Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Mar. 03, 2014 | Jun. 30, 2013 | |
Document and Entity Information [Abstract] | ' | ' | ' |
Entity Registrant Name | 'KBS Real Estate Investment Trust II, Inc. | ' | ' |
Entity Central Index Key | '0001411059 | ' | ' |
Current Fiscal Year end | '--12-31 | ' | ' |
Entity Filer category | 'Non-accelerated Filer | ' | ' |
Document type | '10-K | ' | ' |
Document period end date | 31-Dec-13 | ' | ' |
Document fiscal year focus | '2013 | ' | ' |
Document fiscal period focus | 'FY | ' | ' |
Amendment flag | 'false | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 191,812,353 | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Public Float | ' | ' | $0 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Real estate: | ' | ' | ||
Land | $336,357 | $265,197 | ||
Buildings and improvements | 2,157,019 | 1,992,264 | ||
Tenant origination and absorption costs | 304,706 | 304,732 | ||
Total real estate held for investment, cost | 2,798,082 | 2,562,193 | ||
Less accumulated depreciation and amortization | -362,822 | -270,538 | ||
Total real estate, net | 2,435,260 | 2,291,655 | ||
Real estate loans receivable, net | 184,828 | [1] | 348,846 | [1] |
Total real estate and real estate-related investments, net | 2,620,088 | 2,640,501 | ||
Cash and cash equivalents | 175,042 | 48,390 | ||
Rents and other receivables, net | 73,316 | 57,349 | ||
Above-market leases, net | 51,510 | 49,215 | ||
Deferred financing costs, prepaid expenses and other assets | 34,344 | 26,495 | ||
Total assets | 2,954,300 | 2,821,950 | ||
Liabilities and stockholders’ equity | ' | ' | ||
Notes payable | 1,521,353 | 1,334,514 | ||
Accounts payable and accrued liabilities | 24,597 | 20,416 | ||
Due to affiliate | 0 | 168 | ||
Distributions payable | 10,649 | 10,521 | ||
Below-market leases, net | 22,983 | 26,519 | ||
Other liabilities | 34,674 | 34,355 | ||
Total liabilities | 1,614,256 | 1,426,493 | ||
Commitments and contingencies (Note 12) | ' | ' | ||
Redeemable common stock | 70,562 | 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, 192,269,969 and 190,274,167 shares issued and outstanding as of December 31, 2013 and December 31, 2012, respectively | 1,923 | 1,903 | ||
Additional paid-in capital | 1,647,214 | 1,633,994 | ||
Cumulative distributions in excess of net income | -369,342 | -289,737 | ||
Accumulated other comprehensive loss | -10,313 | -17,129 | ||
Total stockholders’ equity | 1,269,482 | 1,329,031 | ||
Total liabilities and stockholders’ equity | $2,954,300 | $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) (USD $) | Dec. 31, 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 | 192,269,969 | 190,274,167 |
Common stock, shares outstanding | 192,269,969 | 190,274,167 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenues: | ' | ' | ' |
Rental income | $258,452 | $247,191 | $223,861 |
Tenant reimbursements | 61,167 | 53,379 | 47,059 |
Interest income from real estate loans receivable | 30,439 | 37,144 | 36,476 |
Other operating income | 10,576 | 10,423 | 11,769 |
Total revenues | 360,634 | 348,137 | 319,165 |
Expenses: | ' | ' | ' |
Operating, maintenance, and management | 67,978 | 64,475 | 60,261 |
Real estate taxes and insurance | 48,605 | 42,357 | 35,038 |
Asset management fees to affiliate | 23,524 | 22,275 | 20,044 |
Real estate acquisition fees to affiliates | 1,797 | 0 | 4,808 |
Real estate acquisition fees and expenses | 623 | 0 | 3,974 |
General and administrative expenses | 4,982 | 4,624 | 5,061 |
Depreciation and amortization | 120,778 | 124,933 | 118,014 |
Interest expense | 65,687 | 58,423 | 50,323 |
Total expenses | 333,974 | 317,087 | 297,523 |
Other income: | ' | ' | ' |
Other interest income | 46 | 28 | 104 |
Gain on payoff or sale of real estate loan receivable | 29,073 | 14,884 | 0 |
Total other income | 29,119 | 14,912 | 104 |
Income from continuing operations | 55,779 | 45,962 | 21,746 |
Discontinued operations: | ' | ' | ' |
Gain on sale of real estate, net | 0 | 2,471 | 0 |
Income (loss) from discontinued operations | 0 | -59 | 47 |
Total income from discontinued operations | 0 | 2,412 | 47 |
Net income | $55,779 | $48,374 | $21,793 |
Basic and diluted income per common share: | ' | ' | ' |
Continuing operations (in dollars per share) | $0.29 | $0.24 | $0.11 |
Discontinued operations (in dollars per share) | $0 | $0.01 | $0 |
Net income per common share (in dollars per share) | $0.29 | $0.25 | $0.11 |
Weighted-average number of common shares outstanding, basic and diluted | 192,370,985 | 190,787,460 | 189,555,551 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Statement of Other Comprehensive Income [Abstract] | ' | ' | ' |
Net income | $55,779 | $48,374 | $21,793 |
Other comprehensive income (loss): | ' | ' | ' |
Unrealized gains (losses) on derivative instruments | 5,960 | 336 | -15,335 |
Reclassification of realized losses on derivative instruments | 856 | 0 | 0 |
Total other comprehensive income (loss) | 6,816 | 336 | -15,335 |
Total comprehensive income | $62,595 | $48,710 | $6,458 |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Total | Common Stock | Additional Paid-in Capital | Cumulative Distributions and Net Income (Loss) | Accumulated Other Comprehensive Income (Loss) |
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 | ' | -18,586,160 | ' | ' | ' |
Redemptions of common stock, value | ($184,900) | ' | ' | ' | ' |
Balance, value at Dec. 31, 2013 | 1,269,482 | 1,923 | ' | ' | ' |
Balance, shares at Dec. 31, 2013 | 192,269,969 | 192,269,969 | ' | ' | ' |
Balance, value at Dec. 31, 2010 | 1,424,329 | 1,767 | 1,537,403 | -112,711 | -2,130 |
Balance, shares at Dec. 31, 2010 | ' | 176,739,865 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' |
Net income | 21,793 | ' | ' | 21,793 | ' |
Other comprehensive income (loss) | -15,335 | ' | ' | ' | -15,335 |
Issuance of common stock, shares | ' | 17,630,691 | ' | ' | ' |
Issuance of common stock, value | 171,656 | 176 | 171,480 | ' | ' |
Redemptions of common stock, shares | ' | -2,645,389 | ' | ' | ' |
Redemptions of common stock, value | -25,695 | -26 | -25,669 | ' | ' |
Transfer to redeemable common stock | -24,482 | ' | -24,482 | ' | ' |
Distributions declared | -123,219 | ' | ' | -123,219 | ' |
Commissions on stock sales and related dealer manager fees to affiliate | -8,864 | ' | -8,864 | ' | ' |
Other offering costs | -839 | ' | -839 | ' | ' |
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 (loss) | 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 | ' | ' |
Transfer 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 | 55,779 | ' | ' | 55,779 | ' |
Other comprehensive income (loss) | 6,816 | ' | ' | ' | 6,816 |
Issuance of common stock, shares | ' | 7,214,805 | ' | ' | ' |
Issuance of common stock, value | 70,562 | 72 | 70,490 | ' | ' |
Redemptions of common stock, shares | ' | -5,219,003 | ' | ' | ' |
Redemptions of common stock, value | -53,168 | -52 | -53,116 | ' | ' |
Transfer to redeemable common stock | -4,135 | ' | -4,135 | ' | ' |
Distributions declared | -135,384 | ' | ' | -135,384 | ' |
Other offering costs | -19 | ' | -19 | ' | ' |
Balance, value at Dec. 31, 2013 | $1,269,482 | $1,923 | $1,647,214 | ($369,342) | ($10,313) |
Balance, shares at Dec. 31, 2013 | 192,269,969 | 192,269,969 | ' | ' | ' |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash Flows from Operating Activities: | ' | ' | ' |
Net income | $55,779 | $48,374 | $21,793 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' | ' |
Depreciation and amortization, continuing operations | 120,778 | 124,933 | 118,014 |
Depreciation and amortization, discontinued operations | 0 | 212 | 425 |
Noncash interest income on real estate-related investments | -3,589 | -6,063 | -6,915 |
Deferred rent | -12,806 | -15,949 | -19,890 |
Bad debt expense (recovery) | 589 | -30 | 285 |
Amortization of above- and below-market leases, net | 2,249 | 2,134 | -882 |
Amortization of deferred financing costs | 3,314 | 3,240 | 2,857 |
Reclassification of realized losses on derivative instruments | 856 | 0 | 0 |
Change in fair value of contingent consideration | -31 | -135 | 463 |
Gain on payoff or sale of real estate loan receivable | -29,073 | -14,884 | 0 |
Gain on sale of real estate, net | 0 | -2,471 | 0 |
Changes in operating assets and liabilities: | ' | ' | ' |
Rents and other receivables | -2,467 | -337 | -1,303 |
Prepaid expenses and other assets | -10,235 | -8,251 | -5,962 |
Accounts payable and accrued liabilities | 1,889 | 269 | -78 |
Due to affiliate | -168 | 168 | 0 |
Other liabilities | 6,061 | -2,541 | 4,419 |
Net cash provided by operating activities | 133,146 | 128,669 | 113,226 |
Cash Flows from Investing Activities: | ' | ' | ' |
Acquisitions of real estate | -238,952 | 0 | -636,222 |
Improvements to real estate | -29,434 | -20,586 | -22,356 |
Proceeds from sale of real estate | 0 | 12,217 | 0 |
Investments in real estate loans receivable | -5,490 | -55,339 | -15,608 |
Principal repayments on real estate loans receivable | 1,579 | 1,288 | 504 |
Proceeds from payoff or sale of real estate loan receivable | 200,591 | 84,930 | 0 |
Net cash (used in) provided by investing activities | -71,706 | 22,510 | -673,682 |
Cash Flows from Financing Activities: | ' | ' | ' |
Proceeds from notes payable | 456,000 | 0 | 546,998 |
Transfer of financial asset | 0 | 0 | 45,000 |
Principal payments on notes payable | -269,161 | -58,756 | -26,885 |
Payments of deferred financing costs | -4,048 | -91 | -6,916 |
Return of contingent consideration related to acquisition of real estate | 308 | 943 | 1,514 |
Proceeds from issuance of common stock | 0 | 0 | 103,867 |
Payments to redeem common stock | -53,174 | -82,818 | -25,695 |
Payments of commissions on stock sales and related dealer manager fees | 0 | 0 | -8,864 |
Payments of other offering costs | -19 | -20 | -1,421 |
Distributions paid to common stockholders | -64,694 | -57,601 | -54,001 |
Net cash provided by (used in) financing activities | 65,212 | -198,343 | 573,597 |
Net increase (decrease) in cash and cash equivalents | 126,652 | -47,164 | 13,141 |
Cash and cash equivalents, beginning of period | 48,390 | 95,554 | 82,413 |
Cash and cash equivalents, end of period | 175,042 | 48,390 | 95,554 |
Supplemental Disclosure of Cash Flow Information: | ' | ' | ' |
Interest paid | 58,445 | 55,406 | 46,263 |
Supplemental Disclosure of Noncash Transactions: | ' | ' | ' |
Increase (decrease) in distributions payable | 128 | -87 | 1,429 |
Increase in lease commissions payable | 0 | 0 | 565 |
Distributions paid to common stockholders through common stock issuances pursuant to the dividend reinvestment plan | 70,562 | 66,460 | 67,789 |
Increase in accrued improvements to real estate | 1,666 | 0 | 2,715 |
Increase in lease incentives payable | $1,283 | $0 | $0 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 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 December 31, 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 five 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 December 31, 2013, the Company had sold 28,154,497 shares of common stock under its dividend reinvestment plan for gross offering proceeds of $271.3 million. Also as of December 31, 2013, the Company had redeemed 18,586,160 shares sold in the Offering for $184.9 million. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | |
Dec. 31, 2013 | ||
Accounting Policies [Abstract] | ' | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Principles of Consolidation and Basis of Presentation | ||
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. | ||
The consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). | ||
Use of Estimates | ||
The preparation of the consolidated financial statements and the accompanying 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. | ||
Reclassifications | ||
Certain amounts in the Company’s prior period consolidated financial statements have been reclassified to conform to the current period presentation. These reclassifications have not changed the results of operations of prior periods. In addition, the Company disposed of one industrial property during the year ended December 31, 2012. As a result, certain reclassifications were made to the consolidated balance sheets, statements of operations and footnote disclosures for all periods presented. | ||
Revenue Recognition | ||
Real Estate | ||
The Company recognizes minimum rent, including rental abatements, lease incentives and contractual fixed increases attributable to operating leases, on a straight-line basis over the term of the related leases when collectibility is reasonably assured and records amounts expected to be received in later years as deferred rent receivable. If the lease provides for tenant improvements, the Company determines whether the tenant improvements, for accounting purposes, are owned by the tenant or the Company. When the Company is the owner of the tenant improvements, the tenant is not considered to have taken physical possession or have control of the physical use of the leased asset until the tenant improvements are substantially completed. When the tenant is the owner of the tenant improvements, any tenant improvement allowance (including amounts that a tenant can take in the form of cash or a credit against its rent) that is funded is treated as a lease incentive and amortized as a reduction of revenue over the lease term. Tenant improvement ownership is determined based on various factors including, but not limited to: | ||
• | whether the lease stipulates how a tenant improvement allowance may be spent; | |
• | whether the amount of a tenant improvement allowance is in excess of market rates; | |
• | whether the tenant or landlord retains legal title to the improvements at the end of the lease term; | |
• | whether the tenant improvements are unique to the tenant or general-purpose in nature; and | |
• | whether the tenant improvements are expected to have any residual value at the end of the lease. | |
The Company makes estimates of the collectibility of its tenant receivables related to base rents, including deferred rent receivable, expense reimbursements and other revenue or income. Management specifically analyzes accounts receivable, deferred rent receivable, historical bad debts, customer creditworthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. In addition, with respect to tenants in bankruptcy, management makes estimates of the expected recovery of pre-petition and post-petition claims in assessing the estimated collectibility of the related receivable. In some cases, the ultimate resolution of these claims can exceed one year. When a tenant is in bankruptcy, the Company will record a bad debt reserve for the tenant’s receivable balance and generally will not recognize subsequent rental revenue until cash is received or until the tenant is no longer in bankruptcy and has the ability to make rental payments. | ||
Real Estate Loans Receivable | ||
Interest income on the Company’s real estate loans receivable is recognized on an accrual basis over the life of the investment using the interest method. Direct loan origination fees and origination or acquisition costs, as well as acquisition premiums or discounts, are amortized over the term of the loan as an adjustment to interest income. The Company will place loans on nonaccrual status when any portion of principal or interest is 90 days past due, or earlier when concern exists as to the ultimate collection of principal or interest. When a loan is placed on nonaccrual status, the Company will reverse the accrual for unpaid interest and generally will not recognize subsequent interest income until the cash is received, or the loan returns to accrual status. The Company will resume the accrual of interest if it determines the collection of interest according to the contractual terms of the loan is probable. | ||
Cash and Cash Equivalents | ||
The Company recognizes interest income on its cash and cash equivalents as it is earned and classifies such amounts as other interest income. | ||
Real Estate | ||
Depreciation and Amortization | ||
Real estate costs related to the acquisition and improvement of properties are capitalized and amortized over the expected useful life of the asset on a straight-line basis. Repair and maintenance costs are charged to expense as incurred and significant replacements and betterments are capitalized. Repair and maintenance costs include all costs that do not extend the useful life of the real estate asset. The Company considers the period of future benefit of an asset to determine its appropriate useful life. Expenditures for tenant improvements are capitalized and amortized over the shorter of the tenant’s lease term or expected useful life. The Company anticipates the estimated useful lives of its assets by class to be generally as follows: | ||
Buildings | 25-40 years | |
Building improvements | 10-25 years | |
Tenant improvements | Shorter of lease term or expected useful life | |
Tenant origination and absorption costs | Remaining term of related leases, including below-market renewal periods | |
Real Estate Acquisition Valuation | ||
The Company records the acquisition of income-producing real estate or real estate that will be used for the production of income as a business combination. All assets acquired and liabilities assumed in a business combination are measured at their acquisition-date fair values. Acquisition costs are expensed as incurred and restructuring costs that do not meet the definition of a liability at the acquisition date are expensed in periods subsequent to the acquisition date. | ||
The Company assesses the acquisition date fair values of all tangible assets, identifiable intangibles and assumed liabilities using methods similar to those used by independent appraisers, generally utilizing a discounted cash flow analysis that applies appropriate discount and/or capitalization rates and available market information. Estimates of future cash flows are based on a number of factors, including historical operating results, known and anticipated trends, and market and economic conditions. The fair value of tangible assets of an acquired property considers the value of the property as if it were vacant. | ||
The Company records above-market and below-market in-place lease values for acquired properties based on the present value (using a discount rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of above-market in-place leases and for the initial term plus any extended term for any leases with below-market renewal options. The Company amortizes any recorded above-market or below-market lease values as a reduction or increase, respectively, to rental income over the remaining non-cancelable terms of the respective lease, including any below-market renewal periods. | ||
The Company estimates the value of tenant origination and absorption costs by considering the estimated carrying costs during hypothetical expected lease up periods, considering current market conditions. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods. | ||
The Company amortizes the value of tenant origination and absorption costs to depreciation and amortization expense over the remaining average non-cancelable term of the leases. | ||
Estimates of the fair values of the tangible assets, identifiable intangibles and assumed liabilities require the Company to make significant assumptions to estimate market lease rates, property-operating expenses, carrying costs during lease-up periods, discount rates, market absorption periods, and the number of years the property will be held for investment. The use of inappropriate assumptions would result in an incorrect valuation of the Company’s acquired tangible assets, identifiable intangibles and assumed liabilities, which would impact the amount of the Company’s net income. | ||
Impairment of Real Estate and Related Intangible Assets and Liabilities | ||
The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate and related intangible assets and liabilities may not be recoverable or realized. When indicators of potential impairment suggest that the carrying value of real estate and related intangible assets and liabilities may not be recoverable, the Company assesses the recoverability by estimating whether the Company will recover the carrying value of the real estate and related intangible assets and liabilities through its undiscounted future cash flows and its eventual disposition. If, based on this analysis, the Company does not believe that it will be able to recover the carrying value of the real estate and related intangible assets and liabilities, the Company would record an impairment loss to the extent that the carrying value exceeds the estimated fair value of the real estate and related intangible assets and liabilities. The Company did not record any impairment loss on its real estate and related intangible assets and liabilities during the years ended December 31, 2013, 2012 and 2011. | ||
Real Estate Sold and Discontinued Operations | ||
Real estate sold during the current period and its related assets are classified as “real estate held for sale” and “assets related to real estate held for sale,” respectively, for all prior periods presented in the accompanying consolidated financial statements. Notes payable and other liabilities related to real estate sold are classified as “notes payable related to real estate held for sale” and “liabilities related to real estate held for sale,” respectively, for all prior periods presented in the accompanying consolidated financial statements. Additionally, the Company records the operating results related to real estate that has been disposed of as discontinued operations for all periods presented if the operations have been eliminated and the Company will not have any significant continuing involvement in the operations of the property following the sale. | ||
Real Estate Loans Receivable | ||
The Company’s real estate loans receivable are recorded at amortized cost, net of loan loss reserves (if any), and evaluated for impairment at each balance sheet date. The amortized cost of a real estate loan receivable is the outstanding unpaid principal balance, net of unamortized acquisition premiums or discounts and unamortized costs and fees directly associated with the origination or acquisition of the loan. | ||
As of December 31, 2013, there was no loan loss reserve and the Company did not record any impairment losses related to the real estate loans receivable during the years ended December 31, 2013, 2012 and 2011. However, in the future, the Company may experience losses from its investments in loans receivable requiring the Company to record loan loss reserves. Realized losses on individual loans could be material and significantly exceed any recorded reserves. | ||
The reserve for loan losses is a valuation allowance that reflects management’s estimate of loan losses inherent in the loan portfolio as of the balance sheet date. The reserve is adjusted through “Provision for loan losses” on the Company’s consolidated statements of operations and is decreased by charge-offs to specific loans when losses are confirmed. The reserve for loan losses may include a portfolio-based component and an asset-specific component. | ||
An asset-specific reserve relates to reserves for losses on loans considered impaired. The Company considers a loan to be impaired when, based upon current information and events, it believes that it is probable that the Company will be unable to collect all amounts due under the contractual terms of the loan agreement. The Company also considers a loan to be impaired if it grants the borrower a concession through a modification of the loan terms or if it expects to receive assets (including equity interests in the borrower) with fair values that are less than the carrying value of the loan in satisfaction of the loan. A reserve is established when the present value of payments expected to be received, observable market prices, the estimated fair value of the collateral (for loans that are dependent on the collateral for repayment) or amounts expected to be received in satisfaction of a loan are lower than the carrying value of that loan. | ||
A portfolio-based reserve covers the pool of loans that do not have asset-specific reserves. A provision for loan losses is recorded when available information as of each balance sheet date indicates that it is probable that the pool of loans will incur a loss and the amount of the loss can be reasonably estimated. Required reserve balances for this pool of loans are derived from estimated probabilities of default and estimated loss severities assuming a default occurs. On a quarterly basis, the Company’s management assigns estimated probabilities of default and loss severities to each loan in the portfolio based on factors such as the debt service coverage of the underlying collateral, the estimated fair value of the collateral, the significance of the borrower’s investment in the collateral, the financial condition of the borrower and/or its sponsors, the likelihood that the borrower and/or its sponsors would allow the loan to default, the Company’s willingness and ability to step in as owner in the event of default, and other pertinent factors. | ||
Failure to recognize impairments would result in the overstatement of earnings and the carrying value of the Company’s real estate loans held for investment. Actual losses, if any, could differ significantly from estimated amounts. | ||
Cash and Cash Equivalents | ||
The Company considers all short-term (with an original maturity of three months or less), highly-liquid investments utilized as part of the Company’s cash-management activities to be cash equivalents. Cash equivalents may include cash and short-term investments. Short-term investments are stated at cost, which approximates fair value. | ||
The Company’s cash and cash equivalents balance exceeds federally insurable limits as of December 31, 2013. The Company monitors the cash balances in its operating accounts and adjusts the cash balances as appropriate; however, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, the Company has experienced no loss or lack of access to cash in its operating accounts. | ||
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) in 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. | ||
Deferred Financing Costs | ||
Deferred financing costs represent commitment fees, loan fees, legal fees and other third-party costs associated with obtaining financing. These costs are amortized over the terms of the respective financing agreements using the interest method. Unamortized deferred financing costs are generally expensed when the associated debt is refinanced or repaid before maturity unless specific rules are met that would allow for the carryover of such costs to the refinanced debt. Costs incurred in seeking financing transactions that do not close are expensed in the period in which it is determined that the financing will not close. | ||
Transfer of Financial Assets | ||
The Company accounts for transfers of real estate loans receivable to unrelated entities in accordance with Accounting Standards Codification 860, Transfers and Servicing (“ASC 860”). When a real estate loan receivable is divided into multiple tranches and one or more of the tranches is transferred to an unrelated third party, the Company determines if each of the tranches of the loan would qualify as participating interests. If the tranches do not qualify as participating interests, the Company would account for the transfer as a secured borrowing with a pledge of collateral. As a result, the Company would continue to report the transferred financial asset in the Company’s consolidated balance sheet and recognize interest income on the entire note. Proceeds from the transferee are treated as a secured borrowing and recorded as a note payable. Interest income allocated to the transferee is also recorded as interest expense on the Company’s consolidated statement of operations. | ||
Fair Value Measurements | ||
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. | |
When available, the Company utilizes quoted market prices from independent third-party sources to determine fair value and classifies such items in Level 1 or Level 2. In instances where the market for a financial instrument is not active, regardless of the availability of a nonbinding quoted market price, observable inputs might not be relevant and could require the Company to make a significant adjustment to derive a fair value measurement. Additionally, in an inactive market, a market price quoted from an independent third party may rely more on models with inputs based on information available only to that independent third party. When the Company determines the market for a financial instrument owned by the Company to be illiquid or when market transactions for similar instruments do not appear orderly, the Company uses several valuation sources (including internal valuations, discounted cash flow analysis and quoted market prices) and establishes a fair value by assigning weights to the various valuation sources. 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 or 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. | ||
Changes in assumptions or estimation methodologies can have a material effect on these estimated fair values. In this regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, may not be realized in an immediate settlement of the instrument. | ||
The Company considers the following factors to be indicators of an inactive market: (i) there are few recent transactions, (ii) price quotations are not based on current information, (iii) price quotations vary substantially either over time or among market makers (for example, some brokered markets), (iv) indexes that previously were highly correlated with the fair values of the asset or liability are demonstrably uncorrelated with recent indications of fair value for that asset or liability, (v) there is a significant increase in implied liquidity risk premiums, yields, or performance indicators (such as delinquency rates or loss severities) for observed transactions or quoted prices when compared with the Company’s estimate of expected cash flows, considering all available market data about credit and other nonperformance risk for the asset or liability, (vi) there is a wide bid-ask spread or significant increase in the bid-ask spread, (vii) there is a significant decline or absence of a market for new issuances (that is, a primary market) for the asset or liability or similar assets or liabilities, and (viii) little information is released publicly (for example, a principal-to-principal market). | ||
