Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 11, 2018 | |
Document Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Central Index Key | 1,390,213 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Registrant Name | CORPORATE PROPERTY ASSOCIATES 17 - GLOBAL INC | |
Entity Common Stock Shares Outstanding | 354,231,464 |
Consolidated Balance Sheets (UN
Consolidated Balance Sheets (UNAUDITED) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Investments in real estate | ||
Real estate — Land, buildings and improvements | $ 2,827,416 | $ 2,772,611 |
Operating real estate — Land, buildings and improvements | 345,682 | 340,772 |
Net investments in direct financing leases | 510,916 | 509,228 |
In-place lease intangible assets | 636,545 | 629,961 |
Other intangible assets | 112,696 | 111,004 |
Investments in real estate | 4,433,255 | 4,363,576 |
Accumulated depreciation and amortization | (663,004) | (626,655) |
Net investments in real estate | 3,770,251 | 3,736,921 |
Equity investments in real estate | 413,345 | 409,254 |
Cash and cash equivalents | 102,402 | 119,094 |
Other assets, net | 307,126 | 322,201 |
Total assets | 4,593,124 | 4,587,470 |
Debt: | ||
Mortgage debt, net | 1,853,541 | 1,849,459 |
Senior Credit Facility, net | 92,323 | 101,931 |
Debt, net | 1,945,864 | 1,951,390 |
Accounts payable, accrued expenses and other liabilities | 129,426 | 132,751 |
Below-market rent and other intangible liabilities, net | 60,554 | 61,222 |
Deferred income taxes | 27,907 | 30,524 |
Due to affiliates | 9,955 | 11,467 |
Distributions payable | 57,121 | 56,859 |
Total liabilities | 2,230,827 | 2,244,213 |
Commitments and contingencies (Note 11) | ||
Preferred stock, $0.001 par value; 50,000,000 shares authorized; none issued | 0 | 0 |
Common stock, $0.001 par value; 900,000,000 shares authorized; and 351,499,230 and 349,899,827 shares, respectively, issued and outstanding | 351 | 349 |
Additional paid-in capital | 3,191,993 | 3,174,786 |
Distributions in excess of accumulated earnings | (883,635) | (861,319) |
Accumulated other comprehensive loss | (54,364) | (78,420) |
Total stockholders’ equity | 2,254,345 | 2,235,396 |
Noncontrolling interests | 107,952 | 107,861 |
Total equity | 2,362,297 | 2,343,257 |
Total liabilities and equity | $ 4,593,124 | $ 4,587,470 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (UNAUDITED) (Parentheticals) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Stockholders' Equity Attributable to Parent [Abstract] | ||
Preferred stock, par or stated value (usd per share) | $ 0.001 | $ 0.001 |
Preferred stock shares authorized, shares | 50,000,000 | 50,000,000 |
Preferred stock shares issued, shares | 0 | 0 |
Common stock, par or stated value (usd per share) | $ 0.001 | $ 0.001 |
Common stock shares authorized, shares | 900,000,000 | 900,000,000 |
Common stock shares outstanding, shares | 351,499,230 | 349,899,827 |
Consolidated Statements of Inco
Consolidated Statements of Income (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Lease revenues: | ||
Rental income | $ 74,691 | $ 91,254 |
Interest income from direct financing leases | 14,640 | 14,696 |
Total lease revenues | 89,331 | 105,950 |
Other real estate income | 12,213 | 9,337 |
Other operating income | 7,175 | 5,978 |
Other interest income | 4,563 | 1,740 |
Gross revenues | 113,282 | 123,005 |
Operating Expenses | ||
Depreciation and amortization | 28,450 | 30,819 |
Property expenses | 23,037 | 16,605 |
Other real estate expenses | 7,617 | 3,352 |
Impairment charges | 5,404 | 4,519 |
General and administrative | 3,119 | 3,570 |
Acquisition and other expenses | 57 | 750 |
Operating expenses | 67,684 | 59,615 |
Other Income and Expenses | ||
Interest expense | (20,550) | (23,390) |
Equity in earnings of equity method investments in real estate | 4,683 | 1,985 |
Other gains and (losses) | 4,003 | 5,657 |
Loss on extinguishment of debt | 0 | (1,614) |
Other Income and Expenses | (11,864) | (17,362) |
Income before income taxes and gain on sale of real estate | 33,734 | 46,028 |
Benefit from (provision for) income taxes | 1,403 | (621) |
Income before gain on sale of real estate, net of tax | 35,137 | 45,407 |
Gain on sale of real estate, net of tax | 24 | 1,739 |
Net Income | 35,161 | 47,146 |
Net income attributable to noncontrolling interests (inclusive of Available Cash Distributions to a related party of $6,170 and $6,810, respectively) | (8,424) | (9,135) |
Net Income Attributable to CPA:17 – Global | $ 26,737 | $ 38,011 |
Basic and Diluted Earnings Per Share (usd per share) | $ 0.08 | $ 0.11 |
Basic and Diluted Weighted-Average Shares Outstanding, shares | 352,098,948 | 345,796,312 |
Distributions Declared Per Share (usd per share) | $ 0.1625 | $ 0.1625 |
Consolidated Statements of Inc5
Consolidated Statements of Income (UNAUDITED) (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Other Income and Expenses | ||
Available Cash Distributions | $ 6,170 | $ 6,810 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Comprehensive Income Attributable to Parent | ||
Net Income | $ 35,161 | $ 47,146 |
Other Comprehensive Income | ||
Foreign currency translation adjustments | 26,935 | 8,609 |
Change in net unrealized loss on derivative instruments | (2,332) | (2,553) |
Change in unrealized gain on marketable investments | 0 | 30 |
Total other comprehensive loss | 24,603 | 6,086 |
Comprehensive Income | 59,764 | 53,232 |
Amounts Attributable to Noncontrolling Interests | ||
Net income | (8,424) | (9,135) |
Foreign currency translation adjustments | (547) | (259) |
Comprehensive income attributable to noncontrolling interests | (8,971) | (9,394) |
Comprehensive Income Attributable to CPA:17 – Global | $ 50,793 | $ 43,838 |
Consolidated Statements of Equi
Consolidated Statements of Equity (UNAUDITED) - USD ($) $ in Thousands | Total | Total CPA:17 – Global Stockholders | Common Stock | Additional Paid-In Capital | Distributions in Excess of Accumulated Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interests |
Beginning equity balance, value at Dec. 31, 2016 | $ 2,315,004 | $ 2,217,510 | $ 343 | $ 3,106,456 | $ (732,613) | $ (156,676) | $ 97,494 |
Beginning equity balance, shares at Dec. 31, 2016 | 343,575,840 | ||||||
Statement of Equity | |||||||
Shares issued, value | 25,761 | 25,761 | $ 2 | 25,759 | |||
Shares issued, shares | 2,515,991 | ||||||
Shares issued to affiliates, value | 6,010 | 6,010 | $ 1 | 6,009 | |||
Shares issued to affiliates, shares | 592,949 | ||||||
Distributions declared | (56,142) | (56,142) | (56,142) | ||||
Distributions to noncontrolling interests | (9,944) | (9,944) | |||||
Net Income | 47,146 | 38,011 | 38,011 | 9,135 | |||
Other comprehensive income: | |||||||
Foreign currency translation adjustments | 8,609 | 8,350 | 8,350 | 259 | |||
Realized and unrealized loss on derivative instruments | (2,553) | (2,553) | (2,553) | ||||
Change in unrealized gain on marketable investments | 30 | 30 | 30 | ||||
Repurchase of shares, value | (11,314) | (11,314) | $ (1) | (11,313) | |||
Repurchase of shares, shares | (1,194,914) | ||||||
Ending equity balance, value at Mar. 31, 2017 | 2,322,607 | 2,225,663 | $ 345 | 3,126,911 | (750,744) | (150,849) | 96,944 |
Ending equity balance, shares at Mar. 31, 2017 | 345,489,866 | ||||||
Statement of Equity | |||||||
Cumulative-effect adjustment for the adoption of new accounting pronouncement | 8,068 | 8,068 | 8,068 | ||||
Beginning equity balance, value at Dec. 31, 2017 | $ 2,343,257 | 2,235,396 | $ 349 | 3,174,786 | (861,319) | (78,420) | 107,861 |
Beginning equity balance, shares at Dec. 31, 2017 | 349,899,827 | 349,899,827 | |||||
Statement of Equity | |||||||
Shares issued, value | $ 25,091 | 25,091 | $ 3 | 25,088 | |||
Shares issued, shares | 2,481,702 | ||||||
Shares issued to affiliates, value | 7,427 | 7,427 | $ 0 | 7,427 | |||
Shares issued to affiliates, shares | 738,271 | ||||||
Distributions declared | (57,121) | (57,121) | (57,121) | ||||
Distributions to noncontrolling interests | (9,586) | (9,586) | |||||
Contributions from noncontrolling interests | 706 | 706 | |||||
Net Income | 35,161 | 26,737 | 26,737 | 8,424 | |||
Other comprehensive income: | |||||||
Foreign currency translation adjustments | 26,935 | 26,388 | 26,388 | 547 | |||
Realized and unrealized loss on derivative instruments | (2,332) | (2,332) | (2,332) | ||||
Change in unrealized gain on marketable investments | 0 | ||||||
Repurchase of shares, value | (15,309) | (15,309) | $ (1) | (15,308) | |||
Repurchase of shares, shares | (1,620,570) | ||||||
Ending equity balance, value at Mar. 31, 2018 | $ 2,362,297 | $ 2,254,345 | $ 351 | $ 3,191,993 | $ (883,635) | $ (54,364) | $ 107,952 |
Ending equity balance, shares at Mar. 31, 2018 | 351,499,230 | 351,499,230 |
Consolidated Statements of Equ8
Consolidated Statements of Equity (UNAUDITED) (Parentheticals) - $ / shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Distribution per share | ||
Distributions declared per share (usd per share) | $ 0.1625 | $ 0.1625 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Cash Flows (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash Flow - Operating Activities | ||
Net Cash Provided by Operating Activities | $ 67,945 | $ 61,209 |
Cash Flows — Investing Activities | ||
Return of capital from equity investments in real estate | 7,527 | 17,781 |
Funding for build-to-suit projects and expansions | (6,810) | (236) |
Capital contributions to equity investments in real estate | (2,868) | (81,989) |
Payment of deferred acquisition fees to an affiliate | (1,090) | (1,245) |
Acquisitions of real estate and direct financing leases | (971) | (11,393) |
Capital expenditures on owned real estate | (689) | (663) |
Other investing activities, net | 652 | 489 |
Value added taxes paid in connection with acquisition of real estate | (383) | 0 |
Proceeds from sale of real estate | 0 | 96,674 |
Value added taxes refunded in connection with acquisition of real estate | 0 | 5,412 |
Net Cash (Used in) Provided by Investing Activities | (4,632) | 24,830 |
Cash Flows — Financing Activities | ||
Distributions paid | (56,859) | (55,830) |
Proceeds from issuance of shares | 25,091 | 25,761 |
Repayments of Senior Credit Facility | (19,840) | 0 |
Repurchase of shares | (15,309) | (11,314) |
Scheduled payments and prepayments of mortgage principal | (12,925) | (243,403) |
Distributions to noncontrolling interests | (9,586) | (9,944) |
Proceeds from Senior Credit Facility | 8,052 | 33,878 |
Contributions from noncontrolling interests | 706 | 0 |
Payment of financing costs and mortgage deposits, net of deposits refunded | (15) | (45) |
Proceeds from mortgage financing | 0 | 104,287 |
Other financing activities, net | 0 | (564) |
Net Cash Used in Financing Activities | (80,685) | (157,174) |
Change in Cash and Cash Equivalents and Restricted Cash During the Period | ||
Effect of exchange rate changes on cash and cash equivalents and restricted cash | 1,749 | 1,483 |
Net decrease in cash and cash equivalents and restricted cash | (15,623) | (69,652) |
Cash and cash equivalents and restricted cash, beginning of period | 145,108 | 300,153 |
Cash and cash equivalents and restricted cash, end of period | $ 129,485 | $ 230,501 |
Organization
Organization | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Corporate Property Associates 17 – Global Incorporated, or CPA:17 – Global, and together with its consolidated subsidiaries, is a publicly owned REIT that invests primarily in commercial real estate properties leased to companies both domestically and internationally. We were formed in 2007 and are managed by W. P. Carey Inc., or WPC, through one of its subsidiaries, or collectively our Advisor. As a REIT, we are not subject to U.S. federal income taxation as long as we satisfy certain requirements, principally relating to the nature of our income and the level of our distributions, among other factors. We earn revenue primarily by leasing the properties we own to single corporate tenants, predominantly on a triple-net lease basis, which requires the tenant to pay substantially all of the costs associated with operating and maintaining the property. Revenue is subject to fluctuation due to the timing of new lease transactions, lease terminations, lease expirations, contractual rent adjustments, tenant defaults, sales of properties, and changes in foreign currency exchange rates. Substantially all of our assets and liabilities are held by CPA:17 Limited Partnership, or the Operating Partnership, and at March 31, 2018 , we owned 99.99% of general and limited partnership interests in the Operating Partnership. The remaining interest in the Operating Partnership is held by a subsidiary of WPC. At March 31, 2018 , our portfolio was comprised of full or partial ownership interests in 411 properties, substantially all of which were fully-occupied and triple-net leased to 114 tenants, and totaled approximately 44.4 million square feet. In addition, our portfolio was comprised of full or majority ownership interests in 38 operating properties, including 37 self-storage properties and one hotel property, for an aggregate of approximately 2.7 million square feet. We operate in two reportable business segments: Net Lease and Self Storage. Our Net Lease segment includes our domestic and foreign investments in net-leased properties, whether they are accounted for as operating or direct financing leases. Our Self Storage segment is comprised of our investments in self-storage properties. In addition, we have investments in loans receivable, commercial mortgage-backed securities, or CMBS, one hotel, and certain other properties, which are included in our All Other category ( Note 14 ). Our reportable business segments and All Other category are the same as our reporting units. We raised aggregate gross proceeds of approximately $2.9 billion from our initial public offering, which closed in April 2011, and our follow-on offering, which closed in January 2013. We have fully invested the proceeds from our initial and follow-on public offerings. In addition, from inception through March 31, 2018 , $701.1 million of distributions to our shareholders were reinvested in our common stock through our Distribution Reinvestment Plan, or DRIP. |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Basis of Presentation Our interim consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not necessarily include all information and footnotes necessary for a fair statement of our consolidated financial position, results of operations, and cash flows in accordance with generally accepted accounting principles in the United States, or GAAP. In the opinion of management, the unaudited financial information for the interim periods presented in this Report reflects all normal and recurring adjustments necessary for a fair statement of financial position, results of operations, and cash flows. Our interim consolidated financial statements should be read in conjunction with our audited consolidated financial statements and accompanying notes for the year ended December 31, 2017 , which are included in the 2017 Annual Report, as certain disclosures that would substantially duplicate those contained in the audited consolidated financial statements have not been included in this Report. Operating results for interim periods are not necessarily indicative of operating results for an entire year. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in our consolidated financial statements and the accompanying notes. Actual results could differ from those estimates. Basis of Consolidation Our consolidated financial statements reflect all of our accounts, including those of our controlled subsidiaries and our tenancy-in-common interest, as described below. The portions of equity in consolidated subsidiaries that are not attributable, directly or indirectly, to us are presented as noncontrolling interests. All significant intercompany accounts and transactions have been eliminated. When we obtain an economic interest in an entity, we evaluate the entity to determine if it should be deemed a variable interest entity, or VIE, and, if so, whether we are the primary beneficiary and are therefore required to consolidate the entity. We apply accounting guidance for consolidation of VIEs to certain entities in which the equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. Fixed price purchase and renewal options within a lease, as well as certain decision-making rights within a loan or joint-venture agreement, can cause us to consider an entity a VIE. Limited partnerships and other similar entities that operate as a partnership will be considered a VIE unless the limited partners hold substantive kick-out rights or participation rights. Significant judgment is required to determine whether a VIE should be consolidated. We review the contractual arrangements provided for in the partnership agreement or other related contracts to determine whether the entity is considered a VIE, and to establish whether we have any variable interests in the VIE. We then compare our variable interests, if any, to those of the other variable interest holders to determine which party is the primary beneficiary of the VIE based on whether the entity (i) has the power to direct the activities that most significantly impact the economic performance of the VIE and (ii) has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The liabilities of these VIEs are non-recourse to us and can only be satisfied from each VIE’s respective assets. At both March 31, 2018 and December 31, 2017 , we considered 21 entities VIEs, nine of which we consolidated as we are considered the primary beneficiary and one of which we accounted for as a loan receivable. The following table presents a summary of selected financial data of the consolidated VIEs, included in the consolidated balance sheets (in thousands): March 31, 2018 December 31, 2017 Real estate — Land, buildings and improvements $ 115,924 $ 109,426 Operating real estate — Land, buildings and improvements 85,317 80,658 Net investments in direct financing leases 312,724 312,234 In-place lease intangible assets 8,949 8,650 Accumulated depreciation and amortization (28,957 ) (26,395 ) Other assets, net 70,654 73,620 Total assets 573,877 567,929 Mortgage debt, net $ 103,579 $ 104,213 Accounts payable, accrued expenses and other liabilities 18,419 12,693 Deferred income taxes 10,282 12,374 Total liabilities 132,668 129,662 At both March 31, 2018 and December 31, 2017 , we had 11 unconsolidated VIEs, all of which we account for under the equity method of accounting. We do not consolidate these entities because we are not the primary beneficiary and the nature of our involvement in the activities of these entities allows us to exercise significant influence on, but does not give us power over, decisions that significantly affect the economic performance of these entities. As of March 31, 2018 and December 31, 2017 , the net carrying amount of our investments in these entities was $283.9 million and $282.0 million , respectively, and our maximum exposure to loss in these entities was limited to our investments. At both March 31, 2018 and December 31, 2017 , we had an investment in a tenancy-in-common interest in a portfolio of international properties. Consolidation of this investment is not required as such interest does not qualify as a VIE and does not meet the control requirement for consolidation. Accordingly, we account for this investment using the equity method of accounting. We use the equity method of accounting because the shared decision-making involved in a tenancy-in-common interest investment provides us with significant influence on the operating and financial decisions of this investment. At times, the carrying value of our equity investments may fall below zero for certain investments. We intend to fund our share of the jointly owned investments’ future operating deficits should the need arise. However, we have no legal obligation to pay for any of the liabilities of such investments nor do we have any legal obligation to fund operating deficits. At both March 31, 2018 and December 31, 2017 , none of our equity investments had carrying values below zero. Accounting Policy Update Distributions from Equity Method Investments — We classify distributions received from equity method investments using the cumulative earnings approach. Distributions received are considered returns on the investment and classified as cash inflows from operating activities. If, however, the investor’s cumulative distributions received, less distributions received in prior periods determined to be returns of investment, exceeds cumulative equity in earning recognized, the excess is considered a return of investment and is classified as inflows from investing activities. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. Restricted Cash — In connection with our adoption of Accounting Standards Update, or ASU, 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash , as described below, we revised our consolidated statements of cash flows to include restricted cash when reconciling the beginning-of-period and end-of-period cash amounts shown on the statement of cash flows. As a result, we retrospectively revised prior periods presented to conform to the current period presentation. Restricted cash primarily consists of security deposits and amounts required to be reserved pursuant to lender agreements for debt service, capital improvements and real estate taxes. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total presented in the consolidated statement of cash flows. March 31, 2018 December 31, 2017 Cash and cash equivalents $ 102,402 $ 119,094 Restricted cash (a) 27,083 26,014 Total cash and cash equivalents, and restricted cash $ 129,485 $ 145,108 __________ (a) Restricted cash is included within Other assets, net on our consolidated balance sheet. Recent Accounting Pronouncements Pronouncements Adopted as of March 31, 2018 In May 2014, the Financial Accounting Standards Board, or FASB, issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) . ASU 2014-09 is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. ASU 2014-09 does not apply to our lease revenues, which constitute a majority of our revenues, but will primarily apply to revenues generated from our operating properties. We adopted this guidance for our interim and annual periods beginning January 1, 2018 using the modified retrospective method applied to any contracts not completed as of that date. There were no changes to the prior period presentations of revenue. Results of operations for reporting periods beginning January 1, 2018 are presented under Topic 606. The adoption of Topic 606 did not have a material impact on our consolidated financial statements. Revenue is recognized when, or as, control of promised goods or services is transferred to customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. At contract inception, we assess the services promised in our contracts with customers and identify a performance obligation for each promise to transfer to the customer a good or service (or bundle of goods or services) that is distinct. To identify the performance obligations, we consider all of the services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. Revenue from contracts with customers primarily represents Other real estate income of $12.2 million and $9.3 million for the three months ended March 31, 2018 and 2017 , respectively. Other real estate income is primarily comprised of revenues from our self-storage portfolio as well as room rentals and food and beverage services at our hotel. We identified a single performance obligation for each distinct service. Performance obligations are typically satisfied at a point in time, at the time of sale, or at the rendering of the service. Fees are generally determined to be fixed. Payment is typically due immediately following the delivery of the service. In January 2016, the FASB issued ASU 2016-01, Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . ASU 2016-01 requires all equity investments (other than those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value, with changes in the fair value recognized through net income. We adopted this guidance for our interim and annual periods beginning January 1, 2018. The adoption of ASU 2016-01 did not have a material impact on our consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 intends to reduce diversity in practice for certain cash flow classifications, including, but not limited to (i) debt prepayment or debt extinguishment costs, (ii) contingent consideration payments made after a business combination, (iii) proceeds from the settlement of insurance claims, and (iv) distributions received from equity method investees. We retrospectively adopted this guidance for our interim and annual periods beginning January 1, 2018. As a result, we reclassified debt extinguishment costs from net cash provided by operating activities to net cash used in financing activities on the consolidated statement of cash flows for the three months ended March 31, 2017 . The adoption of ASU 2016-15 did not have a material impact on our consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash . ASU 2016-18 intends to reduce diversity in practice for the classification and presentation of changes in restricted cash on the statement of cash flows. ASU 2016-18 requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. We adopted ASU 2016-18 on January 1, 2018 and have retrospectively applied this standard to our consolidated statements of cash flows for the three months ended March 31, 2018 and 2017 . See Restricted Cash above for additional information. In February 2017, the FASB issued ASU 2017-05, Other Income — Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20) . ASU 2017-05 clarifies that a financial asset is within the scope of Subtopic 610-20 if it meets the definition of an in substance nonfinancial asset. The amendments define the term “in substance nonfinancial asset,” in part, as a financial asset promised to a counterparty in a contract if substantially all of the fair value of the assets (recognized and unrecognized) that are promised to the counterparty in the contract is concentrated in nonfinancial assets. If substantially all of the fair value of the assets that are promised to the counterparty in a contract is concentrated in nonfinancial assets, then all of the financial assets promised to the counterparty are in substance nonfinancial assets within the scope of Subtopic 610-20. This amendment also clarifies that nonfinancial assets within the scope of Subtopic 610-20 may include nonfinancial assets transferred within a legal entity to a counterparty. For example, a parent company may transfer control of nonfinancial assets by transferring ownership interests in a consolidated subsidiary. We adopted this guidance for our interim and annual periods beginning January 1, 2018 and applied the modified retrospective transition method (applicable to any contracts not completed as of that date). Results of operations for reporting periods beginning January 1, 2018 are presented under Subtopic 610-20, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for those periods. As of January 1, 2018, there was one open contract, which was related to the I-drive Property Disposition and I-drive Wheel Restructuring ( Note 13 ). On March 17, 2017, the developer exercised its purchase option and acquired the entertainment complex, which we refer to as the I-drive Property. The gain on sale was deferred during the first quarter of 2017 and was expected to be recognized in income upon recovery of the cost of the I-drive Property through the receipt of principal payments received on the mezzanine loan. As a result of the adoption of ASU 2017-05, we recognized a cumulative effect adjustment to the opening balance of stockholders’ equity and a reduction to Accounts payable, accrued expenses and other liabilities as of January 1, 2018 equal to the total gain on sale of the Property of $2.1 million that was previously deferred. In addition to the sale of the I-drive Property, we restructured the $50.0 million loan, referred to as the I-drive Wheel Loan, to fund the construction of an observation wheel, which we refer to as the I-drive Wheel. This resulted in the elimination of our participation in the expected residual profits, with the loan no longer qualifying as an acquisition, development and construction of real estate arrangement, or ADC Arrangement, pursuant to the equity method of accounting. The gain recognized upon restructuring of the I-drive Wheel Loan of $16.4 million was deferred during 2017. As a result of the adoption of ASU 2017-05, the loan restructuring is now recognized as a receivable purchased at a discount of $18.6 million (which represents the carrying value of the ADC Arrangement upon restructuring on March 17, 2017) and will accrete up to the fair value of the loan in the amount of $35.0 million until maturity in December 2018. Accordingly, as of January 1, 2018, we recognized (i) a reduction of $16.4 million to Accounts payable, accrued expenses and other liabilities, (ii) a reduction of $10.4 million to Other assets, net and (iii) an adjustment to the opening balance of stockholders’ equity for the accretion of the loan related to prior periods, using the effective interest method, of $6.0 million . Pronouncements to be Adopted after March 31, 2018 In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 outlines a new model for accounting by lessees, whereby their rights and obligations under substantially all leases, existing and new, would be capitalized and recorded on the balance sheet. For lessors, however, the accounting remains largely unchanged from the current model, with the distinction between operating and financing leases retained, but updated to align with certain changes to the lessee model and the new revenue recognition standard. The new standard also replaces existing sale-leaseback guidance with a new model applicable to both lessees and lessors. In addition, it also requires lessors to record gross revenues and expenses associated with activities that do not transfer services to the lessee (such as real estate taxes and insurance). Additionally, the new standard requires extensive quantitative and qualitative disclosures. Early application will be permitted for all entities. The new standard must be adopted using a modified retrospective transition of the new guidance and provides for certain practical expedients. Transition will require application of the new model at the beginning of the earliest comparative period presented. We will adopt this guidance for our interim and annual periods beginning January 1, 2019. The ASU is expected to impact our consolidated financial statements as we have certain land lease arrangements for which we are the lessee. We are evaluating the impact of the new standard and have not yet determined if it will have a material impact on our business or our consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses. ASU 2016-13 introduces a new model for estimating credit losses based on current expected credit losses for certain types of financial instruments, including loans receivable, held-to-maturity debt securities, and net investments in direct financing leases, amongst other financial instruments. ASU 2016-13 also modifies the impairment model for available-for-sale debt securities and expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating the allowance for losses. ASU 2016-13 will be effective for public business entities in fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early application of the guidance permitted. We are in the process of evaluating the impact of adopting ASU 2016-13 on our consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities . ASU 2017-12 will make more financial and nonfinancial hedging strategies eligible for hedge accounting. It also amends the presentation and disclosure requirements and changes how companies assess hedge effectiveness. It is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. ASU 2017-12 will be effective in fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. We are in the process of evaluating the impact of adopting ASU 2017-12 on our consolidated financial statements, and expect to adopt the standard for the fiscal year beginning January 1, 2019. |
Agreements and Transactions wit
Agreements and Transactions with Related Parties | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Agreements and Transactions with Related Parties | Agreements and Transactions with Related Parties Transactions with Our Advisor We have an advisory agreement with our Advisor whereby our Advisor performs certain services for us under a fee arrangement, including the identification, evaluation, negotiation, purchase, and disposition of real estate and related assets and mortgage loans; day-to-day management; and the performance of certain administrative duties. We also reimburse our Advisor for general and administrative duties performed on our behalf. The advisory agreement has a term of one year and may be renewed for successive one-year periods. We may terminate the advisory agreement upon 60 days’ written notice without cause or penalty. The following tables present a summary of fees we paid, expenses we reimbursed, and distributions we made to our Advisor and other affiliates in accordance with the relevant agreements (in thousands): Three Months Ended March 31, 2018 2017 Amounts Included in the Consolidated Statements of Income Asset management fees $ 7,492 $ 7,325 Available Cash Distributions 6,170 6,810 Personnel and overhead reimbursements 1,765 2,291 Interest expense on deferred acquisition fees 64 64 Director compensation 40 53 $ 15,531 $ 16,543 Acquisition Fees Capitalized Personnel and overhead reimbursements $ 50 $ 107 Current acquisition fees 3 286 Deferred acquisition fees 3 229 $ 56 $ 622 The following table presents a summary of amounts included in Due to affiliates in the consolidated financial statements (in thousands): March 31, 2018 December 31, 2017 Due to Affiliates Deferred acquisition fees, including interest $ 5,434 $ 6,564 Asset management fees payable 2,498 2,435 Reimbursable costs 1,772 2,162 Accounts payable 251 175 Current acquisition fees — 131 $ 9,955 $ 11,467 Acquisition and Disposition Fees We pay our Advisor acquisition fees for structuring and negotiating investments and related mortgage financing on our behalf, a portion of which is payable upon acquisition of investments, with the remainder subordinated to the achievement of a preferred return, which is a non-compounded cumulative distribution of 5.0% per annum (based initially on our invested capital). Acquisition fees payable to our Advisor with respect to our long-term, net-leased investments are 4.5% of the total cost of those investments and are comprised of a current portion of 2.5% , typically paid upon acquisition, and a deferred portion of 2.0% , typically paid over three years and subject to the 5.0% preferred return described above. The preferred return was achieved as of each of the cumulative periods ended March 31, 2018 and December 31, 2017 . For certain types of non-long term net-leased investments, initial acquisition fees are between 1.0% and 1.75% of the equity invested plus the related acquisition fees, with no portion of the payment being deferred. Unpaid installments of deferred acquisition fees are included in Due to affiliates in the consolidated financial statements. Unpaid installments of deferred acquisition fees bear interest at an annual rate of 5.0% . The cumulative total acquisition costs, including acquisition fees paid to our Advisor, may not exceed 6.0% of the aggregate contract purchase price of all investments, which is measured at the end of each year. Our cumulative total acquisition costs have not exceeded the amount that would require our Advisor to reimburse us. Our Advisor may be entitled to receive a disposition fee equal to the lesser of (i) 50.0% of the competitive real estate commission (as defined in the advisory agreement) or (ii) 3.0% of the contract sales price of the investment being sold; however, payment of such fees is subordinated to the 5.0% preferred return. These fees are payable at the discretion of our board of directors. Asset Management Fees As described in the advisory agreement, we pay our Advisor asset management fees that vary based on the nature of the underlying investment. We pay 0.5% per annum of average market value for long-term net leases and certain other types of real estate investments, and 1.5% to 1.75% per annum of average equity value for certain types of securities. Asset management fees are payable in cash and/or shares of our common stock at our option, after consultation with our Advisor. If our Advisor receives all or a portion of its fees in shares, the number of shares issued is determined by dividing the dollar amount of fees by our most recently published estimated net asset value per share, or NAV, which was $10.04 as of December 31, 2017 . For the three months ended March 31, 2018 and year ended December 31, 2017 , we paid our Advisor 100.0% of its asset management fees in shares of our common stock. At March 31, 2018 , our Advisor owned 15,385,683 shares ( 4.4% ) of our common stock. Asset management fees are included in Property expenses in the consolidated financial statements. Available Cash Distributions WPC’s interest in the Operating Partnership entitles it to receive distributions of up to 10.0% of available cash generated by the Operating Partnership, referred to as the Available Cash Distribution, which is defined as cash generated from operations, excluding capital proceeds, as reduced by operating expenses and debt service, excluding prepayments and balloon payments. Available Cash Distributions are included in Net income attributable to noncontrolling interests in the consolidated financial statements. Personnel and Overhead Reimbursements Under the terms of the advisory agreement, our Advisor allocates a portion of its personnel and overhead expenses to us and the other entities that are managed by our Advisor, including Corporate Property Associates 18 – Global Incorporated, or CPA:18 – Global; Carey Watermark Investors Incorporated; Carey Watermark Investors 2 Incorporated; and Carey European Student Housing Fund I, L.P.; collectively referred to as the Managed Programs. Our Advisor also allocated a portion of its personnel and overhead expenses to Carey Credit Income Fund (now known as Guggenheim Credit Income Fund) prior to September 11, 2017, which was the effective date of its resignation as the advisor to that fund. Our Advisor allocates these expenses to us on the basis of our trailing four quarters of reported revenues in comparison to those of WPC and other entities managed by WPC and its affiliates. We reimburse our Advisor for various expenses it incurs in the course of providing services to us. We reimburse certain third-party expenses paid by our Advisor on our behalf, including property-specific costs, professional fees, office expenses, and business development expenses. In addition, we reimburse our Advisor for the allocated costs of personnel and overhead in managing our day-to-day operations, including accounting services, stockholder services, corporate management, and property management and operations. We do not reimburse our Advisor for the cost of personnel if these personnel provide services for transactions for which our Advisor receives a transaction fee, such as for acquisitions and dispositions. Under the advisory agreement, the amount of applicable personnel costs allocated to us is capped at 1.0% and 2.0% for 2018 and 2017, respectively, of pro rata lease revenues for each year. Costs related to our Advisor’s legal transactions group are based on a schedule of expenses relating to services performed for different types of transactions, such as financings, lease amendments, and dispositions, among other categories, and includes 0.25% of the total investment cost of an acquisition. In general, personnel and overhead reimbursements are included in General and administrative expenses in the consolidated financial statements. However, we capitalize certain of the costs related to our Advisor’s legal transactions group if the costs relate to a transaction that is not considered to be a business combination. Excess Operating Expenses Our Advisor is obligated to reimburse us for the amount by which our operating expenses exceeds the “ 2% / 25% guidelines” (the greater of 2% of average invested assets or 25% of net income) as defined in the advisory agreement for any 12-month period, subject to certain conditions. For the most recent trailing four quarters, our operating expenses were below this threshold. Jointly Owned Investments and Other Transactions with Affiliates At March 31, 2018 , we owned interests ranging from 6% to 97% in jointly owned investments, with the remaining interests held by affiliates or by third parties. We consolidate certain of these investments and account for the remainder under the equity method of accounting. We also owned an interest in a jointly controlled tenancy-in-common interest in several properties, which we account for under the equity method of accounting ( Note 6 ). At December 31, 2017 , we had $0.2 million due from an affiliate primarily related to one of our jointly owned investments, which has since been repaid. |
Real Estate and Operating Real
Real Estate and Operating Real Estate | 3 Months Ended |
Mar. 31, 2018 | |
Real Estate [Abstract] | |
Real Estate and Operating Real Estate | Real Estate and Operating Real Estate Real Estate — Land, Buildings and Improvements Real estate, which consists of land and buildings leased to others, at cost, and which are subject to operating leases, is summarized as follows (in thousands): March 31, 2018 December 31, 2017 Land $ 573,054 $ 567,113 Buildings and improvements 2,234,353 2,200,901 Real estate under construction (a) 20,009 4,597 Less: Accumulated depreciation (376,078 ) (354,668 ) $ 2,451,338 $ 2,417,943 __________ (a) Amount as of March 31, 2018 includes accrued capitalized costs of $8.9 million . During the three months ended March 31, 2018 , the U.S. dollar weakened against the euro, as the end-of-period rate for the U.S. dollar in relation to the euro increased by 2.7% to $1.2321 from $1.1993 . As a result, the carrying value of our real estate increased by $35.0 million from December 31, 2017 to March 31, 2018 . Depreciation expense, including the effect of foreign currency translation, on our real estate was $17.3 million and $16.2 million for the three months ended March 31, 2018 and 2017 , respectively. Real Estate Under Construction At both March 31, 2018 and December 31, 2017 , we had three build-to-suit investments that are still under construction. The aggregate unfunded commitment on our build-to-suit investments and certain other tenant improvements totaled approximately $50.2 million and $56.5 million at December 31, 2017. Operating Real Estate — Land, Buildings and Improvements Operating real estate, which consists of our wholly owned domestic self-storage operations and a majority ownership in one hotel, at cost, is summarized as follows (in thousands): March 31, 2018 December 31, 2017 Land $ 90,388 $ 90,042 Buildings and improvements 252,300 250,730 Real estate under construction (a) 2,994 — Less: Accumulated depreciation (27,870 ) (26,087 ) $ 317,812 $ 314,685 __________ (a) Primarily represents accrued restoration costs on our hotel property, which was impacted by Hurricane Irma as noted below. Depreciation expense on our operating real estate was $1.7 million for both the three months ended March 31, 2018 and 2017 . Hurricane Impact Update Hurricane Irma made landfall in September 2017, which directly impacted our hotel in Miami, Florida. The hotel sustained damage and has since been operating at less than full capacity. All of the damage is expected to be covered by insurance, apart from the estimated insurance deductible of $1.8 million and certain professional fees. We currently believe that the recovery of the insurance proceeds is probable, however, we will monitor the collectability of this receivable on a periodic basis. The table below summarizes the components of our insurance receivables that are outstanding as of March 31, 2018 and December 31, 2017 (in thousands): March 31, 2018 (a) December 31, 2017 Beginning balance $ 30,756 $ — Estimated receivable proceeds (2,229 ) 32,583 Property damage insurance advances received (191 ) — Insurance deductible — (1,827 ) Property damage insurance receivables $ 28,336 $ 30,756 __________ (a) Excludes $2.6 million of amounts to be paid to our insurance adjuster, which is not covered under our insurance policy. In addition to the table above, as of March 31, 2018 , we have received estimated business interruption insurance proceeds of $1.7 million and have recorded a corresponding payable within Accounts payable, accrued expenses and other liabilities in our consolidated financial statements as of March 31, 2018 as the claims have not yet been settled. We will record revenue for covered business interruption when both the recovery is probable and contingencies have been resolved with the insurance carrier. We are still assessing the impact of the hurricane to this hotel, and the final damages incurred could vary significantly from our estimate and additional remediation work may be performed. Any changes in estimates for property damage will be recorded in the periods in which they were determined and any additional work will be recorded in the periods in which it is performed. |
Finance Receivables
Finance Receivables | 3 Months Ended |
Mar. 31, 2018 | |
Receivables [Abstract] | |
Finance Receivables | Finance Receivables Assets representing rights to receive money on demand or at fixed or determinable dates are referred to as finance receivables. Our finance receivables portfolio consists of our Net investments in direct financing leases and loans receivable. Operating leases are not included in finance receivables as such amounts are not recognized as an asset in the consolidated financial statements. Our loans receivable are included in Other assets, net in the consolidated financial statements. Earnings from our loans receivable are included in Other interest income in the consolidated financial statements. At March 31, 2018 and December 31, 2017 , we had five loans receivable with outstanding balances of $102.4 million and $110.5 million , respectively, which are included in Other assets, net in the consolidated financial statements. The adoption of ASU 2017-05 impacted our outstanding loan receivable balance at March 31, 2018 . See Note 2 for more details. In January 2018, The New York Times Company, a tenant at one of our properties, exercised its bargain purchase option to acquire the property for $250.0 million in 2019. There can be no assurance that such repurchase will be completed. Credit Quality of Finance Receivables We generally seek investments in facilities that we believe are critical to a tenant’s business and have a low risk of tenant default. At March 31, 2018 and December 31, 2017 , we had $1.5 million and $1.1 million , respectively, of finance receivable balances that were past due, of which we established allowances for credit losses of $1.1 million and $0.7 million , respectively. Additionally, there were no modifications of finance receivables during the three months ended March 31, 2018 or the year ended December 31, 2017 . We evaluate the credit quality of our finance receivables utilizing an internal five-point credit rating scale, with one representing the highest credit quality and five representing the lowest. The credit quality evaluation of our finance receivables is updated quarterly. A summary of our finance receivables by internal credit quality rating is as follows (dollars in thousands): Number of Tenants / Obligors at Carrying Value at Internal Credit Quality Indicator March 31, 2018 December 31, 2017 March 31, 2018 December 31, 2017 1 — — $ — $ — 2 2 2 62,936 62,744 3 10 8 393,540 379,621 4 5 8 124,839 165,413 5 2 1 31,960 11,950 $ 613,275 $ 619,728 |
Equity Investments in Real Esta
Equity Investments in Real Estate | 3 Months Ended |
