Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 08, 2013 | |
Document Information [Line Items] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Entity Common Stock, Shares Outstanding | ' | 10,969,714 |
Entity Registrant Name | 'Strategic Realty Trust, Inc. | ' |
Entity Central Index Key | '0001446371 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Investments in real estate | ' | ' |
Land | $49,546,000 | $61,449,000 |
Building and improvements | 115,218,000 | 161,703,000 |
Tenant improvements | 9,221,000 | 11,846,000 |
Investments in real estate, gross | 173,985,000 | 234,998,000 |
Accumulated depreciation | -10,651,000 | -7,992,000 |
Investments in real estate, net | 163,334,000 | 227,006,000 |
Cash and cash equivalents | 1,390,000 | 1,707,000 |
Restricted cash | 4,440,000 | 4,283,000 |
Prepaid expenses and other assets, net | 1,813,000 | 1,187,000 |
Amounts due from affiliates | 0 | 1,063,000 |
Tenant receivables, net | 2,991,000 | 3,180,000 |
Lease intangibles, net | 17,289,000 | 33,735,000 |
Assets held for sale | 40,800,000 | 25,771,000 |
Deferred financing costs, net | 2,349,000 | 3,527,000 |
TOTAL ASSETS | 234,406,000 | 301,459,000 |
LIABILITIES AND EQUITY LIABILITIES | ' | ' |
Notes payable | 120,575,000 | 190,577,000 |
Accounts payable and accrued expenses | 3,015,000 | 5,592,000 |
Amounts due to affiliates | 572,000 | 755,000 |
Other liabilities | 3,282,000 | 3,303,000 |
Liabilities related to assets held for sale | 40,716,000 | 21,277,000 |
Below market lease intangibles, net | 6,914,000 | 11,828,000 |
TOTAL LIABILITIES | 175,074,000 | 233,332,000 |
Commitments and contingencies | ' | ' |
Stockholders' equity | ' | ' |
Preferred stock, $0.01 par value; 50,000,000 shares authorized, none issued and outstanding | 0 | 0 |
Common stock, $0.01 par value; 400,000,000 shares authorized, 10,969,714 issued and outstanding at September 30, 2013, 10,893,227 issued and outstanding at December 31, 2012 | 110,000 | 109,000 |
Additional paid-in capital | 96,253,000 | 95,567,000 |
Accumulated deficit | -41,096,000 | -30,160,000 |
Total stockholders' equity | 55,267,000 | 65,516,000 |
Non-controlling interests | 4,065,000 | 2,611,000 |
TOTAL EQUITY | 59,332,000 | 68,127,000 |
TOTAL LIABILITIES AND EQUITY | $234,406,000 | $301,459,000 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Preferred stock par value | $0.01 | $0.01 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock par value | $0.01 | $0.01 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, Issued | 10,969,714 | 10,893,227 |
Common stock, shares outstanding | 10,969,714 | 10,893,227 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Revenue: | ' | ' | ' | ' |
Rental and reimbursements | $4,599,000 | $5,227,000 | $15,776,000 | $14,027,000 |
Expense: | ' | ' | ' | ' |
Operating and maintenance | 1,731,000 | 1,902,000 | 6,041,000 | 4,723,000 |
General and administrative | 706,000 | 993,000 | 3,689,000 | 2,595,000 |
Depreciation and amortization | 2,310,000 | 2,271,000 | 6,581,000 | 5,834,000 |
Transaction expenses | -4,000 | 406,000 | 38,000 | 3,334,000 |
Interest expense | 2,187,000 | 2,364,000 | 7,014,000 | 7,981,000 |
Total operating expense | 6,930,000 | 7,936,000 | 23,363,000 | 24,467,000 |
Loss from continuing operations | -2,331,000 | -2,709,000 | -7,587,000 | -10,440,000 |
Discontinued operations: | ' | ' | ' | ' |
Loss from discontinued operations | -296,000 | -561,000 | -2,366,000 | -1,313,000 |
Gain (loss) on impairment and disposal of real estate | -161,000 | 118,000 | 4,566,000 | 118,000 |
Loss on extinguishment of debt | -5,394,000 | 0 | -5,394,000 | 0 |
Loss from discontinued operations | -5,851,000 | -443,000 | -3,194,000 | -1,195,000 |
Net loss | -8,182,000 | -3,152,000 | -10,781,000 | -11,635,000 |
Net loss attributable to non-controlling interests | -383,000 | -122,000 | -481,000 | -517,000 |
Net loss attributable to common shares | ($7,799,000) | ($3,030,000) | ($10,300,000) | ($11,118,000) |
Basic loss per common share: | ' | ' | ' | ' |
Continuing operations (In dollars per share) | ($0.20) | ($0.25) | ($0.66) | ($1.11) |
Discontinued operations (In dollars per share) | ($0.51) | ($0.04) | ($0.28) | ($0.13) |
Net loss applicable to common shares (In dollars per share) | ($0.71) | ($0.29) | ($0.94) | ($1.24) |
Diluted loss per common share: | ' | ' | ' | ' |
Continuing operations (In dollars per share) | ($0.20) | ($0.25) | ($0.66) | ($1.11) |
Discontinued operations (In dollars per share) | ($0.51) | ($0.04) | ($0.28) | ($0.13) |
Net loss applicable to common shares (In dollars per share) | ($0.71) | ($0.29) | ($0.94) | ($1.24) |
Weighted average shares outstanding used to calculate loss per common share: | ' | ' | ' | ' |
Basic (In shares) | 10,967,963 | 10,616,610 | 10,964,563 | 8,956,275 |
Diluted (In shares) | 10,967,963 | 10,616,610 | 10,964,563 | 8,956,275 |
CONSOLIDATED_STATEMENTS_OF_EQU
CONSOLIDATED STATEMENTS OF EQUITY (USD $) | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Shareholders Equity | Noncontrolling Interest | |
BALANCE at Dec. 31, 2012 | $68,127,000 | $109,000 | $95,567,000 | ($30,160,000) | $65,516,000 | $2,611,000 | |
BALANCE (In shares) at Dec. 31, 2012 | ' | 10,893,227 | ' | ' | ' | ' | |
Issuance of common shares | 502,000 | 1,000 | 501,000 | 0 | 502,000 | 0 | |
Issuance of common stock, shares | ' | 50,547 | ' | ' | ' | ' | |
Issuance of common units | 0 | 0 | -73,000 | 0 | -73,000 | 73,000 | |
Issuance of member interests | 1,929,000 | ' | ' | ' | ' | 1,929,000 | |
Offering costs | -21,000 | 0 | -21,000 | 0 | -21,000 | 0 | |
Stock compensation expense | 33,000 | 0 | 33,000 | 0 | 33,000 | 0 | |
Issuance of common stock under DRIP | 246,000 | [1] | 0 | 246,000 | 0 | 246,000 | 0 |
Issuance of common stock under DRIP, shares | ' | 25,940 | ' | ' | ' | ' | |
Distributions | -703,000 | 0 | 0 | -636,000 | -636,000 | -67,000 | |
Net loss | -10,781,000 | 0 | 0 | -10,300,000 | -10,300,000 | -481,000 | |
BALANCE at Sep. 30, 2013 | $59,332,000 | $110,000 | $96,253,000 | ($41,096,000) | $55,267,000 | $4,065,000 | |
BALANCE (In shares) at Sep. 30, 2013 | ' | 10,969,714 | ' | ' | ' | ' | |
[1] | Cash distributions were paid, and shares issued pursuant to the Company’s DRIP, generally on a monthly basis. Cash distributions for all record dates of a given month were generally paid approximately 15 days following month end. |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Cash flows from operating activities: | ' | ' |
Net loss | ($10,781,000) | ($11,635,000) |
Loss from discontinued operations | -3,194,000 | -1,195,000 |
Loss from continuing operations | -7,587,000 | -10,440,000 |
Adjustments to reconcile loss from continuing operations to net cash used in operating activities: | ' | ' |
Gain on sale of real estate | 0 | -118,000 |
Straight-line rent | -340,000 | -527,000 |
Amortization of deferred costs and note payable premium/discount | 1,178,000 | 1,725,000 |
Depreciation and amortization | 6,581,000 | 5,834,000 |
Amortization of above and below-market leases | 124,000 | -38,000 |
Bad debt expense | 572,000 | 278,000 |
Stock-based compensation expense | 33,000 | 65,000 |
Changes in operating assets and liabilities, net of acquisitions: | ' | ' |
Prepaid expenses and other assets | -732,000 | 1,307,000 |
Tenant receivables | -260,000 | -604,000 |
Prepaid rent | -381,000 | 0 |
Accounts payable and accrued expenses | -2,577,000 | 1,324,000 |
Amounts due to affiliates | 880,000 | -14,000 |
Other liabilities | 660,000 | 314,000 |
Net change in restricted cash for operational expenditures | -32,000 | -1,592,000 |
Net cash used in operating activities - continuing operations | -1,881,000 | -2,486,000 |
Net cash provided by operating activities - discontinued operations | 807,000 | 683,000 |
Net cash used in operating activities - continuing operations | -1,074,000 | -1,803,000 |
Cash flows from investing activities: | ' | ' |
Investments in real estate and real estate lease intangibles | 0 | -72,489,000 |
Improvements, capital expenditures, and leasing costs | -346,000 | -1,006,000 |
Tenant lease incentive | 31,000 | -17,000 |
Real estate deposits | 0 | 1,250,000 |
Cash held in 1031 exchange | 0 | -1,253,000 |
Net change in restricted cash for capital expenditures | -498,000 | -745,000 |
Net cash used in investing activities - continuing operations | -813,000 | -74,260,000 |
Net cash provided by (used in) investing activities - discontinued operations | 6,172,000 | -24,468,000 |
Net cash used in investing activities | 5,359,000 | -98,728,000 |
Cash flows from financing activities: | ' | ' |
Proceeds from issuance of common stock | 502,000 | 45,148,000 |
Proceeds from issuance of member interests | 1,929,000 | 0 |
Redemption of common stock | 0 | -243,000 |
Distributions | -457,000 | -2,799,000 |
Payment of offering costs | -21,000 | -6,520,000 |
Proceeds from notes payable | 500,000 | 140,178,000 |
Repayment of notes payable | -5,147,000 | -74,722,000 |
Payment of loan fees and financing costs | 0 | -2,478,000 |
Net change in restricted cash for financing activities | 373,000 | -1,033,000 |
Net cash provided by (used in) financing activities - continuing operations | -2,321,000 | 97,531,000 |
Net cash provided by (used in) financing activities - discontinued operations | -2,281,000 | 3,829,000 |
Net cash provided by financing activities | -4,602,000 | 101,360,000 |
Net increase (decrease) in cash and cash equivalents | -317,000 | 829,000 |
Cash and cash equivalents - beginning of period | 1,707,000 | 2,052,000 |
Cash and cash equivalents - end of period | 1,390,000 | 2,881,000 |
Supplemental disclosure of non-cash investing and financing activities: | ' | ' |
Common units issued in acquisition of real estate | 0 | 1,371,000 |
1031 exchange proceeds used in acquisition of real estate | 0 | 2,508,000 |
Notes payable balance assumed on sale of real estate | 19,717,000 | 0 |
Notes Payable balance on extinguishment of debt | 28,000,000 | 0 |
Investments in real estate transferred related to deed in lieu transaction | 34,070,000 | 0 |
Issuance of common stock under DRIP | 246,000 | 1,685,000 |
Cash distributions declared but not paid | 42,000 | 408,000 |
Cash paid for interest | $7,150,000 | $7,454,000 |
ORGANIZATION_AND_BUSINESS
ORGANIZATION AND BUSINESS | 9 Months Ended |
Sep. 30, 2013 | |
Organization and Business [Abstract] | ' |
ORGANIZATION AND BUSINESS | ' |
1. ORGANIZATION AND BUSINESS | |
Strategic Realty Trust, Inc. (the “Company”) was formed on September 18, 2008 as a Maryland corporation. Effective August 22, 2013, the Company changed its name from TNP Strategic Retail Trust, Inc. to Strategic Realty Trust, Inc. The Company believes it qualifies as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), and has elected REIT status beginning with the taxable year ended December 31, 2009, the year in which the Company began material operations. The Company was initially capitalized by the sale of shares of common stock to Thompson National Properties, LLC (“TNP LLC”) on October 16, 2008. | |
On November 4, 2008, the Company filed a registration statement on Form S-11 with the Securities and Exchange Commission (the “SEC”) to offer a maximum of 100,000,000 in shares of its common stock to the public in its primary offering at $10.00 per share and 10,526,316 shares of its common stock to the Company’s stockholders at $9.50 per share pursuant to its distribution reinvestment plan (“DRIP”) (collectively, the “Offering”). On August 7, 2009, the SEC declared the registration statement effective and the Company commenced the Offering. On February 7, 2013, the Company terminated the Offering and ceased offering shares of common stock in the primary offering and under the DRIP. As of December 31, 2012, the Company had accepted subscriptions for, and issued, 10,893,227 shares of common stock in the Offering (net of share redemptions), including 365,242 shares of common stock pursuant to the DRIP, resulting in gross offering proceeds of $107,609,000. As of the termination of the Offering on February 7, 2013, the Company had accepted subscriptions for, and issued, 10,969,714 shares of common stock (net of share redemptions), including 391,182 shares of common stock pursuant to the DRIP, resulting in gross offering proceeds of $108,357,000. | |
On June 15, 2012, the Company filed a registration statement on Form S-11 with the SEC to register up to $900,000,000 in shares of the Company’s common stock in a follow-on public offering. The Company subsequently determined not to proceed with the follow-on public offering and on March 1, 2013, the Company requested that the SEC withdraw the registration statement for the follow-on public offering, effective immediately. As a result of the termination of the Offering and the withdrawal of the registration statement for the Company’s follow-on public offering, offering proceeds are not currently available to fund the Company’s cash needs, and will not be available until the Company is able to successfully engage in an offering of its securities. The Company currently does not expect to commence a follow-on offering. | |
On August 7, 2013, the Company allowed its existing advisory agreement (the “Prior Advisory Agreement”) with the Company’s prior advisor, TNP Strategic Retail Advisor, LLC (the “Prior Advisor”), to expire without renewal. On August 10, 2013, the Company entered into a new advisory agreement (the “Advisory Agreement”) with SRT Advisor, LLC, a Delaware limited liability company (the “Advisor”). Advisor manages the Company’s business as the Company’s external advisor pursuant to the Advisory Agreement. Advisor is an affiliate of Glenborough, LLC (together with its affiliates, “Glenborough”), a privately held full-service real estate investment and management company focused on the acquisition, management and leasing of high quality commercial properties. Glenborough and its predecessor entities have over three decades of experience in the commercial real estate industry. | |
In December 2012, the Company entered into a consulting agreement with Glenborough to assist the Company with the process of transitioning to a new external advisor as well as to provide other services (the “Consulting Agreement”). Pursuant to the Consulting Agreement, the Company paid Glenborough a monthly consulting fee and reimbursed Glenborough for its reasonable out-of-pocket expenses. From December 2012 through April 2013, the Company agreed to pay Glenborough a monthly consulting fee of $75,000 pursuant to the Consulting Agreement. Effective May 1, 2013, the Company and Glenborough amended the Consulting Agreement to expand the services provided to the Company by Glenborough to include accounting services and increase the monthly consulting fee payable to Glenborough to $90,000. On August 10, 2013, in connection with the execution of the Advisory Agreement, the Company terminated the Consulting Agreement. In connection with the execution of the Advisory Agreement, in August 2013, Glenborough rebated $150,000 of consulting fees to the Company. | |
Substantially all of the Company’s business is conducted through Strategic Realty Operating Partnership, L.P. (formerly TNP Strategic Retail Trust Operating Partnership, L.P.), a Delaware limited partnership (the “OP”). The initial limited partners of the OP were Prior Advisor and TNP Strategic Retail OP Holdings, LLC, a Delaware limited liability company affiliated with Prior Advisor (“TNP Holdings”). Prior Advisor invested $1,000 in the OP in exchange for common units of the OP (“Common Units”) and TNP Holdings invested $1,000 in the OP in exchange for a separate class of limited partnership units (the “Special Units”). As the Company accepted subscriptions for shares of its common stock, it transferred substantially all of the net proceeds of the Offering to the OP as a capital contribution. As of September 30, 2013 and December 31, 2012 the Company owned 96.2% of the limited partnership interest in the OP. As of September 30, 2013 and December 31, 2012, Prior Advisor owned 0.01% of the limited partnership interest in the OP. TNP Holdings owned 100% of the outstanding Special Units as of December 31, 2012. Following the expiration of the Prior Advisory Agreement, the Special Units owned by TNP Holdings were redeemed for cause, as defined in the Prior Advisor Agreement. In connection with the execution of the Advisory Agreement, the Advisor or its affiliate was to contribute $1,000 to the OP in exchange for a separate class of Special Units. This transaction has been delayed by mutual agreement of the parties and continues to be contemplated. | |
On May 26, 2011, in connection with the acquisition of Pinehurst Square East (“Pinehurst”), a retail property located in Bismarck, North Dakota, the OP issued 287,472 Common Units to certain of the sellers of Pinehurst who elected to receive Common Units for an aggregate value of $2,587,000, or $9.00 per Common Unit. On March 12, 2012, in connection with the acquisition of the Shops at Turkey Creek (“Turkey Creek”), a retail property located in Knoxville, Tennessee, the OP issued 144,324 Common Units to certain of the sellers of Turkey Creek who elected to receive Common Units for an aggregate value of $1,371,000, or $9.50 per Common Unit. | |
The Company’s principal demand for funds has been for the acquisition of real estate assets, the payment of operating expenses and interest on outstanding indebtedness and the payment of distributions to stockholders. Substantially all of the proceeds of the completed Offering have been used to fund investments in real properties and other real estate-related assets, for payment of operating expenses, for payment of various fees and expenses such as acquisition fees and management fees and for payment of distributions to stockholders. As discussed below, the Company’s available capital resources, cash and cash equivalents on hand and sources of liquidity are currently limited. The Company expects its future cash needs will be funded using cash from operations, future asset sales, debt financing and the proceeds to the Company from any sale of equity that it conducts in the future. The Company expects that its investment activities will be significantly reduced for the foreseeable future until it is able to identify other significant sources of financing. The Company also has suspended its share redemption program and dividend distributions until the refinancing of the Company’s credit agreement with KeyBank National Association (“KeyBank”) following the expiration of the Company’s forbearance agreement with KeyBank (see Note 6. NOTES PAYABLE). For so long as the Company remains in default under the terms of the KeyBank financing, the Company’s credit facility with KeyBank prohibits the payment of distributions to investors in the Company. | |
On August 2, 2012, the Company, the OP and Prior Advisor entered into an amendment to the Company’s Advisory Agreement, effective as of August 7, 2012, which, among other things, required the Prior Advisor to cause the Company to maintain at all times a cash reserve of at least $4,000,000 and provided that Prior Advisor may deploy any cash proceeds in excess of the cash reserve for the Company’s business pursuant to the terms of the Prior Advisory Agreement. As a result of the significant cash required to complete the Company’s acquisition of the Lahaina Gateway property on November 9, 2012, and the additional cash required by the mortgage lender for the Lahaina Gateway property acquisition for reserves and mandatory principal payments, the Company’s cash and cash equivalents had fallen to approximately $492,000 at June 30, 2013, significantly below the $4,000,000 cash reserve required under the Prior Advisory Agreement. The current Advisory Agreement does not contain a similar restriction. The Company’s cash and cash equivalents will remain significantly limited until the Company finds other sources of cash, such as from borrowings, sales of equity capital or sales of assets. Although no assurances may be given, the Company believes that its current cash from operations will be sufficient to support the Company’s ongoing operations, including its debt service payments, other than the required payment on the Company’s credit agreement with KeyBank following the expiration of the Company’s forbearance agreement with KeyBank (see discussion below). | |
On April 1, 2013, the Company entered into a forbearance agreement with respect to the Company’s credit agreement with KeyBank, and on July 31, 2013 the Company entered into an amendment to the forbearance agreement which extended the term of the forbearance period (see additional discussion in Note 6. NOTES PAYABLE). On or before the expiration of the forbearance period, the Company currently intends to refinance a portion of the credit agreement with KeyBank or another lender, and pay down a portion of the balance of the credit agreement with proceeds from the disposition of certain properties securing the credit agreement. | |
The Company has invested in a portfolio of income-producing retail properties throughout the United States, with a focus on grocery anchored multi-tenant retail centers in the Western United States, including neighborhood, community and lifestyle shopping centers, multi-tenant shopping centers and free standing single-tenant retail properties. As of September 30, 2013, the Company’s portfolio was comprised of 19 properties with approximately 1,900,000 rentable square feet of retail space located in 13 states. As of September 30, 2013, the rentable space at the Company’s retail properties was 87% leased. | |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | |||
Sep. 30, 2013 | ||||
Summary Of Significant Accounting Policies [Abstract] | ' | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | |||
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Principles of Consolidation and Basis of Presentation | ||||
The accompanying condensed consolidated unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. | ||||
The condensed consolidated financial statements include the accounts of the Company, the OP, and their direct and indirect owned subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the Company’s financial position, results of operations and cash flows have been included. | ||||
The Company evaluates the need to consolidate joint ventures and variable interest entities based on standards set forth in ASC 810, Consolidation (“ASC 810”). In determining whether the Company has a controlling interest in a joint venture or a variable interest entity and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the partners/members as well as whether the entity is a variable interest entity for which the Company is the primary beneficiary. As of September 30, 2013, the Company did not have any joint ventures or variable interests in any variable interest entities. | ||||
Non-Controlling Interests | ||||
The Company’s non-controlling interests are comprised primarily of the Common Units in the OP and membership interest in SRT Secured Holdings, LLC (“Secured Holdings”), formerly known as TNP SRT Secured Holdings, LLC, the Company’s subsidiary. The Company accounts for non-controlling interests in accordance with ASC 810. In accordance with ASC 810, the Company reports non-controlling interests in subsidiaries within equity in the condensed consolidated financial statements, but separate from the parent’s stockholders’ equity. Net income (loss) attributable to non-controlling interests is presented as a reduction from net income (loss) in calculating net income (loss) available to common stockholders on the statement of operations. Acquisitions or dispositions of non-controlling interests that do not result in a change of control are accounted for as equity transactions. In addition, ASC 810 requires that a parent company recognize a gain or loss in net income when a subsidiary is deconsolidated upon a change in control. In accordance with FASB ASC 480-10, Distinguishing Liabilities from Equity, non-controlling interests that are determined to be redeemable are carried at their fair value or redemption value as of the balance sheet date and reported as liabilities or temporary equity depending on their terms. The Company periodically evaluates individual non-controlling interests for the ability to continue to recognize the non-controlling interest as permanent equity in the condensed consolidated balance sheets. Any non-controlling interest that fails to qualify as permanent equity will be reclassified as liabilities or temporary equity and adjusted to the greater of (1) the carrying amount, or (2) its redemption value as of the end of the period in which the determination is made, and the resulting adjustment is recorded in the condensed consolidated statement of operations. All non-controlling interests at September 30, 2013 qualified as permanent equity. | ||||
Use of Estimates | ||||
The preparation of the Company’s financial statements requires significant management judgments, assumptions and estimates about matters that are inherently uncertain. These judgments affect the reported amounts of assets and liabilities and the Company’s disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. With different estimates or assumptions, materially different amounts could be reported in the Company’s financial statements, and actual results could differ from the estimates or assumptions used by management. Additionally, other companies may utilize different estimates that may impact the comparability of the Company’s results of operations to those of companies in similar businesses. The Company considers significant estimates to include the carrying amounts and recoverability of investments in real estate, impairments, real estate acquisition purchase price allocations, allowance for doubtful accounts, estimated useful lives to determine depreciation and amortization and fair value determinations, among others. | ||||
Cash and Cash Equivalents | ||||
Cash and cash equivalents represents current bank accounts and other bank deposits free of encumbrances and having maturity dates of three months or less from the respective dates of deposit. The Company limits cash investments to financial institutions with high credit standing; therefore, the Company believes it is not exposed to any significant credit risk in cash. | ||||
Restricted Cash | ||||
Restricted cash includes escrow accounts for real property taxes, insurance, capital expenditures and tenant improvements, debt service and leasing costs held by lenders. | ||||
Revenue Recognition | ||||
Revenues include minimum rents, expense recoveries and percentage rental payments. Minimum rents are recognized on an accrual basis over the terms of the related leases on a straight-line basis when collectability is reasonably assured and the tenant has taken possession or controls the physical use of the leased property. If the lease provides for tenant improvements, the Company determines whether the tenant improvements, for accounting purposes, are owned by the tenant or the Company. When the Company is the owner of the tenant improvements, the tenant is not considered to have taken physical possession or have control of the physical use of the leased asset until the tenant improvements are substantially completed. When the tenant is the owner of the tenant improvements, any tenant improvement allowance that is funded is treated as a lease incentive and amortized as a reduction of revenue over the lease term. Tenant improvement ownership is determined based on various factors including, but not limited to: | ||||
• whether the lease stipulates how a tenant improvement allowance may be spent; | ||||
• whether the amount of a tenant improvement allowance is in excess of market rates; | ||||
• whether the tenant or landlord retains legal title to the improvements at the end of the lease term; | ||||
• whether the tenant improvements are unique to the tenant or general-purpose in nature; and | ||||
• whether the tenant improvements are expected to have any residual value at the end of the lease. | ||||
For leases with minimum scheduled rent increases, the Company recognizes income on a straight-line basis over the lease term when collectability is reasonably assured. Recognizing rental income on a straight-line basis for leases results in recognized revenue amounts which differ from those that are contractually due from tenants on a cash basis. If the Company determines the collectability of straight-line rents is not reasonably assured, the Company limits future recognition to amounts contractually owed and paid, and, when appropriate, establishes an allowance for estimated losses. | ||||