The Company considers the following factors to be indicators of non-orderly transactions: (i) there was not adequate exposure to the market for a period before the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities under current market conditions, (ii) there was a usual and customary marketing period, but the seller marketed the asset or liability to a single market participant, (iii) the seller is in or near bankruptcy or receivership (that is, distressed), or the seller was required to sell to meet regulatory or legal requirements (that is, forced), and (iv) the transaction price is an outlier when compared with other recent transactions for the same or similar assets or liabilities. | ||
Dividend Reinvestment Plan | ||
The Company has adopted a dividend reinvestment plan (the “DRP”) through which its stockholders may have their dividends and other distributions reinvested in additional shares of the Company’s common stock. In accordance with the DRP, at such time as the Company announces an updated estimated value per share, participants in the DRP will acquire shares of common stock under the plan at a price equal to 95% of the updated estimated value per share of the Company’s common stock. | ||
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. Commencing with the January 2, 2013 purchase date and until the estimated value per share was updated, the purchase price per share under the DRP was $9.78. | ||
On December 18, 2013, 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, as of September 30, 2013, with the exception of the Company’s real estate properties, which were appraised as of November 30, 2013. Commencing with the January 2, 2014 purchase date and until the estimated value per share is updated, the purchase price per share under the DRP is $9.78. The Company currently expects to utilize the Advisor and/or an independent valuation firm to update the estimated value per share in December 2014, but is not required to update the estimated value per share more frequently than every 18 months. | ||
Redeemable Common Stock | ||
The Company has a share redemption program that may enable stockholders to sell their shares to the Company in limited circumstances. The Company adopted two amendments to its share redemption program in 2013 and increased funding available under the program, as described below, by $20.0 million effective for redemptions made on or after the November 2013 redemption date, until such amount is exhausted. | ||
Pursuant to the share redemption program (and unless subsequently amended during 2013 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. | |
• | 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 March 6, 2013, the Company’s board of directors approved a sixth amended and restated share redemption program (the “Sixth Amended Share Redemption Program”). Pursuant to the Sixth Amended Share Redemption Program, the Company modified how it processes redemptions that result in a stockholder owning less than the minimum purchase requirement described in its currently effective, or the most recently effective, registration statement as such registration statement has been amended or supplemented (the “Minimum Purchase Requirement”). Specifically, if the Company cannot repurchase all shares presented for redemption in any month because of the limitations on redemptions set forth in the 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, then the Company would redeem all of such stockholder’s shares. The Sixth Amended Share Redemption Program became effective on April 7, 2013. | ||
On October 15, 2013, the Company’s board of directors approved a seventh amended and restated share redemption program (the “Seventh Amended Share Redemption Program”). Pursuant to the Seventh Amended Share Redemption Program, the board of directors may increase the funding available for the redemption of shares pursuant to the Seventh 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. | ||
The Seventh Amended Share Redemption Program became effective on November 16, 2013, and as a result became effective for redemptions under the program made on the November 2013 redemption date, which was November 29, 2013. | ||
In conjunction with the approval of the Seventh Amended Share Redemption Program, on October 16, 2013, the Company’s board of directors approved additional funding for the redemption of shares as follows: 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 Seventh 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. As of December 31, 2013, the Company had exhausted $11.1 million of these funds and had $8.9 million available to be used for eligible redemptions once the Company has redeemed $3.0 million of shares in the aggregate in any month. | ||
On March 7, 2014, the Company’s board of directors approved additional funding of $30.0 million for the redemption of shares pursuant to the share redemption program upon the terms described under Note 13, “Subsequent Events — Authorization of Additional Funds for Share Redemption Program.” | ||
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. 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. | |
For purposes of determining the time period a redeeming stockholder has held each share, the time period begins as of the date the stockholder acquired the share; provided, that shares purchased by the redeeming stockholder pursuant to the Company’s dividend reinvestment plan will be deemed to have been acquired on the same date as the initial share to which the dividend reinvestment plan shares relate. The date of the share’s original issuance by the Company is not determinative. In addition, as described above, the shares owned by a stockholder may be redeemed at different prices depending on how long the stockholder has held each share submitted for redemption. | ||
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. This estimated value per share was used to calculate the redemption price effective for the December 2012 redemption date, which was December 31, 2012. | ||
On December 18, 2013, 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, as of September 30, 2013, with the exception of the Company’s real estate properties, which were appraised as of November 30, 2013. This estimated value per share was used to calculate the redemption price effective for the December 2013 redemption date, which was December 31, 2013. | ||
The estimated value per share was based upon the recommendation and valuation prepared by the Advisor. As with any valuation methodology, the methodologies used are based upon a number of estimates and assumptions that may not be accurate or complete. Different parties with different assumptions and estimates could derive a different estimated value per share, and these differences could be significant. The estimated value per share is not audited and does not represent the fair value of the Company’s assets and liabilities according to GAAP, nor does it represent a liquidation value of the Company’s assets and liabilities or the amount the Company’s shares of common stock would trade at on a national securities exchange. The estimated value per share does not reflect a discount for the fact that the Company is externally managed, nor does it reflect a real estate portfolio premium/discount versus the sum of the individual property values. The estimated value per share also does not take into account estimated disposition costs and fees for real estate properties that are not held for sale, debt prepayment penalties that could apply upon the prepayment of certain of the Company’s debt obligations or the impact of restrictions on the assumption of debt. | ||
The value of the Company’s shares will fluctuate over time in response to developments related to individual assets in the portfolio and the management of those assets and in response to the real estate and finance markets. The Company currently expects to utilize the Advisor and/or an independent valuation firm to update the estimated value per share in December 2014, in accordance with recommended Investment Program Association guidelines, but is not required to update the estimated value per share more frequently than every 18 months. | ||
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 records amounts that are redeemable under the share redemption program as redeemable common stock in the accompanying consolidated balance sheets because the shares are mandatorily redeemable at the option of the holder and therefore their redemption is outside the control of the Company. The maximum amount redeemable under the Company’s share redemption program is limited as set forth above. However, because the amounts that can be redeemed in future periods are determinable and only contingent on an event that is likely to occur (e.g., the passage of time), the Company presents the net proceeds from the current year dividend reinvestment plan as redeemable common stock in the accompanying consolidated balance sheets. | ||
The Company classifies financial instruments that represent a mandatory obligation of the Company to redeem shares as liabilities. The Company’s redeemable common shares are contingently redeemable at the option of the holder. When the Company determines it has a mandatory obligation to redeem shares under the share redemption program, it will reclassify such obligations from temporary equity to a liability based upon their respective settlement values. | ||
The Company limits the dollar value of shares that may be redeemed under the share redemption program as described above. For the year ended December 31, 2013, the Company redeemed 5,219,003 shares sold in the Offering for $53.2 million, which represented all redemption requests received in good order and eligible for redemption through the December 2013 redemption date, except for 2,798 shares, which were redeemed in January 2014 due to an administrative error by the Company’s transfer agent. Effective January 2014, these limitations were reset, and based on the amount of net proceeds raised from the sale of shares under the dividend reinvestment plan during 2013, the Company has $70.6 million available for all eligible redemptions in 2014, subject to the limitations described above, including the monthly limitation for ordinary redemptions. | ||
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 entered into a fee reimbursement agreement (the “AIP Reimbursement Agreement”) with the Dealer Manager pursuant to which the Company agreed to reimburse the Dealer Manager for certain fees and expenses it incurs for administering the Company’s participation in the DTCC Alternative Investment Product Platform with respect to certain accounts of the Company’s investors serviced through the platform. The Advisor 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 KBS Strategic Opportunity REIT II, Inc. | ||
On January 6, 2014, the Company, together with KBS Real Estate Investment Trust, Inc., KBS Real Estate Investment Trust III, Inc., KBS Strategic Opportunity REIT, Inc., KBS Legacy Partners Apartment REIT, Inc., KBS Strategic Opportunity REIT II, Inc., the Dealer Manager, the Advisor and other KBS-affiliated entities, entered into an errors and omissions and directors and officers liability insurance program where the lower tiers of coverage are shared. The cost of these lower tiers is allocated by the Advisor and its insurance broker among each of the various entities covered by the plan, and is billed directly to each entity. The allocation of these shared coverage costs is proportionate to the pricing by the insurance marketplace for the first tiers of directors and officers liability coverage purchased individually by each REIT. The Advisor’s and the Dealer Manager’s portion of the shared lower tiers’ cost is proportionate to the respective entities’ prior cost for the errors and omissions insurance. | ||
During the years ended December 31, 2013, 2012 and 2011, no other transactions occurred between the Company and 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 KBS Strategic Opportunity REIT II, Inc. See Note 9, “Related Party Transactions.” | ||
The Company records all related party fees as incurred, subject to any limitations described in the Advisory Agreement. | ||
Selling Commissions and Dealer Manager Fees | ||
Through April 29, 2010, the Company paid the Dealer Manager up to 6.0% and 3.5% of the gross offering proceeds from the primary offering as selling commissions and dealer manager fees, respectively. Effective April 30, 2010, the Company paid the Dealer Manager up to 6.5% and 3.0% of the gross offering proceeds from the primary offering as selling commissions and dealer manager fees, respectively. A reduced sales commission and dealer manager fee were paid with respect to certain volume discount sales. No sales commission or dealer manager fee is paid with respect to shares issued through the dividend reinvestment plan. The Dealer Manager reallowed 100% of sales commissions earned to participating broker-dealers. The Dealer Manager also reallowed certain participating broker-dealers up to 1% of the gross offering proceeds attributable to that participating broker-dealer as a marketing fee and, in special cases, the Dealer Manager increased the reallowance. | ||
Organization and Offering Costs | ||
Organization and offering costs (other than selling commissions and dealer manager fees) of the Company were paid and, with respect to the dividend reinvestment plan, may be paid by the Advisor, the Dealer Manager or their affiliates on behalf of the Company or may be paid directly by the Company. Other offering costs include all expenses incurred by the Company in connection with the Offering. Organization costs include all expenses incurred by the Company in connection with the formation of the Company, including but not limited to legal fees and other costs to incorporate the Company. | ||
Pursuant to the Advisory Agreement and the Dealer Manager Agreement, the Company was and is obligated to reimburse the Advisor, the Dealer Manager or their affiliates, as applicable, for organization and other offering costs paid by them on behalf of the Company, provided that the Advisor would be obligated to reimburse the Company to the extent selling commissions, dealer manager fees and organization and other offering costs incurred by the Company in the Offering exceed 15% of gross offering proceeds. The Company ceased offering shares in its primary offering on December 31, 2010 and terminated the primary offering on March 22, 2011. The Company continues to offer shares of common stock under its dividend reinvestment plan. | ||
Acquisition and Origination Fees | ||
The Company pays the Advisor an acquisition fee equal to 0.75% of the cost of investments acquired, including acquisition expenses and any debt attributable to such investments. With respect to investments in and originations of loans, the Company pays an origination fee equal to 1% of the amount funded by the Company to acquire or originate mortgage, mezzanine, bridge or other loans, including any expenses related to such investments and any debt the Company uses to fund the acquisition or origination of these loans. The Company does not pay an acquisition fee with respect to investments in loans. | ||
Asset Management Fee | ||
With respect to investments in real estate, the Company pays the Advisor a monthly asset management fee equal to one-twelfth of 0.75% of the amount paid or allocated to acquire the investment, plus the cost of any subsequent development, construction of improvements to the property. This amount includes any portion of the investment that was debt financed and is inclusive of acquisition fees and expenses related thereto. In the case of investments made through joint ventures, the asset management fee will be determined based on the Company’s proportionate share of the underlying investment. | ||
With respect to investments in loans and any investments other than real estate, the Company pays the Advisor a monthly fee calculated, each month, as one-twelfth of 0.75% of the lesser of (i) the amount paid or allocated to acquire or fund the loan or other investment (which amount includes any portion of the investment that was debt financed and is inclusive of acquisition or origination fees and expenses related thereto) and (ii) the outstanding principal amount of such loan or other investment, plus the acquisition or origination fees and expenses related to the acquisition or funding of such investment, as of the time of calculation. | ||
With respect to an investment that has suffered an impairment in value, reduction in cash flow or other negative circumstances, such investment may either be excluded from the calculation of the asset management fee described above or included in such calculation at a reduced value that is recommended by the Advisor and the Company’s management and then approved by a majority of the Company’s independent directors, and this change in the fee will be applicable to an investment upon the earlier to occur of the date on which (i) such investment is sold, (ii) such investment is surrendered to a person other than the Company, its direct or indirect wholly owned subsidiary or a joint venture or partnership in which the Company has an interest, (iii) the Advisor determines that it will no longer pursue collection or other remedies related to such investment, or (iv) the Advisor recommends a revised fee arrangement with respect to such investment. As of December 31, 2013, the Company has not determined to calculate the asset management fee at an adjusted value for any investments or to exclude any investments from the calculation of the asset management fee. | ||
Disposition Fee | ||
For substantial assistance in connection with the sale of properties or other investments, the Company pays the Advisor or its affiliates 1.0% of the contract sales price of each property or other investment sold; provided, however, in no event may the disposition fees paid to Advisor, its affiliates and unaffiliated third parties exceed 6.0% of the contract sales price. | ||
Income Taxes | ||
The Company has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended. To qualify as a REIT, the Company must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of the Company’s annual REIT taxable income to stockholders (which is computed without regard to the dividends-paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). As a REIT, the Company generally will not be subject to federal income tax on income that it distributes as dividends to its stockholders. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income tax on its taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four taxable years following the year during which qualification is lost, unless the Internal Revenue Service grants the Company relief under certain statutory provisions. Such an event could materially and adversely affect the Company’s net income and net cash available for distribution to stockholders. However, the Company believes that it is organized and operates in such a manner as to qualify for treatment as a REIT. | ||
The Company has concluded that there are no significant uncertain tax positions requiring recognition in its financial statements. Neither the Company nor its subsidiaries have been assessed interest or penalties by any major tax jurisdictions. The Company’s evaluations were performed for the tax years ended December 31, 2013, 2012 and 2011. As of December 31, 2013, returns for the calendar years 2009 through 2012 remain subject to examination by major tax jurisdictions. | ||
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 years ended December 31, 2013, 2012 and 2011, respectively. | ||
Distributions declared per common share were $0.704, $0.650 and $0.650 for the years ended December 31, 2013, 2012 and 2011, respectively. Distributions declared per common share assumes each share was issued and outstanding each day during the years ended December 31, 2013, 2012 and 2011, respectively. For the years ended December 31, 2013, 2012 and 2011, distributions were based on daily record dates and calculated at a rate of $0.00178082 per share per day. Each day during the periods from January 1, 2011 through February 28, 2012 and March 1, 2012 through December 31, 2013 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.” | ||
Square Footage, Occupancy and Other Measures | ||
Square footage, occupancy and other measures used to describe real estate and real estate-related investments included in these Notes to Consolidated Financial Statements are presented on an unaudited basis. | ||
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 | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||
Real Estate [Abstract] | ' | |||||||||||||||||||||||
REAL ESTATE | ' | |||||||||||||||||||||||
REAL ESTATE | ||||||||||||||||||||||||
As of December 31, 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 11.7 million rentable square feet. As of December 31, 2013, the Company’s real estate portfolio was 95% occupied. The following table summarizes the Company’s investments in real estate as of December 31, 2013 and 2012 (in thousands): | ||||||||||||||||||||||||
Land | Buildings and | Tenant Origination and Absorption Costs | Total Real Estate | |||||||||||||||||||||
Improvements | ||||||||||||||||||||||||
As of December 31, 2013: | ||||||||||||||||||||||||
Office | $ | 326,057 | $ | 2,067,684 | $ | 287,073 | $ | 2,680,814 | ||||||||||||||||
Industrial (1) | 10,300 | 89,335 | 17,633 | 117,268 | ||||||||||||||||||||
Total real estate, cost | $ | 336,357 | $ | 2,157,019 | $ | 304,706 | $ | 2,798,082 | ||||||||||||||||
Accumulated depreciation and amortization | — | (241,659 | ) | (121,163 | ) | (362,822 | ) | |||||||||||||||||
Net Amount | $ | 336,357 | $ | 1,915,360 | $ | 183,543 | $ | 2,435,260 | ||||||||||||||||
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 December 31, 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 | $ | 551,142 | 18.7 | % | $ | 45,356 | $ | 35.02 | 99.4 | % | ||||||||||||
_____________________ | ||||||||||||||||||||||||
(1) Annualized base rent represents annualized contractual base rental income as of December 31, 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 December 31, 2013, the leases had remaining terms, excluding options to extend, of up to 15.2 years with a weighted-average remaining term of 5.5 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 December 31, 2013 and 2012, respectively. | ||||||||||||||||||||||||
During the years ended December 31, 2013, 2012 and 2011, the Company recognized deferred rent from tenants, net of lease incentive amortization, of $12.8 million, $15.9 million and $19.9 million, respectively. As of December 31, 2013 and 2012, the cumulative deferred rent balance was $69.2 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 $7.6 million and $5.3 million of unamortized lease incentives as of December 31, 2013 and 2012, respectively. | ||||||||||||||||||||||||
As of December 31, 2013, the future minimum rental income from the Company’s properties under non-cancelable operating leases was as follows (in thousands): | ||||||||||||||||||||||||
2014 | $ | 248,700 | ||||||||||||||||||||||
2015 | 234,911 | |||||||||||||||||||||||
2016 | 220,331 | |||||||||||||||||||||||
2017 | 198,578 | |||||||||||||||||||||||
2018 | 170,314 | |||||||||||||||||||||||
Thereafter | 675,902 | |||||||||||||||||||||||
$ | 1,748,736 | |||||||||||||||||||||||
As of December 31, 2013, the Company had over 500 tenants over a diverse range of industries and geographic areas. 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) | ||||||||||||||||||||||||
Finance | 94 | $ | 50,539 | 19.3 | % | |||||||||||||||||||
Legal Services | 59 | 50,482 | 19.2 | % | ||||||||||||||||||||
Computer System Design & Programming | 22 | 32,568 | 12.4 | % | ||||||||||||||||||||
$ | 133,589 | 50.9 | % | |||||||||||||||||||||
_____________________ | ||||||||||||||||||||||||
(1) Annualized base rent represents annualized contractual base rental income as of December 31, 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 year ended December 31, 2013, the Company recorded bad debt expense of $0.6 million. During the year ended December 31, 2012, the Company reduced its bad debt expense reserve and recorded a net recovery of bad debt related to its tenant receivables of $30,000. During the year ended December 31, 2011, the Company recorded bad debt expense related to its tenant receivables of $0.3 million . As of December 31, 2013 and 2012, the Company had a bad debt expense reserve of approximately $0.3 million and $0.1 million, respectively, which represents less than 1% of its annualized base rent. | ||||||||||||||||||||||||
As of December 31, 2013, there were no leases that accounted for more than 10% of the Company’s annualized base rent. | ||||||||||||||||||||||||
Geographic Concentration Risk | ||||||||||||||||||||||||
As of December 31, 2013, the Company’s net investments in real estate in Illinois, California and New Jersey represented 18.7%, 18.0% and 14.7% 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 18.7% of the Company’s total assets and 19.7% of the Company’s total revenues for the year ended December 31, 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 | 12 Months Ended | ||||||||||||||||||||||||||||||||||||
Dec. 31, 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 December 31, 2013 and 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 | |||||||||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||||||||||
Cost | $ | 304,706 | $ | 304,732 | $ | 75,850 | $ | 70,176 | $ | (48,654 | ) | $ | (46,607 | ) | |||||||||||||||||||||||
Accumulated Amortization | (121,163 | ) | (96,621 | ) | (24,340 | ) | (20,961 | ) | 25,671 | 20,088 | |||||||||||||||||||||||||||
Net Amount | $ | 183,543 | $ | 208,111 | $ | 51,510 | $ | 49,215 | $ | (22,983 | ) | $ | (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 years ended December 31, 2013 and 2012 were as follows (in thousands): | |||||||||||||||||||||||||||||||||||||
Tenant Origination and | Above-Market | Below-Market | |||||||||||||||||||||||||||||||||||
Absorption Costs | Lease Assets | Lease Liabilities | |||||||||||||||||||||||||||||||||||
For the Years Ended December 31, | For the Years Ended December 31, | For the Years Ended December 31, | |||||||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | 2013 | 2012 | 2011 | |||||||||||||||||||||||||||||
Amortization | $ | (41,151 | ) | $ | (48,900 | ) | $ | (51,448 | ) | $ | (9,673 | ) | $ | (10,353 | ) | $ | (8,007 | ) | $ | 7,424 | $ | 8,261 | $ | 8,972 | |||||||||||||
The remaining unamortized balance for these outstanding intangible assets and liabilities as of December 31, 2013 will be amortized for the years ending December 31 as follows (in thousands): | |||||||||||||||||||||||||||||||||||||
Tenant | Above-Market | Below-Market | |||||||||||||||||||||||||||||||||||
Origination and | Lease Assets | Lease Liabilities | |||||||||||||||||||||||||||||||||||
Absorption Costs | |||||||||||||||||||||||||||||||||||||
2014 | $ | (35,085 | ) | $ | (8,741 | ) | $ | 6,520 | |||||||||||||||||||||||||||||
2015 | (28,237 | ) | (7,339 | ) | 5,030 | ||||||||||||||||||||||||||||||||
2016 | (24,433 | ) | (7,017 | ) | 3,727 | ||||||||||||||||||||||||||||||||
2017 | (21,335 | ) | (6,119 | ) | 2,558 | ||||||||||||||||||||||||||||||||
2018 | (16,986 | ) | (5,250 | ) | 1,788 | ||||||||||||||||||||||||||||||||
Thereafter | (57,467 | ) | (17,044 | ) | 3,360 | ||||||||||||||||||||||||||||||||
$ | (183,543 | ) | $ | (51,510 | ) | $ | 22,983 | ||||||||||||||||||||||||||||||
Weighted-Average Remaining Amortization Period | 8.2 years | 9.1 years | 5.5 years | ||||||||||||||||||||||||||||||||||
REAL_ESTATE_LOANS_RECEIVABLE
REAL ESTATE LOANS RECEIVABLE | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Receivables [Abstract] | ' | ||||||||||||||||||||||||
REAL ESTATE LOANS RECEIVABLE | ' | ||||||||||||||||||||||||
REAL ESTATE LOANS RECEIVABLE | |||||||||||||||||||||||||
As of December 31, 2013 and 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 December 31, | 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 | ||||||||||||||||||||||
December 31, 2013 (2) | December 31, | ||||||||||||||||||||||||
2012 (2) | |||||||||||||||||||||||||
Tuscan Inn First Mortgage Origination (5) | |||||||||||||||||||||||||
San Francisco, California | 1/21/10 | Hotel | Mortgage | $ | 20,200 | $ | 20,077 | $ | 19,973 | 8.30% | 9.00% | 1/21/15 | |||||||||||||
Chase Tower First Mortgage Origination (6) | |||||||||||||||||||||||||
Austin, Texas | 1/25/10 | Office | Mortgage | 58,815 | 58,820 | 59,210 | 8.40% | 8.50% | 2/1/15 | ||||||||||||||||
Pappas Commerce First Mortgage Origination (7) | |||||||||||||||||||||||||
Boston, Massachusetts | 4/5/10 | Industrial | Mortgage | 32,673 | 32,673 | 32,673 | (7) | 9.80% | 7/1/14 | ||||||||||||||||
Sheraton Charlotte Airport Hotel First Mortgage | |||||||||||||||||||||||||
Charlotte, North Carolina | 7/11/11 | Hotel | Mortgage | 14,462 | 14,477 | 14,519 | 7.50% | 7.60% | 8/1/18 | ||||||||||||||||
Summit I & II First Mortgage | |||||||||||||||||||||||||
Reston, Virginia | 1/17/12 | Office | Mortgage | 58,750 | 58,781 | 53,302 | 7.50% | 7.60% | 2/1/17 | ||||||||||||||||
One Liberty Plaza Notes (8) | |||||||||||||||||||||||||
New York, New York | 2/11/09 | Office | Mortgage | — | — | 81,163 | (8) | (8) | 8/6/17 | ||||||||||||||||
One Kendall Square First Mortgage Origination (9) | |||||||||||||||||||||||||
Cambridge, Massachusetts | 11/22/10 | Mixed-use Facility | Mortgage | — | — | 88,006 | (9) | (9) | 12/1/13 | ||||||||||||||||
Participation | |||||||||||||||||||||||||
$ | 184,900 | $ | 184,828 | $ | 348,846 | ||||||||||||||||||||
_____________________ | |||||||||||||||||||||||||
(1) Outstanding principal balance as of December 31, 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 rate is the stated interest rate on the face of the loan. Annualized effective interest rate is calculated as the actual interest income recognized in 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 December 31, 2013. | |||||||||||||||||||||||||
