Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Jul. 31, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | Behringer Harvard Opportunity REIT II, Inc. | |
Entity Central Index Key | 1,387,061 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 25,654,986 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Real estate | ||
Land and improvements, net | $ 57,300 | $ 60,374 |
Buildings and improvements, net | 216,820 | 228,650 |
Real estate under development | 589 | 274 |
Total real estate | 274,709 | 289,298 |
Real Estate Held-for-sale | 9,581 | 12,951 |
Cash and cash equivalents | 47,985 | 72,949 |
Restricted cash | 4,891 | 4,199 |
Accounts receivable, net | 2,530 | 2,208 |
Prepaid expenses and other assets | 842 | 1,402 |
Investment in unconsolidated joint venture | 14,222 | 13,973 |
Furniture, fixtures and equipment, net | 7,384 | 8,244 |
Deferred financing fees, net | 2,204 | 2,617 |
Lease intangibles, net | 320 | 1,850 |
Total assets | 364,668 | 409,691 |
Liabilities and Equity | ||
Notes payable | 206,152 | 216,294 |
Accounts payable | 594 | 702 |
Payables to related parties | 389 | 466 |
Acquired below-market leases, net | 88 | 210 |
Distributions payable to noncontrolling interest | 20 | 19 |
Income taxes payable | 1,648 | 0 |
Accrued and other liabilities | 8,029 | 6,232 |
Real Estate Liabilities Associated with Assets Held for Development and Sale | 95 | 9,212 |
Total liabilities | 217,015 | 233,135 |
Commitments and contingencies | 0 | 0 |
Equity | ||
Preferred stock, $.0001 par value per share; 50,000,000 shares authorized, none outstanding | 0 | 0 |
Convertible stock, $.0001 par value per share; 1,000 shares authorized, 1,000 outstanding | 0 | 0 |
Common stock, $.0001 par value per share; 350,000,000 shares authorized, 25,691,443 and 25,801,669 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively | 3 | 3 |
Additional paid-in capital | 230,480 | 231,240 |
Accumulated distributions and net loss | (90,342) | (62,477) |
Accumulated other comprehensive income | (22) | (246) |
Total Behringer Harvard Opportunity REIT II, Inc. equity | 140,119 | 168,520 |
Noncontrolling interest | 7,534 | 8,036 |
Total equity | 147,653 | 176,556 |
Total liabilities and equity | $ 364,668 | $ 409,691 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Convertible stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Convertible stock, shares authorized | 1,000 | 1,000 |
Convertible stock, shares outstanding | 1,000 | 1,000 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 350,000,000 | 350,000,000 |
Common stock, shares issued | 25,691,443 | 25,801,669 |
Common stock, shares outstanding | 25,691,443 | 25,801,669 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Revenues | ||||
Rental revenue | $ 8,465 | $ 7,889 | $ 16,951 | $ 15,770 |
Hotel revenue | 4,314 | 4,138 | 9,142 | 8,502 |
Total revenues | 12,779 | 12,027 | 26,093 | 24,272 |
Expenses | ||||
Property operating expenses | 2,767 | 2,625 | 5,664 | 5,349 |
Hotel operating expenses | 3,116 | 2,988 | 6,274 | 6,010 |
Interest expense, net | 1,746 | 2,055 | 3,567 | 4,118 |
Real estate taxes | 1,572 | 1,352 | 3,156 | 2,765 |
Property management fees | 418 | 403 | 864 | 830 |
Asset management fees | 717 | 98 | 1,442 | 1,068 |
General and administrative | 790 | 1,098 | 1,711 | 1,957 |
Acquisition Expense | 0 | 25 | 0 | 25 |
Depreciation and amortization | 3,949 | 3,400 | 8,402 | 7,062 |
Total expenses | 15,075 | 14,044 | 31,080 | 29,184 |
Interest income, net | 29 | 54 | 79 | 100 |
Loss on early extinguishment of debt | 0 | (454) | (119) | (454) |
Other loss | (130) | (3) | (169) | (3) |
Loss before gain on sale of real estate and income tax benefit (expense) | (2,397) | (2,420) | (5,196) | (5,269) |
Gain on sale of real estate | 0 | 11,445 | 5,320 | 11,445 |
Income tax benefit (expense) | 519 | 0 | (1,664) | 0 |
Loss before gain on sale of real estate and income tax benefit (expense) | (1,878) | 9,025 | (1,540) | 6,176 |
Net income (loss) | (1,878) | 9,025 | (1,540) | 6,176 |
Net (income) loss attributable to the noncontrolling interest | (82) | 159 | (593) | 124 |
Net income (loss) attributable to the Company | $ (1,960) | $ 9,184 | $ (2,133) | $ 6,300 |
Weighted average shares outstanding: | ||||
Basic and diluted (in shares) | 25,704 | 25,993 | 25,740 | 26,002 |
Basic and diluted income (loss) per share | ||||
Basic and diluted income (loss) per share (in dollars per share) | $ (0.07) | $ 0.35 | $ (0.08) | $ 0.24 |
Distributions declared per common share (in dollars per share) | $ 0 | $ 0 | $ 1 | $ 0 |
Comprehensive income (loss): | ||||
Net income (loss) | $ (1,878) | $ 9,025 | $ (1,540) | $ 6,176 |
Other comprehensive income (loss): | ||||
Reclassification of unrealized loss on interest rate derivatives to net income | 0 | 20 | 0 | 37 |
Reclassification of unrealized loss on currency translation to net income | 0 | 0 | 596 | 0 |
Foreign currency translation gain (loss) | 397 | (54) | (372) | (27) |
Total other comprehensive income (loss) | 397 | (34) | 224 | 10 |
Comprehensive income (loss) | (1,481) | 8,991 | (1,316) | 6,186 |
Comprehensive income (loss) attributable to noncontrolling interest | (82) | 155 | (593) | 117 |
Comprehensive income (loss) attributable to the Company | $ (1,563) | $ 9,146 | $ (1,909) | $ 6,303 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands | Total | Convertible Stock | Common Stock | Additional Paid-in Capital | Accumulated Distributions and Net (Loss) | Accumulated Other Comprehensive Income (loss) | Noncontrolling Interest |
Balance at Dec. 31, 2013 | $ 192,789 | $ 0 | $ 3 | $ 232,903 | $ (49,520) | $ 498 | $ 8,905 |
Balance (in shares) at Dec. 31, 2013 | 1 | 26,016 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | 6,176 | 6,300 | (124) | ||||
Redemption of common stock | (233) | (233) | |||||
Redemption of common stock (in shares) | (27) | ||||||
Noncontrolling Interest, Increase from Capital Contribution | 53 | ||||||
Distributions to noncontrolling interest | (495) | (495) | |||||
Reclassification of unrealized loss on currency translation to net income | 0 | ||||||
Other comprehensive income (loss): | |||||||
Reclassification of unrealized loss on interest rate derivatives to net income | 37 | 31 | 6 | ||||
Foreign currency translation loss | (27) | (27) | |||||
Balance at Jun. 30, 2014 | 198,300 | $ 0 | $ 3 | 232,670 | (43,220) | 502 | 8,345 |
Balance (in shares) at Jun. 30, 2014 | 1 | 25,989 | |||||
Balance at Dec. 31, 2014 | 176,556 | $ 0 | $ 3 | 231,240 | (62,477) | (246) | 8,036 |
Balance (in shares) at Dec. 31, 2014 | 1 | 25,802 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | (1,540) | (2,133) | 593 | ||||
Redemption of common stock | (760) | (760) | |||||
Redemption of common stock (in shares) | (110) | ||||||
Dividends, Common Stock | (25,732) | ||||||
Noncontrolling Interest, Increase from Capital Contribution | 154 | 154 | |||||
Distributions to noncontrolling interest | (1,249) | (1,249) | |||||
Reclassification of unrealized loss on currency translation to net income | 596 | 596 | |||||
Other comprehensive income (loss): | |||||||
Foreign currency translation loss | (372) | (372) | |||||
Balance at Jun. 30, 2015 | $ 147,653 | $ 0 | $ 3 | $ 230,480 | $ (90,342) | $ (22) | $ 7,534 |
Balance (in shares) at Jun. 30, 2015 | 1 | 25,692 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (1,540) | $ 6,176 |
Adjustments to reconcile net income (loss) to net cash flows provided by operating activities: | ||
Depreciation and amortization | 8,292 | 7,006 |
Amortization of deferred financing fees | 370 | 415 |
Gain on sale of real estate | (5,320) | (11,445) |
Loss on early extinguishment of debt | 119 | 454 |
Loss on derivatives | 15 | 159 |
Change in operating assets and liabilities: | ||
Accounts receivable | 330 | 356 |
Prepaid expenses and other assets | 544 | 156 |
Accounts payable | (107) | 444 |
Income taxes payable | 1,705 | 0 |
Accrued and other liabilities | 771 | (893) |
Payables to related parties | (76) | (97) |
Addition of lease intangibles | (6) | (87) |
Cash provided by operating activities | 5,097 | 2,644 |
Cash flows from investing activities: | ||
Acquisition deposits reimbursed | 0 | 500 |
Investment in unconsolidated joint venture | (249) | (249) |
Proceeds from sale of real estate | 18,244 | 46,290 |
Additions of property and equipment | (1,617) | (4,267) |
Change in restricted cash | (692) | (38) |
Cash provided by investing activities | 15,686 | 42,236 |
Cash flows from financing activities: | ||
Financing costs | (107) | (101) |
Payments on notes payable | (17,716) | (16,682) |
Redemptions of common stock | (760) | (233) |
Distributions paid on common stock | (25,732) | 0 |
Contributions from noncontrolling interest holders | 154 | 53 |
Distributions to noncontrolling interest holders | (1,249) | (443) |
Cash used in financing activities | (45,410) | (17,406) |
Effect of exchange rate changes on cash and cash equivalents | (337) | 14 |
Net change in cash and cash equivalents | (24,964) | 27,488 |
Cash and cash equivalents at beginning of period | 72,949 | 94,877 |
Cash and cash equivalents at end of period | $ 47,985 | $ 122,365 |
Business and Organization
Business and Organization | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Organization | Business and Organization Business Behringer Harvard Opportunity REIT II, Inc. (which may be referred to as the “Company,” “we,” “us,” or “our”) was organized as a Maryland corporation on January 9, 2007 and has elected to be taxed, and currently qualifies, as a real estate investment trust (“REIT”) for federal income tax purposes. We were formed primarily to acquire and operate commercial real estate and real estate-related assets on an opportunistic and value-add basis. In particular, we have focused generally on acquiring commercial properties with significant possibilities for capital appreciation, such as those requiring development, redevelopment, or repositioning, those located in markets and submarkets with high growth potential, and those available from sellers who are distressed or face time-sensitive deadlines. We have acquired a wide variety of commercial properties, including office, industrial, retail, hospitality and multifamily. We have purchased existing, income-producing properties and newly-constructed properties. We have also invested in a mortgage loan and a mezzanine loan. We are not actively seeking to purchase additional assets at this time, but may invest capital in our current assets in order to position them for sale in the normal course of business. We intend to hold the various real properties in which we have invested until such time as we determine that a sale or other disposition appears to be advantageous to achieve our investment objectives or until it appears that such objectives will not be met. As of June 30, 2015, we had 11 real estate investments, ten of which were consolidated in our condensed consolidated financial statements ( two wholly owned and eight properties consolidated through investments in joint ventures). We sold Babcock Self Storage (“Babcock”) and Alte Jakobstraße (“AJS”) on January 8, 2015 and February 21, 2015, respectively. We entered into a Purchase and Sale Agreement (“PSA”) effective July 16, 2015 to sell Holstenplatz, an office building located in Hamburg, Germany. Holstenplatz was classified as real estate held for sale on our condensed consolidated balance sheet at June 30, 2015. Substantially all of our business is conducted through Behringer Harvard Opportunity OP II LP, a limited partnership organized in Delaware (“Behringer Harvard Opportunity OP II”). As of June 30, 2015, our wholly-owned subsidiary, BHO II, Inc., a Delaware corporation, owned a 0.1% partnership interest in Behringer Harvard Opportunity OP II as its sole general partner. As of June 30, 2015, our wholly-owned subsidiary, BHO Business Trust II, a Maryland business trust, was the sole limited partner of Behringer Harvard Opportunity OP II and owned the remaining 99.9% interest in Behringer Harvard Opportunity OP II. We are externally managed and advised by Behringer Harvard Opportunity Advisors II, LLC (the “Advisor”). The Advisor is responsible for managing our day-to-day affairs and for identifying and making investments on our behalf. Organization In connection with our initial capitalization, we issued 22,471 shares of our common stock and 1,000 shares of our convertible stock to Behringer Harvard Holdings, LLC (“Behringer”) on January 19, 2007. Behringer transferred its shares of convertible stock to one of its affiliates on April 2, 2010. As of June 30, 2015, we had issued 26.7 million shares of our common stock, including 22,471 shares owned by Behringer and 2.2 million shares issued through the distribution reinvestment plan. As of June 30, 2015, we had redeemed 1 million shares of our common stock and had 25.7 million shares of common stock outstanding. As of June 30, 2015, we had 1,000 shares of convertible stock outstanding held by an affiliate of Behringer. Our common stock is not currently listed on a national securities exchange. The timing of a liquidity event will depend upon then prevailing market conditions. We currently intend to consider the process of disposing assets, liquidating, and distributing the net proceeds to our stockholders no later than six years after the termination of our initial public offering of common stock, which occurred on July 3, 2011. Economic or market conditions may, however, result in different holding periods for different assets. |
Interim Unaudited Financial Inf
Interim Unaudited Financial Information | 6 Months Ended |
Jun. 30, 2015 | |
Interim Unaudited Financial Information | |
Interim Unaudited Financial Information | Interim Unaudited Financial Information The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014, which was filed with the SEC on March 20, 2015. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted in this report on Form 10-Q pursuant to the rules and regulations of the SEC. The results for the interim periods shown in this report are not necessarily indicative of future financial results. The accompanying condensed consolidated balance sheet as of June 30, 2015, the condensed consolidated statements of operations and comprehensive income for the three and six months ended June 30, 2015 and 2014 and condensed consolidated statements of equity and cash flows for the six months ended June 30, 2015 and 2014 have not been audited by our independent registered public accounting firm. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments necessary to fairly present our condensed consolidated financial position as of June 30, 2015 and December 31, 2014 and our condensed consolidated results of operations and cash flows for the periods ended June 30, 2015 and 2014. Such adjustments are of a normal recurring nature. In the Notes to Condensed Consolidated Financial Statements, all dollar and share amounts in tabulation are in thousands of dollars and shares, respectively, unless otherwise noted. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 3. Summary of Significant Accounting Policies Described below are certain of our significant accounting policies. The disclosures regarding several of the policies have been condensed or omitted in accordance with interim reporting regulations specified by Form 10-Q. Please see our Annual Report on Form 10-K for a complete listing of all of our significant accounting policies. Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates include such items as purchase price allocation for real estate acquisitions, impairment of long-lived assets, depreciation and amortization, and allowance for doubtful accounts. Actual results could differ from those estimates. Principles of Consolidation and Basis of Presentation Our condensed consolidated financial statements include our accounts and the accounts of other subsidiaries over which we have control. All inter-company transactions, balances, and profits have been eliminated in consolidation. Interests in entities acquired will be evaluated based on applicable GAAP, which includes the requirement to consolidate entities deemed to be variable interest entities (“VIE”) in which we are the primary beneficiary. If the interest in the entity is determined not to be a VIE, then the entity will be evaluated for consolidation based on legal form, economic substance, and the extent to which we have control, or substantive participating rights or both under the respective ownership agreement. For entities in which we have less than a controlling interest or entities which we are not deemed to be the primary beneficiary, we account for the investment using the equity method of accounting. There are judgments and estimates involved in determining if an entity in which we have made an investment is a VIE and, if so, whether we are the primary beneficiary. The entity is evaluated to determine if it is a VIE by, among other things, calculating the percentage of equity being risked compared to the total equity of the entity. Determining expected future losses involves assumptions of various possibilities of the results of future operations of the entity, assigning a probability to each possibility and using a discount rate to determine the net present value of those future losses. A change in the judgments, assumptions, and estimates outlined above could result in consolidating an entity that should not be consolidated or accounting for an investment using the equity method that should in fact be consolidated, the effects of which could be material to our financial statements. Real Estate Upon the acquisition of real estate properties, we recognize the assets acquired, the liabilities assumed and any noncontrolling interest as of the acquisition date, measured at their fair values. The acquisition date is the date on which we obtain control of the real estate property. The assets acquired and liabilities assumed may consist of land, inclusive of associated rights, buildings, assumed debt, identified intangible assets and liabilities and asset retirement obligations. Identified intangible assets generally consist of above-market leases, in-place leases, in-place tenant improvements, in-place leasing commissions and tenant relationships. Identified intangible liabilities generally consist of below-market leases. Goodwill is recognized as of the acquisition date and measured as the aggregate fair value of the consideration transferred and any noncontrolling interests in the acquiree over the fair value of the identifiable net assets acquired. Likewise, a bargain purchase gain is recognized in current earnings when the aggregate fair value of the consideration transferred and any noncontrolling interests in the acquiree is less than the fair value of the identifiable net assets acquired. Acquisition-related costs are expensed in the period incurred. Initial valuations are subject to change until our information is finalized, which is no later than twelve months from the acquisition date. The fair value of the tangible assets acquired, consisting of land and buildings, is determined by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to land and buildings. Land values are derived from appraisals, and building values are calculated as replacement cost less depreciation or management’s estimates of the fair value of these assets using discounted cash flow analyses or similar methods believed to be used by market participants. The value of hotels and all other buildings is depreciated over the estimated useful lives of 39 years and 25 years , respectively, using the straight-line method. We determine the fair value of assumed debt by calculating the net present value of the scheduled mortgage payments using interest rates for debt with similar terms and remaining maturities that management believes we could obtain at the date of the debt assumption. Any difference between the fair value and stated value of the assumed debt is recorded as a discount or premium and amortized over the remaining life of