The Company maintains an allowance for doubtful accounts, including an allowance for straight-line rent receivables, for estimated losses resulting from tenant defaults or the inability of tenants to make contractual rent and tenant recovery payments. The Company monitors the liquidity and creditworthiness of its tenants on an ongoing basis. For straight-line rent amounts, the Company’s assessment is based on amounts estimated to be recoverable over the term of the lease. The Company’s straight-line rent receivable, which is included in tenant receivables on the condensed consolidated balance sheets, was $1,498,000 and $1,380,000 at September 30, 2013 and December 31, 2012, respectively. | ||||
Certain leases contain provisions that require the payment of additional rents based on the respective tenants’ sales volume (contingent or percentage rent) and substantially all contain provisions that require reimbursement of the tenants’ allocable real estate taxes, insurance and common area maintenance costs (“CAM”). Revenue based on percentage of tenants’ sales is recognized only after the tenant exceeds its sales breakpoint. Revenue from tenant reimbursements of taxes, CAM and insurance is recognized in the period that the applicable costs are incurred in accordance with the lease agreement. | ||||
The Company recognizes gains or losses on sales of real estate in accordance with ASC 360. Profits are not recognized until (a) a sale has been consummated; (b) the buyer’s initial and continuing investments are adequate to demonstrate a commitment to pay for the property; (c) the Company’s receivable, if any, is not subject to future subordination; and (d) the Company has transferred to the buyer the usual risks and reward of ownership, and the Company does not have a substantial continuing involvement with the property. The results of operations of income producing properties where the Company does not have a continuing involvement are presented in the discontinued operations section of the Company’s condensed consolidated statements of operations when the property has been classified as held-for-sale or sold. | ||||
Valuation of Accounts Receivable | ||||
The Company makes estimates of the collectability of its tenant receivables related to base rents, including deferred rents receivable, expense reimbursements and other revenue or income. | ||||
The Company analyzes tenant receivables, deferred rent receivable, historical bad debts, customer creditworthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. In addition, with respect to tenants in bankruptcy, the Company will make estimates of the expected recovery of pre-petition and post-petition claims in assessing the estimated collectability of the related receivable. In some cases, the ultimate resolution of these claims can exceed one year. When a tenant is in bankruptcy, the Company will record a bad debt reserve for the tenant’s receivable balance and generally will not recognize subsequent rental revenue until cash is received or until the tenant is no longer in bankruptcy and has the ability to make rental payments. | ||||
Concentration of Credit Risk | ||||
A concentration of credit risk arises in the Company’s business when a national or regionally based tenant occupies a substantial amount of space in multiple properties owned by the Company. In that event, if the tenant suffers a significant downturn in its business, it may become unable to make its contractual rent payments to the Company, exposing the Company to potential losses in rental revenue, expense recoveries, and percentage rent. Further, the impact may be magnified if the tenant is renting space in multiple locations. Generally, the Company does not obtain security from the nationally-based or regionally-based tenants in support of their lease obligations to the Company. The Company regularly monitors its tenant base to assess potential concentrations of credit risk. As of September 30, 2013, Schnuck Markets, Inc. is the Company’s largest tenant (by square feet) and accounted for approximately 127,835 square feet, or approximately 7% of the Company’s gross leasable area, and approximately $832,000, or 4% of the Company’s annual minimum rent. Publix, another large tenant, accounted for approximately 5% of the Company’s annual minimum rent. No other tenant accounted for over 5% of the Company’s annual minimum rent. There was $107,000 in outstanding receivables from Schnuck Markets, Inc. at September 30, 2013. | ||||
The Company’s real estate properties are leased to tenants under operating leases for which the terms and expirations vary. As of September 30, 2013, the leases at the Company’s properties have remaining terms (excluding options to extend) of up to 21 years with a weighted-average remaining term (excluding options to extend) of eight years. The leases may have provisions to extend the lease agreements, options for early termination after paying a specified penalty, rights of first refusal to purchase the property at competitive market rates, and other terms and conditions as negotiated. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. Generally, upon the execution of a lease, the Company requires security deposits from tenants in the form of a cash deposit and/or a letter of credit. Amounts required as security deposits vary depending upon the terms of the respective leases and the creditworthiness of the tenant, but generally are not significant amounts. Therefore, exposure to credit risk exists to the extent that a receivable from a tenant exceeds the amount of its security deposit. Security deposits received in cash related to tenant leases are included in other liabilities in the accompanying condensed consolidated balance sheets and totaled $379,000 and $651,000 as of September 30, 2013 and December 31, 2012, respectively. | ||||
Business Combinations | ||||
The Company records the acquisition of income-producing real estate or real estate that will be used for the production of income as a business combination. All assets acquired and liabilities assumed in a business combination are measured at their acquisition-date fair values, including tenant improvements and identifiable intangible assets or liabilities. Tenant improvements represent the tangible assets associated with the existing leases valued on a fair value basis at the acquisition date. Tenant improvements are classified as assets under investments in real estate and are depreciated over the remaining lease terms. Identifiable intangible assets and liabilities relate to the value of in-place operating leases which come in three forms: (1) leasing commissions and legal costs, which represent the value associated with “cost avoidance” of acquiring in-place leases, such as lease commissions paid under terms generally experienced in markets in which the Company operates; (2) value of in-place leases, which represents the estimated loss of revenue and of costs incurred for the period required to lease the “assumed vacant” property to the occupancy level when purchased; and (3) above- or below-market value of in-place leases, which represents the difference between the contractual rents and market rents at the time of the acquisition, discounted for tenant credit risks. The value of in-place leases is recorded in acquired lease intangibles and amortized over the remaining lease term. Above- or below-market leases are classified in acquired lease intangibles, or in acquired below-market lease intangibles, depending on whether the contractual terms are above- or below-market. Above-market leases are amortized as a decrease to rental revenue over the remaining non-cancelable terms of the respective leases and below-market leases are amortized as an increase to rental revenue over the remaining initial lease term and any fixed rate renewal periods, if applicable. | ||||
Acquisition costs are expensed as incurred and costs that do not meet the definition of a liability at the acquisition date are expensed in periods subsequent to the acquisition date. During the nine months ended September 30, 2013, the Company did not acquire any properties. During the nine months ended September 30, 2012, the Company acquired nine properties; Morningside Marketplace (“Morningside Marketplace”), Woodland West Marketplace (“Woodland West”), Ensenada Square (“Ensenada Square”), the Shops at Turkey Creek (“Turkey Creek”), Aurora Commons (“Aurora Commons”), Florissant Marketplace (“Florissant”), Willow Run Shopping Center (“Willow Run”), Bloomingdale Hills (“Bloomingdale Hills”) and Visalia Marketplace (“Visalia Marketplace”) for an aggregate purchase price of $103.4 million. The Company recorded these acquisitions as business combinations and incurred $3,037,000 of acquisition costs. Costs incurred in pursuit of targeted properties for acquisitions not yet closed or those determined to no longer be viable and costs incurred which are expected to result in future period disposals of property not currently classified as held for sale properties have been expensed and are also classified in the condensed consolidated statement of operations as transaction expenses. | ||||
Estimates of the fair values of the tangible assets, identifiable intangibles and assumed liabilities require the Company to make significant assumptions to estimate market lease rates, property-operating expenses, carrying costs during lease-up periods, discount rates, market absorption periods, and the number of years the property will be held for investment. The use of inappropriate assumptions would result in an incorrect valuation of the Company’s acquired tangible assets, identifiable intangibles and assumed liabilities, which would impact the amount of the Company’s net income. These allocations also impact depreciation expense, amortization expense and gains or losses recorded on future sales of properties. | ||||
Reportable Segments | ||||
ASC 280, Segment Reporting, establishes standards for reporting financial and descriptive information about an enterprise’s reportable segments. The Company has one reportable segment, income-producing retail properties, which consists of activities related to investing in real estate. The retail properties are geographically diversified throughout the United States, and the Company evaluates operating performance on an overall portfolio level. | ||||
Investments in Real Estate | ||||
Real property is recorded at estimated fair value at time of acquisition with subsequent additions at cost, less accumulated depreciation and amortization. Costs include those related to acquisition, development and construction, including tenant improvements, interest incurred during development, costs of predevelopment and certain direct and indirect costs of development. Costs related to business combinations are expensed as incurred, and are included in transaction expense in the Company’s condensed consolidated statements of operations. | ||||
Depreciation and amortization is computed using a straight-line method over the estimated useful lives of the assets as follows: | ||||
Years | ||||
Buildings and improvements | 5 - 48 years | |||
Exterior improvements | 10 - 20 years | |||
Equipment and fixtures | 5 - 10 years | |||
Tenant improvement costs recorded as capital assets are depreciated over the shorter of (1) the tenant’s remaining lease term or (2) the life of the improvement. | ||||
Expenditures for ordinary maintenance and repairs are expensed to operations as they are incurred. Significant renovations and improvements that improve or extend the useful lives of assets are capitalized. | ||||
Impairment of Long-lived Assets | ||||
The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its investments in real estate and related intangible assets may not be recoverable. When indicators of potential impairment suggest that the carrying value of real estate and related intangible assets may not be recoverable, the Company assesses the recoverability by estimating whether the Company will recover the carrying value of the real estate and related intangible assets through its undiscounted future cash flows and its eventual disposition. If, based on this analysis, the Company does not believe that it will be able to recover the carrying value of the real estate and related intangible assets and liabilities, the Company would record an impairment loss to the extent that the carrying value exceeds the estimated fair value of the investments in real estate and related intangible assets. Key inputs that the Company estimates in this analysis include projected rental rates, capital expenditures and property sale capitalization rates. The Company did not record any impairment losses on its investments in real estate and related intangible assets during the three and nine months ended September 30, 2013 and 2012. | ||||
Assets Held-for-Sale and Discontinued Operations | ||||
When certain criteria are met, long-lived assets are classified as held-for-sale and are reported at the lower of their carrying value or their fair value less costs to sell and are no longer depreciated. Discontinued operations is a component of an entity that has either been disposed of or is deemed to be held-for-sale and (i) the operations and cash flows of the component have been or will be eliminated from ongoing operations as a result of the disposal transaction and (ii) the entity will not have any significant continuing involvement in the operations of the component after the disposal transaction. | ||||
Fair Value Measurements | ||||
Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other financial instruments and balances at fair value on a non-recurring basis (e.g., carrying value of impaired real estate loans receivable and long-lived assets). Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories: | ||||
• Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; | ||||
• Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and | ||||
• Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable. | ||||
When available, the Company utilizes quoted market prices or other observable inputs (Level 2 inputs), such as interest rates or yield curves, from independent third-party sources to determine fair value and classify such items in Level 1 or Level 2. In instances where the market for a financial instrument is not active, regardless of the availability of a nonbinding quoted market price, observable inputs might not be relevant and could require the Company to use significant judgment to derive a fair value measurement. Additionally, in an inactive market, a market price quoted from an independent third party may rely more on models with inputs based on information available only to that independent third party. When the Company determines the market for an asset owned by it to be illiquid or when market transactions for similar instruments do not appear orderly, the Company uses several valuation sources (including internal valuations, discounted cash flow analysis and quoted market prices) and establishes a fair value by assigning weights to the various valuation sources. Additionally, when determining the fair value of liabilities in circumstances in which a quoted price in an active market for an identical liability is not available, the Company measures fair value using (i) a valuation technique that uses the quoted price of the identical liability when traded as an asset or quoted prices for similar liabilities when traded as assets or (ii) another a present value technique that considers the future cash flows based on contractual obligations discounted by an observed or estimated market rates of comparable liabilities. The use of contractual cash flows with regard to amount and timing significantly reduces the judgment applied in arriving at fair value. | ||||
Changes in assumptions or estimation methodologies can have a material effect on these estimated fair values. In this regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, may not be realized in an immediate settlement of the instrument. | ||||
The Company considers the following factors to be indicators of an inactive market: (1) there are few recent transactions, (2) price quotations are not based on current information, (3) price quotations vary substantially either over time or among market makers (for example, some brokered markets), (4) indexes that previously were highly correlated with the fair values of the asset or liability are demonstrably uncorrelated with recent indications of fair value for that asset or liability, (5) there is a significant increase in implied liquidity risk premiums, yields, or performance indicators (such as delinquency rates or loss severities) for observed transactions or quoted prices when compared with the Company’s estimate of expected cash flows, considering all available market data about credit and other nonperformance risk for the asset or liability, (6) there is a wide bid-ask spread or significant increase in the bid-ask spread, (7) there is a significant decline or absence of a market for new issuances (that is, a primary market) for the asset or liability or similar assets or liabilities, and (8) little information is released publicly (for example, a principal-to-principal market). | ||||
The Company considers the following factors to be indicators of non-orderly transactions: (1) there was not adequate exposure to the market for a period before the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities under current market conditions, (2) there was a usual and customary marketing period, but the seller marketed the asset or liability to a single market participant, (3) the seller is in or near bankruptcy or receivership (that is, distressed), or the seller was required to sell to meet regulatory or legal requirements (that is, forced), and (4) the transaction price is an outlier when compared with other recent transactions for the same or similar assets or liabilities. | ||||
Deferred Financing Costs | ||||
Deferred financing costs represent commitment fees, loan fees, legal fees and other third-party costs associated with obtaining financing. These costs are amortized over the terms of the respective financing agreements using the straight-line method which approximates the effective interest method. Unamortized deferred financing costs are expensed when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financings that do not close are expensed in the period in which it is determined that the financing will not close. | ||||
Income Taxes | ||||
The Company has elected to be taxed as a REIT under the Internal Revenue Code. To qualify as a REIT, the Company must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of the Company’s annual REIT taxable income to stockholders (which is computed without regard to the dividends-paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). As a REIT, the Company generally will not be subject to federal income tax on income that it distributes as dividends to its stockholders. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income tax on its taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four taxable years following the year during which qualification is lost, unless the Internal Revenue Service grants the Company relief under certain statutory provisions. Such an event could materially and adversely affect the Company’s net income and net cash available for distribution to stockholders. However, the Company believes that it is organized and operates in such a manner as to qualify for treatment as a REIT. The Company may also be subject to certain state or local income taxes, or franchise taxes. | ||||
The Company evaluates tax positions taken in the financial statements under the interpretation for accounting for uncertainty in income taxes. As a result of this evaluation, the Company may recognize a tax benefit from an uncertain tax position only if it is “more-likely-than-not” that the tax position will be sustained on examination by taxing authorities. | ||||
When necessary, deferred income taxes are recognized in certain taxable entities. Deferred income tax is generally a function of the period’s temporary differences (items that are treated differently for tax purposes than for financial reporting purposes). A valuation allowance for deferred income tax assets is provided if all or some portion of the deferred income tax asset may not be realized. Any increase or decrease in the valuation allowance is generally included in deferred income tax expense. | ||||
The Company’s tax returns remain subject to examination and consequently, the taxability of the distributions is subject to change. | ||||
Earnings Per Share | ||||
Basic earnings per share (“EPS”) is computed by dividing net income (loss) applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed after adjusting the basic EPS computation for the effect of potentially dilutive securities outstanding during the period. The effect of non-vested shares, if dilutive, is computed using the treasury stock method. The Company accounts for unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) as participating securities, which are included in the computation of earnings per share pursuant to the two-class method. The Company’s excess of distributions over earnings related to participating securities are shown as a reduction in income (loss) applicable to common stockholders in the Company’s computation of EPS. | ||||
Reclassification | ||||
Assets sold or held-for-sale have been reclassified on the condensed consolidated balance sheets and the related operating results reclassified from continuing to discontinued operations on the condensed consolidated statements of operations and condensed consolidated statements of cash flows. Certain amounts from the prior year have been reclassified to conform to current period presentation. | ||||
DISCONTINUED_OPERATIONS_AND_AS
DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Dispositions and Discontinued Operations [Abstract] | ' | |||||||||||||
DISCONTINUED OPERATIONS | ' | |||||||||||||
3. DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE | ||||||||||||||
The Company reports as discontinued operations, properties held-for-sale and operating properties sold in the current or prior periods. The results of these discontinued operations are included in a separate component of income on the condensed consolidated statements of operations under the caption “Discontinued operations.” | ||||||||||||||
During the three months ended March 31, 2013, the Company completed the sale of the Waianae Mall in Waianae, Hawaii (acquired in June 2010), for a sales price of $30,500,000. The Company classified assets and liabilities (including the mortgage debt) related to Waianae Mall as held for sale in the consolidated balance sheet at December 31, 2012. The results of operations related to Waianae Mall were classified as discontinued operations for the three and nine months ended September 30, 2013 and 2012. | ||||||||||||||
During the three months ended June 30, 2013, the Company announced a plan to place Craig Promenade and Willow Run on the market for sale, and during the three months ended September 30, 2013, Visalia Marketplace was added to the plan and also placed on the market for sale. All three of the properties secure the revolving credit facility with KeyBank (see Note 6. NOTES PAYABLE). If the Company is successful in selling any of the properties placed on the market for sale on acceptable terms, net proceeds from the sale of the properties will be used to pay down the Company’s revolving credit facility with KeyBank. The results of operations related to these properties were classified as discontinued operations for the three and nine months ended September 30, 2013 and 2012. None of the three properties were classified as held for sale at December 31, 2012. | ||||||||||||||
On November 9, 2012, TNP SRT Lahaina Gateway, LLC, the Company’s wholly-owned subsidiary (“TNP SRT Lahaina”), financed TNP SRT Lahaina’s acquisition of a ground lease interest in the Lahaina Gateway property, a multi-tenant necessity retail center located in Lahaina, Maui, Hawaii, with the proceeds of a loan (the "Lahaina Loan") from DOF IV REIT Holdings, LLC (the "Lahaina Lender"). On August 1, 2013, in order to resolve its obligations under the Lahaina Loan, mitigate certain risks presented by the terms of the Lahaina loan and avoid potential litigation and foreclosure proceedings (and the associated costs and delays), TNP SRT Lahaina granted and conveyed all of TNP SRT Lahaina’s right, title and interest in and to the leasehold estate in the Lahaina Gateway property, including all leases, improvements, licenses and permits and personal property related thereto, to DOF IV Lahaina, LLC, an affiliate of the Lahaina Lender, pursuant to a Deed In Lieu Of Foreclosure Agreement by and among the Company, TNP SRT Lahaina and the Lahaina lender. For the three and nine months ended September 30, 2013, the Company realized a loss of $5,394,000 associated with the Deed In Lieu transaction (see Note 6. NOTES PAYABLE). The loss and the results of operations related to TNP SRT Lahaina were classified as discontinued operations, loss on extinguishment of debt, for the three and nine months ended September 30, 2013 and 2012. The parcel was not classified as held for sale at December 31, 2012. | ||||||||||||||
On December 4, 2012, the Company entered into a purchase and sale agreement, as amended, with a third party for the sale of the office building at the Aurora Commons property (acquired in March 2012). On or about May 9, 2013, the purchase and sale agreement, as amended, for the sale of the office building at the Aurora Commons property expired and the buyer did not release the contingencies in the purchase and sale agreement. The Company classified assets and liabilities related to the office portion of the Aurora Commons property as held for sale in the consolidated balance sheet at December 31, 2012. The results of operations related to the office building at Aurora Commons, previously classified as discontinued operations for the three months ended March 31, 2013, were included within continuing operations for the nine months ended September 30, 2013 and all previously unrecorded depreciation was recorded. | ||||||||||||||
Discontinued operations for the three and nine months ended September 30, 2012 included the operating results of five land parcels at Morningside Marketplace and Osceola Village which were sold in 2012, as well as, the operating results related to Craig Promenade, Willow Run, Visalia Marketplace, and Waianae Mall. | ||||||||||||||
The components of income and expense relating to discontinued operations for the three and nine months ended September 30, 2013 and 2012, are shown below. | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Revenues from rental property | $ | 1,526,000 | $ | 2,059,000 | $ | 7,080,000 | $ | 4,981,000 | ||||||
Rental property expenses | -759,000 | -913,000 | -3,401,000 | -1,903,000 | ||||||||||
Depreciation and amortization | -571,000 | -948,000 | -2,744,000 | -1,953,000 | ||||||||||
Transaction expenses | - | -520,000 | -78,000 | -846,000 | ||||||||||
Interest | -492,000 | -239,000 | -3,223,000 | -1,592,000 | ||||||||||
Operating loss from discontinued operations | -296,000 | -561,000 | -2,366,000 | -1,313,000 | ||||||||||
Gain (loss) on impairment and disposal of real estate | -161,000 | 118,000 | 4,566,000 | 118,000 | ||||||||||
Loss on extinguishment of debt | -5,394,000 | - | -5,394,000 | - | ||||||||||
Loss from discontinued operations | $ | -5,851,000 | $ | -443,000 | $ | -3,194,000 | $ | -1,195,000 | ||||||
The major classes of assets and liabilities related to assets held for sale included in the condensed consolidated balance sheets are as follows: | ||||||||||||||
September 30, | December 31, | |||||||||||||
2013 | 2012 | |||||||||||||
ASSETS | ||||||||||||||
Investments in real estate | ||||||||||||||
Land | $ | 11,563,000 | $ | 10,760,000 | ||||||||||
Building and improvements | 23,488,000 | 13,937,000 | ||||||||||||
Tenant improvements | 1,572,000 | 689,000 | ||||||||||||
36,623,000 | 25,386,000 | |||||||||||||
Accumulated depreciation | -2,227,000 | -2,324,000 | ||||||||||||
Investments in real estate, net | 34,396,000 | 23,062,000 | ||||||||||||
Restricted cash | - | 358,000 | ||||||||||||
Prepaid expenses and other assets, net | 18,000 | 37,000 | ||||||||||||
Tenant receivables | 148,000 | 261,000 | ||||||||||||
Lease intangibles, net | 6,238,000 | 1,955,000 | ||||||||||||
Deferred financing fees, net | - | 98,000 | ||||||||||||
Assets held for sale | $ | 40,800,000 | $ | 25,771,000 | ||||||||||
LIABILITIES | ||||||||||||||
Notes payable | $ | 36,455,000 | $ | 19,571,000 | ||||||||||
Accounts payable and accrued expenses | - | 247,000 | ||||||||||||
Other liabilities | 331,000 | 235,000 | ||||||||||||
Below market lease intangibles, net | 3,930,000 | 1,224,000 | ||||||||||||
Liabilities related to assets held for sale | $ | 40,716,000 | $ | 21,277,000 | ||||||||||
Amounts above are being presented at the lower of carrying value and estimated fair value less costs to sell. | ||||||||||||||
FUTURE_MINIMUM_RENTAL_INCOME
FUTURE MINIMUM RENTAL INCOME | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Minimum Rents [Abstract] | ' | ||||
