Document_And_Entity_Informatio
Document And Entity Information | 3 Months Ended | |
Mar. 31, 2014 | 2-May-14 | |
Document And Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'Inland Diversified Real Estate Trust, Inc. | ' |
Entity Central Index Key | '0001438897 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Non-accelerated Filer | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Mar-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Amendment Flag | 'false | ' |
Entity Common Stock, Shares Outstanding | ' | 117,809,586 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Investment properties: | ' | ' |
Land | $306,539 | $304,971 |
Building and improvements | 1,367,490 | 1,353,212 |
Construction in progress | 10,877 | 9,322 |
Total | 1,684,906 | 1,667,505 |
Less accumulated depreciation | -106,812 | -94,544 |
Net investment properties | 1,578,094 | 1,572,961 |
Cash and cash equivalents | 63,120 | 32,233 |
Restricted cash and escrows | 32,199 | 5,616 |
Investment in marketable securities | 35,604 | 34,070 |
Investment in unconsolidated entities | 554 | 485 |
Accounts and rents receivable (net of allowance of $2,782 and $2,285, respectively) | 17,741 | 17,023 |
Acquired lease intangibles, net | 190,590 | 194,759 |
Deferred costs, net | 6,419 | 6,677 |
Other assets | 6,880 | 9,476 |
Assets held for sale, net | 209,328 | 454,298 |
Total assets | 2,140,529 | 2,327,598 |
Liabilities and Equity | ' | ' |
Mortgages, credit facility and securities margin payable | 942,133 | 1,005,593 |
Accounts payable and accrued expenses | 12,772 | 7,873 |
Distributions payable | 6,003 | 6,009 |
Accrued real estate taxes payable | 4,742 | 4,699 |
Deferred investment property acquisition obligations | 20,483 | 29,203 |
Other liabilities | 8,344 | 9,930 |
Acquired below market lease intangibles, net | 45,371 | 45,732 |
Due to related parties | 1,759 | 2,074 |
Liabilities held for sale, net | 125,545 | 252,665 |
Total liabilities | 1,167,152 | 1,363,778 |
Commitments and contingencies | ' | ' |
Redeemable noncontrolling interests | 67,983 | 67,950 |
Equity: | ' | ' |
Preferred stock, $.001 par value, 40,000,000 shares authorized, none outstanding | 0 | 0 |
Common stock, $.001 par value, 2,460,000,000 shares authorized, 117,809,586 shares issued and outstanding as of March 31, 2014 and December 31, 2013 | 118 | 118 |
Additional paid in capital, net of offering costs of $118,182 as of March 31, 2014 and December 31, 2013 | 1,053,472 | 1,053,472 |
Accumulated distributions and net income | -151,704 | -160,423 |
Accumulated other comprehensive income | 3,508 | 2,703 |
Total equity | 905,394 | 895,870 |
Total liabilities and equity | $2,140,529 | $2,327,598 |
Consolidated_Balance_Sheet_Par
Consolidated Balance Sheet (Parenthetical) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ' | ' |
Accounts and rents receivable, allowance | $2,782 | $2,285 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 2,460,000,000 | 2,460,000,000 |
Common stock, shares issued | 117,809,586 | 117,809,586 |
Common stock, shares outstanding | 117,809,586 | 117,809,586 |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 40,000,000 | 40,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Additional paid in capital, offering costs | $118,182 | $118,182 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations and Other Comprehensive Income (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Income: | ' | ' |
Rental income | $36,196 | $34,597 |
Tenant recovery income | 9,134 | 8,791 |
Other property income | 1,261 | 3,499 |
Total income | 46,591 | 46,887 |
Expenses: | ' | ' |
General and administrative expenses | 1,950 | 1,804 |
Acquisition related costs | 91 | 218 |
Liquidity event costs | 2,841 | 0 |
Property operating expenses | 9,069 | 8,733 |
Real estate taxes | 5,533 | 5,102 |
Depreciation and amortization | 17,851 | 19,451 |
Business management fee-related party | 3,446 | 3,500 |
Total expenses | 40,781 | 38,808 |
Operating income | 5,810 | 8,079 |
Interest, dividend and other income | 711 | 819 |
Realized gain on sale of marketable securities | 24 | 26 |
Interest expense | -10,578 | -10,240 |
Equity in income of unconsolidated entities | 70 | 155 |
Loss from continuing operations | -3,963 | -1,161 |
Income from discontinued operations | 30,808 | 1,867 |
Net income | 26,845 | 706 |
Net income attributable to redeemable noncontrolling interests | -697 | -501 |
Net income attributable to common stockholders | 26,148 | 205 |
Basic and diluted earnings per common share: | ' | ' |
Continuing operations attributable to common stockholders | ($0.04) | ($0.02) |
Discontinued operations attributable to common stockholders | $0.26 | $0.02 |
Net income attributable to common stockholders | $0.22 | $0 |
Weighted average number of common shares outstanding, basic and diluted | 117,809,586 | 115,380,042 |
Comprehensive income: | ' | ' |
Net income | 26,845 | 706 |
Other comprehensive income: | ' | ' |
Unrealized gain on marketable securities | 1,821 | 2,705 |
Unrealized (loss) gain on derivatives | -1,016 | 165 |
Comprehensive income | 27,650 | 3,576 |
Redeemable noncontrolling interests | -697 | -501 |
Comprehensive income attributable to common stockholders | $26,953 | $3,075 |
Consolidated_Statements_of_Equ
Consolidated Statements of Equity (USD $) | Total | Common Stock | Additional Paid-in Capital, Net of Offering Costs | Accumulated Distributions and Net Income | Accumulated Other Comprehensive Income |
In Thousands, except Share data, unless otherwise specified | |||||
Balance at Dec. 31, 2013 | $895,870 | $118 | $1,053,472 | ($160,423) | $2,703 |
Balance (In Shares) at Dec. 31, 2013 | ' | 117,809,586 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' |
Distributions declared | -17,429 | ' | ' | -17,429 | ' |
Unrealized gain (loss) on marketable securities | 1,821 | ' | ' | ' | 1,821 |
Unrealized (loss) gain on derivatives | -1,016 | ' | ' | ' | -1,016 |
Net (loss) income (excluding income attributable to redeemable noncontrolling interests) | 26,148 | ' | ' | 26,148 | ' |
Balance at Mar. 31, 2014 | $905,394 | $118 | $1,053,472 | ($151,704) | $3,508 |
Balance (In Shares) at Mar. 31, 2014 | 117,809,586 | ' | ' | ' | ' |
Consolidated_Statements_of_Equ1
Consolidated Statements of Equity (Parentheticals) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2014 |
Comprehensive income attributable to redeemable noncontrolling interests | $697 |
Accumulated Distributions and Net Income | ' |
Comprehensive income attributable to redeemable noncontrolling interests | $697 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Cash flows from operations: | ' | ' |
Net income | $26,845 | $706 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 17,851 | 23,353 |
Amortization of debt premium and financing costs | 307 | 333 |
Amortization of acquired above market leases | 1,266 | 2,097 |
Amortization of acquired below market leases | -706 | -1,177 |
Gain on sales of investment properties, net | -26,916 | 0 |
Fair value adjustment of deferred investment property acquisition obligations | -298 | -188 |
Straight-line rental income | -1,130 | -1,728 |
Equity in income of unconsolidated entities | -70 | -155 |
Payment of leasing fees | -103 | -98 |
Realized gain on sale of marketable securities | -24 | -26 |
Changes in assets and liabilities: | ' | ' |
Restricted escrows | 9 | -65 |
Accounts and rents receivable, net | 1,590 | -3,259 |
Other assets | -1,036 | 42 |
Accounts payable and accrued expenses | 2,730 | 1,525 |
Accrued real estate taxes payable | -638 | 1,233 |
Other liabilities | -397 | -2,553 |
Due to related parties | -311 | 224 |
Net cash flows provided by operating activities | 18,969 | 20,264 |
Cash flows from investing activities: | ' | ' |
Purchase of investment properties | -23,371 | -5,378 |
Construction in progress, capital expenditures and tenant improvements | -2,520 | -725 |
Purchase of marketable securities | -36 | -125 |
Sale of marketable securities | 347 | 725 |
Proceeds from sales of investment properties | 202,161 | 0 |
Restricted escrows | -2,480 | -1,477 |
Repayment of notes receivable | 5 | 0 |
Investment in notes receivable | -1,517 | 0 |
Net cash flows provided by (used in) investing activities | 172,589 | -6,980 |
Cash flows from financing activities: | ' | ' |
Proceeds from the distribution reinvestment plan | 0 | 10,294 |
Shares repurchased | 0 | -1,841 |
Proceeds from mortgages payable | 0 | 14,750 |
Principal payments on mortgages payable | -88,436 | -3,173 |
Principal payments on credit facility | -52,500 | 0 |
Proceeds from securities margin debt | 49 | 149 |
Principal payments on securities margin debt | -987 | -1,342 |
Payment of loan fees and deposits | -698 | -109 |
Distributions paid | -17,435 | -17,008 |
Payment of preferred return to redeemable noncontrolling interests | -664 | -417 |
Net cash flows (used in) provided by financing activities | -160,671 | 1,303 |
Net increase in cash and cash equivalents | 30,887 | 14,587 |
Cash and cash equivalents, at beginning of period | 32,233 | 36,299 |
Cash and cash equivalents, at end of period | 63,120 | 50,886 |
Supplemental disclosure of cash flow information: | ' | ' |
Land | 1,568 | 269 |
Building and improvements | 14,069 | 1,069 |
Acquired in-place lease intangibles | 2,324 | 178 |
Acquired above market lease intangibles | 70 | 0 |
Acquired below market lease intangibles | -327 | 0 |
Settlement of deferred investment property acquisition obligations | 8,497 | 3,865 |
Other liabilities | -95 | -3 |
Other assets | 22 | 0 |
Accrued real estate taxes payable | -34 | 0 |
Repayment of note payable | 1,333 | 0 |
Partial settlement of note receivable | -4,056 | 0 |
Purchase of investment properties | 23,371 | 5,378 |
Cash paid for interest | 12,820 | 12,366 |
Supplemental schedule of non-cash investing and financing activities: | ' | ' |
Distributions payable | 6,003 | 5,894 |
Assumption of mortgages payable related to sales of investment properties | $45,869 | $0 |
Organization
Organization | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||||||||||||
Organization | ' | ||||||||||||
Organization | |||||||||||||
Inland Diversified Real Estate Trust, Inc. (which may be referred to herein as the “Company,” “we,” “us,” or “our”) was formed on June 30, 2008 (inception) to acquire and develop a diversified portfolio of commercial real estate investments located in the United States and Canada. The Company has entered into a Business Management Agreement (the “Agreement”) with Inland Diversified Business Manager & Advisor, Inc. (the “Business Manager”), to be the Business Manager to the Company. The Business Manager is a related party to our sponsor, Inland Real Estate Investment Corporation (the “Sponsor”). In addition, Inland Diversified Real Estate Services LLC, Inland Diversified Asset Services LLC, Inland Diversified Leasing Services LLC and Inland Diversified Development Services LLC, which are indirectly controlled by the four principals of The Inland Group, Inc. (collectively, the “Real Estate Managers”), serve as the Company’s real estate managers. The Company was authorized to sell up to 500,000,000 shares of common stock (“Shares”) at $10.00 each in its “best efforts” offering which commenced on August 24, 2009 and up to 50,000,000 shares at $9.50 each pursuant to the Company’s distribution reinvestment plan (“DRP”). The “best efforts” portion of the offering was completed on August 23, 2012. On November 13, 2013, the Company's board of directors voted to suspend the DRP until further notice, effective immediately. On November 13, 2013, the Company’s board of directors also voted to suspend the share repurchase program, as amended (“SRP”), until further notice, effective December 13, 2013. | |||||||||||||
At March 31, 2014, the Company owned 83 retail properties, three office properties and one industrial property collectively totaling 11.5 million square feet, including 24 multi-family units, and two multi-family properties totaling 420 units. As of March 31, 2014, the portfolio had a weighted average physical occupancy and economic occupancy of 95.6% and 96.7%, respectively. Economic occupancy excludes square footage associated with an earnout component. At the time that we acquired certain properties, the purchase agreement contained an earnout component to the purchase price, meaning the Company did not pay a portion of the purchase price at closing related to certain vacant spaces, although it owns the entire property. The Company is not obligated to settle this contingent purchase price unless the seller obtains leases for the vacant space within the time limits and parameters set forth in the applicable acquisition agreement (see note 16). | |||||||||||||
Proposed Merger | |||||||||||||
On February 9, 2014, the Company entered into an agreement and plan of merger (the “Merger Agreement”) with Kite Realty Group Trust, a publicly traded (NYSE: KRG) Maryland real estate investment trust (“Kite”), and KRG Magellan, LLC, a Maryland limited liability company and a direct wholly owned subsidiary of Kite (“Merger Sub”). The Merger Agreement provides for, upon the terms and conditions of the Merger Agreement, the merger of the Company with and into Merger Sub, with Merger Sub surviving the Merger as a direct wholly owned subsidiary of Kite (the “Merger”). Pursuant to the terms and conditions of the Merger Agreement, at the effective time of the Merger, each outstanding share of the Company’s common stock will be converted into the right to receive shares of beneficial interest of Kite, par value $0.01 per share (“Kite Common Shares”), based on: | |||||||||||||
• | an exchange ratio of 1.707 Kite Common Shares for each share of our common stock if the volume-weighted average trading price of Kite Common Shares for the ten consecutive trading days ending on the third trading day preceding the meeting of our stockholders to approve the Merger (the “Reference Price”) is equal to or less than $6.36; | ||||||||||||
• | a floating exchange ratio if the Reference Price is more than $6.36 or less than $6.58 (with such floating exchange ratio being determined by dividing $10.85 by the Reference Price); and | ||||||||||||
• | an exchange ratio of 1.650 Kite Common Shares for each share of our common stock if the Reference Price is $6.58 or greater. | ||||||||||||
Pursuant to the Merger Agreement, upon the effective time of the merger, the board of trustees of Kite will consist of nine members, six of whom will be current trustees of Kite and three of whom will be designated by us. | |||||||||||||
The completion of the Merger is subject to a number of closing conditions, including, among others: (i) approval by Kite’s stockholders and the Company’s stockholders, including the approval of Kite’s stockholders of an amendment to Kite’s declaration of trust to increase the number of Kite Common Shares that Kite is authorized to issue; (ii) the absence of a material adverse effect on either the Company or Kite; (iii) the receipt of tax opinions relating to the REIT status of Kite and the Company and the tax-free nature of the transaction; (iv) the completion of the Net Lease Sale Transactions (as defined below); and (v) the completion of the redeployment of certain proceeds from the Net Lease Sale Transactions to acquire replacement properties for purposes of Section 1031 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). As a result of the closing conditions to which the Merger is subject, there are no assurances that the proposed Merger will be consummated on the expected timetable, or at all. If the closing conditions are satisfied, it is anticipated that the Merger will close during the second or third quarter of 2014. | |||||||||||||
The Merger Agreement may be terminated under certain circumstances, including by either the Company or Kite if the Merger has not been consummated on or before the outside date of August 31, 2014, subject to extension under certain circumstances. The Merger Agreement provides that, in connection with the termination of the Merger Agreement under specified circumstances, the Company may be required to pay to Kite a termination fee of $43,000 and/or reimburse Kite’s transaction expenses up to an amount equal to $8,000. Where termination is in connection with a failure to close the Net Lease Sale Transactions, the Company may be required to (i) reimburse Kite for its transaction expenses up to an amount equal to $8,000 and (ii) pay Kite a termination fee of $3,000. The Merger Agreement also provides that, under specified circumstances, Kite may be required to pay the Company a termination fee of $30,000 and/or reimburse the Company’s transaction expenses up to an amount equal to $8,000. Under certain circumstances, including upon payment of the applicable termination fee, either party is permitted to terminate the Merger Agreement to enter into a definitive agreement with a third party with respect to a superior acquisition proposal. | |||||||||||||
If the Merger is consummated, it is expected to significantly change the scope of the Company’s business and as a result the Company’s 2013 results of operations may not necessarily be representative of the Company’s future results of operations. Unless otherwise stated, all disclosures and discussion in this Quarterly Report on Form 10-Q do not include the expected effects of the Merger. | |||||||||||||
On February 19, 2014, solely to assist broker-dealers in meeting their customer account statement reporting obligations, the Company’s board of directors established an estimated per share value of the Company common stock as of February 18, 2014 of $10.70. This estimated per share value was determined based upon the final closing price of the Kite Common Shares on February 18, 2014 and the exchange ratio for Kite Common Shares under the Merger Agreement that would apply if the Reference Price was equal to the final closing price of the Kite Common Shares on February 18, 2014. | |||||||||||||
In connection with the execution of Merger Agreement, the Company entered into a Master Liquidity Event Agreement (the “Master Agreement”) with the Business Manager, the Real Estate Managers, and certain other affiliates of the Business Manager. The Master Agreement sets forth the terms of the consideration due to the Business Manager and the Real Estate Managers in connection with the Merger, provides for the automatic termination upon the closing of the Merger of the Company’s agreements with the Business Manager and the Real Estate Managers and certain other agreements between the Company and affiliates of the Business Manager and includes certain other agreements in order to facilitate the Merger. Pursuant to the Master Agreement, the Company agreed that the liquidity event fee payable by the Company to the Business Manager upon the consummation of the Merger pursuant to the terms of Business Management Agreement will be $10,235; provided, however, that the total amount of the liquidity event fee will be increased to not more than $12,000 in the event that the Business Manager achieves certain cost savings for the Company prior to the closing of the Merger. | |||||||||||||
Net Lease Sale Transactions | |||||||||||||
On December 16, 2013, the Company, Inland Diversified Cumming Market Place, L.L.C., a Delaware limited liability company and the Company’s subsidiary (“Market Place”), and Bulwark Corporation, a Delaware corporation and the Company’s subsidiary(“Bulwark”), entered into two Purchase and Sale Agreements with Realty Income Corporation, a Maryland corporation and unaffiliated third party purchaser (“Realty Income”), which collectively provide for the sale of a total of 84 of the Company’s single tenant, net leased properties (the “Net Lease Properties”) to Realty Income in a series of transactions which the Company refers to collectively as the “Net Lease Sale Transactions.” (see note 4) | |||||||||||||
The Purchase and Sale Agreement by and among Bulwark, the Company and Realty Income provides for the sale by Bulwark to Realty Income of 100% of the limited liability company membership interests in certain Delaware limited liability companies owned by Bulwark which own, directly or indirectly, a portfolio of nine net-leased commercial real estate properties (collectively, the “Bulwark Properties”). On March 31, 2014, the Company closed the sale of the Bulwark Properties to Realty Income (“Bulwark Closing”) for an aggregate cash purchase price of approximately $72,304, resulting in net proceeds to the Company from the sale of $22,172 after repayment of mortgages payable. | |||||||||||||
The Purchase and Sale Agreement by and among the Company, Market Place, and Realty Income (as amended, the “Net-Lease Purchase Agreement”) provides for (1) the sale by the Company to Realty Income of 100% of the limited liability company membership interests in certain Delaware limited liability companies which own, directly or indirectly, a portfolio of 74 net-leased commercial real estate properties (collectively, the “Net-Lease Properties”), and (2) the sale by Market Place to Realty Income of fee simple title to a single net-leased commercial real estate property (the “Market Place Property”). The Net-Lease Purchase Agreement provides that the Net Lease Properties and the Market Place Property will be sold to Realty Income in two separate tranches. The closing of the sale of first tranche (“Tranche I”) of Net-Lease Properties pursuant to the Net-Lease Purchase Agreement occurred on January 31, 2014, resulting in the sale by the Company to Realty Income of 46 of the Net Lease Properties for an aggregate cash purchase price of approximately $201,955 and net proceeds to the Company from the sale of $126,312 after repayment or assumptions of mortgages payable. The sale of the second tranche (“Tranche II”) of Net-Lease Properties pursuant to the Net-Lease Purchase Agreement will be completed at four separate closings. The first closing of the sale of the Tranche II properties (“Tranche II(a)”) occurred on April 1, 2014, resulting in the sale by the Company to Realty Income of 13 of the Net-Lease Properties and the Market Place Property for an aggregate cash purchase price of approximately $93,605 and net proceeds to the Company from the sale of $41,773 after repayment or assumption of mortgages payable. The second closing of the sale of the Tranche II properties (“Tranche II(b)”) occurred on April 30, 2014, resulting in the sale by the Company to Realty Income of 12 of the Net-Lease Properties for an aggregate cash purchase price of approximately $63,434 and net proceeds to the Company from the sale of $30,534 after repayment or assumption of mortgages payable. The third closing of the sale of the Tranche II properties (“Tranche II(c)”) occurred on May 9, 2014, resulting in the sale by the Company to Realty Income of three of the Net-Lease Properties for an aggregate cash purchase price of approximately $44,422 and net proceeds to the Company from the sale of $14,140 after repayment or assumption of mortgages payable. The fourth closing of the sale of the Tranche II properties (“Tranche II(d)”), at which the final Net-Lease Property will be sold to Realty Income, will occur by June 15, 2014, subject to the satisfaction of all closing conditions. | |||||||||||||
The sale of the Net Lease Properties during the three months ended March 31, 2014 is summarized in the following table. | |||||||||||||
Transaction | Sale Date | Number of Properties Sold | Aggregate Purchase Price | Net Proceeds (1) | |||||||||
Tranche I | 31-Jan-14 | 46 | $ | 201,955 | $ | 126,312 | |||||||
Bulwark | 31-Mar-14 | 9 | 72,304 | 22,172 | |||||||||
Total | 55 | $ | 274,259 | $ | 148,484 | ||||||||
-1 | After repayment or assumption of mortgages payable. | ||||||||||||
The sale of the Net Lease Properties subsequent to March 31, 2014 is summarized in the following table. | |||||||||||||
Transaction | Sale Date | Number of Properties Sold | Aggregate Purchase Price | Net Proceeds (1) | |||||||||
Tranche II (a) | 1-Apr-14 | 13 | $ | 93,605 | $ | 41,773 | |||||||
Tranche II (b) | 30-Apr-14 | 12 | 63,434 | 30,534 | |||||||||
Tranche II (c) | 9-May-14 | 3 | 44,422 | 14,140 | |||||||||
Total | 28 | $ | 201,461 | $ | 86,447 | ||||||||
(1) After repayment or assumption of mortgages payable. | |||||||||||||
As of May 14, 2014, the Company's portfolio consisted of 59 retail properties collectively totaling 10.6 million square feet, including 24 multi-family units, and two multi-family properties totaling 420 units, which does not include one property, which is under contract to sell under the Net Lease Sale Transactions. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||
Summary of Significant Accounting Policies | ' | |||||||||||
Summary of Significant Accounting Policies | ||||||||||||
General | ||||||||||||
The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP and require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. | ||||||||||||
Certain amounts in the prior period consolidated financial statements have been reclassified to conform with the current year presentation. The reclasses primarily represent reclassifications of assets and liabilities to assets and liabilities held for sale as well as revenue and expenses to discontinued operations. | ||||||||||||
Consolidation | ||||||||||||
The accompanying consolidated financial statements include the accounts of the Company, as well as all wholly owned subsidiaries and entities in which the Company has a controlling financial interest. Interests of third parties in these consolidated entities are reflected as noncontrolling interests in the accompanying consolidated financial statements. Wholly owned subsidiaries generally consist of limited liability companies (LLCs). All intercompany balances and transactions have been eliminated in consolidation. | ||||||||||||
Each property is owned by a separate legal entity which maintains its own books and financial records and each entity’s assets are not available to satisfy the liabilities of other affiliated entities, except for certain properties which have cross-collateralized first mortgages as previously disclosed. | ||||||||||||