the loan using the effective interest method. We determine the value of above-market and below-market leases for acquired properties based on the present value (using an interest rate that reflects the risks associated with the leases acquired) of the difference between (1) the contractual amounts to be paid pursuant to the in-place leases and (2) management’s estimate of current market lease rates for the corresponding in-place leases, measured over a period equal to (a) the remaining non-cancelable lease term for above-market leases or (b) the remaining non-cancelable lease term plus any below-market fixed rate renewal options that, based on a qualitative assessment of several factors, including the financial condition of the lessee, the business conditions in the industry in which the lessee operates, the economic conditions in the area in which the property is located, and the ability of the lessee to sublease the property during the renewal term, are reasonably assured to be exercised by the lessee for below-market leases. We record the fair value of above-market and below-market leases as intangible assets or intangible liabilities, respectively, and amortize them as an adjustment to rental income over the determined lease term. The total value of identified real estate intangible assets acquired is further allocated to in-place leases, in-place tenant improvements, in-place leasing commissions, and tenant relationships based on our evaluation of the specific characteristics of each tenant’s lease and our overall relationship with that respective tenant. The aggregate value for tenant improvements and leasing commissions is based on estimates of these costs incurred at inception of the acquired leases, amortized through the date of acquisition. The aggregate value of in-place leases acquired and tenant relationships is determined by applying a fair value model. The estimates of fair value of in-place leases include an estimate of carrying costs during the expected lease-up periods for the respective spaces considering existing market conditions. In estimating the carrying costs that would have otherwise been incurred had the leases not been in place, we include such items as real estate taxes, insurance, and other operating expenses as well as lost rental revenue during the expected lease-up period based on existing market conditions. The estimates of the fair value of tenant relationships also include costs to execute similar leases including leasing commissions, legal fees, and tenant improvements as well as an estimate of the likelihood of renewal as determined by management on a tenant-by-tenant basis. We amortize the value of in-place leases, in-place tenant improvements, and in-place leasing commissions to expense over the initial term of the respective leases. In no event does the amortization period for intangible assets or liabilities exceed the remaining depreciable life of the building. Should a tenant terminate its lease, the unamortized portion of the acquired lease intangibles related to that tenant would be charged to expense. Anticipated amortization expense associated with the acquired lease intangibles for each of the following five years as of June 30, 2015 was as follows: Year Lease / Other Intangibles July 1, 2015 - December 31, 2015 $ 18 2016 36 2017 20 2018 (14 ) 2019 (12 ) _________________________ (1) Excludes Holstenplatz which was classified as held for sale as of June 30, 2015. The anticipated amortization expense of Holstenplatz over the next five years is $0.2 million . As of June 30, 2015 and December 31, 2014, accumulated depreciation and amortization related to our consolidated investments in real estate assets and intangibles were as follows: June 30, 2015 Buildings and Improvements Land and Improvements Lease Intangibles Acquired Cost (1) $ 244,605 $ 59,759 $ 3,023 $ (184 ) Less: depreciation and amortization (1) (27,785 ) (2,459 ) (2,703 ) 96 Net $ 216,820 $ 57,300 $ 320 $ (88 ) ______________________________________________ (1) Excludes Holstenplatz, which was classified as held for sale as of June 30, 2015. We entered into a PSA effective July 16, 2015 to sell Holstenplatz, an office building located in Germany. Net book values included in assets associated with real estate held for sale on the condensed consolidated balance sheet were buildings and improvements of $6.8 million , land and improvements of $2.5 million , lease intangibles of $0.4 million , and acquired below-market leases of less than $0.1 million . See Note 8, Real Estate Held for Sale. December 31, 2014 Buildings and Improvements Land and Improvements Lease Intangibles Acquired Cost (1) $ 252,812 $ 62,447 $ 4,551 $ (469 ) Less: depreciation and amortization (1) (24,162 ) (2,073 ) (2,701 ) 259 Net $ 228,650 $ 60,374 $ 1,850 $ (210 ) ______________________________________________ (1) Excludes Babcock and AJS, which were classified as held for sale as of December 31, 2014. These two properties sold on January 8, 2015 and February 21, 2015, respectively. Net book values included in assets associated with real estate held for sale in the consolidated balance sheet were buildings and improvements of $9.6 million , land and improvements of $3.2 million , lease intangibles of $0.2 million , and acquired below-market leases of less than $0.1 million . See Note 8, Real Estate Held for Sale. Real Estate Held for Sale and Discontinued Operations We classify properties as held for sale when certain criteria are met in accordance with GAAP. At that time, we present the assets and obligations of the property held for sale separately in our consolidated balance sheet and we cease recording depreciation and amortization expense related to that property. Properties held for sale are reported at the lower of their carrying amount or their estimated fair value, less estimated costs to sell. As of June 30, 2015, we were in active negotiations for the disposal of Holstenplatz, and on July 16, 2015, we entered into a PSA to sell Holstenplatz, an office building located in Germany and our only remaining foreign operation at June 30, 2015. The prospective buyer has substantially completed the due diligence process and we believe the sale is probable within the next twelve months. Therefore, we classified Holstenplatz as real estate held for sale in our condensed consolidated balance sheet at June 30, 2015. During the fourth quarter of 2014, we entered into PSAs for Babcock, a self storage facility in Texas, and AJS, an office building located in Germany, and classified Babcock and AJS as real estate held for sale in our consolidated balance sheet at December 31, 2014. We sold Babcock on January 8, 2015 and AJS on February 21, 2015. Effective as of April 1, 2014, we adopted the revised guidance in Accounting Standards Update No. 2014-08 regarding discontinued operations. For sales of real estate or assets classified as held for sale after April 1, 2014, we will evaluate whether a disposal transaction meets the criteria of a strategic shift and will have a major effect on our operations and financial results to determine if the results of operations and gains on sale of real estate will be presented as part of our continuing operations or as discontinued operations in our consolidated statements of operations. If the disposal represents a strategic shift, it will be classified as discontinued operations for all periods presented; if not, it will be presented in continuing operations. Investment Impairment For all of our real estate and real estate-related investments, we monitor events and changes in circumstances indicating that the carrying amounts of the real estate assets may not be recoverable. Examples of the types of events and circumstances that would cause management to assess our assets for potential impairment include, but are not limited to: a significant decrease in the market price of an asset; a significant adverse change in the manner in which the asset is being used; an accumulation of costs in excess of the acquisition basis plus construction of the property; major vacancies and the resulting loss of revenues; natural disasters; a change in the projected holding period; legitimate purchase offers and changes in the global and local markets or economic conditions. Our assets may at times be concentrated in limited geographic locations, and to the extent that our portfolio is concentrated in limited geographic locations, downturns specifically related to such regions may result in tenants defaulting on their lease obligations at those properties within a short time period, which may result in asset impairments. When such events or changes in circumstances are present, we assess potential impairment by comparing estimated future undiscounted operating cash flows expected to be generated over the life of the asset and from its eventual disposition to the carrying amount of the asset. These projected cash flows are prepared internally by the Advisor and reflect in-place and projected leasing activity, market revenue and expense growth rates, market capitalization rates, discount rates, and changes in economic and other relevant conditions. The Company’s principal executive officer and principal financial officer, as well as a panel of asset managers and a financial analyst of the Advisor, review these projected cash flows to assure that the valuation is prepared using reasonable inputs and assumptions that are consistent with market data or with assumptions that would be used by a third-party market participant and assume the highest and best use of the investment. We consider trends, strategic decisions regarding future development plans, and other factors in our assessment of whether impairment conditions exist. In the event that the carrying amount exceeds the estimated future undiscounted operating cash flows, we recognize an impairment loss to adjust the carrying amount of the asset to estimated fair value. While we believe our estimates of future cash flows are reasonable, different assumptions regarding factors such as market rents, economic conditions, and occupancy rates could significantly affect these estimates. In evaluating our investments for impairment, management may use appraisals and make estimates and assumptions, including, but not limited to, the projected date of disposition of the properties, the estimated future cash flows of the properties during our ownership, and the projected sales price of each of the properties. A future change in these estimates and assumptions could result in understating or overstating the carrying value of our investments, which could be material to our financial statements. In addition, we may incur impairment charges on assets classified as held for sale in the future if the carrying amount of the asset upon classification as held for sale exceeds the estimated fair value, less costs to sell. We also evaluate our investments in unconsolidated joint ventures at each reporting date. If we believe there is an other than temporary decline in market value, we will record an impairment charge based on these evaluations. We assess potential impairment by comparing our portion of estimated future undiscounted operating cash flows expected to be generated by the joint venture over the life of the joint venture’s assets to the carrying amount of the joint venture. In the event that the carrying amount exceeds our portion of estimated future undiscounted operating cash flows, we recognize an impairment loss to adjust the carrying amount of the joint venture to its estimated fair value. We believe the carrying value of our operating real estate is currently recoverable. Accordingly, there were no impairment charges for the three and six months ended June 30, 2015 and 2014. However, if market conditions worsen unexpectedly or if changes in our strategy significantly affect any key assumptions used in our fair value calculations, we may need to take charges in future periods for impairments related to our existing investments. Any such non-cash charges would have an adverse effect on our consolidated financial position and results of operations. Investment in Unconsolidated Joint Venture We provide funding to third-party developers for the acquisition, development, and construction of real estate (“ADC Arrangement”). Under the ADC Arrangement, we may participate in the residual profits of the project through the sale or refinancing of the property. We evaluate this arrangement to determine if it has characteristics similar to a loan or if the characteristics are more similar to a joint venture or partnership such as participating in the risks and rewards of the project as an owner or an investment partner. When we determine that the characteristics are more similar to a jointly-owned investment or partnership, we account for the arrangement as an investment in an unconsolidated joint venture under the equity method of accounting or a direct investment (consolidated basis of accounting) instead of applying loan accounting. The ADC Arrangement is reassessed at each reporting period. See Note 9, Investment in Unconsolidated Joint Venture, for further discussion. Revenue Recognition We recognize rental income generated from leases of our operating properties on a straight-line basis over the terms of the respective leases, including the effect of rent holidays, if any. Straight-line rent was income of less than $0.1 million recognized in rental revenues for the three and six months ended June 30, 2015. Straight-line rent was a charge of less than $0.1 million recognized in rental revenues for the three and six months ended June 30, 2014. Leases associated with our multifamily, student housing, and hotel assets are generally short-term in nature, and thus have no straight-line rent. Net below-market lease amortization was income of less than $0.1 million recognized in rental revenues for the three and six months ended June 30, 2015. Net above-market lease amortization was a charge of less than $0.1 million recognized in rental revenues for the three and six months ended June 30, 2014. Hotel revenue is derived from the operations of the Courtyard Kauai Coconut Beach Hotel and consists primarily of guest room, food and beverage, and other ancillary revenues such as laundry and parking. Hotel revenue is recognized as the services are rendered. Accounts Receivable Accounts receivable primarily consist of receivables related to our consolidated properties of $2.5 million and $2.2 million as of June 30, 2015 and December 31, 2014, respectively, and included straight-line rental revenue receivables of $0.4 million and $0.6 million as of June 30, 2015 and December 31, 2014, respectively. Furniture, Fixtures, and Equipment Furniture, fixtures, and equipment are recorded at cost and are depreciated according to the Company’s capitalization policy, which uses the straight-line method over their estimated useful lives of five to seven years . Furniture, fixtures and equipment associated with properties classified as held for sale are not depreciated. Maintenance and repairs are charged to operations as incurred. Accumulated depreciation associated with our furniture, fixtures, and equipment was $7.7 million and $6.4 million as of June 30, 2015 and December 31, 2014, respectively. Deferred Financing Fees Deferred financing fees are recorded at cost and are amortized to interest expense of our notes payable using a straight-line method that approximates the effective interest method over the life of the related debt. Accumulated amortization of deferred financing fees was $2.3 million and $2.2 million as of June 30, 2015 and December 31, 2014, respectively. Income Taxes We have elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), and have qualified as a REIT since the year ended December 31, 2008. To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we distribute at least 90% of our REIT taxable income to our stockholders. As a REIT, we generally will not be subject to federal income tax at the corporate level. We are organized and operate in such a manner as to qualify for taxation as a REIT under the Code and intend to continue to operate in such a manner, but no assurance can be given that we will operate in a manner so as to qualify or remain qualified as a REIT. Taxable income from non-REIT activities managed through a taxable REIT subsidiary (“TRS”) is subject to applicable federal, state, and local income and margin taxes. We have no taxable income associated with a TRS. Our operating partnerships are flow-through entities and are not subject to federal income taxes at the entity level. The Company recorded a provision for income tax of approximately $2.2 million in the first quarter of 2015 as a result of estimated foreign income tax related to the sale of AJS which is located in Berlin, Germany. The foreign income tax was calculated on gains recognized at the exchange rate in effect on the sale date of February 21, 2015 and calculated using current tax rates. During the second quarter of 2015, we recorded a credit of $0.5 million to the provision for income tax based on a change in the estimated taxes payable on the sale of AJS. We have reviewed our tax positions under GAAP guidance that clarify the relevant criteria and approach for the recognition and measurement of uncertain tax positions. The guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition of a tax position taken, or expected to be taken, in a tax return. A tax position may only be recognized in the financial statements if it is more likely than not that the tax position will be sustained upon examination. We believe it is more likely than not that the tax positions taken relative to our federal tax status as a REIT will be sustained in any tax examination. Foreign Currency Translation For our international investments where the functional currency is other than the U.S. dollar, assets and liabilities are translated using period-end exchange rates, while the statement of operations amounts are translated using the average exchange rates for the respective period. Gains and losses resulting from the change in exchange rates from period to period are reported separately as a component of other comprehensive income (loss) (“OCI”) as a separate component. Gains and losses resulting from foreign currency transactions are included in the condensed consolidated statements of operations and comprehensive income (loss). The Euro is the functional currency for the operations of Holstenplatz and AJS. We sold AJS in the first quarter of 2015. We also maintain a Euro-denominated bank account that is translated into U.S. dollars at the current exchange rate at each reporting period. For the three and six months ended June 30, 2015, the foreign currency translation adjustment was a gain of $0.4 million and a loss of $0.4 million , respectively. For the three and six months ended June 30, 2014, the foreign currency translation adjustment was a loss of less than $0.1 million . When the Company has substantially liquidated its investment in a foreign entity, the cumulative translation adjustment (“CTA”) balance is required to be released into earnings. During the first quarter of 2015, we recognized a CTA of approximately $0.6 million as a reduction to the gain on sale of our AJS office building which we sold on February 21, 2015. Our wholly owned investment in the Holstenplatz office building, located in Hamburg, Germany, is our only remaining foreign operation and is classified as real estate held for sale at June 30, 2015. The cumulative balance of our foreign currency translation for Holstenplatz is a gain of $0.3 million at June 30, 2015. In accordance with ASU 2013-05, upon disposal of the property, we would recognize the CTA as an adjustment to the gain on sale. Concentration of Credit Risk At June 30, 2015 and December 31, 2014, we had cash and cash equivalents deposited in certain financial institutions in excess of federally insured levels. We have diversified our cash and cash equivalents among several banking institutions in an attempt to minimize exposure to any one of these entities. We regularly monitor the financial stability of these financial institutions and believe that we are not exposed to any significant credit risk in cash and cash equivalents or restricted cash. Geographic and Asset Type Concentration Our investments in target assets may at times be concentrated in certain asset types that are subject to higher risk of foreclosure, or secured by assets concentrated in a limited number of geographic locations. For the six months ended June 30, 2015, excluding Holstenplatz, which was classified as real estate held for sale at June 30, 2015, and Babcock and AJS which were sold in the first quarter of 2015, 36% and 20% of our total revenues were derived from our properties located in Hawaii and Florida, respectively. Additionally, excluding Holstenplatz, Babcock, and AJS, 44% , 36% , and 16% of our total revenues for the six months ended June 30, 2015 were from our multifamily, hotel, and student housing investments, respectively. To the extent that our portfolio is concentrated in limited geographic regions or types of assets, downturns relating generally to such region or type of asset may result in defaults on a number of our investments within a short time period, which may reduce our net income and the value of our common stock and accordingly limit our ability to fund our operations. Noncontrolling Interest Noncontrolling interest represents the noncontrolling ownership interest’s proportionate share of the equity in our consolidated real estate investments. Income and losses are allocated to noncontrolling interest holders based generally on their ownership percentage. In certain instances, our joint venture agreement provides for liquidating distributions based on achieving certain return metrics (“promoted interest”). If a property reaches a defined return threshold, then it will result in distributions to noncontrolling interest which is different from the standard pro-rata allocation percentage. Earnings per Share Net income (loss) per share is calculated based on the weighted average number of common shares outstanding during each period. The weighted average shares outstanding used to calculate both basic and diluted loss per share were the same for each of the three and six months ended June 30, 2015 and 2014, as there were no potentially dilutive securities outstanding. Subsequent Events We have evaluated subsequent events for recognition or disclosure in our condensed consolidated financial statements. |