FUTURE MINIMUM RENTAL INCOME | ' | ||||
4. FUTURE MINIMUM RENTAL INCOME | |||||
Operating Leases | |||||
The Company’s real estate properties are leased to tenants under operating leases for which the terms and expirations vary. As of September 30, 2013, the leases at the Company’s properties have remaining terms (excluding options to extend) of up to 21 years with a weighted-average remaining term (excluding options to extend) of eight years. The leases may have provisions to extend the lease agreements, options for early termination after paying a specified penalty, rights of first refusal to purchase the property at competitive market rates, and other terms and conditions as negotiated. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. Generally, upon the execution of a lease, the Company requires security deposits from tenants in the form of a cash deposit and/or a letter of credit. Amounts required as security deposits vary depending upon the terms of the respective leases and the creditworthiness of the tenant, but generally are not significant amounts. Therefore, exposure to credit risk exists to the extent that a receivable from a tenant exceeds the amount of its security deposit. Security deposits received in cash related to tenant leases are included in other liabilities in the accompanying condensed consolidated unaudited balance sheets and totaled $379,000 and $651,000 as of September 30, 2013 and December 31, 2012, respectively. | |||||
As of September 30, 2013, the future minimum rental income from the Company’s properties under non-cancelable operating leases was as follows: | |||||
October 1 through December 31, 2013 | $ | 3,903,000 | |||
2014 | 15,420,000 | ||||
2015 | 14,231,000 | ||||
2016 | 13,013,000 | ||||
2017 | 11,789,000 | ||||
Thereafter | 66,832,000 | ||||
$ | 125,188,000 | ||||
ACQUIRED_LEASE_INTANGIBLES_AND
ACQUIRED LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Intangibles [Abstract] | ' | |||||||||||||
ACQUIRED LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES | ' | |||||||||||||
5. ACQUIRED LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES | ||||||||||||||
As of September 30, 2013 and December 31, 2012, the Company’s acquired lease intangibles and below-market lease liabilities were as follows: | ||||||||||||||
Lease Intangibles | Below - Market Lease Liabilities | |||||||||||||
September 30, | December 31, | September 30, | December 31, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Cost | $ | 23,570,000 | $ | 39,853,000 | $ | -7,983,000 | $ | -12,764,000 | ||||||
Accumulated amortization | -6,281,000 | -6,118,000 | 1,069,000 | 936,000 | ||||||||||
$ | 17,289,000 | $ | 33,735,000 | $ | -6,914,000 | $ | -11,828,000 | |||||||
Increases (decreases) in net income as a result of amortization of the Company’s lease intangibles and below-market lease liabilities for the three and nine months ended September 30, 2013 and 2012 were as follows: | ||||||||||||||
Lease Intangibles | Below - Market Lease Liabilities | |||||||||||||
For the Three Months Ended Sept. 30, | For the Three Months Ended Sept. 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Amortization and accelerated amortization | $ | -943,000 | $ | -1,020,000 | $ | 229,000 | $ | 175,000 | ||||||
For the Nine Months Ended Sept. 30, | For the Nine Months Ended Sept. 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Amortization and accelerated amortization | $ | -2,787,000 | $ | -2,696,000 | $ | 560,000 | $ | 380,000 | ||||||
The scheduled amortization of lease intangibles and below-market lease liabilities as of September 30, 2013 was as follows: | ||||||||||||||
Acquired | Below-market | |||||||||||||
Lease | Lease | |||||||||||||
Intangibles | Liabilities | |||||||||||||
October 1 through December 31, 2013 | $ | 813,000 | $ | -158,000 | ||||||||||
2014 | 2,712,000 | -587,000 | ||||||||||||
2015 | 2,168,000 | -500,000 | ||||||||||||
2016 | 1,820,000 | -442,000 | ||||||||||||
2017 | 1,589,000 | -385,000 | ||||||||||||
Thereafter | 8,187,000 | -4,842,000 | ||||||||||||
$ | 17,289,000 | $ | -6,914,000 | |||||||||||
NOTES_PAYABLE
NOTES PAYABLE | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Debt [Abstract] | ' | |||||||||
NOTES PAYABLE | ' | |||||||||
6. NOTES PAYABLE | ||||||||||
As of September 30, 2013 and December 31, 2012, the Company’s notes payable, excluding notes payable that are classified under liabilities related to assets held for sale (which includes the entire balance of the KeyBank Credit Facility), consisted of the following: | ||||||||||
Principal Balance | Interest Rates At | |||||||||
30-Sep-13 | 31-Dec-12 | 30-Sep-13 | ||||||||
KeyBank Credit Facility | $ | - | $ | 38,438,000 | n/a | |||||
Secured term loans | 58,164,000 | 60,706,000 | 5.10% - 10.00% | |||||||
Mortgage loans | 60,661,000 | 90,183,000 | 4.50% - 15.00% | |||||||
Unsecured loans | 1,750,000 | 1,250,000 | 7.00% - 8.00% | |||||||
Total | $ | 120,575,000 | $ | 190,577,000 | ||||||
During the three months ended September 30, 2013 and 2012, the Company incurred $2,187,000 and $2,364,000, respectively, of interest expense, which included the amortization and write-off of deferred financing costs of $287,000 and $261,000, respectively. | ||||||||||
During the nine months ended September 30, 2013 and 2012, the Company incurred $7,014,000 and $7,981,000, respectively, of interest expense, which included the amortization and write-off of deferred financing costs of $716,000 and $1,725,000, respectively. | ||||||||||
As of September 30, 2013 and December 31, 2012, interest expense payable was $1,163,000 and $1,097,000, respectively. | ||||||||||
The following is a schedule of principal maturities for all of the Company’s notes payable outstanding as of September 30, 2013: | ||||||||||
Amount | ||||||||||
October 1 through December 31, 2013 | $ | 422,000 | ||||||||
2014 | 7,574,000 | |||||||||
2015 | 3,245,000 | |||||||||
2016 | 18,594,000 | |||||||||
2017 | 61,825,000 | |||||||||
Thereafter | 28,915,000 | |||||||||
$ | 120,575,000 | |||||||||
KeyBank Credit Facility and Forbearance Agreement | ||||||||||
On December 17, 2010, the Company, through its subsidiary, Secured Holdings, entered into a line of credit with KeyBank and certain other lenders (collectively, the “Lenders”) to establish a secured revolving credit facility with an initial maximum aggregate commitment of $35 million (the “Credit Facility”). The Credit Facility initially consisted of an A tranche (“Tranche A”) with an initial aggregate commitment of $25 million, and a B tranche (“Tranche B”) with an initial aggregate commitment of $10 million. Tranche B under the Credit Facility terminated as of June 30, 2011. The aggregate commitment under Tranche A was subsequently increased on multiple occasions to a maximum of $45 million. As of September 30, 2013, as a consequence of the Company’s default under the Credit Facility, the Company has no additional availability under the Tranche A commitment. | ||||||||||
As of September 30, 2013, the outstanding principal balance on the Credit Facility, including debt reclassified under liabilities held for sale, was $36,455,000. Borrowings under the Credit Facility are secured by (1) pledges by the Company, the OP, Secured Holdings, and certain subsidiaries of Secured Holdings, of their respective direct and indirect equity ownership interests in, as applicable, any subsidiary of Secured Holdings or us which directly or indirectly owns real property, subject to certain limitations and exceptions, (2) guarantees, granted by the Company and the OP on a joint and several basis, of the prompt and full payment of all of the obligations under the Credit Facility, (3) a security interest granted in favor of KeyBank with respect to all operating, depository, escrow and security deposit accounts and all cash management services of the Company, the OP, Secured Holdings and any other borrower under the Credit Facility, and (4) a deed of trust, assignment agreement, security agreement and fixture filing in favor of KeyBank with respect to the San Jacinto Esplanade, Craig Promenade, Willow Run Shopping Center, Visalia Marketplace and Aurora Commons properties. As discussed below, due to the Company’s events of default under the Credit Facility, the Company has entered into a forbearance agreement with KeyBank. | ||||||||||
Under the Credit Facility, the Company is required to comply with certain restrictive and financial covenants. In January 2013, the Company became aware of a number of events of default under the Credit Facility relating to, among other things, the Company’s failure to use the net proceeds from its sale of shares in the Offering and the sale of its assets to repay borrowings under the Credit Facility as required by the Credit Facility and its failure to satisfy certain financial covenants under the Credit Facility (collectively, the “Existing Events of Default”). The Company also failed to comply with certain financial covenants at March 31, 2013. Due to the Existing Events of Default, the Lenders became entitled to exercise all of their rights and remedies under the Credit Facility and applicable law. | ||||||||||
On April 1, 2013, the Company, the OP, certain subsidiaries of the OP which are borrowers under the Credit Facility (collectively, the “Borrowers”) and KeyBank, as lender and agent for the other Lenders, entered into a forbearance agreement (the “Forbearance Agreement”) which amended the terms of the Credit Facility and provides for certain additional agreements with respect to the Existing Events of Default. On July 31, 2013, the OP, the Borrowers and KeyBank entered into an amendment to the Forbearance Agreement which extended the forbearance period under the Forbearance Agreement. Pursuant to the terms of the Forbearance Agreement (as amended), KeyBank and the other Lenders agreed to forbear the exercise of their rights and remedies with respect to the Existing Events of Default until the earliest to occur of (1) January 31, 2014, (2) the Company’s default under or breach of any of the representations or covenants under the Forbearance Agreement or (3) the date any additional events of defaults (other than the Existing Events of Default) under the Credit Facility occur or become known to KeyBank or any other Lender, (the “Forbearance Expiration Date”). Upon the Forbearance Expiration Date, all forbearances, deferrals and indulgences granted by the Lenders pursuant to the Forbearance Agreement will automatically terminate and the Lenders will be entitled to enforce, without further notice of any kind, any and all rights and remedies available to them as creditors at law, in equity, or pursuant to the Credit Facility or any other agreement as a result of the existing events of default or any additional events of default which occur or come to light following the date of the Forbearance Agreement. | ||||||||||
Pursuant to the Forbearance Agreement, the Company, the OP and all of the Borrowers under the Credit Facility have jointly and severally agreed to pay to KeyBank (1) any and all out-of-pocket costs or expenses (including legal fees and disbursements) incurred or sustained by the Lenders in connection with the preparation of the Forbearance Agreement and all related matters, and (2) from time to time after the occurrence of any default under the Forbearance Agreement any out-of-pocket costs or expenses (including legal fees and consulting and other similar professional fees and expenses) incurred by the Lenders in connection with the preservation of or enforcement of any rights of the Lenders under the Forbearance Agreement and the Credit Facility. In connection with the execution of the Forbearance Agreement, the Company has agreed to pay a market rate forbearance fee. | ||||||||||
The Forbearance Agreement converts the entire outstanding principal balance under the Credit Facility (the “Outstanding Loans”) into a term loan which is due and payable in full on January 31, 2014. Pursuant to the Forbearance Agreement, the Company, the OP and every other borrower under the Credit Facility must apply 100% of the net proceeds from, among other things, (1) the sale of shares in the Offering or any other sale of securities by the Company, the OP or any other borrower, (2) the sale or refinancing of any of the Company’s properties or other assets, and (3) the collection of insurance or condemnation proceeds due to any damage or destruction of properties or any condemnation for public use of any properties, to the repayment of the Outstanding Loans. The Company paid down a total of $1,983,000 of the outstanding balance on the Credit Facility from the net proceeds from the sales of the Waianae Mall in January 2013 and the McDonalds pad at Willow Run in February 2013. The Forbearance Agreement provides that all commitments under the Credit Facility will terminate on January 31, 2014 and that, effective as of the date of the Forbearance Agreement, the Lenders have no further obligation whatsoever to advance any additional loans or amounts under the Credit Facility. The Forbearance Agreement also provides that neither the Company, the OP or any other borrower under the Credit Facility may, without KeyBank’s prior written consent, incur, assume, guarantee or be or remain liable, contingently or otherwise, with respect to any indebtedness other than the existing indebtedness specified in the Forbearance Agreement and any refinancing of such existing indebtedness which does not materially modify the terms of such existing indebtedness in a manner adverse to the Company or the Lenders. | ||||||||||
Under the terms of the Credit Facility, the Company is not permitted to make, without the Lender’s consent, certain restricted payments (as defined in the Credit Facility) which includes the payment of distributions that are not required to maintain the Company’s REIT status. | ||||||||||
Waianae Loan Assumption | ||||||||||
On January 22, 2013, the Company sold the Waianae Mall in Waianae, Hawaii to an unaffiliated buyer for a final sales price of $29,763,000. The mortgage loan secured by the Waianae Mall with an outstanding balance of $19,717,000 was assumed by the buyer in connection with the sale. The Company incurred a disposition fee to Prior Advisor of $893,000 in connection with the sale. | ||||||||||
Lahaina Loan | ||||||||||
In connection with the acquisition of Lahaina Gateway property on November 9, 2012, the Company, through TNP SRT Lahaina, borrowed $29,000,000 from the Lahaina Lender. The entire unpaid principal balance of the Lahaina Loan and all accrued and unpaid interest thereon was due and payable in full on October 1, 2017. The Lahaina Loan bore interest at a rate of 9.483% per annum for the initial 12 months, and then 11.429% for the remainder of the term of the loan. On each of December 1, 2012, January 1, 2013, and February 1, 2013, the Company was required to make a mandatory principal prepayment of $333,333, such that the Company would prepay an aggregate $1,000,000 of the outstanding principal balance of the Lahaina Loan, no later than February 1, 2013. | ||||||||||
On January 14, 2013, the Company received a letter of default from the Lahaina Lender in connection with the certain Guaranty of Recourse Obligations by the Company and Anthony W. Thompson, the Company’s Chairman and Co-Chief Executive Officer at the time, for the benefit of the Lahaina Lender, pursuant to which the Company and Mr. Thompson guaranteed the obligations of TNP SRT Lahaina under the Lahaina Loan. The letter of default stated that two events of default existed under the Lahaina Loan as a result of the failure of TNP SRT Lahaina to (1) pay a deposit into a rollover account, and (2) pay two mandatory principal payments. The Lahaina Lender requested payment of the missed deposit into the rollover account, the two overdue mandatory principal payments, and late payment charges and default interest in the aggregate amount of $1,281,000 by January 18, 2013. On January 22, 2013, the Company used a portion of the proceeds from the sale of the Waianae Mall (discussed above) to pay the entire amount requested by Lahaina Lender and cure the events of default described in the letter of default under the Lahaina Loan. | ||||||||||
Since the acquisition of the Lahaina Gateway property on November 9, 2012, cash from operations from the Lahaina Gateway property has not been sufficient to support the property’s operating expenses, the debt service obligations under the Lahaina Loan, and the various cash reserve requirements imposed by the Lahaina Lender. As a result, since the acquisition of the Lahaina Gateway property, the Company has supported the property’s cash requirements with cash from operations generated by other properties within the Company’s portfolio. In addition to the property cash flow issues, the Lahaina Loan contained a number of provisions that potentially exposed the Company to increased risk and constrained its ability to make certain strategic decisions. In order to settle the Company’s obligations under the Lahaina Loan and avoid potential litigation and foreclosure proceedings (and the associated delays and expenses), relating to the Lahaina Gateway property, on August 1, 2013, the Company entered into a deed in lieu of foreclosure agreement with the Lahaina Lender (the “DIL Agreement”). Pursuant to the DIL Agreement, the Company conveyed title to the Lahaina Gateway property to a designee of the Lahaina Lender in exchange for the Lahaina Lender’s agreement not to seek payment from the Company for any amounts owed under the Lahaina Loan, subject to certain exceptions as set forth in the DIL Agreement and the agreements entered into in connection therewith. For the three and nine months ended September 30, 2013, the Company realized a loss of $5,394,000 associated with the Deed In Lieu transaction which was derived from the carrying value of all of Lahaina Gateway’s assets of $34,070,000 less the carrying value of all of its liabilities of $28,676,000, on August 1, 2013. | ||||||||||
KeyBank Mezzanine Loan | ||||||||||
On June 13, 2012, the Company, through TNP SRT Portfolio II Holdings, LLC obtained a mezzanine loan from KeyBank in the original principal amount of $2,000,000.The proceeds of the mezzanine loan were used to refinance the portions of the Credit Facility secured by Morningside Marketplace, Cochran Bypass (Bi Lo Grocery Store), Ensenada Square, Florissant Marketplace and Turkey Creek. The mezzanine loan was repaid in full in January 2013 using a portion of the proceeds from the sale of the Waianae Mall. | ||||||||||
FAIR_VALUE_DISCLOSURES
FAIR VALUE DISCLOSURES | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Fair Value Disclosures [Abstract] | ' | |||||||
FAIR VALUE DISCLOSURES | ' | |||||||
7. FAIR VALUE DISCLOSURES | ||||||||
The Company believes the total carrying values reflected on its condensed consolidated balance sheets reasonably approximate the fair values for cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, and amounts due to affiliates due to their short-term nature, except for the Company’s notes payable, which are disclosed below. | ||||||||
The fair value of the Company’s notes payable is estimated using a present value technique based on contractual cash flows and management’s observations of current market interest rates for instruments with similar characteristics, including remaining loan term, loan-to-value ratio, type of collateral and other credit enhancements. The Company significantly reduces the amount of judgment and subjectivity in its fair value determination through the use of cash flow inputs that are based on contractual obligations. Discount rates are determined by observing interest rates published by independent market participants for comparable instruments. The Company classifies these inputs as Level 2 inputs. | ||||||||
The following table provides the carrying values and fair values of the Company’s notes payable related to continuing operations as of September 30, 2013 and December 31, 2012: | ||||||||
At September 30, 2013 | Carrying Value (1) | Fair Value (2) | ||||||
Notes Payable | $ | 120,575,000 | $ | 121,188,000 | ||||
At December 31, 2012 | Carrying Value (1) | Fair Value (2) | ||||||
Notes Payable | $ | 190,577,000 | $ | 191,319,000 | ||||
(1) The carrying value of the Company’s notes payable represents outstanding principal as of September 30, 2013 and December 31, 2012. | ||||||||
(2) The estimated fair value of the notes payable is based upon indicative market prices of the Company’s notes payable based on prevailing market interest rates. | ||||||||
EQUITY
EQUITY | 9 Months Ended | ||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||
Equity [Abstract] | ' | ||||||||||||||||||||||
EQUITY | ' | ||||||||||||||||||||||
8. EQUITY | |||||||||||||||||||||||
Common Stock | |||||||||||||||||||||||
Under the Company’s Articles of Amendment and Restatement (the “Charter”), the Company has the authority to issue 400,000,000 shares of common stock. All shares of common stock have a par value of $0.01 per share. On October 16, 2008, the Company issued 22,222 shares of common stock to TNP LLC for an aggregate purchase price of $200,000. As of September 30, 2013, Sharon D. Thompson, the wife of Anthony W. Thompson, the Company’s former Co-Chief Executive Officer and former President, independently owned 111,111 shares of the Company’s common stock for which she paid an aggregate purchase price of $1,000,000 and TNP LLC, which is controlled by Mr. Thompson, owned 22,222 shares of the Company’s common stock. | |||||||||||||||||||||||
On February 7, 2013, the Company terminated the Offering and ceased offering shares of common stock in the primary offering and under the DRIP. As of the termination of the Offering on February 7, 2013, the Company had accepted subscriptions for, and issued, 10,969,714 shares of common stock (net of share redemptions), including 391,182 shares of common stock pursuant to the DRIP, resulting in gross offering proceeds of $108,357,000. | |||||||||||||||||||||||
Common Units | |||||||||||||||||||||||
Prior Advisor invested $1,000 in the OP in exchange for common units of the OP, and as of September 30, 2013, Prior Advisor owned 0.01% of the limited partnership interest in the OP. On May 26, 2011, in connection with the acquisition of Pinehurst Square East, a retail property located in Bismarck, North Dakota, the OP issued 287,472 Common Units to certain of the sellers of Pinehurst Square East who elected to receive Common Units for an aggregate value of approximately $2,587,000, or $9.00 per Common Unit. On March 12, 2012, in connection with the acquisition of Turkey Creek, a retail property located in Knoxville, Tennessee, the OP issued 144,324 Common Units to certain of the sellers of Turkey Creek who elected to receive Common Units for an aggregate value of approximately $1,371,079, or $9.50 per Common Unit. | |||||||||||||||||||||||
Member Interests | |||||||||||||||||||||||
On July 9, 2013, SRT Secured Holdings Manager, LLC (“SRT Manager”), an affiliate of Glenborough, made a cash investment of $1,929,000 in Secured Holdings pursuant to a Membership Interest Purchase Agreement by and among the Company, SRT Manager, Secured Holdings, and the OP, and, as of September 30, 2013, SRT Manager owned a twelve percent (12%) membership interest in Secured Holdings. Following the acquisition of the membership interest by SRT Manager, the remaining eighty-eight percent (88%) membership interest in Secured Holdings is held by the OP. As of September 30, 2013, Secured Holdings owns five of the nineteen multi-tenant retail properties in the Company’s property portfolio. The Company’s independent directors approved the transaction in order to help enable the Company to meet its short-term liquidity needs for operations, as well as to build working capital for future operations. | |||||||||||||||||||||||
Preferred Stock | |||||||||||||||||||||||
The Charter authorizes the Company to issue 50,000,000 shares of $0.01 par value preferred stock. As of September 30, 2013 and December 31, 2012, no shares of preferred stock were issued and outstanding. | |||||||||||||||||||||||
Share Redemption Program | |||||||||||||||||||||||
The Company’s share redemption program allows for share repurchases by the Company when certain criteria are met by requesting stockholders. Share repurchases pursuant to the share redemption program are made at the sole discretion of the Company. The number of shares to be redeemed during any calendar year is limited to no more than (1) 5.0% of the weighted average of the number of shares of the Company’s common stock outstanding during the prior calendar year and (2) those that could be funded from the net proceeds from the sale of shares under the DRIP in the prior calendar year plus such additional funds as may be borrowed or reserved for that purpose by the Company’s board of directors. The Company reserves the right to reject any redemption request for any reason or no reason or to amend or terminate the share redemption program at any time. | |||||||||||||||||||||||
Effective January 15, 2013, the Company suspended its share redemption program, including redemptions upon death and disability, and the Company did not redeem any common shares under its share redemption program during the nine months ended September 30, 2013. During the nine months ended September 30, 2012, the Company redeemed 26,094 shares of common shares under its share redemption program. | |||||||||||||||||||||||
Distributions | |||||||||||||||||||||||
In order to qualify as a REIT, the Company is required to distribute at least 90% of its annual REIT taxable income, subject to certain adjustments, to its stockholders. Some or all of the Company’s distributions have been paid, and in the future may continue to be paid from sources other than cash flows from operations. | |||||||||||||||||||||||
Effective January 15, 2013, the Company announced that it will no longer be making monthly distributions. For so long as the Company remains in default under the terms of the Credit Facility, KeyBank prohibits the payment of distributions to investors in the Company. Once the prohibitions on distributions imposed by the Credit Facility are no longer in place, the Company’s board of directors will periodically evaluate the Company’s ability to make quarterly distributions based on the Company’s other operational cash needs. Due to the prohibitions imposed by the Credit Facility, the Company’s board of directors has determined that quarterly distributions for the quarter ended September 30, 2013 will not be made. | |||||||||||||||||||||||
The following table sets forth the distributions declared and paid to the Company’s common stockholders and non-controlling Common Unit holders for the nine months ended September 30, 2013 and the year ended December 31, 2012, respectively: | |||||||||||||||||||||||
Distributions | Monthly | Distributions | Cash | Cash | Reinvested | Total Common | |||||||||||||||||
Declared to | Distributions | Declared to | Distribution | Distribution | Distributions | Stockholder | |||||||||||||||||
Common | Declared Per | Common Unit | Payments to | Payments to | (DRIP shares | Distributions | |||||||||||||||||
Stockholders (1) | Share (1) | Holders (1)/(3) | Common | Common Unit | issuance) (2) | Paid and DRIP | |||||||||||||||||
Stockholders (2) | Holders (2) | Shares Issued | |||||||||||||||||||||
First Quarter 2013 (4) | $ | 636,000 | $ | 0.05833 | $ | 25,000 | $ | 390,000 | $ | 25,000 | $ | 246,000 | $ | 636,000 | |||||||||
Second Quarter 2013 | - | N/A | - | - | - | - | - | ||||||||||||||||
Third Quarter 2013 | - | N/A | - | - | - | - | - | ||||||||||||||||
$ | 636,000 | $ | 25,000 | $ | 390,000 | $ | 25,000 | $ | 246,000 | $ | 636,000 | ||||||||||||
Cash | Cash | Total Common | |||||||||||||||||||||
Distributions | Monthly | Distributions | Distribution | Distribution | Reinvested | Stock holder | |||||||||||||||||
Declared to | Distributions | Declared to | Payments to | Payments to | Distributions | Distributions | |||||||||||||||||
Common | Declared Per | Common Unit | Common | Common Unit | (DRIP shares | Paid and DRIP | |||||||||||||||||
Stockholders (1) | Share (1) | Holders (1)/ (3 ) | Stock holders (2 ) | Holders (2) | issuance) (2) | Shares Issued | |||||||||||||||||
First Quarter 2012 | $ | 1,183,000 | $ | 0.05833 | $ | 57,000 | $ | 721,000 | $ | 52,000 | $ | 406,000 | $ | 1,127,000 | |||||||||
Second Quarter 2012 | 1,637,000 | $ | 0.05833 | 74,000 | 866,000 | 71,000 | 570,000 | 1,436,000 | |||||||||||||||
Third Quarter 2012 | 1,874,000 | $ | 0.05833 | 76,000 | 1,015,000 | 76,000 | 709,000 | 1,724,000 | |||||||||||||||
Fourth Quarter 2012 (4 ) | 1,259,000 | $ | 0.05833 | 51,000 | 1,274,000 | 76,000 | 607,000 | 1,881,000 | |||||||||||||||
$ | 5,953,000 | $ | 258,000 | $ | 3,876,000 | $ | 275,000 | $ | 2,292,000 | $ | 6,168,000 | ||||||||||||
