Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 04, 2013 | |
Document and Entity Information [Abstract] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Entity Registrant Name | 'KBS Real Estate Investment Trust II, Inc. | ' |
Entity Central Index Key | '0001411059 | ' |
Entity Filer Category | 'Non-accelerated Filer | ' |
Current Fiscal Year end | '--12-31 | ' |
Entity Common Stock, Shares Outstanding | ' | 193,481,985 |
CONSOLIDATED_BALANCE_SHEETS_Un
CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Real estate: | ' | ' | ||
Land | $336,357 | $265,197 | ||
Buildings and improvements | 2,149,881 | 1,992,264 | ||
Tenant origination and absorption costs | 308,128 | 304,732 | ||
Total real estate, cost | 2,794,366 | 2,562,193 | ||
Less accumulated depreciation and amortization | -339,112 | -270,538 | ||
Total real estate, net | 2,455,254 | 2,291,655 | ||
Real estate loans receivable, net | 356,677 | [1] | 348,846 | [1] |
Total real estate and real estate-related investments, net | 2,811,931 | 2,640,501 | ||
Cash and cash equivalents | 51,165 | 48,390 | ||
Rents and other receivables, net | 70,968 | 57,349 | ||
Above-market leases, net | 53,982 | 49,215 | ||
Deferred financing costs, prepaid expenses and other assets | 38,440 | 26,495 | ||
Total assets | 3,026,486 | 2,821,950 | ||
Liabilities and stockholders’ equity | ' | ' | ||
Notes payable | 1,582,924 | 1,334,514 | ||
Accounts payable and accrued liabilities | 34,722 | 20,416 | ||
Due to affiliates | 0 | 168 | ||
Distributions payable | 10,310 | 10,521 | ||
Below-market leases, net | 24,821 | 26,519 | ||
Other liabilities | 41,757 | 34,355 | ||
Total liabilities | 1,694,534 | 1,426,493 | ||
Commitments and contingencies (Note 11) | ' | ' | ||
Redeemable common stock | 80,651 | 66,426 | ||
Stockholders’ equity: | ' | ' | ||
Preferred stock, $.01 par value; 10,000,000 shares authorized, no shares issued and outstanding | 0 | 0 | ||
Common stock, $.01 par value; 1,000,000,000 shares authorized, 192,704,717 and 190,274,167 shares issued and outstanding as of September 30, 2013 and December 31, 2012, respectively | 1,927 | 1,903 | ||
Additional paid-in capital | 1,633,951 | 1,633,994 | ||
Cumulative distributions in excess of net income | -372,017 | -289,737 | ||
Accumulated other comprehensive loss | -12,560 | -17,129 | ||
Total stockholders’ equity | 1,251,301 | 1,329,031 | ||
Total liabilities and stockholders’ equity | $3,026,486 | $2,821,950 | ||
[1] | Book value represents outstanding principal balance, adjusted for unamortized acquisition discounts, origination fees and direct origination and acquisition costs. |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (Unaudited) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Statement of Financial Position [Abstract] | ' | ' |
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 192,704,717 | 190,274,167 |
Common stock, shares outstanding | 192,704,717 | 190,274,167 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Revenues: | ' | ' | ' | ' |
Rental income | $65,446 | $62,406 | $192,989 | $186,904 |
Tenant reimbursements | 15,582 | 12,971 | 46,175 | 41,250 |
Interest income from real estate loans receivable | 8,586 | 8,331 | 25,258 | 28,743 |
Other operating income | 2,632 | 2,642 | 7,923 | 7,786 |
Total revenues | 92,246 | 86,350 | 272,345 | 264,683 |
Expenses: | ' | ' | ' | ' |
Operating, maintenance, and management | 16,967 | 16,639 | 49,616 | 47,266 |
Real estate taxes, property-related taxes, and insurance | 12,400 | 10,407 | 36,246 | 31,538 |
Asset management fees to affiliate | 6,079 | 5,556 | 17,563 | 16,708 |
Real estate acquisition fees to affiliates | 0 | 0 | 1,797 | 0 |
Real estate acquisition fees and expenses | 0 | 0 | 623 | 0 |
General and administrative expenses | 1,347 | 1,149 | 3,684 | 3,547 |
Depreciation and amortization | 30,746 | 30,949 | 90,769 | 94,411 |
Interest expense | 19,123 | 14,497 | 50,614 | 43,936 |
Total expenses | 86,662 | 79,197 | 250,912 | 237,406 |
Other income: | ' | ' | ' | ' |
Other interest income | 6 | 3 | 21 | 25 |
Gain on early payoff of real estate loan receivable | 0 | 0 | 0 | 14,884 |
Total other income | 6 | 3 | 21 | 14,909 |
Income from continuing operations | 5,590 | 7,156 | 21,454 | 42,186 |
Discontinued operations: | ' | ' | ' | ' |
Gain (loss) on sale of real estate, net | 0 | -5 | 0 | 2,470 |
Loss from discontinued operations | 0 | -2 | 0 | -59 |
Total income (loss) from discontinued operations | 0 | -7 | 0 | 2,411 |
Net income | $5,590 | $7,149 | $21,454 | $44,597 |
Basic and diluted income per common share: | ' | ' | ' | ' |
Continuing operations | $0.03 | $0.04 | $0.11 | $0.22 |
Discontinued operations | $0 | $0 | $0 | $0.01 |
Net income per common share | $0.03 | $0.04 | $0.11 | $0.23 |
Weighted-average number of common shares outstanding, basic and diluted | 192,788,656 | 190,073,044 | 192,093,022 | 190,932,462 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Statement of Other Comprehensive Income [Abstract] | ' | ' | ' | ' |
Net income | $5,590 | $7,149 | $21,454 | $44,597 |
Other comprehensive income (loss): | ' | ' | ' | ' |
Unrealized gains (losses) on derivative instruments | -583 | -288 | 3,956 | -1,906 |
Reclassification of realized losses on derivative instruments | 256 | 0 | 613 | 0 |
Total other comprehensive income (loss) | -327 | -288 | 4,569 | -1,906 |
Total comprehensive income | $5,263 | $6,861 | $26,023 | $42,691 |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) (USD $) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Cumulative Distributions and Net Income (Loss) [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
In Thousands, except Share data, unless otherwise specified | |||||
Balance, value at Apr. 21, 2008 | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' |
Redemptions of common stock, shares | ' | -16,489,448 | ' | ' | ' |
Redemptions of common stock, value | ($163,400) | ' | ' | ' | ' |
Balance, value at Sep. 30, 2013 | 1,251,301 | 1,927 | ' | ' | ' |
Balance, shares at Sep. 30, 2013 | 192,704,717 | 192,704,717 | ' | ' | ' |
Balance, value at Dec. 31, 2011 | 1,419,344 | 1,917 | 1,649,029 | -214,137 | -17,465 |
Balance, shares at Dec. 31, 2011 | ' | 191,725,167 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' |
Net income | 48,374 | ' | ' | 48,374 | ' |
Other comprehensive income | 336 | ' | ' | ' | 336 |
Issuance of common stock, shares | ' | 6,804,964 | ' | ' | ' |
Issuance of common stock, value | 66,460 | 67 | 66,393 | ' | ' |
Redemptions of common stock, shares | ' | -8,255,964 | ' | ' | ' |
Redemptions of common stock, value | -82,818 | -81 | -82,737 | ' | ' |
Transfers from/to redeemable common stock | 1,329 | ' | 1,329 | ' | ' |
Distributions declared | -123,974 | ' | ' | -123,974 | ' |
Other offering costs | -20 | ' | -20 | ' | ' |
Balance, value at Dec. 31, 2012 | 1,329,031 | 1,903 | 1,633,994 | -289,737 | -17,129 |
Balance, shares at Dec. 31, 2012 | 190,274,167 | 190,274,167 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' |
Net income | 21,454 | ' | ' | 21,454 | ' |
Other comprehensive income | 4,569 | ' | ' | ' | 4,569 |
Issuance of common stock, shares | ' | 5,552,841 | ' | ' | ' |
Issuance of common stock, value | 54,308 | 55 | 54,253 | ' | ' |
Redemptions of common stock, shares | ' | -3,122,291 | ' | ' | ' |
Redemptions of common stock, value | -31,757 | -31 | -31,726 | ' | ' |
Transfers from/to redeemable common stock | -22,551 | ' | -22,551 | ' | ' |
Distributions declared | -103,734 | ' | ' | -103,734 | ' |
Other offering costs | -19 | ' | -19 | ' | ' |
Balance, value at Sep. 30, 2013 | $1,251,301 | $1,927 | $1,633,951 | ($372,017) | ($12,560) |
Balance, shares at Sep. 30, 2013 | 192,704,717 | 192,704,717 | ' | ' | ' |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Cash Flows from Operating Activities: | ' | ' |
Net income | $21,454 | $44,597 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization, continuing operations | 90,769 | 94,411 |
Depreciation and amortization, discontinued operations | 0 | 212 |
Noncash interest income on real estate-related investments | -3,661 | -4,913 |
Deferred rent | -9,938 | -12,162 |
Bad debt expense (recovery) | 470 | -127 |
Amortization of above- and below-market leases, net | 1,615 | 531 |
Amortization of deferred financing costs | 2,440 | 2,444 |
Reclassification of realized losses on derivative instruments | 613 | 0 |
Change in fair value of contingent consideration | -31 | -87 |
Gain on early payoff of real estate loan receivable | 0 | -14,884 |
Gain on sale of real estate, net | 0 | -2,470 |
Changes in operating assets and liabilities: | ' | ' |
Rents and other receivables | -2,807 | -703 |
Prepaid expenses and other assets | -11,838 | -8,339 |
Accounts payable and accrued liabilities | 6,321 | 4,919 |
Other liabilities | 2,685 | -4,852 |
Net cash provided by operating activities | 98,092 | 98,577 |
Cash Flows from Investing Activities: | ' | ' |
Acquisitions of real estate | -238,952 | 0 |
Improvements to real estate | -15,473 | -15,498 |
Proceeds from sale of real estate | 0 | 12,216 |
Investments in real estate loans receivable | -5,490 | -54,415 |
Principal repayments on real estate loans receivable | 1,320 | 948 |
Proceeds from the early payoff of real estate loan receivable | 0 | 84,930 |
Net cash (used in) provided by investing activities | -258,595 | 28,181 |
Cash Flows from Financing Activities: | ' | ' |
Proceeds from notes payable | 456,000 | 0 |
Principal payments on notes payable | -207,590 | -58,756 |
Payments of deferred financing costs | -4,027 | -7 |
Return of contingent consideration related to acquisition of real estate | 308 | 809 |
Payments to redeem common stock | -31,757 | -70,139 |
Payments of other offering costs | -19 | -19 |
Distributions paid to common stockholders | -49,637 | -43,124 |
Net cash provided by (used in) financing activities | 163,278 | -171,236 |
Net increase (decrease) in cash and cash equivalents | 2,775 | -44,478 |
Cash and cash equivalents, beginning of period | 48,390 | 95,554 |
Cash and cash equivalents, end of period | 51,165 | 51,076 |
Supplemental Disclosure of Cash Flow Information: | ' | ' |
Interest paid | 44,245 | 41,847 |
Supplemental Disclosure of Noncash Transactions: | ' | ' |
Decrease in distributions payable | -211 | -454 |
Increase in redeemable common stock payable | 8,326 | 0 |
Increase in accrued improvements to real estate | 5,930 | 0 |
Increase in lease incentives payable | 1,344 | 0 |
Increase in lease commissions payable | 710 | 0 |
Distributions paid to common stockholders through common stock issuances pursuant to the dividend reinvestment plan | $54,308 | $50,126 |
ORGANIZATION
ORGANIZATION | 9 Months Ended |
Sep. 30, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
ORGANIZATION | ' |
ORGANIZATION | |
KBS Real Estate Investment Trust II, Inc. (the “Company”) was formed on July 12, 2007 as a Maryland corporation that elected to be taxed as a real estate investment trust (“REIT”) beginning with the taxable year ended December 31, 2008. The Company conducts its business primarily through KBS Limited Partnership II, a Delaware limited partnership formed on August 23, 2007 (the “Operating Partnership”), and its subsidiaries. The Company is the sole general partner of and directly owns a 0.1% partnership interest in the Operating Partnership. The Company’s wholly-owned subsidiary, KBS REIT Holdings II LLC, a Delaware limited liability company formed on August 23, 2007 (“KBS REIT Holdings II”), owns the remaining 99.9% partnership interest in the Operating Partnership and is its sole limited partner. | |
The Company owns a diverse portfolio of real estate and real estate-related investments. As of September 30, 2013, the Company owned 27 real estate properties (consisting of 20 office properties, one office/flex property, a portfolio of four industrial properties, an office campus consisting of eight office buildings and one individual industrial property), a leasehold interest in one industrial property and seven real estate loans receivable. | |
Subject to certain restrictions and limitations, the business of the Company is managed by KBS Capital Advisors LLC (the “Advisor”), an affiliate of the Company, pursuant to an advisory agreement the Company renewed with the Advisor on May 21, 2013 (the “Advisory Agreement”). The Advisory Agreement may be renewed for an unlimited number of one-year periods upon the mutual consent of the Advisor and the Company. Either party may terminate the Advisory Agreement upon 60 days’ written notice. The Advisor owns 20,000 shares of the Company’s common stock. | |
Upon commencing its initial public offering (the “Offering”), the Company retained KBS Capital Markets Group LLC (the “Dealer Manager”), an affiliate of the Advisor, to serve as the dealer manager of the Offering pursuant to a dealer manager agreement, as amended and restated on April 30, 2010 (the “Dealer Manager Agreement”). The Company ceased offering shares of common stock in its primary offering on December 31, 2010 and terminated its primary offering on March 22, 2011. The Company continues to offer shares of common stock under its dividend reinvestment plan. | |
The Company sold 182,681,633 shares of common stock in its primary offering for gross offering proceeds of $1.8 billion. As of September 30, 2013, the Company had sold 26,492,532 shares of common stock under its dividend reinvestment plan for gross offering proceeds of $255.0 million. Also as of September 30, 2013, the Company had redeemed 16,489,448 shares sold in the Offering for $163.4 million. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | |
Sep. 30, 2013 | ||
Accounting Policies [Abstract] | ' | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
There have been no significant changes to the Company’s accounting policies since it filed its audited financial statements in its Annual Report on Form 10-K for the year ended December 31, 2012, except for the addition of an accounting policy with respect to fees paid in connection with termination of a derivative. For further information about the Company’s accounting policies, refer to the Company’s consolidated financial statements and notes thereto for the year ended December 31, 2012 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”). | ||
Principles of Consolidation and Basis of Presentation | ||
The accompanying unaudited consolidated financial statements and condensed notes thereto have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair and consistent presentation of the results for such periods. Operating results for the three and nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. | ||
The consolidated financial statements include the accounts of the Company, KBS REIT Holdings II, the Operating Partnership, and their direct and indirect wholly owned subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation. | ||
Use of Estimates | ||
The preparation of the consolidated financial statements and condensed notes thereto in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. | ||
Derivative Instruments | ||
The Company enters into derivative instruments for risk management purposes to hedge its exposure to cash flow variability caused by changing interest rates on its variable rate notes payable. The Company records these derivative instruments at fair value on the accompanying consolidated balance sheets. Derivative instruments designated and qualifying as a hedge of the exposure to variability in expected future cash flows or other types of forecasted transactions are considered cash flow hedges. The change in fair value of the effective portion of a derivative instrument that is designated as a cash flow hedge is recorded as other comprehensive income (loss) on the accompanying consolidated statements of comprehensive income (loss) and consolidated statements of equity. The changes in fair value for derivative instruments that are not designated as a hedge or that do not meet the hedge accounting criteria are recorded as gain or loss on derivative instruments in the accompanying consolidated statements of operations. | ||
The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objectives and strategy for undertaking various hedge transactions. This process includes designating all derivative instruments that are part of a hedging relationship to specific forecasted transactions or recognized obligations on the consolidated balance sheets. The Company also assesses and documents, both at the hedging instrument’s inception and on a quarterly basis thereafter, whether the derivative instruments that are used in hedging transactions are highly effective in offsetting changes in cash flows associated with the respective hedged items. When the Company determines that a derivative instrument ceases to be highly effective as a hedge, or that it is probable the underlying forecasted transaction will not occur, the Company discontinues hedge accounting prospectively and reclassifies amounts recorded in accumulated other comprehensive income (loss) to earnings. | ||
The termination of a cash flow hedge prior to the maturity date may result in a net derivative instrument gain or loss that continues to be reported in accumulated other comprehensive income (loss) and is reclassified into earnings over the period of the original forecasted hedged transaction (i.e., LIBOR based debt service payments) unless it is probable that the original forecasted hedged transaction will not occur by the end of the originally specified time period (as documented at the inception of the hedging relationship) or within an additional two-month period of time thereafter. If it is probable that the hedged forecasted transaction will not occur either by the end of the originally specified time period or within the additional two-month period of time, that derivative instrument gain or loss reported in accumulated other comprehensive income (loss) shall be reclassified into earnings immediately. | ||
Redeemable Common Stock | ||
The Company has a share redemption program that may enable stockholders to sell their shares to the Company in limited circumstances. | ||
Pursuant to the share redemption program (and unless subsequently amended as described below), there are several limitations on the Company’s ability to redeem shares under the program: | ||
• | Unless the shares are being redeemed in connection with a stockholder’s death, “qualifying disability” or “determination of incompetence” (each as defined in the share redemption program), the Company may not redeem shares unless the stockholder has held the shares for one year, provided that if the Company is redeeming all of a stockholder’s shares, then there is no holding period requirement for shares purchased pursuant to the Company’s dividend reinvestment plan. | |
• | During any calendar year, the Company may redeem only the number of shares that the Company could purchase with the amount of net proceeds from the sale of shares under the Company’s dividend reinvestment plan during the prior calendar year, provided that the Company may not redeem more than $3.0 million of shares in the aggregate each month, excluding shares redeemed in connection with a stockholder’s death, qualifying disability or determination of incompetence. | |
• | During any calendar year, the Company may redeem no more than 5% of the weighted-average number of shares outstanding during the prior calendar year. | |
• | The Company has no obligation to redeem shares if the redemption would violate the restrictions on distributions under Maryland General Corporation Law, as amended from time to time, which prohibits distributions that would cause a corporation to fail to meet statutory tests of solvency. | |
On October 15, 2013, the Company’s board of directors approved a seventh amended and restated share redemption program (the “Amended Share Redemption Program”). Pursuant to the Amended Share Redemption Program, the board of directors may increase the funding available for the redemption of shares pursuant to the Amended Share Redemption Program upon ten business days’ notice to the Company’s stockholders. The Company may provide notice of a funding increase by including such information in a Current Report on Form 8-K or in its annual or quarterly reports, all publicly filed with the SEC, or by a separate mailing to its stockholders. There were no other material changes in the Amended Share Redemption Program. | ||
The Amended Share Redemption Program will be effective on November 16, 2013, and as a result will be effective for redemptions under the program made on the November 2013 redemption date, which is November 29, 2013. | ||
In conjunction with the approval of the Amended Share Redemption Program, on October 16, 2013, the Company’s board of directors approved additional funding for the redemption of shares pursuant to the Amended Share Redemption Program. Once the Company has redeemed $3.0 million of shares in the aggregate in any month (excluding shares redeemed in connection with a stockholder’s death, qualifying disability or determination of incompetence), then an additional $20.0 million of funds in the aggregate shall be available for the redemption of shares on redemption dates commencing with the November 29, 2013 redemption date (excluding shares redeemed in connection with a stockholder’s death, qualifying disability or determination of incompetence) until such $20.0 million of funds is exhausted; provided that, in no event may the Company redeem, during any calendar year, more shares than the number of shares that the Company could purchase with the amount of net proceeds from the sale of shares under the Company’s dividend reinvestment plan during the prior calendar year. The other limitations of the Amended Share Redemption Program are in full force and effect, including that during any calendar year, the Company may redeem no more than 5% of the weighted-average number of shares outstanding during the prior calendar year. | ||
For a stockholder’s shares to be eligible for redemption in a given month or to withdraw a redemption request, the Company must receive a written notice from the stockholder or from an authorized representative of the stockholder in good order and on a form approved by the Company at least five business days before the redemption date, or by November 21, 2013 in the case of the November 29, 2013 redemption date. | ||
Pursuant to the share redemption program, redemptions made in connection with a stockholder’s death, qualifying disability or determination of incompetence are made at a price per share equal to the most recent estimated value per share of the Company’s common stock as of the applicable redemption date, and the price at which the Company redeems all other shares eligible for redemption is as follows: | ||
• | For those shares held by the redeeming stockholder for at least one year, 92.5% of the Company’s most recent estimated value per share as of the applicable redemption date; | |
• | For those shares held by the redeeming stockholder for at least two years, 95.0% of the Company’s most recent estimated value per share as of the applicable redemption date; | |
• | For those shares held by the redeeming stockholder for at least three years, 97.5% of the Company’s most recent estimated value per share as of the applicable redemption date; and | |
• | For those shares held by the redeeming stockholder for at least four years, 100% of the Company’s most recent estimated value per share as of the applicable redemption date. | |
On December 18, 2012, the Company’s board of directors approved an estimated value per share of the Company’s common stock of $10.29 (unaudited), based on the estimated value of the Company’s assets less the estimated value of the Company’s liabilities, divided by the number of shares outstanding, all as of September 30, 2012. The change in the redemption price, which is calculated based on the most recent estimated value per share, was effective for the December 2012 redemption date, which was December 31, 2012. The Company currently expects to engage the Advisor and/or an independent valuation firm to update the Company’s estimated value per share in December 2013, but is not required to update the estimated value per share more frequently than every 18 months. | ||
If the Company cannot repurchase all shares presented for redemption in any month because of the limitations on redemptions set forth in the share redemption program, then the Company will honor redemption requests on a pro rata basis, except that if a pro rata redemption would result in a stockholder owning less than the minimum purchase requirement described in the Company’s currently effective, or the most recently effective, registration statement as such registration statement has been amended or supplemented, then the Company would redeem all of such stockholder’s shares. If the Company is redeeming all of a stockholder’s shares, there would be no holding period requirement for shares purchased pursuant to the Company’s dividend reinvestment plan. | ||
