on notes payable, net 227 Amortization of deferred financing costs 273 Total notes payable, net - September 30, 2016 $ 178,524 Significant Financing Transactions Defeasance of the FSI 6000 Mortgage Loans On April 11, 2016, in connection with the disposition of the FSI 6000 Properties, the Company entered into a defeasance agreement with each of the lenders under the FSI 6000A Mortgage Loan, FSI 6000B Mortgage Loan, FSI 6000C Mortgage Loan and FSI 6000D Mortgage Loan (collectively, the “FSI 6000 Mortgage Loans”) to defease the entire aggregate outstanding principal balance of $102.3 million under the FSI 6000 Mortgage Loans, releasing the FSI 6000 Properties, which had secured the FSI 6000 Mortgage Loans. The defeasance costs and write-off of an unamortized discount resulted in an aggregate loss on extinguishment of debt of approximately $6.6 million . Defeasance of the Bank of America - BBD2 Mortgage Loan On April 15, 2016, the Company, through an indirect wholly owned subsidiary, entered into a defeasance agreement with the lender under the Bank of America - BBD2 Mortgage Loan to defease the remaining outstanding principal balance of $65.1 million , releasing all the properties that secured the Bank of America - BBD2 Mortgage Loan. The defeasance costs and write-off of an unamortized discount and unamortized deferred financing costs resulted in a loss on extinguishment of debt of approximately $12.7 million . Early Pay-off of the Pitney Bowes - Bank of America Mortgage Loan On September 1, 2016, the Company repaid the entire $36.2 million principal balance and all other sums due on the Pitney Bowes - Bank of America Mortgage Loan and paid a prepayment premium of $6.5 million . The prepayment premium and write-off of an unamortized discount resulted in an aggregate loss on extinguishment of debt of approximately $7.0 million . Debt Covenants The documents evidencing the Company’s outstanding debt obligations typically require that specified loan-to-value and debt service coverage ratios be maintained with respect to the financed properties. A breach of the financial covenants in these documents may result in the lender imposing additional restrictions on the Company’s operations, such as restrictions on the Company’s ability to incur additional debt, or may allow the lender to impose “cash traps” with respect to cash flow from the property securing the loan. In addition, such a breach may constitute an event of default and the lender could require the Company to repay the debt immediately. If the Company fails to make such repayment in a timely manner, the lender may be entitled to take possession of any property securing the loan. As of September 30, 2016 , the Company was in compliance with these debt covenants. |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE DISCLOSURES | FAIR VALUE DISCLOSURES Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other non-financial and financial assets at fair value on a non-recurring basis (e.g., carrying value of impaired real estate loans receivable and long-lived assets). Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories: • Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; • Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and • Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable. The fair value for certain financial instruments is derived using a combination of market quotes, pricing models and other valuation techniques that involve significant management judgment. The price transparency of financial instruments is a key determinant of the degree of judgment involved in determining the fair value of the Company’s financial instruments. Financial instruments for which actively quoted prices or pricing parameters are available and for which markets contain orderly transactions will generally have a higher degree of price transparency than financial instruments for which markets are inactive or consist of non-orderly trades. The Company evaluates several factors when determining if a market is inactive or when market transactions are not orderly. The following is a summary of the methods and assumptions used by management in estimating the fair value of each class of assets and liabilities for which it is practicable to estimate the fair value: Cash and cash equivalents, restricted cash, rent and other receivables, and accounts payable and accrued liabilities: These balances approximate their fair values due to the short maturities of these items. Real estate loans receivable: These instruments are presented in the accompanying consolidated balance sheets at their amortized cost net of recorded loan loss reserves and not at fair value. The fair values of real estate loans receivable were estimated using an internal valuation model that considered the expected cash flows for the loans, underlying collateral values (for collateral-dependent loans) and estimated yield requirements of institutional investors for loans with similar characteristics, including remaining loan term, loan-to-value, type of collateral and other credit enhancements. The Company classifies these inputs as Level 3 inputs. Notes payable: The fair values of the Company’s notes payable are estimated using a discounted cash flow analysis based on management’s estimates of current market interest rates for instruments with similar characteristics, including remaining loan term, loan-to-value ratio, type of collateral and other credit enhancements. Additionally, when determining the fair value of a liability in circumstances in which a quoted price in an active market for an identical liability is not available, the Company measures fair value using (i) a valuation technique that uses the quoted price of the identical liability when traded as an asset or quoted prices for similar liabilities when traded as assets or (ii) another valuation technique that is consistent with the principles of fair value measurement, such as the income approach or the market approach. The Company classifies these inputs as Level 3 inputs. The following were the face values, carrying amounts and fair values of the Company’s real estate loans receivable and notes payable as of September 30, 2016 and December 31, 2015 , which carrying amounts generally do not approximate the fair values (in thousands): September 30, 2016 December 31, 2015 Face Value Carrying Amount Fair Value Face Value Carrying Amount Fair Value Financial assets: Real estate loans receivable (1) $ 28,868 $ 22,580 $ 21,168 $ 35,811 $ 27,281 $ 25,218 Financial liabilities: Notes payable $ 178,574 $ 178,524 $ 178,452 $ 431,138 $ 428,222 $ 448,351 _____________________ (1) Carrying amount of real estate loans receivable includes loan loss reserves. Disclosure of the fair values of financial instruments is based on pertinent information available to the Company as of the period end and requires a significant amount of judgment. Low levels of transaction volume for certain financial instruments have made the estimation of fair values difficult and, therefore, both the actual results and the Company’s estimate of value at a future date could be materially different. Assets Recorded at Fair Value During the nine months ended September 30, 2016 , the Company measured the following assets at fair value on a nonrecurring basis (in thousands): Fair Value Measurements Using Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Nonrecurring Basis (1) : Impaired real estate held for investment $ 82,131 $ — $ — $ 82,131 Impaired real estate held for sale 2,828 — — 2,828 Impaired real estate sold 12,065 — — 12,065 _____________________ (1) Amounts represent the aggregate fair value for real estate assets impacted by impairment charges during the nine months ended September 30, 2016 , as of the date that the fair value measurements were made. The carrying value for these real estate assets may have subsequently increased or decreased from the fair value reflected due to activity that has occurred since the measurement date. As of September 30, 2016 , certain of the Company’s real estate properties held for investment were measured at estimated fair value as these properties were impaired and the carrying values of these properties were adjusted to estimated fair values. The Company estimated the fair value for the impaired real estate properties held for investment by performing a 10-year discounted cash flow analysis. The range of the terminal capitalization rates used to estimate the fair values for these properties was 7.00% to 10.75% . See Note 3, “Real Estate Held for Investment — Impairment of Real Estate,” for information regarding impairments related to real estate held for investment. As of September 30, 2016 , certain of the Company’s real estate properties held for sale and sold were measured at estimated fair value as these properties were impaired and the carrying values of these properties were adjusted to estimated fair value. The Company estimated the fair value for these impaired real estate properties held for sale and sold based on an estimated sales price, less estimated costs to sell. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS The Company has entered into an Advisory Agreement with the Advisor, which entitles the Advisor to specified fees for the management and disposition of investments, among other services, as well as to reimbursement for certain costs incurred by the Advisor in providing services to the Company. In addition, the Advisor is entitled to certain other fees, including an incentive fee upon achieving certain performance goals, as detailed in the Advisory Agreement. The Company has also entered into a fee reimbursement agreement (the “AIP Reimbursement Agreement”) with the Dealer Manager pursuant to which the Company agreed to reimburse the Dealer Manager for certain fees and expenses it incurs for administering the Company’s participation in the DTCC Alternative Investment Product Platform with respect to certain accounts of the Company’s investors serviced through the platform. The Advisor also serves, and the Dealer Manager also serves or served, as the advisor and dealer manager, respectively, for KBS Real Estate Investment Trust II, Inc., KBS Real Estate Investment Trust III, Inc., KBS Strategic Opportunity REIT, Inc., KBS Legacy Partners Apartment REIT, Inc., KBS Strategic Opportunity REIT II, Inc. and KBS Growth & Income REIT, Inc. On January 6, 2014, the Company, together with KBS Real Estate Investment Trust II, Inc., KBS Real Estate Investment Trust III, Inc., KBS Strategic Opportunity REIT, Inc., KBS Legacy Partners Apartment REIT, Inc., KBS Strategic Opportunity REIT II, Inc., the Dealer Manager, the Advisor and other KBS-affiliated entities, entered into an errors and omissions and directors and officers liability insurance program where the lower tiers of such insurance coverage are shared. The cost of these lower tiers is allocated by the Advisor and its insurance broker among each of the various entities covered by the program, and is billed directly to each entity. The allocation of these shared coverage costs is proportionate to the pricing by the insurance marketplace for the first tiers of directors and officers liability coverage purchased individually by each REIT. The Advisor’s and the Dealer Manager’s portion of the shared lower tiers’ cost is proportionate to the respective entities’ prior cost for the errors and omissions insurance. In June 2015, KBS Growth & Income REIT, Inc. was added to the insurance program at terms similar to those described above. The insurance program was renewed and is effective through June 30, 2017. During the nine months ended September 30, 2016 and 2015 , no other business transactions occurred between the Company and the other KBS-sponsored programs. On May 18, 2012, KBS Strategic Opportunity REIT, Inc. made an $8.0 million investment in a joint venture in which the Company indirectly owns a participation interest through another joint venture investment. Pursuant to the terms of the Advisory Agreement and the AIP Reimbursement Agreement, summarized below are the related-party costs incurred by the Company for the three and nine months ended September 30, 2016 and 2015 , respectively, and any related amounts payable as of September 30, 2016 and December 31, 2015 (in thousands): Incurred Payable Three Months Ended September 30, Nine Months Ended September 30, September 30, December 31, 2016 2015 2016 2015 2016 2015 Expensed Asset management fees (1) $ 1,653 $ 2,386 $ 6,098 $ 7,152 $ — $ — Reimbursement of operating expenses (2) 82 60 247 159 84 68 Disposition fees (3) 3,446 — 6,926 2,253 6 — $ 5,181 $ 2,446 $ 13,271 $ 9,564 $ 90 $ 68 _____________________ (1) See “Asset Management Fee for GKK Properties” below. (2) Reimbursable operating expenses primarily consists of internal audit personnel costs, accounting software and cybersecurity related expenses incurred by the Advisor under the Advisory Agreement. The Company reimburses the Advisor for the Company’s allocable portion of the salaries, benefits and overhead of internal audit department personnel providing services to the Company. These amounts totaled $76,000 and $51,000 for the three months ended September 30, 2016 and 2015 , respectively, and $218,000 and $146,000 for the nine months ended September 30, 2016 and 2015 , respectively. These were the only type of employee costs reimbursed under the Advisory Agreement for the nine months ended September 30, 2016 and 2015 . The Company will not reimburse for employee costs in connection with services for which the Advisor earns disposition fees (other than reimbursement of travel and communication expenses) or for the salaries or benefits the Advisor or its affiliates may pay to the Company’s executive officers. In addition to the amounts above, the Company reimburses the Advisor for certain of the Company’s direct costs incurred from third parties that were initially paid by the Advisor on behalf of the Company. (3) Disposition fees with respect to real estate sold are included in the gain (loss) on sales of real estate in the accompanying consolidated