-1 | Distributions were generally declared monthly and calculated at a monthly distribution rate of $0.05833 per share of common stock and Common Units. | ||||||||||||||||||||||
-2 | Cash distributions were paid, and shares issued pursuant to the DRIP, generally on a monthly basis. Cash distributions for all record dates of a given month were generally paid approximately 15 days following month end. | ||||||||||||||||||||||
-3 | None of the holders of Common Units participated in the DRIP, which was terminated effective February 7, 2013. | ||||||||||||||||||||||
-4 | Distributions for the month of December 2012 in the aggregate amount of $636,000 were declared on January 18, 2013, of which $390,000 was paid in cash and $246,000 was paid through the DRIP in the form of additional shares of common stock. Total dividends paid to holders of Common Units for the same period were $25,000. | ||||||||||||||||||||||
Distribution Reinvestment Plan | |||||||||||||||||||||||
The Company adopted the DRIP to allow common stockholders to purchase additional shares of the Company’s common stock through the reinvestment of distributions, subject to certain conditions. The Company registered and reserved 10,526,316 shares of its common stock for sale pursuant to the DRIP. The DRIP was terminated effective February 7, 2013 in connection with the expiration of the Offering and the Company’s deregistration of all of the unsold shares registered for sale pursuant to the Offering. For the nine months ended September 30, 2013 and 2012, $246,000 and $1,685,000 in distributions were reinvested and 25,940 and 177,303 shares of common stock were issued under the DRIP, respectively. | |||||||||||||||||||||||
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||
EARNINGS PER SHARE | ' | |||||||||||||
9. EARNINGS PER SHARE | ||||||||||||||
EPS is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during each period. Diluted EPS is computed after adjusting the basic EPS computation for the effect of potentially dilutive securities outstanding during the period. The effect of non-vested shares, if dilutive, is computed using the treasury stock method. The Company applies the two-class method for determining EPS as its outstanding unvested shares with non-forfeitable dividend rights are considered participating securities. The Company’s excess of distributions over earnings related to participating securities are shown as a reduction in income (loss) attributable to common stockholders in the Company’s computation of EPS. | ||||||||||||||
The following table sets forth the computation of the Company’s basic and diluted loss per share: | ||||||||||||||
For the Three Months Ended | For the Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Numerator - basic and diluted | ||||||||||||||
Net loss from continuing operations | $ | -2,331,000 | $ | -2,709,000 | $ | -7,587,000 | $ | -10,440,000 | ||||||
Non-controlling interests' share in continuing operations | 122,000 | 105,000 | 321,000 | 464,000 | ||||||||||
Distributions paid on unvested restricted shares | - | -2,000 | - | -5,000 | ||||||||||
Net loss from continuing operations applicable to common shares | -2,209,000 | -2,606,000 | -7,266,000 | -9,981,000 | ||||||||||
Discontinued operations | -5,851,000 | -443,000 | -3,194,000 | -1,195,000 | ||||||||||
Non-controlling interests' share in discontinued operations | 261,000 | 17,000 | 160,000 | 53,000 | ||||||||||
Net loss applicable to common shares | $ | -7,799,000 | $ | -3,032,000 | $ | -10,300,000 | $ | -11,123,000 | ||||||
Denominator - basic and diluted | ||||||||||||||
Basic weighted average common shares | 10,967,963 | 10,616,610 | 10,964,563 | 8,956,275 | ||||||||||
Effect of dilutive securities | ||||||||||||||
Unvested common shares | - | - | - | - | ||||||||||
Common units (1) | - | - | - | - | ||||||||||
Diluted weighted average common shares | 10,967,963 | 10,616,610 | 10,964,563 | 8,956,275 | ||||||||||
Basic Earnings per Common Share | ||||||||||||||
Net loss from continuing operations applicable to common shares | $ | -0.2 | $ | -0.25 | $ | -0.66 | $ | -1.11 | ||||||
Discontinued operations | -0.51 | -0.04 | -0.28 | -0.13 | ||||||||||
Net loss applicable to common shares | $ | -0.71 | $ | -0.29 | $ | -0.94 | $ | -1.24 | ||||||
Diluted Earnings per Common Share | ||||||||||||||
Net loss from continuing operations applicable to common shares | $ | -0.2 | $ | -0.25 | $ | -0.66 | $ | -1.11 | ||||||
Discontinued operations | -0.51 | -0.04 | -0.28 | -0.13 | ||||||||||
Net loss applicable to common shares | $ | -0.71 | $ | -0.29 | $ | -0.94 | $ | -1.24 | ||||||
(1) Number of convertible Common Units pursuant to the redemption rights outlined in the Company's registration statement on Form S-11. Anti-dilutive for all periods presented. | ||||||||||||||
INCENTIVE_AWARD_PLAN
INCENTIVE AWARD PLAN | 9 Months Ended | ||||||
Sep. 30, 2013 | |||||||
Incentive Award Plan [Abstract] | ' | ||||||
INCENTIVE AWARD PLAN | ' | ||||||
10. INCENTIVE AWARD PLAN | |||||||
The Company adopted an incentive award plan on July 7, 2009 (the “Incentive Award Plan”) that provides for the grant of equity awards to its employees, directors and consultants and those of the Company’s affiliates. The Incentive Award Plan authorizes the grant of non-qualified and incentive stock options, restricted stock awards, restricted stock units, stock appreciation rights, dividend equivalents and other stock-based awards or cash-based awards. The Company has reserved 2,000,000 shares of common stock for stock grants pursuant to the Incentive Award Plan. | |||||||
Pursuant to the Company’s Amended and Restated Independent Directors Compensation Plan, which is a sub-plan of the Incentive Award Plan (the “Directors Plan”), the Company granted each of its independent directors an initial grant of 5,000 shares of restricted stock (the “initial restricted stock grant”) following the Company’s raising of the $2,000,000 minimum offering amount in the Offering on November 12, 2009. Each new independent director that subsequently joins the board of directors receives the initial restricted stock grant on the date he or she joins the board of directors. In addition, on the date of each of the Company’s annual stockholders meetings at which an independent director is re-elected to the board of directors, he or she may receive 2,500 shares of restricted stock. The restricted stock vests one-third on the date of grant and one-third on each of the next two anniversaries of the grant date. The restricted stock will become fully vested and non-forfeitable in the event of an independent director’s termination of service due to his or her death or disability, or upon the occurrence of a change in control of the Company. | |||||||
For the three months ended September 30, 2013 and 2012, the Company recognized compensation expense of $7,500 and $39,000, respectively, related to restricted common stock grants to its independent directors, which is included in general and administrative expense in the Company’s accompanying condensed consolidated statements of operations. For the nine months ended September 30, 2013 and 2012, the Company recognized compensation expense of $33,000 and $65,000, respectively. Shares of restricted common stock have full voting rights and rights to dividends. | |||||||
As of September 30, 2013 and December 31, 2012, there was $25,000 and $60,000, respectively, of total unrecognized compensation expense related to non-vested shares of restricted common stock. As of September 30, 2013, this expense is expected to be realized over a remaining period of one year. As of September 30, 2013 and December 31, 2012, the fair value of the non-vested shares of restricted common stock was $45,000 and $90,000, respectively, and 5,000 and 10,000 shares remain unvested, respectively. During the nine months ended September 30, 2013, there were no restricted stock grants issued and 5,000 shares of restricted stock vested. | |||||||
A summary of the changes in restricted stock grants for the nine months ended September 30, 2013 is presented below: | |||||||
Unvested | Weighted | ||||||
Restricted | Average | ||||||
Stock (No. | Grant Date | ||||||
of Shares) | Fair Value | ||||||
Balance - December 31, 2012 | 10,000 | $ | 9 | ||||
Granted | - | - | |||||
Vested | -5,000 | - | |||||
Balance - September 30, 2013 | 5,000 | 9 | |||||
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
Related Party Transactions [Abstract] | ' | |||||||||||||||||||
RELATED PARTY TRANSACTIONS | ' | |||||||||||||||||||
11. RELATED PARTY TRANSACTIONS | ||||||||||||||||||||
Pursuant to the Prior Advisory Agreement by and among the Company, the OP and the Prior Advisor, the Company was obligated to pay Advisor specified fees upon the provision of certain services related to the investment of funds in real estate and real estate-related investments, management of the Company’s investments and for other services. Pursuant to the dealer manager agreement (the “Dealer Manager Agreement”) by and among the Company, the OP, and TNP Securities, LLC (the “Dealer Manager” or “TNP Securities”), prior to the termination of the Offering, the Company was obligated to pay the Dealer Manager certain commissions and fees in connection with the sales of shares in the Offering. Subject to certain limitations, the Company was also obligated to reimburse Prior Advisor and Dealer Manager for organization and offering costs incurred by Prior Advisor and Dealer Manager on behalf of the Company, and the Company was obligated to reimburse Prior Advisor for acquisition and origination expenses and certain operating expenses incurred on behalf of the Company or incurred in connection with providing services to the Company. The Company records all related party fees as incurred, subject to any limitations described in the Prior Advisory Agreement. | ||||||||||||||||||||
On August 7, 2013, the Company allowed the Prior Advisory Agreement with the Prior Advisor to expire without renewal, and on August 10, 2013, the Company entered into the Advisory Agreement with Advisor. Advisor manages the Company’s business as the Company’s external advisor pursuant to the Advisory Agreement. Pursuant to the Advisory Agreement, the Company will pay Advisor specified fees for services related to the investment of funds in real estate and real estate-related investments, management of the Company’s investments and for other services. On July 9, 2013, SRT Manager, an affiliate of Advisor, acquired a twelve percent (12%) membership interest in Secured Holdings, the Company’s wholly-owned subsidiary (see Note 8. EQUITY). | ||||||||||||||||||||
Summary of Related Party Fees | ||||||||||||||||||||
Summarized separately below are the Prior Advisor and Advisor related-party costs incurred by the Company for the three and nine months ended September 30, 2013 and 2012, respectively, and payable as of September 30, 2013 and December 31, 2012: | ||||||||||||||||||||
Prior Advisor Fees | Incurred | Incurred | Payable as of | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | September | December 31, | |||||||||||||||||
Expensed | 2013 | 2012 | 2013 | 2012 | 30, 2013 | 2012 | ||||||||||||||
Asset management fees | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||
Reimbursement of operating expenses | - | 315,000 | 73,000 | 736,000 | - | 209,000 | ||||||||||||||
Acquisition fees | - | - | 13,000 | 2,595,000 | - | 475,000 | ||||||||||||||
Property management fees | 171,000 | 344,000 | 862,000 | 898,000 | 161,000 | 48,000 | ||||||||||||||
Guaranty fees | 5,000 | 4,000 | 24,000 | 41,000 | 14,000 | 10,000 | ||||||||||||||
Leasing fees | - | 103,000 | - | 108,000 | - | - | ||||||||||||||
Disposition fees | - | 25,000 | 924,000 | 130,000 | - | - | ||||||||||||||
Interest expense on notes payable | - | - | - | 20,000 | - | - | ||||||||||||||
$ | 176,000 | $ | 791,000 | $ | 1,896,000 | $ | 4,528,000 | $ | 175,000 | $ | 742,000 | |||||||||
Capitalized | ||||||||||||||||||||
Financing coordination fee | $ | - | $ | - | $ | - | $ | 811,000 | $ | - | $ | - | ||||||||
Leasing commission fees | - | - | 143,000 | - | 19,000 | - | ||||||||||||||
$ | - | $ | - | $ | 143,000 | $ | 811,000 | $ | 19,000 | $ | - | |||||||||
Additional Paid In Capital | ||||||||||||||||||||
Selling commissions | $ | - | $ | 122,000 | $ | 32,000 | $ | 2,978,000 | $ | - | $ | 9,000 | ||||||||
Dealer manager fees | - | 66,000 | 15,000 | 1,364,000 | - | 4,000 | ||||||||||||||
Organization and offering costs | - | 782,000 | 7,000 | 1,265,000 | - | - | ||||||||||||||
$ | - | $ | 970,000 | $ | 54,000 | $ | 5,607,000 | $ | - | $ | 13,000 | |||||||||
Advisor Fees | Incurred | Incurred | Payable as of | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | September | December 31, | |||||||||||||||||
Expensed | 2013 | 2012 | 2013 | 2012 | 30, 2013 | 2012 | ||||||||||||||
Consulting and accounting fees | $ | 41,000 | $ | - | $ | 446,000 | $ | - | $ | 26,000 | $ | - | ||||||||
Asset management fees | 211,000 | - | 211,000 | - | 211,000 | - | ||||||||||||||
Reimbursement of operating expenses | 14,000 | - | 30,000 | - | - | - | ||||||||||||||
Property management fees | 140,000 | - | 140,000 | - | 140,000 | - | ||||||||||||||
Interest expense on notes payable | 1,000 | - | 1,000 | - | 1,000 | - | ||||||||||||||
$ | 407,000 | $ | - | $ | 828,000 | $ | - | $ | 378,000 | $ | - | |||||||||
In March 2012, the Company reimbursed its Prior Advisor $240,000 related to a non-refundable earnest deposit incurred by an affiliate of Prior Advisor in 2010 on a potential acquisition commonly known as Morrison Crossing. The reimbursement was subsequently determined by the Company to be non-reimbursable since the acquisition was not one that was approved by the Company’s board of directors in 2010 and accordingly, the Company recorded the amount as a receivable from Prior Advisor and recorded a provision to reserve the entire amount at December 31, 2012, and until May 2013, when the Company settled with Prior Advisor and determined to not seek reimbursement from Prior Advisor for the amount previously paid. | ||||||||||||||||||||
Organization and Offering Costs | ||||||||||||||||||||
Organization and offering costs of the Company (other than selling commissions and the dealer manager fee described below) were initially paid by Prior Advisor and its affiliates on the Company’s behalf. Such costs include legal, accounting, printing and other offering expenses, including marketing, salaries and direct expenses of certain of Prior Advisor’s employees and employees of Prior Advisor’s affiliates and others. Pursuant to the Prior Advisory Agreement, the Company was obligated to reimburse Prior Advisor or its affiliates, as applicable, for organization and offering costs associated with the Offering, provided the Company was not obligated to reimburse Prior Advisor to the extent organization and offering costs, other than selling commissions and dealer manager fees, incurred by the Company exceed 3.0% of the gross offering proceeds from the Offering. Any such reimbursement will not exceed actual expenses incurred by Prior Advisor. | ||||||||||||||||||||
As of September 30, 2013 and December 31, 2012, cumulative organization and offering costs incurred by Prior Advisor on the Company’s behalf were $3,272,000 and $3,016,000, respectively. These costs were payable by the Company to the extent organization and offering costs, other than selling commissions and dealer manager fees, did not exceed 3.0% of the gross proceeds of the Offering. As of September 30, 2013, cumulative organization and offering costs reimbursed to Prior Advisor or paid directly by the Company were $4,273,000, which amount exceeded 3.0% of the gross proceeds from the Offering by $1,001,000. This excess amount was billed to Prior Advisor and settled as of January 31, 2013. | ||||||||||||||||||||
Under the new Advisory Agreement, the Company shall reimburse Advisor for all offering and marketing related expenses incurred on the Company’s behalf in connection with any private placement up to 2.0% of the gross proceeds of such private placement. There were no such expenses under the new Advisory Agreement for the three months ended September 30, 2013. | ||||||||||||||||||||
Selling Commissions and Dealer Manager Fees | ||||||||||||||||||||
Prior to the termination of the Offering, the Dealer Manager received a sales commission of 7.0% of the gross proceeds from the sale of shares of common stock in the primary offering. The Dealer Manager also received 3.0% of the gross proceeds from the sale of shares in the primary offering in the form of a dealer manager fee as compensation for acting as the dealer manager. The Company incurred selling commissions and dealer manager fees during the following periods: | ||||||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | Inception Through | ||||||||||||||||||
September 30, | September 30, | September 30, | ||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | ||||||||||||||||
Selling Commissions | $ | - | $ | 122,000 | $ | 32,000 | $ | 2,978,000 | $ | 6,925,000 | ||||||||||
Dealer Manager Fee | - | 66,000 | 15,000 | 1,364,000 | 3,090,000 | |||||||||||||||
$ | - | $ | 188,000 | $ | 47,000 | $ | 4,342,000 | $ | 10,015,000 | |||||||||||
Reimbursement of Operating Expenses | ||||||||||||||||||||
The Company reimbursed Prior Advisor for all expenses paid or incurred by Prior Advisor in connection with the services provided to the Company, subject to the limitation that the Company did not reimburse Prior Advisor for any amount by which the Company’s operating expenses (including the asset management fee described below) at the end of the four preceding fiscal quarters exceeds the greater of: (1) 2% of its average invested assets (as defined in the Charter), or (2) 25% of its net income (as defined in the Charter) determined without reduction for any additions to depreciation, bad debts or other similar non-cash expenses and excluding any gain from the sale of the Company’s assets for that period (the “2%/25% guideline”). Notwithstanding the above, the Company could reimburse Prior Advisor for expenses in excess of the 2%/25% guideline if a majority of the independent directors determined that such excess expenses are justified based on unusual and nonrecurring factors. Under the Advisory Agreement, the terms and conditions regarding the reimbursement of operating expenses are generally the same as the Prior Advisory Agreement. For the twelve months ended September 30, 2013, the Company’s total operating expenses (as defined in the Charter) did not exceed the 2%/25% guideline. | ||||||||||||||||||||
The Company reimbursed Prior Advisor for the cost of administrative services, including personnel costs and its allocable share of other overhead of Prior Advisor such as rent and utilities; provided, however, that no reimbursement could be made for costs of such personnel to the extent that personnel are used in transactions for which Prior Advisor received a separate fee or with respect to an officer of the Company. See the Summary of Related Party Fees table for incurred administrative services for the three and nine months ended September 30, 2013 and 2012. | ||||||||||||||||||||
Property Management Fee | ||||||||||||||||||||
The Company terminated its property management agreements with TNP Property Manager, LLC, its property manager and an affiliate of Prior Advisor, effective August 9, 2013. The Company entered into new property management agreements with Glenborough effective August 10, 2013. The terms and conditions of the new property management agreements with Glenborough are generally the same as the prior property management agreements except the property management fees are calculated at a maximum of up to 4% of gross revenue (reduced from 5% in the prior agreements). See the Summary of Related Party Fees table for incurred property management fees for the three and nine months ended September 30, 2013 and 2012. | ||||||||||||||||||||
Acquisition and Origination Fee | ||||||||||||||||||||
The Company paid Prior Advisor an acquisition fee equal to 2.5% of the cost of investments acquired, including acquisition expenses and any debt attributable to such investments. Under the Advisory Agreement, Advisor is entitled to receive an acquisition fee equal to 1.0% of the costs of investments acquired, including acquisition expenses and any debt attributable to such investments. See the Summary of Related Party Fees table for incurred acquisition fees for the three and nine months ended September 30, 2013 and 2012. | ||||||||||||||||||||
The Company paid Prior Advisor 2.5% of the amount funded by the Company to acquire or originate real estate-related loans, including third party expenses related to such investments and any debt used to fund the acquisition or origination of the real estate related loans. Under the Advisory Agreement, Advisor is entitled to receive an origination fee equal to 1.0% of the amount funded by the Company to acquire or originate real estate-related loans, including any acquisition expenses related to such investment and any debt used to fund the acquisition or origination of the real estate related loans. See the Summary of Related Party Fees table for incurred loan origination fees for the three and nine months ended September 30, 2013 and 2012. | ||||||||||||||||||||
Asset Management Fee | ||||||||||||||||||||
The Company paid Prior Advisor a monthly asset management fee equal to one-twelfth (1/12th) of 0.6% of the aggregate cost of all real estate investments the Company acquires; provided, however, that Prior Advisor could not be paid the asset management fee until the Company’s funds from operations exceed the lesser of (1) the cumulative amount of any distributions declared and payable to the Company’s stockholders or (2) an amount that is equal to a 10.0% cumulative, non-compounded, annual return on invested capital for the Company’s stockholders. On November 11, 2011, the board of directors approved Amendment No. 2 to the Prior Advisory Agreement to clarify that upon termination of the Prior Advisory Agreement, any asset management fees that may have accumulated in arrears, but which had not been earned pursuant to the terms of the Prior Advisory Agreement, will not be paid to Prior Advisor. | ||||||||||||||||||||
Under the Advisory Agreement, Advisor will receive an asset management fee equal to a monthly fee of one-twelfth (1/12th) of 0.6% of the higher of (1) aggregate cost on a GAAP basis (before non cash reserves and depreciation) of all investments the Company owns, including any debt attributable to such investments or (2) the fair market value of investments (before non-cash reserves and deprecation) if the Company’s board of directors has authorized the estimate of a fair market value of the Company’s investments; provided, however, that the asset management fee will not be less than $250,000 in the aggregate during any one (1) calendar year. | ||||||||||||||||||||
See the Summary of Related Party Fees table for incurred asset management fees for the three and nine months ended September 30, 2013 and 2012. | ||||||||||||||||||||
Disposition Fee | ||||||||||||||||||||
If Prior Advisor or its affiliates provided a substantial amount of services, as determined by the Company’s independent directors, in connection with the sale of a real property, Prior Advisor or its affiliates could be paid disposition fees up to 50.0% of a customary and competitive real estate commission, but not to exceed 3.0% of the contract sales price of each property sold. Under the Advisory Agreement, the terms and conditions of the disposition fee payable to Advisor are the same as the terms for such fees under the Prior Advisory Agreement. See the Summary of Related Party Fees table for incurred disposition fees for the three and nine months ended September 30, 2013 and 2012. | ||||||||||||||||||||
Leasing Commission Fee | ||||||||||||||||||||
On June 9, 2011, pursuant to Section 11 of the Prior Advisory Agreement, the Company’s board of directors approved the payment of fees to the Prior Advisor for services it provided in connection with leasing the Company’s properties. Under the new property management agreements, Advisor shall receive a separate fee for the leases of new tenants, and for expansions, extensions and renewals of existing tenants in an amount not to exceed the fee customarily charged by similarly situated parties rendering similar services in the same geographic area for similar properties. See the Summary of Related Party Fees table for incurred leasing commission fees for the three and nine months ended September 30, 2013 and 2012. | ||||||||||||||||||||
Financing Coordination Fee | ||||||||||||||||||||
On January 12, 2012, the board of directors approved Amendment No. 3 to the Prior Advisory Agreement to provide for the payment of a financing coordination fee to Prior Advisor in an amount equal to 1.0% of any amount financed or refinanced by the Company or the OP. Under the Advisory Agreement, the Advisor will receive a financing coordination fee equal to 1.0% of the amount made available and/or outstanding under any (1) financing obtained or assumed, directly or indirectly, by the Company or the OP and used to acquire or originate investments, or (2) the refinancing of any financing obtained or assumed, directly or indirectly, by the Company or the OP. See the Summary of Related Party Fees table for incurred financing coordination fees for the three and nine months ended September 30, 2013 and 2012. | ||||||||||||||||||||
Guaranty Fees | ||||||||||||||||||||
In connection with certain acquisition financings, the Company’s former Chairman and former Co-Chief Executive Officer and/or TNP LLC had executed certain guaranty agreements to the respective lenders. As consideration for such guaranty, the Company entered into a reimbursement and fee agreement to provide for an upfront payment and an annual guaranty fee payment for the duration of the guarantee period. See the Summary of Related Party Fees table for incurred guaranty fees for the three and nine months ended September 30, 2013 and 2012. At September 30, 2013, the Company’s outstanding guaranty agreements relate to the guarantee on the financing on Constitution Trail and Osceola Village. | ||||||||||||||||||||
Related Party Loans | ||||||||||||||||||||
In connection with the acquisition of Morningside Marketplace in January 2012, the Company financed the payment of a portion of the purchase price for Morningside Marketplace with the proceeds of (1) a loan in the aggregate principal amount of $235,000 from TNP LLC, (2) a loan in the aggregate principal amount of $200,000 from Mr. James Wolford, the Company’s Chief Financial Officer at the time of the loan, and (3) a loan in the aggregate principal amount of $920,000 from Mrs. Sharon Thompson, the spouse of Mr. Anthony W. Thompson, the Company’s Chairman, Co-Chief Executive Officer and President at the time of the loan (collectively, the “Morningside Affiliate Loans”). The Morningside Affiliate Loans each accrued interest at a rate of 12% per annum and were due on April 8, 2012. All Morningside Affiliate Loans including unpaid accrued interest were paid in full during the first quarter of 2012. See the Summary of Related Party Fees table for incurred interest expense for the three and nine months ended September 30, 2013 and 2012. | ||||||||||||||||||||
On September 20, 2013, the Company borrowed $500,000 from Glenborough Property Partners, LLC (“Glenborough Lender”), an affiliate of Advisor, pursuant to an unsecured promissory note by the Company in favor of Glenborough Lender (the “Glenborough Loan”). The Company will use the proceeds of the Glenborough Loan for general working capital purposes. | ||||||||||||||||||||
The entire unpaid principal amount of the Glenborough Loan and all accrued and unpaid interest thereon and any other amounts due under the Glenborough Loan will be due and payable in full on February 28, 2014; provided, however, that in the event that the Advisory Agreement between the Company, OP, and Advisor is terminated by the Company (excluding any termination by the Company for cause) or expires without renewal, the maturity date will be accelerated to the date of such termination or expiration of the Advisory Agreement. The Glenborough Loan will bear interest at a per annum rate of seven percent (7.0%). The Company may prepay all or any portion of the Glenborough Loan at any time or from time to time, without penalty. | ||||||||||||||||||||
Secured Holdings has agreed to unconditionally guarantee to Glenborough Lender the full and prompt payment when due (whether at maturity, by required prepayment, acceleration, demand or otherwise) of the Company’s obligations under the Glenborough Loan. | ||||||||||||||||||||
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2013 | |
Commitments and Contingencies [Abstract] | ' |
COMMITMENTS AND CONTINGENCIES | ' |
12. COMMITMENTS AND CONTINGENCIES | |
Osceola Village Contingencies | |
