Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 06, 2016 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | Strategic Realty Trust, Inc. | |
Entity Central Index Key | 1,446,371 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 11,007,227 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Investments in real estate | ||
Land | $ 15,981,000 | $ 15,981,000 |
Building and improvements | 56,158,000 | 56,158,000 |
Tenant improvements | 3,577,000 | 3,676,000 |
Investments in real estate, net | 75,716,000 | 75,815,000 |
Accumulated depreciation | (10,612,000) | (10,068,000) |
Investments in real estate, net | 65,104,000 | 65,747,000 |
Properties under development and development costs | ||
Land | 25,851,000 | 0 |
Buildings | 613,000 | 0 |
Development costs | 901,000 | 0 |
Properties under development and development costs | 27,365,000 | 0 |
Cash and cash equivalents | 3,414,000 | 8,793,000 |
Restricted cash | 6,025,000 | 2,693,000 |
Prepaid expenses and other assets, net | 558,000 | 731,000 |
Tenant receivables, net | 1,212,000 | 1,664,000 |
Investments in unconsolidated joint ventures | 6,645,000 | 6,902,000 |
Lease intangibles, net | 4,081,000 | 4,290,000 |
Assets held for sale | 9,752,000 | 9,769,000 |
Deferred financing costs, net | 487,000 | 579,000 |
TOTAL ASSETS | 124,643,000 | 101,168,000 |
LIABILITIES | ||
Notes payable, net | 58,509,000 | 34,052,000 |
Accounts payable and accrued expenses | 1,145,000 | 1,486,000 |
Amounts due to affiliates | 184,000 | 49,000 |
Other liabilities | 1,090,000 | 1,479,000 |
Liabilities related to assets held for sale | 6,859,000 | 6,909,000 |
Below market lease intangibles, net | 3,231,000 | 3,303,000 |
Deferred gain on sale of properties to unconsolidated joint venture | 1,227,000 | 1,225,000 |
TOTAL LIABILITIES | $ 72,245,000 | $ 48,503,000 |
Commitments and contingencies (Note 13) | ||
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; 11,007,227 and 11,037,948 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively | 111,000 | 111,000 |
Additional paid-in capital | 96,482,000 | 96,684,000 |
Accumulated deficit | (46,187,000) | (46,124,000) |
Total stockholders' equity | 50,406,000 | 50,671,000 |
Non-controlling interests | 1,992,000 | 1,994,000 |
TOTAL EQUITY | 52,398,000 | 52,665,000 |
TOTAL LIABILITIES AND EQUITY | $ 124,643,000 | $ 101,168,000 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 |
Preferred stock par value (in dollars per share) | $ 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 (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, Issued | 11,007,227 | 11,037,948 |
Common stock, shares outstanding | 11,007,227 | 11,037,948 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenue: | ||
Rental and reimbursements | $ 2,708,000 | $ 4,804,000 |
Expense: | ||
Operating and maintenance | 937,000 | 1,775,000 |
General and administrative | 396,000 | 766,000 |
Depreciation and amortization | 870,000 | 1,868,000 |
Transaction expense | 4,000 | 0 |
Interest expense | 600,000 | 1,694,000 |
Total expense | 2,807,000 | 6,103,000 |
Operating loss | (99,000) | (1,299,000) |
Other income (loss): | ||
Equity in income (losses) of unconsolidated joint ventures | 26,000 | (129,000) |
Gain on disposal of real estate | 9,000 | 4,783,000 |
Loss on extinguishment of debt | (1,000) | (233,000) |
Net income (loss) | (65,000) | 3,122,000 |
Net income (loss) attributable to non-controlling interests | (2,000) | 261,000 |
Net income (loss) attributable to common stockholders | $ (63,000) | $ 2,861,000 |
Earnings (loss) per common share - basic and diluted | $ (0.01) | $ 0.26 |
Weighted average shares outstanding used to calculate earnings (loss) per common share - basic and diluted | 11,037,189 | 10,969,714 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENT OF EQUITY - 3 months ended Mar. 31, 2016 - USD ($) | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders' Equity | Non-controlling Interests |
BALANCE at Dec. 31, 2015 | $ 52,665,000 | $ 111,000 | $ 96,684,000 | $ (46,124,000) | $ 50,671,000 | $ 1,994,000 |
BALANCE (in shares) at Dec. 31, 2015 | 11,037,948 | |||||
Redemption of common shares | (202,000) | $ 0 | (202,000) | 0 | (202,000) | 0 |
Redemption of common shares (in shares) | (30,721) | |||||
Net loss | (65,000) | $ 0 | 0 | (63,000) | (63,000) | (2,000) |
BALANCE at Mar. 31, 2016 | $ 52,398,000 | $ 111,000 | $ 96,482,000 | $ (46,187,000) | $ 50,406,000 | $ 1,992,000 |
BALANCE (in shares) at Mar. 31, 2016 | 11,007,227 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (65,000) | $ 3,122,000 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Net gain on disposal of real estate | (9,000) | (4,783,000) |
Loss on extinguishment of debt | 1,000 | 233,000 |
Equity in (income) loss of unconsolidated joint ventures | (26,000) | 129,000 |
Straight-line rent | (26,000) | (30,000) |
Amortization of deferred costs and notes payable premium/discount | 120,000 | 127,000 |
Depreciation and amortization | 870,000 | 1,868,000 |
Amortization of above and below-market leases | (47,000) | (15,000) |
Bad debt expense | 3,000 | 11,000 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other assets | 189,000 | 83,000 |
Tenant receivables | 476,000 | (227,000) |
Accounts payable and accrued expenses | 347,000 | (635,000) |
Amounts due to affiliates | 135,000 | 62,000 |
Other liabilities | (389,000) | 216,000 |
Net change in restricted cash for operational expenditures | 166,000 | (849,000) |
Net cash provided by (used in) operating activities | 1,745,000 | (688,000) |
Cash flows from investing activities: | ||
Net proceeds from the sale of real estate | 9,000 | 53,136,000 |
Investment in properties under development and costs of development | (27,280,000) | 0 |
Improvements, capital expenditures, and leasing costs | (42,000) | (480,000) |
Investments in unconsolidated joint ventures | 0 | (4,555,000) |
Issuance of note receivable | 0 | (7,000,000) |
Distributions from unconsolidated joint ventures | 283,000 | 0 |
Net change in restricted cash from investments in consolidated variable interest entities | (3,458,000) | 0 |
Net change in restricted cash for capital expenditures | (40,000) | (147,000) |
Net cash provided by (used in) investing activities | (30,528,000) | 40,954,000 |
Cash flows from financing activities: | ||
Redemption of member interests | 0 | (2,102,000) |
Redemption of common shares | (202,000) | 0 |
Quartertly distributions | (688,000) | (747,000) |
Proceeds from notes and loan payable | 25,200,000 | 0 |
Payment of loan fees and financing costs | (712,000) | 0 |
Repayment of notes payable | (194,000) | (36,663,000) |
Net cash provided by (used in) financing activities | 23,404,000 | (39,512,000) |
Net increase (decrease) in cash and cash equivalents | (5,379,000) | 754,000 |
Cash and cash equivalents - beginning of period | 8,793,000 | 3,211,000 |
Cash and cash equivalents - end of period | 3,414,000 | 3,965,000 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Distributions declared but not paid | 0 | 685,000 |
Cash paid for interest, net of amounts capitalized | $ 490,000 | $ 2,426,000 |
ORGANIZATION AND BUSINESS
ORGANIZATION AND BUSINESS | 3 Months Ended |
Mar. 31, 2016 | |
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 10.00 10,526,316 9.50 10,688,940 104,700,000 391,182 3,620,000 50,000 273,729 396,624 3,197,000 As a result of the termination of the Offering, offering proceeds are not currently available to fund the Company’s cash needs, and will not be available unless the Company engages in an offering of its securities. Since the Company’s inception, its business has been managed by an external advisor, and the Company has no direct employees and all management and administrative personnel responsible for conducting the Company’s business are employed by its advisor. Currently the Company is externally managed and advised by SRT Advisor, LLC, a Delaware limited liability company (the “Advisor”) pursuant to an advisory agreement with the Advisor (the “Advisory Agreement”) initially executed on August 10, 2013, and subsequently renewed in August 2014 and August 2015. The current term of the Advisory Agreement terminates on August 10, 2016. The 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 commercial properties. Substantially all of the Company’s business is conducted through Strategic Realty Operating Partnership, L.P. (the “OP”). During the Offering, 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. The Company is the sole general partner of the OP. As of March 31, 2016 and December 31, 2015, the Company owned 96.2 The Company’s principal demand for funds has been for the acquisition of real estate assets, the payment of operating expenses, interest on outstanding indebtedness, the payment of distributions to stockholders and investments in unconsolidated joint ventures. 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 interest, for payment of various fees and expenses, such as acquisition fees and management fees, and for payment of distributions to stockholders. 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 may conduct in the future. The Company has invested directly, and indirectly through joint ventures, in a portfolio of income-producing retail properties located throughout the United States, with a focus on grocery anchored multi-tenant retail centers, including neighborhood, community and lifestyle shopping centers, multi-tenant shopping centers and free standing single-tenant retail properties. In the first quarter of 2016, the Company invested, through joint ventures, in two significant retail projects under development. On January 7, 2016, the Company invested in a joint venture with Sunset & Gardner Investors, LLC, a subsidiary of Cadence Capital Investments, LLC (the “Gelson’s Joint Venture”). The Gelson’s Joint Venture acquired property located at the corner of Sunset Boulevard and Gardner in Hollywood, California (the “Gelson’s Property”) for a build to suit grocery store for Gelson’s Market. On March 7, 2016, the Company invested in a joint venture with 3032 Wilshire Investors, LLC (the “Wilshire Joint Venture”) to fund the acquisition of certain property located in 3032 Wilshire Boulevard and 1210 Berkeley Street in Santa Monica, California (the “Wilshire Property”). The Wilshire Joint Venture intends to redevelop, reposition and re-lease the Wilshire Property. Together, the Gelson’s Property and Wilshire Property are referred to as “Properties Under Development.” On September 30, 2015, the Company, through wholly-owned subsidiaries, formed a joint venture (the “SGO MN Joint Venture”) with MN Retail Grand Avenue Partners, LLC, a subsidiary of Oaktree Real Estate Opportunities Fund V.I. L.P. (“Oaktree”) and GLB SGO MN, LLC, a wholly-owned subsidiary of Glenborough Property Partners, LLC (“GPP”). GPP is an affiliate of the Advisor and the Company’s property manager. On March 11, 2015, the Company, through a wholly-owned subsidiary, formed a joint venture (the “SGO Joint Venture”) with Grocery Retail Grand Avenue Partners, LLC, a subsidiary of Oaktree, and GLB SGO, LLC, a wholly-owned subsidiary of GPP. These joint ventures own property types similar to properties that are directly owned by the Company. As of March 31, 2016, the Company’s portfolio of properties was comprised of 9 properties, including 1 property held for sale, with approximately 766,000 rentable square feet of retail space located in 7 states. As of March 31, 2016, the rentable space at the Company’s retail properties, including the property held for sale, which was 89% leased. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2016 | |