(4) Maturity dates are as of December 31, 2013; subject to certain conditions, the maturity dates of certain real estate loans receivable may be extended beyond the maturity date shown. | |||||||||||||||||||||||||
(5) On February 7, 2014, the Company, through an indirect wholly owned subsidiary, entered into an early payoff agreement with the borrower of the Tuscan Inn First Mortgage Origination. See Note 13, “Subsequent Events — Payoff of the Tuscan Inn First Mortgage Origination.” | |||||||||||||||||||||||||
(6) On February 14, 2014, the Company, through an indirect wholly owned subsidiary, entered into an early payoff agreement with the borrower of the Chase Tower First Mortgage Origination. See Note 13, “Subsequent Events — Payoff of the Chase Tower First Mortgage Origination.” | |||||||||||||||||||||||||
(7) As of December 31, 2013, $32.7 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) 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 and accrued interest 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. | |||||||||||||||||||||||||
(9) Upon maturity in December 2013, the borrower under the One Kendall Square First Mortgage Origination paid off the entire principal balance outstanding due to the Company in the amount of $87.5 million. | |||||||||||||||||||||||||
The following summarizes the activity related to the real estate loans receivable for the year ended December 31, 2013 (in thousands): | |||||||||||||||||||||||||
Real estate loans receivable - December 31, 2012 | $ | 348,846 | |||||||||||||||||||||||
Additional principal funded under real estate loans receivable | 5,490 | ||||||||||||||||||||||||
Principal repayment received on real estate loan receivable | (1,579 | ) | |||||||||||||||||||||||
Payoff of the One Liberty Plaza Notes | (84,018 | ) | |||||||||||||||||||||||
Payoff of the One Kendall Square First Mortgage Origination | (87,500 | ) | |||||||||||||||||||||||
Accretion of discounts on purchased real estate loans receivable | 4,075 | ||||||||||||||||||||||||
Amortization of closing costs and origination fees on real estate loans receivable | (486 | ) | |||||||||||||||||||||||
Real estate loans receivable - December 31, 2013 | $ | 184,828 | |||||||||||||||||||||||
For the years ended December 31, 2013, 2012 and 2011, interest income from real estate loans receivable consisted of the following (in thousands): | |||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Contractual interest income | $ | 26,850 | $ | 31,081 | $ | 29,561 | |||||||||||||||||||
Accretion of purchase discounts | 4,075 | 6,620 | 7,441 | ||||||||||||||||||||||
Amortization of closing costs and origination fees | (486 | ) | (557 | ) | (526 | ) | |||||||||||||||||||
Interest income from real estate loans receivable | $ | 30,439 | $ | 37,144 | $ | 36,476 | |||||||||||||||||||
As of December 31, 2013 and 2012, interest receivable from real estate loans receivable was $1.3 million and $2.3 million, respectively, and was included in rents and other receivables. | |||||||||||||||||||||||||
The following is a schedule of maturities for all real estate loans receivable outstanding as of December 31, 2013 (in thousands): | |||||||||||||||||||||||||
Current Maturity (1) | Fully Extended Maturity (1) | ||||||||||||||||||||||||
Face Value | Book Value | Face Value | Book Value | ||||||||||||||||||||||
(Funded) | (Funded) | ||||||||||||||||||||||||
2014 | $ | 32,673 | $ | 32,673 | $ | 32,673 | $ | 32,673 | |||||||||||||||||
2015 | 79,015 | 78,897 | 79,015 | 78,897 | |||||||||||||||||||||
2016 | — | — | — | — | |||||||||||||||||||||
2017 | 58,750 | 58,781 | — | — | |||||||||||||||||||||
2018 | 14,462 | 14,477 | 73,212 | 73,258 | |||||||||||||||||||||
Thereafter | — | — | — | — | |||||||||||||||||||||
$ | 184,900 | $ | 184,828 | $ | 184,900 | $ | 184,828 | ||||||||||||||||||
_____________________ | |||||||||||||||||||||||||
(1) The schedule of current maturities above represents the contractual maturity dates and outstanding balances as of December 31, 2013. Certain of the real estate loans receivable have extension options available to the borrowers, subject to certain conditions, that have been reflected in the schedule of fully extended maturities. |
NOTES_PAYABLE
NOTES PAYABLE | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Debt Disclosure [Abstract] | ' | ||||||||||||||||
NOTES PAYABLE | ' | ||||||||||||||||
NOTES PAYABLE | |||||||||||||||||
As of December 31, 2013 and 2012, the Company’s notes payable consisted of the following (dollars in thousands): | |||||||||||||||||
Principal as of December 31, 2013 | Principal as of December 31, 2012 | Contractual Interest Rate as of | Effective Interest Rate as of December 31, 2013 (1) | Payment Type | Maturity Date (2) | ||||||||||||
December 31, 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 (6) | 348,061 | 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 (9) | — | 45,000 | (9) | (9) | (9) | (9) | |||||||||||
601 Tower Mortgage Loan (10) | 16,320 | 16,320 | (10) | 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 (11) | 75,628 | 76,000 | One-month LIBOR + 2.75% | 3.00% | Interest Only | 1/1/16 | |||||||||||
Portfolio Mortgage Loan #3 (12) | 141,000 | — | One-month LIBOR + | 2.30% | Interest Only | 3/1/16 | |||||||||||
1.75% - 1.85% | |||||||||||||||||
Corporate Technology Centre Mortgage Loan (13) | 140,000 | — | 3.50% | 3.50% | (13) | 4/1/20 | |||||||||||
300-600 Campus Drive Revolving Loan (4) | 78,000 | — | One-month LIBOR + 2.05% (4) | 2.60% | Interest Only | 8/1/16 | |||||||||||
$ | 1,521,353 | $ | 1,334,514 | ||||||||||||||
_____________________ | |||||||||||||||||
(1) Contractual interest rate represents the interest rate in effect under the loan as of December 31, 2013. Effective interest rate is calculated as the actual interest rate in effect as of December 31, 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 December 31, 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 December 31, 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 entered into a three-year senior secured credit facility for borrowings of up to $120.0 million, of which $95.0 million is non-revolving debt and $25.0 million is revolving debt. As of December 31, 2013, the principal balance consisted of the $78.0 million non-revolving portion. The remaining non-revolving portion of $17.0 million and the revolving portion of $25.0 million remain 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. | |||||||||||||||||
(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 December 31, 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 December 31, 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) 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) The outstanding balance of this loan was repaid in December 2013 in connection with the maturity and repayment of the One Kendall Square First Mortgage Origination. | |||||||||||||||||
(10) On June 6, 2011, the Company entered into a four-year $32.6 million revolving credit loan. As of December 31, 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 December 31, 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 December 31, 2013 would be calculated at a variable rate of 220 basis points over one-month LIBOR. | |||||||||||||||||
(11) 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 Portfolio Mortgage Loan #2. Subsequent to December 31, 2013, the Company, through an indirect wholly owned subsidiary, entered into early payoff agreements with the borrowers under the Tuscan Inn First Mortgage Origination and Chase Tower First Mortgage Origination and these loans were released as security for Portfolio Mortgage Loan #2. See Note 13, “Subsequent Events — Payoff of the Tuscan Inn First Mortgage Origination” and “Subsequent Events — Payoff of the Chase Tower First Mortgage Origination.” | |||||||||||||||||
(12) 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 December 31, 2013, the principal balance consisted of the $141.0 million non-revolving portion. The revolving portion of $94.0 million remains available for future disbursements, subject to certain terms and conditions contained in the loan documents. Portfolio Mortgage Loan #3 is secured by 100 & 200 Campus Drive Buildings, Metropolitan Center and Willow Oaks Corporate Center. | |||||||||||||||||
(13) Monthly payments are initially interest-only. Beginning on May 1, 2017, monthly payments will 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. | |||||||||||||||||
As of December 31, 2013 and 2012, the Company’s deferred financing costs were $7.8 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 years ended December 31, 2013, 2012 and 2011, the Company incurred $65.7 million, $58.4 million and $50.3 million of interest expense, respectively. As of December 31, 2013 and 2012, $4.5 million and $4.3 million, respectively, of interest expense were payable. Included in interest expense for the years ended December 31, 2013, 2012 and 2011 were $3.3 million, $3.2 million and $2.8 million of amortization of deferred financing costs, respectively. Interest expense incurred as a result of the Company’s interest rate swap agreements were $10.4 million, $9.2 million and $8.2 million for the years ended December 31, 2013, 2012 and 2011, respectively. Included in interest expense for the year ended December 31, 2013 was $3.7 million of prepayment fees related to the pay-off of the 300-600 Campus Drive Mortgage Loan. | |||||||||||||||||
The following is a schedule of maturities, including principal amortization payments, for all notes payable outstanding as of December 31, 2013 (in thousands): | |||||||||||||||||
2014 | $ | 5,985 | |||||||||||||||
2015 | 614,396 | ||||||||||||||||
2016 | 655,972 | ||||||||||||||||
2017 | 106,781 | ||||||||||||||||
2018 | 2,750 | ||||||||||||||||
Thereafter | 135,469 | ||||||||||||||||
$ | 1,521,353 | ||||||||||||||||
Certain of the Company’s notes payable contain financial debt covenants. As of December 31, 2013, the Company was in compliance with these debt covenants. |
DERIVATIVE_INSTRUMENTS
DERIVATIVE INSTRUMENTS | 12 Months Ended | ||||||||||||||
Dec. 31, 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 amount and other information related to the Company’s interest rate swaps designated as cash flow hedges as of December 31, 2013 and 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): | |||||||||||||||
December 31, 2013 | December 31, 2012 | Weighted-Average | Weighted-Average Remaining Term | ||||||||||||
Derivative Instruments | Number of Instruments | Notional Amount | Number of Instruments | Notional Amount | Reference Rate as of December 31, 2013 | Fix Pay Rate | in Years | ||||||||
Interest Rate Swaps | 16 | $842,150 | 18 | $654,150 | One-month LIBOR/ | 1.36% | 1.7 | ||||||||
Fixed at 0.50% - 2.39% | |||||||||||||||
The following table sets forth the fair value of the Company’s derivative instruments as well as their classification on the consolidated balance sheets as of December 31, 2013 and 2012 (dollars in thousands): | |||||||||||||||
Number of | Fair Value as of | ||||||||||||||
Instruments | December 31, | ||||||||||||||
Derivative Instruments | Balance Sheet Location | 2013 | 2012 | ||||||||||||
Interest Rate Swaps | Deferred financing costs, prepaid expenses and other assets, at fair value | 2 | $ | 225 | $ | — | |||||||||
Interest Rate Swaps | Other liabilities, at fair value | 14 | $ | (10,260 | ) | $ | (17,129 | ) | |||||||
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 gains (losses) of $6.0 million, $0.3 million and $(15.3) million on derivative instruments designated as cash flow hedges in accumulated other comprehensive income (loss) during the years ended December 31, 2013, 2012 and 2011, 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 $10.4 million, $9.2 million and $8.2 million of interest expense related to the effective portion of cash flow hedges during the years ended December 31, 2013, 2012 and 2011, respectively. The change in fair value of the ineffective portion is recognized directly in earnings. During the years ended December 31, 2013, 2012 and 2011, 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 $7.7 million as of December 31, 2013 and was included in accumulated other comprehensive income (loss). | |||||||||||||||
In conjunction with the refinancing of Portfolio Mortgage Loan #3 on March 6, 2013, the Company terminated its 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 year ended December 31, 2013, the Company reclassified $0.9 million of the loss related to the termination of swap agreements into earnings as an increase to interest expense. |
FAIR_VALUE_DISCLOSURES
FAIR VALUE DISCLOSURES | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 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 financial instruments 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 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 December 31, 2013 and 2012, which carrying amounts do not approximate the fair values (in thousands): | |||||||||||||||||||||||||
December 31, 2013 | December 31, 2012 | ||||||||||||||||||||||||
Face Value | Carrying Amount | Fair Value | Face Value | Carrying Amount | Fair Value | ||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||||
Real estate loans receivable | $ | 184,900 | $ | 184,828 | $ | 190,485 | $ | 380,542 | $ | 348,846 | $ | 390,145 | |||||||||||||
Financial liabilities: | |||||||||||||||||||||||||
Notes payable | $ | 1,521,353 | $ | 1,521,353 | $ | 1,526,075 | $ | 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 year ended December 31, 2013, the Company measured the following assets and liabilities at fair value (in thousands): | |||||||||||||||||||||||||
Fair Value Measurements Using | |||||||||||||||||||||||||
Total | Quoted Prices in Active Markets | Significant Other Observable | Significant Unobservable | ||||||||||||||||||||||
for Identical Assets (Level 1) | Inputs (Level 2) | Inputs (Level 3) | |||||||||||||||||||||||
Recurring Basis: | |||||||||||||||||||||||||
Asset derivatives | $ | 225 | $ | — | $ | 225 | $ | — | |||||||||||||||||
Liability derivatives | $ | (10,260 | ) | $ | — | $ | (10,260 | ) | $ | — | |||||||||||||||
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 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 the AIP Reimbursement Agreement with the Dealer Manager pursuant to which the Company agreed to reimburse the Dealer Manager for certain fees and expenses it incurs for administering the Company’s participation in the 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 KBS Strategic Opportunity REIT II, Inc. | |||||||||||||||||||||
On January 6, 2014, the Company, together with KBS Real Estate Investment Trust, Inc., KBS Real Estate Investment Trust III, Inc., KBS Strategic Opportunity REIT, Inc., KBS Legacy Partners Apartment REIT, Inc., KBS Strategic Opportunity REIT II, Inc., the Dealer Manager, the Advisor and other KBS-affiliated entities, entered into an errors and omissions and directors and officers liability insurance program where the lower tiers of coverage are shared. The cost of these lower tiers is allocated by the Advisor and its insurance broker among each of the various entities covered by the plan, and is billed directly to each entity. The allocation of these shared coverage costs is proportionate to the pricing by the insurance marketplace for the first tiers of directors and officers liability coverage purchased individually by each REIT. The Advisor’s and the Dealer Manager’s portion of the shared lower tiers’ cost is proportionate to the respective entities’ prior cost for the errors and omissions insurance. | |||||||||||||||||||||
During the years ended December 31, 2013, 2012 and 2011, no other transactions occurred between the Company and 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 KBS Strategic Opportunity REIT II, Inc. | |||||||||||||||||||||
Pursuant to the terms of these agreements, summarized below are the related-party costs incurred by the Company for the years ended December 31, 2013, 2012 and 2011, respectively, and any related amounts payable as of December 31, 2013 and 2012 (in thousands): | |||||||||||||||||||||
Incurred | Payable as of | ||||||||||||||||||||
Years Ended December 31, | December 31, | ||||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | |||||||||||||||||
Expensed | |||||||||||||||||||||
Asset management fees (1) | $ | 23,524 | $ | 22,316 | $ | 20,127 | $ | — | $ | — | |||||||||||
Reimbursement of operating expenses (2) | 168 | 271 | 55 | — | 168 | ||||||||||||||||
Acquisition fees | 1,797 | — | 4,808 | — | — | ||||||||||||||||
Disposition fees (3) | 1,143 | 968 | — | — | — | ||||||||||||||||
Additional Paid-in Capital | |||||||||||||||||||||
Selling commissions | — | — | 5,748 | — | — | ||||||||||||||||
Dealer manager fees | — | — | 3,116 | — | — | ||||||||||||||||
Reimbursable other offering costs | — | — | 283 | — | — | ||||||||||||||||
Capitalized | |||||||||||||||||||||
Origination fees | — | 608 | 145 | — | — | ||||||||||||||||
Disposition fees (3) | — | — | 450 | — | — | ||||||||||||||||
$ | 26,632 | $ | 24,163 | $ | 34,732 | $ | — | $ | 168 | ||||||||||||
_____________________ | |||||||||||||||||||||
(1) Amounts include asset management fees from discontinued operations totaling $41,000 and $83,000 for the years ended December 31, 2012 and 2011, respectively. | |||||||||||||||||||||
(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 $145,000, $103,000 and $55,000 for the years ended December 31, 2013, 2012 and 2011, respectively, and were the only employee costs reimbursed under the Advisory Agreement through December 31, 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. | |||||||||||||||||||||
(3) Disposition fees with respect to real estate sold are included in the gain on sale of real estate in the accompanying consolidated statements of operations. Disposition fees with respect to real estate loans receivable sold are included in the gain on payoff or sale of real estate loan receivable in the accompanying consolidated statements of operations. | |||||||||||||||||||||
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 year ended December 31, 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 | 12 Months Ended | ||||||||||||
Dec. 31, 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 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 years ended December 31, 2013, 2012 and 2011 and total assets and total liabilities for each reportable segment as of December 31, 2013 and 2012 (in thousands): | |||||||||||||
For the Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Revenues: | |||||||||||||
Real estate segment (1) | $ | 330,195 | $ | 310,993 | $ | 282,689 | |||||||
Real estate-related segment | 30,439 | 37,144 | 36,476 | ||||||||||
Total segment revenues | $ | 360,634 | $ | 348,137 | $ | 319,165 | |||||||
Interest Expense: | |||||||||||||
Real estate segment (1) | $ | 60,754 | $ | 53,124 | $ | 47,929 | |||||||
Real estate-related segment | 4,421 | 4,601 | 1,496 | ||||||||||
Total segment interest expense | 65,175 | 57,725 | 49,425 | ||||||||||
Corporate-level | 512 | 698 | 898 | ||||||||||
Total interest expense | $ | 65,687 | $ | 58,423 | $ | 50,323 | |||||||
NOI: | |||||||||||||
Real estate segment (1) | $ | 131,422 | $ | 131,155 | $ | 121,719 | |||||||
Real estate-related segment | 23,930 | 30,150 | 32,678 | ||||||||||
Total NOI | $ | 155,352 | $ | 161,305 | $ | 154,397 | |||||||
As of December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
Assets: | |||||||||||||
Real estate segment | $ | 2,622,380 | $ | 2,441,112 | |||||||||
Real estate-related segment | 229,457 | 352,377 | |||||||||||
Total segment assets | 2,851,837 | 2,793,489 | |||||||||||
Corporate-level (2) | 102,463 | 28,461 | |||||||||||
Total assets | $ | 2,954,300 | $ | 2,821,950 | |||||||||
Liabilities: | |||||||||||||
Real estate segment | $ | 1,527,057 | $ | 1,293,854 | |||||||||
Real estate-related segment | 75,820 | 121,332 | |||||||||||
Total segment liabilities | 1,602,877 | 1,415,186 | |||||||||||
Corporate-level (3) | 11,379 | 11,307 | |||||||||||
Total liabilities | $ | 1,614,256 | $ | 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 $102.2 million and $28.2 million as of December 31, 2013 and 2012, respectively. | |||||||||||||
(3) As of December 31, 2013 and 2012, corporate-level liabilities consisted primarily of distributions payable. | |||||||||||||
The following table reconciles the Company’s net income to its NOI for the years ended December 31, 2013, 2012 and 2011 (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Net income | $ | 55,779 | $ | 48,374 | $ | 21,793 | |||||||
Other interest income | (46 | ) | (28 | ) | (104 | ) | |||||||
Gain on payoff or sale of real estate loan receivable | (29,073 | ) | (14,884 | ) | — | ||||||||
Real estate acquisition fees to affiliates | 1,797 | — | 4,808 | ||||||||||
Real estate acquisition fees and expenses | 623 | — | 3,974 | ||||||||||
General and administrative expenses | 4,982 | 4,624 | 5,061 | ||||||||||
Depreciation and amortization | 120,778 | 124,933 | 118,014 | ||||||||||
Corporate-level interest expense | 512 | 698 | 898 | ||||||||||
Total income from discontinued operations | — | (2,412 | ) | (47 | ) | ||||||||
NOI | $ | 155,352 | $ | 161,305 | $ | 154,397 | |||||||
SELECTED_QUARTERLY_FINANCIAL_D
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | |||||||||||||
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | ' | |||||||||||||
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | ||||||||||||||
Presented below is a summary of the unaudited quarterly financial information for the years ended December 31, 2013 and 2012 (in thousands, except per share amounts): | ||||||||||||||
2013 | ||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||
Revenues | $ | 86,887 | 93,212 | 92,246 | 88,289 | |||||||||
Net income | 6,432 | 9,432 | 5,590 | 34,325 | ||||||||||
Net income per common share, basic and diluted | 0.03 | 0.05 | 0.03 | 0.18 | ||||||||||
Distributions declared per common share (1) | 0.214 | 0.162 | 0.164 | 0.164 | ||||||||||
2012 | ||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||
Revenues | $ | 89,258 | 89,076 | 86,350 | 83,453 | |||||||||
Net income | 10,463 | 26,985 | 7,149 | 3,777 | ||||||||||
Net income per common share, basic and diluted | 0.05 | 0.14 | 0.04 | 0.02 | ||||||||||
Distributions declared per common share (1) | 0.16 | 0.162 | 0.164 | 0.164 | ||||||||||
____________________ | ||||||||||||||
(1) Distributions declared per common share assumes each share was issued and outstanding each day during the respective period from January 1, 2012 through December 31, 2013. Each day during the period from January 1, 2012 through February 28, 2012 and March 1, 2012 through December 31, 2013 was a record date for distributions. Distributions were calculated at a rate of $0.00178082 per share per day. In addition, on January 16, 2013, the Company’s board of directors declared a one-time 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. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 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 the respective 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 December 31, 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 the Company’s results of operations or financial condition, which would require accrual or disclosure of the contingency and possible range of loss. Additionally, the Company has not recorded any loss contingencies related to legal proceedings in which the potential loss is deemed to be remote. |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 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 January 2, 2014, the Company paid distributions of $10.6 million, which related to distributions declared for daily record dates for each day in the period from December 1, 2013 through December 31, 2013. On February 3, 2014, the Company paid distributions of $10.6 million, which related to distributions declared for daily record dates for each day in the period from January 1, 2014 through January 31, 2014. On March 3, 2014, the Company paid distributions of $9.6 million, which related to distributions declared for daily record dates for each day in the period from February 1, 2014 through February 28, 2014. | |
Distributions Declared | |
On January 23, 2014, the Company’s board of directors declared distributions based on daily record dates for the period from March 1, 2014 through March 31, 2014, which the Company expects to pay in April 2014. On March 5, 2014, the Company’s board of directors declared distributions based on daily record dates for the period from April 1, 2014 through April 30, 2014, which the Company expects to pay in May 2014, and distributions based on daily record dates for the period from May 1, 2014 through May 31, 2014, which the Company expects to pay in June 2014. 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, 2013 estimated value per share of $10.29. | |
Investors may choose to receive cash distributions or purchase additional shares through the Company’s dividend reinvestment plan. | |
Payoff of the Tuscan Inn First Mortgage Origination | |
On January 21, 2010, the Company, through an indirect wholly owned subsidiary, originated a first mortgage loan in the amount of $20.2 million (the “Tuscan Inn First Mortgage Origination”) to fund the acquisition of a four-story, 221-room hotel located in San Francisco. On February 7, 2014, the Company, through an indirect wholly owned subsidiary, entered into an early payoff agreement with the borrower of the Tuscan Inn First Mortgage Origination, pursuant to which the borrower of the Tuscan Inn First Mortgage Origination paid off the entire principal balance outstanding and accrued interest in the amount of $20.2 million. The Tuscan Inn First Mortgage Origination had an original maturity date of January 21, 2015 and bore interest at a fixed rate of 8.3%. | |
Payoff of the Chase Tower First Mortgage Origination | |
On January 25, 2010, the Company, through an indirect wholly owned subsidiary, originated a first mortgage loan in the amount of $59.2 million (the “Chase Tower First Mortgage Origination”) to fund the acquisition of a 22-story Class A office tower located in Austin, Texas. On February 14, 2014, the Company, through an indirect wholly owned subsidiary, entered into an early payoff agreement with the borrower of the Chase Tower First Mortgage Origination, pursuant to which the borrower of the Chase Tower Mortgage Origination paid off the entire principal balance outstanding and accrued interest in the amount of $58.9 million, excluding a yield maintenance premium of $4.9 million. The Chase Tower Mortgage Origination had an original maturity date of February 1, 2015 and bore interest at a fixed rate of 8.4%. | |
Redemptions Subsequent to December 31, 2013 | |
During the period from January 1, 2014 through February 28, 2014, the Company redeemed 1,589,239 shares sold in the Offering pursuant to the share redemption program for $16.3 million, which represented all redemption requests received in good order and eligible for redemption during this period. Based on the amount of net proceeds raised from the sale of shares under the dividend reinvestment plan during 2013, the Company has $54.3 million available for all eligible redemptions for the remainder of 2014, subject to the limitations described in the program, including the monthly limitation for ordinary redemptions. Pursuant to the October 16, 2013 increase in funding under the program pursuant to the Seventh Amended Share Redemption Program, once the Company 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 was 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 was exhausted. As of February 28, 2014, the Company had exhausted all $20.0 million of these funds. Also see “─Authorization of Additional Funds for Share Redemption Program” below. | |
Authorization of Additional Funds for Share Redemption Program | |
On March 7, 2014, the Company’s board of directors approved additional funding for the redemption of shares pursuant to the Seventh 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 $30.0 million of funds in the aggregate shall be available for the redemption of shares on redemption dates commencing with the March 31, 2014 redemption date (excluding shares redeemed in connection with a stockholder’s death, qualifying disability or determination of incompetence) until such $30.0 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 its dividend reinvestment plan during the prior calendar year. The other limitations of the Seventh 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. |
SCHEDULE_III_REAL_ESTATE_ASSET
SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||||||||||||||
Real Estate and Accumulated Depreciation Disclosure [Abstract] | ' | ||||||||||||||||||||||||||||||||||||||||||||
SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION | ' | ||||||||||||||||||||||||||||||||||||||||||||
Initial Cost to Company | Gross Amount at which Carried at Close of Period | ||||||||||||||||||||||||||||||||||||||||||||
Description | Location | Ownership | Encumbrances | Land | Building and Improvements (1) | Total | Cost | Land | Building and | Total (3) | Accumulated | Original | Date Acquired | ||||||||||||||||||||||||||||||||
Percent | Capitalized | Improvements (1) | Depreciation and | Date of | |||||||||||||||||||||||||||||||||||||||||
Subsequent | Amortization | Construction | |||||||||||||||||||||||||||||||||||||||||||
to Acquisition (2) | |||||||||||||||||||||||||||||||||||||||||||||
Mountain View Corporate Center | Basking Ridge, NJ | 100% | $ | 12,093 | $ | 3,600 | $ | 27,138 | $ | 30,738 | $ | (725 | ) | $ | 3,600 | $ | 26,413 | $ | 30,013 | $ | (6,566 | ) | 2001 | 7/30/08 | |||||||||||||||||||||
100 & 200 Campus Drive Buildings | Florham Park, NJ | 100% | 55,996 | 10,700 | 188,509 | 199,209 | (975 | ) | 10,700 | 187,534 | 198,234 | (34,840 | ) | 1988/1989 | 9/9/08 | ||||||||||||||||||||||||||||||
300-600 Campus Drive Buildings | Florham Park, NJ | 100% | 78,000 | 9,717 | 185,445 | 195,162 | (886 | ) | 9,717 | 184,559 | 194,276 | (38,289 | ) | 1997/1999 | 10/10/08 | ||||||||||||||||||||||||||||||
350 E. Plumeria Building | San Jose, CA | 100% | 16,510 | 11,290 | 24,819 | 36,109 | 7 | 11,290 | 24,826 | 36,116 | (5,658 | ) | 1984/2008 | 12/18/08 | |||||||||||||||||||||||||||||||