In connection with the acquisition financing on Osceola Village, the Company through its subsidiary, granted a lender a profit participation in the property Osceola Village equal to 25% of the net profits received by the Company upon the sale of the property (the “Profit Participation Payment”). Net profits is calculated as (1) the gross proceeds received by the Company upon a sale of the property in an arms-length transaction at market rates to third parties less (2) the sum of: (a) principal repaid to the lender out of such sales proceeds at the time of such sale; (b) all bona fide closing costs and similar expenses provided that all such closing costs and similar expenses are paid to third parties, unaffiliated with the Company including, without limitation, reasonable brokerage fees and reasonable attorneys’ fees paid to third parties, unaffiliated with the Company and incurred by the Company in connection with the sale; and (c) a stipulated amount of $3,200,000. If for any reason consummation of such sale has not occurred on or before the scheduled maturity date or any earlier foreclosure of the underlying mortgage loan secured by the property, the Company shall be deemed to have sold the property as of the business day immediately preceding the mortgage loan maturity date or the filing date of the foreclosure action, whichever is applicable, for an amount equal to a stipulated sales price and shall pay the lender the Profit Participation Payment. In the event the underlying mortgage loan is prepaid, the Company shall also be required to immediately pay the Profit Participation Payment based upon a deemed sale of the property for a stipulated sales price. Based on the estimated sale price as of September 30, 2013, the Company determined that it does not have any liability under the Profit Participation Payment as of September 30, 2013. | |
Additionally, in connection with the acquisition financing on Osceola Village, the Company entered into a Master Lease Agreement (the “Master Lease”) with TNP SRT Osceola Village Master Lessee, LLC, a wholly-owned subsidiary of the OP (the “Master Lessee”). Pursuant to the Master Lease, TNP SRT Osceola Village leased to Master Lessee the approximately 23,000 square foot portion of Osceola Village which was not leased to third-party tenants as of the closing date (the “Premises”). The Master Lease provides that the Master Lessee will pay TNP SRT Osceola Village a monthly rent in an amount equal to $36,425, provided that such monthly amount will be reduced proportionally for each square foot of space at the premises subsequently leased to third-party tenants pursuant to leases which are reasonably acceptable to the lender and which satisfy certain criteria set forth in the Master Lease (“Approved Leases”). The Master Lease has a seven-year term, subject to earlier expiration upon the earlier to occur of (1) the date on which all available rentable space at the Premises is leased to third-party tenants pursuant to Approved Leases and (2) the date on which the mortgage loan is repaid in full in cash (other than as a result of a credit bid by the lender at a foreclosure sale). The Master Lessee has no right to assign or pledge the Master Lease or to sublet any part of the premises without the prior written consent of TNP SRT Osceola Village and the lender. In connection with the acquisition of Osceola Village, TNP SRT Osceola Village obtained a mortgage (the “Osceola Loan”) from American National Insurance Company (“ANICO”). The Master Lease was assigned to ANICO pursuant to the assignment of leases and rents in favor of ANICO entered into by TNP SRT Osceola Village in connection with the Osceola Loan. Pursuant to the Master Lease, the Master Lessee acknowledges and agrees that upon any default by TNP SRT Osceola Village under any of the loan documents related to the Osceola Loan, ANICO will be entitled to enforce the assignment of the Master Lease to ANICO and replace TNP SRT Osceola Village under the Master Lease for all purposes. | |
Constitution Trail Contingency | |
In connection with the financing of the Constitution Trail acquisition, TNP SRT Constitution Trail, LLC, a wholly owned subsidiary of the OP (“TNP SRT Constitution Trail”) and TNP SRT Constitution Trail Master Lessee, LLC (the “Starplex Master Lessee”), a wholly owned subsidiary of the OP, entered into a Master Lease Agreement with respect to a portion of Constitution Trail (the “Starplex Master Lease”). Pursuant to the Starplex Master Lease, TNP SRT Constitution Trail leased to the Starplex Master Lessee an approximately 7.78 acre parcel of land included in the Constitution Trail property, and the approximately 44,064 square foot Starplex Cinemas building located thereon (the “Starplex Premises”). The Starplex Master Lease provides that, in the event that the annual gross sales from the Starplex premises are less than $2,800,000, then thereafter the Starplex Master Lessee will pay TNP SRT Constitution Trail a monthly rent in an amount equal to $62,424 ($749,088 annually), subject to an offset based on any minimum annual rent for the Starplex premises received by TNP SRT Constitution Trail. The Starplex Master Lease will expire upon the earlier to occur of (1) December 31, 2018 and (2) the date on which the Constitution Trail mortgage loan is repaid in full in cash (other than as a result of a credit bid by the lender at a foreclosure sale or refinancing of the Constitution Trail Loan). The Starplex Master Lessee has no right to assign or pledge the Starplex Master Lease or to sublet any part of the Starplex premises without the prior written consent of TNP SRT Constitution Trail and the lender of the mortgage loan. | |
Carson Plaza Contingency | |
In 2012, the Company pursued an acquisition commonly known as Carson Plaza and placed a non-refundable deposit of $250,000 into escrow which was expensed and included in transaction expense for the year ended December 31, 2012. The acquisition did not materialize as a result of the Company’s claim of certain undisclosed environmental conditions uncovered during due diligence. The seller disagreed with the Company’s claim and the Company filed a lawsuit seeking to recover the deposit. The lawsuit was settled in August 2013 and, as part of that settlement, the Company received $125,000 as a partial refund of the deposit which was recognized as a reduction to transaction expense in the third quarter of 2013. | |
Economic Dependency | |
As disclosed in “Note 1. ORGANIZATION AND BUSINESS”, the Company has recently transitioned to a new external advisor. The Company is dependent on Advisor and its affiliates for certain services that are essential to the Company, including the identification, evaluation, negotiation, purchase, and disposition of real estate and real estate-related investments, management of the daily operations of the Company’s real estate and real estate-related investment portfolio, and other general and administrative responsibilities In the event that the Advisor is unable to provide such services to the Company, the Company will be required to obtain such services from other sources. | |
Environmental | |
As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. The Company is not aware of any environmental liability that could have a material adverse effect on its financial condition or results of operations. However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s properties, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to the properties could result in future environmental liabilities. | |
Legal Matters | |
As of September 30, 2013, the Company is involved in three separate legal proceedings as summarized below. | |
Litigation Concerning Change in Transfer Agents | |
On or about August 12, 2013, the Company commenced a civil action in the Court of Chancery of the State of Delaware against Mr. Anthony W. Thompson, the Company’s former Chief Executive Officer and Chairman of the Board and TNP Transfer Agent, LLC (the “Prior Transfer Agent”). The Company alleged that it had replaced the Prior Transfer Agent with a new transfer agent, but Mr. Thompson was causing the Prior Transfer Agent to refuse to transfer the stockholder information belonging to the Company to the new transfer agent. The Company sought affirmative injunctive relief compelling the defendants to transfer all stockholder information belonging to the Company to the new transfer agent. On September 6, 2013, the Court granted the Company’s motion to expedite the proceeding due to the threat of irreparable harm to the Company and its stockholders. A final hearing on the merits is now scheduled for November 26, 2013. Subsequent to the Court’s ruling granting the motion to expedite, the defendants provided some of the requested information. To date, however, the defendants still have not provided all of the requested information. The Company believes it has a strong case on the merits and intends to seek full compliance by the defendants. | |
Litigation Concerning Termination of Property Management Agreements | |
On or about September 9, 2013, TNP Property Manager, LLC (“TNP Property Manager”), the Company’s former property manager, commenced a civil action in the Superior Court of the State of California for Orange County against Glenborough and the Company. The Company was not served until October 15, 2013. The complaint relates to the recently announced termination by the Company of the property management agreements between TNP Property Manager and the subsidiaries of the Company that own the various real estate projects in the Company’s portfolio and the selection of Glenborough to act as the Company’s new property manager. TNP Property Manager alleges that there was no valid basis for the Company to terminate the prior property management agreements and that the Company is now in breach of the agreements. In addition, the TNP Property Manager accuses Glenborough of “intentional interference with economic relationship.” From the Company, TNP Property Manager seeks an award of compensatory damages in the amount of at least $5 million. From Glenborough, TNP Property Manager seeks an award of compensatory damages in the amount of at least $5 million, an award of punitive damages in an unspecified amount, and equitable relief. Glenborough has submitted a request for indemnification to the Company, and the Company has agreed to advance Glenborough’s litigation expenses based on the Company’s obligation under the Consulting Agreement. The Company intends to defend the action vigorously. | |
Securities Litigation | |
On or about September 23, 2013, a civil action captioned Stephen Drews v. TNP Strategic Retail Trust, Inc., et al., SA-CV-13-1488-PA-DFMx, was commenced in the United States District Court for the Central District of California. The named defendants were the Company, various of its present or former officers and directors, including Anthony W. Thompson, and several entities controlled by Mr. Thompson. The plaintiff alleged that he invested in connection with the initial public offering of the Company’s shares (the “IPO”) and purported to represent a class consisting of all persons who invested in connection with the IPO between September 23, 2010 and February 7, 2013. The plaintiff alleged that the Company and all of the individual defendants violated Section 11 of the Securities Act of 1933, as amended (the “Securities Act”) because the offering materials used in connection with the IPO allegedly failed to disclose financial difficulties that Mr. Thompson and the entities controlled by him were experiencing. Additional claims under the Securities Act were asserted against Mr. Thompson, the entities controlled by Mr. Thompson and the other individual defendants who were employees of Mr. Thompson. The complaint sought a class-wide award of damages in an unspecified amount. On October 22, 2013, the plaintiff filed a notice of voluntary dismissal without prejudice. On October 23, 2013, a virtually identical complaint was filed in the United States District Court for the Northern District of California, asserting the same claims against the same defendants. The only material difference was that an additional plaintiff was added. Like the original plaintiff, the additional plaintiff alleges that he invested in connection with the IPO. The new action is captioned Lewis Booth, et al. v. Strategic Realty Trust, Inc., et al., CV-13-4921-JST. The Company believes that the claims brought against the Company and the individual defendants other than Mr. Thompson or employees of Mr. Thompson are without merit and intends to defend the action vigorously. | |
At this time, the Company cannot reasonably estimate the probability or amount of loss that may arise from any of the legal proceedings summarized above. As a result, the Company has not recorded any loss contingencies related to these legal proceedings in its financial statements as of September 30, 2013. | |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2013 | |
Subsequent Events [Abstract] | ' |
SUBSEQUENT EVENTS | ' |
13. SUBSEQUENT EVENTS | |
Proxy Contest | |
On October 29, 2013, a group of minority stockholders led by Anthony W. Thompson, the Company’s former Chief Executive Officer and chairman of the board and a current member of the Company’s board of directors (the “Thompson Group”) filed with the SEC a definitive Solicitation Statement to Request a Meeting of Stockholders (the “Thompson Group Solicitation”). Pursuant to the Thompson Group Solicitation, the Thompson Group has solicited written requests from the Company’s stockholders to call a special meeting of the Company’s stockholders for the purposes of (1) removing each member of the Company’s current board of directors (except for Mr. Thompson), and (2) replacing the removed directors with a slate of director nominees selected by the Thompson Group. The Company’s board of directors has determined that the solicitation from the Thompson Group is not in the best interests of the Company or its stockholders and has recommended that the Company’s stockholders disregard any solicitation materials received from the Thompson Group. Pursuant to a proxy statement to be filed with the SEC, the Company’s board of directors intends to solicit revocations of any written requests submitted by stockholders in response to the Thompson Group Solicitation. | |
Amended Articles of Incorporation | |
On October 31, 2013, in order to protect the Company’s stockholders from the Thompson Group’s unsolicited attempt to take control of the Company, the Company’s board of directors elected, in accordance with Maryland law, to be subject to all of the provisions of the Maryland Unsolicited Takeover Act (the “MUTA”). On November 4, 2013, the Company filed Articles Supplementary to the Charter with the Maryland Department of Assessments and Taxation in order to make the election to be subject to the provisions of MUTA. The effect of the Company’s election to be subject to MUTA is as follows: | |
• Classified Board of Directors. The Company’s board of directors is now divided into three classes: Andrew Batinovich and Anthony W. Thompson are in Class I with a term of office expiring at the Company’s 2013 annual meeting of stockholders (which is scheduled for January 10, 2014), John B. Maier II is in Class II with a term of office expiring at the Company’s 2014 annual meeting of stockholders, and Phillip I. Levin and Jeffrey S. Rogers are in Class III with a term of office expiring at the Company’s 2015 annual meeting of stockholders. Previously, all directors served one-year terms. | |
• Removal of Directors. The removal of directors will now require a two-thirds vote of the Company’s stockholders. Previously, the Charter required a majority vote for removal of directors. In addition, because the Company’s directors are classified, under Maryland law they may only be removed for cause. | |
• Stockholder-Requested Meetings. Previously, the Charter required the Company’s secretary to call a special meeting of the stockholders (a “Stockholder-Requested Meeting”) upon the request of the holders of ten percent (10%) of all the votes entitled to be cast at such special meeting. As a result of the Company’s election to be subject to all of the provisions of MUTA, a Stockholder-Requested Meeting will require the written request of the Company’s stockholders entitled to cast at least a majority of the votes entitled to be cast at the meeting. | |
For additional information regarding the Articles Supplementary, see the Company’s Form 8-K filed with the SEC on November 4, 2013, and the full text of the Articles Supplementary, which are filed as Exhibit 3.1 thereto. | |
Amended and Restated Bylaws | |
On October 17, 2013, the Company’s board of directors adopted the Company’s Amended and Restated Bylaws, which became effective upon their adoption by the Company’s board. On October 31, 2013, the Company’s board of directors adopted the Company’s Second Amended and Restated Bylaws, which became effective upon their adoption by the Company’s board. The Second Amended and Restated Bylaws address a number of issues related to the director nominations and Stockholder-Requested Meetings. For additional information regarding the Second Amended and Restated Bylaws, see the Company’s Form 8-K filed with the SEC on November 4, 2013, and the full text of the Second Amended and Restated Bylaws, which are filed as Exhibit 3.2 thereto. | |
Appointment of Chairman; Reduction in Board Size | |
On October 31, 2013, the Company’s board of directors took the following actions: | |
• Appointment of Chairman. The board of directors appointed John B. Maier, II as chairman of the board of directors. The previous chairman of the board, Mr. Anthony W. Thompson, was removed from that position in August 2013. | |
• Reduction in Size of Board. The board of directors elected to reduce the size of the board from five to four effective at the 2013 annual meeting of the Company’s stockholders by eliminating the seat currently occupied by Mr. Anthony W. Thompson. | |
Willow Run Sales Completion | |
On October 31, 2013, the Company sold the Willow Run property in Westminster, Colorado to an unaffiliated buyer for a gross sales price of $10,825,000. The Company originally acquired the Willow Run property in May 2012 for $11,550,000 and then in February2013 sold a pad for a gross sales price of $1,050,000. In accordance with the terms of the loan documents with KeyBank, all net proceeds from the sale were released from escrow to KeyBank. The Company incurred a disposition fee to the Advisor of $54,000 in connection with the sale, which was paid through the closing. | |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | |||
Sep. 30, 2013 | ||||
Summary Of Significant Accounting Policies [Abstract] | ' | |||
Principles of Consolidation and Basis of Presentation | ' | |||
Principles of Consolidation and Basis of Presentation | ||||
The accompanying condensed consolidated unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. | ||||
The condensed consolidated financial statements include the accounts of the Company, the OP, and their direct and indirect owned subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the Company’s financial position, results of operations and cash flows have been included. | ||||
The Company evaluates the need to consolidate joint ventures and variable interest entities based on standards set forth in ASC 810, Consolidation (“ASC 810”). In determining whether the Company has a controlling interest in a joint venture or a variable interest entity and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the partners/members as well as whether the entity is a variable interest entity for which the Company is the primary beneficiary. As of September 30, 2013, the Company did not have any joint ventures or variable interests in any variable interest entities. | ||||
Non-Controlling Interests | ' | |||
Non-Controlling Interests | ||||
The Company’s non-controlling interests are comprised primarily of the Common Units in the OP and membership interest in SRT Secured Holdings, LLC (“Secured Holdings”), formerly known as TNP SRT Secured Holdings, LLC, the Company’s subsidiary. The Company accounts for non-controlling interests in accordance with ASC 810. In accordance with ASC 810, the Company reports non-controlling interests in subsidiaries within equity in the condensed consolidated financial statements, but separate from the parent’s stockholders’ equity. Net income (loss) attributable to non-controlling interests is presented as a reduction from net income (loss) in calculating net income (loss) available to common stockholders on the statement of operations. Acquisitions or dispositions of non-controlling interests that do not result in a change of control are accounted for as equity transactions. In addition, ASC 810 requires that a parent company recognize a gain or loss in net income when a subsidiary is deconsolidated upon a change in control. In accordance with FASB ASC 480-10, Distinguishing Liabilities from Equity, non-controlling interests that are determined to be redeemable are carried at their fair value or redemption value as of the balance sheet date and reported as liabilities or temporary equity depending on their terms. The Company periodically evaluates individual non-controlling interests for the ability to continue to recognize the non-controlling interest as permanent equity in the condensed consolidated balance sheets. Any non-controlling interest that fails to qualify as permanent equity will be reclassified as liabilities or temporary equity and adjusted to the greater of (1) the carrying amount, or (2) its redemption value as of the end of the period in which the determination is made, and the resulting adjustment is recorded in the condensed consolidated statement of operations. All non-controlling interests at September 30, 2013 qualified as permanent equity. | ||||
Use of Estimates | ' | |||
Use of Estimates | ||||
The preparation of the Company’s financial statements requires significant management judgments, assumptions and estimates about matters that are inherently uncertain. These judgments affect the reported amounts of assets and liabilities and the Company’s disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. With different estimates or assumptions, materially different amounts could be reported in the Company’s financial statements, and actual results could differ from the estimates or assumptions used by management. Additionally, other companies may utilize different estimates that may impact the comparability of the Company’s results of operations to those of companies in similar businesses. The Company considers significant estimates to include the carrying amounts and recoverability of investments in real estate, impairments, real estate acquisition purchase price allocations, allowance for doubtful accounts, estimated useful lives to determine depreciation and amortization and fair value determinations, among others. | ||||
Cash and Cash Equivalents | ' | |||
Cash and Cash Equivalents | ||||
Cash and cash equivalents represents current bank accounts and other bank deposits free of encumbrances and having maturity dates of three months or less from the respective dates of deposit. The Company limits cash investments to financial institutions with high credit standing; therefore, the Company believes it is not exposed to any significant credit risk in cash. | ||||
Restricted Cash | ' | |||
Restricted Cash | ||||
Restricted cash includes escrow accounts for real property taxes, insurance, capital expenditures and tenant improvements, debt service and leasing costs held by lenders. | ||||
Revenue Recognition | ' | |||
Revenue Recognition | ||||
Revenues include minimum rents, expense recoveries and percentage rental payments. Minimum rents are recognized on an accrual basis over the terms of the related leases on a straight-line basis when collectability is reasonably assured and the tenant has taken possession or controls the physical use of the leased property. If the lease provides for tenant improvements, the Company determines whether the tenant improvements, for accounting purposes, are owned by the tenant or the Company. When the Company is the owner of the tenant improvements, the tenant is not considered to have taken physical possession or have control of the physical use of the leased asset until the tenant improvements are substantially completed. When the tenant is the owner of the tenant improvements, any tenant improvement allowance that is funded is treated as a lease incentive and amortized as a reduction of revenue over the lease term. Tenant improvement ownership is determined based on various factors including, but not limited to: | ||||
• whether the lease stipulates how a tenant improvement allowance may be spent; | ||||
• whether the amount of a tenant improvement allowance is in excess of market rates; | ||||
• whether the tenant or landlord retains legal title to the improvements at the end of the lease term; | ||||
• whether the tenant improvements are unique to the tenant or general-purpose in nature; and | ||||
• whether the tenant improvements are expected to have any residual value at the end of the lease. | ||||
For leases with minimum scheduled rent increases, the Company recognizes income on a straight-line basis over the lease term when collectability is reasonably assured. Recognizing rental income on a straight-line basis for leases results in recognized revenue amounts which differ from those that are contractually due from tenants on a cash basis. If the Company determines the collectability of straight-line rents is not reasonably assured, the Company limits future recognition to amounts contractually owed and paid, and, when appropriate, establishes an allowance for estimated losses. | ||||
The Company maintains an allowance for doubtful accounts, including an allowance for straight-line rent receivables, for estimated losses resulting from tenant defaults or the inability of tenants to make contractual rent and tenant recovery payments. The Company monitors the liquidity and creditworthiness of its tenants on an ongoing basis. For straight-line rent amounts, the Company’s assessment is based on amounts estimated to be recoverable over the term of the lease. The Company’s straight-line rent receivable, which is included in tenant receivables on the condensed consolidated balance sheets, was $1,498,000 and $1,380,000 at September 30, 2013 and December 31, 2012, respectively. | ||||
Certain leases contain provisions that require the payment of additional rents based on the respective tenants’ sales volume (contingent or percentage rent) and substantially all contain provisions that require reimbursement of the tenants’ allocable real estate taxes, insurance and common area maintenance costs (“CAM”). Revenue based on percentage of tenants’ sales is recognized only after the tenant exceeds its sales breakpoint. Revenue from tenant reimbursements of taxes, CAM and insurance is recognized in the period that the applicable costs are incurred in accordance with the lease agreement. | ||||
The Company recognizes gains or losses on sales of real estate in accordance with ASC 360. Profits are not recognized until (a) a sale has been consummated; (b) the buyer’s initial and continuing investments are adequate to demonstrate a commitment to pay for the property; (c) the Company’s receivable, if any, is not subject to future subordination; and (d) the Company has transferred to the buyer the usual risks and reward of ownership, and the Company does not have a substantial continuing involvement with the property. The results of operations of income producing properties where the Company does not have a continuing involvement are presented in the discontinued operations section of the Company’s condensed consolidated statements of operations when the property has been classified as held-for-sale or sold. | ||||
Valuation of Accounts Receivable | ' | |||
Valuation of Accounts Receivable | ||||
The Company makes estimates of the collectability of its tenant receivables related to base rents, including deferred rents receivable, expense reimbursements and other revenue or income. | ||||
The Company analyzes tenant receivables, deferred rent receivable, historical bad debts, customer creditworthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. In addition, with respect to tenants in bankruptcy, the Company will make estimates of the expected recovery of pre-petition and post-petition claims in assessing the estimated collectability of the related receivable. In some cases, the ultimate resolution of these claims can exceed one year. When a tenant is in bankruptcy, the Company will record a bad debt reserve for the tenant’s receivable balance and generally will not recognize subsequent rental revenue until cash is received or until the tenant is no longer in bankruptcy and has the ability to make rental payments. | ||||
