Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 30, 2016 | |
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 | Mar. 31, 2016 | |
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 | 25,453,730 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Real estate | ||
Land and improvements, net | $ 43,154 | $ 51,382 |
Buildings and improvements, net | 136,531 | 185,213 |
Real estate under development | 35 | 176 |
Total real estate | 179,720 | 236,771 |
Assets associated with real estate held for sale | 55,792 | 0 |
Cash and cash equivalents | 37,990 | 76,815 |
Restricted cash | 3,837 | 4,581 |
Accounts receivable, net | 2,235 | 2,426 |
Prepaid expenses and other assets | 953 | 1,078 |
Investment in unconsolidated joint venture | 14,614 | 14,482 |
Furniture, fixtures and equipment, net | 4,488 | 5,702 |
Lease intangibles, net | 336 | 334 |
Total assets | 299,965 | 342,189 |
Liabilities and Equity | ||
Notes payable, net | 143,609 | 177,036 |
Accounts payable | 374 | 479 |
Payables to related parties | 432 | 433 |
Acquired below-market leases, net | 76 | 80 |
Dividends Payable | 0 | 38,378 |
Distributions payable to noncontrolling interest | 19 | 52 |
Income taxes payable | 1,036 | 986 |
Accrued and other liabilities | 6,219 | 8,166 |
Obligations associated with real estate held for sale | 33,261 | 0 |
Total liabilities | 185,026 | 225,610 |
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, 25,494,946 and 25,585,198 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively | 3 | 3 |
Additional paid-in capital | 229,333 | 229,796 |
Accumulated distributions and net loss | (120,682) | (119,609) |
Accumulated other comprehensive loss | (215) | (372) |
Total Behringer Harvard Opportunity REIT II, Inc. equity | 108,439 | 109,818 |
Noncontrolling interest | 6,500 | 6,761 |
Total equity | 114,939 | 116,579 |
Total liabilities and equity | $ 299,965 | $ 342,189 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Convertible stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Convertible stock, shares authorized (in shares) | 1,000 | 1,000 |
Convertible stock, shares outstanding (in shares) | 1,000 | 1,000 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 350,000,000 | 350,000,000 |
Common stock, shares issued (in shares) | 25,494,946 | |
Common stock, shares outstanding (in shares) | 25,494,946 | 25,585,198 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenues | ||
Rental revenue | $ 7,319 | $ 8,486 |
Hotel revenue | 5,131 | 4,828 |
Total revenues | 12,450 | 13,314 |
Expenses | ||
Property operating expenses | 2,283 | 2,897 |
Hotel operating expenses | 3,448 | 3,158 |
Interest expense, net | 1,524 | 1,821 |
Real estate taxes | 1,465 | 1,584 |
Property management fees | 414 | 446 |
Asset management fees | 614 | 725 |
General and administrative | 802 | 921 |
Depreciation and amortization | 3,165 | 4,453 |
Total expenses | 13,715 | 16,005 |
Interest income, net | 14 | 50 |
Loss on early extinguishment of debt | 0 | (119) |
Other income (loss) | 284 | (39) |
Loss before gain on sale of real estate and income tax expense | (967) | (2,799) |
Gain on sale of real estate | 0 | 5,320 |
Income tax expense | 0 | (2,183) |
Net income (loss) | (967) | 338 |
Net income attributable to the noncontrolling interest | (106) | (511) |
Net loss attributable to the Company | $ (1,073) | $ (173) |
Weighted average shares outstanding: | ||
Basic and diluted (in shares) | 25,553 | 25,776 |
Basic and diluted income (loss) per share (in dollars per share) | $ (0.04) | $ (0.01) |
Distributions declared per common share (in dollars per share) | $ 0 | $ 1 |
Comprehensive income (loss): | ||
Net income (loss) | $ (967) | $ 338 |
Other comprehensive income (loss): | ||
Reclassification of unrealized loss on currency translation to net income | 0 | 596 |
Foreign currency translation gain (loss) | 157 | (769) |
Total other comprehensive income (loss) | 157 | (173) |
Comprehensive income (loss) | (810) | 165 |
Comprehensive income attributable to noncontrolling interest | (106) | (511) |
Comprehensive loss attributable to the Company | $ (916) | $ (346) |
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 (in shares) at Dec. 31, 2014 | 1 | 25,802 | |||||
Balance at Dec. 31, 2014 | $ 176,556 | $ 0 | $ 3 | $ 231,240 | $ (62,477) | $ (246) | $ 8,036 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | 338 | (173) | 511 | ||||
Redemption of common stock (in shares) | (70) | ||||||
Redemption of common stock | (498) | (498) | |||||
Distributions declared on common stock | (25,732) | (25,732) | |||||
Contributions from noncontrolling interest | 62 | 62 | |||||
Distributions to noncontrolling interest | (988) | $ (988) | |||||
Other comprehensive income (loss): | |||||||
Reclassification of unrealized loss on currency translation to net income | 596 | 596 | |||||
Foreign currency translation gain (loss) | (769) | (769) | |||||
Balance (in shares) at Mar. 31, 2015 | 1 | 25,732 | |||||
Balance at Mar. 31, 2015 | 149,565 | $ 0 | $ 3 | 230,742 | (88,382) | (419) | $ 7,621 |
Other comprehensive income (loss): | |||||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | (769) | ||||||
Balance (in shares) at Dec. 31, 2015 | 1 | 25,585 | |||||
Balance at Dec. 31, 2015 | 116,579 | $ 0 | $ 3 | 229,796 | (119,609) | (372) | 6,761 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | (967) | (1,073) | 106 | ||||
Redemption of common stock (in shares) | (90) | ||||||
Redemption of common stock | (463) | (463) | |||||
Contributions from noncontrolling interest | 60 | 60 | |||||
Distributions to noncontrolling interest | (427) | (427) | |||||
Other comprehensive income (loss): | |||||||
Reclassification of unrealized loss on currency translation to net income | 0 | ||||||
Foreign currency translation gain (loss) | 157 | 157 | |||||
Balance (in shares) at Mar. 31, 2016 | 1 | 25,495 | |||||
Balance at Mar. 31, 2016 | 114,939 | $ 0 | $ 3 | $ 229,333 | $ (120,682) | $ (215) | $ 6,500 |
Other comprehensive income (loss): | |||||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | $ 157 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (967) | $ 338 |
Adjustments to reconcile net income (loss) to net cash flows provided by operating activities: | ||
Depreciation and amortization | 3,126 | 4,389 |
Amortization of deferred financing fees | 137 | 187 |
Gain on sale of real estate | 0 | (5,320) |
Loss on early extinguishment of debt | 0 | 119 |
Loss on derivatives | 1 | 15 |
Change in operating assets and liabilities: | ||
Accounts receivable | 188 | 507 |
Prepaid expenses and other assets | 125 | 269 |
Accounts payable | (110) | (252) |
Income taxes payable | 12 | 2,223 |
Accrued and other liabilities | (1,786) | (6) |
Payables to related parties | (1) | 47 |
Addition of lease intangibles | (27) | (6) |
Cash provided by operating activities | 698 | 2,510 |
Cash flows from investing activities: | ||
Investment in unconsolidated joint venture | (132) | (125) |
Proceeds from sale of real estate | 0 | 18,244 |
Additions of property and equipment | (668) | (640) |
Change in restricted cash | 744 | 385 |
Cash provided by (used in) investing activities | (56) | 17,864 |
Cash flows from financing activities: | ||
Financing costs | 0 | (106) |
Payments on notes payable | (424) | (9,086) |
Redemptions of common stock | (463) | (498) |
Distributions paid on common stock | (38,378) | (25,732) |
Contributions from noncontrolling interest holders | 60 | 62 |
Distributions to noncontrolling interest holders | (459) | (988) |
Cash used in financing activities | (39,664) | (36,348) |
Effect of exchange rate changes on cash and cash equivalents | 197 | (565) |
Net change in cash and cash equivalents | (38,825) | (16,539) |
Cash and cash equivalents at beginning of period | 76,815 | 72,949 |
Cash and cash equivalents at end of period | $ 37,990 | $ 56,410 |
Business and Organization
Business and Organization | 3 Months Ended |
Mar. 31, 2016 | |
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 our board of directors determines that a sale or other disposition appears to be advantageous to achieve our investment objectives or until it appears that the objectives will not be met. Consistent with our investment objectives of commencing a liquidation within three to six years after the termination of our initial public offering, we have entered our disposition phase and our board of directors is in the process of considering the orderly disposition of our assets. As of March 31, 2016, we had nine real estate investments, eight of which were consolidated. One of our consolidated properties is wholly owned and seven properties are consolidated through investments in joint ventures. As of March 31, 2016, Lakewood Flats, a 435 -unit multifamily community located in Dallas, Texas, was classified as real estate held for sale on our condensed consolidated balance sheet. See Note 8, Real Estate Held for Sale, for further detail. Substantially all of our business is conducted through Behringer Harvard Opportunity OP II LP, a limited partnership organized in Delaware (the “Operating Partnership”). As of March 31, 2016, our wholly-owned subsidiary, BHO II, Inc., a Delaware corporation, owned a 0.1% partnership interest in the Operating Partnership as its sole general partner. As of March 31, 2016, our wholly-owned subsidiary, BHO Business Trust II, a Maryland business trust, was the sole limited partner of the Operating Partnership and owned the remaining 99.9% interest in the Operating Partnership. 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 services related to the sale of our assets. 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 March 31, 2016, we had 25.5 million shares of common stock outstanding and 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 are in the process of disposing of assets and can provide no assurances as to the timing of our ultimate liquidation. As we make disposals, we will liquidate and distribute the net proceeds to our stockholders. Economic or market conditions may, however, result in different holding periods for different assets. |
Interim Unaudited Financial Inf
Interim Unaudited Financial Information | 3 Months Ended |
Mar. 31, 2016 | |