Summary Of Significant Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements 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 Regulation S-X. The unaudited condensed consolidated financial statements include the accounts of the Company, the OP, their direct and indirect owned subsidiaries, and the accounts of joint ventures that are determined to be variable interest entities for which the Company is the primary beneficiary. 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 The Company’s non-controlling interests are comprised primarily of common units in the OP (“Common Units”) and, until its redemption on March 12, 2015, the membership interest in SRT Secured Holdings, LLC (“Secured Holdings”), one of the Company’s subsidiaries. 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 stockholders’ equity. Net income (loss) attributable to non-controlling interests is presented as a reduction from net income (loss) in calculating net income (loss) attributable to common stockholders on the condensed consolidated 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 the Company’s results of operations when a subsidiary is deconsolidated upon a change in control. In accordance with ASC 480-10, Distinguishing Liabilities from Equity The preparation of the Company’s condensed consolidated 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 condensed consolidated 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 condensed consolidated 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 condensed consolidated 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 represent 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 includes escrow accounts for real property taxes, insurance, capital expenditures and tenant improvements, debt service and leasing costs held by lenders. 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. 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 (not including receivables on property held for sale), which is included in tenant receivables, net, on the condensed consolidated balance sheets, was $ 618,000 592,000 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, insurance and CAM 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, Property, Plant, and Equipment 1.2 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. A concentration of credit risk arises in the Company’s business when a nationally 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. Generally, the Company does not obtain security deposits 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 March 31, 2016, excluding property classified as held for sale, Ralph’s Grocery accounted for 10 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 when the acquired property meets the definition of a business. Assets acquired and liabilities assumed in a business combination are generally measured at their acquisition-date fair values, including tenant improvements and identifiable intangible assets or liabilities. Tenant improvements recognized 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-rate 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. 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 statements 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 results of operations. These allocations also impact depreciation expense, amortization expense and gains or losses recorded on future sales of properties. ASC 280, Segment Reporting 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 pre-development and certain direct and indirect costs of development. Years Buildings and improvements 5 30 Tenant improvements 1 36 Tenant improvement costs recorded as capital assets are depreciated over the tenant’s remaining lease term which the Company has determined approximates the useful life of the improvement. Expenditures for ordinary maintenance and repairs are expensed to operations as incurred. Significant renovations and improvements that improve or extend the useful lives of assets are capitalized. The initial cost of properties under development includes the acquisition cost of the property, direct development costs and borrowing costs directly attributable to the development. Borrowing costs associated with direct expenditures on properties under development are capitalized. The amount of capitalized borrowing costs is determined by reference to borrowings specific to the project, where relevant. Borrowing costs are capitalized from the commencement of the development until the date of practical completion where the property is substantially ready for its intended use. Capitalization of borrowing costs is suspended if there are prolonged periods when development activity is interrupted. Practical completion is when the property is capable of operating in the manner intended by management. Interest on projects during periods of development is capitalized until the project is ready for its intended use based on interest rates in place during the development period. The amount of interest capitalized during the three months ended March 31, 2016, was $328,000. 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 (excluding interest) 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, property sale capitalization rates, and expected holding period of the property. The Company evaluates its equity investments for impairment in accordance with ASC 320, Investments Debt and Securities The Company continually monitors its properties under development for impairment. Estimates of future cash flows used to test the recoverability of properties under development are based on their expected service potential when development is substantially complete. Those estimates include cash flows associated with all future expenditures necessary to develop the properties under development, including interest payments that will be capitalized as part of the cost of the properties under development. The Company did not record any impairment losses for the three months ended March 31, 2016 and 2015. 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. For property sales prior to May 1, 2014, 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 eliminated from ongoing operations as a result of the disposal transaction and (ii) the entity does not have any significant continuing involvement in the operations of the component after the disposal transaction. For property sales on or after May 1, 2014, a disposal of a component of an entity is required to be reported as discontinued operations only if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. See Note 3. “Real Estate Investments” for a discussion of property sales and discontinued operations. Under GAAP, the Company is required to measure or disclose 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 for inputs that are significant to the fair value measurement. 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 external appraisals) 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) a present value technique that considers the future cash flows based on contractual obligations discounted by 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 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. T he Company presents deferred financing costs, net of accumulated amortization, as a contra-liability that reduces the carrying amount of the associated note payable, rather than as a deferred asset. Deferred financing costs related to a line-of-credit arrangement are presented on the balance sheet as a deferred asset, regardless of whether there were any outstanding borrowings at period-end. The Company accounts for its current investments in unconsolidated joint ventures under the equity method of accounting. Under the equity method of accounting, the Company records its initial investment in a joint venture at cost and subsequently adjusts the cost for the Company’s share of the joint venture’s income or loss and cash contributions and distributions each period. See Note 4. “Investments in Unconsolidated Joint Ventures” for a discussion of the Company’s investments in joint ventures. The Company monitors its investments in unconsolidated joint ventures periodically for impairment. No impairment indicators were identified and no impairment losses were recorded during the three months ended March, 31, 2016. 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 The Company evaluates tax positions taken in the condensed consolidated 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. In 2015, the Company estimated it could owe alternative minimum state/federal taxes totaling approximately $ 200,000 111,000 89,000 Basic earnings per share (“EPS”) is computed by dividing net income (loss) attributable 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 non-vested 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) attributable to common stockholders in the Company’s computation of EPS. Assets sold or held for sale and related liabilities have been reclassified on the condensed consolidated balance sheets. For operating properties sold prior to May 1, 2014, the related operating results have been reclassified from continuing to discontinued operations on the condensed consolidated statements of operations. For operating properties sold on or after May 1, 2014, the related operating results remain in continuing operations on the condensed consolidated statements of operations unless the sold properties represent a strategic shift that have had (or will have) a major effect on the Company’s operations and financial results. As of March 31, 2016, in respect to the Company’s adoption of ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs 938,000 127,000 339,000 127,000 Newly Adopted Accounting Pronouncements The Company adopted ASU No. 2015-03 on a retrospective basis, effective for the quarter ended March 31, 2016. The amendments in ASU No. 2015-03 require debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. ASU No. 2015-03 is limited to the presentation of debt issuance costs and does not affect the recognition and measurement of debt issuance costs. The adoption of ASU No. 2015-03 would change the presentation of debt issuance costs as the Company presents debt issuance costs as deferred financing costs, net on the accompanying condensed consolidated balance sheets. ASU No. 2015-03 does not address how debt issuance costs related to line-of-credit arrangements should be presented on the balance sheet or amortized. Given this absence of authoritative guidance within ASU 2015-03, the FASB issued ASU No. 2015-15, Interest Imputation of Interest (Subtopic 835-30), Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting The Company adopted ASU No. 2015-16, ( Business Combinations (Topic 805 Simplifying the Accounting for Measurement-Period Adjustment In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements Going Concern In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). In March 2016, the FASB issued ASU No. 2016-07, Investments Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting |
REAL ESTATE INVESTMENTS
REAL ESTATE INVESTMENTS | 3 Months Ended |
Mar. 31, 2016 | |
Real Estate Investments, Net [Abstract] | |
REAL ESTATE INVESTMENTS | 3. REAL ESTATE INVESTMENTS Acquisition of Properties The Company did not have any property acquisitions for the three months ended March 31, 2016 and 2015. For property acquisitions of the Company’s consolidated variable interests, refer to Note. 5 “Variable Interest Entities.” 2016 Sale of Properties The Company did not sell any properties for the three months ended March 31, 2016. 2015 Sale of Properties 53.6 Property Location Acquisition Date Gross Original (1) Osceola Village Kissimmee, Florida 10/11/2011 $ 22,000,000 $ 21,800,000 (2) Constitution Trail Normal, Illinois 10/21/2011 23,100,000 18,000,000 Aurora Commons Aurora, Ohio 3/20/2012 8,500,000 7,000,000 Total $ 53,600,000 $ 46,800,000 (1) The original purchase price amounts do not include acquisition fees. (2) The original purchase price for Osceola Village included an additional pad which was sold for $ 875,000 The sale of the three properties did not represent a strategic shift that will have a major effect on the Company’s operations and financial results and, as a result, was not included in discontinued operations for the three months ended March 31, 2015. The Company’s condensed consolidated statement of operations includes net operating losses of $289,000 for the three months ended March 31, 2015, relating to the results of operations for the three sold properties. The sale of Osceola Village, Constitution Trail and Aurora Commons (the “SGO Properties”) was completed in connection with the formation of the SGO Joint Venture. The three properties were sold to the SGO Joint Venture, and the closing of the sale was conditioned on the Company receiving a 19 19 4.5 36.4 Assets Held for Sale and Liabilities Related to Assets Held for Sale At March 31, 2016 and December 31, 2015, Bloomingdale Hills, located in Riverside, Florida, was classified as held for sale in the condensed consolidated balance sheet. Since the sale of the property does not represent a strategic shift that will have a major effect on the Company’s operations and financial results, its results of operations was not reported as discontinued operations on the Company’s financial statements. See Note. 14 “Subsequent Events” for the sale of Bloomingdale Hills after quarter-end. The Company’s condensed consolidated statements of operations include net operating income of $ 83,000 15,000 March 31, 2016 December 31, 2015 ASSETS Investments in real estate Land $ 4,718,000 $ 4,718,000 Building and improvements 4,697,000 4,697,000 Tenant improvements 499,000 499,000 9,914,000 9,914,000 Accumulated depreciation (891,000) (891,000) Investments in real estate, net 9,023,000 9,023,000 Lease intangibles, net 694,000 694,000 Tenant receivables, net 35,000 36,000 Prepaid expenses - 16,000 Assets held for sale $ 9,752,000 $ 9,769,000 LIABILITIES Notes payable, net (1) 5,218,000 5,268,000 Below market lease intangibles, net 1,625,000 1,625,000 Other liabilities 16,000 16,000 Liabilities related to assets held for sale $ 6,859,000 $ 6,909,000 (1) Includes $127,000 reclassification of deferred financing costs, net of accumulated amortization, as a contra-liability to notes payable, as of March 31, 2016 and December 31, 2015. Amounts above were presented at their carrying values which the Company believed to be lower than their estimated fair value less costs to sell. |