statements of operations. See also “ —Modification of Disposition Fee Related to GKK Properties” below. During the nine months ended September 30, 2016 , the Advisor reimbursed the Company $36,000 for a property insurance rebate and $69,000 for legal and professional fees. Asset Management Fee for GKK Properties Among the fees payable to the Advisor is an asset management fee. With respect to investments in real estate, the Company pays the Advisor a monthly asset management fee equal to one-twelfth of 0.75% of the amount actually paid or allocated to acquire the investment, plus the cost of any subsequent development, construction or improvements to the property. This amount includes any portion of the investment that was debt financed and is inclusive of acquisition fees and expenses related thereto. In the case of investments made through joint ventures, the asset management fee is determined based on the Company’s proportionate share of the underlying investment. With respect to investments in loans and any investments other than real estate, the Company pays our advisor a monthly asset management fee calculated, each month, as one-twelfth of 0.75% of the lesser of (i) the amount actually paid or allocated to acquire or fund the loan or other investment (which amount includes any portion of the investment that was debt financed and is inclusive of acquisition or origination fees and expenses related thereto) and (ii) the outstanding principal amount of such loan or other investment, plus the acquisition or origination fees and expenses related to the acquisition or funding of such investment, as of the time of calculation. With respect to an investment that has suffered an impairment in value, reduction in cash flow or other negative circumstances, such investment may either be excluded from the calculation of the asset management fee described above or included in such calculation at a reduced value that is recommended by the Advisor and Company’s management and then approved by a majority of its independent directors, and this change in the fee shall be applicable to an investment upon the earlier to occur of the date on which (i) such investment is sold, (ii) such investment is surrendered to a person other than the company, its direct or indirect wholly owned subsidiary or a joint venture or partnership in which it has an interest, (iii) the Advisor determines that it will no longer pursue collection or other remedies related to such investment, or (iv) the Advisor recommends a revised fee arrangement with respect to such investment. As of September 30, 2016 , the Company excluded its interest in an unconsolidated joint venture from the calculation of asset management fees. Through March 31, 2016, the Company calculated the asset management fee for the GKK Properties based on the original cost of its investment in the GKK Mezzanine Loan, rather than on the gross value of the GKK Properties it owns or in which it holds a leasehold interest. Beginning in April 2016, the gross value of the GKK Properties fell below the original cost of the Company’s investment in the GKK Mezzanine Loan and for the period from April 1, 2016 through September 30, 2016 , the Company calculated the asset management fee for these properties based on the gross value of the GKK Properties. As of September 30, 2016 , the Company had not determined to calculate the asset management fee at an adjusted value for any other investments or to exclude any other investments from the calculation of the asset management fee. Modification of Disposition Fee Related to GKK Properties In accordance with the Advisory Agreement, for substantial assistance in connection with the sale of properties, loans or other investments as determined by the conflicts committee of the Company’s board of directors, the Company pays the Advisor or its affiliates a disposition fee of 1% of the contract sales price of the properties, loans or other investments sold. However, in no event may the total commissions (including such disposition fees) paid to the Advisor, its affiliates and unaffiliated third parties exceed 6% of the contract sales price of the property, loan or other investment sold or exceed a competitive real estate commission. Prior to August 9, 2016, notwithstanding the foregoing, in January 2015, the disposition fee related to the sales of GKK Properties was modified to provide that the conflicts committee would determine in its sole discretion the amount of the disposition fee related to the sale of GKK Properties upon the terms set forth below, which disposition fee may be an amount not to exceed 1% of the contract sales price, which maximum amount is consistent with the fixed percentage applicable to the sales of other properties, loans and other investments. With respect to sales of the GKK Properties, and provided that the conflicts committee determined that the Advisor had provided a substantial amount of services in connection with the sale of each GKK Property for which the payment of a disposition fee was requested by the Advisor, then: (a) With respect to portfolio or single asset sales of GKK Properties designated by the conflicts committee in its sole discretion at or about the time of the sale, the Company would pay the Advisor a fee in an amount not to exceed 1% of the contract sales price and subject to other limitations and conditions set forth in the Advisory Agreement, as determined by the conflicts committee in its sole discretion, which fee would be payable upon the respective closing; and (b) With respect to sales of all other GKK Properties for which a disposition fee had not yet been paid, if, upon the sale of the final GKK Property, the conflicts committee determined in its sole discretion that the Company had recovered its entire investment related to the GKK Mezzanine Loan and the GKK Properties subsequent to the Settlement Agreement, after taking into consideration the net cash flow received by the Company from the investment, whether in the form of (i) net proceeds from the sales or other dispositions or transfers of the GKK Properties, (ii) the net cash flow related to the GKK Mezzanine Loan, (iii) the net cash flow related to the GKK Properties subsequent to the Settlement Agreement and/or (iv) other proceeds related to the assets and liabilities received under the Settlement Agreement, then the Company would pay the Advisor a fee in an amount not to exceed 1% of the contract sales price and subject to other conditions set forth in the Advisory Agreement, as determined by the conflicts committee in its sole discretion, which fee would be payable promptly upon such determination by the conflicts committee. On August 9, 2016, the Company and the Advisor entered into an amendment (“Amendment No. 1”) to the Advisory Agreement to amend certain terms related to the disposition fee payable to the Advisor by the Company. Pursuant to Amendment No. 1, with respect to sales of GKK Properties for which a disposition fee had not yet been paid as of August 9, 2016, based on the proceeds received from the entire investment related to the GKK Mezzanine Loan and the GKK Properties through August 9, 2016 and expected proceeds from future sales, the conflicts committee determined that the Advisor had provided a substantial amount of services in connection with the sale of each of the 160 GKK Properties named therein and approved the payment to the Advisor of a disposition fee equal to 1.0% of the aggregate contract sales prices of such GKK Properties, of which the aggregate disposition fee was $2.0 million . The aggregate contract sales price of such 160 GKK Properties was $214.1 million . The $2.0 million disposition fee was paid in August 2016 and was included in the gain on sales of real estate, net in the accompanying consolidated statements of operations for the three and nine months ended September 30, 2016 . Also pursuant to Amendment No. 1, for substantial assistance in connection with the sale of all GKK Properties that had not been sold as of August 9, 2016 (as determined by the conflicts committee of the Company’s board of directors), the Company will pay the Advisor or its affiliates a disposition fee of 1.0% of the contract sales price of such GKK Properties sold. However, in no event may the total commissions (including such disposition fees) paid to the Advisor, its affiliates and unaffiliated third parties exceed 6% of the contract sales price of the property, loan or other investment sold or exceed a competitive real estate commission. |
SUPPLEMENTAL CASH FLOW AND SIGN
SUPPLEMENTAL CASH FLOW AND SIGNIFICANT NONCASH TRANSACTION DISCLOSURES | 9 Months Ended |
Sep. 30, 2016 | |
Supplemental Cash Flow and Significant Noncash Transaction Disclosures [Abstract] | |
SUPPLEMENTAL CASH FLOW AND SIGNIFICANT NONCASH TRANSACTION DISCLOSURES | SUPPLEMENTAL CASH FLOW AND SIGNIFICANT NONCASH TRANSACTION DISCLOSURES Supplemental cash flow and significant noncash transaction disclosures were as follows (in thousands): For the Nine Months Ended September 30, 2016 2015 Supplemental Disclosure of Cash Flow Information: Interest paid $ 10,658 $ 19,594 Supplemental Disclosure of Significant Noncash Transactions: Treasury securities transferred in connection with defeasance of notes payable $ (184,256 ) $ — Defeasance of notes payable $ 167,328 $ — Investment in a real estate property through deed-in-lieu of foreclosure $ 5,480 $ — |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company presently operates in three business segments based on its investment types: real estate, real estate-related and commercial properties primarily leased to financial institutions received under the Settlement Agreement, or the GKK Properties. Under the real estate segment, the Company has invested primarily in office and industrial properties located throughout the United States. The real estate segment excludes all real estate properties that were classified as discontinued operations. Under the real estate-related segment, the Company has invested in or originated mortgage loans, mezzanine loans and other real estate-related assets, including real estate securities. The GKK Properties segment consists of primarily office properties, bank branch properties, operations centers and other properties located in 20 states but excludes GKK Properties that were classified as discontinued operations. All revenues earned from the Company’s three reporting segments were from external customers and there were no intersegment sales or transfers. The Company does not allocate corporate-level accounts to its reporting segments. Corporate-level accounts include corporate general and administrative expenses, asset management fees, non-operating interest income and other corporate-level expenses. The accounting policies of the reporting segments are consistent with those described in Note 2, “Summary of Significant Accounting Policies.” The Company evaluates the performance of its segments based upon net operating income from continuing operations (“NOI”), which is a non-GAAP supplemental financial measure. The Company defines NOI for its real estate segment and the GKK Properties segment as operating revenues (rental income, tenant reimbursements and other operating income) less property and related expenses (property operating expenses, real estate taxes, insurance and provision for bad debt) less interest expense. The Company defines NOI for its real estate-related segment as interest income and income from its unconsolidated joint venture investment less loan servicing costs (if applicable) and interest expense (if applicable). NOI excludes certain items that are not considered to be controllable in connection with the management of an asset such as non-property income and expenses, depreciation and amortization, asset management fees and corporate general and administrative expenses. The Company uses NOI to evaluate the operating performance of the Company’s real estate investments, real estate-related investments and the GKK Properties and to make decisions about resource allocations. The Company believes that net income is the GAAP measure that is most directly comparable to NOI; however, NOI should not be considered as an alternative to net income as the primary indicator of operating performance as it excludes the items described above. Additionally, NOI as defined above may not be comparable to other REITs or companies as their definitions of NOI may differ from the Company’s definition. During the year ended December 31, 2014, the Company revised its definition of NOI to exclude asset management fees, which the Company does not consider to be controllable in connection with the management of each property or real estate-related asset and is viewed by the chief operating decision makers as a corporate-level administrative expense. NOI for all prior periods presented has been adjusted to conform to the current period definition. The following tables summarize total revenues, interest expense and NOI for each reportable segment for the three and nine months ended September 30, 2016 and 2015 , and total assets and total liabilities for each reportable segment as of September 30, 2016 and December 31, 2015 (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2016 2015 2016 2015 Revenues: Real estate segment (1) $ 14,060 $ 16,520 $ 47,731 $ 50,849 Real estate-related segment 644 756 2,193 2,223 GKK Properties segment (1) 12,586 27,568 53,276 86,315 Total revenues $ 27,290 $ 44,844 $ 103,200 $ 139,387 Interest expense: Real estate segment (1) $ 1,742 $ 2,069 $ 5,602 $ 6,314 GKK Properties segment (1) 347 4,956 4,367 17,528 Total interest expense $ 2,089 $ 7,025 $ 9,969 $ 23,842 NOI: Real estate segment (1) $ 6,859 $ 7,055 $ 21,748 $ 20,108 Real estate-related segment 643 756 2,191 2,221 GKK Properties segment (1) 2,999 6,905 13,931 17,635 Total NOI $ 10,501 $ 14,716 $ 37,870 $ 39,964 As of September 30, As of December 31, 2016 2015 Assets: Real estate segment $ 408,002 $ 406,690 Real estate-related segment 23,145 27,899 GKK Properties segment 165,695 232,973 