New Accounting Pronouncements
New Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2015 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued an update (“ASU 2014-09”) to ASC Topic 606, Revenue from Contracts with Customers. ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. ASU 2014-09 requires an entity to recognize revenue when it transfers 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 or services and also requires certain additional disclosures. ASU 2014-09 is effective for public companies for interim and annual reporting periods beginning after December 15, 2017. This effective date is adjusted for a one-year deferral of the new revenue standard which was confirmed by FASB in the July 2015 meeting. In addition, early adoption will be permitted as of the original effective date in ASU 2014-09, which for public companies was annual reporting periods beginning after December 15, 2016, including interim reporting periods within those annual periods. Either full retrospective adoption or modified retrospective adoption is permitted. We are currently evaluating the impact of the adoption of ASU 2014-09 on our consolidated financial statements. In February 2015, the FASB issued an update (“ASU No. 2015-02”) to ASC Topic 810, Amendments to the Consolidation Analysis. ASU 2015-02 makes several modifications to the consolidation guidance for VIEs and general partners’ investments in limited partnerships, as well as modifications to the evaluation of whether limited partnerships are VIEs or voting interest entities. The amendments in ASU 2015-02 are effective for public companies in interim and annual reporting periods in fiscal years beginning after December 15, 2015. Early adoption is permitted. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements. In April 2015, the FASB issued an update (“ASU 2015-03”) to ASC Topic 835, Interest - Imputation of Interest, Simplifying the Presentation of Debt Issuance Costs. The amendments in ASU 2015-03 require debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with debt discounts, instead of being presented as a deferred charge. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this updated guidance. ASU 2015-03 is effective for public companies in interim and annual reporting periods beginning after December 15, 2015. Early adoption is permitted. The new guidance requires retrospective application. As of June 30, 2015, we have $2.2 million of net deferred financing costs that would be reclassified from a long-term asset to a reduction in the carrying amount of our debt. |
Assets and Liabilities Measured
Assets and Liabilities Measured at Fair Value | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |
Assets and Liabilities Measured at Fair Value | Assets and Liabilities Measured at Fair Value Fair value measurements are determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy) has been established. Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets and liabilities that we have the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability that are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Recurring Fair Value Measurements Currently, we use interest rate swaps and caps to manage our interest rate risk. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves, implied volatilities, and foreign currency exchange rates. We incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by itself and its counterparties. However, as of June 30, 2015, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives. As a result, we have determined that our derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. The following fair value hierarchy table presents information about our assets measured at fair value on a recurring basis as of June 30, 2015 and December 31, 2014: June 30, 2015 Level 1 Level 2 Level 3 Total Assets Derivative financial instruments $ — $ 5 $ — $ 5 December 31, 2014 Level 1 Level 2 Level 3 Total Assets Derivative financial instruments $ — $ 28 $ — $ 28 Derivative financial instruments classified as assets are included in prepaid expenses and other assets on the balance sheet. |
Financial Instruments not Repor
Financial Instruments not Reported at Fair Value | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments not Reported at Fair Value | inancial Instruments not Reported at Fair Value We determined the following disclosure of estimated fair values using available market information and appropriate valuation methodologies. However, considerable judgment is necessary to interpret market data and develop the related estimates of fair value. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. As of June 30, 2015 and December 31, 2014, management estimated that the carrying value of cash and cash equivalents, restricted cash, accounts receivable, prepaid expenses and other assets, accounts payable, accrued expenses, other liabilities, payables/receivables from related parties, and distributions payable to noncontrolling interests were at amounts that reasonably approximated their fair value based on their highly-liquid nature and/or short-term maturities. The notes payable of $206.2 million as of June 30, 2015 and $216.3 million , excluding $9.1 million of contractual obligations on real estate held for sale as of December 31, 2014, have a fair value of approximately $205.9 million and $217.1 million as of June 30, 2015 and December 31, 2014, respectively, based upon interest rates for debt with similar terms and remaining maturities that management believes we could obtain. The fair value of the notes payable is categorized as a Level 2 basis. The fair value is estimated using a discounted cash flow analysis valuation on the borrowing rates currently available for loans with similar terms and maturities. The fair value of the notes payable was determined by discounting the future contractual interest and principal payments by a market rate. Disclosure about fair value of financial instruments is based on pertinent information available to management as of June 30, 2015 and December 31, 2014. |
Real Estate and Real Estate-Rel
Real Estate and Real Estate-Related Investments | 6 Months Ended |
Jun. 30, 2015 | |
Real Estate [Abstract] | |
Real Estate and Real Estate-Related Investments | Real Estate and Real Estate-Related Investments As of June 30, 2015, we consolidated ten real estate assets, including Holstenplatz, which was classified as real estate held for sale in our condensed consolidated balance sheet. The following table presents certain information about our consolidated investments as of June 30, 2015: Property Name Description Location Date Acquired Ownership Interest Holstenplatz (1) Office building Hamburg, Germany June 30, 2010 100% Gardens Medical Pavilion (2) Medical office building Palm Beach Gardens, Florida October 20, 2010 80.4% Courtyard Kauai Coconut Beach Hotel Hotel Kauai, Hawaii October 20, 2010 80% River Club and the Townhomes at River Club Student housing Athens, Georgia April 25, 2011 85% Lakes of Margate Multifamily Margate, Florida October 19, 2011 92.5% Arbors Harbor Town Multifamily Memphis, Tennessee December 20, 2011 94% Wimberly at Deerwood (“Wimberly”) Multifamily Jacksonville, Florida February 19, 2013 95% 22 Exchange Student housing Akron, Ohio April 16, 2013 90% Parkside Apartments (“Parkside”) Multifamily Sugar Land, Texas August 8, 2013 90% Lakewood Flats Multifamily Dallas, Texas October 10, 2014 100% _________________________________________ (1) We entered into a PSA effective July 16, 2015 to sell Holstenplatz, an office building located in Hamburg, Germany. Holstenplatz is classified as real estate held for sale in our condensed consolidated balance sheet at June 30, 2015. (2) We acquired a portfolio of eight medical office buildings, known as the Original Florida MOB Portfolio on October 8, 2010. We acquired a medical office building known as Gardens Medical Pavilion on October 20, 2010. Collectively, the Original Florida MOB Portfolio and Gardens Medical Pavilion were referred to as the Florida MOB Portfolio. The Florida MOB Portfolio consisted of nine medical office buildings. On September 20, 2013, we sold the Original Florida MOB Portfolio. As of June 30, 2015, we own approximately 80.4% of the ninth building, Gardens Medical Pavilion. Real Estate Asset Dispositions Babcock Self Storage On January 8, 2015, we sold Babcock for a contract sales price of approximately $5.4 million . We recorded a gain on sale of real estate of $2.0 million and loss on early extinguishment of debt of less than $0.1 million , which was composed of the write-off of deferred financing fees and an early termination fee. A portion of the proceeds from the sale were used to pay off in full the existing indebtedness of approximately $2.1 million associated with the storage facility. Babcock was classified as held for sale on our consolidated balance sheet at December 31, 2014. Alte Jakobstraße On February 21, 2015, we sold AJS, which is located in Berlin, Germany, for a contract sales price of approximately €12.4 million (approximately $14.1 million ). We recorded a gain on sale of real estate of approximately $3.3 million which is net of a CTA of approximately $0.6 million . We recognized a loss on early extinguishment of debt of less than $0.1 million , which was composed of the write-off of deferred financing fees and an early termination fee. A portion of the proceeds from the sale were used to fully satisfy the existing indebtedness associated with the property of approximately €5.7 million (approximately $6.5 million ). The Company recorded a provision for income tax of approximately $2.2 million during the first quarter of 2015 as a result of foreign income tax related to the sale. The foreign income tax was calculated on gains recognized at the exchange rate in effect on the sale date of February 21, 2015 and calculated using current tax rates. During the second quarter of 2015, we recorded a credit of $0.5 million to the provision for income tax based on a change in the estimated taxes payable on the sale of AJS. All U.S. dollar amounts related to the AJS sale are based on the exchange rate in effect on February 21, 2015. AJS was classified as held for sale on our consolidated balance sheet at December 31, 2014. Sales of Real Estate Reported in Continuing Operations The Company does not view the disposals of Babcock and AJS in the first quarter of 2015 or the disposal of 1875 Lawrence in the second quarter of 2014 as a strategic shift. Therefore, the results of operations for Babcock and AJS are presented in continuing operations in the consolidated statements of operations for the six months ended June 30, 2015 and the results of operations for all three investments are presented in continuing operations in the consolidated statements of operations for the three and six months ended June 30, 2014. The following table presents our sales of real estate for the six months ended June 30, 2015 ($ in millions): Date of Sale Property Ownership Interest Sales Contract Price Net Cash Proceeds (1) Gain on Sale of Real Estate January 8, 2015 Babcock Self Storage 85% $ 5.4 $ 5.2 $ 2.0 February 21, 2015 Alte Jakobstraße 99.7% $ 14.1 $ 13.0 $ 3.3 ______________________________________ (1) A portion of the net cash proceeds was used to pay off the property-associated debt of $8.6 million . In addition, we sold our 1875 Lawrence office building on May 30, 2014, which is included in continuing operations for the three and six months ended June 30, 2014. The following table presents net income attributable to the Company for the three and six months ended June 30, 2015 and 2014 related to Holstenplatz (classified as Real Estate Held for Sale at June 30, 2015, see Note 8), Babcock, AJS, and 1875 Lawrence. Net income for the three and six months ended June 30, 2014 includes the gain on sale of 1875 Lawrence of $ 11.4 million . Net income for the six months ended June 30, 2015 includes the gain on sale of AJS and Babcock for a total of $5.3 million (in millions): For the Three Months Ended June 30, For the Six Months Description 2015 2014 2015 2014 Net income attributable to the Company $ 0.5 $ 10.6 $ 2.9 $ 9.9 Real Estate Held for Sale As of June 30, 2015, Holstenplatz was classified as real estate held for sale on our condensed consolidated balance sheet. As of December 31, 2014, Babcock and AJS were classified as real estate held for sale on our consolidated balance sheet. We sold Babcock and AJS in the first quarter of 2015. In 2010, we acquired Holstenplatz, an office building located in Hamburg, Germany, with the investment objective of increasing net operating income through longer lease terms and increased rents. On July 16, 2015, we entered into a PSA to sell Holstenplatz to an unaffiliated third party for a contract sales price of approximately €16.5 million or approximately $18.1 million based on the exchange rate in effect on July 16, 2015. The prospective buyer has substantially completed the due diligence process and we believe the sale is probable within the next twelve months. Therefore, we classified Holstenplatz as real estate held for sale in our condensed consolidated balance sheet at June 30, 2015. The classification of Holstenplatz as real estate held for sale as of June 30, 2015 did not represent a strategic shift and did not have a major effect on the Company’s operations and financial results. Therefore, the results of operations for Holstenplatz are presented in continuing operations in the consolidated statements of operations for the three and six months ended June 30, 2015 and 2014. See Note 7, Real Estate and Real Estate-Related Investments, for total net income included in continuing operations for Holstenplatz, Babcock, AJS and 1875 Lawrence for the three and six months ended June 30, 2015 and 2014. The major classes of assets and liabilities associated with our real estate held for sale as of June 30, 2015 and December 31, 2014 were as follows: Real Estate Held for Sale as of Description June 30, 2015 December 31, 2014 Land and improvements, net $ 2,456 $ 3,195 Building and improvements, net 6,761 9,581 Lease intangibles, net 351 175 Furniture, fixtures and equipment, net 13 — Assets associated with real estate held for sale $ 9,581 $ 12,951 Notes payable (1) $ — $ 9,122 Other 95 90 Obligations associated with real estate held for sale $ 95 $ 9,212 ___________________________ (1) We paid off the Holstenplatz debt of approximately $8.1 million on April 30, 2015, its maturity date. On July 20, 2015, we entered into a PSA to sell Wimberly to an unaffiliated third party for a contract sales price of approximately $43.5 million . We acquired Wimberly on February 19, 2013. As of June 30, 2015, we were still in active negotiations and the due diligence process was not complete. In addition, at the time of filing this report on Form 10-Q, we cannot give any assurances that the closing of this sale is probable within the next twelve months. Therefore, we determined Wimberly did not meet the requirements to be classified as held for sale at June 30, 2015. |
Real Estate Held for Sale
Real Estate Held for Sale | 6 Months Ended |
Jun. 30, 2015 | |
Real Estate [Abstract] | |