The Company consolidates the operations of a joint venture if it determines that it's either the primary beneficiary of a variable interest entity (“VIE”) or has substantial influence and control of the entity. The primary beneficiary is the party that has the ability to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses and right to receive the returns from the VIE that would be significant to the VIE. There are significant judgments and estimates involved in determining the primary beneficiary of a variable interest entity or the determination of who has control and influence of the entity. When the Company consolidates an entity, the assets, liabilities and results of operations will be included in the consolidated financial statements. | ||||||||||||
In instances where the Company is not the primary beneficiary of a variable interest entity or it does not control the joint venture, the Company uses the equity method of accounting. Under the equity method, the operations of a joint venture are not consolidated with the Company's operations but instead its share of operations would be reflected as equity in income of unconsolidated entities on the consolidated statements of operations and other comprehensive income. Additionally, the Company's investment in the entities is reflected as investment in unconsolidated entities on the consolidated balance sheets. | ||||||||||||
Recently Issued Accounting Pronouncements | ||||||||||||
In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 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, which amends GAAP to require reporting of discontinued operations only if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. This pronouncement will be effective for the first annual reporting period beginning after December 15, 2015 with early adoption permitted. The Company adopted this accounting pronouncement effective January 1, 2014. This pronouncement does not have any effect on investment properties held for sale as of December 31, 2013. | ||||||||||||
Cash and Cash Equivalents | ||||||||||||
The Company considers all demand deposits and money market accounts and all short-term investments with a maturity of three months or less, at the date of purchase, to be cash equivalents. The Company maintains its cash and cash equivalents at financial institutions. The combined account balances at one or more institutions periodically exceed the Federal Depository Insurance Corporation (“FDIC”) insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company believes that the risk is not significant, as the Company does not anticipate the financial institutions’ non-performance. | ||||||||||||
Restricted Cash and Escrows | ||||||||||||
The Company had restricted escrows of $27,699 and $5,616, excluding amounts related to investment properties held for sale, as of March 31, 2014 and December 31, 2013, respectively, which consist of cash held in escrow relating to the sale of the Bulwark Properties and based on lender requirements for collateral or funds to be used for the payment of insurance, real estate taxes, tenant improvements and leasing commissions. Additionally, the Company had restricted cash of $4,500 and $0 as of March 31, 2014 and December 31, 2013, respectively, which consist of cash held as collateral on an interest rate swap. | ||||||||||||
Revenue Recognition | ||||||||||||
The Company commences revenue recognition on its leases based on a number of factors. In most cases, revenue recognition under a lease begins when the lessee takes possession of or controls the physical use of the leased asset. Generally, this occurs on the lease commencement date. The determination of who is the owner, for accounting purposes, of the tenant improvements determines the nature of the leased asset and when revenue recognition under a lease begins. If the Company is the owner, for accounting purposes, of the tenant improvements, then the leased asset is the finished space and revenue recognition begins when the lessee takes possession of the finished space, typically when the improvements are substantially complete. If the Company concludes it is not the owner, for accounting purposes, of the tenant improvements (the lessee is the owner), then the leased asset is the unimproved space and any tenant improvement allowances funded by the Company under the lease are treated as lease incentives which reduces revenue recognized over the term of the lease. In these circumstances, the Company begins revenue recognition when the lessee takes possession of the unimproved space for the lessee to construct their own improvements. The Company considers a number of different factors to evaluate whether it or the lessee is the owner of the tenant improvements for accounting purposes. The determination of who owns the tenant improvements, for accounting purposes, is subject to significant judgment. | ||||||||||||
Rental income is recognized on a straight-line basis over the term of each lease. The difference between rental income earned on a straight-line basis and the cash rent due under the provisions of the lease agreements is recorded as deferred rent receivable and is included as a component of accounts and rents receivable in the consolidated balance sheets. Due to the impact of the straight-line basis, rental income generally will be greater than the cash collected in the early years and decrease in the later years of a lease. The Company periodically reviews the collectability of outstanding receivables. Allowances are taken for those balances that the Company deems to be uncollectible, including any amounts relating to straight-line rent receivables. | ||||||||||||
Reimbursements from tenants for recoverable real estate tax and operating expenses are accrued as revenue in the period the applicable expenses are incurred. The Company makes certain assumptions and judgments in estimating the reimbursements at the end of each reporting period. The Company does not expect the actual results to materially differ from the estimated reimbursement. | ||||||||||||
The Company records lease termination income if there is a signed termination agreement, all of the conditions of the agreement have been met, the tenant is no longer occupying the property and amounts due are considered collectible. Upon early lease termination, the Company provides for gains or losses related to unrecovered intangibles and other assets. | ||||||||||||
As a lessor, the Company defers the recognition of contingent rental income, such as percentage rent, until the specified target that triggered the contingent rental income is achieved. | ||||||||||||
Capitalization and Depreciation | ||||||||||||
Real estate acquisitions are recorded at cost less accumulated depreciation. Improvement and betterment costs are capitalized, and ordinary repairs and maintenance are expensed as incurred. | ||||||||||||
Transactional costs in connection with the acquisition of real estate properties and businesses are expensed as incurred. | ||||||||||||
Depreciation expense is computed using the straight-line method. Building and improvements are depreciated based upon estimated useful lives of 30 years and 5-15 years for furniture, fixtures and equipment and site improvements. | ||||||||||||
Tenant improvements are amortized on a straight-line basis over the shorter of the life of the asset or the term of the related lease as a component of depreciation and amortization expense. Leasing fees are amortized on a straight-line basis over the term of the related lease as a component of depreciation and amortization expense. Loan fees are amortized on a straight-line basis, which approximates the effective interest method, over the term of the related loans as a component of interest expense. | ||||||||||||
Cost capitalization and the estimate of useful lives require judgment and include significant estimates that can and do change. | ||||||||||||
Depreciation expense was $12,268 and $12,069, excluding amounts related to discontinued operations, for the three months ended March 31, 2014 and 2013, respectively. | ||||||||||||
Fair Value Measurements | ||||||||||||
The Company has estimated fair value using available market information and valuation methodologies the Company believes to be appropriate for these purposes. Considerable judgment and a high degree of subjectivity are involved in developing these estimates and, accordingly, they are not necessarily indicative of amounts that would be realized upon disposition. | ||||||||||||
The Company defines fair value based on the price that it believes would be received upon sale of an asset or the exit price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value. The fair value hierarchy consists of three broad levels, which are described below: | ||||||||||||
• | Level 1—Quoted prices in active markets for identical assets or liabilities. | |||||||||||
• | Level 2—Quoted prices in active markets for similar assets or liabilities; quoted prices in markets that are not active; and model-derived valuations whose inputs are observable. | |||||||||||
• | Level 3—model-derived valuations with unobservable inputs that are supported by little or no market activity. | |||||||||||
Acquisition of Investment Properties | ||||||||||||
Upon acquisition, the Company determines the total purchase price of each property (see note 3), which includes the estimated contingent consideration to be paid or received in future periods (see note 16). The Company allocates the total purchase price of properties and businesses based on the fair value of the tangible and intangible assets acquired and liabilities assumed based on Level 3 inputs, such as comparable sales values, discount rates, capitalization rates, revenue and expense growth rates and lease-up assumptions, from a third party appraisal or other market sources. | ||||||||||||
Certain of the Company’s properties included earnout components to the purchase price, meaning the Company did not pay a portion of the purchase price of the property at closing, although the Company owns the entire property. The Company is not obligated to settle the contingent portion of the purchase prices unless space which was vacant at the time of acquisition is later leased by the seller within the time limits and parameters set forth in the related acquisition agreements. The earnout payments are based on a predetermined formula applied to rental income received. The earnout agreements have a limited obligation period ranging from one to three years from the date of acquisition. If at the end of the time period certain space has not been leased, occupied and rent producing, the Company will have no further obligation to pay additional purchase price consideration and will retain ownership of that entire property. Based on its best estimate, the Company has recorded a liability for the potential future earnout payments using estimated fair value at the date of acquisition using Level 3 inputs including lease-up periods ranging from one to three years, market rents ranging from $9.60 to $45.00, probability of occupancy ranging from 90% to 100% based on leasing activity and discount rates, generally 10%. The Company has recorded these earnout amounts as additional purchase price of the related properties and as a liability included in deferred investment property acquisition obligations on the consolidated balance sheets. The liability increases as the anticipated payment date draws near based on a present value; such increases in the liability are recorded as amortization expense on the consolidated statements of operations and other comprehensive income. The Company records changes in the underlying liability assumptions to other property income on the consolidated statements of operations and other comprehensive income. | ||||||||||||
The portion of the purchase price allocated to acquired above market lease value and acquired below market lease value are amortized on a straight-line basis over the term of the related lease as an adjustment to rental income. For below-market lease values, the amortization period includes bargain renewal option periods at a fixed rate. Amortization pertaining to the above market lease value of $1,086 and $1,891, excluding amounts related to discontinued operations, was recorded as a reduction to rental income for the three months ended March 31, 2014 and 2013, respectively. Amortization pertaining to the below market lease value of $688 and $1,158, excluding amounts related to discontinued operations, was recorded as an increase to rental income for the three months ended March 31, 2014 and 2013, respectively. | ||||||||||||
The portion of the purchase price allocated to acquired in-place lease value is amortized on a straight-line basis over the acquired leases’ weighted-average remaining term. The Company incurred amortization expense pertaining to acquired in-place lease intangibles of $5,477 and $6,164, excluding amounts related to discontinued operations, for the three months ended March 31, 2014 and 2013, respectively. The portion of the purchase price allocated to customer relationship value is amortized on a straight-line basis over the weighted-average remaining lease term. As of March 31, 2014, no amount has been allocated to customer relationship value. | ||||||||||||
The following table summarizes the Company’s identified intangible assets and liabilities, excluding amounts related to investment properties held for sale, as of March 31, 2014 and December 31, 2013. | ||||||||||||
March 31, | December 31, | |||||||||||
2014 | 2013 | |||||||||||
Intangible assets: | ||||||||||||
Acquired in-place lease value | $ | 218,165 | $ | 215,913 | ||||||||
Acquired above market lease value | 35,149 | 35,079 | ||||||||||
Accumulated amortization | (62,724 | ) | (56,234 | ) | ||||||||
Acquired lease intangibles, net | $ | 190,590 | $ | 194,758 | ||||||||
Intangible liabilities: | ||||||||||||
Acquired below market lease value | $ | 51,495 | $ | 51,168 | ||||||||
Accumulated amortization | (6,124 | ) | (5,436 | ) | ||||||||
Acquired below market lease intangibles, net | $ | 45,371 | $ | 45,732 | ||||||||
As of March 31, 2014, the weighted average amortization periods for acquired in-place lease, above market lease and below market lease intangibles, excluding amounts related to investment properties held for sale, are 12, 9 and 23 years, respectively. | ||||||||||||
Estimated amortization of the respective intangible lease assets and liabilities, excluding amounts related to investment properties held for sale, as of March 31, 2014 for each of the five succeeding years and thereafter is as follows: | ||||||||||||
In-place Leases | Above Market Leases | Below Market Leases | ||||||||||
2014 (remainder of year) | $ | 16,362 | $ | 3,079 | $ | 2,073 | ||||||
2015 | 21,542 | 3,862 | 2,667 | |||||||||
2016 | 21,020 | 3,532 | 2,549 | |||||||||
2017 | 20,073 | 3,245 | 2,514 | |||||||||
2018 | 17,321 | 2,365 | 2,428 | |||||||||
Thereafter | 71,210 | 6,979 | 33,140 | |||||||||
Total | $ | 167,528 | $ | 23,062 | $ | 45,371 | ||||||
Investment Properties Held For Sale | ||||||||||||
The Company will classify an investment property as held for sale in the period in which it has committed to a plan to dispose of the property, the Company’s Board of Directors has approved the sale of the property, are in the process of finding or have found a buyer, the property is available for immediate sale and subject only to sales terms that are usual and customary, and the sale of the property is probable and is expected to be completed within one year without significant changes. The Company suspends depreciation on the investment properties held for sale, including depreciation for tenant improvements and additions, as well as on the amortization of acquired in-place leases. The Company will classify the assets and related liabilities as held for sale in its consolidated balance sheets in the period the held for sale criteria is met and reclassify for presentation purposes the related results of operations for all prior periods presented. The Company does not allocate any general and administrative expenses to discontinued operations and only interest expense to the extent the held for sale property is secured by specific mortgage debt and the mortgage debt will not be assigned to another property owned by the Company after the disposition. During December 2013, the Net Lease Properties met the criteria to be held for sale and were classified as held for sale. Assets and liabilities related to the Merger Agreement were not classified as held for sale. | ||||||||||||
Disposition of Real Estate | ||||||||||||
The Company accounts for dispositions in accordance with U.S. GAAP. The Company recognizes a gain or loss in full when a property is sold. A sale is considered complete when the profit is determinable, the collectability of the sales price is reasonably assured or can be estimated, and when the earnings process is virtually complete, and the Company is not obliged to perform significant activities after the sale to earn the profit. The Company records the transaction as discontinued operations for all periods presented in accordance with U.S. GAAP. | ||||||||||||
Impairment of Investment Properties | ||||||||||||
The Company assesses the carrying values of its respective long-lived assets classified as held and used whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable. Recoverability of the assets is measured by comparison of the carrying amount of the asset to the estimated future undiscounted cash flows. In order to review its assets for recoverability, the Company considers current market conditions, as well as its intent with respect to holding or disposing of the asset. Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values and third party appraisals, where considered necessary (Level 3 inputs). If the Company’s analysis indicates that the carrying value of the long-lived asset is not recoverable on an undiscounted cash flow basis, the Company recognizes an impairment charge for the amount by which the carrying value exceeds the current estimated fair value of the real estate property. | ||||||||||||
The Company estimates the future undiscounted cash flows based on the estimated future net rental income from operating the property and termination value. | ||||||||||||
The use of projected future cash flows is based on assumptions that are consistent with our estimates of future expectations and the strategic plan the Company uses to manage its underlying business. However, assumptions and estimates about future cash flows, including comparable sales values, discount rates, capitalization rates, revenue and expense growth rates and lease-up assumptions which impact the discounted cash flow approach to determining value are complex and subjective. Changes in economic and operating conditions and the Company’s ultimate investment intent that occur subsequent to the impairment analysis could impact these assumptions and result in future impairment charges of the real estate properties. | ||||||||||||
The Company assesses the carrying value for all properties classified as held for sale for possible impairment. If the fair value less selling costs is less than the current carrying value, the Company recognizes an impairment charge for the amount by which the carrying value exceeds the fair value less selling costs. | ||||||||||||
During the three months ended March 31, 2014 and 2013, the Company incurred no impairment charges for any investment property classified as held and used or held for sale. | ||||||||||||
Impairment of Marketable Securities | ||||||||||||
The Company assesses its investments in marketable securities for impairment. A decline in the market value of any available-for-sale or held-to-maturity security below cost that is deemed to be other-than-temporary will result in an impairment to reduce the carrying amount to fair value using Level 1 and 2 inputs (see note 7). The impairment will be charged to earnings and a new cost basis for the security will be established. To determine whether impairment is other-than-temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and duration of the impairment, changes in value subsequent to year-end, forecasted performance of the investee, and the general market condition in the geographic area or industry the investee operates in. The Company considers the following factors in evaluating our securities for impairments that are other than temporary: | ||||||||||||
• | declines in the REIT and overall stock market relative to our security positions; | |||||||||||
• | the estimated net asset value (“NAV”) of the companies it invests in relative to their current market prices; and | |||||||||||
• | future growth prospects and outlook for companies using analyst reports and company guidance, including dividend coverage, NAV estimates and growth in “funds from operations,” or “FFO,” and duration of the decline in the value of the securities. | |||||||||||
During the three months ended March 31, 2014 and 2013, the Company incurred no other-than-temporary impairment charges. | ||||||||||||
Redeemable Noncontrolling Interests | ||||||||||||
Certain of the Company's consolidated joint ventures have issued units to noncontrolling interest holders that are redeemable at the noncontrolling interest holder's option for cash or for shares of the Company's common stock at the Company's option. If the noncontrolling interest holder seeks redemption of its units for the Company's shares, the joint ventures may redeem the units through issuance of common shares by the Company on a one-for-one basis or through cash settlement at the redemption price. The redemption is at the option of the holder after passage of time or upon the occurrence of an event that is not solely within the control of the joint ventures. Because redemption of the noncontrolling interests is outside of the applicable joint venture's control, the interests are presented on the consolidated balance sheets outside of permanent equity as redeemable noncontrolling interests. None of the noncontrolling interests are currently redeemable, but it is probable that the noncontrolling interests will become redeemable. Based on such probability, the Company measures and records the noncontrolling interests at their maximum redemption amount at each balance sheet date. Any adjustments to the carrying amount of the redeemable noncontrolling interests for changes in the maximum redemption amount are recorded to additional paid in capital in the period of the change (see note 11). | ||||||||||||
REIT Status | ||||||||||||
The Company has qualified and has elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended, for federal income tax purposes commencing with the tax year ended December 31, 2009. Because the Company qualifies for taxation as a REIT, the Company generally will not be subject to federal income tax on taxable income that is distributed to stockholders. A REIT is subject to a number of organizational and operational requirements, including a requirement that it currently distributes at least 90% of its taxable income (subject to certain adjustments) to its stockholders. The Company will monitor the business and transactions that may potentially impact our REIT status. If the Company fails to qualify as a REIT in any taxable year, without the benefit of certain relief provisions, the Company will be subject to federal (including any applicable alternative minimum tax) and state income tax on its taxable income at regular corporate tax rates. Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes on its income, property or net worth and federal income and excise taxes on its undistributed income. | ||||||||||||
Derivatives | ||||||||||||
The Company uses derivative instruments, such as interest rate swaps, primarily to manage exposure to interest rate risks inherent in variable rate debt. The Company may also enter into forward starting swaps or treasury lock agreements to set the effective interest rate on a planned fixed-rate financing. The Company’s interest rate swaps involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. In a forward starting swap or treasury lock agreement that the Company cash settles in anticipation of a fixed rate financing or refinancing, the Company will receive or pay an amount equal to the present value of future cash flow payments based on the difference between the contract rate and market rate on the settlement date. The Company does not use derivatives for trading or speculative purposes and currently does not have any derivatives that are not designated as hedging instruments under the accounting requirements for derivatives and hedging. |
Acquisitions
Acquisitions | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Business Combinations [Abstract] | ' | ||||||||||||
Acquisitions In 2013 | ' | ||||||||||||
Acquisition | |||||||||||||
On March 21, 2014, the Company acquired a fee simple interest in a 111,271 square foot retail property known as Memorial Commons located in Goldsboro, North Carolina. The Company purchased this property from an unaffiliated third party for $17,810. | |||||||||||||
Memorial Commons is the first replacement property to be acquired to satisfy the Company's Merger closing conditions related to the completion of certain Net Lease Sale Transactions for the purpose of Section 1031 of the Internal Revenue Code. | |||||||||||||
The following table presents certain additional information regarding the Company’s acquisition during the three months ended March 31, 2014. The amounts recognized for major assets acquired and liabilities assumed as of the acquisition date: | |||||||||||||
Property Name | Land | Building and Improvements | Acquired Lease Intangibles | ||||||||||
Memorial Commons | $ | 1,568 | $ | 14,069 | $ | 2,067 | |||||||
For the property acquired during the three months ended March 31, 2014, the Company recorded revenue of $33 and property net income of $29 not including expensed acquisition related costs. |
Discontinued_Operations_and_In
Discontinued Operations and Investment Properties Held for Sale | 3 Months Ended | |||||||
Mar. 31, 2013 | ||||||||
Discontinued Operations and Investment Properties Held for Sale [Abstract] | ' | |||||||
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | ' | |||||||