Total segment assets 596,842 667,562 Real estate held for sale 9,152 376,133 Corporate-level (2) 210,066 11,170 Total assets $ 816,060 $ 1,054,865 Liabilities: Real estate segment $ 191,264 $ 199,729 Real estate-related segment 13 3 GKK Properties segment 48,002 119,208 Total segment liabilities 239,279 318,940 Real estate held for sale 1,526 204,958 Corporate-level (3) 1,547 1,304 Total liabilities $ 242,352 $ 525,202 _____________________ (1) Amounts include certain properties in continuing operations that were sold or held for sale as of September 30, 2016 . See Note 6, “Real Estate Held for Sale and Discontinued Operations” for more information. (2) Total corporate-level assets consisted primarily of cash and cash equivalents of approximately $209.2 million and $10.6 million as of September 30, 2016 and December 31, 2015 , respectively. (3) As of September 30, 2016 and December 31, 2015 , corporate-level liabilities consisted primarily of accounts payable and accrued liabilities for general and administrative expenses. The following table reconciles the Company’s net income to its NOI 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 (loss) income $ (9,294 ) $ (47,411 ) $ 62,706 $ (19,071 ) Gain on sales of real estate (7,910 ) (806 ) (128,845 ) (49,865 ) Loss from extinguishment of debt 7,023 2,189 26,343 8,565 Gain on sale of foreclosed real estate held for sale — — — (2,509 ) Other income and interest income (360 ) (276 ) (806 ) (867 ) Asset management fees to affiliate 1,653 2,386 6,098 7,152 Foreclosure fees and expenses — — 275 — General and administrative expenses 7,755 7,591 14,003 15,868 Depreciation and amortization 7,554 13,911 28,597 43,721 Impairment charges on real estate 4,080 34,933 29,574 34,933 Provision for loan losses — 2,504 — 2,504 Total (income) loss from discontinued operations — (305 ) (75 ) (467 ) NOI (1) $ 10,501 $ 14,716 $ 37,870 $ 39,964 _____________________ (1) Amounts include certain properties in continuing operations that were sold or held for sale as of September 30, 2016 . See Note 6, “Real Estate Held for Sale and Discontinued Operations” for more information. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Lease Obligations Pursuant to the Settlement Agreement, the Company indirectly received leasehold interests in certain commercial properties, pursuant to leases between the owner of the property, as landlord, and the Company, as tenant. The ground leases have expiration dates from 2019 through 2058 and the building leases have expiration dates from 2016 through 2085. These lease obligations generally contain rent increases and renewal options. In certain instances, the rent owed by the Company to the owner of the property under the lease is greater than the revenue received by the Company from the tenants occupying the property. Future minimum lease payments owed by the Company under non-cancelable operating building and ground leases as of September 30, 2016 were as follows (in thousands): October 1, 2016 through December 31, 2016 $ 3,702 2017 11,199 2018 1,101 2019 914 2020 707 Thereafter 26,736 $ 44,359 If the Company were to dispose of an asset that is subject to a ground lease, the Company may incur additional losses to settle obligations related to the ground lease. Economic Dependency The Company is dependent on the Advisor for certain services that are essential to the Company, including the management of the Company’s real estate and real estate-related investment portfolio; the disposition of real estate and real estate-related investments; and other general and administrative responsibilities. In the event that the Advisor is unable to provide any of these services, the Company will be required to obtain such services from other sources. The Company is also dependent on GPT Realty Management LP and the Property Manager for the Services under the Second Amended Services Agreement and the Accounting/Construction Services Agreement, including the operations, leasing and eventual dispositions of the GKK Properties. Environmental As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. Although there can be no assurance, the Company is not aware of any environmental liability that could have a material adverse effect on its financial condition or results of operations. However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s properties, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to the properties could result in future environmental liabilities. Under the Settlement Agreement, the Company indirectly took title to or, with respect to a limited number of the GKK Properties, indirectly took a leasehold interest in, the GKK Properties on an “as is” basis. As such, the Company was not able to inspect the GKK Properties or conduct standard due diligence on certain of the GKK Properties before the transfers of the properties. Additionally, the Company did not receive representations, warranties and indemnities relating to the GKK Properties from Gramercy and/or its affiliates. Thus, the value of the GKK Properties may decline if the Company subsequently discovers environmental problems with the GKK Properties. Legal Matters From time to time, the Company is party to legal proceedings that arise in the ordinary course of its business. Management is not aware of any legal proceedings the outcome of which is probable or reasonably possible to have a material adverse effect on the Company’s results of operations or financial condition, which would require accrual or disclosure of the contingency and possible range of loss. Additionally, the Company has not recorded any loss contingencies related to legal proceedings in which the potential loss is deemed to be remote. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS The Company evaluates subsequent events up until the date the consolidated financial statements are issued. Distribution Declared On November 7, 2016, the Company’s board of directors declared a distribution in the amount of $0.025 per share of common stock to stockholders of record as of the close of business on December 22, 2016. The Company expects to pay this distribution on or about December 29, 2016. Plan of Liquidation On October 5, 2016, in connection with a review of potential strategic alternatives available to the Company, the board of directors unanimously approved the sale of all of the Company’s assets and the dissolution of the Company pursuant to the terms of a plan of complete liquidation and dissolution of the Company (the “Plan of Liquidation”). The principal purpose of the Plan of Liquidation is to maximize stockholder value by selling the Company’s assets, paying its debts and distributing the net proceeds from liquidation to the Company’s stockholders. Pursuant to the Company’s charter, the affirmative vote of a majority of all of the shares of the Company’s common stock entitled to vote on the Plan of Liquidation is required for approval of the Plan of Liquidation. The Company can provide no assurance that the Plan of Liquidation will be approved by the Company’s stockholders. If the Plan of Liquidation is approved by the Company’s stockholders, the Company expects to pay multiple liquidating distribution payments to its stockholders during the liquidation process and to pay the final liquidating distribution after the Company sells all of its assets, pays all of its known liabilities and provides for unknown liabilities. The Company expects to complete these activities within 24 months after stockholder approval of the Plan of Liquidation; however, there can be no assurances regarding the amounts of any liquidating distributions or the timing thereof. Renewal of Advisory Agreement On November 8, 2016, the Company renewed the Advisory Agreement with the Advisor. The renewed Advisory Agreement is effective through November 8, 2017; however, either party may terminate the renewed Advisory Agreement without cause or penalty upon providing 60 days’ written notice. The terms of the renewed Advisory Agreement are identical to those of the Advisory Agreement that was previously in effect, including the August 9, 2016 amendment to the previous Advisory Agreement. |
SUMMARY OF SIGNIFICANT ACCOUN20
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited consolidated financial statements and condensed notes thereto have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair and consistent presentation of the results for such periods. Operating results for the three and nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016 . |
Principles of Consolidation | The unaudited consolidated financial statements include the accounts of the Company, KBS REIT Holdings, the Operating Partnership and their direct and indirect wholly owned subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation. |
Use of Estimates | The preparation of the unaudited consolidated financial statements and condensed notes thereto in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited consolidated financial statements and condensed notes. Actual results could materially differ from those estimates. |
Reclassifications | Certain amounts in the Company’s prior period consolidated financial statements have been reclassified to conform to the current period presentation. These reclassifications have not changed the results of operations of prior periods. During the nine months ended September 30, 2016 , the Company sold 179 properties ( 177 of which were GKK Properties). As of September 30, 2016 , the Company had classified 12 properties as held for sale, all of which were GKK Properties. As a result, certain assets and liabilities were reclassified to held for sale on the consolidated balance sheets for all periods presented. |
Per Share Data | Basic net income (loss) per share of common stock is calculated by dividing net income (loss) by the weighted-average number of shares of common stock issued and outstanding during such period. Diluted net income (loss) per share of common stock equals basic net income (loss) per share of common stock, as there were no potentially dilutive securities outstanding during the nine months ended September 30, 2016 and 2015 , respectively. Distributions declared per share of common stock were $0.025 and $0.075 for the three and nine months ended September 30, 2016 , respectively, and $0.025 and $0.075 for the three and nine months ended September 30, 2015 , respectively. Distributions per share of common stock were based on a quarterly record date for each quarter ended September 30, 2016 and 2015 , respectively. |
Segments | The Company’s segments are based on the Company’s method of internal reporting, which classifies its operations by investment type: (i) real estate, (ii) real estate-related and (iii) commercial properties primarily leased to financial institutions received under the Settlement Agreement, the GKK Properties. For financial data by segment, see Note 11, “Segment Information.” |
Square Footage, Occupancy and Other Measures | Any references to square footage, occupancy or annualized base rent are unaudited and outside the scope of the Company’s independent registered public accounting firm’s review of the Company’s financial statements in accordance with the standards of the United States Public Company Accounting Oversight Board. |
Recently Issued Accounting Standards Update | In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU No. 2014-09”). ASU No. 2014-09 requires an entity to recognize the revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. ASU No. 2014-09 supersedes the revenue requirements in Revenue Recognition (Topic 605) and most industry-specific guidance throughout the Industry Topics of the Codification. ASU No. 2014-09 does not apply to lease contracts within the scope of Leases (Topic 840). ASU No. 2014-09 was to be effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and is to be applied retrospectively, with early application not permitted. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (“ASU No. 2015-14”), which defers the effective date of ASU No. 2014-09 by one year. Early adoption is permitted but not before the original effective date. The Company is still evaluating the impact of adopting ASU No. 2014-09 on its financial statements. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements (Subtopic 205-40) , Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU No. 2014-15”). The amendments in ASU No. 2014-15 require management to evaluate, for each annual and interim reporting period, whether there are conditions or events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or are available to be issued when applicable) and, if so, provide related disclosures. ASU No. 2014-15 is effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early adoption is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. The Company does not expect the adoption of ASU No. 2014-15 to have a significant impact on its financial statements. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU No. 2016-01”). The amendments in ASU No. 2016-01 address certain aspects of recognition, measurement, presentation and disclosure of financial instruments. ASU No. 2016-01 primarily affects accounting for equity investments and financial liabilities where the fair value option has been elected. ASU No. 2016-01 also requires entities to present financial assets and financial liabilities separately, grouped by measurement category and form of financial asset in the balance sheet or in the accompanying notes to the financial statements. ASU No. 2016-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. Early application is permitted for financial statements that have not been previously issued. The Company does not expect the adoption of ASU No. 2016-01 to have a significant impact on its financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU No. 2016-02”). The amendments in ASU No. 2016-02 change the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU No. 2016-02 is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption of ASU No. 2016-02 as of its issuance is permitted. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company is currently evaluating the impact of adopting the new leases standard on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) (“ASU No. 2016-13”). ASU No. 2016-13 affects entities holding financial assets and net investments in leases that are not accounted for at fair value through net income. The amendments in ASU No. 2016-13 require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. ASU No. 2016-13 also amends the impairment model for available-for-sale securities. An entity will recognize an allowance for credit losses on available-for-sale debt securities as a contra-account to the amortized cost basis rather than as a direct reduction of the amortized cost basis of the investment, as is currently required. ASU No. 2016-13 also requires new disclosures. For financial assets measured at amortized cost, an entity will be required to disclose information about how it developed its allowance for credit losses, including changes in the factors that influenced management’s estimate of expected credit losses and the reasons for those changes. For financing receivables and net investments in leases measured at amortized cost, an entity will be required to further disaggregate the information it currently discloses about the credit quality of these assets by year of the asset’s origination for as many as five annual periods. For available for sale securities, an entity will be required to provide a roll-forward of the allowance for credit losses and an aging analysis for securities that are past due. ASU No. 2016-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is still evaluating the impact of adopting ASU No. 2016-13 on its financial statements, but does not expect the adoption of ASU No. 2016-13 to have a material impact on its financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments (“ASU No. 2016-15”). ASU No. 2016-15 is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. The amendments in ASU No. 2016-15 provide guidance on eight specific cash flow issues, including the following that are or may be relevant to the Company: (a) Cash payments for debt prepayment or debt extinguishment costs should be classified as cash outflows for financing activities; (b) Cash payments relating to contingent consideration made soon after an acquisition’s consummation date (i.e., approximately three months or less) should be classified as cash outflows for investing activities. Payments made thereafter should be classified as cash outflows for financing activities up to the amount of the original contingent consideration liability. Payments made in excess of the amount of the original contingent consideration liability should be classified as cash outflows for operating activities; (c) Cash payments received from the settlement of insurance claims should be classified on the basis of the nature of the loss (or each component loss, if an entity receives a lump-sum settlement); (d) In the absence of specific guidance, an entity should classify each separately identifiable cash source and use on the basis of the nature of the underlying cash flows. For cash flows with aspects of more than one class that cannot be separated, the classification should be based on the activity that is likely to be the predominant source or use of cash flow. ASU No. 2016-15 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The Company is still evaluating the impact of adopting ASU No. 2016-15 on its financial statements, but does not expect the adoption of ASU No. 2016-15 to have a material impact on its financial statements. |
REAL ESTATE HELD FOR INVESTME21
REAL ESTATE HELD FOR INVESTMENT (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Real Estate Held for Investment [Abstract] | |
Schedule of Real Estate Investments | The following table summarizes the Company’s real estate held for investment as of September 30, 2016 and December 31, 2015 (in thousands): Land Buildings and Improvements Tenant Origination and Absorption Costs Total Real Estate Held for Investment As of September 30, 2016: Office $ 55,335 $ 292,005 $ 525 $ 347,865 Industrial 10,975 57,416 1,835 70,226 Retail (1) 1,607 2,930 753 5,290 GKK Properties 49,757 92,567 14,135 156,459 Real estate held for investment, at cost and net of impairment charges 117,674 444,918 17,248 579,840 Accumulated depreciation/amortization — (77,176 ) (9,685 ) (86,861 ) Real estate held for investment, net $ 117,674 $ 367,742 $ 7,563 $ 492,979 As of December 31, 2015: Office $ 56,745 $ 294,979 $ 525 $ 352,249 Industrial 10,974 56,451 1,835 69,260 GKK Properties 55,138 116,139 19,602 190,879 Real estate held for investment, at cost and net of impairment charges 122,857 467,569 21,962 612,388 Accumulated depreciation/amortization — (82,877 ) (12,443 ) (95,320 ) Real estate held for investment, net $ 122,857 $ 384,692 $ 9,519 $ 517,068 _____________________ (1) On May 13, 2016, the Company received a deed-in-lieu of foreclosure in satisfaction of all amounts due to it under its investment in the Lawrence Village Plaza Loan Origination and received title to the collateral that secured the loan. See Note 5, “Real Estate Loans Receivable.” |
Schedule of Future Minimum Rental Income Under Non-cancelable Operating Leases | The future minimum rental income from the Company’s properties held for investment under non-cancelable operating leases, including leases subject to shedding rights and excluding options to extend, as of September 30, 2016 for the years ending December 31 is as follows (in thousands): October 1, 2016 through December 31, 2016 $ 14,045 2017 55,444 2018 45,897 2019 42,090 2020 37,123 Thereafter 132,090 $ 326,689 |
Schedules of Concentration of Risk, by Risk Factor | As of September 30, 2016 , the Company’s highest tenant industry concentrations (greater than 10% of annualized base rent) were as follows: Industry Number of Annualized Base Rent (1) (in thousands) Percentage of Finance 36 $ 22,082 30.2 % Legal 19 8,662 11.8 % _____________________ (1) Annualized base rent represents annualized contractual base rental income as of September 30, 2016 , adjusted to straight-line any contractual tenant concessions (including free rent), rent increases and rent decreases from the lease's inception through the balance of the lease term. As of September 30, 2016 , the Company had a concentration of credit risk related to leases with the following tenant that represented more than 10% of the Company’s annualized base rent: Annualized Base Rent Statistics Tenant Property Tenant Industry Rentable Square Feet % of Portfolio Rentable Square Feet Annualized Base Rent (1) (in thousands) % of Portfolio Annualized Base Rent Annualized Base Rent per Square Foot Lease Expirations Bank of America, N.A. Various Finance 773,524 19.5 % $ 7,944 10.9 % $ 10.27 (2) _____________________ (1) Annualized base rent represents annualized contractual base rental income as of September 30, 2016 , adjusted to straight-line any contractual tenant concessions (including free rent), rent increases and rent decreases from the lease’s inception through the balance of the lease term. (2) As of September 30, 2016 , lease expiration dates ranged from 2019 through 2023 with a weighted-average remaining term of 4.6 years. |
TENANT ORIGINATION AND ABSORP22
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Abstract] | |
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities | As of September 30, 2016 and December 31, 2015 , the Company’s tenant origination and absorption costs, above-market lease assets, and below-market lease liabilities (excluding fully amortized assets and liabilities and accumulated amortization) were as follows (in thousands): Tenant Origination and Absorption Costs Above-Market Lease Assets Below-Market Lease Liabilities September 30, 2016 December 31, 2015 September 30, 2016 December 31, 2015 September 30, 2016 December 31, 2015 Cost, net of impairments $ 17,248 $ 21,962 $ 4,309 $ 5,024 $ (37,337 ) $ (38,012 ) Accumulated amortization (9,685 ) (12,443 ) (3,534 ) (3,683 ) 28,731 25,315 Net amount $ 7,563 $ 9,519 $ 775 $ 1,341 $ (8,606 ) $ (12,697 ) |
Amortization of Tenant Origination and Absorption Costs, Above-Market Leases and Below-Market Lease Liabilities | Increases (decreases) in net income as a result of amortization of the Company’s tenant origination and absorption costs, above-market lease assets and below-market lease liabilities for the three and nine months ended September 30, 2016 and 2015 were as follows (in thousands): Tenant Origination and Absorption Costs Above-Market Lease Assets Below-Market Lease Liabilities For the Three Months Ended September 30, For the Three Months Ended September 30, For the Three Months Ended September 30, 2016 2015 2016 2015 2016 2015 Amortization $ (791 ) $ (2,409 ) $ (384 ) $ (843 ) $ 1,573 $ 2,460 Tenant Origination and Absorption Costs Above-Market Lease Assets Below-Market Lease Liabilities For the Nine Months Ended September 30, For the Nine Months Ended September 30, For the Nine Months Ended September 30, 2016 2015 2016 2015 2016 2015 Amortization $ (3,621 ) $ (7,814 ) $ (1,688 ) $ (3,001 ) $ 5,708 $ 8,699 |
REAL ESTATE LOANS RECEIVABLE (T
REAL ESTATE LOANS RECEIVABLE (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Receivables [Abstract] | |
Schedule of Real Estate Loans Receivable | As of September 30, 2016 and December 31, 2015 , the Company, through indirect wholly owned subsidiaries, had invested in or originated real estate loans receivable as follows (dollars in thousands): Loan Name Location of Related Property or Collateral Date Acquired/ Originated Property Type Loan Type Outstanding Principal Balance as of September 30, 2016 (1) Book Value as of September 30, 2016 (2) Book Value as of December 31, 2015 (2) Contractual Interest Rate (3) Annualized Effective Interest Rate (3) Maturity Date Sandmar Mezzanine Loan Southeast U.S. (4) 01/09/2007 Retail Mezzanine $ 5,074 $ 5,096 $ 5,096 5.4% — % 01/01/2017 Lawrence Village Plaza Loan Origination New Castle, Pennsylvania (5) 08/06/2007 Retail Mortgage — — 6,903 (5) (5) (5) San Diego Office Portfolio B-Note San Diego, California (6) 10/26/2007 Office B-Note 20,000 18,962 18,277 5.8% 11.2 % 10/11/2017 4929 Wilshire B-Note Los Angeles, California 11/19/2007 Office B-Note 3,794 3,618 3,503 6.1% 12.4 % 07/11/2017 $ 28,868 $ 27,676 $ 33,779 Reserve for Loan Losses (7) — (5,096 ) (6,498 ) $ 28,868 $ 22,580 $ 27,281 _____________________ (1) Outstanding principal balance as of September 30, 2016 represents original principal balance outstanding under the loan, increased for any subsequent fundings and reduced for any principal paydowns. (2) Book value represents outstanding principal balance, adjusted for unamortized acquisition discounts, origination fees and direct origination and acquisition costs. Loan balances are presented gross of any asset-specific reserves. (3) Contractual interest rate is the stated interest rate on the face of the loan. Annualized effective interest rate is calculated as the actual interest income recognized in 2016, using the interest method, annualized and divided by the average amortized cost basis of the investment during 2016. The contractual interest rates and annualized effective interest rates presented are as of September 30, 2016 . (4) The Company had recorded an asset-specific loan loss reserve against this investment as of September 30, 2016 . See “—Reserve for Loan Losses.” (5) On September 1, 2015, the Lawrence Village Plaza Loan Origination matured without repayment. On May 13, 2016, the Company received a deed-in-lieu of foreclosure in satisfaction of all amounts due to it under its investment in the Lawrence Village Plaza Loan Origination and received title to the collateral that secured the loan. (6) The borrower under this note is a wholly owned subsidiary of The Irvine Company. Donald Bren, who is the brother of Peter Bren (one of the Company’s executive officers and sponsors), is the chairman of The Irvine Company. In addition, Charles J. Schreiber, Jr. (the Company’s Chief Executive Officer, one of the Company’s directors and one of the Company’s sponsors) has served as a member of the board of directors and executive committee of The Irvine Company since August 2016. During the nine months ended September 30, 2016 , the Company recognized $1.6 million of interest income related to its investment in this loan. (7) See “—Reserve for Loan Losses.” |
Schedule of Activity Related to Real Estate Loans Receivable | The following summarizes the activity related to real estate loans receivable for the nine months ended September 30, 2016 (in thousands): Real estate loans receivable, net - December 31, 2015 $ 27,281 Principal repayments received on real estate loans receivable (62 ) Accretion of discounts on purchased real estate loans receivable 867 Amortization of origination fees and costs on purchased and originated real estate loans receivable (26 ) Deed-in-lieu foreclosure of real estate loan receivable (5,480 ) Real estate loans receivable, net - September 30, 2016 $ 22,580 |
Schedule of Interest Income from Real Estate Loans Receivable | For the three and nine months ended September 30, 2016 and 2015 , interest income from real estate loans receivable consisted of the following (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Contractual interest income $ 354 $ 496 $ 1,352 $ 1,473 Interest accretion 299 268 867 774 Amortization of origination fees and costs (9 ) (8 ) (26 ) (24 ) Interest income from real estate loans receivable $ 644 $ 756 $ 2,193 $ 2,223 |
REAL ESTATE HELD FOR SALE AND24
REAL ESTATE HELD FOR SALE AND DISCONTINUED OPERATIONS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Major Components of Real Estate Held for Sale and Liabilities Related to Real Estate Held for Sale | The following summary presents the major components of assets and liabilities related to real estate held for sale as of September 30, 2016 and December 31, 2015 (in thousands): September 30, 2016 December 31, 2015 Assets related to real estate held for sale Total real estate, at cost and net of impairment charges $ 11,071 $ 411,575 Accumulated depreciation and amortization (2,232 ) (67,763 ) Real estate held for sale, net 8,839 343,812 Other assets 313 32,321 Total assets related to real estate held for sale $ 9,152 $ 376,133 Liabilities related to real estate held for sale Notes payable, net — 189,541 Other liabilities 1,526 15,417 Total liabilities related to real estate held for sale $ 1,526 $ 204,958 |