INVESTMENTS IN UNCONSOLIDATED J
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES | 3 Months Ended |
Mar. 31, 2016 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENT IN UNCONSOLIDATED JOINT VENTURE | 4. INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES Ownership Interest Investment at Date of March 31, December 31, March 31, December 31, Joint Venture Investment 2016 2015 2016 2015 SGO Retail Acquisitions Venture, LLC 3/11/2015 19 % 19 % $ 3,967,000 $ 4,098,000 SGO MN Retail Acquisitions Venture, LLC 9/30/2015 10 % 10 % 2,678,000 2,804,000 Total $ 6,645,000 $ 6,902,000 The Company’s off-balance sheet arrangements consist primarily of investments in the joint ventures as set forth in the table above. The joint ventures typically fund their cash needs through secured debt financings obtained by and in the name of the joint venture entity. The joint ventures’ debts are secured by a first mortgage, are without recourse to the joint venture members, and do not represent a liability of the members other than carve-out guarantees for certain matters such as environmental conditions, misuse of funds and material misrepresentations. As of March 31, 2016, the Company has provided carve-out guarantees in connection with the two aforementioned unconsolidated joint ventures; in connection with those carve-out guarantees, the Company has certain rights of recovery from the joint venture members. |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 3 Months Ended |
Mar. 31, 2016 | |
Organization and Business [Abstract] | |
VARIABLE INTEREST ENTITIES | 5. VARIABLE INTEREST ENTITIES The Company has variable interests in, and is the primary beneficiary of, variable interest entities (“VIEs”) through its investments in the Gelson’s Joint Venture and the Wilshire Joint Venture. The Company has consolidated the accounts of these variable interest entities. For further information, refer to Note 2. “Summary of Significant Accounting Policies,” under “Principles of Consolidation and Basis of Presentation.” Gelson’s Joint Venture On January 7, 2016, the Company, through wholly-owned subsidiaries, entered into the Limited Liability Company Agreement of Sunset & Gardner Investors, LLC (the “Gelson’s Joint Venture Agreement”) to form the Gelson’s Joint Venture with Sunset & Gardner LA, LLC (“S&G LA” and together with the Company the “Gelson’s Members”), a subsidiary of Cadence Capital Investments, LLC (“Cadence”). Cadence is a real estate development and investment firm focused on commercial properties. They offer high-quality, market-driven developments, and have expertise in market planning and site selection build to suit and small center developments, redevelopment and repositioning of existing properties. The Gelson’s Joint Venture Agreement provides for the ownership and operation of certain real property by the Gelson’s Joint Venture, in which the Company owns a 100 50 7 700,000 20 On January 28, 2016, the Gelson’s Joint Venture used the capital contributions of the Company, together with the proceeds of a loan from Buchanan Mortgage Holdings, LLC in the amount of $ 10,700,000 12,950,000 38,000 Pursuant to the Gelson’s Joint Venture Agreement, S&G LA will manage and conduct the day-to-day operations and affairs of the Gelson’s Joint Venture, subject to certain major decisions set forth in the Gelson’s Joint Venture Agreement that require the consent of all the Gelson’s Members. Income, losses and distributions will generally be allocated based on the Gelson’s Members’ respective capital and profits interests. Additionally, in certain circumstances described in the Gelson’s Joint Venture Agreement, the Company may be required to make additional capital contributions to the Joint Venture, in proportion to the Gelson’s Members’ respective ownership interests. Until the Company has received back its capital contribution and specified preferred returns, all distributions go to the Company; thereafter, the Gelson’s Joint Venture will distribute the profits 50% to the Company and 50% to S&G LA. 3032 Wilshire Joint Venture On December 21, 2015, the Company, through wholly owned subsidiaries, entered into the Limited Liability Company Agreement of 3032 Wilshire Investors, LLC (the “Wilshire Joint Venture Agreement”) to form the Wilshire Joint Venture with 3032 Wilshire SM, LLC, a subsidiary of Cadence (together with the Company, the “Wilshire Members”). On December 14, 2015 and January 5, 2016, the Company paid deposits in the amounts of $ 500,000 100,000 5,700,000 100 50 On March 8, 2016, the Wilshire Joint Venture used the deposits and capital contribution of the Company, together with the proceeds of a loan from Buchanan Mortgage Holdings, LLC in the amount of $ 8,500,000 13,500,000 Pursuant to the Wilshire Joint Venture Agreement, 3032 Wilshire SM will manage and conduct the day-to-day operations and affairs of the Wilshire Joint Venture, subject to certain major decisions set forth in the Wilshire Joint Venture Agreement that require the consent of all the Wilshire Members. Income, losses and distributions will generally be allocated based on the Wilshire Members’ respective capital and profits interests. Additionally, in certain circumstances described in the Wilshire Joint Venture Agreement, the Company may be required to make additional capital contributions to the Wilshire Joint Venture, in proportion to the Wilshire Members’ respective ownership interests. Until the Company has received back its capital contribution and specified preferred returns, all distributions go to the Company; thereafter, the Wilshire Joint Venture will distribute the profits 50 50 March 31, 2016 ASSETS Properties under development and development costs: Land $ 25,851,000 Building 613,000 Development costs 901,000 Properties under development and development costs 27,365,000 Loan reserves 3,458,000 Cash and cash equivalents 67,000 Prepaid expenses and deposits 36,000 Accounts receivable 11,000 TOTAL ASSETS (1) $ 30,937,000 LIABILITIES Notes payable, net (2) $ 18,573,000 Accrued liabilities 331,000 Security deposits 40,000 TOTAL LIABILITIES $ 18,944,000 (1) The assets of the Gelson’s Joint Venture and Wilshire Joint Venture can be used only to settle obligations of the respective consolidated joint ventures. (2) 627,000 |
FUTURE MINIMUM RENTAL INCOME
FUTURE MINIMUM RENTAL INCOME | 3 Months Ended |
Mar. 31, 2016 | |
Minimum Rents [Abstract] | |
FUTURE MINIMUM RENTAL INCOME | 6. 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 March 31, 2016, the leases at the Company’s properties have remaining terms (excluding options to extend) of up to 20 years with a weighted-average remaining term (excluding options to extend) of 5 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 $ 171,000 175,000 April 1 through remainder of 2016 $ 5,374,000 2017 6,346,000 2018 5,266,000 2019 4,664,000 2020 3,887,000 Thereafter 7,739,000 Total $ 33,276,000 |
ACQUIRED LEASE INTANGIBLES AND
ACQUIRED LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES | 3 Months Ended |
Mar. 31, 2016 | |
Intangibles [Abstract] | |
ACQUIRED LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES | 7. ACQUIRED LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES Lease Intangibles Below-Market Lease Liabilities March 31, 2016 December 31, 2015 March 31, 2016 December 31, 2015 Cost $ 7,775,000 $ 8,089,000 $ (4,346,000) $ (4,463,000) Accumulated amortization (3,694,000) (3,799,000) 1,115,000 1,160,000 Total $ 4,081,000 $ 4,290,000 $ (3,231,000) $ (3,303,000) Lease Intangibles Below-Market Lease Liabilities Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 Amortization $ (251,000) $ (593,000) $ 72,000 $ 117,000 |
NOTES PAYABLE, NET
NOTES PAYABLE, NET | 3 Months Ended |
Mar. 31, 2016 | |
Debt [Abstract] | |
NOTES PAYABLE | 8. NOTES PAYABLE, NET Principal Balance Interest Rates At March 31, 2016 December 31, 2015 March 31, 2016 KeyBank credit facility (1) $ 6,000,000 $ - 2.94% Secured term loans 24,595,000 24,701,000 5.10% Mortgage loans 9,652,000 9,690,000 5.63% Mortgage loans secured by properties under development (2) 19,200,000 - 9.5% - 10.0% Deferred financing costs, net (3) (938,000) (339,000) n/a $ 58,509,000 $ 34,052,000 (1) The KeyBank credit facility is a revolving credit facility with an initial maximum aggregate commitment of $ 30,000,000 60,000,000 (2) Comprised of $ 10,700,000 8,500,000 (3) Reclassification of deferred financing costs, net of accumulated depreciation, as a contra-liability in accordance with ASU 2015-03. During the three months ended March 31, 2016 and 2015, the Company incurred and expensed $ 600,000 1,694,000 121,000 162,000 328,000 86,000 As of March 31, 2016 and December 31, 2015, interest expense payable was $ 337,000 199,000 149,000 Amount April 1 through remainder of 2016 $ 434,000 2017 35,185,000 2018 473,000 2019 23,355,000 Total (1) $ 59,447,000 (1) Total future principal payments reflect actual amounts due to creditors, and excludes reclassification of $ 938,000 Recent Financing Transactions KeyBank Credit Facility On March 7, 2016, the Company drew $ 6.0 Mortgage Loans Secured by Properties Under Development In connection with the Company’s investment in the Wilshire Joint Venture and the acquisition of the Wilshire Property, the Company has consolidated borrowings of $ 8,500,000 10.0 March 7, 2017 In connection with the Company’s investment in the Gelson’s Joint Venture and the acquisition of the Gelson’s Property, the Company has consolidated borrowings of $ 10,700,000 9.50 January 27, 2017 |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE DISCLOSURES | 9. 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, restricted cash, 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. March 31, 2016 Carrying Value (1) Fair Value (2) Notes Payable $ 58,509,000 $ 59,163,000 December 31, 2015 Carrying Value (1) Fair Value (2) Notes Payable $ 34,052,000 $ 34,760,000 (1) The carrying value of the Company’s notes payable represents the outstanding principal as of March 31, 2016 and December 31, 2015. The carrying values and fair values of the notes payable include the reclassification of deferred financing costs, net, of $ 938,000 339,000 (2) The estimated fair value of the notes payable is based upon the indicative market prices of the Company’s notes payable based on prevailing market interest rates. |
EQUITY
EQUITY | 3 Months Ended |
Mar. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
EQUITY | 10. EQUITY Common Stock Under the Company’s Articles of Amendment and Restatement (the “Charter”), the Company has the authority to issue 400,000,000 On February 7, 2013, the Company terminated the Offering and ceased offering its securities. The Company sold 10,688,940 104,700,000 391,182 3,600,000 273,729 396,624 3,197,000 Common Units and Special Units The Company’s prior advisor, TNP Strategic Retail Advisor, LLC, invested $ 1,000 287,472 2.6 9.00 144,324 1.4 9.50 Pursuant to the Advisory Agreement, in April 2014 the Company caused the OP to issue to the Advisor a separate series of limited partnership interests of the OP in exchange for a capital contribution to the OP of $1,000 (the “Special Units”). The terms of the Special Units entitle the Advisor to (i) 15% of the Company’s net sale proceeds upon disposition of its assets after the Company’s stockholders receive a return of their investment plus a 7% cumulative, non-compounded rate of return or (ii) an equivalent amount in the event that the Company lists its shares of common stock on a national securities exchange or upon certain terminations of the Advisory Agreement after the Company’s stockholders are deemed to have received a return of their investment plus a 7% cumulative, non-compounded rate of return. The holders of Common Units, other than the Company and the holder of the Special Units, generally have the right to cause the OP to redeem all or a portion of their Common Units for, at the Company’s sole discretion, shares of the Company’s common stock, cash or a combination of both. If the Company elects to redeem Common Units for shares of common stock, the Company will generally deliver one share of common stock for each Common Unit redeemed. Holders of Common Units, other than the Company and the holders of the Special Units, may exercise their redemption rights at any time after one year following the date of issuance of their Common Units; provided, however, that a holder of Common Units may not deliver more than two redemption notices in a single calendar year and may not exercise a redemption right for less than 1,000 Common Units, unless such holder holds less than 1,000 