The Company’s board of directors may amend, suspend or terminate the share redemption program with 30 days’ notice to its stockholders. The Company may provide this notice by including such information in a Current Report on Form 8‑K or in the Company’s annual or quarterly reports, all publicly filed with the SEC, or by a separate mailing to its stockholders. | ||
The Company limits the dollar value of shares that may be redeemed under the share redemption program as described above. For the nine months ended September 30, 2013, the Company redeemed 3,122,291 shares sold in the Offering for $31.8 million, which represented all redemption requests received in good order and eligible for redemption through the September 2013 redemption date, except for 819,334 shares due to the limitations discussed above. The Company recorded $8.4 million of other liabilities on the accompanying consolidated balance sheet as of September 30, 2013 related to these unfulfilled redemption requests. Based on the amount of net proceeds raised from the sale of shares under the dividend reinvestment plan during 2012, the Company has $34.7 million available for redemptions during the remainder of 2013, subject to the limitations described above, including the monthly limitation for ordinary redemptions. | ||
Per Share Data | ||
Basic net income (loss) per share of common stock is calculated by dividing net income (loss) by the weighted-average number of shares of common stock issued and outstanding during such period. Diluted net income (loss) per share of common stock equals basic net income (loss) per share of common stock as there were no potentially dilutive securities outstanding during the three and nine months ended September 30, 2013 and 2012, respectively. | ||
Distributions declared per common share were $0.164 and $0.540 for the three and nine months ended September 30, 2013, respectively, and $0.164 and $0.486 for the three and nine months ended September 30, 2012, respectively. Distributions declared per common share assumes each share was issued and outstanding each day during the three and nine months ended September 30, 2013 and 2012, respectively. For each day that was a record date for distributions during the three and nine months ended September 30, 2013 and 2012, distributions were calculated at a rate of $0.00178082 per share per day. Each day during the period from January 1, 2013 through September 30, 2013 was a record date for distributions. Each day during the periods from January 1, 2012 through February 28, 2012 and March 1, 2012 through September 30, 2012 was a record date for distributions. Additionally, the Company’s board of directors declared a distribution in the amount of $0.05416667 per share of common stock to stockholders of record as of the close of business on February 4, 2013. | ||
Segments | ||
The Company’s segments are based on the Company’s method of internal reporting, which classifies its operations by investment type: real estate and real estate-related. For financial data by segment, see Note 10, “Segment Information.” | ||
Recently Issued Accounting Standards Update | ||
In February 2013, the FASB issued ASU No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU No. 2013-02”). ASU No. 2013-02 requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. An entity is also required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by respective line items of net income only if the amount reclassified is required under GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under GAAP that provide additional detail about these amounts, such as when a portion of the amount reclassified out of accumulated other comprehensive income is reclassified to a balance sheet account instead of directly to income or expense in the same reporting period. ASU No. 2013-02 is effective for reporting periods beginning after December 31, 2012. The adoption of ASU No. 2013-02 did not have a material impact on the Company’s consolidated financial statements. |
REAL_ESTATE
REAL ESTATE | 9 Months Ended | |||||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||||
Real Estate [Abstract] | ' | |||||||||||||||||||||||
REAL ESTATE | ' | |||||||||||||||||||||||
REAL ESTATE | ||||||||||||||||||||||||
As of September 30, 2013, the Company’s real estate portfolio was composed of 20 office properties, one office/flex property, a portfolio of four industrial properties, an office campus consisting of eight office buildings, one industrial property and a leasehold interest in one industrial property, encompassing in the aggregate approximately 11.6 million rentable square feet. As of September 30, 2013, the Company’s real estate portfolio was 95% occupied. The following table summarizes the Company’s investments in real estate as of September 30, 2013 and December 31, 2012 (in thousands): | ||||||||||||||||||||||||
Land | Buildings and | Tenant Origination and Absorption Costs | Total Real Estate | |||||||||||||||||||||
Improvements | ||||||||||||||||||||||||
As of September 30, 2013: | ||||||||||||||||||||||||
Office | $ | 326,057 | $ | 2,061,016 | $ | 290,494 | $ | 2,677,567 | ||||||||||||||||
Industrial (1) | 10,300 | 88,865 | 17,634 | 116,799 | ||||||||||||||||||||
Total real estate, cost | $ | 336,357 | $ | 2,149,881 | $ | 308,128 | $ | 2,794,366 | ||||||||||||||||
Accumulated depreciation and amortization | — | (224,461 | ) | (114,651 | ) | (339,112 | ) | |||||||||||||||||
Net Amount | $ | 336,357 | $ | 1,925,420 | $ | 193,477 | $ | 2,455,254 | ||||||||||||||||
As of December 31, 2012: | ||||||||||||||||||||||||
Office | $ | 254,897 | $ | 1,903,298 | $ | 286,291 | $ | 2,444,486 | ||||||||||||||||
Industrial (1) | 10,300 | 88,966 | 18,441 | 117,707 | ||||||||||||||||||||
Total real estate, cost | $ | 265,197 | $ | 1,992,264 | $ | 304,732 | $ | 2,562,193 | ||||||||||||||||
Accumulated depreciation and amortization | — | (173,917 | ) | (96,621 | ) | (270,538 | ) | |||||||||||||||||
Net Amount | $ | 265,197 | $ | 1,818,347 | $ | 208,111 | $ | 2,291,655 | ||||||||||||||||
_____________________ | ||||||||||||||||||||||||
(1) Includes an investment in the rights to a ground lease. The ground lease expires in February 2050. | ||||||||||||||||||||||||
As of September 30, 2013, the following property represented more than 10% of the Company’s total assets: | ||||||||||||||||||||||||
Property | Location | Rentable | Total | Percentage | Annualized Base Rent | Average Annualized Base Rent per sq. ft. | Occupancy | |||||||||||||||||
Square | Real Estate, Net | of Total | (in thousands) (1) | |||||||||||||||||||||
Feet | (in thousands) | Assets | ||||||||||||||||||||||
300 N. LaSalle Building | Chicago, IL | 1,302,901 | $ | 556,248 | 18.4 | % | $ | 45,266 | $ | 35.04 | 99.1 | % | ||||||||||||
_____________________ | ||||||||||||||||||||||||
(1) Annualized base rent represents annualized contractual base rental income as of September 30, 2013, adjusted to straight-line any contractual tenant concessions (including free rent), rent increases and rent decreases from the lease’s inception through the balance of the lease term. | ||||||||||||||||||||||||
Operating Leases | ||||||||||||||||||||||||
The Company’s real estate properties are leased to tenants under operating leases for which the terms and expirations vary. As of September 30, 2013, the leases had remaining terms, excluding options to extend, of up to 15.4 years with a weighted-average remaining term of 5.7 years. Some of the leases have provisions to extend the term of the leases, options for early termination for all or part of the leased premises after paying a specified penalty, rights of first refusal to purchase the property at competitive market rates, and other terms and conditions as negotiated. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. Generally, upon the execution of a lease, the Company requires a security deposit from the tenant in the form of a cash deposit and/or a letter of credit. The amount required as a security deposit varies depending upon the terms of the respective lease and the creditworthiness of the tenant, but generally is not a significant amount. Therefore, exposure to credit risk exists to the extent that a receivable from a tenant exceeds the amount of its security deposit. Security deposits received in cash related to tenant leases are included in other liabilities in the accompanying consolidated balance sheets and totaled $4.6 million and $4.2 million as of September 30, 2013 and December 31, 2012, respectively. | ||||||||||||||||||||||||
During the nine months ended September 30, 2013 and 2012, the Company recognized deferred rent from tenants, net of lease incentive amortization, of $9.9 million and $12.2 million, respectively. As of September 30, 2013 and December 31, 2012, the cumulative deferred rent balance was $66.2 million and $53.5 million, respectively, and is included in rents and other receivables on the accompanying balance sheets. The cumulative deferred rent balance included $7.7 million and $5.3 million of unamortized lease incentives as of September 30, 2013 and December 31, 2012, respectively. | ||||||||||||||||||||||||
As of September 30, 2013, the future minimum rental income from the Company’s properties under non-cancelable operating leases was as follows (in thousands): | ||||||||||||||||||||||||
October 1, 2013 through December 31, 2013 | $ | 62,674 | ||||||||||||||||||||||
2014 | 246,965 | |||||||||||||||||||||||
2015 | 231,911 | |||||||||||||||||||||||
2016 | 216,653 | |||||||||||||||||||||||
2017 | 194,412 | |||||||||||||||||||||||
Thereafter | 831,946 | |||||||||||||||||||||||
$ | 1,784,561 | |||||||||||||||||||||||
As of September 30, 2013, the Company’s highest tenant industry concentrations (greater than 10% of annualized base rent) were as follows: | ||||||||||||||||||||||||
Industry | Number of Tenants | Annualized | Percentage of Annualized Base Rent | |||||||||||||||||||||
Base Rent (1) | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Legal Services | 61 | $ | 51,391 | 19.6 | % | |||||||||||||||||||
Finance | 91 | 49,985 | 19.1 | % | ||||||||||||||||||||
Computer System Design & Programming | 21 | 32,646 | 12.5 | % | ||||||||||||||||||||
$ | 134,022 | 51.2 | % | |||||||||||||||||||||
_____________________ | ||||||||||||||||||||||||
(1) Annualized base rent represents annualized contractual base rental income as of September 30, 2013, adjusted to straight-line any contractual tenant concessions (including free rent), rent increases and rent decreases from the lease’s inception through the balance of the lease term. | ||||||||||||||||||||||||
No other tenant industries accounted for more than 10% of annualized base rent. No material tenant credit issues have been identified at this time. During the nine months ended September 30, 2013, the Company recorded bad debt expense of $0.5 million. During the nine months ended September 30, 2012, the Company reduced its bad debt expense reserve and recorded a net recovery of bad debt related to its tenant receivables of $0.1 million. As of September 30, 2013, the Company had a bad debt expense reserve of approximately $0.2 million, which represents less than 1% of its annualized base rent. | ||||||||||||||||||||||||
As of September 30, 2013, there were no leases that accounted for more than 10% of annualized base rent. | ||||||||||||||||||||||||
Geographic Concentration Risk | ||||||||||||||||||||||||
As of September 30, 2013, the Company’s net investments in real estate in Illinois, California and New Jersey represented 18.4%, 17.7% and 14.4% of the Company’s total assets, respectively. As a result, the geographic concentration of the Company’s portfolio makes it particularly susceptible to adverse economic developments in the Illinois, California and New Jersey real estate markets. Any adverse economic or real estate developments in these markets, such as business layoffs or downsizing, industry slowdowns, relocations of businesses, changing demographics and other factors, or any decrease in demand for office space resulting from the local business climate, could adversely affect the Company’s operating results and its ability to make distributions to stockholders. | ||||||||||||||||||||||||
In addition, the Company’s investment in the 300 N. LaSalle Building, located in Chicago, Illinois, represented 18.4% of the Company’s total assets and 19.6% of the Company’s total revenues as of and for the nine months ended September 30, 2013. As a result of this investment, the geographic concentration of the Company’s portfolio makes it particularly susceptible to adverse economic developments in the Chicago real estate market. Any adverse economic or real estate developments in this market, such as business layoffs or downsizing, industry slowdowns, relocations of businesses, changing demographics and other factors, or any decrease in demand for office space resulting from the local business climate, could adversely affect the Company’s operating results and its ability to make distributions to stockholders. | ||||||||||||||||||||||||
Recent Acquisition | ||||||||||||||||||||||||
Corporate Technology Centre | ||||||||||||||||||||||||
On March 28, 2013, the Company, through an indirect wholly owned subsidiary (the “Corporate Technology Centre Owner”), acquired an office campus consisting of eight office buildings totaling 610,083 rentable square feet located on approximately 32.7 acres of land in San Jose, California (“Corporate Technology Centre”). The seller is not affiliated with the Company or the Advisor. The purchase price of Corporate Technology Centre was $239.0 million plus closing costs. At acquisition, Corporate Technology Centre was 100% leased to five tenants. |
TENANT_ORIGINATION_AND_ABSORPT
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Abstract] | ' | ||||||||||||||||||||||||
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES | ' | ||||||||||||||||||||||||
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW‑MARKET LEASE LIABILITIES | |||||||||||||||||||||||||
As of September 30, 2013 and December 31, 2012, the Company’s tenant origination and absorption costs, above-market lease assets and below-market lease liabilities (excluding fully amortized assets and liabilities and accumulated amortization) were as follows (in thousands): | |||||||||||||||||||||||||
Tenant Origination and | Above-Market | Below-Market | |||||||||||||||||||||||
Absorption Costs | Lease Assets | Lease Liabilities | |||||||||||||||||||||||
September 30, | December 31, | September 30, | December 31, | September 30, | December 31, | ||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||
Cost | $ | 308,128 | $ | 304,732 | $ | 76,227 | $ | 70,176 | $ | (49,287 | ) | $ | (46,607 | ) | |||||||||||
Accumulated Amortization | (114,651 | ) | (96,621 | ) | (22,245 | ) | (20,961 | ) | 24,466 | 20,088 | |||||||||||||||
Net Amount | $ | 193,477 | $ | 208,111 | $ | 53,982 | $ | 49,215 | $ | (24,821 | ) | $ | (26,519 | ) | |||||||||||
Increases (decreases) in net income as a result of amortization of the Company’s tenant origination and absorption costs, above-market lease assets and below-market lease liabilities for the three and nine months ended September 30, 2013 and 2012 were as follows (in thousands): | |||||||||||||||||||||||||
Tenant Origination and | Above-Market | Below-Market | |||||||||||||||||||||||
Absorption Costs | Lease Assets | Lease Liabilities | |||||||||||||||||||||||
For the Three Months Ended September 30, | For the Three Months Ended September 30, | For the Three Months Ended September 30, | |||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||
Amortization | $ | (10,343 | ) | $ | (11,984 | ) | $ | (2,451 | ) | $ | (2,253 | ) | $ | 1,828 | $ | 2,160 | |||||||||
Tenant Origination and | Above-Market | Below-Market | |||||||||||||||||||||||
Absorption Costs | Lease Assets | Lease Liabilities | |||||||||||||||||||||||
For the Nine Months Ended September 30, | For the Nine Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||
Amortization | $ | (31,216 | ) | $ | (37,432 | ) | $ | (7,201 | ) | $ | (6,813 | ) | $ | 5,586 | $ | 6,324 | |||||||||
REAL_ESTATE_LOANS_RECEIVABLE
REAL ESTATE LOANS RECEIVABLE | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Receivables [Abstract] | ' | ||||||||||||||||||||||||
REAL ESTATE LOANS RECEIVABLE | ' | ||||||||||||||||||||||||
REAL ESTATE LOANS RECEIVABLE | |||||||||||||||||||||||||
As of September 30, 2013 and December 31, 2012, the Company, through indirect wholly owned subsidiaries, had invested in or originated real estate loans receivable as follows (dollars in thousands): | |||||||||||||||||||||||||
Loan Name | Date Acquired/ Originated | Property Type | Loan Type | Outstanding Principal Balance as of September 30, | Book Value | Book Value | Contractual Interest Rate (3) | Annualized Effective Interest Rate (3) | Maturity Date (4) | ||||||||||||||||
Location of Related Property or Collateral | 2013 (1) | as of | as of | ||||||||||||||||||||||
September 30, | December 31, | ||||||||||||||||||||||||
2013 (2) | 2012 (2) | ||||||||||||||||||||||||
One Liberty Plaza Notes (5) | |||||||||||||||||||||||||
New York, New York | 2/11/09 | Office | Mortgage | $ | 112,179 | $ | 84,144 | $ | 81,163 | 6.10% | 14.90% | 8/6/17 | |||||||||||||
Tuscan Inn First Mortgage Origination (6) | |||||||||||||||||||||||||
San Francisco, California | 1/21/10 | Hotel | Mortgage | 20,200 | 20,050 | 19,973 | 8.30% | 9.00% | 1/21/15 | ||||||||||||||||
Chase Tower First Mortgage Origination (6) | |||||||||||||||||||||||||
Austin, Texas | 1/25/10 | Office | Mortgage | 58,917 | 58,924 | 59,210 | 8.40% | 8.50% | 2/1/15 | ||||||||||||||||
Pappas Commerce First Mortgage Origination (6) (7) | |||||||||||||||||||||||||
Boston, Massachusetts | 4/5/10 | Industrial | Mortgage | 32,673 | 32,673 | 32,673 | (7) | 9.80% | 7/1/14 | ||||||||||||||||
One Kendall Square First Mortgage Origination (8) | |||||||||||||||||||||||||
Cambridge, Massachusetts | 11/22/10 | Mixed-use Facility | Mortgage | 87,500 | 87,595 | 88,006 | (8) | 7.00% | 12/1/13 | ||||||||||||||||
Participation | |||||||||||||||||||||||||
Sheraton Charlotte Airport Hotel First Mortgage (6) | |||||||||||||||||||||||||
Charlotte, North Carolina | 7/11/11 | Hotel | Mortgage | 14,492 | 14,507 | 14,519 | 7.50% | 7.60% | 8/1/18 | ||||||||||||||||
Summit I & II First Mortgage | |||||||||||||||||||||||||
Reston, Virginia | 1/17/12 | Office | Mortgage | 58,750 | 58,784 | 53,302 | 7.50% | 7.60% | 2/1/17 | ||||||||||||||||
$ | 384,711 | $ | 356,677 | $ | 348,846 | ||||||||||||||||||||
_____________________ | |||||||||||||||||||||||||
(1) Outstanding principal balance as of September 30, 2013 represents original principal balance outstanding under the loan, increased for any subsequent fundings and reduced for any principal paydowns. | |||||||||||||||||||||||||
(2) Book value represents outstanding principal balance, adjusted for unamortized acquisition discounts, origination fees and direct origination and acquisition costs. | |||||||||||||||||||||||||
(3) Contractual interest rates are the stated interest rates on the face of the loans. Annualized effective interest rates are calculated as the actual interest income recognized in 2013, using the interest method, annualized and divided by the average amortized cost basis of the investment. The contractual interest rates and annualized effective interest rates presented are as of September 30, 2013. | |||||||||||||||||||||||||
(4) Maturity dates are as of September 30, 2013; subject to certain conditions, the maturity dates of certain real estate loans receivable may be extended beyond the maturity date shown. | |||||||||||||||||||||||||
(5) On October 11, 2013, the Company sold the One Liberty Plaza Notes. See Note 12, “Subsequent Events - Sale of the One Liberty Plaza Notes.” | |||||||||||||||||||||||||
(6) The Tuscan Inn First Mortgage Origination, the Chase Tower First Mortgage Origination, the Pappas Commerce First Mortgage Origination and the Sheraton Charlotte Airport Hotel First Mortgage are the collateral for the Portfolio Mortgage Loan #2. | |||||||||||||||||||||||||
(7) As of September 30, 2013, $31.9 million had been disbursed under the Pappas Commerce First Mortgage. Interest on the first mortgage is calculated at a fixed rate of 9.5%. Outstanding principal balance also includes a protective advance of $0.8 million made on June 22, 2011 to cover property taxes and to fund the tax and insurance reserve account. Interest on the protective advance is calculated at a fixed rate of 14.5%. | |||||||||||||||||||||||||
(8) The One Kendall Square First Mortgage bears interest at a floating rate of 550 basis points over one-month LIBOR, but at no point shall the interest rate be less than 7.5%. | |||||||||||||||||||||||||
The following summarizes the activity related to real estate loans receivable for the nine months ended September 30, 2013 (in thousands): | |||||||||||||||||||||||||
Real estate loans receivable - December 31, 2012 | $ | 348,846 | |||||||||||||||||||||||
Additional principal funded under real estate loans receivable | 5,490 | ||||||||||||||||||||||||
Principal repayments received on real estate loans receivable | (1,320 | ) | |||||||||||||||||||||||
Accretion of discounts on purchased real estate loans receivable | 4,075 | ||||||||||||||||||||||||
Amortization of closing costs and origination fees on real estate loans receivable | (414 | ) | |||||||||||||||||||||||
Real estate loans receivable - September 30, 2013 | $ | 356,677 | |||||||||||||||||||||||
For the three and nine months ended September 30, 2013 and 2012, interest income from real estate loans receivable consisted of the following (in thousands): | |||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||
Contractual interest income | $ | 7,313 | $ | 7,214 | $ | 21,597 | $ | 23,830 | |||||||||||||||||
Accretion of purchase discounts | 1,416 | 1,248 | 4,075 | 5,331 | |||||||||||||||||||||
Amortization of closing costs and origination fees | (143 | ) | (131 | ) | (414 | ) | (418 | ) | |||||||||||||||||
Interest income from real estate loans receivable | $ | 8,586 | $ | 8,331 | $ | 25,258 | $ | 28,743 | |||||||||||||||||
As of September 30, 2013 and December 31, 2012, interest receivable from real estate loans receivable was $2.2 million and $2.3 million, respectively, and was included in rents and other receivables. |
NOTES_PAYABLE
NOTES PAYABLE | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Notes Payable [Abstract] | ' | ||||||||||||||||
NOTES PAYABLE | ' | ||||||||||||||||
NOTES PAYABLE | |||||||||||||||||
As of September 30, 2013 and December 31, 2012, the Company’s notes payable consisted of the following (dollars in thousands): | |||||||||||||||||
Principal as of September 30, | Principal as of December 31, | Contractual Interest Rate as of | Effective Interest Rate as of | Payment Type | Maturity Date (2) | ||||||||||||
2013 | 2012 | September 30, 2013(1) | September 30, | ||||||||||||||
2013 (1) | |||||||||||||||||
100 & 200 Campus Drive Mortgage Loan (3) | $ | — | $ | 55,000 | (3) | (3) | (3) | (3) | |||||||||
300-600 Campus Drive Mortgage Loan (4) | — | 93,850 | (4) | (4) | (4) | (4) | |||||||||||
Portfolio Revolving Loan Facility (5) | 105,000 | 55,000 | One-month LIBOR + 1.80% (5) | 3.50% | Interest Only | 6/21/17 | |||||||||||
Willow Oaks Revolving Loan (3) | — | 13,000 | (3) | (3) | (3) | (3) | |||||||||||
300 N. LaSalle Building Mortgage Loan | 349,518 | 350,000 | 4.25% | 4.30% | (6) | 8/1/15 | |||||||||||
Union Bank Plaza Mortgage Loan (7) | 105,000 | 105,000 | One-month LIBOR + 1.75% | 3.50% | Interest Only | 9/15/15 | |||||||||||
Emerald View at Vista Center Mortgage Loan | 19,800 | 19,800 | One-month LIBOR + 2.25% | 4.60% | Interest Only | 1/1/16 | |||||||||||
Portfolio Mortgage Loan #1 (8) | 341,544 | 341,544 | One-month LIBOR + 2.15% | 3.70% | Interest Only | 1/27/16 | |||||||||||
One Kendall Square Borrowing | 45,000 | 45,000 | One-month LIBOR + 2.50% | 4.00% | Interest Only | 12/1/13 | |||||||||||
601 Tower Mortgage Loan (9) | 16,320 | 16,320 | (9) | 3.50% | Interest Only | 6/3/15 | |||||||||||
CityPlace Tower Mortgage Loan | 71,000 | 71,000 | 3.59% | 3.60% | Interest Only | 8/1/15 | |||||||||||
Fountainhead Plaza Mortgage Loan | 80,000 | 80,000 | One-month LIBOR + 1.90% | 2.90% | Interest Only | 12/1/15 | |||||||||||
Metropolitan Center Mortgage Loan (3) | — | 13,000 | (3) | (3) | (3) | (3) | |||||||||||