Discontinued Operations and Investment Properties Held for Sale | ||||||||
On December 16, 2013, the Company entered into the Purchase and Sale Agreement, providing for the sale of the Net Lease Properties in an all-cash transaction with a gross sales price of approximately $503,013. The transaction is expected to close in three tranches during the first and second quarters of 2014. The Tranche I closing and Bulwark Closing were competed on January 31, 2014 and March 31, 2104, respectively. The Tranche II closings were competed in April and May 2014 in multiple closings. The Net Lease Properties qualified for held for sale accounting treatment upon meeting all applicable GAAP criteria on December 16, 2013, at which time depreciation and amortization was suspended. The assets and liabilities associated with these properties are separately classified as held for sale in the consolidated balance sheets as of March 31, 2014 and December 31, 2013. All periods presented on the consolidated balance sheets and consolidated statements of operations and other comprehensive income have been adjusted to conform to the current period presentation. Properties relating to the Merger Agreement were classified as held and used as of March 31, 2014 and as of December 31, 2013. | ||||||||
The following table presents the assets and liabilities associated with the held for sale properties: | ||||||||
March 31, | December 31, | |||||||
Assets | 2014 | 2013 | ||||||
Investment properties: | ||||||||
Land | $ | 29,395 | $ | 89,365 | ||||
Building and improvements | 153,198 | 315,958 | ||||||
Total | 182,593 | 405,323 | ||||||
Less accumulated depreciation | (10,766 | ) | (20,555 | ) | ||||
Net investment properties | 171,827 | 384,768 | ||||||
Restricted cash and escrows | — | 1,939 | ||||||
Accounts and rents receivable, net | 3,020 | 4,199 | ||||||
Acquired lease intangibles, net | 32,296 | 60,504 | ||||||
Deferred costs, net | 1,621 | 2,570 | ||||||
Other assets | 564 | 318 | ||||||
Total assets held for sale | $ | 209,328 | $ | 454,298 | ||||
Liabilities | ||||||||
Mortgages payable | $ | 118,325 | $ | 242,680 | ||||
Accounts payable and accrued expenses | 473 | 1,012 | ||||||
Accrued real estate taxes payable | 166 | 813 | ||||||
Other liabilities | 6,209 | 6,802 | ||||||
Acquired below market lease intangibles, net | 372 | 1,358 | ||||||
Total liabilities held for sale | $ | 125,545 | $ | 252,665 | ||||
The Company will have no continuing involvement with any of its disposed properties subsequent to their disposal. The Company recorded a gain on sale of $26,916 relating to the Tranche I closing and Bulwark Closing that were completed during the three months ended March 31, 2014. Any additional gain will be recorded once each additional tranche is closed. | ||||||||
The results of operations for the investment properties that are accounted for as discontinued operations are presented for each of the three months ended March 31, 2014 and 2013 in the table below: | ||||||||
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
Income: | ||||||||
Rental income | $ | 6,448 | $ | 9,062 | ||||
Tenant recovery income | 250 | 694 | ||||||
Other property income | 22 | 32 | ||||||
Total income | 6,720 | 9,788 | ||||||
Expenses: | ||||||||
General and administrative expenses | — | 153 | ||||||
Property operating expenses | 340 | 479 | ||||||
Real estate taxes | 281 | 554 | ||||||
Depreciation and amortization | — | 3,902 | ||||||
Total expenses | 621 | 5,088 | ||||||
Operating income | 6,099 | 4,700 | ||||||
Gain on sale of investment properties, net | 26,916 | — | ||||||
Interest expense | (2,207 | ) | (2,833 | ) | ||||
Income from discontinued operations | 30,808 | 1,867 | ||||||
Redeemable noncontrolling interests associated with discontinued operations | (18 | ) | (18 | ) | ||||
Net income from discontinued operations attributable to common stockholders | $ | 30,790 | $ | 1,849 | ||||
Operating_Leases
Operating Leases | 3 Months Ended | |||
Mar. 31, 2014 | ||||
Leases [Abstract] | ' | |||
Operating Leases | ' | |||
Operating Leases | ||||
Minimum lease payments to be received under operating leases, including ground leases and excluding leases relating to discontinued operations and multi-family units (lease terms of twelve-months or less), as of March 31, 2014 for the years indicated, assuming no expiring leases are renewed, are as follows: | ||||
Minimum Lease Payments | ||||
2014 (remainder of year) | $ | 101,821 | ||
2015 | 131,762 | |||
2016 | 125,195 | |||
2017 | 113,979 | |||
2018 | 92,415 | |||
Thereafter | 593,965 | |||
Total | $ | 1,159,137 | ||
The remaining lease terms range from less than one year to 72 years. Most of the revenue from the Company’s properties consists of rents received under long-term operating leases. Some leases require the tenant to pay fixed base rent paid monthly in advance, and to reimburse the Company for the tenant’s pro rata share of certain operating expenses including real estate taxes, special assessments, insurance, utilities, common area maintenance, management fees, and certain building repairs paid by the Company and recoverable under the terms of the lease. Under these leases, the Company pays all expenses and is reimbursed by the tenant for the tenant’s pro rata share of recoverable expenses paid. Certain other tenants are subject to net leases which provide that the tenant is responsible for fixed base rent as well as all costs and expenses associated with occupancy. Under net leases where all expenses are paid directly by the tenant rather than the landlord, such expenses are not included in the consolidated statements of operations and other comprehensive income. Under leases where all expenses are paid by the Company, subject to reimbursement by the tenant, the expenses are included within property operating expenses and reimbursements are included in tenant recovery income on the consolidated statements of operations and other comprehensive income. |
Unconsolidated_Entities
Unconsolidated Entities | 3 Months Ended | ||||||||||||||
Mar. 31, 2014 | |||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | ' | ||||||||||||||
Unconsolidated Entities | ' | ||||||||||||||
Unconsolidated Entities | |||||||||||||||
The Company is a member of a limited liability company formed as an insurance association captive (the “Insurance Captive”), which is owned in equal proportions by the Company and three related parties, Inland Real Estate Corporation, Inland American Real Estate Trust, Inc. and Inland Real Estate Income Trust, Inc., and a third party, Retail Properties of America, Inc., and is serviced by an affiliate of the Business Manager, Inland Risk and Insurance Management Services Inc. The Insurance Captive was formed to initially insure/reimburse the members’ deductible obligations for the first $100 of property insurance and $100 of general liability insurance. The Company entered into the Insurance Captive to stabilize its insurance costs, manage its exposures and recoup expenses through the functions of the captive program. This entity is considered to be a variable interest entity (VIE) as defined in U.S. GAAP and the Company is not considered to be the primary beneficiary. Therefore, this investment is accounted for utilizing the equity method of accounting. The Company's risk of loss is limited to its investment in the Insurance Captive and it is not required to fund additional capital to the entity. | |||||||||||||||
Ownership % at | Investment at | ||||||||||||||
Joint Venture | Description | March 31, 2014 | December 31, 2013 | March 31, 2014 | December 31, 2013 | ||||||||||
Oak Property & Casualty LLC | Insurance Captive | 20% | 20% | $ | 553 | $ | 484 | ||||||||
The Company’s share of net income from its investment in the unconsolidated entity is based on the ratio of each member’s premium contribution to the venture. The Company was allocated income of $70 and $155 for the three months ended March 31, 2014 and 2013, respectively. | |||||||||||||||
On May 28, 2009, the Company purchased 1,000 shares of common stock in the Inland Real Estate Group of Companies for $1, which are accounted for under the cost method and included in investment in unconsolidated entities on the consolidated balance sheets. |
Investment_in_Marketable_Secur
Investment in Marketable Securities | 3 Months Ended |
Mar. 31, 2014 | |
Investments, Debt and Equity Securities [Abstract] | ' |
Investment in Marketable Securities | ' |
Investment in Marketable Securities | |
Investment in marketable securities of $35,604 and $34,070 at March 31, 2014 and December 31, 2013, respectively, consists of primarily preferred and common stock and corporate bond investments in other publicly traded REITs which are classified as available-for-sale securities and recorded at fair value. The cost basis of the Company's investment in marketable securities was $33,205 and $33,492 at March 31, 2014 and December 31, 2013, respectively. | |
Unrealized holding gains and losses on available-for-sale securities are excluded from earnings and reported as a separate component of comprehensive income until realized. The Company has recorded an accumulated net unrealized gain of $2,399 and $578 on the consolidated balance sheets as of March 31, 2014 and December 31, 2013, respectively. The Company had net unrealized gains of $1,821 and $2,705 for the three months ended March 31, 2014 and 2013, respectively. These unrealized and gains have been recorded as other comprehensive income in the consolidated statements of operations and other comprehensive income. | |
Realized gains and losses from the sale of available-for-sale securities are determined on a specific identification basis or first-in, first-out basis. The Company had realized gains of $24 and $26 for the three months ended March 31, 2014 and 2013, respectively. These gains have been recorded as realized gain on sale of marketable securities in the consolidated statements of operations and other comprehensive income. | |
The Company’s policy for assessing recoverability of its available-for-sale securities is to record a charge against net earnings when the Company determines that a decline in the fair value of a security drops below the cost basis and believes that decline to be other-than-temporary, which includes determining whether for marketable securities: (1) the Company intends to sell the marketable security, and (2) it is more likely than not that the Company will be required to sell the marketable security before its anticipated recovery. |
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||
Fair Value of Financial Instruments | ' | |||||||||||||||
Fair Value of Financial Instruments | ||||||||||||||||
The fair value of financial instruments is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amounts reflected in the consolidated balance sheets for cash and cash equivalents, restricted cash and escrows, accounts and rents receivable, accounts payable and accrued expenses, accrued real estate taxes payable and due to related parties approximates their fair values at March 31, 2014 and December 31, 2013 due to the short maturity of these instruments. | ||||||||||||||||
All financial assets and liabilities are recognized or disclosed at fair value using a fair value hierarchy as described in note 2 – “Fair Value Measurements.” | ||||||||||||||||
The following table presents the Company’s assets and liabilities, measured at fair value on a recurring basis, and related valuation inputs within the fair value hierarchy utilized to measure fair value as of March 31, 2014 and December 31, 2013: | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
March 31, 2014 | ||||||||||||||||
Asset - investment in marketable securities | $ | 26,576 | $ | 9,028 | $ | — | $ | 35,604 | ||||||||
Asset - interest rate swap | $ | — | $ | 819 | $ | — | $ | 819 | ||||||||
Liability - interest rate swap | $ | — | $ | 3,708 | $ | — | $ | 3,708 | ||||||||
December 31, 2013 | ||||||||||||||||
Asset - investment in marketable securities | $ | 24,871 | $ | 9,199 | $ | — | $ | 34,070 | ||||||||
Asset - interest rate swap | $ | — | $ | 2,379 | $ | — | $ | 2,379 | ||||||||
Liability - interest rate swap | $ | — | $ | 4,127 | $ | — | $ | 4,127 | ||||||||
The valuation techniques used to measure fair value of the investment in marketable securities above was quoted prices from national stock exchanges and quoted prices from third party brokers for similar assets (see note 7). The Company performs certain validation procedures such as verifying changes in security prices from one period to the next and verifying ending security prices on a test basis. | ||||||||||||||||
The valuation techniques used to measure the fair value of the interest rate swaps above in which the counterparties have high credit ratings, were derived from pricing models provided by a third party, such as discounted cash flow techniques, with all significant inputs derived from or corroborated by observable market data. The Company verifies the ending values provided by the third party to the values received on the counterparties' statements for reasonableness. The Company’s discounted cash flow techniques use observable market inputs, such as LIBOR-based yield curves. | ||||||||||||||||
The Company estimates the fair value of its total debt by discounting the future cash flows of each instrument at rates currently offered for similar debt instruments of comparable maturities by the Company’s lenders using Level 3 inputs. The carrying value of the Company’s mortgage debt (including mortgage debt classified as held for sale) was $1,051,055 and $1,185,433 at March 31, 2014 and December 31, 2013, respectively, and its estimated fair value was $1,062,781 and $1,211,250 as of March 31, 2014 and December 31, 2013, respectively. The Company’s carrying amount of variable rate borrowings on the credit facility and securities margin payable approximates their fair values at March 31, 2014 and December 31, 2013. |
Transactions_with_Related_Part
Transactions with Related Parties | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Related Party Transactions [Abstract] | ' | ||||||||||||||||
Transactions With Related Parties | ' | ||||||||||||||||
Transactions with Related Parties | |||||||||||||||||
The Company has an investment in Insurance Captive, an insurance captive entity with other REITs sponsored by our Sponsor and a third party. The Insurance Captive is included in the Company’s disclosure of Unconsolidated Entities (see note 6) and is included in investment in unconsolidated entities on the consolidated balance sheets. | |||||||||||||||||
As of March 31, 2014 and December 31, 2013, the Company owed a total of $1,759 and $2,074, respectively, to our Sponsor and its affiliates related to advances used to pay administrative and offering costs and certain accrued expenses which are included in due to related parties on the consolidated balance sheets. These amounts represent non-interest bearing advances by the Sponsor and its affiliates and accrued business management fees, which the Company intends to repay. | |||||||||||||||||
At March 31, 2014 and December 31, 2013, the Company held $791 and $789, respectively, in shares of common stock in Inland Real Estate Corporation, which are classified as available-for-sale securities and recorded at fair value. | |||||||||||||||||
The Company has 1,000 shares of common stock in the Inland Real Estate Group of Companies with a recorded value of $1 at March 31, 2014 and December 31, 2013, which are accounted for under the cost method and included in investment in unconsolidated entities on the consolidated balance sheets. | |||||||||||||||||
The following table summarizes the Company’s related party transactions for the three months ended March 31, 2014 and 2013. | |||||||||||||||||
For the Three Months Ended March 31, | Unpaid Amounts as of | ||||||||||||||||
2014 | 2013 | March 31, 2014 | December 31, 2013 | ||||||||||||||
General and administrative: | |||||||||||||||||
General and administrative reimbursement | (a) | $ | 450 | $ | 409 | $ | 291 | $ | 292 | ||||||||
Loan servicing | (b) | 76 | 74 | — | — | ||||||||||||
Investment advisor fee | (c) | 68 | 80 | 23 | 25 | ||||||||||||
Total general and administrative to related parties | $ | 594 | $ | 563 | $ | 314 | $ | 317 | |||||||||
Acquisition related costs | (d) | $ | 46 | $ | 54 | — | — | ||||||||||
Real estate management fees | (e) | 2,109 | 2,205 | — | — | ||||||||||||
Business management fee | (f) | 3,446 | 3,500 | 1,445 | 1,757 | ||||||||||||
Loan placement fees | (g) | — | 67 | — | — | ||||||||||||
Cost reimbursement | (h) | 5 | — | — | — | ||||||||||||
(a) | The Business Manager and its related parties are entitled to reimbursement for general and administrative expenses of the Business Manager and its related parties relating to the Company’s administration. Such costs are included in general and administrative expenses in the consolidated statements of operations and other comprehensive income. | ||||||||||||||||
(b) | A related party of the Business Manager provides loan servicing to the Company for an annual fee equal to .03% of the first $1,000,000 of serviced loans and .01% for serviced loans over $1,000,000. These loan servicing fees are paid monthly and are included in general and administrative expenses in the consolidated statements of operations and other comprehensive income. | ||||||||||||||||
(c) | The Company pays a related party of the Business Manager to purchase and monitor its investment in marketable securities. | ||||||||||||||||
(d) | The Business Manager and its related parties are reimbursed for acquisition, dead deal and transaction related costs of the Business Manager and its related parties relating to the Company’s acquisition of real estate assets. These costs relate to both closed and potential transactions and include customary due diligence costs including time and travel expense reimbursements. Such costs are included in acquisition related costs in the consolidated statements of operations and other comprehensive income. The Company does not pay acquisition fees to its Business Manager or its affiliates. | ||||||||||||||||
(e) | The real estate managers, entities owned principally by individuals who are related parties of the Business Manager, receive monthly real estate management fees up to 4.5% of gross operating income (as defined), for management and leasing services. Such costs are included in property operating expenses in the consolidated statements of operations and other comprehensive income. In addition to these fees, the real estate managers receive reimbursements of payroll costs for property level employees. The Company reimbursed or will reimburse the real estate managers and other affiliates $547 and $569 for the three months ended March 31, 2014 and 2013, respectively. | ||||||||||||||||
(f) | Subject to satisfying the criteria described below, the Company pays the Business Manager a quarterly business management fee equal to a percentage of the Company’s “average invested assets” (as defined in the business management agreement), calculated as follows: | ||||||||||||||||
-1 | if the Company has declared distributions during the prior calendar quarter just ended, in an amount equal to or greater than an average 7% annualized distribution rate (assuming a share was purchased for $10.00), it will pay a fee equal to 0.1875% of its “average invested assets” for that prior calendar quarter; | ||||||||||||||||
-2 | if the Company has declared distributions during the prior calendar quarter just ended, in an amount equal to or greater than an average 6% annualized distribution rate but less than 7% annualized distribution rate (assuming a share was purchased for $10.00), it will pay a fee equal to 0.1625% of its “average invested assets” for that prior calendar quarter; | ||||||||||||||||
-3 | if the Company has declared distributions during the prior calendar quarter just ended, in an amount equal to or greater than an average 5% annualized distribution rate but less than 6% annualized distribution rate (assuming a share was purchased for $10.00), it will pay a fee equal to 0.125% of its “average invested assets” for that prior calendar quarter; or | ||||||||||||||||
-4 | if the Company does not satisfy the criteria in (1), (2) or (3) above in a particular calendar quarter just ended, it will not, except as set forth below, pay a business management fee for that prior calendar quarter. | ||||||||||||||||
-5 | Assuming that (1), (2) or (3) above is satisfied, the Business Manager may decide, in its sole discretion, to be paid an amount less than the total amount that may be paid. If the Business Manager decides to accept less in any particular quarter, the excess amount that is not paid may, in the Business Manager’s sole discretion, be waived permanently or deferred, without interest, to be paid at a later point in time. This obligation to pay the deferred fee terminates if the Company acquires the Business Manager. For the three months ended March 31, 2014 and 2013, the Business Manager was entitled to a business management fee in the amount equal to $3,446 and $3,664, respectively of which $0 and $164, respectively was permanently waived. | ||||||||||||||||
Separate and distinct from any business management fee, the Company will also reimburse the Business Manager, the Real Estate Managers and their affiliates for certain expenses that they, or any related party including the Sponsor, pay or incur on its behalf including the salaries and benefits of persons employed except that the Company will not reimburse either our Business Manager or Real Estate Managers for any compensation paid to individuals who also serve as the Company’s executive officers, or the executive officers of the Business Manager, the Real Estate Managers or their affiliates; provided that, for these purposes, the secretaries will not be considered “executive officers.” These costs were recorded in general and administrative expenses in the consolidated statements of operations and other comprehensive income. | |||||||||||||||||
(g) | The Company pays a related party of the Business Manager 0.2% of the principal amount of each loan it places for the Company. Such costs are capitalized as loan fees and amortized over the respective loan term. | ||||||||||||||||
(h) | The Company reimburses a related party of the Business Manager for costs incurred for construction oversight provided to the Company relating to its development project. These reimbursements are paid monthly during the development period. These costs are capitalized and are included in construction in progress on the consolidated balance sheet. | ||||||||||||||||
The Company may pay additional types of compensation to affiliates of the Sponsor in the future, including the Business Manager and the Real Estate Managers and their respective affiliates; however, we did not pay any other types of compensation for the three months ended March 31, 2014 and 2013. |
Mortgages_Credit_Facility_and_
Mortgages, Credit Facility, and Securities Margins Payable | 3 Months Ended | ||||||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ' | ||||||||||||||||||||||||||||
Mortgages, Credit Facility, and Securities Margins Payable | ' | ||||||||||||||||||||||||||||
Mortgages, Credit Facility, and Securities Margins Payable | |||||||||||||||||||||||||||||
The following table shows the scheduled maturities and required principal payments of the Company’s mortgages payable and Credit Facility including liabilities related to investment properties held for sale as of March 31, 2014, for each of the next five years and thereafter, including the effects of interest rate swaps: | |||||||||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | Thereafter | Total | |||||||||||||||||||||||
(remainder of year) | |||||||||||||||||||||||||||||
Fixed rate debt: | |||||||||||||||||||||||||||||
Mortgages payable (a) | $ | 408 | $ | 85,950 | $ | 48,058 | $ | 81,076 | $ | 78,222 | $ | 635,345 | $ | 929,059 | |||||||||||||||
Total fixed rate debt | 408 | 85,950 | 48,058 | 81,076 | 78,222 | 635,345 | 929,059 | ||||||||||||||||||||||
Variable rate debt: | |||||||||||||||||||||||||||||
Mortgages payable (a) | — | 50,140 | 2,232 | 18,340 | 5,180 | 45,000 | 120,892 | ||||||||||||||||||||||
Total variable debt | — | 50,140 | 2,232 | 18,340 | 5,180 | 45,000 | 120,892 | ||||||||||||||||||||||
Total debt (b) | $ | 408 | $ | 136,090 | $ | 50,290 | $ | 99,416 | $ | 83,402 | $ | 680,345 | $ | 1,049,951 | |||||||||||||||
Mortgages payable related to investment properties held for sale (c) | $ | — | $ | 23 | $ | 254 | $ | 281 | $ | 295 | $ | 117,472 | $ | 118,325 | |||||||||||||||
Weighted average interest rate on debt: | |||||||||||||||||||||||||||||
Fixed rate debt | 5.59 | % | 5.29 | % | 4.84 | % | 4.44 | % | 5.27 | % | 4.49 | % | 4.64 | % | |||||||||||||||
Variable rate debt | — | 1.9 | % | 2.65 | % | 2.63 | % | 2.51 | % | 1.55 | % | 1.92 | % | ||||||||||||||||
Total | 5.59 | % | 4.04 | % | 4.74 | % | 4.11 | % | 5.1 | % | 4.3 | % | 4.33 | % | |||||||||||||||
Weighted average interest rate on mortgages payable related to investment properties held for sale (c) | — | 5.06 | % | 5.11 | % | 5.11 | % | 5.11 | % | 4.76 | % | 4.76 | % | ||||||||||||||||
(a) | Excludes net mortgage premiums of $1,104, associated with debt assumed at acquisition, net of accumulated amortization as of March 31, 2014. | ||||||||||||||||||||||||||||
(b) | Excludes securities margin payable of $9,403 which is due upon the sale of marketable securities, and currently has an interest rate of 0.50% per annum, as of March 31, 2014. | ||||||||||||||||||||||||||||
(c) | As part of the Tranche II closings of the Net Lease Properties which closed in April and May 2014, the Company assumptions of mortgage debt with a principal balance of $107,825 and a weighted average interest rate of 4.67% as of March 31, 2014. | ||||||||||||||||||||||||||||
The principal amount of our mortgage loans outstanding as of March 31, 2014 and December 31, 2013 (including mortgage debt classified as held for sale) was $1,049,951 and $1,184,256, respectively, and had a weighted average stated interest rate of 4.33% and 4.30% per annum, respectively, which includes effects of interest rate swaps. All of the Company’s mortgage loans are secured by first mortgages on the real estate assets. | |||||||||||||||||||||||||||||