Mar. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Investments in Real Estate | Equity Investments in Real Estate We own equity interests in net-leased properties that are generally leased to companies through noncontrolling interests (i) in partnerships and limited liability companies that we do not control but over which we exercise significant influence or (ii) as tenants-in-common subject to common control. Generally, the underlying investments are jointly owned with affiliates. We account for these investments under the equity method of accounting. Earnings for each investment are recognized in accordance with each respective investment agreement and, where applicable, based upon an allocation of the investment’s net assets at book value as if the investment were hypothetically liquidated at the end of each reporting period. As required by current authoritative accounting guidance, we periodically compare an investment’s carrying value to its estimated fair value and recognize an impairment charge to the extent that the carrying value exceeds fair value and such decline is determined to be other than temporary. Additionally, we provide funding to developers for ADC Arrangements, under which we have provided loans to third-party developers of real estate projects, which we account for as equity investments as the characteristics of the arrangement with the third-party developers are more similar to a jointly owned investment or partnership rather than a loan. The following table presents Equity in earnings of equity method investments in real estate , which represents our proportionate share of the income or losses of these investments, as well as amortization of basis differences related to purchase accounting adjustments (in thousands): Three Months Ended March 31, 2018 2017 Equity Earnings from Equity Investments: Net Lease $ 4,702 $ 4,955 All Other (a) (b) (c) 593 (2,108 ) 5,295 2,847 Amortization of Basis Differences on Equity Investments: Net Lease (535 ) (563 ) All Other (a) (b) (c) (77 ) (299 ) (612 ) (862 ) Equity in earnings of equity method investments in real estate $ 4,683 $ 1,985 __________ (a) On October 3, 2017, we restructured Shelborne Operating Associates, LLC, or the Shelborne hotel. All equity interests in the investment were transferred to us in satisfaction of the underlying loan. Simultaneously, we transferred a 4.5% minority interest back to one of the original equity partners in exchange for a cash contribution of $4.0 million . As a result of the restructuring, we became the managing member with controlling financial interest in the investment. The minority interests have no decision-making control. Since the construction is now completed and the loan has been satisfied, we determined that this investment should no longer be accounted for as an ADC Arrangement and, as a result, have consolidated this investment as of the restructure date. (b) On May 19, 2017, we received the full repayment of our preferred equity interest in BPS Nevada LLC; therefore, the preferred equity interest is now retired as of that date. As a result, the three months ended March 31, 2018 in the table above does not include any activity related to this investment. (c) On March 17, 2017, we restructured our investment in the IDL Wheel Tenant, LLC ( Note 13 ) and, as a result, this investment is accounted for as a loan receivable, included in Other assets, net in the consolidated financial statements, and is no longer accounted for as an ADC Arrangement under the equity method of accounting. The following table sets forth our ownership interests in our equity method investments in real estate and their respective carrying values (dollars in thousands): Ownership Interest at Carrying Value at Lessee/Equity Investee Co-owner March 31, 2018 March 31, 2018 December 31, 2017 Net Lease: Hellweg Die Profi-Baumärkte GmbH & Co. KG (referred to as Hellweg 2) (a) (b) WPC 37% $ 112,657 $ 109,933 Kesko Senukai (a) Third Party 70% 58,752 58,136 Jumbo Logistiek Vastgoed B.V. (a) (c) WPC 85% 56,067 55,162 U-Haul Moving Partners, Inc. and Mercury Partners, LP (b) WPC 12% 35,471 35,897 Bank Pekao S.A. (a) (b) CPA:18 – Global 50% 25,460 25,582 BPS Nevada, LLC (b) (d) Third Party 15% 23,276 23,455 State Farm Automobile Co. (b) CPA:18 – Global 50% 15,582 16,072 Berry Global Inc. (b) WPC 50% 14,037 14,476 Tesco Global Aruhazak Zrt. (a) (b) WPC 49% 10,988 10,707 Eroski Sociedad Cooperativa — Mallorca (a) WPC 30% 7,749 7,629 Apply Sørco AS (referred to as Apply) (a) CPA:18 – Global 49% 6,903 6,298 Konzum d.d. (referred to as Agrokor) (a) (b) CPA:18 – Global 20% 3,585 3,433 Dick’s Sporting Goods, Inc. (b) WPC 45% 3,577 3,750 374,104 370,530 All Other: BG LLH, LLC (b) (d) Third Party 6% 39,241 38,724 39,241 38,724 $ 413,345 $ 409,254 __________ (a) The carrying value of this investment is affected by the impact of fluctuations in the exchange rate of the applicable foreign currency. (b) This investment is a VIE. (c) This investment represents a tenancy-in-common interest, whereby the property is encumbered by debt for which we are jointly and severally liable. The co-obligor is WPC and the amount due under the arrangement was approximately $77.9 million at March 31, 2018 . Of this amount, $66.2 million represents the amount we are liable for and is included within the carrying value of this investment at March 31, 2018 . (d) This investment is reported using the hypothetical liquidation at book value model, which may be different then pro rata ownership percentages, primarily due to the complex capital structure of the partnership agreement. Aggregate distributions from our interests in unconsolidated real estate investments were $11.8 million and $21.3 million for the three months ended March 31, 2018 and 2017 , respectively. At March 31, 2018 and December 31, 2017 , the unamortized basis differences on our equity investments were $25.5 million and $26.3 million , respectively. |
Intangible Assets and Liabiliti
Intangible Assets and Liabilities | 3 Months Ended |
Mar. 31, 2018 | |
Intangible Assets And Liabilities [Abstract] | |
Intangible Assets and Liabilities | Intangible Assets and Liabilities In-place lease intangibles are included in In-place lease intangible assets in the consolidated financial statements. Above-market rent and below-market ground lease and other (as lessee) intangibles are included in Other intangible assets in the consolidated financial statements. Goodwill is included in Other assets, net in the consolidated financial statements. Below-market rent and above-market ground lease (as lessor) intangibles are included in Below-market rent and other intangible liabilities, net in the consolidated financial statements. Intangible assets and liabilities are summarized as follows (in thousands): March 31, 2018 December 31, 2017 Amortization Period (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Finite-Lived Intangible Assets In-place lease 4 - 53 $ 636,545 $ (224,911 ) $ 411,634 $ 629,961 $ (213,641 ) $ 416,320 Above-market rent 7 - 40 99,702 (33,353 ) 66,349 98,162 (31,533 ) 66,629 Below-market ground leases and other 55 - 94 12,994 (792 ) 12,202 12,842 (726 ) 12,116 749,241 (259,056 ) 490,185 740,965 (245,900 ) 495,065 Indefinite-Lived Intangible Assets Goodwill 304 — 304 304 — 304 Total intangible assets $ 749,545 $ (259,056 ) $ 490,489 $ 741,269 $ (245,900 ) $ 495,369 Finite-Lived Intangible Liabilities Below-market rent 7 - 53 $ (82,759 ) $ 23,285 $ (59,474 ) $ (82,259 ) $ 22,121 $ (60,138 ) Above-market ground lease 49 - 88 (1,145 ) 65 (1,080 ) (1,145 ) 61 (1,084 ) Total intangible liabilities $ (83,904 ) $ 23,350 $ (60,554 ) $ (83,404 ) $ 22,182 $ (61,222 ) Amortization of below-market rent and above-market rent intangibles is recorded as an adjustment to Rental income; amortization of below-market ground lease and other and above-market ground lease intangibles is included in Property expenses; and amortization of in-place lease intangibles is included in Depreciation and amortization expense on our consolidated financial statements. Amortization of below- and above-market rent intangibles, including the effect of foreign currency translation, decreased Rental income by $0.4 million for the three months ended March 31, 2018 and increased Rental income by $18.8 million for the three months ended March 31, 2017 . The three months ended March 31, 2017 includes the impact of a below-market rent intangible liability write-off of $15.7 million recognized in conjunction with a lease modification that occurred during 2017 ( Note 13 ). Net amortization expense of all of our other net intangible assets totaled $9.3 million and $12.9 million for the three months ended March 31, 2018 and 2017 , respectively. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The fair value of an asset is defined as the exit price, which is the amount that would either be received when an asset is sold or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance establishes a three-tier fair value hierarchy based on the inputs used in measuring fair value. These tiers are: Level 1, for which quoted market prices for identical instruments are available in active markets, such as money market funds, equity securities, and U.S. Treasury securities; Level 2, for which there are inputs other than quoted prices included within Level 1 that are observable for the instrument, such as certain derivative instruments including interest rate caps, interest rate swaps, foreign currency forward contracts, and foreign currency collars; and Level 3, for securities and other derivative assets that do not fall into Level 1 or Level 2 and for which little or no market data exists, therefore requiring us to develop our own assumptions. Items Measured at Fair Value on a Recurring Basis The methods and assumptions described below were used to estimate the fair value of each class of financial instrument. For significant Level 3 items, we have also provided the unobservable inputs. Derivative Assets — Our derivative assets, which are included in Other assets, net in the consolidated financial statements, are comprised of interest rate caps, interest rate swaps, foreign currency forward contracts, stock warrants, and foreign currency collars ( Note 9 ). The interest rate caps, interest rate swaps, foreign currency forward contracts, and foreign currency collars were measured at fair value using readily observable market inputs, such as quotations on interest rates, and were classified as Level 2 as these instruments are custom, over-the-counter contracts with various bank counterparties that are not traded in an active market. The stock warrants were measured at fair value using internal valuation models that incorporated market inputs and our own assumptions about future cash flows. We classified these assets as Level 3 because they are not traded in an active market. Derivative Liabilities — Our derivative liabilities, which are included in Accounts payable, accrued expenses and other liabilities in the consolidated financial statements, are comprised of interest rate swaps and foreign currency collars ( Note 9 ). These derivative instruments were measured at fair value using readily observable market inputs, such as quotations on interest rates, and were classified as Level 2 because they are custom, over-the-counter contracts with various bank counterparties that are not traded in an active market. We did not have any transfers into or out of Level 1, Level 2, and Level 3 measurements during the three months ended March 31, 2018 and 2017 . Gains and losses (realized and unrealized) recognized on items measured at fair value on a recurring basis included in earnings are reported within Other gains and (losses) on our consolidated financial statements. Our other financial instruments had the following carrying values and fair values as of the dates shown (dollars in thousands): March 31, 2018 December 31, 2017 Level Carrying Value Fair Value Carrying Value Fair Value Mortgage debt, net (a) (b) 3 $ 1,853,541 $ 1,856,737 $ 1,849,459 $ 1,864,043 Loans receivable (c) (d) 3 102,359 110,500 110,500 110,500 CMBS (e) 3 1,144 1,144 6,548 7,237 ___________ (a) The carrying value of Mortgage debt, net includes unamortized deferred financing costs of $7.4 million and $7.9 million at March 31, 2018 and December 31, 2017 , respectively. (b) We determined the estimated fair value of our Mortgage debt, net using a discounted cash flow model that estimates the present value of future loan payments by discounting such payments at current estimated market interest rates. The estimated market interest rates take into account interest rate risk and the value of the underlying collateral, which includes the quality of the collateral, the credit quality of the tenant/obligor, and the time until maturity. (c) We determined the estimated fair value of our Loans receivable using a discounted cash flow model with rates that take into account the credit of the tenant/obligor, order of payment tranches, and interest rate risk. We also considered the value of the underlying collateral, taking into account the quality of the collateral, the credit quality of the tenant/obligor, the time until maturity, and the current market interest rate. (d) Carrying value amount at March 31, 2018 includes the impact of adopting ASU 2017-05 ( Note 2 ). (e) At both March 31, 2018 and December 31, 2017 , we had two separate tranches of CMBS investments. The carrying values of our CMBS investments are inclusive of impairment charges for both periods presented. The balance at December 31, 2017 also included the accretion of the estimated cash flows that we expected to receive. We estimated that our other financial assets and liabilities (excluding net investments in direct financing leases) had fair values that approximated their carrying values at both March 31, 2018 and December 31, 2017 . Items Measured at Fair Value on a Non-Recurring Basis (Including Impairment Charges) We periodically assess whether there are any indicators that the value of our real estate investments may be impaired or that their carrying value may not be recoverable. For investments in real estate held for use for which an impairment indicator is identified, we follow a two-step process to determine whether the investment is impaired and to determine the amount of the charge. First, we compare the carrying value of the property’s asset group to the future undiscounted net cash flows that we expect the property’s asset group will generate, including any estimated proceeds from the eventual sale of the property’s asset group. If this amount is less than the carrying value, the property’s asset group is considered to be not recoverable. We then measure the impairment charge as the excess of the carrying value of the property’s asset group over the estimated fair value of the property’s asset group, which is primarily determined using market information (such as recent comparable sales, broker quotes, or third-party appraisals.) If relevant market information is not available or is not deemed appropriate, we perform a future net cash flow analysis, discounted for inherent risk associated with each investment. We determined that the significant inputs used to value these investments fall within Level 3 for fair value reporting. As a result of our assessments, we calculated impairment charges based on market conditions and assumptions. The valuation of real estate is subject to significant judgment and actual results may differ materially if market conditions or the underlying assumptions change. CMBS During the three months ended March 31, 2018 , we incurred an other-than-temporary impairment charge of $5.4 million on one of our CMBS tranches to reduce its carrying value to its estimated fair value due to defaults of certain underlying loans during the first quarter of 2018. The fair value of the CMBS portfolio after the impairment charge approximated $1.1 million . The fair value measurements related to the impairment charges were derived from third-party appraisals, which were based on input from dealers, buyers, and other market participants, as well as updates on prepayments, losses, and delinquencies within our CMBS portfolio. Real Estate During the three months ended March 31, 2017 , we were notified by the tenant currently occupying a property that we own with an affiliate, located in Waldaschaff, Germany, that the tenant will not be renewing its lease. As a result of this information, and with the expectation that we will not be able to replace the tenant upon the lease expiration (primarily due to, among other things, the remote location of the facility and certain environmental concerns), we recognized an impairment charge of $4.5 million , which included $1.5 million attributed to a noncontrolling interest (amounts are based on the exchange rate of the euro at the date of impairment). The fair value of the property after the impairment charge approximated $4.7 million . The fair value measurement related to the impairment charge was determined by estimating discounted cash flows using a discount rate of 9.75% , which is considered a significant unobservable input. Significant increases or decreases to this input would result in a significant change in the fair value measurement. We did not recognize any impairments of real estate during the three months ended March 31, 2018 . |
Risk Management and Use of Deri
Risk Management and Use of Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Risk Management and Use of Derivative Financial Instruments | Risk Management and Use of Derivative Financial Instruments Risk Management In the normal course of our ongoing business operations, we encounter economic risk. There are four main components of economic risk that impact us: interest rate risk, credit risk, market risk, and foreign currency risk. We are primarily subject to interest rate risk on our interest-bearing liabilities, including the Senior Credit Facility ( Note 10 ). Credit risk is the risk of default on our operations and our tenants’ inability or unwillingness to make contractually required payments. Market risk includes changes in the value of our properties and related loans, as well as changes in the value of our other investments due to changes in interest rates or other market factors. We own investments in Europe and Asia and are subject to risks associated with fluctuating foreign currency exchange rates. Derivative Financial Instruments When we use derivative instruments, it is generally to reduce our exposure to fluctuations in interest rates and foreign currency exchange rate movements. We have not entered into, and do not plan to enter into, financial instruments for trading or speculative purposes. In addition to entering into derivative instruments on our own behalf, we may also be a party to derivative instruments that are embedded in other contracts and we may be granted common stock warrants by lessees when structuring lease transactions, which are considered to be derivative instruments. The primary risks related to our use of derivative instruments include: (i) a counterparty to a hedging arrangement defaulting on its obligation and (ii) a downgrade in the credit quality of a counterparty to such an extent that our ability to sell or assign our side of the hedging transaction is impaired. While we seek to mitigate these risks by entering into hedging arrangements with large financial institutions that we deem to be creditworthy, it is possible that our hedging transactions, which are intended to limit losses, could adversely affect our earnings. Furthermore, if we terminate a hedging arrangement, we may be obligated to pay certain costs, such as transaction or breakage fees. We have established policies and procedures for risk assessment, as well as the approval, reporting, and monitoring of derivative financial instrument activities. We measure derivative instruments at fair value and record them as assets or liabilities, depending on our rights or obligations under the applicable derivative contract. Derivatives that are not designated as hedges must be adjusted to fair value through earnings. For a derivative designated, and that qualified, as a cash flow hedge, the effective portion of the change in fair value of the derivative is recognized in Other comprehensive income until the hedged item is recognized in earnings. For a derivative designated, and that qualified, as a net investment hedge, the effective portion of the change in the fair value and/or the net settlement of the derivative is reported in Other comprehensive income as part of the cumulative foreign currency translation adjustment. The ineffective portion of the change in fair value of any derivative is immediately recognized in earnings. All derivative transactions with an individual counterparty are governed by a master International Swap and Derivatives Association agreement, which can be considered as a master netting arrangement; however, we report all our derivative instruments on a gross basis on our consolidated financial statements. At both March 31, 2018 and December 31, 2017 , no cash collateral had been posted or received for any of our derivative positions. The following table sets forth certain information regarding our derivative instruments (in thousands): Derivatives Designated as Hedging Instruments Asset Derivatives Fair Value at Liability Derivatives Fair Value at Balance Sheet Location March 31, 2018 December 31, 2017 March 31, 2018 December 31, 2017 Foreign currency forward contracts Other assets, net $ 9,896 $ 14,382 $ — $ — Interest rate swaps Other assets, net 856 314 — — Interest rate caps Other assets, net 180 201 — — Interest rate swaps Accounts payable, accrued expenses and other liabilities — — (2,363 ) (3,852 ) Foreign currency collars Accounts payable, accrued expenses and other liabilities — — (2,005 ) (1,431 ) Derivatives Not Designated as Hedging Instruments Stock warrants Other assets, net 1,947 1,815 — — Foreign currency forward contracts Other assets, net 306 86 — — Interest rate swap Accounts payable, accrued expenses and other liabilities — — (125 ) (128 ) Total derivatives $ 13,185 $ 16,798 $ (4,493 ) $ (5,411 ) The following tables present the impact of our derivative instruments in the consolidated financial statements (in thousands): Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive Income (Effective Portion) (a) Three Months Ended March 31, Derivatives in Cash Flow Hedging Relationships 2018 2017 Foreign currency forward contracts $ (4,224 ) $ (3,749 ) Interest rate swaps 2,022 993 Foreign currency collars (556 ) (57 ) Interest rate caps (23 ) (258 ) Derivatives in Net Investment Hedging Relationships (b) Foreign currency forward contracts (22 ) (291 ) Foreign currency collar (12 ) (2 ) Total $ (2,815 ) $ (3,364 ) Amount of Gain (Loss) Reclassified from Other Comprehensive Income into Income (Effective Portion) Derivatives in Cash Flow Hedging Relationships Location of Gain (Loss) Reclassified to Income Three Months Ended March 31, 2018 2017 Foreign currency forward contracts Other gains and (losses) $ 1,492 $ 2,858 Interest rate swaps Interest expense (431 ) (706 ) Interest rate caps Interest expense (5 ) — Total $ 1,056 $ 2,152 __________ (a) Excludes net gains of $0.5 million on unconsolidated jointly owned investments for both the three months ended March 31, 2018 and 2017 . (b) The effective portion of the change in fair value and the settlement of these contracts are reported in the foreign currency translation adjustment section of Other comprehensive income . Amounts reported in Other comprehensive income related to interest rate swaps will be reclassified to Interest expense as interest is incurred on our variable-rate debt. Amounts reported in Other comprehensive income related to foreign currency derivative contracts will be reclassified to Other gains and (losses) when the hedged foreign currency contracts are settled. At March 31, 2018 , we estimated that an additional $0.8 million and $4.5 million will be reclassified as interest expense and as Other gains and (losses), respectively, during the next 12 months. The following table presents the impact of our derivative instruments in the consolidated financial statements (in thousands): Amount of Gain (Loss) Recognized in Income on Derivatives Derivatives Not in Cash Flow Hedging Relationships Location of Gain (Loss) Recognized in Income Three Months Ended March 31, 2018 2017 Stock warrants Other gains and (losses) $ 132 $ (198 ) Foreign currency forward contracts Other gains and (losses) 66 33 Interest rate swap Interest expense (8 ) 18 Swaption Other gains and (losses) — (48 ) Derivatives in Cash Flow Hedging Relationships Interest rate swaps (a) Interest expense 45 46 Foreign currency collars Other gains and (losses) (5 ) — Total $ 230 $ (149 ) __________ (a) Relates to the ineffective portion of the hedging relationship. See below for information regarding why we enter into our derivative instruments and concerning derivative instruments owned by unconsolidated investments, which are excluded from the tables above. Interest Rate Swaps, Caps, and Swaption We are exposed to the impact of interest rate changes primarily through our borrowing activities. To limit this exposure, we attempt