Portfolio Mortgage Loan #2 (10) | 75,742 | 76,000 | One-month LIBOR + 2.75% | 3.00% | Interest Only | 1/1/16 | |||||||||||
Portfolio Mortgage Loan #3 (11) | 156,000 | — | One-month LIBOR + | 2.30% | Interest Only | 3/1/16 | |||||||||||
1.75% - 1.85% | |||||||||||||||||
Corporate Technology Centre Mortgage Loan | 140,000 | — | 3.50% | 3.40% | (12) | 4/1/20 | |||||||||||
300-600 Campus Drive Revolving Loan (13) | 78,000 | — | One-month LIBOR + 2.05% (13) | 2.60% | Interest Only | 8/1/16 | |||||||||||
$ | 1,582,924 | $ | 1,334,514 | ||||||||||||||
_____________________ | |||||||||||||||||
(1) Contractual interest rate represents the interest rate in effect under the loan as of September 30, 2013. Effective interest rate is calculated as the actual interest rate in effect as of September 30, 2013 (consisting of the contractual interest rate and the effect of interest rate swaps and contractual floor rates, if applicable), using interest rate indices as of September 30, 2013, where applicable. For further information regarding the Company’s derivative instruments, see Note 7, “Derivative Instruments.” | |||||||||||||||||
(2) Represents the initial maturity date or the maturity date as extended as of September 30, 2013; subject to certain conditions, the maturity dates of certain loans may be extended beyond the maturity date shown. | |||||||||||||||||
(3) On March 6, 2013, the Company used proceeds from the Portfolio Mortgage Loan #3 to repay these loans in full. | |||||||||||||||||
(4) On July 10, 2013, the Company used proceeds from the 300-600 Campus Drive Revolving Loan to repay the loan in full. | |||||||||||||||||
(5) On April 30, 2010, the Company entered into a four-year revolving loan facility for an amount up to $100.0 million. On June 21, 2013, the Portfolio Revolving Loan Facility was amended and restated to increase the borrowing capacity from $100.0 million to $145.0 million and to extend the maturity date to June 21, 2017. The Amended and Restated Portfolio Revolving Loan Facility is secured by Mountain View Corporate Center, 350 E. Plumeria Building, Pierre Laclede Center and One Main Place. As of September 30, 2013, the $105.0 million non‑revolving portion had been funded, and the $40.0 million revolving portion remained available for future disbursements, subject to certain terms and conditions contained in the loan documents. | |||||||||||||||||
(6) Monthly payments were initially interest-only. Beginning on September 1, 2013, monthly payments include principal and interest with principal payments calculated using an amortization schedule of 30 years for the balance of the loan term, with the remaining principal balance, all accrued and unpaid interest and any other amounts due at maturity. | |||||||||||||||||
(7) On September 15, 2010, in connection with the acquisition of the Union Bank Plaza, the Company entered into a five-year mortgage loan for borrowings of up to $119.3 million secured by the Union Bank Plaza. As of September 30, 2013, $105.0 million had been disbursed to the Company with the remaining loan balance of $14.3 million available for future disbursements, subject to certain conditions set forth in the loan agreement. | |||||||||||||||||
(8) The Portfolio Mortgage Loan #1 is secured by Plano Business Park, Horizon Tech Center, Crescent VIII, National City Tower, Granite Tower, Gateway Corporate Center, I-81 Industrial Portfolio, Two Westlake Park, Torrey Reserve West and our leasehold interest in the Dallas Cowboys Distribution Center. | |||||||||||||||||
(9) On June 6, 2011, the Company entered into a four-year $32.6 million revolving credit loan. As of September 30, 2013, $16.3 million had been disbursed to the Company under the mortgage loan and $16.3 million remained available for future disbursements under the revolving loan facility, subject to certain conditions set forth in the loan agreement. The interest rate on the $16.3 million outstanding as of September 30, 2013 was calculated at a fixed rate of 3.54% per annum. The interest rate on the $16.3 million available for future disbursements as of September 30, 2013 will be calculated at a variable rate of 220 basis points over one-month LIBOR. | |||||||||||||||||
(10) The Portfolio Mortgage Loan #2 is secured by the Tuscan Inn First Mortgage Origination, the Chase Tower First Mortgage Origination, the Pappas Commerce First Mortgage Origination and the Sheraton Charlotte Airport Hotel First Mortgage. Principal payments received as prepayments or upon the maturity of the underlying collateral are required to be remitted as principal repayments on the Portfolio Mortgage Loan #2. | |||||||||||||||||
(11) On March 6, 2013, the Company entered into a three-year senior secured credit facility for borrowings of up to $235.0 million, of which $141.0 million is non-revolving debt and $94.0 million is revolving debt. As of September 30, 2013, the principal balance consisted of the $141.0 million non-revolving portion and $15.0 million of the revolving portion. The revolving portion of $79.0 million remains available for future disbursements, subject to certain terms and conditions contained in the loan documents. The Portfolio Mortgage Loan #3 is secured by 100 & 200 Campus Drive Buildings, Metropolitan Center and Willow Oaks Corporate Center. | |||||||||||||||||
(12) Monthly payments are initially interest-only. Beginning on May 1, 2017, monthly payments include principal and interest with principal payments calculated using an amortization schedule of 30 years for the balance of the loan term, with the remaining principal balance, all accrued and unpaid interest and any other amounts due at maturity. | |||||||||||||||||
(13) On July 10, 2013, the Company entered into a three-year senior secured credit facility for borrowings of up to $120.0 million. See “ — Recent Financing Transaction — 300-600 Campus Drive Revolving Loan.” | |||||||||||||||||
As of September 30, 2013 and December 31, 2012, the Company’s deferred financing costs were $8.6 million and $7.0 million, respectively, net of amortization, and are included in deferred financing costs, prepaid expenses and other assets on the accompanying consolidated balance sheets. | |||||||||||||||||
During the three and nine months ended September 30, 2013, the Company incurred $19.1 million and $50.6 million of interest expense, respectively. During the three and nine months ended September 30, 2012, the Company incurred $14.5 million and $43.9 million of interest expense, respectively. As of September 30, 2013 and December 31, 2012, $4.5 million and $4.3 million, respectively, of interest expense were payable. Included in interest expense for the three and nine months ended September 30, 2013 were $0.9 million and $2.4 million of amortization of deferred financing costs, respectively. Included in interest expense for the three and nine months ended September 30, 2012 were $0.8 million and $2.4 million of amortization of deferred financing costs, respectively. Interest expense incurred as a result of the Company’s interest rate swap agreements was $2.7 million and $7.6 million for the three and nine months ended September 30, 2013, respectively. Interest expense incurred as a result of the Company’s interest rate swap agreements was $2.3 million and $6.9 million for the three and nine months ended September 30, 2012, respectively. Included in interest expense for the three and nine months ended September 30, 2013 was $3.7 million of prepayment fees related to the pay-off of the 300-600 Campus Drive Mortgage Loan. See “— Recent Financing Transaction — 300-600 Campus Drive Revolving Loan.” | |||||||||||||||||
The following is a schedule of maturities for all notes payable outstanding as of September 30, 2013 (in thousands): | |||||||||||||||||
October 1, 2013 through December 31, 2013 | $ | 45,000 | |||||||||||||||
2014 | — | ||||||||||||||||
2015 | 621,838 | ||||||||||||||||
2016 | 671,086 | ||||||||||||||||
2017 | 105,000 | ||||||||||||||||
Thereafter | 140,000 | ||||||||||||||||
$ | 1,582,924 | ||||||||||||||||
Certain of the Company’s notes payable contain financial debt covenants. As of September 30, 2013, the Company was in compliance with these debt covenants. | |||||||||||||||||
Recent Financing Transaction | |||||||||||||||||
300-600 Campus Drive Revolving Loan | |||||||||||||||||
On July 10, 2013, the Company, through an indirect wholly owned subsidiary (the “300-600 Campus Drive Borrower”), entered into a three-year senior secured credit facility with an unaffiliated lender for borrowings of up to $120.0 million (the “300-600 Campus Drive Revolving Loan”), of which $95.0 million is non-revolving debt and $25.0 million is revolving debt. The 300-600 Campus Drive Revolving Loan is secured by the 300-600 Campus Drive Buildings. As of September 30, 2013, $78.0 million of the non-revolving debt had been funded with the remaining $17.0 million available for future disbursements to be used for tenant improvements and/or leasing commissions, subject to certain terms and conditions contained in the loan documents. Also, as of September 30, 2013, the revolving portion of $25.0 million remained available for future disbursements, subject to certain terms and conditions contained in the loan documents. The Company used the net proceeds from the initial funding to repay the outstanding principal balance due under the 300-600 Campus Drive Mortgage Loan, which was subject to a prepayment fee of $3.7 million, which is included in interest expense on the accompanying statements of operations. | |||||||||||||||||
The 300-600 Campus Drive Revolving Loan matures on August 1, 2016, with two one-year extension options, subject to certain terms and conditions contained in the loan documents. The 300-600 Campus Drive Revolving Loan bears interest at a floating rate of 205 basis points over one-month LIBOR. Monthly payments during the initial term are interest only with the entire principal balance and all outstanding interest and fees due at maturity. The Company will have the right to prepay the loan in whole at any time or in part from time to time, subject to the payment of certain expenses potentially incurred by the lender as a result of the prepayment and subject to certain other conditions and possible fees contained in the loan documents. In connection with the closing of the 300-600 Campus Drive Revolving Loan, the 300-600 Campus Drive Borrower entered into an interest rate swap agreement with the lender, which swap became effective on August 1, 2013 and effectively fixes the interest rate on $78.0 million of the non-revolving debt at approximately 2.91% during the initial loan term. | |||||||||||||||||
KBS REIT Properties II LLC, the wholly owned subsidiary through which the Company indirectly owns all of its real estate assets (“KBS REIT Properties II”), is providing a guaranty of 25% of the outstanding principal amount due and payable under the 300-600 Campus Drive Revolving Loan. KBS REIT Properties II is also providing a guaranty of: (i) in certain circumstances, any amounts owed by the 300-600 Campus Drive Borrower pursuant to the related environmental indemnity; and (ii) any deficiency, loss or damage suffered by the lender resulting from (a) certain intentional acts committed by the 300-600 Campus Drive Borrower and, in certain circumstances, KBS REIT Properties II, or (b) certain bankruptcy or insolvency proceedings involving the 300-600 Campus Drive Borrower. |
DERIVATIVE_INSTRUMENTS
DERIVATIVE INSTRUMENTS | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | |||||||||||||||||||
DERIVATIVE INSTRUMENTS | ' | |||||||||||||||||||
DERIVATIVE INSTRUMENTS | ||||||||||||||||||||
The Company enters into derivative instruments for risk management purposes to hedge its exposure to cash flow variability caused by changing interest rates. The primary goal of the Company’s risk management practices related to interest rate risk is to prevent changes in interest rates from adversely impacting the Company’s ability to achieve its investment return objectives. The Company does not enter into the derivatives for speculative purposes. | ||||||||||||||||||||
The Company enters into interest rate swaps as a fixed rate payer to mitigate its exposure to rising interest rates on its variable rate notes payable. The value of interest rate swaps is primarily impacted by interest rates, market expectations about interest rates, and the remaining life of the instrument. In general, increases in interest rates, or anticipated increases in interest rates, will increase the value of the fixed rate payer position and decrease the value of the variable rate payer position. As the remaining life of the interest rate swap decreases, the value of both positions will generally move towards zero. All of the Company’s interest rate swaps are designated as cash flow hedges. | ||||||||||||||||||||
The following table summarizes the notional and fair value of the Company’s interest rate swaps designated as cash flow hedges as of September 30, 2013 and December 31, 2012. The notional value is an indication of the extent of the Company’s involvement in each instrument at that time, but does not represent exposure to credit, interest rate or market risks (dollars in thousands): | ||||||||||||||||||||
Fair Value of Asset (Liability) | Fair Value of Asset (Liability) | |||||||||||||||||||
Derivative Instruments | Effective Date | Maturity Date | Notional Value | Reference Rate | September 30, 2013 | December 31, 2012 | ||||||||||||||
Interest Rate Swap (1) | 2/26/10 | 2/26/14 | $ | — | One-month LIBOR/ | $ | — | (1) | $ | (239 | ) | |||||||||
Fixed at 2.30% | ||||||||||||||||||||
Interest Rate Swap (1) | 2/26/10 | 2/26/14 | — | One-month LIBOR/ | — | (1) | (239 | ) | ||||||||||||
Fixed at 2.30% | ||||||||||||||||||||
Interest Rate Swap | 4/30/10 | 4/30/14 | 45,000 | One-month LIBOR/ | (517 | ) | (1,214 | ) | ||||||||||||
Fixed at 2.17% | ||||||||||||||||||||
Interest Rate Swap (1) | 7/26/10 | 8/1/13 | — | One-month LIBOR/ | — | (1) | (43 | ) | ||||||||||||
Fixed at 1.33% | ||||||||||||||||||||
Interest Rate Swap (1) | 7/26/10 | 8/1/13 | — | One-month LIBOR/ | — | (1) | (43 | ) | ||||||||||||
Fixed at 1.33% | ||||||||||||||||||||
Interest Rate Swap | 9/15/10 | 9/15/15 | 105,000 | One-month LIBOR/ | (2,778 | ) | (3,788 | ) | ||||||||||||
Fixed at 1.70% | ||||||||||||||||||||
Interest Rate Swap (1) | 12/15/10 | 2/26/14 | — | One-month LIBOR/ | — | (1) | (262 | ) | ||||||||||||
Fixed at 1.53% | ||||||||||||||||||||
Interest Rate Swap (1) | 12/15/10 | 2/26/14 | — | One-month LIBOR/ | — | (1) | (262 | ) | ||||||||||||
Fixed at 1.53% | ||||||||||||||||||||
Interest Rate Swap | 12/16/10 | 1/1/16 | 19,800 | One-month LIBOR/ | (878 | ) | (1,166 | ) | ||||||||||||
Fixed at 2.39% | ||||||||||||||||||||
Interest Rate Swap | 12/20/10 | 6/16/15 | 69,000 | One-month LIBOR/ | (1,917 | ) | (2,700 | ) | ||||||||||||
Fixed at 1.94% | ||||||||||||||||||||
Interest Rate Swap | 2/1/11 | 1/1/16 | 56,150 | One-month LIBOR/ | (2,202 | ) | (2,929 | ) | ||||||||||||
Fixed at 2.16% | ||||||||||||||||||||
Interest Rate Swap | 2/1/11 | 2/1/15 | 8,400 | One-month LIBOR/ | (168 | ) | (254 | ) | ||||||||||||
Fixed at 1.75% | ||||||||||||||||||||
Interest Rate Swap | 2/1/11 | 2/1/14 | 80,150 | One-month LIBOR/ | (306 | ) | (928 | ) | ||||||||||||
Fixed at 1.29% | ||||||||||||||||||||
Interest Rate Swap | 3/8/11 | 2/1/14 | 85,900 | One-month LIBOR/ | (376 | ) | (1,147 | ) | ||||||||||||
Fixed at 1.45% | ||||||||||||||||||||
Interest Rate Swap | 3/10/11 | 2/1/14 | 13,750 | One-month LIBOR/ | (54 | ) | (164 | ) | ||||||||||||
Fixed at 1.32% | ||||||||||||||||||||
Interest Rate Swap | 12/1/11 | 12/1/15 | 80,000 | One-month LIBOR/ | (1,140 | ) | (1,547 | ) | ||||||||||||
Fixed at 1.04% | ||||||||||||||||||||
Interest Rate Swap (1) | 1/1/12 | 1/1/16 | — | One-month LIBOR/ | — | (1) | (145 | ) | ||||||||||||
Fixed at 1.02% | ||||||||||||||||||||
Interest Rate Swap (1) | 2/1/12 | 1/1/16 | — | One-month LIBOR/ | — | (1) | (59 | ) | ||||||||||||
Fixed at 0.77% | ||||||||||||||||||||
Interest Rate Swap | 3/6/13 | 3/1/17 | 32,113 | One-month LIBOR/ | 105 | — | ||||||||||||||
Fixed at 0.71% | ||||||||||||||||||||
Interest Rate Swap | 5/1/13 | 3/1/17 | 23,787 | One-month LIBOR/ | 74 | — | ||||||||||||||
Fixed at 0.71% | ||||||||||||||||||||
Interest Rate Swap | 3/6/13 | 3/1/16 | 48,887 | One-month LIBOR/ | (57 | ) | — | |||||||||||||
Fixed at 0.50% | ||||||||||||||||||||
Interest Rate Swap | 5/1/13 | 3/1/16 | 36,213 | One-month LIBOR/ | (43 | ) | — | |||||||||||||
Fixed at 0.50% | ||||||||||||||||||||
Interest Rate Swap | 7/1/13 | 6/1/17 | 60,000 | One-month LIBOR/ | (1,192 | ) | — | |||||||||||||
Fixed at 1.30% | ||||||||||||||||||||
Interest Rate Swap | 8/1/13 | 8/1/16 | 78,000 | One-month LIBOR/ | (591 | ) | — | |||||||||||||
Fixed at 0.86% | ||||||||||||||||||||
Total derivatives designated | $ | 842,150 | $ | (12,040 | ) | $ | (17,129 | ) | ||||||||||||
as hedging instruments | ||||||||||||||||||||
_____________________ | ||||||||||||||||||||
(1) On March 6, 2013, the Company used proceeds from the Portfolio Mortgage Loan #3 to repay the loans related to these swaps in full. In connection with the repayment of these loans, the Company terminated the swap agreements with respect to eight swaps which were subject to an aggregate breakage fee of $1.1 million. | ||||||||||||||||||||
Asset derivatives are recorded as deferred financing costs, prepaid expenses and other assets on the accompanying consolidated balance sheets, and liability derivatives are recorded as other liabilities on the accompanying consolidated balance sheets. The change in fair value of the effective portion of a derivative instrument that is designated as a cash flow hedge is recorded as other comprehensive income (loss) in the accompanying consolidated statements of comprehensive income (loss) and as other comprehensive income in the accompanying consolidated statements of stockholders’ equity. The Company recorded unrealized (losses) gains of $(0.6) million and $4.0 million on derivative instruments designated as cash flow hedges in accumulated other comprehensive income (loss) during the three and nine months ended September 30, 2013, respectively. The Company recorded unrealized losses of $0.3 million and $1.9 million on derivative instruments designated as cash flow hedges in accumulated other comprehensive income (loss) during the three and nine months ended September 30, 2012, respectively. Amounts in other comprehensive income (loss) will be reclassified into earnings in the periods in which earnings are affected by the hedged cash flow. As a result of utilizing derivative instruments designated as cash flow hedges to hedge its variable rate notes payable, the Company recognized an additional $7.6 million and $6.9 million of interest expense related to the effective portion of cash flow hedges during the nine months ended September 30, 2013 and 2012, respectively. The change in fair value of the ineffective portion is recognized directly in earnings. During the three and nine months ended September 30, 2013 and 2012, there was no ineffective portion related to the change in fair value of the cash flow hedges. During the next 12 months, the Company expects to recognize additional interest expense related to derivative instruments designated as cash flow hedges. The present value of the additional interest expense totaled $8.6 million as of September 30, 2013 and was included in accumulated other comprehensive income (loss). | ||||||||||||||||||||
In conjunction with the refinancing of the Portfolio Mortgage Loan #3 on March 6, 2013, the Company terminated the swap agreements with respect to eight swaps and paid an aggregate breakage fee of $1.1 million. Because it remains probable that the original hedged forecasted transactions (i.e., LIBOR-based debt service payments) will occur, the loss related to the termination of these swap agreements is included in accumulated other comprehensive income (loss) and will be reclassified into earnings over the period of the original forecasted hedged transaction. During the three and nine months ended September 30, 2013, the Company reclassified $0.3 million and $0.6 million of the loss related to the termination of swap agreements into earnings as an increase to interest expense, respectively. |
FAIR_VALUE_DISCLOSURES
FAIR VALUE DISCLOSURES | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||||||||||
FAIR VALUE DISCLOSURES | ' | ||||||||||||||||||||||||
FAIR VALUE DISCLOSURES | |||||||||||||||||||||||||
Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other financial instruments and balances at fair value on a non-recurring basis (e.g., carrying value of impaired real estate loans receivable and long-lived assets). Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories: | |||||||||||||||||||||||||
• | Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; | ||||||||||||||||||||||||
• | Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model‑derived valuations in which significant inputs and significant value drivers are observable in active markets; and | ||||||||||||||||||||||||
• | Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable. | ||||||||||||||||||||||||
The fair value for certain financial instruments is derived using a combination of market quotes, pricing models and other valuation techniques that involve significant management judgment. The price transparency of financial instruments is a key determinant of the degree of judgment involved in determining the fair value of the Company’s financial instruments. Financial instruments for which actively quoted prices or pricing parameters are available and for which markets contain orderly transactions will generally have a higher degree of price transparency than financial instruments for which markets are inactive or consist of non-orderly trades. The Company evaluates several factors when determining if a market is inactive or when market transactions are not orderly. The following is a summary of the methods and assumptions used by management in estimating the fair value of each class of assets and liabilities for which it is practicable to estimate the fair value: | |||||||||||||||||||||||||
Cash and cash equivalents, rent and other receivables, and accounts payable and accrued liabilities: These balances approximate their fair values due to the short maturities of these items. | |||||||||||||||||||||||||
Real estate loans receivable: The Company’s real estate loans receivable are presented in the accompanying consolidated balance sheets at their amortized cost net of recorded loan loss reserves and not at fair value. The fair values of real estate loans receivable were estimated using an internal valuation model that considered the expected cash flows for the loans, underlying collateral values (for collateral-dependent loans) and estimated yield requirements of institutional investors for loans with similar characteristics, including remaining loan term, loan-to-value, type of collateral and other credit enhancements. The Company classifies these inputs as Level 3 inputs. | |||||||||||||||||||||||||
Derivative instruments: The Company’s derivative instruments are presented at fair value on the accompanying consolidated balance sheets. The valuation of these instruments is determined by a third-party expert using a proprietary model that utilizes observable inputs. As such, the Company classifies these inputs as Level 2 inputs. The proprietary model uses the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and volatility. The fair values of interest rate swaps are estimated using the market standard methodology of netting the discounted fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of interest rates (forward curves) derived from observable market interest rate curves. In addition, credit valuation adjustments, which consider the impact of any credit risks to the contracts, are incorporated in the fair values to account for potential nonperformance risk. | |||||||||||||||||||||||||
Notes payable: The fair value of the Company’s notes payable is estimated using a discounted cash flow analysis based on management’s estimates of current market interest rates for instruments with similar characteristics, including remaining loan term, loan-to-value ratio, type of collateral and other credit enhancements. Additionally, when determining the fair value of liabilities in circumstances in which a quoted price in an active market for an identical liability is not available, the Company measures fair value using (i) a valuation technique that uses the quoted price of the identical liability when traded as an asset or quoted prices for similar liabilities when traded as assets or (ii) another valuation technique that is consistent with the principles of fair value measurement, such as the income approach or the market approach. The Company classifies these inputs as Level 3 inputs. | |||||||||||||||||||||||||