The mortgage loans may require compliance with certain covenants, such as debt service ratios, investment restrictions and distribution limitations. As of March 31, 2014, all of the mortgages were current in payments and the Company was in compliance with such covenants. | |||||||||||||||||||||||||||||
On November 1, 2012, the Company entered into an amended and restated credit agreement (as amended the “Credit Facility”), under which the Company may borrow, on an unsecured basis, up to $105,000. The Company has the right, provided that no default has occurred and is continuing, to increase the facility amount up to $200,000 with approval from the lending group. The obligations under the Credit Facility will mature on October 31, 2015, which may be extended to October 31, 2016 subject to satisfaction of certain conditions. The Company has the right to terminate the facility at any time, upon one business day notice and the repayment of all of its obligations thereunder. Borrowings under the Credit Facility bear interest at a base rate applicable to any particular borrowing (e.g., LIBOR) plus a graduated spread that varies with the Company's leverage ratio. The Company generally will be required to make monthly interest-only payments, except that we may be required to make partial principal payments in order to comply with certain debt covenants set forth in the Credit Facility. The Company is also required to pay, on a quarterly basis, an amount up to 0.35% per annum on the average daily unused funds remaining under the Credit Facility. The Credit Facility requires compliance with certain covenants which may restrict the availability of funds under the Credit Facility. Our performance of the obligations under the Credit Facility, including the payment of any outstanding indebtedness thereunder, is secured by a guaranty by certain of our subsidiaries owning unencumbered properties. The amount outstanding on the Credit Facility was $0 and $52,500 as of March 31, 2014 and December 31, 2013, respectively. | |||||||||||||||||||||||||||||
The Company has purchased a portion of its marketable securities through margin accounts. As of March 31, 2014 and December 31, 2013, the Company had a payable of $9,403 and $10,341, respectively, for securities purchased on margin. The debt bears a variable interest rate. As of March 31, 2014 and December 31, 2013, the interest rate was 0.50% and 0.51% per annum, respectively. The securities margin payable is due upon the sale of any marketable securities. | |||||||||||||||||||||||||||||
Interest Rate Swap Agreements | |||||||||||||||||||||||||||||
The Company entered into interest rate swaps to fix the floating LIBOR based debt under certain variable rate loans to a fixed rate to manage the risk exposed to interest rate fluctuations. The Company will generally match the maturity of the underlying variable rate debt with the maturity date on the interest swap. | |||||||||||||||||||||||||||||
The following table summarizes the Company's interest rate swap contracts outstanding as of March 31, 2014: | |||||||||||||||||||||||||||||
Date Entered | Effective Date | Maturity Date | Pay | Receive | Notional | Fair Value as of | Fair Value | ||||||||||||||||||||||
Fixed | Floating | Amount | 31-Mar-14 | as of | |||||||||||||||||||||||||
Rate | Rate Index | 31-Dec-13 | |||||||||||||||||||||||||||
11-Mar-11 | -1 | 5-Apr-11 | 5-Nov-15 | 5.01 | % | 1 month LIBOR | $ | 9,350 | $ | — | $ | (322 | ) | ||||||||||||||||
22-Jun-11 | 24-Jun-11 | 22-Jun-16 | 4.47 | % | 1 month LIBOR | 13,359 | (413 | ) | (457 | ) | |||||||||||||||||||
28-Oct-11 | 1-Nov-11 | 21-Oct-16 | 3.75 | % | 1 month LIBOR | 10,837 | (216 | ) | (240 | ) | |||||||||||||||||||
9-May-12 | 9-May-12 | 9-May-17 | 3.38 | % | 1 month LIBOR | 10,150 | (52 | ) | (66 | ) | |||||||||||||||||||
13-Jun-12 | -2 | 10-Jun-11 | 10-Dec-18 | 5.17 | % | 1 month LIBOR | 49,391 | (3,027 | ) | (3,041 | ) | ||||||||||||||||||
24-Jul-12 | -1 | 26-Jul-12 | 20-Jul-17 | 3.09 | % | 1 month LIBOR | 4,677 | — | 23 | ||||||||||||||||||||
1-Oct-12 | 1-Apr-14 | 29-Mar-19 | 3.85 | % | 1 month LIBOR | 45,000 | 622 | 977 | |||||||||||||||||||||
2-Oct-12 | 4-Oct-12 | 1-Oct-17 | 3.73 | % | 1 month LIBOR | 24,750 | 121 | 132 | |||||||||||||||||||||
4-Oct-12 | -1 | 4-Oct-12 | 3-Oct-19 | 3.15 | % | 1 month LIBOR | 10,808 | — | 402 | ||||||||||||||||||||
20-Dec-12 | 20-Dec-12 | 20-Dec-17 | 3.36 | % | 1 month LIBOR | 9,900 | 76 | 87 | |||||||||||||||||||||
14-Feb-13 | -1 | 14-Feb-13 | 31-Dec-22 | 4.25 | % | 1 month LIBOR | 14,900 | — | 757 | ||||||||||||||||||||
Total | $ | 203,122 | $ | (2,889 | ) | $ | (1,748 | ) | |||||||||||||||||||||
-1 | Interest rate swaps were settled as part of Tranche I Closing of the Net Lease Properties on January 31, 2014. | ||||||||||||||||||||||||||||
-2 | Assumed at the time of acquisition of Walgreens NE Portfolio with a then fair value of ($5,219). The Company retained this interest rate swap subsequent to the sale of the Walgreens NE Portfolio in the Bulwark Closing of the Net Lease Sale Transaction. | ||||||||||||||||||||||||||||
The Company has documented and designated these interest rate swaps as cash flow hedges. Based on the assessment of effectiveness using statistical regression, the Company determined that the interest rate swaps are effective. Effectiveness testing of the hedge relationship and measurement to quantify ineffectiveness is performed each fiscal quarter using the hypothetical derivative method. As these interest rate swaps qualify as cash flow hedges, the Company adjusts the cash flow hedges on a quarterly basis to their fair values with corresponding offsets to accumulated other comprehensive income. The Company does not offset derivative liabilities with derivative assets relating to its cash flow hedges. The Company has recorded an accumulated net unrealized gain of $1,109 and $2,125 on the consolidated balance sheet as of March 31, 2014 and December 31, 2013, respectively. The interest rate swaps have been and are expected to remain highly effective for the term of the hedge. Effective amounts are reclassified to interest expense as the related hedged expense is incurred. Any ineffectiveness on the hedges is reported in other income/expense. For the three months ended March 31, 2014 and 2013, the Company had $2 and $4, respectively of ineffectiveness on its cash flow hedges. Amounts related to the swaps expected to be reclassified from accumulated other comprehensive income to interest expense in the next twelve months total $1,832. | |||||||||||||||||||||||||||||
The table below presents the fair value of the Company’s cash flow hedges as well as their classification on the consolidated balance sheets as of March 31, 2014 and December 31, 2013. | |||||||||||||||||||||||||||||
March 31, 2014 | December 31, 2013 | ||||||||||||||||||||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||||||||||||||||||||
Derivatives designated as cash flow hedges: | |||||||||||||||||||||||||||||
Interest rate swaps | Other liabilities | $ | (3,708 | ) | Other liabilities | $ | (4,127 | ) | |||||||||||||||||||||
Interest rate swaps | Other assets | 819 | Other assets | 2,379 | |||||||||||||||||||||||||
The table below presents the effect of the Company’s derivative financial instruments on the consolidated statements of operations and other comprehensive income for the three months ended March 31, 2014 and 2013: | |||||||||||||||||||||||||||||
Derivatives in Cash Flow Hedging Relationships | Amount of Loss Recognized in OCI on Derivative (Effective Portion) | Location of Loss Reclassified from Accumulated OCI into Income | Amount of Loss Reclassified from Accumulated OCI into Income | Location of Loss Recognized in Income on Derivative (Ineffective Portion) | Amount of Loss Recognized in Income on Derivative (Ineffective Portion) | ||||||||||||||||||||||||
(Effective Portion) | (Effective Portion) | ||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||
Interest rate swaps | $ | 1,325 | $ | 160 | Interest Expense | $ | 309 | $ | 325 | Other Expense | $ | 2 | $ | 4 | |||||||||||||||
Redeemable_Noncontrolling_Inte
Redeemable Noncontrolling Interest | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Noncontrolling Interest [Abstract] | ' | ||||||||||||||||
Redeemable Noncontrolling Interest | ' | ||||||||||||||||
Redeemable Noncontrolling Interests | |||||||||||||||||
Certain of the Company's consolidated joint ventures have issued units to noncontrolling interest holders that are redeemable at the noncontrolling interest holder's option for cash, or for shares of the Company's common stock at the Company's option. If the noncontrolling interest holder seeks redemption of its units for the Company's shares, the joint ventures may redeem the units through issuance of common stock by the Company on a one-for-one basis or through cash settlement at the redemption price. These redeemable noncontrolling interests will become redeemable at future dates generally no earlier than in 2015 and no later than 2022 based on certain redemption criteria. The redeemable noncontrolling interests are not mandatorily redeemable. | |||||||||||||||||
The following table summarizes the redeemable noncontrolling interests as of March 31, 2014. | |||||||||||||||||
Joint Venture | Number of Redeemable Noncontrolling Interests Units Outstanding (1) | Redeemable Noncontrolling Interests at Issuance | Carrying Value of Redeemable Noncontrolling Interests | Preferred Return per Annum | Notes | ||||||||||||
Kohl's Cumming | 141,602 | $ | 1,416 | $ | 1,416 | 5 | % | (2), (3) | |||||||||
City Center | 2,656,450 | 26,565 | 26,758 | 4 | % | (3), (4) | |||||||||||
Crossing at Killingly | 960,802 | 9,608 | 9,809 | 3.5 | % | (3), (5) | |||||||||||
Territory Portfolio | 3,000,000 | 30,000 | 30,000 | 4 | % | -6 | |||||||||||
Total | 6,758,854 | $ | 67,589 | $ | 67,983 | ||||||||||||
-1 | Redeemable noncontrolling interest units had a fair value of $10.00 each at the time of issuance. | ||||||||||||||||
-2 | As part of the Tranche II(a) closing of the Net Lease Properties on April 1, 2014, the Company's ownership interest in the Kohl's Cumming joint venture, a consolidated subsidiary, was sold and the redeemable noncontrolling interests were derecognized. | ||||||||||||||||
-3 | If the unit holder elects shares and the joint venture pays the redemption price in cash, the redemption value will be greater of (i) $10.00 per unit, plus any accumulated, accrued and unpaid distributions to and including the date of redemption or (ii) the Company's share price per share. | ||||||||||||||||
-4 | Preferred return started on June 7, 2013, upon fulfillment of the deferred investment property acquisition obligations. | ||||||||||||||||
-5 | Preferred return will increase to 5.50% per annum on October 3, 2015. The joint venture may issue up to an additional 298,121 redeemable noncontrolling interest units to settle its earnout liability included in the Company's investment property acquisition obligation on the consolidated balance sheet (see note 16). | ||||||||||||||||
-6 | If the unit holder elects shares and the joint venture pays the redemption price in cash, the redemption value will be $10.00 per unit plus 50% of the excess of the Company's share price per share over $10.00 per unit. | ||||||||||||||||
Below is a table reflecting the activity of the consolidated redeemable noncontrolling interests as of and for the three months ended March 31, 2014 and 2013. | |||||||||||||||||
Redeemable Noncontrolling Interests | |||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Balance at beginning of period | $ | 67,950 | $ | 47,215 | |||||||||||||
Net income attributable to redeemable noncontrolling interests | 697 | 501 | |||||||||||||||
Payment of preferred return | (664 | ) | (417 | ) | |||||||||||||
Balance at close of period | $ | 67,983 | $ | 47,299 | |||||||||||||
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||
Equity [Abstract] | ' | ||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | ' | ||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||||||||
The following table indicates the changes and reclassifications affecting accumulated other comprehensive income (loss) by component for the three months ended March 31, 2014 and 2013. | |||||||||||||||||||||||||
Gain (Loss) on Cash Flow Hedges | Unrealized Gains and (Losses) on Available-for-sale Securities | Total | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||
Accumulated other comprehensive income (loss) - January 1 | $ | 2,125 | $ | (3,282 | ) | $ | 578 | $ | 2,999 | $ | 2,703 | $ | (283 | ) | |||||||||||
Activity for current-period: | |||||||||||||||||||||||||
Other comprehensive (loss) income before reclassifications | (1,325 | ) | (160 | ) | 1,845 | 2,731 | 520 | 2,571 | |||||||||||||||||
Amounts reclassified from other comprehensive income (loss) into income | 309 | 325 | -1 | (24 | ) | (26 | ) | -2 | 285 | 299 | |||||||||||||||
Net current-period other comprehensive (loss) income | (1,016 | ) | 165 | 1,821 | 2,705 | 805 | 2,870 | ||||||||||||||||||
Accumulated other comprehensive income (loss) - March 31 | $ | 1,109 | $ | (3,117 | ) | $ | 2,399 | $ | 5,704 | $ | 3,508 | $ | 2,587 | ||||||||||||
-1 | Included in interest expense on the consolidated statements of operations and other comprehensive income. | ||||||||||||||||||||||||
-2 | Included in realized gain on sale of marketable securities on the consolidated statements of operations and other comprehensive income. |
Income_Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2014 | |
Income Tax Disclosure [Abstract] | ' |
Income Taxes | ' |
Income Taxes | |
The Company had no uncertain tax positions as of March 31, 2014 and December 31, 2013. The Company expects no significant increases or decreases in uncertain tax positions due to changes in tax positions within one year of March 31, 2014. The Company has no interest or penalties relating to income taxes recognized in the consolidated statements of operations and other comprehensive income for the three months ended March 31, 2014 and 2013. As of March 31, 2014, returns for the calendar years 2010, 2011, 2012 and 2013 remain subject to examination by the U.S. tax jurisdiction and various state and local tax returns remain subject to examination for the years 2009, 2010, 2011, 2012 and 2013 by the state and local tax jurisdictions. |
Distributions
Distributions | 3 Months Ended |
Mar. 31, 2014 | |
Distributions [Abstract] | ' |
Distributions | ' |
Distributions | |
The Company has paid distributions based on daily record dates, payable monthly in arrears. The distributions that the Company has paid are equal to a daily amount equal to $0.00164384, which if paid each day for a 365-day period, would equal $0.60 per share or a 6.0% annualized rate based on a purchase price of $10.00 per share. During for the three months ended March 31, 2014 and 2013, the Company declared cash distributions, totaling $17,429 and $17,071, respectively. |
Earnings_Loss_per_Share
Earnings (Loss) per Share | 3 Months Ended |
Mar. 31, 2014 | |
Earnings Per Share [Abstract] | ' |
Earnings (Loss) per Share | ' |
Earnings (Loss) per Share | |
Basic earnings (loss) per share (“EPS”) are computed by dividing net (loss) income attributable to common stockholders by the weighted average number of common shares outstanding for the period (the “common shares”). Diluted EPS is computed by dividing net (loss) income attributable to common stockholders by the weighted average number of common shares outstanding plus potential common shares issuable upon exercising options or other contracts. As of March 31, 2014 and 2013, the Company's only potentially dilutive common share equivalents outstanding were the redeemable noncontrolling interests that could be converted to 6,758,854 and 4,711,553 common shares, respectively, at future dates. As of March 31, 2014, our consolidated joint venture may issue up to an additional 298,121 redeemable noncontrolling interest units to settle its earnout liability included in the Company's investment property acquisition obligation on the consolidated balance sheet (see note 16). For the three months ended March 31, 2014, the common share equivalents were excluded as they were antidilutive. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||||||
Commitments and Contingencies | ' | |||||||
Commitments and Contingencies | ||||||||
Twelve of the Company’s properties have earnout components related to property acquisitions. The maximum potential earnout payment was $24,018 at March 31, 2014. The table below presents the change in the Company’s earnout liability for the three months ended March 31, 2014 and 2013. | ||||||||
For the Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
Earnout liability – beginning of period, fair value | $ | 29,203 | $ | 70,580 | ||||
Increases: | ||||||||
Amortization expense | 75 | 1,203 | ||||||
Decreases: | ||||||||
Payments to settle earnouts | (4,441 | ) | (3,865 | ) | ||||
Partial repayment of note receivable in settlement of earnout | (4,056 | ) | — | |||||
Other: | ||||||||
Fair value adjustment of earnout liability | (298 | ) | (188 | ) | ||||
Earnout liability – end of period, fair value | $ | 20,483 | $ | 67,730 | ||||
The Company has provided a partial guarantee on certain financial obligations of our subsidiaries with an outstanding principal balance of $263,386. As of March 31, 2014, these guarantees totaled to an aggregate recourse amount of $91,002. | ||||||||
As of March 31, 2014, our consolidated joint ventures had $67,983 in redeemable noncontrolling interests that will become redeemable at future dates generally no earlier than in 2015 and no later than 2022 based on certain redemption criteria. The Kohl's Cumming redeemable noncontrolling interest units were settled as part of Tranche II(a) closing of the Net Lease Properties on April 1, 2014. The redeemable noncontrolling interests are not mandatorily redeemable. At the noncontrolling interest holders’ option, the Company may be required to pay cash, but if the noncontrolling interest holder elects to redeem its interest for the Company’s stock, the Company at its option, may pay cash, issue common stock, or a mixture of both. See additional information relating to these redeemable noncontrolling interests in note 11. | ||||||||
The Company may be subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business. While the resolution of these matters cannot be predicted with certainty, management believes, based on currently available information, that the final outcome of such matters will not have a material adverse effect on the consolidated financial statements of the Company. |
Segment_Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2014 | |
Segment Reporting [Abstract] | ' |
Segment Reporting | ' |
Segment Reporting | |
The Company has one reportable segment as defined by U.S. GAAP for the three months ended March 31, 2014 and 2013. |
Subsequent_Events
Subsequent Events | 3 Months Ended | |
Mar. 31, 2014 | ||
Subsequent Events [Abstract] | ' | |
Subsequent Events | ' | |
Subsequent Events | ||
The Company has evaluated events and transactions that have occurred subsequent to March 31, 2014 for potential recognition and disclosure in these consolidated financial statements. | ||
The Company's board of directors declared distributions payable to stockholders of record each day beginning on the close of business on April 1, 2014 through the close of business on May 31, 2014. Distributions were declared in a daily amount equal to $0.00164384 per share, which if paid each day for a 365-year period, would equate to $0.60 or a 6.0% annualized rate based on a purchase price of $10.00 per share. Distributions were and will continue to be paid monthly in arrears, as follows: | ||
• | In April 2014, total distributions declared for the month of March 2014 were paid cash in the amount equal to $6,003. | |
• | In May 2014, total distributions declared for the month of April 2014 were paid cash in the amount equal to $5,810. | |
On April 1, 2014, the Company completed the Tranche II(a) closing, resulting in the sale to Realty Income of a total of 13 of the Net Lease Properties for an aggregate cash purchase price of approximately $93,605. See note 1 to these consolidated financial statements. | ||
On April 25, 2014, the Company acquired a fee simple interest in a 252,370 square foot retail property known as Hitchcock Plaza located in Aiken, South Carolina. The Company purchased this property from an unaffiliated third party for $28,919. Hitchcock Plaza is the second property to be acquired to satisfy the Company's Merger closing conditions related to the completion of certain Net Lease Sale Transactions for the purpose of Section 1031 of the Internal Revenue Code. | ||
On April 30, 2014, the Company completed the Tranche II(b) closing, resulting in the sale to Realty Income of a total of 12 of the Net Lease Properties for an aggregate cash purchase price of approximately $63,434. See note 1 to these consolidated financial statements. | ||
On May 9, 2014, the Company completed the Tranche II(c) closing, resulting in the sale to Realty Income of a total of three of the Net Lease Properties for an aggregate cash purchase price of approximately $44,422. See note 1 to these consolidated financial statements. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | |
Mar. 31, 2014 | ||
Accounting Policies [Abstract] | ' | |
General | ' | |
General | ||
The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP and require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. | ||
Certain amounts in the prior period consolidated financial statements have been reclassified to conform with the current year presentation. The reclasses primarily represent reclassifications of assets and liabilities to assets and liabilities held for sale as well as revenue and expenses to discontinued operations. | ||
Consolidation | ' | |
Consolidation | ||
The accompanying consolidated financial statements include the accounts of the Company, as well as all wholly owned subsidiaries and entities in which the Company has a controlling financial interest. Interests of third parties in these consolidated entities are reflected as noncontrolling interests in the accompanying consolidated financial statements. Wholly owned subsidiaries generally consist of limited liability companies (LLCs). All intercompany balances and transactions have been eliminated in consolidation. | ||
Each property is owned by a separate legal entity which maintains its own books and financial records and each entity’s assets are not available to satisfy the liabilities of other affiliated entities, except for certain properties which have cross-collateralized first mortgages as previously disclosed. | ||
The Company consolidates the operations of a joint venture if it determines that it's either the primary beneficiary of a variable interest entity (“VIE”) or has substantial influence and control of the entity. The primary beneficiary is the party that has the ability to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses and right to receive the returns from the VIE that would be significant to the VIE. There are significant judgments and estimates involved in determining the primary beneficiary of a variable interest entity or the determination of who has control and influence of the entity. When the Company consolidates an entity, the assets, liabilities and results of operations will be included in the consolidated financial statements. | ||
In instances where the Company is not the primary beneficiary of a variable interest entity or it does not control the joint venture, the Company uses the equity method of accounting. Under the equity method, the operations of a joint venture are not consolidated with the Company's operations but instead its share of operations would be reflected as equity in income of unconsolidated entities on the consolidated statements of operations and other comprehensive income. Additionally, the Company's investment in the entities is reflected as investment in unconsolidated entities on the consolidated balance sheets. | ||
Recently Issued Accounting Pronouncements | ' | |
Recently Issued Accounting Pronouncements | ||
In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 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, which amends GAAP to require reporting of discontinued operations only if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. This pronouncement will be effective for the first annual reporting period beginning after December 15, 2015 with early adoption permitted. The Company adopted this accounting pronouncement effective January 1, 2014. This pronouncement does not have any effect on investment properties held for sale as of December 31, 2013. | ||
Cash and Cash Equivalents | ' | |
Cash and Cash Equivalents | ||
The Company considers all demand deposits and money market accounts and all short-term investments with a maturity of three months or less, at the date of purchase, to be cash equivalents. The Company maintains its cash and cash equivalents at financial institutions. The combined account balances at one or more institutions periodically exceed the Federal Depository Insurance Corporation (“FDIC”) insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company believes that the risk is not significant, as the Company does not anticipate the financial institutions’ non-performance. | ||
Restricted Cash and Escrows | ' | |
Restricted Cash and Escrows | ||
The Company had restricted escrows of $27,699 and $5,616, excluding amounts related to investment properties held for sale, as of March 31, 2014 and December 31, 2013, respectively, which consist of cash held in escrow relating to the sale of the Bulwark Properties and based on lender requirements for collateral or funds to be used for the payment of insurance, real estate taxes, tenant improvements and leasing commissions. Additionally, the Company had restricted cash of $4,500 and $0 as of March 31, 2014 and December 31, 2013, respectively, which consist of cash held as collateral on an interest rate swap. | ||
Revenue Recognition | ' | |
Revenue Recognition | ||