to obtain non-recourse mortgage financing on a long-term, fixed-rate basis. However, from time to time, we or our joint investment partners have obtained, and may in the future obtain, variable-rate non-recourse mortgage loans and, as a result, we have entered into, and may continue to enter into, swaptions, interest rate swap agreements or interest rate cap agreements with counterparties. Interest rate swaps, which effectively convert the variable rate debt service obligations of a loan to a fixed rate, are agreements in which one party exchanges a stream of interest payments for a counterparty’s stream of cash flow over a specific period. The notional, or face, amount on which the swaps are based is not exchanged. Interest rate caps limit the effective borrowing rate of variable rate debt obligations while allowing participants to share downward shifts in interest rates. A swaption gives us the right but not the obligation to enter into an interest rate swap, of which the terms and conditions are set on the trade date, on a specified date in the future. Our objective in using these derivatives is to limit our exposure to interest rate movements. The interest rate swaps and caps that our consolidated subsidiaries had outstanding at March 31, 2018 are summarized as follows (currency in thousands): Interest Rate Derivatives Number of Instruments Notional Amount Fair Value at March 31, 2018 (a) Designated as Cash Flow Hedging Instruments Interest rate swaps 12 123,075 USD $ (1,167 ) Interest rate swaps 4 60,528 EUR (340 ) Interest rate caps 4 132,692 EUR 122 Interest rate cap 1 75,000 USD 43 Interest rate cap 1 6,394 GBP 15 Not Designated as Hedging Instrument Interest rate swap 1 4,814 EUR (125 ) $ (1,452 ) __________ (a) Fair value amount is based on the exchange rate of the euro or British pound sterling at March 31, 2018 , as applicable. Foreign Currency Contracts We are exposed to foreign currency exchange rate movements, primarily in the euro and, to a lesser extent, the British pound sterling, the Japanese yen, and the Norwegian krone. We manage foreign currency exchange rate movements by generally placing our debt service obligation on an investment in the same currency as the tenant’s rental obligation to us. This reduces our overall exposure to the net cash flow from that investment. However, we are subject to foreign currency exchange rate movements to the extent that there is a difference in the timing and amount of the rental obligation and the debt service. Realized and unrealized gains and losses recognized in earnings related to foreign currency transactions are included in Other gains and (losses) in the consolidated financial statements. In order to hedge certain of our foreign currency cash flow exposures, we enter into foreign currency forward contracts and collars. A foreign currency forward contract is a commitment to deliver a certain amount of currency at a certain price on a specific date in the future. A foreign currency collar consists of a written call option and a purchased put option to sell the foreign currency at a range of predetermined exchange rates. By entering into forward contracts and holding them to maturity, we are locked into a future currency exchange rate for the term of the contract. A foreign currency collar guarantees that the exchange rate of the currency will not fluctuate beyond the range of the options’ strike prices. Our foreign currency forward contracts and foreign currency collars have maturities of 77 months or less. The following table presents the foreign currency derivative contracts we had outstanding and their designations at March 31, 2018 (currency in thousands): Foreign Currency Derivatives Number of Instruments Notional Amount Fair Value at March 31, 2018 Designated as Cash Flow Hedging Instruments Foreign currency forward contracts 31 75,280 EUR $ 9,896 Foreign currency collars 2 15,100 EUR (1,947 ) Foreign currency collars 3 2,000 NOK (26 ) Not Designated as Hedging Instruments Foreign currency forward contracts 7 2,105 EUR 224 Foreign currency forward contracts 8 5,802 NOK 47 Designated as Net Investment Hedging Instruments Foreign currency forward contracts 2 4,329 NOK 35 Foreign currency collar 1 2,500 NOK (32 ) $ 8,197 Credit Risk-Related Contingent Features We measure our credit exposure on a counterparty basis as the net positive aggregate estimated fair value of our derivatives, net of any collateral received. No collateral was received as of March 31, 2018 . At March 31, 2018 , our total credit exposure was $8.5 million and the maximum exposure to any single counterparty was $4.2 million . Some of the agreements with our derivative counterparties contain cross-default provisions that could trigger a declaration of default on our derivative obligations if we default, or are capable of being declared in default, on certain of our indebtedness. At March 31, 2018 , we had not been declared in default on any of our derivative obligations. The estimated fair value of our derivatives that were in a net liability position was $4.6 million and $5.6 million at March 31, 2018 and December 31, 2017 , respectively, which included accrued interest and any nonperformance risk adjustments. If we had breached any of these provisions at March 31, 2018 or December 31, 2017 , we could have been required to settle our obligations under these agreements at their aggregate termination value of $4.7 million and $5.7 million , respectively. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt Mortgage Debt, Net Mortgage debt, net consists of mortgage notes payable, which are collateralized by the assignment of real estate properties. At March 31, 2018 , our mortgage notes payable bore interest at fixed annual rates ranging from 1.9% to 7.4% and variable contractual annual rates ranging from 1.3% to 6.0% , with maturity dates ranging from 2018 to 2031 . Financing Activity During 2018 As of December 31, 2017, we were in breach of a loan-to-value, or LTV, covenant on one of our non-recourse mortgage loans. On January 22, 2018, we repaid $6.1 million (amount is based on the exchange rate of the euro as of the date of repayment) of principal on this loan to cure the covenant breach. Senior Credit Facility On August 26, 2015, we entered into a Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent, Bank of America, N.A., as syndication agent, and a syndicate of other lenders, which we refer to herein as the Credit Agreement. The Credit Agreement was amended on March 31, 2016 to clarify the Restricted Payments covenant (see below); no other terms were changed. The Credit Agreement provides for a $200.0 million senior unsecured revolving credit facility, or the Revolver, and a $50.0 million delayed-draw term loan facility, or the Term Loan. We refer to the Revolver and the Term Loan together as the Senior Credit Facility, which has a maximum aggregate principal amount of $250.0 million and, subject to lender approval, an accordion feature of $250.0 million . The Senior Credit Facility is scheduled to mature on August 26, 2018 , and may be extended by us for two 12-month periods. The Senior Credit Facility provides for an annual interest rate of either (i) the Eurocurrency Rate or (ii) the Base Rate, in each case plus the Applicable Rate (each as defined in the Credit Agreement). With respect to the Revolver, the Applicable Rate on Eurocurrency loans and letters of credit ranges from 1.50% to 2.25% (based on London Interbank Offered Rate, or LIBOR) and the Applicable Rate on Base Rate loans ranges from 0.50% to 1.25% (as defined in the Credit Agreement), depending on our leverage ratio. With respect to the Term Loan, the Applicable Rate on Eurocurrency loans and letters of credit ranges from 1.45% to 2.20% (based on LIBOR) and the Applicable Rate on Base Rate loans ranges from 0.45% to 1.20% (as defined in the Credit Agreement), depending on our leverage ratio. In addition, we pay a fee of either 0.15% or 0.30% on the unused portion of the Senior Credit Facility. If usage of the Senior Credit Facility is equal to or greater than 50% of the Aggregate Commitments, the Unused Fee Rate will be 0.15% , and if usage of the Senior Credit Facility is less than 50% of the Aggregate Commitments, the Unused Fee Rate will be 0.30% . In connection with the transaction, we incurred costs of $1.9 million , which are being amortized to interest expense over the remaining term of the Senior Credit Facility. The following table presents a summary of our Senior Credit Facility (dollars in thousands): Interest Rate at March 31, 2018 Outstanding Balance at Senior Credit Facility, Net March 31, 2018 December 31, 2017 Term Loan (a) LIBOR + 1.45% $ 49,948 $ 49,915 Revolver: Revolver — borrowing in yen (b) 1.50% 22,002 22,047 Revolver — borrowing in euros (b) 1.50% 20,373 29,969 $ 92,323 $ 101,931 __________ (a) Includes unamortized deferred financing costs and discounts. (b) Amounts are based on the exchange rate of the euro or yen at March 31, 2018 . On September 30, 2016, we exercised the delayed draw option on our Term Loan and borrowed $50.0 million . The Term Loan bears interest at LIBOR + 1.45% and is scheduled to mature on August 26, 2018 , unless extended pursuant to its terms. The Revolver and Term Loan are used for our working capital needs and for new investments, as well as for general corporate purposes. During the three months ended March 31, 2018 , we drew down $8.1 million from our Senior Credit Facility and repaid $19.8 million (amounts are based on the exchange rate of the euro or yen, as applicable, on the date of each draw/repayment). We are required to ensure that the total Restricted Payments (as defined in the amended Credit Agreement) in an aggregate amount in any fiscal year does not exceed the greater of 95% MFFO and the amount of Restricted Payments required in order for us to (i) maintain our REIT status and (ii) avoid the payment of federal or state income or excise tax. Restricted Payments include quarterly dividends and the total amount of shares repurchased by us, if any, in excess of $100.0 million per year. In addition to placing limitations on dividend distributions and share repurchases, the Credit Agreement also stipulates certain customary financial covenants. We were in compliance with all such covenants at March 31, 2018 . Scheduled Debt Principal Payments Scheduled debt principal payments for the remainder of 2018 , each of the next four calendar years following December 31, 2018 and thereafter through 2031 are as follows (in thousands): Years Ending December 31, Total 2018 (remainder) (a) $ 151,430 2019 75,202 2020 430,280 2021 457,042 2022 353,229 Thereafter through 2031 491,365 Total principal payments 1,958,548 Deferred financing costs (7,489 ) Unamortized discount, net (5,195 ) Total $ 1,945,864 __________ (a) Includes the $50.0 million Term Loan and $42.4 million Revolver outstanding at March 31, 2018 under our Senior Credit Facility, which is scheduled to mature on August 26, 2018, unless extended pursuant to its terms. Certain amounts in the table above are based on the applicable foreign currency exchange rate at March 31, 2018 . The carrying value of our Debt, net increased by $18.2 million from December 31, 2017 to March 31, 2018 due the weakening of the U.S. dollar relative to foreign currencies, particularly the euro, during the same period. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies At March 31, 2018 , we were not involved in any material litigation. Various claims and lawsuits arising in the normal course of business are pending against us. The results of these proceedings are not expected to have a material adverse effect on our consolidated financial position or results of operations. See Note 4 for unfunded construction commitments. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Equity | Equity Reclassifications Out of Accumulated Other Comprehensive Loss The following tables present a reconciliation of changes in Accumulated other comprehensive loss by component for the periods presented (in thousands): Three Months Ended March 31, 2018 Gains and Losses Gains and Losses on Marketable Investments Foreign Currency Translation Adjustments Total Beginning balance $ 9,087 $ (15 ) $ (87,492 ) $ (78,420 ) Other comprehensive income before reclassifications (1,276 ) — 26,935 25,659 Amounts reclassified from accumulated other comprehensive loss to: Interest expense 436 — — 436 Other gains and (losses) (1,492 ) — — (1,492 ) Total (1,056 ) — — (1,056 ) Net current-period Other comprehensive income (2,332 ) — 26,935 24,603 Net current-period Other comprehensive income attributable to noncontrolling interests — — (547 ) (547 ) Ending balance $ 6,755 $ (15 ) $ (61,104 ) $ (54,364 ) Three Months Ended March 31, 2017 Gains and Losses on Derivative Instruments Gains and Losses on Marketable Investments Foreign Currency Translation Adjustments Total Beginning balance $ 29,549 $ (48 ) $ (186,177 ) $ (156,676 ) Other comprehensive income before reclassifications (401 ) 30 8,609 8,238 Amounts reclassified from accumulated other comprehensive loss to: Interest expense 706 — — 706 Other gains and (losses) (2,858 ) — — (2,858 ) Total (2,152 ) — — (2,152 ) Net current-period Other comprehensive income (2,553 ) 30 8,609 6,086 Net current-period Other comprehensive income attributable to noncontrolling interests — — (259 ) (259 ) Ending balance $ 26,996 $ (18 ) $ (177,827 ) $ (150,849 ) See Note 9 for additional information on our derivative activity recognized within Other comprehensive income for the periods presented. Distributions During the first quarter of 2018 , our board of directors declared a quarterly distribution of $0.1625 per share, which was paid on April 16, 2018 to stockholders of record on March 29, 2018, in the amount of $57.1 million . Distributions are declared at the discretion of our board of directors and are not guaranteed. |
Property Dispositions
Property Dispositions | 3 Months Ended |
Mar. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Property Dispositions | Property Dispositions From time to time, we may decide to sell a property. We have an active capital recycling program, with a goal of extending the average lease term through reinvestment, improving portfolio credit quality through dispositions and acquisitions of assets, increasing the asset criticality factor in our portfolio, and/or executing strategic dispositions of assets. We may decide to dispose of a property due to vacancy, tenants electing not to renew their leases, tenant insolvency, or lease rejection in the bankruptcy process. In such cases, we assess whether we can obtain the highest value from the property by selling it, as opposed to re-leasing it. We may also sell a property when we receive an unsolicited offer or negotiate a price for an investment that is consistent with our strategy for that investment. When it is appropriate to do so, we classify the property as an asset held for sale on our consolidated balance sheet. Property Dispositions The results of operations for properties that have been sold or classified as held for sale are included in the consolidated financial statements and are summarized as follows (in thousands): Three Months Ended March 31, 2018 2017 Revenues $ — $ 7,006 Operating expenses — (3,049 ) Interest expense — (1,088 ) Equity in losses of equity method investments in real estate — (688 ) Loss on extinguishment of debt — (1,320 ) Provision for income taxes — (10 ) Gain on sale of real estate, net of tax — 1,634 Income from properties sold or classified as held for sale, net of income taxes $ — $ 2,485 2017 Dispositions I-drive Property Disposition and I-drive Wheel Restructuring In 2012, we entered into a contract for the construction of a domestic build-to-suit project with IDL Master Tenant, LLC, a developer, for the construction of the I-drive Property and the I-drive Wheel at that location. We had accounted for the construction of the I-drive Property as Real estate under construction. The funding for the construction of the I-drive Wheel was provided by the I-drive Wheel Loan. Pursuant to the accounting guidance regarding ADC Arrangements, we accounted for the I-drive Wheel Loan under the equity method of accounting as the characteristics of the arrangement with the third-party developer were more similar to a jointly owned investment or partnership rather than a loan. During 2015, the construction on both the I-drive Property and the I-drive Wheel were completed and they were placed into service. On March 17, 2017, the developer exercised its purchase option and acquired the I-drive Property for a purchase price of $117.5 million (net proceeds of $23.5 million ). The $60.0 million non-recourse mortgage loan encumbering the I-drive Property was repaid at closing by the buyer. In connection with the disposition, we provided seller financing in the form of a $34.0 million mezzanine loan, which was considered to be a non-cash investing activity, and the sale was accounted for under the cost recovery method. As a result, the $2.1 million gain on sale was deferred during the first quarter of 2017 . As a result of the adoption of ASU 2017-05 ( Note 2 ), we recognized a cumulative effect adjustment to recognize the deferred gain on our opening balance sheet as of January 1, 2018. In addition to the sale of the I-drive Property, we restructured the I-drive Wheel Loan on March 17, 2017. In connection with the restructuring of the I-drive Wheel Loan, we determined that the loan no longer qualifies as an ADC Arrangement and should no longer be accounted for as an equity investment. As a result, we reclassified the aggregate loan balance noted above to loans receivable, included in Other Assets, net, which was a non-cash investing activity. A deferred gain of $16.4 million was recorded during the first quarter of 2017 , which was the difference between the fair value of the remaining $35.0 million loan and the $18.6 million carrying value of our previously held equity investment on March 17, 2017. As a result of the adoption of ASU 2017-05 ( Note 2 ), we recognized a $6.0 million cumulative effect adjustment to partially recognize the deferred gain within our opening balance sheet as of January 1, 2018. The remaining portion of the deferred gain will be recognized into income through the accretion of the loan balance during the remaining life of the loan. KBR Property Disposition In August 2016, we simultaneously entered into two agreements with one of our tenants, KBR, Inc., to amend the lease at one property and terminate the lease at another property, both located in Houston, Texas. The lease modification and lease termination were contingent upon one another and became effective upon disposing of one net-lease property on March 13, 2017, which was previously classified as held for sale as of December 31, 2016 prior to its sale in the first quarter of 2017. Upon disposition, we received proceeds of $14.1 million , net of closing costs, and recognized a gain on sale, net of tax of $1.6 million , which was recorded under the full accrual method. In addition, as a result of the aforementioned lease modification, contractual rents were renegotiated to be at market and the existing below-market rent lease liability of $15.7 million was written off and recognized in Rental income during the three months ended March 31, 2017 ( Note 7 ). In addition, as a result of the termination of the lease noted above, we accelerated the below-market lease intangible liabilities of $3.3 million that were also recognized in Rental income during the three months ended March 31, 2017 . We did not have any significant dispositions during the three months ended March 31, 2018 . |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting We operate in two reportable business segments: Net Lease and Self Storage. Our Net Lease segment includes our domestic and foreign investments in net-leased properties, whether they are accounted for as operating or direct financing leases. Our Self Storage segment is comprised of our investments in self-storage properties. In addition, we have investments in loans receivable, CMBS, one hotel, and certain other properties, which are included in our All Other category . The following tables present a summary of comparative results and assets for these business segments (in thousands): Three Months Ended March 31, 2018 2017 Net Lease Revenues (a) (b) $ 96,992 $ 112,523 Operating expenses (c) (d) (41,957 ) (41,308 ) Interest expense (17,692 ) (20,651 ) Other income and (expenses), excluding interest expense 4,559 3,459 (Provision for) benefit from income taxes (404 ) 614 Gain on sale of real estate, net of tax 24 1,739 Net income attributable to noncontrolling interests (3,115 ) (2,325 ) Net income attributable to CPA:17 – Global $ 38,407 $ 54,051 Self Storage Revenues $ 9,045 $ 8,742 Operating expenses (5,448 ) (7,199 ) Interest expense (1,911 ) (2,003 ) Other income and (expenses), excluding interest expense — (2 ) Provision for income taxes (48 ) (32 ) Net income (loss) attributable to CPA:17 – Global $ 1,638 $ (494 ) All Other Revenues (e) $ 7,245 $ 1,740 Operating expenses (f) (9,520 ) (38 ) Other income and (expenses), excluding interest expense 571 (2,408 ) Benefit from (provision for) income taxes 2,078 (650 ) Net loss attributable to noncontrolling interests 861 — Net income (loss) attributable to CPA:17 – Global $ 1,235 $ (1,356 ) Corporate Unallocated Corporate Overhead (g) $ (8,373 ) $ (7,380 ) Net income attributable to noncontrolling interests — Available Cash Distributions $ (6,170 ) $ (6,810 ) Total Company Revenues $ 113,282 $ 123,005 Operating expenses (67,684 ) (59,615 ) Interest expense (20,550 ) (23,390 ) Other income and (expenses), excluding interest expense 8,686 6,028 Benefit from (provision for) income taxes 1,403 (621 ) Gain on sale of real estate, net of tax 24 1,739 Net income attributable to noncontrolling interests (8,424 ) (9,135 ) Net income attributable to CPA:17 – Global $ 26,737 $ 38,011 Total Assets at March 31, 2018 December 31, 2017 Net Lease $ 4,017,437 $ 3,980,445 All Other 264,629 277,702 Self-Storage 240,648 241,438 Corporate 70,410 87,885 Total Company $ 4,593,124 $ 4,587,470 ___________ (a) Includes a $15.7 million write-off of a below-market rent lease liabilities pertaining to our KBR, Inc. properties that was recognized in Rental income as a result of a lease modification during the three months ended March 31, 2017 ( Note 13 ). In addition, as a result of a lease termination, we accelerated the below-market rent lease intangible liabilities of $3.3 million that was also recognized in Rental income during the three months ended March 31, 2017 . (b) During the three months ended March 31, 2018 and 2017 we recognized straight-line rent adjustments of $2.8 million and $3.5 million , respectively. (c) Includes an impairment charge of $4.5 million related to a net-leased property ( Note 8 ) recognized during the three months ended March 31, 2017 . (d) In April 2017, the Croatian government passed a special law assisting the restructuring of companies considered of systematic significance in Croatia. This law directly impacts our Agrokor tenant, which is currently experiencing financial distress and recently received a credit downgrade from both Standard & Poor’s and Moody’s. As a result of the financial difficulties and the uncertainty regarding future rent collections from the tenant, we recorded bad debt expense of $4.4 million and $1.6 million during the three months ended March 31, 2018 and 2017 , respectively. (e) Amount includes the impact of adopting ASU 2017-05 ( Note 2 ), which resulted in the recognition of $2.2 million of accretion into income during the three months ended March 31, 2018 . (f) Includes an impairment charge of $5.4 million related to our CMBS investments ( Note 8 ) recognized during the three months ended March 31, 2018 . (g) Included in unallocated corporate overhead are asset management fees and general and administrative expenses, as well as interest expense and other charges related to our Senior Credit Facility. These expenses are calculated and reported at the portfolio level and not evaluated as part of any segment’s operating performance. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Consolidation | Basis of Consolidation Our consolidated financial statements reflect all of our accounts, including those of our controlled subsidiaries and our tenancy-in-common interest, as described below. The portions of equity in consolidated subsidiaries that are not attributable, directly or indirectly, to us are presented as noncontrolling interests. All significant intercompany accounts and transactions have been eliminated. |