Willow Oaks Corporate Center | Fairfax, VA | 100% | 45,347 | 25,300 | 87,802 | 113,102 | (9,293 | ) | 25,300 | 78,509 | 103,809 | (19,449 | ) | 1986/1989/2003 | 8/26/09 | ||||||||||||||||||||||||||||||
Pierre Laclede Center | Clayton, MO | 100% | 46,490 | 15,200 | 61,507 | 76,707 | 2,448 | 15,200 | 63,955 | 79,155 | (14,502 | ) | 1964/1970 | 2/4/10 | |||||||||||||||||||||||||||||||
One Main Place | Portland, OR | 100% | 29,907 | 7,200 | 47,643 | 54,843 | (2,122 | ) | 7,200 | 45,521 | 52,721 | (10,621 | ) | 1980 | 2/5/10 | ||||||||||||||||||||||||||||||
Plano Business Park | Plano, TX | 100% | 9,317 | 3,050 | 13,648 | 16,698 | (255 | ) | 3,050 | 13,393 | 16,443 | (2,987 | ) | 2001 | 3/15/10 | ||||||||||||||||||||||||||||||
Crescent VIII | Greenwood Village, CO | 100% | 7,153 | 2,300 | 9,552 | 11,852 | 191 | 2,300 | 9,743 | 12,043 | (3,018 | ) | 1996 | 5/26/10 | |||||||||||||||||||||||||||||||
Horizon Tech Center | San Diego, CA | 100% | 22,530 | 7,900 | 29,237 | 37,137 | — | 7,900 | 29,237 | 37,137 | (7,932 | ) | 2009 | 6/17/10 | |||||||||||||||||||||||||||||||
Dallas Cowboys Distribution Center (4) | Irving, TX | 100% | 10,702 | — | 18,513 | 18,513 | (2 | ) | — | 18,511 | 18,511 | (2,483 | ) | 2010 | 7/8/10 | ||||||||||||||||||||||||||||||
300 N. LaSalle Building | Chicago, IL | 100% | 348,061 | 41,200 | 574,340 | 615,540 | 3,374 | 41,200 | 577,714 | 618,914 | (67,772 | ) | 2009 | 7/29/10 | |||||||||||||||||||||||||||||||
Torrey Reserve West | San Diego, CA | 100% | 15,270 | 5,300 | 19,437 | 24,737 | 10 | 5,300 | 19,447 | 24,747 | (5,188 | ) | 2000 | 9/9/10 | |||||||||||||||||||||||||||||||
Union Bank Plaza | Los Angeles, CA | 100% | 105,000 | 24,000 | 190,232 | 214,232 | 110 | 24,000 | 190,342 | 214,342 | (25,473 | ) | 1967 | 9/15/10 | |||||||||||||||||||||||||||||||
Emerald View at Vista Center | West Palm Beach, FL | 100% | 19,800 | 5,300 | 28,455 | 33,755 | (2,105 | ) | 5,300 | 26,350 | 31,650 | (4,191 | ) | 2007 | 12/9/10 | ||||||||||||||||||||||||||||||
Granite Tower | Denver, CO | 100% | 82,259 | 8,850 | 141,438 | 150,288 | 3,166 | 8,850 | 144,604 | 153,454 | (18,990 | ) | 1983 | 12/16/10 | |||||||||||||||||||||||||||||||
National City Tower | Louisville, KY | 100% | 68,876 | 6,700 | 108,864 | 115,564 | 3 | 6,700 | 108,867 | 115,567 | (18,714 | ) | 1972 | 12/17/10 | |||||||||||||||||||||||||||||||
Gateway Corporate Center | Sacramento, CA | 100% | 26,230 | 6,380 | 38,946 | 45,326 | (338 | ) | 6,380 | 38,608 | 44,988 | (6,328 | ) | 2008/2009 | 1/26/11 | ||||||||||||||||||||||||||||||
601 Tower at Carlson Center | Minnetonka, MN | 100% | 16,320 | 4,350 | 49,627 | 53,977 | (1,804 | ) | 4,350 | 47,823 | 52,173 | (6,805 | ) | 1989 | 2/3/11 | ||||||||||||||||||||||||||||||
I-81 Industrial Portfolio | Various, PA | 100% | 50,994 | 7,250 | 75,475 | 82,725 | (411 | ) | 7,250 | 75,064 | 82,314 | (11,846 | ) | 2007/2008 | 2/16/11 | ||||||||||||||||||||||||||||||
Two Westlake Park | Houston, TX | 100% | 48,213 | 7,000 | 77,881 | 84,881 | 4,216 | 7,000 | 82,097 | 89,097 | (9,702 | ) | 1982 | 2/25/11 | |||||||||||||||||||||||||||||||
CityPlace Tower | West Palm Beach, FL | 100% | 71,000 | 17,460 | 106,539 | 123,999 | 1,943 | 17,460 | 108,482 | 125,942 | (13,281 | ) | 2008 | 4/6/11 | |||||||||||||||||||||||||||||||
Fountainhead Plaza | Tempe, AZ | 100% | 80,000 | 12,300 | 123,700 | 136,000 | 45 | 12,300 | 123,745 | 136,045 | (12,574 | ) | 2011 | 9/13/11 | |||||||||||||||||||||||||||||||
Metropolitan Center | East Rutherford, NJ | 100% | 39,657 | 22,850 | 75,232 | 98,082 | 1,385 | 22,850 | 76,617 | 99,467 | (9,284 | ) | 1986 | 12/16/11 | |||||||||||||||||||||||||||||||
Corporate Technology Centre | San Jose, CA | 100% | 140,000 | 71,160 | 159,712 | 230,872 | 52 | 71,160 | 159,764 | 230,924 | (6,329 | ) | 1999/2001 | 3/28/13 | |||||||||||||||||||||||||||||||
TOTAL | $ | 1,445,725 | $ | 336,357 | $ | 2,463,691 | $ | 2,800,048 | $ | (1,966 | ) | $ | 336,357 | $ | 2,461,725 | $ | 2,798,082 | $ | (362,822 | ) | |||||||||||||||||||||||||
____________________ | |||||||||||||||||||||||||||||||||||||||||||||
(1) Building and improvements includes tenant origination and absorption costs. | |||||||||||||||||||||||||||||||||||||||||||||
(2) Costs capitalized subsequent to acquisition is net of write-offs of fully depreciated/amortized assets. | |||||||||||||||||||||||||||||||||||||||||||||
(3) The aggregate cost of real estate for federal income tax purposes was $2.9 billion as of December 31, 2013. | |||||||||||||||||||||||||||||||||||||||||||||
(4) The Company acquired the rights to a ground lease with respect to this property. The ground lease expires in February 2050. | |||||||||||||||||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||||||||||||||||||||||
Real Estate: | |||||||||||||||||||||||||||||||||||||||||||||
Balance at the beginning of the year | $ | 2,562,193 | $ | 2,590,243 | $ | 1,953,876 | |||||||||||||||||||||||||||||||||||||||
Acquisitions | 230,872 | — | 624,990 | ||||||||||||||||||||||||||||||||||||||||||
Improvements | 30,607 | 18,123 | 25,291 | ||||||||||||||||||||||||||||||||||||||||||
Write-off of fully depreciated and fully amortized assets | (25,590 | ) | (35,806 | ) | (13,914 | ) | |||||||||||||||||||||||||||||||||||||||
Sale | — | (10,367 | ) | — | |||||||||||||||||||||||||||||||||||||||||
Balance at the end of the year | $ | 2,798,082 | $ | 2,562,193 | $ | 2,590,243 | |||||||||||||||||||||||||||||||||||||||
Accumulated depreciation and amortization: | |||||||||||||||||||||||||||||||||||||||||||||
Balance at the beginning of the year | $ | 270,538 | $ | 183,855 | $ | 80,473 | |||||||||||||||||||||||||||||||||||||||
Depreciation and amortization expense | 117,874 | 123,426 | 117,296 | ||||||||||||||||||||||||||||||||||||||||||
Write-off of fully depreciated and fully amortized assets | (25,590 | ) | (35,806 | ) | (13,914 | ) | |||||||||||||||||||||||||||||||||||||||
Sale | — | (937 | ) | — | |||||||||||||||||||||||||||||||||||||||||
Balance at the end of the year | $ | 362,822 | $ | 270,538 | $ | 183,855 | |||||||||||||||||||||||||||||||||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | |
Dec. 31, 2013 | ||
Accounting Policies [Abstract] | ' | |
Principles of Consolidation and Basis of Presentation | ' | |
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. | ||
The consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). | ||
Use of Estimates | ' | |
The preparation of the consolidated financial statements and the accompanying 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. | ||
Reclassifications | ' | |
Certain amounts in the Company’s prior period consolidated financial statements have been reclassified to conform to the current period presentation. These reclassifications have not changed the results of operations of prior periods. In addition, the Company disposed of one industrial property during the year ended December 31, 2012. As a result, certain reclassifications were made to the consolidated balance sheets, statements of operations and footnote disclosures for all periods presented. | ||
Revenue Recognition, Real Estate | ' | |
The Company recognizes minimum rent, including rental abatements, lease incentives and contractual fixed increases attributable to operating leases, on a straight-line basis over the term of the related leases when collectibility is reasonably assured and records amounts expected to be received in later years as deferred rent receivable. If the lease provides for tenant improvements, the Company determines whether the tenant improvements, for accounting purposes, are owned by the tenant or the Company. When the Company is the owner of the tenant improvements, the tenant is not considered to have taken physical possession or have control of the physical use of the leased asset until the tenant improvements are substantially completed. When the tenant is the owner of the tenant improvements, any tenant improvement allowance (including amounts that a tenant can take in the form of cash or a credit against its rent) that is funded is treated as a lease incentive and amortized as a reduction of revenue over the lease term. Tenant improvement ownership is determined based on various factors including, but not limited to: | ||
• | whether the lease stipulates how a tenant improvement allowance may be spent; | |
• | whether the amount of a tenant improvement allowance is in excess of market rates; | |
• | whether the tenant or landlord retains legal title to the improvements at the end of the lease term; | |
• | whether the tenant improvements are unique to the tenant or general-purpose in nature; and | |
• | whether the tenant improvements are expected to have any residual value at the end of the lease. | |
The Company makes estimates of the collectibility of its tenant receivables related to base rents, including deferred rent receivable, expense reimbursements and other revenue or income. Management specifically analyzes accounts receivable, deferred rent receivable, historical bad debts, customer creditworthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. In addition, with respect to tenants in bankruptcy, management makes estimates of the expected recovery of pre-petition and post-petition claims in assessing the estimated collectibility of the related receivable. In some cases, the ultimate resolution of these claims can exceed one year. When a tenant is in bankruptcy, the Company will record a bad debt reserve for the tenant’s receivable balance and generally will not recognize subsequent rental revenue until cash is received or until the tenant is no longer in bankruptcy and has the ability to make rental payments. | ||
Revenue Recognition, Real Estate Loans Receivable | ' | |
Interest income on the Company’s real estate loans receivable is recognized on an accrual basis over the life of the investment using the interest method. Direct loan origination fees and origination or acquisition costs, as well as acquisition premiums or discounts, are amortized over the term of the loan as an adjustment to interest income. The Company will place loans on nonaccrual status when any portion of principal or interest is 90 days past due, or earlier when concern exists as to the ultimate collection of principal or interest. When a loan is placed on nonaccrual status, the Company will reverse the accrual for unpaid interest and generally will not recognize subsequent interest income until the cash is received, or the loan returns to accrual status. The Company will resume the accrual of interest if it determines the collection of interest according to the contractual terms of the loan is probable. | ||
Revenue Recognition, Cash and Cash Equivalents | ' | |
The Company recognizes interest income on its cash and cash equivalents as it is earned and classifies such amounts as other interest income. | ||
Real Estate, Depreciation and Amortization | ' | |
Real estate costs related to the acquisition and improvement of properties are capitalized and amortized over the expected useful life of the asset on a straight-line basis. Repair and maintenance costs are charged to expense as incurred and significant replacements and betterments are capitalized. Repair and maintenance costs include all costs that do not extend the useful life of the real estate asset. The Company considers the period of future benefit of an asset to determine its appropriate useful life. Expenditures for tenant improvements are capitalized and amortized over the shorter of the tenant’s lease term or expected useful life. The Company anticipates the estimated useful lives of its assets by class to be generally as follows: | ||
Buildings | 25-40 years | |
Building improvements | 10-25 years | |
Tenant improvements | Shorter of lease term or expected useful life | |
Tenant origination and absorption costs | Remaining term of related leases, including below-market renewal periods | |
Real Estate, Acquisition Valuation | ' | |
The Company records the acquisition of income-producing real estate or real estate that will be used for the production of income as a business combination. All assets acquired and liabilities assumed in a business combination are measured at their acquisition-date fair values. Acquisition costs are expensed as incurred and restructuring costs that do not meet the definition of a liability at the acquisition date are expensed in periods subsequent to the acquisition date. | ||
The Company assesses the acquisition date fair values of all tangible assets, identifiable intangibles and assumed liabilities using methods similar to those used by independent appraisers, generally utilizing a discounted cash flow analysis that applies appropriate discount and/or capitalization rates and available market information. Estimates of future cash flows are based on a number of factors, including historical operating results, known and anticipated trends, and market and economic conditions. The fair value of tangible assets of an acquired property considers the value of the property as if it were vacant. | ||
The Company records above-market and below-market in-place lease values for acquired properties based on the present value (using a discount rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of above-market in-place leases and for the initial term plus any extended term for any leases with below-market renewal options. The Company amortizes any recorded above-market or below-market lease values as a reduction or increase, respectively, to rental income over the remaining non-cancelable terms of the respective lease, including any below-market renewal periods. | ||
The Company estimates the value of tenant origination and absorption costs by considering the estimated carrying costs during hypothetical expected lease up periods, considering current market conditions. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods. | ||
The Company amortizes the value of tenant origination and absorption costs to depreciation and amortization expense over the remaining average non-cancelable term of the leases. | ||
Estimates of the fair values of the tangible assets, identifiable intangibles and assumed liabilities require the Company to make significant assumptions to estimate market lease rates, property-operating expenses, carrying costs during lease-up periods, discount rates, market absorption periods, and the number of years the property will be held for investment. The use of inappropriate assumptions would result in an incorrect valuation of the Company’s acquired tangible assets, identifiable intangibles and assumed liabilities, which would impact the amount of the Company’s net income. | ||
Real Estate, Impairments of Real Estate and Related Intangible Assets and Liabilities | ' | |
The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate and related intangible assets and liabilities may not be recoverable or realized. When indicators of potential impairment suggest that the carrying value of real estate and related intangible assets and liabilities may not be recoverable, the Company assesses the recoverability by estimating whether the Company will recover the carrying value of the real estate and related intangible assets and liabilities through its undiscounted future cash flows and its eventual disposition. If, based on this analysis, the Company does not believe that it will be able to recover the carrying value of the real estate and related intangible assets and liabilities, the Company would record an impairment loss to the extent that the carrying value exceeds the estimated fair value of the real estate and related intangible assets and liabilities. The Company did not record any impairment loss on its real estate and related intangible assets and liabilities during the years ended December 31, 2013, 2012 and 2011. | ||
Real Estate, Real Estate Sold and Discontinued Operations | ' | |
Real estate sold during the current period and its related assets are classified as “real estate held for sale” and “assets related to real estate held for sale,” respectively, for all prior periods presented in the accompanying consolidated financial statements. Notes payable and other liabilities related to real estate sold are classified as “notes payable related to real estate held for sale” and “liabilities related to real estate held for sale,” respectively, for all prior periods presented in the accompanying consolidated financial statements. Additionally, the Company records the operating results related to real estate that has been disposed of as discontinued operations for all periods presented if the operations have been eliminated and the Company will not have any significant continuing involvement in the operations of the property following the sale. | ||
Real Estate Loan Receivable | ' | |
The Company’s real estate loans receivable are recorded at amortized cost, net of loan loss reserves (if any), and evaluated for impairment at each balance sheet date. The amortized cost of a real estate loan receivable is the outstanding unpaid principal balance, net of unamortized acquisition premiums or discounts and unamortized costs and fees directly associated with the origination or acquisition of the loan. | ||
As of December 31, 2013, there was no loan loss reserve and the Company did not record any impairment losses related to the real estate loans receivable during the years ended December 31, 2013, 2012 and 2011. However, in the future, the Company may experience losses from its investments in loans receivable requiring the Company to record loan loss reserves. Realized losses on individual loans could be material and significantly exceed any recorded reserves. | ||
The reserve for loan losses is a valuation allowance that reflects management’s estimate of loan losses inherent in the loan portfolio as of the balance sheet date. The reserve is adjusted through “Provision for loan losses” on the Company’s consolidated statements of operations and is decreased by charge-offs to specific loans when losses are confirmed. The reserve for loan losses may include a portfolio-based component and an asset-specific component. | ||
An asset-specific reserve relates to reserves for losses on loans considered impaired. The Company considers a loan to be impaired when, based upon current information and events, it believes that it is probable that the Company will be unable to collect all amounts due under the contractual terms of the loan agreement. The Company also considers a loan to be impaired if it grants the borrower a concession through a modification of the loan terms or if it expects to receive assets (including equity interests in the borrower) with fair values that are less than the carrying value of the loan in satisfaction of the loan. A reserve is established when the present value of payments expected to be received, observable market prices, the estimated fair value of the collateral (for loans that are dependent on the collateral for repayment) or amounts expected to be received in satisfaction of a loan are lower than the carrying value of that loan. | ||
A portfolio-based reserve covers the pool of loans that do not have asset-specific reserves. A provision for loan losses is recorded when available information as of each balance sheet date indicates that it is probable that the pool of loans will incur a loss and the amount of the loss can be reasonably estimated. Required reserve balances for this pool of loans are derived from estimated probabilities of default and estimated loss severities assuming a default occurs. On a quarterly basis, the Company’s management assigns estimated probabilities of default and loss severities to each loan in the portfolio based on factors such as the debt service coverage of the underlying collateral, the estimated fair value of the collateral, the significance of the borrower’s investment in the collateral, the financial condition of the borrower and/or its sponsors, the likelihood that the borrower and/or its sponsors would allow the loan to default, the Company’s willingness and ability to step in as owner in the event of default, and other pertinent factors. | ||
Failure to recognize impairments would result in the overstatement of earnings and the carrying value of the Company’s real estate loans held for investment. Actual losses, if any, could differ significantly from estimated amounts. | ||
Cash and Cash Equivalents | ' | |
The Company considers all short-term (with an original maturity of three months or less), highly-liquid investments utilized as part of the Company’s cash-management activities to be cash equivalents. Cash equivalents may include cash and short-term investments. Short-term investments are stated at cost, which approximates fair value. | ||
The Company’s cash and cash equivalents balance exceeds federally insurable limits as of December 31, 2013. The Company monitors the cash balances in its operating accounts and adjusts the cash balances as appropriate; however, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, the Company has experienced no loss or lack of access to cash in its operating accounts. | ||
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) in 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. | ||
Deferred Financing Costs | ' | |
Deferred financing costs represent commitment fees, loan fees, legal fees and other third-party costs associated with obtaining financing. These costs are amortized over the terms of the respective financing agreements using the interest method. Unamortized deferred financing costs are generally expensed when the associated debt is refinanced or repaid before maturity unless specific rules are met that would allow for the carryover of such costs to the refinanced debt. Costs incurred in seeking financing transactions that do not close are expensed in the period in which it is determined that the financing will not close. | ||
Transfer of Financial Assets | ' | |
The Company accounts for transfers of real estate loans receivable to unrelated entities in accordance with Accounting Standards Codification 860, Transfers and Servicing (“ASC 860”). When a real estate loan receivable is divided into multiple tranches and one or more of the tranches is transferred to an unrelated third party, the Company determines if each of the tranches of the loan would qualify as participating interests. If the tranches do not qualify as participating interests, the Company would account for the transfer as a secured borrowing with a pledge of collateral. As a result, the Company would continue to report the transferred financial asset in the Company’s consolidated balance sheet and recognize interest income on the entire note. Proceeds from the transferee are treated as a secured borrowing and recorded as a note payable. Interest income allocated to the transferee is also recorded as interest expense on the Company’s consolidated statement of operations. | ||
Fair Value Measurements | ' | |
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. | |
When available, the Company utilizes quoted market prices from independent third-party sources to determine fair value and classifies such items in Level 1 or Level 2. In instances where the market for a financial instrument is not active, regardless of the availability of a nonbinding quoted market price, observable inputs might not be relevant and could require the Company to make a significant adjustment to derive a fair value measurement. Additionally, in an inactive market, a market price quoted from an independent third party may rely more on models with inputs based on information available only to that independent third party. When the Company determines the market for a financial instrument owned by the Company to be illiquid or when market transactions for similar instruments do not appear orderly, the Company uses several valuation sources (including internal valuations, discounted cash flow analysis and quoted market prices) and establishes a fair value by assigning weights to the various valuation sources. 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 or 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. | ||
Changes in assumptions or estimation methodologies can have a material effect on these estimated fair values. In this regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, may not be realized in an immediate settlement of the instrument. | ||
The Company considers the following factors to be indicators of an inactive market: (i) there are few recent transactions, (ii) price quotations are not based on current information, (iii) price quotations vary substantially either over time or among market makers (for example, some brokered markets), (iv) indexes that previously were highly correlated with the fair values of the asset or liability are demonstrably uncorrelated with recent indications of fair value for that asset or liability, (v) there is a significant increase in implied liquidity risk premiums, yields, or performance indicators (such as delinquency rates or loss severities) for observed transactions or quoted prices when compared with the Company’s estimate of expected cash flows, considering all available market data about credit and other nonperformance risk for the asset or liability, (vi) there is a wide bid-ask spread or significant increase in the bid-ask spread, (vii) there is a significant decline or absence of a market for new issuances (that is, a primary market) for the asset or liability or similar assets or liabilities, and (viii) little information is released publicly (for example, a principal-to-principal market). | ||
The Company considers the following factors to be indicators of non-orderly transactions: (i) there was not adequate exposure to the market for a period before the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities under current market conditions, (ii) there was a usual and customary marketing period, but the seller marketed the asset or liability to a single market participant, (iii) the seller is in or near bankruptcy or receivership (that is, distressed), or the seller was required to sell to meet regulatory or legal requirements (that is, forced), and (iv) the transaction price is an outlier when compared with other recent transactions for the same or similar assets or liabilities. | ||
Redeemable Common Stock | ' | |
The Company has a share redemption program that may enable stockholders to sell their shares to the Company in limited circumstances. The Company adopted two amendments to its share redemption program in 2013 and increased funding available under the program, as described below, by $20.0 million effective for redemptions made on or after the November 2013 redemption date, until such amount is exhausted. | ||
Pursuant to the share redemption program (and unless subsequently amended during 2013 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. | |
• | 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 March 6, 2013, the Company’s board of directors approved a sixth amended and restated share redemption program (the “Sixth Amended Share Redemption Program”). Pursuant to the Sixth Amended Share Redemption Program, the Company modified how it processes redemptions that result in a stockholder owning less than the minimum purchase requirement described in its currently effective, or the most recently effective, registration statement as such registration statement has been amended or supplemented (the “Minimum Purchase Requirement”). Specifically, if the Company cannot repurchase all shares presented for redemption in any month because of the limitations on redemptions set forth in the 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, then the Company would redeem all of such stockholder’s shares. The Sixth Amended Share Redemption Program became effective on April 7, 2013. | ||
On October 15, 2013, the Company’s board of directors approved a seventh amended and restated share redemption program (the “Seventh Amended Share Redemption Program”). Pursuant to the Seventh Amended Share Redemption Program, the board of directors may increase the funding available for the redemption of shares pursuant to the Seventh 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. | ||
The Seventh Amended Share Redemption Program became effective on November 16, 2013, and as a result became effective for redemptions under the program made on the November 2013 redemption date, which was November 29, 2013. | ||
In conjunction with the approval of the Seventh Amended Share Redemption Program, on October 16, 2013, the Company’s board of directors approved additional funding for the redemption of shares as follows: 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 Seventh 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. As of December 31, 2013, the Company had exhausted $11.1 million of these funds and had $8.9 million available to be used for eligible redemptions once the Company has redeemed $3.0 million of shares in the aggregate in any month. | ||
On March 7, 2014, the Company’s board of directors approved additional funding of $30.0 million for the redemption of shares pursuant to the share redemption program upon the terms described under Note 13, “Subsequent Events — Authorization of Additional Funds for Share Redemption Program.” | ||
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. 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. | |
For purposes of determining the time period a redeeming stockholder has held each share, the time period begins as of the date the stockholder acquired the share; provided, that shares purchased by the redeeming stockholder pursuant to the Company’s dividend reinvestment plan will be deemed to have been acquired on the same date as the initial share to which the dividend reinvestment plan shares relate. The date of the share’s original issuance by the Company is not determinative. In addition, as described above, the shares owned by a stockholder may be redeemed at different prices depending on how long the stockholder has held each share submitted for redemption. | ||
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. This estimated value per share was used to calculate the redemption price effective for the December 2012 redemption date, which was December 31, 2012. | ||
