Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 05, 2018 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | Strategic Realty Trust, Inc. | |
Entity Central Index Key | 1,446,371 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 10,926,513 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | ||
Investments in real estate | ||||
Land | $ 15,217 | $ 14,020 | ||
Building and improvements | 32,013 | 30,825 | ||
Tenant improvements | 1,466 | 1,188 | ||
Investments in real estate, gross | 48,696 | 46,033 | ||
Accumulated depreciation | (3,619) | (2,579) | ||
Investments in real estate, net | 45,077 | 43,454 | ||
Properties under development and development costs | ||||
Land | 25,851 | 25,851 | ||
Buildings | 574 | 585 | ||
Development costs | 12,928 | 9,609 | ||
Properties under development and development costs | 39,353 | 36,045 | ||
Cash, cash equivalents and restricted cash | 3,148 | 3,902 | ||
Prepaid expenses and other assets, net | 272 | 200 | ||
Tenant receivables, net of $62 and $0 bad debt reserve | 791 | 1,007 | ||
Investments in unconsolidated joint ventures | 3,030 | 2,705 | ||
Lease intangibles, net | 1,910 | 2,061 | ||
Assets held for sale | 12,683 | 20,646 | ||
Deferred financing costs, net | 894 | 1,258 | ||
TOTAL ASSETS (1) | 107,158 | [1] | 111,278 | |
LIABILITIES | ||||
Notes payable, net | 43,979 | 42,223 | ||
Accounts payable and accrued expenses | 1,775 | 2,006 | ||
Amounts due to affiliates | 24 | 21 | ||
Other liabilities | 300 | 387 | ||
Liabilities related to assets held for sale | 5,963 | 13,017 | ||
Below-market lease liabilities, net | 386 | 438 | ||
Deferred gain on sale of properties to unconsolidated joint venture | 0 | 668 | ||
TOTAL LIABILITIES (1) | 52,427 | 58,760 | ||
Commitments and contingencies (Note 13) | ||||
EQUITY | ||||
Preferred stock, $0.01 par value; 50,000,000 shares authorized, none issued and outstanding | 0 | 0 | ||
Common stock, $0.01 par value; 400,000,000 shares authorized; 10,926,513 and 10,988,438 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively | 111 | 111 | ||
Additional paid-in capital | 95,717 | 96,097 | ||
Accumulated deficit | (42,189) | (44,741) | ||
Total stockholders’ equity | 53,639 | 51,467 | ||
Non-controlling interests | 1,092 | 1,051 | ||
TOTAL EQUITY | 54,731 | 52,518 | ||
TOTAL LIABILITIES AND EQUITY | 107,158 | 111,278 | ||
Variable Interest Entity, Primary Beneficiary [Member] | ||||
Properties under development and development costs | ||||
Land | 25,851 | 25,851 | ||
Buildings | 574 | 585 | ||
Development costs | 12,928 | 9,609 | ||
Properties under development and development costs | 39,353 | 36,045 | ||
Cash, cash equivalents and restricted cash | 526 | 1,099 | ||
Prepaid expenses and other assets, net | 12 | 9 | ||
Lease intangibles, net | 4 | 0 | ||
TOTAL ASSETS (1) | [2] | 39,895 | 37,153 | |
LIABILITIES | ||||
Notes payable, net | [3] | 18,248 | 19,116 | |
Accounts payable and accrued expenses | 199 | 478 | ||
Amounts due to affiliates | 8 | 9 | ||
Other liabilities | 9 | 9 | ||
TOTAL LIABILITIES (1) | $ 18,464 | $ 19,612 | ||
[1] | As of September 30, 2018 and December 31, 2017, includes approximately $39.9 million and $37.2 million, respectively, of assets related to consolidated variable interest entities that can be used only to settle obligations of the consolidated variable interest entities and approximately $18.5 million and $19.6 million, respectively, of liabilities of consolidated variable interest entities for which creditors do not have recourse to the general credit of the Company. Refer to Note 5. “Variable Interest Entities”. | |||