Variable Interest Entity | When we obtain an economic interest in an entity, we evaluate the entity to determine if it should be deemed a variable interest entity, or VIE, and, if so, whether we are the primary beneficiary and are therefore required to consolidate the entity. We apply accounting guidance for consolidation of VIEs to certain entities in which the equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. Fixed price purchase and renewal options within a lease, as well as certain decision-making rights within a loan or joint-venture agreement, can cause us to consider an entity a VIE. Limited partnerships and other similar entities that operate as a partnership will be considered a VIE unless the limited partners hold substantive kick-out rights or participation rights. Significant judgment is required to determine whether a VIE should be consolidated. We review the contractual arrangements provided for in the partnership agreement or other related contracts to determine whether the entity is considered a VIE, and to establish whether we have any variable interests in the VIE. We then compare our variable interests, if any, to those of the other variable interest holders to determine which party is the primary beneficiary of the VIE based on whether the entity (i) has the power to direct the activities that most significantly impact the economic performance of the VIE and (ii) has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The liabilities of these VIEs are non-recourse to us and can only be satisfied from each VIE’s respective assets. At both March 31, 2018 and December 31, 2017 , we considered 21 entities VIEs, nine of which we consolidated as we are considered the primary beneficiary and one of which we accounted for as a loan receivable. The following table presents a summary of selected financial data of the consolidated VIEs, included in the consolidated balance sheets (in thousands): March 31, 2018 December 31, 2017 Real estate — Land, buildings and improvements $ 115,924 $ 109,426 Operating real estate — Land, buildings and improvements 85,317 80,658 Net investments in direct financing leases 312,724 312,234 In-place lease intangible assets 8,949 8,650 Accumulated depreciation and amortization (28,957 ) (26,395 ) Other assets, net 70,654 73,620 Total assets 573,877 567,929 Mortgage debt, net $ 103,579 $ 104,213 Accounts payable, accrued expenses and other liabilities 18,419 12,693 Deferred income taxes 10,282 12,374 Total liabilities 132,668 129,662 At both March 31, 2018 and December 31, 2017 , we had 11 unconsolidated VIEs, all of which we account for under the equity method of accounting. We do not consolidate these entities because we are not the primary beneficiary and the nature of our involvement in the activities of these entities allows us to exercise significant influence on, but does not give us power over, decisions that significantly affect the economic performance of these entities. As of March 31, 2018 and December 31, 2017 , the net carrying amount of our investments in these entities was $283.9 million and $282.0 million , respectively, and our maximum exposure to loss in these entities was limited to our investments. |
Equity Method Investments | Distributions from Equity Method Investments — We classify distributions received from equity method investments using the cumulative earnings approach. Distributions received are considered returns on the investment and classified as cash inflows from operating activities. If, however, the investor’s cumulative distributions received, less distributions received in prior periods determined to be returns of investment, exceeds cumulative equity in earning recognized, the excess is considered a return of investment and is classified as inflows from investing activities. We own equity interests in net-leased properties that are generally leased to companies through noncontrolling interests (i) in partnerships and limited liability companies that we do not control but over which we exercise significant influence or (ii) as tenants-in-common subject to common control. Generally, the underlying investments are jointly owned with affiliates. We account for these investments under the equity method of accounting. Earnings for each investment are recognized in accordance with each respective investment agreement and, where applicable, based upon an allocation of the investment’s net assets at book value as if the investment were hypothetically liquidated at the end of each reporting period. As required by current authoritative accounting guidance, we periodically compare an investment’s carrying value to its estimated fair value and recognize an impairment charge to the extent that the carrying value exceeds fair value and such decline is determined to be other than temporary. Additionally, we provide funding to developers for ADC Arrangements, under which we have provided loans to third-party developers of real estate projects, which we account for as equity investments as the characteristics of the arrangement with the third-party developers are more similar to a jointly owned investment or partnership rather than a loan. |
Reclassification | Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. |
Restricted Cash | Restricted Cash — In connection with our adoption of Accounting Standards Update, or ASU, 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash , as described below, we revised our consolidated statements of cash flows to include restricted cash when reconciling the beginning-of-period and end-of-period cash amounts shown on the statement of cash flows. As a result, we retrospectively revised prior periods presented to conform to the current period presentation. Restricted cash primarily consists of security deposits and amounts required to be reserved pursuant to lender agreements for debt service, capital improvements and real estate taxes. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total presented in the consolidated statement of cash flows. |
Recent Accounting Requirements | Pronouncements Adopted as of March 31, 2018 In May 2014, the Financial Accounting Standards Board, or FASB, issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) . ASU 2014-09 is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. ASU 2014-09 does not apply to our lease revenues, which constitute a majority of our revenues, but will primarily apply to revenues generated from our operating properties. We adopted this guidance for our interim and annual periods beginning January 1, 2018 using the modified retrospective method applied to any contracts not completed as of that date. There were no changes to the prior period presentations of revenue. Results of operations for reporting periods beginning January 1, 2018 are presented under Topic 606. The adoption of Topic 606 did not have a material impact on our consolidated financial statements. Revenue is recognized when, or as, control of promised goods or services is transferred to customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. At contract inception, we assess the services promised in our contracts with customers and identify a performance obligation for each promise to transfer to the customer a good or service (or bundle of goods or services) that is distinct. To identify the performance obligations, we consider all of the services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. Revenue from contracts with customers primarily represents Other real estate income of $12.2 million and $9.3 million for the three months ended March 31, 2018 and 2017 , respectively. Other real estate income is primarily comprised of revenues from our self-storage portfolio as well as room rentals and food and beverage services at our hotel. We identified a single performance obligation for each distinct service. Performance obligations are typically satisfied at a point in time, at the time of sale, or at the rendering of the service. Fees are generally determined to be fixed. Payment is typically due immediately following the delivery of the service. In January 2016, the FASB issued ASU 2016-01, Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . ASU 2016-01 requires all equity investments (other than those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value, with changes in the fair value recognized through net income. We adopted this guidance for our interim and annual periods beginning January 1, 2018. The adoption of ASU 2016-01 did not have a material impact on our consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 intends to reduce diversity in practice for certain cash flow classifications, including, but not limited to (i) debt prepayment or debt extinguishment costs, (ii) contingent consideration payments made after a business combination, (iii) proceeds from the settlement of insurance claims, and (iv) distributions received from equity method investees. We retrospectively adopted this guidance for our interim and annual periods beginning January 1, 2018. As a result, we reclassified debt extinguishment costs from net cash provided by operating activities to net cash used in financing activities on the consolidated statement of cash flows for the three months ended March 31, 2017 . The adoption of ASU 2016-15 did not have a material impact on our consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash . ASU 2016-18 intends to reduce diversity in practice for the classification and presentation of changes in restricted cash on the statement of cash flows. ASU 2016-18 requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. We adopted ASU 2016-18 on January 1, 2018 and have retrospectively applied this standard to our consolidated statements of cash flows for the three months ended March 31, 2018 and 2017 . See Restricted Cash above for additional information. In February 2017, the FASB issued ASU 2017-05, Other Income — Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20) . ASU 2017-05 clarifies that a financial asset is within the scope of Subtopic 610-20 if it meets the definition of an in substance nonfinancial asset. The amendments define the term “in substance nonfinancial asset,” in part, as a financial asset promised to a counterparty in a contract if substantially all of the fair value of the assets (recognized and unrecognized) that are promised to the counterparty in the contract is concentrated in nonfinancial assets. If substantially all of the fair value of the assets that are promised to the counterparty in a contract is concentrated in nonfinancial assets, then all of the financial assets promised to the counterparty are in substance nonfinancial assets within the scope of Subtopic 610-20. This amendment also clarifies that nonfinancial assets within the scope of Subtopic 610-20 may include nonfinancial assets transferred within a legal entity to a counterparty. For example, a parent company may transfer control of nonfinancial assets by transferring ownership interests in a consolidated subsidiary. We adopted this guidance for our interim and annual periods beginning January 1, 2018 and applied the modified retrospective transition method (applicable to any contracts not completed as of that date). Results of operations for reporting periods beginning January 1, 2018 are presented under Subtopic 610-20, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for those periods. As of January 1, 2018, there was one open contract, which was related to the I-drive Property Disposition and I-drive Wheel Restructuring ( Note 13 ). On March 17, 2017, the developer exercised its purchase option and acquired the entertainment complex, which we refer to as the I-drive Property. The gain on sale was deferred during the first quarter of 2017 and was expected to be recognized in income upon recovery of the cost of the I-drive Property through the receipt of principal payments received on the mezzanine loan. As a result of the adoption of ASU 2017-05, we recognized a cumulative effect adjustment to the opening balance of stockholders’ equity and a reduction to Accounts payable, accrued expenses and other liabilities as of January 1, 2018 equal to the total gain on sale of the Property of $2.1 million that was previously deferred. In addition to the sale of the I-drive Property, we restructured the $50.0 million loan, referred to as the I-drive Wheel Loan, to fund the construction of an observation wheel, which we refer to as the I-drive Wheel. This resulted in the elimination of our participation in the expected residual profits, with the loan no longer qualifying as an acquisition, development and construction of real estate arrangement, or ADC Arrangement, pursuant to the equity method of accounting. The gain recognized upon restructuring of the I-drive Wheel Loan of $16.4 million was deferred during 2017. As a result of the adoption of ASU 2017-05, the loan restructuring is now recognized as a receivable purchased at a discount of $18.6 million (which represents the carrying value of the ADC Arrangement upon restructuring on March 17, 2017) and will accrete up to the fair value of the loan in the amount of $35.0 million until maturity in December 2018. Accordingly, as of January 1, 2018, we recognized (i) a reduction of $16.4 million to Accounts payable, accrued expenses and other liabilities, (ii) a reduction of $10.4 million to Other assets, net and (iii) an adjustment to the opening balance of stockholders’ equity for the accretion of the loan related to prior periods, using the effective interest method, of $6.0 million . Pronouncements to be Adopted after March 31, 2018 In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 outlines a new model for accounting by lessees, whereby their rights and obligations under substantially all leases, existing and new, would be capitalized and recorded on the balance sheet. For lessors, however, the accounting remains largely unchanged from the current model, with the distinction between operating and financing leases retained, but updated to align with certain changes to the lessee model and the new revenue recognition standard. The new standard also replaces existing sale-leaseback guidance with a new model applicable to both lessees and lessors. In addition, it also requires lessors to record gross revenues and expenses associated with activities that do not transfer services to the lessee (such as real estate taxes and insurance). Additionally, the new standard requires extensive quantitative and qualitative disclosures. Early application will be permitted for all entities. The new standard must be adopted using a modified retrospective transition of the new guidance and provides for certain practical expedients. Transition will require application of the new model at the beginning of the earliest comparative period presented. We will adopt this guidance for our interim and annual periods beginning January 1, 2019. The ASU is expected to impact our consolidated financial statements as we have certain land lease arrangements for which we are the lessee. We are evaluating the impact of the new standard and have not yet determined if it will have a material impact on our business or our consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses. ASU 2016-13 introduces a new model for estimating credit losses based on current expected credit losses for certain types of financial instruments, including loans receivable, held-to-maturity debt securities, and net investments in direct financing leases, amongst other financial instruments. ASU 2016-13 also modifies the impairment model for available-for-sale debt securities and expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating the allowance for losses. ASU 2016-13 will be effective for public business entities in fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early application of the guidance permitted. We are in the process of evaluating the impact of adopting ASU 2016-13 on our consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities . ASU 2017-12 will make more financial and nonfinancial hedging strategies eligible for hedge accounting. It also amends the presentation and disclosure requirements and changes how companies assess hedge effectiveness. It is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. ASU 2017-12 will be effective in fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. We are in the process of evaluating the impact of adopting ASU 2017-12 on our consolidated financial statements, and expect to adopt the standard for the fiscal year beginning January 1, 2019. |
Intangible Assets and Liabilities | Amortization of below-market rent and above-market rent intangibles is recorded as an adjustment to Rental income; amortization of below-market ground lease and other and above-market ground lease intangibles is included in Property expenses; and amortization of in-place lease intangibles is included in Depreciation and amortization expense on our consolidated financial statements. |
Fair Value of Financial Instruments | Derivative Assets — Our derivative assets, which are included in Other assets, net in the consolidated financial statements, are comprised of interest rate caps, interest rate swaps, foreign currency forward contracts, stock warrants, and foreign currency collars ( Note 9 ). The interest rate caps, interest rate swaps, foreign currency forward contracts, and foreign currency collars were measured at fair value using readily observable market inputs, such as quotations on interest rates, and were classified as Level 2 as these instruments are custom, over-the-counter contracts with various bank counterparties that are not traded in an active market. The stock warrants were measured at fair value using internal valuation models that incorporated market inputs and our own assumptions about future cash flows. We classified these assets as Level 3 because they are not traded in an active market. Derivative Liabilities — Our derivative liabilities, which are included in Accounts payable, accrued expenses and other liabilities in the consolidated financial statements, are comprised of interest rate swaps and foreign currency collars ( Note 9 ). These derivative instruments were measured at fair value using readily observable market inputs, such as quotations on interest rates, and were classified as Level 2 because they are custom, over-the-counter contracts with various bank counterparties that are not traded in an active market. The fair value of an asset is defined as the exit price, which is the amount that would either be received when an asset is sold or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance establishes a three-tier fair value hierarchy based on the inputs used in measuring fair value. These tiers are: Level 1, for which quoted market prices for identical instruments are available in active markets, such as money market funds, equity securities, and U.S. Treasury securities; Level 2, for which there are inputs other than quoted prices included within Level 1 that are observable for the instrument, such as certain derivative instruments including interest rate caps, interest rate swaps, foreign currency forward contracts, and foreign currency collars; and Level 3, for securities and other derivative assets that do not fall into Level 1 or Level 2 and for which little or no market data exists, therefore requiring us to develop our own assumptions. |
Derivatives | We measure derivative instruments at fair value and record them as assets or liabilities, depending on our rights or obligations under the applicable derivative contract. Derivatives that are not designated as hedges must be adjusted to fair value through earnings. For a derivative designated, and that qualified, as a cash flow hedge, the effective portion of the change in fair value of the derivative is recognized in Other comprehensive income until the hedged item is recognized in earnings. For a derivative designated, and that qualified, as a net investment hedge, the effective portion of the change in the fair value and/or the net settlement of the derivative is reported in Other comprehensive income as part of the cumulative foreign currency translation adjustment. The ineffective portion of the change in fair value of any derivative is immediately recognized in earnings. All derivative transactions with an individual counterparty are governed by a master International Swap and Derivatives Association agreement, which can be considered as a master netting arrangement; however, we report all our derivative instruments on a gross basis on our consolidated financial statements. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Variable Interest Entities | The following table presents a summary of selected financial data of the consolidated VIEs, included in the consolidated balance sheets (in thousands): March 31, 2018 December 31, 2017 Real estate — Land, buildings and improvements $ 115,924 $ 109,426 Operating real estate — Land, buildings and improvements 85,317 80,658 Net investments in direct financing leases 312,724 312,234 In-place lease intangible assets 8,949 8,650 Accumulated depreciation and amortization (28,957 ) (26,395 ) Other assets, net 70,654 73,620 Total assets 573,877 567,929 Mortgage debt, net $ 103,579 $ 104,213 Accounts payable, accrued expenses and other liabilities 18,419 12,693 Deferred income taxes 10,282 12,374 Total liabilities 132,668 129,662 |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total presented in the consolidated statement of cash flows. March 31, 2018 December 31, 2017 Cash and cash equivalents $ 102,402 $ 119,094 Restricted cash (a) 27,083 26,014 Total cash and cash equivalents, and restricted cash $ 129,485 $ 145,108 __________ (a) Restricted cash is included within Other assets, net on our consolidated balance sheet. |
Restrictions on Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total presented in the consolidated statement of cash flows. March 31, 2018 December 31, 2017 Cash and cash equivalents $ 102,402 $ 119,094 Restricted cash (a) 27,083 26,014 Total cash and cash equivalents, and restricted cash $ 129,485 $ 145,108 __________ (a) Restricted cash is included within Other assets, net on our consolidated balance sheet. |
Agreements and Transactions w26
Agreements and Transactions with Related Parties (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The following tables present a summary of fees we paid, expenses we reimbursed, and distributions we made to our Advisor and other affiliates in accordance with the relevant agreements (in thousands): Three Months Ended March 31, 2018 2017 Amounts Included in the Consolidated Statements of Income Asset management fees $ 7,492 $ 7,325 Available Cash Distributions 6,170 6,810 Personnel and overhead reimbursements 1,765 2,291 Interest expense on deferred acquisition fees 64 64 Director compensation 40 53 $ 15,531 $ 16,543 Acquisition Fees Capitalized Personnel and overhead reimbursements $ 50 $ 107 Current acquisition fees 3 286 Deferred acquisition fees 3 229 $ 56 $ 622 The following table presents a summary of amounts included in Due to affiliates in the consolidated financial statements (in thousands): March 31, 2018 December 31, 2017 Due to Affiliates Deferred acquisition fees, including interest $ 5,434 $ 6,564 Asset management fees payable 2,498 2,435 Reimbursable costs 1,772 2,162 Accounts payable 251 175 Current acquisition fees — 131 $ 9,955 $ 11,467 |
Real Estate and Operating Rea27
Real Estate and Operating Real Estate (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Real Estate [Abstract] | |
Schedule of Real Estate Properties | Operating real estate, which consists of our wholly owned domestic self-storage operations and a majority ownership in one hotel, at cost, is summarized as follows (in thousands): March 31, 2018 December 31, 2017 Land $ 90,388 $ 90,042 Buildings and improvements 252,300 250,730 Real estate under construction (a) 2,994 — Less: Accumulated depreciation (27,870 ) (26,087 ) $ 317,812 $ 314,685 __________ (a) Primarily represents accrued restoration costs on our hotel property, which was impacted by Hurricane Irma as noted below. Real estate, which consists of land and buildings leased to others, at cost, and which are subject to operating leases, is summarized as follows (in thousands): March 31, 2018 December 31, 2017 Land $ 573,054 $ 567,113 Buildings and improvements 2,234,353 2,200,901 Real estate under construction (a) 20,009 4,597 Less: Accumulated depreciation (376,078 ) (354,668 ) $ 2,451,338 $ 2,417,943 __________ (a) Amount as of March 31, 2018 includes accrued capitalized costs of $8.9 million . |