On December 18, 2013, 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, as of September 30, 2013, with the exception of the Company’s real estate properties, which were appraised as of November 30, 2013. This estimated value per share was used to calculate the redemption price effective for the December 2013 redemption date, which was December 31, 2013. | ||
The estimated value per share was based upon the recommendation and valuation prepared by the Advisor. As with any valuation methodology, the methodologies used are based upon a number of estimates and assumptions that may not be accurate or complete. Different parties with different assumptions and estimates could derive a different estimated value per share, and these differences could be significant. The estimated value per share is not audited and does not represent the fair value of the Company’s assets and liabilities according to GAAP, nor does it represent a liquidation value of the Company’s assets and liabilities or the amount the Company’s shares of common stock would trade at on a national securities exchange. The estimated value per share does not reflect a discount for the fact that the Company is externally managed, nor does it reflect a real estate portfolio premium/discount versus the sum of the individual property values. The estimated value per share also does not take into account estimated disposition costs and fees for real estate properties that are not held for sale, debt prepayment penalties that could apply upon the prepayment of certain of the Company’s debt obligations or the impact of restrictions on the assumption of debt. | ||
The value of the Company’s shares will fluctuate over time in response to developments related to individual assets in the portfolio and the management of those assets and in response to the real estate and finance markets. The Company currently expects to utilize the Advisor and/or an independent valuation firm to update the estimated value per share in December 2014, in accordance with recommended Investment Program Association guidelines, but is not required to update the estimated value per share more frequently than every 18 months. | ||
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 records amounts that are redeemable under the share redemption program as redeemable common stock in the accompanying consolidated balance sheets because the shares are mandatorily redeemable at the option of the holder and therefore their redemption is outside the control of the Company. The maximum amount redeemable under the Company’s share redemption program is limited as set forth above. However, because the amounts that can be redeemed in future periods are determinable and only contingent on an event that is likely to occur (e.g., the passage of time), the Company presents the net proceeds from the current year dividend reinvestment plan as redeemable common stock in the accompanying consolidated balance sheets. | ||
The Company classifies financial instruments that represent a mandatory obligation of the Company to redeem shares as liabilities. The Company’s redeemable common shares are contingently redeemable at the option of the holder. When the Company determines it has a mandatory obligation to redeem shares under the share redemption program, it will reclassify such obligations from temporary equity to a liability based upon their respective settlement values. | ||
The Company limits the dollar value of shares that may be redeemed under the share redemption program as described above. For the year ended December 31, 2013, the Company redeemed 5,219,003 shares sold in the Offering for $53.2 million, which represented all redemption requests received in good order and eligible for redemption through the December 2013 redemption date, except for 2,798 shares, which were redeemed in January 2014 due to an administrative error by the Company’s transfer agent. Effective January 2014, these limitations were reset, and based on the amount of net proceeds raised from the sale of shares under the dividend reinvestment plan during 2013, the Company has $70.6 million available for all eligible redemptions in 2014, subject to the limitations described above, including the monthly limitation for ordinary redemptions. | ||
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 entered into a fee reimbursement agreement (the “AIP Reimbursement Agreement”) with the Dealer Manager pursuant to which the Company agreed to reimburse the Dealer Manager for certain fees and expenses it incurs for administering the Company’s participation in the DTCC Alternative Investment Product Platform with respect to certain accounts of the Company’s investors serviced through the platform. The Advisor 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 KBS Strategic Opportunity REIT II, Inc. | ||
On January 6, 2014, the Company, together with KBS Real Estate Investment Trust, Inc., KBS Real Estate Investment Trust III, Inc., KBS Strategic Opportunity REIT, Inc., KBS Legacy Partners Apartment REIT, Inc., KBS Strategic Opportunity REIT II, Inc., the Dealer Manager, the Advisor and other KBS-affiliated entities, entered into an errors and omissions and directors and officers liability insurance program where the lower tiers of coverage are shared. The cost of these lower tiers is allocated by the Advisor and its insurance broker among each of the various entities covered by the plan, and is billed directly to each entity. The allocation of these shared coverage costs is proportionate to the pricing by the insurance marketplace for the first tiers of directors and officers liability coverage purchased individually by each REIT. The Advisor’s and the Dealer Manager’s portion of the shared lower tiers’ cost is proportionate to the respective entities’ prior cost for the errors and omissions insurance. | ||
During the years ended December 31, 2013, 2012 and 2011, no other transactions occurred between the Company and 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 KBS Strategic Opportunity REIT II, Inc. See Note 9, “Related Party Transactions.” | ||
The Company records all related party fees as incurred, subject to any limitations described in the Advisory Agreement. | ||
Related Party Transactions, Selling Commissions and Dealer Manager Fees | ' | |
Through April 29, 2010, the Company paid the Dealer Manager up to 6.0% and 3.5% of the gross offering proceeds from the primary offering as selling commissions and dealer manager fees, respectively. Effective April 30, 2010, the Company paid the Dealer Manager up to 6.5% and 3.0% of the gross offering proceeds from the primary offering as selling commissions and dealer manager fees, respectively. A reduced sales commission and dealer manager fee were paid with respect to certain volume discount sales. No sales commission or dealer manager fee is paid with respect to shares issued through the dividend reinvestment plan. The Dealer Manager reallowed 100% of sales commissions earned to participating broker-dealers. The Dealer Manager also reallowed certain participating broker-dealers up to 1% of the gross offering proceeds attributable to that participating broker-dealer as a marketing fee and, in special cases, the Dealer Manager increased the reallowance. | ||
Related Party Transactions, Organization and Offering Costs | ' | |
Organization and offering costs (other than selling commissions and dealer manager fees) of the Company were paid and, with respect to the dividend reinvestment plan, may be paid by the Advisor, the Dealer Manager or their affiliates on behalf of the Company or may be paid directly by the Company. Other offering costs include all expenses incurred by the Company in connection with the Offering. Organization costs include all expenses incurred by the Company in connection with the formation of the Company, including but not limited to legal fees and other costs to incorporate the Company. | ||
Pursuant to the Advisory Agreement and the Dealer Manager Agreement, the Company was and is obligated to reimburse the Advisor, the Dealer Manager or their affiliates, as applicable, for organization and other offering costs paid by them on behalf of the Company, provided that the Advisor would be obligated to reimburse the Company to the extent selling commissions, dealer manager fees and organization and other offering costs incurred by the Company in the Offering exceed 15% of gross offering proceeds. The Company ceased offering shares in its primary offering on December 31, 2010 and terminated the primary offering on March 22, 2011. The Company continues to offer shares of common stock under its dividend reinvestment plan. | ||
Related Party Transactions, Acquisition and Origination Fees | ' | |
The Company pays the Advisor an acquisition fee equal to 0.75% of the cost of investments acquired, including acquisition expenses and any debt attributable to such investments. With respect to investments in and originations of loans, the Company pays an origination fee equal to 1% of the amount funded by the Company to acquire or originate mortgage, mezzanine, bridge or other loans, including any expenses related to such investments and any debt the Company uses to fund the acquisition or origination of these loans. The Company does not pay an acquisition fee with respect to investments in loans. | ||
Related Party Transactions, Asset Management Fee | ' | |
With respect to investments in real estate, the Company pays the Advisor a monthly asset management fee equal to one-twelfth of 0.75% of the amount paid or allocated to acquire the investment, plus the cost of any subsequent development, construction of improvements to the property. This amount includes any portion of the investment that was debt financed and is inclusive of acquisition fees and expenses related thereto. In the case of investments made through joint ventures, the asset management fee will be determined based on the Company’s proportionate share of the underlying investment. | ||
With respect to investments in loans and any investments other than real estate, the Company pays the Advisor a monthly fee calculated, each month, as one-twelfth of 0.75% of the lesser of (i) the amount paid or allocated to acquire or fund the loan or other investment (which amount includes any portion of the investment that was debt financed and is inclusive of acquisition or origination fees and expenses related thereto) and (ii) the outstanding principal amount of such loan or other investment, plus the acquisition or origination fees and expenses related to the acquisition or funding of such investment, as of the time of calculation. | ||
With respect to an investment that has suffered an impairment in value, reduction in cash flow or other negative circumstances, such investment may either be excluded from the calculation of the asset management fee described above or included in such calculation at a reduced value that is recommended by the Advisor and the Company’s management and then approved by a majority of the Company’s independent directors, and this change in the fee will be applicable to an investment upon the earlier to occur of the date on which (i) such investment is sold, (ii) such investment is surrendered to a person other than the Company, its direct or indirect wholly owned subsidiary or a joint venture or partnership in which the Company has an interest, (iii) the Advisor determines that it will no longer pursue collection or other remedies related to such investment, or (iv) the Advisor recommends a revised fee arrangement with respect to such investment. As of December 31, 2013, the Company has not determined to calculate the asset management fee at an adjusted value for any investments or to exclude any investments from the calculation of the asset management fee. | ||
Related Party Transactions, Disposition Fee | ' | |
For substantial assistance in connection with the sale of properties or other investments, the Company pays the Advisor or its affiliates 1.0% of the contract sales price of each property or other investment sold; provided, however, in no event may the disposition fees paid to Advisor, its affiliates and unaffiliated third parties exceed 6.0% of the contract sales price. | ||
Income Taxes | ' | |
The Company has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended. To qualify as a REIT, the Company must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of the Company’s annual REIT taxable income to stockholders (which is computed without regard to the dividends-paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). As a REIT, the Company generally will not be subject to federal income tax on income that it distributes as dividends to its stockholders. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income tax on its taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four taxable years following the year during which qualification is lost, unless the Internal Revenue Service grants the Company relief under certain statutory provisions. Such an event could materially and adversely affect the Company’s net income and net cash available for distribution to stockholders. However, the Company believes that it is organized and operates in such a manner as to qualify for treatment as a REIT. | ||
The Company has concluded that there are no significant uncertain tax positions requiring recognition in its financial statements. Neither the Company nor its subsidiaries have been assessed interest or penalties by any major tax jurisdictions. The Company’s evaluations were performed for the tax years ended December 31, 2013, 2012 and 2011. As of December 31, 2013, returns for the calendar years 2009 through 2012 remain subject to examination by major tax jurisdictions. | ||
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 years ended December 31, 2013, 2012 and 2011, respectively. | ||
Distributions declared per common share were $0.704, $0.650 and $0.650 for the years ended December 31, 2013, 2012 and 2011, respectively. Distributions declared per common share assumes each share was issued and outstanding each day during the years ended December 31, 2013, 2012 and 2011, respectively. For the years ended December 31, 2013, 2012 and 2011, distributions were based on daily record dates and calculated at a rate of $0.00178082 per share per day. Each day during the periods from January 1, 2011 through February 28, 2012 and March 1, 2012 through December 31, 2013 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.” | ||
Square Footage, Occupancy and Other Measures | ' | |
Square footage, occupancy and other measures used to describe real estate and real estate-related investments included in these Notes to Consolidated Financial Statements are presented on an unaudited basis. | ||
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. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | |
Dec. 31, 2013 | ||
Accounting Policies [Abstract] | ' | |
Schedule of Estimated Useful Life | ' | |
The Company anticipates the estimated useful lives of its assets by class to be generally as follows: | ||
Buildings | 25-40 years | |
Building improvements | 10-25 years | |
Tenant improvements | Shorter of lease term or expected useful life | |
Tenant origination and absorption costs | Remaining term of related leases, including below-market renewal periods |
REAL_ESTATE_Tables
REAL ESTATE (Tables) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||
Real Estate [Abstract] | ' | |||||||||||||||||||||||
Schedule of Real Estate Investments | ' | |||||||||||||||||||||||
The following table summarizes the Company’s investments in real estate as of December 31, 2013 and 2012 (in thousands): | ||||||||||||||||||||||||
Land | Buildings and | Tenant Origination and Absorption Costs | Total Real Estate | |||||||||||||||||||||
Improvements | ||||||||||||||||||||||||
As of December 31, 2013: | ||||||||||||||||||||||||
Office | $ | 326,057 | $ | 2,067,684 | $ | 287,073 | $ | 2,680,814 | ||||||||||||||||
Industrial (1) | 10,300 | 89,335 | 17,633 | 117,268 | ||||||||||||||||||||
Total real estate, cost | $ | 336,357 | $ | 2,157,019 | $ | 304,706 | $ | 2,798,082 | ||||||||||||||||
Accumulated depreciation and amortization | — | (241,659 | ) | (121,163 | ) | (362,822 | ) | |||||||||||||||||
Net Amount | $ | 336,357 | $ | 1,915,360 | $ | 183,543 | $ | 2,435,260 | ||||||||||||||||
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 December 31, 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 | $ | 551,142 | 18.7 | % | $ | 45,356 | $ | 35.02 | 99.4 | % | ||||||||||||
_____________________ | ||||||||||||||||||||||||
(1) Annualized base rent represents annualized contractual base rental income as of December 31, 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 December 31, 2013, the Company had over 500 tenants over a diverse range of industries and geographic areas. 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) | ||||||||||||||||||||||||
Finance | 94 | $ | 50,539 | 19.3 | % | |||||||||||||||||||
Legal Services | 59 | 50,482 | 19.2 | % | ||||||||||||||||||||
Computer System Design & Programming | 22 | 32,568 | 12.4 | % | ||||||||||||||||||||
$ | 133,589 | 50.9 | % | |||||||||||||||||||||
_____________________ | ||||||||||||||||||||||||
(1) Annualized base rent represents annualized contractual base rental income as of December 31, 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 December 31, 2013, there were no leases that accounted for more than 10% of the Company’s annualized base rent. | ||||||||||||||||||||||||
Schedule of Future Minimum Rental Income for Company's Properties | ' | |||||||||||||||||||||||
As of December 31, 2013, the future minimum rental income from the Company’s properties under non-cancelable operating leases was as follows (in thousands): | ||||||||||||||||||||||||
2014 | $ | 248,700 | ||||||||||||||||||||||
2015 | 234,911 | |||||||||||||||||||||||
2016 | 220,331 | |||||||||||||||||||||||
2017 | 198,578 | |||||||||||||||||||||||
2018 | 170,314 | |||||||||||||||||||||||
Thereafter | 675,902 | |||||||||||||||||||||||
$ | 1,748,736 | |||||||||||||||||||||||
TENANT_ORIGINATION_AND_ABSORPT1
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||||||
Dec. 31, 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 | ' | ||||||||||||||||||||||||||||||||||||
As of December 31, 2013 and 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 | |||||||||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||||||||||
Cost | $ | 304,706 | $ | 304,732 | $ | 75,850 | $ | 70,176 | $ | (48,654 | ) | $ | (46,607 | ) | |||||||||||||||||||||||
Accumulated Amortization | (121,163 | ) | (96,621 | ) | (24,340 | ) | (20,961 | ) | 25,671 | 20,088 | |||||||||||||||||||||||||||
Net Amount | $ | 183,543 | $ | 208,111 | $ | 51,510 | $ | 49,215 | $ | (22,983 | ) | $ | (26,519 | ) | |||||||||||||||||||||||
Amortization of Tenant Origination and Absorption Costs, Above-Market Leases and Below-Market Lease Liabilities | ' | ||||||||||||||||||||||||||||||||||||
Increases (decreases) in net income as a result of amortization of the Company’s tenant origination and absorption costs, above-market lease assets and below-market lease liabilities for the years ended December 31, 2013 and 2012 were as follows (in thousands): | |||||||||||||||||||||||||||||||||||||
Tenant Origination and | Above-Market | Below-Market | |||||||||||||||||||||||||||||||||||
Absorption Costs | Lease Assets | Lease Liabilities | |||||||||||||||||||||||||||||||||||
For the Years Ended December 31, | For the Years Ended December 31, | For the Years Ended December 31, | |||||||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | 2013 | 2012 | 2011 | |||||||||||||||||||||||||||||
Amortization | $ | (41,151 | ) | $ | (48,900 | ) | $ | (51,448 | ) | $ | (9,673 | ) | $ | (10,353 | ) | $ | (8,007 | ) | $ | 7,424 | $ | 8,261 | $ | 8,972 | |||||||||||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | ' | ||||||||||||||||||||||||||||||||||||
The remaining unamortized balance for these outstanding intangible assets and liabilities as of December 31, 2013 will be amortized for the years ending December 31 as follows (in thousands): | |||||||||||||||||||||||||||||||||||||
Tenant | Above-Market | Below-Market | |||||||||||||||||||||||||||||||||||
Origination and | Lease Assets | Lease Liabilities | |||||||||||||||||||||||||||||||||||
Absorption Costs | |||||||||||||||||||||||||||||||||||||
2014 | $ | (35,085 | ) | $ | (8,741 | ) | $ | 6,520 | |||||||||||||||||||||||||||||
2015 | (28,237 | ) | (7,339 | ) | 5,030 | ||||||||||||||||||||||||||||||||
2016 | (24,433 | ) | (7,017 | ) | 3,727 | ||||||||||||||||||||||||||||||||
2017 | (21,335 | ) | (6,119 | ) | 2,558 | ||||||||||||||||||||||||||||||||
2018 | (16,986 | ) | (5,250 | ) | 1,788 | ||||||||||||||||||||||||||||||||
Thereafter | (57,467 | ) | (17,044 | ) | 3,360 | ||||||||||||||||||||||||||||||||
$ | (183,543 | ) | $ | (51,510 | ) | $ | 22,983 | ||||||||||||||||||||||||||||||
Weighted-Average Remaining Amortization Period | 8.2 years | 9.1 years | 5.5 years | ||||||||||||||||||||||||||||||||||
REAL_ESTATE_LOANS_RECEIVABLE_T
REAL ESTATE LOANS RECEIVABLE (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Receivables [Abstract] | ' | ||||||||||||||||||||||||
Schedule of Real Estate Loans Receivable | ' | ||||||||||||||||||||||||
As of December 31, 2013 and 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 December 31, | 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 | ||||||||||||||||||||||
December 31, 2013 (2) | December 31, | ||||||||||||||||||||||||
2012 (2) | |||||||||||||||||||||||||
Tuscan Inn First Mortgage Origination (5) | |||||||||||||||||||||||||
San Francisco, California | 1/21/10 | Hotel | Mortgage | $ | 20,200 | $ | 20,077 | $ | 19,973 | 8.30% | 9.00% | 1/21/15 | |||||||||||||
Chase Tower First Mortgage Origination (6) | |||||||||||||||||||||||||
Austin, Texas | 1/25/10 | Office | Mortgage | 58,815 | 58,820 | 59,210 | 8.40% | 8.50% | 2/1/15 | ||||||||||||||||
Pappas Commerce First Mortgage Origination (7) | |||||||||||||||||||||||||
Boston, Massachusetts | 4/5/10 | Industrial | Mortgage | 32,673 | 32,673 | 32,673 | (7) | 9.80% | 7/1/14 | ||||||||||||||||
Sheraton Charlotte Airport Hotel First Mortgage | |||||||||||||||||||||||||
Charlotte, North Carolina | 7/11/11 | Hotel | Mortgage | 14,462 | 14,477 | 14,519 | 7.50% | 7.60% | 8/1/18 | ||||||||||||||||
Summit I & II First Mortgage | |||||||||||||||||||||||||
Reston, Virginia | 1/17/12 | Office | Mortgage | 58,750 | 58,781 | 53,302 | 7.50% | 7.60% | 2/1/17 | ||||||||||||||||
One Liberty Plaza Notes (8) | |||||||||||||||||||||||||
New York, New York | 2/11/09 | Office | Mortgage | — | — | 81,163 | (8) | (8) | 8/6/17 | ||||||||||||||||
One Kendall Square First Mortgage Origination (9) | |||||||||||||||||||||||||
Cambridge, Massachusetts | 11/22/10 | Mixed-use Facility | Mortgage | — | — | 88,006 | (9) | (9) | 12/1/13 | ||||||||||||||||
Participation | |||||||||||||||||||||||||
$ | 184,900 | $ | 184,828 | $ | 348,846 | ||||||||||||||||||||
_____________________ | |||||||||||||||||||||||||
(1) Outstanding principal balance as of December 31, 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 rate is the stated interest rate on the face of the loan. Annualized effective interest rate is calculated as the actual interest income recognized in 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 December 31, 2013. | |||||||||||||||||||||||||
(4) Maturity dates are as of December 31, 2013; subject to certain conditions, the maturity dates of certain real estate loans receivable may be extended beyond the maturity date shown. | |||||||||||||||||||||||||
(5) On February 7, 2014, the Company, through an indirect wholly owned subsidiary, entered into an early payoff agreement with the borrower of the Tuscan Inn First Mortgage Origination. See Note 13, “Subsequent Events — Payoff of the Tuscan Inn First Mortgage Origination.” | |||||||||||||||||||||||||
(6) On February 14, 2014, the Company, through an indirect wholly owned subsidiary, entered into an early payoff agreement with the borrower of the Chase Tower First Mortgage Origination. See Note 13, “Subsequent Events — Payoff of the Chase Tower First Mortgage Origination.” | |||||||||||||||||||||||||
(7) As of December 31, 2013, $32.7 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) 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 and accrued interest 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. | |||||||||||||||||||||||||
(9) Upon maturity in December 2013, the borrower under the One Kendall Square First Mortgage Origination paid off the entire principal balance outstanding due to the Company in the amount of $87.5 million. | |||||||||||||||||||||||||
Schedule of Activity Related to Real Estate Loans Receivable | ' | ||||||||||||||||||||||||
The following summarizes the activity related to the real estate loans receivable for the year ended December 31, 2013 (in thousands): | |||||||||||||||||||||||||
Real estate loans receivable - December 31, 2012 | $ | 348,846 | |||||||||||||||||||||||
Additional principal funded under real estate loans receivable | 5,490 | ||||||||||||||||||||||||
Principal repayment received on real estate loan receivable | (1,579 | ) | |||||||||||||||||||||||
Payoff of the One Liberty Plaza Notes | (84,018 | ) | |||||||||||||||||||||||
Payoff of the One Kendall Square First Mortgage Origination | (87,500 | ) | |||||||||||||||||||||||
Accretion of discounts on purchased real estate loans receivable | 4,075 | ||||||||||||||||||||||||
Amortization of closing costs and origination fees on real estate loans receivable | (486 | ) | |||||||||||||||||||||||
Real estate loans receivable - December 31, 2013 | $ | 184,828 | |||||||||||||||||||||||
Schedule of Interest Income from Real Estate Loans Receivable | ' | ||||||||||||||||||||||||
For the years ended December 31, 2013, 2012 and 2011, interest income from real estate loans receivable consisted of the following (in thousands): | |||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Contractual interest income | $ | 26,850 | $ | 31,081 | $ | 29,561 | |||||||||||||||||||
Accretion of purchase discounts | 4,075 | 6,620 | 7,441 | ||||||||||||||||||||||
Amortization of closing costs and origination fees | (486 | ) | (557 | ) | (526 | ) | |||||||||||||||||||
Interest income from real estate loans receivable | $ | 30,439 | $ | 37,144 | $ | 36,476 | |||||||||||||||||||
Schedule of Maturities for Real Estate Loans Receivable Outstanding | ' | ||||||||||||||||||||||||
The following is a schedule of maturities for all real estate loans receivable outstanding as of December 31, 2013 (in thousands): | |||||||||||||||||||||||||
Current Maturity (1) | Fully Extended Maturity (1) | ||||||||||||||||||||||||
Face Value | Book Value | Face Value | Book Value | ||||||||||||||||||||||
(Funded) | (Funded) | ||||||||||||||||||||||||
2014 | $ | 32,673 | $ | 32,673 | $ | 32,673 | $ | 32,673 | |||||||||||||||||
2015 | 79,015 | 78,897 | 79,015 | 78,897 | |||||||||||||||||||||
2016 | — | — | — | — | |||||||||||||||||||||
2017 | 58,750 | 58,781 | — | — | |||||||||||||||||||||
2018 | 14,462 | 14,477 | 73,212 | 73,258 | |||||||||||||||||||||
Thereafter | — | — | — | — | |||||||||||||||||||||
$ | 184,900 | $ | 184,828 | $ | 184,900 | $ | 184,828 | ||||||||||||||||||
_____________________ | |||||||||||||||||||||||||
(1) The schedule of current maturities above represents the contractual maturity dates and outstanding balances as of December 31, 2013. Certain of the real estate loans receivable have extension options available to the borrowers, subject to certain conditions, that have been reflected in the schedule of fully extended maturities. |
NOTES_PAYABLE_Tables
NOTES PAYABLE (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Debt Disclosure [Abstract] | ' | ||||||||||||||||
Schedule of Long-term Debt | ' | ||||||||||||||||
As of December 31, 2013 and 2012, the Company’s notes payable consisted of the following (dollars in thousands): | |||||||||||||||||
Principal as of December 31, 2013 | Principal as of December 31, 2012 | Contractual Interest Rate as of | Effective Interest Rate as of December 31, 2013 (1) | Payment Type | Maturity Date (2) | ||||||||||||
December 31, 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 (6) | 348,061 | 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 (9) | — | 45,000 | (9) | (9) | (9) | (9) | |||||||||||
601 Tower Mortgage Loan (10) | 16,320 | 16,320 | (10) | 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 (11) | 75,628 | 76,000 | One-month LIBOR + 2.75% | 3.00% | Interest Only | 1/1/16 | |||||||||||
Portfolio Mortgage Loan #3 (12) | 141,000 | — | One-month LIBOR + | 2.30% | Interest Only | 3/1/16 | |||||||||||
1.75% - 1.85% | |||||||||||||||||
Corporate Technology Centre Mortgage Loan (13) | 140,000 | — | 3.50% | 3.50% | (13) | 4/1/20 | |||||||||||
300-600 Campus Drive Revolving Loan (4) | 78,000 | — | One-month LIBOR + 2.05% (4) | 2.60% | Interest Only | 8/1/16 | |||||||||||
$ | 1,521,353 | $ | 1,334,514 | ||||||||||||||
_____________________ | |||||||||||||||||
(1) Contractual interest rate represents the interest rate in effect under the loan as of December 31, 2013. Effective interest rate is calculated as the actual interest rate in effect as of December 31, 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 December 31, 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 December 31, 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 entered into a three-year senior secured credit facility for borrowings of up to $120.0 million, of which $95.0 million is non-revolving debt and $25.0 million is revolving debt. As of December 31, 2013, the principal balance consisted of the $78.0 million non-revolving portion. The remaining non-revolving portion of $17.0 million and the revolving portion of $25.0 million remain 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. | |||||||||||||||||
(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 December 31, 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 December 31, 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) 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) The outstanding balance of this loan was repaid in December 2013 in connection with the maturity and repayment of the One Kendall Square First Mortgage Origination. | |||||||||||||||||
(10) On June 6, 2011, the Company entered into a four-year $32.6 million revolving credit loan. As of December 31, 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 December 31, 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 December 31, 2013 would be calculated at a variable rate of 220 basis points over one-month LIBOR. | |||||||||||||||||