The following were the face values, carrying amounts and fair values of the Company’s real estate loans receivable and notes payable as of September 30, 2013 and December 31, 2012, which carrying amounts do not approximate the fair values (in thousands): | |||||||||||||||||||||||||
September 30, 2013 | December 31, 2012 | ||||||||||||||||||||||||
Face Value | Carrying | Fair Value | Face Value | Carrying | Fair Value | ||||||||||||||||||||
Amount | Amount | ||||||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||||
Real estate loans receivable | $ | 384,711 | $ | 356,677 | $ | 389,536 | $ | 380,542 | $ | 348,846 | $ | 390,145 | |||||||||||||
Financial liabilities: | |||||||||||||||||||||||||
Notes payable | $ | 1,582,924 | $ | 1,582,924 | $ | 1,589,362 | $ | 1,334,514 | $ | 1,334,514 | $ | 1,341,363 | |||||||||||||
Disclosure of the fair values of financial instruments is based on pertinent information available to the Company as of the period end and requires a significant amount of judgment. Despite increased capital market and credit market activity, transaction volume for certain financial instruments remains relatively low. This has made the estimation of fair values difficult and, therefore, both the actual results and the Company’s estimate of value at a future date could be materially different. | |||||||||||||||||||||||||
During the nine months ended September 30, 2013, the Company measured the following assets and liabilities at fair value (in thousands): | |||||||||||||||||||||||||
Fair Value Measurements Using | |||||||||||||||||||||||||
Total | Quoted Prices in | Significant Other | Significant | ||||||||||||||||||||||
Active Markets | Observable | Unobservable | |||||||||||||||||||||||
for Identical Assets | Inputs (Level 2) | Inputs (Level 3) | |||||||||||||||||||||||
(Level 1) | |||||||||||||||||||||||||
Recurring Basis: | |||||||||||||||||||||||||
Asset derivatives | $ | 179 | $ | — | $ | 179 | $ | — | |||||||||||||||||
Liability derivatives | (12,219 | ) | — | (12,219 | ) | — | |||||||||||||||||||
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Related Party Transactions [Abstract] | ' | ||||||||||||||||||||||||
RELATED PARTY TRANSACTIONS | ' | ||||||||||||||||||||||||
RELATED PARTY TRANSACTIONS | |||||||||||||||||||||||||
The Company has entered into the Advisory Agreement with the Advisor and the Dealer Manager Agreement with the Dealer Manager. These agreements entitled the Advisor and/or the Dealer Manager to specified fees upon the provision of certain services with regard to the Offering and entitle the Advisor to specified fees upon the provision of certain services with regard to the investment of funds in real estate and real estate-related investments, the management of those investments, among other services, and the disposition of investments, as well as reimbursement of organization and offering costs incurred by the Advisor and the Dealer Manager on behalf of the Company, such as expenses related to the dividend reinvestment plan, and certain costs incurred by the Advisor in providing services to the Company. In addition, the Advisor is entitled to certain other fees, including an incentive fee upon achieving certain performance goals, as detailed in the Advisory Agreement. The Company has also entered into a fee reimbursement agreement with the Dealer Manager pursuant to which the Company agreed to reimburse the Dealer Manager for certain fees and expenses it incurs for administering the Company’s participation in the Depository Trust & Clearing Corporation Alternative Investment Product Platform with respect to certain accounts of the Company’s investors serviced through the platform. The Advisor and Dealer Manager also serve as the advisor and dealer manager, respectively, for KBS Real Estate Investment Trust, Inc., KBS Real Estate Investment Trust III, Inc., KBS Strategic Opportunity REIT, Inc., KBS Legacy Partners Apartment REIT, Inc. and a private program. During the nine months ended September 30, 2013 and 2012, no transactions occurred between the Company and these other KBS-sponsored programs. | |||||||||||||||||||||||||
Pursuant to the terms of these agreements, summarized below are the related-party costs incurred by the Company for the three and nine months ended September 30, 2013 and 2012, respectively, and any related amounts payable as of September 30, 2013 and December 31, 2012 (in thousands): | |||||||||||||||||||||||||
Incurred | Incurred | Payable as of | |||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | September 30, | December 31, | ||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||
Expensed | |||||||||||||||||||||||||
Asset management fees | $ | 6,079 | $ | 5,556 | $ | 17,563 | $ | 16,749 | (1) | $ | — | $ | — | ||||||||||||
Reimbursement of operating expenses (2) | 44 | 35 | 102 | 71 | — | 168 | |||||||||||||||||||
Acquisition fees | — | — | 1,797 | — | — | — | |||||||||||||||||||
Disposition fees | — | — | — | 968 | — | — | |||||||||||||||||||
Capitalized | |||||||||||||||||||||||||
Origination fees | — | — | — | 608 | — | — | |||||||||||||||||||
$ | 6,123 | $ | 5,591 | $ | 19,462 | $ | 18,396 | $ | — | $ | 168 | ||||||||||||||
_____________________ | |||||||||||||||||||||||||
(1) Amount includes asset management fees from discontinued operations totaling $41,000 for the nine months ended September 30, 2012. | |||||||||||||||||||||||||
(2) The Advisor may seek reimbursement for certain employee costs under the Advisory Agreement. The Company reimburses the Advisor for the Company’s allocable portion of the salaries, benefits and overhead of internal audit department personnel providing services to the Company. These amounts totaled $44,000 and $35,000 for the three months ended September 30, 2013 and 2012, respectively, and $102,000 and $71,000 for the nine months ended September 30, 2013 and 2012, respectively, and were the only employee costs reimbursed under the Advisory Agreement through September 30, 2013. The Company will not reimburse for employee costs in connection with services for which the Advisor earns acquisition, origination or disposition fees (other than reimbursement of travel and communication expenses) or for the salaries or benefits the Advisor or its affiliates may pay to the Company’s executive officers. | |||||||||||||||||||||||||
On June 27, 2012, the Company, through an indirect wholly owned subsidiary, entered into a discounted payoff agreement with 4370 La Jolla Village LLC (the “Borrower”), a wholly owned subsidiary of the Irvine Company, for the payoff of the Northern Trust Notes for approximately $85.8 million, less closing costs of $0.9 million, resulting in a net gain on early payoff of $14.9 million during the nine months ended September 30, 2012. The aggregate purchase price of the Northern Trust Notes was $60.1 million, including closing costs. Donald Bren, who is the brother of Peter Bren (one of the Company’s executive officers and sponsors), is the chairman and owner of the Irvine Company. The Company’s conflicts committee, composed of all of the Company’s independent directors, approved the purchase and payoff of the Northern Trust Notes. |
SEGMENT_INFORMATION
SEGMENT INFORMATION | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||
SEGMENT INFORMATION | ' | ||||||||||||||||
SEGMENT INFORMATION | |||||||||||||||||
The Company presently operates in two reportable business segments based on its investment types: real estate and real estate‑related. Under the real estate segment, the Company has invested in office, office/flex and industrial properties. Under the real estate-related segment, the Company has invested in or originated mortgage loans, a mortgage participation and an A-Note. All revenues earned from the Company’s two reporting segments were from external customers and there were no intersegment sales or transfers. The Company does not allocate corporate-level accounts to its reporting segments. Corporate-level accounts include corporate general and administrative expenses, non-operating interest income, non-operating interest expense and other corporate-level expenses. The accounting policies of the segments are consistent with those described in Note 2, “Summary of Significant Accounting Policies.” | |||||||||||||||||
The Company evaluates the performance of its segments based upon net operating income (“NOI”), which is a non-GAAP supplemental financial measure. The Company defines NOI for its real estate segment as operating revenues (rental income, tenant reimbursements and other operating income) less property and related expenses (property operating expenses, real estate taxes, insurance, asset management fees and provision for bad debt) less interest expense. The Company defines NOI for its real estate-related segment as interest income less loan servicing costs, asset management fees and interest expense. NOI excludes certain items that are not considered to be controllable in connection with the management of an asset such as non-property income and expenses, depreciation and amortization, and corporate general and administrative expenses. The Company uses NOI to evaluate the operating performance of the Company’s real estate and real estate-related investments and to make decisions about resource allocations. The Company believes that net income is the GAAP measure that is most directly comparable to NOI; however, NOI should not be considered as an alternative to net income as the primary indicator of operating performance, as it excludes the items described above. Additionally, NOI as defined above may not be comparable to other REITs or companies as their definitions of NOI may differ from the Company’s definition. | |||||||||||||||||
The following tables summarize total revenues and NOI for each reportable segment for the three and nine months ended September 30, 2013 and 2012 and total assets and total liabilities for each reportable segment as of September 30, 2013 and December 31, 2012 (in thousands): | |||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Revenues: | |||||||||||||||||
Real estate segment (1) | $ | 83,660 | $ | 78,019 | $ | 247,087 | $ | 235,940 | |||||||||
Real estate-related segment | 8,586 | 8,331 | 25,258 | 28,743 | |||||||||||||
Total segment revenues | $ | 92,246 | $ | 86,350 | $ | 272,345 | $ | 264,683 | |||||||||
Interest Expense: | |||||||||||||||||
Real estate segment (1) | $ | 17,878 | $ | 13,209 | $ | 46,718 | $ | 39,890 | |||||||||
Real estate-related segment | 1,152 | 1,154 | 3,424 | 3,448 | |||||||||||||
Total segment interest expense | 19,030 | 14,363 | 50,142 | 43,338 | |||||||||||||
Corporate-level | 93 | 134 | 472 | 598 | |||||||||||||
Total interest expense | $ | 19,123 | $ | 14,497 | $ | 50,614 | $ | 43,936 | |||||||||
NOI: | |||||||||||||||||
Real estate segment (1) | $ | 30,900 | $ | 32,760 | $ | 98,608 | $ | 102,375 | |||||||||
Real estate-related segment | 6,870 | 6,625 | 20,170 | 23,458 | |||||||||||||
Total NOI | $ | 37,770 | $ | 39,385 | $ | 118,778 | $ | 125,833 | |||||||||
As of September 30, | As of December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Assets: | |||||||||||||||||
Real estate segment | $ | 2,635,238 | $ | 2,441,112 | |||||||||||||
Real estate-related segment | 360,680 | 352,377 | |||||||||||||||
Total segment assets | 2,995,918 | 2,793,489 | |||||||||||||||
Corporate-level (2) | 30,568 | 28,461 | |||||||||||||||
Total assets | $ | 3,026,486 | $ | 2,821,950 | |||||||||||||
Liabilities: | |||||||||||||||||
Real estate segment | $ | 1,554,223 | $ | 1,293,854 | |||||||||||||
Real estate-related segment | 121,085 | 121,332 | |||||||||||||||
Total segment liabilities | 1,675,308 | 1,415,186 | |||||||||||||||
Corporate-level (3) | 19,226 | 11,307 | |||||||||||||||
Total liabilities | $ | 1,694,534 | $ | 1,426,493 | |||||||||||||
_____________________ | |||||||||||||||||
(1) Amounts do not include real estate held for sale and discontinued operations. | |||||||||||||||||
(2) Total corporate-level assets consisted primarily of cash and cash equivalents of approximately $30.3 million and $28.2 million as of September 30, 2013 and December 31, 2012, respectively. | |||||||||||||||||
(3) As of September 30, 2013 and December 31, 2012, corporate-level liabilities consisted primarily of distributions payable and redemptions payable. | |||||||||||||||||
The following table reconciles the Company’s net income to its NOI for the three and nine months ended September 30, 2013 and 2012 (in thousands): | |||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Net income | $ | 5,590 | $ | 7,149 | $ | 21,454 | $ | 44,597 | |||||||||
Other interest income | (6 | ) | (3 | ) | (21 | ) | (25 | ) | |||||||||
Gain on early payoff of real estate loan receivable | — | — | — | (14,884 | ) | ||||||||||||
Real estate acquisition fees to affiliates | — | — | 1,797 | — | |||||||||||||
Real estate acquisition fees and expenses | — | — | 623 | — | |||||||||||||
General and administrative expenses | 1,347 | 1,149 | 3,684 | 3,547 | |||||||||||||
Depreciation and amortization | 30,746 | 30,949 | 90,769 | 94,411 | |||||||||||||
Corporate-level interest expense | 93 | 134 | 472 | 598 | |||||||||||||
Total income from discontinued operations | — | 7 | — | (2,411 | ) | ||||||||||||
NOI | $ | 37,770 | $ | 39,385 | $ | 118,778 | $ | 125,833 | |||||||||
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
COMMITMENTS AND CONTINGENCIES | ' |
COMMITMENTS AND CONTINGENCIES | |
Economic Dependency | |
The Company is dependent on the Advisor for certain services that are essential to the Company, including the identification, evaluation, negotiation, acquisition or origination, and disposition of real estate and real estate-related investments; management of the daily operations of the Company’s real estate and real estate-related investment portfolio; and other general and administrative responsibilities. In the event the Advisor is unable to provide any of these services, the Company will be required to obtain such services from other sources. | |
Environmental | |
As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. Compliance with existing environmental laws is not expected to have a material adverse effect on the Company’s financial condition and results of operations as of September 30, 2013. | |
Legal Matters | |
From time to time, the Company is party to legal proceedings that arise in the ordinary course of its business. Management is not aware of any legal proceedings of which the outcome is probable or reasonably possible to have a material adverse effect on its results of operations or financial condition, which would require accrual or disclosure of the contingency and possible range of loss. Additionally, the Company has not recorded any loss contingencies related to legal proceedings in which the potential loss is deemed to be remote. |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2013 | |
Subsequent Events [Abstract] | ' |
SUBSEQUENT EVENTS | ' |
SUBSEQUENT EVENTS | |
The Company evaluates subsequent events up until the date the consolidated financial statements are issued. | |
Distributions Paid | |
On October 1, 2013, the Company paid distributions of $10.3 million, which related to distributions declared for daily record dates for each day in the period from September 1, 2013 through September 30, 2013. On November 1, 2013, the Company paid distributions of $10.7 million, which related to distributions declared for daily record dates for each day in the period from October 1, 2013 through October 31, 2013. | |
Distributions Declared | |
On October 15, 2013, the Company’s board of directors declared distributions based on daily record dates for the period from November 1, 2013 through November 30, 2013, which the Company expects to pay in December 2013. On November 6, 2013, the Company’s board of directors declared distributions based on daily record dates for the period from December 1, 2013 through December 31, 2013, which the Company expects to pay in January 2014, and distributions based on daily record dates for the period from January 1, 2014 through January 31, 2014, which the Company expects to pay in February 2014. Investors may choose to receive cash distributions or purchase additional shares through the Company’s dividend reinvestment plan. | |
Distributions for these periods will be calculated based on stockholders of record each day during these periods at a rate of $0.00178082 per share per day and equal a daily amount that, if paid each day for a 365-day period, would equal a 6.5% annualized rate based on a purchase price of $10.00 per share in the Company’s now terminated primary initial public offering or a 6.3% annualized rate based on the Company’s December 18, 2012 estimated value per share of $10.29. | |
Sale of the One Liberty Plaza Notes | |
On October 11, 2013, the Company, through an indirect wholly owned subsidiary, sold to a buyer unaffiliated with the Company or the Advisor, the One Liberty Plaza Notes for $114.3 million, excluding closing costs of $1.2 million. As of the date of sale, the Company’s carrying value of the One Liberty Plaza Notes was $84.0 million. As a result, the Company recorded a gain on sale of the One Liberty Plaza Notes of approximately $29.1 million. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | |
Sep. 30, 2013 | ||
Accounting Policies [Abstract] | ' | |
Principles of Consolidation and Basis of Presentation | ' | |
The accompanying unaudited consolidated financial statements and condensed notes thereto have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair and consistent presentation of the results for such periods. Operating results for the three and nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. | ||
The consolidated financial statements include the accounts of the Company, KBS REIT Holdings II, the Operating Partnership, and their direct and indirect wholly owned subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation. | ||
Use of Estimates | ' | |
The preparation of the consolidated financial statements and condensed notes thereto in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. | ||
Derivative Instruments | ' | |
The Company enters into derivative instruments for risk management purposes to hedge its exposure to cash flow variability caused by changing interest rates on its variable rate notes payable. The Company records these derivative instruments at fair value on the accompanying consolidated balance sheets. Derivative instruments designated and qualifying as a hedge of the exposure to variability in expected future cash flows or other types of forecasted transactions are considered cash flow hedges. The change in fair value of the effective portion of a derivative instrument that is designated as a cash flow hedge is recorded as other comprehensive income (loss) on the accompanying consolidated statements of comprehensive income (loss) and consolidated statements of equity. The changes in fair value for derivative instruments that are not designated as a hedge or that do not meet the hedge accounting criteria are recorded as gain or loss on derivative instruments in the accompanying consolidated statements of operations. | ||
The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objectives and strategy for undertaking various hedge transactions. This process includes designating all derivative instruments that are part of a hedging relationship to specific forecasted transactions or recognized obligations on the consolidated balance sheets. The Company also assesses and documents, both at the hedging instrument’s inception and on a quarterly basis thereafter, whether the derivative instruments that are used in hedging transactions are highly effective in offsetting changes in cash flows associated with the respective hedged items. When the Company determines that a derivative instrument ceases to be highly effective as a hedge, or that it is probable the underlying forecasted transaction will not occur, the Company discontinues hedge accounting prospectively and reclassifies amounts recorded in accumulated other comprehensive income (loss) to earnings. | ||
The termination of a cash flow hedge prior to the maturity date may result in a net derivative instrument gain or loss that continues to be reported in accumulated other comprehensive income (loss) and is reclassified into earnings over the period of the original forecasted hedged transaction (i.e., LIBOR based debt service payments) unless it is probable that the original forecasted hedged transaction will not occur by the end of the originally specified time period (as documented at the inception of the hedging relationship) or within an additional two-month period of time thereafter. If it is probable that the hedged forecasted transaction will not occur either by the end of the originally specified time period or within the additional two-month period of time, that derivative instrument gain or loss reported in accumulated other comprehensive income (loss) shall be reclassified into earnings immediately. | ||
Redeemable Common Stock | ' | |
The Company has a share redemption program that may enable stockholders to sell their shares to the Company in limited circumstances. | ||
Pursuant to the share redemption program (and unless subsequently amended as described below), there are several limitations on the Company’s ability to redeem shares under the program: | ||
• | Unless the shares are being redeemed in connection with a stockholder’s death, “qualifying disability” or “determination of incompetence” (each as defined in the share redemption program), the Company may not redeem shares unless the stockholder has held the shares for one year, provided that if the Company is redeeming all of a stockholder’s shares, then there is no holding period requirement for shares purchased pursuant to the Company’s dividend reinvestment plan. | |
• | During any calendar year, the Company may redeem only the number of shares that the Company could purchase with the amount of net proceeds from the sale of shares under the Company’s dividend reinvestment plan during the prior calendar year, provided that the Company may not redeem more than $3.0 million of shares in the aggregate each month, excluding shares redeemed in connection with a stockholder’s death, qualifying disability or determination of incompetence. | |
• | During any calendar year, the Company may redeem no more than 5% of the weighted-average number of shares outstanding during the prior calendar year. | |
• | The Company has no obligation to redeem shares if the redemption would violate the restrictions on distributions under Maryland General Corporation Law, as amended from time to time, which prohibits distributions that would cause a corporation to fail to meet statutory tests of solvency. | |
On October 15, 2013, the Company’s board of directors approved a seventh amended and restated share redemption program (the “Amended Share Redemption Program”). Pursuant to the Amended Share Redemption Program, the board of directors may increase the funding available for the redemption of shares pursuant to the Amended Share Redemption Program upon ten business days’ notice to the Company’s stockholders. The Company may provide notice of a funding increase by including such information in a Current Report on Form 8-K or in its annual or quarterly reports, all publicly filed with the SEC, or by a separate mailing to its stockholders. There were no other material changes in the Amended Share Redemption Program. | ||
The Amended Share Redemption Program will be effective on November 16, 2013, and as a result will be effective for redemptions under the program made on the November 2013 redemption date, which is November 29, 2013. | ||
In conjunction with the approval of the Amended Share Redemption Program, on October 16, 2013, the Company’s board of directors approved additional funding for the redemption of shares pursuant to the Amended Share Redemption Program. Once the Company has redeemed $3.0 million of shares in the aggregate in any month (excluding shares redeemed in connection with a stockholder’s death, qualifying disability or determination of incompetence), then an additional $20.0 million of funds in the aggregate shall be available for the redemption of shares on redemption dates commencing with the November 29, 2013 redemption date (excluding shares redeemed in connection with a stockholder’s death, qualifying disability or determination of incompetence) until such $20.0 million of funds is exhausted; provided that, in no event may the Company redeem, during any calendar year, more shares than the number of shares that the Company could purchase with the amount of net proceeds from the sale of shares under the Company’s dividend reinvestment plan during the prior calendar year. The other limitations of the Amended Share Redemption Program are in full force and effect, including that during any calendar year, the Company may redeem no more than 5% of the weighted-average number of shares outstanding during the prior calendar year. | ||