Concentration of Credit Risk | ' | |||
Concentration of Credit Risk | ||||
A concentration of credit risk arises in the Company’s business when a national or regionally based tenant occupies a substantial amount of space in multiple properties owned by the Company. In that event, if the tenant suffers a significant downturn in its business, it may become unable to make its contractual rent payments to the Company, exposing the Company to potential losses in rental revenue, expense recoveries, and percentage rent. Further, the impact may be magnified if the tenant is renting space in multiple locations. Generally, the Company does not obtain security from the nationally-based or regionally-based tenants in support of their lease obligations to the Company. The Company regularly monitors its tenant base to assess potential concentrations of credit risk. As of September 30, 2013, Schnuck Markets, Inc. is the Company’s largest tenant (by square feet) and accounted for approximately 127,835 square feet, or approximately 7% of the Company’s gross leasable area, and approximately $832,000, or 4% of the Company’s annual minimum rent. Publix, another large tenant, accounted for approximately 5% of the Company’s annual minimum rent. No other tenant accounted for over 5% of the Company’s annual minimum rent. There was $107,000 in outstanding receivables from Schnuck Markets, Inc. at September 30, 2013. | ||||
The Company’s real estate properties are leased to tenants under operating leases for which the terms and expirations vary. As of September 30, 2013, the leases at the Company’s properties have remaining terms (excluding options to extend) of up to 21 years with a weighted-average remaining term (excluding options to extend) of eight years. The leases may have provisions to extend the lease agreements, options for early termination after paying a specified penalty, rights of first refusal to purchase the property at competitive market rates, and other terms and conditions as negotiated. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. Generally, upon the execution of a lease, the Company requires security deposits from tenants in the form of a cash deposit and/or a letter of credit. Amounts required as security deposits vary depending upon the terms of the respective leases and the creditworthiness of the tenant, but generally are not significant amounts. Therefore, exposure to credit risk exists to the extent that a receivable from a tenant exceeds the amount of its security deposit. Security deposits received in cash related to tenant leases are included in other liabilities in the accompanying condensed consolidated balance sheets and totaled $379,000 and $651,000 as of September 30, 2013 and December 31, 2012, respectively. | ||||
Business Combinations | ' | |||
Business Combinations | ||||
The Company records the acquisition of income-producing real estate or real estate that will be used for the production of income as a business combination. All assets acquired and liabilities assumed in a business combination are measured at their acquisition-date fair values, including tenant improvements and identifiable intangible assets or liabilities. Tenant improvements represent the tangible assets associated with the existing leases valued on a fair value basis at the acquisition date. Tenant improvements are classified as assets under investments in real estate and are depreciated over the remaining lease terms. Identifiable intangible assets and liabilities relate to the value of in-place operating leases which come in three forms: (1) leasing commissions and legal costs, which represent the value associated with “cost avoidance” of acquiring in-place leases, such as lease commissions paid under terms generally experienced in markets in which the Company operates; (2) value of in-place leases, which represents the estimated loss of revenue and of costs incurred for the period required to lease the “assumed vacant” property to the occupancy level when purchased; and (3) above- or below-market value of in-place leases, which represents the difference between the contractual rents and market rents at the time of the acquisition, discounted for tenant credit risks. The value of in-place leases is recorded in acquired lease intangibles and amortized over the remaining lease term. Above- or below-market leases are classified in acquired lease intangibles, or in acquired below-market lease intangibles, depending on whether the contractual terms are above- or below-market. Above-market leases are amortized as a decrease to rental revenue over the remaining non-cancelable terms of the respective leases and below-market leases are amortized as an increase to rental revenue over the remaining initial lease term and any fixed rate renewal periods, if applicable. | ||||
Acquisition costs are expensed as incurred and costs that do not meet the definition of a liability at the acquisition date are expensed in periods subsequent to the acquisition date. During the nine months ended September 30, 2013, the Company did not acquire any properties. During the nine months ended September 30, 2012, the Company acquired nine properties; Morningside Marketplace (“Morningside Marketplace”), Woodland West Marketplace (“Woodland West”), Ensenada Square (“Ensenada Square”), the Shops at Turkey Creek (“Turkey Creek”), Aurora Commons (“Aurora Commons”), Florissant Marketplace (“Florissant”), Willow Run Shopping Center (“Willow Run”), Bloomingdale Hills (“Bloomingdale Hills”) and Visalia Marketplace (“Visalia Marketplace”) for an aggregate purchase price of $103.4 million. The Company recorded these acquisitions as business combinations and incurred $3,037,000 of acquisition costs. Costs incurred in pursuit of targeted properties for acquisitions not yet closed or those determined to no longer be viable and costs incurred which are expected to result in future period disposals of property not currently classified as held for sale properties have been expensed and are also classified in the condensed consolidated statement of operations as transaction expenses. | ||||
Estimates of the fair values of the tangible assets, identifiable intangibles and assumed liabilities require the Company to make significant assumptions to estimate market lease rates, property-operating expenses, carrying costs during lease-up periods, discount rates, market absorption periods, and the number of years the property will be held for investment. The use of inappropriate assumptions would result in an incorrect valuation of the Company’s acquired tangible assets, identifiable intangibles and assumed liabilities, which would impact the amount of the Company’s net income. These allocations also impact depreciation expense, amortization expense and gains or losses recorded on future sales of properties. | ||||
Reportable Segments | ' | |||
Reportable Segments | ||||
ASC 280, Segment Reporting, establishes standards for reporting financial and descriptive information about an enterprise’s reportable segments. The Company has one reportable segment, income-producing retail properties, which consists of activities related to investing in real estate. The retail properties are geographically diversified throughout the United States, and the Company evaluates operating performance on an overall portfolio level. | ||||
Investments in Real Estate | ' | |||
Investments in Real Estate | ||||
Real property is recorded at estimated fair value at time of acquisition with subsequent additions at cost, less accumulated depreciation and amortization. Costs include those related to acquisition, development and construction, including tenant improvements, interest incurred during development, costs of predevelopment and certain direct and indirect costs of development. Costs related to business combinations are expensed as incurred, and are included in transaction expense in the Company’s condensed consolidated statements of operations. | ||||
Depreciation and amortization is computed using a straight-line method over the estimated useful lives of the assets as follows: | ||||
Years | ||||
Buildings and improvements | 5 - 48 years | |||
Exterior improvements | 10 - 20 years | |||
Equipment and fixtures | 5 - 10 years | |||
Tenant improvement costs recorded as capital assets are depreciated over the shorter of (1) the tenant’s remaining lease term or (2) the life of the improvement. | ||||
Expenditures for ordinary maintenance and repairs are expensed to operations as they are incurred. Significant renovations and improvements that improve or extend the useful lives of assets are capitalized. | ||||
Impairment of Long-lived Assets | ' | |||
Impairment of Long-lived Assets | ||||
The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its investments in real estate and related intangible assets may not be recoverable. When indicators of potential impairment suggest that the carrying value of real estate and related intangible assets may not be recoverable, the Company assesses the recoverability by estimating whether the Company will recover the carrying value of the real estate and related intangible assets through its undiscounted future cash flows and its eventual disposition. If, based on this analysis, the Company does not believe that it will be able to recover the carrying value of the real estate and related intangible assets and liabilities, the Company would record an impairment loss to the extent that the carrying value exceeds the estimated fair value of the investments in real estate and related intangible assets. Key inputs that the Company estimates in this analysis include projected rental rates, capital expenditures and property sale capitalization rates. The Company did not record any impairment losses on its investments in real estate and related intangible assets during the three and nine months ended September 30, 2013 and 2012. | ||||
Assets Held-for-Sale and Discontinued Operations | ' | |||
Assets Held-for-Sale and Discontinued Operations | ||||
When certain criteria are met, long-lived assets are classified as held-for-sale and are reported at the lower of their carrying value or their fair value less costs to sell and are no longer depreciated. Discontinued operations is a component of an entity that has either been disposed of or is deemed to be held-for-sale and (i) the operations and cash flows of the component have been or will be eliminated from ongoing operations as a result of the disposal transaction and (ii) the entity will not have any significant continuing involvement in the operations of the component after the disposal transaction. | ||||
Fair Value Measurements | ' | |||
Fair Value Measurements | ||||
Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other financial instruments and balances at fair value on a non-recurring basis (e.g., carrying value of impaired real estate loans receivable and long-lived assets). Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories: | ||||
• Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; | ||||
• Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and | ||||
• Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable. | ||||
When available, the Company utilizes quoted market prices or other observable inputs (Level 2 inputs), such as interest rates or yield curves, from independent third-party sources to determine fair value and classify such items in Level 1 or Level 2. In instances where the market for a financial instrument is not active, regardless of the availability of a nonbinding quoted market price, observable inputs might not be relevant and could require the Company to use significant judgment to derive a fair value measurement. Additionally, in an inactive market, a market price quoted from an independent third party may rely more on models with inputs based on information available only to that independent third party. When the Company determines the market for an asset owned by it to be illiquid or when market transactions for similar instruments do not appear orderly, the Company uses several valuation sources (including internal valuations, discounted cash flow analysis and quoted market prices) and establishes a fair value by assigning weights to the various valuation sources. Additionally, when determining the fair value of liabilities in circumstances in which a quoted price in an active market for an identical liability is not available, the Company measures fair value using (i) a valuation technique that uses the quoted price of the identical liability when traded as an asset or quoted prices for similar liabilities when traded as assets or (ii) another a present value technique that considers the future cash flows based on contractual obligations discounted by an observed or estimated market rates of comparable liabilities. The use of contractual cash flows with regard to amount and timing significantly reduces the judgment applied in arriving at fair value. | ||||
Changes in assumptions or estimation methodologies can have a material effect on these estimated fair values. In this regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, may not be realized in an immediate settlement of the instrument. | ||||
The Company considers the following factors to be indicators of an inactive market: (1) there are few recent transactions, (2) price quotations are not based on current information, (3) price quotations vary substantially either over time or among market makers (for example, some brokered markets), (4) indexes that previously were highly correlated with the fair values of the asset or liability are demonstrably uncorrelated with recent indications of fair value for that asset or liability, (5) there is a significant increase in implied liquidity risk premiums, yields, or performance indicators (such as delinquency rates or loss severities) for observed transactions or quoted prices when compared with the Company’s estimate of expected cash flows, considering all available market data about credit and other nonperformance risk for the asset or liability, (6) there is a wide bid-ask spread or significant increase in the bid-ask spread, (7) there is a significant decline or absence of a market for new issuances (that is, a primary market) for the asset or liability or similar assets or liabilities, and (8) little information is released publicly (for example, a principal-to-principal market). | ||||
The Company considers the following factors to be indicators of non-orderly transactions: (1) there was not adequate exposure to the market for a period before the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities under current market conditions, (2) there was a usual and customary marketing period, but the seller marketed the asset or liability to a single market participant, (3) the seller is in or near bankruptcy or receivership (that is, distressed), or the seller was required to sell to meet regulatory or legal requirements (that is, forced), and (4) the transaction price is an outlier when compared with other recent transactions for the same or similar assets or liabilities. | ||||
Deferred Financing Costs | ' | |||
Deferred Financing Costs | ||||
Deferred financing costs represent commitment fees, loan fees, legal fees and other third-party costs associated with obtaining financing. These costs are amortized over the terms of the respective financing agreements using the straight-line method which approximates the effective interest method. Unamortized deferred financing costs are expensed when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financings that do not close are expensed in the period in which it is determined that the financing will not close. | ||||
Income Taxes | ' | |||
Income Taxes | ||||
The Company has elected to be taxed as a REIT under the Internal Revenue Code. To qualify as a REIT, the Company must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of the Company’s annual REIT taxable income to stockholders (which is computed without regard to the dividends-paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). As a REIT, the Company generally will not be subject to federal income tax on income that it distributes as dividends to its stockholders. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income tax on its taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four taxable years following the year during which qualification is lost, unless the Internal Revenue Service grants the Company relief under certain statutory provisions. Such an event could materially and adversely affect the Company’s net income and net cash available for distribution to stockholders. However, the Company believes that it is organized and operates in such a manner as to qualify for treatment as a REIT. The Company may also be subject to certain state or local income taxes, or franchise taxes. | ||||
The Company evaluates tax positions taken in the financial statements under the interpretation for accounting for uncertainty in income taxes. As a result of this evaluation, the Company may recognize a tax benefit from an uncertain tax position only if it is “more-likely-than-not” that the tax position will be sustained on examination by taxing authorities. | ||||
When necessary, deferred income taxes are recognized in certain taxable entities. Deferred income tax is generally a function of the period’s temporary differences (items that are treated differently for tax purposes than for financial reporting purposes). A valuation allowance for deferred income tax assets is provided if all or some portion of the deferred income tax asset may not be realized. Any increase or decrease in the valuation allowance is generally included in deferred income tax expense. | ||||
The Company’s tax returns remain subject to examination and consequently, the taxability of the distributions is subject to change. | ||||
Earnings Per Share | ' | |||
Earnings Per Share | ||||
Basic earnings per share (“EPS”) is computed by dividing net income (loss) applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed after adjusting the basic EPS computation for the effect of potentially dilutive securities outstanding during the period. The effect of non-vested shares, if dilutive, is computed using the treasury stock method. The Company accounts for unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) as participating securities, which are included in the computation of earnings per share pursuant to the two-class method. The Company’s excess of distributions over earnings related to participating securities are shown as a reduction in income (loss) applicable to common stockholders in the Company’s computation of EPS. | ||||
Reclassification | ' | |||
Reclassification | ||||
Assets sold or held-for-sale have been reclassified on the condensed consolidated balance sheets and the related operating results reclassified from continuing to discontinued operations on the condensed consolidated statements of operations and condensed consolidated statements of cash flows. Certain amounts from the prior year have been reclassified to conform to current period presentation. | ||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended | |||
Sep. 30, 2013 | ||||
Summary Of Significant Accounting Policies [Abstract] | ' | |||
Depreciation and amortization | ' | |||
Depreciation and amortization is computed using a straight-line method over the estimated useful lives of the assets as follows: | ||||
Years | ||||
Buildings and improvements | 5 - 48 years | |||
Exterior improvements | 10 - 20 years | |||
Equipment and fixtures | 5 - 10 years | |||
DISCONTINUED_OPERATIONS_AND_AS1
DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Dispositions and Discontinued Operations [Abstract] | ' | |||||||||||||
Income and expense relating to discontinued operations | ' | |||||||||||||
The components of income and expense relating to discontinued operations for the three and nine months ended September 30, 2013 and 2012, are shown below. | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Revenues from rental property | $ | 1,526,000 | $ | 2,059,000 | $ | 7,080,000 | $ | 4,981,000 | ||||||
Rental property expenses | -759,000 | -913,000 | -3,401,000 | -1,903,000 | ||||||||||
Depreciation and amortization | -571,000 | -948,000 | -2,744,000 | -1,953,000 | ||||||||||
Transaction expenses | - | -520,000 | -78,000 | -846,000 | ||||||||||
Interest | -492,000 | -239,000 | -3,223,000 | -1,592,000 | ||||||||||
Operating loss from discontinued operations | -296,000 | -561,000 | -2,366,000 | -1,313,000 | ||||||||||
Gain (loss) on impairment and disposal of real estate | -161,000 | 118,000 | 4,566,000 | 118,000 | ||||||||||
Loss on extinguishment of debt | -5,394,000 | - | -5,394,000 | - | ||||||||||
Loss from discontinued operations | $ | -5,851,000 | $ | -443,000 | $ | -3,194,000 | $ | -1,195,000 | ||||||
Assets and liabilities held for sale and of discontinued operations | ' | |||||||||||||
The major classes of assets and liabilities related to assets held for sale included in the condensed consolidated balance sheets are as follows: | ||||||||||||||
September 30, | December 31, | |||||||||||||
2013 | 2012 | |||||||||||||
ASSETS | ||||||||||||||
Investments in real estate | ||||||||||||||
Land | $ | 11,563,000 | $ | 10,760,000 | ||||||||||
Building and improvements | 23,488,000 | 13,937,000 | ||||||||||||
Tenant improvements | 1,572,000 | 689,000 | ||||||||||||
36,623,000 | 25,386,000 | |||||||||||||
Accumulated depreciation | -2,227,000 | -2,324,000 | ||||||||||||
Investments in real estate, net | 34,396,000 | 23,062,000 | ||||||||||||
Restricted cash | - | 358,000 | ||||||||||||
Prepaid expenses and other assets, net | 18,000 | 37,000 | ||||||||||||
Tenant receivables | 148,000 | 261,000 | ||||||||||||
Lease intangibles, net | 6,238,000 | 1,955,000 | ||||||||||||
Deferred financing fees, net | - | 98,000 | ||||||||||||
Assets held for sale | $ | 40,800,000 | $ | 25,771,000 | ||||||||||
LIABILITIES | ||||||||||||||
Notes payable | $ | 36,455,000 | $ | 19,571,000 | ||||||||||
Accounts payable and accrued expenses | - | 247,000 | ||||||||||||
Other liabilities | 331,000 | 235,000 | ||||||||||||
Below market lease intangibles, net | 3,930,000 | 1,224,000 | ||||||||||||
Liabilities related to assets held for sale | $ | 40,716,000 | $ | 21,277,000 | ||||||||||
FUTURE_MINIMUM_RENTAL_INCOME_T
FUTURE MINIMUM RENTAL INCOME (Tables) | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Minimum Rents [Abstract] | ' | ||||
Schedule of Future Minimum Rental Payments For Operating Leases | ' | ||||
As of September 30, 2013, the future minimum rental income from the Company’s properties under non-cancelable operating leases was as follows: | |||||
October 1 through December 31, 2013 | $ | 3,903,000 | |||
2014 | 15,420,000 | ||||
2015 | 14,231,000 | ||||
2016 | 13,013,000 | ||||
2017 | 11,789,000 | ||||
Thereafter | 66,832,000 | ||||
$ | 125,188,000 | ||||
ACQUIRED_LEASE_INTANGIBLES_AND1
ACQUIRED LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Intangibles [Abstract] | ' | |||||||||||||
Lease intangibles and below-market lease liabilities | ' | |||||||||||||
As of September 30, 2013 and December 31, 2012, the Company’s acquired lease intangibles and below-market lease liabilities were as follows: | ||||||||||||||
Lease Intangibles | Below - Market Lease Liabilities | |||||||||||||
September 30, | December 31, | September 30, | December 31, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Cost | $ | 23,570,000 | $ | 39,853,000 | $ | -7,983,000 | $ | -12,764,000 | ||||||
Accumulated amortization | -6,281,000 | -6,118,000 | 1,069,000 | 936,000 | ||||||||||
$ | 17,289,000 | $ | 33,735,000 | $ | -6,914,000 | $ | -11,828,000 | |||||||
Increases (decreases) in net income as result of amortization of lease intangibles | ' | |||||||||||||
Increases (decreases) in net income as a result of amortization of the Company’s lease intangibles and below-market lease liabilities for the three and nine months ended September 30, 2013 and 2012 were as follows: | ||||||||||||||
Lease Intangibles | Below - Market Lease Liabilities | |||||||||||||
For the Three Months Ended Sept. 30, | For the Three Months Ended Sept. 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Amortization and accelerated amortization | $ | -943,000 | $ | -1,020,000 | $ | 229,000 | $ | 175,000 | ||||||
For the Nine Months Ended Sept. 30, | For the Nine Months Ended Sept. 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Amortization and accelerated amortization | $ | -2,787,000 | $ | -2,696,000 | $ | 560,000 | $ | 380,000 | ||||||
Scheduled amortization of lease intangibles and below-market lease liabilities | ' | |||||||||||||
The scheduled amortization of lease intangibles and below-market lease liabilities as of September 30, 2013 was as follows: | ||||||||||||||
Acquired | Below-market | |||||||||||||
Lease | Lease | |||||||||||||
Intangibles | Liabilities | |||||||||||||
October 1 through December 31, 2013 | $ | 813,000 | $ | -158,000 | ||||||||||
2014 | 2,712,000 | -587,000 | ||||||||||||
2015 | 2,168,000 | -500,000 | ||||||||||||
2016 | 1,820,000 | -442,000 | ||||||||||||
2017 | 1,589,000 | -385,000 | ||||||||||||
Thereafter | 8,187,000 | -4,842,000 | ||||||||||||
$ | 17,289,000 | $ | -6,914,000 | |||||||||||
NOTES_PAYABLE_Tables
NOTES PAYABLE (Tables) | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Debt [Abstract] | ' | |||||||||
Schedule Of Debt | ' | |||||||||
As of September 30, 2013 and December 31, 2012, the Company’s notes payable, excluding notes payable that are classified under liabilities related to assets held for sale (which includes the entire balance of the KeyBank Credit Facility), consisted of the following: | ||||||||||
Principal Balance | Interest Rates At | |||||||||
30-Sep-13 | 31-Dec-12 | 30-Sep-13 | ||||||||
KeyBank Credit Facility | $ | - | $ | 38,438,000 | n/a | |||||
Secured term loans | 58,164,000 | 60,706,000 | 5.10% - 10.00% | |||||||
Mortgage loans | 60,661,000 | 90,183,000 | 4.50% - 15.00% | |||||||
Unsecured loans | 1,750,000 | 1,250,000 | 7.00% - 8.00% | |||||||
Total | $ | 120,575,000 | $ | 190,577,000 | ||||||
Schedule of maturities for notes payable outstanding | ' | |||||||||
The following is a schedule of principal maturities for all of the Company’s notes payable outstanding as of September 30, 2013: | ||||||||||
Amount | ||||||||||
October 1 through December 31, 2013 | $ | 422,000 | ||||||||
2014 | 7,574,000 | |||||||||
2015 | 3,245,000 | |||||||||
2016 | 18,594,000 | |||||||||
2017 | 61,825,000 | |||||||||
Thereafter | 28,915,000 | |||||||||
$ | 120,575,000 | |||||||||
FAIR_VALUE_DISCLOSURES_Tables
FAIR VALUE DISCLOSURES (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Fair Value Disclosures [Abstract] | ' | |||||||
Notes Payable | ' | |||||||
The following table provides the carrying values and fair values of the Company’s notes payable related to continuing operations as of September 30, 2013 and December 31, 2012: | ||||||||
At September 30, 2013 | Carrying Value (1) | Fair Value (2) | ||||||
Notes Payable | $ | 120,575,000 | $ | 121,188,000 | ||||
At December 31, 2012 | Carrying Value (1) | Fair Value (2) | ||||||
Notes Payable | $ | 190,577,000 | $ | 191,319,000 | ||||
(1) The carrying value of the Company’s notes payable represents outstanding principal as of September 30, 2013 and December 31, 2012. | ||||||||
(2) The estimated fair value of the notes payable is based upon indicative market prices of the Company’s notes payable based on prevailing market interest rates. | ||||||||
EQUITY_Tables
EQUITY (Tables) | 9 Months Ended | ||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||
Equity [Abstract] | ' | ||||||||||||||||||||||
Distributions declared and paid | ' | ||||||||||||||||||||||
The following table sets forth the distributions declared and paid to the Company’s common stockholders and non-controlling Common Unit holders for the nine months ended September 30, 2013 and the year ended December 31, 2012, respectively: | |||||||||||||||||||||||
Distributions | Monthly | Distributions | Cash | Cash | Reinvested | Total Common | |||||||||||||||||
Declared to | Distributions | Declared to | Distribution | Distribution | Distributions | Stockholder | |||||||||||||||||
Common | Declared Per | Common Unit | Payments to | Payments to | (DRIP shares | Distributions | |||||||||||||||||
Stockholders (1) | Share (1) | Holders (1)/(3) | Common | Common Unit | issuance) (2) | Paid and DRIP | |||||||||||||||||
Stockholders (2) | Holders (2) | Shares Issued | |||||||||||||||||||||
First Quarter 2013 (4) | $ | 636,000 | $ | 0.05833 | $ | 25,000 | $ | 390,000 | $ | 25,000 | $ | 246,000 | $ | 636,000 | |||||||||
Second Quarter 2013 | - | N/A | - | - | - | - | - | ||||||||||||||||
Third Quarter 2013 | - | N/A | - | - | - | - | - | ||||||||||||||||
$ | 636,000 | $ | 25,000 | $ | 390,000 | $ | 25,000 | $ | 246,000 | $ | 636,000 | ||||||||||||
