Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 14, 2016 | Jun. 30, 2015 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | KBS Real Estate Investment Trust II, Inc. | ||
Entity Central Index Key | 1,411,059 | ||
Current Fiscal Year end | --12-31 | ||
Entity Filer category | Non-accelerated Filer | ||
Document type | 10-K | ||
Document period end date | Dec. 31, 2015 | ||
Document fiscal year focus | 2,015 | ||
Document fiscal period focus | FY | ||
Amendment flag | false | ||
Entity Common Stock, Shares Outstanding | 189,353,216 | ||
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 ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Real estate: | ||
Land | $ 206,262 | $ 207,501 |
Buildings and improvements | 1,009,368 | 1,074,148 |
Tenant origination and absorption costs | 76,132 | 109,378 |
Total real estate held for investment, cost | 1,291,762 | 1,391,027 |
Less accumulated depreciation and amortization | (113,460) | (168,041) |
Total real estate held for investment, net | 1,178,302 | 1,222,986 |
Real estate held for sale, net | 0 | 93,682 |
Total real estate, net | 1,178,302 | 1,316,668 |
Real estate loans receivable, net | 14,210 | 72,940 |
Total real estate and real estate-related investments, net | 1,192,512 | 1,389,608 |
Cash and cash equivalents | 72,687 | 179,021 |
Rents and other receivables, net | 58,109 | 41,231 |
Above-market leases, net | 7,596 | 10,271 |
Assets related to real estate held for sale | 0 | 4,159 |
Prepaid expenses and other assets | 33,626 | 30,033 |
Total assets | 1,364,530 | 1,654,323 |
Notes payable: | ||
Notes payable, net | 546,077 | 723,895 |
Notes payable related to real estate held for sale, net | 0 | 63,523 |
Total notes payable, net | 546,077 | 787,418 |
Accounts payable and accrued liabilities | 30,329 | 23,183 |
Due to affiliate | 49 | 38 |
Distributions payable | 4,725 | 6,456 |
Below-market leases, net | 5,570 | 8,904 |
Liabilities related to real estate held for sale | 0 | 3,024 |
Other liabilities | 9,850 | 15,773 |
Total liabilities | $ 596,600 | $ 844,796 |
Commitments and contingencies (Note 13) | ||
Redeemable common stock | $ 10,000 | $ 10,000 |
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, 189,556,185 and 190,561,603 shares issued and outstanding as of December 31, 2015 and December 31, 2014, respectively | 1,895 | 1,905 |
Additional paid-in capital | 1,684,206 | 1,690,010 |
Cumulative distributions in excess of net income | (928,111) | (890,751) |
Accumulated other comprehensive loss | (60) | (1,637) |
Total stockholders’ equity | 757,930 | 799,527 |
Total liabilities and stockholders’ equity | $ 1,364,530 | $ 1,654,323 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 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 (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 189,556,185 | 190,561,603 |
Common stock, shares outstanding | 189,556,185 | 190,561,603 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues: | |||
Rental income | $ 138,745 | $ 212,454 | $ 258,452 |
Tenant reimbursements | 14,749 | 43,481 | 61,167 |
Interest income from real estate loans receivable | 4,552 | 12,742 | 30,439 |
Interest income from marketable securities | 0 | 953 | 0 |
Other operating income | 7,249 | 9,770 | 10,576 |
Total revenues | 165,295 | 279,400 | 360,634 |
Expenses: | |||
Operating, maintenance, and management | 36,069 | 58,711 | 67,978 |
Real estate taxes and insurance | 20,528 | 36,444 | 48,605 |
Asset management fees to affiliate | 12,082 | 18,641 | 23,524 |
Real estate acquisition fees to affiliates | 0 | 0 | 1,797 |
Real estate acquisition fees and expenses | 0 | 0 | 623 |
General and administrative expenses | 4,485 | 5,082 | 4,982 |
Depreciation and amortization | 56,271 | 77,988 | 120,778 |
Interest expense | 22,115 | 62,944 | 65,687 |
Impairment charge on real estate | 23,082 | 15,601 | 0 |
Total expenses | 174,632 | 275,411 | 333,974 |
Other income: | |||
Other interest income | 293 | 209 | 46 |
Loss on sale of marketable securities | 0 | (331) | 0 |
Gain on sales of real estate, net | 27,421 | 441,640 | 0 |
Gain on payoff or sale of real estate loans receivable | 0 | 0 | 29,073 |
Total other income | 27,714 | 441,518 | 29,119 |
Net income | $ 18,377 | $ 445,507 | $ 55,779 |
Net income per common share (in dollars per share) | $ 0.10 | $ 2.33 | $ 0.29 |
Weighted-average number of common shares outstanding, basic and diluted | 190,227,577 | 191,346,949 | 192,370,985 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 18,377 | $ 445,507 | $ 55,779 |
Other comprehensive income (loss): | |||
Unrealized losses on derivative instruments | 0 | (2,158) | (3,591) |
Reclassification adjustment on derivative instruments realized in net income (effective portion) | 1,577 | 7,106 | 9,551 |
Reclassification of unrealized losses due to hedge ineffectiveness | 0 | 3,207 | 0 |
Reclassification of realized losses related to swap terminations | 0 | 521 | 856 |
Unrealized loss on marketable securities | 0 | (313) | 0 |
Reclassification of loss on marketable securities to income | 0 | 313 | 0 |
Total other comprehensive income | 1,577 | 8,676 | 6,816 |
Total comprehensive income | $ 19,954 | $ 454,183 | $ 62,595 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Cumulative Distributions and Net Income (Loss) | Accumulated Other Comprehensive Income (Loss) |
Balance, shares at Dec. 31, 2012 | 190,274,167 | ||||
Balance, value at Dec. 31, 2012 | $ 1,329,031 | $ 1,903 | $ 1,633,994 | $ (289,737) | $ (17,129) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 55,779 | 55,779 | |||
Other comprehensive income | 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) | ||
Transfers to redeemable common stock | (4,135) | (4,135) | |||
Distributions declared | (135,384) | (135,384) | |||
Other offering costs | (19) | (19) | |||
Balance, shares at Dec. 31, 2013 | 192,269,969 | ||||
Balance, value at Dec. 31, 2013 | 1,269,482 | $ 1,923 | 1,647,214 | (369,342) | (10,313) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 445,507 | 445,507 | |||
Other comprehensive income | 8,676 | 8,676 | |||
Issuance of common stock, shares | 2,749,008 | ||||
Issuance of common stock, value | 26,885 | $ 28 | 26,857 | ||
Redemptions of common stock, shares | (4,457,374) | ||||
Redemptions of common stock, value | (44,659) | $ (46) | (44,613) | ||
Transfers from redeemable common stock | 60,552 | 60,552 | |||
Distributions declared | $ (966,916) | (966,916) | |||
Balance, shares at Dec. 31, 2014 | 190,561,603 | 190,561,603 | |||
Balance, value at Dec. 31, 2014 | $ 799,527 | $ 1,905 | 1,690,010 | (890,751) | (1,637) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 18,377 | 18,377 | |||
Other comprehensive income | 1,577 | 1,577 | |||
Redemptions of common stock, shares | (1,005,418) | ||||
Redemptions of common stock, value | (5,814) | $ (10) | (5,804) | ||
Distributions declared | $ (55,737) | (55,737) | |||
Balance, shares at Dec. 31, 2015 | 189,556,185 | 189,556,185 | |||
Balance, value at Dec. 31, 2015 | $ 757,930 | $ 1,895 | $ 1,684,206 | $ (928,111) | $ (60) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash Flows from Operating Activities: | |||
Net income | $ 18,377 | $ 445,507 | $ 55,779 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 56,271 | 77,988 | 120,778 |
Impairment charge on real estate | 23,082 | 15,601 | 0 |
Noncash interest income on real estate-related investments | 23 | (104) | (3,589) |
Deferred rent | (6,692) | (5,818) | (12,806) |
Bad debt expense | 156 | 287 | 589 |
Amortization of above- and below-market leases, net | (680) | 1,258 | 2,249 |
Amortization of deferred financing costs | 1,975 | 4,655 | 3,314 |
Reclassification of realized losses on derivative instruments | 0 | 521 | 856 |
Unrealized losses due to hedge ineffectiveness | 0 | 3,207 | 0 |
Unrealized gain on derivative instruments | (2,410) | (218) | 0 |
Change in fair value of contingent consideration | 0 | 0 | (31) |
Gain on payoff or sale of real estate loans receivable | 0 | 0 | (29,073) |
Gain on sale of real estate, net | (27,421) | (441,640) | 0 |
Loss on sale of marketable securities | 0 | 331 | 0 |
Changes in operating assets and liabilities: | |||
Rents and other receivables | (2,843) | (676) | (2,467) |
Prepaid expenses and other assets | (14,477) | (12,693) | (10,235) |
Accounts payable and accrued liabilities | (1,403) | (7,276) | 1,889 |
Due to affiliate | 11 | 38 | (168) |
Other liabilities | (1,833) | (13,632) | 6,061 |
Net cash provided by operating activities | 42,136 | 67,336 | 133,146 |
Cash Flows from Investing Activities: | |||
Proceeds from sale of real estate | 122,923 | 1,579,401 | 0 |
Acquisitions of real estate | 0 | 0 | (238,952) |
Improvements to real estate | (23,502) | (34,749) | (29,434) |
Investments in marketable securities | 0 | (529,997) | 0 |
Proceeds from sale of marketable securities | 0 | 529,666 | 0 |
Investments in real estate loans receivable | 0 | 0 | (5,490) |
Principal repayments on real estate loans receivable | 435 | 304 | 1,579 |
Proceeds from payoff or sale of real estate loans receivable | 58,272 | 111,688 | 200,591 |
Net cash provided by (used in) investing activities | 158,128 | 1,656,313 | (71,706) |
Cash Flows from Financing Activities: | |||
Proceeds from notes payable | 0 | 0 | 456,000 |
Principal payments on notes payable | (243,140) | (730,742) | (269,161) |
Payments of deferred financing costs | (176) | (45) | (4,048) |
Return of contingent consideration related to acquisition of real estate | 0 | 0 | 308 |
Payments to redeem common stock | (5,814) | (44,659) | (53,174) |
Payments of other offering costs | 0 | 0 | (19) |
Distributions paid to common stockholders | (57,468) | (944,224) | (64,694) |
Net cash (used in) provided by financing activities | (306,598) | (1,719,670) | 65,212 |
Net (decrease) increase in cash and cash equivalents | (106,334) | 3,979 | 126,652 |
Cash and cash equivalents, beginning of period | 179,021 | 175,042 | 48,390 |
Cash and cash equivalents, end of period | 72,687 | 179,021 | 175,042 |
Supplemental Disclosure of Cash Flow Information: | |||
Interest paid | 23,076 | 42,096 | 58,445 |
Supplemental Disclosure of Noncash Investing and Financing Activities: | |||
Increase in distributions payable | 0 | 0 | 128 |
Distributions paid to common stockholders through common stock issuances pursuant to the dividend reinvestment plan | 0 | 26,885 | 70,562 |
Increase in accrued improvements to real estate | $ 6,938 | $ 0 | $ 1,666 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 2015 | |
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 invested in a diverse portfolio of real estate and real estate-related investments. As of December 31, 2015 , the Company owned 12 real estate properties (consisting of 10 office properties, one office/flex property and an office campus consisting of eight office buildings) and one real estate loan 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, 2015 (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 terminated its dividend reinvestment plan effective May 29, 2014. The Company sold 182,681,633 shares of common stock in its primary offering for gross offering proceeds of $1.8 billion . The Company sold 30,903,504 shares of common stock under its dividend reinvestment plan for gross offering proceeds of $298.2 million . Also as of December 31, 2015 , the Company had redeemed 24,048,952 shares sold in the Offering for $235.4 million . |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
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. During the year ended December 31, 2015 , the Company sold one office property. As a result, certain assets and liabilities were reclassified to held for sale on the consolidated balance sheets for all periods presented. Additionally, as of December 31, 2015 , the Company reclassified two properties that were previously classified as held for sale to held for investment. During the year ended December 31, 2015 , the Company elected to early adopt ASU No. 2015-03 (defined below). As a result, the Company has reclassified debt issuance costs associated with a debt liability from prepaid expenses and other assets to notes payable, net on the consolidated balance sheets 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 loan 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 a loan 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 reserve for any unpaid accrued 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 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. Real Estate Held for Sale and Discontinued Operations The Company generally considers real estate to be “held for sale” when the following criteria are met: (i) management commits to a plan to sell the property, (ii) the property is available for sale immediately, (iii) the property is actively being marketed for sale at a price that is reasonable in relation to its current fair value, (iv) the sale of the property within one year is considered probable and (v) significant changes to the plan to sell are not expected. Real estate that is held for sale and its related assets are classified as “real estate held for sale” and “assets related to real estate held for sale,” respectively, for all periods presented in the accompanying consolidated financial statements. Notes payable and other liabilities related to real estate held for sale are classified as “notes payable related to real estate held for sale” and “liabilities related to real estate held for sale,” respectively, for all periods presented in the accompanying consolidated financial statements. Real estate classified as held for sale is no longer depreciated and is reported at the lower of its carrying value or its estimated fair value less estimated costs to sell. Additionally, with respect to properties that were classified as held for sale in financial statements prior to January 1, 2014, the Company records the operating results as discontinued operations for all periods presented if the operations have been or are expected to be eliminated and the Company will not have any significant continuing involvement in the operations of the property following the sale. Operating results of properties that were disposed of or classified as held for sale in the ordinary course of business during the years ended December 31, 2015 and 2014 that had not been classified as held for sale in financial statements prior to January 1, 2014 are included in continuing operations on the Company’s consolidated statements of operations. Change in a Plan to Sell When real estate is initially considered “held for sale” it is measured at the lower of its depreciated book value or estimated fair value less estimated costs to sell. Changes in the market may compel the Company to decide to reclassify a property that was designated as held for sale to held for investment. A property that is reclassified from held for sale to held for investment is measured and recorded at the lower of (i) its carrying amount before the property was classified as held for sale, adjusted for any depreciation and amortization expense that would have been recognized had the property been continuously classified as held and used, or (ii) its fair value at the date of the subsequent decision not to sell. Any adjustment to the carrying amount of the property as a result of the reclassification is included in income from continuing operations as an impairment charge on real estate held for investment. 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, 2015 , 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, 2015 , 2014 and 2013 . 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 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. 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. Marketable Securities The Company classifies its investments in marketable securities as available-for-sale, since the Company may sell them prior to their maturity but does not hold them principally for the purpose of making frequent investments and sales with the objective of generating profits on short-term differences in price. These investments are carried at estimated fair value, with unrealized gains and losses reported in accumulated other comprehensive income (loss). Estimated fair values are generally based on quoted market prices, when available, or on estimates provided by independent pricing sources or dealers who make markets in such securities. In certain circumstances, such as when the market for the securities becomes inactive, the Company may determine it is appropriate to perform an internal valuation of the securities. Upon the sale of a security, the previously recognized unrealized gain (loss) is reversed out of accumulated other comprehensive income (loss) and the actual realized gain (loss) is recognized in earnings. On a quarterly basis, the Company evaluates its marketable securities for other-than-temporary impairment. The Company reviews the projected future cash flows from these securities for changes in assumptions due to prepayments, credit loss experience and other factors. If, based on the Company’s quarterly estimate of cash flows, there has been an adverse change in the estimated cash flows from the cash flows previously estimated, the present value of the revised cash flows is less than the present value previously estimated, and the fair value of the securities is less than their amortized cost basis, an other-than-temporary impairment is deemed to have occurred. The Company recognizes interest income on marketable securities that are beneficial interests in securitized financial assets and are rated “AA” and above on an accrual basis according to the contractual terms of the securities. Discounts or premiums are amortized to interest income over the life of the investment using the interest method. The Company recognizes interest income on marketable securities that are beneficial interests in securitized financial assets that are rated below “AA” using the effective yield method, which requires the Company to periodically project estimated cash flows related to these securities and recognize interest income at an interest rate equivalent to the estimated yield on the security, as calculated using the security’s estimated cash flows and amortized cost basis, or reference amount. Changes in the estimated cash flows are recognized through an adjustment to the yield on the security on a prospective basis. Projecting cash flows for these types of securities requires significant judgment, which may have a significant impact on the timing of revenue recognized on these investments. The Company is required to distinguish between other-than-temporary impairments related to credit and other-than-temporary impairments related to other factors (e.g., market fluctuations) on its debt securities that it does not intend to sell and where it is not likely that the Company will be required to sell the security prior to the anticipated recovery of its amortized cost basis. The Company calculates the credit component of the other-than-temporary impairment as the difference between the amortized cost basis of the security and the present value of its estimated cash flows discounted at the yield used to recognize interest income. The credit component will be charged to earnings and the component related to other factors is recorded to other comprehensive income (loss). 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, 2015 . 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. Rents and Other Receivables The Company periodically evaluates the collectibility of amounts due from tenants and maintains an allowance for doubtful accounts for estimated losses resulting from the inability of tenants to make required payments under lease agreements. In addition, the Company maintains an allowance for deferred rent receivable that arises from the straight-lining of rents. The Company exercises judgment in establishing these allowances and considers payment history and current credit status of its tenants in developing these estimates. Derivative Instruments The Company enters into derivative instruments for risk management purposes to hedge its exposure to cash flow variability caused by changing interest rates on its variable rate notes payable. The Company records these derivative instruments at fair value on the accompanying consolidated balance sheets. Derivative instruments designated and qualifying as a hedge of the exposure to variability in expected future cash flows or other types of forecasted transactions are considered cash flow hedges. The change in fair value of the effective portion of a derivative instrument that is designated as a cash flow hedge is recorded as other comprehensive income (loss) in the accompanying consolidated statements of comprehensive income (loss) and consolidated statements of stockholders’ 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 and are presented on the balance sheet as a direct deduction from the carrying value of the associated debt liability. 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. Deferred financing costs incurred before an associated debt liability is recognized are included in prepaid and other assets on the balance sheet. 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. 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 had a dividend reinvestment plan (the “DRP”) through which its stockholders were able to 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 announced an updated estimated value per share, participants in the DRP were able to 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, 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, the purchase price per share under the DRP was $9.78 . On May 15, 2014, the Company’s board of directors approved the termination of the DRP, which termination was effective May 29, 2014. Redeemable Common Stock The Company has a share redemption program pursuant to which stockholders may sell their shares to the Company only in connection with a stockholder’s death, “qualifying disability” or “determination of incompetence” (each as defined in the share redemption program and, together with redemptions sought in connection with a stockholder’s death, “special redemptions”). Such redemptions are subject to an annual dollar limitation and are further subject to the other limitations described in the share redemption program document, including: • During each calendar year, special redemptions are limited to an annual dollar amount determined by the board of directors, which may be reviewed during the year and increased or decreased upon ten business days’ notice to the Company’s stockholders. The dollar limitation for calendar year 2015 was $10.0 million . On December 8, 2015, the Company’s board of directors approved the dollar amount limitation for special redemptions for calendar year 2016 of $10.0 million in the aggregate, as may be reviewed and adjusted from time to time by the boa |