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, 2015, which was filed with the SEC on March 16, 2016. 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 March 31, 2016, the condensed consolidated statements of operations and comprehensive income for the three months ended March 31, 2016 and 2015 and condensed consolidated statements of equity and cash flows for the three months ended March 31, 2016 and 2015 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 March 31, 2016 and December 31, 2015 and our condensed consolidated results of operations and cash flows for the periods ended March 31, 2016 and 2015. 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 | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 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 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, 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 As of March 31, 2016 and December 31, 2015, accumulated depreciation and amortization related to our consolidated investments in real estate assets and intangibles were as follows: March 31, 2016 Buildings and Improvements Land and Improvements Lease Intangibles Acquired Cost (1) $ 162,514 $ 45,872 $ 1,508 $ (137 ) Less: depreciation and amortization (1) (25,983 ) (2,718 ) (1,172 ) 61 Net $ 136,531 $ 43,154 $ 336 $ (76 ) ______________________________________________ (1) Excludes Lakewood Flats, which was classified as held for sale as of March 31, 2016. Net book values included in assets associated with real estate held for sale in the condensed consolidated balance sheet were buildings and improvements of $47 million and land and improvements of $8.1 million . See Note 8, Real Estate Held for Sale. December 31, 2015 Buildings and Improvements Land and Improvements Lease Intangibles Acquired Cost $ 211,635 $ 54,068 $ 3,083 $ (184 ) Less: depreciation and amortization (26,422 ) (2,686 ) (2,749 ) 104 Net $ 185,213 $ 51,382 $ 334 $ (80 ) 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 net amortization expense associated with the acquired lease intangibles for each of the following five years as of March 31, 2016 is as follows: Year Lease / Other Intangibles April 1, 2016 - December 31, 2016 $ 28 2017 20 2018 (14 ) 2019 (12 ) 2020 (10 ) 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 March 31, 2016, Lakewood Flats, a 435 -unit multifamily community located in Dallas, Texas, was classified as real estate held for sale on our condensed consolidated balance sheet. We received an unsolicited offer from an unaffiliated third party and on April 7, 2016, we entered into a purchase and sale agreement (“PSA”) for the investment with the unaffiliated third party. See Note 8, Real Estate Held for Sale, for further detail. We did not have any real estate assets classified as held for sale as of December 31, 2015. 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 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 assets and our investment in an unconsolidated joint venture is currently recoverable. Accordingly, there were no impairment charges for the three months ended March 31, 2016 and 2015. 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 an 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 months ended March 31, 2016 and 2015. Leases associated with our multifamily, student housing, and hotel assets are generally short-term in nature, and thus have no straight-line rent. Net above-market lease amortization was a charge of less than $0.1 million recognized in rental revenues for the three months ended March 31, 2016. Net below-market lease amortization was income of less than $0.1 million recognized in rental revenues for the three months ended March 31, 2015. 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 $2.2 million and $2.4 million as of March 31, 2016 and December 31, 2015, respectively, and included straight-line rental revenue receivables of $0.3 million as of March 31, 2016 and December 31, 2015. 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 $8.7 million and $8.1 million as of March 31, 2016 and December 31, 2015, respectively. Deferred Financing Fees Deferred financing fees are recorded at cost and are amortized to interest expense using a straight-line method that approximates the effective interest method over the life of the related debt. Deferred financing fees, net of accumulated amortization, were $1.5 million and $1.7 million as of March 31, 2016 and December 31, 2015, respectively. Accumulated amortization of deferred financing fees were $1.7 million and $2.5 million as of March 31, 2016 and December 31, 2015, respectively. In April 2015, the Financial Accounting Standards Board (“FASB”) issued an update (“ASU 2015-03”) to ASC Topic 835, Interest - Imputation of Interest, Simplifying the Presentation of Debt Issuance Costs. The adoption of ASU 2015-03, effective January 1, 2016, requires companies to present debt issuance costs related to a recognized debt liability as a direct reduction from the carrying amount of the related debt liability, retrospectively. See Note 4, New Accounting Pronouncements, for further details. The adoption of the new standard resulted in the following reclassifications of unamortized deferred financing fees as of December 31, 2015: December 31, 2015 Originally Reported Reclassification Adjusted Deferred financing fees, net $ 1,656 $ (1,656 ) $ — Notes payable 178,692 (1,656 ) 177,036 As of March 31, 2016, we reported $1.1 million of deferred financing fees as a reduction to the carrying amount of notes payable and $0.4 million of deferred financing fees as a reduction to the carrying amount of obligations associated with real estate held for sale. 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. As a result of the sale of one of our foreign investments during the first quarter of 2015, Alte Jakobstraße (“AJS”), we recorded estimated foreign income tax of approximately $2.2 million during the period ended March 31, 2015. We recorded no income tax during the three months ended March 31, 2016. The foreign income tax was calculated on gains recognized at the exchange rate in effect on the date of sale and calculated using current tax rates. 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”). 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 AJS and Holstenplatz, which were both sold in 2015. We sold AJS in February 2015 and Holstenplatz in September 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 months ended March 31, 2016 and 2015, the foreign currency translation adjustment was a gain of $0.2 million and a loss of $0.8 million , respectively. 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. In accordance with ASU 2013-05, upon disposal of the property, we would recognize the CTA as an adjustment to the gain on sale. 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. Concentration of Credit Risk At March 31, 2016 and December 31, 2015, 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 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 three months ended March 31, 2016, excluding Lakewood Flats, which was classified as real estate held for sale, 48% and 14% of our total revenues were derived from our properties located in Hawaii and Florida, respectively. Additionally, excluding our property classified as held for sale as of March 31, 2016, 48% , 28% and 21% of our total revenues for the three months ended March 31, 2016 were from our hotel, multifamily 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 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 months ended March 31, 2016 and 2015, 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 | 3 Months Ended |
Mar. 31, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, the 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. In addition, early adoption will be permitted 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 August 2014, the FASB issued an update (“ASU 2014-15”) to ASC Topic 205, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. ASU 2014-15 requires management’s assessment of a company’s ability to continue as a going concern and provide related footnote disclosures when conditions give rise to substantial doubt about a company’s ability to continue as a going concern within one year from the financial statement issuance date. ASU 2014-15 applies to all companies and is effective for the annual period ending after December 15, 2016, and all annual and interim periods thereafter. We do not believe the adoption of this guidance will have a material impact on our disclosures. In January 2015, the FASB issued (“ASU 2015-01”) to ASC Topic 225, Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items. ASU 2015-01 eliminates the concept of an extraordinary item from U.S. GAAP. An entity is no longer required to (i) segregate an extraordinary item from the results of ordinary operations; (ii) separately present an extraordinary item on its income statement, net of tax, after income from continuing operations; and (iii) disclose income taxes and earnings per share data applicable to an extraordinary item. ASU 2015-01 does not affect disclosure guidance for events or transactions that are unusual in nature or infrequent in occurrence. ASU 2015-01 is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2015. The adoption of ASU 2015-01, effective January 1, 2016, did not impact our consolidated financial position, results of operations, or cash flows. 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 adoption of ASU 2015-02, effective January 1, 2016, did not impact our consolidated financial position, results of operations, or cash flows. See Note 10 for further details. 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. Effective January 1, 2016, 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. We adopted ASU 2015-03 on January 1, 2016. The recognition and measurement guidance for debt issuance costs is not affected. The new guidance requires retrospective application. As of December 31, 2015, we had $1.7 million of net deferred financing costs that were reclassified from assets to a reduction in the carrying amount of our debt. In January 2016, the FASB issued an update ("ASU 2016-01") to ASC Topic 825-10, Financial Instruments - Overall, Recognition and Measurement of Financial Assets and Liabilities. ASU 2016-01 will require certain investments in equity securities to be measured at fair value with changes in fair value recognized in net income, and will modify the impairment assessment of certain equity securities. The new guidance is effective January 1, 2018. Certain aspects of the guidance may require a cumulative-effect adjustment and other aspects of the guidance are required to be adopted prospectively. We are currently evaluating the impact of the adoption of ASU 2016-01 on our consolidated financial statements. In February 2016, the FASB issued an update ("ASU 2016-02") to ASC Topic 842, Leases. ASU 2016-02 supersedes the existing lease accounting model, and modifies both lessee and lessor accounting. The new guidance will require a lessee to reflect most operating lease arrangements on the balance sheet by recording a right-of-use asset and a lease liability that will initially be measured at the present value of lease payments. Among other changes, the new standard also modifies the definition of a lease, and requires expanded lease disclosures. The new standard will be effective January 1, 2019, with early adoption permitted. We are currently evaluating the impact of the adoption of ASU 2016-02 on our consolidated financial statements. In April 2016, the FASB issued an update ("ASU 2016-10") to ASC Topic 606, Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing. The new guidance will require companies to apply a five-step model in accounting for revenue arising from contracts with customers, as well as enhance disclosures regarding revenue recognition. Lease contracts will be excluded from this revenue recognition criteria; however, the sale of real estate will be required to follow the new model. The new guidance is effective January 1, 2018, with early adoption permitted beginning January 1, 2017, and allows full or modified retrospective application. We are currently evaluating the impact of the adoption of ASU 2016-10 on our consolidated financial statements. |