Common Units, in which case, it must exercise its redemption right for all of its Common Units. Member Interests On July 9, 2013, SRT Manager made a cash investment of approximately $ 1.9 12 88 91.67 8.33 2.1 Preferred Stock The Charter authorizes the Company to issue 50,000,000 0.01 Share Redemption Program On April 1, 2015, the Company’s board of directors approved the reinstatement of the share redemption program (which had been suspended since January 15, 2013) and adopted an Amended and Restated Share Redemption Program (the “Amended and Restated SRP”). Under the Amended and Restated SRP, only shares submitted for repurchase in connection with the death or “qualifying disability” (as defined in the Amended and Restated SRP) of a stockholder are eligible for repurchase by the Company. The number of shares to be redeemed is limited to the lesser of (i) a total of $ 2,000,000 1,000,000 5 The redemption price for shares that are redeemed is 100 The Amended and Restated SRP provides that any request to redeem less than $ 5,000 The other material terms of the Amended and Restated SRP are consistent with the terms of the share redemption program that was in effect immediately prior to January 15, 2013. On August 7, 2015, the board of directors approved the amendment and restatement of the Amended and Restated SRP (the “Second Amended and Restated SRP” and, together with the Amended and Restated SRP, the “SRP”). Under the Second Amended and Restated SRP, the redemption date with respect to third quarter 2015 redemptions was November 10, 2015 or the next practicable date as the Chief Executive Officer determined so that redemptions with respect to the third quarter of 2015 were delayed until after the payment date for the Special Distribution. With this revision, stockholders who were to have 100 During the three months ended March 31, 2016, the Company redeemed 30,721 202,000 Quarterly Distributions In order to qualify as a REIT, the Company is required to distribute at least 90 Under the terms of the Amended and Restated Credit Facility, the Company may pay distributions to its investors so long as the total amount paid does not exceed 100 Distribution Per Distribution Distribution Share of Total Common Total Common Record Payable Common Stock / Stockholders Unit Holders Total Date Date Common Unit Distribution Distribution Distribution First Quarter 2015 3/31/2015 4/30/2015 $ 0.06 $ 658,000 $ 26,000 $ 684,000 Second Quarter 2015 6/30/2015 7/30/2015 $ 0.06 654,000 26,000 680,000 Third Quarter 2015 9/30/2015 10/31/2015 $ 0.06 654,000 26,000 680,000 Fourth Quarter 2015 12/31/2015 1/30/2016 $ 0.06 661,000 25,000 686,000 Total $ 2,627,000 $ 103,000 $ 2,730,000 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | 11. EARNINGS PER SHARE 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 shares of non-vested restricted stock are considered participating securities as dividend payments are not forfeited even if the underlying award does not vest. There is no unvested stock as of March 31, 2016. 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. For the Three Months Ended March 31, 2016 2015 Numerator - basic and diluted Net income (loss) from continuing operations $ (65,000) $ 3,122,000 Net income (loss) attributable to non-controlling interests (2,000) 261,000 Net income (loss) attributable to common shares $ (63,000) $ 2,861,000 Denominator - basic and diluted Basic weighted average common shares 11,037,189 10,969,714 Effect of dilutive securities - - Common Units (1) - - Diluted weighted average common shares 11,037,189 10,969,714 Earnings (loss) per common share - basic and diluted Net earnings (loss) attributable to common shares $ (0.01) $ 0.26 (1) The effect of 431,896 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Transaction, Due from (to) Related Party [Abstract] | |
RELATED PARTY TRANSACTIONS | 12. RELATED PARTY TRANSACTIONS On August 7, 2013, the Company entered into the Advisory Agreement with Advisor. On August 3, 2015, the Advisory Agreement with the Advisor was renewed for an additional twelve months, beginning on August 10, 2015. 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 an initial 12 8.33 2,102,000 8.33 On January 24, 2014, GPP purchased 22,222 111,111 8.00 On March 11, 2015, the Company, through a wholly-owned subsidiary, entered into the Limited Liability Company Agreement of SGO Retail Acquisitions Venture, LLC to form the SGO Joint Venture. On September 30, 2015, the Company, through wholly-owned subsidiaries, entered into the Limited Liability Company Agreement of SGO MN Retail Acquisitions Venture, LLC to form the SGO MN Joint Venture. For additional information regarding the SGO Joint Venture and the SGO MN Joint Venture, see Note 4. “Investments in Unconsolidated Joint Ventures.” Summary of Related Party Fees Advisor Fees Incurred Payable as of Three Months Ended March 31, March 31, December 31, Expensed 2016 2015 2016 2015 Acquisition fees $ 2,000 $ - $ - $ - Asset management fees 217,000 320,000 - 19,000 Reimbursement of operating expenses 50,000 - 8,000 27,000 Property management fees 124,000 201,000 37,000 3,000 Disposition fees - 525,000 - - Guaranty fees (1) - 1,000 - - Total $ 393,000 $ 1,047,000 $ 45,000 $ 49,000 Capitalized Acquisition fees $ 273,000 $ - $ 139,000 $ - Leasing fees 10,000 27,000 - - Legal leasing fees 12,000 38,000 - - Construction management fees 1,000 5,000 - - Total $ 296,000 $ 70,000 $ 139,000 $ - (1) Guaranty fees were paid by the Company to its prior advisor, TNP Strategic Retail Advisor, LLC. Acquisition Fee Under the Advisory Agreement, the Advisor is entitled to receive an acquisition fee equal to 1.0 Origination Fee Under the Advisory Agreement, the Advisor is entitled to receive an origination fee equal to 1.0 Financing Coordination Fee Under the Advisory Agreement, the Advisor is entitled to receive a financing coordination fee equal to 1 Asset Management Fee Under the Advisory Agreement, the Advisor is entitled to receive an asset management fee equal to a monthly fee of one-twelfth (1/12th) of 0.6 250,000 Reimbursement of Operating Expenses The Company reimburses the Advisor for all expenses paid or incurred by the Advisor in connection with the services provided to the Company, subject to the limitation that the Company will not reimburse the Advisor for any amount by which the Company’s total operating expenses (including the asset management fee described below) at the end of the four preceding fiscal quarters exceeded 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”). The Advisor is required to reimburse the Company quarterly for any amounts by which total operating expenses exceed the 2%/25% Guideline in the previous expense year that the independent directors do not approve. The Company will not reimburse the Advisor for any of its personnel costs or other overhead costs except for customary reimbursements for personnel costs under property management agreements entered into between the OP and the Advisor or its affiliates. Notwithstanding the above, the Company may reimburse the Advisor for expenses in excess of the 2%/25% Guideline if a majority of the independent directors determine that such excess expenses are justified based on unusual and non-recurring factors. For the three months ended March 31, 2016 and 2015, the Company’s total operating expenses (as defined in the Charter) did not exceed the 2%/25% Guideline. Property Management Fee Under the property management agreements between the Company and Glenborough, Glenborough is entitled to receive property management fees calculated at a maximum of up to 4 Disposition Fee Under the Advisory Agreement, if the Advisor or its affiliates provide a substantial amount of services, as determined by the Company’s independent directors, in connection with the sale of a real property, the Advisor or its affiliates may be paid disposition fees up to 50 3 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. In March 2015, the Company retired the outstanding notes payable related to Osceola Village resulting in the expiration of the remaining guaranty agreement. Leasing Fee Under the property management agreements, Glenborough is entitled to 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. Legal Leasing Fee Under the property management agreements, Glenborough is entitled to receive a market-based legal leasing fee for the negotiation and production of new leases, renewals, and amendments. Construction Management Fee In connection with the construction or repair in or about a property, the property manager is responsible for coordinating and facilitating the planning and the performance of all construction and is entitled to receive a fee equal to 5 Related-Party Fees Paid by the Unconsolidated Joint Ventures The unconsolidated joint ventures are party to certain agreements with Glenborough for services related to the investment of funds and management of the joint ventures’ investments, as well as the day-to-day management, operation and maintenance of the properties owned by the joint ventures. The joint ventures pay fees to Glenborough for these services. The SGO Joint Venture and the SGO MN Joint Venture recognized related-party fees and reimbursements of approximately $ 150,000 234,000 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 13. COMMITMENTS AND CONTINGENCIES Economic Dependency The Company is dependent on the 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. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 14. SUBSEQUENT EVENTS First Quarter Distribution On April 6, 2016, the Company declared a first quarter distribution in the amount of $ 0.06 686,000 Sale of Held for Sale Property and Payment of Mortgage Loan On April 4, 2016, the Company consummated the disposition of Bloomingdale Hills for a sales price of approximately $ 9.2 5.3 3 Entry into a Material Definitive Agreement On May 4, 2016, the Company, through an indirect subsidiary, entered into three separate purchase agreements to acquire three retail properties located in San Francisco, California (the “San Francisco Properties”) from each of Octavia Gateway Holdings, LLC, Grove Street Hayes Valley, LLC and Hayes Street Hayes Valley LLC, each a Delaware limited liability company and each a subsidiary of DDG Partners LLC. The sellers are not affiliated with the Company or its external advisor. The San Francisco Properties encompass an aggregate of six retail condominiums with an aggregate of 9,121 square feet of retail space. The aggregate purchase price of the San Francisco Properties is approximately $13.7 million plus closing costs. Pursuant to the agreements, the Company made aggregate earnest money deposits of $425,000 to the sellers on May 6, 2016. There can be no assurance that the Company will complete the acquisition of any or all of the San Francisco Properties. In some circumstances, if the Company fails to complete the acquisitions, it may forfeit up to $425,000 of earnest money. |
SUMMARY OF SIGNIFICANT ACCOUN21
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Summary Of Significant Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements 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 Regulation S-X. The unaudited condensed consolidated financial statements include the accounts of the Company, the OP, their direct and indirect owned subsidiaries, and the accounts of joint ventures that are determined to be variable interest entities for which the Company is the primary beneficiary. 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 |
Non-Controlling Interests | Non-Controlling Interests The Company’s non-controlling interests are comprised primarily of common units in the OP (“Common Units”) and, until its redemption on March 12, 2015, the membership interest in SRT Secured Holdings, LLC (“Secured Holdings”), one of the Company’s subsidiaries. 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 stockholders’ equity. Net income (loss) attributable to non-controlling interests is presented as a reduction from net income (loss) in calculating net income (loss) attributable to common stockholders on the condensed consolidated 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 the Company’s results of operations when a subsidiary is deconsolidated upon a change in control. In accordance with ASC 480-10, Distinguishing Liabilities from Equity |
Use of Estimates | Use of Estimates The preparation of the Company’s condensed consolidated 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 condensed consolidated 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 condensed consolidated 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 condensed consolidated 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 represent 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 (not including receivables on property held for sale), which is included in tenant receivables, net, on the condensed consolidated balance sheets, was $ 618,000 592,000 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, insurance and CAM 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, Property, Plant, and Equipment 1.2 |