REAL ESTATE
REAL ESTATE | 12 Months Ended |
Dec. 31, 2015 | |
Real Estate [Abstract] | |
REAL ESTATE | REAL ESTATE As of December 31, 2015 , the Company’s portfolio of real estate was composed of ten office properties, one office/flex property and an office campus consisting of eight office buildings, encompassing in the aggregate approximately 5.2 million rentable square feet. As of December 31, 2015 , the Company’s real estate portfolio was 87% occupied. The following table summarizes the Company’s real estate portfolio as of December 31, 2015 (in thousands): Property Date Acquired City State Property Type Total Real Estate at Cost (1) Accumulated Depreciation and Amortization (1) Total Real Estate, Net (1) 100 & 200 Campus Drive Buildings 09/09/2008 Florham Park NJ Office $ 135,926 $ (1,634 ) $ 134,292 300-600 Campus Drive Buildings 10/10/2008 Florham Park NJ Office 153,139 (4,884 ) 148,255 350 E. Plumeria Building 12/18/2008 San Jose CA Office/Flex 36,668 (7,927 ) 28,741 Willow Oaks Corporate Center 08/26/2009 Fairfax VA Office 97,724 (13,639 ) 84,085 Pierre Laclede Center 02/04/2010 Clayton MO Office 73,229 (3,409 ) 69,820 Horizon Tech Center 06/17/2010 San Diego CA Office 28,377 (735 ) 27,642 Union Bank Plaza 09/15/2010 Los Angeles CA Office 186,430 (6,784 ) 179,646 Emerald View at Vista Center 12/09/2010 West Palm Beach FL Office 31,301 (5,485 ) 25,816 Granite Tower 12/16/2010 Denver CO Office 155,175 (31,651 ) 123,524 Gateway Corporate Center 01/26/2011 Sacramento CA Office 45,114 (9,130 ) 35,984 Fountainhead Plaza 09/13/2011 Tempe AZ Office 119,384 (6,840 ) 112,544 Corporate Technology Centre 03/28/2013 San Jose CA Office 229,295 (21,342 ) 207,953 $ 1,291,762 $ (113,460 ) $ 1,178,302 _____________________ (1) Amounts presented are net of impairment charges. As of December 31, 2015 , the following properties represented more than 10% of the Company’s total assets: Property Location Rentable Square Feet Total Real Estate, Net (in thousands) Percentage of Total Assets Annualized Base Rent (in thousands) (1) Average Annualized Base Rent per sq. ft. Occupancy Corporate Technology Centre San Jose, CA 610,083 $ 207,953 15.2 % $ 18,537 $ 30.38 100 % Union Bank Plaza Los Angeles, CA 627,334 179,646 13.2 % 22,677 39.48 92 % 300-600 Campus Drive Buildings Florham Park, NJ 578,366 148,255 10.9 % 17,196 30.51 97 % _____________________ (1) Annualized base rent represents annualized contractual base rental income as of December 31, 2015 , 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, 2015 , the leases had remaining terms, excluding options to extend, of up to 15.8 years with a weighted-average remaining term of 5.4 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 $2.4 million and $2.5 million as of December 31, 2015 and 2014 , respectively. During the years ended December 31, 2015 , 2014 and 2013 , the Company recognized deferred rent from tenants, net of lease incentive amortization, of $6.7 million , $5.8 million and $12.8 million , respectively. As of December 31, 2015 and 2014 , the cumulative deferred rent balance was $54.6 million and $39.4 million , respectively, and is included in rents and other receivables on the accompanying balance sheets. The cumulative deferred rent balance included $11.9 million and $4.0 million of unamortized lease incentives as of December 31, 2015 and 2014 , respectively. As of December 31, 2015 , the future minimum rental income from the Company’s properties under non-cancelable operating leases was as follows (in thousands): 2016 $ 127,820 2017 123,438 2018 117,116 2019 103,029 2020 97,895 Thereafter 354,275 $ 923,573 As of December 31, 2015 , the Company had over 250 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 Base Rent (1) (in thousands) Percentage of Annualized Base Rent Finance 31 $ 30,185 22.2 % Computer System Design & Programming 9 22,250 16.4 % Legal Services 37 14,195 10.5 % Mining, Oil & Gas Extraction 4 13,985 10.3 % $ 80,615 59.4 % _____________________ (1) Annualized base rent represents annualized contractual base rental income as of December 31, 2015 , 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. The Company had not identified any material tenant credit issues as of December 31, 2015 . During the years ended December 31, 2015 , 2014 and 2013 , the Company recorded bad debt expense of $0.2 million , $0.3 million and $0.6 million , respectively. As of December 31, 2015 , the Company had a bad debt expense reserve of approximately $0.3 million , which represented less than 1% of its annualized base rent. As of December 31, 2015 , the Company had a concentration of credit risk related to the following tenant lease that represented more than 10% of the Company’s annualized base rent: Annualized Base Rent Statistics Tenant Property Tenant Industry Square Feet % of Portfolio (Net Rentable Sq. Ft.) Annualized Base Rent (in thousands) (1) % of Portfolio Annualized Base Rent Annualized Base Rent per Sq. Ft. Lease Expiration (2)(3) Union Bank Union Bank Plaza Finance 408,260 9.0% $ 16,742 12.3% $ 41.01 9/30/2016 / _____________________ (1) Annualized base rent represents annualized contractual base rental income as of December 31, 2015 , 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. (2) Represents the expiration date of the lease as of December 31, 2015 and does not take into account any tenant renewal or termination options. (3) Of the 408,260 rentable square feet occupied by the tenant, a total of 33,602 rentable square feet will expire on September 30, 2016. No other tenant accounted for more than 10% of annualized base rent. Geographic Concentration Risk As of December 31, 2015 , the Company’s net investments in real estate in California and New Jersey represented 35.2% and 20.7% 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 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. Impairment of Real Estate During the year ended December 31, 2015 , the Company recorded impairment charges of $23.1 million , including an impairment charge of $18.6 million to write-down the carrying value of the 100 & 200 Campus Drive Buildings, an office property located in Florham Park, New Jersey, to its estimated fair value as a result of changes in cash flow estimates. The decrease in cash flow projections was primarily due to (i) the lack of demand in the Florham Park office rental market resulting in slower rent growth and longer lease up periods and (ii) an increase in projected vacancy related to a tenant occupying 199,024 rentable square feet, or approximately 34% of the 100 & 200 Campus Drive Buildings. This tenant’s lease expires in November 2016. The Company no longer expects the tenant to renew its lease. As a result, the Company revised its cash flow projections for longer lease up periods and additional tenant improvement costs and leasing concessions required to attract new tenants. In addition, during the year ended December 31, 2015 , the Company recorded impairment charges of $4.5 million with respect to two real estate properties that were reclassified from held for sale to held for investment. The impairment charge was recorded to adjust the carrying values of the properties for any depreciation and amortization expense that would have been recognized if the properties had always been classified as held for investment, which otherwise would have been recorded through depreciation and amortization expense. During the year ended December 31, 2014 , the Company recorded impairment charges of $15.6 million , including $10.6 million of impairments with respect to a real estate property held for investment and $3.9 million of impairments with respect to two real estate properties that were reclassified from held for sale to held for investment. The Company recognized an impairment charge during the year ended December 31, 2014 to reduce the carrying value of the Company’s investment in the 300-600 Campus Drive Buildings to its estimated fair value. The impairment was caused by the Company revising its cash flow projections and the estimated hold period of the investment due to longer than estimated lease-up periods and lower projected rental rates. The impairment charge with respect to two real estate properties that were reclassified from held for sale to held for investment was recorded to adjust the carrying values of the properties for any depreciation and amortization expense that would have been recognized if the properties had always been classified as held for investment, which otherwise would have been recorded through depreciation and amortization expense and rental income (related to the amortization of above-market lease assets and below-market lease liabilities). See Note 6, “Real Estate Sales,” for information regarding the $1.1 million of impairments of real estate assets sold in 2014. |
TENANT ORIGINATION AND ABSORPTI
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015 and 2014 , 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 Absorption Costs Above-Market Lease Assets Below-Market Lease Liabilities 2015 2014 2015 2014 2015 2014 Cost $ 76,132 $ 109,378 $ 15,375 $ 17,281 $ (20,436 ) $ (24,917 ) Accumulated amortization (31,020 ) (49,302 ) (7,779 ) (7,010 ) 14,866 16,013 Net amount $ 45,112 $ 60,076 $ 7,596 $ 10,271 $ (5,570 ) $ (8,904 ) 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, 2015 and 2014 were as follows (in thousands): Tenant Origination and Absorption Costs Above-Market Lease Assets Below-Market Lease Liabilities For the Years Ended December 31, For the Years Ended December 31, For the Years Ended December 31, 2015 2014 2013 2015 2014 2013 2015 2014 2013 Amortization $ (13,808 ) $ (24,236 ) $ (41,151 ) $ (2,722 ) $ (7,953 ) $ (9,673 ) $ 3,402 $ 6,695 $ 7,424 The remaining unamortized balance for these outstanding intangible assets and liabilities as of December 31, 2015 will be amortized for the years ending December 31 as follows (in thousands): Tenant Origination and Absorption Costs Above-Market Lease Assets Below-Market Lease Liabilities 2016 $ (11,498 ) $ (2,510 ) $ 2,629 2017 (10,067 ) (2,457 ) 1,587 2018 (6,955 ) (1,978 ) 955 2019 (4,437 ) (154 ) 178 2020 (4,214 ) (154 ) 110 Thereafter (7,941 ) (343 ) 111 $ (45,112 ) $ (7,596 ) $ 5,570 Weighted-Average Remaining Amortization Period 5.3 years 3.4 years 2.7 years |
REAL ESTATE LOANS RECEIVABLE
REAL ESTATE LOANS RECEIVABLE | 12 Months Ended |
Dec. 31, 2015 | |
Receivables [Abstract] | |
REAL ESTATE LOANS RECEIVABLE | REAL ESTATE LOANS RECEIVABLE As of December 31, 2015 and 2014 , the Company, through indirect wholly owned subsidiaries, had invested in or originated real estate loans receivable as follows (dollars in thousands): Loan Name Location of Related Property or Collateral Date Acquired/ Originated Property Type Loan Type Outstanding Principal Balance as of December 31, 2015 (1) Book Value as of December 31, 2015 (2) Book Value as of December 31, 2014 (2) Contractual Interest Rate (3) Annualized Effective Interest Rate (3) Maturity Date Sheraton Charlotte Airport Hotel First Mortgage Charlotte, North Carolina 07/11/2011 Hotel Mortgage $ 14,201 $ 14,210 $ 14,353 7.5% 7.6% 08/01/2018 Summit I & II First Mortgage (4) Reston, Virginia 01/17/2012 Office Mortgage — — 58,587 (4) (4) (4) $ 14,201 $ 14,210 $ 72,940 _____________________ (1) Outstanding principal balance as of December 31, 2015 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 2015, using the interest method, annualized and divided by the average amortized cost basis of the investment during 2015. The contractual interest rate and annualized effective interest rate presented are as of December 31, 2015 . (4) On August 4, 2015, the borrower under the Summit I & II First Mortgage paid off the entire principal balance outstanding of $58.3 million plus a yield maintenance premium of $0.9 million and accrued interest of $0.4 million . The Summit I & II First Mortgage had an original maturity date of February 1, 2017. The Summit I & II First Mortgage bore interest at a fixed rate of 7.5% . The following summarizes the activity related to real estate loans receivable for the year ended December 31, 2015 (in thousands): Real estate loans receivable - December 31, 2014 $ 72,940 Principal repayments received on real estate loans receivable (435 ) Payoff of real estate loan receivable (58,272 ) Amortization of closing costs and origination fees on real estate loans receivable (23 ) Real estate loans receivable - December 31, 2015 $ 14,210 For the years ended December 31, 2015 , 2014 and 2013 , interest income from real estate loans receivable consisted of the following (in thousands): For the Years Ended December 31, 2015 2014 2013 Contractual interest income $ 3,701 $ 7,721 $ 26,850 Prepayment fee received on real estate loan receivable 874 4,917 — Accretion of purchase discounts — — 4,075 Amortization of closing costs and origination fees (23 ) 104 (486 ) Interest income from real estate loans receivable $ 4,552 $ 12,742 $ 30,439 As of December 31, 2015 and 2014 , interest receivable from real estate loans receivable was $0 and $0.5 million , respectively, and was included in rents and other receivables. |
REAL ESTATE SALES
REAL ESTATE SALES | 12 Months Ended |
Dec. 31, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
REAL ESTATE SALES | REAL ESTATE SALES In accordance with ASU No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU No. 2014-08”), results of operations from properties that are classified as held for sale in the ordinary course of business on or subsequent to January 1, 2014 would generally be included in continuing operations on the Company’s consolidated statements of operations. Results of operations from properties that were classified as held for sale in financial statements issued prior to January 1, 2014 will remain in discontinued operations on the Company’s consolidated statements of operations. Prior to the adoption of ASU No. 2014-08, the results of operations of properties held for sale or to be disposed of and the aggregate net gains recognized upon their disposition were presented as discontinued operations in the accompanying consolidated statements of operations for all periods presented. During the year ended December 31, 2015 , the Company disposed of one office property. During the year ended December 31, 2014 , the Company disposed of nine office properties, one industrial property, a portfolio of four industrial properties and a leasehold interest in one industrial property. The results of operations for the properties sold during the year s ended December 31, 2015 and 2014 are included in continuing operations on the Company’s consolidated statements of operations. The following table summarizes certain revenue and expenses related to the Company’s real estate properties that were sold during the years ended December 31, 2015 and 2014 , which were included in continuing operations (in thousands): Years Ended December 31, 2015 2014 2013 Revenues Rental income $ 2,041 $ 75,220 $ 122,411 Tenant reimbursements (175 ) 26,746 45,337 Other operating income 125 2,844 3,851 Total revenues 1,991 104,810 171,599 Expenses Operating, maintenance, and management 502 23,414 34,992 Real estate taxes and insurance 218 17,406 29,113 Asset management fees to affiliate 108 6,496 10,653 General and administrative expenses 8 87 15 Depreciation and amortization — 21,663 57,800 Interest expense 411 33,902 30,043 Impairment charge on real estate — 1,075 — Total expenses $ 1,247 $ 104,043 $ 162,616 During the year ended December 31, 2014 , the Company recorded an impairment charge of $1.1 million related to a real estate property that was sold. The impairment charge represents the difference between the carrying value of the real estate and the fair value of the real estate (based on a purchase and sale agreement which the Company had entered into) less costs to sell. The following summary presents the major components of assets and liabilities related to real estate held for sale as of December 31, 2014 (in thousands). No real estate properties were held for sale as of December 31, 2015 : December 31, 2014 Assets related to real estate held for sale Total real estate, at cost and net of impairment charge $ 116,264 Accumulated depreciation and amortization (22,582 ) Real estate held for sale, net 93,682 Other assets 4,159 Total assets related to real estate held for sale $ 97,841 Liabilities related to real estate held for sale Total notes payable, net 63,523 Other liabilities 3,024 Total liabilities related to real estate held for sale $ 66,547 |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTES PAYABLE As of December 31, 2015 and 2014 , the Company’s notes payable, including notes payable related to real estate held for sale, consisted of the following (dollars in thousands): Book Value as of December 31, 2015 Book Value as of December 31, 2014 Contractual Interest Rate as of December 31, 2015 (1) Effective Interest Rate as of December 31, 2015 (1) Payment Type Maturity Date (2) Amended and Restated Portfolio Revolving Loan Facility (3) $ 75,438 $ 75,438 One-month LIBOR + 1.80% 3.1% Interest Only 06/21/2017 Union Bank Plaza Mortgage Loan (4) 105,000 105,000 One-month LIBOR + 1.65% 1.9% Interest Only 09/15/2016 Portfolio Mortgage Loan #1 (5) 95,033 184,733 One-month LIBOR + 2.15% 3.5% Interest Only 01/27/2016 Portfolio Mortgage Loan #3 (6) 54,000 107,640 One-month LIBOR + 2.5% Interest Only 03/01/2016 Corporate Technology Centre Mortgage Loan (7) 140,000 140,000 3.50% 3.5% (7) 04/01/2020 300-600 Campus Drive Revolving Loan (8) 78,000 78,000 One-month LIBOR + 2.05% 2.9% Interest Only 08/01/2016 Emerald View at Vista Center Mortgage Loan (9) — 19,800 One-month LIBOR + 2.25% (9) (9) (9) Fountainhead Plaza Mortgage Loan (10) — 80,000 One-month LIBOR + 1.90% (10) (10) (10) Total notes payable principal outstanding $ 547,471 $ 790,611 Deferred financing costs, net (1,394 ) (3,193 ) Total notes payable, net $ 546,077 $ 787,418 _____________________ (1) Contractual interest rate represents the interest rate in effect under the loan as of December 31, 2015 . Effective interest rate is calculated as the actual interest rate in effect as of December 31, 2015 (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, 2015 , where applicable. For further information regarding the Company’s derivative instruments, see Note 8, “Derivative Instruments.” (2) Represents the initial maturity date or the maturity date as extended as of December 31, 2015 ; subject to certain conditions, the maturity dates of