For a stockholder’s shares to be eligible for redemption in a given month or to withdraw a redemption request, the Company must receive a written notice from the stockholder or from an authorized representative of the stockholder in good order and on a form approved by the Company at least five business days before the redemption date, or by November 21, 2013 in the case of the November 29, 2013 redemption date. | ||
Pursuant to the share redemption program, redemptions made in connection with a stockholder’s death, qualifying disability or determination of incompetence are made at a price per share equal to the most recent estimated value per share of the Company’s common stock as of the applicable redemption date, and the price at which the Company redeems all other shares eligible for redemption is as follows: | ||
• | For those shares held by the redeeming stockholder for at least one year, 92.5% of the Company’s most recent estimated value per share as of the applicable redemption date; | |
• | For those shares held by the redeeming stockholder for at least two years, 95.0% of the Company’s most recent estimated value per share as of the applicable redemption date; | |
• | For those shares held by the redeeming stockholder for at least three years, 97.5% of the Company’s most recent estimated value per share as of the applicable redemption date; and | |
• | For those shares held by the redeeming stockholder for at least four years, 100% of the Company’s most recent estimated value per share as of the applicable redemption date. | |
On December 18, 2012, the Company’s board of directors approved an estimated value per share of the Company’s common stock of $10.29 (unaudited), based on the estimated value of the Company’s assets less the estimated value of the Company’s liabilities, divided by the number of shares outstanding, all as of September 30, 2012. The change in the redemption price, which is calculated based on the most recent estimated value per share, was effective for the December 2012 redemption date, which was December 31, 2012. The Company currently expects to engage the Advisor and/or an independent valuation firm to update the Company’s estimated value per share in December 2013, but is not required to update the estimated value per share more frequently than every 18 months. | ||
If the Company cannot repurchase all shares presented for redemption in any month because of the limitations on redemptions set forth in the share redemption program, then the Company will honor redemption requests on a pro rata basis, except that if a pro rata redemption would result in a stockholder owning less than the minimum purchase requirement described in the Company’s currently effective, or the most recently effective, registration statement as such registration statement has been amended or supplemented, then the Company would redeem all of such stockholder’s shares. If the Company is redeeming all of a stockholder’s shares, there would be no holding period requirement for shares purchased pursuant to the Company’s dividend reinvestment plan. | ||
The Company’s board of directors may amend, suspend or terminate the share redemption program with 30 days’ notice to its stockholders. The Company may provide this notice by including such information in a Current Report on Form 8‑K or in the Company’s annual or quarterly reports, all publicly filed with the SEC, or by a separate mailing to its stockholders. | ||
The Company limits the dollar value of shares that may be redeemed under the share redemption program as described above. For the nine months ended September 30, 2013, the Company redeemed 3,122,291 shares sold in the Offering for $31.8 million, which represented all redemption requests received in good order and eligible for redemption through the September 2013 redemption date, except for 819,334 shares due to the limitations discussed above. The Company recorded $8.4 million of other liabilities on the accompanying consolidated balance sheet as of September 30, 2013 related to these unfulfilled redemption requests. Based on the amount of net proceeds raised from the sale of shares under the dividend reinvestment plan during 2012, the Company has $34.7 million available for redemptions during the remainder of 2013, subject to the limitations described above, including the monthly limitation for ordinary redemptions. | ||
Per Share Data | ' | |
Basic net income (loss) per share of common stock is calculated by dividing net income (loss) by the weighted-average number of shares of common stock issued and outstanding during such period. Diluted net income (loss) per share of common stock equals basic net income (loss) per share of common stock as there were no potentially dilutive securities outstanding during the three and nine months ended September 30, 2013 and 2012, respectively. | ||
Distributions declared per common share were $0.164 and $0.540 for the three and nine months ended September 30, 2013, respectively, and $0.164 and $0.486 for the three and nine months ended September 30, 2012, respectively. Distributions declared per common share assumes each share was issued and outstanding each day during the three and nine months ended September 30, 2013 and 2012, respectively. For each day that was a record date for distributions during the three and nine months ended September 30, 2013 and 2012, distributions were calculated at a rate of $0.00178082 per share per day. Each day during the period from January 1, 2013 through September 30, 2013 was a record date for distributions. Each day during the periods from January 1, 2012 through February 28, 2012 and March 1, 2012 through September 30, 2012 was a record date for distributions. Additionally, the Company’s board of directors declared a distribution in the amount of $0.05416667 per share of common stock to stockholders of record as of the close of business on February 4, 2013. | ||
Segments | ' | |
The Company’s segments are based on the Company’s method of internal reporting, which classifies its operations by investment type: real estate and real estate-related. For financial data by segment, see Note 10, “Segment Information.” |
REAL_ESTATE_Tables
REAL ESTATE (Tables) | 9 Months Ended | |||||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||||
Real Estate [Abstract] | ' | |||||||||||||||||||||||
Schedule of Real Estate Investments | ' | |||||||||||||||||||||||
The following table summarizes the Company’s investments in real estate as of September 30, 2013 and December 31, 2012 (in thousands): | ||||||||||||||||||||||||
Land | Buildings and | Tenant Origination and Absorption Costs | Total Real Estate | |||||||||||||||||||||
Improvements | ||||||||||||||||||||||||
As of September 30, 2013: | ||||||||||||||||||||||||
Office | $ | 326,057 | $ | 2,061,016 | $ | 290,494 | $ | 2,677,567 | ||||||||||||||||
Industrial (1) | 10,300 | 88,865 | 17,634 | 116,799 | ||||||||||||||||||||
Total real estate, cost | $ | 336,357 | $ | 2,149,881 | $ | 308,128 | $ | 2,794,366 | ||||||||||||||||
Accumulated depreciation and amortization | — | (224,461 | ) | (114,651 | ) | (339,112 | ) | |||||||||||||||||
Net Amount | $ | 336,357 | $ | 1,925,420 | $ | 193,477 | $ | 2,455,254 | ||||||||||||||||
As of December 31, 2012: | ||||||||||||||||||||||||
Office | $ | 254,897 | $ | 1,903,298 | $ | 286,291 | $ | 2,444,486 | ||||||||||||||||
Industrial (1) | 10,300 | 88,966 | 18,441 | 117,707 | ||||||||||||||||||||
Total real estate, cost | $ | 265,197 | $ | 1,992,264 | $ | 304,732 | $ | 2,562,193 | ||||||||||||||||
Accumulated depreciation and amortization | — | (173,917 | ) | (96,621 | ) | (270,538 | ) | |||||||||||||||||
Net Amount | $ | 265,197 | $ | 1,818,347 | $ | 208,111 | $ | 2,291,655 | ||||||||||||||||
_____________________ | ||||||||||||||||||||||||
(1) Includes an investment in the rights to a ground lease. The ground lease expires in February 2050. | ||||||||||||||||||||||||
Schedules of Concentration of Risk, by Risk Factor | ' | |||||||||||||||||||||||
As of September 30, 2013, the Company’s highest tenant industry concentrations (greater than 10% of annualized base rent) were as follows: | ||||||||||||||||||||||||
Industry | Number of Tenants | Annualized | Percentage of Annualized Base Rent | |||||||||||||||||||||
Base Rent (1) | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Legal Services | 61 | $ | 51,391 | 19.6 | % | |||||||||||||||||||
Finance | 91 | 49,985 | 19.1 | % | ||||||||||||||||||||
Computer System Design & Programming | 21 | 32,646 | 12.5 | % | ||||||||||||||||||||
$ | 134,022 | 51.2 | % | |||||||||||||||||||||
_____________________ | ||||||||||||||||||||||||
(1) Annualized base rent represents annualized contractual base rental income as of September 30, 2013, adjusted to straight-line any contractual tenant concessions (including free rent), rent increases and rent decreases from the lease’s inception through the balance of the lease term. | ||||||||||||||||||||||||
As of September 30, 2013, the following property represented more than 10% of the Company’s total assets: | ||||||||||||||||||||||||
Property | Location | Rentable | Total | Percentage | Annualized Base Rent | Average Annualized Base Rent per sq. ft. | Occupancy | |||||||||||||||||
Square | Real Estate, Net | of Total | (in thousands) (1) | |||||||||||||||||||||
Feet | (in thousands) | Assets | ||||||||||||||||||||||
300 N. LaSalle Building | Chicago, IL | 1,302,901 | $ | 556,248 | 18.4 | % | $ | 45,266 | $ | 35.04 | 99.1 | % | ||||||||||||
_____________________ | ||||||||||||||||||||||||
(1) Annualized base rent represents annualized contractual base rental income as of September 30, 2013, adjusted to straight-line any contractual tenant concessions (including free rent), rent increases and rent decreases from the lease’s inception through the balance of the lease term. | ||||||||||||||||||||||||
Schedule of Future Minimum Rental Income for Company's Properties | ' | |||||||||||||||||||||||
As of September 30, 2013, the future minimum rental income from the Company’s properties under non-cancelable operating leases was as follows (in thousands): | ||||||||||||||||||||||||
October 1, 2013 through December 31, 2013 | $ | 62,674 | ||||||||||||||||||||||
2014 | 246,965 | |||||||||||||||||||||||
2015 | 231,911 | |||||||||||||||||||||||
2016 | 216,653 | |||||||||||||||||||||||
2017 | 194,412 | |||||||||||||||||||||||
Thereafter | 831,946 | |||||||||||||||||||||||
$ | 1,784,561 | |||||||||||||||||||||||
TENANT_ORIGINATION_AND_ABSORPT1
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Abstract] | ' | ||||||||||||||||||||||||
Tenant Origination and Absorption Costs, Above-Market Lease Assests and Below-Market Lease Liabiities | ' | ||||||||||||||||||||||||
As of September 30, 2013 and December 31, 2012, the Company’s tenant origination and absorption costs, above-market lease assets and below-market lease liabilities (excluding fully amortized assets and liabilities and accumulated amortization) were as follows (in thousands): | |||||||||||||||||||||||||
Tenant Origination and | Above-Market | Below-Market | |||||||||||||||||||||||
Absorption Costs | Lease Assets | Lease Liabilities | |||||||||||||||||||||||
September 30, | December 31, | September 30, | December 31, | September 30, | December 31, | ||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||
Cost | $ | 308,128 | $ | 304,732 | $ | 76,227 | $ | 70,176 | $ | (49,287 | ) | $ | (46,607 | ) | |||||||||||
Accumulated Amortization | (114,651 | ) | (96,621 | ) | (22,245 | ) | (20,961 | ) | 24,466 | 20,088 | |||||||||||||||
Net Amount | $ | 193,477 | $ | 208,111 | $ | 53,982 | $ | 49,215 | $ | (24,821 | ) | $ | (26,519 | ) | |||||||||||
Amortization of Tenant Origination and Absorptoin Costs, Above-Market Leases and Below-Market Lease Liabilities | ' | ||||||||||||||||||||||||
Increases (decreases) in net income as a result of amortization of the Company’s tenant origination and absorption costs, above-market lease assets and below-market lease liabilities for the three and nine months ended September 30, 2013 and 2012 were as follows (in thousands): | |||||||||||||||||||||||||
Tenant Origination and | Above-Market | Below-Market | |||||||||||||||||||||||
Absorption Costs | Lease Assets | Lease Liabilities | |||||||||||||||||||||||
For the Three Months Ended September 30, | For the Three Months Ended September 30, | For the Three Months Ended September 30, | |||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||
Amortization | $ | (10,343 | ) | $ | (11,984 | ) | $ | (2,451 | ) | $ | (2,253 | ) | $ | 1,828 | $ | 2,160 | |||||||||
Tenant Origination and | Above-Market | Below-Market | |||||||||||||||||||||||
Absorption Costs | Lease Assets | Lease Liabilities | |||||||||||||||||||||||
For the Nine Months Ended September 30, | For the Nine Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||
Amortization | $ | (31,216 | ) | $ | (37,432 | ) | $ | (7,201 | ) | $ | (6,813 | ) | $ | 5,586 | $ | 6,324 | |||||||||
REAL_ESTATE_LOANS_RECEIVABLE_T
REAL ESTATE LOANS RECEIVABLE (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Receivables [Abstract] | ' | ||||||||||||||||||||||||
Schedule of Real Estate Loans Receivable | ' | ||||||||||||||||||||||||
As of September 30, 2013 and December 31, 2012, the Company, through indirect wholly owned subsidiaries, had invested in or originated real estate loans receivable as follows (dollars in thousands): | |||||||||||||||||||||||||
Loan Name | Date Acquired/ Originated | Property Type | Loan Type | Outstanding Principal Balance as of September 30, | Book Value | Book Value | Contractual Interest Rate (3) | Annualized Effective Interest Rate (3) | Maturity Date (4) | ||||||||||||||||
Location of Related Property or Collateral | 2013 (1) | as of | as of | ||||||||||||||||||||||
September 30, | December 31, | ||||||||||||||||||||||||
2013 (2) | 2012 (2) | ||||||||||||||||||||||||
One Liberty Plaza Notes (5) | |||||||||||||||||||||||||
New York, New York | 2/11/09 | Office | Mortgage | $ | 112,179 | $ | 84,144 | $ | 81,163 | 6.10% | 14.90% | 8/6/17 | |||||||||||||
Tuscan Inn First Mortgage Origination (6) | |||||||||||||||||||||||||
San Francisco, California | 1/21/10 | Hotel | Mortgage | 20,200 | 20,050 | 19,973 | 8.30% | 9.00% | 1/21/15 | ||||||||||||||||
Chase Tower First Mortgage Origination (6) | |||||||||||||||||||||||||
Austin, Texas | 1/25/10 | Office | Mortgage | 58,917 | 58,924 | 59,210 | 8.40% | 8.50% | 2/1/15 | ||||||||||||||||
Pappas Commerce First Mortgage Origination (6) (7) | |||||||||||||||||||||||||
Boston, Massachusetts | 4/5/10 | Industrial | Mortgage | 32,673 | 32,673 | 32,673 | (7) | 9.80% | 7/1/14 | ||||||||||||||||
One Kendall Square First Mortgage Origination (8) | |||||||||||||||||||||||||
Cambridge, Massachusetts | 11/22/10 | Mixed-use Facility | Mortgage | 87,500 | 87,595 | 88,006 | (8) | 7.00% | 12/1/13 | ||||||||||||||||
Participation | |||||||||||||||||||||||||
Sheraton Charlotte Airport Hotel First Mortgage (6) | |||||||||||||||||||||||||
Charlotte, North Carolina | 7/11/11 | Hotel | Mortgage | 14,492 | 14,507 | 14,519 | 7.50% | 7.60% | 8/1/18 | ||||||||||||||||
Summit I & II First Mortgage | |||||||||||||||||||||||||
Reston, Virginia | 1/17/12 | Office | Mortgage | 58,750 | 58,784 | 53,302 | 7.50% | 7.60% | 2/1/17 | ||||||||||||||||
$ | 384,711 | $ | 356,677 | $ | 348,846 | ||||||||||||||||||||
_____________________ | |||||||||||||||||||||||||
(1) Outstanding principal balance as of September 30, 2013 represents original principal balance outstanding under the loan, increased for any subsequent fundings and reduced for any principal paydowns. | |||||||||||||||||||||||||
(2) Book value represents outstanding principal balance, adjusted for unamortized acquisition discounts, origination fees and direct origination and acquisition costs. | |||||||||||||||||||||||||
(3) Contractual interest rates are the stated interest rates on the face of the loans. Annualized effective interest rates are calculated as the actual interest income recognized in 2013, using the interest method, annualized and divided by the average amortized cost basis of the investment. The contractual interest rates and annualized effective interest rates presented are as of September 30, 2013. | |||||||||||||||||||||||||
(4) Maturity dates are as of September 30, 2013; subject to certain conditions, the maturity dates of certain real estate loans receivable may be extended beyond the maturity date shown. | |||||||||||||||||||||||||
(5) On October 11, 2013, the Company sold the One Liberty Plaza Notes. See Note 12, “Subsequent Events - Sale of the One Liberty Plaza Notes.” | |||||||||||||||||||||||||
(6) The Tuscan Inn First Mortgage Origination, the Chase Tower First Mortgage Origination, the Pappas Commerce First Mortgage Origination and the Sheraton Charlotte Airport Hotel First Mortgage are the collateral for the Portfolio Mortgage Loan #2. | |||||||||||||||||||||||||
(7) As of September 30, 2013, $31.9 million had been disbursed under the Pappas Commerce First Mortgage. Interest on the first mortgage is calculated at a fixed rate of 9.5%. Outstanding principal balance also includes a protective advance of $0.8 million made on June 22, 2011 to cover property taxes and to fund the tax and insurance reserve account. Interest on the protective advance is calculated at a fixed rate of 14.5%. | |||||||||||||||||||||||||
(8) The One Kendall Square First Mortgage bears interest at a floating rate of 550 basis points over one-month LIBOR, but at no point shall the interest rate be less than 7.5%. | |||||||||||||||||||||||||
Schedule of Activity Related to Real Estate Loans Receivable | ' | ||||||||||||||||||||||||
The following summarizes the activity related to real estate loans receivable for the nine months ended September 30, 2013 (in thousands): | |||||||||||||||||||||||||
Real estate loans receivable - December 31, 2012 | $ | 348,846 | |||||||||||||||||||||||
Additional principal funded under real estate loans receivable | 5,490 | ||||||||||||||||||||||||
Principal repayments received on real estate loans receivable | (1,320 | ) | |||||||||||||||||||||||
Accretion of discounts on purchased real estate loans receivable | 4,075 | ||||||||||||||||||||||||
Amortization of closing costs and origination fees on real estate loans receivable | (414 | ) | |||||||||||||||||||||||
Real estate loans receivable - September 30, 2013 | $ | 356,677 | |||||||||||||||||||||||
Schedule of Interest Income from Real Estate Loans Receivable | ' | ||||||||||||||||||||||||
For the three and nine months ended September 30, 2013 and 2012, interest income from real estate loans receivable consisted of the following (in thousands): | |||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||
Contractual interest income | $ | 7,313 | $ | 7,214 | $ | 21,597 | $ | 23,830 | |||||||||||||||||
Accretion of purchase discounts | 1,416 | 1,248 | 4,075 | 5,331 | |||||||||||||||||||||
Amortization of closing costs and origination fees | (143 | ) | (131 | ) | (414 | ) | (418 | ) | |||||||||||||||||
Interest income from real estate loans receivable | $ | 8,586 | $ | 8,331 | $ | 25,258 | $ | 28,743 | |||||||||||||||||
NOTES_PAYABLE_Tables
NOTES PAYABLE (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Notes Payable [Abstract] | ' | ||||||||||||||||
Schedule of Long-term Debt Instruments | ' | ||||||||||||||||
As of September 30, 2013 and December 31, 2012, the Company’s notes payable consisted of the following (dollars in thousands): | |||||||||||||||||
Principal as of September 30, | Principal as of December 31, | Contractual Interest Rate as of | Effective Interest Rate as of | Payment Type | Maturity Date (2) | ||||||||||||
2013 | 2012 | September 30, 2013(1) | September 30, | ||||||||||||||
2013 (1) | |||||||||||||||||
100 & 200 Campus Drive Mortgage Loan (3) | $ | — | $ | 55,000 | (3) | (3) | (3) | (3) | |||||||||
300-600 Campus Drive Mortgage Loan (4) | — | 93,850 | (4) | (4) | (4) | (4) | |||||||||||
Portfolio Revolving Loan Facility (5) | 105,000 | 55,000 | One-month LIBOR + 1.80% (5) | 3.50% | Interest Only | 6/21/17 | |||||||||||
Willow Oaks Revolving Loan (3) | — | 13,000 | (3) | (3) | (3) | (3) | |||||||||||
300 N. LaSalle Building Mortgage Loan | 349,518 | 350,000 | 4.25% | 4.30% | (6) | 8/1/15 | |||||||||||
Union Bank Plaza Mortgage Loan (7) | 105,000 | 105,000 | One-month LIBOR + 1.75% | 3.50% | Interest Only | 9/15/15 | |||||||||||
Emerald View at Vista Center Mortgage Loan | 19,800 | 19,800 | One-month LIBOR + 2.25% | 4.60% | Interest Only | 1/1/16 | |||||||||||
Portfolio Mortgage Loan #1 (8) | 341,544 | 341,544 | One-month LIBOR + 2.15% | 3.70% | Interest Only | 1/27/16 | |||||||||||
One Kendall Square Borrowing | 45,000 | 45,000 | One-month LIBOR + 2.50% | 4.00% | Interest Only | 12/1/13 | |||||||||||
601 Tower Mortgage Loan (9) | 16,320 | 16,320 | (9) | 3.50% | Interest Only | 6/3/15 | |||||||||||
CityPlace Tower Mortgage Loan | 71,000 | 71,000 | 3.59% | 3.60% | Interest Only | 8/1/15 | |||||||||||
Fountainhead Plaza Mortgage Loan | 80,000 | 80,000 | One-month LIBOR + 1.90% | 2.90% | Interest Only | 12/1/15 | |||||||||||
Metropolitan Center Mortgage Loan (3) | — | 13,000 | (3) | (3) | (3) | (3) | |||||||||||
Portfolio Mortgage Loan #2 (10) | 75,742 | 76,000 | One-month LIBOR + 2.75% | 3.00% | Interest Only | 1/1/16 | |||||||||||
Portfolio Mortgage Loan #3 (11) | 156,000 | — | One-month LIBOR + | 2.30% | Interest Only | 3/1/16 | |||||||||||
1.75% - 1.85% | |||||||||||||||||
Corporate Technology Centre Mortgage Loan | 140,000 | — | 3.50% | 3.40% | (12) | 4/1/20 | |||||||||||
300-600 Campus Drive Revolving Loan (13) | 78,000 | — | One-month LIBOR + 2.05% (13) | 2.60% | Interest Only | 8/1/16 | |||||||||||
$ | 1,582,924 | $ | 1,334,514 | ||||||||||||||
_____________________ | |||||||||||||||||
(1) Contractual interest rate represents the interest rate in effect under the loan as of September 30, 2013. Effective interest rate is calculated as the actual interest rate in effect as of September 30, 2013 (consisting of the contractual interest rate and the effect of interest rate swaps and contractual floor rates, if applicable), using interest rate indices as of September 30, 2013, where applicable. For further information regarding the Company’s derivative instruments, see Note 7, “Derivative Instruments.” | |||||||||||||||||
(2) Represents the initial maturity date or the maturity date as extended as of September 30, 2013; subject to certain conditions, the maturity dates of certain loans may be extended beyond the maturity date shown. | |||||||||||||||||
(3) On March 6, 2013, the Company used proceeds from the Portfolio Mortgage Loan #3 to repay these loans in full. | |||||||||||||||||
(4) On July 10, 2013, the Company used proceeds from the 300-600 Campus Drive Revolving Loan to repay the loan in full. | |||||||||||||||||
(5) On April 30, 2010, the Company entered into a four-year revolving loan facility for an amount up to $100.0 million. On June 21, 2013, the Portfolio Revolving Loan Facility was amended and restated to increase the borrowing capacity from $100.0 million to $145.0 million and to extend the maturity date to June 21, 2017. The Amended and Restated Portfolio Revolving Loan Facility is secured by Mountain View Corporate Center, 350 E. Plumeria Building, Pierre Laclede Center and One Main Place. As of September 30, 2013, the $105.0 million non‑revolving portion had been funded, and the $40.0 million revolving portion remained available for future disbursements, subject to certain terms and conditions contained in the loan documents. | |||||||||||||||||
(6) Monthly payments were initially interest-only. Beginning on September 1, 2013, monthly payments include principal and interest with principal payments calculated using an amortization schedule of 30 years for the balance of the loan term, with the remaining principal balance, all accrued and unpaid interest and any other amounts due at maturity. | |||||||||||||||||
(7) On September 15, 2010, in connection with the acquisition of the Union Bank Plaza, the Company entered into a five-year mortgage loan for borrowings of up to $119.3 million secured by the Union Bank Plaza. As of September 30, 2013, $105.0 million had been disbursed to the Company with the remaining loan balance of $14.3 million available for future disbursements, subject to certain conditions set forth in the loan agreement. | |||||||||||||||||