Cash | Cash | Total Common | |||||||||||||||||||||
Distributions | Monthly | Distributions | Distribution | Distribution | Reinvested | Stock holder | |||||||||||||||||
Declared to | Distributions | Declared to | Payments to | Payments to | Distributions | Distributions | |||||||||||||||||
Common | Declared Per | Common Unit | Common | Common Unit | (DRIP shares | Paid and DRIP | |||||||||||||||||
Stockholders (1) | Share (1) | Holders (1)/ (3 ) | Stock holders (2 ) | Holders (2) | issuance) (2) | Shares Issued | |||||||||||||||||
First Quarter 2012 | $ | 1,183,000 | $ | 0.05833 | $ | 57,000 | $ | 721,000 | $ | 52,000 | $ | 406,000 | $ | 1,127,000 | |||||||||
Second Quarter 2012 | 1,637,000 | $ | 0.05833 | 74,000 | 866,000 | 71,000 | 570,000 | 1,436,000 | |||||||||||||||
Third Quarter 2012 | 1,874,000 | $ | 0.05833 | 76,000 | 1,015,000 | 76,000 | 709,000 | 1,724,000 | |||||||||||||||
Fourth Quarter 2012 (4 ) | 1,259,000 | $ | 0.05833 | 51,000 | 1,274,000 | 76,000 | 607,000 | 1,881,000 | |||||||||||||||
$ | 5,953,000 | $ | 258,000 | $ | 3,876,000 | $ | 275,000 | $ | 2,292,000 | $ | 6,168,000 | ||||||||||||
-1 | Distributions were generally declared monthly and calculated at a monthly distribution rate of $0.05833 per share of common stock and Common Units. | ||||||||||||||||||||||
-2 | Cash distributions were paid, and shares issued pursuant to the DRIP, generally on a monthly basis. Cash distributions for all record dates of a given month were generally paid approximately 15 days following month end. | ||||||||||||||||||||||
-3 | None of the holders of Common Units participated in the DRIP, which was terminated effective February 7, 2013. | ||||||||||||||||||||||
-4 | Distributions for the month of December 2012 in the aggregate amount of $636,000 were declared on January 18, 2013, of which $390,000 was paid in cash and $246,000 was paid through the DRIP in the form of additional shares of common stock. Total dividends paid to holders of Common Units for the same period were $25,000. | ||||||||||||||||||||||
EARNINGS_PER_SHARE_Tables
EARNINGS PER SHARE (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||
Company's basic and diluted (loss)earnings per share | ' | |||||||||||||
The following table sets forth the computation of the Company’s basic and diluted loss per share: | ||||||||||||||
For the Three Months Ended | For the Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Numerator - basic and diluted | ||||||||||||||
Net loss from continuing operations | $ | -2,331,000 | $ | -2,709,000 | $ | -7,587,000 | $ | -10,440,000 | ||||||
Non-controlling interests' share in continuing operations | 122,000 | 105,000 | 321,000 | 464,000 | ||||||||||
Distributions paid on unvested restricted shares | - | -2,000 | - | -5,000 | ||||||||||
Net loss from continuing operations applicable to common shares | -2,209,000 | -2,606,000 | -7,266,000 | -9,981,000 | ||||||||||
Discontinued operations | -5,851,000 | -443,000 | -3,194,000 | -1,195,000 | ||||||||||
Non-controlling interests' share in discontinued operations | 261,000 | 17,000 | 160,000 | 53,000 | ||||||||||
Net loss applicable to common shares | $ | -7,799,000 | $ | -3,032,000 | $ | -10,300,000 | $ | -11,123,000 | ||||||
Denominator - basic and diluted | ||||||||||||||
Basic weighted average common shares | 10,967,963 | 10,616,610 | 10,964,563 | 8,956,275 | ||||||||||
Effect of dilutive securities | ||||||||||||||
Unvested common shares | - | - | - | - | ||||||||||
Common units (1) | - | - | - | - | ||||||||||
Diluted weighted average common shares | 10,967,963 | 10,616,610 | 10,964,563 | 8,956,275 | ||||||||||
Basic Earnings per Common Share | ||||||||||||||
Net loss from continuing operations applicable to common shares | $ | -0.2 | $ | -0.25 | $ | -0.66 | $ | -1.11 | ||||||
Discontinued operations | -0.51 | -0.04 | -0.28 | -0.13 | ||||||||||
Net loss applicable to common shares | $ | -0.71 | $ | -0.29 | $ | -0.94 | $ | -1.24 | ||||||
Diluted Earnings per Common Share | ||||||||||||||
Net loss from continuing operations applicable to common shares | $ | -0.2 | $ | -0.25 | $ | -0.66 | $ | -1.11 | ||||||
Discontinued operations | -0.51 | -0.04 | -0.28 | -0.13 | ||||||||||
Net loss applicable to common shares | $ | -0.71 | $ | -0.29 | $ | -0.94 | $ | -1.24 | ||||||
(1) Number of convertible Common Units pursuant to the redemption rights outlined in the Company's registration statement on Form S-11. Anti-dilutive for all periods presented. | ||||||||||||||
INCENTIVE_AWARD_PLAN_Tables
INCENTIVE AWARD PLAN (Tables) | 9 Months Ended | ||||||
Sep. 30, 2013 | |||||||
Incentive Award Plan [Abstract] | ' | ||||||
Granted and vested restricted stock | ' | ||||||
A summary of the changes in restricted stock grants for the nine months ended September 30, 2013 is presented below: | |||||||
Unvested | Weighted | ||||||
Restricted | Average | ||||||
Stock (No. | Grant Date | ||||||
of Shares) | Fair Value | ||||||
Balance - December 31, 2012 | 10,000 | $ | 9 | ||||
Granted | - | - | |||||
Vested | -5,000 | - | |||||
Balance - September 30, 2013 | 5,000 | 9 | |||||
RELATED_PARTY_TRANSACTIONS_Tab
RELATED PARTY TRANSACTIONS (Tables) | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
Related Party Transactions [Abstract] | ' | |||||||||||||||||||
Summarized below are the related-party transactions | ' | |||||||||||||||||||
Summarized separately below are the Prior Advisor and Advisor related-party costs incurred by the Company for the three and nine months ended September 30, 2013 and 2012, respectively, and payable as of September 30, 2013 and December 31, 2012: | ||||||||||||||||||||
Prior Advisor Fees | Incurred | Incurred | Payable as of | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | September | December 31, | |||||||||||||||||
Expensed | 2013 | 2012 | 2013 | 2012 | 30, 2013 | 2012 | ||||||||||||||
Asset management fees | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||
Reimbursement of operating expenses | - | 315,000 | 73,000 | 736,000 | - | 209,000 | ||||||||||||||
Acquisition fees | - | - | 13,000 | 2,595,000 | - | 475,000 | ||||||||||||||
Property management fees | 171,000 | 344,000 | 862,000 | 898,000 | 161,000 | 48,000 | ||||||||||||||
Guaranty fees | 5,000 | 4,000 | 24,000 | 41,000 | 14,000 | 10,000 | ||||||||||||||
Leasing fees | - | 103,000 | - | 108,000 | - | - | ||||||||||||||
Disposition fees | - | 25,000 | 924,000 | 130,000 | - | - | ||||||||||||||
Interest expense on notes payable | - | - | - | 20,000 | - | - | ||||||||||||||
$ | 176,000 | $ | 791,000 | $ | 1,896,000 | $ | 4,528,000 | $ | 175,000 | $ | 742,000 | |||||||||
Capitalized | ||||||||||||||||||||
Financing coordination fee | $ | - | $ | - | $ | - | $ | 811,000 | $ | - | $ | - | ||||||||
Leasing commission fees | - | - | 143,000 | - | 19,000 | - | ||||||||||||||
$ | - | $ | - | $ | 143,000 | $ | 811,000 | $ | 19,000 | $ | - | |||||||||
Additional Paid In Capital | ||||||||||||||||||||
Selling commissions | $ | - | $ | 122,000 | $ | 32,000 | $ | 2,978,000 | $ | - | $ | 9,000 | ||||||||
Dealer manager fees | - | 66,000 | 15,000 | 1,364,000 | - | 4,000 | ||||||||||||||
Organization and offering costs | - | 782,000 | 7,000 | 1,265,000 | - | - | ||||||||||||||
$ | - | $ | 970,000 | $ | 54,000 | $ | 5,607,000 | $ | - | $ | 13,000 | |||||||||
Advisor Fees | Incurred | Incurred | Payable as of | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | September | December 31, | |||||||||||||||||
Expensed | 2013 | 2012 | 2013 | 2012 | 30, 2013 | 2012 | ||||||||||||||
Consulting and accounting fees | $ | 41,000 | $ | - | $ | 446,000 | $ | - | $ | 26,000 | $ | - | ||||||||
Asset management fees | 211,000 | - | 211,000 | - | 211,000 | - | ||||||||||||||
Reimbursement of operating expenses | 14,000 | - | 30,000 | - | - | - | ||||||||||||||
Property management fees | 140,000 | - | 140,000 | - | 140,000 | - | ||||||||||||||
Interest expense on notes payable | 1,000 | - | 1,000 | - | 1,000 | - | ||||||||||||||
$ | 407,000 | $ | - | $ | 828,000 | $ | - | $ | 378,000 | $ | - | |||||||||
Selling commissions and dealer manager fees as an offset to additional paid-in capital incurred | ' | |||||||||||||||||||
The Company incurred selling commissions and dealer manager fees during the following periods: | ||||||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | Inception Through | ||||||||||||||||||
September 30, | September 30, | September 30, | ||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | ||||||||||||||||
Selling Commissions | $ | - | $ | 122,000 | $ | 32,000 | $ | 2,978,000 | $ | 6,925,000 | ||||||||||
Dealer Manager Fee | - | 66,000 | 15,000 | 1,364,000 | 3,090,000 | |||||||||||||||
$ | - | $ | 188,000 | $ | 47,000 | $ | 4,342,000 | $ | 10,015,000 | |||||||||||
ORGANIZATION_AND_BUSINESS_Deta
ORGANIZATION AND BUSINESS (Details Textual) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 60 Months Ended | 9 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 5 Months Ended | 0 Months Ended | 12 Months Ended | ||||||||||||||
Feb. 07, 2013 | Aug. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Jun. 30, 2013 | Dec. 31, 2011 | Nov. 04, 2008 | Sep. 30, 2013 | Sep. 30, 2013 | Aug. 07, 2012 | 26-May-11 | Mar. 12, 2012 | Jun. 15, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Apr. 30, 2013 | Dec. 31, 2012 | Nov. 04, 2008 | Feb. 07, 2013 | Dec. 31, 2012 | |
Subsequent Event [Member] | Advisory Agreement [Member] | Advisory Agreement [Member] | Pinehurst Square East [Member] | Turkey Creek [Member] | Followon Public Offering [Member] | Advisor [Member] | Advisor [Member] | Delaware Limited Liability Company [Member] | TNP Strategic Retail Advisor LLC [Member] | TNP Strategic Retail OP Holdings LLC [Member] | Glenborough [Member] | DRIP [Member] | DRIP [Member] | DRIP [Member] | DRIP [Member] | ||||||||||||
Consulting Agreement [Member] | IPO [Member] | IPO [Member] | |||||||||||||||||||||||||
Organization and Business (Additional Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued under plan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 365,242 | 10,526,316 | ' | ' |
Common stock, primary offering price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $10 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $9.50 | ' | ' |
Minimum Cash Reserve To Be Maintained | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $4,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, $0.01 par value; 400,000,000 shares authorized, 10,969,714 issued and outstanding at March 31, 2013, 10,893,227 issued and outstanding at December 31, 2012 | ' | ' | 110,000 | ' | 110,000 | ' | 109,000 | 110,000 | ' | ' | ' | ' | ' | ' | 2,587,000 | 1,371,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Investment of advisor in OP | ' | ' | 0 | 188,000 | 47,000 | 4,342,000 | ' | 10,015,000 | ' | ' | ' | ' | 1,000 | ' | ' | ' | ' | ' | ' | ' | 1,000 | 1,000 | ' | ' | ' | ' | ' |
Organization and Business (Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum common stock to the public from primary offering | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of leased space of retail properties | ' | ' | 87.00% | ' | 87.00% | ' | ' | 87.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Partnership Interest Ownership Percentage | ' | ' | ' | ' | 100.00% | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.01% | 0.01% | 96.20% | ' | 0.01% | ' | ' | ' | ' | ' |
Common Stock Par Or Stated Per Unit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $9 | $9.50 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase In Monthly Payment Of Consulting Fee | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 90,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Contribution Period Limit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '60 years | ' | ' | ' | ' | ' |
Limited Partners Capital Account, Units Issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 287,472 | 144,324 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Rebated Consulting Fee | ' | 150,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock, Shares Subscribed but Unissued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,969,714 | ' |
Common Stock Share Issued Net Of Share Redemption | ' | ' | ' | ' | ' | ' | 10,893,227 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock under DRIP, shares | 391,182 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from issuance of common stock | ' | ' | ' | ' | 502,000 | 45,148,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 108,357,000 | 107,609,000 |
Consulting Fees Monthly Payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 75,000 | ' | ' | ' | ' |
Cash and cash equivalents | ' | ' | $1,390,000 | $2,881,000 | $1,390,000 | $2,881,000 | $1,707,000 | $1,390,000 | $492,000 | $2,052,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares To Be Registered | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 900,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Leased Space Of Retail Properties | ' | ' | ' | ' | 1,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 9 Months Ended |
Sep. 30, 2013 | |
Buildings and improvements [Member] | Maximum [Member] | ' |
Depreciation and amortization | ' |
Estimated useful lives of assets | '48 years |
Buildings and improvements [Member] | Minimum [Member] | ' |
Depreciation and amortization | ' |
Estimated useful lives of assets | '5 years |
Exterior improvements [Member] | Maximum [Member] | ' |
Depreciation and amortization | ' |
Estimated useful lives of assets | '20 years |
Exterior improvements [Member] | Minimum [Member] | ' |
Depreciation and amortization | ' |
Estimated useful lives of assets | '10 years |
Equipment and fixtures [Member] | Maximum [Member] | ' |
Depreciation and amortization | ' |
Estimated useful lives of assets | '10 years |
Equipment and fixtures [Member] | Minimum [Member] | ' |
Depreciation and amortization | ' |
Estimated useful lives of assets | '5 years |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) (USD $) | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
sqft | |||
Summary of Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Straight-line rent receivable | $1,498,000 | ' | $1,380,000 |
Acquisition price of property | ' | 103,400,000 | ' |
Acquisition expense | ' | 3,037,000 | ' |
Total percentage of Company's annual REIT taxable income to stockholders | 90.00% | ' | ' |
Rentable area based on Company's gross leasable area | 127,835 | ' | ' |
Value of rentable area based on Company's annual minimum rent | 832,000 | ' | ' |
Percentage of rentable area based on Company's gross leasable area | 7.00% | ' | ' |
Percentage of minimum value of rentable area based on company's annual minimum rent | 4.00% | ' | ' |
Advance Rent | 379,000 | ' | 651,000 |
Outstanding receivables | $107,000 | ' | ' |
Other Tenant [Member] | ' | ' | ' |
Summary of Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Percentage of minimum value of rentable area based on company's annual minimum rent | 5.00% | ' | ' |
DISCONTINUED_OPERATIONS_AND_AS2
DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Income and expense relating to discontinued operations | ' | ' | ' | ' |
Revenues from rental property | $1,526,000 | $2,059,000 | $7,080,000 | $4,981,000 |
Rental property expenses | -759,000 | -913,000 | -3,401,000 | -1,903,000 |
Depreciation and amortization | -571,000 | -948,000 | -2,744,000 | -1,953,000 |
Transaction expenses | 0 | -520,000 | -78,000 | -846,000 |
Interest | -492,000 | -239,000 | -3,223,000 | -1,592,000 |
Operating loss from discontinued operations | -296,000 | -561,000 | -2,366,000 | -1,313,000 |
Gain (loss) on impairment and disposal of real estate | -161,000 | 118,000 | 4,566,000 | 118,000 |
Loss on extinguishment of debt | -5,394,000 | 0 | -5,394,000 | 0 |
Loss from discontinued operations | ($5,851,000) | ($443,000) | ($3,194,000) | ($1,195,000) |
DISCONTINUED_OPERATIONS_AND_AS3
DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE (Details 1) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Investments in real estate | ' | ' |
Land | $49,546,000 | $61,449,000 |
Building and improvements | 115,218,000 | 161,703,000 |
Tenant improvements | 9,221,000 | 11,846,000 |
Investments in real estate, net | 173,985,000 | 234,998,000 |
Accumulated depreciation | -10,651,000 | -7,992,000 |
Investments in real estate, net | 163,334,000 | 227,006,000 |
Restricted cash | 4,440,000 | 4,283,000 |
Prepaid expenses and other assets, net | 1,813,000 | 1,187,000 |
Tenant receivables | 2,991,000 | 3,180,000 |
Lease intangibles, net | 17,289,000 | 33,735,000 |
Deferred financing fees, net | 2,349,000 | 3,527,000 |
Assets held for sale | 40,800,000 | 25,771,000 |
LIABILITIES | ' | ' |
Notes payable | 120,575,000 | 190,577,000 |
Accounts payable and accrued expenses | 3,015,000 | 5,592,000 |
Other liabilities | 3,282,000 | 3,303,000 |
Below market lease intangibles, net | 6,914,000 | 11,828,000 |
Liabilities related to assets held for sale | 40,716,000 | 21,277,000 |
Assets Held-for-sale [Member] | ' | ' |
Investments in real estate | ' | ' |
Land | 11,563,000 | 10,760,000 |
Building and improvements | 23,488,000 | 13,937,000 |
Tenant improvements | 1,572,000 | 689,000 |
Investments in real estate, net | 36,623,000 | 25,386,000 |
Accumulated depreciation | -2,227,000 | -2,324,000 |
Investments in real estate, net | 34,396,000 | 23,062,000 |
Restricted cash | 0 | 358,000 |
Prepaid expenses and other assets, net | 18,000 | 37,000 |
Tenant receivables | 148,000 | 261,000 |
Lease intangibles, net | 6,238,000 | 1,955,000 |
Deferred financing fees, net | 0 | 98,000 |
Assets held for sale | 40,800,000 | 25,771,000 |
LIABILITIES | ' | ' |
Notes payable | 36,455,000 | 19,571,000 |
Accounts payable and accrued expenses | 0 | 247,000 |
Other liabilities | 331,000 | 235,000 |
Below market lease intangibles, net | 3,930,000 | 1,224,000 |
Liabilities related to assets held for sale | $40,716,000 | $21,277,000 |
DISCONTINUED_OPERATIONS_AND_AS4
DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended |
Sep. 30, 2013 | Sep. 30, 2013 | Jan. 22, 2013 | Mar. 31, 2013 | |
Deed In Lieu [Member] | Deed In Lieu [Member] | Waianae Loan [Member] | Waianae Property [Member] | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' | ' | ' |
Proceeds from Sale of Land Held-for-use | ' | ' | $29,763,000 | $30,500,000 |
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax, Total | $5,394,000 | $5,394,000 | ' | ' |
FUTURE_MINIMUM_RENTAL_INCOME_D
FUTURE MINIMUM RENTAL INCOME (Details) (USD $) | Sep. 30, 2013 |
Schedule of future minimum rental payments for operating leases | ' |
October 1 through December 31, 2013 | $3,903,000 |
2014 | 15,420,000 |
2015 | 14,231,000 |
2016 | 13,013,000 |
2017 | 11,789,000 |
Thereafter | 66,832,000 |
Total Minimum Rent | $125,188,000 |
FUTURE_MINIMUM_RENTAL_INCOME_D1
FUTURE MINIMUM RENTAL INCOME (Details Textual) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | |
Description of Lessee Leasing Arrangements, Operating Leases | 'As of September 30, 2013, the leases at the Companys properties have remaining terms (excluding options to extend) of up to 21years with a weighted-average remaining term (excluding options to extend) of eight years. | ' |
Security Deposit | $379,000 | $651,000 |
ACQUIRED_LEASE_INTANGIBLES_AND2
ACQUIRED LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Lease intangibles and below-market lease liabilities | ' | ' |
Intangibles, Net | $17,289,000 | $33,735,000 |
Lease Intangibles [Member] | ' | ' |
Lease intangibles and below-market lease liabilities | ' | ' |
Cost | 23,570,000 | 39,853,000 |
Accumulated amortization | -6,281,000 | -6,118,000 |
Intangibles, Net | 17,289,000 | 33,735,000 |
Below Market Lease Liabilities [Member] | ' | ' |
Lease intangibles and below-market lease liabilities | ' | ' |
Cost | -7,983,000 | -12,764,000 |
Accumulated amortization | 1,069,000 | 936,000 |
Intangibles, Net | ($6,914,000) | ($11,828,000) |
ACQUIRED_LEASE_INTANGIBLES_AND3
ACQUIRED LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES (Details 1) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Lease Intangibles [Member] | ' | ' | ' | ' |
Increases (decreases) in net income as result of amortization of lease intangibles | ' | ' | ' | ' |
Amortization and accelerated amortization | ($943,000) | ($1,020,000) | ($2,787,000) | ($2,696,000) |
Below Market Leases Liability [Member] | ' | ' | ' | ' |
Increases (decreases) in net income as result of amortization of lease intangibles | ' | ' | ' | ' |
Amortization and accelerated amortization | $229,000 | $175,000 | $560,000 | $380,000 |
ACQUIRED_LEASE_INTANGIBLES_AND4
ACQUIRED LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES (Details 2) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Scheduled amortization of lease intangibles and below-market lease liabilities | ' | ' |
Intangibles, Net | $17,289,000 | $33,735,000 |
Lease Intangibles [Member] | ' | ' |
Scheduled amortization of lease intangibles and below-market lease liabilities | ' | ' |
October 1 through December 31, 2013 | 813,000 | ' |
2014 | 2,712,000 | ' |
2015 | 2,168,000 | ' |
2016 | 1,820,000 | ' |
2017 | 1,589,000 | ' |
Thereafter | 8,187,000 | ' |
Intangibles, Net | 17,289,000 | 33,735,000 |
Below Market Leases liabilities [Member] | ' | ' |
Scheduled amortization of lease intangibles and below-market lease liabilities | ' | ' |
October 1 through December 31, 2013 | -158,000 | ' |
2014 | -587,000 | ' |
2015 | -500,000 | ' |
2016 | -442,000 | ' |
2017 | -385,000 | ' |
Thereafter | -4,842,000 | ' |
Intangibles, Net | ($6,914,000) | ' |
NOTES_PAYABLE_Details
NOTES PAYABLE (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Debt | ' | ' |
Principal Balance | $120,575,000 | $190,577,000 |
Key Bank Credit Facility [Member] | ' | ' |
Debt | ' | ' |
Principal Balance | 0 | 38,438,000 |
Secured term loans [Member] | ' | ' |
Debt | ' | ' |
Principal Balance | 58,164,000 | 60,706,000 |
Secured term loans [Member] | Maximum [Member] | ' | ' |
Debt | ' | ' |
Interest Rate | 10.00% | ' |
Secured term loans [Member] | Minimum [Member] | ' | ' |
Debt | ' | ' |
Interest Rate | 5.10% | ' |
Mortgage loans [Member] | ' | ' |
Debt | ' | ' |
Principal Balance | 60,661,000 | 90,183,000 |
Mortgage loans [Member] | Maximum [Member] | ' | ' |
Debt | ' | ' |
Interest Rate | 15.00% | ' |
Mortgage loans [Member] | Minimum [Member] | ' | ' |
Debt | ' | ' |
Interest Rate | 4.50% | ' |
Unsecured loans [Member] | ' | ' |
Debt | ' | ' |
Principal Balance | $1,750,000 | $1,250,000 |
Unsecured loans [Member] | Maximum [Member] | ' | ' |
Debt | ' | ' |
Interest Rate | 8.00% | ' |
Unsecured loans [Member] | Minimum [Member] | ' | ' |
Debt | ' | ' |
Interest Rate | 7.00% | ' |
NOTES_PAYABLE_Details_1
NOTES PAYABLE (Details 1) (USD $) | Sep. 30, 2013 |
Schedule of maturities for notes payable outstanding | ' |
October 1 through December 31, 2013 | $422,000 |
2014 | 7,574,000 |
2015 | 3,245,000 |
2016 | 18,594,000 |
2017 | 61,825,000 |
Thereafter | 28,915,000 |
Total maturities for notes payable outstanding | $120,575,000 |
NOTES_PAYABLE_Details_Textual
NOTES PAYABLE (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 1 Months Ended | 9 Months Ended | ||||||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Jun. 13, 2012 | Feb. 01, 2013 | Jan. 02, 2013 | Jan. 14, 2013 | Dec. 01, 2012 | Nov. 09, 2012 | Nov. 09, 2012 | Jan. 22, 2013 | Sep. 30, 2013 | Dec. 17, 2010 | Dec. 17, 2010 | Dec. 17, 2010 | Sep. 30, 2013 | |
Deed In Lieu [Member] | Deed In Lieu [Member] | Lahaina Lender [Member] | Key Bank [Member] | Lahaina Gateway Shopping Center [Member] | Lahaina Gateway Shopping Center [Member] | Lahaina Gateway Shopping Center [Member] | Lahaina Gateway Shopping Center [Member] | Lahaina Gateway Shopping Center [Member] | Interest Rate Two [Member] | Waianae Loan [Member] | Tranche A Of Credit Facility [Member] | Tranche A Of Credit Facility [Member] | Tranche B Of Credit Facility [Member] | Revolving Credit Facility [Member] | Tranche A Commitments [Member] | ||||||
Lahaina Gateway Shopping Center [Member] | |||||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest Expense, Debt | $2,187,000 | $2,364,000 | $7,014,000 | $7,981,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of deferred financing costs | 287,000 | 261,000 | 716,000 | 1,725,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense payable | 1,163,000 | ' | 1,163,000 | ' | 1,097,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Initial maximum aggregate commitment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,000,000 | 10,000,000 | 35,000,000 | ' |
Aggregate Commitment Under Credit Facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 45,000,000 | ' | ' | ' | ' |
Credit facility amount outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 36,455,000 |
Percentage Of Forbearance Fees Paid To Total Amount Outstanding | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount Of Net Proceeds From Sale Of Assets Paid Towards Credit Facility Borrowing | ' | ' | 1,983,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds From Sale Of Land Held-For-Use | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 29,763,000 | ' | ' | ' | ' | ' |
Principal Balance | 120,575,000 | ' | 120,575,000 | ' | 190,577,000 | ' | ' | ' | 2,000,000 | ' | ' | ' | ' | 29,000,000 | ' | 19,717,000 | ' | ' | ' | ' | ' |
Disposition Fee | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 893,000 | ' | ' | ' | ' | ' |
Interest Rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9.48% | 11.43% | ' | ' | ' | ' | ' | ' |
Debt Instrument, Periodic Payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | 333,333 | 333,333 | 1,281,000 | 333,333 | ' | ' | ' | ' | ' | ' | ' | ' |
Prepayment Of Outstanding Principal Balance | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax, Total | ' | ' | ' | ' | ' | 5,394,000 | 5,394,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Assets Held For Sale | 40,800,000 | ' | 40,800,000 | ' | 25,771,000 | ' | ' | 34,070,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Carrying Value Of liabilities | ' | ' | ' | ' | ' | ' | ' | $28,676,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
FAIR_VALUE_DISCLOSURES_Details
FAIR VALUE DISCLOSURES (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | ||
Notes Payable | ' | ' | ||
Notes Payable, Carrying Value | $120,575,000 | [1] | $190,577,000 | [1] |
Notes Payable, Fair Value | $121,188,000 | [2] | $191,319,000 | [2] |
[1] | The carrying value of the Companybs notes payable represents outstanding principal as of September 30, 2013 and December 31, 2012. | |||
[2] | The estimated fair value of the notes payable is based upon indicative market prices of the Companybs notes payable based on prevailing market interest rates. |
EQUITY_Details
EQUITY (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||||||
Feb. 07, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | ||||||||||
Company's common stockholders and non-controlling Common Unit holders | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Distributions Declared to Common Stockholders | ' | $0 | [1] | $0 | [1] | $636,000 | [1],[2] | $1,259,000 | [1],[2] | $1,874,000 | [1] | $1,637,000 | [1] | $1,183,000 | [1] | $636,000 | [1] | ' | $5,953,000 | [1] |
Monthly Distributions Declared Per Share | ' | ' | ' | $0.06 | [1],[2] | $0.06 | [1],[2] | $0.06 | [1] | $0.06 | [1] | $0.06 | [1] | ' | ' | ' | ||||
Distributions Declared to Common Unit Holders | ' | 0 | [1],[3] | 0 | [1],[3] | 25,000 | [1],[2],[3] | 51,000 | [1],[2],[3] | 76,000 | [1],[3] | 74,000 | [1],[3] | 57,000 | [1],[3] | 25,000 | [1],[3] | ' | 258,000 | [1],[3] |
Cash Distributions Payments to Common Stockholders | ' | 0 | [4] | 0 | [4] | 390,000 | [2],[4] | 1,274,000 | [2],[4] | 1,015,000 | [4] | 866,000 | [4] | 721,000 | [4] | 390,000 | [4] | ' | 3,876,000 | [4] |
Cash Distributions Payments to Common Units Holders | ' | 0 | [4] | 0 | [4] | 25,000 | [2],[4] | 76,000 | [2],[4] | 76,000 | [4] | 71,000 | [4] | 52,000 | [4] | 25,000 | [4] | ' | 275,000 | [4] |
Reinvested Distributions (DRIP shares issuance) | 391,182 | 0 | [4] | 0 | [4] | 246,000 | [2],[4] | 607,000 | [2],[4] | 709,000 | [4] | 570,000 | [4] | 406,000 | [4] | 246,000 | [4] | 1,685,000 | 2,292,000 | [4] |
Total Common Stockholder Distributions Paid and DRIP Shares Issued | ' | $0 | $0 | $636,000 | [2] | $1,881,000 | [2] | $1,724,000 | $1,436,000 | $1,127,000 | $636,000 | ' | $6,168,000 | |||||||
[1] | Distributions were generally declared monthly and calculated at a monthly distribution rate of $0.05833 per share of common stock and Common Units. | |||||||||||||||||||
[2] | Distributions for the month of December 2012 in the aggregate amount of $636,000 were declared on January 18, 2013, of which $390,000 was paid in cash and $246,000 was paid through the Companybs DRIP in the form of additional shares of common stock. Total dividends paid to holders of Common Units for the same period were $25,000. | |||||||||||||||||||
[3] | None of the holders of Common Units participated in the Companybs DRIP, which was terminated effective February 7, 2013. | |||||||||||||||||||