Schedule of Revenue and Expenses Related to Real Estate Properties | The following table summarizes certain revenues and expenses related to all of these properties, which were included in continuing operations (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Revenues Rental income $ 1,915 $ 12,621 $ 18,691 $ 43,757 Tenant reimbursements and other operating income 1,618 8,832 13,755 26,503 Total revenues 3,533 21,453 32,446 70,260 Expenses Operating, maintenance, and management 1,687 7,732 12,040 26,675 Real estate taxes and insurance 388 3,024 5,242 10,463 Asset management fees to affiliate 41 377 699 1,216 General and administrative expenses (77 ) 1 (21 ) — Depreciation and amortization 259 6,656 6,567 22,129 Interest expense 30 4,153 3,112 14,252 Impairment of real estate 392 19,035 4,196 19,035 Total expenses 2,720 40,978 31,835 93,770 |
Schedule of Operating Income from Discontinued Operations | The following table summarizes operating income from discontinued operations for the three and nine months ended September 30, 2016 and 2015 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Total revenues and other income $ — $ 113 $ 6 $ 142 Total expenses — (192 ) (69 ) (201 ) Income from discontinued operations before gain on sales of real estate, net, and impairment charge — 305 75 343 Gain on sales of real estate, net — — — 124 Income from discontinued operations $ — $ 305 $ 75 $ 467 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Notes Payable [Abstract] | |
Schedule of Long-term Debt Instruments | As of September 30, 2016 and December 31, 2015 , the Company’s notes payable, including notes payable related to real estate held for sale, consisted of the following (dollars in thousands): Loan Type Book Value as of September 30, 2016 Book Value as of December 31, 2015 Contractual Interest Rate as of September 30, 2016 (1) Effective (1) Payment Type Maturity Date (2) Notes Payable Plaza in Clayton Mortgage Loan (3) $ 62,200 $ 62,200 5.9% 5.9% Interest Only 10/6/2016 Portfolio Loan 116,374 164,131 One-month LIBOR + 1.80% 2.3% Interest Only 1/1/2017 178,574 226,331 GKK Properties Notes Payable Bank of America - BBD2 Mortgage Loan (4) — 65,712 (4) (4) (4) (4) Pitney Bowes - Bank of America Mortgage Loan (5) — 36,160 (5) (5) (5) (5) FSI 6000D Mortgage Loan (6) — 28,934 (6) (6) (6) (6) FSI 6000B Mortgage Loan (6) — 27,763 (6) (6) (6) (6) FSI 6000A Mortgage Loan (6) — 24,271 (6) (6) (6) (6) FSI 6000C Mortgage Loan (6) — 21,967 (6) (6) (6) (6) — 204,807 Total notes payable principal outstanding 178,574 431,138 Discount on notes payable, net (7) — (2,487 ) Deferred financing costs, net (50 ) (429 ) Total notes payable, net $ 178,524 $ 428,222 _____________________ (1) Contractual interest rate represents the interest rate in effect under the loan as of September 30, 2016 . Effective interest rate is calculated as the actual interest rate in effect as of September 30, 2016 (consisting of the contractual interest rate), using interest rate indices as of September 30, 2016 , where applicable. (2) Represents the initial maturity date or the maturity date as extended as of September 30, 2016 ; subject to certain conditions, the maturity dates of certain loans may be extended beyond the maturity date shown. (3) On October 6, 2016, the Company repaid the entire outstanding principal balance due and all other sums due under the Plaza in Clayton Mortgage Loan. (4) On April 15, 2016, the Company, through an indirect wholly owned subsidiary, entered into a defeasance agreement with the lenders under the Bank of America - BBD2 Mortgage Loan. See “Significant Financing Transactions - Defeasance of the Bank of America - BBD2 Mortgage Loan” below. (5) On September 1, 2016, the Company repaid the entire outstanding principal balance due and all other sums due under the Pitney Bowes - Bank of America Mortgage Loan. See “Significant Financing Transactions - Early Pay-off of the Pitney Bowes - Bank of America Mortgage Loan” below. (6) On April 11, 2016, the Company, through indirect wholly owned subsidiaries, entered into a defeasance agreement with each of the lenders under these loans. See “Significant Financing Transactions - Defeasance of the FSI 6000 Mortgage Loans” below. (7) Represents the unamortized discounts and premiums on notes payable due to the above- and below-market interest rates when the loans were assumed. The discounts and premiums are amortized over the remaining life of the respective loan. |
Schedule of Maturities of Long-term Debt | The following is a schedule of maturities, including principal amortization payments, for all notes payable outstanding as of September 30, 2016 (in thousands): October 1, 2016 through December 31, 2016 $ 62,200 (1) 2017 116,374 2018 — 2019 — 2020 — Thereafter — $ 178,574 _____________________ (1) On October 6, 2016, the Company repaid the entire $62.2 million outstanding principal balance due and all other sums due under the Plaza in Clayton Mortgage Loan. |
Schedule of Activity Related to Notes Payable and Repurchase Agreements | The following summarizes the activity related to notes payable for the nine months ended September 30, 2016 (in thousands): Total notes payable, net - December 31, 2015 $ 428,222 Principal repayments (85,235 ) Defeasance of notes payable (167,328 ) Write-off of discount on notes payable related to sale 2,260 Write-off of deferred financing costs 105 Amortization of discounts and premiums on notes payable, net 227 Amortization of deferred financing costs 273 Total notes payable, net - September 30, 2016 $ 178,524 |
FAIR VALUE DISCLOSURES (Tables)
FAIR VALUE DISCLOSURES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of Face Value, Carrying Amounts and Fair Value | The following were the face values, carrying amounts and fair values of the Company’s real estate loans receivable and notes payable as of September 30, 2016 and December 31, 2015 , which carrying amounts generally do not approximate the fair values (in thousands): September 30, 2016 December 31, 2015 Face Value Carrying Amount Fair Value Face Value Carrying Amount Fair Value Financial assets: Real estate loans receivable (1) $ 28,868 $ 22,580 $ 21,168 $ 35,811 $ 27,281 $ 25,218 Financial liabilities: Notes payable $ 178,574 $ 178,524 $ 178,452 $ 431,138 $ 428,222 $ 448,351 _____________________ (1) Carrying amount of real estate loans receivable includes loan loss reserves. |
Fair Value, Assets Measured on Recurring and Nonrecurring Basis | During the nine months ended September 30, 2016 , the Company measured the following assets at fair value on a nonrecurring basis (in thousands): Fair Value Measurements Using Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Nonrecurring Basis (1) : Impaired real estate held for investment $ 82,131 $ — $ — $ 82,131 Impaired real estate held for sale 2,828 — — 2,828 Impaired real estate sold 12,065 — — 12,065 _____________________ (1) Amounts represent the aggregate fair value for real estate assets impacted by impairment charges during the nine months ended September 30, 2016 , as of the date that the fair value measurements were made. The carrying value for these real estate assets may have subsequently increased or decreased from the fair value reflected due to activity that has occurred since the measurement date. |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Costs | Pursuant to the terms of the Advisory Agreement and the AIP Reimbursement Agreement, summarized below are the related-party costs incurred by the Company for the three and nine months ended September 30, 2016 and 2015 , respectively, and any related amounts payable as of September 30, 2016 and December 31, 2015 (in thousands): Incurred Payable Three Months Ended September 30, Nine Months Ended September 30, September 30, December 31, 2016 2015 2016 2015 2016 2015 Expensed Asset management fees (1) $ 1,653 $ 2,386 $ 6,098 $ 7,152 $ — $ — Reimbursement of operating expenses (2) 82 60 247 159 84 68 Disposition fees (3) 3,446 — 6,926 2,253 6 — $ 5,181 $ 2,446 $ 13,271 $ 9,564 $ 90 $ 68 _____________________ (1) See “Asset Management Fee for GKK Properties” below. (2) Reimbursable operating expenses primarily consists of internal audit personnel costs, accounting software and cybersecurity related expenses incurred by the Advisor under the Advisory Agreement. The Company reimburses the Advisor for the Company’s allocable portion of the salaries, benefits and overhead of internal audit department personnel providing services to the Company. These amounts totaled $76,000 and $51,000 for the three months ended September 30, 2016 and 2015 , respectively, and $218,000 and $146,000 for the nine months ended September 30, 2016 and 2015 , respectively. These were the only type of employee costs reimbursed under the Advisory Agreement for the nine months ended September 30, 2016 and 2015 . The Company will not reimburse for employee costs in connection with services for which the Advisor earns disposition fees (other than reimbursement of travel and communication expenses) or for the salaries or benefits the Advisor or its affiliates may pay to the Company’s executive officers. In addition to the amounts above, the Company reimburses the Advisor for certain of the Company’s direct costs incurred from third parties that were initially paid by the Advisor on behalf of the Company. (3) Disposition fees with respect to real estate sold are included in the gain (loss) on sales of real estate in the accompanying consolidated statements of operations. See also “ —Modification of Disposition Fee Related to GKK Properties” below. |
SUPPLEMENTAL CASH FLOW AND SI28
SUPPLEMENTAL CASH FLOW AND SIGNIFICANT NONCASH TRANSACTION DISCLOSURES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Supplemental Cash Flow and Significant Noncash Transaction Disclosures [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | Supplemental cash flow and significant noncash transaction disclosures were as follows (in thousands): For the Nine Months Ended September 30, 2016 2015 Supplemental Disclosure of Cash Flow Information: Interest paid $ 10,658 $ 19,594 Supplemental Disclosure of Significant Noncash Transactions: Treasury securities transferred in connection with defeasance of notes payable $ (184,256 ) $ — Defeasance of notes payable $ 167,328 $ — Investment in a real estate property through deed-in-lieu of foreclosure $ 5,480 $ — |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following tables summarize total revenues, interest expense and NOI for each reportable segment for the three and nine months ended September 30, 2016 and 2015 , and total assets and total liabilities for each reportable segment as of September 30, 2016 and December 31, 2015 (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2016 2015 2016 2015 Revenues: Real estate segment (1) $ 14,060 $ 16,520 $ 47,731 $ 50,849 Real estate-related segment 644 756 2,193 2,223 GKK Properties segment (1) 12,586 27,568 53,276 86,315 Total revenues $ 27,290 $ 44,844 $ 103,200 $ 139,387 Interest expense: Real estate segment (1) $ 1,742 $ 2,069 $ 5,602 $ 6,314 GKK Properties segment (1) 347 4,956 4,367 17,528 Total interest expense $ 2,089 $ 7,025 $ 9,969 $ 23,842 NOI: Real estate segment (1) $ 6,859 $ 7,055 $ 21,748 $ 20,108 Real estate-related segment 643 756 2,191 2,221 GKK Properties segment (1) 2,999 6,905 13,931 17,635 Total NOI $ 10,501 $ 14,716 $ 37,870 $ 39,964 As of September 30, As of December 31, 2016 2015 Assets: Real estate segment $ 408,002 $ 406,690 Real estate-related segment 23,145 27,899 GKK Properties segment 165,695 232,973 Total segment assets 596,842 667,562 Real estate held for sale 9,152 376,133 Corporate-level (2) 210,066 11,170 Total assets $ 816,060 $ 1,054,865 Liabilities: Real estate segment $ 191,264 $ 199,729 Real estate-related segment 13 3 GKK Properties segment 48,002 119,208 Total segment liabilities 239,279 318,940 Real estate held for sale 1,526 204,958 Corporate-level (3) 1,547 1,304 Total liabilities $ 242,352 $ 525,202 _____________________ (1) Amounts include certain properties in continuing operations that were sold or held for sale as of September 30, 2016 . See Note 6, “Real Estate Held for Sale and Discontinued Operations” for more information. (2) Total corporate-level assets consisted primarily of cash and cash equivalents of approximately $209.2 million and $10.6 million as of September 30, 2016 and December 31, 2015 , respectively. (3) As of September 30, 2016 and December 31, 2015 , corporate-level liabilities consisted primarily of accounts payable and accrued liabilities for general and administrative expenses. |
Reconciliation of Net Income (Loss) to Net Operating Income (Loss) | The following table reconciles the Company’s net income to its NOI 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 (loss) income $ (9,294 ) $ (47,411 ) $ 62,706 $ (19,071 ) Gain on sales of real estate (7,910 ) (806 ) (128,845 ) (49,865 ) Loss from extinguishment of debt 7,023 2,189 26,343 8,565 Gain on sale of foreclosed real estate held for sale — — — (2,509 ) Other income and interest income (360 ) (276 ) (806 ) (867 ) Asset management fees to affiliate 1,653 2,386 6,098 7,152 Foreclosure fees and expenses — — 275 — General and administrative expenses 7,755 7,591 14,003 15,868 Depreciation and amortization 7,554 13,911 28,597 43,721 Impairment charges on real estate 4,080 34,933 29,574 34,933 Provision for loan losses — 2,504 — 2,504 Total (income) loss from discontinued operations — (305 ) (75 ) (467 ) NOI (1) $ 10,501 $ 14,716 $ 37,870 $ 39,964 _____________________ (1) Amounts include certain properties in continuing operations that were sold or held for sale as of September 30, 2016 . See Note 6, “Real Estate Held for Sale and Discontinued Operations” for more information. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Minimum Lease Payments, Non-Cancelable Operating Leases | Future minimum lease payments owed by the Company under non-cancelable operating building and ground leases as of September 30, 2016 were as follows (in thousands): October 1, 2016 through December 31, 2016 $ 3,702 2017 11,199 2018 1,101 2019 914 2020 707 Thereafter 26,736 $ 44,359 |