Valuation of Accounts Receivables | Valuation of Accounts Receivables 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 nationally 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. Generally, the Company does not obtain security deposits 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 March 31, 2016, excluding property classified as held for sale, Ralph’s Grocery accounted for 10 |
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 when the acquired property meets the definition of a business. Assets acquired and liabilities assumed in a business combination are generally measured at their acquisition-date fair values, including tenant improvements and identifiable intangible assets or liabilities. Tenant improvements recognized 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-rate 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. 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 statements 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 results of operations. 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 |
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 pre-development and certain direct and indirect costs of development. Years Buildings and improvements 5 30 Tenant improvements 1 36 Tenant improvement costs recorded as capital assets are depreciated over the tenant’s remaining lease term which the Company has determined approximates the useful life of the improvement. Expenditures for ordinary maintenance and repairs are expensed to operations as incurred. Significant renovations and improvements that improve or extend the useful lives of assets are capitalized. |
Properties Under Development | Properties Under Development The initial cost of properties under development includes the acquisition cost of the property, direct development costs and borrowing costs directly attributable to the development. Borrowing costs associated with direct expenditures on properties under development are capitalized. The amount of capitalized borrowing costs is determined by reference to borrowings specific to the project, where relevant. Borrowing costs are capitalized from the commencement of the development until the date of practical completion where the property is substantially ready for its intended use. Capitalization of borrowing costs is suspended if there are prolonged periods when development activity is interrupted. Practical completion is when the property is capable of operating in the manner intended by management. Interest on projects during periods of development is capitalized until the project is ready for its intended use based on interest rates in place during the development period. The amount of interest capitalized during the three months ended March 31, 2016, was $328,000. |
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 (excluding interest) 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, property sale capitalization rates, and expected holding period of the property. The Company evaluates its equity investments for impairment in accordance with ASC 320, Investments Debt and Securities The Company continually monitors its properties under development for impairment. Estimates of future cash flows used to test the recoverability of properties under development are based on their expected service potential when development is substantially complete. Those estimates include cash flows associated with all future expenditures necessary to develop the properties under development, including interest payments that will be capitalized as part of the cost of the properties under development. The Company did not record any impairment losses for the three months ended March 31, 2016 and 2015. |
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. For property sales prior to May 1, 2014, 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 eliminated from ongoing operations as a result of the disposal transaction and (ii) the entity does not have any significant continuing involvement in the operations of the component after the disposal transaction. For property sales on or after May 1, 2014, a disposal of a component of an entity is required to be reported as discontinued operations only if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. See Note 3. “Real Estate Investments” for a discussion of property sales and discontinued operations. |
Fair Value Measurements | Fair Value Measurements Under GAAP, the Company is required to measure or disclose 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 for inputs that are significant to the fair value measurement. 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 external appraisals) 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) a present value technique that considers the future cash flows based on contractual obligations discounted by 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. T he Company presents deferred financing costs, net of accumulated amortization, as a contra-liability that reduces the carrying amount of the associated note payable, rather than as a deferred asset. Deferred financing costs related to a line-of-credit arrangement are presented on the balance sheet as a deferred asset, regardless of whether there were any outstanding borrowings at period-end. |
Accounting for Investments in Unconsolidated Joint Ventures | Accounting for Investments in Unconsolidated Joint Ventures The Company accounts for its current investments in unconsolidated joint ventures under the equity method of accounting. Under the equity method of accounting, the Company records its initial investment in a joint venture at cost and subsequently adjusts the cost for the Company’s share of the joint venture’s income or loss and cash contributions and distributions each period. See Note 4. “Investments in Unconsolidated Joint Ventures” for a discussion of the Company’s investments in joint ventures. The Company monitors its investments in unconsolidated joint ventures periodically for impairment. No impairment indicators were identified and no impairment losses were recorded during the three months ended March, 31, 2016. |
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 The Company evaluates tax positions taken in the condensed consolidated 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. In 2015, the Company estimated it could owe alternative minimum state/federal taxes totaling approximately $ 200,000 111,000 89,000 |
Earnings Per Share | Earnings Per Share Basic earnings per share (“EPS”) is computed by dividing net income (loss) attributable 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 non-vested 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) attributable to common stockholders in the Company’s computation of EPS. |
Reclassification | Reclassifications Assets sold or held for sale and related liabilities have been reclassified on the condensed consolidated balance sheets. For operating properties sold prior to May 1, 2014, the related operating results have been reclassified from continuing to discontinued operations on the condensed consolidated statements of operations. For operating properties sold on or after May 1, 2014, the related operating results remain in continuing operations on the condensed consolidated statements of operations unless the sold properties represent a strategic shift that have had (or will have) a major effect on the Company’s operations and financial results. As of March 31, 2016, in respect to the Company’s adoption of ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs 938,000 127,000 339,000 127,000 |
Recent Accounting Pronouncements | Newly Adopted Accounting Pronouncements The Company adopted ASU No. 2015-03 on a retrospective basis, effective for the quarter ended March 31, 2016. The amendments in ASU No. 2015-03 require debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. ASU No. 2015-03 is limited to the presentation of debt issuance costs and does not affect the recognition and measurement of debt issuance costs. The adoption of ASU No. 2015-03 would change the presentation of debt issuance costs as the Company presents debt issuance costs as deferred financing costs, net on the accompanying condensed consolidated balance sheets. ASU No. 2015-03 does not address how debt issuance costs related to line-of-credit arrangements should be presented on the balance sheet or amortized. Given this absence of authoritative guidance within ASU 2015-03, the FASB issued ASU No. 2015-15, Interest Imputation of Interest (Subtopic 835-30), Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting The Company adopted ASU No. 2015-16, ( Business Combinations (Topic 805 Simplifying the Accounting for Measurement-Period Adjustment In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements Going Concern In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). In March 2016, the FASB issued ASU No. 2016-07, Investments Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting |
SUMMARY OF SIGNIFICANT ACCOUN22
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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 30 Tenant improvements 1 36 |
REAL ESTATE INVESTMENTS (Tables
REAL ESTATE INVESTMENTS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Real Estate Investments, Net [Abstract] | |
Real Estate Properties Sales Price | On March 11, 2015, the Company sold the following three properties for the aggregate gross sales price of $ 53.6 Property Location Acquisition Date Gross Original (1) Osceola Village Kissimmee, Florida 10/11/2011 $ 22,000,000 $ 21,800,000 (2) Constitution Trail Normal, Illinois 10/21/2011 23,100,000 18,000,000 Aurora Commons Aurora, Ohio 3/20/2012 8,500,000 7,000,000 Total $ 53,600,000 $ 46,800,000 (1) The original purchase price amounts do not include acquisition fees. (2) The original purchase price for Osceola Village included an additional pad which was sold for $ 875,000 |
Assets And Liabilities Held For Sale | March 31, 2016 December 31, 2015 ASSETS Investments in real estate Land $ 4,718,000 $ 4,718,000 Building and improvements 4,697,000 4,697,000 Tenant improvements 499,000 499,000 9,914,000 9,914,000 Accumulated depreciation (891,000) (891,000) Investments in real estate, net 9,023,000 9,023,000 Lease intangibles, net 694,000 694,000 Tenant receivables, net 35,000 36,000 Prepaid expenses - 16,000 Assets held for sale $ 9,752,000 $ 9,769,000 LIABILITIES Notes payable, net (1) 5,218,000 5,268,000 Below market lease intangibles, net 1,625,000 1,625,000 Other liabilities 16,000 16,000 Liabilities related to assets held for sale $ 6,859,000 $ 6,909,000 (1) Includes $127,000 reclassification of deferred financing costs, net of accumulated amortization, as a contra-liability to notes payable, as of March 31, 2016 and December 31, 2015. |
INVESTMENTS IN UNCONSOLIDATED24
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Investment in Unconsolidated Joint Ventures | The following table summarizes the Company’s investments in unconsolidated joint ventures as of March 31, 2016 and December 31, 2015: Ownership Interest Investment at Date of March 31, December 31, March 31, December 31, Joint Venture Investment 2016 2015 2016 2015 SGO Retail Acquisitions Venture, LLC 3/11/2015 19 % 19 % $ 3,967,000 $ 4,098,000 SGO MN Retail Acquisitions Venture, LLC 9/30/2015 10 % 10 % 2,678,000 2,804,000 Total $ 6,645,000 $ 6,902,000 |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Organization and Business [Abstract] | |
Schedule of Variable Interest Entities | March 31, 2016 ASSETS Properties under development and development costs: Land $ 25,851,000 Building 613,000 Development costs 901,000 Properties under development and development costs 27,365,000 Loan reserves 3,458,000 Cash and cash equivalents 67,000 Prepaid expenses and deposits 36,000 Accounts receivable 11,000 TOTAL ASSETS (1) $ 30,937,000 LIABILITIES Notes payable, net (2) $ 18,573,000 Accrued liabilities 331,000 Security deposits 40,000 TOTAL LIABILITIES $ 18,944,000 (1) The assets of the Gelson’s Joint Venture and Wilshire Joint Venture can be used only to settle obligations of the respective consolidated joint ventures. (2) 627,000 |
FUTURE MINIMUM RENTAL INCOME (T
FUTURE MINIMUM RENTAL INCOME (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Minimum Rents [Abstract] | |
Schedule of Future Minimum Rental Receivable For Operating Leases | As of March 31, 2016, the future minimum rental income from the Company’s properties under non-cancelable operating leases, excluding properties held for sale, was as follows: April 1 through remainder of 2016 $ 5,374,000 2017 6,346,000 2018 5,266,000 2019 4,664,000 2020 3,887,000 Thereafter 7,739,000 Total $ 33,276,000 |