Schedule of Impact of Hurricane Damage | The table below summarizes the components of our insurance receivables that are outstanding as of March 31, 2018 and December 31, 2017 (in thousands): March 31, 2018 (a) December 31, 2017 Beginning balance $ 30,756 $ — Estimated receivable proceeds (2,229 ) 32,583 Property damage insurance advances received (191 ) — Insurance deductible — (1,827 ) Property damage insurance receivables $ 28,336 $ 30,756 __________ (a) Excludes $2.6 million of amounts to be paid to our insurance adjuster, which is not covered under our insurance policy. |
Finance Receivables (Tables)
Finance Receivables (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Receivables [Abstract] | |
Financing Receivable Credit Quality Indicators | A summary of our finance receivables by internal credit quality rating is as follows (dollars in thousands): Number of Tenants / Obligors at Carrying Value at Internal Credit Quality Indicator March 31, 2018 December 31, 2017 March 31, 2018 December 31, 2017 1 — — $ — $ — 2 2 2 62,936 62,744 3 10 8 393,540 379,621 4 5 8 124,839 165,413 5 2 1 31,960 11,950 $ 613,275 $ 619,728 |
Equity Investments in Real Es29
Equity Investments in Real Estate (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | The following table presents Equity in earnings of equity method investments in real estate , which represents our proportionate share of the income or losses of these investments, as well as amortization of basis differences related to purchase accounting adjustments (in thousands): Three Months Ended March 31, 2018 2017 Equity Earnings from Equity Investments: Net Lease $ 4,702 $ 4,955 All Other (a) (b) (c) 593 (2,108 ) 5,295 2,847 Amortization of Basis Differences on Equity Investments: Net Lease (535 ) (563 ) All Other (a) (b) (c) (77 ) (299 ) (612 ) (862 ) Equity in earnings of equity method investments in real estate $ 4,683 $ 1,985 __________ (a) On October 3, 2017, we restructured Shelborne Operating Associates, LLC, or the Shelborne hotel. All equity interests in the investment were transferred to us in satisfaction of the underlying loan. Simultaneously, we transferred a 4.5% minority interest back to one of the original equity partners in exchange for a cash contribution of $4.0 million . As a result of the restructuring, we became the managing member with controlling financial interest in the investment. The minority interests have no decision-making control. Since the construction is now completed and the loan has been satisfied, we determined that this investment should no longer be accounted for as an ADC Arrangement and, as a result, have consolidated this investment as of the restructure date. (b) On May 19, 2017, we received the full repayment of our preferred equity interest in BPS Nevada LLC; therefore, the preferred equity interest is now retired as of that date. As a result, the three months ended March 31, 2018 in the table above does not include any activity related to this investment. (c) On March 17, 2017, we restructured our investment in the IDL Wheel Tenant, LLC ( Note 13 ) and, as a result, this investment is accounted for as a loan receivable, included in Other assets, net in the consolidated financial statements, and is no longer accounted for as an ADC Arrangement under the equity method of accounting. The following table sets forth our ownership interests in our equity method investments in real estate and their respective carrying values (dollars in thousands): Ownership Interest at Carrying Value at Lessee/Equity Investee Co-owner March 31, 2018 March 31, 2018 December 31, 2017 Net Lease: Hellweg Die Profi-Baumärkte GmbH & Co. KG (referred to as Hellweg 2) (a) (b) WPC 37% $ 112,657 $ 109,933 Kesko Senukai (a) Third Party 70% 58,752 58,136 Jumbo Logistiek Vastgoed B.V. (a) (c) WPC 85% 56,067 55,162 U-Haul Moving Partners, Inc. and Mercury Partners, LP (b) WPC 12% 35,471 35,897 Bank Pekao S.A. (a) (b) CPA:18 – Global 50% 25,460 25,582 BPS Nevada, LLC (b) (d) Third Party 15% 23,276 23,455 State Farm Automobile Co. (b) CPA:18 – Global 50% 15,582 16,072 Berry Global Inc. (b) WPC 50% 14,037 14,476 Tesco Global Aruhazak Zrt. (a) (b) WPC 49% 10,988 10,707 Eroski Sociedad Cooperativa — Mallorca (a) WPC 30% 7,749 7,629 Apply Sørco AS (referred to as Apply) (a) CPA:18 – Global 49% 6,903 6,298 Konzum d.d. (referred to as Agrokor) (a) (b) CPA:18 – Global 20% 3,585 3,433 Dick’s Sporting Goods, Inc. (b) WPC 45% 3,577 3,750 374,104 370,530 All Other: BG LLH, LLC (b) (d) Third Party 6% 39,241 38,724 39,241 38,724 $ 413,345 $ 409,254 __________ (a) The carrying value of this investment is affected by the impact of fluctuations in the exchange rate of the applicable foreign currency. (b) This investment is a VIE. (c) This investment represents a tenancy-in-common interest, whereby the property is encumbered by debt for which we are jointly and severally liable. The co-obligor is WPC and the amount due under the arrangement was approximately $77.9 million at March 31, 2018 . Of this amount, $66.2 million represents the amount we are liable for and is included within the carrying value of this investment at March 31, 2018 . (d) This investment is reported using the hypothetical liquidation at book value model, which may be different then pro rata ownership percentages, primarily due to the complex capital structure of the partnership agreement. |
Intangible Assets and Liabili30
Intangible Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Intangible Assets And Liabilities [Abstract] | |
Schedule Of Intangible Assets and Liabilities | Intangible assets and liabilities are summarized as follows (in thousands): March 31, 2018 December 31, 2017 Amortization Period (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Finite-Lived Intangible Assets In-place lease 4 - 53 $ 636,545 $ (224,911 ) $ 411,634 $ 629,961 $ (213,641 ) $ 416,320 Above-market rent 7 - 40 99,702 (33,353 ) 66,349 98,162 (31,533 ) 66,629 Below-market ground leases and other 55 - 94 12,994 (792 ) 12,202 12,842 (726 ) 12,116 749,241 (259,056 ) 490,185 740,965 (245,900 ) 495,065 Indefinite-Lived Intangible Assets Goodwill 304 — 304 304 — 304 Total intangible assets $ 749,545 $ (259,056 ) $ 490,489 $ 741,269 $ (245,900 ) $ 495,369 Finite-Lived Intangible Liabilities Below-market rent 7 - 53 $ (82,759 ) $ 23,285 $ (59,474 ) $ (82,259 ) $ 22,121 $ (60,138 ) Above-market ground lease 49 - 88 (1,145 ) 65 (1,080 ) (1,145 ) 61 (1,084 ) Total intangible liabilities $ (83,904 ) $ 23,350 $ (60,554 ) $ (83,404 ) $ 22,182 $ (61,222 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule Of Other Financial Instruments In Carrying Values And Fair Values | Our other financial instruments had the following carrying values and fair values as of the dates shown (dollars in thousands): March 31, 2018 December 31, 2017 Level Carrying Value Fair Value Carrying Value Fair Value Mortgage debt, net (a) (b) 3 $ 1,853,541 $ 1,856,737 $ 1,849,459 $ 1,864,043 Loans receivable (c) (d) 3 102,359 110,500 110,500 110,500 CMBS (e) 3 1,144 1,144 6,548 7,237 ___________ (a) The carrying value of Mortgage debt, net includes unamortized deferred financing costs of $7.4 million and $7.9 million at March 31, 2018 and December 31, 2017 , respectively. (b) We determined the estimated fair value of our Mortgage debt, net using a discounted cash flow model that estimates the present value of future loan payments by discounting such payments at current estimated market interest rates. The estimated market interest rates take into account interest rate risk and the value of the underlying collateral, which includes the quality of the collateral, the credit quality of the tenant/obligor, and the time until maturity. (c) We determined the estimated fair value of our Loans receivable using a discounted cash flow model with rates that take into account the credit of the tenant/obligor, order of payment tranches, and interest rate risk. We also considered the value of the underlying collateral, taking into account the quality of the collateral, the credit quality of the tenant/obligor, the time until maturity, and the current market interest rate. (d) Carrying value amount at March 31, 2018 includes the impact of adopting ASU 2017-05 ( Note 2 ). (e) At both March 31, 2018 and December 31, 2017 , we had two separate tranches of CMBS investments. The carrying values of our CMBS investments are inclusive of impairment charges for both periods presented. The balance at December 31, 2017 also included the accretion of the estimated cash flows that we expected to receive. |
Risk Management and Use of De32
Risk Management and Use of Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following table sets forth certain information regarding our derivative instruments (in thousands): Derivatives Designated as Hedging Instruments Asset Derivatives Fair Value at Liability Derivatives Fair Value at Balance Sheet Location March 31, 2018 December 31, 2017 March 31, 2018 December 31, 2017 Foreign currency forward contracts Other assets, net $ 9,896 $ 14,382 $ — $ — Interest rate swaps Other assets, net 856 314 — — Interest rate caps Other assets, net 180 201 — — Interest rate swaps Accounts payable, accrued expenses and other liabilities — — (2,363 ) (3,852 ) Foreign currency collars Accounts payable, accrued expenses and other liabilities — — (2,005 ) (1,431 ) Derivatives Not Designated as Hedging Instruments Stock warrants Other assets, net 1,947 1,815 — — Foreign currency forward contracts Other assets, net 306 86 — — Interest rate swap Accounts payable, accrued expenses and other liabilities — — (125 ) (128 ) Total derivatives $ 13,185 $ 16,798 $ (4,493 ) $ (5,411 ) |
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) | The following tables present the impact of our derivative instruments in the consolidated financial statements (in thousands): Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive Income (Effective Portion) (a) Three Months Ended March 31, Derivatives in Cash Flow Hedging Relationships 2018 2017 Foreign currency forward contracts $ (4,224 ) $ (3,749 ) Interest rate swaps 2,022 993 Foreign currency collars (556 ) (57 ) Interest rate caps (23 ) (258 ) Derivatives in Net Investment Hedging Relationships (b) Foreign currency forward contracts (22 ) (291 ) Foreign currency collar (12 ) (2 ) Total $ (2,815 ) $ (3,364 ) Amount of Gain (Loss) Reclassified from Other Comprehensive Income into Income (Effective Portion) Derivatives in Cash Flow Hedging Relationships Location of Gain (Loss) Reclassified to Income Three Months Ended March 31, 2018 2017 Foreign currency forward contracts Other gains and (losses) $ 1,492 $ 2,858 Interest rate swaps Interest expense (431 ) (706 ) Interest rate caps Interest expense (5 ) — Total $ 1,056 $ 2,152 __________ (a) Excludes net gains of $0.5 million on unconsolidated jointly owned investments for both the three months ended March 31, 2018 and 2017 . (b) The effective portion of the change in fair value and the settlement of these contracts are reported in the foreign currency translation adjustment section of Other comprehensive income . |
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | The following table presents the impact of our derivative instruments in the consolidated financial statements (in thousands): Amount of Gain (Loss) Recognized in Income on Derivatives Derivatives Not in Cash Flow Hedging Relationships Location of Gain (Loss) Recognized in Income Three Months Ended March 31, 2018 2017 Stock warrants Other gains and (losses) $ 132 $ (198 ) Foreign currency forward contracts Other gains and (losses) 66 33 Interest rate swap Interest expense (8 ) 18 Swaption Other gains and (losses) — (48 ) Derivatives in Cash Flow Hedging Relationships Interest rate swaps (a) Interest expense 45 46 Foreign currency collars Other gains and (losses) (5 ) — Total $ 230 $ (149 ) __________ (a) Relates to the ineffective portion of the hedging relationship. |
Schedule of Derivative Instruments | The following table presents the foreign currency derivative contracts we had outstanding and their designations at March 31, 2018 (currency in thousands): Foreign Currency Derivatives Number of Instruments Notional Amount Fair Value at March 31, 2018 Designated as Cash Flow Hedging Instruments Foreign currency forward contracts 31 75,280 EUR $ 9,896 Foreign currency collars 2 15,100 EUR (1,947 ) Foreign currency collars 3 2,000 NOK (26 ) Not Designated as Hedging Instruments Foreign currency forward contracts 7 2,105 EUR 224 Foreign currency forward contracts 8 5,802 NOK 47 Designated as Net Investment Hedging Instruments Foreign currency forward contracts 2 4,329 NOK 35 Foreign currency collar 1 2,500 NOK (32 ) $ 8,197 The interest rate swaps and caps that our consolidated subsidiaries had outstanding at March 31, 2018 are summarized as follows (currency in thousands): Interest Rate Derivatives Number of Instruments Notional Amount Fair Value at March 31, 2018 (a) Designated as Cash Flow Hedging Instruments Interest rate swaps 12 123,075 USD $ (1,167 ) Interest rate swaps 4 60,528 EUR (340 ) Interest rate caps 4 132,692 EUR 122 Interest rate cap 1 75,000 USD 43 Interest rate cap 1 6,394 GBP 15 Not Designated as Hedging Instrument Interest rate swap 1 4,814 EUR (125 ) $ (1,452 ) __________ (a) Fair value amount is based on the exchange rate of the euro or British pound sterling at March 31, 2018 , as applicable. |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Senior Credit Facilities | The following table presents a summary of our Senior Credit Facility (dollars in thousands): Interest Rate at March 31, 2018 Outstanding Balance at Senior Credit Facility, Net March 31, 2018 December 31, 2017 Term Loan (a) LIBOR + 1.45% $ 49,948 $ 49,915 Revolver: Revolver — borrowing in yen (b) 1.50% 22,002 22,047 Revolver — borrowing in euros (b) 1.50% 20,373 29,969 $ 92,323 $ 101,931 __________ (a) Includes unamortized deferred financing costs and discounts. (b) Amounts are based on the exchange rate of the euro or yen at March 31, 2018 . |
Schedule of Debt | Scheduled debt principal payments for the remainder of 2018 , each of the next four calendar years following December 31, 2018 and thereafter through 2031 are as follows (in thousands): Years Ending December 31, Total 2018 (remainder) (a) $ 151,430 2019 75,202 2020 430,280 2021 457,042 2022 353,229 Thereafter through 2031 491,365 Total principal payments 1,958,548 Deferred financing costs (7,489 ) Unamortized discount, net (5,195 ) Total $ 1,945,864 __________ (a) Includes the $50.0 million Term Loan and $42.4 million Revolver outstanding at March 31, 2018 under our Senior Credit Facility, which is scheduled to mature on August 26, 2018, unless extended pursuant to its terms. |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Reclassification out of Accumulated Other Comprehensive Income | The following tables present a reconciliation of changes in Accumulated other comprehensive loss by component for the periods presented (in thousands): Three Months Ended March 31, 2018 Gains and Losses Gains and Losses on Marketable Investments Foreign Currency Translation Adjustments Total Beginning balance $ 9,087 $ (15 ) $ (87,492 ) $ (78,420 ) Other comprehensive income before reclassifications (1,276 ) — 26,935 25,659 Amounts reclassified from accumulated other comprehensive loss to: Interest expense 436 — — 436 Other gains and (losses) (1,492 ) — — (1,492 ) Total (1,056 ) — — (1,056 ) Net current-period Other comprehensive income (2,332 ) — 26,935 24,603 Net current-period Other comprehensive income attributable to noncontrolling interests — — (547 ) (547 ) Ending balance $ 6,755 $ (15 ) $ (61,104 ) $ (54,364 ) Three Months Ended March 31, 2017 Gains and Losses on Derivative Instruments Gains and Losses on Marketable Investments Foreign Currency Translation Adjustments Total Beginning balance $ 29,549 $ (48 ) $ (186,177 ) $ (156,676 ) Other comprehensive income before reclassifications (401 ) 30 8,609 8,238 Amounts reclassified from accumulated other comprehensive loss to: Interest expense 706 — — 706 Other gains and (losses) (2,858 ) — — (2,858 ) Total (2,152 ) — — (2,152 ) Net current-period Other comprehensive income (2,553 ) 30 8,609 6,086 Net current-period Other comprehensive income attributable to noncontrolling interests — — (259 ) (259 ) Ending balance $ 26,996 $ (18 ) $ (177,827 ) $ (150,849 ) |
Property Dispositions (Tables)
Property Dispositions (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations | The results of operations for properties that have been sold or classified as held for sale are included in the consolidated financial statements and are summarized as follows (in thousands): Three Months Ended March 31, 2018 2017 Revenues $ — $ 7,006 Operating expenses — (3,049 ) Interest expense — (1,088 ) Equity in losses of equity method investments in real estate — (688 ) Loss on extinguishment of debt — (1,320 ) Provision for income taxes — (10 ) Gain on sale of real estate, net of tax — 1,634 Income from properties sold or classified as held for sale, net of income taxes $ — $ 2,485 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Reconciliation of Revenue from Segments to Consolidated | The following tables present a summary of comparative results and assets for these business segments (in thousands): Three Months Ended March 31, 2018 2017 Net Lease Revenues (a) (b) $ 96,992 $ 112,523 Operating expenses (c) (d) (41,957 ) (41,308 ) Interest expense (17,692 ) (20,651 ) Other income and (expenses), excluding interest expense 4,559 3,459 (Provision for) benefit from income taxes (404 ) 614 Gain on sale of real estate, net of tax 24 1,739 Net income attributable to noncontrolling interests (3,115 ) (2,325 ) Net income attributable to CPA:17 – Global $ 38,407 $ 54,051 Self Storage Revenues $ 9,045 $ 8,742 Operating expenses (5,448 ) (7,199 ) Interest expense (1,911 ) (2,003 ) Other income and (expenses), excluding interest expense — (2 ) Provision for income taxes (48 ) (32 ) Net income (loss) attributable to CPA:17 – Global $ 1,638 $ (494 ) All Other Revenues (e) $ 7,245 $ 1,740 Operating expenses (f) (9,520 ) (38 ) Other income and (expenses), excluding interest expense 571 (2,408 ) Benefit from (provision for) income taxes 2,078 (650 ) Net loss attributable to noncontrolling interests 861 — Net income (loss) attributable to CPA:17 – Global $ 1,235 $ (1,356 ) Corporate Unallocated Corporate Overhead (g) $ (8,373 ) $ (7,380 ) Net income attributable to noncontrolling interests — Available Cash Distributions $ (6,170 ) $ (6,810 ) Total Company Revenues $ 113,282 $ 123,005 Operating expenses (67,684 ) (59,615 ) Interest expense (20,550 ) (23,390 ) Other income and (expenses), excluding interest expense 8,686 6,028 Benefit from (provision for) income taxes 1,403 (621 ) Gain on sale of real estate, net of tax 24 1,739 Net income attributable to noncontrolling interests (8,424 ) (9,135 ) Net income attributable to CPA:17 – Global $ 26,737 $ 38,011 (a) Includes a $15.7 million write-off of a below-market rent lease liabilities pertaining to our KBR, Inc. properties that was recognized in Rental income as a result of a lease modification during the three months ended March 31, 2017 ( Note 13 ). In addition, as a result of a lease termination, we accelerated the below-market rent lease intangible liabilities of $3.3 million that was also recognized in Rental income during the three months ended March 31, 2017 . (b) During the three months ended March 31, 2018 and 2017 we recognized straight-line rent adjustments of $2.8 million and $3.5 million , respectively. (c) Includes an impairment charge of $4.5 million related to a net-leased property ( Note 8 ) recognized during the three months ended March 31, 2017 . (d) In April 2017, the Croatian government passed a special law assisting the restructuring of companies considered of systematic significance in Croatia. This law directly impacts our Agrokor tenant, which is currently experiencing financial distress and recently received a credit downgrade from both Standard & Poor’s and Moody’s. As a result of the financial difficulties and the uncertainty regarding future rent collections from the tenant, we recorded bad debt expense of $4.4 million and $1.6 million during the three months ended March 31, 2018 and 2017 , respectively. (e) Amount includes the impact of adopting ASU 2017-05 ( Note 2 ), which resulted in the recognition of $2.2 million of accretion into income during the three months ended March 31, 2018 . (f) Includes an impairment charge of $5.4 million related to our CMBS investments ( Note 8 ) recognized during the three months ended March 31, 2018 . (g) Included in unallocated corporate overhead are asset management fees and general and administrative expenses, as well as interest expense and other charges related to our Senior Credit Facility. These expenses are calculated and reported at the portfolio level and not evaluated as part of any segment’s operating performance. |
Reconciliation of Assets from Segment to Consolidated | Total Assets at March 31, 2018 December 31, 2017 Net Lease $ 4,017,437 $ 3,980,445 All Other 264,629 277,702 Self-Storage 240,648 241,438 Corporate 70,410 87,885 Total Company $ 4,593,124 $ 4,587,470 |
Organization - Narratives (Deta
Organization - Narratives (Details) ft² in Millions, $ in Millions | 3 Months Ended | 73 Months Ended | 135 Months Ended |
Mar. 31, 2018ft²segmentpropertytenant | Jan. 31, 2013USD ($) | Mar. 31, 2018USD ($)ft²propertytenant | |
Real Estate Properties | |||
Capital interest in operating partnership | 99.99% | 99.99% | |
Number of real estate properties (properties) | 411 | 411 | |
Number of tenants | tenant | 114 | 114 | |
Square footage of real estate properties | ft² | 44.4 | 44.4 | |
Number of reportable segments | segment | 2 | ||
Proceeds from Senior Credit Facility | $ | $ 2,900 | ||
Proceeds from DRIP shares | $ | $ 701.1 | ||
Operating real estate | |||
Real Estate Properties | |||
Number of real estate properties (properties) | 38 | 38 | |
Square footage of operating properties | ft² | 2.7 | 2.7 | |
Self storage | |||
Real Estate Properties | |||
Number of real estate properties (properties) | 37 | 37 | |
Hotel | |||
Real Estate Properties | |||
Number of real estate properties (properties) | 1 | 1 |
Basis of Presentation - Narrati
Basis of Presentation - Narratives (Details) $ in Thousands | Jan. 01, 2018USD ($) | Mar. 31, 2018USD ($)vie | Mar. 31, 2017USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($)vie | Dec. 31, 2016USD ($) |
Property, Plant and Equipment | ||||||
Variable interest entities, count | vie | 21 | 21 | ||||
Variable interest entities consolidated, count | vie | 9 | 9 | ||||
Variable interest entities unconsolidated, count | vie | 11 | 11 | ||||
Variable interest entities maximum risk exposure | $ 283,900 | $ 282,000 | ||||
Gain on sale of real estate, net of tax | 24 | $ 1,739 | ||||
Adjustment to stockholders equity | 2,362,297 | $ 2,322,607 | 2,343,257 | $ 2,315,004 | ||
Reduction of accounts payable, accrued expenses and other liabilities | (129,426) | (132,751) | ||||
Reduction of other assets | (307,126) | (322,201) | ||||
ASU 2017-05 | ||||||
Property, Plant and Equipment | ||||||
Adjustment to stockholders equity | $ 6,000 | |||||
Reduction of accounts payable, accrued expenses and other liabilities | 16,400 | |||||
Reduction of other assets | 10,400 | |||||
I Drive Property | ||||||
Property, Plant and Equipment | ||||||
Gain on sale of real estate, net of tax | 2,100 | |||||
Loans restructured | $ 50,000 | |||||
Deferred gain on debt restructuring | 16,400 | |||||
Loans receivable | $ 18,600 | |||||
Adjustments | ||||||
Property, Plant and Equipment | ||||||
Adjustment to stockholders equity | 2,100 | |||||
Reduction of accounts payable, accrued expenses and other liabilities | $ 2,100 | |||||
Forecasted | I Drive Property | Fair Value | ||||||
Property, Plant and Equipment | ||||||
Loans receivable | $ 35,000 | |||||
Loans and Finance Receivables | ||||||
Property, Plant and Equipment | ||||||
Variable interest entities, count | vie | 1 | 1 |
Basis of Presentation - Variabl
Basis of Presentation - Variable Interest Entity Disclosure (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Real estate — Land, buildings and improvements | $ 2,827,416 | $ 2,772,611 |
Operating real estate — Land, buildings and improvements | 345,682 | 340,772 |