certain loans may be extended beyond the maturity date shown. (3) As of December 31, 2015 , the Amended and Restated Portfolio Revolving Loan Facility was secured by 350 E. Plumeria Building and Pierre Laclede Center. (4) As of December 31, 2015 , $105.0 million of the Union Bank Plaza Mortgage Loan 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. (5) As of December 31, 2015 , Portfolio Mortgage Loan #1 was secured by Horizon Tech Center, Granite Tower and Gateway Corporate Center. On February 13, 2015, in connection with the disposition of National City Tower, the Company repaid $89.7 million of principal due under this loan and National City Tower was released as security from Portfolio Mortgage Loan #1. Subsequent to December 31, 2015, the maturity date of Portfolio Mortgage Loan #3 was extended to July 27, 2016. (6) On December 15, 2015, the Company repaid $53.6 million of the outstanding principal balance under Portfolio Mortgage Loan #3 and reduced the borrowing capacity from $107.6 million to $70.0 million . As of December 31, 2015 , the principal balance consisted of the $54.0 million non-revolving portion. The revolving portion of $16.0 million remained available for future disbursements, subject to certain terms and conditions contained in the loan documents. As of December 31, 2015 , Portfolio Mortgage Loan #3 was secured by the 100 & 200 Campus Drive Buildings and Willow Oaks Corporate Center. Subsequent to December 31, 2015, the maturity date of Portfolio Mortgage Loan #3 was extended to March 1, 2017. (7) Monthly payments are initially interest-only. Beginning on May 1, 2017 , monthly payments for the Corporate Technology Centre Mortgage Loan 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. (8) As of December 31, 2015 , the principal balance of the 300-600 Campus Drive Revolving Loan consisted of $78.0 million of the non-revolving portion. The remaining non-revolving portion of $17.0 million and the revolving portion of $25.0 million remained available for future disbursements, subject to certain terms and conditions contained in the loan documents. (9) On December 16, 2015, the Company repaid the entire outstanding principal balance due and all other sums due under this loan. (10) On December 1, 2015, the Company repaid the entire outstanding principal balance due and all other sums due under this loan. During the years ended December 31, 2015 , 2014 and 2013 , the Company incurred $22.1 million , $62.9 million and $65.7 million of interest expense, respectively. As of December 31, 2015 and 2014 , $1.5 million and $2.2 million , respectively, of interest expense were payable. Included in interest expense for the years ended December 31, 2015 , 2014 and 2013 were $2.0 million , $4.7 million and $3.3 million of amortization of deferred financing costs, respectively. Also included in interest expense for the year ended December 31, 2014 were $14.9 million of prepayment penalties. Interest expense incurred as a result of the Company’s interest rate swap agreements were $3.3 million , $11.5 million and $10.4 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. The following is a schedule of maturities, including principal amortization payments, for all notes payable outstanding as of December 31, 2015 (in thousands): 2016 $ 332,033 2017 77,218 2018 2,750 2019 2,848 2020 132,622 $ 547,471 Certain of the Company’s notes payable contain financial debt covenants. As of December 31, 2015 , the Company was in compliance with these debt covenants. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 12 Months Ended |
Dec. 31, 2015 | |
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 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. The following table summarizes the notional amount and other information related to the Company’s interest rate swaps as of December 31, 2015 and 2014 . The notional amount 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, 2015 December 31, 2014 Weighted-Average Fix Pay Rate Weighted-Average Remaining Term in Years Derivative Instruments Number of Instruments Notional Amount Number of Instruments Notional Amount Reference Rate as of December 31, 2015 Interest Rate Swaps (1) 5 $265,488 11 $596,575 One-month LIBOR/ 1.23% 0.9 _____________________ (1) During the year ended December 31, 2015 , the Company terminated four interest rate swap agreements and paid an aggregate breakage fee of $0.2 million . Also, two of the Company’s interest rate swaps expired during the year ended December 31, 2015 . As of December 31, 2015 and 2014 , none of the Company’s interest rate swaps were designated as cash flow hedges. 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, 2015 and 2014 (dollars in thousands): December 31, 2015 December 31, 2014 Derivative Instruments Balance Sheet Location Number of Instruments Fair Value Number of Fair Value Interest Rate Swaps Prepaid expenses and other assets, at fair value 2 $ 19 2 $ 122 Interest Rate Swaps Other liabilities, at fair value 3 $ (658 ) 9 $ (4,749 ) 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. Amounts in other comprehensive income (loss) will be reclassified into earnings in the periods in which earnings are affected by the hedged cash flow. The change in fair value of the ineffective portion is recognized directly in earnings. With respect to swap agreements that were terminated for which 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 is reclassified into earnings over the period of the original forecasted hedged transaction. The change in fair value of a derivative instrument that is not designated as a cash flow hedge is recorded as interest expense in the accompanying consolidated statements of operations. The following table summarizes the effects of derivative instruments on the Company’s consolidated statements of operations (in thousands): For the Years Ended December 31, 2015 2014 2013 Derivatives designated as hedging instruments (1) Amount of loss recognized on interest rate swaps (effective portion) $ 1,577 $ 7,106 $ 9,551 Unrealized losses due to hedge ineffectiveness — 3,207 — Reclassification of realized losses related to swap terminations — 521 856 1,577 10,834 10,407 Derivatives not designated as hedging instruments Realized loss recognized on interest rate swaps 3,980 763 — Unrealized gain on interest rate swaps (2,410 ) (218 ) — Losses related to swap terminations 179 130 — 1,749 675 — Increase in interest expense as a result of derivatives $ 3,326 $ 11,509 $ 10,407 _____________________ (1) All of the Company’s interest rate swap agreements were initially designated as cash flow hedges. During 2014, the Company dedesignated all of its interest rate swap instruments due to the anticipated early repayment of debt in connection with asset sales, and therefore, certain hedged forecasted transactions were no longer probable beyond the projected asset sale date. |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE DISCLOSURES | FAIR VALUE DISCLOSURES Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other financial instruments and balances at fair value on a non-recurring basis (e.g., carrying value of impaired real estate loans receivable and long-lived assets). Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories: • Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; • Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and • Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable. The fair value for certain financial instruments is derived using a combination of market quotes, pricing models and other valuation techniques that involve significant management judgment. The price transparency of financial instruments is a key determinant of the degree of judgment involved in determining the fair value of the Company’s financial instruments. Financial instruments for which actively quoted prices or pricing parameters are available and for which markets contain orderly transactions will generally have a higher degree of price transparency than financial instruments for which markets are inactive or consist of non-orderly trades. The Company evaluates several factors when determining if a market is inactive or when market transactions are not orderly. The following is a summary of the methods and assumptions used by management in estimating the fair value of each class of assets and liabilities for which it is practicable to estimate the fair value: Cash and cash equivalents, rent and other receivables, and accounts payable and accrued liabilities: These balances approximate their fair values due to the short maturities of these items. Real estate loans receivable: The Company’s real estate loans receivable are presented in the accompanying consolidated balance sheets at their amortized cost net of recorded loan loss reserves and not at fair value. The fair values of real estate loans receivable were estimated using an internal valuation model that considered the expected cash flows for the loans, underlying collateral values (for collateral-dependent loans) and estimated yield requirements of institutional investors for loans with similar characteristics, including remaining loan term, loan-to-value, type of collateral and other credit enhancements. The Company classifies these inputs as Level 3 inputs. Derivative instruments: The Company’s derivative instruments are presented at fair value on the accompanying consolidated balance sheets. The valuation of these instruments is determined 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, 2015 and 2014 , which carrying amounts do not generally approximate the fair values (in thousands): December 31, 2015 December 31, 2014 Face Value Carrying Amount Fair Value Face Value Carrying Amount Fair Value Financial assets: Real estate loans receivable $ 14,201 $ 14,210 $ 14,574 $ 72,908 $ 72,940 $ 73,414 Financial liabilities: Notes payable $ 547,471 $ 546,077 $ 549,129 $ 790,611 $ 787,418 $ 794,439 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. Low levels of transaction volume for certain financial instruments 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, 2015 , the Company measured the following assets and liabilities at fair value (in thousands): Fair Value Measurements Using Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Recurring Basis: Asset derivatives $ 19 $ — $ 19 $ — Liability derivatives (658 ) — (658 ) — During the year ended December 31, 2015 , the Company measured the following asset at fair value on a nonrecurring basis (in thousands): Fair Value Measurements Using Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Nonrecurring Basis: Impaired real estate (1) $ 140,747 $ — $ — $ 140,747 _____________________ (1) Amount represents the fair value for a real estate asset impacted by an impairment charge during the year, as of the date that the fair value measurement was made. The carrying value for the real estate asset may have subsequently increased or decreased from the fair value reflected due to activity that has occurred since the measurement date. During the year ended December 31, 2015 , one of the Company’s real estate properties was measured at estimated fair value as this property was impaired and the carrying value was adjusted as a result of changes in cash flow estimates. See Note 3, “Real Estate — Impairment of Real Estate.” |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS The Company has entered into the Advisory Agreement with the Advisor. This agreement entitles the Advisor to specified fees upon the provision of certain services with regard to the management of the Company’s investments, among other services, and the disposition of investments, as well as reimbursement of 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 AIP 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., KBS Strategic Opportunity REIT II, Inc. and KBS Growth & Income REIT, 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 such insurance 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 program, 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. In June 2015, KBS Growth & Income REIT, Inc. was added to the insurance program at terms similar to those described above. During the years ended December 31, 2015 , 2014 and 2013 , no other business 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., KBS Strategic Opportunity REIT II, Inc. and KBS Growth & Income REIT, 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, 2015 , 2014 and 2013 , respectively, and any related amounts payable as of December 31, 2015 and 2014 (in thousands): Incurred Years Ended December 31, Payable as of December 31, 2015 2014 2013 2015 2014 Expensed Asset management fees $ 12,082 $ 18,641 $ 23,524 $ — $ — Reimbursement of operating expenses (1) 197 256 168 49 38 Acquisition fees — — 1,797 — — Disposition fees (2) 1,239 16,201 1,143 — — $ 13,518 $ 35,098 $ 26,632 $ 49 $ 38 _____________________ (1) Reimbursable operating expenses primarily consists of internal audit personnel costs, accounting software and cybersecurity related expenses incurred by the Advisor under the Advisory Agreement. The Company has reimbursed 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 $157,000 , $142,000 and $145,000 for the years ended December 31, 2015 , 2014 and 2013 , respectively, and were the only type of employee costs reimbursed under the Advisory Agreement for the years ended December 31, 2015 , 2014 and 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. (2) Disposition fees with respect to real estate sold are included in the gain on sale of real estate, net 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 loans receivable in the accompanying consolidated statements of operations. On July 29, 2010, the Company, through an indirect wholly owned subsidiary, KBSII 300 North LaSalle, LLC (the “Owner”), purchased the 300 N. LaSalle Building. On May 16, 2014, after a competitive bidding process overseen by HFF, Inc., an unaffiliated independent third party, the Owner entered into a purchase and sale agreement and escrow instructions for the sale of the 300 N. LaSalle Building to an affiliate of the Irvine Company, 300 North LaSalle LLC (the “Purchaser”). Donald Bren is the chairman and owner of the Purchaser and the Irvine Company and the brother of Peter Bren (one of the Company’s executive officers and sponsors). On July 7, 2014, the Company completed the sale of the 300 N. LaSalle Building to the Purchaser for $850.0 million . The Company’s conflicts committee, composed of all of the Company’s independent directors, approved the purchase and disposition of the 300 N. LaSalle Building. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2015 | |
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, asset management fees, 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 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 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, asset management fees 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. During the year ended December 31, 2014, the Company revised its definition of NOI to exclude asset management fees, which the Company does not consider to be controllable in connection with the management of each property or real estate-related asset and is viewed by the chief operating decision makers as a corporate-level administrative expense. NOI for all prior periods presented has been adjusted to conform to the current period definition. The following tables summarize total revenues and NOI for each reportable segment for the years ended December 31, 2015 , 2014 and 2013 and total assets and total liabilities for each reportable segment as of December 31, 2015 and 2014 (in thousands): For the Years Ended December 31, 2015 2014 2013 Revenues: Real estate segment (1) $ 160,743 $ 265,705 $ 330,195 Real estate-related segment 4,552 12,742 30,439 Total segment revenues 165,295 278,447 360,634 Corporate-level — 953 — Total revenues $ 165,295 $ 279,400 $ 360,634 Interest Expense: Real estate segment (1) $ 22,115 $ 61,951 $ 60,754 Real estate-related segment — 993 4,421 Total segment interest expense 22,115 62,944 65,175 Corporate-level — — 512 Total interest expense $ 22,115 $ 62,944 $ 65,687 NOI: Real estate segment (1) $ 82,043 $ 108,663 $ 152,905 Real estate-related segment 4,540 11,698 25,971 Total segment NOI 86,583 120,361 178,876 Corporate-level — 940 — Total NOI $ 86,583 $ 121,301 $ 178,876 As of December 31, 2015 2014 Assets: Real estate segment $ 1,289,290 $ 1,314,927 Real estate-related segment 14,764 73,457 Total segment assets 1,304,054 1,388,384 Real estate held for sale — 97,841 Corporate-level (2) 60,476 168,098 Total assets $ 1,364,530 $ 1,654,323 Liabilities: Real estate segment $ 591,260 $ 771,109 Real estate-related segment 6 2 Total segment liabilities 591,266 771,111 Real estate held for sale — 66,547 Corporate-level (3) 5,334 7,138 Total liabilities $ 596,600 $ 844,796 _____________________ (1) Amounts include properties sold. See Note 6, “Real Estate Sales” for more information. (2) Total corporate-level assets consisted primarily of cash and cash equivalents of approximately $60.2 million and $167.8 million as of December 31, 2015 and 2014 , respectively. (3) As of December 31, 2015 and 2014 , 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, 2015 , 2014 and 2013 (in thousands): Years Ended December 31, 2015 2014 2013 Net income $ 18,377 $ 445,507 $ 55,779 Gain on sales of real estate, net (27,421 ) (441,640 ) — Loss on sale of marketable securities — 331 — Other interest income (293 ) (209 ) (46 ) Gain on payoff or sale of real estate loan receivable — — (29,073 ) Asset management fees to affiliate 12,082 18,641 23,524 Real estate acquisition fees to affiliates — — 1,797 Real estate acquisition fees and expenses — — 623 General and administrative expenses 4,485 5,082 4,982 Depreciation and amortization 56,271 77,988 120,778 Impairment charge on real estate 23,082 15,601 — Corporate-level interest expense — — 512 NOI $ 86,583 $ 121,301 $ 178,876 |
SELECTED QUARTERLY FINANCIAL DA
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015 and 2014 (in thousands, except per share amounts): 2015 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 43,930 $ 41,203 $ 41,013 $ 39,149 Net income (loss) 27,532 3,479 (15,743 ) 3,109 Net income (loss) per common share, basic and diluted 0.14 0.02 (0.08 ) 0.02 Distributions declared per common share 0.072 0.073 0.074 0.074 2014 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 92,455 $ 82,716 $ 55,594 $ 48,635 Net income 10,428 59,719 308,131 67,229 Net income per common share, basic and diluted 0.05 0.31 1.61 0.36 Distributions declared per common share 0.160 0.162 4.644 0.100 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2015 | |
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 disposition of real estate and real estate-related investments; management of the daily operations of the Company’s real estate and real estate-related investment portfolio; and other general and administrative responsibilities. In the event the Advisor is unable to provide any of these services, the Company will be required to obtain such services from other sources. Environmental As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. Compliance with existing environmental laws is not expected to have a material adverse effect on the Company’s financial condition and results of operations as of December 31, 2015 . 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, 2015 | |
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 4, 2016, the Company paid distributions of $4.7 million , which related to distributions declared for December 2015 in the amount of $0.02488493 per share of common stock to stockholders of record as of the close of business on December 21, 2015. On February 1, 2016, the Company paid distributions of $4.5 million , which related to distributions declared for January 2016 in the amount of $0.02380055 per share of common stock to stockholders of record as of the close of business on January 26, 2016. On March 1, 2016, the Company paid distributions of $4.2 million , which related to distributions declared for February 2016 in the amount of $0.02226503 per share of common stock to stockholders of record as of the close of business on February 19, 2016. Distributions Declared On March 11, 2016, the Company’s board of directors declared a March 2016 distribution in the amount of $0.02380055 per share of common stock to stockholders of record as of the close of business on March 21, 2016, which the Company expects to pay in April 2016, and an April 2016 distribution in the amount of $0.02303279 per share of common stock to stockholders of record as of the close of business on April 20, 2016, which the Company expects to pay in May 2016. |