Real Estate Held for Sale | Real Estate and Real Estate-Related Investments As of June 30, 2015, we consolidated ten real estate assets, including Holstenplatz, which was classified as real estate held for sale in our condensed consolidated balance sheet. The following table presents certain information about our consolidated investments as of June 30, 2015: Property Name Description Location Date Acquired Ownership Interest Holstenplatz (1) Office building Hamburg, Germany June 30, 2010 100% Gardens Medical Pavilion (2) Medical office building Palm Beach Gardens, Florida October 20, 2010 80.4% Courtyard Kauai Coconut Beach Hotel Hotel Kauai, Hawaii October 20, 2010 80% River Club and the Townhomes at River Club Student housing Athens, Georgia April 25, 2011 85% Lakes of Margate Multifamily Margate, Florida October 19, 2011 92.5% Arbors Harbor Town Multifamily Memphis, Tennessee December 20, 2011 94% Wimberly at Deerwood (“Wimberly”) Multifamily Jacksonville, Florida February 19, 2013 95% 22 Exchange Student housing Akron, Ohio April 16, 2013 90% Parkside Apartments (“Parkside”) Multifamily Sugar Land, Texas August 8, 2013 90% Lakewood Flats Multifamily Dallas, Texas October 10, 2014 100% _________________________________________ (1) We entered into a PSA effective July 16, 2015 to sell Holstenplatz, an office building located in Hamburg, Germany. Holstenplatz is classified as real estate held for sale in our condensed consolidated balance sheet at June 30, 2015. (2) We acquired a portfolio of eight medical office buildings, known as the Original Florida MOB Portfolio on October 8, 2010. We acquired a medical office building known as Gardens Medical Pavilion on October 20, 2010. Collectively, the Original Florida MOB Portfolio and Gardens Medical Pavilion were referred to as the Florida MOB Portfolio. The Florida MOB Portfolio consisted of nine medical office buildings. On September 20, 2013, we sold the Original Florida MOB Portfolio. As of June 30, 2015, we own approximately 80.4% of the ninth building, Gardens Medical Pavilion. Real Estate Asset Dispositions Babcock Self Storage On January 8, 2015, we sold Babcock for a contract sales price of approximately $5.4 million . We recorded a gain on sale of real estate of $2.0 million and loss on early extinguishment of debt of less than $0.1 million , which was composed of the write-off of deferred financing fees and an early termination fee. A portion of the proceeds from the sale were used to pay off in full the existing indebtedness of approximately $2.1 million associated with the storage facility. Babcock was classified as held for sale on our consolidated balance sheet at December 31, 2014. Alte Jakobstraße On February 21, 2015, we sold AJS, which is located in Berlin, Germany, for a contract sales price of approximately €12.4 million (approximately $14.1 million ). We recorded a gain on sale of real estate of approximately $3.3 million which is net of a CTA of approximately $0.6 million . We recognized a loss on early extinguishment of debt of less than $0.1 million , which was composed of the write-off of deferred financing fees and an early termination fee. A portion of the proceeds from the sale were used to fully satisfy the existing indebtedness associated with the property of approximately €5.7 million (approximately $6.5 million ). The Company recorded a provision for income tax of approximately $2.2 million during the first quarter of 2015 as a result of foreign income tax related to the sale. The foreign income tax was calculated on gains recognized at the exchange rate in effect on the sale date of February 21, 2015 and calculated using current tax rates. During the second quarter of 2015, we recorded a credit of $0.5 million to the provision for income tax based on a change in the estimated taxes payable on the sale of AJS. All U.S. dollar amounts related to the AJS sale are based on the exchange rate in effect on February 21, 2015. AJS was classified as held for sale on our consolidated balance sheet at December 31, 2014. Sales of Real Estate Reported in Continuing Operations The Company does not view the disposals of Babcock and AJS in the first quarter of 2015 or the disposal of 1875 Lawrence in the second quarter of 2014 as a strategic shift. Therefore, the results of operations for Babcock and AJS are presented in continuing operations in the consolidated statements of operations for the six months ended June 30, 2015 and the results of operations for all three investments are presented in continuing operations in the consolidated statements of operations for the three and six months ended June 30, 2014. The following table presents our sales of real estate for the six months ended June 30, 2015 ($ in millions): Date of Sale Property Ownership Interest Sales Contract Price Net Cash Proceeds (1) Gain on Sale of Real Estate January 8, 2015 Babcock Self Storage 85% $ 5.4 $ 5.2 $ 2.0 February 21, 2015 Alte Jakobstraße 99.7% $ 14.1 $ 13.0 $ 3.3 ______________________________________ (1) A portion of the net cash proceeds was used to pay off the property-associated debt of $8.6 million . In addition, we sold our 1875 Lawrence office building on May 30, 2014, which is included in continuing operations for the three and six months ended June 30, 2014. The following table presents net income attributable to the Company for the three and six months ended June 30, 2015 and 2014 related to Holstenplatz (classified as Real Estate Held for Sale at June 30, 2015, see Note 8), Babcock, AJS, and 1875 Lawrence. Net income for the three and six months ended June 30, 2014 includes the gain on sale of 1875 Lawrence of $ 11.4 million . Net income for the six months ended June 30, 2015 includes the gain on sale of AJS and Babcock for a total of $5.3 million (in millions): For the Three Months Ended June 30, For the Six Months Description 2015 2014 2015 2014 Net income attributable to the Company $ 0.5 $ 10.6 $ 2.9 $ 9.9 Real Estate Held for Sale As of June 30, 2015, Holstenplatz was classified as real estate held for sale on our condensed consolidated balance sheet. As of December 31, 2014, Babcock and AJS were classified as real estate held for sale on our consolidated balance sheet. We sold Babcock and AJS in the first quarter of 2015. In 2010, we acquired Holstenplatz, an office building located in Hamburg, Germany, with the investment objective of increasing net operating income through longer lease terms and increased rents. On July 16, 2015, we entered into a PSA to sell Holstenplatz to an unaffiliated third party for a contract sales price of approximately €16.5 million or approximately $18.1 million based on the exchange rate in effect on July 16, 2015. The prospective buyer has substantially completed the due diligence process and we believe the sale is probable within the next twelve months. Therefore, we classified Holstenplatz as real estate held for sale in our condensed consolidated balance sheet at June 30, 2015. The classification of Holstenplatz as real estate held for sale as of June 30, 2015 did not represent a strategic shift and did not have a major effect on the Company’s operations and financial results. Therefore, the results of operations for Holstenplatz are presented in continuing operations in the consolidated statements of operations for the three and six months ended June 30, 2015 and 2014. See Note 7, Real Estate and Real Estate-Related Investments, for total net income included in continuing operations for Holstenplatz, Babcock, AJS and 1875 Lawrence for the three and six months ended June 30, 2015 and 2014. The major classes of assets and liabilities associated with our real estate held for sale as of June 30, 2015 and December 31, 2014 were as follows: Real Estate Held for Sale as of Description June 30, 2015 December 31, 2014 Land and improvements, net $ 2,456 $ 3,195 Building and improvements, net 6,761 9,581 Lease intangibles, net 351 175 Furniture, fixtures and equipment, net 13 — Assets associated with real estate held for sale $ 9,581 $ 12,951 Notes payable (1) $ — $ 9,122 Other 95 90 Obligations associated with real estate held for sale $ 95 $ 9,212 ___________________________ (1) We paid off the Holstenplatz debt of approximately $8.1 million on April 30, 2015, its maturity date. On July 20, 2015, we entered into a PSA to sell Wimberly to an unaffiliated third party for a contract sales price of approximately $43.5 million . We acquired Wimberly on February 19, 2013. As of June 30, 2015, we were still in active negotiations and the due diligence process was not complete. In addition, at the time of filing this report on Form 10-Q, we cannot give any assurances that the closing of this sale is probable within the next twelve months. Therefore, we determined Wimberly did not meet the requirements to be classified as held for sale at June 30, 2015. |
Investment in Unconsolidated Jo
Investment in Unconsolidated Joint Venture | 6 Months Ended |
Jun. 30, 2015 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in Unconsolidated Joint Venture | Investment in Unconsolidated Joint Venture On May 24, 2013, we (the “Lender”) provided mezzanine financing totaling $13.7 million (the “Initial Advance”) to an unaffiliated third-party entity (the “Borrower”) that owns an apartment complex under development in Denver, Colorado (“Prospect Park”). The Borrower also has a senior construction loan with a third-party construction lender (the “Senior Lender”) in an aggregate original principal amount of $35.6 million . The senior construction loan is guaranteed by the owners of the developer. We also have a personal guaranty from the owners of the developer guaranteeing completion of the project and payment of cost overruns. Our mezzanine loan is secured by all of the membership interests of the Borrower and is subordinate to the senior construction loan. Our Initial Advance has an annual stated interest rate of 10% for the first three years of the term, followed by two one -year extension options at which point the annual interest rate would increase to 14% . We evaluated this ADC Arrangement and determined that the characteristics are similar to a jointly-owned investment or partnership. Accordingly, the investment was accounted for as an unconsolidated joint venture under the equity method of accounting instead of loan accounting since we will participate in the residual interests through the sale or refinancing of the property. As a result of projected cost overruns, an event of default was declared by the Senior Lender on April 28, 2014, and we declared an event of default under the mezzanine loan agreement on May 5, 2014. The events of default were cured by the Borrower and developer agreeing to cover cost overruns totaling $6.6 million , increasing our financing by $1.5 million (the “Additional Advance”) at an annual interest rate of 18% , and the Senior Lender increasing their loan to $40 million . The terms of our Initial Advance remained the same under the amended loan agreement. We considered the impact of these events on the accounting treatment and determined the ADC Arrangement will continue to be accounted for as an unconsolidated joint venture under the equity method of accounting. We will continue to monitor this situation and any impact these events might have on our ability to ultimately realize our investment. The ADC Arrangement is reassessed at each reporting period. As of June 30, 2015, the outstanding principal balance under our mezzanine loan was $15.2 million . Interest capitalized for the three and six months ended June 30, 2015 was $0.1 million and $0.2 million , respectively. Interest capitalized for the three and six months ended June 30, 2014 was $0.1 million and $0.2 million , respectively. For the three and six months ended June 30, 2015 and 2014, we recorded no equity in earnings (losses) of unconsolidated joint venture related to our investment in Prospect Park. The following table sets forth our ownership interest in Prospect Park: Ownership Interest Carrying Amount Property Name June 30, 2015 December 31, 2014 June 30, 2015 December 31, 2014 Prospect Park N/A N/A $14,222 $13,973 |
Notes Payable
Notes Payable | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Notes Payable | Notes Payable The following table sets forth information on our notes payable as of June 30, 2015 and December 31, 2014: Notes Payable as of Description June 30, 2015 December 31, 2014 Interest Rate Maturity Date Holstenplatz (2) n/a $ 9,125 3.887% 4/30/2015 Courtyard Kauai Coconut Beach Hotel 38,000 38,000 30-day LIBOR + .95% (1) 11/9/2015 Florida MOB Portfolio - Gardens Medical Pavilion 13,491 13,678 4.9% 1/1/2018 River Club and the Townhomes at River Club 24,482 24,664 5.26% 5/1/2018 Lakes of Margate 14,617 14,723 5.49% and 5.92% 1/1/2020 Arbors Harbor Town 25,362 25,591 3.985% 1/1/2019 Wimberly 26,551 26,685 30-day LIBOR + 2.28% (1) 3/1/2023 22 Exchange 19,500 19,500 3.93% 5/5/2023 Parkside (3) 10,649 10,828 5% 6/1/2018 Lakewood Flats 33,500 33,500 30-day LIBOR + 1.5% (1) 11/5/2019 $ 206,152 $ 216,294 Notes payable in obligations associated with real estate held for sale: Holstenplatz (2) $ — n/a 3.887% 4/30/2015 Babcock Self Storage (4) — 2,137 5.8% 8/30/2018 Alte Jakobstraße (4) — 6,985 2.3% 12/30/2015 $ — $ 9,122 Total notes payable obligations $ 206,152 $ 225,416 _________________________________ (1) 30-day London Interbank Offer Rate (“LIBOR”) was 0.19% at June 30, 2015. (2) We paid off the balance of the Holstenplatz debt on April 30, 2015. As of June 30, 2015, Holstenplatz was classified as real estate held for sale on our condensed consolidated balance sheet. (3) Includes approximately $0.5 million of unamortized premium related to debt we assumed at acquisition. (4) As of December 31, 2014, Babcock and AJS were classified as real estate held for sale on our consolidated balance sheet. The properties were sold in the first quarter of 2015 and a portion of the sales proceeds for each property was used to pay off the existing indebtedness in full. At June 30, 2015, our notes payable balance was $206.2 million and consisted of the notes payable related to our consolidated properties. We have guaranteed payment of certain recourse liabilities with respect to certain customary nonrecourse carveouts as set forth in the guaranties in favor of the unaffiliated lenders with respect to the Courtyard Kauai Coconut Beach Hotel, Wimberly, 22 Exchange, and Parkside notes payable. Interest capitalized for the three and six months ended June 30, 2015 was $0.1 million and $0.2 million , respectively, in connection with our equity method investment in Prospect Park. Interest capitalized for the three and six months ended June 30, 2014 was $0.1 million and $0.2 million , respectively. On January 8, 2015, we sold our Babcock property to an unaffiliated third party. We used a portion of the proceeds from the sale to fully satisfy the existing indebtedness of approximately $2.1 million . On February 21, 2015, we sold AJS, located in Berlin, Germany, to an unaffiliated third party and used a portion of the proceeds from the sale to payoff in full the existing indebtedness of approximately €5.7 million , or approximately $6.5 million based on the exchange rate in effect on February 21, 2015. Babcock and AJS were classified as held for sale on our consolidated balance sheet as of December 31, 2014. We paid off the Holstenplatz debt of approximately $8.1 million on April 30, 2015. We are subject to customary affirmative, negative, and financial covenants and representations, warranties, and borrowing conditions, all as set forth in our loan agreements, including, among other things, maintaining minimum debt service coverage ratios, loan to value ratios and liquidity. As of June 30, 2015, we believe we were in compliance with the covenants under our loan agreements. The following table summarizes our contractual obligations for principal payments as of June 30, 2015: Year Amount Due July 1, 2015 - December 31, 2015 $ 39,082 2016 2,447 2017 2,670 2018 47,393 2019 58,345 Thereafter 55,724 Total contractual obligations for principal payments $ 205,661 Unamortized premium 491 Total notes payable $ 206,152 Our debt secured by Courtyard Kauai Coconut Beach Hotel, with a balance of $38 million at June 30, 2015, matures on November 9, 2015. The loan has an 18 -month renewal option to extend the term to May 9, 2017. |
Leasing Activity
Leasing Activity | 6 Months Ended |
Jun. 30, 2015 | |
Leases [Abstract] | |
Leasing Activity | Leasing Activity Future minimum base rental payments of our office properties due to us under non-cancelable leases in effect as of June 30, 2015 are as follows: Year Amount Due July 1, 2015 - December 31, 2015 $ 566 2016 1,156 2017 1,028 2018 716 2019 646 Thereafter 2,992 Total $ 7,104 The schedule above does not include rental payments due to us from our multifamily, hotel, and student housing properties, as leases associated with these properties typically are for periods of one year or less. We have two remaining office properties at June 30, 2015, Holstenplatz, located in Germany and Gardens Medical Pavilion, located in Florida. We have excluded Holstenplatz from the schedule above as it was classified as held for sale at June 30, 2015. The future minimum base rental payments of our Holstenplatz property over the next 5 years is $3.6 million and the total for years 2020 through 2028 is $1.7 million . |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 6 Months Ended |
Jun. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities We may be exposed to the risk associated with variability of interest rates that might impact our cash flows and the results of operations. The hedging strategy of entering into interest rate caps and swaps, therefore, is to eliminate or reduce, to the extent possible, the volatility of cash flows. As of June 30, 2015, none of our derivative instruments were designated as hedging instruments. We have two interest rate caps as of June 30, 2015. Derivative instruments classified as assets were reported at their combined fair values of less than $0.1 million in prepaid expenses and other assets at June 30, 2015 and December 31, 2014. During the six months ended June 30, 2014, we recorded a reclassification of unrealized loss to interest expense of less than $0.1 million to adjust the carrying amount of the interest rate caps. During the six months ended June 30, 2015, we had no reclassification of unrealized loss to interest expense. The reclassification out of OCI in our statement of equity for the six months ended June 30, 2014 was due to all derivatives being designated as non-hedging instruments as of January 1, 2013. The following table summarizes the notional values of our derivative financial instruments. The notional values provide an indication of the extent of our involvement in these instruments, but do not represent exposure to credit, interest rate, or market risks: Type / Description Notional Value Interest Rate / Strike Rate Index Maturity Date Not Designated as Hedging Instruments Interest rate cap - Courtyard Kauai Coconut Beach Hotel $ 38,000 3.00% 30-day LIBOR October 15, 2016 Interest rate cap - Wimberly 26,685 4.56% 30-day LIBOR March 1, 2018 The table below presents the fair value of our derivative financial instruments, as well as their classification on the consolidated balance sheets as of June 30, 2015 and December 31, 2014: Derivatives not designated as hedging instruments: Asset Derivatives Balance Sheet Location June 30, 2015 December 31, 2014 Interest rate derivative contracts Prepaid expenses and other assets $ 5 $ 28 The table below presents the effect of our derivative financial instruments on the condensed consolidated statements of operations for the three and six months ended June 30, 2015 and 2014: Derivatives Not Designated as Hedging Instruments Amount of Loss Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 $ — $ 103 $ 15 $ 159 |
Distributions
Distributions | 6 Months Ended |
Jun. 30, 2015 | |
Distributions [Abstract] | |