Net investments in direct financing leases | 510,916 | 509,228 |
In-place lease intangible assets | 636,545 | 629,961 |
Accumulated depreciation and amortization | (663,004) | (626,655) |
Other assets, net | 307,126 | 322,201 |
Total assets | 4,593,124 | 4,587,470 |
Liabilities | ||
Mortgage debt, net | 1,853,541 | 1,849,459 |
Accounts payable, accrued expenses and other liabilities | 129,426 | 132,751 |
Deferred income taxes | 27,907 | 30,524 |
Total liabilities | 2,230,827 | 2,244,213 |
Variable Interest Entity, Primary Beneficiary | ||
Assets | ||
Real estate — Land, buildings and improvements | 115,924 | 109,426 |
Operating real estate — Land, buildings and improvements | 85,317 | 80,658 |
Net investments in direct financing leases | 312,724 | 312,234 |
In-place lease intangible assets | 8,949 | 8,650 |
Accumulated depreciation and amortization | (28,957) | (26,395) |
Other assets, net | 70,654 | 73,620 |
Total assets | 573,877 | 567,929 |
Liabilities | ||
Mortgage debt, net | 103,579 | 104,213 |
Accounts payable, accrued expenses and other liabilities | 18,419 | 12,693 |
Deferred income taxes | 10,282 | 12,374 |
Total liabilities | $ 132,668 | $ 129,662 |
Basis of Presentation - Cash an
Basis of Presentation - Cash and Restricted Cash Equivalents (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 102,402 | $ 119,094 | ||
Restricted cash | 27,083 | 26,014 | ||
Total cash and cash equivalents, and restricted cash | $ 129,485 | $ 145,108 | $ 230,501 | $ 300,153 |
Agreements and Transactions w41
Agreements and Transactions with Related Parties - Narratives (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Acquisitions and Disposition Fees | ||
Advisory agreement, term | 1 year | |
Preferred return by advisor (as a percentage) | 5.00% | |
Interest rate on unpaid deferred acquisition fees (as a percentage) | 5.00% | |
Asset Management Fees and Available Cash Distributions | ||
Net asset value (usd per share) | $ 10.04 | |
Asset management fees paid in cash (as a percentage) | 100.00% | 100.00% |
Common stock shares outstanding, shares | 351,499,230 | 349,899,827 |
Available cash distribution to advisor (as a percentage) | 10.00% | |
Personnel And Office Rent Reimbursement | ||
Personnel and overhead reimbursement (as a percentage) | 1.00% | 2.00% |
Legal fee reimbursement rate (as a percentage) | 0.25% | |
Due from affiliate | $ 0.2 | |
Advisor | ||
Asset Management Fees and Available Cash Distributions | ||
Common stock shares outstanding, shares | 15,385,683 | |
Total common stock outstanding held by related party (as a percentage) | 4.40% | |
Average invested assets | ||
Personnel And Office Rent Reimbursement | ||
Operating expenses reimbursements (as a percentage) | 2.00% | |
Adjusted net income | ||
Personnel And Office Rent Reimbursement | ||
Operating expenses reimbursements (as a percentage) | 25.00% | |
Minimum | ||
Personnel And Office Rent Reimbursement | ||
Ownership interest (as a percentage) | 6.00% | |
Minimum | Average equity value | ||
Asset Management Fees and Available Cash Distributions | ||
Asset management fees (as a percentage) | 1.50% | |
Maximum | ||
Acquisitions and Disposition Fees | ||
Interest rate on unpaid deferred acquisition fees (as a percentage) | 6.00% | |
Personnel And Office Rent Reimbursement | ||
Ownership interest (as a percentage) | 97.00% | |
Maximum | Real estate commission | ||
Acquisitions and Disposition Fees | ||
Subordinated disposition fees (as a percentage) | 50.00% | |
Maximum | Contract sales price of investment | ||
Acquisitions and Disposition Fees | ||
Subordinated disposition fees (as a percentage) | 3.00% | |
Maximum | Average equity value | ||
Asset Management Fees and Available Cash Distributions | ||
Asset management fees (as a percentage) | 1.75% | |
Long-term net lease | ||
Acquisitions and Disposition Fees | ||
Acquisition fees (as a percentage) | 4.50% | |
Long-term net lease | Average market value | ||
Asset Management Fees and Available Cash Distributions | ||
Asset management fees (as a percentage) | 0.50% | |
Long-term net lease | Current | ||
Acquisitions and Disposition Fees | ||
Acquisition fees (as a percentage) | 2.50% | |
Long-term net lease | Deferred | ||
Acquisitions and Disposition Fees | ||
Acquisition fees (as a percentage) | 2.00% | |
Non-long term net lease | Minimum | ||
Acquisitions and Disposition Fees | ||
Acquisition fees (as a percentage) | 1.00% | |
Non-long term net lease | Maximum | ||
Acquisitions and Disposition Fees | ||
Acquisition fees (as a percentage) | 1.75% |
Agreements and Transactions w42
Agreements and Transactions with Related Parties - Related Party Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Amounts Included in the Consolidated Statements of Income | ||
Asset management fees | $ 7,492 | $ 7,325 |
Available Cash Distributions | 6,170 | 6,810 |
Personnel and overhead reimbursements | 1,765 | 2,291 |
Interest expense on deferred acquisition fees | 64 | 64 |
Director compensation | 40 | 53 |
Operating expenses | 15,531 | 16,543 |
Acquisition Fees Capitalized | ||
Personnel and overhead reimbursements | 50 | 107 |
Current acquisition fees | 3 | 286 |
Deferred acquisition fees | 3 | 229 |
Transaction fees incurred | $ 56 | $ 622 |
Agreements and Transactions w43
Agreements and Transactions with Related Parties - Due to Affiliates (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Due to Affiliates | ||
Deferred acquisition fees, including interest | $ 5,434 | $ 6,564 |
Asset management fees payable | 2,498 | 2,435 |
Reimbursable costs | 1,772 | 2,162 |
Accounts payable | 251 | 175 |
Current acquisition fees | 0 | 131 |
Due to related parties | $ 9,955 | $ 11,467 |
Real Estate and Operating Rea44
Real Estate and Operating Real Estate - Narratives (Details) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018USD ($)property$ / € | Dec. 31, 2017USD ($)property$ / € | Mar. 31, 2017USD ($) | Sep. 30, 2017USD ($) | |
Foreign Currency Translation | ||||
Capitalized construction costs | $ 8,900 | |||
Effects of foreign currency translation on balance sheet item | 26,935 | $ 8,609 | ||
Insurance deductible | $ 1,800 | |||
Insurance expense | $ 2,600 | |||
Proceeds from business interruption insurance | 1,700 | |||
Real estate | ||||
Foreign Currency Translation | ||||
Effects of foreign currency translation on balance sheet item | 35,000 | |||
Depreciation expense including effects of foreign currency translation | $ 17,300 | 16,200 | ||
Real estate under construction | ||||
Foreign Currency Translation | ||||
Number of open built to suit projects | property | 3 | 3 | ||
Unfunded commitment | $ 50,200 | $ 56,500 | ||
Operating real estate | ||||
Foreign Currency Translation | ||||
Depreciation expense including effects of foreign currency translation | $ 1,700 | $ 1,700 | ||
Euro | ||||
Foreign Currency Translation | ||||
Increase decrease in foreign currency exchange rate | 2.70% | |||
Foreign currency exchange rate | $ / € | 1.2321 | 1.1993 |
Real Estate and Operating Rea45
Real Estate and Operating Real Estate - Property Plant and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Investments in real estate | ||
Net investments in real estate | $ 3,770,251 | $ 3,736,921 |
Real estate | ||
Investments in real estate | ||
Land | 573,054 | 567,113 |
Buildings and improvements | 2,234,353 | 2,200,901 |
Real estate under construction | 20,009 | 4,597 |
Less: Accumulated depreciation | (376,078) | (354,668) |
Net investments in real estate | 2,451,338 | 2,417,943 |
Operating real estate | ||
Investments in real estate | ||
Land | 90,388 | 90,042 |
Buildings and improvements | 252,300 | 250,730 |
Real estate under construction | 2,994 | 0 |
Less: Accumulated depreciation | (27,870) | (26,087) |
Net investments in real estate | $ 317,812 | $ 314,685 |
Real Estate and Operating Rea46
Real Estate and Operating Real Estate - Hurricane Disclosure (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | |
Real Estate Properties | |||
Insurance deductible | $ (1,800) | ||
Hotel | |||
Real Estate Properties | |||
Beginning balance | $ 30,756 | $ 0 | |
Estimated receivable proceeds | (2,229) | 32,583 | |
Property damage insurance advances received | (191) | 0 | |
Insurance deductible | 0 | (1,827) | |
Property damage insurance receivables | $ 28,336 | $ 30,756 |
Finance Receivables - Narrative
Finance Receivables - Narratives (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Mar. 31, 2018USD ($)loan | Dec. 31, 2017USD ($)loan | |
Accounts, Notes, Loans and Financing Receivable | |||
Loans outstanding (loans) | loan | 5 | 5 | |
Financing receivable | $ 613,275 | $ 619,728 | |
Past due receivables | 1,500 | 1,100 | |
Financing receivable allowance for credit loss | 1,100 | 700 | |
Other assets, net | |||
Accounts, Notes, Loans and Financing Receivable | |||
Financing receivable | $ 102,400 | $ 110,500 | |
Forecasted | New York Times Company | Bargain purchase option | |||
Accounts, Notes, Loans and Financing Receivable | |||
Proceeds from sale of real estate | $ 250,000 |
Finance Receivables - Internal
Finance Receivables - Internal Credit Quality Rating (Details) $ in Thousands | Mar. 31, 2018USD ($)tenant | Dec. 31, 2017USD ($)tenant |
Credit Quality Of Finanace Receivables: | ||
Financing receivable | $ 613,275 | $ 619,728 |
Direct Financing Method | Internally Assigned Grade 1 | ||
Credit Quality Of Finanace Receivables: | ||
Number of tenants and obligors | tenant | 0 | 0 |
Financing receivable | $ 0 | $ 0 |
Direct Financing Method | Internally Assigned Grade 2 | ||
Credit Quality Of Finanace Receivables: | ||
Number of tenants and obligors | tenant | 2 | 2 |
Financing receivable | $ 62,936 | $ 62,744 |
Direct Financing Method | Internally Assigned Grade 3 | ||
Credit Quality Of Finanace Receivables: | ||
Number of tenants and obligors | tenant | 10 | 8 |
Financing receivable | $ 393,540 | $ 379,621 |
Direct Financing Method | Internally Assigned Grade 4 | ||
Credit Quality Of Finanace Receivables: | ||
Number of tenants and obligors | tenant | 5 | 8 |
Financing receivable | $ 124,839 | $ 165,413 |
Direct Financing Method | Internally Assigned Grade 5 | ||
Credit Quality Of Finanace Receivables: | ||
Number of tenants and obligors | tenant | 2 | 1 |
Financing receivable | $ 31,960 | $ 11,950 |
Equity Investments in Real Es49
Equity Investments in Real Estate - Narratives (Details) - USD ($) $ in Thousands | Oct. 03, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 |
Schedule of Equity Method Investments | ||||
Proceeds from equity method investment | $ 7,527 | $ 17,781 | ||
Unamortized basis differences on our equity investments | 25,500 | $ 26,300 | ||
Unconsolidated Equity Investments | ||||
Schedule of Equity Method Investments | ||||
Proceeds from equity method investment | 11,800 | $ 21,300 | ||
Shelborne | ||||
Schedule of Equity Method Investments | ||||
Proceeds from noncontrolling interest | $ 4,000 | |||
Shelborne | Third Party | ||||
Schedule of Equity Method Investments | ||||
Ownership interest (as a percentage) | 4.50% | |||
Jumbo Logistiek Vastgooed B.V | Net Lease | ||||
Schedule of Equity Method Investments | ||||
Mortgage debt on tenancy in common | 66,200 | |||
Jumbo Logistiek Vastgooed B.V | Net Lease | WPC | ||||
Schedule of Equity Method Investments | ||||
Mortgage debt on tenancy in common | $ 77,900 |
Equity Investments in Real Es50
Equity Investments in Real Estate - Proportionate Share of Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Equity Method Investment, Financial Statement, Reported Amounts | ||
Equity in earnings of equity method investments in real estate | $ 4,683 | $ 1,985 |
Equity Method Investments | ||
Equity Method Investment, Financial Statement, Reported Amounts | ||
Equity in earnings of equity method investments in real estate | 5,295 | 2,847 |
Equity Method Investments | Net Lease | ||
Equity Method Investment, Financial Statement, Reported Amounts | ||
Equity in earnings of equity method investments in real estate | 4,702 | 4,955 |
Equity Method Investments | All Other | ||
Equity Method Investment, Financial Statement, Reported Amounts | ||
Equity in earnings of equity method investments in real estate | 593 | (2,108) |
Amortization of Basis Difference on Equity Investments | ||
Equity Method Investment, Financial Statement, Reported Amounts | ||
Equity in earnings of equity method investments in real estate | (612) | (862) |
Amortization of Basis Difference on Equity Investments | Net Lease | ||
Equity Method Investment, Financial Statement, Reported Amounts | ||
Equity in earnings of equity method investments in real estate | (535) | (563) |
Amortization of Basis Difference on Equity Investments | All Other | ||
Equity Method Investment, Financial Statement, Reported Amounts | ||
Equity in earnings of equity method investments in real estate | $ (77) | $ (299) |
Equity Investments in Real Es51
Equity Investments in Real Estate - Ownership Interest in Equity Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Ownership interest in equity investments: | ||
Equity investments in real estate | $ 413,345 | $ 409,254 |
Net Lease | ||
Ownership interest in equity investments: | ||
Equity investments in real estate | $ 374,104 | 370,530 |
Net Lease | Third Party | Kesko Senukai | ||
Ownership interest in equity investments: | ||
Ownership interest (as a percentage) | 70.00% | |
Equity investments in real estate | $ 58,752 | 58,136 |
Net Lease | Third Party | BPS Nevada, LLC | ||
Ownership interest in equity investments: | ||
Ownership interest (as a percentage) | 15.00% | |
Equity investments in real estate | $ 23,276 | 23,455 |
Net Lease | WPC | Hellweg Die Profi-Baumärkte GmbH & Co. KG (referred to as Hellweg 2) | ||
Ownership interest in equity investments: | ||
Ownership interest (as a percentage) | 37.00% | |
Equity investments in real estate | $ 112,657 | 109,933 |
Net Lease | WPC | Jumbo Logistiek Vastgooed B.V | ||
Ownership interest in equity investments: | ||
Ownership interest (as a percentage) | 85.00% | |
Equity investments in real estate | $ 56,067 | 55,162 |
Net Lease | WPC | U-Haul Moving Partners, Inc. and Mercury Partners, LP | ||
Ownership interest in equity investments: | ||
Ownership interest (as a percentage) | 12.00% | |
Equity investments in real estate | $ 35,471 | 35,897 |
Net Lease | WPC | Berry Global Inc. | ||
Ownership interest in equity investments: | ||
Ownership interest (as a percentage) | 50.00% | |
Equity investments in real estate | $ 14,037 | 14,476 |
Net Lease | WPC | Tesco Global Aruhazak Zrt. | ||
Ownership interest in equity investments: | ||
Ownership interest (as a percentage) | 49.00% | |
Equity investments in real estate | $ 10,988 | 10,707 |
Net Lease | WPC | Eroski Sociedad Cooperativa - Mallorca | ||
Ownership interest in equity investments: | ||
Ownership interest (as a percentage) | 30.00% | |
Equity investments in real estate | $ 7,749 | 7,629 |
Net Lease | WPC | Dick’s Sporting Goods, Inc. | ||
Ownership interest in equity investments: | ||
Ownership interest (as a percentage) | 45.00% | |
Equity investments in real estate | $ 3,577 | 3,750 |
Net Lease | CPA 18 - Global | Bank Pekao S.A. | ||
Ownership interest in equity investments: | ||
Ownership interest (as a percentage) | 50.00% | |
Equity investments in real estate | $ 25,460 | 25,582 |
Net Lease | CPA 18 - Global | State Farm | ||
Ownership interest in equity investments: | ||
Ownership interest (as a percentage) | 50.00% | |
Equity investments in real estate | $ 15,582 | 16,072 |
Net Lease | CPA 18 - Global | Apply Sorco AS | ||
Ownership interest in equity investments: | ||
Ownership interest (as a percentage) | 49.00% | |
Equity investments in real estate | $ 6,903 | 6,298 |
Net Lease | CPA 18 - Global | Konzum d.d. (referred to as Agrokor) | ||
Ownership interest in equity investments: | ||
Ownership interest (as a percentage) | 20.00% | |
Equity investments in real estate | $ 3,585 | 3,433 |
All Other | ||
Ownership interest in equity investments: | ||
Equity investments in real estate | $ 39,241 | 38,724 |
All Other | Third Party | BG LLH, LLC | ||
Ownership interest in equity investments: | ||
Ownership interest (as a percentage) | 6.00% | |
Equity investments in real estate | $ 39,241 | $ 38,724 |
Intangible Assets and Liabili52
Intangible Assets and Liabilities - Narratives (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Finite-Lived Intangible Assets | ||
Net amortization of intangibles | $ 9.3 | $ 12.9 |
Below and above market rent intangibles | ||
Finite-Lived Intangible Assets | ||
Increase (decrease) in rental income | $ (0.4) | 18.8 |
Assets held for sale | KBR | ||
Finite-Lived Intangible Assets | ||
Accelerated amortization of intangible liabilities | 3.3 | |
Assets held for sale | Below-market rent | KBR | ||
Finite-Lived Intangible Assets | ||
Accelerated amortization of intangible liabilities | $ 15.7 |
Intangible Assets and Liabili53
Intangible Assets and Liabilities - Intangible Assets and Liabilities Summary (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets | ||
Finite-lived intangible assets, gross | $ 749,241 | $ 740,965 |
Less: accumulated amortization | (259,056) | (245,900) |
Finite-lived intangible assets, net | 490,185 | 495,065 |
Indefinite-Lived Intangible Assets | ||
Goodwill | 304 | 304 |
Total intangible assets, gross | 749,545 | 741,269 |
Total intangible assets, net | 490,489 | 495,369 |
Finite-Lived Intangible Liabilities | ||
Finite-lived intangible liabilities, gross | (83,904) | (83,404) |
Less: accumulated amortization | 23,350 | 22,182 |
Finite-lived intangible liabilities, net | (60,554) | (61,222) |
Below-market rent | ||
Finite-Lived Intangible Liabilities | ||
Finite-lived intangible liabilities, gross | (82,759) | (82,259) |
Less: accumulated amortization | 23,285 | 22,121 |
Finite-lived intangible liabilities, net | $ (59,474) | (60,138) |
Below-market rent | Minimum | ||
Intangible Assets Liabilities | ||
Finite lived intangible asset/liability, useful life | 7 years | |
Below-market rent | Maximum | ||
Intangible Assets Liabilities | ||
Finite lived intangible asset/liability, useful life | 53 years | |
Above-market ground lease | ||
Finite-Lived Intangible Liabilities | ||
Finite-lived intangible liabilities, gross | $ (1,145) | (1,145) |
Less: accumulated amortization | 65 | 61 |
Finite-lived intangible liabilities, net | $ (1,080) | (1,084) |
Above-market ground lease | Minimum | ||
Intangible Assets Liabilities | ||
Finite lived intangible asset/liability, useful life | 49 years | |
Above-market ground lease | Maximum | ||
Intangible Assets Liabilities | ||
Finite lived intangible asset/liability, useful life | 88 years | |
In-place lease | ||
Finite-Lived Intangible Assets | ||
Finite-lived intangible assets, gross | $ 636,545 | 629,961 |
Less: accumulated amortization | (224,911) | (213,641) |
Finite-lived intangible assets, net | $ 411,634 | 416,320 |
In-place lease | Minimum | ||
Intangible Assets Liabilities | ||
Finite lived intangible asset/liability, useful life | 4 years | |
In-place lease | Maximum | ||
Intangible Assets Liabilities | ||
Finite lived intangible asset/liability, useful life | 53 years | |
Above-market rent | ||
Finite-Lived Intangible Assets | ||
Finite-lived intangible assets, gross | $ 99,702 | 98,162 |
Less: accumulated amortization | (33,353) | (31,533) |
Finite-lived intangible assets, net | $ 66,349 | 66,629 |
Above-market rent | Minimum | ||
Intangible Assets Liabilities | ||
Finite lived intangible asset/liability, useful life | 7 years | |
Above-market rent | Maximum | ||
Intangible Assets Liabilities | ||
Finite lived intangible asset/liability, useful life | 40 years | |
Below-market ground leases and other | ||
Finite-Lived Intangible Assets | ||
Finite-lived intangible assets, gross | $ 12,994 | 12,842 |
Less: accumulated amortization | (792) | (726) |
Finite-lived intangible assets, net | $ 12,202 | $ 12,116 |
Below-market ground leases and other | Minimum | ||
Intangible Assets Liabilities | ||
Finite lived intangible asset/liability, useful life | 55 years | |
Below-market ground leases and other | Maximum | ||
Intangible Assets Liabilities | ||
Finite lived intangible asset/liability, useful life | 94 years |
Fair Value Measurements - Narra
Fair Value Measurements - Narratives (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018USD ($)tranch | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($)tranch | |
Fair Value, Balance Sheet Grouping | |||
Deferred financing cost | $ 7,489 | ||
Nonrecurring | CMBS | Level 3 | |||
Fair Value, Balance Sheet Grouping | |||
Impairment charges | 5,400 | ||
Fair value measurements | 1,100 | ||
Nonrecurring | Real estate | Agrokor | Level 3 | |||
Fair Value, Balance Sheet Grouping | |||
Impairment charges | $ 4,500 | ||
Nonrecurring | Real estate | Industrial facility in Waldaschaff, Germany | Level 3 | |||
Fair Value, Balance Sheet Grouping | |||
Fair value measurements | $ 4,700 | ||
Fair value inputs, discount rate | 9.75% | ||
Nonrecurring | Real estate | Industrial facility in Waldaschaff, Germany | Noncontrolling Interests | Level 3 | |||
Fair Value, Balance Sheet Grouping | |||
Impairment charges | $ 1,500 | ||
Carrying Value | Level 3 | |||
Fair Value, Balance Sheet Grouping | |||
Deferred financing cost | $ 7,400 | $ 7,900 | |
Number of tranches | tranch | 2 | 2 |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying Value and Fair Value Measurements (Details) - Level 3 - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Carrying Value | ||
Fair Value, Balance Sheet Grouping | ||
Mortgage debt, net | $ 1,853,541 | $ 1,849,459 |
Loans receivable | 102,359 | 110,500 |
CMBS | 1,144 | 6,548 |
Fair Value | ||
Fair Value, Balance Sheet Grouping | ||
Mortgage debt, net | 1,856,737 | 1,864,043 |
Loans receivable | 110,500 | 110,500 |
CMBS | $ 1,144 | $ 7,237 |
Risk Management and Use of De56
Risk Management and Use of Derivative Financial Instruments - Narratives (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Derivative Instrument Detail | ||
Derivative asset collateral offset | $ 0 | $ 0 |
Derivative, remaining maturity | 77 months | |
Collateral received | $ 0 | |
Total credit exposure on derivatives | 8,500,000 | |
Derivatives, net liability position | 4,600,000 | 5,600,000 |
Aggregate termination value for immediate settlement | 4,700,000 | $ 5,700,000 |
Single Counterparty | ||
Derivative Instrument Detail | ||
Total credit exposure on derivatives | 4,200,000 | |
Interest expense | ||
Derivative Instrument Detail | ||
Estimated amount reclassified from OCI to income, derivatives | 800,000 | |
Other gains and (losses) | ||
Derivative Instrument Detail | ||
Estimated amount reclassified from OCI to income, derivatives | $ 4,500,000 |
Risk Management and Use of De57
Risk Management and Use of Derivative Financial Instruments - Information Regarding Derivative Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Derivatives, Fair Value | ||
Derivative assets, fair value, net | $ 13,185 | $ 16,798 |
Derivative liability, fair value, net | (4,493) | (5,411) |
Derivatives Designated as Hedging Instruments | Other assets, net | Foreign currency forward contracts | ||
Derivatives, Fair Value | ||
Derivative assets, fair value, net | 9,896 | 14,382 |
Derivatives Designated as Hedging Instruments | Other assets, net | Interest rate swaps | ||
Derivatives, Fair Value | ||
Derivative assets, fair value, net | 856 | 314 |
Derivatives Designated as Hedging Instruments | Other assets, net | Interest rate caps | ||
Derivatives, Fair Value | ||
Derivative assets, fair value, net | 180 | 201 |
Derivatives Designated as Hedging Instruments | Accounts payable, accrued expenses and other liabilities | Interest rate swaps | ||
Derivatives, Fair Value | ||
Derivative liability, fair value, net | (2,363) | (3,852) |
Derivatives Designated as Hedging Instruments | Accounts payable, accrued expenses and other liabilities | Foreign currency collars | ||
Derivatives, Fair Value | ||
Derivative liability, fair value, net | (2,005) | (1,431) |
Derivatives Not Designated as Hedging Instruments | Other assets, net | Foreign currency forward contracts | ||
Derivatives, Fair Value | ||
Derivative assets, fair value, net | 306 | 86 |
Derivatives Not Designated as Hedging Instruments | Other assets, net | Stock warrants | ||
Derivatives, Fair Value | ||
Derivative assets, fair value, net | 1,947 | 1,815 |
Derivatives Not Designated as Hedging Instruments | Accounts payable, accrued expenses and other liabilities | Interest rate swaps | ||
Derivatives, Fair Value | ||
Derivative liability, fair value, net | $ (125) | $ (128) |
Risk Management and Use of De58