SCHEDULE III REAL ESTATE ASSETS
SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION | 12 Months Ended |
Dec. 31, 2015 | |
SEC Schedule III, 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 Percent Encumbrances Land Building and Improvements (1) Total Cost Capitalized Subsequent to Acquisition (2) Land Building and Improvements (1) Total (3) Accumulated Depreciation and Amortization Original Date of Construction Date Acquired 100 & 200 Campus Drive Buildings Florham Park, NJ 100% (4) $ 10,700 $ 188,509 $ 199,209 $ (63,283 ) $ 9,461 $ 126,465 $ 135,926 $ (1,634 ) 1988/1989 09/09/2008 300-600 Campus Drive Buildings Florham Park, NJ 100% 78,000 9,717 185,445 195,162 (42,023 ) 9,121 144,018 153,139 (4,884 ) 1997/1999 10/10/2008 350 E. Plumeria Building San Jose, CA 100% (5) 11,290 24,819 36,109 559 11,290 25,378 36,668 (7,927 ) 1984/2008 12/18/2008 Willow Oaks Corporate Center Fairfax, VA 100% (4) 25,300 87,802 113,102 (15,378 ) 25,300 72,424 97,724 (13,639 ) 1986/1989/2003 08/26/2009 Pierre Laclede Center Clayton, MO 100% (5) 15,200 61,507 76,707 (3,478 ) 15,200 58,029 73,229 (3,409 ) 1964/1970 02/04/2010 Horizon Tech Center San Diego, CA 100% (6) 7,900 29,237 37,137 (8,760 ) 7,900 20,477 28,377 (735 ) 2009 06/17/2010 Union Bank Plaza Los Angeles, CA 100% 105,000 24,000 190,232 214,232 (27,802 ) 24,000 162,430 186,430 (6,784 ) 1967 09/15/2010 Emerald View at Vista Center West Palm Beach, FL 100% — 5,300 28,455 33,755 (2,454 ) 5,300 26,001 31,301 (5,485 ) 2007 12/09/2010 Granite Tower Denver, CO 100% (6) 8,850 141,438 150,288 4,887 8,850 146,325 155,175 (31,651 ) 1983 12/16/2010 Gateway Corporate Center Sacramento, CA 100% (6) 6,380 38,946 45,326 (212 ) 6,380 38,734 45,114 (9,130 ) 2008/2009 01/26/2011 Fountainhead Plaza Tempe, AZ 100% — 12,300 123,700 136,000 (16,616 ) 12,300 107,084 119,384 (6,840 ) 2011 09/13/2011 Corporate Technology Centre San Jose, CA 100% 140,000 71,160 159,712 230,872 (1,577 ) 71,160 158,135 229,295 (21,342 ) 1999/2001 3/28/2013 TOTAL $ 208,097 $ 1,259,802 $ 1,467,899 $ (176,137 ) $ 206,262 $ 1,085,500 $ 1,291,762 $ (113,460 ) ____________________ (1) Building and improvements includes tenant origination and absorption costs. (2) Costs capitalized subsequent to acquisition is net of impairments and write-offs of fully depreciated/amortized assets. (3) The aggregate cost of real estate for federal income tax purposes was $1.6 billion as of December 31, 2015 . (4) These properties are security for the Portfolio Mortgage Loan #3, which had an outstanding principal balance of $54.0 million as of December 31, 2015 . (5) These properties are security for the Amended and Restated Portfolio Revolving Loan Facility, which had an outstanding principal balance of $75.4 million as of December 31, 2015 . (6) These properties are security for the Portfolio Mortgage Loan #1, which had an outstanding principal balance of $95.0 million as of December 31, 2015 . 2015 2014 2013 Real Estate Balance at the beginning of the year $ 1,507,291 $ 2,798,082 $ 2,562,193 Acquisitions — — 230,872 Improvements 30,440 34,692 30,607 Write-off of fully depreciated and fully amortized assets (15,670 ) (29,280 ) (25,590 ) Impairments (114,128 ) (73,963 ) — Sales (116,171 ) (1,222,240 ) — Balance at the end of the year $ 1,291,762 $ 1,507,291 $ 2,798,082 Accumulated depreciation and amortization Balance at the beginning of the year $ 190,624 $ 362,822 $ 270,538 Depreciation and amortization expense 53,429 75,292 117,874 Write-off of fully depreciated and fully amortized assets (15,670 ) (29,280 ) (25,590 ) Impairments (92,341 ) (59,560 ) — Sales (22,582 ) (158,650 ) — Balance at the end of the year $ 113,460 $ 190,624 $ 362,822 |
SUMMARY OF SIGNIFICANT ACCOUN23
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
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. During the year ended December 31, 2015 , the Company sold one office property. As a result, certain assets and liabilities were reclassified to held for sale on the consolidated balance sheets for all periods presented. Additionally, as of December 31, 2015 , the Company reclassified two properties that were previously classified as held for sale to held for investment. During the year ended December 31, 2015 , the Company elected to early adopt ASU No. 2015-03 (defined below). As a result, the Company has reclassified debt issuance costs associated with a debt liability from prepaid expenses and other assets to notes payable, net on the consolidated balance sheets 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 loan 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 a loan 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 reserve for any unpaid accrued interest and generally will not recognize subsequent interest income until the cash is received, or the loan returns to accrual status. |
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 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. |
Real Estate, Real Estate Held for Sale and Discontinued Operations | The Company generally considers real estate to be “held for sale” when the following criteria are met: (i) management commits to a plan to sell the property, (ii) the property is available for sale immediately, (iii) the property is actively being marketed for sale at a price that is reasonable in relation to its current fair value, (iv) the sale of the property within one year is considered probable and (v) significant changes to the plan to sell are not expected. Real estate that is held for sale and its related assets are classified as “real estate held for sale” and “assets related to real estate held for sale,” respectively, for all periods presented in the accompanying consolidated financial statements. Notes payable and other liabilities related to real estate held for sale are classified as “notes payable related to real estate held for sale” and “liabilities related to real estate held for sale,” respectively, for all periods presented in the accompanying consolidated financial statements. Real estate classified as held for sale is no longer depreciated and is reported at the lower of its carrying value or its estimated fair value less estimated costs to sell. Additionally, with respect to properties that were classified as held for sale in financial statements prior to January 1, 2014, the Company records the operating results as discontinued operations for all periods presented if the operations have been or are expected to be eliminated and the Company will not have any significant continuing involvement in the operations of the property following the sale. Operating results of properties that were disposed of or classified as held for sale in the ordinary course of business during the years ended December 31, 2015 and 2014 that had not been classified as held for sale in financial statements prior to January 1, 2014 are included in continuing operations on the Company’s consolidated statements of operations. |
Change in a Plan to Sell | When real estate is initially considered “held for sale” it is measured at the lower of its depreciated book value or estimated fair value less estimated costs to sell. Changes in the market may compel the Company to decide to reclassify a property that was designated as held for sale to held for investment. A property that is reclassified from held for sale to held for investment is measured and recorded at the lower of (i) its carrying amount before the property was classified as held for sale, adjusted for any depreciation and amortization expense that would have been recognized had the property been continuously classified as held and used, or (ii) its fair value at the date of the subsequent decision not to sell. Any adjustment to the carrying amount of the property as a result of the reclassification is included in income from continuing operations as an impairment charge on real estate held for investment. |
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, 2015 , 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, 2015 , 2014 and 2013 . 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 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. 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. |
Marketable Securities | The Company classifies its investments in marketable securities as available-for-sale, since the Company may sell them prior to their maturity but does not hold them principally for the purpose of making frequent investments and sales with the objective of generating profits on short-term differences in price. These investments are carried at estimated fair value, with unrealized gains and losses reported in accumulated other comprehensive income (loss). Estimated fair values are generally based on quoted market prices, when available, or on estimates provided by independent pricing sources or dealers who make markets in such securities. In certain circumstances, such as when the market for the securities becomes inactive, the Company may determine it is appropriate to perform an internal valuation of the securities. Upon the sale of a security, the previously recognized unrealized gain (loss) is reversed out of accumulated other comprehensive income (loss) and the actual realized gain (loss) is recognized in earnings. On a quarterly basis, the Company evaluates its marketable securities for other-than-temporary impairment. The Company reviews the projected future cash flows from these securities for changes in assumptions due to prepayments, credit loss experience and other factors. If, based on the Company’s quarterly estimate of cash flows, there has been an adverse change in the estimated cash flows from the cash flows previously estimated, the present value of the revised cash flows is less than the present value previously estimated, and the fair value of the securities is less than their amortized cost basis, an other-than-temporary impairment is deemed to have occurred. The Company recognizes interest income on marketable securities that are beneficial interests in securitized financial assets and are rated “AA” and above on an accrual basis according to the contractual terms of the securities. Discounts or premiums are amortized to interest income over the life of the investment using the interest method. The Company recognizes interest income on marketable securities that are beneficial interests in securitized financial assets that are rated below “AA” using the effective yield method, which requires the Company to periodically project estimated cash flows related to these securities and recognize interest income at an interest rate equivalent to the estimated yield on the security, as calculated using the security’s estimated cash flows and amortized cost basis, or reference amount. Changes in the estimated cash flows are recognized through an adjustment to the yield on the security on a prospective basis. Projecting cash flows for these types of securities requires significant judgment, which may have a significant impact on the timing of revenue recognized on these investments. The Company is required to distinguish between other-than-temporary impairments related to credit and other-than-temporary impairments related to other factors (e.g., market fluctuations) on its debt securities that it does not intend to sell and where it is not likely that the Company will be required to sell the security prior to the anticipated recovery of its amortized cost basis. The Company calculates the credit component of the other-than-temporary impairment as the difference between the amortized cost basis of the security and the present value of its estimated cash flows discounted at the yield used to recognize interest income. The credit component will be charged to earnings and the component related to other factors is recorded to other comprehensive income (loss). |
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, 2015 . 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. |
Rents and Other Receivables | The Company periodically evaluates the collectibility of amounts due from tenants and maintains an allowance for doubtful accounts for estimated losses resulting from the inability of tenants to make required payments under lease agreements. In addition, the Company maintains an allowance for deferred rent receivable that arises from the straight-lining of rents. The Company exercises judgment in establishing these allowances and considers payment history and current credit status of its tenants in developing these estimates. |
Derivative Instruments | The Company enters into derivative instruments for risk management purposes to hedge its exposure to cash flow variability caused by changing interest rates on its variable rate notes payable. The Company records these derivative instruments at fair value on the accompanying consolidated balance sheets. Derivative instruments designated and qualifying as a hedge of the exposure to variability in expected future cash flows or other types of forecasted transactions are considered cash flow hedges. The change in fair value of the effective portion of a derivative instrument that is designated as a cash flow hedge is recorded as other comprehensive income (loss) in the accompanying consolidated statements of comprehensive income (loss) and consolidated statements of stockholders’ 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 and are presented on the balance sheet as a direct deduction from the carrying value of the associated debt liability. 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. Deferred financing costs incurred before an associated debt liability is recognized are included in prepaid and other assets on the balance sheet. 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. |
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 had a dividend reinvestment plan (the “DRP”) through which its stockholders were able to 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 announced an updated estimated value per share, participants in the DRP were able to 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, 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, the purchase price per share under the DRP was $9.78 . On May 15, 2014, the Company’s board of directors approved the termination of the DRP, which termination was effective May 29, 2014. |
Redeemable Common Stock | • During each calendar year, special redemptions are limited to an annual dollar amount determined by the board of directors, which may be reviewed during the year and increased or decreased upon ten business days’ notice to the Company’s stockholders. The dollar limitation for calendar year 2015 was $10.0 million . On December 8, 2015, the Company’s board of directors approved the dollar amount limitation for special redemptions for calendar year 2016 of $10.0 million in the aggregate, as may be reviewed and adjusted from time to time by the board of directors. • 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. If the Company cannot repurchase all shares presented for redemption in any month because of the limitations on redemptions set forth in the Company’s share redemption program, then it will honor redemption requests on a pro rata basis, except that if a pro rata redemption would result in a stockholder owning less than the minimum purchase requirement described in the Company’s currently effective, or its most recently effective, registration statement as such registration statement has been amended or supplemented, then the Company would redeem all of such stockholder’s shares. Pursuant to the share redemption program, redemptions made in connection with special redemptions 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 Company does not currently expect to have funds available for ordinary redemptions in the future. On December 4, 2014, the Company’s board of directors approved an estimated value per share of the Company’s common stock of $5.86 (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, 2014. The change in the redemption price became effective for the December 2014 redemption date, which was December 31, 2014. On December 8, 2015, the Company’s board of directors approved an estimated value per share of the Company’s common stock of $5.62 (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, 2015. The change in the redemption price became effective for the December 2015 redemption date, which was December 31, 2015, and will be effective until the estimated value per share is updated. The estimated value per share was based upon the recommendation and valuation prepared by the Advisor and was performed in accordance with the provisions of and also to comply with Practice Guideline 2013-01, Valuations of Publicly Registered Non-Listed REITs, issued by the Investment Program Association (“IPA”) in April 2013 (the “IPA Valuation Guidelines”). 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 using different assumptions and estimates could derive a different estimated value per share of the Company’s common stock and this difference could be significant. The estimated value per share is not audited and does not represent the fair value of the Company’s assets less the fair value of the Company’s liabilities according to GAAP, nor does it represent a liquidation value of the Company’s assets and liabilities or the price at which the Company’s shares of common stock would trade 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 under contract to sell, debt prepayment penalties or swap breakage fees that could apply upon the prepayment of certain of the Company’s debt obligations or termination of related swap agreements prior to expiration 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 fluctuations in 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 no later than December 2016. The Company’s board of directors may amend, suspend or terminate the share redemption program with 30 days’ notice to its stockholders, provided that the Company may increase or decrease the funding available for the redemption of shares under the program upon ten business days’ notice to stockholders. The Company may provide this notice by (a) 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 (b) 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. Pursuant to the share redemption program, effective for redemptions on or after June 18, 2014, the maximum amount redeemable under the Company’s share redemption program is limited to an annual dollar amount determined by Company’s board of directors, as described 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 amounts available for future redemptions in future periods 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. For the year ended December 31, 2015 , the Company redeemed 1,005,418 shares sold in the Offering for $5.8 million , which represented all redemption requests received in good order and eligible for redemption as special redemptions under the share redemption program through the December 2015 redemption date. |
Related Party Transactions | The Company has entered into the Advisory Agreement with the Advisor. This agreement entitles the Advisor to specified fees upon the provision of certain services with regard to the management of the Company’s investments, among other services, and the disposition of investments, as well as reimbursement of 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 (“AIP 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., KBS Strategic Opportunity REIT II, Inc. and KBS Growth & Income REIT, Inc. The Company records all related party fees as incurred, subject to any limitations described in the Advisory Agreement. |
Related Party Transactions, Acquisition and Origination Fees | The Company paid 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 paid 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 used to fund the acquisition or origination of these loans. The Company did not pay an acquisition fee with respect to investments in loans. |
Related Party Transactions, Operating Expenses | Under the Advisory Agreement, the Advisor has the right to seek reimbursement from the Company for all costs and expenses it incurs in connection with the provision of services to the Company, including the Company’s allocable share of the Advisor’s overhead, such as rent, employee costs, accounting software and cybersecurity costs. Commencing July 1, 2010, the Company has reimbursed the Advisor for the Company’s allocable portion of the salaries, benefits and overhead of internal audit department personnel providing services to the Company. In the future, the Advisor may seek reimbursement for additional employee costs. The Company will not reimburse the Advisor 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 and benefits the Advisor or its affiliates may pay to the Company’s executive officers. |