Distributions | Distributions Distributions are authorized at the discretion of our board of directors based on its analysis of our performance over the previous periods and expectations of performance for future periods. These analyses may include actual and anticipated operating cash flow, changes in market capitalization rates for investments suitable for our portfolio, capital expenditure needs, general financial and market conditions, proceeds from asset sales and other factors that our board deems relevant. The board’s decision will be substantially influenced by its obligation to ensure that we maintain our federal tax status as a REIT. We cannot provide assurance that we will pay distributions at any particular level, or at all. We expect that any future distributions authorized by our board of directors will be periodic, special distributions as opposed to regular monthly or quarterly distributions. On March 18, 2015, our board of directors authorized a special cash distribution of $1.00 per share of common stock payable to stockholders of record as of March 30, 2015. The total special cash distribution of $25.7 million , which represents a portion of proceeds from asset sales, was paid on March 31, 2015. We did not pay any distributions to stockholders during the three months ended June 30, 2015 or during the three and six months ended June 30, 2014. We have paid, and may in the future pay, some or all of our distributions from sources other than operating cash flow. For example, we have generated cash to pay special distributions from sales activities and financing activities, components of which included proceeds from our offerings and borrowings (including borrowings secured by our assets) in anticipation of future operating cash flow. We have also utilized cash from refinancing and dispositions, the components of which may represent a return of capital and/or the gains on sale. In addition, from time to time, our Advisor may agree to waive or defer all or a portion of the acquisition, asset management, or other fees or incentives due to it, pay general administrative expenses or otherwise supplement investor returns, which may increase the amount of cash that we have available to pay distributions to our stockholders. Future special distributions authorized and paid at the discretion of the board of directors, are expected to be funded with proceeds from asset sales. Therefore, future special distributions may exceed cash flow from operating activities or funds from operations. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Advisor The Advisor and certain of its affiliates may receive fees and compensation in connection with the acquisition, management, and sale of our assets based on the advisory management agreement, as amended and restated. Fourth Amended and Restated Advisory Management Agreement On June 6, 2014, we entered into the Fourth Amended and Restated Advisory Management Agreement (the “Fourth Advisory Agreement”) with our Advisor to, among other things, revise the acquisition and advisory fees, asset management fee, and the debt financing fee that may be paid to the Advisor and to fix certain expense reimbursement provisions. The Fourth Advisory Agreement was effective as of January 1, 2014. Effective as of June 6, 2015, we entered into the First Amendment to Fourth Amended and Restated Advisory Management Agreement to (i) reduce the administrative services fee to be paid to the Advisor for calendar year 2015 from $1.8 million to $1.5 million and (ii) reimburse the Advisor for certain due diligence services provided in connection with asset dispositions or debt financings separately from the administrative services fee. In addition, we renewed the term of the Fourth Advisory Agreement by one year. As amended, the Fourth Advisory Agreement will expire on June 6, 2016. In all other material respects, the terms of the Fourth Advisory Agreement remain unchanged. The following discussion reflects the terms of the Fourth Advisory Agreement, as amended, and the fees and expenses paid or reimbursed to the Advisor thereunder since January 1, 2014. The Advisor or its affiliates receive acquisition and advisory fees of 1.5% of the amount paid in respect of the purchase, development, construction, or improvement of each asset we acquire, including any debt attributable to those assets. In addition, the Advisor and its affiliates will also receive acquisition and advisory fees of 1.5% of the funds advanced in respect of a loan investment. We incurred acquisition and advisory fees payable to the Advisor of less than $0.1 million for the six months ended June 30, 2015 and 2014 as a result of improvements made to our assets. During the six months ended June 30, 2015 and 2014, we had no acquisitions. The Advisor or its affiliates also receive an acquisition expense reimbursement in the amount of (i) 0.25% of the funds paid for purchasing an asset, including any debt attributable to the asset, plus 0.25% of the funds budgeted for development, construction, or improvement in the case of assets that we acquire and intend to develop, construct, or improve or (ii) 0.25% of the funds advanced in respect of a loan investment. We also pay third parties, or reimburse the Advisor or its affiliates, for any investment-related expenses due to third parties in the case of a completed investment, including, but not limited to, legal fees and expenses, travel and communication expenses, costs of appraisals, accounting fees and expenses, third-party brokerage or finder's fees, title insurance, premium expenses, and other closing costs. In addition, acquisition expenses for which we will reimburse the Advisor, include any payments approved in advance by our board of directors made to (i) a prospective seller of an asset, (ii) an agent of a prospective seller of an asset, or (iii) a party that has the right to control the sale of an asset intended for investment by us that are not refundable and that are not ultimately applied against the purchase price for such asset. Previously, to the extent the Advisor or its affiliates directly provided services, formerly provided or usually provided by third parties, including, without limitation, accounting services related to the preparation of audits required by the Securities and Exchange Commission, property condition reports, title services, title insurance, insurance brokerage or environmental services related to the preparation of environmental assessments in connection with a completed investment, the direct employee costs and burden to the Advisor of providing these services was included as acquisition expenses for which we reimbursed the Advisor. Pursuant to the Fourth Advisory Agreement, effective January 1, 2014, such services will no longer be included as acquisition expenses for which the Company will reimburse the Advisor. In addition, the Advisor is responsible for paying all of the expenses it incurs associated with persons employed by the Advisor to the extent that they are dedicated to making investments for us, such as wages and benefits of the investment personnel. The Advisor and its affiliates are also responsible for paying all of the investment-related expenses that we or the Advisor or its affiliates incur that are due to third parties or related to the additional services provided by the Advisor as described above with respect to investments we do not make, other than certain non-refundable payments made in connection with any acquisition. For the six months ended June 30, 2015 and 2014, we incurred less than $0.1 million in acquisition expense reimbursements. Beginning January 1, 2014, we pay the Advisor or its affiliates a debt financing fee of 0.5% of the amount available under any loan or line of credit made available to us and will pay directly all third-party costs associated with obtaining the debt financing. We incurred no debt financing fees for the six months ended June 30, 2015 and 2014. We pay the Advisor or its affiliates a development fee in an amount that is usual and customary for comparable services rendered to similar projects in the geographic market of the project if such affiliate provides the development services and if a majority of our independent directors determines that such development fee is fair and reasonable to us. We incurred no such fees for the six months ended June 30, 2015 and 2014. Pursuant to the Fourth Advisory Agreement, we pay the Advisor or its affiliates a monthly asset management fee which, effective January 1, 2014, was reduced to one-twelfth of 0.7% of the value of each asset. The value of our assets will be the value as determined in connection with the establishment and publication of an estimated value per share unless the asset was acquired after our publication of an estimated value per share (in which case the value of the asset will be the contract purchase price of the asset). In addition, pursuant to the Fourth Advisory Agreement, the Advisor agreed to waive asset management fees previously accrued during the period from August 2013 to December 2013 of $0.3 million . Therefore, we reversed this accrual in the second quarter of 2014. In addition, we reversed approximately $0.1 million in the second quarter of 2014 to reflect the reduction in the fee structure related to the first quarter of 2014. For the six months ended June 30, 2015 and 2014, we expensed $1.3 million and $1 million , respectively, of asset management fees payable to the Advisor. The totals for the six months ended June 30, 2015 and 2014 include asset management fees related to our disposed properties. Under the Fourth Advisory Agreement, beginning January 1, 2014, instead of reimbursing the Advisor for specific expenses paid or incurred in connection with providing services to us, we pay the Advisor an administrative services fee based on a budget of expenses prepared by the Advisor. The administrative services fee is intended to reimburse for all costs associated with providing services to us under the Fourth Advisory Agreement. On June 6, 2015, we amended the Fourth Advisory Agreement to reduce the administrative services fee from $1.8 million for calendar year 2014 to $1.5 million for calendar year 2015. The administrative services fee is payable in four equal quarterly installments within 45 days of the end of each calendar quarter. For the six months ended June 30, 2015 and 2014, we incurred and expensed such costs for administrative services of approximately $0.8 million and $0.9 million , respectively. In addition, effective January 1, 2015, the amended Fourth Advisory Agreement includes a provision to reimburse the Advisor for certain due diligence services provided in connection with asset dispositions or debt financings separately from the administrative services fee. The expense of $0.8 million for the six months ended June 30, 2015, includes less than $0.1 million of due diligence service costs. Notwithstanding the fees and cost reimbursements payable to our Advisor pursuant to the Fourth Advisory Agreement, under our charter we may not reimburse the Advisor for any amount by which our operating expenses (including the asset management fee) at the end of the four preceding fiscal quarters exceeds the greater of: (i) 2% of our average invested assets, or (ii) 25% of our net income determined without reduction for any additions to reserves for depreciation, bad debts or other similar non-cash reserves and excluding any gain from the sale of our assets for that period unless a majority of our independent directors determines that such excess expenses are justified based on unusual and non-recurring factors. For the four fiscal quarters ended June 30, 2015, our total operating expenses (including the asset management fee) were not excessive. Property Manager We pay our property manager and affiliate of the Advisor, Behringer Harvard Opportunity II Management Services, LLC (“BHO II Management”), or its affiliates, fees for the management, leasing, and construction supervision of our properties. Effective January 1, 2014, we entered into the First Amendment to the Amended and Restated Property Management and Leasing Agreement, which reduced the property management fee paid to 4.0% of gross revenues of the properties managed by BHO II Management or its affiliates. We pay BHO II Management or its affiliates an oversight fee equal to 0.5% of the gross revenues of the property managed for any property for which we contract directly with a third-party property manager. In no event will BHO II Management or its affiliates receive both a property management fee and an oversight fee with respect to any particular property. In the event we own a property through a joint venture that does not pay BHO II Management directly for its services, we will pay BHO II Management a management fee or oversight fee, as applicable, based only on our economic interest in the property. We incurred and expensed property management fees or oversight fees to BHO II Management of approximately $0.3 million for the six months ended June 30, 2015 and 2014. We pay the Advisor or its affiliates a construction management fee in an amount not to exceed 5% of all hard construction costs incurred in connection with, but not limited to capital repairs and improvements, major building reconstruction and tenant improvements, if such affiliate supervises construction performed by or on behalf of us or our affiliates. We incurred no construction management fees for the six months ended June 30, 2015. We incurred less than $0.1 million of construction management fees for the six months ended June 30, 2014. We are dependent on the Advisor and BHO II Management for certain services that are essential to us, including asset acquisition and disposition decisions, property management and leasing services, and other general administrative responsibilities. In the event that these companies were unable to provide us with their respective services, we would be required to obtain such services from other sources. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 6 Months Ended |
Jun. 30, 2015 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Supplemental cash flow information is summarized below: Six months ended June 30, Description 2015 2014 Interest paid, net of amounts capitalized $ 3,252 $ 3,915 Income tax paid, net 35 196 Non-cash investing and financing activities: Proceeds held in escrow through sale of real estate interests 912 — Capital expenditures for real estate in accrued liabilities 583 393 Accrued distributions to noncontrolling interest holder 20 72 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Holstenplatz - Purchase and Sale Agreement On July 16, 2015, we entered into a PSA to sell Holstenplatz to an unaffiliated third party for a contract sales price of approximately €16.5 million , or approximately $18.1 million based on the exchange rate in effect on July 16, 2015. Holstenplatz was classified as real estate held for sale as of June 30, 2015. See Note 8, Real Estate Held for Sale. Wimberly - Purchase and Sale Agreement On July 20, 2015, we entered into a PSA to sell Wimberly to an unaffiliated third party for a contract sales price of approximately $43.5 million . We did not classify Wimberly as held for sale as of June 30, 2015. See Note 8, Real Estate Held for Sale. Share Redemption Program On August 11, 2015, our board of directors approved redemptions for the third quarter of 2015 totaling 36,457 shares with an aggregate redemption payment of approximately $0.2 million . See Part II, Item 2, “Unregistered Sales of Equity Securities and Use of Proceeds” for a full description of the price at which we redeem shares under our share redemption program. ****** |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates include such items as purchase price allocation for real estate acquisitions, impairment of long-lived assets, depreciation and amortization, and allowance for doubtful accounts. Actual results could differ from those estimates. |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation Our condensed consolidated financial statements include our accounts and the accounts of other subsidiaries over which we have control. All inter-company transactions, balances, and profits have been eliminated in consolidation. Interests in entities acquired will be evaluated based on applicable GAAP, which includes the requirement to consolidate entities deemed to be variable interest entities (“VIE”) in which we are the primary beneficiary. If the interest in the entity is determined not to be a VIE, then the entity will be evaluated for consolidation based on legal form, economic substance, and the extent to which we have control, or substantive participating rights or both under the respective ownership agreement. For entities in which we have less than a controlling interest or entities which we are not deemed to be the primary beneficiary, we account for the investment using the equity method of accounting. There are judgments and estimates involved in determining if an entity in which we have made an investment is a VIE and, if so, whether we are the primary beneficiary. The entity is evaluated to determine if it is a VIE by, among other things, calculating the percentage of equity being risked compared to the total equity of the entity. Determining expected future losses involves assumptions of various possibilities of the results of future operations of the entity, assigning a probability to each possibility and using a discount rate to determine the net present value of those future losses. A change in the judgments, assumptions, and estimates outlined above could result in consolidating an entity that should not be consolidated or accounting for an investment using the equity method that should in fact be consolidated, the effects of which could be material to our financial statements. |
Real Estate | Real Estate Upon the acquisition of real estate properties, we recognize the assets acquired, the liabilities assumed and any noncontrolling interest as of the acquisition date, measured at their fair values. The acquisition date is the date on which we obtain control of the real estate property. The assets acquired and liabilities assumed may consist of land, inclusive of associated rights, buildings, assumed debt, identified intangible assets and liabilities and asset retirement obligations. Identified intangible assets generally consist of above-market leases, in-place leases, in-place tenant improvements, in-place leasing commissions and tenant relationships. Identified intangible liabilities generally consist of below-market leases. Goodwill is recognized as of the acquisition date and measured as the aggregate fair value of the consideration transferred and any noncontrolling interests in the acquiree over the fair value of the identifiable net assets acquired. Likewise, a bargain purchase gain is recognized in current earnings when the aggregate fair value of the consideration transferred and any noncontrolling interests in the acquiree is less than the fair value of the identifiable net assets acquired. Acquisition-related costs are expensed in the period incurred. Initial valuations are subject to change until our information is finalized, which is no later than twelve months from the acquisition date. The fair value of the tangible assets acquired, consisting of land and buildings, is determined by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to land and buildings. Land values are derived from appraisals, and building values are calculated as replacement cost less depreciation or management’s estimates of the fair value of these assets using discounted cash flow analyses or similar methods believed to be used by market participants. The value of hotels and all other buildings is depreciated over the estimated useful lives of 39 years and 25 years , respectively, using the straight-line method. We determine the fair value of assumed debt by calculating the net present value of the scheduled mortgage payments using interest rates for debt with similar terms and remaining maturities that management believes we could obtain at the date of the debt assumption. Any difference between the fair value and stated value of the assumed debt is recorded as a discount or premium and amortized over the remaining life of the loan using the effective interest method. We determine the value of above-market and below-market leases for acquired properties based on the present value (using an interest rate that reflects the risks associated with the leases acquired) of the difference between (1) the contractual amounts to be paid pursuant to the in-place leases and (2) management’s estimate of current market lease rates for the corresponding in-place leases, measured over a period equal to (a) the remaining non-cancelable lease term for above-market leases or (b) the remaining non-cancelable lease term plus any below-market fixed rate renewal options that, based on a qualitative assessment of several factors, including the financial condition of the lessee, the business conditions in the industry in which the lessee operates, the economic conditions in the area in which the property is located, and the ability of the lessee to sublease the property during the renewal term, are reasonably assured to be exercised by the lessee for below-market leases. We record the fair value of above-market and below-market leases as intangible assets or intangible liabilities, respectively, and amortize them as an adjustment to rental income over the determined lease term. The total value of identified real estate intangible assets acquired is further allocated to in-place leases, in-place tenant improvements, in-place leasing commissions, and tenant relationships based on our evaluation of the specific characteristics of each tenant’s lease and our overall relationship with that respective tenant. The aggregate value for tenant improvements and leasing commissions is based on estimates of these costs incurred at inception of the acquired leases, amortized through the date of acquisition. The aggregate value of in-place leases acquired and tenant relationships is determined by applying a fair value model. The estimates of fair value of in-place leases include an estimate of carrying costs during the expected lease-up periods for the respective spaces considering existing market conditions. In estimating the carrying costs that would have otherwise been incurred had the leases not been in place, we include such items as real estate taxes, insurance, and other operating expenses as well as lost rental revenue during the expected lease-up period based on existing market conditions. The estimates of the fair value of tenant relationships also include costs to execute similar leases including leasing commissions, legal fees, and tenant improvements as well as an estimate of the likelihood of renewal as determined by management on a tenant-by-tenant basis. We amortize the value of in-place leases, in-place tenant improvements, and in-place leasing commissions to expense over the initial term of the respective leases. In no event does the amortization period for intangible assets or liabilities exceed the remaining depreciable life of the building. Should a tenant terminate its lease, the unamortized portion of the acquired lease intangibles related to that tenant would be charged to expense. |