Assets and Liabilities Measured
Assets and Liabilities Measured at Fair Value | 3 Months Ended |
Mar. 31, 2016 | |
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 March 31, 2016, 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 December 31, 2015: December 31, 2015 Level 1 Level 2 Level 3 Total Assets Derivative financial instruments $ — $ 2 $ — $ 2 Courtyard Kauai Coconut Beach Hotel was our only remaining asset with an interest rate cap as of March 31, 2016 and it had a nominal value. Derivative financial instruments classified as assets are included in prepaid expenses and other assets on the balance sheet. Nonrecurring Fair Value Measurements During the year ended December 31, 2015, we recorded a $1.4 million non-cash impairment charge as a result of a measurable decrease in the fair value of 22 Exchange, one of our student housing investments. In estimating the fair value of 22 Exchange, we used management’s internal discounted cash flow analysis prepared with consideration of the current local market. The discounted cash flow estimate is considered Level 3 under the fair value hierarchy described above. The following fair value hierarchy table presents information about our assets measured at fair value on a nonrecurring basis during the year ended December 31, 2015: As of December 31, 2015 Level 1 Level 2 Level 3 Total Fair Value Loss Assets Buildings and improvements, net (1) $ — $ — $ 25,000 $ 25,000 $ (1,417 ) ______________________________________ (1) Due to the local market in Akron, Ohio during the fourth quarter of 2015, we recorded a non-cash impairment charge of $1.4 million on our investment in 22 Exchange, one of our student housing investments. Quantitative Information about Level 3 Fair Value Measurements Description Fair Value at December 31, 2015 (in 000s) Valuation Unobservable Input Range Buildings and improvements, net (1) $ 25,000 Discounted cash flow Discount rate 7.5% - 8.0% ______________________________________ (1) Due to the local market in Akron, Ohio during the fourth quarter of 2015, we recorded a non-cash impairment charge of $1.4 million on our investment in 22 Exchange, a student housing property. There were no impairment charges recorded during the three months ended March 31, 2016 and 2015. |
Financial Instruments not Repor
Financial Instruments not Reported at Fair Value | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments not Reported at Fair Value | Financial 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 or only estimation methodologies may have a material effect on the estimated fair value amounts. As of March 31, 2016 and December 31, 2015, 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 short-term maturities. As of March 31, 2016, we had notes payable of $143.6 million , net of deferred financing fees of $1.1 million and excluding $33.1 million of net contractual obligations related to real estate held for sale, with a fair value of approximately $145.4 million . As of December 31, 2015, we had notes payable of $177 million , net of deferred financing fees of $1.7 million , with a fair value of approximately $179.3 million . The fair value of the notes payable is categorized as a Level 2 in the fair value hierarchy. The fair value was 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 March 31, 2016 and December 31, 2015. |
Real Estate and Real Estate-Rel
Real Estate and Real Estate-Related Investments | 3 Months Ended |
Mar. 31, 2016 | |
Real Estate [Abstract] | |
Real Estate and Real Estate-Related Investments | Real Estate and Real Estate-Related Investments As of March 31, 2016, we consolidated eight real estate assets, including Lakewood Flats which is 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 March 31, 2016: Property Name Description Location Date Acquired Ownership Interest Gardens Medical Pavilion (1) Medical office building Palm Beach Gardens, Florida October 20, 2010 80.9% 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% 22 Exchange Student housing Akron, Ohio April 16, 2013 90% Parkside Apartments (“Parkside”) Multifamily Sugar Land, Texas August 8, 2013 90% Lakewood Flats (2) Multifamily Dallas, Texas October 10, 2014 100% _________________________________________ (1) 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 March 31, 2016, we own approximately 80.9% of the remaining building, Gardens Medical Pavilion. (2) We received an unsolicited offer from an unaffiliated third party for our Lakewood Flats investment. On April 7, 2016, we entered into a PSA for the investment with the unaffiliated third party. Sales of Real Estate Reported in Continuing Operations The following table presents our sale of real estate for the three months ended March 31, 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 $2.1 million and $6.5 million for Babcock Self Storage (“Babcock”) and AJS, respectively. The Company does not view the 2015 disposals of Babcock and AJS as a strategic shift. Therefore, the results of operations for Babcock and AJS are presented in continuing operations in the condensed consolidated statements of operations for the three months ended March 31, 2015. Net income attributable to the Company for the three months ended March 31, 2015 related to Babcock and AJS was $2.4 million and includes the gains on sale of Babcock and AJS for a total of $5.3 million . Real Estate Held for Sale As of March 31, 2016, Lakewood Flats was classified as real estate held for sale on our condensed consolidated balance sheet. In 2014, we acquired Lakewood Flats, a 435 -unit multifamily community located in Dallas, Texas, for a purchase price of $60.5 million . We received an unsolicited offer from an unaffiliated third party. On April 7, 2016, we entered into an agreement to sell Lakewood Flats to the unaffiliated third party for a contract sales price of $68.8 million . The Company does not view the impending sale of Lakewood Flats as a strategic shift. Therefore, the results of operations for Lakewood Flats are presented in continuing operations for the three months ended March 31, 2016 and 2015. At the time of this filing, closing of the sale is subject to the buyers satisfactory completion of due diligence. We did not have any real estate assets classified as held for sale as of December 31, 2015. The major classes of assets and liabilities associated with our real estate held for sale as of March 31, 2016 were as follows: Description Amount Land and improvements, net $ 8,050 Building and improvements, net 46,970 Furniture, fixtures and equipment, net 772 Assets associated with real estate held for sale $ 55,792 Notes payable $ 33,500 Deferred financing fees (1) (403 ) Notes payable, net 33,097 Other 164 Obligations associated with real estate held for sale $ 33,261 ______________________________________ (1) Effective January 1, 2016, we adopted ASU 2015-03, which requires companies to present the debt issuance costs related to a recognized debt liability as a direct deduction from the carrying amount of the related debt liability. See Note 4, New Accounting Pronouncements, for further details. |
Real Estate Held for Sale
Real Estate Held for Sale | 3 Months Ended |
Mar. 31, 2016 | |
Real Estate [Abstract] | |
Real Estate Held for Sale | Real Estate and Real Estate-Related Investments As of March 31, 2016, we consolidated eight real estate assets, including Lakewood Flats which is 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 March 31, 2016: Property Name Description Location Date Acquired Ownership Interest Gardens Medical Pavilion (1) Medical office building Palm Beach Gardens, Florida October 20, 2010 80.9% 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% 22 Exchange Student housing Akron, Ohio April 16, 2013 90% Parkside Apartments (“Parkside”) Multifamily Sugar Land, Texas August 8, 2013 90% Lakewood Flats (2) Multifamily Dallas, Texas October 10, 2014 100% _________________________________________ (1) 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 March 31, 2016, we own approximately 80.9% of the remaining building, Gardens Medical Pavilion. (2) We received an unsolicited offer from an unaffiliated third party for our Lakewood Flats investment. On April 7, 2016, we entered into a PSA for the investment with the unaffiliated third party. Sales of Real Estate Reported in Continuing Operations The following table presents our sale of real estate for the three months ended March 31, 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 $2.1 million and $6.5 million for Babcock Self Storage (“Babcock”) and AJS, respectively. The Company does not view the 2015 disposals of Babcock and AJS as a strategic shift. Therefore, the results of operations for Babcock and AJS are presented in continuing operations in the condensed consolidated statements of operations for the three months ended March 31, 2015. Net income attributable to the Company for the three months ended March 31, 2015 related to Babcock and AJS was $2.4 million and includes the gains on sale of Babcock and AJS for a total of $5.3 million . Real Estate Held for Sale As of March 31, 2016, Lakewood Flats was classified as real estate held for sale on our condensed consolidated balance sheet. In 2014, we acquired Lakewood Flats, a 435 -unit multifamily community located in Dallas, Texas, for a purchase price of $60.5 million . We received an unsolicited offer from an unaffiliated third party. On April 7, 2016, we entered into an agreement to sell Lakewood Flats to the unaffiliated third party for a contract sales price of $68.8 million . The Company does not view the impending sale of Lakewood Flats as a strategic shift. Therefore, the results of operations for Lakewood Flats are presented in continuing operations for the three months ended March 31, 2016 and 2015. At the time of this filing, closing of the sale is subject to the buyers satisfactory completion of due diligence. We did not have any real estate assets classified as held for sale as of December 31, 2015. The major classes of assets and liabilities associated with our real estate held for sale as of March 31, 2016 were as follows: Description Amount Land and improvements, net $ 8,050 Building and improvements, net 46,970 Furniture, fixtures and equipment, net 772 Assets associated with real estate held for sale $ 55,792 Notes payable $ 33,500 Deferred financing fees (1) (403 ) Notes payable, net 33,097 Other 164 Obligations associated with real estate held for sale $ 33,261 ______________________________________ (1) Effective January 1, 2016, we adopted ASU 2015-03, which requires companies to present the debt issuance costs related to a recognized debt liability as a direct deduction from the carrying amount of the related debt liability. See Note 4, New Accounting Pronouncements, for further details. |