The Company commences revenue recognition on its leases based on a number of factors. In most cases, revenue recognition under a lease begins when the lessee takes possession of or controls the physical use of the leased asset. Generally, this occurs on the lease commencement date. The determination of who is the owner, for accounting purposes, of the tenant improvements determines the nature of the leased asset and when revenue recognition under a lease begins. If the Company is the owner, for accounting purposes, of the tenant improvements, then the leased asset is the finished space and revenue recognition begins when the lessee takes possession of the finished space, typically when the improvements are substantially complete. If the Company concludes it is not the owner, for accounting purposes, of the tenant improvements (the lessee is the owner), then the leased asset is the unimproved space and any tenant improvement allowances funded by the Company under the lease are treated as lease incentives which reduces revenue recognized over the term of the lease. In these circumstances, the Company begins revenue recognition when the lessee takes possession of the unimproved space for the lessee to construct their own improvements. The Company considers a number of different factors to evaluate whether it or the lessee is the owner of the tenant improvements for accounting purposes. The determination of who owns the tenant improvements, for accounting purposes, is subject to significant judgment. | ||
Rental income is recognized on a straight-line basis over the term of each lease. The difference between rental income earned on a straight-line basis and the cash rent due under the provisions of the lease agreements is recorded as deferred rent receivable and is included as a component of accounts and rents receivable in the consolidated balance sheets. Due to the impact of the straight-line basis, rental income generally will be greater than the cash collected in the early years and decrease in the later years of a lease. The Company periodically reviews the collectability of outstanding receivables. Allowances are taken for those balances that the Company deems to be uncollectible, including any amounts relating to straight-line rent receivables. | ||
Reimbursements from tenants for recoverable real estate tax and operating expenses are accrued as revenue in the period the applicable expenses are incurred. The Company makes certain assumptions and judgments in estimating the reimbursements at the end of each reporting period. The Company does not expect the actual results to materially differ from the estimated reimbursement. | ||
The Company records lease termination income if there is a signed termination agreement, all of the conditions of the agreement have been met, the tenant is no longer occupying the property and amounts due are considered collectible. Upon early lease termination, the Company provides for gains or losses related to unrecovered intangibles and other assets. | ||
As a lessor, the Company defers the recognition of contingent rental income, such as percentage rent, until the specified target that triggered the contingent rental income is achieved. | ||
Capitalization and Depreciation | ' | |
Capitalization and Depreciation | ||
Real estate acquisitions are recorded at cost less accumulated depreciation. Improvement and betterment costs are capitalized, and ordinary repairs and maintenance are expensed as incurred. | ||
Transactional costs in connection with the acquisition of real estate properties and businesses are expensed as incurred. | ||
Depreciation expense is computed using the straight-line method. Building and improvements are depreciated based upon estimated useful lives of 30 years and 5-15 years for furniture, fixtures and equipment and site improvements. | ||
Tenant improvements are amortized on a straight-line basis over the shorter of the life of the asset or the term of the related lease as a component of depreciation and amortization expense. Leasing fees are amortized on a straight-line basis over the term of the related lease as a component of depreciation and amortization expense. Loan fees are amortized on a straight-line basis, which approximates the effective interest method, over the term of the related loans as a component of interest expense. | ||
Cost capitalization and the estimate of useful lives require judgment and include significant estimates that can and do change. | ||
Fair Value Measurements | ' | |
Fair Value Measurements | ||
The Company has estimated fair value using available market information and valuation methodologies the Company believes to be appropriate for these purposes. Considerable judgment and a high degree of subjectivity are involved in developing these estimates and, accordingly, they are not necessarily indicative of amounts that would be realized upon disposition. | ||
The Company defines fair value based on the price that it believes would be received upon sale of an asset or the exit price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value. The fair value hierarchy consists of three broad levels, which are described below: | ||
• | Level 1—Quoted prices in active markets for identical assets or liabilities. | |
• | Level 2—Quoted prices in active markets for similar assets or liabilities; quoted prices in markets that are not active; and model-derived valuations whose inputs are observable. | |
• | Level 3—model-derived valuations with unobservable inputs that are supported by little or no market activity. | |
Acquisition of Investment Properties | ' | |
Acquisition of Investment Properties | ||
Upon acquisition, the Company determines the total purchase price of each property (see note 3), which includes the estimated contingent consideration to be paid or received in future periods (see note 16). The Company allocates the total purchase price of properties and businesses based on the fair value of the tangible and intangible assets acquired and liabilities assumed based on Level 3 inputs, such as comparable sales values, discount rates, capitalization rates, revenue and expense growth rates and lease-up assumptions, from a third party appraisal or other market sources. | ||
Certain of the Company’s properties included earnout components to the purchase price, meaning the Company did not pay a portion of the purchase price of the property at closing, although the Company owns the entire property. The Company is not obligated to settle the contingent portion of the purchase prices unless space which was vacant at the time of acquisition is later leased by the seller within the time limits and parameters set forth in the related acquisition agreements. The earnout payments are based on a predetermined formula applied to rental income received. The earnout agreements have a limited obligation period ranging from one to three years from the date of acquisition. If at the end of the time period certain space has not been leased, occupied and rent producing, the Company will have no further obligation to pay additional purchase price consideration and will retain ownership of that entire property. Based on its best estimate, the Company has recorded a liability for the potential future earnout payments using estimated fair value at the date of acquisition using Level 3 inputs including lease-up periods ranging from one to three years, market rents ranging from $9.60 to $45.00, probability of occupancy ranging from 90% to 100% based on leasing activity and discount rates, generally 10%. The Company has recorded these earnout amounts as additional purchase price of the related properties and as a liability included in deferred investment property acquisition obligations on the consolidated balance sheets. The liability increases as the anticipated payment date draws near based on a present value; such increases in the liability are recorded as amortization expense on the consolidated statements of operations and other comprehensive income. The Company records changes in the underlying liability assumptions to other property income on the consolidated statements of operations and other comprehensive income. | ||
The portion of the purchase price allocated to acquired above market lease value and acquired below market lease value are amortized on a straight-line basis over the term of the related lease as an adjustment to rental income. For below-market lease values, the amortization period includes bargain renewal option periods at a fixed rate. Amortization pertaining to the above market lease value of $1,086 and $1,891, excluding amounts related to discontinued operations, was recorded as a reduction to rental income for the three months ended March 31, 2014 and 2013, respectively. Amortization pertaining to the below market lease value of $688 and $1,158, excluding amounts related to discontinued operations, was recorded as an increase to rental income for the three months ended March 31, 2014 and 2013, respectively. | ||
The portion of the purchase price allocated to acquired in-place lease value is amortized on a straight-line basis over the acquired leases’ weighted-average remaining term. The Company incurred amortization expense pertaining to acquired in-place lease intangibles of $5,477 and $6,164, excluding amounts related to discontinued operations, for the three months ended March 31, 2014 and 2013, respectively. The portion of the purchase price allocated to customer relationship value is amortized on a straight-line basis over the weighted-average remaining lease term. As of March 31, 2014, no amount has been allocated to customer relationship value. | ||
Investment Properties Held For Sale | ' | |
Investment Properties Held For Sale | ||
The Company will classify an investment property as held for sale in the period in which it has committed to a plan to dispose of the property, the Company’s Board of Directors has approved the sale of the property, are in the process of finding or have found a buyer, the property is available for immediate sale and subject only to sales terms that are usual and customary, and the sale of the property is probable and is expected to be completed within one year without significant changes. The Company suspends depreciation on the investment properties held for sale, including depreciation for tenant improvements and additions, as well as on the amortization of acquired in-place leases. The Company will classify the assets and related liabilities as held for sale in its consolidated balance sheets in the period the held for sale criteria is met and reclassify for presentation purposes the related results of operations for all prior periods presented. The Company does not allocate any general and administrative expenses to discontinued operations and only interest expense to the extent the held for sale property is secured by specific mortgage debt and the mortgage debt will not be assigned to another property owned by the Company after the disposition. During December 2013, the Net Lease Properties met the criteria to be held for sale and were classified as held for sale. Assets and liabilities related to the Merger Agreement were not classified as held for sale. | ||
Disposition of Real Estate | ' | |
Disposition of Real Estate | ||
The Company accounts for dispositions in accordance with U.S. GAAP. The Company recognizes a gain or loss in full when a property is sold. A sale is considered complete when the profit is determinable, the collectability of the sales price is reasonably assured or can be estimated, and when the earnings process is virtually complete, and the Company is not obliged to perform significant activities after the sale to earn the profit. The Company records the transaction as discontinued operations for all periods presented in accordance with U.S. GAAP. | ||
Impairment of Investment Properties | ' | |
Impairment of Investment Properties | ||
The Company assesses the carrying values of its respective long-lived assets classified as held and used whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable. Recoverability of the assets is measured by comparison of the carrying amount of the asset to the estimated future undiscounted cash flows. In order to review its assets for recoverability, the Company considers current market conditions, as well as its intent with respect to holding or disposing of the asset. Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values and third party appraisals, where considered necessary (Level 3 inputs). If the Company’s analysis indicates that the carrying value of the long-lived asset is not recoverable on an undiscounted cash flow basis, the Company recognizes an impairment charge for the amount by which the carrying value exceeds the current estimated fair value of the real estate property. | ||
The Company estimates the future undiscounted cash flows based on the estimated future net rental income from operating the property and termination value. | ||
The use of projected future cash flows is based on assumptions that are consistent with our estimates of future expectations and the strategic plan the Company uses to manage its underlying business. However, assumptions and estimates about future cash flows, including comparable sales values, discount rates, capitalization rates, revenue and expense growth rates and lease-up assumptions which impact the discounted cash flow approach to determining value are complex and subjective. Changes in economic and operating conditions and the Company’s ultimate investment intent that occur subsequent to the impairment analysis could impact these assumptions and result in future impairment charges of the real estate properties. | ||
The Company assesses the carrying value for all properties classified as held for sale for possible impairment. If the fair value less selling costs is less than the current carrying value, the Company recognizes an impairment charge for the amount by which the carrying value exceeds the fair value less selling costs. | ||
Impairment of Marketable Securities | ' | |
Impairment of Marketable Securities | ||
The Company assesses its investments in marketable securities for impairment. A decline in the market value of any available-for-sale or held-to-maturity security below cost that is deemed to be other-than-temporary will result in an impairment to reduce the carrying amount to fair value using Level 1 and 2 inputs (see note 7). The impairment will be charged to earnings and a new cost basis for the security will be established. To determine whether impairment is other-than-temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and duration of the impairment, changes in value subsequent to year-end, forecasted performance of the investee, and the general market condition in the geographic area or industry the investee operates in. The Company considers the following factors in evaluating our securities for impairments that are other than temporary: | ||
• | declines in the REIT and overall stock market relative to our security positions; | |
• | the estimated net asset value (“NAV”) of the companies it invests in relative to their current market prices; and | |
• | future growth prospects and outlook for companies using analyst reports and company guidance, including dividend coverage, NAV estimates and growth in “funds from operations,” or “FFO,” and duration of the decline in the value of the securities. | |
Redeemable Noncontrolling Interest | ' | |
Redeemable Noncontrolling Interests | ||
Certain of the Company's consolidated joint ventures have issued units to noncontrolling interest holders that are redeemable at the noncontrolling interest holder's option for cash or for shares of the Company's common stock at the Company's option. If the noncontrolling interest holder seeks redemption of its units for the Company's shares, the joint ventures may redeem the units through issuance of common shares by the Company on a one-for-one basis or through cash settlement at the redemption price. The redemption is at the option of the holder after passage of time or upon the occurrence of an event that is not solely within the control of the joint ventures. Because redemption of the noncontrolling interests is outside of the applicable joint venture's control, the interests are presented on the consolidated balance sheets outside of permanent equity as redeemable noncontrolling interests. None of the noncontrolling interests are currently redeemable, but it is probable that the noncontrolling interests will become redeemable. Based on such probability, the Company measures and records the noncontrolling interests at their maximum redemption amount at each balance sheet date. Any adjustments to the carrying amount of the redeemable noncontrolling interests for changes in the maximum redemption amount are recorded to additional paid in capital in the period of the change (see note 11). | ||
REIT Status | ' | |
REIT Status | ||
The Company has qualified and has elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended, for federal income tax purposes commencing with the tax year ended December 31, 2009. Because the Company qualifies for taxation as a REIT, the Company generally will not be subject to federal income tax on taxable income that is distributed to stockholders. A REIT is subject to a number of organizational and operational requirements, including a requirement that it currently distributes at least 90% of its taxable income (subject to certain adjustments) to its stockholders. The Company will monitor the business and transactions that may potentially impact our REIT status. If the Company fails to qualify as a REIT in any taxable year, without the benefit of certain relief provisions, the Company will be subject to federal (including any applicable alternative minimum tax) and state income tax on its taxable income at regular corporate tax rates. Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes on its income, property or net worth and federal income and excise taxes on its undistributed income. | ||
Derivatives | ' | |
Derivatives | ||
The Company uses derivative instruments, such as interest rate swaps, primarily to manage exposure to interest rate risks inherent in variable rate debt. The Company may also enter into forward starting swaps or treasury lock agreements to set the effective interest rate on a planned fixed-rate financing. The Company’s interest rate swaps involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. In a forward starting swap or treasury lock agreement that the Company cash settles in anticipation of a fixed rate financing or refinancing, the Company will receive or pay an amount equal to the present value of future cash flow payments based on the difference between the contract rate and market rate on the settlement date. The Company does not use derivatives for trading or speculative purposes and currently does not have any derivatives that are not designated as hedging instruments under the accounting requirements for derivatives and hedging. |
Organization_Sale_of_the_Net_L
Organization Sale of the Net Lease Properties (Tables) | 3 Months Ended | 1 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2014 | 9-May-14 | |||||||||||||||||||||||||
Subsequent Event [Member] | ||||||||||||||||||||||||||
Subsequent Event [Line Items] | ' | ' | ||||||||||||||||||||||||
Net Lease Sale Transaction [Table Text Block] | ' | ' | ||||||||||||||||||||||||
The sale of the Net Lease Properties during the three months ended March 31, 2014 is summarized in the following table. | The sale of the Net Lease Properties subsequent to March 31, 2014 is summarized in the following table. | |||||||||||||||||||||||||
Transaction | Sale Date | Number of Properties Sold | Aggregate Purchase Price | Net Proceeds (1) | Transaction | Sale Date | Number of Properties Sold | Aggregate Purchase Price | Net Proceeds (1) | |||||||||||||||||
Tranche I | 31-Jan-14 | 46 | $ | 201,955 | $ | 126,312 | Tranche II (a) | 1-Apr-14 | 13 | $ | 93,605 | $ | 41,773 | |||||||||||||
Bulwark | 31-Mar-14 | 9 | 72,304 | 22,172 | Tranche II (b) | 30-Apr-14 | 12 | 63,434 | 30,534 | |||||||||||||||||
Total | 55 | $ | 274,259 | $ | 148,484 | Tranche II (c) | 9-May-14 | 3 | 44,422 | 14,140 | ||||||||||||||||
Total | 28 | $ | 201,461 | $ | 86,447 | |||||||||||||||||||||
-1 | After repayment or assumption of mortgages payable. | |||||||||||||||||||||||||
(1) After repayment or assumption of mortgages payable. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||
Schedule of intangible assets and liabilities | ' | |||||||||||
The following table summarizes the Company’s identified intangible assets and liabilities, excluding amounts related to investment properties held for sale, as of March 31, 2014 and December 31, 2013. | ||||||||||||
March 31, | December 31, | |||||||||||
2014 | 2013 | |||||||||||
Intangible assets: | ||||||||||||
Acquired in-place lease value | $ | 218,165 | $ | 215,913 | ||||||||
Acquired above market lease value | 35,149 | 35,079 | ||||||||||
Accumulated amortization | (62,724 | ) | (56,234 | ) | ||||||||
Acquired lease intangibles, net | $ | 190,590 | $ | 194,758 | ||||||||
Intangible liabilities: | ||||||||||||
Acquired below market lease value | $ | 51,495 | $ | 51,168 | ||||||||
Accumulated amortization | (6,124 | ) | (5,436 | ) | ||||||||
Acquired below market lease intangibles, net | $ | 45,371 | $ | 45,732 | ||||||||
Future amortization of the intangible lease assets and liabilities | ' | |||||||||||
Estimated amortization of the respective intangible lease assets and liabilities, excluding amounts related to investment properties held for sale, as of March 31, 2014 for each of the five succeeding years and thereafter is as follows: | ||||||||||||
In-place Leases | Above Market Leases | Below Market Leases | ||||||||||
2014 (remainder of year) | $ | 16,362 | $ | 3,079 | $ | 2,073 | ||||||
2015 | 21,542 | 3,862 | 2,667 | |||||||||
2016 | 21,020 | 3,532 | 2,549 | |||||||||
2017 | 20,073 | 3,245 | 2,514 | |||||||||
2018 | 17,321 | 2,365 | 2,428 | |||||||||
Thereafter | 71,210 | 6,979 | 33,140 | |||||||||
Total | $ | 167,528 | $ | 23,062 | $ | 45,371 | ||||||
Acquisitions_Tables
Acquisitions (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Business Combinations [Abstract] | ' | ||||||||||||
Major assets acquired and liabilities assumed | ' | ||||||||||||
The following table presents certain additional information regarding the Company’s acquisition during the three months ended March 31, 2014. The amounts recognized for major assets acquired and liabilities assumed as of the acquisition date: | |||||||||||||
Property Name | Land | Building and Improvements | Acquired Lease Intangibles | ||||||||||
Memorial Commons | $ | 1,568 | $ | 14,069 | $ | 2,067 | |||||||
Discontinued_Operations_and_In1
Discontinued Operations and Investment Properties Held for Sale (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Discontinued Operations and Investment Properties Held for Sale [Abstract] | ' | |||||||
Assets and Liabilities Held for Sale | ' | |||||||
The following table presents the assets and liabilities associated with the held for sale properties: | ||||||||
March 31, | December 31, | |||||||
Assets | 2014 | 2013 | ||||||
Investment properties: | ||||||||
Land | $ | 29,395 | $ | 89,365 | ||||
Building and improvements | 153,198 | 315,958 | ||||||
Total | 182,593 | 405,323 | ||||||
Less accumulated depreciation | (10,766 | ) | (20,555 | ) | ||||
Net investment properties | 171,827 | 384,768 | ||||||
Restricted cash and escrows | — | 1,939 | ||||||
Accounts and rents receivable, net | 3,020 | 4,199 | ||||||
Acquired lease intangibles, net | 32,296 | 60,504 | ||||||
Deferred costs, net | 1,621 | 2,570 | ||||||
Other assets | 564 | 318 | ||||||
Total assets held for sale | $ | 209,328 | $ | 454,298 | ||||
Liabilities | ||||||||
Mortgages payable | $ | 118,325 | $ | 242,680 | ||||
Accounts payable and accrued expenses | 473 | 1,012 | ||||||
Accrued real estate taxes payable | 166 | 813 | ||||||
Other liabilities | 6,209 | 6,802 | ||||||
Acquired below market lease intangibles, net | 372 | 1,358 | ||||||
Total liabilities held for sale | $ | 125,545 | $ | 252,665 | ||||
Discontinued Operations | ' | |||||||
The results of operations for the investment properties that are accounted for as discontinued operations are presented for each of the three months ended March 31, 2014 and 2013 in the table below: | ||||||||
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
Income: | ||||||||
Rental income | $ | 6,448 | $ | 9,062 | ||||
Tenant recovery income | 250 | 694 | ||||||
Other property income | 22 | 32 | ||||||
Total income | 6,720 | 9,788 | ||||||
Expenses: | ||||||||
General and administrative expenses | — | 153 | ||||||
Property operating expenses | 340 | 479 | ||||||
Real estate taxes | 281 | 554 | ||||||
Depreciation and amortization | — | 3,902 | ||||||
Total expenses | 621 | 5,088 | ||||||
Operating income | 6,099 | 4,700 | ||||||
Gain on sale of investment properties, net | 26,916 | — | ||||||
Interest expense | (2,207 | ) | (2,833 | ) | ||||
Income from discontinued operations | 30,808 | 1,867 | ||||||
Redeemable noncontrolling interests associated with discontinued operations | (18 | ) | (18 | ) | ||||
Net income from discontinued operations attributable to common stockholders | $ | 30,790 | $ | 1,849 | ||||
Operating_Leases_Tables
Operating Leases (Tables) | 3 Months Ended | |||
Mar. 31, 2014 | ||||
Leases [Abstract] | ' | |||
Schedule of future minimum rental payments for operating leases | ' | |||
Minimum lease payments to be received under operating leases, including ground leases and excluding leases relating to discontinued operations and multi-family units (lease terms of twelve-months or less), as of March 31, 2014 for the years indicated, assuming no expiring leases are renewed, are as follows: | ||||
Minimum Lease Payments | ||||
2014 (remainder of year) | $ | 101,821 | ||
2015 | 131,762 | |||
2016 | 125,195 | |||
2017 | 113,979 | |||
2018 | 92,415 | |||
Thereafter | 593,965 | |||
Total | $ | 1,159,137 | ||
Unconsolidated_Entities_Tables
Unconsolidated Entities (Tables) | 3 Months Ended | ||||||||||||||
Mar. 31, 2014 | |||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | ' | ||||||||||||||