Real Estate Held for Sale | Real Estate Held for Sale and Discontinued Operations We classify properties as held for sale when certain criteria are met in accordance with GAAP. At that time, we present the assets and obligations of the property held for sale separately in our consolidated balance sheet and we cease recording depreciation and amortization expense related to that property. Properties held for sale are reported at the lower of their carrying amount or their estimated fair value, less estimated costs to sell. As of June 30, 2015, we were in active negotiations for the disposal of Holstenplatz, and on July 16, 2015, we entered into a PSA to sell Holstenplatz, an office building located in Germany and our only remaining foreign operation at June 30, 2015. The prospective buyer has substantially completed the due diligence process and we believe the sale is probable within the next twelve months. Therefore, we classified Holstenplatz as real estate held for sale in our condensed consolidated balance sheet at June 30, 2015. During the fourth quarter of 2014, we entered into PSAs for Babcock, a self storage facility in Texas, and AJS, an office building located in Germany, and classified Babcock and AJS as real estate held for sale in our consolidated balance sheet at December 31, 2014. We sold Babcock on January 8, 2015 and AJS on February 21, 2015. Effective as of April 1, 2014, we adopted the revised guidance in Accounting Standards Update No. 2014-08 regarding discontinued operations. For sales of real estate or assets classified as held for sale after April 1, 2014, we will evaluate whether a disposal transaction meets the criteria of a strategic shift and will have a major effect on our operations and financial results to determine if the results of operations and gains on sale of real estate will be presented as part of our continuing operations or as discontinued operations in our consolidated statements of operations. If the disposal represents a strategic shift, it will be classified as discontinued operations for all periods presented; if not, it will be presented in continuing operations. |
Investment Impairment | Investment Impairment For all of our real estate and real estate-related investments, we monitor events and changes in circumstances indicating that the carrying amounts of the real estate assets may not be recoverable. Examples of the types of events and circumstances that would cause management to assess our assets for potential impairment include, but are not limited to: a significant decrease in the market price of an asset; a significant adverse change in the manner in which the asset is being used; an accumulation of costs in excess of the acquisition basis plus construction of the property; major vacancies and the resulting loss of revenues; natural disasters; a change in the projected holding period; legitimate purchase offers and changes in the global and local markets or economic conditions. Our assets may at times be concentrated in limited geographic locations, and to the extent that our portfolio is concentrated in limited geographic locations, downturns specifically related to such regions may result in tenants defaulting on their lease obligations at those properties within a short time period, which may result in asset impairments. When such events or changes in circumstances are present, we assess potential impairment by comparing estimated future undiscounted operating cash flows expected to be generated over the life of the asset and from its eventual disposition to the carrying amount of the asset. These projected cash flows are prepared internally by the Advisor and reflect in-place and projected leasing activity, market revenue and expense growth rates, market capitalization rates, discount rates, and changes in economic and other relevant conditions. The Company’s principal executive officer and principal financial officer, as well as a panel of asset managers and a financial analyst of the Advisor, review these projected cash flows to assure that the valuation is prepared using reasonable inputs and assumptions that are consistent with market data or with assumptions that would be used by a third-party market participant and assume the highest and best use of the investment. We consider trends, strategic decisions regarding future development plans, and other factors in our assessment of whether impairment conditions exist. In the event that the carrying amount exceeds the estimated future undiscounted operating cash flows, we recognize an impairment loss to adjust the carrying amount of the asset to estimated fair value. While we believe our estimates of future cash flows are reasonable, different assumptions regarding factors such as market rents, economic conditions, and occupancy rates could significantly affect these estimates. In evaluating our investments for impairment, management may use appraisals and make estimates and assumptions, including, but not limited to, the projected date of disposition of the properties, the estimated future cash flows of the properties during our ownership, and the projected sales price of each of the properties. A future change in these estimates and assumptions could result in understating or overstating the carrying value of our investments, which could be material to our financial statements. In addition, we may incur impairment charges on assets classified as held for sale in the future if the carrying amount of the asset upon classification as held for sale exceeds the estimated fair value, less costs to sell. We also evaluate our investments in unconsolidated joint ventures at each reporting date. If we believe there is an other than temporary decline in market value, we will record an impairment charge based on these evaluations. We assess potential impairment by comparing our portion of estimated future undiscounted operating cash flows expected to be generated by the joint venture over the life of the joint venture’s assets to the carrying amount of the joint venture. In the event that the carrying amount exceeds our portion of estimated future undiscounted operating cash flows, we recognize an impairment loss to adjust the carrying amount of the joint venture to its estimated fair value. We believe the carrying value of our operating real estate is currently recoverable. Accordingly, there were no impairment charges for the three and six months ended June 30, 2015 and 2014. However, if market conditions worsen unexpectedly or if changes in our strategy significantly affect any key assumptions used in our fair value calculations, we may need to take charges in future periods for impairments related to our existing investments. Any such non-cash charges would have an adverse effect on our consolidated financial position and results of operations. |
Investment in Unconsolidated Joint Venture | Investment in Unconsolidated Joint Venture We provide funding to third-party developers for the acquisition, development, and construction of real estate (“ADC Arrangement”). Under the ADC Arrangement, we may participate in the residual profits of the project through the sale or refinancing of the property. We evaluate this arrangement to determine if it has characteristics similar to a loan or if the characteristics are more similar to a joint venture or partnership such as participating in the risks and rewards of the project as an owner or an investment partner. When we determine that the characteristics are more similar to a jointly-owned investment or partnership, we account for the arrangement as an investment in an unconsolidated joint venture under the equity method of accounting or a direct investment (consolidated basis of accounting) instead of applying loan accounting. The ADC Arrangement is reassessed at each reporting period. See Note 9, Investment in Unconsolidated Joint Venture, for further discussion. |
Revenue Recognition | Revenue Recognition We recognize rental income generated from leases of our operating properties on a straight-line basis over the terms of the respective leases, including the effect of rent holidays, if any. Straight-line rent was income of less than $0.1 million recognized in rental revenues for the three and six months ended June 30, 2015. Straight-line rent was a charge of less than $0.1 million recognized in rental revenues for the three and six months ended June 30, 2014. Leases associated with our multifamily, student housing, and hotel assets are generally short-term in nature, and thus have no straight-line rent. Net below-market lease amortization was income of less than $0.1 million recognized in rental revenues for the three and six months ended June 30, 2015. Net above-market lease amortization was a charge of less than $0.1 million recognized in rental revenues for the three and six months ended June 30, 2014. Hotel revenue is derived from the operations of the Courtyard Kauai Coconut Beach Hotel and consists primarily of guest room, food and beverage, and other ancillary revenues such as laundry and parking. Hotel revenue is recognized as the services are rendered. |
Accounts Receivable | Accounts Receivable Accounts receivable primarily consist of receivables related to our consolidated properties of $2.5 million and $2.2 million as of June 30, 2015 and December 31, 2014, respectively, and included straight-line rental revenue receivables of $0.4 million and $0.6 million as of June 30, 2015 and December 31, 2014, respectively. |
Furniture, Fixtures, and Equipment | Furniture, Fixtures, and Equipment Furniture, fixtures, and equipment are recorded at cost and are depreciated according to the Company’s capitalization policy, which uses the straight-line method over their estimated useful lives of five to seven years . Furniture, fixtures and equipment associated with properties classified as held for sale are not depreciated. Maintenance and repairs are charged to operations as incurred. Accumulated depreciation associated with our furniture, fixtures, and equipment was $7.7 million and $6.4 million as of June 30, 2015 and December 31, 2014, respectively. |
Deferred Financing Fees | Deferred Financing Fees Deferred financing fees are recorded at cost and are amortized to interest expense of our notes payable using a straight-line method that approximates the effective interest method over the life of the related debt. Accumulated amortization of deferred financing fees was $2.3 million and $2.2 million as of June 30, 2015 and December 31, 2014, respectively. |
Income Taxes | Income Taxes We have elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), and have qualified as a REIT since the year ended December 31, 2008. To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we distribute at least 90% of our REIT taxable income to our stockholders. As a REIT, we generally will not be subject to federal income tax at the corporate level. We are organized and operate in such a manner as to qualify for taxation as a REIT under the Code and intend to continue to operate in such a manner, but no assurance can be given that we will operate in a manner so as to qualify or remain qualified as a REIT. Taxable income from non-REIT activities managed through a taxable REIT subsidiary (“TRS”) is subject to applicable federal, state, and local income and margin taxes. We have no taxable income associated with a TRS. Our operating partnerships are flow-through entities and are not subject to federal income taxes at the entity level. The Company recorded a provision for income tax of approximately $2.2 million in the first quarter of 2015 as a result of estimated foreign income tax related to the sale of AJS which is located in Berlin, Germany. The foreign income tax was calculated on gains recognized at the exchange rate in effect on the sale date of February 21, 2015 and calculated using current tax rates. During the second quarter of 2015, we recorded a credit of $0.5 million to the provision for income tax based on a change in the estimated taxes payable on the sale of AJS. We have reviewed our tax positions under GAAP guidance that clarify the relevant criteria and approach for the recognition and measurement of uncertain tax positions. The guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition of a tax position taken, or expected to be taken, in a tax return. A tax position may only be recognized in the financial statements if it is more likely than not that the tax position will be sustained upon examination. We believe it is more likely than not that the tax positions taken relative to our federal tax status as a REIT will be sustained in any tax examination. |
Foreign Currency Translation | Foreign Currency Translation For our international investments where the functional currency is other than the U.S. dollar, assets and liabilities are translated using period-end exchange rates, while the statement of operations amounts are translated using the average exchange rates for the respective period. Gains and losses resulting from the change in exchange rates from period to period are reported separately as a component of other comprehensive income (loss) (“OCI”) as a separate component. Gains and losses resulting from foreign currency transactions are included in the condensed consolidated statements of operations and comprehensive income (loss). The Euro is the functional currency for the operations of Holstenplatz and AJS. We sold AJS in the first quarter of 2015. We also maintain a Euro-denominated bank account that is translated into U.S. dollars at the current exchange rate at each reporting period. For the three and six months ended June 30, 2015, the foreign currency translation adjustment was a gain of $0.4 million and a loss of $0.4 million , respectively. For the three and six months ended June 30, 2014, the foreign currency translation adjustment was a loss of less than $0.1 million . When the Company has substantially liquidated its investment in a foreign entity, the cumulative translation adjustment (“CTA”) balance is required to be released into earnings. During the first quarter of 2015, we recognized a CTA of approximately $0.6 million as a reduction to the gain on sale of our AJS office building which we sold on February 21, 2015. Our wholly owned investment in the Holstenplatz office building, located in Hamburg, Germany, is our only remaining foreign operation and is classified as real estate held for sale at June 30, 2015. |
Concentration of Credit Risk | Concentration of Credit Risk At June 30, 2015 and December 31, 2014, we had cash and cash equivalents deposited in certain financial institutions in excess of federally insured levels. We have diversified our cash and cash equivalents among several banking institutions in an attempt to minimize exposure to any one of these entities. We regularly monitor the financial stability of these financial institutions and believe that we are not exposed to any significant credit risk in cash and cash equivalents or restricted cash. Geographic and Asset Type Concentration Our investments in target assets may at times be concentrated in certain asset types that are subject to higher risk of foreclosure, or secured by assets concentrated in a limited number of geographic locations. For the six months ended June 30, 2015, excluding Holstenplatz, which was classified as real estate held for sale at June 30, 2015, and Babcock and AJS which were sold in the first quarter of 2015, 36% and 20% of our total revenues were derived from our properties located in Hawaii and Florida, respectively. Additionally, excluding Holstenplatz, Babcock, and AJS, 44% , 36% , and 16% of our total revenues for the six months ended June 30, 2015 were from our multifamily, hotel, and student housing investments, respectively. To the extent that our portfolio is concentrated in limited geographic regions or types of assets, downturns relating generally to such region or type of asset may result in defaults on a number of our investments within a short time period, which may reduce our net income and the value of our common stock and accordingly limit our ability to fund our operations. |
Noncontrolling Interest | Noncontrolling Interest Noncontrolling interest represents the noncontrolling ownership interest’s proportionate share of the equity in our consolidated real estate investments. Income and losses are allocated to noncontrolling interest holders based generally on their ownership percentage. In certain instances, our joint venture agreement provides for liquidating distributions based on achieving certain return metrics (“promoted interest”). If a property reaches a defined return threshold, then it will result in distributions to noncontrolling interest which is different from the standard pro-rata allocation percentage. |
Earnings per Share | Earnings per Share Net income (loss) per share is calculated based on the weighted average number of common shares outstanding during each period. The weighted average shares outstanding used to calculate both basic and diluted loss per share were the same for each of the three and six months ended June 30, 2015 and 2014, as there were no potentially dilutive securities outstanding. |
Subsequent Events | Subsequent Events We have evaluated subsequent events for recognition or disclosure in our condensed consolidated financial statements. |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Schedule of anticipated amortization expense associated with the acquired lease intangibles excluding properties classified as discontinued operations | Anticipated amortization expense associated with the acquired lease intangibles for each of the following five years as of June 30, 2015 was as follows: Year Lease / Other Intangibles July 1, 2015 - December 31, 2015 $ 18 2016 36 2017 20 2018 (14 ) 2019 (12 ) |