ORGANIZATION (Details)
ORGANIZATION (Details) $ in Thousands | Dec. 19, 2013USD ($) | Sep. 30, 2016USD ($)propertyshares | Dec. 31, 2015USD ($)shares | May 30, 2008USD ($)shares | Sep. 30, 2012USD ($)shares | Sep. 30, 2016USD ($)propertyshares | Sep. 01, 2011property |
Organizational Structure [Line Items] | |||||||
Partnership interest in the Operating Partnership and is its sole limited partner | 99.00% | ||||||
Partnership interest in Operating Partnership | 1.00% | ||||||
Number of real estate properties | property | 186 | 186 | |||||
Number of real estate loans receivable | property | 3 | 3 | |||||
Redemptions of common stock | $ | $ 4,727 | $ 6,361 | |||||
Common Stock [Member] | |||||||
Organizational Structure [Line Items] | |||||||
Issuance of common stock, shares | shares | 171,109,494 | ||||||
Issuance of common stock, value | $ | $ 1,700,000 | ||||||
Shares of common stock sold under dividend reinvestment plan, shares | shares | 28,306,086 | ||||||
Shares of common stock sold under dividend reinvestment plan, value | $ | $ 233,700 | ||||||
Redemptions of common stock, shares | shares | 1,199,710 | 1,431,368 | 14,221,143 | ||||
Redemptions of common stock | $ | $ 12 | $ 15 | $ 96,500 | ||||
KBS Capital Advisors LLC [Member] | |||||||
Organizational Structure [Line Items] | |||||||
Period of Advisory Agreement renewal | 1 year | ||||||
Period of termination notice | 60 days | ||||||
KBS Capital Advisors LLC [Member] | Common Stock [Member] | |||||||
Organizational Structure [Line Items] | |||||||
Shares held by affiliate | shares | 20,000 | 20,000 | |||||
GKK Properties [Member] | |||||||
Organizational Structure [Line Items] | |||||||
Number of real estate properties | property | 867 | ||||||
Agreement for annual fee to be paid for real estate services, amount | $ | $ 7,500 | ||||||
Accrued income | $ | $ 19,100 | $ 19,100 | |||||
Amended service agreement, extension period | 1 year | ||||||
GKK Properties [Member] | Minimum [Member] | |||||||
Organizational Structure [Line Items] | |||||||
Profit participation interest based on a percentage rate of gross fair value of gross sale price | 10.00% | ||||||
GKK Properties [Member] | Maximum [Member] | |||||||
Organizational Structure [Line Items] | |||||||
Profit participation interest based on a percentage rate of gross fair value of gross sale price | 30.00% | ||||||
GKK Properties [Member] | Bank Branches [Member] | |||||||
Organizational Structure [Line Items] | |||||||
Number of real estate properties | property | 576 | ||||||
GKK Properties [Member] | Office Building [Member] | |||||||
Organizational Structure [Line Items] | |||||||
Number of real estate properties | property | 291 | ||||||
Held-for-Sale [Member] | GKK Properties [Member] | |||||||
Organizational Structure [Line Items] | |||||||
Number of real estate properties | property | 12 | 12 |
SUMMARY OF SIGNIFICANT ACCOUN32
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2016property$ / shares | Sep. 30, 2015$ / shares | Sep. 30, 2016property$ / shares | Sep. 30, 2015$ / shares | Aug. 09, 2016property | Dec. 31, 2015property | Sep. 01, 2011property | |
Summary of Significant Accounting Policies [Line Items] | |||||||
Number of real estate properties | 186 | 186 | |||||
Distributions declared per common share (in dollars per share) | $ / shares | $ 0.025 | $ 0.025 | $ 0.075 | $ 0.075 | |||
GKK Properties [Member] | |||||||
Summary of Significant Accounting Policies [Line Items] | |||||||
Number of real estate properties | 867 | ||||||
Disposed of by Sale [Member] | |||||||
Summary of Significant Accounting Policies [Line Items] | |||||||
Number of real estate properties | 34 | ||||||
Number of real estate properties disposed | 179 | ||||||
Disposed of by Sale [Member] | GKK Properties [Member] | |||||||
Summary of Significant Accounting Policies [Line Items] | |||||||
Number of real estate properties | 160 | 31 | |||||
Number of real estate properties disposed | 177 | ||||||
Held-for-Sale [Member] | GKK Properties [Member] | |||||||
Summary of Significant Accounting Policies [Line Items] | |||||||
Number of real estate properties | 12 | 12 |
REAL ESTATE HELD FOR INVESTME33
REAL ESTATE HELD FOR INVESTMENT (Narrative) (Details) $ in Thousands, ft² in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016USD ($)ft²state | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)ft²state | Sep. 30, 2015USD ($) | |
Real Estate Properties [Line Items] | ||||
Rentable square feet | 4 | 4 | ||
Percentage of real estate portfolio occupied | 88.00% | 88.00% | ||
Number of states in which entity operates | state | 23 | 23 | ||
Impairment of real estate | $ | $ 4,080 | $ 34,933 | $ 29,574 | $ 34,933 |
GKK Properties [Member] | ||||
Real Estate Properties [Line Items] | ||||
Rentable square feet | 1.7 | 1.7 | ||
Percentage of real estate portfolio occupied | 86.00% | 86.00% |
REAL ESTATE HELD FOR INVESTME34
REAL ESTATE HELD FOR INVESTMENT (Schedule of Real Estate Investments) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Real Estate Properties [Line Items] | ||
Real estate held for investment, at cost and net of impairment charges | $ 579,840 | $ 612,388 |
Accumulated depreciation/amortization | (86,861) | (95,320) |
Total real estate held for investment, net | 492,979 | 517,068 |
Office [Member] | ||
Real Estate Properties [Line Items] | ||
Real estate held for investment, at cost and net of impairment charges | 347,865 | 352,249 |
Industrial [Member] | ||
Real Estate Properties [Line Items] | ||
Real estate held for investment, at cost and net of impairment charges | 70,226 | 69,260 |
Retail [Member] | ||
Real Estate Properties [Line Items] | ||
Real estate held for investment, at cost and net of impairment charges | 5,290 | |
GKK Properties [Member] | ||
Real Estate Properties [Line Items] | ||
Real estate held for investment, at cost and net of impairment charges | 156,459 | 190,879 |
Land [Member] | ||
Real Estate Properties [Line Items] | ||
Real estate held for investment, at cost and net of impairment charges | 117,674 | 122,857 |
Accumulated depreciation/amortization | 0 | 0 |
Total real estate held for investment, net | 117,674 | 122,857 |
Land [Member] | Office [Member] | ||
Real Estate Properties [Line Items] | ||
Real estate held for investment, at cost and net of impairment charges | 55,335 | 56,745 |
Land [Member] | Industrial [Member] | ||
Real Estate Properties [Line Items] | ||
Real estate held for investment, at cost and net of impairment charges | 10,975 | 10,974 |
Land [Member] | Retail [Member] | ||
Real Estate Properties [Line Items] | ||
Real estate held for investment, at cost and net of impairment charges | 1,607 | |
Land [Member] | GKK Properties [Member] | ||
Real Estate Properties [Line Items] | ||
Real estate held for investment, at cost and net of impairment charges | 49,757 | 55,138 |
Buildings and Improvements [Member] | ||
Real Estate Properties [Line Items] | ||
Real estate held for investment, at cost and net of impairment charges | 444,918 | 467,569 |
Accumulated depreciation/amortization | (77,176) | (82,877) |
Total real estate held for investment, net | 367,742 | 384,692 |
Buildings and Improvements [Member] | Office [Member] | ||
Real Estate Properties [Line Items] | ||
Real estate held for investment, at cost and net of impairment charges | 292,005 | 294,979 |
Buildings and Improvements [Member] | Industrial [Member] | ||
Real Estate Properties [Line Items] | ||
Real estate held for investment, at cost and net of impairment charges | 57,416 | 56,451 |
Buildings and Improvements [Member] | Retail [Member] | ||
Real Estate Properties [Line Items] | ||
Real estate held for investment, at cost and net of impairment charges | 2,930 | |
Buildings and Improvements [Member] | GKK Properties [Member] | ||
Real Estate Properties [Line Items] | ||
Real estate held for investment, at cost and net of impairment charges | 92,567 | 116,139 |
Tenant Origination and Absorption Costs [Member] | ||
Real Estate Properties [Line Items] | ||
Real estate held for investment, at cost and net of impairment charges | 17,248 | 21,962 |
Accumulated depreciation/amortization | (9,685) | (12,443) |
Total real estate held for investment, net | 7,563 | 9,519 |
Tenant Origination and Absorption Costs [Member] | Office [Member] | ||
Real Estate Properties [Line Items] | ||
Real estate held for investment, at cost and net of impairment charges | 525 | 525 |
Tenant Origination and Absorption Costs [Member] | Industrial [Member] | ||
Real Estate Properties [Line Items] | ||
Real estate held for investment, at cost and net of impairment charges | 1,835 | 1,835 |
Tenant Origination and Absorption Costs [Member] | Retail [Member] | ||
Real Estate Properties [Line Items] | ||
Real estate held for investment, at cost and net of impairment charges | 753 | |
Tenant Origination and Absorption Costs [Member] | GKK Properties [Member] | ||
Real Estate Properties [Line Items] | ||
Real estate held for investment, at cost and net of impairment charges | $ 14,135 | $ 19,602 |
REAL ESTATE HELD FOR INVESTME35
REAL ESTATE HELD FOR INVESTMENT (Operating Leases) (Narrative) (Details) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2016USD ($)tenant | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | |
Operating Leased Assets [Line Items] | |||
Recognition of deferred revenue, net of discontinued operations | $ 1,200 | $ 1,800 | |
Amortization of lease incentives | 900 | 1,000 | |
Deferred rent receivables | 21,300 | $ 19,400 | |
Unamortized lease incentives | 4,800 | 4,700 | |
Liabilities related to potential loss contingencies | $ 3,200 | ||
Number of tenants | tenant | 200 | ||
Bad debt reserve | $ 500 | 500 | |
Provision of doubtful accounts, net of discontinued operations | $ 100 | $ 38 | |
Maximum [Member] | |||
Operating Leased Assets [Line Items] | |||
Operating lease, term | 13 years 9 months 18 days | ||
Weighted Average [Member] | |||
Operating Leased Assets [Line Items] | |||
Operating lease, term | 3 years 10 months 24 days | ||
GKK Properties [Member] | Maximum [Member] | |||
Operating Leased Assets [Line Items] | |||
Operating lease, term | 9 years 9 months 18 days | ||
GKK Properties [Member] | Weighted Average [Member] | |||
Operating Leased Assets [Line Items] | |||
Operating lease, term | 3 years 1 month 6 days | ||
Other Liabilities [Member] | |||
Operating Leased Assets [Line Items] | |||
Security deposit liability | $ 2,700 | $ 3,200 |
REAL ESTATE HELD FOR INVESTME36
REAL ESTATE HELD FOR INVESTMENT (Future Minimum Rental Income) (Details) $ in Thousands | Sep. 30, 2016USD ($) |
Real Estate Held for Investment [Abstract] | |
October 1, 2016 through December 31, 2016 | $ 14,045 |
2,017 | 55,444 |
2,018 | 45,897 |
2,019 | 42,090 |
2,020 | 37,123 |
Thereafter | 132,090 |
Future minimum rental income | $ 326,689 |
REAL ESTATE HELD FOR INVESTME37
REAL ESTATE HELD FOR INVESTMENT (Highes Tenant Industry Concentrations- Grater than 10% of Annual Base Rent) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($)tenant | |
Concentration Risk [Line Items] | |
Number of Tenants | 200 |
Industry - Finance [Member] | |
Concentration Risk [Line Items] | |
Number of Tenants | 36 |
Annualized Base Rent | $ | $ 22,082 |
Percentage of Annualized Base Rent | 30.20% |
Industry - Legal Services [Member] | |
Concentration Risk [Line Items] | |
Number of Tenants | 19 |
Annualized Base Rent | $ | $ 8,662 |
Percentage of Annualized Base Rent | 11.80% |
REAL ESTATE HELD FOR INVESTME38
REAL ESTATE HELD FOR INVESTMENT (Concentration of Credit Risk, Tenant Lease that Represents More than 10% of Annualized Base Rent) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($)ft²$ / ft² | |
Weighted Average [Member] | |
Concentration Risk [Line Items] | |
Operating lease, term | 3 years 10 months 24 days |
Tenant Lease - Bank of America, N.A. [Member] | |
Concentration Risk [Line Items] | |
Rentable Square Feet | ft² | 773,524 |
Annualized Base Rent | $ | $ 7,944 |
Annualized Base Rent per Square Foot | $ / ft² | 10.27 |
Tenant Lease - Bank of America, N.A. [Member] | Weighted Average [Member] | |
Concentration Risk [Line Items] | |
Operating lease, term | 4 years 7 months 6 days |
Tenant Lease - Bank of America, N.A. [Member] | Rentable Square Feet [Member] | |
Concentration Risk [Line Items] | |
Percentage of Annualized Base Rent | 19.50% |
Tenant Lease - Bank of America, N.A. [Member] | Base Rent [Member] | |
Concentration Risk [Line Items] | |
Percentage of Annualized Base Rent | 10.90% |
REAL ESTATE HELD FOR INVESTME39
REAL ESTATE HELD FOR INVESTMENT (Geographic Concentration Risk) (Details) | 9 Months Ended |
Sep. 30, 2016 | |
VIRGINIA | Assets, Total [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 14.60% |
REAL ESTATE HELD FOR INVESTME40
REAL ESTATE HELD FOR INVESTMENT (Impairment of Real Estate) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2016USD ($)property | Sep. 30, 2016USD ($)property | |
Investment [Line Items] | ||
Impairment of real estate | $ 4,100 | $ 29,600 |
Assets Held-for-Investment [Member] | ||
Investment [Line Items] | ||
Impairment of real estate | $ 3,700 | $ 25,400 |
Number of real estate properties included in impairment charges | property | 15 | 47 |
Assets Held-for-Investment [Member] | City Gate Plaza [Member] | ||
Investment [Line Items] | ||
Impairment of real estate | $ 3,300 | |
Number of real estate properties included in impairment charges | property | 1 | |
Assets Held-for-Investment [Member] | University Park Buildings [Member] | ||
Investment [Line Items] | ||
Impairment of real estate | $ 3,200 | |
Number of real estate properties included in impairment charges | property | 1 | |