Schedule of variable interest entities | ' | ||||||||||||||
The Company's risk of loss is limited to its investment in the Insurance Captive and it is not required to fund additional capital to the entity. | |||||||||||||||
Ownership % at | Investment at | ||||||||||||||
Joint Venture | Description | March 31, 2014 | December 31, 2013 | March 31, 2014 | December 31, 2013 | ||||||||||
Oak Property & Casualty LLC | Insurance Captive | 20% | 20% | $ | 553 | $ | 484 | ||||||||
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||
Assets and liabilities, measured at fair value on a recurring basis | ' | |||||||||||||||
The following table presents the Company’s assets and liabilities, measured at fair value on a recurring basis, and related valuation inputs within the fair value hierarchy utilized to measure fair value as of March 31, 2014 and December 31, 2013: | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
March 31, 2014 | ||||||||||||||||
Asset - investment in marketable securities | $ | 26,576 | $ | 9,028 | $ | — | $ | 35,604 | ||||||||
Asset - interest rate swap | $ | — | $ | 819 | $ | — | $ | 819 | ||||||||
Liability - interest rate swap | $ | — | $ | 3,708 | $ | — | $ | 3,708 | ||||||||
December 31, 2013 | ||||||||||||||||
Asset - investment in marketable securities | $ | 24,871 | $ | 9,199 | $ | — | $ | 34,070 | ||||||||
Asset - interest rate swap | $ | — | $ | 2,379 | $ | — | $ | 2,379 | ||||||||
Liability - interest rate swap | $ | — | $ | 4,127 | $ | — | $ | 4,127 | ||||||||
Transactions_with_Related_Part1
Transactions with Related Parties (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Related Party Transactions [Abstract] | ' | ||||||||||||||||
Schedule of related party transactions | ' | ||||||||||||||||
The following table summarizes the Company’s related party transactions for the three months ended March 31, 2014 and 2013. | |||||||||||||||||
For the Three Months Ended March 31, | Unpaid Amounts as of | ||||||||||||||||
2014 | 2013 | March 31, 2014 | December 31, 2013 | ||||||||||||||
General and administrative: | |||||||||||||||||
General and administrative reimbursement | (a) | $ | 450 | $ | 409 | $ | 291 | $ | 292 | ||||||||
Loan servicing | (b) | 76 | 74 | — | — | ||||||||||||
Investment advisor fee | (c) | 68 | 80 | 23 | 25 | ||||||||||||
Total general and administrative to related parties | $ | 594 | $ | 563 | $ | 314 | $ | 317 | |||||||||
Acquisition related costs | (d) | $ | 46 | $ | 54 | — | — | ||||||||||
Real estate management fees | (e) | 2,109 | 2,205 | — | — | ||||||||||||
Business management fee | (f) | 3,446 | 3,500 | 1,445 | 1,757 | ||||||||||||
Loan placement fees | (g) | — | 67 | — | — | ||||||||||||
Cost reimbursement | (h) | 5 | — | — | — | ||||||||||||
(a) | The Business Manager and its related parties are entitled to reimbursement for general and administrative expenses of the Business Manager and its related parties relating to the Company’s administration. Such costs are included in general and administrative expenses in the consolidated statements of operations and other comprehensive income. | ||||||||||||||||
(b) | A related party of the Business Manager provides loan servicing to the Company for an annual fee equal to .03% of the first $1,000,000 of serviced loans and .01% for serviced loans over $1,000,000. These loan servicing fees are paid monthly and are included in general and administrative expenses in the consolidated statements of operations and other comprehensive income. | ||||||||||||||||
(c) | The Company pays a related party of the Business Manager to purchase and monitor its investment in marketable securities. | ||||||||||||||||
(d) | The Business Manager and its related parties are reimbursed for acquisition, dead deal and transaction related costs of the Business Manager and its related parties relating to the Company’s acquisition of real estate assets. These costs relate to both closed and potential transactions and include customary due diligence costs including time and travel expense reimbursements. Such costs are included in acquisition related costs in the consolidated statements of operations and other comprehensive income. The Company does not pay acquisition fees to its Business Manager or its affiliates. | ||||||||||||||||
(e) | The real estate managers, entities owned principally by individuals who are related parties of the Business Manager, receive monthly real estate management fees up to 4.5% of gross operating income (as defined), for management and leasing services. Such costs are included in property operating expenses in the consolidated statements of operations and other comprehensive income. In addition to these fees, the real estate managers receive reimbursements of payroll costs for property level employees. The Company reimbursed or will reimburse the real estate managers and other affiliates $547 and $569 for the three months ended March 31, 2014 and 2013, respectively. | ||||||||||||||||
(f) | Subject to satisfying the criteria described below, the Company pays the Business Manager a quarterly business management fee equal to a percentage of the Company’s “average invested assets” (as defined in the business management agreement), calculated as follows: | ||||||||||||||||
-1 | if the Company has declared distributions during the prior calendar quarter just ended, in an amount equal to or greater than an average 7% annualized distribution rate (assuming a share was purchased for $10.00), it will pay a fee equal to 0.1875% of its “average invested assets” for that prior calendar quarter; | ||||||||||||||||
-2 | if the Company has declared distributions during the prior calendar quarter just ended, in an amount equal to or greater than an average 6% annualized distribution rate but less than 7% annualized distribution rate (assuming a share was purchased for $10.00), it will pay a fee equal to 0.1625% of its “average invested assets” for that prior calendar quarter; | ||||||||||||||||
-3 | if the Company has declared distributions during the prior calendar quarter just ended, in an amount equal to or greater than an average 5% annualized distribution rate but less than 6% annualized distribution rate (assuming a share was purchased for $10.00), it will pay a fee equal to 0.125% of its “average invested assets” for that prior calendar quarter; or | ||||||||||||||||
-4 | if the Company does not satisfy the criteria in (1), (2) or (3) above in a particular calendar quarter just ended, it will not, except as set forth below, pay a business management fee for that prior calendar quarter. | ||||||||||||||||
-5 | Assuming that (1), (2) or (3) above is satisfied, the Business Manager may decide, in its sole discretion, to be paid an amount less than the total amount that may be paid. If the Business Manager decides to accept less in any particular quarter, the excess amount that is not paid may, in the Business Manager’s sole discretion, be waived permanently or deferred, without interest, to be paid at a later point in time. This obligation to pay the deferred fee terminates if the Company acquires the Business Manager. For the three months ended March 31, 2014 and 2013, the Business Manager was entitled to a business management fee in the amount equal to $3,446 and $3,664, respectively of which $0 and $164, respectively was permanently waived. | ||||||||||||||||
Separate and distinct from any business management fee, the Company will also reimburse the Business Manager, the Real Estate Managers and their affiliates for certain expenses that they, or any related party including the Sponsor, pay or incur on its behalf including the salaries and benefits of persons employed except that the Company will not reimburse either our Business Manager or Real Estate Managers for any compensation paid to individuals who also serve as the Company’s executive officers, or the executive officers of the Business Manager, the Real Estate Managers or their affiliates; provided that, for these purposes, the secretaries will not be considered “executive officers.” These costs were recorded in general and administrative expenses in the consolidated statements of operations and other comprehensive income. | |||||||||||||||||
(g) | The Company pays a related party of the Business Manager 0.2% of the principal amount of each loan it places for the Company. Such costs are capitalized as loan fees and amortized over the respective loan term. | ||||||||||||||||
(h) | The Company reimburses a related party of the Business Manager for costs incurred for construction oversight provided to the Company relating to its development project. These reimbursements are paid monthly during the development period. These costs are capitalized and are included in construction in progress on the consolidated balance sheet. |
Mortgages_Credit_Facility_and_1
Mortgages, Credit Facility, and Securities Margins Payable (Tables) | 3 Months Ended | ||||||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ' | ||||||||||||||||||||||||||||
Schedule of maturities of long-term debt | ' | ||||||||||||||||||||||||||||
The following table shows the scheduled maturities and required principal payments of the Company’s mortgages payable and Credit Facility including liabilities related to investment properties held for sale as of March 31, 2014, for each of the next five years and thereafter, including the effects of interest rate swaps: | |||||||||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | Thereafter | Total | |||||||||||||||||||||||
(remainder of year) | |||||||||||||||||||||||||||||
Fixed rate debt: | |||||||||||||||||||||||||||||
Mortgages payable (a) | $ | 408 | $ | 85,950 | $ | 48,058 | $ | 81,076 | $ | 78,222 | $ | 635,345 | $ | 929,059 | |||||||||||||||
Total fixed rate debt | 408 | 85,950 | 48,058 | 81,076 | 78,222 | 635,345 | 929,059 | ||||||||||||||||||||||
Variable rate debt: | |||||||||||||||||||||||||||||
Mortgages payable (a) | — | 50,140 | 2,232 | 18,340 | 5,180 | 45,000 | 120,892 | ||||||||||||||||||||||
Total variable debt | — | 50,140 | 2,232 | 18,340 | 5,180 | 45,000 | 120,892 | ||||||||||||||||||||||
Total debt (b) | $ | 408 | $ | 136,090 | $ | 50,290 | $ | 99,416 | $ | 83,402 | $ | 680,345 | $ | 1,049,951 | |||||||||||||||
Mortgages payable related to investment properties held for sale (c) | $ | — | $ | 23 | $ | 254 | $ | 281 | $ | 295 | $ | 117,472 | $ | 118,325 | |||||||||||||||
Weighted average interest rate on debt: | |||||||||||||||||||||||||||||
Fixed rate debt | 5.59 | % | 5.29 | % | 4.84 | % | 4.44 | % | 5.27 | % | 4.49 | % | 4.64 | % | |||||||||||||||
Variable rate debt | — | 1.9 | % | 2.65 | % | 2.63 | % | 2.51 | % | 1.55 | % | 1.92 | % | ||||||||||||||||
Total | 5.59 | % | 4.04 | % | 4.74 | % | 4.11 | % | 5.1 | % | 4.3 | % | 4.33 | % | |||||||||||||||
Weighted average interest rate on mortgages payable related to investment properties held for sale (c) | — | 5.06 | % | 5.11 | % | 5.11 | % | 5.11 | % | 4.76 | % | 4.76 | % | ||||||||||||||||
(a) | Excludes net mortgage premiums of $1,104, associated with debt assumed at acquisition, net of accumulated amortization as of March 31, 2014. | ||||||||||||||||||||||||||||
(b) | Excludes securities margin payable of $9,403 which is due upon the sale of marketable securities, and currently has an interest rate of 0.50% per annum, as of March 31, 2014. | ||||||||||||||||||||||||||||
(c) | As part of the Tranche II closings of the Net Lease Properties which closed in April and May 2014, the Company assumptions of mortgage debt with a principal balance of $107,825 and a weighted average interest rate of 4.67% as of March 31, 2014. | ||||||||||||||||||||||||||||
Derivatives and fair value | ' | ||||||||||||||||||||||||||||
The following table summarizes the Company's interest rate swap contracts outstanding as of March 31, 2014: | |||||||||||||||||||||||||||||
Date Entered | Effective Date | Maturity Date | Pay | Receive | Notional | Fair Value as of | Fair Value | ||||||||||||||||||||||
Fixed | Floating | Amount | 31-Mar-14 | as of | |||||||||||||||||||||||||
Rate | Rate Index | 31-Dec-13 | |||||||||||||||||||||||||||
11-Mar-11 | -1 | 5-Apr-11 | 5-Nov-15 | 5.01 | % | 1 month LIBOR | $ | 9,350 | $ | — | $ | (322 | ) | ||||||||||||||||
22-Jun-11 | 24-Jun-11 | 22-Jun-16 | 4.47 | % | 1 month LIBOR | 13,359 | (413 | ) | (457 | ) | |||||||||||||||||||
28-Oct-11 | 1-Nov-11 | 21-Oct-16 | 3.75 | % | 1 month LIBOR | 10,837 | (216 | ) | (240 | ) | |||||||||||||||||||
9-May-12 | 9-May-12 | 9-May-17 | 3.38 | % | 1 month LIBOR | 10,150 | (52 | ) | (66 | ) | |||||||||||||||||||
13-Jun-12 | -2 | 10-Jun-11 | 10-Dec-18 | 5.17 | % | 1 month LIBOR | 49,391 | (3,027 | ) | (3,041 | ) | ||||||||||||||||||
24-Jul-12 | -1 | 26-Jul-12 | 20-Jul-17 | 3.09 | % | 1 month LIBOR | 4,677 | — | 23 | ||||||||||||||||||||
1-Oct-12 | 1-Apr-14 | 29-Mar-19 | 3.85 | % | 1 month LIBOR | 45,000 | 622 | 977 | |||||||||||||||||||||
2-Oct-12 | 4-Oct-12 | 1-Oct-17 | 3.73 | % | 1 month LIBOR | 24,750 | 121 | 132 | |||||||||||||||||||||
4-Oct-12 | -1 | 4-Oct-12 | 3-Oct-19 | 3.15 | % | 1 month LIBOR | 10,808 | — | 402 | ||||||||||||||||||||
20-Dec-12 | 20-Dec-12 | 20-Dec-17 | 3.36 | % | 1 month LIBOR | 9,900 | 76 | 87 | |||||||||||||||||||||
14-Feb-13 | -1 | 14-Feb-13 | 31-Dec-22 | 4.25 | % | 1 month LIBOR | 14,900 | — | 757 | ||||||||||||||||||||
Total | $ | 203,122 | $ | (2,889 | ) | $ | (1,748 | ) | |||||||||||||||||||||
-1 | Interest rate swaps were settled as part of Tranche I Closing of the Net Lease Properties on January 31, 2014. | ||||||||||||||||||||||||||||
-2 | Assumed at the time of acquisition of Walgreens NE Portfolio with a then fair value of ($5,219). The Company retained this interest rate swap subsequent to the sale of the Walgreens NE Portfolio in the Bulwark Closing of the Net Lease Sale Transaction. | ||||||||||||||||||||||||||||
Cash flow hedges as well as their classification on the consolidated balance sheets | ' | ||||||||||||||||||||||||||||
The table below presents the fair value of the Company’s cash flow hedges as well as their classification on the consolidated balance sheets as of March 31, 2014 and December 31, 2013. | |||||||||||||||||||||||||||||
March 31, 2014 | December 31, 2013 | ||||||||||||||||||||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||||||||||||||||||||
Derivatives designated as cash flow hedges: | |||||||||||||||||||||||||||||
Interest rate swaps | Other liabilities | $ | (3,708 | ) | Other liabilities | $ | (4,127 | ) | |||||||||||||||||||||
Interest rate swaps | Other assets | 819 | Other assets | 2,379 | |||||||||||||||||||||||||
Derivative financial instruments on the consolidated statements of operations and other comprehensive loss | ' | ||||||||||||||||||||||||||||
The table below presents the effect of the Company’s derivative financial instruments on the consolidated statements of operations and other comprehensive income for the three months ended March 31, 2014 and 2013: | |||||||||||||||||||||||||||||
Derivatives in Cash Flow Hedging Relationships | Amount of Loss Recognized in OCI on Derivative (Effective Portion) | Location of Loss Reclassified from Accumulated OCI into Income | Amount of Loss Reclassified from Accumulated OCI into Income | Location of Loss Recognized in Income on Derivative (Ineffective Portion) | Amount of Loss Recognized in Income on Derivative (Ineffective Portion) | ||||||||||||||||||||||||
(Effective Portion) | (Effective Portion) | ||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||
Interest rate swaps | $ | 1,325 | $ | 160 | Interest Expense | $ | 309 | $ | 325 | Other Expense | $ | 2 | $ | 4 | |||||||||||||||
Redeemable_Noncontrolling_Inte1
Redeemable Noncontrolling Interest (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Noncontrolling Interest [Abstract] | ' | ||||||||||||||||
Redeemable noncontrolling interest | ' | ||||||||||||||||
The following table summarizes the redeemable noncontrolling interests as of March 31, 2014. | |||||||||||||||||
Joint Venture | Number of Redeemable Noncontrolling Interests Units Outstanding (1) | Redeemable Noncontrolling Interests at Issuance | Carrying Value of Redeemable Noncontrolling Interests | Preferred Return per Annum | Notes | ||||||||||||
Kohl's Cumming | 141,602 | $ | 1,416 | $ | 1,416 | 5 | % | (2), (3) | |||||||||
City Center | 2,656,450 | 26,565 | 26,758 | 4 | % | (3), (4) | |||||||||||
Crossing at Killingly | 960,802 | 9,608 | 9,809 | 3.5 | % | (3), (5) | |||||||||||
Territory Portfolio | 3,000,000 | 30,000 | 30,000 | 4 | % | -6 | |||||||||||
Total | 6,758,854 | $ | 67,589 | $ | 67,983 | ||||||||||||
-1 | Redeemable noncontrolling interest units had a fair value of $10.00 each at the time of issuance. | ||||||||||||||||
-2 | As part of the Tranche II(a) closing of the Net Lease Properties on April 1, 2014, the Company's ownership interest in the Kohl's Cumming joint venture, a consolidated subsidiary, was sold and the redeemable noncontrolling interests were derecognized. | ||||||||||||||||
-3 | If the unit holder elects shares and the joint venture pays the redemption price in cash, the redemption value will be greater of (i) $10.00 per unit, plus any accumulated, accrued and unpaid distributions to and including the date of redemption or (ii) the Company's share price per share. | ||||||||||||||||
-4 | Preferred return started on June 7, 2013, upon fulfillment of the deferred investment property acquisition obligations. | ||||||||||||||||
-5 | Preferred return will increase to 5.50% per annum on October 3, 2015. The joint venture may issue up to an additional 298,121 redeemable noncontrolling interest units to settle its earnout liability included in the Company's investment property acquisition obligation on the consolidated balance sheet (see note 16). | ||||||||||||||||
-6 | If the unit holder elects shares and the joint venture pays the redemption price in cash, the redemption value will be $10.00 per unit plus 50% of the excess of the Company's share price per share over $10.00 per unit. | ||||||||||||||||
Schedule of activity of consolidated redeemable noncontrolling interest | ' | ||||||||||||||||
Below is a table reflecting the activity of the consolidated redeemable noncontrolling interests as of and for the three months ended March 31, 2014 and 2013. | |||||||||||||||||
Redeemable Noncontrolling Interests | |||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Balance at beginning of period | $ | 67,950 | $ | 47,215 | |||||||||||||
Net income attributable to redeemable noncontrolling interests | 697 | 501 | |||||||||||||||
Payment of preferred return | (664 | ) | (417 | ) | |||||||||||||
Balance at close of period | $ | 67,983 | $ | 47,299 | |||||||||||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||
Equity [Abstract] | ' | ||||||||||||||||||||||||
Schedule of accumulated other comprehensive income (loss) | ' | ||||||||||||||||||||||||
The following table indicates the changes and reclassifications affecting accumulated other comprehensive income (loss) by component for the three months ended March 31, 2014 and 2013. | |||||||||||||||||||||||||
Gain (Loss) on Cash Flow Hedges | Unrealized Gains and (Losses) on Available-for-sale Securities | Total | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||
Accumulated other comprehensive income (loss) - January 1 | $ | 2,125 | $ | (3,282 | ) | $ | 578 | $ | 2,999 | $ | 2,703 | $ | (283 | ) | |||||||||||
Activity for current-period: | |||||||||||||||||||||||||
Other comprehensive (loss) income before reclassifications | (1,325 | ) | (160 | ) | 1,845 | 2,731 | 520 | 2,571 | |||||||||||||||||
Amounts reclassified from other comprehensive income (loss) into income | 309 | 325 | -1 | (24 | ) | (26 | ) | -2 | 285 | 299 | |||||||||||||||
Net current-period other comprehensive (loss) income | (1,016 | ) | 165 | 1,821 | 2,705 | 805 | 2,870 | ||||||||||||||||||
Accumulated other comprehensive income (loss) - March 31 | $ | 1,109 | $ | (3,117 | ) | $ | 2,399 | $ | 5,704 | $ | 3,508 | $ | 2,587 | ||||||||||||
-1 | Included in interest expense on the consolidated statements of operations and other comprehensive income. | ||||||||||||||||||||||||
-2 | Included in realized gain on sale of marketable securities on the consolidated statements of operations and other comprehensive income. |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||||||
Schedule of earnout liability | ' | |||||||
The table below presents the change in the Company’s earnout liability for the three months ended March 31, 2014 and 2013. | ||||||||
For the Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
Earnout liability – beginning of period, fair value | $ | 29,203 | $ | 70,580 | ||||
Increases: | ||||||||
Amortization expense | 75 | 1,203 | ||||||
Decreases: | ||||||||
Payments to settle earnouts | (4,441 | ) | (3,865 | ) | ||||
Partial repayment of note receivable in settlement of earnout | (4,056 | ) | — | |||||
Other: | ||||||||
Fair value adjustment of earnout liability | (298 | ) | (188 | ) | ||||
Earnout liability – end of period, fair value | $ | 20,483 | $ | 67,730 | ||||
Organization_Details
Organization (Details) (USD $) | Mar. 31, 2014 | Feb. 18, 2014 | Dec. 31, 2013 |
principal | |||
Organization diclosure | ' | ' | ' |
Estimated Per Share Value | ' | $10.70 | ' |
Number of Principals With Indirect Control of the Real Estate Managers | 4 | ' | ' |
Common stock, shares authorized | 2,460,000,000 | ' | 2,460,000,000 |
Share price (in dollars per share) | $10 | ' | ' |
Weighted average physical occupancy | 95.60% | ' | ' |
Weighted average economic occupancy | 96.70% | ' | ' |
Initial Public Offering | ' | ' | ' |
Organization diclosure | ' | ' | ' |
Common stock, shares authorized | 500,000,000 | ' | ' |
Share price (in dollars per share) | $10 | ' | ' |
Distribution Reinvestment Plan | ' | ' | ' |
Organization diclosure | ' | ' | ' |
Common stock, shares authorized | 50,000,000 | ' | ' |
Share price (in dollars per share) | $9.50 | ' | ' |
Retail Properties | ' | ' | ' |
Organization diclosure | ' | ' | ' |
Number of real estate properties | 83 | ' | ' |
Office Properties | ' | ' | ' |
Organization diclosure | ' | ' | ' |
Number of real estate properties | 3 | ' | ' |
Industrial | ' | ' | ' |
Organization diclosure | ' | ' | ' |
Number of real estate properties | 1 | ' | ' |
Retail and Office Properties | ' | ' | ' |
Organization diclosure | ' | ' | ' |
Square Footage/Units | 11,500,000 | ' | ' |
Multi-Family Properties | ' | ' | ' |
Organization diclosure | ' | ' | ' |
Number of real estate properties | 2 | ' | ' |
Number of units in real estate property | 420 | ' | ' |
City Center | Multi-Family Properties | ' | ' | ' |
Organization diclosure | ' | ' | ' |
Number of units in real estate property | 24 | ' | ' |
Organization_Proposed_Merger_D
Organization Proposed Merger (Details) (USD $) | Feb. 09, 2014 |
In Thousands, except Per Share data, unless otherwise specified | |
Organization diclosure | ' |
Kite Realty Group Trust par value per share | $0.01 |
Numerator For Exchange Ratio | $10.85 |
Merger Transaction Costs | $8,000 |
Maximum | ' |
Organization diclosure | ' |
Exchange ratio of Kite Common Share | $1.71 |
Merger Reference Price | $6.58 |
Seller Merger Termination Fee | 43,000 |
Buyer Merger Termination Fee | 30,000 |
Business Manager Liquidity Event Fee | 12,000 |
Minimum | ' |
Organization diclosure | ' |
Exchange ratio of Kite Common Share | $1.65 |
Merger Reference Price | $6.36 |
Seller Merger Termination Fee | 3,000 |
Business Manager Liquidity Event Fee | $10,235 |
Organization_Net_Lease_Sale_Tr
Organization Net Lease Sale Transactions (Details) (USD $) | Mar. 31, 2014 | Dec. 16, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Jan. 31, 2014 | Mar. 31, 2014 | 14-May-14 | 9-May-14 | 14-May-14 | 14-May-14 | 14-May-14 | 14-May-14 | Apr. 02, 2014 | Apr. 30, 2014 | 9-May-14 | Dec. 16, 2013 | |||||||
In Thousands, unless otherwise specified | property | property | Office Properties | Industrial | Retail and Office Properties | Multi-Family Properties | Retail | City Center | Tranche I [Member] | Bulwark Closing [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Market Place, and Realty Income [Member] | |||||||
property | property | sqft | property_unit | property | Multi-Family Properties | property | property | property | property | Retail and Office Properties | Multi-Family Properties | Retail | City Center | Tranche II(a) [Member] | Tranche II(b) [Member] [Member] | Tranche II(c) [Member] | property | ||||||||||
property | property_unit | sqft | property_unit | property | Multi-Family Properties | property | property | property | |||||||||||||||||||
property_unit | |||||||||||||||||||||||||||
Organization diclosure | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Net Lease Properties Sold | 55 | ' | ' | ' | ' | ' | ' | ' | 46 | 9 | 1 | 28 | ' | ' | ' | ' | 13 | 12 | 3 | ' | |||||||
Net Lease Properties Aggregate Cash Sale Price | $274,259 | $503,013 | ' | ' | ' | ' | ' | ' | $201,955 | $72,304 | ' | $201,461 | ' | ' | ' | ' | $93,605 | $63,434 | $44,422 | ' | |||||||
Sale of Net Lease Properties Net Proceeds Received | $148,484 | [1] | ' | ' | ' | ' | ' | ' | ' | $126,312 | [1] | $22,172 | [1] | ' | $86,447 | [1] | ' | ' | ' | ' | $41,773 | [1] | $30,534 | [1] | $14,140 | [1] | ' |
Number of Real Estate Properties | ' | ' | 3 | 1 | ' | 2 | 83 | ' | ' | ' | ' | ' | ' | 2 | 59 | ' | ' | ' | ' | ' | |||||||
Square Footage/Units | ' | ' | ' | ' | 11,500,000 | ' | ' | ' | ' | ' | ' | ' | 10,600,000 | ' | ' | ' | ' | ' | ' | ' | |||||||
Number of Units in Real Estate Property | ' | ' | ' | ' | ' | 420 | ' | 24 | ' | ' | ' | ' | ' | 420 | ' | 24 | ' | ' | ' | ' | |||||||
Total Net Lease properties held for sale | ' | 84 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 74 | |||||||
Percent of membership interests in certain Delaware limited liability companies to be sold | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | |||||||
[1] | After repayment or assumption of mortgages payable. |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Narrative (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 |
Restricted escrow | $27,699 | ' | $5,616 |
Restricted Cash and Cash Equivalents | 4,500 | ' | 0 |
Depreciation | 12,268 | 12,069 | ' |
Minimum | ' | ' | ' |
Earnout Liability Term | '1 year | ' | ' |