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 or 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, 2015 , 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 continue 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, 2015 , 2014 and 2013 . As of December 31, 2015 , returns for the calendar years 2011 through 2014 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, 2015 , 2014 and 2013 , respectively. Distributions declared per common share were $0.293 in the aggregate for the year ended December 31, 2015. Distributions per common share were based on a monthly record date for each month during the period commencing January 2015 through December 2015. Distributions declared per common share were $5.066 in the aggregate for the year ended December 31, 2014. Distributions declared per common share were based on daily record dates for each day during the period commencing January 1, 2014 through August 31, 2014. Distributions declared per common share assumes each share was issued and outstanding each day during this period. For each day that was a record date for distributions during this period, distributions were calculated at a rate of $0.00178082 per share per day. For the period from September 2014 through December 2014, the Company’s board of directors declared monthly distributions based on a monthly record date for the months of September 2014 through December 2014. Additionally, the Company’s board of directors declared special distributions in the amounts of $3.75 , $0.30 and $0.45 per share on the outstanding shares of the Company’s common stock on July 8, 2014, August 5, 2014 and August 29, 2014, respectively, for an aggregate amount of $4.50 per share of common stock, all to stockholders of record as of the close of business on September 15, 2014. Distributions declared per common share were $0.704 for the year ended December 31, 2013. Distributions declared per common share assumes each share was issued and outstanding each day during the year ended December 31, 2013. For each day that was record date for distributions during the year ended December 31, 2013, distributions were based on a daily record dates and calculated at a rate of $0.00178082 per share per day. Each day during the period from January 1, 2013 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 11, “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 May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU No. 2014-09”). ASU No. 2014-09 requires an entity to recognize the revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. ASU No. 2014-09 supersedes the revenue requirements in Revenue Recognition (Topic 605) and most industry-specific guidance throughout the Industry Topics of the Codification. ASU No. 2014-09 does not apply to lease contracts within the scope of Leases (Topic 840). ASU No. 2014-09 was to be effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and is to be applied retrospectively, with early application not permitted. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (“ASU No. 2015-14”), which defers the effective date of ASU No. 2014-09 by one year. Early adoption is permitted but not before the original effective date. The Company is still evaluating the impact of adopting ASU No. 2014-09 on its financial statements, but does not expect the adoption of ASU No. 2014-09 to have a material impact on its financial statements. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements (Subtopic 205-40) , Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU No. 2014-15”). The amendments in ASU No. 2014-15 require management to evaluate, for each annual and interim reporting period, whether there are conditions or events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or are available to be issued when applicable) and, if so, provide related disclosures. ASU No. 2014-15 is effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early adoption is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. The Company does not expect the adoption of ASU No. 2014-15 to have a significant impact on its financial statements. In January 2015, the FASB issued ASU No. 2015-01, Income Statement - Extraordinary and Unusual Items (Subtopic 225-20), Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items (“ASU No. 2015-01”). The amendments in ASU No. 2015-01 eliminate from GAAP the concept of extraordinary items. Although the amendments will eliminate the requirements in Subtopic 225-20 for reporting entities to consider whether an underlying event or transaction is extraordinary, the presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and will be expanded to include items that are both unusual in nature and infrequently occurring. ASU No. 2015-01 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The Company does not expect the adoption of ASU No. 2015-01 to have a significant impact on its financial statements. In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs (“ASU No. 2015-03”). The amendments in ASU No. 2015-03 require debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. ASU No. 2015-03 is limited to the presentation of debt issuance costs and does not affect the recognition and measurement of debt issuance costs. Given the absence of authoritative guidance within ASU No. 2015-03 for debt issuance costs related to line-of-credit arrangements, in August 2015, the FASB issued ASU No. 2015-15, Interest - Imputation of Interest (Subtopic 835-30), Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements (“ASU No. 2015-15”), which clarifies ASU No. 2015-03 by stating that the staff of the SEC would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. ASU No. 2015-03 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015 and is to be applied retrospectively. Early adoption is permitted for financial statements that have not been previously issued. The Company elected to early adopt ASU No. 2015-03 for the reporting period ending December 31, 2015. As a result of adoption of ASU No. 2015-03, the Company reclassified debt issuance costs associated with a debt liability from prepaid expenses and other assets to notes payable, net on the accompanying consolidated balance sheets. All periods presented have been retroactively adjusted. In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805), Simplifying the Accounting for Measurement-Period Adjustments (“ASU No. 2015-16”). The amendments in ASU No. 2015-16 require that in a business combination, an acquirer recognizes adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. ASU No. 2015-16 is effective for annual periods beginning after December 15, 2015, and interim periods within those fiscal years and is to be applied prospectively. Early adoption is permitted for financial statements that have not been previously issued. The Company does not expect the adoption of ASU No. 2015-16 to have a significant impact on its financial statements. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU No. 2016-01”). The amendments in ASU No. 2016-01 address certain aspects of recognition, measurement, presentation and disclosure of financial instruments. ASU No. 2016-01 primarily affects accounting for equity investments and financial liabilities where the fair value option has been elected. ASU No. 2016-01 also requires entities to present financial assets and financial liabilities separately, grouped by measurement category and form of financial asset in the balance sheet or in the accompanying notes to the financial statements. ASU No. 2016-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. Early application is permitted for financial statements that have not been previously issued. The Company does not expect the adoption of ASU No. 2016-01 to have a significant impact on its financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU No. 2016-02”). The amendments in ASU No. 2016-02 changes the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU No. 2016-02 is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption of ASU No. 2016-02 as of its issuance is permitted. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company is currently evaluating the impact of adopting the new leases standard on its consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN24
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015 | |
Real Estate [Abstract] | |
Schedule of Real Estate Investments | The following table summarizes the Company’s real estate portfolio as of December 31, 2015 (in thousands): Property Date Acquired City State Property Type Total Real Estate at Cost (1) Accumulated Depreciation and Amortization (1) Total Real Estate, Net (1) 100 & 200 Campus Drive Buildings 09/09/2008 Florham Park NJ Office $ 135,926 $ (1,634 ) $ 134,292 300-600 Campus Drive Buildings 10/10/2008 Florham Park NJ Office 153,139 (4,884 ) 148,255 350 E. Plumeria Building 12/18/2008 San Jose CA Office/Flex 36,668 (7,927 ) 28,741 Willow Oaks Corporate Center 08/26/2009 Fairfax VA Office 97,724 (13,639 ) 84,085 Pierre Laclede Center 02/04/2010 Clayton MO Office 73,229 (3,409 ) 69,820 Horizon Tech Center 06/17/2010 San Diego CA Office 28,377 (735 ) 27,642 Union Bank Plaza 09/15/2010 Los Angeles CA Office 186,430 (6,784 ) 179,646 Emerald View at Vista Center 12/09/2010 West Palm Beach FL Office 31,301 (5,485 ) 25,816 Granite Tower 12/16/2010 Denver CO Office 155,175 (31,651 ) 123,524 Gateway Corporate Center 01/26/2011 Sacramento CA Office 45,114 (9,130 ) 35,984 Fountainhead Plaza 09/13/2011 Tempe AZ Office 119,384 (6,840 ) 112,544 Corporate Technology Centre 03/28/2013 San Jose CA Office 229,295 (21,342 ) 207,953 $ 1,291,762 $ (113,460 ) $ 1,178,302 _____________________ (1) Amounts presented are net of impairment charges. |
Schedules of Concentration of Risk, by Risk Factor | As of December 31, 2015 , the following properties represented more than 10% of the Company’s total assets: Property Location Rentable Square Feet Total Real Estate, Net (in thousands) Percentage of Total Assets Annualized Base Rent (in thousands) (1) Average Annualized Base Rent per sq. ft. Occupancy Corporate Technology Centre San Jose, CA 610,083 $ 207,953 15.2 % $ 18,537 $ 30.38 100 % Union Bank Plaza Los Angeles, CA 627,334 179,646 13.2 % 22,677 39.48 92 % 300-600 Campus Drive Buildings Florham Park, NJ 578,366 148,255 10.9 % 17,196 30.51 97 % _____________________ (1) Annualized base rent represents annualized contractual base rental income as of December 31, 2015 , 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, 2015 , the Company had over 250 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 Base Rent (1) (in thousands) Percentage of Annualized Base Rent Finance 31 $ 30,185 22.2 % Computer System Design & Programming 9 22,250 16.4 % Legal Services 37 14,195 10.5 % Mining, Oil & Gas Extraction 4 13,985 10.3 % $ 80,615 59.4 % _____________________ (1) Annualized base rent represents annualized contractual base rental income as of December 31, 2015 , 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, 2015 , the Company had a concentration of credit risk related to the following tenant lease that represented more than 10% of the Company’s annualized base rent: Annualized Base Rent Statistics Tenant Property Tenant Industry Square Feet % of Portfolio (Net Rentable Sq. Ft.) Annualized Base Rent (in thousands) (1) % of Portfolio Annualized Base Rent Annualized Base Rent per Sq. Ft. Lease Expiration (2)(3) Union Bank Union Bank Plaza Finance 408,260 9.0% $ 16,742 12.3% $ 41.01 9/30/2016 / _____________________ (1) Annualized base rent represents annualized contractual base rental income as of December 31, 2015 , 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. (2) Represents the expiration date of the lease as of December 31, 2015 and does not take into account any tenant renewal or termination options. (3) Of the 408,260 rentable square feet occupied by the tenant, a total of 33,602 rentable square feet will expire on September 30, 2016. |
Schedule of Future Minimum Rental Income for Company's Properties | As of December 31, 2015 , the future minimum rental income from the Company’s properties under non-cancelable operating leases was as follows (in thousands): 2016 $ 127,820 2017 123,438 2018 117,116 2019 103,029 2020 97,895 Thereafter 354,275 $ 923,573 |
TENANT ORIGINATION AND ABSORP26
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015 and 2014 , 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 Absorption Costs Above-Market Lease Assets Below-Market Lease Liabilities 2015 2014 2015 2014 2015 2014 Cost $ 76,132 $ 109,378 $ 15,375 $ 17,281 $ (20,436 ) $ (24,917 ) Accumulated amortization (31,020 ) (49,302 ) (7,779 ) (7,010 ) 14,866 16,013 Net amount $ 45,112 $ 60,076 $ 7,596 $ 10,271 $ (5,570 ) $ (8,904 ) |
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, 2015 and 2014 were as follows (in thousands): Tenant Origination and Absorption Costs Above-Market Lease Assets Below-Market Lease Liabilities For the Years Ended December 31, For the Years Ended December 31, For the Years Ended December 31, 2015 2014 2013 2015 2014 2013 2015 2014 2013 Amortization $ (13,808 ) $ (24,236 ) $ (41,151 ) $ (2,722 ) $ (7,953 ) $ (9,673 ) $ 3,402 $ 6,695 $ 7,424 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The remaining unamortized balance for these outstanding intangible assets and liabilities as of December 31, 2015 will be amortized for the years ending December 31 as follows (in thousands): Tenant Origination and Absorption Costs Above-Market Lease Assets Below-Market Lease Liabilities 2016 $ (11,498 ) $ (2,510 ) $ 2,629 2017 (10,067 ) (2,457 ) 1,587 2018 (6,955 ) (1,978 ) 955 2019 (4,437 ) (154 ) 178 2020 (4,214 ) (154 ) 110 Thereafter (7,941 ) (343 ) 111 $ (45,112 ) $ (7,596 ) $ 5,570 Weighted-Average Remaining Amortization Period 5.3 years 3.4 years 2.7 years |
REAL ESTATE LOANS RECEIVABLE (T
REAL ESTATE LOANS RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Receivables [Abstract] | |
Schedule of Real Estate Loans Receivable | As of December 31, 2015 and 2014 , the Company, through indirect wholly owned subsidiaries, had invested in or originated real estate loans receivable as follows (dollars in thousands): Loan Name Location of Related Property or Collateral Date Acquired/ Originated Property Type Loan Type Outstanding Principal Balance as of December 31, 2015 (1) Book Value as of December 31, 2015 (2) Book Value as of December 31, 2014 (2) Contractual Interest Rate (3) Annualized Effective Interest Rate (3) Maturity Date Sheraton Charlotte Airport Hotel First Mortgage Charlotte, North Carolina 07/11/2011 Hotel Mortgage $ 14,201 $ 14,210 $ 14,353 7.5% 7.6% 08/01/2018 Summit I & II First Mortgage (4) Reston, Virginia 01/17/2012 Office Mortgage — — 58,587 (4) (4) (4) $ 14,201 $ 14,210 $ 72,940 _____________________ (1) Outstanding principal balance as of December 31, 2015 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 2015, using the interest method, annualized and divided by the average amortized cost basis of the investment during 2015. The contractual interest rate and annualized effective interest rate presented are as of December 31, 2015 . (4) On August 4, 2015, the borrower under the Summit I & II First Mortgage paid off the entire principal balance outstanding of $58.3 million plus a yield maintenance premium of $0.9 million and accrued interest of $0.4 million . The Summit I & II First Mortgage had an original maturity date of February 1, 2017. The Summit I & II First Mortgage bore interest at a fixed rate of 7.5% . |
Schedule of Activity Related to Real Estate Loans Receivable | The following summarizes the activity related to real estate loans receivable for the year ended December 31, 2015 (in thousands): Real estate loans receivable - December 31, 2014 $ 72,940 Principal repayments received on real estate loans receivable (435 ) Payoff of real estate loan receivable (58,272 ) Amortization of closing costs and origination fees on real estate loans receivable (23 ) Real estate loans receivable - December 31, 2015 $ 14,210 |
Schedule of Interest Income from Real Estate Loans Receivable | For the years ended December 31, 2015 , 2014 and 2013 , interest income from real estate loans receivable consisted of the following (in thousands): For the Years Ended December 31, 2015 2014 2013 Contractual interest income $ 3,701 $ 7,721 $ 26,850 Prepayment fee received on real estate loan receivable 874 4,917 — Accretion of purchase discounts — — 4,075 Amortization of closing costs and origination fees (23 ) 104 (486 ) Interest income from real estate loans receivable $ 4,552 $ 12,742 $ 30,439 |
REAL ESTATE SALES (Tables)
REAL ESTATE SALES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Revenue and Expenses of Real Estate Held-for-Sale | The following table summarizes certain revenue and expenses related to the Company’s real estate properties that were sold during the years ended December 31, 2015 and 2014 , which were included in continuing operations (in thousands): Years Ended December 31, 2015 2014 2013 Revenues Rental income $ 2,041 $ 75,220 $ 122,411 Tenant reimbursements (175 ) 26,746 45,337 Other operating income 125 2,844 3,851 Total revenues 1,991 104,810 171,599 Expenses Operating, maintenance, and management 502 23,414 34,992 Real estate taxes and insurance 218 17,406 29,113 Asset management fees to affiliate 108 6,496 10,653 General and administrative expenses 8 87 15 Depreciation and amortization — 21,663 57,800 Interest expense 411 33,902 30,043 Impairment charge on real estate — 1,075 — Total expenses $ 1,247 $ 104,043 $ 162,616 |
Schedule of Major Components of Real Estate Held for Sale and Liabilities Related to Real Estate Held for Sale | The following summary presents the major components of assets and liabilities related to real estate held for sale as of December 31, 2014 (in thousands). No real estate properties were held for sale as of December 31, 2015 : December 31, 2014 Assets related to real estate held for sale Total real estate, at cost and net of impairment charge $ 116,264 Accumulated depreciation and amortization (22,582 ) Real estate held for sale, net 93,682 Other assets 4,159 Total assets related to real estate held for sale $ 97,841 Liabilities related to real estate held for sale Total notes payable, net 63,523 Other liabilities 3,024 Total liabilities related to real estate held for sale $ 66,547 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | As of December 31, 2015 and 2014 , the Company’s notes payable, including notes payable related to real estate held for sale, consisted of the following (dollars in thousands): Book Value as of December 31, 2015 Book Value as of December 31, 2014 Contractual Interest Rate as of December 31, 2015 (1) Effective Interest Rate as of December 31, 2015 (1) Payment Type Maturity Date (2) Amended and Restated Portfolio Revolving Loan Facility (3) $ 75,438 $ 75,438 One-month LIBOR + 1.80% 3.1% Interest Only 06/21/2017 Union Bank Plaza Mortgage Loan (4) 105,000 105,000 One-month LIBOR + 1.65% 1.9% Interest Only 09/15/2016 Portfolio Mortgage Loan #1 (5) 95,033 184,733 One-month LIBOR + 2.15% 3.5% Interest Only 01/27/2016 Portfolio Mortgage Loan #3 (6) 54,000 107,640 One-month LIBOR + 2.5% Interest Only 03/01/2016 Corporate Technology Centre Mortgage Loan (7) 140,000 140,000 3.50% 3.5% (7) 04/01/2020 300-600 Campus Drive Revolving Loan (8) 78,000 78,000 One-month LIBOR + 2.05% 2.9% Interest Only 08/01/2016 Emerald View at Vista Center Mortgage Loan (9) — 19,800 One-month LIBOR + 2.25% (9) (9) (9) Fountainhead Plaza Mortgage Loan (10) — 80,000 One-month LIBOR + 1.90% (10) (10) (10) Total notes payable principal outstanding $ 547,471 $ 790,611 Deferred financing costs, net (1,394 ) (3,193 ) Total notes payable, net $ 546,077 $ 787,418 _____________________ (1) Contractual interest rate represents the interest rate in effect under the loan as of December 31, 2015 . Effective interest rate is calculated as the actual interest rate in effect as of December 31, 2015 (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, 2015 , where applicable. For further information regarding the Company’s derivative instruments, see Note 8, “Derivative Instruments.” (2) Represents the initial maturity date or the maturity date as extended as of December 31, 2015 ; subject to certain conditions, the maturity dates of certain loans may be extended beyond the maturity date shown. (3) As of December 31, 2015 , the Amended and Restated Portfolio Revolving Loan Facility was secured by 350 E. Plumeria Building and Pierre Laclede Center. (4) As of December 31, 2015 , $105.0 million of the Union Bank Plaza Mortgage Loan 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. (5) As of December 31, 2015 , Portfolio Mortgage Loan #1 was secured by Horizon Tech Center, Granite Tower and Gateway Corporate Center. On February 13, 2015, in connection with the disposition of National City Tower, the Company repaid $89.7 million of principal due under this loan and National City Tower was released as security from Portfolio Mortgage Loan #1. Subsequent to December 31, 2015, the maturity date of Portfolio Mortgage Loan #3 was extended to July 27, 2016. (6) On December 15, 2015, the Company repaid $53.6 million of the outstanding principal balance under Portfolio Mortgage Loan #3 and reduced the borrowing capacity from $107.6 million to $70.0 million . As of December 31, 2015 , the principal balance consisted of the $54.0 million non-revolving portion. The revolving portion of $16.0 million remained available for future disbursements, subject to certain terms and conditions contained in the loan documents. As of December 31, 2015 , Portfolio Mortgage Loan #3 was secured by the 100 & 200 Campus Drive Buildings and Willow Oaks Corporate Center. Subsequent to December 31, 2015, the maturity date of Portfolio Mortgage Loan #3 was extended to March 1, 2017. (7) Monthly payments are initially interest-only. Beginning on May 1, 2017 , monthly payments for the Corporate Technology Centre Mortgage Loan 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. (8) As of December 31, 2015 , the principal balance of the 300-600 Campus Drive Revolving Loan consisted of $78.0 million of the non-revolving portion. The remaining non-revolving portion of $17.0 million and the revolving portion of $25.0 million remained available for future disbursements, subject to certain terms and conditions contained in the loan documents. (9) On December 16, 2015, the Company repaid the entire outstanding principal balance due and all other sums due under this loan. (10) On December 1, 2015, the Company repaid the entire outstanding principal balance due and all other sums due under this loan. |