Assets Held-for-Investment [Member] | ADP Plaza [Member] | ||
Investment [Line Items] | ||
Impairment of real estate | $ 1,700 | |
Number of real estate properties included in impairment charges | property | 1 | |
Percent of occupancy of real estate | 48.60% | 48.60% |
Assets Held-for-Investment [Member] | GKK Properties [Member] | ||
Investment [Line Items] | ||
Impairment of real estate | $ 3,400 | |
Number of real estate properties included in impairment charges | property | 44 | |
Assets Held-for-Investment [Member] | GKK Properties [Member] | Maximum [Member] | ||
Investment [Line Items] | ||
Amount of Impairment of Real Estate per Individual Property | $ 800 | |
Assets Held-for-Investment [Member] | GKK Properties [Member] | Impairment Charge up to $800,000 [Member] | ||
Investment [Line Items] | ||
Number of real estate properties included in impairment charges | property | 11 | |
Assets Held-for-Investment [Member] | GKK Properties [Member] | Pitney Bowes - Bank of America Portfolio [Member] | ||
Investment [Line Items] | ||
Impairment of real estate | $ 3,000 | |
Number of real estate properties included in impairment charges | property | 13 | |
Assets Held-for-Investment [Member] | GKK Properties [Member] | Citizen Bank Portfolio [Member] | ||
Investment [Line Items] | ||
Impairment of real estate | $ 10,800 | |
Number of real estate properties included in impairment charges | property | 20 | |
Held-for-Sale [Member] | ||
Investment [Line Items] | ||
Impairment of real estate | $ 400 | $ 4,200 |
Held-for-Sale [Member] | GKK Properties [Member] | ||
Investment [Line Items] | ||
Number of real estate properties included in impairment charges | property | 3 | 13 |
TENANT ORIGINATION AND ABSORP41
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Abstract] | |||||
Tenant Origination and Absorption Costs, Cost, net of impairments | $ 17,248 | $ 17,248 | $ 21,962 | ||
Tenant Origination and Absorption Costs, Accumulated amortization | (9,685) | (9,685) | (12,443) | ||
Tenant Origination and Absorption Costs, Net amount | 7,563 | 7,563 | 9,519 | ||
Tenant Origination and Absorption Costs, Amortization | (791) | $ (2,409) | (3,621) | $ (7,814) | |
Above-Market Lease Assets, Cost, net of impairments | 4,309 | 4,309 | 5,024 | ||
Above-Market Lease Assets, Accumulated amortization | (3,534) | (3,534) | (3,683) | ||
Above-Market Lease Assets, Net amount | 775 | 775 | 1,341 | ||
Above-Market Lease Assets, Amortization | (384) | (843) | (1,688) | (3,001) | |
Below-Market Lease Liabilities, Cost, net of impairments | (37,337) | (37,337) | (38,012) | ||
Below-Market Lease Liabilities, Accumulated amortization | 28,731 | 28,731 | 25,315 | ||
Below-Market Lease Liabilities, Net amount | (8,606) | (8,606) | $ (12,697) | ||
Below-Market Lease Liabilities, Amortization | $ 1,573 | $ 2,460 | $ 5,708 | $ 8,699 |
REAL ESTATE LOANS RECEIVABLE (S
REAL ESTATE LOANS RECEIVABLE (Schedule of Real Estate Loans Receivable) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Outstanding Principal Balance | $ 28,868 | |
Book Value | 27,676 | $ 33,779 |
Reserve for Loan Losses | (5,096) | (6,498) |
Book Value | 22,580 | 27,281 |
Interest receivable | $ 100 | 100 |
Sandmar Mezzanine Loan Southeast U.S. [Member] | Mezzanine [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Date Acquired/ Originated | Jan. 9, 2007 | |
Outstanding Principal Balance | $ 5,074 | |
Book Value | $ 5,096 | 5,096 |
Contractual Interest Rate | 5.40% | |
Annualized Effective Interest Rate | 0.00% | |
Maturity Date | Jan. 1, 2017 | |
Lawrence Village Plaza Loan Origination New Castle, Pennsylvania [Member] | Mortgages [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Date Acquired/ Originated | Aug. 6, 2007 | |
Outstanding Principal Balance | $ 0 | |
Book Value | 0 | 6,903 |
San Diego Office Portfolio B-Note San Diego, California [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Interest income | $ 1,600 | |
San Diego Office Portfolio B-Note San Diego, California [Member] | B-Note [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Date Acquired/ Originated | Oct. 26, 2007 | |
Outstanding Principal Balance | $ 20,000 | |
Book Value | $ 18,962 | 18,277 |
Contractual Interest Rate | 5.80% | |
Annualized Effective Interest Rate | 11.20% | |
Maturity Date | Oct. 11, 2017 | |
4929 Wilshire B-Note Los Angeles, California [Member] | B-Note [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Date Acquired/ Originated | Nov. 19, 2007 | |
Outstanding Principal Balance | $ 3,794 | |
Book Value | $ 3,618 | $ 3,503 |
Contractual Interest Rate | 6.10% | |
Annualized Effective Interest Rate | 12.40% | |
Maturity Date | Jul. 11, 2017 |
REAL ESTATE LOANS RECEIVABLE 43
REAL ESTATE LOANS RECEIVABLE (Schedule of Activity Related to Real Estate Loans Receivable) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Real Estate Loans Receivable [Roll Forward] | ||||
Real estate loans receivable, net - December 31, 2015 | $ 27,281 | |||
Principal repayments received on real estate loans receivable | (62) | |||
Accretion of discounts on purchased real estate loans receivable | 867 | |||
Amortization of origination fees and costs on purchased and originated real estate loans receivable | $ (9) | $ (8) | (26) | $ (24) |
Deed-in-lieu foreclosure of real estate loan receivable | (5,480) | |||
Real estate loans receivable, net - September 30, 2016 | $ 22,580 | $ 22,580 |
REAL ESTATE LOANS RECEIVABLE 44
REAL ESTATE LOANS RECEIVABLE (Schedule of Interest Income from Real Estate Loans Receivable) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Real Estate Properties [Line Items] | |||||
Contractual interest income | $ 354 | $ 496 | $ 1,352 | $ 1,473 | |
Interest accretion | 299 | 268 | 867 | 774 | |
Amortization of origination fees and costs | (9) | (8) | (26) | (24) | |
Interest income from real estate loans receivable | 644 | $ 756 | 2,193 | 2,223 | |
Book value | 27,676 | 27,676 | $ 33,779 | ||
Sandmar Mezzanine Loan [Member] | |||||
Real Estate Properties [Line Items] | |||||
Book value | $ 0 | 0 | |||
Interest income related to impaired loans | 94 | 0 | |||
Lawrence Village Plaza Loan Origination [Member] | |||||
Real Estate Properties [Line Items] | |||||
Interest income related to impaired loans | $ 200 | $ 400 |
REAL ESTATE LOANS RECEIVABLE (R
REAL ESTATE LOANS RECEIVABLE (Reserve for Loan Losses) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Mortgage Loans on Real Estate [Line Items] | ||
Reserve for loan losses | $ 5,096 | $ 6,498 |
Sandmar Mezzanine Loan [Member] | ||
Mortgage Loans on Real Estate [Line Items] | ||
Reserve for loan losses | 5,100 | |
Mortgage loans on real estate, amortized cost basis | $ 5,100 |
REAL ESTATE HELD FOR SALE AND46
REAL ESTATE HELD FOR SALE AND DISCONTINUED OPERATIONS (Narrative) (Details) $ in Thousands | Aug. 09, 2016USD ($)property | Sep. 30, 2016USD ($)property | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)property | Sep. 30, 2015USD ($)unit | Dec. 31, 2015USD ($)property | Sep. 01, 2011property |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Number of real estate properties | 186 | 186 | |||||
Real estate held for sale, net | $ | $ 8,839 | $ 8,839 | $ 343,812 | ||||
Number of residential units sold, included in disposition fees | unit | 2 | ||||||
Gain on sales of foreclosed real estate held for sale | $ | $ 0 | $ 0 | $ 0 | $ 2,509 | |||
GKK Properties [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Additional number of real estate properties disposed | 30 | ||||||
Number of real estate properties with terminated leasehold interest | 3 | ||||||
Number of real estate properties | 867 | ||||||
Disposition fees | $ | $ 2,000 | ||||||
Tribeca Building [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Disposition fees | $ | 200 | ||||||
Foreclosed real estate expense | $ | $ 300 | ||||||
Held-for-Sale [Member] | GKK Properties [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Number of real estate properties | 8 | ||||||
Disposed of by Sale [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Number of real estate properties | 34 | ||||||
Number of real estate properties disposed | 179 | ||||||
Disposed of by Sale [Member] | GKK Properties [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Number of real estate properties | 160 | 31 | |||||
Number of real estate properties disposed | 177 | ||||||
Disposed of by Sale [Member] | Historical Real Estate [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Number of real estate properties | 2 | 2 | 3 | ||||
Held-for-Sale [Member] | GKK Properties [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Number of real estate properties | 12 | 12 |
REAL ESTATE HELD FOR SALE AND47
REAL ESTATE HELD FOR SALE AND DISCONTINUED OPERATIONS (Schedule of Major Components of Real Estate Held for Sale and Liabilities Related to Real Estate Held for Sale) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Total assets related to real estate held for sale | $ 313 | $ 32,321 |
Total liabilities related to real estate held for sale | 0 | 189,541 |
Held-for-Sale [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Total real estate, at cost and net of impairment charges | 11,071 | 411,575 |
Accumulated depreciation and amortization | (2,232) | (67,763) |
Real estate held for sale, net | 8,839 | 343,812 |
Other assets | 313 | 32,321 |
Total assets related to real estate held for sale | 9,152 | 376,133 |
Notes payable, net | 0 | 189,541 |
Other liabilities | 1,526 | 15,417 |
Total liabilities related to real estate held for sale | $ 1,526 | $ 204,958 |
REAL ESTATE HELD FOR SALE AND48
REAL ESTATE HELD FOR SALE AND DISCONTINUED OPERATIONS REAL ESTATE HELD FOR SALE AND DISCONTINUED OPERATIONS (Revenue and Expenses) (Details) - Disposed of by Sale [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues | ||||
Rental income | $ 1,915 | $ 12,621 | $ 18,691 | $ 43,757 |
Tenant reimbursements and other operating income | 1,618 | 8,832 | 13,755 | 26,503 |
Total revenues | 3,533 | 21,453 | 32,446 | 70,260 |
Expenses | ||||
Operating, maintenance, and management | 1,687 | 7,732 | 12,040 | 26,675 |
Real estate taxes and insurance | 388 | 3,024 | 5,242 | 10,463 |
Asset management fees to affiliate | 41 | 377 | 699 | 1,216 |
General and administrative expenses | (77) | 1 | (21) | 0 |
Depreciation and amortization | 259 | 6,656 | 6,567 | 22,129 |
Interest expense | 30 | 4,153 | 3,112 | 14,252 |
Impairment of real estate | 392 | 19,035 | 4,196 | 19,035 |
Total expenses | $ 2,720 | $ 40,978 | $ 31,835 | $ 93,770 |
REAL ESTATE HELD FOR SALE AND49
REAL ESTATE HELD FOR SALE AND DISCONTINUED OPERATIONS (Schedule of Operating Income from Discontinued Operations) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | ||||
Total revenues and other income | $ 0 | $ 113 | $ 6 | $ 142 |
Total expenses | 0 | (192) | (69) | (201) |
Income from discontinued operations before gain on sales of real estate, net, and impairment charge | 0 | 305 | 75 | 343 |
Gain on sales of real estate, net | 0 | 0 | 0 | 124 |
Total income from discontinued operations | $ 0 | $ 305 | $ 75 | $ 467 |
REAL ESTATE HELD FOR SALE AND50
REAL ESTATE HELD FOR SALE AND DISCONTINUED OPERATIONS (Dispositions) (Details) $ in Millions | Apr. 11, 2016USD ($)ft²property | Sep. 30, 2016property | Dec. 31, 2015property |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of real estate properties | 186 | ||
Disposed of by Sale [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of real estate properties | 34 | ||
Bank Branches [Member] | Disposed of by Sale [Member] | FSI 6000 Properties [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of real estate properties | 61 | ||
Net rentable area | ft² | 245,843 | ||
Sales of real estate | $ | $ 139.6 | ||
Payment received for cost and expenses | $ | $ 6.6 |
NOTES PAYABLE (Narrative) (Deta
NOTES PAYABLE (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | |||||
Interest expense | $ 2,089 | $ 7,025 | $ 9,969 | $ 23,842 | |
Amortization of financing cost, net of discontinued operations | 100 | 300 | 300 | 1,600 | |
Amortization of discounts and premiums on notes payable, net | 227 | 1,128 | |||
Interest payable | 500 | 500 | $ 1,700 | ||
Notes Payable [Member] | |||||
Debt Instrument [Line Items] | |||||
Amortization of discounts and premiums on notes payable, net | $ 15 | $ 300 | $ 200 | $ 1,100 |
NOTES PAYABLE (Schedule of Long
NOTES PAYABLE (Schedule of Long-term Debt Instruments) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | ||
Total notes payable principal outstanding | $ 178,574 | $ 431,138 |
Discount on notes payable, net | 0 | (2,487) |
Deferred Finance Costs, Net | (50) | (429) |
Total notes payable, net | 178,524 | 428,222 |
Mortgages [Member] | ||
Debt Instrument [Line Items] | ||
Total notes payable principal outstanding | 178,574 | 226,331 |
Mortgages [Member] | GKK Properties [Member] | ||
Debt Instrument [Line Items] | ||
Total notes payable principal outstanding | 0 | 204,807 |
Mortgages [Member] | Plaza in Clayton Mortgage Loan [Member] | ||
Debt Instrument [Line Items] | ||
Total notes payable principal outstanding | $ 62,200 | 62,200 |
Contractual interest rate | 5.90% | |
Effective Percentage | 5.90% | |
Maturity Date | Oct. 6, 2016 | |
Mortgages [Member] | Portfolio Loan [Member] | ||
Debt Instrument [Line Items] | ||
Total notes payable principal outstanding | $ 116,374 | 164,131 |
Effective Percentage | 2.30% | |
Maturity Date | Jan. 1, 2017 | |
Mortgages [Member] | Portfolio Loan [Member] | One-month LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Variable rate | 1.80% | |
Mortgages [Member] | Bank of America - BBD2 Mortgage Loan [Member] | GKK Properties [Member] | ||
Debt Instrument [Line Items] | ||
Total notes payable principal outstanding | $ 0 | 65,712 |
Mortgages [Member] | Pitney Bowes - Bank of America Mortgage Loan [Member] | GKK Properties [Member] | ||
Debt Instrument [Line Items] | ||
Total notes payable principal outstanding | 0 | 36,160 |
Mortgages [Member] | FSI 6000D Mortgage Loan [Member] | GKK Properties [Member] | ||
Debt Instrument [Line Items] | ||
Total notes payable principal outstanding | 0 | 28,934 |