ACQUIRED LEASE INTANGIBLES AN27
ACQUIRED LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Intangibles [Abstract] | |
Acquired Lease Intangibles and Below Market Lease Liabilities | As of March 31, 2016 and December 31, 2015, the Company’s acquired lease intangibles and below-market lease liabilities were as follows: Lease Intangibles Below-Market Lease Liabilities March 31, 2016 December 31, 2015 March 31, 2016 December 31, 2015 Cost $ 7,775,000 $ 8,089,000 $ (4,346,000) $ (4,463,000) Accumulated amortization (3,694,000) (3,799,000) 1,115,000 1,160,000 Total $ 4,081,000 $ 4,290,000 $ (3,231,000) $ (3,303,000) |
Increases Decreases In Net Income As Result Of Amortization Of Acquired Lease Intangibles | The Company’s amortization of lease intangibles and below-market lease liabilities for the three months ended March 31, 2016 and 2015, were as follows: Lease Intangibles Below-Market Lease Liabilities Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 Amortization $ (251,000) $ (593,000) $ 72,000 $ 117,000 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Debt [Abstract] | |
Schedule Of Notes Payable | Principal Balance Interest Rates At March 31, 2016 December 31, 2015 March 31, 2016 KeyBank credit facility (1) $ 6,000,000 $ - 2.94% Secured term loans 24,595,000 24,701,000 5.10% Mortgage loans 9,652,000 9,690,000 5.63% Mortgage loans secured by properties under development (2) 19,200,000 - 9.5% - 10.0% Deferred financing costs, net (3) (938,000) (339,000) n/a $ 58,509,000 $ 34,052,000 (1) The KeyBank credit facility is a revolving credit facility with an initial maximum aggregate commitment of $ 30,000,000 60,000,000 (2) Comprised of $ 10,700,000 8,500,000 (3) Reclassification of deferred financing costs, net of accumulated depreciation, as a contra-liability in accordance with ASU 2015-03. |
Schedule of maturities for notes payable outstanding | Amount April 1 through remainder of 2016 $ 434,000 2017 35,185,000 2018 473,000 2019 23,355,000 Total (1) $ 59,447,000 (1) Total future principal payments reflect actual amounts due to creditors, and excludes reclassification of $ 938,000 |
FAIR VALUE DISCLOSURES (Tables)
FAIR VALUE DISCLOSURES (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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 March 31, 2016 and December 31, 2015: March 31, 2016 Carrying Value (1) Fair Value (2) Notes Payable $ 58,509,000 $ 59,163,000 December 31, 2015 Carrying Value (1) Fair Value (2) Notes Payable $ 34,052,000 $ 34,760,000 (1) The carrying value of the Company’s notes payable represents the outstanding principal as of March 31, 2016 and December 31, 2015. The carrying values and fair values of the notes payable include the reclassification of deferred financing costs, net, of $ 938,000 339,000 (2) The estimated fair value of the notes payable is based upon the indicative market prices of the Company’s notes payable based on prevailing market interest rates. |
EQUITY (Tables)
EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Distributions declared and paid | The following tables set forth the quarterly distributions declared to the Company’s common stockholders and Common Unit holders for the year ended December 31, 2015. Distributions to its common stockholders and common unit holders for the three months ended March 31, 2016 were declared subsequent to March 31, 2016, as described in Note 14. “Subsequent Events.” Distribution Per Distribution Distribution Share of Total Common Total Common Record Payable Common Stock / Stockholders Unit Holders Total Date Date Common Unit Distribution Distribution Distribution First Quarter 2015 3/31/2015 4/30/2015 $ 0.06 $ 658,000 $ 26,000 $ 684,000 Second Quarter 2015 6/30/2015 7/30/2015 $ 0.06 654,000 26,000 680,000 Third Quarter 2015 9/30/2015 10/31/2015 $ 0.06 654,000 26,000 680,000 Fourth Quarter 2015 12/31/2015 1/30/2016 $ 0.06 661,000 25,000 686,000 Total $ 2,627,000 $ 103,000 $ 2,730,000 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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 earnings (loss) per share for the three months ended March 31, 2016 and 2015: For the Three Months Ended March 31, 2016 2015 Numerator - basic and diluted Net income (loss) from continuing operations $ (65,000) $ 3,122,000 Net income (loss) attributable to non-controlling interests (2,000) 261,000 Net income (loss) attributable to common shares $ (63,000) $ 2,861,000 Denominator - basic and diluted Basic weighted average common shares 11,037,189 10,969,714 Effect of dilutive securities - - Common Units (1) - - Diluted weighted average common shares 11,037,189 10,969,714 Earnings (loss) per common share - basic and diluted Net earnings (loss) attributable to common shares $ (0.01) $ 0.26 (1) The effect of 431,896 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Transaction, Due from (to) Related Party [Abstract] | |
Summarized below are the related-party transactions | Summarized separately below are the Advisor related party costs incurred and payable by the Company for the periods presented: Advisor Fees Incurred Payable as of Three Months Ended March 31, March 31, December 31, Expensed 2016 2015 2016 2015 Acquisition fees $ 2,000 $ - $ - $ - Asset management fees 217,000 320,000 - 19,000 Reimbursement of operating expenses 50,000 - 8,000 27,000 Property management fees 124,000 201,000 37,000 3,000 Disposition fees - 525,000 - - Guaranty fees (1) - 1,000 - - Total $ 393,000 $ 1,047,000 $ 45,000 $ 49,000 Capitalized Acquisition fees $ 273,000 $ - $ 139,000 $ - Leasing fees 10,000 27,000 - - Legal leasing fees 12,000 38,000 - - Construction management fees 1,000 5,000 - - Total $ 296,000 $ 70,000 $ 139,000 $ - (1) Guaranty fees were paid by the Company to its prior advisor, TNP Strategic Retail Advisor, LLC. |
ORGANIZATION AND BUSINESS (Deta
ORGANIZATION AND BUSINESS (Details Textual) - USD ($) | Feb. 07, 2013 | Mar. 31, 2016 | Dec. 31, 2015 | Nov. 04, 2008 |
Stock Issue Plans [Line Items] | ||||
Proceeds from issuance of common stock | $ 104,700,000 | |||
Special Distribution Shares Issued To Stockholders | 273,729 | |||
Organization and Business (Additional Textual) [Abstract] | ||||
Common stock, primary offering price | $ 10 | |||
Common Stock, Shares, Issued | 10,688,940 | 11,007,227 | 11,037,948 | 100,000,000 |
Partnership Interest Ownership Percentage | 100.00% | |||
Stock Redeemed or Called During Period, Value | $ 202,000 | |||
Restricted Stock [Member] | ||||
Stock Issue Plans [Line Items] | ||||
Issuance of stock | 50,000 | |||
Common Stock [Member] | ||||
Organization and Business (Additional Textual) [Abstract] | ||||
Stock Redeemed or Called During Period, Shares | 30,721 | |||
Stock Redeemed or Called During Period, Value | $ 0 | |||
Delaware Limited Liability Company [Member] | ||||
Organization and Business (Additional Textual) [Abstract] | ||||
Partnership Interest Ownership Percentage | 96.20% | 96.20% | ||
DRIP [Member] | ||||
Organization and Business (Additional Textual) [Abstract] | ||||
Common stock, primary offering price | $ 9.50 | |||
Common Stock, Shares, Issued | 10,526,316 | |||
Stock Redeemed or Called During Period, Shares | 396,624 | |||
Stock Redeemed or Called During Period, Value | $ 3,197,000 | |||
DRIP [Member] | Common Stock [Member] | ||||
Stock Issue Plans [Line Items] | ||||
Issuance of stock | 391,182 | |||
Proceeds from issuance of common stock | $ 3,620,000 |
SUMMARY OF SIGNIFICANT ACCOUN34
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 3 Months Ended |
Mar. 31, 2016 | |
Buildings and improvements [Member] | Maximum [Member] | |
Depreciation and amortization | |
Estimated useful lives of assets | 30 years |
Buildings and improvements [Member] | Minimum [Member] | |
Depreciation and amortization | |
Estimated useful lives of assets | 5 years |
Tenant improvements [Member] | Maximum [Member] | |
Depreciation and amortization | |
Estimated useful lives of assets | 36 years |
Tenant improvements [Member] | Minimum [Member] | |
Depreciation and amortization | |
Estimated useful lives of assets | 1 year |
SUMMARY OF SIGNIFICANT ACCOUN35
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Summary of Significant Accounting Policies (Textual) [Abstract] | ||
Straight-line rent receivable | $ 618,000 | $ 592,000 |
Percent Of Taxable Income Require To Distribute To Investors In Real Estate Investment Trust | 90.00% | |
Deferred Gain on Sale of Property | $ 1,227,000 | 1,225,000 |
Deferred Tax Assets, Tax Credit Carryforwards, Alternative Minimum Tax | 200,000 | |
Tax Adjustments, Settlements, and Unusual Provisions | 111,000 | |
Income Taxes Paid, Net, Total | 89,000 | |
Interest Costs Capitalized | 328,000 | |
Reclassification From Deferred Financing Cost To Notes Payable [Member] | Accounting Standard Update 2015-03 [Member] | ||
Summary of Significant Accounting Policies (Textual) [Abstract] | ||
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets | 938,000 | 339,000 |
Reclassification From Deferred Financing Cost To Liabilities Held For Sale [Member] | Accounting Standard Update 2015-03 [Member] | ||
Summary of Significant Accounting Policies (Textual) [Abstract] | ||
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets | $ 127,000 | $ 127,000 |
Ralph's Grocery [Member] | ||
Summary of Significant Accounting Policies (Textual) [Abstract] | ||
Percentage Of Minimum Value Of Rentable Area Based On Company Annual Minimum Rent | 10.00% |
REAL ESTATE INVESTMENTS (Detail
REAL ESTATE INVESTMENTS (Details) - USD ($) | Mar. 11, 2015 | Mar. 31, 2016 | |
Real Estate Properties Gross Sales Price | $ 53,600,000 | $ 53,600,000 | |
Real Estate Properties Original Purchase Price | [1] | $ 46,800,000 | |
Osceola Village [Member] | |||
Real Estate Properties Location | Kissimmee, Florida | ||
Real Estate Properties Acquisition Date | Oct. 11, 2011 | ||
Real Estate Properties Gross Sales Price | $ 22,000,000 | ||
Real Estate Properties Original Purchase Price | [1],[2] | $ 21,800,000 | |
Constitution Trail [Member] | |||
Real Estate Properties Location | Normal, Illinois | ||
Real Estate Properties Acquisition Date | Oct. 21, 2011 | ||
Real Estate Properties Gross Sales Price | $ 23,100,000 | ||
Real Estate Properties Original Purchase Price | [1] | $ 18,000,000 | |
Aurora Commons [Member] | |||
Real Estate Properties Location | Aurora, Ohio | ||
Real Estate Properties Acquisition Date | Mar. 20, 2012 | ||
Real Estate Properties Gross Sales Price | $ 8,500,000 | ||
Real Estate Properties Original Purchase Price | [1] | $ 7,000,000 | |
[1] | The original purchase price amounts do not include acquisition fees. | ||
[2] | The original purchase price for Osceola Village included an additional pad which was sold for $875,000 prior to this transaction. |
REAL ESTATE INVESTMENTS (Deta37
REAL ESTATE INVESTMENTS (Details 1) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 | |
Investments in real estate | |||
Land | $ 15,981,000 | $ 15,981,000 | |
Building and improvements | 56,158,000 | 56,158,000 | |
Tenant improvements | 3,577,000 | 3,676,000 | |
Accumulated depreciation | (10,612,000) | (10,068,000) | |
Investments in real estate, net | 65,104,000 | 65,747,000 | |
Lease intangibles, net | 4,081,000 | 4,290,000 | |
Tenants receivables, net | 1,212,000 | 1,664,000 | |
LIABILITIES | |||
Notes payable, net | 58,509,000 | 34,052,000 | |
Below market lease intangibles, net | 3,231,000 | 3,303,000 | |
Other liabilities | 1,090,000 | 1,479,000 | |
Liabilities related to assets held for sale | 6,859,000 | 6,909,000 | |
Assets Held-for-sale [Member] | |||
Investments in real estate | |||
Land | 4,718,000 | 4,718,000 | |
Building and improvements | 4,697,000 | 4,697,000 | |
Tenant improvements | 499,000 | 499,000 | |
Investments in real estate, at Cost | 9,914,000 | 9,914,000 | |
Accumulated depreciation | (891,000) | (891,000) | |
Investments in real estate, net | 9,023,000 | 9,023,000 | |
Lease intangibles, net | 694,000 | 694,000 | |
Tenants receivables, net | 35,000 | 36,000 | |
Prepaid expenses | 0 | 16,000 | |
Assets held for sale | 9,752,000 | 9,769,000 | |
LIABILITIES | |||
Notes payable, net | [1] | 5,218,000 | 5,268,000 |
Below market lease intangibles, net | 1,625,000 | 1,625,000 | |
Other liabilities | 16,000 | 16,000 | |
Liabilities related to assets held for sale | $ 6,859,000 | $ 6,909,000 | |
[1] | Includes $127,000 reclassification of deferred financing costs, net of accumulated amortization, as a contra-liability to notes payable, as of March 31, 2016 and December 31, 2015. |
REAL ESTATE INVESTMENTS (Deta38
REAL ESTATE INVESTMENTS (Details Textual) - USD ($) | Mar. 11, 2015 | Mar. 31, 2016 | Mar. 31, 2015 |
Payments to Acquire Interest in Joint Venture | $ 0 | $ 4,555,000 | |
Sales of Real Estate | $ 53,600,000 | 53,600,000 | |
Operating Income (Loss) | (99,000) | (1,299,000) | |
SGO Joint Venture [Member] | |||