(11) 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 Portfolio Mortgage Loan #2. Subsequent to December 31, 2013, the Company, through an indirect wholly owned subsidiary, entered into early payoff agreements with the borrowers under the Tuscan Inn First Mortgage Origination and Chase Tower First Mortgage Origination and these loans were released as security for Portfolio Mortgage Loan #2. See Note 13, “Subsequent Events — Payoff of the Tuscan Inn First Mortgage Origination” and “Subsequent Events — Payoff of the Chase Tower First Mortgage Origination.” | |||||||||||||||||
(12) 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 December 31, 2013, the principal balance consisted of the $141.0 million non-revolving portion. The revolving portion of $94.0 million remains available for future disbursements, subject to certain terms and conditions contained in the loan documents. Portfolio Mortgage Loan #3 is secured by 100 & 200 Campus Drive Buildings, Metropolitan Center and Willow Oaks Corporate Center. | |||||||||||||||||
(13) Monthly payments are initially interest-only. Beginning on May 1, 2017, monthly payments will 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. | |||||||||||||||||
Schedule of Maturities of Long-term Debt | ' | ||||||||||||||||
The following is a schedule of maturities, including principal amortization payments, for all notes payable outstanding as of December 31, 2013 (in thousands): | |||||||||||||||||
2014 | $ | 5,985 | |||||||||||||||
2015 | 614,396 | ||||||||||||||||
2016 | 655,972 | ||||||||||||||||
2017 | 106,781 | ||||||||||||||||
2018 | 2,750 | ||||||||||||||||
Thereafter | 135,469 | ||||||||||||||||
$ | 1,521,353 | ||||||||||||||||
DERIVATIVE_INSTRUMENTS_Tables
DERIVATIVE INSTRUMENTS (Tables) | 12 Months Ended | ||||||||||||||
Dec. 31, 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 amount and other information related to the Company’s interest rate swaps designated as cash flow hedges as of December 31, 2013 and 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): | |||||||||||||||
December 31, 2013 | December 31, 2012 | Weighted-Average | Weighted-Average Remaining Term | ||||||||||||
Derivative Instruments | Number of Instruments | Notional Amount | Number of Instruments | Notional Amount | Reference Rate as of December 31, 2013 | Fix Pay Rate | in Years | ||||||||
Interest Rate Swaps | 16 | $842,150 | 18 | $654,150 | One-month LIBOR/ | 1.36% | 1.7 | ||||||||
Fixed at 0.50% - 2.39% | |||||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position | ' | ||||||||||||||
The following table sets forth the fair value of the Company’s derivative instruments as well as their classification on the consolidated balance sheets as of December 31, 2013 and 2012 (dollars in thousands): | |||||||||||||||
Number of | Fair Value as of | ||||||||||||||
Instruments | December 31, | ||||||||||||||
Derivative Instruments | Balance Sheet Location | 2013 | 2012 | ||||||||||||
Interest Rate Swaps | Deferred financing costs, prepaid expenses and other assets, at fair value | 2 | $ | 225 | $ | — | |||||||||
Interest Rate Swaps | Other liabilities, at fair value | 14 | $ | (10,260 | ) | $ | (17,129 | ) |
FAIR_VALUE_DISCLOSURES_Tables
FAIR VALUE DISCLOSURES (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 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 December 31, 2013 and 2012, which carrying amounts do not approximate the fair values (in thousands): | |||||||||||||||||||||||||
December 31, 2013 | December 31, 2012 | ||||||||||||||||||||||||
Face Value | Carrying Amount | Fair Value | Face Value | Carrying Amount | Fair Value | ||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||||
Real estate loans receivable | $ | 184,900 | $ | 184,828 | $ | 190,485 | $ | 380,542 | $ | 348,846 | $ | 390,145 | |||||||||||||
Financial liabilities: | |||||||||||||||||||||||||
Notes payable | $ | 1,521,353 | $ | 1,521,353 | $ | 1,526,075 | $ | 1,334,514 | $ | 1,334,514 | $ | 1,341,363 | |||||||||||||
Schedule of Assets and Liabilities at Fair Value | ' | ||||||||||||||||||||||||
During the year ended December 31, 2013, the Company measured the following assets and liabilities at fair value (in thousands): | |||||||||||||||||||||||||
Fair Value Measurements Using | |||||||||||||||||||||||||
Total | Quoted Prices in Active Markets | Significant Other Observable | Significant Unobservable | ||||||||||||||||||||||
for Identical Assets (Level 1) | Inputs (Level 2) | Inputs (Level 3) | |||||||||||||||||||||||
Recurring Basis: | |||||||||||||||||||||||||
Asset derivatives | $ | 225 | $ | — | $ | 225 | $ | — | |||||||||||||||||
Liability derivatives | $ | (10,260 | ) | $ | — | $ | (10,260 | ) | $ | — | |||||||||||||||
RELATED_PARTY_TRANSACTIONS_Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 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 years ended December 31, 2013, 2012 and 2011, respectively, and any related amounts payable as of December 31, 2013 and 2012 (in thousands): | |||||||||||||||||||||
Incurred | Payable as of | ||||||||||||||||||||
Years Ended December 31, | December 31, | ||||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | |||||||||||||||||
Expensed | |||||||||||||||||||||
Asset management fees (1) | $ | 23,524 | $ | 22,316 | $ | 20,127 | $ | — | $ | — | |||||||||||
Reimbursement of operating expenses (2) | 168 | 271 | 55 | — | 168 | ||||||||||||||||
Acquisition fees | 1,797 | — | 4,808 | — | — | ||||||||||||||||
Disposition fees (3) | 1,143 | 968 | — | — | — | ||||||||||||||||
Additional Paid-in Capital | |||||||||||||||||||||
Selling commissions | — | — | 5,748 | — | — | ||||||||||||||||
Dealer manager fees | — | — | 3,116 | — | — | ||||||||||||||||
Reimbursable other offering costs | — | — | 283 | — | — | ||||||||||||||||
Capitalized | |||||||||||||||||||||
Origination fees | — | 608 | 145 | — | — | ||||||||||||||||
Disposition fees (3) | — | — | 450 | — | — | ||||||||||||||||
$ | 26,632 | $ | 24,163 | $ | 34,732 | $ | — | $ | 168 | ||||||||||||
_____________________ | |||||||||||||||||||||
(1) Amounts include asset management fees from discontinued operations totaling $41,000 and $83,000 for the years ended December 31, 2012 and 2011, respectively. | |||||||||||||||||||||
(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 $145,000, $103,000 and $55,000 for the years ended December 31, 2013, 2012 and 2011, respectively, and were the only employee costs reimbursed under the Advisory Agreement through December 31, 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. | |||||||||||||||||||||
(3) Disposition fees with respect to real estate sold are included in the gain on sale of real estate in the accompanying consolidated statements of operations. Disposition fees with respect to real estate loans receivable sold are included in the gain on payoff or sale of real estate loan receivable in the accompanying consolidated statements of operations. |
SEGMENT_INFORMATION_Tables
SEGMENT INFORMATION (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 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 years ended December 31, 2013, 2012 and 2011 and total assets and total liabilities for each reportable segment as of December 31, 2013 and 2012 (in thousands): | |||||||||||||
For the Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Revenues: | |||||||||||||
Real estate segment (1) | $ | 330,195 | $ | 310,993 | $ | 282,689 | |||||||
Real estate-related segment | 30,439 | 37,144 | 36,476 | ||||||||||
Total segment revenues | $ | 360,634 | $ | 348,137 | $ | 319,165 | |||||||
Interest Expense: | |||||||||||||
Real estate segment (1) | $ | 60,754 | $ | 53,124 | $ | 47,929 | |||||||
Real estate-related segment | 4,421 | 4,601 | 1,496 | ||||||||||
Total segment interest expense | 65,175 | 57,725 | 49,425 | ||||||||||
Corporate-level | 512 | 698 | 898 | ||||||||||
Total interest expense | $ | 65,687 | $ | 58,423 | $ | 50,323 | |||||||
NOI: | |||||||||||||
Real estate segment (1) | $ | 131,422 | $ | 131,155 | $ | 121,719 | |||||||
Real estate-related segment | 23,930 | 30,150 | 32,678 | ||||||||||
Total NOI | $ | 155,352 | $ | 161,305 | $ | 154,397 | |||||||
As of December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
Assets: | |||||||||||||
Real estate segment | $ | 2,622,380 | $ | 2,441,112 | |||||||||
Real estate-related segment | 229,457 | 352,377 | |||||||||||
Total segment assets | 2,851,837 | 2,793,489 | |||||||||||
Corporate-level (2) | 102,463 | 28,461 | |||||||||||
Total assets | $ | 2,954,300 | $ | 2,821,950 | |||||||||
Liabilities: | |||||||||||||
Real estate segment | $ | 1,527,057 | $ | 1,293,854 | |||||||||
Real estate-related segment | 75,820 | 121,332 | |||||||||||
Total segment liabilities | 1,602,877 | 1,415,186 | |||||||||||
Corporate-level (3) | 11,379 | 11,307 | |||||||||||
Total liabilities | $ | 1,614,256 | $ | 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 $102.2 million and $28.2 million as of December 31, 2013 and 2012, respectively. | |||||||||||||
(3) As of December 31, 2013 and 2012, corporate-level liabilities consisted primarily of distributions 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 years ended December 31, 2013, 2012 and 2011 (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Net income | $ | 55,779 | $ | 48,374 | $ | 21,793 | |||||||
Other interest income | (46 | ) | (28 | ) | (104 | ) | |||||||
Gain on payoff or sale of real estate loan receivable | (29,073 | ) | (14,884 | ) | — | ||||||||
Real estate acquisition fees to affiliates | 1,797 | — | 4,808 | ||||||||||
Real estate acquisition fees and expenses | 623 | — | 3,974 | ||||||||||
General and administrative expenses | 4,982 | 4,624 | 5,061 | ||||||||||
Depreciation and amortization | 120,778 | 124,933 | 118,014 | ||||||||||
Corporate-level interest expense | 512 | 698 | 898 | ||||||||||
Total income from discontinued operations | — | (2,412 | ) | (47 | ) | ||||||||
NOI | $ | 155,352 | $ | 161,305 | $ | 154,397 | |||||||
SELECTED_QUARTERLY_FINANCIAL_D1
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | |||||||||||||
Schedule of Quarterly Financial Information | ' | |||||||||||||
Presented below is a summary of the unaudited quarterly financial information for the years ended December 31, 2013 and 2012 (in thousands, except per share amounts): | ||||||||||||||
2013 | ||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||
Revenues | $ | 86,887 | 93,212 | 92,246 | 88,289 | |||||||||
Net income | 6,432 | 9,432 | 5,590 | 34,325 | ||||||||||
Net income per common share, basic and diluted | 0.03 | 0.05 | 0.03 | 0.18 | ||||||||||
Distributions declared per common share (1) | 0.214 | 0.162 | 0.164 | 0.164 | ||||||||||
2012 | ||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||
Revenues | $ | 89,258 | 89,076 | 86,350 | 83,453 | |||||||||
Net income | 10,463 | 26,985 | 7,149 | 3,777 | ||||||||||
Net income per common share, basic and diluted | 0.05 | 0.14 | 0.04 | 0.02 | ||||||||||
Distributions declared per common share (1) | 0.16 | 0.162 | 0.164 | 0.164 | ||||||||||
____________________ | ||||||||||||||
(1) Distributions declared per common share assumes each share was issued and outstanding each day during the respective period from January 1, 2012 through December 31, 2013. Each day during the period from January 1, 2012 through February 28, 2012 and March 1, 2012 through December 31, 2013 was a record date for distributions. Distributions were calculated at a rate of $0.00178082 per share per day. In addition, on January 16, 2013, the Company’s board of directors declared a one-time 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. |
ORGANIZATION_Details
ORGANIZATION (Details) (USD $) | 12 Months Ended | 35 Months Ended | 68 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Mar. 22, 2011 | Dec. 31, 2013 | |
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 | 5 | ' | ' | ' | 5 |
Issuance of common stock, value | $70,562,000 | $66,460,000 | $171,656,000 | ' | ' |
Shares of common stock sold under dividend reinvestment plan, value | ' | ' | ' | ' | 271,300,000 |
Redemptions of common stock, value | 53,168,000 | 82,818,000 | 25,695,000 | ' | 184,900,000 |
Common Stock [Member] | ' | ' | ' | ' | ' |
Organizational Structure [Line Items] | ' | ' | ' | ' | ' |
Issuance of common stock, shares | 7,214,805 | 6,804,964 | 17,630,691 | 182,681,633 | ' |
Issuance of common stock, value | 72,000 | 67,000 | 176,000 | 1,800,000,000 | ' |
Shares of common stock sold under dividend reinvestment plan, shares | ' | ' | ' | ' | 28,154,497 |
Redemptions of common stock, shares | 5,219,003 | 8,255,964 | 2,645,389 | ' | 18,586,160 |
Redemptions of common stock, value | $52,000 | $81,000 | $26,000 | ' | ' |
Common Stock [Member] | Advisor (KBS Capital Advisors LLC) [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 Campus [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_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Useful Life) (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Building [Member] | Minimum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Useful life | '25 years |
Building [Member] | Maximum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Useful life | '40 years |
Building Improvements [Member] | Minimum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Useful life | '10 years |
Building Improvements [Member] | Maximum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Useful life | '25 years |
Tenant Improvements [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated useful lives | 'Shorter of lease term or expected useful life |
Tenant Origination and Absorption Costs [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated useful lives | 'Remaining term of related leases, including below-market renewal periods |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) (USD $) | 0 Months Ended | 3 Months Ended | 10 Months Ended | 12 Months Ended | 14 Months Ended | 12 Months Ended | 12 Months Ended | 68 Months Ended | 0 Months Ended | 0 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||
Feb. 04, 2013 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Feb. 28, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 18, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Jan. 02, 2013 | Dec. 18, 2013 | Mar. 07, 2014 | Dec. 31, 2013 | |||||||||
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] | 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] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Dividend Reinvestment Plan [Member] | Dividend Reinvestment Plan [Member] | $3.0 Million of Shares Have Been Redeemed in the Aggregate in Any Month [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] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||
Loan loss reserve | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||
Purchase price per share as percent of estimated value | ' | 95.00% | ' | ' | ' | ' | ' | ' | ' | ' | 95.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||
Price per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $9.78 | ' | ' | ' | ||||||||
Purchase price per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $10.29 | ' | ' | ||||||||
Impairment losses of real estate loans receivable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||
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% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||
Stock redeemed or called on monthly basis, value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||
Funds available for redemption of shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30,000,000 | 20,000,000 | ||||||||
Funds exhausted for redemption of shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||
Funds available for future redemption of shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||
Redemption price percentage of most recent estimated value per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 92.50% | ' | 95.00% | ' | 97.50% | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||
Estimated value per share of company's common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $10.29 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||
Offering stage completion term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '18 months | ' | ' | ' | ' | ' | ' | ' | ||||||||
Common stock redeemed, shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,219,003 | ' | ' | ' | ' | ' | ' | ' | ||||||||
Common stock redeemed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 53,200,000 | ' | ' | ' | ' | ' | ' | ' | ||||||||
Number of shares non-redeemable do to limitations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,798 | ' | ' | ' | ' | ' | ' | ' | ||||||||
Other liabilities | ' | 34,674,000 | ' | ' | ' | 34,355,000 | ' | ' | ' | 34,355,000 | 34,674,000 | 34,355,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||
Amount available for redemption | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $70,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||
Redemptions of common stock, shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,219,003 | 8,255,964 | 2,645,389 | 18,586,160 | ' | ' | ' | ' | ||||||||
Distributions declared per common share | ' | $0.16 | [1] | $0.16 | [1] | $0.16 | [1] | $0.21 | [1] | $0.16 | [1] | $0.16 | [1] | $0.16 | [1] | $0.16 | [1] | ' | $0.70 | $0.65 | $0.65 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
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 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||
Share holding term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | '2 years | ' | '3 years | ' | '4 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||
[1] | Distributions declared per common share assumes each share was issued and outstanding each day during the respective period from January 1, 2012 through December 31, 2013. Each day during the period from January 1, 2012 through February 28, 2012 and March 1, 2012 through December 31, 2013 was a record date for distributions. Distributions were calculated at a rate of $0.00178082 per share per day. In addition, on January 16, 2013, the Company’s board of directors declared a one-time 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. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Related Party Transactions) (Details) | Dec. 31, 2013 | Apr. 29, 2010 |
Related Party Transaction [Line Items] | ' | ' |
Percent of dealer manager reallows of sales commissions earned to participating broker-dealer | 100.00% | ' |
Origination fee, percent | 1.00% | ' |
Maximum [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Selling commissions fees paid, percent of gross offering proceeds | 6.50% | 6.00% |
Dealer managers fees paid, percent of gross offering proceeds | 3.00% | 3.50% |
Sales commissions, broker dealer, percentage | 1.00% | ' |
Advisor (KBS Capital Advisors LLC) [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Acquisition advisory fee, percent | 0.75% | ' |
Monthly asset management fee, percent of acquisition expense, excluding acquisition fees related to thereto | 0.06% | ' |
Advisor (KBS Capital Advisors LLC) [Member] | Minimum [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Reimbursable offering costs determination, gross offering costs, percentage | 15.00% | ' |
Advisor or Affiliates [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Selling commissions fees paid, percent of sales price | 1.00% | ' |
Advisor, Affiliates or Unaffiliated Third Parties [Member] | Maximum [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Selling commissions fees paid, percent of sales price | 6.00% | ' |
REAL_ESTATE_Narrative_Details
REAL ESTATE (Narrative) (Details) | Dec. 31, 2013 |
sqft | |
properties | |
Real Estate Properties [Line Items] | ' |
Number of real estate properties | 27 |
Rentable square feet | 11,700,000 |
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 Buildings, Campus [Member] | ' |
Real Estate Properties [Line Items] | ' |
Number of real estate properties | 8 |
Office Campus [Member] | ' |
Real Estate Properties [Line Items] | ' |
Number of real estate properties | 1 |
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 $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Real Estate Properties [Line Items] | ' | ' | ||
Total real estate, cost | $2,798,082 | $2,562,193 | ||
Accumulated depreciation and amortization | -362,822 | -270,538 | ||
Total real estate held for investment, net | 2,435,260 | 2,291,655 | ||
Office [Member] | ' | ' | ||
Real Estate Properties [Line Items] | ' | ' | ||
Total real estate, cost | 2,680,814 | 2,444,486 | ||
Industrial [Member] | ' | ' | ||
Real Estate Properties [Line Items] | ' | ' | ||
Total real estate, cost | 117,268 | [1] | 117,707 | [1] |
Land [Member] | ' | ' | ||
Real Estate Properties [Line Items] | ' | ' | ||
Total real estate, cost | 336,357 | 265,197 | ||
Total real estate held for investment, 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 | 2,157,019 | 1,992,264 | ||
Accumulated depreciation and amortization | -241,659 | -173,917 | ||
Total real estate held for investment, net | 1,915,360 | 1,818,347 | ||
Buildings and Improvements [Member] | Office [Member] | ' | ' | ||
Real Estate Properties [Line Items] | ' | ' | ||
Total real estate, cost | 2,067,684 | 1,903,298 | ||
Buildings and Improvements [Member] | Industrial [Member] | ' | ' | ||
Real Estate Properties [Line Items] | ' | ' | ||
Total real estate, cost | 89,335 | [1] | 88,966 | [1] |
Tenant Origination and Absorption Costs [Member] | ' | ' | ||
Real Estate Properties [Line Items] | ' | ' | ||
Total real estate, cost | 304,706 | 304,732 | ||
Accumulated depreciation and amortization | -121,163 | -96,621 | ||
Total real estate held for investment, net | 183,543 | 208,111 | ||
Tenant Origination and Absorption Costs [Member] | Office [Member] | ' | ' | ||
Real Estate Properties [Line Items] | ' | ' | ||
Total real estate, cost | 287,073 | 286,291 | ||
Tenant Origination and Absorption Costs [Member] | Industrial [Member] | ' | ' | ||
Real Estate Properties [Line Items] | ' | ' | ||
Total real estate, cost | $17,633 | [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 $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | |
sqft | |||
Real Estate Properties [Line Items] | ' | ' | |
Rentable Square Feet | 11,700,000 | ' | |
Total Real Estate, Net | $2,435,260 | $2,291,655 | |
Percentage of Total Assets | 50.90% | ' | |
Annualized Base Rent | 133,589 | [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 | 551,142 | ' | |
Percentage of Total Assets | 18.70% | ' | |
Annualized Base Rent | $45,356 | [1] | ' |
Average Annualized Base Rent per sq. ft. | 35.02 | ' | |
Occupancy | 99.40% | ' | |
[1] | Annualized base rent represents annualized contractual base rental income as of December 31, 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 $) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||
Tenants | ||||
Operating Leased Assets [Line Items] | ' | ' | ' | |
Deferred rent recognized | $12,806,000 | $15,949,000 | $19,890,000 | |
Deferred rent receivables | 69,200,000 | 53,500,000 | ' | |
Unamortized lease incentives | 7,600,000 | 5,300,000 | ' | |
Number of tenants | 500 | ' | ' | |
Recorded bad debt expense related to tenant | 589,000 | -30,000 | 285,000 | |
Bad debt reserve | 300,000 | 100,000 | ' | |
Annualized Base Rent | 133,589,000 | [1] | ' | ' |
Weighted Average [Member] | ' | ' | ' | |
Operating Leased Assets [Line Items] | ' | ' | ' | |
Operating lease, term | '5 years 6 months | ' | ' | |
Maximum [Member] | ' | ' | ' | |
Operating Leased Assets [Line Items] | ' | ' | ' | |
Operating lease, term | '15 years 2 months 12 days | ' | ' | |
Bad debt reserve of annualized base rent | 1.00% | ' | ' | |
Other Liabilities [Member] | ' | ' | ' | |
Operating Leased Assets [Line Items] | ' | ' | ' | |
Security deposit liability | $4,600,000 | $4,200,000 | ' | |
[1] | Annualized base rent represents annualized contractual base rental income as of December 31, 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_Future_Minimum_Ren
REAL ESTATE (Future Minimum Rental Income) (Details) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Real Estate [Abstract] | ' |
2014 | $248,700 |
2015 | 234,911 |
2016 | 220,331 |
2017 | 198,578 |
2018 | 170,314 |
Thereafter | 675,902 |
Future minimum rental income | $1,748,736 |
REAL_ESTATE_Highes_Tenant_Indu
REAL ESTATE (Highes Tenant Industry Concentrations- Grater than 10% of Annual Base Rent) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | |
Tenants | ||
Concentration Risk [Line Items] | ' | |
Number of tenants | 500 | |
Annualized Base Rent | $133,589 | [1] |
Percentage of Annualized Base Rent | 50.90% | |
Industry - Finance [Member] | ' | |
Concentration Risk [Line Items] | ' | |
Number of tenants | 94 | |
Annualized Base Rent | 50,539 | [1] |
Percentage of Annualized Base Rent | 19.30% | |
Industry - Legal Services [Member] | ' | |
Concentration Risk [Line Items] | ' | |
Number of tenants | 59 | |
Annualized Base Rent | 50,482 | [1] |
Percentage of Annualized Base Rent | 19.20% | |
Industry - Computer System Design & Programming [Member] | ' | |
Concentration Risk [Line Items] | ' | |
Number of tenants | 22 | |
Annualized Base Rent | $32,568 | [1] |
Percentage of Annualized Base Rent | 12.40% | |
[1] | Annualized base rent represents annualized contractual base rental income as of December 31, 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_Concentration_of_C
REAL ESTATE (Concentration of Credit Risk, Tenant Lease that Represents More than 10% of Annualized Base Rent) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | |
sqft | ||
Real Estate [Abstract] | ' | |
Square Feet | 11,700,000 | |
Percentage of Annualized Base Rent | 50.90% | |
Annualized Base Rent | $133,589 | [1] |
[1] | Annualized base rent represents annualized contractual base rental income as of December 31, 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) | 12 Months Ended |
Dec. 31, 2013 | |
Concentration Risk [Line Items] | ' |
Concentration risk, percentage | 50.90% |
Assets, Total [Member] | 300 N. Lasalle [Member] | ' |
Concentration Risk [Line Items] | ' |
Concentration risk, percentage | 18.70% |
Revenues, Total [Member] | 300 N. Lasalle [Member] | ' |
Concentration Risk [Line Items] | ' |
Concentration risk, percentage | 19.70% |
ILLINOIS [Member] | Assets, Total [Member] | ' |
Concentration Risk [Line Items] | ' |
Concentration risk, percentage | 18.70% |
CALIFORNIA [Member] | Assets, Total [Member] | ' |
Concentration Risk [Line Items] | ' |
Concentration risk, percentage | 18.00% |
NEW JERSEY [Member] | Assets, Total [Member] | ' |
Concentration Risk [Line Items] | ' |
Concentration risk, percentage | 14.70% |
REAL_ESTATE_Recent_Disposition
REAL ESTATE (Recent Disposition) (Narrative) (Details) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | ||||||||||
Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Mar. 28, 2013 | Mar. 28, 2013 | |
sqft | sqft | Corporate Technology Centre [Member] | Corporate Technology Centre [Member] | ||||||||||
Tenants | Tenants | Tenants | Office Buildings, Campus [Member] | ||||||||||
acre | properties | ||||||||||||
sqft | |||||||||||||
Real Estate Properties [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of real estate properties acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8 |
Rentable square feet | 11,700,000 | ' | ' | ' | ' | ' | ' | ' | 11,700,000 | ' | ' | 610,083 | ' |
Area of land | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 32.7 | ' |
Contractual purchase price before closing costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $239,000,000 | ' |
Gain on sale of real estate, net | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 2,471,000 | 0 | ' | ' |
Revenues | 88,289,000 | 92,246,000 | 93,212,000 | 86,887,000 | 83,453,000 | 86,350,000 | 89,076,000 | 89,258,000 | 360,634,000 | 348,137,000 | 319,165,000 | ' | ' |
Expenses | ' | ' | ' | ' | ' | ' | ' | ' | $333,974,000 | $317,087,000 | $297,523,000 | ' | ' |
Percent of property leased | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' |
Number of tenants | 500 | ' | ' | ' | ' | ' | ' | ' | 500 | ' | ' | 5 | ' |
TENANT_ORIGINATION_AND_ABSORPT2
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ' |
Amortization | ($2,249) | ($2,134) | $882 |
Tenant Origination and Absorption Costs [Member] | ' | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ' |
Cost | 304,706 | 304,732 | ' |
Accumulated Amortization | -121,163 | -96,621 | ' |
Net Amount | 183,543 | 208,111 | ' |
Amortization | -41,151 | -48,900 | -51,448 |
Above-Market Lease Assets [Member] | ' | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ' |
Cost | 75,850 | 70,176 | ' |
Accumulated Amortization | -24,340 | -20,961 | ' |
Net Amount | 51,510 | 49,215 | ' |
Amortization | -9,673 | -10,353 | -8,007 |
Below-Market Lease Liabilities [Member] | ' | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ' |
Cost | -48,654 | -46,607 | ' |
Accumulated Amortization | 25,671 | 20,088 | ' |
Net Amount | -22,983 | -26,519 | ' |
Amortization | $7,424 | $8,261 | $8,972 |
TENANT_ORIGINATION_AND_ABSORPT3
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES (Remaining Unamortized Balance) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Tenant Origination and Absorption Costs [Member] | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
2014 | ($35,085) | ' |
2015 | -28,237 | ' |
2016 | -24,433 | ' |
2017 | -21,335 | ' |
2018 | -16,986 | ' |
Thereafter | -57,467 | ' |
Net Amount | -183,543 | -208,111 |
Weighted-Average Remaining Amortization Period | '8 years 2 months 12 days | ' |
Above-Market Lease Assets [Member] | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
2014 | -8,741 | ' |
2015 | -7,339 | ' |
2016 | -7,017 | ' |
2017 | -6,119 | ' |
2018 | -5,250 | ' |
Thereafter | -17,044 | ' |
Net Amount | -51,510 | -49,215 |
Weighted-Average Remaining Amortization Period | '9 years 1 month 6 days | ' |
Below-Market Lease Liabilities [Member] | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
2014 | 6,520 | ' |
2015 | 5,030 | ' |
2016 | 3,727 | ' |
2017 | 2,558 | ' |
2018 | 1,788 | ' |
Thereafter | 3,360 | ' |
Net Amount | $22,983 | $26,519 |
Weighted-Average Remaining Amortization Period | '5 years 6 months | ' |
REAL_ESTATE_LOANS_RECEIVABLE_S