Investment in Unconsolidated Jo
Investment in Unconsolidated Joint Venture | 3 Months Ended |
Mar. 31, 2016 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in Unconsolidated Joint Venture | Investment in Unconsolidated Joint Venture We (the “Lender”) provided mezzanine financing totaling $15.3 million 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 principal amount up to $40 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 advances of $15.3 million have annual stated interest rates ranging from 10% to 18% . 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. Both the senior loan and our mezzanine loan were in technical default at December 31, 2015 due to a delay in completion of the project. The Senior Lender executed a loan amendment waiving the event of default and extending the completion date of the project to May 31, 2016. The other terms in the loan agreement remained the same. We, in turn, amended the mezzanine loan agreement to mirror the terms of the senior loan. As of March 31, 2016, the outstanding principal balance under our mezzanine loan was $15.3 million . The borrower has been funding any cost overruns. 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. In connection with this investment, we capitalized interest totaling $0.1 million during the three months ended March 31, 2016 and 2015, respectively. For the three months ended March 31, 2016 and 2015, 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 March 31, 2016 December 31, 2015 March 31, 2016 December 31, 2015 Prospect Park N/A N/A $ 14,614 $ 14,482 |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | Variable Interest Entities As discussed in Note 4, effective January 1, 2016, we have adopted the guidance in ASU 2015-02. As a result, the Operating Partnership (see Note 1) and each of our less than wholly-owned real estate partnerships (22 Exchange, LLC, Gardens Medical Pavilion, LLC, SL Parkside Apartments, LLC and the ADC Arrangement associated with Prospect Park) have been deemed to have the characteristics of a VIE. However, we were not required to consolidate any previously unconsolidated entities or deconsolidate any previously consolidated entities as a result of the change in classification. Accordingly, there has been no change to the amounts reported in our condensed consolidated balance sheets and statements of cash flows or amounts recognized in our condensed consolidated statements of operations. Consolidated VIEs The Company consolidates the Operating Partnership, 22 Exchange, LLC, Gardens Medical Pavilion, LLC through BH-AW-Florida MOB Venture, LLC, and SL Parkside Apartments, LLC, which are variable interest entities, or VIEs, for which we are the primary beneficiary. Generally, a VIE, is a legal entity in which the equity investors do not have the characteristics of a controlling financial interest or the equity investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. A limited partnership, or legal entities such as an LLC, are considered a VIE when the majority of the limited partners unrelated to the general partner possess neither the right to remove the general partner without cause, nor certain rights to participate in the decisions that most significantly affect the financial results of the partnership. In determining whether we are the primary beneficiary of a VIE, we consider qualitative and quantitative factors, including, but not limited to: which activities most significantly impact the VIE’s economic performance and which party controls such activities; the amount and characteristics of our investment; the obligation or likelihood for us or other investors to provide financial support; and the similarity with and significance to our business activities and the business activities of the other investors. Significant judgments related to these determinations include estimates about the current and future fair values and performance of real estate held by these VIEs and general market conditions. Unconsolidated VIEs Included in the Company’s joint venture investments at March 31, 2016, is the ADC Arrangement associated with Prospect Park, accounted for as an unconsolidated joint venture, which is a VIE. Refer to Note 9 for further details on the ADC Arrangement. This arrangement was established to provide mezzanine financing to an unaffiliated third party that owns Prospect Park, an apartment complex under development in Denver, Colorado. Based on our reevaluation under ASU 2015-02, we determined that we are not the primary beneficiary of this VIE based on the rights of the general partner. The arrangement does not allow for substantive kick-out rights over the general partner and we do not have the power to direct the activities of Prospect Park that most significantly affect the entity’s economic performance. Accordingly, we have determined it is appropriate, consistent with past accounting, that the Prospect Park ADC Arrangement will continue to be accounted for under the equity method. As of March 31, 2016 and December 31, 2015, total assets of the property under development were approximately $69.3 million and $63.9 million , respectively. Total assets as of March 31, 2016 and December 31, 2015 were made up of construction in progress of $59.0 million and $53.5 million , respectively, land of $9.8 million , and other assets of $0.4 million and $0.5 million , respectively. The outstanding balance on the senior construction loan as of March 31, 2016 and December 31, 2015 was $31.5 million and $26.9 million , respectively. At March 31, 2016 and December 31, 2015, the outstanding principal balance of our mezzanine loan was $15.3 million . The Company’s maximum exposure to losses associated with its unconsolidated joint venture is limited to its carrying value in this investment. As of March 31, 2016 and December 31, 2015, the Company’s carrying value and maximum exposure to loss in this investment was $14.6 million and $14.5 million , respectively. |
Notes Payable
Notes Payable | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Notes Payable | Notes Payable The following table sets forth information on our notes payable as of March 31, 2016 and December 31, 2015: Notes Payable as of Description March 31, 2016 December 31, 2015 Interest Rate Maturity Date Courtyard Kauai Coconut Beach Hotel $ 38,000 $ 38,000 30-day LIBOR + .95% (1) 5/9/2017 Florida MOB Portfolio - Gardens Medical Pavilion 13,200 13,298 4.9% 1/1/2018 River Club and the Townhomes at River Club 24,203 24,299 5.26% 5/1/2018 Lakes of Margate 14,433 14,496 5.49% and 5.92% 1/1/2020 Arbors Harbor Town 25,011 25,130 3.985% 1/1/2019 22 Exchange 19,500 19,500 3.93% 5/5/2023 Parkside (2) 10,378 10,469 5% 6/1/2018 Lakewood Flats (3) — 33,500 30-day LIBOR + 1.5% (1) 11/5/2019 Total debt 144,725 178,692 Deferred financing fees (4) (1,116 ) (1,656 ) Notes payable, net of deferred financing fees 143,609 177,036 Notes Payable included with obligations related to real estate held for sale: Lakewood Flats debt (3) 33,500 — 30-day LIBOR + 1.5% (1) 11/5/2019 Deferred financing fees (4) (403 ) — Notes Payable included with obligations related to real estate held for sale, net of deferred financing fees: 33,097 — Total notes payable obligations $ 176,706 $ 177,036 _________________________________ (1) 30-day London Interbank Offer Rate (“LIBOR”) was 0.44% at March 31, 2016. (2) Includes approximately $0.4 million of unamortized premium related to debt we assumed at acquisition. (3) As of March 31, 2016, Lakewood Flats was classified as real estate held for sale on our condensed consolidated balance sheet. (4) Effective January 1, 2016, we adopted ASU 2015-03, which requires companies to present the debt issuance costs related to a recognized debt liability as a direct deduction from the carrying amount of the related debt liability. See Note 4, New Accounting Pronouncements, for further details. At March 31, 2016, our notes payable balance was $143.6 million , net of deferred financing fees of $1.1 million and excluding $33.1 million of net contractual obligations related to real estate held for sale. 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, 22 Exchange, and Parkside notes payable. Interest capitalized in connection with our equity method investment in Prospect Park for the three months ended March 31, 2016 and 2015 was $0.1 million . 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 March 31, 2016, 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 March 31, 2016: Year Amount Due (1) April 1, 2016 - December 31, 2016 $ 1,491 2017 40,135 2018 46,841 2019 24,309 2020 13,772 Thereafter 17,813 Total contractual obligations for principal payments 144,361 Unamortized premium 364 Total notes payable 144,725 Less: Deferred financing fees, net (1,116 ) Notes payable, net $ 143,609 ____________________________________________ (1) Our debt secured by Lakewood Flats, with a balance at March 31, 2016 of $33.5 million and deferred financing fees of $0.4 million is not included in the table as the investment was classified as held for sale at March 31, 2016. We received an unsolicited offer for Lakewood Flats from an unaffiliated third party. We entered into an agreement with the unaffiliated third party on April 7, 2016 to sell Lakewood Flats for a contract sales price of $68.8 million . |
Leasing Activity
Leasing Activity | 3 Months Ended |
Mar. 31, 2016 | |
Leases [Abstract] | |
Leasing Activity | Leasing Activity Future minimum base rental payments of our remaining office property due to us under non-cancelable leases in effect as of March 31, 2016 are as follows: Year Amount Due April 1, 2016 - December 31, 2016 $ 920 2017 1,224 2018 917 2019 836 2020 841 Thereafter 2,685 Total $ 7,423 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 one remaining office property at March 31, 2016, Gardens Medical Pavilion, located in Palm Beach Gardens, Florida. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 3 Months Ended |
Mar. 31, 2016 | |