Risk Management and Use of Derivative Financial Instruments - Derivative Gain Loss Recognized in OCI (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive Income (Effective Portion) | ||
Derivatives, income (loss) recognized in OCI, effective portion, net | $ (2,815) | $ (3,364) |
Equity Method Investments | ||
Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive Income (Effective Portion) | ||
Derivatives, income (loss) recognized in OCI, effective portion, net | 500 | 500 |
Derivatives in Cash Flow Hedging Relationships | Foreign currency forward contracts | ||
Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive Income (Effective Portion) | ||
Derivatives, income (loss) recognized in OCI, effective portion, net | (4,224) | (3,749) |
Derivatives in Cash Flow Hedging Relationships | Interest rate swaps | ||
Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive Income (Effective Portion) | ||
Derivatives, income (loss) recognized in OCI, effective portion, net | 2,022 | 993 |
Derivatives in Cash Flow Hedging Relationships | Foreign currency collars | ||
Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive Income (Effective Portion) | ||
Derivatives, income (loss) recognized in OCI, effective portion, net | (556) | (57) |
Derivatives in Cash Flow Hedging Relationships | Interest rate caps | ||
Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive Income (Effective Portion) | ||
Derivatives, income (loss) recognized in OCI, effective portion, net | (23) | (258) |
Derivatives in Net Investment Hedging Relationships | Foreign currency forward contracts | ||
Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive Income (Effective Portion) | ||
Derivatives, income (loss) recognized in OCI, effective portion, net | (22) | (291) |
Derivatives in Net Investment Hedging Relationships | Foreign currency collars | ||
Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive Income (Effective Portion) | ||
Derivatives, income (loss) recognized in OCI, effective portion, net | $ (12) | $ (2) |
Risk Management and Use of De59
Risk Management and Use of Derivative Financial Instruments - Derivative Gain Loss Reclassified From OCI (Details) - Cash Flow Hedging - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Amount of Gain (Loss) Reclassified from Other Comprehensive Income into Income (Effective Portion) | ||
Derivatives, income (loss) reclassified from AOCI to Income, effective portion, net | $ 1,056 | $ 2,152 |
Foreign currency forward contracts | Other gains and (losses) | ||
Amount of Gain (Loss) Reclassified from Other Comprehensive Income into Income (Effective Portion) | ||
Derivatives, income (loss) reclassified from AOCI to Income, effective portion, net | 1,492 | 2,858 |
Interest rate swaps | Interest expense | ||
Amount of Gain (Loss) Reclassified from Other Comprehensive Income into Income (Effective Portion) | ||
Derivatives, income (loss) reclassified from AOCI to Income, effective portion, net | (431) | (706) |
Interest rate caps | Interest expense | ||
Amount of Gain (Loss) Reclassified from Other Comprehensive Income into Income (Effective Portion) | ||
Derivatives, income (loss) reclassified from AOCI to Income, effective portion, net | $ (5) | $ 0 |
Risk Management and Use of De60
Risk Management and Use of Derivative Financial Instruments - Derivative Gain Loss Recognized in Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Amount of Gain (Loss) Recognized in Income on Derivatives | ||
Amount of gain (loss) recognized income on derivatives | $ 230 | $ (149) |
Derivatives Not Designated as Hedging Instruments | Stock warrants | Other gains and (losses) | ||
Amount of Gain (Loss) Recognized in Income on Derivatives | ||
Amount of gain (loss) recognized income on derivatives | 132 | (198) |
Derivatives Not Designated as Hedging Instruments | Foreign currency forward contracts | Other gains and (losses) | ||
Amount of Gain (Loss) Recognized in Income on Derivatives | ||
Amount of gain (loss) recognized income on derivatives | 66 | 33 |
Derivatives Not Designated as Hedging Instruments | Interest rate swaps | Interest expense | ||
Amount of Gain (Loss) Recognized in Income on Derivatives | ||
Amount of gain (loss) recognized income on derivatives | (8) | 18 |
Derivatives Not Designated as Hedging Instruments | Swaption | Other gains and (losses) | ||
Amount of Gain (Loss) Recognized in Income on Derivatives | ||
Amount of gain (loss) recognized income on derivatives | 0 | (48) |
Derivatives in Cash Flow Hedging Relationships | Interest rate swaps | Interest expense | ||
Amount of Gain (Loss) Recognized in Income on Derivatives | ||
Amount of gain (loss) recognized income on derivatives | 45 | 46 |
Derivatives in Cash Flow Hedging Relationships | Foreign currency collars | Other gains and (losses) | ||
Amount of Gain (Loss) Recognized in Income on Derivatives | ||
Amount of gain (loss) recognized income on derivatives | $ (5) | $ 0 |
Risk Management and Use of De61
Risk Management and Use of Derivative Financial Instruments - Interest Rate Swap and Swaptions Summary (Details) € in Thousands, £ in Thousands, $ in Thousands | Mar. 31, 2018EUR (€)instrument | Mar. 31, 2018USD ($)instrument | Mar. 31, 2018GBP (£)instrument |
Derivative | |||
Fair value | $ (1,452) | ||
Derivatives Designated as Hedging Instruments | Interest rate swaps | USD | |||
Derivative | |||
Number of Instruments | instrument | 12 | 12 | 12 |
Notional Amount | $ 123,075 | ||
Fair value | $ (1,167) | ||
Derivatives Designated as Hedging Instruments | Interest rate swaps | Euro | |||
Derivative | |||
Number of Instruments | instrument | 4 | 4 | 4 |
Notional Amount | € | € 60,528 | ||
Fair value | $ (340) | ||
Derivatives Designated as Hedging Instruments | Interest rate cap | USD | |||
Derivative | |||
Number of Instruments | instrument | 1 | 1 | 1 |
Notional Amount | $ 75,000 | ||
Fair value | $ 43 | ||
Derivatives Designated as Hedging Instruments | Interest rate cap | Euro | |||
Derivative | |||
Number of Instruments | instrument | 4 | 4 | 4 |
Notional Amount | € | € 132,692 | ||
Fair value | $ 122 | ||
Derivatives Designated as Hedging Instruments | Interest rate cap | GBP | |||
Derivative | |||
Number of Instruments | instrument | 1 | 1 | 1 |
Notional Amount | £ | £ 6,394 | ||
Fair value | $ 15 | ||
Not Designated as Hedging Instrument | Interest rate swap | Euro | |||
Derivative | |||
Number of Instruments | instrument | 1 | 1 | 1 |
Notional Amount | € | € 4,814 | ||
Fair value | $ (125) |
Risk Management and Use of De62
Risk Management and Use of Derivative Financial Instruments - Foreign Currency Derivatives Details (Details) € in Thousands, kr in Thousands, $ in Thousands | Mar. 31, 2018EUR (€)instrument | Mar. 31, 2018USD ($)instrument | Mar. 31, 2018NOK (kr)instrument |
Derivative Instrument Detail | |||
Fair value, foreign currency derivatives | $ 8,197 | ||
Derivatives Designated as Hedging Instruments | Cash Flow Hedging | Foreign currency forward contracts | Euro | |||
Derivative Instrument Detail | |||
Number of Instruments | instrument | 31 | 31 | 31 |
Notional Amount | € | € 75,280 | ||
Fair value, foreign currency derivatives | $ 9,896 | ||
Derivatives Designated as Hedging Instruments | Cash Flow Hedging | Foreign currency collars | Euro | |||
Derivative Instrument Detail | |||
Number of Instruments | instrument | 2 | 2 | 2 |
Notional Amount | € | € 15,100 | ||
Fair value, foreign currency derivatives | $ (1,947) | ||
Derivatives Designated as Hedging Instruments | Cash Flow Hedging | Foreign currency collars | NOK | |||
Derivative Instrument Detail | |||
Number of Instruments | instrument | 3 | 3 | 3 |
Notional Amount | kr | kr 2,000 | ||
Fair value, foreign currency derivatives | $ (26) | ||
Derivatives Designated as Hedging Instruments | Designated as Net Investment Hedging Instruments | Foreign currency forward contracts | NOK | |||
Derivative Instrument Detail | |||
Number of Instruments | instrument | 2 | 2 | 2 |
Notional Amount | kr | kr 4,329 | ||
Fair value, foreign currency derivatives | $ 35 | ||
Derivatives Designated as Hedging Instruments | Designated as Net Investment Hedging Instruments | Foreign currency collars | NOK | |||
Derivative Instrument Detail | |||
Number of Instruments | instrument | 1 | 1 | 1 |
Notional Amount | kr | kr 2,500 | ||
Fair value, foreign currency derivatives | $ (32) | ||
Not Designated as Hedging Instrument | Foreign currency forward contracts | Euro | |||
Derivative Instrument Detail | |||
Number of Instruments | instrument | 7 | 7 | 7 |
Notional Amount | € | € 2,105 | ||
Fair value, foreign currency derivatives | $ 224 | ||
Not Designated as Hedging Instrument | Foreign currency forward contracts | NOK | |||
Derivative Instrument Detail | |||
Number of Instruments | instrument | 8 | 8 | 8 |
Notional Amount | kr | kr 5,802 | ||
Fair value, foreign currency derivatives | $ 47 |
Debt - Narratives (Details)
Debt - Narratives (Details) - USD ($) | Jan. 22, 2018 | Aug. 26, 2015 | Mar. 31, 2018 | Mar. 31, 2017 | Sep. 30, 2016 | Dec. 31, 2017 |
Additional Debt Disclosures | ||||||
Repayments of mortgage debt | $ 6,100,000 | $ 12,925,000 | $ 243,403,000 | |||
Line of credit, maximum borrowing capacity | $ 250,000,000 | |||||
Commitment fee threshold | 50.00% | |||||
Credit facility fees | $ 1,900,000 | |||||
Debt and capital lease obligation | 92,323,000 | $ 101,931,000 | ||||
Proceeds from senior credit facility | 8,052,000 | 33,878,000 | ||||
Repayments of credit facility | 19,840,000 | 0 | ||||
Restriction payment threshold | 100,000,000 | |||||
Debt scheduled to mature in 2018 | 151,430,000 | |||||
Effects of foreign currency translation on balance sheet item | 26,935,000 | $ 8,609,000 | ||||
Non-recourse debt | ||||||
Additional Debt Disclosures | ||||||
Effects of foreign currency translation on balance sheet item | 18,200,000 | |||||
Revolver | ||||||
Additional Debt Disclosures | ||||||
Line of credit, maximum borrowing capacity | $ 200,000,000 | |||||
Debt maturity date | Aug. 26, 2018 | |||||
Debt scheduled to mature in 2018 | 42,400,000 | |||||
Revolver | Accordion | ||||||
Additional Debt Disclosures | ||||||
Line of credit, maximum borrowing capacity | $ 250,000,000 | |||||
Term Loan | ||||||
Additional Debt Disclosures | ||||||
Line of credit, maximum borrowing capacity | $ 50,000,000 | |||||
Debt maturity date | Aug. 26, 2018 | |||||
Debt and capital lease obligation | 49,948,000 | $ 50,000,000 | $ 49,915,000 | |||
Debt scheduled to mature in 2018 | $ 50,000,000 | |||||
Term Loan | LIBOR | ||||||
Additional Debt Disclosures | ||||||
Basis spread | 1.45% | 1.45% | ||||
Minimum | ||||||
Additional Debt Disclosures | ||||||
Debt maturity date | Dec. 31, 2017 | |||||
Credit facility fee, rate | 0.15% | |||||
Minimum | Revolver | Euro Currency Rate | ||||||
Additional Debt Disclosures | ||||||
Interest rate on debt | 1.50% | |||||
Minimum | Revolver | Base Rate | ||||||
Additional Debt Disclosures | ||||||
Interest rate on debt | 0.50% | |||||
Minimum | Term Loan | Euro Currency Rate | ||||||
Additional Debt Disclosures | ||||||
Interest rate on debt | 1.45% | |||||
Minimum | Term Loan | Base Rate | ||||||
Additional Debt Disclosures | ||||||
Interest rate on debt | 0.45% | |||||
Maximum | ||||||
Additional Debt Disclosures | ||||||
Debt maturity date | Dec. 31, 2031 | |||||
Credit facility fee, rate | 0.30% | |||||
Maximum | Revolver | Euro Currency Rate | ||||||
Additional Debt Disclosures | ||||||
Interest rate on debt | 2.25% | |||||
Maximum | Revolver | Base Rate | ||||||
Additional Debt Disclosures | ||||||
Interest rate on debt | 1.25% | |||||
Maximum | Term Loan | Euro Currency Rate | ||||||
Additional Debt Disclosures | ||||||
Interest rate on debt | 2.20% | |||||
Maximum | Term Loan | Base Rate | ||||||
Additional Debt Disclosures | ||||||
Interest rate on debt | 1.20% | |||||
Fixed interest rate | Minimum | ||||||
Additional Debt Disclosures | ||||||
Interest rate on mortgage loan | 1.90% | |||||
Fixed interest rate | Maximum | ||||||
Additional Debt Disclosures | ||||||
Interest rate on mortgage loan | 7.40% | |||||
Variable interest rate | Minimum | ||||||
Additional Debt Disclosures | ||||||
Interest rate on mortgage loan | 1.30% | |||||
Variable interest rate | Maximum | ||||||
Additional Debt Disclosures | ||||||
Interest rate on mortgage loan | 6.00% |
Debt - Summary of Senior Credit
Debt - Summary of Senior Credit Facility (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2018 | Sep. 30, 2016 | Dec. 31, 2017 | |
Debt Instrument | |||
Debt and capital lease obligation | $ 92,323 | $ 101,931 | |
Term Loan | |||
Debt Instrument | |||
Debt and capital lease obligation | $ 49,948 | $ 50,000 | 49,915 |
Term Loan | LIBOR | |||
Debt Instrument | |||
Basis spread | 1.45% | 1.45% | |
Revolver | Yen | |||
Debt Instrument | |||
Debt and capital lease obligation | $ 22,002 | 22,047 | |
Interest rate on debt | 1.50% | ||
Revolver | Euro | |||
Debt Instrument | |||
Debt and capital lease obligation | $ 20,373 | $ 29,969 | |
Interest rate on debt | 1.50% |
Debt - Schedule of Debt Princip
Debt - Schedule of Debt Principal Payments (Details) $ in Thousands | Mar. 31, 2018USD ($) |
Long-term Debt, Fiscal Year Maturity | |
2018 (remainder) | $ 151,430 |
2,019 | 75,202 |
2,020 | 430,280 |
2,021 | 457,042 |
2,022 | 353,229 |
Thereafter through 2031 | 491,365 |
Total principal payments | 1,958,548 |
Deferred financing cost | (7,489) |
Unamortized discount, net | (5,195) |
Total | $ 1,945,864 |
Equity - Narratives (Details)
Equity - Narratives (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Distributions Per Share | |||
Distributions declared per share (usd per share) | $ 0.1625 | $ 0.1625 | |
Distributions payable | $ 57,121 | $ 56,859 |
Equity - Reclassifications Out
Equity - Reclassifications Out of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) | ||
Beginning equity balance, value | $ 2,343,257 | $ 2,315,004 |
Amounts reclassified from accumulated other comprehensive loss to: | ||
Interest expense | 20,550 | 23,390 |
Total other comprehensive loss | 24,603 | 6,086 |
Ending equity balance, value | 2,362,297 | 2,322,607 |
Accumulated Other Comprehensive Loss | ||
Accumulated Other Comprehensive Income (Loss) | ||
Beginning equity balance, value | (78,420) | (156,676) |
Amounts reclassified from accumulated other comprehensive loss to: | ||
Ending equity balance, value | (54,364) | (150,849) |
Gains and Losses on Derivative Instruments | ||
Accumulated Other Comprehensive Income (Loss) | ||
Beginning equity balance, value | 9,087 | 29,549 |
Amounts reclassified from accumulated other comprehensive loss to: | ||
Ending equity balance, value | 6,755 | 26,996 |
Gains and Losses on Marketable Securities | ||
Accumulated Other Comprehensive Income (Loss) | ||
Beginning equity balance, value | (15) | (48) |
Amounts reclassified from accumulated other comprehensive loss to: | ||
Ending equity balance, value | (15) | (18) |
Foreign Currency Translation Adjustments | ||
Accumulated Other Comprehensive Income (Loss) | ||
Beginning equity balance, value | (87,492) | (186,177) |
Amounts reclassified from accumulated other comprehensive loss to: | ||
Ending equity balance, value | (61,104) | (177,827) |
AOCI Including Portion Attributable to Noncontrolling Interest | ||
Accumulated Other Comprehensive Income (Loss) | ||
Other comprehensive loss before reclassifications | 25,659 | 8,238 |
Amounts reclassified from accumulated other comprehensive loss to: | ||
Total | (1,056) | (2,152) |
Total other comprehensive loss | 24,603 | 6,086 |
AOCI Including Portion Attributable to Noncontrolling Interest | Reclassification out of Accumulated Other Comprehensive Income | ||
Amounts reclassified from accumulated other comprehensive loss to: | ||
Interest expense | 436 | 706 |
Other income and (expenses) | (1,492) | (2,858) |
Gains and Losses on Derivative Instruments | ||
Accumulated Other Comprehensive Income (Loss) | ||
Other comprehensive loss before reclassifications | (1,276) | (401) |
Amounts reclassified from accumulated other comprehensive loss to: | ||
Total | (1,056) | (2,152) |
Total other comprehensive loss | (2,332) | (2,553) |
Gains and Losses on Derivative Instruments | Reclassification out of Accumulated Other Comprehensive Income | ||
Amounts reclassified from accumulated other comprehensive loss to: | ||
Interest expense | 436 | 706 |
Other income and (expenses) | (1,492) | (2,858) |
Gains and Losses on Marketable Investments | ||
Accumulated Other Comprehensive Income (Loss) | ||
Other comprehensive loss before reclassifications | 0 | 30 |
Amounts reclassified from accumulated other comprehensive loss to: | ||
Total | 0 | 0 |
Total other comprehensive loss | 0 | 30 |
Gains and Losses on Marketable Investments | Reclassification out of Accumulated Other Comprehensive Income | ||
Amounts reclassified from accumulated other comprehensive loss to: | ||
Interest expense | 0 | 0 |
Other income and (expenses) | 0 | 0 |
Foreign Currency Translation Adjustments | ||
Accumulated Other Comprehensive Income (Loss) | ||
Other comprehensive loss before reclassifications | 26,935 | 8,609 |
Amounts reclassified from accumulated other comprehensive loss to: | ||
Total | 0 | 0 |
Total other comprehensive loss | 26,935 | 8,609 |
Foreign Currency Translation Adjustments | Reclassification out of Accumulated Other Comprehensive Income | ||
Amounts reclassified from accumulated other comprehensive loss to: | ||
Interest expense | 0 | 0 |
Other income and (expenses) | 0 | 0 |
Noncontrolling Interests | ||
Amounts reclassified from accumulated other comprehensive loss to: | ||
Net current-period Other comprehensive income attributable to noncontrolling interests | (547) | (259) |
Gains and Losses on Derivative Instruments | ||
Amounts reclassified from accumulated other comprehensive loss to: | ||
Net current-period Other comprehensive income attributable to noncontrolling interests | 0 | 0 |
Gains and Losses on Marketable Securities | ||
Amounts reclassified from accumulated other comprehensive loss to: | ||
Net current-period Other comprehensive income attributable to noncontrolling interests | 0 | 0 |
Foreign Currency Translation Adjustments | ||
Amounts reclassified from accumulated other comprehensive loss to: | ||
Net current-period Other comprehensive income attributable to noncontrolling interests | $ (547) | $ (259) |
Property Dispositions - Narrati
Property Dispositions - Narratives (Details) - USD ($) $ in Thousands | Mar. 17, 2017 | Mar. 13, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||||
Financing receivable | $ 613,275 | $ 619,728 | |||||
Adjustment to stockholders equity | 2,362,297 | $ 2,322,607 | $ 2,343,257 | $ 2,315,004 | |||
ASU 2017-05 | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||||
Adjustment to stockholders equity | $ 6,000 | ||||||
Assets held for sale | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||||
Proceeds from sale of real estate | $ 14,100 | ||||||
Interest income | $ 1,600 | $ 0 | (1,088) | ||||
Assets held for sale | KBR | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||||
Accelerated amortization of intangible liabilities | 3,300 | ||||||
Assets held for sale | KBR | Below-market rent | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||||
Accelerated amortization of intangible liabilities | 15,700 | ||||||
I Drive Property | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||||
Financing receivable | $ 34,000 | ||||||
Deferred gain on the sale of property | 2,100 | ||||||
I Drive Property | Fair Value | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||||
Debt instrument fair value | 35,000 | ||||||
I Drive Property | Carrying Value | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||||
Debt instrument fair value | 18,600 | ||||||
I Drive Property | Developer | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||||
Investment purchase price | 117,500 | ||||||
Non recourse mortgage loan assumed | 60,000 | ||||||
I Drive Property | Assets held for sale | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||||
Proceeds from sale of real estate | $ 23,500 | ||||||
I Drive Wheel | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||||
Deferred gain on the sale of property | $ 16,400 |
Property Dispositions - Results
Property Dispositions - Results of Operations (Details) - Assets held for sale - USD ($) $ in Thousands | Mar. 13, 2017 | Mar. 31, 2018 | Mar. 31, 2017 |
Disposal Group, Including Discontinued Operation, Income Statement Disclosures | |||
Revenues | $ 0 | $ 7,006 | |
Operating expenses | 0 | (3,049) | |
Interest expense | $ 1,600 | 0 | (1,088) |
Equity in losses of equity method investments in real estate | 0 | (688) | |
Loss on extinguishment of debt | 0 | (1,320) | |
Provision for income taxes | 0 | (10) | |
Gain on sale of real estate, net of tax | 0 | 1,634 | |
Income before gain on sale of real estate, net of tax | $ 0 | $ 2,485 |
Segment Reporting - Narratives
Segment Reporting - Narratives (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018USD ($)segment | Mar. 31, 2017USD ($) | |
Segment Reporting Information | ||
Number of reportable segments | segment | 2 | |
Straight line rent adjustment | $ 2,800 | $ 3,500 |
Revenues | 113,282 | 123,005 |
Operating Segments | Net Lease | ||
Segment Reporting Information | ||
Bad debt expense | 4,400 | 1,600 |
Revenues | 96,992 | 112,523 |
All Other | ||
Segment Reporting Information | ||
Revenues | 7,245 | 1,740 |
All Other | ASU 2017-05 | ||
Segment Reporting Information | ||
Revenues | 2,200 | |
CMBS | Level 3 | Nonrecurring | ||
Segment Reporting Information | ||
Impairment on equity method investment | $ 5,400 | |
Agrokor | Real estate | Level 3 | Nonrecurring | ||
Segment Reporting Information | ||
Impairment on equity method investment | 4,500 | |
KBR | Assets held for sale | ||
Segment Reporting Information | ||
Accelerated amortization of intangible liabilities | $ 3,300 |
Segment Reporting - Income Stat
Segment Reporting - Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting Information, Profit (Loss) | ||
Revenues | $ 113,282 | $ 123,005 |
Operating expenses | (67,684) | (59,615) |
Interest expense | (20,550) | (23,390) |
Other income and expenses, excluding interest expense | 8,686 | 6,028 |
Benefit from (provision for) income taxes | 1,403 | (621) |
Gain on sale of real estate, net of tax | 24 | 1,739 |
Net income attributable to noncontrolling interests | (8,424) | (9,135) |
Net income attributable to CPA:17 – Global | 26,737 | 38,011 |
Operating Segments | Net Lease | ||
Segment Reporting Information, Profit (Loss) | ||
Revenues | 96,992 | 112,523 |
Operating expenses | (41,957) | (41,308) |
Interest expense | (17,692) | (20,651) |
Other income and expenses, excluding interest expense | 4,559 | 3,459 |
Benefit from (provision for) income taxes | (404) | 614 |
Gain on sale of real estate, net of tax | 24 | 1,739 |
Net income attributable to noncontrolling interests | (3,115) | (2,325) |
Net income attributable to CPA:17 – Global | 38,407 | 54,051 |
Operating Segments | Self Storage | ||
Segment Reporting Information, Profit (Loss) | ||
Revenues | 9,045 | 8,742 |
Operating expenses | (5,448) | (7,199) |
Interest expense | (1,911) | (2,003) |
Other income and expenses, excluding interest expense | 0 | (2) |
Benefit from (provision for) income taxes | (48) | (32) |
Net income attributable to CPA:17 – Global | 1,638 | (494) |
All Other | ||
Segment Reporting Information, Profit (Loss) | ||
Revenues | 7,245 | 1,740 |
Operating expenses | (9,520) | (38) |
Other income and expenses, excluding interest expense | 571 | (2,408) |
Benefit from (provision for) income taxes | 2,078 | (650) |
Net income attributable to noncontrolling interests | 861 | 0 |
Net income attributable to CPA:17 – Global | 1,235 | (1,356) |
Corporate | ||
Segment Reporting Information, Profit (Loss) | ||
Net income attributable to noncontrolling interests | (6,170) | (6,810) |
Unallocated Corporate Overhead | $ (8,373) | $ (7,380) |
Segment Reporting - Segment Ass
Segment Reporting - Segment Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Segment Reporting Information, Additional Information | ||
Assets | $ 4,593,124 | $ 4,587,470 |
Operating Segments | Net Lease | ||
Segment Reporting Information, Additional Information | ||
Assets | 4,017,437 | 3,980,445 |
Operating Segments | Self Storage | ||
Segment Reporting Information, Additional Information | ||
Assets | 240,648 | 241,438 |
All Other | ||
Segment Reporting Information, Additional Information | ||
Assets | 264,629 | 277,702 |
Corporate | ||
Segment Reporting Information, Additional Information | ||
Assets | $ 70,410 | $ 87,885 |