REAL ESTATE LOANS RECEIVABLE (Schedule of Real Estate Loans Receivable) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 22, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 11, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | ||||||||||||||||
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] | Pappas Commerce First Mortgage Origination [Member] | Pappas Commerce 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 Liberty Plaza Notes [Member] | One Liberty Plaza Notes [Member] | One Liberty Plaza Notes [Member] | One Liberty Plaza Notes [Member] | One Kendall Square First Mortgage Origination [Member] | One Kendall Square 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] | Face Amount [Member] | Mortgages [Member] | Mortgages [Member] | Protective Advance [Member] | Protective Advance [Member] | Mortgages [Member] | Mortgages [Member] | Mortgages [Member] | Mortgages [Member] | Mortgages [Member] | Mortgages [Member] | Mortgage Participation [Member] | Mortgage Participation [Member] | ||||||||||||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||
Date Acquired/ Originated | ' | ' | 21-Jan-10 | [1] | ' | 25-Jan-10 | [2] | ' | ' | ' | 5-Apr-10 | [3] | ' | ' | ' | 11-Jul-11 | ' | 17-Jan-12 | ' | ' | ' | 11-Feb-09 | [4] | ' | ' | ' | 22-Nov-10 | [5] | ' | |||||||||||
Outstanding Principal Balance | $184,900,000 | [6] | ' | $20,200,000 | [1],[6] | ' | $58,815,000 | [2],[6] | ' | ' | $32,700,000 | $32,673,000 | [3],[6] | ' | ' | ' | $14,462,000 | [6] | ' | $58,750,000 | [6] | ' | ' | ' | $0 | [4],[6] | ' | ' | ' | $0 | [5],[6] | ' | ||||||||
Book Value | 184,828,000 | [7] | 348,846,000 | [7] | 20,077,000 | [1],[7] | 19,973,000 | [1],[7] | 58,820,000 | [2],[7] | 59,210,000 | [2],[7] | ' | ' | 32,673,000 | [3],[7] | 32,673,000 | [3],[7] | ' | ' | 14,477,000 | [7] | 14,519,000 | [7] | 58,781,000 | [7] | 53,302,000 | [7] | 84,000,000 | ' | 0 | [4],[7] | 81,163,000 | [4],[7] | ' | ' | 0 | [5],[7] | 88,006,000 | [5],[7] |
Contractual Interest Rate | ' | ' | 8.30% | [1],[8] | ' | 8.40% | [2],[8] | ' | ' | ' | ' | ' | ' | ' | 7.50% | [8] | ' | 7.50% | [8] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Annualized Effective Interest Rate | ' | ' | 9.00% | [1],[8] | ' | 8.50% | [2],[8] | ' | 9.50% | ' | 9.80% | [3],[8] | ' | ' | 14.50% | 7.60% | [8] | ' | 7.60% | [8] | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Maturity Date | ' | ' | 21-Jan-15 | [1],[9] | ' | 1-Feb-15 | [2],[9] | ' | ' | ' | 1-Jul-14 | [3],[9] | ' | ' | ' | 1-Aug-18 | [9] | ' | 1-Feb-17 | [9] | ' | ' | ' | 6-Aug-17 | [4],[9] | ' | ' | ' | 1-Dec-13 | [5],[9] | ' | |||||||||
Additional advance under mortgage loans | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||
Sale of notes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 114,300,000 | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||
Closing cost | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,200,000 | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||
Book value | 184,828,000 | [7] | 348,846,000 | [7] | 20,077,000 | [1],[7] | 19,973,000 | [1],[7] | 58,820,000 | [2],[7] | 59,210,000 | [2],[7] | ' | ' | 32,673,000 | [3],[7] | 32,673,000 | [3],[7] | ' | ' | 14,477,000 | [7] | 14,519,000 | [7] | 58,781,000 | [7] | 53,302,000 | [7] | 84,000,000 | ' | 0 | [4],[7] | 81,163,000 | [4],[7] | ' | ' | 0 | [5],[7] | 88,006,000 | [5],[7] |
Gain on sale of notes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 29,100,000 | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||
Payoff of principle balance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $84,018,000 | ' | ' | $87,500,000 | $87,500,000 | ' | ' | ||||||||||||||||
[1] | On February 7, 2014, the Company, through an indirect wholly owned subsidiary, entered into an early payoff agreement with the borrower of the Tuscan Inn First Mortgage Origination. See Note 13, “Subsequent Events — Payoff of the Tuscan Inn First Mortgage Origination.†| |||||||||||||||||||||||||||||||||||||||
[2] | On February 14, 2014, the Company, through an indirect wholly owned subsidiary, entered into an early payoff agreement with the borrower of the Chase Tower First Mortgage Origination. See Note 13, “Subsequent Events — Payoff of the Chase Tower First Mortgage Origination.†| |||||||||||||||||||||||||||||||||||||||
[3] | As of December 31, 2013, $32.7 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] | 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 and accrued interest 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. | |||||||||||||||||||||||||||||||||||||||
[5] | Upon maturity in December 2013, the borrower under the One Kendall Square First Mortgage Origination paid off the entire principal balance outstanding due to the Company in the amount of $87.5 million. | |||||||||||||||||||||||||||||||||||||||
[6] | Outstanding principal balance as of December 31, 2013 represents original principal balance outstanding under the loan, increased for any subsequent fundings and reduced for any principal paydowns. | |||||||||||||||||||||||||||||||||||||||
[7] | Book value represents outstanding principal balance, adjusted for unamortized acquisition discounts, origination fees and direct origination and acquisition costs. | |||||||||||||||||||||||||||||||||||||||
[8] | Contractual interest rate is the stated interest rate on the face of the loan. Annualized effective interest rate is calculated as the actual interest income recognized in 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 December 31, 2013. | |||||||||||||||||||||||||||||||||||||||
[9] | Maturity dates are as of December 31, 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 $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Oct. 11, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | ||
One Liberty Plaza Notes [Member] | One Liberty Plaza Notes [Member] | One Kendall Square First Mortgage Origination [Member] | One Kendall Square First Mortgage Origination [Member] | ||||||
Real Estate Loans Receivable [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ||
Real estate loans receivables, Beginning Balance | $348,846 | [1] | ' | ' | ' | $84,000 | ' | ' | |
Face value of real estate loan receivable originated and acquired | 5,490 | ' | ' | ' | ' | ' | ' | ||
Principal repayment received on real estate loan receivable | -1,579 | -1,288 | -504 | ' | ' | ' | ' | ||
Payoff of principle balance | ' | ' | ' | -84,018 | ' | -87,500 | -87,500 | ||
Accretion of discounts on purchased real estate loans receivable | 4,075 | ' | ' | ' | ' | ' | ' | ||
Amortization of closing costs and origination fees on real estate loans receivable | -486 | -557 | -526 | ' | ' | ' | ' | ||
Real estate loans receivables, Ending Balance | $184,828 | [1] | $348,846 | [1] | ' | ' | $84,000 | ' | ' |
[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 $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Receivables [Abstract] | ' | ' | ' |
Contractual interest income | $26,850,000 | $31,081,000 | $29,561,000 |
Accretion of purchase discounts | 4,075,000 | 6,620,000 | 7,441,000 |
Amortization of closing costs and origination fees | -486,000 | -557,000 | -526,000 |
Interest income from real estate loans receivable | 30,439,000 | 37,144,000 | 36,476,000 |
Interest receivable | $1,300,000 | $2,300,000 | ' |
REAL_ESTATE_LOANS_RECEIVABLE_S3
REAL ESTATE LOANS RECEIVABLE (Schedule of Maturities for Real Estate Loans Receivable Outstanding) (Details) (USD $) | Dec. 31, 2013 | |
In Thousands, unless otherwise specified | ||
Current Maturity [Member] | Face Value (Funded) [Member] | ' | |
Schedule of Maturities of Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | |
2014 | $32,673 | |
2015 | 79,015 | |
2016 | 0 | |
2017 | 58,750 | |
2018 | 14,462 | |
Thereafter | 0 | |
Total | 184,900 | |
Current Maturity [Member] | Book Value [Member] | ' | |
Schedule of Maturities of Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | |
2014 | 32,673 | |
2015 | 78,897 | |
2016 | 0 | |
2017 | 58,781 | |
2018 | 14,477 | |
Thereafter | 0 | |
Total | 184,828 | |
Fully Extended Maturity [Member] | Face Value (Funded) [Member] | ' | |
Schedule of Maturities of Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | |
2014 | 32,673 | [1] |
2015 | 79,015 | [1] |
2016 | 0 | [1] |
2017 | 0 | [1] |
2018 | 73,212 | [1] |
Thereafter | 0 | [1] |
Total | 184,900 | [1] |
Fully Extended Maturity [Member] | Book Value [Member] | ' | |
Schedule of Maturities of Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | |
2014 | 32,673 | [1] |
2015 | 78,897 | [1] |
2016 | 0 | [1] |
2017 | 0 | [1] |
2018 | 73,258 | [1] |
Thereafter | 0 | [1] |
Total | $184,828 | [1] |
[1] | The schedule of current maturities above represents the contractual maturity dates and outstanding balances as of December 31, 2013. Certain of the real estate loans receivable have extension options available to the borrowers, subject to certain conditions, that have been reflected in the schedule of fully extended maturities. |
NOTES_PAYABLE_Narrative_Detail
NOTES PAYABLE (Narrative) (Details) (USD $) | 12 Months Ended | 0 Months Ended | ||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jul. 10, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
300-600 Campus Drive [Member] | Deferred Financing Costs, Prepaid Expenses and Other Assets [Member] | Deferred Financing Costs, Prepaid Expenses and Other Assets [Member] | ||||
Revolving Credit Facility [Member] | ||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' |
Deferred financing costs | ' | ' | ' | ' | $7,800,000 | $7,000,000 |
Interest expense | 65,687,000 | 58,423,000 | 50,323,000 | ' | ' | ' |
Interest payable, current | 4,500,000 | 4,300,000 | ' | ' | ' | ' |
Amortization of financing cost, net of discontinued operations | 3,300,000 | 3,200,000 | 2,800,000 | ' | ' | ' |
Additional interest expense related to the effective portion of cash flow hedges | 10,400,000 | 9,200,000 | 8,200,000 | ' | ' | ' |
Prepayment fee | ' | ' | ' | $3,700,000 | ' | ' |
NOTES_PAYABLE_Schedule_of_Long
NOTES PAYABLE (Schedule of Long-term Debt Instruments) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 10, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Jul. 10, 2013 | Dec. 31, 2013 | Mar. 06, 2013 | Dec. 31, 2013 | Mar. 06, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Jul. 10, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Jul. 10, 2013 | Apr. 30, 2010 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 30, 2010 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 15, 2010 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Jun. 06, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 06, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 21, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | ||||||||||||||||||||||||||||||||||||||||
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] | |||||||||||||||||||||||||||||||||||||||||||
Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Non-Revolving Credit Facility [Member] | Non-Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Non-Revolving Credit Facility [Member] | Secured Debt [Member] | 100 & 200 Campus Drive [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] | 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] | 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 Loan [Member] | Portfolio Loan [Member] | Portfolio Loan [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] | 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] | Metropolitan Center [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] | Corporate Technology Centre [Member] | Corporate Technology Centre [Member] | 300-600 Campus Drive Revolving Loan [Member] | 300-600 Campus Drive Revolving Loan [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] | |||||||||||||||||||||||||||||||||||||||||||||
One-month LIBOR [Member] | Secured Debt [Member] | Secured Debt [Member] | Revolving Credit Facility [Member] | One-month LIBOR [Member] | One-month LIBOR [Member] | One-month LIBOR [Member] | One-month LIBOR [Member] | One-month LIBOR [Member] | One-month LIBOR [Member] | One-month LIBOR [Member] | One-month LIBOR [Member] | Revolving Credit Facility [Member] | Non-Revolving Credit Facility [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||||||||||||||||||||||||||
Principal Balance | $1,521,353,000 | $1,334,514,000 | ' | ' | ' | ' | ' | ' | ' | ' | $1,521,353,000 | $1,334,514,000 | $0 | [1] | $55,000,000 | [1] | ' | ' | $0 | [2] | $93,850,000 | [2] | ' | ' | ' | $105,000,000 | [3] | $55,000,000 | [3] | $100,000,000 | ' | $0 | [1] | $13,000,000 | [1] | $348,061,000 | [4] | $350,000,000 | [4] | $119,300,000 | $105,000,000 | [5] | $105,000,000 | [5] | ' | $19,800,000 | $19,800,000 | ' | $341,544,000 | [6] | $341,544,000 | [6] | ' | $0 | [7] | $45,000,000 | [7] | ' | $32,600,000 | $16,320,000 | [8] | $16,320,000 | [8] | ' | $71,000,000 | $71,000,000 | $80,000,000 | $80,000,000 | ' | $0 | [1] | $13,000,000 | [1] | ' | $75,628,000 | [9] | $76,000,000 | [9] | ' | $141,000,000 | [10] | $0 | [10] | $140,000,000 | [11] | $0 | [11] | $78,000,000 | [2] | $0 | [2] | $145,000,000 | $40,000,000 | $105,000,000 | ||||||||||||
Variable rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.25% | [12] | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.00% | [12],[2] | ' | ' | ' | ' | ' | ' | ' | 1.75% | [12] | ' | ' | 2.25% | [12] | ' | ' | 2.15% | [12] | ' | ' | 2.50% | [12] | ' | ' | ' | 2.20% | [12] | ' | ' | ' | ' | 1.90% | [12] | ' | ' | 2.20% | [12] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||||||||||||||||||||||
Contractual Interest Rate, Percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.25% | [12],[4] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.54% | ' | ' | 3.59% | [12] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.50% | [11],[12] | ' | ' | ' | ' | ' | ' | |||||||||||||||||||||||||||||||||||||
Effective Interest Rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.50% | [12],[3] | ' | ' | ' | ' | ' | 4.30% | [12],[4] | ' | ' | 3.50% | [12],[5] | ' | ' | 4.60% | [12] | ' | ' | 3.70% | [12],[6] | ' | ' | ' | ' | ' | ' | 3.50% | [12],[8] | ' | ' | 3.60% | [12] | ' | 2.90% | [12] | ' | ' | ' | ' | ' | 3.00% | [12],[9] | ' | ' | 2.30% | [10],[12] | ' | 3.50% | [11],[12] | ' | 2.60% | [12],[2] | ' | ' | ' | ' | ||||||||||||||||||||||||||||
Payment type | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'Interest Only | [3] | ' | ' | ' | ' | ' | ' | ' | ' | 'Interest Only | [5] | ' | ' | 'Interest Only | ' | ' | 'Interest Only | [6] | ' | ' | ' | ' | ' | ' | 'Interest Only | [8] | ' | ' | 'Interest Only | ' | 'Interest Only | ' | ' | ' | ' | ' | 'Interest Only | [9] | ' | ' | 'Interest Only | [10] | ' | ' | ' | 'Interest Only | [2] | ' | ' | ' | ' | |||||||||||||||||||||||||||||||||
Debt Instrument, Maturity Date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 21-Jun-17 | [13],[3] | ' | ' | ' | ' | ' | 1-Aug-15 | [13],[4] | ' | ' | 15-Sep-15 | [13],[5] | ' | ' | 1-Jan-16 | [13] | ' | ' | 27-Jan-16 | [13],[6] | ' | ' | ' | ' | ' | ' | 3-Jun-15 | [13],[8] | ' | ' | 1-Aug-15 | [13] | ' | 1-Dec-15 | [13] | ' | ' | ' | ' | ' | 1-Jan-16 | [13],[9] | ' | ' | 1-Mar-16 | [10],[13] | ' | 1-Apr-20 | [11],[13] | ' | 1-Aug-16 | [13],[2] | ' | ' | ' | ' | ||||||||||||||||||||||||||||
Term of credit facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | 'four | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'four | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||||||||||||||||||||||||||
Current borrowing capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 120,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||||||||||||||||||||||||||
Borrowing capacity | ' | ' | 25,000,000 | 25,000,000 | ' | 95,000,000 | ' | 94,000,000 | 141,000,000 | 235,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||||||||||||||||||||||||||
Amount outstanding | ' | ' | ' | ' | 78,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 105,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 16,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||||||||||||||||||||||||||
Remaining borrowing capacity | ' | ' | ' | ' | ' | ' | 94,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 17,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||||||||||||||||||||||||||
Prepayment fee | ' | ' | 3,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||||||||||||||||||||||||||
Unused borrowing capacity, amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $14,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $16,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||||||||||||||||||||||||||
Periodic payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'monthly | [11] | ' | ' | ' | ' | ' | ' | |||||||||||||||||||||||||||||||||||||||
Amortization schedule | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '30 years | [11] | ' | ' | ' | ' | ' | ' | |||||||||||||||||||||||||||||||||||||||
[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 entered into a three-year senior secured credit facility for borrowings of up to $120.0 million, of which $95.0 million is non-revolving debt and $25.0 million is revolving debt. As of December 31, 2013, the principal balance consisted of the $78.0 million non-revolving portion. The remaining non-revolving portion of $17.0 million and the revolving portion of $25.0 million remain 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. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[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 December 31, 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] | 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. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[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 December 31, 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] | 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] | The outstanding balance of this loan was repaid in December 2013 in connection with the maturity and repayment of the One Kendall Square First Mortgage Origination. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[8] | On June 6, 2011, the Company entered into a four-year $32.6 million revolving credit loan. As of December 31, 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 December 31, 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 December 31, 2013 would be calculated at a variable rate of 220 basis points over one-month LIBOR. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[9] | 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 Portfolio Mortgage Loan #2. Subsequent to December 31, 2013, the Company, through an indirect wholly owned subsidiary, entered into early payoff agreements with the borrowers under the Tuscan Inn First Mortgage Origination and Chase Tower First Mortgage Origination and these loans were released as security for Portfolio Mortgage Loan #2. See Note 13, “Subsequent Events — Payoff of the Tuscan Inn First Mortgage Origination†and “Subsequent Events — Payoff of the Chase Tower First Mortgage Origination.†| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[10] | 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 December 31, 2013, the principal balance consisted of the $141.0 million non-revolving portion. The revolving portion of $94.0 million remains available for future disbursements, subject to certain terms and conditions contained in the loan documents. Portfolio Mortgage Loan #3 is secured by 100 & 200 Campus Drive Buildings, Metropolitan Center and Willow Oaks Corporate Center. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[11] | Monthly payments are initially interest-only. Beginning on May 1, 2017, monthly payments will 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] | Contractual interest rate represents the interest rate in effect under the loan as of December 31, 2013. Effective interest rate is calculated as the actual interest rate in effect as of December 31, 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 December 31, 2013, where applicable. For further information regarding the Company’s derivative instruments, see Note 7, “Derivative Instruments.†| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[13] | Represents the initial maturity date or the maturity date as extended as of December 31, 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 $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Debt Disclosure [Abstract] | ' | ' |
2014 | $5,985 | ' |
2015 | 614,396 | ' |
2016 | 655,972 | ' |
2017 | 106,781 | ' |
2018 | 2,750 | ' |
Thereafter | 135,469 | ' |
Total notes payable | $1,521,353 | $1,334,514 |
DERIVATIVE_INSTRUMENTS_Details
DERIVATIVE INSTRUMENTS (Details) (USD $) | 12 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Mar. 06, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | |
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] | ||||
Investments | Investments | Deferred Financing Costs, Prepaid Expenses and Other Assets [Member] | Deferred Financing Costs, Prepaid Expenses and Other Assets [Member] | Other Liabilities [Member] | Other Liabilities [Member] | One-month LIBOR [Member] | One-month LIBOR [Member] | |||||
Investments | Investments | Minimum [Member] | Maximum [Member] | |||||||||
Derivative [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of Instruments | ' | ' | ' | ' | 16 | 18 | 2 | ' | 14 | ' | ' | ' |
Notional Amount | ' | ' | ' | ' | $842,150,000 | $654,150,000 | $225,000 | $0 | ($10,260,000) | ($17,129,000) | ' | ' |
Fixed Interest Rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.50% | 2.39% |
Weighted-Average Fix Pay Rate | ' | ' | ' | ' | 1.36% | ' | ' | ' | ' | ' | ' | ' |
Weighted-Average Remaining Term in Years | ' | ' | ' | ' | '1 year 8 months 12 days | ' | ' | ' | ' | ' | ' | ' |
Unrealized gains (losses) on derivative instruments | 5,960,000 | 336,000 | -15,335,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gain (loss) recognized in other comprehensive income (loss) | 10,400,000 | 9,200,000 | 8,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional unrealized losses | 7,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Breakage fees | ' | ' | ' | 1,100,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Additional interest expense related to the effective portion of cash flow hedges | $856,000 | $0 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
FAIR_VALUE_DISCLOSURES_Schedul
FAIR VALUE DISCLOSURES (Schedule of Face Value, Carrying Amounts and Fair Value) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Real estate loan receivable, Face Value | $184,900 | $380,542 |
Notes payable, Face Value | 1,521,353 | 1,334,514 |
Carrying Amount [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Real estate loans receivable, Value | 184,828 | 348,846 |
Notes payable, Value | 1,521,353 | 1,334,514 |
Fair Value [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Real estate loans receivable, Value | 190,485 | 390,145 |
Notes payable, Value | $1,526,075 | $1,341,363 |
FAIR_VALUE_DISCLOSURES_Schedul1
FAIR VALUE DISCLOSURES (Schedule of Assets and Liabilities at Fair Value) (Details) (Recurring Basis [Member], USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' |
Derivative Assets | $225 |
Derivative Liabilities | -10,260 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' |
Derivative Assets | 0 |
Derivative Liabilities | 0 |
Significant Other Observable Inputs (Level 2) [Member] | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' |
Derivative Assets | 225 |
Derivative Liabilities | -10,260 |
Significant Unobservable Inputs (Level 3) [Member] | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' |
Derivative Assets | 0 |
Derivative Liabilities | $0 |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details) (USD $) | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jun. 27, 2012 | |||||||||||||||
Advisor and Dealer Manager [Member] | Advisor and Dealer Manager [Member] | Advisor and Dealer Manager [Member] | Advisor and Dealer Manager [Member] | Advisor and Dealer Manager [Member] | Advisor and Dealer Manager [Member] | Advisor and Dealer Manager [Member] | Advisor and Dealer Manager [Member] | Advisor and Dealer Manager [Member] | Advisor and Dealer Manager [Member] | Advisor and Dealer Manager [Member] | Advisor and Dealer Manager [Member] | Advisor and Dealer Manager [Member] | Advisor and Dealer Manager [Member] | Advisor and Dealer Manager [Member] | Advisor and Dealer Manager [Member] | Advisor and Dealer Manager [Member] | Advisor and Dealer Manager [Member] | Advisor and Dealer Manager [Member] | Advisor and Dealer Manager [Member] | Advisor and Dealer Manager [Member] | Advisor and Dealer Manager [Member] | Advisor and Dealer Manager [Member] | Advisor and Dealer Manager [Member] | Advisor and Dealer Manager [Member] | Advisor and Dealer Manager [Member] | Advisor and Dealer Manager [Member] | Irvine Company [Member] | ||||||||||||||||||
Expensed [Member] | Expensed [Member] | Expensed [Member] | Expensed [Member] | Expensed [Member] | Expensed [Member] | Expensed [Member] | Expensed [Member] | Expensed [Member] | Expensed [Member] | Expensed [Member] | Expensed [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member] | Capitalized [Member] | Capitalized [Member] | Capitalized [Member] | Capitalized [Member] | Capitalized [Member] | Capitalized [Member] | Notes Receivable [Member] | ||||||||||||||||||
Asset Management Fees [Member] | Asset Management Fees [Member] | Asset Management Fees [Member] | Reimbursement of Operating Expenses [Member] | Reimbursement of Operating Expenses [Member] | Reimbursement of Operating Expenses [Member] | Acquisition Fees [Member] | Acquisition Fees [Member] | Acquisition Fees [Member] | Dispositon Fees [Member] | Dispositon Fees [Member] | Dispositon Fees [Member] | Sales Commissions [Member] | Sales Commissions [Member] | Sales Commissions [Member] | Dealer Manager Fees [Member] | Dealer Manager Fees [Member] | Dealer Manager Fees [Member] | Reimbursable Other Offering Costs [Member] | Reimbursable Other Offering Costs [Member] | Reimbursable Other Offering Costs [Member] | Dispositon Fees [Member] | Dispositon Fees [Member] | Dispositon Fees [Member] | Origination Fees [Member] | Origination Fees [Member] | Origination Fees [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||
Expenses | ' | ' | ' | $23,524,000 | [1] | $22,316,000 | [1] | $20,127,000 | [1] | $168,000 | [2] | $271,000 | [2] | $55,000 | [2] | $1,797,000 | $0 | $4,808,000 | $1,143,000 | [3] | $968,000 | [3] | $0 | [3] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Incurred | 26,632,000 | 24,163,000 | 34,732,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | 5,748,000 | 0 | 0 | 3,116,000 | 0 | 0 | 283,000 | 0 | [3] | 0 | [3] | 450,000 | [3] | 0 | 608,000 | 145,000 | ' | |||||||||||
Payable as of | 0 | 168,000 | ' | 0 | [1] | 0 | [1] | ' | 0 | [2] | 168,000 | [2] | ' | 0 | 0 | ' | 0 | [3] | 0 | [3] | ' | 0 | 0 | ' | 0 | 0 | ' | 0 | 0 | ' | 0 | [3] | 0 | [3] | ' | 0 | 0 | ' | ' | ||||||
Asset management fees from discontinued operations | ' | 41,000 | 83,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||
Administrative fees, amount paid | 145,000 | 103,000 | 55,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||
Real estate loans receivable, net | 184,828,000 | [4] | 348,846,000 | [4] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 85,800,000 | ||||||||||||
Extinguishment of loans receivable, closing cost | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 900,000 | ||||||||||||||
Gain on payoff of real estate loan receivable | 29,073,000 | 14,884,000 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||
Purchase price, loans receivable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $60,100,000 | ||||||||||||||
[1] | Amounts include asset management fees from discontinued operations totaling $41,000 and $83,000 for the years ended December 31, 2012 and 2011, respectively. | ||||||||||||||||||||||||||||||||||||||||||||
[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 $145,000, $103,000 and $55,000 for the years ended December 31, 2013, 2012 and 2011, respectively, and were the only employee costs reimbursed under the Advisory Agreement through December 31, 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 | ||||||||||||||||||||||||||||||||||||||||||||
[3] | Disposition fees with respect to real estate sold are included in the gain on sale of real estate in the accompanying consolidated statements of operations. Disposition fees with respect to real estate loans receivable sold are included in the gain on payoff or sale of real estate loan receivable in the accompanying consolidated statements of operations. | ||||||||||||||||||||||||||||||||||||||||||||
[4] | 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 | 12 Months Ended | |||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | |||||
segments | |||||||||||||||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Number of reportable segments | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | |||||
Revenues | $88,289 | $92,246 | $93,212 | $86,887 | $83,453 | $86,350 | $89,076 | $89,258 | $360,634 | $348,137 | $319,165 | ' | |||||
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | 65,687 | 58,423 | 50,323 | ' | |||||
Total net operating income | ' | ' | ' | ' | ' | ' | ' | ' | 155,352 | 161,305 | 154,397 | ' | |||||
Assets | 2,954,300 | ' | ' | ' | 2,821,950 | ' | ' | ' | 2,954,300 | 2,821,950 | ' | ' | |||||
Liabilities | 1,614,256 | ' | ' | ' | 1,426,493 | ' | ' | ' | 1,614,256 | 1,426,493 | ' | ' | |||||
Cash and cash equivalents | 175,042 | ' | ' | ' | 48,390 | ' | ' | ' | 175,042 | 48,390 | 95,554 | 82,413 | |||||
Real Estate Segment [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | 330,195 | [1] | 310,993 | [1] | 282,689 | [1] | ' | ||
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | 60,754 | [1] | 53,124 | [1] | 47,929 | [1] | ' | ||
Total net operating income | ' | ' | ' | ' | ' | ' | ' | ' | 131,422 | [1] | 131,155 | [1] | 121,719 | [1] | ' | ||
Assets | 2,622,380 | ' | ' | ' | 2,441,112 | ' | ' | ' | 2,622,380 | 2,441,112 | ' | ' | |||||
Liabilities | 1,527,057 | ' | ' | ' | 1,293,854 | ' | ' | ' | 1,527,057 | 1,293,854 | ' | ' | |||||
Real Estate-Related Segment [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | 30,439 | 37,144 | 36,476 | ' | |||||
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | 4,421 | 4,601 | 1,496 | ' | |||||
Total net operating income | ' | ' | ' | ' | ' | ' | ' | ' | 23,930 | 30,150 | 32,678 | ' | |||||
Assets | 229,457 | ' | ' | ' | 352,377 | ' | ' | ' | 229,457 | 352,377 | ' | ' | |||||