(8) The Portfolio Mortgage Loan #1 is secured by Plano Business Park, Horizon Tech Center, Crescent VIII, National City Tower, Granite Tower, Gateway Corporate Center, I-81 Industrial Portfolio, Two Westlake Park, Torrey Reserve West and our leasehold interest in the Dallas Cowboys Distribution Center. | |||||||||||||||||
(9) On June 6, 2011, the Company entered into a four-year $32.6 million revolving credit loan. As of September 30, 2013, $16.3 million had been disbursed to the Company under the mortgage loan and $16.3 million remained available for future disbursements under the revolving loan facility, subject to certain conditions set forth in the loan agreement. The interest rate on the $16.3 million outstanding as of September 30, 2013 was calculated at a fixed rate of 3.54% per annum. The interest rate on the $16.3 million available for future disbursements as of September 30, 2013 will be calculated at a variable rate of 220 basis points over one-month LIBOR. | |||||||||||||||||
(10) The Portfolio Mortgage Loan #2 is secured by the Tuscan Inn First Mortgage Origination, the Chase Tower First Mortgage Origination, the Pappas Commerce First Mortgage Origination and the Sheraton Charlotte Airport Hotel First Mortgage. Principal payments received as prepayments or upon the maturity of the underlying collateral are required to be remitted as principal repayments on the Portfolio Mortgage Loan #2. | |||||||||||||||||
(11) On March 6, 2013, the Company entered into a three-year senior secured credit facility for borrowings of up to $235.0 million, of which $141.0 million is non-revolving debt and $94.0 million is revolving debt. As of September 30, 2013, the principal balance consisted of the $141.0 million non-revolving portion and $15.0 million of the revolving portion. The revolving portion of $79.0 million remains available for future disbursements, subject to certain terms and conditions contained in the loan documents. The Portfolio Mortgage Loan #3 is secured by 100 & 200 Campus Drive Buildings, Metropolitan Center and Willow Oaks Corporate Center. | |||||||||||||||||
(12) Monthly payments are initially interest-only. Beginning on May 1, 2017, monthly payments include principal and interest with principal payments calculated using an amortization schedule of 30 years for the balance of the loan term, with the remaining principal balance, all accrued and unpaid interest and any other amounts due at maturity. | |||||||||||||||||
(13) On July 10, 2013, the Company entered into a three-year senior secured credit facility for borrowings of up to $120.0 million. See “ — Recent Financing Transaction — 300-600 Campus Drive Revolving Loan.” | |||||||||||||||||
Schedule of Maturities of Long-term Debt | ' | ||||||||||||||||
The following is a schedule of maturities for all notes payable outstanding as of September 30, 2013 (in thousands): | |||||||||||||||||
October 1, 2013 through December 31, 2013 | $ | 45,000 | |||||||||||||||
2014 | — | ||||||||||||||||
2015 | 621,838 | ||||||||||||||||
2016 | 671,086 | ||||||||||||||||
2017 | 105,000 | ||||||||||||||||
Thereafter | 140,000 | ||||||||||||||||
$ | 1,582,924 | ||||||||||||||||
DERIVATIVE_INSTRUMENTS_Tables
DERIVATIVE INSTRUMENTS (Tables) | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | |||||||||||||||||||
Schedule of Notional and Fair Value of Interest Rate Swaps Designated as Cash Flow Hedges | ' | |||||||||||||||||||
The following table summarizes the notional and fair value of the Company’s interest rate swaps designated as cash flow hedges as of September 30, 2013 and December 31, 2012. The notional value is an indication of the extent of the Company’s involvement in each instrument at that time, but does not represent exposure to credit, interest rate or market risks (dollars in thousands): | ||||||||||||||||||||
Fair Value of Asset (Liability) | Fair Value of Asset (Liability) | |||||||||||||||||||
Derivative Instruments | Effective Date | Maturity Date | Notional Value | Reference Rate | September 30, 2013 | December 31, 2012 | ||||||||||||||
Interest Rate Swap (1) | 2/26/10 | 2/26/14 | $ | — | One-month LIBOR/ | $ | — | (1) | $ | (239 | ) | |||||||||
Fixed at 2.30% | ||||||||||||||||||||
Interest Rate Swap (1) | 2/26/10 | 2/26/14 | — | One-month LIBOR/ | — | (1) | (239 | ) | ||||||||||||
Fixed at 2.30% | ||||||||||||||||||||
Interest Rate Swap | 4/30/10 | 4/30/14 | 45,000 | One-month LIBOR/ | (517 | ) | (1,214 | ) | ||||||||||||
Fixed at 2.17% | ||||||||||||||||||||
Interest Rate Swap (1) | 7/26/10 | 8/1/13 | — | One-month LIBOR/ | — | (1) | (43 | ) | ||||||||||||
Fixed at 1.33% | ||||||||||||||||||||
Interest Rate Swap (1) | 7/26/10 | 8/1/13 | — | One-month LIBOR/ | — | (1) | (43 | ) | ||||||||||||
Fixed at 1.33% | ||||||||||||||||||||
Interest Rate Swap | 9/15/10 | 9/15/15 | 105,000 | One-month LIBOR/ | (2,778 | ) | (3,788 | ) | ||||||||||||
Fixed at 1.70% | ||||||||||||||||||||
Interest Rate Swap (1) | 12/15/10 | 2/26/14 | — | One-month LIBOR/ | — | (1) | (262 | ) | ||||||||||||
Fixed at 1.53% | ||||||||||||||||||||
Interest Rate Swap (1) | 12/15/10 | 2/26/14 | — | One-month LIBOR/ | — | (1) | (262 | ) | ||||||||||||
Fixed at 1.53% | ||||||||||||||||||||
Interest Rate Swap | 12/16/10 | 1/1/16 | 19,800 | One-month LIBOR/ | (878 | ) | (1,166 | ) | ||||||||||||
Fixed at 2.39% | ||||||||||||||||||||
Interest Rate Swap | 12/20/10 | 6/16/15 | 69,000 | One-month LIBOR/ | (1,917 | ) | (2,700 | ) | ||||||||||||
Fixed at 1.94% | ||||||||||||||||||||
Interest Rate Swap | 2/1/11 | 1/1/16 | 56,150 | One-month LIBOR/ | (2,202 | ) | (2,929 | ) | ||||||||||||
Fixed at 2.16% | ||||||||||||||||||||
Interest Rate Swap | 2/1/11 | 2/1/15 | 8,400 | One-month LIBOR/ | (168 | ) | (254 | ) | ||||||||||||
Fixed at 1.75% | ||||||||||||||||||||
Interest Rate Swap | 2/1/11 | 2/1/14 | 80,150 | One-month LIBOR/ | (306 | ) | (928 | ) | ||||||||||||
Fixed at 1.29% | ||||||||||||||||||||
Interest Rate Swap | 3/8/11 | 2/1/14 | 85,900 | One-month LIBOR/ | (376 | ) | (1,147 | ) | ||||||||||||
Fixed at 1.45% | ||||||||||||||||||||
Interest Rate Swap | 3/10/11 | 2/1/14 | 13,750 | One-month LIBOR/ | (54 | ) | (164 | ) | ||||||||||||
Fixed at 1.32% | ||||||||||||||||||||
Interest Rate Swap | 12/1/11 | 12/1/15 | 80,000 | One-month LIBOR/ | (1,140 | ) | (1,547 | ) | ||||||||||||
Fixed at 1.04% | ||||||||||||||||||||
Interest Rate Swap (1) | 1/1/12 | 1/1/16 | — | One-month LIBOR/ | — | (1) | (145 | ) | ||||||||||||
Fixed at 1.02% | ||||||||||||||||||||
Interest Rate Swap (1) | 2/1/12 | 1/1/16 | — | One-month LIBOR/ | — | (1) | (59 | ) | ||||||||||||
Fixed at 0.77% | ||||||||||||||||||||
Interest Rate Swap | 3/6/13 | 3/1/17 | 32,113 | One-month LIBOR/ | 105 | — | ||||||||||||||
Fixed at 0.71% | ||||||||||||||||||||
Interest Rate Swap | 5/1/13 | 3/1/17 | 23,787 | One-month LIBOR/ | 74 | — | ||||||||||||||
Fixed at 0.71% | ||||||||||||||||||||
Interest Rate Swap | 3/6/13 | 3/1/16 | 48,887 | One-month LIBOR/ | (57 | ) | — | |||||||||||||
Fixed at 0.50% | ||||||||||||||||||||
Interest Rate Swap | 5/1/13 | 3/1/16 | 36,213 | One-month LIBOR/ | (43 | ) | — | |||||||||||||
Fixed at 0.50% | ||||||||||||||||||||
Interest Rate Swap | 7/1/13 | 6/1/17 | 60,000 | One-month LIBOR/ | (1,192 | ) | — | |||||||||||||
Fixed at 1.30% | ||||||||||||||||||||
Interest Rate Swap | 8/1/13 | 8/1/16 | 78,000 | One-month LIBOR/ | (591 | ) | — | |||||||||||||
Fixed at 0.86% | ||||||||||||||||||||
Total derivatives designated | $ | 842,150 | $ | (12,040 | ) | $ | (17,129 | ) | ||||||||||||
as hedging instruments | ||||||||||||||||||||
_____________________ | ||||||||||||||||||||
(1) On March 6, 2013, the Company used proceeds from the Portfolio Mortgage Loan #3 to repay the loans related to these swaps in full. In connection with the repayment of these loans, the Company terminated the swap agreements with respect to eight swaps which were subject to an aggregate breakage fee of $1.1 million. |
FAIR_VALUE_DISCLOSURES_Tables
FAIR VALUE DISCLOSURES (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||||||||||
Schedule of Face Value, Carrying Amounts and Fair Value | ' | ||||||||||||||||||||||||
The following were the face values, carrying amounts and fair values of the Company’s real estate loans receivable and notes payable as of September 30, 2013 and December 31, 2012, which carrying amounts do not approximate the fair values (in thousands): | |||||||||||||||||||||||||
September 30, 2013 | December 31, 2012 | ||||||||||||||||||||||||
Face Value | Carrying | Fair Value | Face Value | Carrying | Fair Value | ||||||||||||||||||||
Amount | Amount | ||||||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||||
Real estate loans receivable | $ | 384,711 | $ | 356,677 | $ | 389,536 | $ | 380,542 | $ | 348,846 | $ | 390,145 | |||||||||||||
Financial liabilities: | |||||||||||||||||||||||||
Notes payable | $ | 1,582,924 | $ | 1,582,924 | $ | 1,589,362 | $ | 1,334,514 | $ | 1,334,514 | $ | 1,341,363 | |||||||||||||
Schedule of Assets and Liabilities at Fair Value | ' | ||||||||||||||||||||||||
During the nine months ended September 30, 2013, the Company measured the following assets and liabilities at fair value (in thousands): | |||||||||||||||||||||||||
Fair Value Measurements Using | |||||||||||||||||||||||||
Total | Quoted Prices in | Significant Other | Significant | ||||||||||||||||||||||
Active Markets | Observable | Unobservable | |||||||||||||||||||||||
for Identical Assets | Inputs (Level 2) | Inputs (Level 3) | |||||||||||||||||||||||
(Level 1) | |||||||||||||||||||||||||
Recurring Basis: | |||||||||||||||||||||||||
Asset derivatives | $ | 179 | $ | — | $ | 179 | $ | — | |||||||||||||||||
Liability derivatives | (12,219 | ) | — | (12,219 | ) | — | |||||||||||||||||||
RELATED_PARTY_TRANSACTIONS_Tab
RELATED PARTY TRANSACTIONS (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Related Party Transactions [Abstract] | ' | ||||||||||||||||||||||||
Schedule of Related Party Costs | ' | ||||||||||||||||||||||||
Pursuant to the terms of these agreements, summarized below are the related-party costs incurred by the Company for the three and nine months ended September 30, 2013 and 2012, respectively, and any related amounts payable as of September 30, 2013 and December 31, 2012 (in thousands): | |||||||||||||||||||||||||
Incurred | Incurred | Payable as of | |||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | September 30, | December 31, | ||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||
Expensed | |||||||||||||||||||||||||
Asset management fees | $ | 6,079 | $ | 5,556 | $ | 17,563 | $ | 16,749 | (1) | $ | — | $ | — | ||||||||||||
Reimbursement of operating expenses (2) | 44 | 35 | 102 | 71 | — | 168 | |||||||||||||||||||
Acquisition fees | — | — | 1,797 | — | — | — | |||||||||||||||||||
Disposition fees | — | — | — | 968 | — | — | |||||||||||||||||||
Capitalized | |||||||||||||||||||||||||
Origination fees | — | — | — | 608 | — | — | |||||||||||||||||||
$ | 6,123 | $ | 5,591 | $ | 19,462 | $ | 18,396 | $ | — | $ | 168 | ||||||||||||||
_____________________ | |||||||||||||||||||||||||
(1) Amount includes asset management fees from discontinued operations totaling $41,000 for the nine months ended September 30, 2012. | |||||||||||||||||||||||||
(2) The Advisor may seek reimbursement for certain employee costs under the Advisory Agreement. The Company reimburses the Advisor for the Company’s allocable portion of the salaries, benefits and overhead of internal audit department personnel providing services to the Company. These amounts totaled $44,000 and $35,000 for the three months ended September 30, 2013 and 2012, respectively, and $102,000 and $71,000 for the nine months ended September 30, 2013 and 2012, respectively, and were the only employee costs reimbursed under the Advisory Agreement through September 30, 2013. The Company will not reimburse for employee costs in connection with services for which the Advisor earns acquisition, origination or disposition fees (other than reimbursement of travel and communication expenses) or for the salaries or benefits the Advisor or its affiliates may pay to the Company’s executive officers. |
SEGMENT_INFORMATION_Tables
SEGMENT INFORMATION (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||
Schedule of Segment Reporting Information, by Segment | ' | ||||||||||||||||
The following tables summarize total revenues and NOI for each reportable segment for the three and nine months ended September 30, 2013 and 2012 and total assets and total liabilities for each reportable segment as of September 30, 2013 and December 31, 2012 (in thousands): | |||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Revenues: | |||||||||||||||||
Real estate segment (1) | $ | 83,660 | $ | 78,019 | $ | 247,087 | $ | 235,940 | |||||||||
Real estate-related segment | 8,586 | 8,331 | 25,258 | 28,743 | |||||||||||||
Total segment revenues | $ | 92,246 | $ | 86,350 | $ | 272,345 | $ | 264,683 | |||||||||
Interest Expense: | |||||||||||||||||
Real estate segment (1) | $ | 17,878 | $ | 13,209 | $ | 46,718 | $ | 39,890 | |||||||||
Real estate-related segment | 1,152 | 1,154 | 3,424 | 3,448 | |||||||||||||
Total segment interest expense | 19,030 | 14,363 | 50,142 | 43,338 | |||||||||||||
Corporate-level | 93 | 134 | 472 | 598 | |||||||||||||
Total interest expense | $ | 19,123 | $ | 14,497 | $ | 50,614 | $ | 43,936 | |||||||||
NOI: | |||||||||||||||||
Real estate segment (1) | $ | 30,900 | $ | 32,760 | $ | 98,608 | $ | 102,375 | |||||||||
Real estate-related segment | 6,870 | 6,625 | 20,170 | 23,458 | |||||||||||||
Total NOI | $ | 37,770 | $ | 39,385 | $ | 118,778 | $ | 125,833 | |||||||||
As of September 30, | As of December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Assets: | |||||||||||||||||
Real estate segment | $ | 2,635,238 | $ | 2,441,112 | |||||||||||||
Real estate-related segment | 360,680 | 352,377 | |||||||||||||||
Total segment assets | 2,995,918 | 2,793,489 | |||||||||||||||
Corporate-level (2) | 30,568 | 28,461 | |||||||||||||||
Total assets | $ | 3,026,486 | $ | 2,821,950 | |||||||||||||
Liabilities: | |||||||||||||||||
Real estate segment | $ | 1,554,223 | $ | 1,293,854 | |||||||||||||
Real estate-related segment | 121,085 | 121,332 | |||||||||||||||
Total segment liabilities | 1,675,308 | 1,415,186 | |||||||||||||||
Corporate-level (3) | 19,226 | 11,307 | |||||||||||||||
Total liabilities | $ | 1,694,534 | $ | 1,426,493 | |||||||||||||
_____________________ | |||||||||||||||||
(1) Amounts do not include real estate held for sale and discontinued operations. | |||||||||||||||||
(2) Total corporate-level assets consisted primarily of cash and cash equivalents of approximately $30.3 million and $28.2 million as of September 30, 2013 and December 31, 2012, respectively. | |||||||||||||||||
(3) As of September 30, 2013 and December 31, 2012, corporate-level liabilities consisted primarily of distributions payable and redemptions payable. | |||||||||||||||||
Reconciliation of Net Income (Loss) to Net Operating Income (Loss) | ' | ||||||||||||||||
The following table reconciles the Company’s net income to its NOI for the three and nine months ended September 30, 2013 and 2012 (in thousands): | |||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Net income | $ | 5,590 | $ | 7,149 | $ | 21,454 | $ | 44,597 | |||||||||
Other interest income | (6 | ) | (3 | ) | (21 | ) | (25 | ) | |||||||||
Gain on early payoff of real estate loan receivable | — | — | — | (14,884 | ) | ||||||||||||
Real estate acquisition fees to affiliates | — | — | 1,797 | — | |||||||||||||
Real estate acquisition fees and expenses | — | — | 623 | — | |||||||||||||
General and administrative expenses | 1,347 | 1,149 | 3,684 | 3,547 | |||||||||||||
Depreciation and amortization | 30,746 | 30,949 | 90,769 | 94,411 | |||||||||||||
Corporate-level interest expense | 93 | 134 | 472 | 598 | |||||||||||||
Total income from discontinued operations | — | 7 | — | (2,411 | ) | ||||||||||||
NOI | $ | 37,770 | $ | 39,385 | $ | 118,778 | $ | 125,833 | |||||||||
ORGANIZATION_Details
ORGANIZATION (Details) (USD $) | 9 Months Ended | 12 Months Ended | 35 Months Ended | 65 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | Mar. 22, 2011 | Sep. 30, 2013 | |
properties | properties | |||
LoansReceivables | LoansReceivables | |||
Organizational Structure [Line Items] | ' | ' | ' | ' |
Partnership interest in Operating Partnership | 0.10% | ' | ' | ' |
Partnership interest in the Operating Partnership and is its sole limited partner | 99.90% | ' | ' | ' |
Number of real estate properties | 27 | ' | ' | 27 |
Number of real estate loans receivable | 7 | ' | ' | 7 |
Issuance of common stock, value | $54,308,000 | $66,460,000 | $1,800,000,000 | ' |
Shares of common stock sold under dividend reinvestment plan, value | ' | ' | ' | 255,000,000 |
Redemptions of common stock, value | 31,757,000 | 82,818,000 | ' | 163,400,000 |
Common Stock [Member] | ' | ' | ' | ' |
Organizational Structure [Line Items] | ' | ' | ' | ' |
Issuance of common stock, shares | 5,552,841 | 6,804,964 | 182,681,633 | ' |
Issuance of common stock, value | 55,000 | 67,000 | ' | ' |
Shares of common stock sold under dividend reinvestment plan, shares | ' | ' | ' | 26,492,532 |
Redemptions of common stock, shares | 3,122,291 | 8,255,964 | ' | 16,489,448 |
Redemptions of common stock, value | $31,000 | $81,000 | ' | ' |
KBS Capital Advisors LLC [Member] | Common Stock [Member] | ' | ' | ' | ' |
Organizational Structure [Line Items] | ' | ' | ' | ' |
Shares held by affiliate | 20,000 | ' | ' | 20,000 |
Office Properties [Member] | ' | ' | ' | ' |
Organizational Structure [Line Items] | ' | ' | ' | ' |
Number of real estate properties | 20 | ' | ' | 20 |
Office-Flex Properties [Member] | ' | ' | ' | ' |
Organizational Structure [Line Items] | ' | ' | ' | ' |
Number of real estate properties | 1 | ' | ' | 1 |
Industrial Properties Porfolio-1 [Member] | ' | ' | ' | ' |
Organizational Structure [Line Items] | ' | ' | ' | ' |
Number of real estate properties | 4 | ' | ' | 4 |
Industrial Properties Portfolio-2 [Member] | ' | ' | ' | ' |
Organizational Structure [Line Items] | ' | ' | ' | ' |
Number of real estate properties | 1 | ' | ' | 1 |
Industrial Property-Leasehold Interest [Member] | ' | ' | ' | ' |
Organizational Structure [Line Items] | ' | ' | ' | ' |
Number of real estate properties | 1 | ' | ' | 1 |
Office Buildings, Campus [Member] | ' | ' | ' | ' |
Organizational Structure [Line Items] | ' | ' | ' | ' |
Number of real estate properties | 8 | ' | ' | 8 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 9 Months Ended | 12 Months Ended | 65 Months Ended | 9 Months Ended | |||||||||||||||
Feb. 04, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 18, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |
Unfulfilled Redemption Request [Member] | Third Amended and Restated Share Redemption Program [Member] | Third Amended and Restated Share Redemption Program [Member] | Fourth Amended and Restated Share Redemption Program [Member] | Fourth Amended and Restated Share Redemption Program [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Held for One Year [Member] | Held for One Year [Member] | Held for Two Years [Member] | Held for Two Years [Member] | Held for Three Years [Member] | Held for Three Years [Member] | Held for Four Years [Member] | Held for Four Years [Member] | $3.0 Million of Shares Have Been Redeemed in the Aggregate in Any Month [Member] | Maximum [Member] | |||||||
Third Amended and Restated Share Redemption Program [Member] | Fourth Amended and Restated Share Redemption Program [Member] | Third Amended and Restated Share Redemption Program [Member] | Fourth Amended and Restated Share Redemption Program [Member] | Third Amended and Restated Share Redemption Program [Member] | Fourth Amended and Restated Share Redemption Program [Member] | Third Amended and Restated Share Redemption Program [Member] | Fourth Amended and Restated Share Redemption Program [Member] | Third Amended and Restated Share Redemption Program [Member] | Third Amended and Restated Share Redemption Program [Member] | |||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum number of shares redeemable per month, value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $3,000,000 |
Maximum percentage of weighted-average shares outstanding available for redemption during any calendar year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% |
Shares redeemed on monthly basis, value | ' | ' | ' | ' | ' | ' | ' | ' | 3,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Funds available for redemption of shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20,000,000 | ' |
Redemption price percentage of most recent estimated value per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 92.50% | ' | 95.00% | ' | 97.50% | ' | 100.00% | ' | ' |
Share holding term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | '2 years | ' | '3 years | ' | '4 years | ' | ' | ' |
Estimated value per share of company's common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $10.29 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Offering stage completion term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '18 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Redemptions of common stock, shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,122,291 | 8,255,964 | 16,489,448 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock redeemed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 31,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares non-redeemable do to limitatios | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 819,334 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other liabilities | ' | 41,757,000 | ' | 41,757,000 | ' | 34,355,000 | 8,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount available for redemption | ' | ' | ' | ' | ' | ' | ' | ' | ' | $34,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Distrubutions declared per common share | ' | $0.16 | $0.16 | $0.54 | $0.49 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Distribution rate per share per day, declared | $0.05 | $0.00 | $0.00 | $0.00 | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum share holding period to be available for redemption | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
REAL_ESTATE_Narrative_Details
REAL ESTATE (Narrative) (Details) | Sep. 30, 2013 |
sqft | |
properties | |
Real Estate Properties [Line Items] | ' |
Number of real estate properties | 27 |
Rentable square feet | 11,600,000 |
Percentage of portfolio occupied | 95.00% |
Office Properties [Member] | ' |
Real Estate Properties [Line Items] | ' |
Number of real estate properties | 20 |
Office-Flex Properties [Member] | ' |
Real Estate Properties [Line Items] | ' |
Number of real estate properties | 1 |
Office Campus [Member] | ' |
Real Estate Properties [Line Items] | ' |
Number of real estate properties | 1 |
Office Buildings, Campus [Member] | ' |
Real Estate Properties [Line Items] | ' |
Number of real estate properties | 8 |
Industrial Properties Porfolio-1 [Member] | ' |
Real Estate Properties [Line Items] | ' |
Number of real estate properties | 4 |
Industrial Properties Portfolio-2 [Member] | ' |
Real Estate Properties [Line Items] | ' |
Number of real estate properties | 1 |
Industrial Property-Leasehold Interest [Member] | ' |
Real Estate Properties [Line Items] | ' |
Number of real estate properties | 1 |
REAL_ESTATE_Schedule_of_Real_E
REAL ESTATE (Schedule of Real Estate Investments) (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Real Estate Properties [Line Items] | ' | ' | ||
Total real estate, cost | $2,794,366 | $2,562,193 | ||
Accumulated depreciation and amortization | -339,112 | -270,538 | ||
Total real estate, net | 2,455,254 | 2,291,655 | ||
Office [Member] | ' | ' | ||
Real Estate Properties [Line Items] | ' | ' | ||
Total real estate, cost | 2,677,567 | 2,444,486 | ||
Industrial [Member] | ' | ' | ||
Real Estate Properties [Line Items] | ' | ' | ||
Total real estate, cost | 116,799 | [1] | 117,707 | [1] |
Land [Member] | ' | ' | ||
Real Estate Properties [Line Items] | ' | ' | ||
Total real estate, cost | 336,357 | 265,197 | ||
Total real estate, net | 336,357 | 265,197 | ||
Land [Member] | Office [Member] | ' | ' | ||
Real Estate Properties [Line Items] | ' | ' | ||
Total real estate, cost | 326,057 | 254,897 | ||
Land [Member] | Industrial [Member] | ' | ' | ||
Real Estate Properties [Line Items] | ' | ' | ||
Total real estate, cost | 10,300 | [1] | 10,300 | [1] |
Buildings and Improvements [Member] | ' | ' | ||
Real Estate Properties [Line Items] | ' | ' | ||
Total real estate, cost | 2,149,881 | 1,992,264 | ||