Schedule of accumulated depreciation and amortization related to entity's consolidated investments in real estate assets and intangibles | ccumulated depreciation and amortization related to our consolidated investments in real estate assets and intangibles were as follows: June 30, 2015 Buildings and Improvements Land and Improvements Lease Intangibles Acquired Cost (1) $ 244,605 $ 59,759 $ 3,023 $ (184 ) Less: depreciation and amortization (1) (27,785 ) (2,459 ) (2,703 ) 96 Net $ 216,820 $ 57,300 $ 320 $ (88 ) ______________________________________________ (1) Excludes Holstenplatz, which was classified as held for sale as of June 30, 2015. We entered into a PSA effective July 16, 2015 to sell Holstenplatz, an office building located in Germany. Net book values included in assets associated with real estate held for sale on the condensed consolidated balance sheet were buildings and improvements of $6.8 million , land and improvements of $2.5 million , lease intangibles of $0.4 million , and acquired below-market leases of less than $0.1 million . See Note 8, Real Estate Held for Sale. December 31, 2014 Buildings and Improvements Land and Improvements Lease Intangibles Acquired Cost (1) $ 252,812 $ 62,447 $ 4,551 $ (469 ) Less: depreciation and amortization (1) (24,162 ) (2,073 ) (2,701 ) 259 Net $ 228,650 $ 60,374 $ 1,850 $ (210 ) ______________________________________________ (1) Excludes Babcock and AJS, which were classified as held for sale as of December 31, 2014. These two properties sold on January 8, 2015 and February 21, 2015, respectively. Net book values included in assets associated with real estate held for sale in the consolidated balance sheet were buildings and improvements of $9.6 million , land and improvements of $3.2 million , lease intangibles of $0.2 million , and acquired below-market leases of less than $0.1 million . See Note 8, Real Estate Held for Sale. |
Assets and Liabilities Measur25
Assets and Liabilities Measured at Fair Value (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |
Schedule of information about assets measured at fair value on a recurring basis | The following fair value hierarchy table presents information about our assets measured at fair value on a recurring basis as of June 30, 2015 and December 31, 2014: June 30, 2015 Level 1 Level 2 Level 3 Total Assets Derivative financial instruments $ — $ 5 $ — $ 5 December 31, 2014 Level 1 Level 2 Level 3 Total Assets Derivative financial instruments $ — $ 28 $ — $ 28 |
Real Estate and Real Estate-R26
Real Estate and Real Estate-Related Investments (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Real Estate [Abstract] | |
Schedule of information pertaining to consolidated investments | As of June 30, 2015, we consolidated ten real estate assets, including Holstenplatz, which was classified as real estate held for sale in our condensed consolidated balance sheet. The following table presents certain information about our consolidated investments as of June 30, 2015: Property Name Description Location Date Acquired Ownership Interest Holstenplatz (1) Office building Hamburg, Germany June 30, 2010 100% Gardens Medical Pavilion (2) Medical office building Palm Beach Gardens, Florida October 20, 2010 80.4% Courtyard Kauai Coconut Beach Hotel Hotel Kauai, Hawaii October 20, 2010 80% River Club and the Townhomes at River Club Student housing Athens, Georgia April 25, 2011 85% Lakes of Margate Multifamily Margate, Florida October 19, 2011 92.5% Arbors Harbor Town Multifamily Memphis, Tennessee December 20, 2011 94% Wimberly at Deerwood (“Wimberly”) Multifamily Jacksonville, Florida February 19, 2013 95% 22 Exchange Student housing Akron, Ohio April 16, 2013 90% Parkside Apartments (“Parkside”) Multifamily Sugar Land, Texas August 8, 2013 90% Lakewood Flats Multifamily Dallas, Texas October 10, 2014 100% _________________________________________ (1) We entered into a PSA effective July 16, 2015 to sell Holstenplatz, an office building located in Hamburg, Germany. Holstenplatz is classified as real estate held for sale in our condensed consolidated balance sheet at June 30, 2015. (2) We acquired a portfolio of eight medical office buildings, known as the Original Florida MOB Portfolio on October 8, 2010. We acquired a medical office building known as Gardens Medical Pavilion on October 20, 2010. Collectively, the Original Florida MOB Portfolio and Gardens Medical Pavilion were referred to as the Florida MOB Portfolio. The Florida MOB Portfolio consisted of nine medical office buildings. On September 20, 2013, we sold the Original Florida MOB Portfolio. As of June 30, 2015, we own approximately 80.4% of the ninth building, Gardens Medical Pavilion. |
Schedule of real estate sold | The following table presents our sales of real estate for the six months ended June 30, 2015 ($ in millions): Date of Sale Property Ownership Interest Sales Contract Price Net Cash Proceeds (1) Gain on Sale of Real Estate January 8, 2015 Babcock Self Storage 85% $ 5.4 $ 5.2 $ 2.0 February 21, 2015 Alte Jakobstraße 99.7% $ 14.1 $ 13.0 $ 3.3 ______________________________________ (1) A portion of the net cash proceeds was used to pay off the property-associated debt of $8.6 million . |
Net income for real Estate sold during period | The following table presents net income attributable to the Company for the three and six months ended June 30, 2015 and 2014 related to Holstenplatz (classified as Real Estate Held for Sale at June 30, 2015, see Note 8), Babcock, AJS, and 1875 Lawrence. Net income for the three and six months ended June 30, 2014 includes the gain on sale of 1875 Lawrence of $ 11.4 million . Net income for the six months ended June 30, 2015 includes the gain on sale of AJS and Babcock for a total of $5.3 million (in millions): For the Three Months Ended June 30, For the Six Months Description 2015 2014 2015 2014 Net income attributable to the Company $ 0.5 $ 10.6 $ 2.9 $ 9.9 |
Real Estate Held for Sale (Tabl
Real Estate Held for Sale (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Real Estate [Abstract] | |
Schedule of Major Classes of Assets and Liabilities of Real Estate Held for Sale [Table Text Block] | The major classes of assets and liabilities associated with our real estate held for sale as of June 30, 2015 and December 31, 2014 were as follows: Real Estate Held for Sale as of Description June 30, 2015 December 31, 2014 Land and improvements, net $ 2,456 $ 3,195 Building and improvements, net 6,761 9,581 Lease intangibles, net 351 175 Furniture, fixtures and equipment, net 13 — Assets associated with real estate held for sale $ 9,581 $ 12,951 Notes payable (1) $ — $ 9,122 Other 95 90 Obligations associated with real estate held for sale $ 95 $ 9,212 ___________________________ (1) We paid off the Holstenplatz debt of approximately $8.1 million on April 30, 2015, its maturity date. On July 20, 2015, we entered into a PSA to sell Wimberly to an unaffiliated third party for a contract sales price of approximately $43.5 million . We acquired Wimberly on February 19, 2013. As of June 30, 2015, we were still in active negotiations and the due diligence process was not complete. In addition, at the time of filing this report on Form 10-Q, we cannot give any assurances that the closing of this sale is probable within the next twelve months. Therefore, we determined Wimberly did not meet the requirements to be classified as held for sale at June 30, 2015. |
Investment in Unconsolidated 28
Investment in Unconsolidated Joint Venture (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of ownership interest in Prospect Park that is recorded as equity investment | The following table sets forth our ownership interest in Prospect Park: Ownership Interest Carrying Amount Property Name June 30, 2015 December 31, 2014 June 30, 2015 December 31, 2014 Prospect Park N/A N/A $14,222 $13,973 |
Notes Payable (Tables)
Notes Payable (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of information on notes payable | The following table sets forth information on our notes payable as of June 30, 2015 and December 31, 2014: Notes Payable as of Description June 30, 2015 December 31, 2014 Interest Rate Maturity Date Holstenplatz (2) n/a $ 9,125 3.887% 4/30/2015 Courtyard Kauai Coconut Beach Hotel 38,000 38,000 30-day LIBOR + .95% (1) 11/9/2015 Florida MOB Portfolio - Gardens Medical Pavilion 13,491 13,678 4.9% 1/1/2018 River Club and the Townhomes at River Club 24,482 24,664 5.26% 5/1/2018 Lakes of Margate 14,617 14,723 5.49% and 5.92% 1/1/2020 Arbors Harbor Town 25,362 25,591 3.985% 1/1/2019 Wimberly 26,551 26,685 30-day LIBOR + 2.28% (1) 3/1/2023 22 Exchange 19,500 19,500 3.93% 5/5/2023 Parkside (3) 10,649 10,828 5% 6/1/2018 Lakewood Flats 33,500 33,500 30-day LIBOR + 1.5% (1) 11/5/2019 $ 206,152 $ 216,294 Notes payable in obligations associated with real estate held for sale: Holstenplatz (2) $ — n/a 3.887% 4/30/2015 Babcock Self Storage (4) — 2,137 5.8% 8/30/2018 Alte Jakobstraße (4) — 6,985 2.3% 12/30/2015 $ — $ 9,122 Total notes payable obligations $ 206,152 $ 225,416 _________________________________ (1) 30-day London Interbank Offer Rate (“LIBOR”) was 0.19% at June 30, 2015. (2) We paid off the balance of the Holstenplatz debt on April 30, 2015. As of June 30, 2015, Holstenplatz was classified as real estate held for sale on our condensed consolidated balance sheet. (3) Includes approximately $0.5 million of unamortized premium related to debt we assumed at acquisition. (4) As of December 31, 2014, Babcock and AJS were classified as real estate held for sale on our consolidated balance sheet. The properties were sold in the first quarter of 2015 and a portion of the sales proceeds for each property was used to pay off the existing indebtedness in full. |
Contractual obligations for principal payments | The following table summarizes our contractual obligations for principal payments as of June 30, 2015: Year Amount Due July 1, 2015 - December 31, 2015 $ 39,082 2016 2,447 2017 2,670 2018 47,393 2019 58,345 Thereafter 55,724 Total contractual obligations for principal payments $ 205,661 Unamortized premium 491 Total notes payable $ 206,152 |
Leasing Activity (Tables)
Leasing Activity (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Leases [Abstract] | |
Future minimum base rental payments of our office and industrial properties due to us under non-cancelable leases | Future minimum base rental payments of our office properties due to us under non-cancelable leases in effect as of June 30, 2015 are as follows: Year Amount Due July 1, 2015 - December 31, 2015 $ 566 2016 1,156 2017 1,028 2018 716 2019 646 Thereafter 2,992 Total $ 7,104 |
Derivative Instruments and He31
Derivative Instruments and Hedging Activities (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of notional value of derivative financial instruments | The following table summarizes the notional values of our derivative financial instruments. The notional values provide an indication of the extent of our involvement in these instruments, but do not represent exposure to credit, interest rate, or market risks: Type / Description Notional Value Interest Rate / Strike Rate Index Maturity Date Not Designated as Hedging Instruments Interest rate cap - Courtyard Kauai Coconut Beach Hotel $ 38,000 3.00% 30-day LIBOR October 15, 2016 Interest rate cap - Wimberly 26,685 4.56% 30-day LIBOR March 1, 2018 |
Summary of fair value of derivative financial instruments | The table below presents the fair value of our derivative financial instruments, as well as their classification on the consolidated balance sheets as of June 30, 2015 and December 31, 2014: Derivatives not designated as hedging instruments: Asset Derivatives Balance Sheet Location June 30, 2015 December 31, 2014 Interest rate derivative contracts Prepaid expenses and other assets $ 5 $ 28 |
Summary of effect of derivative financial instruments on consolidated statements of operations | The table below presents the effect of our derivative financial instruments on the condensed consolidated statements of operations for the three and six months ended June 30, 2015 and 2014: Derivatives Not Designated as Hedging Instruments Amount of Loss Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 $ — $ 103 $ 15 $ 159 |
Supplemental Cash Flow Inform32
Supplemental Cash Flow Information (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of supplemental cash flow information | Supplemental cash flow information is summarized below: Six months ended June 30, Description 2015 2014 Interest paid, net of amounts capitalized $ 3,252 $ 3,915 Income tax paid, net 35 196 Non-cash investing and financing activities: Proceeds held in escrow through sale of real estate interests 912 — Capital expenditures for real estate in accrued liabilities 583 393 Accrued distributions to noncontrolling interest holder 20 72 |
Business and Organization (Deta
Business and Organization (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2015USD ($)real_estate_investmentshares | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)real_estate_investmentshares | Jun. 30, 2014USD ($) | Dec. 31, 2014shares | Jan. 19, 2007shares | |
Business and Organization | ||||||
Straight-line rental revenue | $ | $ 0.1 | $ 0.1 | $ 0.1 | $ 0.1 | ||
Number of real estate investments | real_estate_investment | 11 | |||||
Number of real estate assets consolidated | real_estate_investment | 10 | 10 | ||||
Percentage of ownership interest by BHO II, Inc | 0.10% | |||||
Percentage of remaining ownership interest held by BHO Business Trust II | 99.90% | |||||
Common stock, shares issued | 25,691,443 | 25,691,443 | 25,801,669 | |||
Common stock, shares outstanding | 25,691,443 | 25,691,443 | 25,801,669 | |||
Redemption of common stock (in shares) | 1,000,000 | |||||
Convertible stock outstanding | 1,000 | 1,000 | 1,000 | |||
Maximum | ||||||
Business and Organization | ||||||
Liquidation period of assets and distribution of net proceeds to stockholders | 6 years | |||||
Initial Capitalization | Behringer Harvard Holdings | ||||||
Business and Organization | ||||||
Common stock, shares issued | 22,471 | |||||
Convertible stock issued (in shares) | 1,000 | |||||
Common stock, shares outstanding | 22,471 | 22,471 | ||||
Convertible stock outstanding | 1,000 | 1,000 | ||||
Initial Offering | ||||||
Business and Organization | ||||||
Common stock, shares issued | 26,700,000 | 26,700,000 | ||||
Common stock issued pursuant to reinvestment plan | 2,200,000 | |||||
Consolidated Entities | Wholly Owned Properties | ||||||
Business and Organization | ||||||
Number of real estate investments | real_estate_investment | 2 | |||||
Consolidated Entities | Partially Owned Properties | ||||||
Business and Organization | ||||||
Number of real estate investments | real_estate_investment | 8 |
Summary of Significant Accoun34
Summary of Significant Accounting Policies - Real Estate (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2015unit | Jun. 30, 2015USD ($) | Dec. 31, 2014USD ($) | |
Anticipated amortization expense associated with acquired lease intangibles | |||
July 1, 2015 - December 31, 2015 | $ 18 | ||
2,015 | 36 | ||
2,016 | 20 | ||
2,017 | (14) | ||
2,018 | (12) | ||
Real estate | |||
Total real estate | 274,709 | $ 289,298 | |
Accumulated depreciation and amortization related to consolidated investments in real estate intangibles | |||
Net | $ 320 | 1,850 | |
Maximum | |||
Real Estate | |||
Period for change in initial valuations from acquisition date | 12 months | ||
Lease Intangibles | |||
Accumulated depreciation and amortization related to consolidated investments in real estate intangibles | |||
Cost | $ 3,023 | 4,551 | |
Less: depreciation and amortization | (2,703) | (2,701) | |
Net | 320 | 1,850 | |
Acquired Below-Market Leases | |||
Accumulated depreciation and amortization related to consolidated investments in real estate intangibles | |||
Cost | (184) | (469) | |
Less: depreciation and amortization | 96 | 259 | |
Net | (88) | (210) | |
Holstenplatz Notes | |||
Anticipated amortization expense associated with acquired lease intangibles | |||
July 1, 2015 - December 31, 2015 | 200 | ||
Holstenplatz Notes | Lease Intangibles | |||
Real estate | |||
Total real estate | 400 | ||
Holstenplatz Notes | Acquired Below-Market Leases | |||
Real estate | |||
Total real estate | $ 100 | ||
Babcock and Alte Jakobstrabe | |||
Accumulated depreciation and amortization related to consolidated investments in real estate intangibles | |||
Number of Real Estate Properties Sold | unit | 2 | ||
Babcock and Alte Jakobstrabe | Lease Intangibles | |||
Real estate | |||
Total real estate | 200 | ||
Babcock and Alte Jakobstrabe | Acquired Below-Market Leases | |||
Real estate | |||
Total real estate | 100 | ||
Hotel | |||
Real Estate | |||
Estimated useful lives | 39 years | ||
Buildings and Improvements | |||
Real Estate | |||
Estimated useful lives | 25 years | ||
Real estate | |||
Cost | $ 244,605 | 252,812 | |
Less: depreciation and amortization | (27,785) | (24,162) | |
Total real estate | 216,820 | 228,650 | |
Buildings and Improvements | Holstenplatz Notes | |||
Real estate | |||
Total real estate | 6,800 | ||
Buildings and Improvements | Babcock and Alte Jakobstrabe | |||
Real estate | |||
Total real estate | 9,600 | ||
Land and Improvements | |||
Real estate | |||
Cost | 59,759 | 62,447 | |
Less: depreciation and amortization | (2,459) | (2,073) | |
Total real estate | 57,300 | 60,374 | |
Land and Improvements | Holstenplatz Notes | |||
Real estate | |||
Total real estate | $ 2,500 | ||
Land and Improvements | Babcock and Alte Jakobstrabe | |||
Real estate | |||
Total real estate | $ 3,200 |
Summary of Significant Accoun35
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands | Feb. 21, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 |
Revenue Recognition | |||||||
Straight-line rental revenue | $ 100 | $ 100 | $ 100 | $ 100 | |||
Market lease amortization included in rental revenue | 100 | 100 | 100 | 100 | |||
Accounts Receivable | |||||||
Straight-line rental revenue | 0 | 0 | $ 1,000 | ||||
Deferred Financing Fees | |||||||
Accumulated amortization, deferred financing fees | 2,300 | $ 2,300 | 2,200 | ||||
Income Taxes | |||||||
Required minimum percentage distribution of ordinary taxable income to stockholders to qualify as a REIT | 90.00% | ||||||
Foreign Currency Translation | |||||||
Gain (loss) on foreign currency translation adjustment | (400) | 100 | $ (400) | 0 | |||
Cumulative translation adjustment | 0 | $ 0 | 596 | $ 0 | |||
Furniture, Fixtures and Equipment | |||||||
Furniture, Fixtures and Equipment | |||||||
Accumulated depreciation associated with furniture, fixtures and equipment | 7,700 | $ 7,700 | 6,400 | ||||
Furniture, Fixtures and Equipment | Minimum | |||||||
Furniture, Fixtures and Equipment | |||||||
Estimated useful lives | 5 years | ||||||
Furniture, Fixtures and Equipment | Maximum | |||||||
Furniture, Fixtures and Equipment | |||||||
Estimated useful lives | 7 years | ||||||
Consolidated Properties | |||||||
Accounts Receivable | |||||||
Accounts receivable | 3,000 | $ 3,000 | $ 2,000 | ||||
Alte Jakobstrabe Berlin | |||||||
Foreign Currency Translation | |||||||
Cumulative translation adjustment | $ 600 | $ 600 | |||||
Alte Jakobstrabe Berlin | Foreign Tax Authority | |||||||
Income Taxes | |||||||
Provision (credit) for income tax | $ (500) | $ 2,200 | |||||
Holstenplatz Notes | |||||||
Foreign Currency Translation | |||||||
Cumulative translation adjustment | $ 300 | ||||||
Sales Revenue, Net | HAWAII | Geographic Concentration Risk | |||||||
Geographic Areas, Revenues from External Customers [Abstract] | |||||||
Concentration risk (percent) | 36.00% | ||||||
Sales Revenue, Net | FLORIDA | Geographic Concentration Risk | |||||||
Geographic Areas, Revenues from External Customers [Abstract] | |||||||
Concentration risk (percent) | 20.00% | ||||||
Multifamily | Sales Revenue, Net | Real Estate Asset Concentration Risk | |||||||
Geographic Areas, Revenues from External Customers [Abstract] | |||||||
Concentration risk (percent) | 44.00% | ||||||
Hotel | Sales Revenue, Net | Real Estate Asset Concentration Risk | |||||||
Geographic Areas, Revenues from External Customers [Abstract] | |||||||
Concentration risk (percent) | 36.00% | ||||||
Student Housing | Sales Revenue, Net | Real Estate Asset Concentration Risk | |||||||
Geographic Areas, Revenues from External Customers [Abstract] | |||||||
Concentration risk (percent) | 16.00% |
New Accounting Pronouncements (
New Accounting Pronouncements (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ||
Deferred financing fees, net | $ 2,204 | $ 2,617 |
Assets and Liabilities Measur37
Assets and Liabilities Measured at Fair Value (Details) - Recurring - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Assets | ||
Derivative financial instruments | $ 5 | $ 28 |
Level 1 | ||
Assets | ||
Derivative financial instruments | 0 | 0 |
Level 2 | ||
Assets | ||