Payments to Acquire Interest in Joint Venture | $ 4,500,000 | ||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 19.00% | ||
Payments Of Debt By Sale of Real Estate Properties | $ 36,400,000 | ||
Ownership Interest In Joint Venture | 19.00% | ||
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | |||
Operating Income (Loss) | $ 83,000 | $ 15,000 | |
Osceola Village [Member] | |||
Sales of Real Estate | 22,000,000 | ||
Proceeds from Sale of Other Real Estate | $ 875,000 |
INVESTMENT IN UNCONSOLIDATED JO
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Schedule of Equity Method Investments [Line Items] | ||
Equity Method Investments | $ 6,645,000 | $ 6,902,000 |
SGO Retail Acquisitions Venture, LLC [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Date Of Equity Method Investments | Mar. 11, 2015 | |
Equity Method Investment, Ownership Percentage | 19.00% | 19.00% |
Equity Method Investments | $ 3,967,000 | $ 4,098,000 |
SGO MN Retail Acquisitions Venture, LLC [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Date Of Equity Method Investments | Sep. 30, 2015 | |
Equity Method Investment, Ownership Percentage | 10.00% | 10.00% |
Equity Method Investments | $ 2,678,000 | $ 2,804,000 |
VARIABLE INTEREST ENTITIES (Det
VARIABLE INTEREST ENTITIES (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | |
Properties under development and development costs: | |||||
Land | $ 25,851,000 | $ 0 | |||
Building | 613,000 | 0 | |||
Development costs | 901,000 | 0 | |||
Properties under development and development costs | 27,365,000 | 0 | |||
Cash and cash equivalents | 3,414,000 | 8,793,000 | $ 3,965,000 | $ 3,211,000 | |
Accounts receivable | 1,212,000 | 1,664,000 | |||
TOTAL ASSETS | 124,643,000 | 101,168,000 | |||
LIABILITIES | |||||
Notes payable, net | 58,509,000 | 34,052,000 | |||
TOTAL LIABILITIES | 72,245,000 | $ 48,503,000 | |||
Variable Interest Entity, Primary Beneficiary [Member] | |||||
Properties under development and development costs: | |||||
Land | 25,851,000 | ||||
Building | 613,000 | ||||
Development costs | 901,000 | ||||
Properties under development and development costs | 27,365,000 | ||||
Loan reserves | 3,458,000 | ||||
Cash and cash equivalents | 67,000 | ||||
Prepaid expenses and deposits | 36,000 | ||||
Accounts receivable | 11,000 | ||||
TOTAL ASSETS | [1] | 30,937,000 | |||
LIABILITIES | |||||
Notes payable, net | [2] | 18,573,000 | |||
Accrued Liabilities | 331,000 | ||||
Security deposits | 40,000 | ||||
TOTAL LIABILITIES | $ 18,944,000 | ||||
[1] | The assets of the Gelson’s Joint Venture and Wilshire Joint Venture can be used only to settle obligations of the respective consolidated joint ventures. | ||||
[2] | Includes $627,000 reclassification of deferred financing costs, net, as a contra-liability. The creditors of the consolidated joint ventures do not have recourse to the general credit of the Company. The notes payable of the consolidated joint ventures are not guaranteed by the Company. |
VARIABLE INTEREST ENTITIES (D41
VARIABLE INTEREST ENTITIES (Details Textual) | Mar. 08, 2016USD ($) | Mar. 07, 2016USD ($) | Jan. 05, 2016USD ($) | Dec. 14, 2015USD ($) | Jan. 28, 2016USD ($)a | Mar. 31, 2016USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($) |
Payments to Acquire Interest in Joint Venture | $ 0 | $ 4,555,000 | ||||||
Reclassification From Deferred Financing Cost To Notes Payable [Member] | Accounting Standard Update 2015-03 [Member] | ||||||||
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets | $ 938,000 | $ 339,000 | ||||||
Gelson’s Development Joint Venture [Member] | ||||||||
Capital Interest Percentage in Joint Venture | 100.00% | |||||||
Profit Interest Percentage in Joint Venture | 50.00% | |||||||
Area of Land | a | 38,000 | |||||||
Lease Expiration Term | 20 years | |||||||
Gelson’s Development Joint Venture [Member] | Initial Contribution [Member] | ||||||||
Payments to Acquire Interest in Joint Venture | $ 7,000,000 | |||||||
Gelson’s Development Joint Venture [Member] | Subsequent Contributuion [Member] | ||||||||
Payments to Acquire Interest in Joint Venture | $ 700,000 | |||||||
Gelson’s Development Joint Venture [Member] | Buchanan Mortgage Holdings [Member] | ||||||||
Proceeds from Loan Originations | $ 10,700,000 | |||||||
Payments to Acquire Real Estate, Total | $ 12,950,000 | |||||||
Wilshire Joint Venture 3032 [Member] | ||||||||
Capital Interest Percentage in Joint Venture | 100.00% | |||||||
Profit Interest Percentage in Joint Venture | 50.00% | |||||||
Payments to Acquire Interest in Joint Venture | $ 5,700,000 | |||||||
Proceeds from Loan Originations | $ 8,500,000 | |||||||
Payments to Acquire Real Estate, Total | $ 13,500,000 | |||||||
Profit sharing ratio of joint Venture | 50.00% | 50.00% | ||||||
Payments for Other Deposits | $ 100,000 | $ 500,000 |
FUTURE MINIMUM RENTAL INCOME (D
FUTURE MINIMUM RENTAL INCOME (Details) | Mar. 31, 2016USD ($) |
Operating Leases, Future Minimum Payments Receivable [Abstract] | |
April 1 through remainder of 2016 | $ 5,374,000 |
2,017 | 6,346,000 |
2,018 | 5,266,000 |
2,019 | 4,664,000 |
2,020 | 3,887,000 |
Thereafter | 7,739,000 |
Total | $ 33,276,000 |
FUTURE MINIMUM RENTAL INCOME 43
FUTURE MINIMUM RENTAL INCOME (Details Textual) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Security Deposit | $ 171,000 | $ 175,000 |
ACQUIRED LEASE INTANGIBLES AN44
ACQUIRED LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Indefinite-lived Intangible Assets [Line Items] | ||
Lease Intangibles, Cost | $ 7,775,000 | $ 8,089,000 |
Lease Intangibles, Accumulated amortization | (3,694,000) | (3,799,000) |
Lease Intangibles | 4,081,000 | 4,290,000 |
Below - Market Lease Liabilities, Cost | (4,346,000) | (4,463,000) |
Below - Market Lease Liabilities, Accumulated amortization | 1,115,000 | 1,160,000 |
Below - Market Lease Liabilities | $ (3,231,000) | $ (3,303,000) |
ACQUIRED LEASE INTANGIBLES AN45
ACQUIRED LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES (Details 1) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Amortization of lease intangibles and below-market lease liabilities | ||
Lease Intangibles, Amortization | $ (251,000) | $ (593,000) |
Below - Market Lease Liabilities, Amortization | $ 72,000 | $ 117,000 |
NOTES PAYABLE, NET (Details)
NOTES PAYABLE, NET (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 | |
Notes Payable | |||
Principal Balance | $ 58,509,000 | $ 34,052,000 | |
Deferred Finance Costs, Net | [1] | (938,000) | (339,000) |
Key Bank credit facility [Member] | |||
Notes Payable | |||
Principal Balance | [2] | $ 6,000,000 | 0 |
Interest Rate | [2] | 2.94% | |
Secured term loans [Member] | |||
Notes Payable | |||
Principal Balance | $ 24,595,000 | 24,701,000 | |
Interest Rate | 5.10% | ||
Mortgage loans [Member] | |||
Notes Payable | |||
Principal Balance | $ 9,652,000 | 9,690,000 | |
Interest Rate | 5.63% | ||
Mortgage Loans Secured By Properties Under Development [Member] | |||
Notes Payable | |||
Principal Balance | [3] | $ 19,200,000 | $ 0 |
Mortgage Loans Secured By Properties Under Development [Member] | Minimum [Member] | |||
Notes Payable | |||
Interest Rate | [3] | 9.50% | |
Mortgage Loans Secured By Properties Under Development [Member] | Maximum [Member] | |||
Notes Payable | |||
Interest Rate | [3] | 10.00% | |
[1] | Reclassification of deferred financing costs, net of accumulated depreciation, as a contra-liability in accordance with ASU 2015-03. | ||
[2] | The KeyBank credit facility is a revolving credit facility with an initial maximum aggregate commitment of $30,000,000 (the “Facility Amount”). Subject to certain terms and conditions contained in the loan documents, the Company may request that the Facility Amount be increased to a maximum of $60,000,000. The KeyBank credit facility matures on August 4, 2017. Each loan made pursuant to the Amended and Restated Credit Facility will be either a LIBOR rate loan or a base rate loan, at the election of the Company, plus an applicable margin, as defined. Monthly payments are interest only with the entire principal balance and all outstanding interest due at maturity. The Company will pay KeyBank an unused commitment fee, quarterly in arrears, which will accrue at 0.30% per annum if the usage under the KeyBank credit facility is greater than 50% of the Facility Amount. The Company is providing a guaranty of all of its obligations under the KeyBank credit facility and all other loan documents in connection with the KeyBank credit facility. As of March 31, 2016, the KeyBank credit facility was secured by Pinehurst Square and Topaz Marketplace. For information regarding recent draws under the Amended and Restated Credit Facility, see “ Recent Financing Transactions - KeyBank Credit Facility.” | ||
[3] | Comprised of $10,700,000 and $8,500,000 associated with the Company’s investment in Gelson’s Joint Venture and Wilshire Joint Venture, respectively. |
NOTES PAYABLE, NET (Details 1)
NOTES PAYABLE, NET (Details 1) | Mar. 31, 2016USD ($) | |
Schedule of maturities for notes payable outstanding | ||
April 1 through remainder of 2016 | $ 434,000 | |
2,017 | 35,185,000 | |
2,018 | 473,000 | |
2,019 | 23,355,000 | |
Total | $ 59,447,000 | [1] |
[1] | Total future principal payments reflect actual amounts due to creditors, and excludes reclassification of $938,000 deferred financing costs, net |
NOTES PAYABLE, NET (Details Tex
NOTES PAYABLE, NET (Details Textual) - USD ($) | Mar. 08, 2016 | Mar. 07, 2016 | Jan. 28, 2016 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 |
Notes Payable | ||||||
Interest expense payable | $ 337,000 | $ 199,000 | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 60,000,000 | |||||
Line of Credit Facility, Commitment Fee Description | The Company will pay KeyBank an unused commitment fee, quarterly in arrears, which will accrue at 0.30% per annum if the usage under the KeyBank credit facility is greater than 50% of the Facility Amount. | |||||
Interest Costs Capitalized | $ 328,000 | |||||
Interest Expense, Debt | 600,000 | $ 1,694,000 | ||||
Amortization of Financing Costs | 121,000 | $ 162,000 | ||||
Reclassification From Deferred Financing Cost To Notes Payable [Member] | Accounting Standard Update 2015-03 [Member] | ||||||
Notes Payable | ||||||
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets | 938,000 | $ 339,000 | ||||
Variable Interest Entity, Primary Beneficiary [Member] | ||||||
Notes Payable | ||||||
Interest expense payable | 149,000 | |||||
Interest Costs Capitalized | 328,000 | |||||
Amortization of Financing Costs | $ 86,000 | |||||
Gelson’s Joint Venture [Member] | ||||||
Notes Payable | ||||||
Proceeds from Loan Originations | $ 10,700,000 | |||||
Wilshire Joint Venture 3032 [Member] | ||||||
Notes Payable | ||||||
Proceeds from Loan Originations | $ 8,500,000 | |||||
Wilshire Loan [Member] | Buchanan Mortgage Holdings, LLC [Member] | ||||||
Notes Payable | ||||||
Interest Rate | 10.00% | |||||
Proceeds from Loan Originations | $ 8,500,000 | |||||
Debt Instrument, Maturity Date | Mar. 7, 2017 | |||||
Gelson’s Loan [Member] | Buchanan Mortgage Holdings, LLC [Member] | ||||||
Notes Payable | ||||||
Interest Rate | 9.50% | |||||
Proceeds from Loan Originations | $ 10,700,000 | |||||
Debt Instrument, Maturity Date | Jan. 27, 2017 | |||||
Revolving Credit Facility [Member] | ||||||
Notes Payable | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 30,000,000 | |||||
Amended and Restated Credit Facility [Member] | ||||||
Notes Payable | ||||||
Proceeds from Loan Originations | $ 6,000,000 |
FAIR VALUE DISCLOSURES (Details
FAIR VALUE DISCLOSURES (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 | |
Notes Payable | |||
Notes Payable, Carrying Value | [1] | $ 58,509,000 | $ 34,052,000 |
Notes Payable, Fair Value | [2] | $ 59,163,000 | $ 34,760,000 |
[1] | The carrying value of the Company’s notes payable represents the outstanding principal as of March 31, 2016 and December 31, 2015. The carrying values and fair values of the notes payable include the reclassification of deferred financing costs, net, of $938,000 and $339,000, as a contra-liability, as of March 31, 2016 and December 31, 2015, respectively. | ||
[2] | The estimated fair value of the notes payable is based upon the indicative market prices of the Company’s notes payable based on prevailing market interest rates. |
FAIR VALUE DISCLOSURES (Detai50
FAIR VALUE DISCLOSURES (Details Textual) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Reclassification From Deferred Financing Cost To Notes Payable [Member] | Accounting Standard Update 2015-03 [Member] | ||
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets | $ 938,000 | $ 339,000 |
EQUITY (Details)
EQUITY (Details) - USD ($) | 3 Months Ended | ||||
Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | |
Company's common stockholders and non-controlling Common Unit holders | |||||
Distribution Record Date | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | |
Distribution Payable Date | Jan. 30, 2016 | Oct. 31, 2015 | Jul. 30, 2015 | Apr. 30, 2015 | |