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 March 31, 2016, we had one remaining interest rate cap which was not designated as a hedging instrument. At March 31, 2016 and December 31, 2015, the fair value of our derivative instrument had a nominal value and was reported in prepaid expenses and other assets. The following table summarizes the notional value of our derivative financial instrument. The notional value provides an indication of the extent of our involvement in this instrument, but does 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 instrument Interest rate cap - Courtyard Kauai Coconut Beach Hotel $ 38,000 3.00% 30-day LIBOR May 15, 2017 The table below presents the fair value of our derivative financial instrument, as well as its classification on the consolidated balance sheets as of March 31, 2016 and December 31, 2015: Derivative not designated as hedging instrument: Asset Derivative Balance Sheet Location March 31, 2016 (1) December 31, 2015 Interest rate derivative contract Prepaid expenses and other assets $ — $ 2 ______________________________________ (1) The interest rate cap for Courtyard Kauai Coconut Beach Hotel had a nominal value at March 31, 2016. The table below presents the effect of our derivative financial instruments on the condensed consolidated statements of operations for the three months ended March 31, 2016 and 2015: Derivatives Not Designated as Hedging Instruments Amount of Loss Three months ended March 31, 2016 (1) 2015 $ 1 $ 15 ______________________________________ (1) Courtyard Kauai Coconut Beach Hotel interest rate cap had a nominal value and was our only remaining asset with an interest rate cap during the three months ended March 31, 2016. |
Distributions
Distributions | 3 Months Ended |
Mar. 31, 2016 | |
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 November 20, 2015, our board of directors authorized a special cash distribution of $1.50 per share of common stock, payable to stockholders of record as of December 31, 2015. The Company paid this special cash distribution of $38.4 million on January 5, 2016. 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. This special cash distribution of $25.7 million was paid on March 31, 2015. These special cash distributions represented a portion of proceeds from asset sales. We have paid and may in the future pay some or all of our distributions from sources other than operating cash flow. We have 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 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. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2016 | |
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 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 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 the Fourth Amended and Restated Advisory Management Agreement (“Amended Advisory 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 for 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 receive acquisition and advisory fees of 1.5% of the funds advanced in respect of a loan investment. We incurred no acquisition and advisory fees payable to the Advisor for the three months ended March 31, 2016 and 2015. During the three months ended March 31, 2016 and 2015, 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. 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 managing our day-to-day affairs and for providing services related to the sale of our assets, 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 three months ended March 31, 2016 and 2015, we incurred no acquisition expense reimbursements. 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 three months ended March 31, 2016 and 2015. 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 three months ended March 31, 2016 and 2015. We pay the Advisor or its affiliates a monthly asset management fee of 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). For the three months ended March 31, 2016 and 2015, we expensed $0.6 million and $0.7 million , respectively, of asset management fees payable to the Advisor. The total for the three months ended March 31, 2015 includes asset management fees related to our disposed properties. 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. On June 6, 2015, we amended the agreement to reduce the administrative services fee 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 three months ended March 31, 2016 and 2015, we incurred and expensed such costs for administrative services of approximately $0.3 million . In addition, effective January 1, 2015, the amended 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. We incurred less than $0.1 million for such costs during the three months ended March 31, 2016. Notwithstanding the fees and cost reimbursements payable to our Advisor pursuant to the Amended 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 March 31, 2016, 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 which is 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 $0.1 million and $0.2 million for the three months ended March 31, 2016 and 2015, respectively. 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 three months ended March 31, 2016 and 2015. We are dependent on the Advisor and BHO II Management for certain services that are essential to us, including asset 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 | 3 Months Ended |
Mar. 31, 2016 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Supplemental cash flow information is summarized below: Three months ended March 31, Description 2016 2015 Interest paid, net of amounts capitalized $ 1,422 $ 1,630 Non-cash investing activities and financing activities: Proceeds held in escrow through sale of real estate interests — 912 Capital expenditures for real estate in accounts payable 5 — Capital expenditures for real estate in accrued liabilities 130 86 Accrued distributions to noncontrolling interest 19 19 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Lakewood Flats We received an unsolicited offer from an unaffiliated third party to purchase Lakewood Flats. We entered into an agreement with the unaffiliated third party on April 7, 2016 to sell Lakewood Flats for a contract sales price of $68.8 million . As of March 31, 2016, Lakewood Flats was classified as real estate held for sale on our condensed consolidated balance sheet. At the time of this filing, closing of the sale is subject to the buyers satisfactory completion of due diligence. Share Redemption Program On May 11, 2016, our board of directors approved redemptions for the second quarter of 2016 totaling 41,216 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 Accoun24
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
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 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, 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 |
Real Estate Held for Sale and Discontinued Operations | 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 March 31, 2016, Lakewood Flats, a 435 -unit multifamily community located in Dallas, Texas, was classified as real estate held for sale on our condensed consolidated balance sheet. We received an unsolicited offer from an unaffiliated third party and on April 7, 2016, we entered into a purchase and sale agreement (“PSA”) for the investment with the unaffiliated third party. See Note 8, Real Estate Held for Sale, for further detail. We did not have any real estate assets classified as held for sale as of December 31, 2015. |
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 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 assets and our investment in an unconsolidated joint venture is currently recoverable. Accordingly, there were no impairment charges for the three months ended March 31, 2016 and 2015. 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 an 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 months ended March 31, 2016 and 2015. Leases associated with our multifamily, student housing, and hotel assets are generally short-term in nature, and thus have no straight-line rent. Net above-market lease amortization was a charge of less than $0.1 million recognized in rental revenues for the three months ended March 31, 2016. Net below-market lease amortization was income of less than $0.1 million recognized in rental revenues for the three months ended March 31, 2015. 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 |
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. |
Deferred Financing Fees | Deferred Financing Fees Deferred financing fees are recorded at cost and are amortized to interest expense using a straight-line method that approximates the effective interest method over the life of the related debt. |
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. As a result of the sale of one of our foreign investments during the first quarter of 2015, Alte Jakobstraße (“AJS”), we recorded estimated foreign income tax of approximately $2.2 million during the period ended March 31, 2015. We recorded no income tax during the three months ended March 31, 2016. The foreign income tax was calculated on gains recognized at the exchange rate in effect on the date of sale and calculated using current tax rates. 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”). 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 AJS and Holstenplatz, which were both sold in 2015. We sold AJS in February 2015 and Holstenplatz in September 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 months ended March 31, 2016 and 2015, the foreign currency translation adjustment was a gain of $0.2 million and a loss of $0.8 million , respectively. 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. 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 | Concentration of Credit Risk At March 31, 2016 and December 31, 2015, 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 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 three months ended March 31, 2016, excluding Lakewood Flats, which was classified as real estate held for sale, 48% and 14% of our total revenues were derived from our properties located in Hawaii and Florida, respectively. Additionally, excluding our property classified as held for sale as of March 31, 2016, 48% , 28% and 21% of our total revenues for the three months ended March 31, 2016 were from our hotel, multifamily 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 loss per share is calculated based on the weighted average number of common shares outstanding during each period. |
Subsequent Events | Subsequent Events We have evaluated subsequent events for recognition or disclosure in our condensed consolidated financial statements. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
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: March 31, 2016 Buildings and Improvements Land and Improvements Lease Intangibles Acquired Cost (1) $ 162,514 $ 45,872 $ 1,508 $ (137 ) Less: depreciation and amortization (1) (25,983 ) (2,718 ) (1,172 ) 61 Net $ 136,531 $ 43,154 $ 336 $ (76 ) ______________________________________________ (1) Excludes Lakewood Flats, which was classified as held for sale as of March 31, 2016. Net book values included in assets associated with real estate held for sale in the condensed consolidated balance sheet were buildings and improvements of $47 million and land and improvements of $8.1 million . See Note 8, Real Estate Held for Sale. December 31, 2015 Buildings and Improvements Land and Improvements Lease Intangibles Acquired Cost $ 211,635 $ 54,068 $ 3,083 $ (184 ) Less: depreciation and amortization (26,422 ) (2,686 ) (2,749 ) 104 Net $ 185,213 $ 51,382 $ 334 $ (80 ) |