Maximum | ' | ' | ' |
Earnout Liability Term | '3 years | ' | ' |
Building and improvements | ' | ' | ' |
Property, plant and equipment, useful life | '30 years | ' | ' |
Furniture, fixtures, equipment, and site improvements | Minimum | ' | ' | ' |
Property, plant and equipment, useful life | '5 years | ' | ' |
Furniture, fixtures, equipment, and site improvements | Maximum | ' | ' | ' |
Property, plant and equipment, useful life | '15 years | ' | ' |
Level 3 [Member] | Minimum | ' | ' | ' |
Fair Value Inputs, Lease Up Period | '1 year | ' | ' |
Fair Value Inputs, Market Rents | 9.6 | ' | ' |
Fair Value Inputs, Probabiilty of Occupancy | 90.00% | ' | ' |
Level 3 [Member] | Maximum | ' | ' | ' |
Fair Value Inputs, Lease Up Period | '3 years | ' | ' |
Fair Value Inputs, Market Rents | 45 | ' | ' |
Fair Value Inputs, Probabiilty of Occupancy | 100.00% | ' | ' |
Fair Value Inputs, Discount Rate | 10.00% | ' | ' |
Above market leases | ' | ' | ' |
Amortization of Acquired Intangible Assets | 1,086 | 1,891 | ' |
Below Market Lease [Member] | ' | ' | ' |
Amortization of Acquired Intangible Assets | 688 | 1,158 | ' |
Leases, acquired in-place | ' | ' | ' |
Amortization of Acquired Intangible Assets | $5,477 | $6,164 | ' |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies Acquisition of Investment Properties (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ' |
Finite-Lived Customer Relationships, Gross | $0 | ' | ' |
Intangible assets: | ' | ' | ' |
Accumulated amortization | -62,724 | ' | -56,234 |
Acquired lease intangibles, net | 190,590 | ' | 194,758 |
Intangible liabiltiies: | ' | ' | ' |
Accumulated amortization | -6,124 | ' | -5,436 |
Acquired below market lease intangibles, net | 45,371 | ' | 45,732 |
Intangible assets and liabilities, amortization, fiscal year maturity | ' | ' | ' |
Asset Impairment Charges | 0 | 0 | ' |
Other than Temporary Impairment Losses, Investments | 0 | 0 | ' |
Leases, acquired in-place | ' | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ' |
Amortization of acquired intangible assets | 5,477 | 6,164 | ' |
Intangible assets: | ' | ' | ' |
Acquired intangible assets | 218,165 | ' | 215,913 |
Intangible liabiltiies: | ' | ' | ' |
Acquired finite-lived intangible assets, weighted average useful life | '12 years | ' | ' |
Intangible assets and liabilities, amortization, fiscal year maturity | ' | ' | ' |
2014 (remainder of year) | 16,362 | ' | ' |
2015 | 21,542 | ' | ' |
2016 | 21,020 | ' | ' |
2017 | 20,073 | ' | ' |
2018 | 17,321 | ' | ' |
Thereafter | 71,210 | ' | ' |
Total | 167,528 | ' | ' |
Above market leases | ' | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ' |
Amortization of acquired intangible assets | 1,086 | 1,891 | ' |
Intangible assets: | ' | ' | ' |
Acquired intangible assets | 35,149 | ' | 35,079 |
Intangible liabiltiies: | ' | ' | ' |
Acquired finite-lived intangible assets, weighted average useful life | '9 years | ' | ' |
Intangible assets and liabilities, amortization, fiscal year maturity | ' | ' | ' |
2014 (remainder of year) | 3,079 | ' | ' |
2015 | 3,862 | ' | ' |
2016 | 3,532 | ' | ' |
2017 | 3,245 | ' | ' |
2018 | 2,365 | ' | ' |
Thereafter | 6,979 | ' | ' |
Total | 23,062 | ' | ' |
Below Market Lease [Member] | ' | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ' |
Amortization of acquired intangible assets | 688 | 1,158 | ' |
Intangible liabiltiies: | ' | ' | ' |
Acquired intangible liabilities | 51,495 | ' | 51,168 |
Acquired finite-lived intangible assets, weighted average useful life | '23 years | ' | ' |
Intangible assets and liabilities, amortization, fiscal year maturity | ' | ' | ' |
2014 (remainder of year) | 2,073 | ' | ' |
2015 | 2,667 | ' | ' |
2016 | 2,549 | ' | ' |
2017 | 2,514 | ' | ' |
2018 | 2,428 | ' | ' |
Thereafter | 33,140 | ' | ' |
Total | $45,371 | ' | ' |
Acquisitions_Acquisitions_Deta
Acquisitions (Acquisitions) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 21, 2014 |
Retail | ||
Goldsboro, North Carolina [Member] | ||
Memorial Commons [Member] | ||
sqft | ||
Business acquisition | ' | ' |
Square Footage/Units | ' | 111,271 |
Approximate purchase price | ' | $17,810 |
Revenue of Acquiree since Acquisition Date, Actual | 33 | ' |
Earnings or Loss of Acquiree since Acquisition Date, Actual | $29 | ' |
Acquisitions_Acquired_Assets_a
Acquisitions (Acquired Assets and Liabilities) (Details) (Memorial Commons [Member], USD $) | Mar. 21, 2014 |
In Thousands, unless otherwise specified | |
Memorial Commons [Member] | ' |
Business Acquisition, Purchase Price Allocation [Abstract] | ' |
Land | $1,568 |
Building and Improvements | 14,069 |
Acquired Lease Intangibles | $2,067 |
Discontinued_Operations_and_In2
Discontinued Operations and Investment Properties Held for Sale (Details) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Dec. 16, 2013 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' | ' | ' |
Net Lease Properties Aggregate Cash Sale Price | $274,259 | ' | ' | $503,013 |
Land | 306,539 | ' | 304,971 | ' |
Building and improvements | 1,367,490 | ' | 1,353,212 | ' |
Total | 1,684,906 | ' | 1,667,505 | ' |
Real Estate Investment Property, Accumulated Depreciation | -106,812 | ' | -94,544 | ' |
Net investment properties | 1,578,094 | ' | 1,572,961 | ' |
Restricted cash and escrows | 32,199 | ' | 5,616 | ' |
Accounts and rents receivable (net of allowance of $2,782 and $2,285, respectively) | 17,741 | ' | 17,023 | ' |
Acquired lease intangibles, net | 190,590 | ' | 194,759 | ' |
Deferred costs, net | 6,419 | ' | 6,677 | ' |
Other assets | 6,880 | ' | 9,476 | ' |
Mortgages, credit facility and securities margin payable | 942,133 | ' | 1,005,593 | ' |
Accounts payable and accrued expenses | 12,772 | ' | 7,873 | ' |
Accrued real estate taxes payable | 4,742 | ' | 4,699 | ' |
Other liabilities | 8,344 | ' | 9,930 | ' |
Acquired below market lease intangibles, net | 45,371 | ' | 45,732 | ' |
Liabilities held for sale, net | 125,545 | ' | 252,665 | ' |
Rental income | 36,196 | 34,597 | ' | ' |
Tenant recovery income | 9,134 | 8,791 | ' | ' |
Other property income | 1,261 | 3,499 | ' | ' |
Total income | 46,591 | 46,887 | ' | ' |
General and administrative expenses | 1,950 | 1,804 | ' | ' |
Property operating expenses | 9,069 | 8,733 | ' | ' |
Real estate taxes | 5,533 | 5,102 | ' | ' |
Depreciation and amortization | 17,851 | 19,451 | ' | ' |
Total expenses | 40,781 | 38,808 | ' | ' |
Operating income | 5,810 | 8,079 | ' | ' |
Gain on sales of investment properties, net | 26,916 | 0 | ' | ' |
Interest Expense | -10,578 | -10,240 | ' | ' |
Income from discontinued operations | 30,808 | 1,867 | ' | ' |
Redeemable noncontrolling interests | -697 | -501 | ' | ' |
Discontinued Operations [Member] | ' | ' | ' | ' |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' | ' | ' |
Rental income | 6,448 | 9,062 | ' | ' |
Tenant recovery income | 250 | 694 | ' | ' |
Other property income | 22 | 32 | ' | ' |
Total income | 6,720 | 9,788 | ' | ' |
General and administrative expenses | 0 | 153 | ' | ' |
Property operating expenses | 340 | 479 | ' | ' |
Real estate taxes | 281 | 554 | ' | ' |
Depreciation and amortization | 0 | 3,902 | ' | ' |
Total expenses | 621 | 5,088 | ' | ' |
Operating income | 6,099 | 4,700 | ' | ' |
Gain on sales of investment properties, net | 26,916 | 0 | ' | ' |
Interest Expense | -2,207 | -2,833 | ' | ' |
Income from discontinued operations | 30,808 | 1,867 | ' | ' |
Redeemable noncontrolling interests | -18 | -18 | ' | ' |
Net income from discontinued operations attributable to common stockholders | 30,790 | 1,849 | ' | ' |
Assets Held-for-sale [Member] | ' | ' | ' | ' |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' | ' | ' |
Land | 29,395 | ' | 89,365 | ' |
Building and improvements | 153,198 | ' | 315,958 | ' |
Total | 182,593 | ' | 405,323 | ' |
Real Estate Investment Property, Accumulated Depreciation | -10,766 | ' | -20,555 | ' |
Net investment properties | 171,827 | ' | 384,768 | ' |
Restricted cash and escrows | 0 | ' | 1,939 | ' |
Accounts and rents receivable (net of allowance of $2,782 and $2,285, respectively) | 3,020 | ' | 4,199 | ' |
Acquired lease intangibles, net | 32,296 | ' | 60,504 | ' |
Deferred costs, net | 1,621 | ' | 2,570 | ' |
Other assets | 564 | ' | 318 | ' |
Assets Held-for-sale, Current | 209,328 | ' | 454,298 | ' |
Liability Held for Sale [Member] | ' | ' | ' | ' |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' | ' | ' |
Mortgages, credit facility and securities margin payable | 118,325 | ' | 242,680 | ' |
Accounts payable and accrued expenses | 473 | ' | 1,012 | ' |
Accrued real estate taxes payable | 166 | ' | 813 | ' |
Other liabilities | 6,209 | ' | 6,802 | ' |
Acquired below market lease intangibles, net | 372 | ' | 1,358 | ' |
Liabilities held for sale, net | $125,545 | ' | $252,665 | ' |
Operating_Leases_Details
Operating Leases (Details) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2014 |
Land, Buildings and Improvements | ' |
Minimum lease payments to be received under operating leases | ' |
2014 (remainder of year) | 101,821 |
2015 | 131,762 |
2016 | 125,195 |
2017 | 113,979 |
2018 | 92,415 |
Thereafter | 593,965 |
Total | 1,159,137 |
Minimum | ' |
Minimum lease payments to be received under operating leases | ' |
Remaining Operating Lease Term | '1 year |
Maximum | ' |
Minimum lease payments to be received under operating leases | ' |
Remaining Operating Lease Term | '72 years |
Unconsolidated_Entities_Detail
Unconsolidated Entities (Details) (USD $) | 3 Months Ended | |||||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | 28-May-09 |
REIT | Oak Property & Casualty LLC | Oak Property & Casualty LLC | Oak Property & Casualty LLC | Inland Real Estate Group of Companies | ||
Schedule of Equity Method Investments | ' | ' | ' | ' | ' | ' |
Number of Other Owners In Limited Liability Company | 1 | ' | ' | ' | ' | ' |
Number of Related Party Owners In Limited Liability Company | 3 | ' | ' | ' | ' | ' |
Insure reimburse membersb deductible obligations property insurance amount | $100 | ' | ' | ' | ' | ' |
Insure reimburse membersb deductible obligations general liability insurance | 100 | ' | ' | ' | ' | ' |
Equity method investment, ownership percentage | ' | ' | 20.00% | ' | 20.00% | ' |
Equity method investments | ' | ' | 553 | ' | 484 | ' |
Income (loss) from equity method investments | 70 | 155 | 70 | 155 | ' | ' |
Investment owned, balance, shares | ' | ' | ' | ' | ' | 1,000 |
Cost-method investments, aggregate carrying amount | ' | ' | ' | ' | ' | $1 |
Investment_in_Marketable_Secur1
Investment in Marketable Securities (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 |
Investments, Debt and Equity Securities [Abstract] | ' | ' | ' |
Investment in marketable securities | $35,604 | ' | $34,070 |
Available-for-sale securities, amortized cost | 33,205 | ' | 33,492 |
Available-for-sale securities, gross unrealized gain (loss) | 2,399 | ' | 578 |
Unrealized gain on marketable securities | 1,821 | 2,705 | ' |
Realized gain on sale of marketable securities | $24 | $26 | ' |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Recurring basis | Level 1 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ' | ' |
Asset - investment in marketable securities | $26,576 | $24,871 |
Recurring basis | Level 1 | Interest rate swap | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ' | ' |
Asset - interest rate swap | 0 | 0 |
Liability - interest rate swap | 0 | 0 |
Recurring basis | Level 2 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ' | ' |
Asset - investment in marketable securities | 9,028 | 9,199 |
Recurring basis | Level 2 | Interest rate swap | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ' | ' |
Asset - interest rate swap | 819 | 2,379 |
Liability - interest rate swap | 3,708 | 4,127 |
Recurring basis | Level 3 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ' | ' |
Asset - investment in marketable securities | 0 | 0 |
Recurring basis | Level 3 | Interest rate swap | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ' | ' |
Asset - interest rate swap | 0 | 0 |
Liability - interest rate swap | 0 | 0 |
Recurring basis | Estimate of Fair Value | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ' | ' |
Asset - investment in marketable securities | 35,604 | 34,070 |
Recurring basis | Estimate of Fair Value | Interest rate swap | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ' | ' |
Asset - interest rate swap | 819 | 2,379 |
Liability - interest rate swap | 3,708 | 4,127 |
Carrying (Reported) Amount | Level 3 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ' | ' |
Mortgage debt | 1,051,055 | 1,185,433 |
Estimate of Fair Value | Level 3 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ' | ' |
Mortgage debt | $1,062,781 | $1,211,250 |
Transactions_with_Related_Part2
Transactions with Related Parties (Related Party Summary) (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Related Party Transactions | ' | ' |
Due to Related Parties | $1,759 | $2,074 |
Common stock, par value (in dollars per share) | 554 | 485 |
Sponsor | ' | ' |
Related Party Transactions | ' | ' |
Due to Related Parties | 1,759 | 2,074 |
Inland Real Estate Corporation | ' | ' |
Related Party Transactions | ' | ' |
Available-for-sale securities | 791 | 789 |
Inland Real Estate Group of Companies | ' | ' |
Related Party Transactions | ' | ' |
Investment owned, balance, shares | 1,000 | 1,000 |
Common stock, par value (in dollars per share) | $1 | $1 |
Transactions_with_Related_Part3
Transactions with Related Parties (Related Party Transactions) (Details) (USD $) | 3 Months Ended | |||||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |||
Related Party Transactions [Abstract] | ' | ' | ' | |||
General and administrative reimbursement | $450 | [1] | $409 | [1] | ' | |
Loan servicing | 76 | [2] | 74 | [2] | ' | |
Investment advisor fee | 68 | [3] | 80 | [3] | ' | |
Total general and administrative to related parties | 594 | 563 | ' | |||
Acquisition related costs | 46 | [4] | 54 | [4] | ' | |
Real estate management fees | 2,109 | [5] | 2,205 | [5] | ' | |
Business mangement fee | 3,446 | [6] | 3,500 | [6] | ' | |
Loan placement fees | 0 | [7] | 67 | [7] | ' | |
Related Party Transaction, Cost Reimbursement | 5 | [8] | 0 | [8] | ' | |
Unpaid amounts as of period end | ' | ' | ' | |||
General and administrative reimbursement | 291 | [1] | ' | 292 | [1] | |
Loan servicing | 0 | [2] | ' | 0 | [2] | |
Investment advisor fee | 23 | [3] | ' | 25 | [3] | |
Total general and administrative to related parties | 314 | ' | 317 | |||
Acquisition related costs | 0 | [4] | ' | 0 | [4] | |
Real estate management fees | 0 | [5] | ' | 0 | [5] | |
Business management fee | 1,445 | [6] | ' | 1,757 | [6] | |
Loan placement fees | 0 | [7] | ' | 0 | [7] | |
Cost Reimbursement Due to Related Party | $0 | [8] | ' | $0 | [8] | |
[1] | The Business Manager and its related parties are entitled to reimbursement for general and administrative expenses of the Business Manager and its related parties relating to the Companybs administration. Such costs are included in general and administrative expenses in the consolidated statements of operations and other comprehensive income. | |||||
[2] | A related party of the Business Manager provides loan servicing to the Company for an annual fee equal to .03% of the first $1,000,000 of serviced loans and .01% for serviced loans over $1,000,000. These loan servicing fees are paid monthly and are included in general and administrative expenses in the consolidated statements of operations and other comprehensive income. | |||||
[3] | The Company pays a related party of the Business Manager to purchase and monitor its investment in marketable securities. | |||||
[4] | The Business Manager and its related parties are reimbursed for acquisition, dead deal and transaction related costs of the Business Manager and its related parties relating to the Companybs acquisition of real estate assets. These costs relate to both closed and potential transactions and include customary due diligence costs including time and travel expense reimbursements. Such costs are included in acquisition related costs in the consolidated statements of operations and other comprehensive income. The Company does not pay acquisition fees to its Business Manager or its affiliates. | |||||
[5] | The real estate managers, entities owned principally by individuals who are related parties of the Business Manager, receive monthly real estate management fees up to 4.5% of gross operating income (as defined), for management and leasing services. Such costs are included in property operating expenses in the consolidated statements of operations and other comprehensive income. In addition to these fees, the real estate managers receive reimbursements of payroll costs for property level employees. The Company reimbursed or will reimburse the real estate managers and other affiliates $547 and $569 for the three months ended March 31, 2014 and 2013, respectively. | |||||
[6] | Subject to satisfying the criteria described below, the Company pays the Business Manager a quarterly business management fee equal to a percentage of the Companybs baverage invested assetsb (as defined in the business management agreement), calculated as follows:(1)if the Company has declared distributions during the prior calendar quarter just ended, in an amount equal to or greater than an average 7% annualized distribution rate (assuming a share was purchased for $10.00), it will pay a fee equal to 0.1875% of its baverage invested assetsb for that prior calendar quarter;(2)if the Company has declared distributions during the prior calendar quarter just ended, in an amount equal to or greater than an average 6% annualized distribution rate but less than 7% annualized distribution rate (assuming a share was purchased for $10.00), it will pay a fee equal to 0.1625% of its baverage invested assetsb for that prior calendar quarter;(3)if the Company has declared distributions during the prior calendar quarter just ended, in an amount equal to or greater than an average 5% annualized distribution rate but less than 6% annualized distribution rate (assuming a share was purchased for $10.00), it will pay a fee equal to 0.125% of its baverage invested assetsb for that prior calendar quarter; or (4)if the Company does not satisfy the criteria in (1), (2)B or (3)B above in a particular calendar quarter just ended, it will not, except as set forth below, pay a business management fee for that prior calendar quarter.(5)Assuming that (1), (2)B or (3)B above is satisfied, the Business Manager may decide, in its sole discretion, to be paid an amount less than the total amount that may be paid. If the Business Manager decides to accept less in any particular quarter, the excess amount that is not paid may, in the Business Managerbs sole discretion, be waived permanently or deferred, without interest, to be paid at a later point in time. This obligation to pay the deferred fee terminates if the Company acquires the Business Manager. For the three months ended March 31, 2014 and 2013, the Business Manager was entitled to a business management fee in the amount equal to $3,446 and $3,664, respectively of which $0 and $164, respectively was permanently waived.Separate and distinct from any business management fee, the Company will also reimburse the Business Manager, the Real Estate Managers and their affiliates for certain expenses that they, or any related party including the Sponsor, pay or incur on its behalf including the salaries and benefits of persons employed except that the Company will not reimburse either our Business Manager or Real Estate Managers for any compensation paid to individuals who also serve as the Companybs executive officers, or the executive officers of the Business Manager, the Real Estate Managers or their affiliates; provided that, for these purposes, the secretaries will not be considered bexecutive officers.b These costs were recorded in general and administrative expenses in the consolidated statements of operations and other comprehensive income. | |||||
[7] | The Company pays a related party of the Business Manager 0.2% of the principal amount of each loan it places for the Company. Such costs are capitalized as loan fees and amortized over the respective loan term. | |||||
[8] | The Company reimburses a related party of the Business Manager for costs incurred for construction oversight provided to the Company relating to its development project. These reimbursements are paid monthly during the development period. These costs are capitalized and are included in construction in progress on the consolidated balance sheet. |
Transactions_with_Related_Part4
Transactions with Related Parties (Parenthetical Footnotes) (Details) (USD $) | 3 Months Ended | |||
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | ||
Related Party Transactions | ' | ' | ||
Payroll Reimbursement to Related Party Real Estate Management | $547 | $569 | ||
Business mangement fee | 3,446 | [1] | 3,500 | [1] |
Business Manager and Related Parties | ' | ' | ||
Related Party Transactions | ' | ' | ||
Business mangement fee | 3,446 | 3,664 | ||
Business management fee waived | 0 | 164 | ||
Loan Placement Fee, Percentage | 0.20% | ' | ||
First $1,000,000 Serviced Loans | Business Manager and Related Parties | ' | ' | ||
Related Party Transactions | ' | ' | ||
Loan servicing fee percent | 0.03% | ' | ||
Serviced Loans Initial Amount | 1,000,000 | ' | ||
Excess Amounts Over $1,000,000 Serviced Loans | Business Manager and Related Parties | ' | ' | ||
Related Party Transactions | ' | ' | ||
Loan servicing fee percent | 0.01% | ' | ||
Serviced Loans Initial Amount | $1,000,000 | ' | ||
Maximum | Business Manager and Related Parties | ' | ' | ||
Related Party Transactions | ' | ' | ||
Management fee, percent gross operating income | 4.50% | ' | ||
7% or greater | Business Manager and Related Parties | ' | ' | ||
Related Party Transactions | ' | ' | ||
Related party, stock price per share (in dollars per share) | $10 | ' | ||
Fee, percent average annual investments | 0.19% | ' | ||
7% or greater | Minimum | Business Manager and Related Parties | ' | ' | ||
Related Party Transactions | ' | ' | ||
Average annual distribution rate, minimum | 7.00% | ' | ||
Between 6% and 7% | Business Manager and Related Parties | ' | ' | ||
Related Party Transactions | ' | ' | ||
Related party, stock price per share (in dollars per share) | $10 | ' | ||
Fee, percent average annual investments | 0.16% | ' | ||
Between 6% and 7% | Minimum | Business Manager and Related Parties | ' | ' | ||
Related Party Transactions | ' | ' | ||
Average annual distribution rate, minimum | 6.00% | ' | ||
Between 6% and 7% | Maximum | Business Manager and Related Parties | ' | ' | ||
Related Party Transactions | ' | ' | ||
Average annual distribution rate, minimum | 7.00% | ' | ||
Between 5% and 6% | Business Manager and Related Parties | ' | ' | ||
Related Party Transactions | ' | ' | ||
Related party, stock price per share (in dollars per share) | $10 | ' | ||
Fee, percent average annual investments | 0.13% | ' | ||
Between 5% and 6% | Minimum | Business Manager and Related Parties | ' | ' | ||
Related Party Transactions | ' | ' | ||
Average annual distribution rate, minimum | 5.00% | ' | ||
Between 5% and 6% | Maximum | Business Manager and Related Parties | ' | ' | ||
Related Party Transactions | ' | ' | ||
Average annual distribution rate, minimum | 6.00% | ' | ||
[1] | Subject to satisfying the criteria described below, the Company pays the Business Manager a quarterly business management fee equal to a percentage of the Companybs baverage invested assetsb (as defined in the business management agreement), calculated as follows:(1)if the Company has declared distributions during the prior calendar quarter just ended, in an amount equal to or greater than an average 7% annualized distribution rate (assuming a share was purchased for $10.00), it will pay a fee equal to 0.1875% of its baverage invested assetsb for that prior calendar quarter;(2)if the Company has declared distributions during the prior calendar quarter just ended, in an amount equal to or greater than an average 6% annualized distribution rate but less than 7% annualized distribution rate (assuming a share was purchased for $10.00), it will pay a fee equal to 0.1625% of its baverage invested assetsb for that prior calendar quarter;(3)if the Company has declared distributions during the prior calendar quarter just ended, in an amount equal to or greater than an average 5% annualized distribution rate but less than 6% annualized distribution rate (assuming a share was purchased for $10.00), it will pay a fee equal to 0.125% of its baverage invested assetsb for that prior calendar quarter; or (4)if the Company does not satisfy the criteria in (1), (2)B or (3)B above in a particular calendar quarter just ended, it will not, except as set forth below, pay a business management fee for that prior calendar quarter.(5)Assuming that (1), (2)B or (3)B above is satisfied, the Business Manager may decide, in its sole discretion, to be paid an amount less than the total amount that may be paid. If the Business Manager decides to accept less in any particular quarter, the excess amount that is not paid may, in the Business Managerbs sole discretion, be waived permanently or deferred, without interest, to be paid at a later point in time. This obligation to pay the deferred fee terminates if the Company acquires the Business Manager. For the three months ended March 31, 2014 and 2013, the Business Manager was entitled to a business management fee in the amount equal to $3,446 and $3,664, respectively of which $0 and $164, respectively was permanently waived.Separate and distinct from any business management fee, the Company will also reimburse the Business Manager, the Real Estate Managers and their affiliates for certain expenses that they, or any related party including the Sponsor, pay or incur on its behalf including the salaries and benefits of persons employed except that the Company will not reimburse either our Business Manager or Real Estate Managers for any compensation paid to individuals who also serve as the Companybs executive officers, or the executive officers of the Business Manager, the Real Estate Managers or their affiliates; provided that, for these purposes, the secretaries will not be considered bexecutive officers.b These costs were recorded in general and administrative expenses in the consolidated statements of operations and other comprehensive income. |