Accumulated depreciation and amortization | -224,461 | -173,917 | ||
Total real estate, net | 1,925,420 | 1,818,347 | ||
Buildings and Improvements [Member] | Office [Member] | ' | ' | ||
Real Estate Properties [Line Items] | ' | ' | ||
Total real estate, cost | 2,061,016 | 1,903,298 | ||
Buildings and Improvements [Member] | Industrial [Member] | ' | ' | ||
Real Estate Properties [Line Items] | ' | ' | ||
Total real estate, cost | 88,865 | [1] | 88,966 | [1] |
Tenant Origination and Absorption Costs [Member] | ' | ' | ||
Real Estate Properties [Line Items] | ' | ' | ||
Total real estate, cost | 308,128 | 304,732 | ||
Accumulated depreciation and amortization | -114,651 | -96,621 | ||
Total real estate, net | 193,477 | 208,111 | ||
Tenant Origination and Absorption Costs [Member] | Office [Member] | ' | ' | ||
Real Estate Properties [Line Items] | ' | ' | ||
Total real estate, cost | 290,494 | 286,291 | ||
Tenant Origination and Absorption Costs [Member] | Industrial [Member] | ' | ' | ||
Real Estate Properties [Line Items] | ' | ' | ||
Total real estate, cost | $17,634 | [1] | $18,441 | [1] |
[1] | Includes an investment in the rights to a ground lease. The ground lease expires in February 2050. |
REAL_ESTATE_300_N_LaSalle_Buil
REAL ESTATE (300 N. LaSalle Building) (Details) (USD $) | 9 Months Ended | ||
Sep. 30, 2013 | Dec. 31, 2012 | ||
sqft | |||
Real Estate Properties [Line Items] | ' | ' | |
Rentable Square Feet | 11,600,000 | ' | |
Total Real Estate, Net | $2,455,254,000 | $2,291,655,000 | |
Percentage of Total Assets | 51.20% | ' | |
Annualized Base Rent | 134,022,000 | [1] | ' |
Occupancy | 95.00% | ' | |
300 N. Lasalle [Member] | Assets, Total [Member] | ' | ' | |
Real Estate Properties [Line Items] | ' | ' | |
Rentable Square Feet | 1,302,901 | ' | |
Total Real Estate, Net | 556,248,000 | ' | |
Percentage of Total Assets | 18.40% | ' | |
Annualized Base Rent | 45,266,000 | [1] | ' |
Average Annualized Base Rent per sq. ft. | $35.04 | ' | |
Occupancy | 99.10% | ' | |
[1] | Annualized base rent represents annualized contractual base rental income as of September 30, 2013, adjusted to straight-line any contractual tenant concessions (including free rent), rent increases and rent decreases from the lease’s inception through the balance of the lease term. |
REAL_ESTATE_Operating_Leases_N
REAL ESTATE (Operating Leases) (Narrative) (Details) (USD $) | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Operating Leased Assets [Line Items] | ' | ' | ' |
Deferred rent recognized | $9,938,000 | $12,162,000 | ' |
Deferred rent receivables | 66,200,000 | ' | 53,500,000 |
Unamortized lease incentives | 7,700,000 | ' | 5,300,000 |
Recorded bad debt expense related to tenant | 470,000 | -127,000 | ' |
Bad debt reserve | 200,000 | ' | ' |
Other Liabilities [Member] | ' | ' | ' |
Operating Leased Assets [Line Items] | ' | ' | ' |
Security deposit liability | $4,600,000 | ' | $4,200,000 |
Maximum [Member] | ' | ' | ' |
Operating Leased Assets [Line Items] | ' | ' | ' |
Operating lease, term | '15 years 4 months 24 days | ' | ' |
Bad debt reserve of annualized base rent | 1.00% | ' | ' |
Weighted Average [Member] | ' | ' | ' |
Operating Leased Assets [Line Items] | ' | ' | ' |
Operating lease, term | '5 years 8 months 12 days | ' | ' |
REAL_ESTATE_Future_Minimum_Ren
REAL ESTATE (Future Minimum Rental Income) (Details) (USD $) | Sep. 30, 2013 |
In Thousands, unless otherwise specified | |
Real Estate [Abstract] | ' |
October 1, 2013 through December 31, 2013 | $62,674 |
2014 | 246,965 |
2015 | 231,911 |
2016 | 216,653 |
2017 | 194,412 |
Thereafter | 831,946 |
Future minimum rental income | $1,784,561 |
REAL_ESTATE_Highes_Tenant_Indu
REAL ESTATE (Highes Tenant Industry Concentrations- Grater than 10% of Annual Base Rent) (Details) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | |
Concentration Risk [Line Items] | ' | |
Annualized Base Rent | $134,022 | [1] |
Percentage of Annualized Base Rent | 51.20% | |
Industry - Legal Services [Member] | ' | |
Concentration Risk [Line Items] | ' | |
Number of Tenants | 61 | |
Annualized Base Rent | 51,391 | [1] |
Percentage of Annualized Base Rent | 19.60% | |
Industry - Finance [Member] | ' | |
Concentration Risk [Line Items] | ' | |
Number of Tenants | 91 | |
Annualized Base Rent | 49,985 | [1] |
Percentage of Annualized Base Rent | 19.10% | |
Industry - Computer System Design & Programming [Member] | ' | |
Concentration Risk [Line Items] | ' | |
Number of Tenants | 21 | |
Annualized Base Rent | $32,646 | [1] |
Percentage of Annualized Base Rent | 12.50% | |
[1] | Annualized base rent represents annualized contractual base rental income as of September 30, 2013, adjusted to straight-line any contractual tenant concessions (including free rent), rent increases and rent decreases from the lease’s inception through the balance of the lease term. |
REAL_ESTATE_REAL_ESTATE_Geogra
REAL ESTATE REAL ESTATE (Geographic Concentration Risk) (Details) | 9 Months Ended |
Sep. 30, 2013 | |
Concentration Risk [Line Items] | ' |
Concentration risk, percentage | 51.20% |
Assets, Total [Member] | 300 N. Lasalle [Member] | ' |
Concentration Risk [Line Items] | ' |
Concentration risk, percentage | 18.40% |
Revenues, Total [Member] | 300 N. Lasalle [Member] | ' |
Concentration Risk [Line Items] | ' |
Concentration risk, percentage | 19.60% |
ILLINOIS [Member] | Assets, Total [Member] | ' |
Concentration Risk [Line Items] | ' |
Concentration risk, percentage | 18.40% |
CALIFORNIA [Member] | Assets, Total [Member] | ' |
Concentration Risk [Line Items] | ' |
Concentration risk, percentage | 17.70% |
NEW JERSEY [Member] | Assets, Total [Member] | ' |
Concentration Risk [Line Items] | ' |
Concentration risk, percentage | 14.40% |
REAL_ESTATE_Recent_Acquisition
REAL ESTATE (Recent Acquisition) (Narrative) (Details) (USD $) | Sep. 30, 2013 | Mar. 28, 2013 | Mar. 28, 2013 | Mar. 28, 2013 |
In Millions, unless otherwise specified | sqft | Corporate Technology Centre [Member] | Corporate Technology Centre [Member] | Corporate Technology Centre [Member] |
acre | Office Campus [Member] | Office Buildings, Campus [Member] | ||
Tenants | properties | properties | ||
sqft | ||||
Real Estate Properties [Line Items] | ' | ' | ' | ' |
Number of real estate properties acquired | ' | ' | 1 | 8 |
Rentable square feet | 11,600,000 | 610,083 | ' | ' |
Area of land | ' | 32.7 | ' | ' |
Contractual purchase price | ' | $239 | ' | ' |
Percent of property leased | ' | 100.00% | ' | ' |
Number of tenants | ' | 5 | ' | ' |
TENANT_ORIGINATION_AND_ABSORPT2
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Abstract] | ' | ' | ' | ' | ' |
Tenant Origination And Absorption Costs, Cost | $308,128 | ' | $308,128 | ' | $304,732 |
Tenant Origination and Absorption Costs, Accumulated Amortization | -114,651 | ' | -114,651 | ' | -96,621 |
Tenant Origination and Absorption Costs, Net Amount | 193,477 | ' | 193,477 | ' | 208,111 |
Tenant Origination and Absorption Costs, Amortization expense | -10,343 | -11,984 | -31,216 | -37,432 | ' |
Above-Market Lease Assets, Cost | 76,227 | ' | 76,227 | ' | 70,176 |
Above-Market Lease Assets, Accumulated Amortization | -22,245 | ' | -22,245 | ' | -20,961 |
Above-Market Lease Assets, Net Amount | 53,982 | ' | 53,982 | ' | 49,215 |
Above-Market Lease Assets, Amortization expense | -2,451 | -2,253 | -7,201 | -6,813 | ' |
Below-Market Lease Liabilities, Cost | -49,287 | ' | -49,287 | ' | -46,607 |
Below-Market Lease Liabilities, Accumulated Amortization | 24,466 | ' | 24,466 | ' | 20,088 |
Below-Market Lease Liabilities, Net Amount | -24,821 | ' | -24,821 | ' | -26,519 |
Below-Market Lease Liabilities, Amortization expense | $1,828 | $2,160 | $5,586 | $6,324 | ' |
REAL_ESTATE_LOANS_RECEIVABLE_S
REAL ESTATE LOANS RECEIVABLE (Schedule of Real Estate Loans Receivable) (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Jun. 22, 2011 | Sep. 30, 2013 | ||||||||||||||||
Pappas Commerce First Mortgage Origination [Member] | Pappas Commerce First Mortgage Origination [Member] | One Kendall Square First Mortgage Origination [Member] | One Kendall Square First Mortgage Origination [Member] | Mortgages [Member] | Mortgages [Member] | Mortgages [Member] | Mortgages [Member] | Mortgages [Member] | Mortgages [Member] | Mortgages [Member] | Mortgages [Member] | Mortgages [Member] | Mortgages [Member] | Mortgages [Member] | Mortgages [Member] | Mortgage Participation [Member] | Mortgage Participation [Member] | Protective Advance [Member] | Protective Advance [Member] | |||||||||||||||||||
Face Amount [Member] | Minimum [Member] | One Liberty Plaza Notes [Member] | One Liberty Plaza Notes [Member] | Tuscan Inn First Mortgage Origination [Member] | Tuscan Inn First Mortgage Origination [Member] | Chase Tower First Mortgage Origination [Member] | Chase Tower First Mortgage Origination [Member] | Pappas Commerce First Mortgage Origination [Member] | Pappas Commerce First Mortgage Origination [Member] | Sheraton Charlotte Airport Hotel First Mortgage [Member] | Sheraton Charlotte Airport Hotel First Mortgage [Member] | Origination of Summit I & II First Mortgage [Member] | Origination of Summit I & II First Mortgage [Member] | One Kendall Square First Mortgage Origination [Member] | One Kendall Square First Mortgage Origination [Member] | Pappas Commerce First Mortgage Origination [Member] | Pappas Commerce First Mortgage Origination [Member] | |||||||||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||
Date Acquired/ Originated | ' | ' | ' | ' | ' | ' | 11-Feb-09 | [1] | ' | 21-Jan-10 | [2] | ' | 25-Jan-10 | [2] | ' | 5-Apr-10 | [2],[3] | ' | 11-Jul-11 | [2] | ' | 17-Jan-12 | ' | 22-Nov-10 | [4] | ' | ' | ' | ||||||||||
Outstanding Principal Balance | $384,711,000 | [5] | ' | ' | $31,900,000 | ' | ' | $112,179,000 | [1],[5] | ' | $20,200,000 | [2],[5] | ' | $58,917,000 | [2],[5] | ' | $32,673,000 | [2],[3],[5] | ' | $14,492,000 | [2],[5] | ' | $58,750,000 | [5] | ' | $87,500,000 | [4],[5] | ' | ' | ' | ||||||||
Book Value | 356,677,000 | [6] | 348,846,000 | [6] | ' | ' | ' | ' | 84,144,000 | [1],[6] | 81,163,000 | [1],[6] | 20,050,000 | [2],[6] | 19,973,000 | [2],[6] | 58,924,000 | [2],[6] | 59,210,000 | [2],[6] | 32,673,000 | [2],[3],[6] | 32,673,000 | [2],[3],[6] | 14,507,000 | [2],[6] | 14,519,000 | [2],[6] | 58,784,000 | [6] | 53,302,000 | [6] | 87,595,000 | [4],[6] | 88,006,000 | [4],[6] | ' | ' |
Contractual Interest Rate | ' | ' | 9.50% | ' | ' | 7.50% | 6.10% | [1],[7] | ' | 8.30% | [2],[7] | ' | 8.40% | [2],[7] | ' | ' | ' | 7.50% | [2],[7] | ' | 7.50% | [7] | ' | ' | ' | ' | 14.50% | |||||||||||
Annualized Effective Interest Rate | ' | ' | ' | ' | ' | ' | 14.90% | [1],[7] | ' | 9.00% | [2],[7] | ' | 8.50% | [2],[7] | ' | 9.80% | [2],[3],[7] | ' | 7.60% | [2],[7] | ' | 7.60% | [7] | ' | 7.00% | [4],[7] | ' | ' | ' | |||||||||
Maturity Date | ' | ' | ' | ' | ' | ' | 6-Aug-17 | [1],[8] | ' | 21-Jan-15 | [2],[8] | ' | 1-Feb-15 | [2],[8] | ' | 1-Jul-14 | [2],[3],[8] | ' | 1-Aug-18 | [2],[8] | ' | 1-Feb-17 | [8] | ' | 1-Dec-13 | [4],[8] | ' | ' | ' | |||||||||
Additional advance under mortgage loans | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $800,000 | ' | ||||||||||||||||
Basis spread on variable rate | ' | ' | ' | ' | 5.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||
Description of variable rate basis | ' | ' | ' | ' | 'one-month LIBOR | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||
[1] | On October 11, 2013, the Company sold the One Liberty Plaza Notes. See Note 12, “Subsequent Events - Sale of the One Liberty Plaza Notes.†| |||||||||||||||||||||||||||||||||||||
[2] | The Tuscan Inn First Mortgage Origination, the Chase Tower First Mortgage Origination, the Pappas Commerce First Mortgage Origination and the Sheraton Charlotte Airport Hotel First Mortgage are the collateral for the Portfolio Mortgage Loan #2. | |||||||||||||||||||||||||||||||||||||
[3] | As of September 30, 2013, $31.9 million had been disbursed under the Pappas Commerce First Mortgage. Interest on the first mortgage is calculated at a fixed rate of 9.5%. Outstanding principal balance also includes a protective advance of $0.8 million made on June 22, 2011 to cover property taxes and to fund the tax and insurance reserve account. Interest on the protective advance is calculated at a fixed rate of 14.5%. | |||||||||||||||||||||||||||||||||||||
[4] | The One Kendall Square First Mortgage bears interest at a floating rate of 550 basis points over one-month LIBOR, but at no point shall the interest rate be less than 7.5%. | |||||||||||||||||||||||||||||||||||||
[5] | Outstanding principal balance as of September 30, 2013 represents original principal balance outstanding under the loan, increased for any subsequent fundings and reduced for any principal paydowns. | |||||||||||||||||||||||||||||||||||||
[6] | Book value represents outstanding principal balance, adjusted for unamortized acquisition discounts, origination fees and direct origination and acquisition costs. | |||||||||||||||||||||||||||||||||||||
[7] | Contractual interest rates are the stated interest rates on the face of the loans. Annualized effective interest rates are calculated as the actual interest income recognized in 2013, using the interest method, annualized and divided by the average amortized cost basis of the investment. The contractual interest rates and annualized effective interest rates presented are as of September 30, 2013. | |||||||||||||||||||||||||||||||||||||
[8] | Maturity dates are as of September 30, 2013; subject to certain conditions, the maturity dates of certain real estate loans receivable may be extended beyond the maturity date shown. |
REAL_ESTATE_LOANS_RECEIVABLE_S1
REAL ESTATE LOANS RECEIVABLE (Schedule of Activity Related to Real Estate Loans Receivable) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | ||
Real Estate Loans Receivable [Roll Forward] | ' | ' | ' | ' | ||
Real estate loans receivables, Beginning Balance | ' | ' | $348,846 | [1] | ' | |
Face value of real estate loan receivable originated and acquired | ' | ' | 5,490 | ' | ||
Principal repayment received on real estate loan receivable | ' | ' | -1,320 | -948 | ||
Accretion of discounts on purchased real estate loans receivable | ' | ' | 4,075 | ' | ||
Amortization of closing costs and origination fees on real estate loans receivable | -143 | -131 | -414 | -418 | ||
Real estate loans receivables, Ending Balance | $356,677 | [1] | ' | $356,677 | [1] | ' |
[1] | Book value represents outstanding principal balance, adjusted for unamortized acquisition discounts, origination fees and direct origination and acquisition costs. |
REAL_ESTATE_LOANS_RECEIVABLE_S2
REAL ESTATE LOANS RECEIVABLE (Schedule of Interest Income from Real Estate Loans Receivable) (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Receivables [Abstract] | ' | ' | ' | ' | ' |
Contractual interest income | $7,313,000 | $7,214,000 | $21,597,000 | $23,830,000 | ' |
Accretion of purchase discounts | 1,416,000 | 1,248,000 | 4,075,000 | 5,331,000 | ' |
Amortization of closing costs and origination fees | -143,000 | -131,000 | -414,000 | -418,000 | ' |
Interest income from real estate loans receivable | 8,586,000 | 8,331,000 | 25,258,000 | 28,743,000 | ' |
Interest receivable | $2,200,000 | ' | $2,200,000 | ' | $2,300,000 |
NOTES_PAYABLE_Narrative_Detail
NOTES PAYABLE (Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Debt Instrument [Line Items] | ' | ' | ' | ' | ' |
Interest expense | $19,123,000 | $14,497,000 | $50,614,000 | $43,936,000 | ' |
Interest payable, current | 4,500,000 | ' | 4,500,000 | ' | 4,300,000 |
Amortization of financing cost, net of discontinued operations | 900,000 | 800,000 | 2,400,000 | 2,400,000 | ' |
Additional interest expense related to the effective portion of cash flow hedges | 2,700,000 | 2,300,000 | 7,600,000 | 6,900,000 | ' |
300-600 Campus Drive [Member] | ' | ' | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' | ' | ' |
Prepayment fee | 3,700,000 | ' | 3,700,000 | ' | ' |
Deferred Financing Costs, Prepaid Expenses and Other Assets [Member] | ' | ' | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' | ' | ' |
Deferred financing costs | $8,600,000 | ' | $8,600,000 | ' | $7,000,000 |
NOTES_PAYABLE_Schedule_of_Long
NOTES PAYABLE (Schedule of Long-term Debt Instruments) (Details) (USD $) | Sep. 30, 2013 | Jul. 10, 2013 | Sep. 30, 2013 | Aug. 01, 2013 | Jul. 10, 2013 | Sep. 30, 2013 | Mar. 06, 2013 | Mar. 06, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Jul. 10, 2013 | Aug. 01, 2013 | Apr. 30, 2010 | Sep. 30, 2013 | Sep. 30, 2013 | Jun. 21, 2013 | Dec. 31, 2012 | Apr. 30, 2010 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 15, 2010 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Jun. 06, 2011 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Mar. 06, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Jun. 21, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Jul. 10, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||||||||||||||||||||||||
300-600 Campus Drive [Member] | 300-600 Campus Drive [Member] | 300-600 Campus Drive [Member] | 300-600 Campus Drive [Member] | Portfolio Mortgage Loan 3 [Member] | Portfolio Mortgage Loan 3 [Member] | Portfolio Mortgage Loan 3 [Member] | Portfolio Mortgage Loan 3 [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | Mortgage [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Revolving Credit Facility [Member] | Non-Revolving Credit Facility [Member] | Non-Revolving Credit Facility [Member] | Non-Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Secured Debt [Member] | Non-Revolving Credit Facility [Member] | 100 & 200 Campus Drive [Member] | 100 & 200 Campus Drive [Member] | 300-600 Campus Drive [Member] | 300-600 Campus Drive [Member] | 300-600 Campus Drive [Member] | 300-600 Campus Drive [Member] | Portfolio Revolving Loan [Member] | Portfolio Revolving Loan [Member] | Portfolio Revolving Loan [Member] | Portfolio Revolving Loan [Member] | Portfolio Revolving Loan [Member] | Portfolio Revolving Loan [Member] | Willow Oaks Revolving [Member] | Willow Oaks Revolving [Member] | 300 N. Lasalle [Member] | 300 N. Lasalle [Member] | Union Bank Plaza [Member] | Union Bank Plaza [Member] | Union Bank Plaza [Member] | Union Bank Plaza [Member] | Emerald View at Vista Center [Member] | Emerald View at Vista Center [Member] | Emerald View at Vista Center [Member] | Portfolio Mortgage Loan 1 [Member] | Portfolio Mortgage Loan 1 [Member] | Portfolio Mortgage Loan 1 [Member] | One Kendall Square [Member] | One Kendall Square [Member] | One Kendall Square [Member] | 601 Tower at Carlson Center [Member] | 601 Tower at Carlson Center [Member] | 601 Tower at Carlson Center [Member] | CityPlace Tower [Member] | CityPlace Tower [Member] | Fountainhead Plaza [Member] | Fountainhead Plaza [Member] | Fountainhead Plaza [Member] | Metropolitan Center [Member] | Metropolitan Center [Member] | Portfolio Mortgage Loan 2 [Member] | Portfolio Mortgage Loan 2 [Member] | Portfolio Mortgage Loan 2 [Member] | Portfolio Mortgage Loan 3 [Member] | Portfolio Mortgage Loan 3 [Member] | Portfolio Mortgage Loan 3 [Member] | Portfolio Mortgage Loan 3 [Member] | Portfolio Mortgage Loan 3 [Member] | Portfolio Mortgage Loan 3 [Member] | Corporate Technology Centre [Member] | Corporate Technology Centre [Member] | Amended and Restated Portfolio Revolving Loan Facility [Member] | Amended and Restated Portfolio Revolving Loan Facility [Member] | Amended and Restated Portfolio Revolving Loan Facility [Member] | 300-600 Campus Drive Revolving Loan [Member] | 300-600 Campus Drive Revolving Loan [Member] | 300-600 Campus Drive Revolving Loan [Member] | 300-600 Campus Drive Revolving Loan [Member] | ||||||||||||||||||||||||||||||||||||||||||||||
Secured Debt [Member] | Non-Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Minimum [Member] | Maximum [Member] | Revolving Credit Facility [Member] | Non-Revolving Credit Facility [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||||||||||||||||||||||||||||
Principal Balance | $1,582,924,000 | ' | ' | ' | ' | ' | ' | ' | ' | $1,582,924,000 | $1,334,514,000 | $0 | [1] | $55,000,000 | [1] | $0 | [2] | $93,850,000 | [2] | ' | ' | ' | $105,000,000 | [3] | $105,000,000 | [3] | ' | $55,000,000 | [3] | $100,000,000 | [4] | $0 | [1] | $13,000,000 | [1] | $349,518,000 | $350,000,000 | $119,300,000 | [4] | $105,000,000 | [5] | $105,000,000 | [5] | $105,000,000 | [5] | $19,800,000 | $19,800,000 | $19,800,000 | $341,544,000 | [6] | $341,544,000 | [6] | $341,544,000 | [6] | $45,000,000 | $45,000,000 | $45,000,000 | $32,600,000 | [4] | $16,320,000 | [7] | $16,320,000 | [7] | $71,000,000 | $71,000,000 | $80,000,000 | $80,000,000 | $80,000,000 | $0 | [1] | $13,000,000 | [1] | $75,742,000 | [4] | $75,742,000 | [4] | $76,000,000 | [4] | ' | $156,000,000 | [8] | $156,000,000 | [8] | $0 | [8] | ' | ' | $140,000,000 | $0 | $145,000,000 | $40,000,000 | $105,000,000 | ' | $78,000,000 | [9] | $78,000,000 | [9] | $0 | [9] | |||||||||||
Description of Variable Rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'one-month LIBOR | ' | ' | 'One-month LIBOR | [10],[3] | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'One-month LIBOR | [10],[5] | ' | ' | 'One-month LIBOR | [10] | ' | ' | 'One-month LIBOR | [10],[6] | ' | ' | 'One-month LIBOR | [10] | ' | ' | ' | 'one-month LIBOR | [10],[8] | ' | ' | ' | 'One-month LIBOR | [10] | ' | ' | ' | ' | 'One-month LIBOR | [10],[4] | ' | ' | ' | 'One-month LIBOR | [10],[8] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'One-month LIBOR | [10],[9] | ' | ' | ||||||||||||||||||||||||||||||||
Basis Spread on Variable Rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.80% | [10],[3] | 1.80% | [10],[3] | 3.00% | ' | ' | 3.00% | [10] | ' | ' | ' | ' | 1.75% | [10],[5] | 1.75% | [10],[5] | ' | 2.25% | [10] | 2.25% | [10] | ' | 2.15% | [10],[6] | 2.15% | [10],[6] | ' | 2.50% | [10] | 2.50% | [10] | ' | ' | 2.20% | [10] | ' | ' | ' | 1.90% | [10] | 1.90% | [10] | ' | ' | ' | 2.75% | [10],[4] | 2.75% | [10],[4] | ' | ' | ' | ' | ' | 1.75% | [10],[8] | 1.85% | [10],[8] | ' | ' | 1.80% | ' | ' | ' | 2.05% | [10],[9] | 2.05% | [10],[9] | ' | ||||||||||||||||||||||
Contractual Interest Rate, Percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.05% | 2.91% | ' | ' | ' | ' | ' | ' | ' | ' | 4.25% | [10] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.54% | ' | 3.59% | [10],[11] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.50% | [10] | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||||||||||||||||||||||||||||||
Effective Interest Rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.50% | [10],[3] | 3.50% | [10],[3] | ' | ' | ' | ' | ' | 4.30% | [10] | ' | ' | 3.50% | [10],[5] | 3.50% | [10],[5] | ' | 4.60% | [10] | 4.60% | [10] | ' | 3.70% | [10],[6] | 3.70% | [10],[6] | ' | 4.00% | [10] | 4.00% | [10] | ' | ' | 3.50% | [10],[7] | ' | 3.60% | [10] | ' | 2.90% | [10] | 2.90% | [10] | ' | ' | ' | 3.00% | [10],[4] | 3.00% | [10],[4] | ' | ' | 2.30% | [10],[8] | 2.30% | [10],[8] | ' | ' | ' | 3.40% | [10] | ' | ' | ' | ' | ' | 2.60% | [10],[9] | 2.60% | [10],[9] | ' | ||||||||||||||||||||
Payment Type | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'Interest Only | [3] | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'Interest Only | [5] | ' | ' | 'Interest Only | ' | ' | 'Interest Only | [6] | ' | ' | 'Interest Only | ' | ' | 'Interest Only | [7] | ' | 'Interest Only | ' | ' | 'Interest Only | ' | ' | ' | ' | 'Interest Only | [4] | ' | ' | ' | 'Interest Only | [8] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'Interest Only | [9] | ' | |||||||||||||||||||||||||||||||||||
Maturity Date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 21-Jun-17 | [12],[3] | ' | ' | ' | ' | ' | 1-Aug-15 | [12] | ' | ' | ' | 15-Sep-15 | [12],[5] | ' | ' | 1-Jan-16 | [12] | ' | ' | 27-Jan-16 | [12],[6] | ' | ' | 1-Dec-13 | [12] | ' | ' | 3-Jun-15 | [12],[7] | ' | 1-Aug-15 | [12] | ' | ' | 1-Dec-15 | [12] | ' | ' | ' | ' | 1-Jan-16 | [12],[4] | ' | ' | ' | 1-Mar-16 | [12],[8] | ' | ' | ' | 1-Apr-20 | [12] | ' | ' | ' | ' | ' | ' | 1-Aug-16 | [12],[9] | ' | |||||||||||||||||||||||||||||
Term of credit facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | '4 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '4 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ||||||||||||||||||||||||||||||||||||||||||
Amortization schedule | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '30 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '30 years | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||||||||||||||||||||||||||||
Amount outstanding | ' | ' | 78,000,000 | 78,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 105,000,000 | 105,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 16,300,000 | [4] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||||||||||||||||||||||||||||||||