Mortgages [Member] | FSI 6000B Mortgage Loan [Member] | GKK Properties [Member] | ||
Debt Instrument [Line Items] | ||
Total notes payable principal outstanding | 0 | 27,763 |
Mortgages [Member] | FSI 6000A Mortgage Loan [Member] | GKK Properties [Member] | ||
Debt Instrument [Line Items] | ||
Total notes payable principal outstanding | 0 | 24,271 |
Mortgages [Member] | FSI 6000C Mortgage Loan [Member] | GKK Properties [Member] | ||
Debt Instrument [Line Items] | ||
Total notes payable principal outstanding | $ 0 | $ 21,967 |
NOTES PAYABLE (Schedule of Matu
NOTES PAYABLE (Schedule of Maturities of Long-Term Debt) (Details) - USD ($) $ in Thousands | Oct. 06, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Notes Payable [Abstract] | |||
October 1, 2016 through December 31, 2016 | $ 62,200 | ||
2,017 | 116,374 | ||
2,018 | 0 | ||
2,019 | 0 | ||
2,020 | 0 | ||
Thereafter | 0 | ||
Notes payable outstanding | $ 178,574 | $ 431,138 | |
Plaza in Clayton Mortgage Loan [Member] | Subsequent Event [Member] | |||
Debt Instrument [Line Items] | |||
Extinguishment of debt | $ 62,200 |
NOTES PAYABLE (Schedule of Acti
NOTES PAYABLE (Schedule of Activity Related to Notes Payable) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Activity Related to Notes Payable [Roll Forward] | ||
Total notes payable, net - December 31, 2015 | $ 428,222 | |
Principal repayments | (85,235) | |
Defeasance of notes payable | (167,328) | $ 0 |
Write-off of discount on notes payable related to sale | 2,260 | |
Write-off of deferred financing costs | 105 | |
Amortization of discounts and premiums on notes payable, net | 227 | 1,128 |
Amortization of deferred financing costs | 273 | $ 1,568 |
Total notes payable, net - September 30, 2016 | $ 178,524 |
NOTES PAYABLE (Significant Fina
NOTES PAYABLE (Significant Financing Transactions) (Details) - USD ($) $ in Thousands | Sep. 01, 2016 | Apr. 15, 2016 | Apr. 11, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 |
Debt Instrument [Line Items] | |||||||
Loss on extinguishment of debt | $ 7,023 | $ 2,189 | $ 26,343 | $ 8,565 | |||
Outstanding principal balance | $ 28,868 | $ 28,868 | |||||
FSI 6000 Mortgage Loan [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Defease amount of outstanding principal balance | $ 102,300 | ||||||
Loss on extinguishment of debt | $ (6,600) | ||||||
Bank of America - BBD2 Mortgage Loan [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Loss on extinguishment of debt | $ (12,700) | ||||||
Outstanding principal balance | $ 65,100 | ||||||
Pitney Bowes - Bank of America Mortgage Loan [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Loss on extinguishment of debt | $ 7,000 | ||||||
Extinguishment of debt | 36,200 | ||||||
Prepayment premium | $ 6,500 |
FAIR VALUE DISCLOSURES (Schedul
FAIR VALUE DISCLOSURES (Schedule of Face Value, Carrying Amounts and Fair Value) (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Real estate loans receivable, Face Value | $ 28,868,000 | $ 35,811,000 |
Notes payable, Face Value | 178,574,000 | 431,138,000 |
Carrying Amount [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Real estate loans receivable, Value | 22,580,000 | 27,281,000 |
Notes payable, Value | 178,524,000 | 428,222,000 |
Fair Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Real estate loans receivable, Value | 21,168,000 | 25,218,000 |
Notes payable, Value | $ 178,452,000 | $ 448,351,000 |
FAIR VALUE DISCLOSURES (Sched57
FAIR VALUE DISCLOSURES (Schedule of Assets at Fair Value) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Impairment of real estate | $ 4,080 | $ 34,933 | $ 29,574 | $ 34,933 |
Nonrecurring Basis [Member] | Assets Held-for-Investment [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Impairment of real estate | 82,131 | |||
Nonrecurring Basis [Member] | Assets Held-for-Investment [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Impairment of real estate | 0 | |||
Nonrecurring Basis [Member] | Assets Held-for-Investment [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Impairment of real estate | 0 | |||
Nonrecurring Basis [Member] | Assets Held-for-Investment [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Impairment of real estate | 82,131 | |||
Nonrecurring Basis [Member] | Assets Held-for-Sale [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Impairment of real estate | 2,828 | |||
Nonrecurring Basis [Member] | Assets Held-for-Sale [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Impairment of real estate | 0 | |||
Nonrecurring Basis [Member] | Assets Held-for-Sale [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Impairment of real estate | 0 | |||
Nonrecurring Basis [Member] | Assets Held-for-Sale [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Impairment of real estate | 2,828 | |||
Nonrecurring Basis [Member] | Disposed of by Sale [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Impairment of real estate | 12,065 | |||
Nonrecurring Basis [Member] | Disposed of by Sale [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Impairment of real estate | 0 | |||
Nonrecurring Basis [Member] | Disposed of by Sale [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Impairment of real estate | 0 | |||
Nonrecurring Basis [Member] | Disposed of by Sale [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Impairment of real estate | $ 12,065 |
FAIR VALUE DISCLOSURES (Narrati
FAIR VALUE DISCLOSURES (Narrative) (Details) - Held-for-Investment [Member] - Discounted Cash Flow [Member] | Sep. 30, 2016 |
Minimum [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Terminal capitalization rates | 7.00% |
Maximum [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Terminal capitalization rates | 10.75% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | |||||
Payable | $ 90 | $ 90 | $ 68 | ||
Administrative fees, amount paid | 76 | $ 51 | 218 | $ 146 | |
Advisor and Dealer Manager [Member] | |||||
Related Party Transaction [Line Items] | |||||
Incurred | 5,181 | 2,446 | 13,271 | 9,564 | |
Payable | 90 | 90 | 68 | ||
Advisor and Dealer Manager [Member] | Asset Management Fees [Member] | |||||
Related Party Transaction [Line Items] | |||||
Incurred | 1,653 | 2,386 | 6,098 | 7,152 | |
Payable | 0 | 0 | 0 | ||
Advisor and Dealer Manager [Member] | Reimbursement of Operating Expenses [Member] | |||||
Related Party Transaction [Line Items] | |||||
Incurred | 82 | 60 | 247 | 159 | |
Payable | 84 | 84 | 68 | ||
Advisor and Dealer Manager [Member] | Dispositon Fees [Member] | |||||
Related Party Transaction [Line Items] | |||||
Incurred | 3,446 | $ 0 | 6,926 | $ 2,253 | |
Payable | $ 6 | $ 6 | $ 0 |
RELATED PARTY TRANSACTIONS (Nar
RELATED PARTY TRANSACTIONS (Narrative) (Details) $ in Thousands | Aug. 09, 2016USD ($)property | May 18, 2012USD ($) | Sep. 30, 2016USD ($)property | Dec. 31, 2015property | Jan. 15, 2015 | Aug. 14, 2013 | Sep. 01, 2011property |
Related Party Transaction [Line Items] | |||||||
Number of real estate properties | property | 186 | ||||||
KBS Capital Advisors LLC [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Disposition fee as percent | 1.00% | ||||||
Selling commissions fees paid, percent of sales price | 6.00% | ||||||
Disposed of by Sale [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Number of real estate properties | property | 34 | ||||||
GKK Properties [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Number of real estate properties | property | 867 | ||||||
Disposition fees | $ 2,000 | ||||||
Sales of real estate | $ 214,100 | ||||||
GKK Properties [Member] | KBS Capital Advisors LLC [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Disposition fee as percent | 1.00% | 1.00% | |||||
GKK Properties [Member] | Disposed of by Sale [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Number of real estate properties | property | 160 | 31 | |||||
Option One [Member] | GKK Properties [Member] | KBS Capital Advisors LLC [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Monthly asset management fee, percent of acquisition expense, excluding acquisition fees related to thereto | 0.0625% | ||||||
Acquisition advisory fee, percent | 0.75% | ||||||
Option Two [Member] | GKK Properties [Member] | KBS Capital Advisors LLC [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Monthly asset management fee, percent of acquisition expense, excluding acquisition fees related to thereto | 0.0625% | ||||||
Acquisition advisory fee, percent | 0.75% | ||||||
Property Insurance Rebate [Member] | KBS Capital Advisors LLC [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Due from affiliate | $ 36 | ||||||
Legal and Professional Fees Reimbursement [Member] | KBS Capital Advisors LLC [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Due from affiliate | $ 69 | ||||||
KBS Strategic Opportunity REIT, Inc. [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Investment in joint venture | $ 8,000 |
SUPPLEMENTAL CASH FLOW AND SI61
SUPPLEMENTAL CASH FLOW AND SIGNIFICANT NONCASH TRANSACTION DISCLOSURES (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Supplemental Disclosure of Cash Flow Information: | ||
Interest paid | $ 10,658 | $ 19,594 |
Supplemental Disclosure of Significant Noncash Transactions: | ||
Treasury securities transferred in connection with defeasance of notes payable | (184,256) | 0 |
Defeasance of notes payable | 167,328 | 0 |
Investment in a real estate property through deed-in-lieu of foreclosure | $ 5,480 | $ 0 |
SEGMENT INFORMATION (Schedule o
SEGMENT INFORMATION (Schedule of Segment Reporting Information, by Segment) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016USD ($)state | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)statesegment | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Segment Reporting Information [Line Items] | ||||||
Number of reportable segments | segment | 3 | |||||
Number of states in which entity operates | state | 23 | 23 | ||||
Revenues | $ 27,290 | $ 44,844 | $ 103,200 | $ 139,387 | ||
Interest expense | 2,089 | 7,025 | 9,969 | 23,842 | ||
Total net operating income | 10,501 | 14,716 | 37,870 | 39,964 | ||
Assets | 816,060 | 816,060 | $ 1,054,865 | |||
Real estate held for sale | 8,839 | 8,839 | 343,812 | |||
Liabilities | 242,352 | 242,352 | 525,202 | |||
Liabilities related to real estate held for sale | 1,526 | 1,526 | 15,417 | |||
Cash and cash equivalents | 219,590 | 107,773 | 219,590 | 107,773 | 46,605 | $ 58,675 |
Operating Segments [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Assets | 596,842 | 596,842 | 667,562 | |||
Liabilities | 239,279 | 239,279 | 318,940 | |||
Segment Reconciling Items [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Real estate held for sale | 9,152 | 9,152 | 376,133 | |||
Liabilities related to real estate held for sale | 1,526 | 1,526 | 204,958 | |||
Corporate-Level [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Assets | 210,066 | 210,066 | 11,170 | |||
Liabilities | 1,547 | 1,547 | 1,304 | |||
Cash and cash equivalents | 209,200 | 209,200 | 10,600 | |||
Real Estate Segment [Member] | Operating Segments [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 14,060 | 16,520 | 47,731 | 50,849 | ||
Interest expense | 1,742 | 2,069 | 5,602 | 6,314 | ||
Total net operating income | 6,859 | 7,055 | 21,748 | 20,108 | ||
Assets | 408,002 | 408,002 | 406,690 | |||
Liabilities | 191,264 | 191,264 | 199,729 | |||
Real Estate-Related Segment [Member] | Operating Segments [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 644 | 756 | 2,193 | 2,223 | ||
Total net operating income | 643 | 756 | 2,191 | 2,221 | ||
Assets | 23,145 | 23,145 | 27,899 | |||
Liabilities | $ 13 | $ 13 | 3 | |||
GKK Properties Segment [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Number of states in which entity operates | state | 20 | 20 | ||||
GKK Properties Segment [Member] | Operating Segments [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | $ 12,586 | 27,568 | $ 53,276 | 86,315 | ||
Interest expense | 347 | 4,956 | 4,367 | 17,528 | ||
Total net operating income | 2,999 | $ 6,905 | 13,931 | $ 17,635 | ||
Assets | 165,695 | 165,695 | 232,973 | |||
Liabilities | $ 48,002 | $ 48,002 | $ 119,208 |
SEGMENT INFORMATION (Reconcilia
SEGMENT INFORMATION (Reconciliation of Net Income (Loss) to Net Operating Income (Loss)) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Segment Reporting [Abstract] | |||||
Net (loss) income | $ (9,294) | $ (47,411) | $ 62,706 | $ (19,071) | $ (11,387) |
Gain on sales of real estate | (7,910) | (806) | (128,845) | (49,865) | |
Loss from extinguishment of debt | 7,023 | 2,189 | 26,343 | 8,565 | |
Gain on sales of foreclosed real estate held for sale | 0 | 0 | 0 | (2,509) | |
Other income and interest income | (360) | (276) | (806) | (867) | |
Asset management fees to affiliate | 1,653 | 2,386 | 6,098 | 7,152 | |
Foreclosure fees and expenses | 0 | 0 | 275 | 0 | |
General and administrative expenses | 7,755 | 7,591 | 14,003 | 15,868 | |
Depreciation and amortization | 7,554 | 13,911 | 28,597 | 43,721 | |
Impairment charges on real estate | 4,080 | 34,933 | 29,574 | 34,933 | |
Provision for loan losses | 0 | 2,504 | 0 | 2,504 | |
Total (income) loss from discontinued operations | 0 | (305) | (75) | (467) | |
NOI | $ 10,501 | $ 14,716 | $ 37,870 | $ 39,964 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - $ / shares | Nov. 08, 2016 | Nov. 07, 2016 | Oct. 05, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 |
Subsequent Event [Line Items] | |||||||
Distributions declared per common share (in dollars per share) | $ 0.025 | $ 0.025 | $ 0.075 | $ 0.075 | |||
Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Distributions declared per common share (in dollars per share) | $ 0.025 | ||||||
Plan of liquidation, period of completion | 24 months | ||||||
Period of termination of advisory agreement renewal | 60 days |
COMMITMENTS AND CONTINGENCIES65
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | Sep. 30, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
October 1, 2016 through December 31, 2016 | $ 3,702 |
2,017 | 11,199 |
2,018 | 1,101 |
2,019 | 914 |
2,020 | 707 |
Thereafter | 26,736 |
Total future minimum lease payments | $ 44,359 |