Schedule of anticipated amortization expense associated with the acquired lease intangibles excluding properties classified as discontinued operations | Anticipated net amortization expense associated with the acquired lease intangibles for each of the following five years as of March 31, 2016 is as follows: Year Lease / Other Intangibles April 1, 2016 - December 31, 2016 $ 28 2017 20 2018 (14 ) 2019 (12 ) 2020 (10 ) |
Schedule of adoption of new standards | The adoption of the new standard resulted in the following reclassifications of unamortized deferred financing fees as of December 31, 2015: December 31, 2015 Originally Reported Reclassification Adjusted Deferred financing fees, net $ 1,656 $ (1,656 ) $ — Notes payable 178,692 (1,656 ) 177,036 |
Assets and Liabilities Measur26
Assets and Liabilities Measured at Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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 December 31, 2015: December 31, 2015 Level 1 Level 2 Level 3 Total Assets Derivative financial instruments $ — $ 2 $ — $ 2 |
Real Estate and Real Estate-R27
Real Estate and Real Estate-Related Investments (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Real Estate [Abstract] | |
Schedule of information pertaining to consolidated investments | As of March 31, 2016, we consolidated eight real estate assets, including Lakewood Flats which is 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 March 31, 2016: Property Name Description Location Date Acquired Ownership Interest Gardens Medical Pavilion (1) Medical office building Palm Beach Gardens, Florida October 20, 2010 80.9% 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% 22 Exchange Student housing Akron, Ohio April 16, 2013 90% Parkside Apartments (“Parkside”) Multifamily Sugar Land, Texas August 8, 2013 90% Lakewood Flats (2) Multifamily Dallas, Texas October 10, 2014 100% _________________________________________ (1) 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 March 31, 2016, we own approximately 80.9% of the remaining building, Gardens Medical Pavilion. (2) We received an unsolicited offer from an unaffiliated third party for our Lakewood Flats investment. On April 7, 2016, we entered into a PSA for the investment with the unaffiliated third party. |
Net income for real Estate sold during period | The following table presents our sale of real estate for the three months ended March 31, 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 $2.1 million and $6.5 million for Babcock Self Storage (“Babcock”) and AJS, respectively. |
Real Estate Held for Sale (Tabl
Real Estate Held for Sale (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Real Estate [Abstract] | |
Schedule of Major Classes of Assets and Liabilities of Real Estate Held for Sale | The major classes of assets and liabilities associated with our real estate held for sale as of March 31, 2016 were as follows: Description Amount Land and improvements, net $ 8,050 Building and improvements, net 46,970 Furniture, fixtures and equipment, net 772 Assets associated with real estate held for sale $ 55,792 Notes payable $ 33,500 Deferred financing fees (1) (403 ) Notes payable, net 33,097 Other 164 Obligations associated with real estate held for sale $ 33,261 ______________________________________ (1) Effective January 1, 2016, we adopted ASU 2015-03, which requires companies to present the debt issuance costs related to a recognized debt liability as a direct deduction from the carrying amount of the related debt liability. See Note 4, New Accounting Pronouncements, for further details. |
Investment in Unconsolidated 29
Investment in Unconsolidated Joint Venture (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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 March 31, 2016 December 31, 2015 March 31, 2016 December 31, 2015 Prospect Park N/A N/A $ 14,614 $ 14,482 |
Notes Payable (Tables)
Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of information on notes payable | The following table sets forth information on our notes payable as of March 31, 2016 and December 31, 2015: Notes Payable as of Description March 31, 2016 December 31, 2015 Interest Rate Maturity Date Courtyard Kauai Coconut Beach Hotel $ 38,000 $ 38,000 30-day LIBOR + .95% (1) 5/9/2017 Florida MOB Portfolio - Gardens Medical Pavilion 13,200 13,298 4.9% 1/1/2018 River Club and the Townhomes at River Club 24,203 24,299 5.26% 5/1/2018 Lakes of Margate 14,433 14,496 5.49% and 5.92% 1/1/2020 Arbors Harbor Town 25,011 25,130 3.985% 1/1/2019 22 Exchange 19,500 19,500 3.93% 5/5/2023 Parkside (2) 10,378 10,469 5% 6/1/2018 Lakewood Flats (3) — 33,500 30-day LIBOR + 1.5% (1) 11/5/2019 Total debt 144,725 178,692 Deferred financing fees (4) (1,116 ) (1,656 ) Notes payable, net of deferred financing fees 143,609 177,036 Notes Payable included with obligations related to real estate held for sale: Lakewood Flats debt (3) 33,500 — 30-day LIBOR + 1.5% (1) 11/5/2019 Deferred financing fees (4) (403 ) — Notes Payable included with obligations related to real estate held for sale, net of deferred financing fees: 33,097 — Total notes payable obligations $ 176,706 $ 177,036 _________________________________ (1) 30-day London Interbank Offer Rate (“LIBOR”) was 0.44% at March 31, 2016. (2) Includes approximately $0.4 million of unamortized premium related to debt we assumed at acquisition. (3) As of March 31, 2016, Lakewood Flats was classified as real estate held for sale on our condensed consolidated balance sheet. (4) Effective January 1, 2016, we adopted ASU 2015-03, which requires companies to present the debt issuance costs related to a recognized debt liability as a direct deduction from the carrying amount of the related debt liability. See Note 4, New Accounting Pronouncements, for further details. |
Contractual obligations for principal payments | The following table summarizes our contractual obligations for principal payments as of March 31, 2016: Year Amount Due (1) April 1, 2016 - December 31, 2016 $ 1,491 2017 40,135 2018 46,841 2019 24,309 2020 13,772 Thereafter 17,813 Total contractual obligations for principal payments 144,361 Unamortized premium 364 Total notes payable 144,725 Less: Deferred financing fees, net (1,116 ) Notes payable, net $ 143,609 |
Leasing Activity (Tables)
Leasing Activity (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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 remaining office property due to us under non-cancelable leases in effect as of March 31, 2016 are as follows: Year Amount Due April 1, 2016 - December 31, 2016 $ 920 2017 1,224 2018 917 2019 836 2020 841 Thereafter 2,685 Total $ 7,423 |
Derivative Instruments and He32
Derivative Instruments and Hedging Activities (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of notional value of derivative financial instruments | The following table summarizes the notional value of our derivative financial instrument. The notional value provides an indication of the extent of our involvement in this instrument, but does 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 instrument Interest rate cap - Courtyard Kauai Coconut Beach Hotel $ 38,000 3.00% 30-day LIBOR May 15, 2017 |
Summary of fair value of derivative financial instruments | The table below presents the fair value of our derivative financial instrument, as well as its classification on the consolidated balance sheets as of March 31, 2016 and December 31, 2015: Derivative not designated as hedging instrument: Asset Derivative Balance Sheet Location March 31, 2016 (1) December 31, 2015 Interest rate derivative contract Prepaid expenses and other assets $ — $ 2 |
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 months ended March 31, 2016 and 2015: Derivatives Not Designated as Hedging Instruments Amount of Loss Three months ended March 31, 2016 (1) 2015 $ 1 $ 15 ______________________________________ (1) Courtyard Kauai Coconut Beach Hotel interest rate cap had a nominal value and was our only remaining asset with an interest rate cap during the three months ended March 31, 2016. |
Supplemental Cash Flow Inform33
Supplemental Cash Flow Information (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of supplemental cash flow information | Supplemental cash flow information is summarized below: Three months ended March 31, Description 2016 2015 Interest paid, net of amounts capitalized $ 1,422 $ 1,630 Non-cash investing activities and financing activities: Proceeds held in escrow through sale of real estate interests — 912 Capital expenditures for real estate in accounts payable 5 — Capital expenditures for real estate in accrued liabilities 130 86 Accrued distributions to noncontrolling interest 19 19 |
Business and Organization (Deta
Business and Organization (Details) | 3 Months Ended | |||
Mar. 31, 2016real_estate_investmentunitshares | Dec. 31, 2015shares | Dec. 31, 2014unit | Jan. 19, 2007shares | |
Business and Organization | ||||
Number of real estate investments | real_estate_investment | 9 | |||
Number of real estate assets consolidated | real_estate_investment | 8 | |||
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 (in shares) | 25,494,946 | |||
Common stock, shares outstanding (in shares) | 25,494,946 | 25,585,198 | ||
Convertible stock outstanding (in shares) | 1,000 | 1,000 | ||
Initial Capitalization | Behringer Harvard Holdings | ||||
Business and Organization | ||||
Common stock, shares issued (in shares) | 22,471 | |||
Convertible stock issued (in shares) | 1,000 | |||
Convertible stock outstanding (in shares) | 1,000 | |||
Consolidated Entities | Wholly Owned Properties | ||||
Business and Organization | ||||
Number of real estate investments | real_estate_investment | 1 | |||
Consolidated Entities | Partially Owned Properties | ||||
Business and Organization | ||||
Number of real estate investments | real_estate_investment | 7 | |||
Lakewood Flats [Member] | ||||
Business and Organization | ||||
Number of Units in Real Estate Property | unit | 435 | 435 |
Summary of Significant Accoun35
Summary of Significant Accounting Policies - Real Estate (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Real estate | ||
Total real estate | $ 179,720 | $ 236,771 |
Accumulated depreciation and amortization related to consolidated investments in real estate intangibles | ||
Net | 336 | 334 |
Anticipated amortization expense associated with acquired lease intangibles | ||
April 1, 2016 - December 31, 2016 | 28 | |
2,017 | 20 | |
2,018 | (14) | |
2,019 | (12) | |
2,020 | (10) | |
Lease Intangibles | ||