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, 2015 (in thousands): 2016 $ 332,033 2017 77,218 2018 2,750 2019 2,848 2020 132,622 $ 547,471 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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 as of December 31, 2015 and 2014 . The notional amount 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, 2015 December 31, 2014 Weighted-Average Fix Pay Rate Weighted-Average Remaining Term in Years Derivative Instruments Number of Instruments Notional Amount Number of Instruments Notional Amount Reference Rate as of December 31, 2015 Interest Rate Swaps (1) 5 $265,488 11 $596,575 One-month LIBOR/ 1.23% 0.9 _____________________ (1) During the year ended December 31, 2015 , the Company terminated four interest rate swap agreements and paid an aggregate breakage fee of $0.2 million . Also, two of the Company’s interest rate swaps expired during the year ended December 31, 2015 . As of December 31, 2015 and 2014 , none of the Company’s interest rate swaps were designated as cash flow hedges. |
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, 2015 and 2014 (dollars in thousands): December 31, 2015 December 31, 2014 Derivative Instruments Balance Sheet Location Number of Instruments Fair Value Number of Fair Value Interest Rate Swaps Prepaid expenses and other assets, at fair value 2 $ 19 2 $ 122 Interest Rate Swaps Other liabilities, at fair value 3 $ (658 ) 9 $ (4,749 ) |
Schedule of Derivative Instruments in Statement of Operations | The following table summarizes the effects of derivative instruments on the Company’s consolidated statements of operations (in thousands): For the Years Ended December 31, 2015 2014 2013 Derivatives designated as hedging instruments (1) Amount of loss recognized on interest rate swaps (effective portion) $ 1,577 $ 7,106 $ 9,551 Unrealized losses due to hedge ineffectiveness — 3,207 — Reclassification of realized losses related to swap terminations — 521 856 1,577 10,834 10,407 Derivatives not designated as hedging instruments Realized loss recognized on interest rate swaps 3,980 763 — Unrealized gain on interest rate swaps (2,410 ) (218 ) — Losses related to swap terminations 179 130 — 1,749 675 — Increase in interest expense as a result of derivatives $ 3,326 $ 11,509 $ 10,407 _____________________ (1) All of the Company’s interest rate swap agreements were initially designated as cash flow hedges. During 2014, the Company dedesignated all of its interest rate swap instruments due to the anticipated early repayment of debt in connection with asset sales, and therefore, certain hedged forecasted transactions were no longer probable beyond the projected asset sale date. |
FAIR VALUE DISCLOSURES (Tables)
FAIR VALUE DISCLOSURES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015 and 2014 , which carrying amounts do not generally approximate the fair values (in thousands): December 31, 2015 December 31, 2014 Face Value Carrying Amount Fair Value Face Value Carrying Amount Fair Value Financial assets: Real estate loans receivable $ 14,201 $ 14,210 $ 14,574 $ 72,908 $ 72,940 $ 73,414 Financial liabilities: Notes payable $ 547,471 $ 546,077 $ 549,129 $ 790,611 $ 787,418 $ 794,439 |
Schedule of Assets and Liabilities at Fair Value | During the year ended December 31, 2015 , the Company measured the following assets and liabilities at fair value (in thousands): Fair Value Measurements Using Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Recurring Basis: Asset derivatives $ 19 $ — $ 19 $ — Liability derivatives (658 ) — (658 ) — During the year ended December 31, 2015 , the Company measured the following asset at fair value on a nonrecurring basis (in thousands): Fair Value Measurements Using Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Nonrecurring Basis: Impaired real estate (1) $ 140,747 $ — $ — $ 140,747 _____________________ (1) Amount represents the fair value for a real estate asset impacted by an impairment charge during the year, as of the date that the fair value measurement was made. The carrying value for the real estate asset may have subsequently increased or decreased from the fair value reflected due to activity that has occurred since the measurement date. |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015 , 2014 and 2013 , respectively, and any related amounts payable as of December 31, 2015 and 2014 (in thousands): Incurred Years Ended December 31, Payable as of December 31, 2015 2014 2013 2015 2014 Expensed Asset management fees $ 12,082 $ 18,641 $ 23,524 $ — $ — Reimbursement of operating expenses (1) 197 256 168 49 38 Acquisition fees — — 1,797 — — Disposition fees (2) 1,239 16,201 1,143 — — $ 13,518 $ 35,098 $ 26,632 $ 49 $ 38 _____________________ (1) Reimbursable operating expenses primarily consists of internal audit personnel costs, accounting software and cybersecurity related expenses incurred by the Advisor under the Advisory Agreement. The Company has reimbursed 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 $157,000 , $142,000 and $145,000 for the years ended December 31, 2015 , 2014 and 2013 , respectively, and were the only type of employee costs reimbursed under the Advisory Agreement for the years ended December 31, 2015 , 2014 and 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. (2) Disposition fees with respect to real estate sold are included in the gain on sale of real estate, net 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 loans receivable in the accompanying consolidated statements of operations. |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015 , 2014 and 2013 and total assets and total liabilities for each reportable segment as of December 31, 2015 and 2014 (in thousands): For the Years Ended December 31, 2015 2014 2013 Revenues: Real estate segment (1) $ 160,743 $ 265,705 $ 330,195 Real estate-related segment 4,552 12,742 30,439 Total segment revenues 165,295 278,447 360,634 Corporate-level — 953 — Total revenues $ 165,295 $ 279,400 $ 360,634 Interest Expense: Real estate segment (1) $ 22,115 $ 61,951 $ 60,754 Real estate-related segment — 993 4,421 Total segment interest expense 22,115 62,944 65,175 Corporate-level — — 512 Total interest expense $ 22,115 $ 62,944 $ 65,687 NOI: Real estate segment (1) $ 82,043 $ 108,663 $ 152,905 Real estate-related segment 4,540 11,698 25,971 Total segment NOI 86,583 120,361 178,876 Corporate-level — 940 — Total NOI $ 86,583 $ 121,301 $ 178,876 As of December 31, 2015 2014 Assets: Real estate segment $ 1,289,290 $ 1,314,927 Real estate-related segment 14,764 73,457 Total segment assets 1,304,054 1,388,384 Real estate held for sale — 97,841 Corporate-level (2) 60,476 168,098 Total assets $ 1,364,530 $ 1,654,323 Liabilities: Real estate segment $ 591,260 $ 771,109 Real estate-related segment 6 2 Total segment liabilities 591,266 771,111 Real estate held for sale — 66,547 Corporate-level (3) 5,334 7,138 Total liabilities $ 596,600 $ 844,796 _____________________ (1) Amounts include properties sold. See Note 6, “Real Estate Sales” for more information. (2) Total corporate-level assets consisted primarily of cash and cash equivalents of approximately $60.2 million and $167.8 million as of December 31, 2015 and 2014 , respectively. (3) As of December 31, 2015 and 2014 , 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, 2015 , 2014 and 2013 (in thousands): Years Ended December 31, 2015 2014 2013 Net income $ 18,377 $ 445,507 $ 55,779 Gain on sales of real estate, net (27,421 ) (441,640 ) — Loss on sale of marketable securities — 331 — Other interest income (293 ) (209 ) (46 ) Gain on payoff or sale of real estate loan receivable — — (29,073 ) Asset management fees to affiliate 12,082 18,641 23,524 Real estate acquisition fees to affiliates — — 1,797 Real estate acquisition fees and expenses — — 623 General and administrative expenses 4,485 5,082 4,982 Depreciation and amortization 56,271 77,988 120,778 Impairment charge on real estate 23,082 15,601 — Corporate-level interest expense — — 512 NOI $ 86,583 $ 121,301 $ 178,876 |
SELECTED QUARTERLY FINANCIAL 34
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015 and 2014 (in thousands, except per share amounts): 2015 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 43,930 $ 41,203 $ 41,013 $ 39,149 Net income (loss) 27,532 3,479 (15,743 ) 3,109 Net income (loss) per common share, basic and diluted 0.14 0.02 (0.08 ) 0.02 Distributions declared per common share 0.072 0.073 0.074 0.074 2014 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 92,455 $ 82,716 $ 55,594 $ 48,635 Net income 10,428 59,719 308,131 67,229 Net income per common share, basic and diluted 0.05 0.31 1.61 0.36 Distributions declared per common share 0.160 0.162 4.644 0.100 |
ORGANIZATION (Details)
ORGANIZATION (Details) $ in Thousands | 12 Months Ended | 35 Months Ended | 92 Months Ended | ||
Dec. 31, 2015USD ($)LoansReceivablespropertyshares | Dec. 31, 2014USD ($)shares | Dec. 31, 2013USD ($)shares | Mar. 22, 2011USD ($)shares | Dec. 31, 2015USD ($)LoansReceivablespropertyshares | |
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 | property | 12 | 12 | |||
Number of real estate loans receivable | LoansReceivables | 1 | 1 | |||
Issuance of common stock, value | $ | $ 26,885 | $ 70,562 | |||
Shares of common stock sold under dividend reinvestment plan, value | $ | $ 298,200 | ||||
Redemptions of common stock, value | $ | $ 5,814 | $ 44,659 | $ 53,168 | $ 235,400 | |
Advisor (KBS Capital Advisors LLC) [Member] | |||||
Organizational Structure [Line Items] | |||||
Period of termination notice | 60 days | ||||
Common Stock [Member] | |||||
Organizational Structure [Line Items] | |||||
Issuance of common stock, shares | shares | 2,749,008 | 7,214,805 | 182,681,633 | ||
Issuance of common stock, value | $ | $ 28 | $ 72 | $ 1,800,000 | ||
Shares of common stock sold under dividend reinvestment plan, shares | shares | 30,903,504 | ||||
Redemptions of common stock, shares | shares | 1,005,418 | 4,457,374 | 5,219,003 | 24,048,952 | |
Redemptions of common stock, value | $ | $ 10 | $ 46 | $ 52 | ||
Common Stock [Member] | Advisor (KBS Capital Advisors LLC) [Member] | |||||
Organizational Structure [Line Items] | |||||
Shares held by affiliate | shares | 20,000 | 20,000 | |||
Office Building [Member] | |||||
Organizational Structure [Line Items] | |||||
Number of real estate properties | property | 10 | 10 | |||
Office-Flex Properties [Member] | |||||
Organizational Structure [Line Items] | |||||
Number of real estate properties | property | 1 | 1 | |||
Office Campus [Member] | |||||
Organizational Structure [Line Items] | |||||
Number of real estate properties | property | 1 | 1 | |||
Office Buildings, Campus [Member] | |||||
Organizational Structure [Line Items] | |||||
Number of real estate properties | property | 8 | 8 |
SUMMARY OF SIGNIFICANT ACCOUN36
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Reclassifications) (Details) - property | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Real Estate Properties [Line Items] | ||
Number of real estate properties classified from held-for-sale to held for investment | 2 | |
Office Building [Member] | ||
Real Estate Properties [Line Items] | ||
Number of real estate properties sold | 1 | 9 |
SUMMARY OF SIGNIFICANT ACCOUN37
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Useful Life) (Details) | 12 Months Ended |
Dec. 31, 2015 | |
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 ACCOUN38
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Real Estate Loans Receivable) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accounting Policies [Abstract] | |||
Loan loss reserve | $ 0 | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN39
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Dividend Reinvestment Plan) (Details) - $ / shares | Jan. 02, 2014 | Dec. 31, 2015 | Dec. 18, 2013 |
Dividends Payable [Line Items] | |||
Purchase price per share as percent of estimated value | 95.00% | ||
Dividend Reinvestment Plan [Member] | |||
Dividends Payable [Line Items] | |||
Purchase price per share | $ 10.29 | ||
Price per share | $ 9.78 |
SUMMARY OF SIGNIFICANT ACCOUN40
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Redeemable Common Stock) (Details) - USD ($) $ / shares in Units, $ in Millions | Dec. 08, 2015 | Dec. 31, 2015 | Dec. 04, 2014 |
Summary of Significant Accounting Policies [Line Items] | |||
Dollar limitation | $ 10 | ||
Dollar limitation for special redemptions | $ 10 | ||
Maximum percentage of weighted-average shares outstanding available for redemption during any calendar year | 5.00% | ||
Estimated value per share of company's common stock | $ 5.62 | $ 5.86 | |
Share redemption program, termination period | 30 days | ||
Common Stock | |||
Summary of Significant Accounting Policies [Line Items] | |||
Common stock redeemed, shares | 1,005,418 | ||
Common stock redeemed | $ 5.8 |
SUMMARY OF SIGNIFICANT ACCOUN41
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Fees) (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies [Line Items] | |
Origination fee, percent | 1.00% |
Property management fee, percent fee | 0.75% |
Advisor (KBS Capital Advisors LLC) [Member] | |
Summary of Significant Accounting Policies [Line Items] | |
Acquisition advisory fee, percent | 0.75% |
Monthly asset management fee, percent of acquisition expense, excluding acquisition fees related to thereto | 0.0625% |
Advisor or Affiliates [Member] | |
Summary of Significant Accounting Policies [Line Items] | |
Disposition fee, percent | 1.00% |
Maximum [Member] | Advisor, Affiliates or Unaffiliated Third Parties [Member] | |
Summary of Significant Accounting Policies [Line Items] | |
Disposition fee, percent | 6.00% |
SUMMARY OF SIGNIFICANT ACCOUN42
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Per Share Data) (Details) - $ / shares | Aug. 29, 2014 | Aug. 05, 2014 | Jul. 08, 2014 | Feb. 04, 2013 | Sep. 15, 2014 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Aug. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Accounting Policies [Abstract] | |||||||||||||||||
Distributions declared per common share (in dollars per share) | $ 0.45 | $ 0.30 | $ 3.75 | $ 4.50 | $ 0.074 | $ 0.074 | $ 0.073 | $ 0.072 | $ 0.100 | $ 4.644 | $ 0.162 | $ 0.160 | $ 0.293 | $ 5.066 | $ 0.704 | ||
Distribution rate per share per day, declared | $ 0.05416667 | $ 0.00178082 | $ 0.00178082 |
REAL ESTATE (Narrative) (Detail
REAL ESTATE (Narrative) (Details) $ in Thousands, ft² in Millions | 12 Months Ended | ||
Dec. 31, 2015USD ($)ft²property | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Real Estate Properties [Line Items] | |||
Number of real estate properties | 12 | ||
Rentable square feet | ft² | 5.2 | ||
Percentage of portfolio occupied | 87.00% | ||
Impairment charge on real estate | $ | $ 23,082 | $ 15,601 | $ 0 |
Assets Held-for-Investment [Member] | |||
Real Estate Properties [Line Items] | |||
Impairment charge on real estate | $ | 10,600 | ||
Reclassified from Held-for-Sale to Held-for-Investment [Member] | |||
Real Estate Properties [Line Items] | |||
Impairment charge on real estate | $ | $ 3,900 | ||
Office Building [Member] | |||
Real Estate Properties [Line Items] | |||
Number of real estate properties | 10 | ||
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 |
REAL ESTATE (Schedule of Real E
REAL ESTATE (Schedule of Real Estate Investments) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Real Estate Properties [Line Items] | ||
Total Real Estate at Cost (1) | $ 1,291,762 | $ 1,391,027 |
Accumulated Depreciation and Amortization (1) | (113,460) | (168,041) |
Total real estate held for investment, net | 1,178,302 | $ 1,222,986 |
Office Building [Member] | ||
Real Estate Properties [Line Items] | ||
Total Real Estate at Cost (1) | 1,291,762 | |
Accumulated Depreciation and Amortization (1) | (113,460) | |
Total real estate held for investment, net | $ 1,178,302 | |
100 & 200 Campus Drive Buildings [Member] | Office Building [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Sep. 9, 2008 | |
Total Real Estate at Cost (1) | $ 135,926 | |
Accumulated Depreciation and Amortization (1) | (1,634) | |
Total real estate held for investment, net | $ 134,292 | |
300-600 Campus Drive Buildings [Member] | Office Building [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Oct. 10, 2008 | |
Total Real Estate at Cost (1) | $ 153,139 | |
Accumulated Depreciation and Amortization (1) | (4,884) | |
Total real estate held for investment, net | $ 148,255 | |
350 E. Plumeria Building [Member] | Office-Flex Properties [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Dec. 18, 2008 | |
Total Real Estate at Cost (1) | $ 36,668 | |
Accumulated Depreciation and Amortization (1) | (7,927) | |
Total real estate held for investment, net | $ 28,741 | |
Willow Oaks Corporate Center [Member] | Office Building [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Aug. 26, 2009 | |
Total Real Estate at Cost (1) | $ 97,724 | |
Accumulated Depreciation and Amortization (1) | (13,639) | |
Total real estate held for investment, net | $ 84,085 | |
Pierre Laclede Center [Member] | Office Building [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Feb. 4, 2010 | |
Total Real Estate at Cost (1) | $ 73,229 | |
Accumulated Depreciation and Amortization (1) | (3,409) | |
Total real estate held for investment, net | $ 69,820 | |
Horizon Tech Center [Member] | Office Building [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Jun. 17, 2010 | |
Total Real Estate at Cost (1) | $ 28,377 | |
Accumulated Depreciation and Amortization (1) | (735) | |
Total real estate held for investment, net | $ 27,642 | |
Union Bank Plaza [Member] | Office Building [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Sep. 15, 2010 | |
Total Real Estate at Cost (1) | $ 186,430 | |
Accumulated Depreciation and Amortization (1) | (6,784) | |
Total real estate held for investment, net | $ 179,646 | |
Emerald View at Vista Center [Member] | Office Building [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Dec. 9, 2010 | |
Total Real Estate at Cost (1) | $ 31,301 | |
Accumulated Depreciation and Amortization (1) | (5,485) | |
Total real estate held for investment, net | $ 25,816 | |
Granite Tower [Member] | Office Building [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Dec. 16, 2010 | |
Total Real Estate at Cost (1) | $ 155,175 | |
Accumulated Depreciation and Amortization (1) | (31,651) | |
Total real estate held for investment, net | $ 123,524 | |
Gateway Corporate Center [Member] | Office Building [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Jan. 26, 2011 | |