Derivative financial instruments | 5 | 28 |
Level 3 | ||
Assets | ||
Derivative financial instruments | $ 0 | $ 0 |
Financial Instruments not Rep38
Financial Instruments not Reported at Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Fair Value Disclosures [Abstract] | ||
Notes payable | $ 206,152 | $ 216,294 |
Real Estate Held-for-sale | 0 | 9,122 |
Fair value of notes payable | $ 205,900 | $ 217,100 |
Real Estate and Real Estate-R39
Real Estate and Real Estate-Related Investments (Details) $ in Thousands, € in Millions | Feb. 21, 2015EUR (€) | Feb. 21, 2015USD ($) | Jan. 08, 2015USD ($) | Jun. 30, 2015USD ($)real_estate_investment | Mar. 31, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)real_estate_investment | Jun. 30, 2014USD ($) | Oct. 20, 2010building |
Real Estate Properties [Line Items] | |||||||||
Number of real estate assets consolidated | real_estate_investment | 10 | 10 | |||||||
Loss on early extinguishment of debt | $ 0 | $ (454) | $ (119) | $ (454) | |||||
Repayment of long-term debt | 17,716 | 16,682 | |||||||
Cumulative translation adjustment | 0 | 0 | 596 | 0 | |||||
Gain on sale of real estate | 0 | 11,445 | 5,320 | 11,445 | |||||
Repayments of debt | 8,600 | ||||||||
Net income (loss) attributable to the Company | (1,960) | 9,184 | $ (2,133) | 6,300 | |||||
Holstenplatz, Hamburg, Germany | |||||||||
Real Estate Properties [Line Items] | |||||||||
Ownership Interest (as a percent) | 100.00% | ||||||||
Gardens Medical Pavilion, South Florida | |||||||||
Real Estate Properties [Line Items] | |||||||||
Ownership Interest (as a percent) | 80.40% | ||||||||
Real estate ownership interest | 80.40% | ||||||||
Courtyard Kauai at Coconut Beach Hotel | |||||||||
Real Estate Properties [Line Items] | |||||||||
Ownership Interest (as a percent) | 80.00% | ||||||||
River Club and the Townhomes at River Club, Athens, Georgia | |||||||||
Real Estate Properties [Line Items] | |||||||||
Ownership Interest (as a percent) | 85.00% | ||||||||
Babcock Self Storage San Antonio | |||||||||
Real Estate Properties [Line Items] | |||||||||
Loss on early extinguishment of debt | $ (100) | ||||||||
Repayment of long-term debt | $ 2,100 | ||||||||
Ownership interest percentage | 85.00% | ||||||||
Sales contract price, real estate | $ 5,400 | ||||||||
Net cash proceeds from sale of real estate | 5,200 | ||||||||
Gain on sale of real estate | $ 2,000 | ||||||||
Lakes of Margate, Margate, Florida | |||||||||
Real Estate Properties [Line Items] | |||||||||
Ownership Interest (as a percent) | 92.50% | ||||||||
Arbors Harbor Town, Memphis, Tennessee | |||||||||
Real Estate Properties [Line Items] | |||||||||
Ownership Interest (as a percent) | 94.00% | ||||||||
Alte Jakobstrabe Berlin | |||||||||
Real Estate Properties [Line Items] | |||||||||
Loss on early extinguishment of debt | $ (100) | ||||||||
Repayment of long-term debt | € 5.7 | 6,500 | |||||||
Cumulative translation adjustment | $ 600 | $ 600 | |||||||
Ownership interest percentage | 99.70% | 99.70% | |||||||
Sales contract price, real estate | € 12.4 | $ 14,100 | |||||||
Net cash proceeds from sale of real estate | 13,000 | ||||||||
Gain on sale of real estate | $ 3,300 | ||||||||
Wimberly at Deerwood, Jacksonville, Florida | |||||||||
Real Estate Properties [Line Items] | |||||||||
Ownership Interest (as a percent) | 95.00% | ||||||||
22 Exchange, Akron, Ohio | |||||||||
Real Estate Properties [Line Items] | |||||||||
Ownership Interest (as a percent) | 90.00% | ||||||||
Parkside Apartments, Sugarland, Texas | |||||||||
Real Estate Properties [Line Items] | |||||||||
Ownership Interest (as a percent) | 90.00% | ||||||||
Original Florida MOB Portfolio | |||||||||
Real Estate Properties [Line Items] | |||||||||
Number of properties | building | 8 | ||||||||
Florida MOB Portfolio, South Florida | |||||||||
Real Estate Properties [Line Items] | |||||||||
Number of properties | building | 9 | ||||||||
Lakewood Flats | |||||||||
Real Estate Properties [Line Items] | |||||||||
Ownership Interest (as a percent) | 100.00% | ||||||||
Disposal Group, Not Discontinued Operations | Babcock, Alte Jakobstrabe and 1875 Lawrence | |||||||||
Real Estate Properties [Line Items] | |||||||||
Net income (loss) attributable to the Company | 500 | 10,600 | $ 2,900 | 9,900 | |||||
Disposal Group, Not Discontinued Operations | 1875 Lawrence, Denver, CO | |||||||||
Real Estate Properties [Line Items] | |||||||||
Net income (loss) attributable to the Company | $ 11,400 | $ 11,400 | |||||||
Disposal Group, Not Discontinued Operations | Babcock, Alte Jakobstrabe and 1875 Lawrence | |||||||||
Real Estate Properties [Line Items] | |||||||||
Net income (loss) attributable to the Company | $ 5,300 | ||||||||
Foreign Tax Authority | Alte Jakobstrabe Berlin | |||||||||
Real Estate Properties [Line Items] | |||||||||
Provision (credit) for income tax | $ (500) | $ 2,200 |
Real Estate Held for Sale - Add
Real Estate Held for Sale - Additional Information (Details) - Subsequent Event € in Millions, $ in Millions | Jul. 20, 2015USD ($) | Jul. 16, 2015EUR (€) | Jul. 16, 2015USD ($) |
Holstenplatz Notes | |||
Long Lived Assets Held-for-sale [Line Items] | |||
Sales contract price, real estate | € 16.5 | $ 18.1 | |
Wimberly at Deerwood | |||
Long Lived Assets Held-for-sale [Line Items] | |||
Sales contract price, real estate | $ 43.5 |
Real Estate Held for Sale - Maj
Real Estate Held for Sale - Major Classes of Assets and Liabilities (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Real Estate [Abstract] | |||
Land and improvements, net | $ 2,456 | $ 3,195 | |
Building and improvements, net | 6,761 | 9,581 | |
Lease intangibles, net | 351 | 175 | |
Furniture, fixtures and equipment, net | 13 | 0 | |
Assets associated with real estate held for sale | 9,581 | 12,951 | |
Notes payable | 0 | 9,122 | |
Other | 95 | 90 | |
Obligations associated with real estate held for sale | 95 | $ 9,212 | |
Repayment of long-term debt | $ 17,716 | $ 16,682 |
Investment in Unconsolidated 42
Investment in Unconsolidated Joint Venture - Additional Information (Details) - Prospect Park $ in Millions | May. 05, 2014USD ($) | May. 24, 2013USD ($)extension_option | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) |
Investment in Unconsolidated Joint Venture | ||||||
Outstanding principal balance under mezzanine loan | $ 15.2 | $ 15.2 | ||||
Interest capitalized | $ 0.1 | $ 0.1 | $ 0.2 | $ 0.2 | ||
Initial Advance to Joint Venture | ||||||
Investment in Unconsolidated Joint Venture | ||||||
Loans receivable, construction | $ 13.7 | |||||
Annual interest rate (as a percent) | 10.00% | |||||
Period for which annual interest rate will be 10 percent | 3 years | |||||
Number of extensions of the term of mezzanine loan at the option of the borrower | extension_option | 2 | |||||
Period of extension of the term of mezzanine loan at the option of the borrower | 1 year | |||||
Annual interest rate after two extensions of mezzanine loan (as a percent) | 14.00% | |||||
Initial Advance to Joint Venture | Third-party senior construction lender | ||||||
Investment in Unconsolidated Joint Venture | ||||||
Loans receivable, construction | $ 35.6 | |||||
Additional Advance to Joint Venture | ||||||
Investment in Unconsolidated Joint Venture | ||||||
Annual interest rate (as a percent) | 18.00% | |||||
Construction cost overruns | $ 6.6 | |||||
Increase to maximum borrowing capacity, loan receivable | 1.5 | |||||
Additional Advance to Joint Venture | Third-party senior construction lender | ||||||
Investment in Unconsolidated Joint Venture | ||||||
Loans receivable, construction | $ 40 |
Investment in Unconsolidated 43
Investment in Unconsolidated Joint Venture - Schedule of Ownership Interest (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Prospect Park | ||
Investment in Unconsolidated Joint Venture | ||
Carrying Amount | $ 14,222 | $ 13,973 |
Notes Payable (Details)
Notes Payable (Details) $ in Thousands, € in Millions | Apr. 30, 2015USD ($) | Feb. 21, 2015EUR (€) | Feb. 21, 2015USD ($) | Jan. 08, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015 | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($) |
Notes Payable | ||||||||||
Notes payable | $ 206,152 | $ 206,152 | $ 216,294 | |||||||
Variable rate (as a percent) | 0.19% | 0.19% | ||||||||
Repayment of long-term debt | $ 17,716 | $ 16,682 | ||||||||
Courtyard Kauai at Coconut Beach Hotel | ||||||||||
Notes Payable | ||||||||||
Notes payable | $ 38,000 | 38,000 | ||||||||
Alte Jakobstrabe | ||||||||||
Notes Payable | ||||||||||
Repayment of long-term debt | € 5.7 | $ 6,500 | ||||||||
Babcock Self Storage | ||||||||||
Notes Payable | ||||||||||
Repayment of long-term debt | $ 2,100 | |||||||||
Notes Payable, Other Payables | Holstenplatz Notes | ||||||||||
Notes Payable | ||||||||||
Notes payable | $ 0 | $ 0 | 9,125 | |||||||
Interest rate (as a percent) | 3.887% | 3.887% | ||||||||
Repayment of long-term debt | $ 8,100 | |||||||||
Notes Payable, Other Payables | Courtyard Kauai at Coconut Beach Hotel | ||||||||||
Notes Payable | ||||||||||
Variable rate basis | 30-day LIBOR | |||||||||
Variable rate (as a percent) | 0.95% | |||||||||
Notes payable | $ 38,000 | $ 38,000 | 38,000 | |||||||
Variable rate (as a percent) | 0.15% | 0.15% | ||||||||
Notes Payable, Other Payables | Florida MOB Portfolio - Gardens Medical Pavilion | ||||||||||
Notes Payable | ||||||||||
Notes payable | $ 13,491 | $ 13,491 | 13,678 | |||||||
Interest rate (as a percent) | 4.90% | 4.90% | ||||||||
Notes Payable, Other Payables | River Club and the Townhomes at River Club (formerly referred to as the UGA Portfolio) | ||||||||||
Notes Payable | ||||||||||
Notes payable | $ 24,482 | $ 24,482 | 24,664 | |||||||
Interest rate (as a percent) | 5.26% | 5.26% | ||||||||
Notes Payable, Other Payables | Lakes of Margate | ||||||||||
Notes Payable | ||||||||||
Notes payable | $ 14,617 | $ 14,617 | 14,723 | |||||||
Minimum interest rate (as a percent) | 5.49% | |||||||||
Maximum interest rate (as a percent) | 5.92% | |||||||||
Notes Payable, Other Payables | Arbors Harbor Town | ||||||||||
Notes Payable | ||||||||||
Notes payable | $ 25,362 | $ 25,362 | 25,591 | |||||||
Interest rate (as a percent) | 3.985% | 3.985% | ||||||||
Notes Payable, Other Payables | Wimberly at Deerwood | ||||||||||
Notes Payable | ||||||||||
Variable rate basis | 30-day LIBOR | |||||||||
Variable rate (as a percent) | 2.28% | |||||||||
Notes payable | $ 26,551 | $ 26,551 | 26,685 | |||||||
Variable rate (as a percent) | 0.15% | 0.15% | ||||||||
Notes Payable, Other Payables | 1875 Lawrence, Denver, CO | ||||||||||
Notes Payable | ||||||||||
Variable rate basis | 30-day LIBOR | |||||||||
Variable rate (as a percent) | 5.35% | |||||||||
Variable rate (as a percent) | 0.15% | 0.15% | ||||||||
Notes Payable, Other Payables | 22 Exchange | ||||||||||
Notes Payable | ||||||||||
Notes payable | $ 19,500 | $ 19,500 | 19,500 | |||||||
Interest rate (as a percent) | 3.93% | 3.93% | ||||||||
Notes Payable, Other Payables | Parkside | ||||||||||
Notes Payable | ||||||||||
Notes payable | $ 10,649 | $ 10,649 | 10,828 | |||||||
Interest rate (as a percent) | 5.00% | 5.00% | ||||||||
Debt instrument, unamortized premium | $ 500 | $ 500 | ||||||||
Notes Payable, Other Payables | Lakewood Flats | ||||||||||
Notes Payable | ||||||||||
Notes payable | 33,500 | 33,500 | 33,500 | |||||||
Prospect Park | ||||||||||
Notes Payable | ||||||||||
Interest capitalized | 100 | $ 100 | $ 200 | $ 200 | ||||||
Alte Jakobstrabe | ||||||||||
Notes Payable | ||||||||||
Repayment of long-term debt | € 5.7 | $ 6,500 | ||||||||
Babcock Self Storage | ||||||||||
Notes Payable | ||||||||||
Repayment of long-term debt | $ 2,100 | |||||||||
Notes Payable to Banks | Courtyard Kauai at Coconut Beach Hotel | ||||||||||
Notes Payable | ||||||||||
Debt instrument, term of renewal option | 18 months | |||||||||
Notes Payable, Other Payables | ||||||||||
Notes Payable | ||||||||||
Notes payable | 0 | $ 0 | 9,122 | |||||||
Notes Payable, Other Payables | Alte Jakobstrabe | ||||||||||
Notes Payable | ||||||||||
Notes payable | 0 | 0 | 6,985 | |||||||
Notes Payable, Other Payables | Babcock Self Storage | ||||||||||
Notes Payable | ||||||||||
Notes payable | 0 | 0 | 2,137 | |||||||
Notes Payable, Assets Held-for-sale | ||||||||||
Notes Payable | ||||||||||
Notes payable | $ 206,152 | $ 206,152 | $ 225,416 |
Notes Payable (Details 2)
Notes Payable (Details 2) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | |||
Repayments of Notes Payable | $ 17,716 | $ 16,682 | |
Contractual obligations for principal payments | |||
July 1, 2015 - December 31, 2015 | 39,082 | ||
2,015 | 2,447 | ||
2,016 | 2,670 | ||
2,017 | 47,393 | ||
2,018 | 58,345 | ||
Thereafter | 55,724 | ||
Total contractual obligations for principal payments | 205,661 | ||
Unamortized premium | 491 | ||
Total notes payable | 206,152 | $ 216,294 | |
Courtyard Kauai at Coconut Beach Hotel | |||
Contractual obligations for principal payments | |||
Total notes payable | $ 38,000 | ||
Courtyard Kauai at Coconut Beach Hotel | Notes Payable to Banks | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Renewal Option, Term | 18 months |
Leasing Activity - Schedule of
Leasing Activity - Schedule of Future Minimum Payments (Details) $ in Thousands | Jun. 30, 2015USD ($) |
Leases [Abstract] | |
July 1, 2015 - December 31, 2015 | $ 566 |
2,015 | 1,156 |
2,016 | 1,028 |
2,017 | 716 |
2,018 | 646 |
Thereafter | 2,992 |
Total | $ 7,104 |
Leasing Activity - Additional I
Leasing Activity - Additional Information (Details) - Jun. 30, 2015 $ in Thousands | USD ($)office_property |
Operating Leased Assets [Line Items] | |
Maximum lease term | 1 year |
Future minimum payments, after five years | $ 2,992 |
Holstenplatz Notes | |
Operating Leased Assets [Line Items] | |
Minimum payments over the next five years | 3,600 |
Future minimum payments, after five years | $ 1,700 |
Germany and Florida | |
Operating Leased Assets [Line Items] | |
Number of office properties remaining | office_property | 2 |
Derivative Instruments and He48
Derivative Instruments and Hedging Activities - Additional Information (Details) | 6 Months Ended | ||
Jun. 30, 2015USD ($)derivative | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($) | |
Interest rate cap | |||
Derivative [Line Items] | |||
Number of interest rate caps | 2 | ||
Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Number of derivatives held | 0 | ||
Interest Expense | |||
Derivative [Line Items] | |||
Reclassification of unrealized loss to interest expense (less than) | $ | $ 0 | $ 100,000 | |
Prepaid Expenses and Other Assets | |||
Derivative [Line Items] | |||
Derivative financial instruments (less than) | $ | $ 100,000 | $ 100,000 |
Derivative Instruments and He49
Derivative Instruments and Hedging Activities - Summary of Notional Values (Details) - Jun. 30, 2015 - Interest rate cap - USD ($) $ in Thousands | Total |
Courtyard Kauai Coconut Beach Hotel, Kauai, Hawaii | LIBOR | |
Derivative [Line Items] | |
Interest Rate/ Strike Rate (as a percent) | 3.00% |
Courtyard Kauai Coconut Beach Hotel, Kauai, Hawaii | Derivative not designated as hedging instruments | |
Derivative [Line Items] | |
Notional Value | $ 38,000 |
Wimberly at Deerwood | LIBOR | |
Derivative [Line Items] | |
Interest Rate/ Strike Rate (as a percent) | 4.56% |
Wimberly at Deerwood | Derivative not designated as hedging instruments | |
Derivative [Line Items] | |
Notional Value | $ 26,685 |
Derivative Instruments and He50
Derivative Instruments and Hedging Activities - Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Derivative not designated as hedging instruments | Interest rate derivative contracts | ||
Derivative [Line Items] | ||
Derivative financial instruments | $ 5 | $ 28 |
Derivative Instruments and He51
Derivative Instruments and Hedging Activities - Effect on Financial Statements (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Amount of gain or (loss) on derivative not designated as hedging instrument | $ 0 | $ 103 | $ 15 | $ 159 |
Distributions (Details)
Distributions (Details) - USD ($) $ / shares in Units, $ in Millions | Mar. 18, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Jun. 30, 2014 |
Distributions [Abstract] | |||||
Special distribution declared on common stock (in dollars per share) | $ 1 | ||||
Special distribution declared on common stock, amount | $ 0 | $ 25.7 | $ 0 | $ 0 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Thousands | Jun. 06, 2015USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)installment | Jun. 30, 2014USD ($) | Dec. 31, 2013USD ($) |
Related party transaction | ||||||
Acquisition and advisory fees incurred | $ 100 | $ 100 | ||||
Reimbursement of acquisition expense | $ 100 | 100 | ||||
Asset management fees incurred | $ 717 | $ 98 | $ 1,442 | 1,068 | ||
Advisor | ||||||
Related party transaction | ||||||
Acquisition and advisory fees as percentage of purchase, development, construction, or improvement of each asset acquired | 1.50% | |||||
Acquisition and advisory fees as percentage of funds advanced in respect of loan or other investment | 1.50% | |||||
Percentage of debt financing fee payable under loan or line of credit | 0.50% | |||||
Asset management fee, annual (percent) | 0.70% | |||||
Asset management fees accrued | $ 300 | |||||
Reversal of asset management fees accrued | $ 100 | |||||
Asset management fees incurred | $ 1,300 | 1,000 | ||||
Administrative service fee, annual | $ 1,800 | $ 1,500 | ||||
Administrative service fees, number of annual installment payments | installment | 4 | |||||
Administrative service fees, maximum period for payment | 45 days | |||||
Administrative services cost incurred and expensed | $ 800 | 900 | ||||
Due diligence service costs (less than) | $ 100 | |||||
Construction management fee, percentage (not to exceed) | 5.00% | |||||
Construction management fees (less than) | 100 | |||||
Advisor | Funds paid for purchasing an asset | ||||||
Related party transaction | ||||||
Percentage of reimbursement of acquisition expense | 0.25% | |||||
Advisor | Funds budgeted for development, construction or improvement of assets | ||||||
Related party transaction | ||||||
Percentage of reimbursement of acquisition expense | 0.25% | |||||
Advisor | Funds advanced in respect of loan investment | ||||||
Related party transaction | ||||||
Percentage of reimbursement of acquisition expense | 0.25% | |||||
Behringer Harvard Opportunity II Management Services, LLC | ||||||
Related party transaction | ||||||
Property management fees as percentage of gross revenues of properties | 4.00% | |||||
Oversight fee as percentage of gross revenues of property managed | 0.50% | |||||
Property management fees or oversight fees incurred | $ 300 | $ 300 | ||||
Behringer Harvard Opportunity II Management Services, LLC | Minimum | ||||||
Related party transaction | ||||||
Non reimbursement of operating expenses in excess of average invested assets (as a percent) | 2.00% | |||||
Non reimbursement of operating expenses in excess of net income (as a percent) | 25.00% |
Supplemental Cash Flow Inform54
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Supplemental Cash Flow Information [Abstract] | ||
Interest paid, net of amounts capitalized | $ 3,252 | $ 3,915 |
Income tax paid, net | 35 | 196 |
Escrow Deposits Related to Property Sales | 912 | 0 |
Non-cash investing and financing activities: | ||
Capital expenditures for real estate in accrued liabilities | 583 | 393 |
Accrued distributions to noncontrolling interest holder | $ 20 | $ 72 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event € in Millions, $ in Millions | Jul. 20, 2015USD ($) | Jul. 16, 2015EUR (€) | Jul. 16, 2015USD ($) | Aug. 11, 2015USD ($)shares |
Subsequent Event [Line Items] | ||||
Stock redemptions approved (in shares) | shares | 36,457 | |||
Aggregate redemption payment of shares approved | $ 0.2 | |||
Holstenplatz Notes | ||||
Subsequent Event [Line Items] | ||||
Sales contract price, real estate | € 16.5 | $ 18.1 | ||
Wimberly at Deerwood | ||||
Subsequent Event [Line Items] | ||||
Sales contract price, real estate | $ 43.5 |