Mortgages_Credit_Facility_and_2
Mortgages, Credit Facility, and Securities Margins Payable (Narrative) (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | 9-May-14 | Mar. 31, 2014 | Dec. 31, 2013 | Nov. 02, 2012 |
In Thousands, unless otherwise specified | Mortgages | Mortgages | Securities margin payable | Securities margin payable | Subsequent Event [Member] | Line of credit | Line of credit | Line of credit | ||
Extinguishment of Debt, Type [Domain] | ||||||||||
Line of Credit Facility [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loans payable | ' | ' | $1,049,951 | $1,184,256 | ' | ' | ' | ' | ' | ' |
Debt, Weighted Average Interest Rate | 4.33% | ' | 4.33% | 4.30% | ' | ' | ' | ' | ' | ' |
Line of Credit Facility, Maximum Borrowing Capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | 105,000 |
Line of Credit Facility, Borrowing Capacity Increase, Lender Appproval | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 |
Notice Period to Terminate the Credit Facility | ' | ' | ' | ' | ' | ' | ' | '1 day | ' | ' |
Debtor-in-Possession Financing, Fee on Unused Borrowings | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.35% |
Line of Credit Facility, Amount Outstanding | ' | ' | ' | ' | ' | ' | ' | 0 | 52,500 | ' |
Debt Instrument, Unamortized Premium | ' | ' | 1,104 | ' | ' | ' | ' | ' | ' | ' |
Margin payable | 9,403 | 10,341 | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate at end of period | ' | ' | ' | ' | 0.50% | 0.51% | ' | ' | ' | ' |
Payment of Principal on Mortgage Debt | ' | ' | ' | ' | ' | ' | $107,825 | ' | ' | ' |
Subsequently Repaid Debt, Weighted Average Interest Rate | ' | ' | ' | ' | ' | ' | 4.67% | ' | ' | ' |
Mortgages_Credit_Facility_and_3
Mortgages, Credit Facility, and Securities Margins Payable (Maturity and Principal Payments) (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | |
In Thousands, unless otherwise specified | |||
Maturities of Long-term Debt [Line Items] | ' | ' | |
Long-term Debt, Current Maturities | $408 | [1] | ' |
Long-term Debt, Maturities, Repayments of Principal in Year Two | 136,090 | [1] | ' |
Long-term Debt, Maturities, Repayments of Principal in Year Three | 50,290 | [1] | ' |
Long-term Debt, Maturities, Repayments of Principal in Year Four | 99,416 | [1] | ' |
Long-term Debt, Maturities, Repayments of Principal in Year Five | 83,402 | [1] | ' |
Long-term Debt, Maturities, Repayments of Principal after Year Five | 680,345 | [1] | ' |
Long-term Debt | 1,049,951 | [1] | ' |
Weighted Average Interest Rate on Current Maturities | 5.59% | ' | |
Weighted Average Interest Rate on Maturities in Year Two | 4.04% | ' | |
Weighted Average Interest Rate on Maturities in Year Three | 4.74% | ' | |
Weighted Average Interest Rate on Maturities in Year Four | 4.11% | ' | |
Weighted Average Interest Rate on Maturities in Year Five | 5.10% | ' | |
Weighted Average Interest Rate on Maturities in after Year Five | 4.30% | ' | |
Debt, Weighted Average Interest Rate | 4.33% | ' | |
Mortgages | ' | ' | |
Maturities of Long-term Debt [Line Items] | ' | ' | |
Long-term Debt, Current Maturities | 0 | [2] | ' |
Long-term Debt, Maturities, Repayments of Principal in Year Two | 23 | [2] | ' |
Long-term Debt, Maturities, Repayments of Principal in Year Three | 254 | [2] | ' |
Long-term Debt, Maturities, Repayments of Principal in Year Four | 281 | [2] | ' |
Long-term Debt, Maturities, Repayments of Principal in Year Five | 295 | [2] | ' |
Long-term Debt, Maturities, Repayments of Principal after Year Five | 117,472 | [2] | ' |
Long-term Debt | 118,325 | [2] | ' |
Weighted Average Interest Rate on Current Maturities | 0.00% | [2] | ' |
Weighted Average Interest Rate on Maturities in Year Two | 5.06% | [2] | ' |
Weighted Average Interest Rate on Maturities in Year Three | 5.11% | [2] | ' |
Weighted Average Interest Rate on Maturities in Year Four | 5.11% | [2] | ' |
Weighted Average Interest Rate on Maturities in Year Five | 5.11% | [2] | ' |
Weighted Average Interest Rate on Maturities in after Year Five | 4.76% | [2] | ' |
Debt, Weighted Average Interest Rate | 4.33% | 4.30% | |
Weighted Average Interest Rate, on Investment Properties Held for Sale | 4.76% | [2] | ' |
Fixed Rate Debt | ' | ' | |
Maturities of Long-term Debt [Line Items] | ' | ' | |
Long-term Debt, Current Maturities | 408 | ' | |
Long-term Debt, Maturities, Repayments of Principal in Year Two | 85,950 | ' | |
Long-term Debt, Maturities, Repayments of Principal in Year Three | 48,058 | ' | |
Long-term Debt, Maturities, Repayments of Principal in Year Four | 81,076 | ' | |
Long-term Debt, Maturities, Repayments of Principal in Year Five | 78,222 | ' | |
Long-term Debt, Maturities, Repayments of Principal after Year Five | 635,345 | ' | |
Long-term Debt | 929,059 | ' | |
Weighted Average Interest Rate on Current Maturities | 5.59% | ' | |
Weighted Average Interest Rate on Maturities in Year Two | 5.29% | ' | |
Weighted Average Interest Rate on Maturities in Year Three | 4.84% | ' | |
Weighted Average Interest Rate on Maturities in Year Four | 4.44% | ' | |
Weighted Average Interest Rate on Maturities in Year Five | 5.27% | ' | |
Weighted Average Interest Rate on Maturities in after Year Five | 4.49% | ' | |
Debt, Weighted Average Interest Rate | 4.64% | ' | |
Fixed Rate Debt | Mortgages | ' | ' | |
Maturities of Long-term Debt [Line Items] | ' | ' | |
Long-term Debt, Current Maturities | 408 | [3] | ' |
Long-term Debt, Maturities, Repayments of Principal in Year Two | 85,950 | [3] | ' |
Long-term Debt, Maturities, Repayments of Principal in Year Three | 48,058 | [3] | ' |
Long-term Debt, Maturities, Repayments of Principal in Year Four | 81,076 | [3] | ' |
Long-term Debt, Maturities, Repayments of Principal in Year Five | 78,222 | [3] | ' |
Long-term Debt, Maturities, Repayments of Principal after Year Five | 635,345 | [3] | ' |
Long-term Debt | 929,059 | [3] | ' |
Variable Rate Debt | ' | ' | |
Maturities of Long-term Debt [Line Items] | ' | ' | |
Long-term Debt, Current Maturities | 0 | ' | |
Long-term Debt, Maturities, Repayments of Principal in Year Two | 50,140 | ' | |
Long-term Debt, Maturities, Repayments of Principal in Year Three | 2,232 | ' | |
Long-term Debt, Maturities, Repayments of Principal in Year Four | 18,340 | ' | |
Long-term Debt, Maturities, Repayments of Principal in Year Five | 5,180 | ' | |
Long-term Debt, Maturities, Repayments of Principal after Year Five | 45,000 | ' | |
Long-term Debt | 120,892 | ' | |
Weighted Average Interest Rate on Current Maturities | 0.00% | ' | |
Weighted Average Interest Rate on Maturities in Year Two | 1.90% | ' | |
Weighted Average Interest Rate on Maturities in Year Three | 2.65% | ' | |
Weighted Average Interest Rate on Maturities in Year Four | 2.63% | ' | |
Weighted Average Interest Rate on Maturities in Year Five | 2.51% | ' | |
Weighted Average Interest Rate on Maturities in after Year Five | 1.55% | ' | |
Debt, Weighted Average Interest Rate | 1.92% | ' | |
Variable Rate Debt | Mortgages | ' | ' | |
Maturities of Long-term Debt [Line Items] | ' | ' | |
Long-term Debt, Current Maturities | 0 | [3] | ' |
Long-term Debt, Maturities, Repayments of Principal in Year Two | 50,140 | [3] | ' |
Long-term Debt, Maturities, Repayments of Principal in Year Three | 2,232 | [3] | ' |
Long-term Debt, Maturities, Repayments of Principal in Year Four | 18,340 | [3] | ' |
Long-term Debt, Maturities, Repayments of Principal in Year Five | 5,180 | [3] | ' |
Long-term Debt, Maturities, Repayments of Principal after Year Five | 45,000 | [3] | ' |
Long-term Debt | $120,892 | [3] | ' |
[1] | Excludes securities margin payable of $9,403 which is due upon the sale of marketable securities, and currently has an interest rate of 0.50% per annum, as of MarchB 31, 2014. | ||
[2] | As part of the Tranche II closings of the Net Lease Properties which closed in April and May 2014, the Company assumptions of mortgage debt with a principal balance of $107,825 and a weighted average interest rate of 4.67% as of MarchB 31, 2014 | ||
[3] | Excludes net mortgage premiums of $1,104, associated with debt assumed at acquisition, net of accumulated amortization as of MarchB 31, 2014. |
Mortgages_Credit_Facility_and_4
Mortgages, Credit Facility, and Securities Margins Payable (Interest Rate Swaps) (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 11, 2011 | Mar. 31, 2014 | Dec. 31, 2013 | Jun. 22, 2011 | Mar. 31, 2014 | Dec. 31, 2013 | Oct. 28, 2011 | Mar. 31, 2014 | Dec. 31, 2013 | 9-May-12 | Mar. 31, 2014 | Dec. 31, 2013 | Jun. 13, 2012 | Mar. 31, 2014 | Dec. 31, 2013 | Jul. 24, 2012 | Mar. 31, 2014 | Dec. 31, 2013 | Oct. 02, 2012 | Mar. 31, 2014 | Dec. 31, 2013 | Oct. 02, 2012 | Mar. 31, 2014 | Dec. 31, 2013 | Oct. 04, 2012 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 20, 2012 | Mar. 31, 2014 | Dec. 31, 2013 | Feb. 14, 2013 | |||||||||||||||
In Thousands, unless otherwise specified | Designated as Hedging Instrument | Designated as Hedging Instrument | Designated as Hedging Instrument | Designated as Hedging Instrument | Designated as Hedging Instrument | Designated as Hedging Instrument | Designated as Hedging Instrument | Designated as Hedging Instrument | Designated as Hedging Instrument | Designated as Hedging Instrument | Designated as Hedging Instrument | Designated as Hedging Instrument | Designated as Hedging Instrument | Designated as Hedging Instrument | Designated as Hedging Instrument | Designated as Hedging Instrument | Designated as Hedging Instrument | Designated as Hedging Instrument | Designated as Hedging Instrument | Designated as Hedging Instrument | Designated as Hedging Instrument | Designated as Hedging Instrument | Designated as Hedging Instrument | Designated as Hedging Instrument | Houston, Texas [Member] | Houston, Texas [Member] | Houston, Texas [Member] | Dallas, Texas [Member] | Dallas, Texas [Member] | Dallas, Texas [Member] | Cash Flow Hedging [Member] | Cash Flow Hedging [Member] | Cash Flow Hedging [Member] | |||||||||||||||||
Kohls Bend River Promenade [Member] | Kohls Bend River Promenade [Member] | Kohls Bend River Promenade [Member] | Shoppes at Prairie Ridge [Member] | Shoppes at Prairie Ridge [Member] | Shoppes at Prairie Ridge [Member] | Fox Point [Member] | Fox Point [Member] | Fox Point [Member] | Shoppes At Branson Hills [Member] | Shoppes At Branson Hills [Member] | Shoppes At Branson Hills [Member] | Walgreens NE Portfolio [Member] | Walgreens NE Portfolio [Member] | Walgreens NE Portfolio [Member] | 9 Bank Branch Portfolio [Member] | 9 Bank Branch Portfolio [Member] | 9 Bank Branch Portfolio [Member] | City Center | City Center | City Center | Crossing at Killingly Commons | Crossing at Killingly Commons | Crossing at Killingly Commons | Designated as Hedging Instrument | Designated as Hedging Instrument | Designated as Hedging Instrument | Designated as Hedging Instrument | Designated as Hedging Instrument | Designated as Hedging Instrument | Office Properties | Office Properties | Office Properties | ||||||||||||||||||
Interest rate swap | Interest rate swap | Interest rate swap | Interest rate swap | Interest rate swap | Interest rate swap | Interest rate swap | Interest rate swap | Interest rate swap | Interest rate swap | Interest rate swap | Interest rate swap | Interest rate swap | Interest rate swap | Interest rate swap | Interest rate swap | Interest rate swap | Interest rate swap | Interest rate swap | Interest rate swap | Interest rate swap | Interest rate swap | Interest rate swap | Interest rate swap | Fedex Centers [Member] | Fedex Centers [Member] | Fedex Centers [Member] | Wheatland Town Center [Member] | Wheatland Town Center [Member] | Wheatland Town Center [Member] | First Mortgage | First Mortgage | First Mortgage | ||||||||||||||||||
Interest rate swap | Interest rate swap | Interest rate swap | Interest rate swap | Interest rate swap | Interest rate swap | Providence, Rhode Island [Member] | Providence, Rhode Island [Member] | Providence, Rhode Island [Member] | ||||||||||||||||||||||||||||||||||||||||||
Interest rate swap | Interest rate swap | Interest rate swap | ||||||||||||||||||||||||||||||||||||||||||||||||
Derivative [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||||||
Derivative, Effective Fixed Interest Rate | ' | ' | ' | ' | 5.01% | [1] | ' | ' | 4.47% | ' | ' | 3.75% | ' | ' | 3.38% | ' | ' | 5.17% | [2] | ' | ' | 3.09% | [1] | ' | ' | 3.85% | ' | ' | 3.73% | ' | ' | 3.15% | [1] | ' | ' | 3.36% | ' | ' | 4.25% | [1] | ||||||||||
Derivative Asset, Notional Amount | $203,122 | ' | ' | ' | $9,350 | [1] | ' | ' | $13,359 | ' | ' | $10,837 | ' | ' | $10,150 | ' | ' | $49,391 | [2] | ' | ' | $4,677 | [1] | ' | ' | $45,000 | ' | ' | $24,750 | ' | ' | $10,808 | ' | ' | $9,900 | ' | ' | $14,900 | [1] | |||||||||||
Derivative Asset, Fair Value, Gross Asset | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | [1] | 23 | [1] | ' | 622 | 977 | ' | 121 | 132 | ' | 0 | [1] | 402 | [1] | ' | 76 | 87 | ' | 0 | [1] | 757 | [1] | ' | |||||||||
Derivative Liability, Fair Value, Gross Liability | ($2,889) | ($1,748) | $0 | [1] | ($322) | [1] | ' | ($413) | ($457) | ' | ($216) | ($240) | ' | ($52) | ($66) | ' | ($3,027) | [2] | ($3,041) | [2] | ($5,219) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
[1] | Interest rate swaps were settled as part of Tranche I Closing of the Net Lease Properties on January 31, 2014. | |||||||||||||||||||||||||||||||||||||||||||||||||
[2] | Assumed at the time of acquisition of Walgreens NE Portfolio with a then fair value of ($5,219). The Company retained this interest rate swap subsequent to the sale of the Walgreens NE Portfolio in the Bulwark Closing of the Net Lease Sale Transaction. |
Mortgages_Credit_Facility_and_5
Mortgages, Credit Facility, and Securities Margins Payable (Balance Sheet Classification of Derivatives) (Details) (Designated as Hedging Instrument, Other Liabilities [Member], Interest rate swaps, USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Designated as Hedging Instrument | Other Liabilities [Member] | Interest rate swaps | ' | ' |
Derivatives, fair value | ' | ' |
Derivative Liability, Fair Value, Net | ($3,708) | ($4,127) |
Derivative Asset, Fair Value, Net | $819 | $2,379 |
Mortgages_Credit_Facility_and_6
Mortgages, Credit Facility, and Securities Margins Payable (Income Statement Classification of Derivatives) (Details) (Designated as Hedging Instrument, Interest rate swaps, USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' |
Amount of Loss Recognized in OCI on Derivative (Effective Portion) | $1,325 | $160 |
Interest expense | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' |
Amount of Loss Reclassified from Accumulated OCI into Income (Effective Portion) | 309 | 325 |
Other expense | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' |
Amount of Loss Recognized in Income on Derivative (Ineffective Portion) | $2 | $4 |
Mortgages_Credit_Facility_and_7
Mortgages, Credit Facility, and Securities Margins Payable Derivative Instruments (Details) (Designated as Hedging Instrument, Interest rate swaps, USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 |
Designated as Hedging Instrument | Interest rate swaps | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss), Cumulative Changes in Net Gain (Loss) from Cash Flow Hedges, Effect Net of Tax | $1,109 | ' | $2,125 |
Derivative Instruments, Loss Recognized in Income, Ineffective Portion and Amount Excluded from Effectiveness Testing | -2 | -4 | ' |
Derivative Instruments, Gain (Loss) Reclassification from Accumulated OCI to Income, Estimated Net Amount to be Transferred | ($1,832) | ' | ' |
Redeemable_Noncontrolling_Inte2
Redeemable Noncontrolling Interest (Details) (USD $) | 3 Months Ended | 3 Months Ended | |||||||||||||||||||||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Aug. 15, 2012 | Mar. 31, 2014 | Jun. 07, 2013 | Sep. 28, 2012 | Mar. 31, 2014 | Oct. 03, 2012 | Mar. 31, 2014 | Dec. 27, 2012 | Oct. 03, 2012 | Mar. 31, 2014 | ||||||||||
Kohl's - Cumming | Kohl's - Cumming | City Center | City Center | City Center | Crossing at Killingly Commons | Crossing at Killingly Commons | Territory Portfolio | Territory Portfolio | October 3, 2015 and Thereafter | Contingent Issuance of Redeemable Noncontrolling Interest Units | |||||||||||||
Joint Venture, Dayville Investors | Joint Venture, Dayville Investors | Crossing at Killingly Commons | |||||||||||||||||||||
Joint Venture, Dayville Investors | |||||||||||||||||||||||
Redeemable Noncontrolling Interest [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Redeemable Noncontrolling Interest Units | 6,758,854 | [1] | ' | ' | 141,602 | [1],[2],[3] | ' | ' | 2,656,450 | [1],[3] | ' | 960,802 | [1],[3] | ' | 3,000,000 | [1],[4] | ' | ' | |||||
Redeemable Noncontrolling Interests at Issuance | ' | ' | ' | $1,416 | [2],[3] | ' | $26,565 | [3] | ' | ' | $9,608 | [3] | ' | $30,000 | [4] | ' | ' | ||||||
Redeemable Noncontrolling Interests Outstanding | 67,589 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Carrying Value of Redeemable Noncontrolling Interests | 67,983 | ' | 1,416 | [2],[3] | ' | 26,758 | [3] | ' | ' | 9,809 | [3] | ' | 30,000 | [4] | ' | ' | ' | ||||||
Preferred Return per Annum | ' | ' | ' | 5.00% | [2],[3] | ' | ' | 4.00% | [3],[5] | ' | 3.50% | [3],[6] | ' | 4.00% | [4] | 5.50% | ' | ||||||
Share price (in dollars per share) | $10 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 298,121 | ||||||||||
Redemption Value, Percent of Excess Share Price Per Share Deducted From Share Price Per Share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ||||||||||
Redeemable Noncontrolling Interests [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Redeemable Noncontrolling Interest, Beginning Balance | 67,950 | 47,215 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Issuance of redeemable noncontrolling interests | ' | ' | ' | 1,416 | [2],[3] | ' | 26,565 | [3] | ' | ' | 9,608 | [3] | ' | 30,000 | [4] | ' | ' | ||||||
Net income attributable to redeemable noncontrolling interests | 697 | 501 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Payment of preferred return | -664 | -417 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Redeemable Noncontrolling Interest, Ending Balance | $67,983 | $47,299 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
[1] | Redeemable noncontrolling interest units had a fair value of $10.00 each at the time of issuance. | ||||||||||||||||||||||
[2] | As part of the Tranche II(a) closing of the Net Lease Properties on April 1, 2014, the Company's ownership interest in the Kohl's Cumming joint venture, a consolidated subsidiary, was sold and the redeemable noncontrolling interests were derecognized. | ||||||||||||||||||||||
[3] | If the unit holder elects shares and the joint venture pays the redemption price in cash, the redemption value will be greater of (i) $10.00 per unit, plus any accumulated, accrued and unpaid distributions to and including the date of redemption or (ii) the Company's share price per share. | ||||||||||||||||||||||
[4] | If the unit holder elects shares and the joint venture pays the redemption price in cash, the redemption value will be $10.00 per unit plus 50% of the excess of the Company's share price per share over $10.00 per unit. | ||||||||||||||||||||||
[5] | Preferred return started on June 7, 2013, upon fulfillment of the deferred investment property acquisition obligations. | ||||||||||||||||||||||
[6] | Preferred return will increase to 5.50% per annum on October 3, 2015. The joint venture may issue up to an additional 298,121 redeemable noncontrolling interest units to settle its earnout liability included in the Company's investment property acquisition obligation on the consolidated balance sheet (see note 16). |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Loss) (Details) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | ||
Schedule of Changes and Reclassifications of Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ' | ' | ||
Accumulated other comprehensive inocme (loss), beginning of period | $2,703 | ($283) | ||
Other comprehensive (loss) income before reclassifications | 520 | 2,571 | ||
Amounts reclassified from other comprehensive income (loss) into income | 285 | 299 | ||
Net current-period other comprehensive loss | 805 | 2,870 | ||
Accumulated other comprehensive inocme (loss), end of period | 3,508 | 2,587 | ||
Gain (Loss) on Cash Flow Hedges | ' | ' | ||
Schedule of Changes and Reclassifications of Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ' | ' | ||
Accumulated other comprehensive inocme (loss), beginning of period | 2,125 | -3,282 | ||
Other comprehensive (loss) income before reclassifications | -1,325 | -160 | ||
Amounts reclassified from other comprehensive income (loss) into income | 309 | [1] | 325 | [1] |
Net current-period other comprehensive loss | -1,016 | 165 | ||
Accumulated other comprehensive inocme (loss), end of period | 1,109 | -3,117 | ||
Unrealized Gains and (Losses) on Available-for-sale Securities | ' | ' | ||
Schedule of Changes and Reclassifications of Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ' | ' | ||
Accumulated other comprehensive inocme (loss), beginning of period | 578 | 2,999 | ||
Other comprehensive (loss) income before reclassifications | 1,845 | 2,731 | ||
Amounts reclassified from other comprehensive income (loss) into income | -24 | [2] | -26 | [2] |
Net current-period other comprehensive loss | 1,821 | 2,705 | ||
Accumulated other comprehensive inocme (loss), end of period | $2,399 | $5,704 | ||
[1] | Included in interest expense on the consolidated statements of operations and other comprehensive income. | |||
[2] | Included in realized gain on sale of marketable securities on the consolidated statements of operations and other comprehensive income. |
Income_Taxes_Narrative_Details
Income Taxes Narrative (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | ' | ' | ' |
Liability for Uncertain Tax Positions, Current | $0 | ' | $0 |
Liability for Uncertain Tax Positions, Noncurrent | 0 | ' | ' |
Income Tax Examination, Penalties and Interest Expense | $0 | $0 | ' |
Distributions_Details
Distributions (Details) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Distributions [Abstract] | ' | ' |
Dividends payable, daily amount per share (in dollars per share) | $0.00 | ' |
Cash distributions declared | $0.60 | ' |
Annualized dividend yield calculated | 6.00% | ' |
Share price (in dollars per share) | $10 | ' |
Dividends, common stock, cash | $17,429 | $17,071 |
Earnings_Loss_per_Share_Antidi
Earnings (Loss) per Share (Antidilutive Securities) (Details) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Redeemable Noncontrolling Interest | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 6,758,854 | 4,711,553 |
Contingent Issuance of Redeemable Noncontrolling Interest Units | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 298,121 | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies (Guarantor Obligations) (Details) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2012 |
property | ||||
Guarantor obligations | ' | ' | ' | ' |
Number of properties acquired | 12 | ' | ' | ' |
Earnout liability, maximum potential payment | $24,018 | ' | ' | ' |
Redeemable Noncontrolling Interest, Equity, Other, Fair Value | 67,983 | 67,950 | 47,299 | 47,215 |
Mortgages | ' | ' | ' | ' |
Guarantor obligations | ' | ' | ' | ' |
Principal Amount Outstanding on Guarantor Obligations | 263,386 | ' | ' | ' |
Guarantor obligations, maximum exposure, undiscounted | $91,002 | ' | ' | ' |
Commitments_and_Contingencies_2
Commitments and Contingencies (Earnout Liability Rollforward) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Earnout Liability | ' | ' |
Earnout liability b beginning of period, fair value | $29,203 | $70,580 |
Amortization expense | 75 | 1,203 |
Payments to settle earnouts | -4,441 | -3,865 |
Earnout Liability, Payments in partial settlement of note receivable | -4,056 | 0 |
Fair value adjustment of earnout liability | -298 | -188 |
Earnout liability b end of period, fair value | $20,483 | $67,730 |
Segment_Reporting_Details
Segment Reporting (Details) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
segment | segment | |
Segment Reporting [Abstract] | ' | ' |
Number of Reportable Segments | 1 | 1 |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 3 Months Ended | 2 Months Ended | 0 Months Ended | 1 Months Ended | ||||||||
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Dec. 16, 2013 | 14-May-14 | 9-May-14 | 31-May-14 | 14-May-14 | 14-May-14 | Apr. 30, 2014 | Apr. 02, 2014 | Apr. 30, 2014 | 9-May-14 | Apr. 25, 2014 |
property | Subsequent Event [Member] | Subsequent Event [Member] | Dividend Declared [Member] | Dividend Declared [Member] | Dividend Paid [Member] | Dividend Paid [Member] | Tranche II(a) [Member] | Tranche II(b) [Member] [Member] | Tranche II(c) [Member] | Hitchcock Plaza [Member] | ||
property | property | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Aiken, South Carolina [Member] | |||
property | property | property | Retail | |||||||||
Subsequent Event [Member] | ||||||||||||
sqft | ||||||||||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock, Dividends, Daily Amount Per Share, Declared | ' | ' | ' | ' | $0.00 | ' | ' | ' | ' | ' | ' | ' |
Cash distributions declared | $0.60 | ' | ' | ' | $0.60 | ' | ' | ' | ' | ' | ' | ' |
Annualized dividend yield calculated | 6.00% | ' | ' | ' | 6.00% | ' | ' | ' | ' | ' | ' | ' |
Share price (in dollars per share) | $10 | ' | ' | ' | ' | $10 | ' | ' | ' | ' | ' | ' |
Dividends Common Stock Cash And Dividend Reinvestment Plan | ' | ' | ' | ' | ' | ' | $5,810 | $6,003 | ' | ' | ' | ' |
Net Lease Properties Sold | 55 | ' | 1 | 28 | ' | ' | ' | ' | 13 | 12 | 3 | ' |
Net Lease Properties Aggregate Cash Sale Price | 274,259 | 503,013 | ' | 201,461 | ' | ' | ' | ' | 93,605 | 63,434 | 44,422 | ' |
Square Footage/Units | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 252,370 |
Business Acquisition Cost Of Acquired Entity Approximate Purchase Price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $28,919 |