Accumulated depreciation and amortization related to consolidated investments in real estate intangibles | ||
Cost | 1,508 | 3,083 |
Less: depreciation and amortization | (1,172) | (2,749) |
Net | 336 | 334 |
Acquired Below-Market Leases | ||
Accumulated depreciation and amortization related to consolidated investments in real estate intangibles | ||
Cost | (137) | (184) |
Less: depreciation and amortization | 61 | 104 |
Net | (76) | (80) |
Buildings and Improvements | ||
Real estate | ||
Cost | 162,514 | 211,635 |
Less: depreciation and amortization | (25,983) | (26,422) |
Total real estate | 136,531 | 185,213 |
Anticipated amortization expense associated with acquired lease intangibles | ||
Real Estate Held-for-sale | 47,000 | |
Land and Improvements | ||
Real estate | ||
Cost | 45,872 | 54,068 |
Less: depreciation and amortization | (2,718) | (2,686) |
Total real estate | 43,154 | $ 51,382 |
Anticipated amortization expense associated with acquired lease intangibles | ||
Real Estate Held-for-sale | $ 8,100 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies - Additional Information (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016USD ($)unit | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($) | |
Investment Impairment | |||
Impairment of Real Estate | $ 0 | $ 0 | $ 1,400,000 |
Revenue Recognition | |||
Straight-line rental revenue (less than) | 100,000 | 100,000 | |
Market Lease Amortization Included in Rental Revenues | 100,000 | (100,000) | |
Accounts Receivable | |||
Straight-line rental revenue | 300,000 | 300,000 | |
Deferred Financing Fees | |||
Accumulated amortization, deferred financing fees | $ 1,700,000 | 2,500,000 | |
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 | $ 200,000 | (800,000) | |
Cumulative translation adjustment | 0 | (596,000) | |
Furniture, Fixtures and Equipment | |||
Furniture, Fixtures and Equipment | |||
Accumulated depreciation associated with furniture, fixtures and equipment | $ 8,700,000 | 8,100,000 | |
Furniture, Fixtures and Equipment | Minimum [Member] | |||
Furniture, Fixtures and Equipment | |||
Estimated useful lives | 5 years | ||
Furniture, Fixtures and Equipment | Maximum [Member] | |||
Furniture, Fixtures and Equipment | |||
Estimated useful lives | 7 years | ||
Consolidated Properties [Member] | |||
Accounts Receivable | |||
Accounts Receivable, Net, Current | $ 2,200,000 | $ 2,400,000 | |
Alte Jakobstrabe Berlin [Member] | |||
Foreign Currency Translation | |||
Cumulative translation adjustment | 600,000 | ||
Alte Jakobstrabe Berlin [Member] | Foreign Tax Authority | |||
Income Taxes | |||
Provision (credit) for income tax | $ 2,200,000 | ||
Sales Revenue, Net | HAWAII | Geographic Concentration Risk | |||
Geographic Areas, Revenues from External Customers [Abstract] | |||
Concentration risk (percent) | 48.00% | ||
Sales Revenue, Net | FLORIDA | Geographic Concentration Risk | |||
Geographic Areas, Revenues from External Customers [Abstract] | |||
Concentration risk (percent) | 14.00% | ||
Multifamily | Sales Revenue, Net | Real Estate Asset Concentration Risk | |||
Geographic Areas, Revenues from External Customers [Abstract] | |||
Concentration risk (percent) | 28.00% | ||
Hotel | Sales Revenue, Net | Real Estate Asset Concentration Risk | |||
Geographic Areas, Revenues from External Customers [Abstract] | |||
Concentration risk (percent) | 48.00% | ||
Student Housing | Sales Revenue, Net | Real Estate Asset Concentration Risk | |||
Geographic Areas, Revenues from External Customers [Abstract] | |||
Concentration risk (percent) | 21.00% | ||
Lakewood Flats [Member] | |||
Real Estate Properties [Line Items] | |||
Number of Units in Real Estate Property | unit | 435 |
Summary of Significant Accoun37
Summary of Significant Accounting Policies - Deferred Financing Fees (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Accumulated amortization, deferred financing fees | $ 1,700 | $ 2,500 |
Deferred financing fees, net | 1,116 | 1,656 |
Notes payable, net | 143,609 | 177,036 |
Accounting Standards Update 2015-03 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Deferred financing fees, net | 1,500 | |
Accounting Standards Update 2015-03 | Originally Reported | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Notes payable, net | 178,692 | |
Accounting Standards Update 2015-03 | Reclassification | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Notes payable, net | 1,656 | |
Deferred Financing Fees, Net [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Deferred financing fees, net | 0 | |
Deferred Financing Fees, Net [Member] | Accounting Standards Update 2015-03 | Originally Reported | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Deferred financing fees, net | 1,656 | |
Deferred Financing Fees, Net [Member] | Accounting Standards Update 2015-03 | Reclassification | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Deferred financing fees, net | 1,656 | |
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Notes payable, net | 33,100 | |
Deferred financing fees | $ 403 | $ 0 |
New Accounting Pronouncements (
New Accounting Pronouncements (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Deferred financing fees, net | $ 1,116 | $ 1,656 |
Accounting Standards Update 2015-03 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Deferred financing fees, net | $ 1,500 | |
Accounting Standards Update 2015-03 | Assets | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Deferred financing fees, net | (1,700) | |
Accounting Standards Update 2015-03 | Debt | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Deferred financing fees, net | $ 1,700 |
Assets and Liabilities Measur39
Assets and Liabilities Measured at Fair Value (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Assets measured at fair value on a recurring basis | |||
Impairment of Real Estate | $ 0 | $ 0 | $ 1,400,000 |
Recurring | |||
Assets | |||
Derivative financial instruments | $ 0 | 2,000 | |
Recurring | Level 1 | |||
Assets | |||
Derivative financial instruments | 0 | ||
Recurring | Level 2 | |||
Assets | |||
Derivative financial instruments | 2,000 | ||
Recurring | Level 3 | |||
Assets | |||
Derivative financial instruments | 0 | ||
Recurring | |||
Assets measured at fair value on a recurring basis | |||
Investment Buildings and Building Improvements, Net, Fair Value Disclosure | $ 25,000,000 | ||
Investment Building and Building Improvements [Member] | Minimum [Member] | Income Approach Valuation Technique [Member] | Recurring | Level 3 | |||
Assets measured at fair value on a recurring basis | |||
Fair Value Inputs, Discount Rate | 6.50% | ||
Assets | |||
Fair Value Inputs, Terminal Capitalization Rate | 7.50% | ||
Investment Building and Building Improvements [Member] | Maximum [Member] | Income Approach Valuation Technique [Member] | Recurring | Level 3 | |||
Assets measured at fair value on a recurring basis | |||
Fair Value Inputs, Discount Rate | 7.50% | ||
Assets | |||
Fair Value Inputs, Terminal Capitalization Rate | 8.00% |
Financial Instruments not Rep40
Financial Instruments not Reported at Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Notes payable, net | $ 143,609 | $ 177,036 |
Deferred financing fees, net | 1,116 | 1,656 |
Fair value of notes payable | 145,400 | 179,300 |
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable, net | 33,100 | |
Notes payable held for sale | $ 33,097 | $ 0 |
Real Estate and Real Estate-R41
Real Estate and Real Estate-Related Investments (Details) | 3 Months Ended | |
Mar. 31, 2016real_estate_investment | Oct. 20, 2010building | |
Real Estate Properties [Line Items] | ||
Number of real estate assets consolidated | real_estate_investment | 8 | |
Gardens Medical Pavilion, South Florida | ||
Real Estate Properties [Line Items] | ||
Ownership Interest (as a percent) | 80.90% | |
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% | |
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% | |
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% | |
Lakewood Flats [Member] | ||
Real Estate Properties [Line Items] | ||
Ownership Interest (as a percent) | 100.00% | |
Original Florida MOB Portfolio | ||
Real Estate Properties [Line Items] | ||
Number of properties | 8 | |
Florida MOB Portfolio, South Florida | ||
Real Estate Properties [Line Items] | ||
Number of properties | 9 |
Real Estate and Real Estate-R42
Real Estate and Real Estate-Related Investments Real Estate and Real Estate-Related Asset Disposition (Details) - USD ($) $ in Thousands | Feb. 21, 2015 | Jan. 08, 2015 | Mar. 31, 2016 | Mar. 31, 2015 |
Real Estate Properties [Line Items] | ||||
Gain on sale of real estate | $ 0 | $ 5,320 | ||
Repayment of long-term debt | 424 | 9,086 | ||
Net income (loss) attributable to the Company | $ (1,073) | (173) | ||
Babcock Self Storage San Antonio [Member] | ||||
Real Estate Properties [Line Items] | ||||
Noncontrolling Interest, Ownership Percentage by Parent | 85.00% | |||
Sales of Real Estate | $ 5,400 | |||
Proceeds from Sale of Real Estate | 5,200 | |||
Gain on sale of real estate | 2,000 | |||
Repayment of long-term debt | $ 2,100 | |||
Alte Jakobstrabe Berlin [Member] | ||||
Real Estate Properties [Line Items] | ||||
Noncontrolling Interest, Ownership Percentage by Parent | 99.70% | |||
Sales of Real Estate | $ 14,100 | |||
Proceeds from Sale of Real Estate | 13,000 | |||
Gain on sale of real estate | 3,300 | |||
Repayment of long-term debt | $ 6,500 | |||
Babcock and Alte Jakobstrabe [Member] | Disposal Group, Not Discontinued Operations [Member] | ||||
Real Estate Properties [Line Items] | ||||
Gain on sale of real estate | 5,300 | |||
Net income (loss) attributable to the Company | $ 2,400 |
Real Estate Held for Sale - Maj
Real Estate Held for Sale - Major Classes of Assets and Liabilities (Details) $ in Thousands | Apr. 07, 2016USD ($) | Dec. 31, 2014USD ($)unit | Mar. 31, 2016USD ($)unit | Dec. 31, 2015USD ($) |
Real Estate Held for Sale, Major Classes of Assets and Liabilities | ||||
Assets associated with real estate held for sale | $ 55,792 | $ 0 | ||
Notes payable | 33,500 | 0 | ||
Obligations associated with real estate held for sale | $ 33,261 | 0 | ||
Lakewood Flats [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of units in real estate property | unit | 435 | |||
Subsequent Event | Lakewood Flats [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Sale of real estate | $ 68,800 | |||
Lakewood Flats [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of units in real estate property | unit | 435 | 435 | ||
Real estate purchase price | $ 60,500 | |||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Subsequent Event | Lakewood Flats [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Sale of real estate | $ 68,800 | |||
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | ||||
Real Estate Held for Sale, Major Classes of Assets and Liabilities | ||||
Assets associated with real estate held for sale | $ 55,792 | |||