Liabilities | 75,820 | ' | ' | ' | 121,332 | ' | ' | ' | 75,820 | 121,332 | ' | ' | |||||
Operating Segments [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | 65,175 | 57,725 | 49,425 | ' | |||||
Assets | 2,851,837 | ' | ' | ' | 2,793,489 | ' | ' | ' | 2,851,837 | 2,793,489 | ' | ' | |||||
Liabilities | 1,602,877 | ' | ' | ' | 1,415,186 | ' | ' | ' | 1,602,877 | 1,415,186 | ' | ' | |||||
Corporate-Level [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | 512 | 698 | 898 | ' | |||||
Assets | 102,463 | [2] | ' | ' | ' | 28,461 | [2] | ' | ' | ' | 102,463 | [2] | 28,461 | [2] | ' | ' | |
Liabilities | 11,379 | [3] | ' | ' | ' | 11,307 | [3] | ' | ' | ' | 11,379 | [3] | 11,307 | [3] | ' | ' | |
Cash and cash equivalents | $102,200 | ' | ' | ' | $28,200 | ' | ' | ' | $102,200 | $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 $102.2 million and $28.2 million as of December 31, 2013 and 2012, respectively. | ||||||||||||||||
[3] | As of December 31, 2013 and 2012, corporate-level liabilities consisted primarily of distributions payable. |
SEGMENT_INFORMATION_Reconcilia
SEGMENT INFORMATION (Reconciliation of Net Income (Loss) to Net Operating Income (Loss)) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | $34,325 | $5,590 | $9,432 | $6,432 | $3,777 | $7,149 | $26,985 | $10,463 | $55,779 | $48,374 | $21,793 |
Other interest income | ' | ' | ' | ' | ' | ' | ' | ' | -46 | -28 | -104 |
Gain on payoff or sale of real estate loan receivable | ' | ' | ' | ' | ' | ' | ' | ' | -29,073 | -14,884 | 0 |
Real estate acquisition fees to affiliates | ' | ' | ' | ' | ' | ' | ' | ' | 1,797 | 0 | 4,808 |
Real estate acquisition fees and expenses | ' | ' | ' | ' | ' | ' | ' | ' | 623 | 0 | 3,974 |
General and administrative expenses | ' | ' | ' | ' | ' | ' | ' | ' | 4,982 | 4,624 | 5,061 |
Depreciation and amortization | ' | ' | ' | ' | ' | ' | ' | ' | 120,778 | 124,933 | 118,014 |
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | 65,687 | 58,423 | 50,323 |
Total (income) loss from discontinued operations | ' | ' | ' | ' | ' | ' | ' | ' | 0 | -2,412 | -47 |
Total net operating income | ' | ' | ' | ' | ' | ' | ' | ' | 155,352 | 161,305 | 154,397 |
Corporate-Level [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | $512 | $698 | $898 |
SELECTED_QUARTERLY_FINANCIAL_D2
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) (USD $) | 0 Months Ended | 3 Months Ended | 10 Months Ended | 12 Months Ended | 14 Months Ended | |||||||||||||||||
In Thousands, except Per Share data, unless otherwise specified | Feb. 04, 2013 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Feb. 28, 2012 | ||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||
Revenues | ' | $88,289 | $92,246 | $93,212 | $86,887 | $83,453 | $86,350 | $89,076 | $89,258 | ' | $360,634 | $348,137 | $319,165 | ' | ||||||||
Net income | ' | $34,325 | $5,590 | $9,432 | $6,432 | $3,777 | $7,149 | $26,985 | $10,463 | ' | $55,779 | $48,374 | $21,793 | ' | ||||||||
Net income per common share, basic and diluted (in dollars per share) | ' | $0.18 | $0.03 | $0.05 | $0.03 | $0.02 | $0.04 | $0.14 | $0.05 | ' | $0.29 | $0.25 | $0.11 | ' | ||||||||
Distributions declared per common share | ' | $0.16 | [1] | $0.16 | [1] | $0.16 | [1] | $0.21 | [1] | $0.16 | [1] | $0.16 | [1] | $0.16 | [1] | $0.16 | [1] | ' | $0.70 | $0.65 | $0.65 | ' |
Distribution rate per share per day, declared | $0.05 | ' | ' | ' | ' | ' | ' | ' | ' | $0.00 | $0.00 | ' | $0.00 | $0.00 | ||||||||
[1] | Distributions declared per common share assumes each share was issued and outstanding each day during the respective period from January 1, 2012 through December 31, 2013. Each day during the period from January 1, 2012 through February 28, 2012 and March 1, 2012 through December 31, 2013 was a record date for distributions. Distributions were calculated at a rate of $0.00178082 per share per day. In addition, on January 16, 2013, the Company’s board of directors declared a one-time 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. |
SUBSEQUENT_EVENTS_Details
SUBSEQUENT EVENTS (Details) (USD $) | 0 Months Ended | 10 Months Ended | 12 Months Ended | 14 Months Ended | 0 Months Ended | |||||
In Millions, except Per Share data, unless otherwise specified | Feb. 04, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2011 | Feb. 28, 2012 | Dec. 18, 2013 | Mar. 03, 2014 | Feb. 03, 2014 | Jan. 02, 2014 | Mar. 05, 2014 |
Dividend Declared [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | ||||||
Dividend Paid [Member] | Dividend Paid [Member] | Dividend Paid [Member] | Dividend Declared [Member] | |||||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Distributions paid to common stockholders | ' | ' | ' | ' | ' | ' | $9.60 | $10.60 | $10.60 | ' |
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 | ' | ' | ' | ' | ' | $10.29 | ' | ' | ' | $10 |
Distribution rate per share annualized, declared, based on current estimated value | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6.30% |
SUBSEQUENT_EVENTS_Investments_
SUBSEQUENT EVENTS (Investments and Financings) (Details) (USD $) | 12 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | ||||||||
Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2013 | Mar. 07, 2014 | Dec. 31, 2013 | Feb. 27, 2014 | Feb. 07, 2014 | Jan. 25, 2010 | Jan. 21, 2010 | Feb. 14, 2014 | Jan. 25, 2010 | Mar. 07, 2014 | Feb. 27, 2014 | Mar. 07, 2014 | Feb. 27, 2014 | |
Third Amended and Restated Share Redemption Program [Member] | Third Amended and Restated Share Redemption Program [Member] | Third Amended and Restated Share Redemption Program [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | |||
Maximum [Member] | $3.0 Million of Shares Have Been Redeemed in the Aggregate in Any Month [Member] | $3.0 Million of Shares Have Been Redeemed in the Aggregate in Any Month [Member] | Tuscan Inn First Mortgage Origination [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] | Seventh Amended Share Redemption Program [Member] | Seventh Amended Share Redemption Program [Member] | Third Amended and Restated Share Redemption Program [Member] | Third Amended and Restated Share Redemption Program [Member] | ||||
Maximum [Member] | Maximum [Member] | $3.0 Million of Shares Have Been Redeemed in the Aggregate in Any Month [Member] | $3.0 Million of Shares Have Been Redeemed in the Aggregate in Any Month [Member] | ||||||||||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notes payable | $1,521,353,000 | $1,334,514,000 | ' | ' | ' | ' | ' | ' | $20,200,000 | ' | $59,200,000 | ' | ' | ' | ' |
Payoff of principle balance | ' | ' | ' | ' | ' | ' | 20,200,000 | ' | ' | 58,900,000 | ' | ' | ' | ' | ' |
Interest rate | ' | ' | ' | ' | ' | ' | ' | 8.40% | 8.30% | ' | ' | ' | ' | ' | ' |
Extinguishment of debt, yield maintenance premium | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,900,000 | ' | ' | ' | ' | ' |
Purchase price | ' | ' | ' | ' | ' | 1,589,239 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Earnest money | ' | ' | ' | ' | ' | 16,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount eligible for redemption | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 54,300,000 | ' | ' |
Maximum number of shares redeemable per month, value | ' | ' | 3,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | 3,000,000 | 3,000,000 | ' | ' |
Funds available for redemption of shares | $20,000,000 | ' | ' | $30,000,000 | $20,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | $30,000,000 | $20,000,000 |
SUBSEQUENT_EVENTS_Authorizatio
SUBSEQUENT EVENTS (Authorization of Additional Funds for Share Redemption Program) (Details) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Mar. 07, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Mar. 07, 2014 | Feb. 27, 2014 | Mar. 07, 2014 | Feb. 27, 2014 | Mar. 07, 2014 |
$3.0 Million of Shares Have Been Redeemed in the Aggregate in Any Month [Member] | $3.0 Million of Shares Have Been Redeemed in the Aggregate in Any Month [Member] | Maximum [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | ||
Third Amended and Restated Share Redemption Program [Member] | Third Amended and Restated Share Redemption Program [Member] | Third Amended and Restated Share Redemption Program [Member] | $3.0 Million of Shares Have Been Redeemed in the Aggregate in Any Month [Member] | $3.0 Million of Shares Have Been Redeemed in the Aggregate in Any Month [Member] | Maximum [Member] | Maximum [Member] | Maximum [Member] | ||
Third Amended and Restated Share Redemption Program [Member] | Third Amended and Restated Share Redemption Program [Member] | Seventh Amended Share Redemption Program [Member] | Seventh Amended Share Redemption Program [Member] | Third Amended and Restated Share Redemption Program [Member] | |||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum number of shares redeemable per month, value | ' | ' | ' | $3 | ' | ' | $3 | $3 | ' |
Funds available for redemption of shares | $20 | $30 | $20 | ' | $30 | $20 | ' | ' | ' |
Maximum percentage of weighted-average shares outstanding available for redemption during any calendar year | ' | ' | ' | 5.00% | ' | ' | ' | ' | 5.00% |
SCHEDULE_III_REAL_ESTATE_ASSET1
SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | ||
Real Estate and Accumulated Depreciation [Line Items] | ' | |
Encumbrances | $1,445,725,000 | |
Initial Cost to Company, Land | 336,357,000 | |
Initial Cost to Company, Building and Improvements | 2,463,691,000 | [1] |
Initial Cost to Company, Total | 2,800,048,000 | |
Cost Capitalized Subsequent to Acquisition | -1,966,000 | [2] |
Gross Amount at which Carried at Close of Period, Land | 336,357,000 | |
Gross Amount at which Carried at Close of Period, Building and Improvements | 2,461,725,000 | [1] |
Gross Amount at which Carried at Close of Period, Total | 2,798,082,000 | [3] |
Accumulated Depreciation and Amortization | -362,822,000 | |
Aggregate cost of real estate for federal income tax purposes | 2,900,000,000 | |
Mountain View Corporate Center [Member] | ' | |
Real Estate and Accumulated Depreciation [Line Items] | ' | |
Ownership Percent | 100.00% | |
Encumbrances | 12,093,000 | |
Initial Cost to Company, Land | 3,600,000 | |
Initial Cost to Company, Building and Improvements | 27,138,000 | [1] |
Initial Cost to Company, Total | 30,738,000 | |
Cost Capitalized Subsequent to Acquisition | -725,000 | [2] |
Gross Amount at which Carried at Close of Period, Land | 3,600,000 | |
Gross Amount at which Carried at Close of Period, Building and Improvements | 26,413,000 | [1] |
Gross Amount at which Carried at Close of Period, Total | 30,013,000 | [3] |
Accumulated Depreciation and Amortization | -6,566,000 | |
Original Date of Construction | '2001 | |
Date Acquired | 30-Jul-08 | |
100 & 200 Campus Drive Buildings [Member] | ' | |
Real Estate and Accumulated Depreciation [Line Items] | ' | |
Ownership Percent | 100.00% | |
Encumbrances | 55,996,000 | |
Initial Cost to Company, Land | 10,700,000 | |
Initial Cost to Company, Building and Improvements | 188,509,000 | [1] |
Initial Cost to Company, Total | 199,209,000 | |
Cost Capitalized Subsequent to Acquisition | -975,000 | [2] |
Gross Amount at which Carried at Close of Period, Land | 10,700,000 | |
Gross Amount at which Carried at Close of Period, Building and Improvements | 187,534,000 | [1] |
Gross Amount at which Carried at Close of Period, Total | 198,234,000 | [3] |
Accumulated Depreciation and Amortization | -34,840,000 | |
Original Date of Construction | '1988/1989 | |
Date Acquired | 9-Sep-08 | |
300-600 Campus Drive Buildings [Member] | ' | |
Real Estate and Accumulated Depreciation [Line Items] | ' | |
Ownership Percent | 100.00% | |
Encumbrances | 78,000,000 | |
Initial Cost to Company, Land | 9,717,000 | |
Initial Cost to Company, Building and Improvements | 185,445,000 | [1] |
Initial Cost to Company, Total | 195,162,000 | |
Cost Capitalized Subsequent to Acquisition | -886,000 | [2] |
Gross Amount at which Carried at Close of Period, Land | 9,717,000 | |
Gross Amount at which Carried at Close of Period, Building and Improvements | 184,559,000 | [1] |
Gross Amount at which Carried at Close of Period, Total | 194,276,000 | [3] |
Accumulated Depreciation and Amortization | -38,289,000 | |
Original Date of Construction | '1997/1999 | |
Date Acquired | 10-Oct-08 | |
350 E. Plumeria Building [Member] | ' | |
Real Estate and Accumulated Depreciation [Line Items] | ' | |
Ownership Percent | 100.00% | |
Encumbrances | 16,510,000 | |
Initial Cost to Company, Land | 11,290,000 | |
Initial Cost to Company, Building and Improvements | 24,819,000 | [1] |
Initial Cost to Company, Total | 36,109,000 | |
Cost Capitalized Subsequent to Acquisition | 7,000 | [2] |
Gross Amount at which Carried at Close of Period, Land | 11,290,000 | |
Gross Amount at which Carried at Close of Period, Building and Improvements | 24,826,000 | [1] |
Gross Amount at which Carried at Close of Period, Total | 36,116,000 | [3] |
Accumulated Depreciation and Amortization | -5,658,000 | |
Original Date of Construction | '1984/2008 | |
Date Acquired | 18-Dec-08 | |
Willow Oaks Corporate Center [Member] | ' | |
Real Estate and Accumulated Depreciation [Line Items] | ' | |
Ownership Percent | 100.00% | |
Encumbrances | 45,347,000 | |
Initial Cost to Company, Land | 25,300,000 | |
Initial Cost to Company, Building and Improvements | 87,802,000 | [1] |
Initial Cost to Company, Total | 113,102,000 | |
Cost Capitalized Subsequent to Acquisition | -9,293,000 | [2] |
Gross Amount at which Carried at Close of Period, Land | 25,300,000 | |
Gross Amount at which Carried at Close of Period, Building and Improvements | 78,509,000 | [1] |
Gross Amount at which Carried at Close of Period, Total | 103,809,000 | [3] |
Accumulated Depreciation and Amortization | -19,449,000 | |
Original Date of Construction | '1986/1989/2003 | |
Date Acquired | 26-Aug-09 | |
Pierre Laclede Center [Member] | ' | |
Real Estate and Accumulated Depreciation [Line Items] | ' | |
Ownership Percent | 100.00% | |
Encumbrances | 46,490,000 | |
Initial Cost to Company, Land | 15,200,000 | |
Initial Cost to Company, Building and Improvements | 61,507,000 | [1] |
Initial Cost to Company, Total | 76,707,000 | |
Cost Capitalized Subsequent to Acquisition | 2,448,000 | [2] |
Gross Amount at which Carried at Close of Period, Land | 15,200,000 | |
Gross Amount at which Carried at Close of Period, Building and Improvements | 63,955,000 | [1] |
Gross Amount at which Carried at Close of Period, Total | 79,155,000 | [3] |
Accumulated Depreciation and Amortization | -14,502,000 | |
Original Date of Construction | '1964/1970 | |
Date Acquired | 4-Feb-10 | |
One Main Place [Member] | ' | |
Real Estate and Accumulated Depreciation [Line Items] | ' | |
Ownership Percent | 100.00% | |
Encumbrances | 29,907,000 | |
Initial Cost to Company, Land | 7,200,000 | |
Initial Cost to Company, Building and Improvements | 47,643,000 | [1] |
Initial Cost to Company, Total | 54,843,000 | |
Cost Capitalized Subsequent to Acquisition | -2,122,000 | [2] |
Gross Amount at which Carried at Close of Period, Land | 7,200,000 | |
Gross Amount at which Carried at Close of Period, Building and Improvements | 45,521,000 | [1] |
Gross Amount at which Carried at Close of Period, Total | 52,721,000 | [3] |
Accumulated Depreciation and Amortization | -10,621,000 | |
Original Date of Construction | '1980 | |
Date Acquired | 5-Feb-10 | |
Plano Business Park [Member] | ' | |
Real Estate and Accumulated Depreciation [Line Items] | ' | |
Ownership Percent | 100.00% | |
Encumbrances | 9,317,000 | |
Initial Cost to Company, Land | 3,050,000 | |
Initial Cost to Company, Building and Improvements | 13,648,000 | [1] |
Initial Cost to Company, Total | 16,698,000 | |
Cost Capitalized Subsequent to Acquisition | -255,000 | [2] |
Gross Amount at which Carried at Close of Period, Land | 3,050,000 | |
Gross Amount at which Carried at Close of Period, Building and Improvements | 13,393,000 | [1] |
Gross Amount at which Carried at Close of Period, Total | 16,443,000 | [3] |
Accumulated Depreciation and Amortization | -2,987,000 | |
Original Date of Construction | '2001 | |
Date Acquired | 15-Mar-10 | |
Crescent VIII [Member] | ' | |
Real Estate and Accumulated Depreciation [Line Items] | ' | |
Ownership Percent | 100.00% | |
Encumbrances | 7,153,000 | |
Initial Cost to Company, Land | 2,300,000 | |
Initial Cost to Company, Building and Improvements | 9,552,000 | [1] |
Initial Cost to Company, Total | 11,852,000 | |
Cost Capitalized Subsequent to Acquisition | 191,000 | [2] |
Gross Amount at which Carried at Close of Period, Land | 2,300,000 | |
Gross Amount at which Carried at Close of Period, Building and Improvements | 9,743,000 | [1] |
Gross Amount at which Carried at Close of Period, Total | 12,043,000 | [3] |
Accumulated Depreciation and Amortization | -3,018,000 | |
Original Date of Construction | '1996 | |
Date Acquired | 26-May-10 | |
Horizon Tech Center [Member] | ' | |
Real Estate and Accumulated Depreciation [Line Items] | ' | |
Ownership Percent | 100.00% | |
Encumbrances | 22,530,000 | |
Initial Cost to Company, Land | 7,900,000 | |
Initial Cost to Company, Building and Improvements | 29,237,000 | [1] |
Initial Cost to Company, Total | 37,137,000 | |
Cost Capitalized Subsequent to Acquisition | 0 | [2] |
Gross Amount at which Carried at Close of Period, Land | 7,900,000 | |
Gross Amount at which Carried at Close of Period, Building and Improvements | 29,237,000 | [1] |
Gross Amount at which Carried at Close of Period, Total | 37,137,000 | [3] |
Accumulated Depreciation and Amortization | -7,932,000 | |
Original Date of Construction | '2009 | |
Date Acquired | 17-Jun-10 | |
Dallas Cowboys Distribution Center [Member] | ' | |
Real Estate and Accumulated Depreciation [Line Items] | ' | |
Ownership Percent | 100.00% | [4] |
Encumbrances | 10,702,000 | [4] |
Initial Cost to Company, Land | 0 | [4] |
Initial Cost to Company, Building and Improvements | 18,513,000 | [1],[4] |
Initial Cost to Company, Total | 18,513,000 | [4] |
Cost Capitalized Subsequent to Acquisition | -2,000 | [2],[4] |
Gross Amount at which Carried at Close of Period, Land | 0 | [4] |
Gross Amount at which Carried at Close of Period, Building and Improvements | 18,511,000 | [1],[4] |
Gross Amount at which Carried at Close of Period, Total | 18,511,000 | [3],[4] |
Accumulated Depreciation and Amortization | -2,483,000 | [4] |
Original Date of Construction | '2010 | [4] |
Date Acquired | 8-Jul-10 | [4] |
300 N. Lasalle Building [Member] | ' | |
Real Estate and Accumulated Depreciation [Line Items] | ' | |
Ownership Percent | 100.00% | |
Encumbrances | 348,061,000 | |
Initial Cost to Company, Land | 41,200,000 | |
Initial Cost to Company, Building and Improvements | 574,340,000 | [1] |
Initial Cost to Company, Total | 615,540,000 | |
Cost Capitalized Subsequent to Acquisition | 3,374,000 | [2] |
Gross Amount at which Carried at Close of Period, Land | 41,200,000 | |
Gross Amount at which Carried at Close of Period, Building and Improvements | 577,714,000 | [1] |
Gross Amount at which Carried at Close of Period, Total | 618,914,000 | [3] |
Accumulated Depreciation and Amortization | -67,772,000 | |
Original Date of Construction | '2009 | |
Date Acquired | 29-Jul-10 | |
Torrey Reserve West [Member] | ' | |
Real Estate and Accumulated Depreciation [Line Items] | ' | |
Ownership Percent | 100.00% | |
Encumbrances | 15,270,000 | |
Initial Cost to Company, Land | 5,300,000 | |
Initial Cost to Company, Building and Improvements | 19,437,000 | [1] |
Initial Cost to Company, Total | 24,737,000 | |
Cost Capitalized Subsequent to Acquisition | 10,000 | [2] |
Gross Amount at which Carried at Close of Period, Land | 5,300,000 | |
Gross Amount at which Carried at Close of Period, Building and Improvements | 19,447,000 | [1] |
Gross Amount at which Carried at Close of Period, Total | 24,747,000 | [3] |
Accumulated Depreciation and Amortization | -5,188,000 | |
Original Date of Construction | '2000 | |
Date Acquired | 9-Sep-10 | |
Union Bank Plaza [Member] | ' | |
Real Estate and Accumulated Depreciation [Line Items] | ' | |
Ownership Percent | 100.00% | |
Encumbrances | 105,000,000 | |
Initial Cost to Company, Land | 24,000,000 | |
Initial Cost to Company, Building and Improvements | 190,232,000 | [1] |
Initial Cost to Company, Total | 214,232,000 | |
Cost Capitalized Subsequent to Acquisition | 110,000 | [2] |
Gross Amount at which Carried at Close of Period, Land | 24,000,000 | |
Gross Amount at which Carried at Close of Period, Building and Improvements | 190,342,000 | [1] |
Gross Amount at which Carried at Close of Period, Total | 214,342,000 | [3] |
Accumulated Depreciation and Amortization | -25,473,000 | |
Original Date of Construction | '1967 | |
Date Acquired | 15-Sep-10 | |
Emerald View at Vista Center [Member] | ' | |
Real Estate and Accumulated Depreciation [Line Items] | ' | |
Ownership Percent | 100.00% | |
Encumbrances | 19,800,000 | |
Initial Cost to Company, Land | 5,300,000 | |
Initial Cost to Company, Building and Improvements | 28,455,000 | [1] |
Initial Cost to Company, Total | 33,755,000 | |
Cost Capitalized Subsequent to Acquisition | -2,105,000 | [2] |
Gross Amount at which Carried at Close of Period, Land | 5,300,000 | |
Gross Amount at which Carried at Close of Period, Building and Improvements | 26,350,000 | [1] |
Gross Amount at which Carried at Close of Period, Total | 31,650,000 | [3] |
Accumulated Depreciation and Amortization | -4,191,000 | |
Original Date of Construction | '2007 | |
Date Acquired | 9-Dec-10 | |
Granite Tower [Member] | ' | |
Real Estate and Accumulated Depreciation [Line Items] | ' | |
Ownership Percent | 100.00% | |
Encumbrances | 82,259,000 | |
Initial Cost to Company, Land | 8,850,000 | |
Initial Cost to Company, Building and Improvements | 141,438,000 | [1] |
Initial Cost to Company, Total | 150,288,000 | |
Cost Capitalized Subsequent to Acquisition | 3,166,000 | [2] |
Gross Amount at which Carried at Close of Period, Land | 8,850,000 | |
Gross Amount at which Carried at Close of Period, Building and Improvements | 144,604,000 | [1] |
Gross Amount at which Carried at Close of Period, Total | 153,454,000 | [3] |
Accumulated Depreciation and Amortization | -18,990,000 | |
Original Date of Construction | '1983 | |
Date Acquired | 16-Dec-10 | |
National City Tower [Member] | ' | |
Real Estate and Accumulated Depreciation [Line Items] | ' | |
Ownership Percent | 100.00% | |
Encumbrances | 68,876,000 | |
Initial Cost to Company, Land | 6,700,000 | |
Initial Cost to Company, Building and Improvements | 108,864,000 | [1] |
Initial Cost to Company, Total | 115,564,000 | |
Cost Capitalized Subsequent to Acquisition | 3,000 | [2] |
Gross Amount at which Carried at Close of Period, Land | 6,700,000 | |
Gross Amount at which Carried at Close of Period, Building and Improvements | 108,867,000 | [1] |
Gross Amount at which Carried at Close of Period, Total | 115,567,000 | [3] |
Accumulated Depreciation and Amortization | -18,714,000 | |
Original Date of Construction | '1972 | |
Date Acquired | 17-Dec-10 | |
Gateway Corporate Center [Member] | ' | |
Real Estate and Accumulated Depreciation [Line Items] | ' | |
Ownership Percent | 100.00% | |
Encumbrances | 26,230,000 | |
Initial Cost to Company, Land | 6,380,000 | |
Initial Cost to Company, Building and Improvements | 38,946,000 | [1] |
Initial Cost to Company, Total | 45,326,000 | |
Cost Capitalized Subsequent to Acquisition | -338,000 | [2] |
Gross Amount at which Carried at Close of Period, Land | 6,380,000 | |
Gross Amount at which Carried at Close of Period, Building and Improvements | 38,608,000 | [1] |
Gross Amount at which Carried at Close of Period, Total | 44,988,000 | [3] |
Accumulated Depreciation and Amortization | -6,328,000 | |
Original Date of Construction | '2008/2009 | |
Date Acquired | 26-Jan-11 | |
601 Tower at Carlson Center [Member] | ' | |
Real Estate and Accumulated Depreciation [Line Items] | ' | |
Ownership Percent | 100.00% | |
Encumbrances | 16,320,000 | |
Initial Cost to Company, Land | 4,350,000 | |
Initial Cost to Company, Building and Improvements | 49,627,000 | [1] |
Initial Cost to Company, Total | 53,977,000 | |
Cost Capitalized Subsequent to Acquisition | -1,804,000 | [2] |
Gross Amount at which Carried at Close of Period, Land | 4,350,000 | |
Gross Amount at which Carried at Close of Period, Building and Improvements | 47,823,000 | [1] |
Gross Amount at which Carried at Close of Period, Total | 52,173,000 | [3] |
Accumulated Depreciation and Amortization | -6,805,000 | |
Original Date of Construction | '1989 | |
Date Acquired | 3-Feb-11 | |
I-81 Industrial Portfolio [Member] | ' | |
Real Estate and Accumulated Depreciation [Line Items] | ' | |
Ownership Percent | 100.00% | |
Encumbrances | 50,994,000 | |
Initial Cost to Company, Land | 7,250,000 | |
Initial Cost to Company, Building and Improvements | 75,475,000 | [1] |
Initial Cost to Company, Total | 82,725,000 | |
Cost Capitalized Subsequent to Acquisition | -411,000 | [2] |
Gross Amount at which Carried at Close of Period, Land | 7,250,000 | |
Gross Amount at which Carried at Close of Period, Building and Improvements | 75,064,000 | [1] |
Gross Amount at which Carried at Close of Period, Total | 82,314,000 | [3] |
Accumulated Depreciation and Amortization | -11,846,000 | |
Original Date of Construction | '2007/2008 | |
Date Acquired | 16-Feb-11 | |
Two Westlake Park [Member] | ' | |
Real Estate and Accumulated Depreciation [Line Items] | ' | |
Ownership Percent | 100.00% | |
Encumbrances | 48,213,000 | |
Initial Cost to Company, Land | 7,000,000 | |
Initial Cost to Company, Building and Improvements | 77,881,000 | [1] |
Initial Cost to Company, Total | 84,881,000 | |
Cost Capitalized Subsequent to Acquisition | 4,216,000 | [2] |
Gross Amount at which Carried at Close of Period, Land | 7,000,000 | |
Gross Amount at which Carried at Close of Period, Building and Improvements | 82,097,000 | [1] |
Gross Amount at which Carried at Close of Period, Total | 89,097,000 | [3] |
Accumulated Depreciation and Amortization | -9,702,000 | |
Original Date of Construction | '1982 | |
Date Acquired | 25-Feb-11 | |
CityPlace Tower [Member] | ' | |
Real Estate and Accumulated Depreciation [Line Items] | ' | |
Ownership Percent | 100.00% | |
Encumbrances | 71,000,000 | |
Initial Cost to Company, Land | 17,460,000 | |
Initial Cost to Company, Building and Improvements | 106,539,000 | [1] |
Initial Cost to Company, Total | 123,999,000 | |
Cost Capitalized Subsequent to Acquisition | 1,943,000 | [2] |
Gross Amount at which Carried at Close of Period, Land | 17,460,000 | |
Gross Amount at which Carried at Close of Period, Building and Improvements | 108,482,000 | [1] |
Gross Amount at which Carried at Close of Period, Total | 125,942,000 | [3] |
Accumulated Depreciation and Amortization | -13,281,000 | |
Original Date of Construction | '2008 | |
Date Acquired | 6-Apr-11 | |
Fountainhead Plaza [Member] | ' | |
Real Estate and Accumulated Depreciation [Line Items] | ' | |
Ownership Percent | 100.00% | |
Encumbrances | 80,000,000 | |
Initial Cost to Company, Land | 12,300,000 | |
Initial Cost to Company, Building and Improvements | 123,700,000 | [1] |
Initial Cost to Company, Total | 136,000,000 | |
Cost Capitalized Subsequent to Acquisition | 45,000 | [2] |
Gross Amount at which Carried at Close of Period, Land | 12,300,000 | |
Gross Amount at which Carried at Close of Period, Building and Improvements | 123,745,000 | [1] |
Gross Amount at which Carried at Close of Period, Total | 136,045,000 | [3] |
Accumulated Depreciation and Amortization | -12,574,000 | |
Original Date of Construction | '2011 | |
Date Acquired | 13-Sep-11 | |
Metropolitan Center [Member] | ' | |
Real Estate and Accumulated Depreciation [Line Items] | ' | |
Ownership Percent | 100.00% | |
Encumbrances | 39,657,000 | |
Initial Cost to Company, Land | 22,850,000 | |
Initial Cost to Company, Building and Improvements | 75,232,000 | [1] |
Initial Cost to Company, Total | 98,082,000 | |
Cost Capitalized Subsequent to Acquisition | 1,385,000 | [2] |
Gross Amount at which Carried at Close of Period, Land | 22,850,000 | |
Gross Amount at which Carried at Close of Period, Building and Improvements | 76,617,000 | [1] |
Gross Amount at which Carried at Close of Period, Total | 99,467,000 | [3] |
Accumulated Depreciation and Amortization | -9,284,000 | |
Original Date of Construction | '1986 | |
Date Acquired | 16-Dec-11 | |
Corporate Technology Centre [Member] | ' | |
Real Estate and Accumulated Depreciation [Line Items] | ' | |
Ownership Percent | 100.00% | |
Encumbrances | 140,000,000 | |
Initial Cost to Company, Land | 71,160,000 | |
Initial Cost to Company, Building and Improvements | 159,712,000 | [1] |
Initial Cost to Company, Total | 230,872,000 | |
Cost Capitalized Subsequent to Acquisition | 52,000 | [2] |
Gross Amount at which Carried at Close of Period, Land | 71,160,000 | |
Gross Amount at which Carried at Close of Period, Building and Improvements | 159,764,000 | [1] |
Gross Amount at which Carried at Close of Period, Total | 230,924,000 | [3] |
Accumulated Depreciation and Amortization | ($6,329,000) | |
Original Date of Construction | '1999/2001 | |
Date Acquired | 28-Mar-13 | |
[1] | Building and improvements includes tenant origination and absorption costs. | |
[2] | Costs capitalized subsequent to acquisition is net of write-offs of fully depreciated/amortized assets. | |
[3] | The aggregate cost of real estate for federal income tax purposes was $2.9 billion as of December 31, 2013. | |
[4] | The Company acquired the rights to a ground lease with respect to this property. The ground lease expires in February 2050. |
SCHEDULE_III_REAL_ESTATE_ASSET2
SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION (Reconciliation) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Real Estate: | ' | ' | ' |
Balance at the beginning of the year | $2,562,193 | $2,590,243 | $1,953,876 |
Acquisitions | 230,872 | 0 | 624,990 |
Improvements | 30,607 | 18,123 | 25,291 |
Write-off of fully depreciated and fully amortized assets | -25,590 | -35,806 | -13,914 |
Sale | 0 | -10,367 | 0 |
Balance at the end of the year | 2,798,082 | 2,562,193 | 2,590,243 |
Accumulated depreciation and amortization: | ' | ' | ' |
Balance at the beginning of the year | 270,538 | 183,855 | 80,473 |
Depreciation and amortization expense | 117,874 | 123,426 | 117,296 |
Write-off of fully depreciated and fully amortized assets | -25,590 | -35,806 | -13,914 |
Sale | 0 | -937 | 0 |
Balance at the end of the year | $362,822 | $270,538 | $183,855 |