Unused borrowing capacity, amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 14,300,000 | 14,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 16,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||||||||||||||||||||||||||||
Borrowing capacity | ' | 25,000,000 | ' | ' | 95,000,000 | ' | 94,000,000 | 235,000,000 | 141,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||||||||||||||||||||||||||||
Used borrowing capacity | ' | ' | ' | ' | ' | 15,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||||||||||||||||||||||||||||
Remaining borrowing capacity | ' | ' | ' | ' | ' | 79,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 17,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||||||||||||||||||||||||||||
Maximum borrowing capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $120,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||||||||||||||||||||||||||||
[1] | On March 6, 2013, the Company used proceeds from the Portfolio Mortgage Loan #3 to repay these loans in full. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[2] | On July 10, 2013, the Company used proceeds from the 300-600 Campus Drive Revolving Loan to repay the loan in full. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[3] | On April 30, 2010, the Company entered into a four-year revolving loan facility for an amount up to $100.0 million. On June 21, 2013, the Portfolio Revolving Loan Facility was amended and restated to increase the borrowing capacity from $100.0 million to $145.0 million and to extend the maturity date to June 21, 2017. The Amended and Restated Portfolio Revolving Loan Facility is secured by Mountain View Corporate Center, 350 E. Plumeria Building, Pierre Laclede Center and One Main Place. As of September 30, 2013, the $105.0 million non‑revolving portion had been funded, and the $40.0 million revolving portion remained available for future disbursements, subject to certain terms and conditions contained in the loan documents. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[4] | The Portfolio Mortgage Loan #2 is secured by the Tuscan Inn First Mortgage Origination, the Chase Tower First Mortgage Origination, the Pappas Commerce First Mortgage Origination and the Sheraton Charlotte Airport Hotel First Mortgage. Principal payments received as prepayments or upon the maturity of the underlying collateral are required to be remitted as principal repayments on the Portfolio Mortgage Loan #2. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[5] | On September 15, 2010, in connection with the acquisition of the Union Bank Plaza, the Company entered into a five-year mortgage loan for borrowings of up to $119.3 million secured by the Union Bank Plaza. As of September 30, 2013, $105.0 million had been disbursed to the Company with the remaining loan balance of $14.3 million available for future disbursements, subject to certain conditions set forth in the loan agreement. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[6] | The Portfolio Mortgage Loan #1 is secured by Plano Business Park, Horizon Tech Center, Crescent VIII, National City Tower, Granite Tower, Gateway Corporate Center, I-81 Industrial Portfolio, Two Westlake Park, Torrey Reserve West and our leasehold interest in the Dallas Cowboys Distribution Center. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[7] | On June 6, 2011, the Company entered into a four-year $32.6 million revolving credit loan. As of September 30, 2013, $16.3 million had been disbursed to the Company under the mortgage loan and $16.3 million remained available for future disbursements under the revolving loan facility, subject to certain conditions set forth in the loan agreement. The interest rate on the $16.3 million outstanding as of September 30, 2013 was calculated at a fixed rate of 3.54% per annum. The interest rate on the $16.3 million available for future disbursements as of September 30, 2013 will be calculated at a variable rate of 220 basis points over one-month LIBOR. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[8] | On March 6, 2013, the Company entered into a three-year senior secured credit facility for borrowings of up to $235.0 million, of which $141.0 million is non-revolving debt and $94.0 million is revolving debt. As of September 30, 2013, the principal balance consisted of the $141.0 million non-revolving portion and $15.0 million of the revolving portion. The revolving portion of $79.0 million remains available for future disbursements, subject to certain terms and conditions contained in the loan documents. The Portfolio Mortgage Loan #3 is secured by 100 & 200 Campus Drive Buildings, Metropolitan Center and Willow Oaks Corporate Center. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[9] | On July 10, 2013, the Company entered into a three-year senior secured credit facility for borrowings of up to $120.0 million. See “ — Recent Financing Transaction — 300-600 Campus Drive Revolving Loan.†| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[10] | Contractual interest rate represents the interest rate in effect under the loan as of September 30, 2013. Effective interest rate is calculated as the actual interest rate in effect as of September 30, 2013 (consisting of the contractual interest rate and the effect of interest rate swaps and contractual floor rates, if applicable), using interest rate indices as of September 30, 2013, where applicable. For further information regarding the Company’s derivative instruments, see Note 7, “Derivative Instruments.†| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[11] | Monthly payments are initially interest-only. Beginning on May 1, 2017, monthly payments include principal and interest with principal payments calculated using an amortization schedule of 30 years for the balance of the loan term, with the remaining principal balance, all accrued and unpaid interest and any other amounts due at maturity. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[12] | Represents the initial maturity date or the maturity date as extended as of September 30, 2013; subject to certain conditions, the maturity dates of certain loans may be extended beyond the maturity date shown. |
NOTES_PAYABLE_Schedule_of_Matu
NOTES PAYABLE (Schedule of Maturities of Long-Term Debt) (Details) (USD $) | Sep. 30, 2013 |
In Thousands, unless otherwise specified | |
Notes Payable [Abstract] | ' |
October 1, 2013 through December 31, 2013 | $45,000 |
2014 | 0 |
2015 | 621,838 |
2016 | 671,086 |
2017 | 105,000 |
Thereafter | 140,000 |
Total notes payable | $1,582,924 |
NOTES_PAYABLE_300600_Campus_Dr
NOTES PAYABLE (300-600 Campus Drive Revolving Loan) (Details) (300-600 Campus Drive [Member], USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | |||||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Aug. 01, 2013 | Jul. 10, 2013 | Jul. 10, 2013 | Jul. 10, 2013 | Aug. 01, 2013 |
Non-Revolving Credit Facility [Member] | Non-Revolving Credit Facility [Member] | Non-Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Mortgages [Member] | Mortgages [Member] | |||
Secured Debt [Member] | Non-Revolving Credit Facility [Member] | |||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Term of credit facility | ' | ' | ' | ' | ' | ' | '3 years | ' |
Maximum borrowing capacity | ' | ' | ' | ' | ' | ' | $120 | ' |
Borrowing capacity | ' | ' | ' | ' | 95 | 25 | ' | ' |
Amount outstanding | ' | ' | 78 | 78 | ' | ' | ' | ' |
Remaining borrowing capacity | ' | ' | ' | ' | ' | ' | 17 | ' |
Prepayment fee | $3.70 | $3.70 | ' | ' | ' | $3.70 | ' | ' |
Description of variable rate | ' | ' | ' | ' | ' | ' | 'one-month LIBOR | ' |
Frequency of periodic payment | ' | ' | ' | ' | ' | ' | 'Monthly | ' |
Fixed rate | ' | ' | ' | ' | ' | ' | 2.05% | 2.91% |
Percent of outstanding balance under guarantees | ' | ' | ' | ' | ' | ' | 25.00% | ' |
DERIVATIVE_INSTRUMENTS_Details
DERIVATIVE INSTRUMENTS (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Mar. 06, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||
Portfolio Mortgage Loan 3 [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | ||||||||||||||||||||||
Interest Rate Swap 1 [Member] | Interest Rate Swap 1 [Member] | Interest Rate Swap 2 [Member] | Interest Rate Swap 2 [Member] | Interest Rate Swap 3 [Member] | Interest Rate Swap 3 [Member] | Interest Rate Swap 4 [Member] | Interest Rate Swap 4 [Member] | Interest Rate Swap 5 [Member] | Interest Rate Swap 5 [Member] | Interest Rate Swap 6 [Member] | Interest Rate Swap 6 [Member] | Interest Rate Swap 7 [Member] | Interest Rate Swap 7 [Member] | Interest Rate Swap 8 [Member] | Interest Rate Swap 8 [Member] | Interest Rate Swap 9 [Member] | Interest Rate Swap 9 [Member] | Interest Rate Swap 10 [Member] | Interest Rate Swap 10 [Member] | Interest Rate Swap 11 [Member] | Interest Rate Swap 11 [Member] | Interest Rate Swap 12 [Member] | Interest Rate Swap 12 [Member] | Interest Rate Swap 13 [Member] | Interest Rate Swap 13 [Member] | Interest Rate Swap 14 [Member] | Interest Rate Swap 14 [Member] | Interest Rate Swap 15 [Member] | Interest Rate Swap 15 [Member] | Interest Rate Swap 16 [Member] | Interest Rate Swap 16 [Member] | Interest Rate Swap 17 [Member] | Interest Rate Swap 17 [Member] | Interest Rate Swap 18 [Member] | Interest Rate Swap 18 [Member] | Interest Rate Swap 19 [Member] | Interest Rate Swap 19 [Member] | Interest Rate Swap 20 [Member] | Interest Rate Swap 20 [Member] | Interest Rate Swap 21 [Member] | Interest Rate Swap 21 [Member] | Interest Rate Swap 22 [Member] | Interest Rate Swap 22 [Member] | Interest Rate Swap 23 [Member] | Interest Rate Swap 23 [Member] | Interest Rate Swap 24 [Member] | Interest Rate Swap 24 [Member] | |||||||||||||||||||||||||
Derivative [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||
Effective Date | ' | ' | ' | ' | ' | ' | ' | ' | 26-Feb-10 | [1] | ' | 26-Feb-10 | [1] | ' | 30-Apr-10 | ' | 26-Jul-10 | [1] | ' | 26-Jul-10 | [1] | ' | 15-Sep-10 | ' | 15-Dec-10 | [1] | ' | 15-Dec-10 | [1] | ' | 16-Dec-10 | ' | 20-Dec-10 | ' | 1-Feb-11 | ' | 1-Feb-11 | ' | 1-Feb-11 | ' | 8-Mar-11 | ' | 10-Mar-11 | ' | 1-Dec-11 | ' | 1-Jan-12 | [1] | ' | 1-Feb-12 | [1] | ' | 6-Mar-13 | ' | 1-May-13 | ' | 6-Mar-13 | ' | 1-May-13 | ' | 1-Jul-13 | ' | 1-Aug-13 | ' | ||||||||
Maturity Date | ' | ' | ' | ' | ' | ' | ' | ' | 26-Feb-14 | [1] | ' | 26-Feb-14 | [1] | ' | 30-Apr-14 | ' | 1-Aug-13 | [1] | ' | 1-Aug-13 | [1] | ' | 15-Sep-15 | ' | 26-Feb-14 | [1] | ' | 26-Feb-14 | [1] | ' | 1-Jan-16 | ' | 16-Jun-15 | ' | 1-Jan-16 | ' | 1-Feb-15 | ' | 1-Feb-14 | ' | 1-Feb-14 | ' | 1-Feb-14 | ' | 1-Dec-15 | ' | 1-Jan-16 | [1] | ' | 1-Jan-16 | [1] | ' | 1-Mar-17 | ' | 1-Mar-17 | ' | 1-Mar-16 | ' | 1-Mar-16 | ' | 1-Jun-17 | ' | 1-Aug-16 | ' | ||||||||
Notional Value | ' | ' | ' | ' | ' | ' | $842,150,000 | ' | $0 | [1] | ' | $0 | [1] | ' | $45,000,000 | ' | $0 | [1] | ' | $0 | [1] | ' | $105,000,000 | ' | $0 | [1] | ' | $0 | [1] | ' | $19,800,000 | ' | $69,000,000 | ' | $56,150,000 | ' | $8,400,000 | ' | $80,150,000 | ' | $85,900,000 | ' | $13,750,000 | ' | $80,000,000 | ' | $0 | [1] | ' | $0 | [1] | ' | $32,113,000 | ' | $23,787,000 | ' | $48,887,000 | ' | $36,213,000 | ' | $60,000,000 | ' | $78,000,000 | ' | ||||||||
Derivative, Description of Variable Rate Basis | ' | ' | ' | ' | ' | ' | ' | ' | 'One-month LIBOR | ' | 'One-month LIBOR | ' | 'One-month LIBOR | ' | 'One-month LIBOR | ' | 'One-month LIBOR | ' | 'One-month LIBOR | ' | 'One-month LIBOR | ' | 'One-month LIBOR | ' | 'One-month LIBOR | ' | 'One-month LIBOR | ' | 'One-month LIBOR | ' | 'One-month LIBOR | ' | 'One-month LIBOR | ' | 'One-month LIBOR | ' | 'One-month LIBOR | ' | 'One-month LIBOR | ' | 'One-month LIBOR | ' | 'One-month LIBOR | ' | 'One-month LIBOR | ' | 'One-month LIBOR | ' | 'One-month LIBOR | ' | 'One-month LIBOR | ' | 'One-month LIBOR | ' | 'One-month LIBOR | ' | ||||||||||||||||
Derivative, Fixed Interest Rate | ' | ' | ' | ' | ' | ' | ' | ' | 2.30% | ' | 2.30% | ' | 2.17% | ' | 1.33% | ' | 1.33% | ' | 1.70% | ' | 1.53% | ' | 1.53% | ' | 2.39% | ' | 1.94% | ' | 2.16% | ' | 1.75% | ' | 1.29% | ' | 1.45% | ' | 1.32% | ' | 1.04% | ' | 1.02% | ' | 0.77% | ' | 0.71% | ' | 0.71% | ' | 0.50% | ' | 0.50% | ' | 1.30% | ' | 0.86% | ' | ||||||||||||||||
Fair Value of Asset (Liability) | ' | ' | ' | ' | ' | ' | -12,040,000 | -17,129,000 | 0 | [1] | -239,000 | [1] | 0 | [1] | -239,000 | [1] | -517,000 | -1,214,000 | 0 | [1] | -43,000 | [1] | 0 | [1] | -43,000 | [1] | -2,778,000 | -3,788,000 | 0 | [1] | -262,000 | [1] | 0 | [1] | -262,000 | [1] | -878,000 | -1,166,000 | -1,917,000 | -2,700,000 | -2,202,000 | -2,929,000 | -168,000 | -254,000 | -306,000 | -928,000 | -376,000 | -1,147,000 | -54,000 | -164,000 | -1,140,000 | -1,547,000 | 0 | [1] | -145,000 | [1] | 0 | [1] | -59,000 | [1] | 105,000 | 0 | 74,000 | 0 | -57,000 | 0 | -43,000 | 0 | -1,192,000 | 0 | -591,000 | 0 |
Unrealized gains (losses) on derivative instruments | ' | -583,000 | -288,000 | 3,956,000 | -1,906,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||
Gain (loss) recognized in OCI, efective portion | ' | ' | ' | 7,600,000 | 6,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||
Additional unrealized losses | 8,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||
Interest rate swap agreements, termination, breakage fees | ' | ' | ' | ' | ' | 1,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||
Reclassification of realized losses on derivative instruments | ' | $256,000 | $0 | $613,000 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||
[1] | On March 6, 2013, the Company used proceeds from the Portfolio Mortgage Loan #3 to repay the loans related to these swaps in full. In connection with the repayment of these loans, the Company terminated the swap agreements with respect to eight swaps which were subject to an aggregate breakage fee of $1.1 million. |
FAIR_VALUE_DISCLOSURES_Schedul
FAIR VALUE DISCLOSURES (Schedule of Face Value, Carrying Amounts and Fair Value) (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Real estate loan receivable, Face Value | $384,711 | $380,542 |
Notes payable, Face Value | 1,582,924 | 1,334,514 |
Carrying Amount [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Real estate loans receivable, Value | 356,677 | 348,846 |
Notes payable, Value | 1,582,924 | 1,334,514 |
Fair Value [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Real estate loans receivable, Value | 389,536 | 390,145 |
Notes payable, Value | $1,589,362 | $1,341,363 |
FAIR_VALUE_DISCLOSURES_Schedul1
FAIR VALUE DISCLOSURES (Schedule of Assets and Liabilities at Fair Value) (Details) (Recurring Basis [Member], USD $) | Sep. 30, 2013 |
In Thousands, unless otherwise specified | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' |
Assets derivatives | $179 |
Liability derivatives | -12,219 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' |
Assets derivatives | 0 |
Liability derivatives | 0 |
Significant Other Observable Inputs (Level 2) [Member] | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' |
Assets derivatives | 179 |
Liability derivatives | -12,219 |
Significant Unobservable Inputs (Level 3) [Member] | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' |
Assets derivatives | 0 |
Liability derivatives | $0 |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | ||||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | |||||
Payable as of | $0 | ' | $0 | ' | $168,000 | |||||
Asset management fees from discontinued operations | ' | ' | ' | 41,000 | ' | |||||
Administrative fees | 44,000 | 35,000 | 102,000 | 71,000 | ' | |||||
Advisor and Dealer Manager [Member] | ' | ' | ' | ' | ' | |||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | |||||
Incurred | 6,123,000 | 5,591,000 | 19,462,000 | 18,396,000 | ' | |||||
Payable as of | 0 | ' | 0 | ' | 168,000 | |||||
Advisor and Dealer Manager [Member] | Expensed [Member] | Asset Management Fees [Member] | ' | ' | ' | ' | ' | |||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | |||||
Expenses | 6,079,000 | 5,556,000 | [1] | 17,563,000 | 16,749,000 | [1] | ' | |||
Payable as of | 0 | ' | 0 | ' | 0 | |||||
Advisor and Dealer Manager [Member] | Expensed [Member] | Reimbursement of Operating Expenses [Member] | ' | ' | ' | ' | ' | |||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | |||||
Expenses | 44,000 | [2] | 35,000 | [2] | 102,000 | [2] | 71,000 | [2] | ' | |
Payable as of | 0 | [2] | ' | 0 | [2] | ' | 168,000 | [2] | ||
Advisor and Dealer Manager [Member] | Expensed [Member] | Acquisition Fees [Member] | ' | ' | ' | ' | ' | |||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | |||||
Expenses | 0 | 0 | 1,797,000 | 0 | ' | |||||
Payable as of | 0 | ' | 0 | ' | 0 | |||||
Advisor and Dealer Manager [Member] | Expensed [Member] | Dispositon Fees [Member] | ' | ' | ' | ' | ' | |||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | |||||
Expenses | 0 | 0 | 0 | 968,000 | ' | |||||
Payable as of | 0 | ' | 0 | ' | 0 | |||||
Advisor and Dealer Manager [Member] | Capitalized [Member] | Origination Fees [Member] | ' | ' | ' | ' | ' | |||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | |||||
Incurred | 0 | 0 | 0 | 608,000 | ' | |||||
Payable as of | $0 | ' | $0 | ' | $0 | |||||
[1] | Amount includes asset management fees from discontinued operations totaling $41,000 for the nine months ended September 30, 2012. | |||||||||
[2] | The Advisor may seek reimbursement for certain employee costs under the Advisory Agreement. The Company reimburses the Advisor for the Company’s allocable portion of the salaries, benefits and overhead of internal audit department personnel providing services to the Company. These amounts totaled $44,000 and $35,000 for the three months ended September 30, 2013 and 2012, respectively, and $102,000 and $71,000 for the nine months ended September 30, 2013 and 2012, respectively, and were the only employee costs reimbursed under the Advisory Agreement through September 30, 2013. The Company will not reimburse for employee costs in connection with services for which the Advisor earns acquisition, origination or disposition fees (other than reimbursement of travel and communication expenses) or for the salaries or benefits the Advisor or its affiliates may pay to the Company’s executive officers. |
RELATED_PARTY_TRANSACTIONS_Nar
RELATED PARTY TRANSACTIONS (Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Jun. 27, 2012 | ||||
Irvine Company [Member] | |||||||||
Notes Receivable [Member] | |||||||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | |||
Real estate loans receivable, net | $356,677,000 | [1] | ' | $356,677,000 | [1] | ' | $348,846,000 | [1] | $85,800,000 |
Extinguishment of loans receivable, closing cost | ' | ' | ' | ' | ' | 900,000 | |||
Gain on early payoff of real estate loan receivable | 0 | 0 | 0 | 14,884,000 | ' | ' | |||
Purchase price, loans receivable | ' | ' | ' | ' | ' | $60,100,000 | |||
[1] | Book value represents outstanding principal balance, adjusted for unamortized acquisition discounts, origination fees and direct origination and acquisition costs. |
SEGMENT_INFORMATION_Schedule_o
SEGMENT INFORMATION (Schedule of Segment Reporting Information, by Segment) (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||||||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |||||
segments | |||||||||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | |||||
Number of reportable segments | ' | ' | 2 | ' | ' | ' | |||||
Revenues | $92,246 | $86,350 | $272,345 | $264,683 | ' | ' | |||||
Interest expense | 19,123 | 14,497 | 50,614 | 43,936 | ' | ' | |||||
Total net operating income | 37,770 | 39,385 | 118,778 | 125,833 | ' | ' | |||||
Assets | 3,026,486 | ' | 3,026,486 | ' | 2,821,950 | ' | |||||
Liabilities | 1,694,534 | ' | 1,694,534 | ' | 1,426,493 | ' | |||||
Cash and cash equivalents | 51,165 | 51,076 | 51,165 | 51,076 | 48,390 | 95,554 | |||||
Real Estate Segment [Member] | ' | ' | ' | ' | ' | ' | |||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | |||||
Revenues | 83,660 | [1] | 78,019 | [1] | 247,087 | [1] | 235,940 | [1] | ' | ' | |
Interest expense | 17,878 | [1] | 13,209 | [1] | 46,718 | [1] | 39,890 | [1] | ' | ' | |
Total net operating income | 30,900 | [1] | 32,760 | [1] | 98,608 | [1] | 102,375 | [1] | ' | ' | |
Assets | 2,635,238 | ' | 2,635,238 | ' | 2,441,112 | ' | |||||
Liabilities | 1,554,223 | ' | 1,554,223 | ' | 1,293,854 | ' | |||||
Real Estate-Related Segment [Member] | ' | ' | ' | ' | ' | ' | |||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | |||||
Revenues | 8,586 | 8,331 | 25,258 | 28,743 | ' | ' | |||||
Interest expense | 1,152 | 1,154 | 3,424 | 3,448 | ' | ' | |||||
Total net operating income | 6,870 | 6,625 | 20,170 | 23,458 | ' | ' | |||||
Assets | 360,680 | ' | 360,680 | ' | 352,377 | ' | |||||
Liabilities | 121,085 | ' | 121,085 | ' | 121,332 | ' | |||||
Operating Segments [Member] | ' | ' | ' | ' | ' | ' | |||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | |||||
Interest expense | 19,030 | 14,363 | 50,142 | 43,338 | ' | ' | |||||
Assets | 2,995,918 | ' | 2,995,918 | ' | 2,793,489 | ' | |||||
Liabilities | 1,675,308 | ' | 1,675,308 | ' | 1,415,186 | ' | |||||
Corporate-Level [Member] | ' | ' | ' | ' | ' | ' | |||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | |||||
Interest expense | 93 | 134 | 472 | 598 | ' | ' | |||||
Assets | 30,568 | [2] | ' | 30,568 | [2] | ' | 28,461 | [2] | ' | ||
Liabilities | 19,226 | [3] | ' | 19,226 | [3] | ' | 11,307 | [3] | ' | ||
Cash and cash equivalents | $30,300 | ' | $30,300 | ' | $28,200 | ' | |||||
[1] | Amounts do not include real estate held for sale and discontinued operations. | ||||||||||
[2] | Total corporate-level assets consisted primarily of cash and cash equivalents of approximately $30.3 million and $28.2 million as of September 30, 2013 and December 31, 2012, respectively. | ||||||||||
[3] | As of September 30, 2013 and December 31, 2012, corporate-level liabilities consisted primarily of distributions payable and redemptions payable. |
SEGMENT_INFORMATION_Reconcilia
SEGMENT INFORMATION (Reconciliation of Net Income (Loss) to Net Operating Income (Loss)) (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Net income | $5,590 | $7,149 | $21,454 | $44,597 | $48,374 |
Other interest income | -6 | -3 | -21 | -25 | ' |
Gain on early payoff of real estate loan receivable | 0 | 0 | 0 | -14,884 | ' |
Real estate acquisition fees to affiliates | 0 | 0 | 1,797 | 0 | ' |
Real estate acquisition fees and expenses | 0 | 0 | 623 | 0 | ' |
General and administrative expenses | 1,347 | 1,149 | 3,684 | 3,547 | ' |
Depreciation and amortization | 30,746 | 30,949 | 90,769 | 94,411 | ' |
Interest expense | 19,123 | 14,497 | 50,614 | 43,936 | ' |
Total (income) loss from discontinued operations | 0 | 7 | 0 | -2,411 | ' |
Total net operating income | 37,770 | 39,385 | 118,778 | 125,833 | ' |
Corporate-Level [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Interest expense | $93 | $134 | $472 | $598 | ' |
SUBSEQUENT_EVENTS_Details
SUBSEQUENT EVENTS (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 0 Months Ended | ||||
In Millions, except Per Share data, unless otherwise specified | Feb. 04, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 19, 2011 | Dec. 18, 2012 | Nov. 01, 2013 | Oct. 01, 2013 |
Dividend Declared [Member] | Dividend Declared [Member] | Subsequent Event [Member] | Subsequent Event [Member] | ||||||
Dividend Paid [Member] | Dividend Paid [Member] | ||||||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Distributions paid to common stockholders | ' | ' | ' | ' | ' | ' | ' | $10.70 | $10.30 |
Distribution rate per share per day, declared | $0.05 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | ' | ' | ' |
Distribution rate per share annualized, declared, based on purchase price | ' | ' | ' | ' | ' | 6.50% | ' | ' | ' |
Purchase price per share | ' | ' | ' | ' | ' | $10 | $10.29 | ' | ' |
Distribution rate per share annualized, declared, based on current estimated value | ' | ' | ' | ' | ' | 6.30% | ' | ' | ' |
SUBSEQUENT_EVENTS_Sale_of_the_
SUBSEQUENT EVENTS (Sale of the One Liberty Plaza Notes) (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Oct. 11, 2013 | |||
Subsequent Event [Member] | ||||||
Notes Receivable [Member] | ||||||
Subsequent Event [Line Items] | ' | ' | ' | |||
Sale of notes | ' | ' | $114,300,000 | |||
Closing cost | ' | ' | 1,200,000 | |||
Book value | 356,677,000 | [1] | 348,846,000 | [1] | 84,000,000 | [1],[2] |
Gain on sale of notes | ' | ' | $29,100,000 | |||
[1] | Book value represents outstanding principal balance, adjusted for unamortized acquisition discounts, origination fees and direct origination and acquisition costs. | |||||
[2] | On October 11, 2013, the Company sold the One Liberty Plaza Notes. See Note 12, “Subsequent Events - Sale of the One Liberty Plaza Notes.†|