Total Real Estate at Cost (1) | $ 45,114 | |
Accumulated Depreciation and Amortization (1) | (9,130) | |
Total real estate held for investment, net | $ 35,984 | |
Fountainhead Plaza [Member] | Office Building [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Sep. 13, 2011 | |
Total Real Estate at Cost (1) | $ 119,384 | |
Accumulated Depreciation and Amortization (1) | (6,840) | |
Total real estate held for investment, net | $ 112,544 | |
Corporate Technology Centre [Member] | Office Building [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Mar. 28, 2013 | |
Total Real Estate at Cost (1) | $ 229,295 | |
Accumulated Depreciation and Amortization (1) | (21,342) | |
Total real estate held for investment, net | $ 207,953 |
REAL ESTATE (Corporate Technolo
REAL ESTATE (Corporate Technology Centre) (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015USD ($)ft²$ / ft² | Dec. 31, 2014USD ($) | |
Real Estate Properties [Line Items] | ||
Rentable Square Feet | ft² | 5,200,000 | |
Total Real Estate, Net | $ 1,178,302 | $ 1,222,986 |
Percentage of Total Assets | 59.40% | |
Annualized Base Rent | $ 80,615 | |
Occupancy | 87.00% | |
Corporate Technology Centre [Member] | Assets, Total [Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | ft² | 610,083 | |
Total Real Estate, Net | $ 207,953 | |
Percentage of Total Assets | 15.20% | |
Annualized Base Rent | $ 18,537 | |
Average Annualized Base Rent per sq. ft. | $ / ft² | 30.38 | |
Occupancy | 100.00% | |
Union Bank Plaza [Member] | Assets, Total [Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | ft² | 627,334 | |
Total Real Estate, Net | $ 179,646 | |
Percentage of Total Assets | 13.20% | |
Annualized Base Rent | $ 22,677 | |
Average Annualized Base Rent per sq. ft. | $ / ft² | 39.48 | |
Occupancy | 92.00% | |
300-600 Campus Drive Buildings [Member] | Assets, Total [Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | ft² | 578,366 | |
Total Real Estate, Net | $ 148,255 | |
Percentage of Total Assets | 10.90% | |
Annualized Base Rent | $ 17,196 | |
Average Annualized Base Rent per sq. ft. | $ / ft² | 30.51 | |
Occupancy | 97.00% |
REAL ESTATE (Operating Leases)
REAL ESTATE (Operating Leases) (Narrative) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)Tenants | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Operating Leased Assets [Line Items] | |||
Deferred rent recognized | $ 6,692 | $ 5,818 | $ 12,806 |
Deferred rent receivables | 54,600 | 39,400 | |
Unamortized lease incentives | $ 11,900 | 4,000 | |
Number of tenants | Tenants | 250 | ||
Recorded bad debt expense related to tenant | $ 156 | 287 | $ 589 |
Bad debt reserve | 300 | ||
Other Liabilities [Member] | |||
Operating Leased Assets [Line Items] | |||
Security deposit liability | $ 2,400 | $ 2,500 | |
Weighted Average [Member] | |||
Operating Leased Assets [Line Items] | |||
Operating leases, term | 5 years 4 months 24 days | ||
Maximum [Member] | |||
Operating Leased Assets [Line Items] | |||
Operating leases, term | 15 years 9 months 18 days | ||
Bad debt reserve of annualized base rent | 1.00% |
REAL ESTATE (Future Minimum Ren
REAL ESTATE (Future Minimum Rental Income) (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Real Estate [Abstract] | |
2,016 | $ 127,820 |
2,017 | 123,438 |
2,018 | 117,116 |
2,019 | 103,029 |
2,020 | 97,895 |
Thereafter | 354,275 |
Future minimum rental income | $ 923,573 |
REAL ESTATE (Highes Tenant Indu
REAL ESTATE (Highes Tenant Industry Concentrations- Grater than 10% of Annual Base Rent) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($)Tenants | |
Concentration Risk [Line Items] | |
Number of Tenants | Tenants | 250 |
Annualized Base Rent | $ | $ 80,615 |
Percentage of Annualized Base Rent | 59.40% |
Industry - Finance [Member] | |
Concentration Risk [Line Items] | |
Number of Tenants | Tenants | 31 |
Annualized Base Rent | $ | $ 30,185 |
Percentage of Annualized Base Rent | 22.20% |
Industry - Computer System Design & Programming [Member] | |
Concentration Risk [Line Items] | |
Number of Tenants | Tenants | 9 |
Annualized Base Rent | $ | $ 22,250 |
Percentage of Annualized Base Rent | 16.40% |
Industry - Legal Services [Member] | |
Concentration Risk [Line Items] | |
Number of Tenants | Tenants | 37 |
Annualized Base Rent | $ | $ 14,195 |
Percentage of Annualized Base Rent | 10.50% |
Industry - Mining, Oil & Gas Extraction [Member] | |
Concentration Risk [Line Items] | |
Number of Tenants | Tenants | 4 |
Annualized Base Rent | $ | $ 13,985 |
Percentage of Annualized Base Rent | 10.30% |
REAL ESTATE (Concentration of C
REAL ESTATE (Concentration of Credit Risk, Tenant Lease that Represents More than 10% of Annualized Base Rent) (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015USD ($)ft²$ / ft² | Sep. 30, 2016ft² | |
Concentration Risk [Line Items] | ||
Square Feet | 5,200,000 | |
Annualized Base Rent | $ | $ 80,615 | |
Tenant Lease - Union Bank Plaza [Member] | ||
Concentration Risk [Line Items] | ||
Square Feet | 408,260 | |
% of Portfolio (Net Rentable Sq. Ft.) | 9.00% | |
Annualized Base Rent | $ | $ 16,742 | |
% of Portfolio Annualized Base Rent | 12.30% | |
Annualized Base Rent per Sq. Ft. | $ / ft² | 41.01 | |
Tenant Lease - Union Bank Plaza [Member] | Scenario, Forecast [Member] | ||
Concentration Risk [Line Items] | ||
Rentable square feet will expire | 33,602 |
REAL ESTATE (Geographic Concent
REAL ESTATE (Geographic Concentration Risk) (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 59.40% |
CALIFORNIA [Member] | Assets, Total [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 35.20% |
NEW JERSEY [Member] | Assets, Total [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 20.70% |
REAL ESTATE (Impairment of Real
REAL ESTATE (Impairment of Real Estate) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)ft²property | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Real Estate Properties [Line Items] | |||
Impairment charge on real estate | $ 23,082 | $ 15,601 | $ 0 |
100 & 200 Campus Drive Buildings [Member] | |||
Real Estate Properties [Line Items] | |||
Non-cash impairment of real estate | $ 18,600 | ||
Net rentable area occupied | ft² | 199,024 | ||
Net rentable area occupied, percent | 34.00% | ||
Assets Held-for-sale [Member] | |||
Real Estate Properties [Line Items] | |||
Impairment charge on real estate | $ 0 | 1,075 | $ 0 |
Assets Held-for-Investment [Member] | |||
Real Estate Properties [Line Items] | |||
Non-cash impairment of real estate | $ 4,500 | ||
Number of real estate properties included in impairment calculation | property | 2 | ||
Impairment charge on real estate | 10,600 | ||
Reclassified from Held-for-Sale to Held-for-Investment [Member] | |||
Real Estate Properties [Line Items] | |||
Impairment charge on real estate | $ 3,900 |
TENANT ORIGINATION AND ABSORP52
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Abstract] | |||
Tenant Origination and Absorption Costs, Cost | $ 76,132 | $ 109,378 | |
Tenant Origination and Absorption Costs, Accumulated amortization | (31,020) | (49,302) | |
Tenant Origination and Absorption Costs, Net amount | 45,112 | 60,076 | |
Above-Market Lease Assets, Costs | 15,375 | 17,281 | |
Above-Market Lease Assets, Accumulated amortization | (7,779) | (7,010) | |
Above-Market Lease Assets, Net amount | 7,596 | 10,271 | |
Below-Market Lease Liabilities, Costs | (20,436) | (24,917) | |
Below-Market Lease Liabilities, Accumulated amortization | 14,866 | 16,013 | |
Below-Market Lease Liabilities, Net amount | (5,570) | (8,904) | |
Tenant Origination and Absorption Costs, Amortization | (13,808) | (24,236) | $ (41,151) |
Above-Market Lease Assets, Amortization | (2,722) | (7,953) | (9,673) |
Below-Market Lease Liabilities, Amortization | $ 3,402 | $ 6,695 | $ 7,424 |
TENANT ORIGINATION AND ABSORP53
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES (Remaining Unamortized Balance) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Below Market Lease, Net, Amortization Income, Fiscal Year Maturity [Abstract] | |
2,016 | $ 2,629 |
2,017 | 1,587 |
2,018 | 955 |
2,019 | 178 |
2,020 | 110 |
Thereafter | 111 |
Net Amount | $ 5,570 |
Tenant Origination and Absorption Costs [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted-Average Remaining Amortization Period | 5 years 3 months 18 days |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
2,016 | $ (11,498) |
2,017 | (10,067) |
2,018 | (6,955) |
2,019 | (4,437) |
2,020 | (4,214) |
Thereafter | (7,941) |
Net Amount | $ (45,112) |
Above-Market Lease Assets [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted-Average Remaining Amortization Period | 3 years 4 months 24 days |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
2,016 | $ (2,510) |
2,017 | (2,457) |
2,018 | (1,978) |
2,019 | (154) |
2,020 | (154) |
Thereafter | (343) |
Net Amount | $ (7,596) |
Below-Market Lease Liabilities [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted-Average Remaining Amortization Period | 2 years 8 months 12 days |
REAL ESTATE LOANS RECEIVABLE (S
REAL ESTATE LOANS RECEIVABLE (Schedule of Real Estate Loans Receivable) (Details) - USD ($) $ in Thousands | Aug. 04, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Outstanding Principal Balance | $ 14,201 | |||
Book Value | 14,210 | $ 72,940 | ||
Payoff of principle balance | 58,272 | |||
Prepayment fee received on real estate loan receivable | $ 874 | $ 874 | 4,917 | $ 0 |
Sheraton Charlotte Airport Hotel First Mortgage [Member] | Mortgages [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Date Acquired/ Originated | Jul. 11, 2011 | |||
Outstanding Principal Balance | $ 14,201 | |||
Book Value | $ 14,210 | 14,353 | ||
Contractual Interest Rate | 7.50% | |||
Annualized Effective Interest Rate | 7.60% | |||
Maturity Date | Aug. 1, 2018 | |||
Origination of Summit I & II First Mortgage [Member] | Mortgages [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Date Acquired/ Originated | Jan. 17, 2012 | |||
Outstanding Principal Balance | $ 0 | |||
Book Value | $ 0 | $ 58,587 | ||
Contractual Interest Rate | 7.50% | |||
Payoff of principle balance | $ 58,300 | |||
Increase, accrued interest | $ 400 |
REAL ESTATE LOANS RECEIVABLE 55
REAL ESTATE LOANS RECEIVABLE (Schedule of Activity Related to Real Estate Loans Receivable) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Real Estate Loans Receivable [Roll Forward] | |||
Real estate loans receivable - December 31, 2014 | $ 72,940 | ||
Principal repayments received on real estate loans receivable | (435) | $ (304) | $ (1,579) |
Payoff of real estate loan receivable | (58,272) | ||
Amortization of closing costs and origination fees on real estate loans receivable | (23) | 104 | $ (486) |
Real estate loans receivable - December 31, 2015 | $ 14,210 | $ 72,940 |
REAL ESTATE LOANS RECEIVABLE 56
REAL ESTATE LOANS RECEIVABLE (Schedule of Interest Income from Real Estate Loans Receivable) (Details) - USD ($) $ in Thousands | Aug. 04, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Receivables [Abstract] | ||||
Contractual interest income | $ 3,701 | $ 7,721 | $ 26,850 | |
Prepayment fee received on real estate loan receivable | $ 874 | 874 | 4,917 | 0 |
Accretion of purchase discounts | 0 | 0 | 4,075 | |
Amortization of closing costs and origination fees | (23) | 104 | (486) | |
Interest income from real estate loans receivable | 4,552 | 12,742 | $ 30,439 | |
Interest receivable | $ 0 | $ 500 |
REAL ESTATE SALES (Narrative) (
REAL ESTATE SALES (Narrative) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)property | Dec. 31, 2014USD ($)property | Dec. 31, 2013USD ($) | |
Real Estate Properties [Line Items] | |||
Real estate held for sale, net | $ | $ 0 | $ 93,682 | |
Number of real estate properties | 12 | ||
Impairment charge on real estate | $ | $ 23,082 | $ 15,601 | $ 0 |
Office Building [Member] | |||
Real Estate Properties [Line Items] | |||
Number of real estate properties sold | 1 | 9 | |
Number of real estate properties | 10 | ||
Industrial Properties [Member] | |||
Real Estate Properties [Line Items] | |||
Number of real estate properties sold | 1 | ||
Industrial Properties Portfolio-1 [Member] | |||
Real Estate Properties [Line Items] | |||
Number of real estate properties sold | 4 | ||
Assets Held-for-sale [Member] | |||
Real Estate Properties [Line Items] | |||
Impairment charge on real estate | $ | $ 0 | $ 1,075 | $ 0 |
REAL ESTATE SALES (Revenue and
REAL ESTATE SALES (Revenue and Expenses of Real Estate Held-for-Sale) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues | |||||||||||
Rental income | $ 138,745 | $ 212,454 | $ 258,452 | ||||||||
Tenant reimbursements | 14,749 | 43,481 | 61,167 | ||||||||
Total revenues | $ 39,149 | $ 41,013 | $ 41,203 | $ 43,930 | $ 48,635 | $ 55,594 | $ 82,716 | $ 92,455 | 165,295 | 279,400 | 360,634 |
Expenses | |||||||||||
Operating, maintenance, and management | 36,069 | 58,711 | 67,978 | ||||||||
Real estate taxes and insurance | 20,528 | 36,444 | 48,605 | ||||||||
Asset management fees to affiliate | 12,082 | 18,641 | 23,524 | ||||||||
General and administrative expenses | 4,485 | 5,082 | 4,982 | ||||||||
Depreciation and amortization | 56,271 | 77,988 | 120,778 | ||||||||
Interest expense | 22,115 | 62,944 | 65,687 | ||||||||
Impairment charge on real estate | 23,082 | 15,601 | 0 | ||||||||
Total expenses | 174,632 | 275,411 | 333,974 | ||||||||
Assets Held-for-sale [Member] | |||||||||||
Revenues | |||||||||||
Rental income | 2,041 | 75,220 | 122,411 | ||||||||
Tenant reimbursements | (175) | 26,746 | 45,337 | ||||||||
Other operating income | 125 | 2,844 | 3,851 | ||||||||
Total revenues | 1,991 | 104,810 | 171,599 | ||||||||
Expenses | |||||||||||
Operating, maintenance, and management | 502 | 23,414 | 34,992 | ||||||||
Real estate taxes and insurance | 218 | 17,406 | 29,113 | ||||||||
Asset management fees to affiliate | 108 | 6,496 | 10,653 | ||||||||
General and administrative expenses | 8 | 87 | 15 | ||||||||
Depreciation and amortization | 0 | 21,663 | 57,800 | ||||||||
Interest expense | 411 | 33,902 | 30,043 | ||||||||
Impairment charge on real estate | 0 | 1,075 | 0 | ||||||||
Total expenses | $ 1,247 | $ 104,043 | $ 162,616 |
REAL ESTATE SALES (Schedule of
REAL ESTATE SALES (Schedule of Major Components of Real Estate Held for Sale and Liabilities Related to Real Estate Held for Sale) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Discontinued Operations and Disposal Groups [Abstract] | ||
Total real estate, at cost and net of impairment charge | $ 116,264 | |
Accumulated depreciation and amortization | (22,582) | |
Real estate held for sale, net | $ 0 | 93,682 |
Other assets | 4,159 | |
Total assets related to real estate held for sale | 97,841 | |
Total notes payable, net | 0 | 63,523 |
Other liabilities | $ 0 | 3,024 |
Total liabilities related to real estate held for sale | $ 66,547 |
NOTES PAYABLE (Narrative) (Deta
NOTES PAYABLE (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Debt Instrument [Line Items] | |||
Interest expense | $ 22,115 | $ 62,944 | $ 65,687 |
Interest payable, current | 1,500 | 2,200 | |
Amortization of financing cost, net of discontinued operations | 2,000 | 4,700 | 3,300 |
Prepayment fees related to pay-off of debt | 14,900 | ||
Additional interest expense related to the effective portion of cash flow hedges | $ 3,300 | $ 11,500 | $ 10,400 |
NOTES PAYABLE (Schedule of Long
NOTES PAYABLE (Schedule of Long-term Debt Instruments) (Details) - USD ($) $ in Thousands | Dec. 15, 2015 | Feb. 13, 2015 | Dec. 31, 2015 | Dec. 14, 2015 | Dec. 31, 2014 | Jun. 27, 2014 |
Debt Instrument [Line Items] | ||||||
Principal outstanding | $ 547,471 | $ 790,611 | ||||
Deferred financing costs, net | (1,394) | (3,193) | ||||
Total notes payable, net | 546,077 | 787,418 | ||||
Payoff of principle balance | 58,272 | |||||
Portfolio Mortgage Loan 3 [Member] | Revolving Credit Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Borrowing capacity | $ 16,000 | |||||
Amount outstanding | $ 70,000 | $ 107,600 | ||||
Portfolio Mortgage Loan 3 [Member] | Non-Revolving Credit Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Amount outstanding | 54,000 | |||||
Payoff of principle balance | $ 53,600 | |||||
300-600 Campus Drive Revolving Loan [Member] | Revolving Credit Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Borrowing capacity | 25,000 | |||||
300-600 Campus Drive Revolving Loan [Member] | Non-Revolving Credit Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Amount outstanding | 78,000 | |||||
Mortgage [Member] | Amended and Restated Portfolio Revolving Loan Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Principal outstanding | $ 75,438 | 75,438 | ||||
Effective Interest Rate | 3.10% | |||||
Debt Instrument, Maturity Date | Jun. 21, 2017 | |||||
Mortgage [Member] | Amended and Restated Portfolio Revolving Loan Facility [Member] | One-month LIBOR [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate | 1.80% | |||||
Mortgage [Member] | Union Bank Plaza [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Principal outstanding | $ 105,000 | 105,000 | ||||
Effective Interest Rate | 1.90% | |||||
Debt Instrument, Maturity Date | Sep. 15, 2016 | |||||
Amount outstanding | $ 105,000 | |||||
Unused borrowing capacity, amount | $ 14,300 | |||||
Mortgage [Member] | Union Bank Plaza [Member] | One-month LIBOR [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate | 1.65% | |||||
Mortgage [Member] | Portfolio Loan [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Principal outstanding | $ 95,033 | 184,733 | ||||
Effective Interest Rate | 3.50% | |||||
Debt Instrument, Maturity Date | Jan. 27, 2016 | |||||
Payoff of principle balance | $ 89,700 | |||||
Mortgage [Member] | Portfolio Loan [Member] | One-month LIBOR [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate | 2.15% | |||||
Mortgage [Member] | Portfolio Mortgage Loan 3 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Principal outstanding | $ 54,000 | 107,640 | ||||
Effective Interest Rate | 2.50% | |||||
Debt Instrument, Maturity Date | Mar. 1, 2016 | |||||
Mortgage [Member] | Portfolio Mortgage Loan 3 [Member] | One-month LIBOR [Member] | Minimum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate | 1.75% | |||||
Mortgage [Member] | Portfolio Mortgage Loan 3 [Member] | One-month LIBOR [Member] | Maximum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate | 1.85% | |||||
Mortgage [Member] | Corporate Technology Centre [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Principal outstanding | $ 140,000 | 140,000 | ||||
Contractual Interest Rate, Percentage | 3.50% | |||||
Effective Interest Rate | 3.50% | |||||
Debt Instrument, Maturity Date | Apr. 1, 2020 | |||||
Periodic payment | monthly | |||||
Amortization schedule | 30 years | |||||
Mortgage [Member] | 300-600 Campus Drive Revolving Loan [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Principal outstanding | $ 78,000 | 78,000 | ||||
Effective Interest Rate | 2.90% | |||||
Debt Instrument, Maturity Date | Aug. 1, 2016 | |||||
Mortgage [Member] | 300-600 Campus Drive Revolving Loan [Member] | Secured Debt [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Remaining borrowing capacity | $ 17,000 | |||||
Mortgage [Member] | 300-600 Campus Drive Revolving Loan [Member] | One-month LIBOR [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate | 2.05% | |||||
Mortgage [Member] | Emerald View at Vista Center [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Principal outstanding | $ 0 | 19,800 | ||||
Mortgage [Member] | Emerald View at Vista Center [Member] | One-month LIBOR [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate | 2.25% | |||||
Mortgage [Member] | Fountainhead Plaza [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Principal outstanding | $ 0 | $ 80,000 | ||||
Mortgage [Member] | Fountainhead Plaza [Member] | One-month LIBOR [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate | 1.90% |
NOTES PAYABLE (Schedule of Matu
NOTES PAYABLE (Schedule of Maturities of Long-Term Debt) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Disclosure [Abstract] | ||
2,016 | $ 332,033 | |
2,017 | 77,218 | |
2,018 | 2,750 | |
2,019 | 2,848 | |
2,020 | 132,622 | |
Total notes payable, net | $ 547,471 | $ 790,611 |
DERIVATIVE INSTRUMENTS (Details
DERIVATIVE INSTRUMENTS (Details) - Interest Rate Swap [Member] $ in Thousands | 12 Months Ended | |
Dec. 31, 2015USD ($)Investments | Dec. 31, 2014USD ($)Investments | |
Derivative [Line Items] | ||
Number of Instruments | 5 | 11 |
Notional Amount | $ | $ 265,488 | $ 596,575 |
Weighted-Average Fix Pay Rate | 1.23% | |
Weighted-Average Remaining Term in Years | 10 months 8 days | |
Number of instruments terminated | 4 | |
Breakage fees | $ | $ 200 | |
Number of instruments expired | 2 | |
Prepaid Expenses and Other Assets [Member] | ||