Distribution Per Common Stock /Common Unit | $ 0.06 | $ 0.06 | $ 0.06 | $ 0.06 | |
Total Common Stockholders Distribution | $ 2,627,000 | $ 661,000 | $ 654,000 | $ 654,000 | $ 658,000 |
Total Common Unit Holders Distribution | 103,000 | 25,000 | 26,000 | 26,000 | 26,000 |
Total Distribution | $ 2,730,000 | $ 686,000 | $ 680,000 | $ 680,000 | $ 684,000 |
EQUITY (Details Textual)
EQUITY (Details Textual) - USD ($) | Aug. 04, 2014 | Feb. 07, 2013 | Jan. 24, 2014 | Mar. 31, 2016 | Dec. 31, 2015 | Aug. 07, 2015 | Jul. 09, 2013 | Mar. 12, 2012 | May. 26, 2011 | Nov. 04, 2008 |
Equity (Textual) [Abstract] | ||||||||||
Common stock shares sold in offering | 10,688,940 | 11,007,227 | 11,037,948 | 100,000,000 | ||||||
Common Stock, Value, Issued | $ 111,000 | $ 111,000 | ||||||||
Common stock par value | $ 0.01 | $ 0.01 | ||||||||
Equity (Additional Textual) [Abstract] | ||||||||||
Authority to issue shares of common stock | 400,000,000 | 400,000,000 | ||||||||
preferred stock, shares authorized | 50,000,000 | 50,000,000 | ||||||||
Preferred stock par value | $ 0.01 | $ 0.01 | ||||||||
Weighted average of the number of shares | 5.00% | |||||||||
Annual REIT taxable income | 90.00% | |||||||||
Alternative Investments, Fair Value Disclosure | $ 1,900,000 | |||||||||
Related Party Transaction, Amounts Of Transaction | $ 1,000 | |||||||||
Subsidiary of Limited Liability Company or Limited Partnership, Ownership Interest | 100.00% | |||||||||
Proceeds From Issuance Of Common Stock | $ 104,700,000 | |||||||||
Stock Redeemed or Called During Period, Value | $ 202,000 | |||||||||
Redemption Price for Shares Percentage | 100.00% | |||||||||
Amended and Restated Share Redemption, Redemption Amount Minimum Limit | $ 5,000 | |||||||||
Units of Partnership Interest, Description | 15% of the Company’s net sale proceeds upon disposition of its assets after the Company’s stockholders receive a return of their investment plus a 7% cumulative, non-compounded rate of return or (ii) an equivalent amount in the event that the Company lists its shares of common stock on a national securities exchange or upon certain terminations of the Advisory Agreement after the Company’s stockholders are deemed to have received a return of their investment plus a 7% cumulative, non-compounded rate of return. | |||||||||
Special Distribution [Member] | ||||||||||
Equity (Additional Textual) [Abstract] | ||||||||||
Share Redemption Program, Redemption Percentage | 100.00% | |||||||||
Death of a shareholder [Member] | ||||||||||
Equity (Additional Textual) [Abstract] | ||||||||||
Stock Redeemed or Called During Period, Value | $ 2,000,000 | |||||||||
Disability of a shareholder [Member] | ||||||||||
Equity (Additional Textual) [Abstract] | ||||||||||
Stock Redeemed or Called During Period, Value | $ 1,000,000 | |||||||||
Restricted Stock [Member] | ||||||||||
Equity (Additional Textual) [Abstract] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 50,000 | |||||||||
T N P Strategic Retail O P Holdings L L C [Member] | ||||||||||
Equity (Additional Textual) [Abstract] | ||||||||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 91.67% | 88.00% | ||||||||
T N P SR T Manager [Member] | ||||||||||
Equity (Additional Textual) [Abstract] | ||||||||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 8.33% | 12.00% | ||||||||
Full Redemption Amount Paid | $ 2,100,000 | |||||||||
Common Stock [Member] | ||||||||||
Equity (Additional Textual) [Abstract] | ||||||||||
Stock Redeemed or Called During Period, Shares | 30,721 | |||||||||
Stock Redeemed or Called During Period, Value | $ 0 | |||||||||
Common Stock [Member] | Share Redemption Program [Member] | ||||||||||
Equity (Additional Textual) [Abstract] | ||||||||||
Stock Redeemed or Called During Period, Shares | 30,721 | |||||||||
Stock Redeemed or Called During Period, Value | $ 202,000 | |||||||||
DRIP [Member] | ||||||||||
Equity (Textual) [Abstract] | ||||||||||
Issuance of common stock under DRIP | $ 391,182 | |||||||||
Equity (Additional Textual) [Abstract] | ||||||||||
Proceeds From Issuance Of Common Stock | $ 3,600,000 | |||||||||
Stock Redeemed or Called During Period, Shares | 396,624 | |||||||||
Stock Redeemed or Called During Period, Value | $ 3,197,000 | |||||||||
Stock Issued During Period, Shares, New Issues | 273,729 | |||||||||
Pinehurst Square East [Member] | ||||||||||
Equity (Textual) [Abstract] | ||||||||||
Common stock shares sold in offering | 287,472 | |||||||||
Common Stock, Value, Issued | $ 2,600,000 | |||||||||
Common stock par value | $ 9 | |||||||||
Turkey Creek [Member] | ||||||||||
Equity (Textual) [Abstract] | ||||||||||
Common stock shares sold in offering | 144,324 | |||||||||
Common Stock, Value, Issued | $ 1,400,000 | |||||||||
Common stock par value | $ 9.50 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Numerator - basic and diluted | |||
Net income (loss) from continuing operations | $ (65,000) | $ 3,122,000 | |
Net income (loss) attributable to non-controlling interests | (2,000) | 261,000 | |
Net income (loss) attributable to common shares | $ (63,000) | $ 2,861,000 | |
Denominator - basic and diluted | |||
Basic weighted average common shares | 11,037,189 | 10,969,714 | |
Effect of dilutive securities Common units | [1] | 0 | 0 |
Diluted weighted average common shares | 11,037,189 | 10,969,714 | |
Earnings (loss) per common share - basic and diluted | |||
Net earnings (loss) attributable to common shares | $ (0.01) | $ 0.26 | |
[1] | The effect of 431,896 convertible Common Units pursuant to the redemption rights outlined in the Company’s registration statement Form S-11 have not been included as they would not be dilutive. |
EARNINGS PER SHARE (Details Tex
EARNINGS PER SHARE (Details Textual) | 3 Months Ended |
Mar. 31, 2016shares | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |
Antidiluted Convertible Common Units of Redemption | 431,896 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |||
Jan. 24, 2014 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | ||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | $ 1,000 | ||||
Expensed Acquisition Fees [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | $ 2,000 | $ 0 | |||
Related-party costs, Payable | 0 | $ 0 | |||
Expensed Asset management Fees [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | 217,000 | 320,000 | |||
Related-party costs, Payable | 0 | 19,000 | |||
Expensed Reimbursement Of Operating Expenses [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | 50,000 | 0 | |||
Related-party costs, Payable | 8,000 | 27,000 | |||
Expensed Property Management Fees [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | 124,000 | 201,000 | |||
Related-party costs, Payable | 37,000 | 3,000 | |||
Expensed Disposition Fees [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | 0 | 525,000 | |||
Related-party costs, Payable | 0 | 0 | |||
Expensed Guaranty Fees [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | [1] | 0 | 1,000 | ||
Related-party costs, Payable | [1] | 0 | 0 | ||
Capitalized Leasing Fees [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | 10,000 | 27,000 | |||
Related-party costs, Payable | 0 | 0 | |||
Capitalized Legal Leasing Fees [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | 12,000 | 38,000 | |||
Related-party costs, Payable | 0 | 0 | |||
Capitalized Construction Management Fees [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | 1,000 | 5,000 | |||
Related-party costs, Payable | 0 | 0 | |||
Expensed [Member] | Advisor Fees [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | 393,000 | 1,047,000 | |||
Related-party costs, Payable | 45,000 | 49,000 | |||
Capitalized [Member] | Advisor Fees [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | 296,000 | 70,000 | |||
Related-party costs, Payable | 139,000 | 0 | |||
Capitalized Acquisition Fees [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | 273,000 | $ 0 | |||
Related-party costs, Payable | $ 139,000 | $ 0 | |||
[1] | Guaranty fees were paid by the Company to its prior advisor, TNP Strategic Retail Advisor, LLC. |
RELATED PARTY TRANSACTIONS (D56
RELATED PARTY TRANSACTIONS (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | ||||
Mar. 31, 2015 | Jan. 24, 2014 | Mar. 31, 2016 | Mar. 31, 2015 | Aug. 04, 2014 | Jul. 09, 2013 | |
Related party transactions (Textual) [Abstract] | ||||||
Related-party costs, Incurred | $ 1,000 | |||||
Property Management Fee, Percent Fee | 4.00% | |||||
Related Party Transactions (Additional Textual) [Abstract] | ||||||
Market-based property management fee of gross revenues | 5.00% | |||||
Company pays Advisor an acquisition fee for cost of investments acquired | 1.00% | |||||
Company pays Advisor of the amount funded by the Company to acquire or originate real estate-related loans | 1.00% | |||||
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% | |||||
Reimbursement Of Operating Expenses Description | The Company reimburses the Advisor for all expenses paid or incurred by the Advisor in connection with the services provided to the Company, subject to the limitation that the Company will not reimburse the Advisor for any amount by which the Company’s total operating expenses (including the asset management fee described below) at the end of the four preceding fiscal quarters exceeded 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”). The Advisor is required to reimburse the Company quarterly for any amounts by which total operating expenses exceed the 2%/25% Guideline in the previous expense year that the independent directors do not approve. The Company will not reimburse the Advisor for any of its personnel costs or other overhead costs except for customary reimbursements for personnel costs under property management agreements entered into between the OP and the Advisor or its affiliates. Notwithstanding the above, the Company may reimburse the Advisor for expenses in excess of the 2%/25% Guideline if a majority of the independent directors determine that such excess expenses are justified based on unusual and non-recurring factors. | |||||
Common Stock, Number of Shares, Par Value and Other Disclosures [Abstract] | ||||||
Common Stock Sale Price Per Share | $ 8 | |||||
Related Party Transaction, Expenses From Transactions With Related Party | $ 4,000 | $ 0 | ||||
TNP LLC [Member] | ||||||
Common Stock, Number of Shares, Par Value and Other Disclosures [Abstract] | ||||||
Sale Of Stock Number Of Shares Issued | 22,222 | |||||
SGO Joint Venture [Member] | ||||||
Related Party Transactions (Additional Textual) [Abstract] | ||||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 19.00% | |||||
Common Stock, Number of Shares, Par Value and Other Disclosures [Abstract] | ||||||
Related Party Transaction, Expenses From Transactions With Related Party | $ 150,000 | $ 234,000 | ||||
Sharon D. Thompson [Member] | ||||||
Common Stock, Number of Shares, Par Value and Other Disclosures [Abstract] | ||||||
Sale Of Stock Number Of Shares Issued | 111,111 | |||||
SRT Manager [Member] | ||||||
Related Party Transactions (Additional Textual) [Abstract] | ||||||
Operating Partnership Interest | 8.33% | 8.33% | 8.33% | |||
Full Redemption Amount Paid | $ 2,102,000 | |||||
Asset management fees [Member] | ||||||
Related party transactions (Textual) [Abstract] | ||||||
Related-party costs, Incurred | $ 250,000 | |||||
Related Party Transactions (Additional Textual) [Abstract] | ||||||
Company pays Advisor a monthly asset management fee on all real estate investments | 0.60% | |||||
Financing coordination fees [Member] | ||||||
Related Party Transactions (Additional Textual) [Abstract] | ||||||
Payment of financial Coordination fees | 1.00% | |||||
Mortgage Notes [Member] | ||||||
Related Party Transactions (Additional Textual) [Abstract] | ||||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 12.00% |
SUBSEQUENT EVENTS (Details Text
SUBSEQUENT EVENTS (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | ||||||
Apr. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | May. 06, 2016 | May. 04, 2016 | |
Subsequent Event [Line Items] | ||||||||
Dividend Distribution To Common Stockholders And Unit Holders | $ 2,730,000 | $ 686,000 | $ 680,000 | $ 680,000 | $ 684,000 | |||
Common Stock, Dividends, Per Share, Declared | $ 0.06 | $ 0.06 | $ 0.06 | $ 0.06 | ||||
Subsequent Event [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Dividend Distribution To Common Stockholders And Unit Holders | $ 686,000 | |||||||
Common Stock, Dividends, Per Share, Declared | $ 0.06 | |||||||
Real Estate Properties Purchase Price | $ 13,700,000 | |||||||
Earnest Money Deposits | $ 425,000 | |||||||
Subsequent Event [Member] | Bloomingdale Hills [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Proceeds from Sale of Property, Plant, and Equipment | $ 9,200,000 | |||||||
Repayments of Debt | 5,300,000 | |||||||
Repayments of Lines of Credit | $ 3,000,000 |