Notes payable | 33,500 | |||
Deferred financing fees | 403 | 0 | ||
Notes payable, net | 33,097 | $ 0 | ||
Other | 164 | |||
Obligations associated with real estate held for sale | 33,261 | |||
Land and Improvements | Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | ||||
Real Estate Held for Sale, Major Classes of Assets and Liabilities | ||||
Property plant and equipment held for sale | 8,050 | |||
Buildings and Improvements | Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | ||||
Real Estate Held for Sale, Major Classes of Assets and Liabilities | ||||
Property plant and equipment held for sale | 46,970 | |||
Furniture, Fixtures and Equipment | Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | ||||
Real Estate Held for Sale, Major Classes of Assets and Liabilities | ||||
Property plant and equipment held for sale | $ 772 |
Investment in Unconsolidated 44
Investment in Unconsolidated Joint Venture - Additional Information (Details) - Prospect Park - USD ($) $ in Millions | May. 24, 2013 | Mar. 31, 2016 | Mar. 31, 2015 |
Investment in Unconsolidated Joint Venture | |||
Outstanding principal balance under mezzanine loan | $ 15.3 | ||
Interest capitalized | $ 0.1 | $ 0.1 | |
Initial Advance to Joint Venture | |||
Investment in Unconsolidated Joint Venture | |||
Loans receivable, construction | $ 15.3 | ||
Annual interest rate (as a percent) | 10.00% | ||
Annual interest rate after two extensions of mezzanine loan (as a percent) | 18.00% | ||
Initial Advance to Joint Venture | Third-party senior construction lender | |||
Investment in Unconsolidated Joint Venture | |||
Loans receivable, construction | $ 40 |
Investment in Unconsolidated 45
Investment in Unconsolidated Joint Venture - Schedule of Ownership Interest (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Prospect Park | ||
Investment in Unconsolidated Joint Venture | ||
Carrying Amount | $ 14,614 | $ 14,482 |
Variable Interest Entities (Det
Variable Interest Entities (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Variable Interest Entity [Line Items] | ||
Assets | $ 299,965 | $ 342,189 |
Variable Interest Entity, Not Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Assets | 69,300 | 63,900 |
Construction in Progress, Gross | 59,000 | 53,500 |
Land | 9,800 | 9,800 |
Other Assets | 400 | 500 |
Maximum loss exposure | 14,600 | 14,500 |
Variable Interest Entity, Not Primary Beneficiary | Notes Receivable | ||
Variable Interest Entity [Line Items] | ||
Notes, Loans and Financing Receivable, Net, Noncurrent | 31,500 | 26,900 |
Variable Interest Entity, Not Primary Beneficiary | Mezzanine Loan | ||
Variable Interest Entity [Line Items] | ||
Notes, Loans and Financing Receivable, Net, Noncurrent | $ 15,300 | $ 15,300 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Notes Payable | |||
Notes payable | $ 144,725 | $ 178,692 | |
Deferred financing fees, net | (1,116) | (1,656) | |
Notes payable, net | 143,609 | 177,036 | |
Disposal Group, Including Discontinued Operation, Notes Payable, Gross | $ 33,500 | 0 | |
LIBOR rate (as a percent) | 0.44% | ||
Long Term Debt, Including Disposal Group | $ 176,706 | 177,036 | |
Notes Payable, Other Payables [Member] | Courtyard Kauai at Coconut Beach Hotel | |||
Notes Payable | |||
Notes payable | $ 38,000 | 38,000 | |
Variable rate basis | 30-day LIBOR | ||
Notes Payable, Other Payables [Member] | Florida MOB Portfolio - Gardens Medical Pavilion | |||
Notes Payable | |||
Notes payable | $ 13,200 | 13,298 | |
Interest rate (as a percent) | 4.90% | ||
Notes Payable, Other Payables [Member] | River Club and the Townhomes at River Club (formerly referred to as the UGA Portfolio) | |||
Notes Payable | |||
Notes payable | $ 24,203 | 24,299 | |
Interest rate (as a percent) | 5.26% | ||
Notes Payable, Other Payables [Member] | Lakes of Margate | |||
Notes Payable | |||
Notes payable | $ 14,433 | 14,496 | |
Notes Payable, Other Payables [Member] | Arbors Harbor Town | |||
Notes Payable | |||
Notes payable | $ 25,011 | 25,130 | |
Interest rate (as a percent) | 3.985% | ||
Notes Payable, Other Payables [Member] | 22 Exchange | |||
Notes Payable | |||
Notes payable | $ 19,500 | 19,500 | |
Interest rate (as a percent) | 3.93% | ||
Notes Payable, Other Payables [Member] | Parkside | |||
Notes Payable | |||
Notes payable | $ 10,378 | 10,469 | |
Interest rate (as a percent) | 5.00% | ||
Debt instrument, unamortized premium | $ 400 | ||
Notes Payable, Other Payables [Member] | Lakewood Flats [Member] | |||
Notes Payable | |||
Notes payable | 33,500 | ||
Variable rate basis | 30-day LIBOR | ||
Prospect Park | |||
Notes Payable | |||
Interest capitalized | $ 100 | $ 100 | |
LIBOR | Notes Payable, Other Payables [Member] | Courtyard Kauai at Coconut Beach Hotel | |||
Notes Payable | |||
Variable rate (as a percent) | 95.00% | ||
LIBOR | Notes Payable, Other Payables [Member] | Lakewood Flats [Member] | |||
Notes Payable | |||
Variable rate (as a percent) | 1.50% | ||
Notes Payable, Assets Held-for-sale [Member] | |||
Notes Payable | |||
Notes payable | $ 33,500 | ||
Deferred financing fees, net | $ (403) | ||
Minimum [Member] | Notes Payable, Other Payables [Member] | Lakes of Margate | |||
Notes Payable | |||
Interest rate (as a percent) | 5.49% | ||
Maximum [Member] | Notes Payable, Other Payables [Member] | Lakes of Margate | |||
Notes Payable | |||
Interest rate (as a percent) | 5.92% | ||
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | |||
Notes Payable | |||
Notes payable, net | $ 33,100 | ||
Disposal Group, Including Discontinued Operation, Notes Payable, Gross | 33,500 | ||
Deferred financing fees | 403 | 0 | |
Notes payable held for sale | $ 33,097 | $ 0 |
Notes Payable (Details 2)
Notes Payable (Details 2) - USD ($) $ in Thousands | Apr. 07, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
Contractual obligations for principal payments | |||
April 1, 2016 - December 31, 2016 | $ 1,491 | ||
2,017 | 40,135 | ||
2,018 | 46,841 | ||
2,019 | 24,309 | ||
2,020 | 13,772 | ||
Thereafter | 17,813 | ||
Total contractual obligations for principal payments | 144,361 | ||
Unamortized premium | 364 | ||
Total notes payable | 144,725 | $ 178,692 | |
Deferred financing fees, net | (1,116) | (1,656) | |
Notes payable, net | 143,609 | $ 177,036 | |
Notes Payable, Assets Held-for-sale [Member] | |||
Contractual obligations for principal payments | |||
Total notes payable | 33,500 | ||
Deferred financing fees, net | $ (403) | ||
Subsequent Event | Lakewood Flats [Member] | |||
Contractual obligations for principal payments | |||
Sales of Real Estate | $ 68,800 |
Leasing Activity - Schedule of
Leasing Activity - Schedule of Future Minimum Payments (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2016USD ($)office_property | |
Operating Leased Assets [Line Items] | |
Operating Leases Period, Maximum | 1 year |
April 1, 2016 - December 31, 2016 | $ 920 |
2,017 | 1,224 |
2,018 | 917 |
2,019 | 836 |
2,020 | 841 |
Thereafter | 2,685 |
Total | $ 7,423 |
Germany and Florida [Member] | |
Operating Leased Assets [Line Items] | |
Operating Leases of Lessor, Number of Office Properties | office_property | 1 |
Derivative Instruments and He50
Derivative Instruments and Hedging Activities - Additional Information (Details) | Mar. 31, 2016derivative |
Interest rate cap | |
Derivative [Line Items] | |
Number of interest rate caps | 1 |
Derivative Instruments and He51
Derivative Instruments and Hedging Activities - Summary of Notional Values (Details) - Courtyard Kauai Coconut Beach Hotel, Kauai, Hawaii - Interest rate cap $ in Thousands | Mar. 31, 2016USD ($) |
LIBOR | |
Derivative [Line Items] | |
Interest Rate/ Strike Rate (as a percent) | 3.00% |
Derivative not designated as hedging instruments | |
Derivative [Line Items] | |
Notional Value | $ 38,000 |
Derivative Instruments and He52
Derivative Instruments and Hedging Activities - Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Prepaid Expenses and Other Assets | Derivative not designated as hedging instruments | Interest rate derivative contracts | ||
Derivative [Line Items] | ||
Derivative financial instruments | $ 0 | $ 2 |
Derivative Instruments and He53
Derivative Instruments and Hedging Activities - Effect on Financial Statements (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Amount of gain or (loss) on derivative not designated as hedging instrument | $ 1 | $ 15 |
Distributions (Details)
Distributions (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 05, 2016 | Mar. 18, 2015 | Mar. 31, 2016 | Mar. 31, 2015 |
Distributions [Abstract] | ||||
Special distribution declared on common stock (in dollars per share) | $ 1.50 | $ 1 | ||
Special distribution declared on common stock, amount | $ 38.4 | $ 25.7 |
Related Party Transactions (Det
Related Party Transactions (Details) | Jun. 06, 2015USD ($) | Mar. 31, 2016USD ($)installment | Mar. 31, 2015USD ($) |
Related party transaction | |||
Asset management fees incurred | $ 614,000 | $ 725,000 | |
Advisor | |||
Related party transaction | |||
Administrative service fee, annual | $ 1,800,000 | $ 1,500,000 | |
Renewal term of agreement | 1 year | ||
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% | ||
Acquisition and advisory fees incurred (less than) | $ 0 | 0 | |
Reimbursement of acquisition expense (less than) | $ 0 | 0 | |
Percentage of debt financing fee payable under loan or line of credit | 0.50% | ||
Debt financing fees | $ 0 | 0 | |
Costs Incurred, Development Costs | $ 0 | 0 | |
Asset management fee, annual (percent) | 0.05833% | ||
Asset management fees incurred | $ 600,000 | 700,000 | |
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 | $ 300,000 | 400,000 | |
Due diligence service costs (less than) | $ 100,000 | 100,000 | |
Construction management fee, percentage (not to exceed) | 5.00% | ||
Construction management fees | $ 0 | 0 | |
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 | $ 100,000 | $ 200,000 | |
Behringer Harvard Opportunity II Management Services, LLC | Minimum [Member] | |||
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 Inform56
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Supplemental Cash Flow Information [Abstract] | ||
Interest paid, net of amounts capitalized | $ 1,422 | $ 1,630 |
Non-cash investing activities and financing activities: | ||
Proceeds held in escrow through sale of real estate interests | 0 | 912 |
Noncash Investing Activities Capital Expenditures for Real Estate in Accounts Payable | 5 | 0 |
Capital expenditures for real estate in accrued liabilities | 130 | 86 |
Accrued distributions to noncontrolling interest | $ 19 | $ 19 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - USD ($) $ in Millions | Apr. 07, 2016 | May. 11, 2016 |
Subsequent Event [Line Items] | ||
Stock redemptions approved (in shares) | 41,216 | |
Aggregate redemption payment of shares approved | $ 0.2 | |
Lakewood Flats [Member] | ||
Subsequent Event [Line Items] | ||
Sales of Real Estate | $ 68.8 |