[4] | Cash distributions were paid, and shares issued pursuant to the Companybs DRIP, generally on a monthly basis. Cash distributions for all record dates of a given month were generally paid approximately 15 days following month end. |
EQUITY_Details_Textual
EQUITY (Details Textual) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 60 Months Ended | 9 Months Ended | 9 Months Ended | 0 Months Ended | ||||||||||||||||||||||||
Feb. 07, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Jul. 09, 2013 | Sep. 30, 2013 | Jul. 09, 2013 | Jul. 09, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Oct. 16, 2008 | Feb. 07, 2013 | 26-May-11 | Mar. 12, 2012 | ||||||||||
TNP Strategic Retail OP Holdings LLC [Member] | TNP Strategic Retail OP Holdings LLC [Member] | T N P SR T Manager [Member] | Common Stock [Member] | Anthony W. Thompson [Member] | Sponsor [Member] | Sponsor [Member] | DRIP [Member] | Pinehurst Square East [Member] | Turkey Creek [Member] | |||||||||||||||||||||||
IPO [Member] | ||||||||||||||||||||||||||||||||
Termination Of Offering [Member] | ||||||||||||||||||||||||||||||||
Equity, Share Redemptions and Distributions [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Common stock shares sold in offering | ' | 10,969,714 | ' | ' | 10,893,227 | ' | ' | ' | 10,969,714 | ' | 10,893,227 | 10,969,714 | ' | ' | ' | ' | ' | 111,111 | 22,222 | 22,222 | 10,969,714 | 287,472 | 144,324 | |||||||||
Common stock, $0.01 par value; 400,000,000 shares authorized, 10,969,714 issued and outstanding at September 30, 2013, 10,893,227 issued and outstanding at December 31, 2012 | ' | $110,000 | ' | ' | $109,000 | ' | ' | ' | $110,000 | ' | $109,000 | $110,000 | ' | ' | ' | ' | ' | $1,000,000 | ' | $200,000 | ' | $2,587,000 | $1,371,079 | |||||||||
Common stock par value | ' | $0.01 | ' | ' | $0.01 | ' | ' | ' | $0.01 | ' | $0.01 | $0.01 | ' | ' | ' | ' | ' | ' | ' | ' | ' | $9 | $9.50 | |||||||||
Issuance of common stock under DRIP | 391,182 | 0 | [1] | 0 | [1] | 246,000 | [1],[2] | 607,000 | [1],[2] | 709,000 | [1] | 570,000 | [1] | 406,000 | [1] | 246,000 | [1] | 1,685,000 | 2,292,000 | [1] | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' |
Authority to issue shares of common stock | ' | 400,000,000 | ' | ' | 400,000,000 | ' | ' | ' | 400,000,000 | ' | 400,000,000 | 400,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Preferred stock, shares authorized | ' | 50,000,000 | ' | ' | 50,000,000 | ' | ' | ' | 50,000,000 | ' | 50,000,000 | 50,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Preferred stock par value | ' | $0.01 | ' | ' | $0.01 | ' | ' | ' | $0.01 | ' | $0.01 | $0.01 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Weighted average of the number of shares | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Share redemptions, shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 26,094 | ' | ' | ' | ' | ' | ' | |||||||||
Annual REIT taxable income | ' | ' | ' | ' | ' | ' | ' | ' | 90.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Monthly cash distribution rate | ' | ' | ' | ' | ' | ' | ' | ' | $0.06 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Period over which distribution made to stock holders | ' | ' | ' | ' | ' | ' | ' | ' | '15 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Common Stock registered and reserved | ' | 10,526,316 | ' | ' | ' | ' | ' | ' | 10,526,316 | ' | ' | 10,526,316 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Distributions reinvested | ' | ' | ' | ' | ' | ' | ' | ' | 25,940 | 177,303 | ' | ' | ' | ' | ' | ' | 390,000 | ' | ' | ' | ' | ' | ' | |||||||||
Dividends Payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 636,000 | ' | ' | ' | ' | ' | ' | |||||||||
Dividend Paid Total | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,000 | ' | ' | ' | ' | ' | ' | |||||||||
Proceeds from issuance of common stock | ' | ' | ' | ' | ' | ' | ' | ' | 502,000 | 45,148,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 108,357,000 | ' | ' | |||||||||
Related Party Transaction, Amounts Of Transaction | ' | 0 | ' | ' | ' | 188,000 | ' | ' | 47,000 | 4,342,000 | ' | 10,015,000 | ' | 1,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Partnership Interest Ownership Percentage | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | 100.00% | ' | ' | 0.01% | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Alternative Investments, Fair Value Disclosure | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,929,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 88.00% | 12.00% | ' | ' | ' | ' | ' | ' | ' | |||||||||
[1] | Cash distributions were paid, and shares issued pursuant to the Companybs DRIP, generally on a monthly basis. Cash distributions for all record dates of a given month were generally paid approximately 15 days following month end. | |||||||||||||||||||||||||||||||
[2] | Distributions for the month of December 2012 in the aggregate amount of $636,000 were declared on January 18, 2013, of which $390,000 was paid in cash and $246,000 was paid through the Companybs DRIP in the form of additional shares of common stock. Total dividends paid to holders of Common Units for the same period were $25,000. |
EARNINGS_PER_SHARE_Details
EARNINGS PER SHARE (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |||||
Numerator - basic and diluted | ' | ' | ' | ' | ||||
Net loss from continuing operations | ($2,331,000) | ($2,709,000) | ($7,587,000) | ($10,440,000) | ||||
Non-controlling interests' share in continuing operations | 122,000 | 105,000 | 321,000 | 464,000 | ||||
Distributions paid on unvested restricted shares | 0 | -2,000 | 0 | -5,000 | ||||
Net loss from continuing operations applicable to common shares | -2,209,000 | -2,606,000 | -7,266,000 | -9,981,000 | ||||
Discontinued operations | -5,851,000 | -443,000 | -3,194,000 | -1,195,000 | ||||
Non-controlling interests' share in discontinued operations | 261,000 | 17,000 | 160,000 | 53,000 | ||||
Net loss applicable to common shares | ($7,799,000) | ($3,032,000) | ($10,300,000) | ($11,123,000) | ||||
Denominator - basic and diluted | ' | ' | ' | ' | ||||
Basic weighted average common shares | 10,967,963 | 10,616,610 | 10,964,563 | 8,956,275 | ||||
Effect of dilutive securities | ' | ' | ' | ' | ||||
Unvested common shares | 0 | 0 | 0 | 0 | ||||
Common units (1) | 0 | [1] | 0 | [1] | 0 | [1] | 0 | [1] |
Diluted weighted average common shares | 10,967,963 | 10,616,610 | 10,964,563 | 8,956,275 | ||||
Basic Earnings per Common Share | ' | ' | ' | ' | ||||
Net loss from continuing operations applicable to common shares | ($0.20) | ($0.25) | ($0.66) | ($1.11) | ||||
Discontinued operations | ($0.51) | ($0.04) | ($0.28) | ($0.13) | ||||
Net loss applicable to common shares (In dollars per share) | ($0.71) | ($0.29) | ($0.94) | ($1.24) | ||||
Diluted Earnings per Common Share | ' | ' | ' | ' | ||||
Net loss from continuing operations applicable to common shares | ($0.20) | ($0.25) | ($0.66) | ($1.11) | ||||
Discontinued operations | ($0.51) | ($0.04) | ($0.28) | ($0.13) | ||||
Net loss applicable to common shares (In dollars per share) | ($0.71) | ($0.29) | ($0.94) | ($1.24) | ||||
[1] | Number of convertible Common Units pursuant to the redemption rights outlined in the Company's registration statement on Form S-11. Anti-dilutive for all periods presented in 2013. |
INCENTIVE_AWARD_PLAN_Details
INCENTIVE AWARD PLAN (Details) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Granted and unvested restricted stock | ' |
Unvested Restricted Stock, Opening balance | 10,000 |
Weighted Average Grant Date Fair Value, Opening balance | $9 |
Unvested Restricted Stock, Granted | 0 |
Weighted Average Grant Date Fair Value, Granted | $0 |
Unvested Restricted Stock, Vested | -5,000 |
Weighted Average Grant Date Fair Value, Vested | $0 |
Unvested Restricted Stock, Closing balance | 5,000 |
Weighted Average Grant Date Fair Value, Closing balance | $9 |
INCENTIVE_AWARD_PLAN_Details_T
INCENTIVE AWARD PLAN (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended | 1 Months Ended | |||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Nov. 30, 2009 | Nov. 30, 2009 | Jul. 07, 2009 | Nov. 30, 2009 | |
Initial Restricted Stock Grant [Member] | Restricted Stock Grant [Member] | Incentive Award Plan [Member] | Minimum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock registered and reserved | 10,526,316 | ' | 10,526,316 | ' | ' | ' | ' | 2,000,000 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | ' | ' | ' | ' | ' | 5,000 | 2,500 | ' | ' |
Proceeds from Issuance Initial Public Offering | ' | ' | ' | ' | ' | ' | ' | ' | $2,000,000 |
Stock-based compensation expense | 7,500 | 39,000 | 33,000 | 65,000 | ' | ' | ' | ' | ' |
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized | 25,000 | ' | 25,000 | ' | 60,000 | ' | ' | ' | ' |
Fair value of the nonvested shares of restricted common stock | $45,000 | ' | $45,000 | ' | $90,000 | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number, Beginning Balance | 5,000 | ' | 5,000 | ' | 10,000 | ' | ' | ' | ' |
Restricted Stock, Vested | ' | ' | -5,000 | ' | ' | ' | ' | ' | ' |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details) (USD $) | 3 Months Ended | 9 Months Ended | 60 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | |
Summarized below are the related-party transactions | ' | ' | ' | ' | ' | ' |
Related-party costs, Incurred | $0 | $188,000 | $47,000 | $4,342,000 | $10,015,000 | ' |
Expensed [Member] | ' | ' | ' | ' | ' | ' |
Summarized below are the related-party transactions | ' | ' | ' | ' | ' | ' |
Related-party costs, Incurred | 176,000 | 791,000 | 1,896,000 | 4,528,000 | ' | ' |
Related-party costs, Payable | 175,000 | ' | 175,000 | ' | 175,000 | 742,000 |
Asset management fees [Member] | ' | ' | ' | ' | ' | ' |
Summarized below are the related-party transactions | ' | ' | ' | ' | ' | ' |
Related-party costs, Incurred | 0 | 0 | 0 | 0 | ' | ' |
Related-party costs, Payable | 0 | ' | 0 | ' | 0 | 0 |
Reimbursement of operating expenses [Member] | ' | ' | ' | ' | ' | ' |
Summarized below are the related-party transactions | ' | ' | ' | ' | ' | ' |
Related-party costs, Incurred | 0 | 315,000 | 73,000 | 736,000 | ' | ' |
Related-party costs, Payable | 0 | ' | 0 | ' | 0 | 209,000 |
Acquisition Fees [Member] | ' | ' | ' | ' | ' | ' |
Summarized below are the related-party transactions | ' | ' | ' | ' | ' | ' |
Related-party costs, Incurred | 0 | 0 | 13,000 | 2,595,000 | ' | ' |
Related-party costs, Payable | 0 | ' | 0 | ' | 0 | 475,000 |
Property management fees [Member] | ' | ' | ' | ' | ' | ' |
Summarized below are the related-party transactions | ' | ' | ' | ' | ' | ' |
Related-party costs, Incurred | 171,000 | 344,000 | 862,000 | 898,000 | ' | ' |
Related-party costs, Payable | 161,000 | ' | 161,000 | ' | 161,000 | 48,000 |
Guaranty fees [Member] | ' | ' | ' | ' | ' | ' |
Summarized below are the related-party transactions | ' | ' | ' | ' | ' | ' |
Related-party costs, Incurred | 5,000 | 4,000 | 24,000 | 41,000 | ' | ' |
Related-party costs, Payable | 14,000 | ' | 14,000 | ' | 14,000 | 10,000 |
Leasing fees [Member] | ' | ' | ' | ' | ' | ' |
Summarized below are the related-party transactions | ' | ' | ' | ' | ' | ' |
Related-party costs, Incurred | 0 | 103,000 | 0 | 108,000 | ' | ' |
Related-party costs, Payable | 0 | ' | 0 | ' | 0 | 0 |
Disposition Fees [Member] | ' | ' | ' | ' | ' | ' |
Summarized below are the related-party transactions | ' | ' | ' | ' | ' | ' |
Related-party costs, Incurred | 0 | 25,000 | 924,000 | 130,000 | ' | ' |
Related-party costs, Payable | 0 | ' | 0 | ' | 0 | 0 |
Interest expense on notes payable [Member] | ' | ' | ' | ' | ' | ' |
Summarized below are the related-party transactions | ' | ' | ' | ' | ' | ' |
Related-party costs, Incurred | 0 | 0 | 0 | 20,000 | ' | ' |
Related-party costs, Payable | 0 | ' | 0 | ' | 0 | 0 |
Capitalized [Member] | ' | ' | ' | ' | ' | ' |
Summarized below are the related-party transactions | ' | ' | ' | ' | ' | ' |
Related-party costs, Incurred | 0 | 0 | 143,000 | 811,000 | ' | ' |
Related-party costs, Payable | 19,000 | ' | 19,000 | ' | 19,000 | 0 |
Financing coordination fees [Member] | ' | ' | ' | ' | ' | ' |
Summarized below are the related-party transactions | ' | ' | ' | ' | ' | ' |
Related-party costs, Incurred | 0 | 0 | 0 | 811,000 | ' | ' |
Related-party costs, Payable | 0 | ' | 0 | ' | 0 | 0 |
Additional Paid-In Capital [Member] | ' | ' | ' | ' | ' | ' |
Summarized below are the related-party transactions | ' | ' | ' | ' | ' | ' |
Related-party costs, Incurred | 0 | 970,000 | 54,000 | 5,607,000 | ' | ' |
Related-party costs, Payable | 0 | ' | 0 | ' | 0 | 13,000 |
Dealer manager fees [Member] | ' | ' | ' | ' | ' | ' |
Summarized below are the related-party transactions | ' | ' | ' | ' | ' | ' |
Related-party costs, Incurred | 0 | 66,000 | 15,000 | 1,364,000 | 3,090,000 | ' |
Related-party costs, Payable | 0 | ' | 0 | ' | 0 | 4,000 |
Organization and offering costs [Member] | ' | ' | ' | ' | ' | ' |
Summarized below are the related-party transactions | ' | ' | ' | ' | ' | ' |
Related-party costs, Incurred | 0 | 782,000 | 7,000 | 1,265,000 | ' | ' |
Related-party costs, Payable | 0 | ' | 0 | ' | 0 | 0 |
Selling commissions [Member] | ' | ' | ' | ' | ' | ' |
Summarized below are the related-party transactions | ' | ' | ' | ' | ' | ' |
Related-party costs, Incurred | 0 | 122,000 | 32,000 | 2,978,000 | ' | ' |
Related-party costs, Payable | 0 | ' | 0 | ' | 0 | 9,000 |
Leasing commission fees [Member] | ' | ' | ' | ' | ' | ' |
Summarized below are the related-party transactions | ' | ' | ' | ' | ' | ' |
Related-party costs, Incurred | 0 | 0 | 143,000 | 0 | ' | ' |
Related-party costs, Payable | 19,000 | ' | 19,000 | ' | 19,000 | 0 |
Consulting And Accounting Fees [Member] | ' | ' | ' | ' | ' | ' |
Summarized below are the related-party transactions | ' | ' | ' | ' | ' | ' |
Related-party costs, Incurred | 41,000 | 0 | 446,000 | 0 | ' | ' |
Related-party costs, Payable | 26,000 | ' | 26,000 | ' | 26,000 | 0 |
Advisor Fees, Asset management fees [Member] | ' | ' | ' | ' | ' | ' |
Summarized below are the related-party transactions | ' | ' | ' | ' | ' | ' |
Related-party costs, Incurred | 211,000 | 0 | 211,000 | 0 | ' | ' |
Related-party costs, Payable | 211,000 | ' | 211,000 | ' | 211,000 | 0 |
Advisor Fees, Reimbursement of operating expenses [Member] | ' | ' | ' | ' | ' | ' |
Summarized below are the related-party transactions | ' | ' | ' | ' | ' | ' |
Related-party costs, Incurred | 14,000 | 0 | 30,000 | 0 | ' | ' |
Related-party costs, Payable | 0 | ' | 0 | ' | 0 | 0 |
Advisor Fees, Property management fees [Member] | ' | ' | ' | ' | ' | ' |
Summarized below are the related-party transactions | ' | ' | ' | ' | ' | ' |
Related-party costs, Incurred | 140,000 | 0 | 140,000 | 0 | ' | ' |
Related-party costs, Payable | 140,000 | ' | 140,000 | ' | 140,000 | 0 |
Advisor Fees, Interest expense on notes payable [Member] | ' | ' | ' | ' | ' | ' |
Summarized below are the related-party transactions | ' | ' | ' | ' | ' | ' |
Related-party costs, Incurred | 1,000 | 0 | 1,000 | 0 | ' | ' |
Related-party costs, Payable | 1,000 | ' | 1,000 | ' | 1,000 | 0 |
Advisor Fees, Expensed [Member] | ' | ' | ' | ' | ' | ' |
Summarized below are the related-party transactions | ' | ' | ' | ' | ' | ' |
Related-party costs, Incurred | 407,000 | 0 | 828,000 | 0 | ' | ' |
Related-party costs, Payable | $378,000 | ' | $378,000 | ' | $378,000 | $0 |
RELATED_PARTY_TRANSACTIONS_Det1
RELATED PARTY TRANSACTIONS (Details 1) (USD $) | 3 Months Ended | 9 Months Ended | 60 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | |
Selling commissions and dealer manager fees as an offset to additional paid-in capital incurred | ' | ' | ' | ' | ' |
Related-party costs, Incurred | $0 | $188,000 | $47,000 | $4,342,000 | $10,015,000 |
Dealer manager fees [Member] | ' | ' | ' | ' | ' |
Selling commissions and dealer manager fees as an offset to additional paid-in capital incurred | ' | ' | ' | ' | ' |
Related-party costs, Incurred | 0 | 66,000 | 15,000 | 1,364,000 | 3,090,000 |
Selling commissions [Member] | ' | ' | ' | ' | ' |
Selling commissions and dealer manager fees as an offset to additional paid-in capital incurred | ' | ' | ' | ' | ' |
Related-party costs, Incurred | $0 | $122,000 | $32,000 | $2,978,000 | $6,925,000 |
RELATED_PARTY_TRANSACTIONS_Det2
RELATED PARTY TRANSACTIONS (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | 60 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||||||||||||||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Jan. 12, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Jan. 31, 2012 | Jan. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Jan. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Mar. 31, 2012 | |
Advisor [Member] | Advisor [Member] | Property management fees [Member] | Property management fees [Member] | Property management fees [Member] | Property management fees [Member] | Acquisition Fees [Member] | Acquisition Fees [Member] | Acquisition Fees [Member] | Acquisition Fees [Member] | Asset management fees [Member] | Asset management fees [Member] | Asset management fees [Member] | Asset management fees [Member] | Disposition Fees [Member] | Disposition Fees [Member] | Disposition Fees [Member] | Disposition Fees [Member] | Leasing fees [Member] | Leasing fees [Member] | Leasing fees [Member] | Leasing fees [Member] | Financing coordination fees [Member] | Financing coordination fees [Member] | Financing coordination fees [Member] | Financing coordination fees [Member] | Financing coordination fees [Member] | Guaranty fees [Member] | Guaranty fees [Member] | Guaranty fees [Member] | Guaranty fees [Member] | Sponsor [Member] | Spouse [Member] | Interest expense on notes payable [Member] | Interest expense on notes payable [Member] | Interest expense on notes payable [Member] | Interest expense on notes payable [Member] | Organization and offering costs [Member] | Organization and offering costs [Member] | Organization and offering costs [Member] | Organization and offering costs [Member] | Mr James Wolford [Member] | Reimbursement Of Operating Expenses [Member] | Reimbursement Of Operating Expenses [Member] | Reimbursement Of Operating Expenses [Member] | Reimbursement Of Operating Expenses [Member] | Glenborough Property Partners, LLC [Member] | Non-Refundable Earnest Deposit [Member] | |||||||
Related party transactions (Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Related-party costs, Incurred | $0 | $188,000 | $47,000 | $4,342,000 | $10,015,000 | ' | $3,272,000 | $3,016,000 | $171,000 | $344,000 | $862,000 | $898,000 | $0 | $0 | $13,000 | $2,595,000 | $0 | $0 | $0 | $0 | $0 | $25,000 | $924,000 | $130,000 | $0 | $103,000 | $0 | $108,000 | $0 | $0 | $0 | $811,000 | ' | $5,000 | $4,000 | $24,000 | $41,000 | ' | ' | $0 | $0 | $0 | $20,000 | $0 | $782,000 | $7,000 | $1,265,000 | ' | $0 | $315,000 | $73,000 | $736,000 | ' | ' |
Amounts due to affiliates | 572,000 | ' | 572,000 | ' | 572,000 | 755,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 920,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 240,000 |
Due to other related parties, noncurrent | 1,001,000 | ' | 1,001,000 | ' | 1,001,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 235,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' |
Related Party Transactions (Additional Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payment of financial Coordination fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of gross proceeds from the sale of shares of common stock | ' | ' | 7.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of gross proceeds received from the sale of shares | ' | ' | 3.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Related Party Reimbursement of Operating Expenses Terms | ' | ' | 'will not reimburse Prior Advisor for any amount by which the Company’s operating expenses (including the asset management fee described below) at the end of the four preceding fiscal quarters exceeds the greater of: (1) 2% of its average invested assets (as defined in the Charter), or (2) 25% of its net income (as defined in the Charter) determined without reduction for any additions to depreciation, bad debts or other similar non-cash expenses and excluding any gain from the sale of the Company’s assets for that period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Market-based property management fee of gross revenues | ' | ' | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Company pays Advisor an acquisition fee for cost of investments acquired | ' | ' | ' | 2.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Company pays Advisor of the amount funded by the Company to acquire or originate real estate-related loans | ' | ' | 2.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Company pays Advisor a monthly asset management fee on all real estate investments | ' | ' | 0.60% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cumulative amount of any distributions declared and payable to the Company's stockholders | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Advisor or its affiliates also will be paid disposition fees of a customary and competitive real estate commission | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Advisor or its affiliates also will be paid disposition fees of a customary and competitive real estate commission, not to exceed | ' | ' | 3.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cumulative Organization and Offering Costs Reimbursed To The Advisor | ' | ' | 4,273,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reimbursement Of Operating Expenses Description | ' | ' | '(1) 2% of its average invested assets (as defined in the Charter), or (2) 25% of its net income (as defined in the Charter) determined without reduction for any additions to depreciation, bad debts or other similar non-cash expenses and excluding any gain from the sale of the Company’s assets for that period (the “2%/25% guideline”). Notwithstanding the above, the Company could reimburse Prior Advisor for expenses in excess of the 2%/25% guideline if a majority of the independent directors determined that such excess expenses are justified based on unusual and nonrecurring factors. Under the new Advisory Agreement, the terms and conditions regarding the reimbursement of operating expenses are generally the same as the prior agreement. For the twelve months ended September 30, 2013, the Company’s total operating expenses (as defined in the Charter) did not exceed the 2%/25% guideline. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3. DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE The Company reports as discontinued operations, properties held-for-sale and operating properties sold in the current or prior periods. The results of these discontinued operations are included in a separate component of income on the condensed consolidated statements of operations under the caption “Discontinued operations.” During the three months ended March 31, 2013, the Company completed the sale of the Waianae Mall in Waianae, Hawaii (acquired in June 2010), for a sales price of $30,500,000. The Company classified assets and liabilities (including the mortgage debt) related to Waianae Mall as held for sale in the consolidated balance sheet at December 31, 2012. The results of operations related to Waianae Mall were classified as discontinued operations for the three and nine months ended September 30, 2013 and 2012. During the three months ended June 30, 2013, the Company announced a plan to place Craig Promenade and Willow Run on the market for sale, and during the three months ended September 30, 2013, Visalia Marketplace was added to the plan and also placed on the market for sale. All three of the properties secure the revolving credit facility with KeyBank (see Note 6. NOTES PAYABLE). If the Company is successful in selling any of the properties placed on the market for sale on acceptable terms, net proceeds from the sale of the properties will be used to pay down the Company’s revolving credit facility with KeyBank. The results of operations related to these properties were classified as discontinued operations for the three and nine months ended September 30, 2013 and 2012. None of the three properties were classified as held for sale at December 31, 2012. On November 9, 2012, TNP SRT Lahaina Gateway, LLC, the Company’s wholly-owned subsidiary (“TNP SRT Lahaina”), financed TNP SRT Lahaina’s acquisition of a ground lease interest in the Lahaina Gateway property, a multi-tenant necessity retail center located in Lahaina, Maui, Hawaii, with the proceeds of a loan (the "Lahaina Loan") from DOF IV REIT Holdings, LLC (the "Lahaina Lender"). On August 1, 2013, in order to resolve its obligations under the Lahaina Loan, mitigate certain risks presented by the terms of the Lahaina loan and avoid potential litigation and foreclosure proceedings (and the associated costs and delays), TNP SRT Lahaina granted and conveyed all of TNP SRT Lahaina’s right, title and interest in and to the leasehold estate in the Lahaina Gateway property, including all leases, improvements, licenses and permits and personal property related thereto, to DOF IV Lahaina, LLC, an affiliate of the Lahaina Lender, pursuant to a Deed In Lieu Of Foreclosure Agreement by and among the Company, TNP SRT Lahaina and the Lahaina lender. For the three and nine months ended September 30, 2013, the Company realized a loss of $5,394,000 associated with the Deed In Lieu transaction (see Note 6. NOTES PAYABLE). The loss and the results of operations related to TNP SRT Lahaina were classified as discontinued operations, loss on extinguishment of debt, for the three and nine months ended September 30, 2013 and 2012. The parcel was not classified as held for sale at December 31, 2012. On December 4, 2012, the Company entered into a purchase and sale agreement, as amended, with a third party for the sale of the office building at the Aurora Commons property (acquired in March 2012). On or about May 9, 2013, the purchase and sale agreement, as amended, for the sale of the office building at the Aurora Commons property expired and the buyer did not release the contingencies in the purchase and sale agreement. The Company classified assets and liabilities related to the office portion of the Aurora Commons property as held for sale in the consolidated balance sheet at December 31, 2012. The results of operations related to the office building at Aurora Commons, previously classified as discontinued operations for the three months ended March 31, 2013, were included within continuing operations for the nine months ended September 30, 2013 and all previously unrecorded depreciation was recorded. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property management fee, percentage | ' | ' | 4.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum Percentage Of Gross Proceeds Of Private Placement | ' | ' | 2.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage Of Acquisition Fee On Costs Of Investments Acquired | ' | ' | 1.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage Of Origination Fee | ' | ' | 1.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from Related Party Debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $500,000 | ' |
Debt Instrument, Interest Rate at Period End | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7.00% | ' |
Reimbursement Of Organization and Offering Cost In Excess Of Percentage | 3.00% | ' | 3.00% | ' | 3.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Details Textual) (USD $) | 0 Months Ended | 9 Months Ended | 12 Months Ended |
Aug. 09, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | |
acre | |||
Commitments and Contingencies (Textual) [Abstract] | ' | ' | ' |
Percentage of profit participation in the property | ' | 25.00% | ' |
Stipulated amount for calculation of net profits on sale of property | ' | $3,200,000 | ' |
Net rentable area | ' | 23,000 | ' |
Monthly operating leases rent expense net | ' | 36,425 | ' |
Non Refundable Deposit | ' | ' | 250,000 |
Refund Of Deposits | 125,000 | ' | ' |
Constitution Trail [Member] | ' | ' | ' |
Commitments and Contingencies (Textual) [Abstract] | ' | ' | ' |
Leased land | ' | 7.78 | ' |
Starplex Premises [Member] | ' | ' | ' |
Commitments and Contingencies (Textual) [Abstract] | ' | ' | ' |
Monthly operating leases rent expense net | ' | 62,424 | ' |
Annually operating leases rent expense net | ' | 749,088 | ' |
Starplex Master Lease [Member] | ' | ' | ' |
Commitments and Contingencies (Textual) [Abstract] | ' | ' | ' |
Net rentable area | ' | 44,064 | ' |
Conditional minimum annual gross sales | ' | $2,800,000 | ' |
SUBSEQUENT_EVENTS_Details_Text
SUBSEQUENT EVENTS (Details Textual) (Willow Run Property [Member], USD $) | 1 Months Ended | ||
Feb. 28, 2013 | 31-May-12 | Oct. 31, 2013 | |
Subsequent Event [Member] | |||
Proceeds from Sale of Property, Plant, and Equipment, Total | $1,050,000 | ' | $10,825,000 |
Payments to Acquire Property, Plant, and Equipment, Total | ' | 11,550,000 | ' |
Disposition Fee To Advisor | ' | ' | $54,000 |