Derivative [Line Items] | ||
Number of Instruments | 2 | 2 |
Derivative asset, fair value | $ | $ 19 | $ 122 |
Other Liabilities [Member] | ||
Derivative [Line Items] | ||
Number of Instruments | 3 | 9 |
Derivative liabilities, fair value | $ | $ (658) | $ (4,749) |
One-month LIBOR [Member] | Minimum [Member] | ||
Derivative [Line Items] | ||
Fixed Interest Rate | 0.71% | |
One-month LIBOR [Member] | Maximum [Member] | ||
Derivative [Line Items] | ||
Fixed Interest Rate | 2.16% |
DERIVATIVE INSTRUMENTS (Stateme
DERIVATIVE INSTRUMENTS (Statement of Operations) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Derivative [Line Items] | |||
Unrealized gain on interest rate swaps | $ 0 | $ 2,158 | $ 3,591 |
Interest Rate Swap [Member] | |||
Derivative [Line Items] | |||
Increase in interest expense as a result of derivatives | 3,326 | 11,509 | 10,407 |
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | |||
Derivative [Line Items] | |||
Amount of loss recognized on interest rate swaps (effective portion) | 1,577 | 7,106 | 9,551 |
Unrealized losses due to hedge ineffectiveness | 0 | 3,207 | 0 |
Reclassification of realized losses related to swap terminations | 0 | 521 | 856 |
Increase in interest expense as a result of derivatives | 1,577 | 10,834 | 10,407 |
Interest Rate Swap [Member] | Not Designated as Hedging Instrument [Member] | |||
Derivative [Line Items] | |||
Realized loss recognized on interest rate swaps | 3,980 | 763 | 0 |
Unrealized gain on interest rate swaps | (2,410) | (218) | 0 |
Losses related to swap terminations | 179 | 130 | 0 |
Increase in interest expense as a result of derivatives | $ 1,749 | $ 675 | $ 0 |
FAIR VALUE DISCLOSURES (Schedul
FAIR VALUE DISCLOSURES (Schedule of Face Value, Carrying Amounts and Fair Value) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Real estate loan receivable, Face Value | $ 14,201 | $ 72,908 |
Notes payable, Face Value | 547,471 | 790,611 |
Carrying Amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Real estate loans receivable, Value | 14,210 | 72,940 |
Notes payable, Value | 546,077 | 787,418 |
Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Real estate loans receivable, Value | 14,574 | 73,414 |
Notes payable, Value | $ 549,129 | $ 794,439 |
FAIR VALUE DISCLOSURES (Sched66
FAIR VALUE DISCLOSURES (Schedule of Assets and Liabilities at Fair Value) (Details) - Recurring Basis [Member] $ in Thousands | Dec. 31, 2015USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Derivative Asset | $ 19 |
Liability derivatives | (658) |
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 Asset | 0 |
Liability derivatives | 0 |
Significant Other Observable Inputs (Level 2) [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Derivative Asset | 19 |
Liability derivatives | (658) |
Significant Unobservable Inputs (Level 3) [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Derivative Asset | 0 |
Liability derivatives | $ 0 |
FAIR VALUE DISCLOSURES (Asset a
FAIR VALUE DISCLOSURES (Asset at Fair Value on a Nonrecurring Basis) (Details) - Fair Value, Measurements, Nonrecurring [Member] - Impaired Real Estate - Continuing Operations [Member] $ in Thousands | Dec. 31, 2015USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Asset derivatives | $ 140,747 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Asset derivatives | 0 |
Significant Other Observable Inputs (Level 2) [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Asset derivatives | 0 |
Significant Unobservable Inputs (Level 3) [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Asset derivatives | $ 140,747 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | Jul. 07, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Related Party Transaction [Line Items] | ||||
Incurred | $ 13,518 | $ 35,098 | $ 26,632 | |
Payable as of | 49 | 38 | ||
Administrative fees, amount paid | 157 | 142 | 145 | |
Payoff of principle balance | 58,272 | |||
Real estate loans receivable, net | 14,210 | 72,940 | ||
Gain on payoff of real estate loan receivable | 0 | 0 | 29,073 | |
300 N. Lasalle [Member] | ||||
Related Party Transaction [Line Items] | ||||
Proceeds from Divestiture of Businesses | $ 850,000 | |||
Advisor and Dealer Manager [Member] | Expensed [Member] | Asset Management Fees [Member] | ||||
Related Party Transaction [Line Items] | ||||
Expenses | 12,082 | 18,641 | 23,524 | |
Payable as of | 0 | 0 | ||
Advisor and Dealer Manager [Member] | Expensed [Member] | Reimbursement of Operating Expenses [Member] | ||||
Related Party Transaction [Line Items] | ||||
Expenses | 197 | 256 | 168 | |
Payable as of | 49 | 38 | ||
Advisor and Dealer Manager [Member] | Expensed [Member] | Acquisition Fees [Member] | ||||
Related Party Transaction [Line Items] | ||||
Expenses | 0 | 0 | 1,797 | |
Payable as of | 0 | 0 | ||
Advisor and Dealer Manager [Member] | Expensed [Member] | Dispositon Fees [Member] | ||||
Related Party Transaction [Line Items] | ||||
Expenses | 1,239 | 16,201 | $ 1,143 | |
Payable as of | $ 0 | $ 0 |
SEGMENT INFORMATION (Schedule o
SEGMENT INFORMATION (Schedule of Segment Reporting Information, by Segment) (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($)segments | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | |
Segment Reporting Information [Line Items] | ||||||||||||
Number of reportable segments | segments | 2 | |||||||||||
Revenues | $ 39,149 | $ 41,013 | $ 41,203 | $ 43,930 | $ 48,635 | $ 55,594 | $ 82,716 | $ 92,455 | $ 165,295 | $ 279,400 | $ 360,634 | |
Interest expense | 22,115 | 62,944 | 65,687 | |||||||||
NOI | 86,583 | 121,301 | 178,876 | |||||||||
Assets | 1,364,530 | 1,654,323 | 1,364,530 | 1,654,323 | ||||||||
Liabilities | 596,600 | 844,796 | 596,600 | 844,796 | ||||||||
Cash and cash equivalents | 72,687 | 179,021 | 72,687 | 179,021 | 175,042 | $ 48,390 | ||||||
Operating Segments [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenues | 165,295 | 278,447 | 360,634 | |||||||||
Interest expense | 22,115 | 62,944 | 65,175 | |||||||||
NOI | 86,583 | 120,361 | 178,876 | |||||||||
Assets | 1,304,054 | 1,388,384 | 1,304,054 | 1,388,384 | ||||||||
Liabilities | 591,266 | 771,111 | 591,266 | 771,111 | ||||||||
Corporate-level [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenues | 0 | 953 | 0 | |||||||||
Interest expense | 0 | 0 | 512 | |||||||||
NOI | 0 | 940 | 0 | |||||||||
Assets | 60,476 | 168,098 | 60,476 | 168,098 | ||||||||
Liabilities | 5,334 | 7,138 | 5,334 | 7,138 | ||||||||
Cash and cash equivalents | 60,200 | 167,800 | 60,200 | 167,800 | ||||||||
Real Estate Segment [Member] | Operating Segments [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenues | 160,743 | 265,705 | 330,195 | |||||||||
Interest expense | 22,115 | 61,951 | 60,754 | |||||||||
NOI | 82,043 | 108,663 | 152,905 | |||||||||
Assets | 1,289,290 | 1,314,927 | 1,289,290 | 1,314,927 | ||||||||
Liabilities | 591,260 | 771,109 | 591,260 | 771,109 | ||||||||
Real Estate-Related Segment [Member] | Operating Segments [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenues | 4,552 | 12,742 | 30,439 | |||||||||
Interest expense | 0 | 993 | 4,421 | |||||||||
NOI | 4,540 | 11,698 | $ 25,971 | |||||||||
Assets | 14,764 | 73,457 | 14,764 | 73,457 | ||||||||
Liabilities | 6 | 2 | 6 | 2 | ||||||||
Real Estate Held-for-Sale [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Assets | 0 | 97,841 | 0 | 97,841 | ||||||||
Liabilities | $ 0 | $ 66,547 | $ 0 | $ 66,547 |
SEGMENT INFORMATION (Reconcilia
SEGMENT INFORMATION (Reconciliation of Net Income (Loss) to Net Operating Income (Loss)) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting Information [Line Items] | |||||||||||
Net income | $ 3,109 | $ (15,743) | $ 3,479 | $ 27,532 | $ 67,229 | $ 308,131 | $ 59,719 | $ 10,428 | $ 18,377 | $ 445,507 | $ 55,779 |
Gain on sales of real estate, net | (27,421) | (441,640) | 0 | ||||||||
Loss on sale of marketable securities | 0 | 331 | 0 | ||||||||
Other interest income | (293) | (209) | (46) | ||||||||
Gain on payoff or sale of real estate loans receivable | 0 | 0 | (29,073) | ||||||||
Asset management fees to affiliate | 12,082 | 18,641 | 23,524 | ||||||||
Real estate acquisition fees to affiliates | 0 | 0 | 1,797 | ||||||||
Real estate acquisition fees and expenses | 0 | 0 | 623 | ||||||||
General and administrative expenses | 4,485 | 5,082 | 4,982 | ||||||||
Depreciation and amortization | 56,271 | 77,988 | 120,778 | ||||||||
Impairment charge on real estate | 23,082 | 15,601 | 0 | ||||||||
Interest expense | 22,115 | 62,944 | 65,687 | ||||||||
NOI | 86,583 | 121,301 | 178,876 | ||||||||
Corporate-level [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Interest expense | 0 | 0 | 512 | ||||||||
NOI | $ 0 | $ 940 | $ 0 |
SELECTED QUARTERLY FINANCIAL 71
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 29, 2014 | Aug. 05, 2014 | Jul. 08, 2014 | Sep. 15, 2014 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||
Revenues | $ 39,149 | $ 41,013 | $ 41,203 | $ 43,930 | $ 48,635 | $ 55,594 | $ 82,716 | $ 92,455 | $ 165,295 | $ 279,400 | $ 360,634 | ||||
Net income | $ 3,109 | $ (15,743) | $ 3,479 | $ 27,532 | $ 67,229 | $ 308,131 | $ 59,719 | $ 10,428 | $ 18,377 | $ 445,507 | $ 55,779 | ||||
Net income per common share, basic and diluted (in dollars per share) | $ 0.02 | $ (0.08) | $ 0.02 | $ 0.14 | $ 0.36 | $ 1.61 | $ 0.31 | $ 0.05 | $ 0.10 | $ 2.33 | $ 0.29 | ||||
Distributions declared per common share (in dollars per share) | $ 0.45 | $ 0.30 | $ 3.75 | $ 4.50 | $ 0.074 | $ 0.074 | $ 0.073 | $ 0.072 | $ 0.100 | $ 4.644 | $ 0.162 | $ 0.160 | $ 0.293 | $ 5.066 | $ 0.704 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ / shares in Units, $ in Millions | Mar. 11, 2016 | Mar. 01, 2016 | Feb. 01, 2016 | Jan. 04, 2016 | Feb. 04, 2013 | Apr. 30, 2016 | Feb. 29, 2016 | Jan. 31, 2016 | Dec. 31, 2015 | Aug. 31, 2014 | Dec. 31, 2013 |
Subsequent Event [Line Items] | |||||||||||
Distribution rate per share per day, declared | $ 0.05416667 | $ 0.00178082 | $ 0.00178082 | ||||||||
Dividend Paid [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Distribution rate per share per day, declared | $ 0.02488493 | ||||||||||
Scenario, Forecast [Member] | Dividend Declared [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Distribution rate per share per day, declared | $ 0.02303279 | ||||||||||
Subsequent Event [Member] | Dividend Paid [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Distributions paid to common stockholders | $ 4.2 | $ 4.5 | $ 4.7 | ||||||||
Distribution rate per share per day, declared | $ 0.02226503 | $ 0.02380055 | |||||||||
Subsequent Event [Member] | Dividend Declared [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Distribution rate per share per day, declared | $ 0.02380055 |
SCHEDULE III REAL ESTATE ASSE73
SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | ||||
Initial Cost to Company, Land | $ 208,097 | |||
Initial Cost to Company, Building and Improvements | 1,259,802 | |||
Initial Cost to Company, Total | 1,467,899 | |||
Cost Capitalized Subsequent to Acquisition | (176,137) | |||
Gross Amount at which Carried at Close of Period, Land | 206,262 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 1,085,500 | |||
Gross Amount at which Carried at Close of Period, Total | 1,291,762 | $ 1,507,291 | $ 2,798,082 | $ 2,562,193 |
Accumulated Depreciation and Amortization | (113,460) | (190,624) | $ (362,822) | $ (270,538) |
Aggregate cost of real estate for federal income tax purposes | 1,600,000 | |||
Principal outstanding | $ 547,471 | 790,611 | ||
100 & 200 Campus Drive Buildings [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Initial Cost to Company, Land | $ 10,700 | |||
Initial Cost to Company, Building and Improvements | 188,509 | |||
Initial Cost to Company, Total | 199,209 | |||
Cost Capitalized Subsequent to Acquisition | (63,283) | |||
Gross Amount at which Carried at Close of Period, Land | 9,461 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 126,465 | |||
Gross Amount at which Carried at Close of Period, Total | 135,926 | |||
Accumulated Depreciation and Amortization | $ (1,634) | |||
Original Date of Construction | 1988/1989 | |||
Date Acquired | Sep. 9, 2008 | |||
300-600 Campus Drive Buildings [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Encumbrances | $ 78,000 | |||
Initial Cost to Company, Land | 9,717 | |||
Initial Cost to Company, Building and Improvements | 185,445 | |||
Initial Cost to Company, Total | 195,162 | |||
Cost Capitalized Subsequent to Acquisition | (42,023) | |||
Gross Amount at which Carried at Close of Period, Land | 9,121 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 144,018 | |||
Gross Amount at which Carried at Close of Period, Total | 153,139 | |||
Accumulated Depreciation and Amortization | $ (4,884) | |||
Original Date of Construction | 1997/1999 | |||
Date Acquired | Oct. 10, 2008 | |||
350 E. Plumeria Building [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Initial Cost to Company, Land | $ 11,290 | |||
Initial Cost to Company, Building and Improvements | 24,819 | |||
Initial Cost to Company, Total | 36,109 | |||
Cost Capitalized Subsequent to Acquisition | 559 | |||
Gross Amount at which Carried at Close of Period, Land | 11,290 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 25,378 | |||
Gross Amount at which Carried at Close of Period, Total | 36,668 | |||
Accumulated Depreciation and Amortization | $ (7,927) | |||
Original Date of Construction | 1984/2008 | |||
Date Acquired | Dec. 18, 2008 | |||
Willow Oaks Corporate Center [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Initial Cost to Company, Land | $ 25,300 | |||
Initial Cost to Company, Building and Improvements | 87,802 | |||
Initial Cost to Company, Total | 113,102 | |||
Cost Capitalized Subsequent to Acquisition | (15,378) | |||
Gross Amount at which Carried at Close of Period, Land | 25,300 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 72,424 | |||
Gross Amount at which Carried at Close of Period, Total | 97,724 | |||
Accumulated Depreciation and Amortization | $ (13,639) | |||
Original Date of Construction | 1986/1989/2003 | |||
Date Acquired | Aug. 26, 2009 | |||
Pierre Laclede Center [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Initial Cost to Company, Land | $ 15,200 | |||
Initial Cost to Company, Building and Improvements | 61,507 | |||
Initial Cost to Company, Total | 76,707 | |||
Cost Capitalized Subsequent to Acquisition | (3,478) | |||
Gross Amount at which Carried at Close of Period, Land | 15,200 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 58,029 | |||
Gross Amount at which Carried at Close of Period, Total | 73,229 | |||
Accumulated Depreciation and Amortization | $ (3,409) | |||
Original Date of Construction | 1964/1970 | |||
Date Acquired | Feb. 4, 2010 | |||
Horizon Tech Center [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Initial Cost to Company, Land | $ 7,900 | |||
Initial Cost to Company, Building and Improvements | 29,237 | |||
Initial Cost to Company, Total | 37,137 | |||
Cost Capitalized Subsequent to Acquisition | (8,760) | |||
Gross Amount at which Carried at Close of Period, Land | 7,900 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 20,477 | |||
Gross Amount at which Carried at Close of Period, Total | 28,377 | |||
Accumulated Depreciation and Amortization | $ (735) | |||
Original Date of Construction | 2,009 | |||
Date Acquired | Jun. 17, 2010 | |||
Union Bank Plaza [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Encumbrances | $ 105,000 | |||
Initial Cost to Company, Land | 24,000 | |||
Initial Cost to Company, Building and Improvements | 190,232 | |||
Initial Cost to Company, Total | 214,232 | |||
Cost Capitalized Subsequent to Acquisition | (27,802) | |||
Gross Amount at which Carried at Close of Period, Land | 24,000 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 162,430 | |||
Gross Amount at which Carried at Close of Period, Total | 186,430 | |||
Accumulated Depreciation and Amortization | $ (6,784) | |||
Original Date of Construction | 1,967 | |||
Date Acquired | Sep. 15, 2010 | |||
Emerald View at Vista Center [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Encumbrances | $ 0 | |||
Initial Cost to Company, Land | 5,300 | |||
Initial Cost to Company, Building and Improvements | 28,455 | |||
Initial Cost to Company, Total | 33,755 | |||
Cost Capitalized Subsequent to Acquisition | (2,454) | |||
Gross Amount at which Carried at Close of Period, Land | 5,300 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 26,001 | |||
Gross Amount at which Carried at Close of Period, Total | 31,301 | |||
Accumulated Depreciation and Amortization | $ (5,485) | |||
Original Date of Construction | 2,007 | |||
Date Acquired | Dec. 9, 2010 | |||
Granite Tower [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Initial Cost to Company, Land | $ 8,850 | |||
Initial Cost to Company, Building and Improvements | 141,438 | |||
Initial Cost to Company, Total | 150,288 | |||
Cost Capitalized Subsequent to Acquisition | 4,887 | |||
Gross Amount at which Carried at Close of Period, Land | 8,850 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 146,325 | |||
Gross Amount at which Carried at Close of Period, Total | 155,175 | |||
Accumulated Depreciation and Amortization | $ (31,651) | |||
Original Date of Construction | 1,983 | |||
Date Acquired | Dec. 16, 2010 | |||
Gateway Corporate Center [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Initial Cost to Company, Land | $ 6,380 | |||
Initial Cost to Company, Building and Improvements | 38,946 | |||
Initial Cost to Company, Total | 45,326 | |||
Cost Capitalized Subsequent to Acquisition | (212) | |||
Gross Amount at which Carried at Close of Period, Land | 6,380 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 38,734 | |||
Gross Amount at which Carried at Close of Period, Total | 45,114 | |||
Accumulated Depreciation and Amortization | $ (9,130) | |||
Original Date of Construction | 2008/2009 | |||
Date Acquired | Jan. 26, 2011 | |||
Fountainhead Plaza [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Encumbrances | $ 0 | |||
Initial Cost to Company, Land | 12,300 | |||
Initial Cost to Company, Building and Improvements | 123,700 | |||
Initial Cost to Company, Total | 136,000 | |||
Cost Capitalized Subsequent to Acquisition | (16,616) | |||
Gross Amount at which Carried at Close of Period, Land | 12,300 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 107,084 | |||
Gross Amount at which Carried at Close of Period, Total | 119,384 | |||
Accumulated Depreciation and Amortization | $ (6,840) | |||
Original Date of Construction | 2,011 | |||
Date Acquired | Sep. 13, 2011 | |||
Corporate Technology Centre [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Encumbrances | $ 140,000 | |||
Initial Cost to Company, Land | 71,160 | |||
Initial Cost to Company, Building and Improvements | 159,712 | |||
Initial Cost to Company, Total | 230,872 | |||
Cost Capitalized Subsequent to Acquisition | (1,577) | |||
Gross Amount at which Carried at Close of Period, Land | 71,160 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 158,135 | |||
Gross Amount at which Carried at Close of Period, Total | 229,295 | |||
Accumulated Depreciation and Amortization | $ (21,342) | |||
Original Date of Construction | 1999/2001 | |||
Date Acquired | Mar. 28, 2013 | |||
Mortgages [Member] | Portfolio Mortgage Loan 3 [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Principal outstanding | $ 54,000 | 107,640 | ||
Mortgages [Member] | Amended and Restated Portfolio Revolving Loan Facility [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Principal outstanding | 75,438 | 75,438 | ||
Mortgages [Member] | Portfolio Loan [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Principal outstanding | $ 95,033 | $ 184,733 |
SCHEDULE III REAL ESTATE ASSE74
SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION (Reconciliation) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Real Estate | |||
Balance at the beginning of the year | $ 1,507,291 | $ 2,798,082 | $ 2,562,193 |
Acquisitions | 0 | 0 | 230,872 |
Improvements | 30,440 | 34,692 | 30,607 |
Write-off of fully depreciated and fully amortized assets | (15,670) | (29,280) | (25,590) |
Impairments | (114,128) | (73,963) | 0 |
Sales | (116,171) | (1,222,240) | 0 |
Balance at the end of the year | 1,291,762 | 1,507,291 | 2,798,082 |
Accumulated depreciation and amortization | |||
Balance at the beginning of the year | 190,624 | 362,822 | 270,538 |
Depreciation and amortization expense | 53,429 | 75,292 | 117,874 |
Write-off of fully depreciated and fully amortized assets | (15,670) | (29,280) | (25,590) |
Impairments | (92,341) | (59,560) | 0 |
Sales | (22,582) | (158,650) | 0 |
Balance at the end of the year | $ 113,460 | $ 190,624 | $ 362,822 |