[2] | The assets of the Sunset & Gardner Joint Venture and Wilshire Joint Venture can be used only to settle obligations of the respective consolidated joint ventures. | |||
[3] | As of September 30, 2018 and December 31, 2017, includes reclassification of approximately $0.2 million and $0.1 million, respectively, of deferred financing costs, net, as a contra-liability. The creditors of the consolidated joint ventures do not have recourse to the general credit of the Company. The notes payable of the consolidated joint ventures are not guaranteed by the Company. |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
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, shares issued | 10,926,513 | 10,988,438 |
Common stock, shares outstanding | 10,926,513 | 10,988,438 |
Bad debt reserve | $ 62 | $ 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue: | ||||
Rental and reimbursements | $ 1,516 | $ 2,219 | $ 5,103 | $ 7,084 |
Expense: | ||||
Operating and maintenance | 660 | 848 | 1,925 | 2,554 |
General and administrative | 421 | 483 | 1,317 | 1,478 |
Depreciation and amortization | 483 | 653 | 1,182 | 2,439 |
Transaction expense | 7 | 0 | 39 | 85 |
Interest expense | 147 | 449 | 667 | 1,505 |
Total expense | 1,718 | 2,433 | 5,130 | 8,061 |
Operating loss | (202) | (214) | (27) | (977) |
Other income (loss): | ||||
Equity in income (loss) of unconsolidated joint ventures | 290 | (19) | 245 | (24) |
Net gain on disposal of real estate | 1,293 | 0 | 3,741 | 9,131 |
Loss on extinguishment of debt | 0 | 0 | 0 | (80) |
Income (loss) before income taxes | 1,381 | (233) | 3,959 | 8,050 |
Income taxes | 5 | 3 | (19) | (99) |
Net income (loss) | 1,386 | (230) | 3,940 | 7,951 |
Net income (loss) attributable to non-controlling interests | 29 | (13) | 83 | 293 |
Net income (loss) attributable to common stockholders | $ 1,357 | $ (217) | $ 3,857 | $ 7,658 |
Earnings (loss) per common share - basic and diluted | $ 0.12 | $ (0.02) | $ 0.35 | $ 0.70 |
Weighted average shares outstanding used to calculate earnings (loss) per common share - basic and diluted | 10,962,529 | 10,885,095 | 10,976,030 | 10,909,141 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF EQUITY - USD ($) | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Non-controlling Interests | Total Stockholders' Equity |
BALANCE at Dec. 31, 2016 | $ 47,233,000 | $ 111,000 | $ 96,032,000 | $ (50,676,000) | $ 1,766,000 | $ 45,467,000 |
BALANCE (in shares) at Dec. 31, 2016 | 10,938,245 | |||||
Stock Issued During Period, Shares, Conversion of Units | 162,409 | |||||
Stock Issued During Period, Value, Conversion of Units | 0 | $ 0 | 809,000 | 0 | (809,000) | 809,000 |
Redemption of common shares (in shares) | (87,928) | |||||
Redemption of common shares, value | (558,000) | $ 0 | (558,000) | 0 | 0 | (558,000) |
Stock Dividends, Shares | 0 | |||||
Quarterly distributions | (2,033,000) | $ 0 | 0 | (1,967,000) | (66,000) | (1,967,000) |
Cumulative effect from change in accounting principle (Note 2) | 0 | |||||
Net income (loss) | 7,951,000 | 0 | 0 | 7,658,000 | 293,000 | 7,658,000 |
BALANCE at Sep. 30, 2017 | 52,593,000 | $ 111,000 | 96,283,000 | (44,985,000) | 1,184,000 | 51,409,000 |
BALANCE (in shares) at Sep. 30, 2017 | 11,012,726 | |||||
BALANCE at Jun. 30, 2017 | 53,614,000 | $ 111,000 | 95,589,000 | (44,108,000) | 2,022,000 | 51,592,000 |
BALANCE (in shares) at Jun. 30, 2017 | 10,868,550 | |||||
Stock Issued During Period, Shares, Conversion of Units | 162,409 | |||||
Stock Issued During Period, Value, Conversion of Units | 0 | $ 0 | 809,000 | 0 | (809,000) | 809,000 |
Redemption of common shares (in shares) | (18,233) | |||||
Redemption of common shares, value | (115,000) | $ 0 | (115,000) | 0 | 0 | (115,000) |
Stock Dividends, Shares | 0 | |||||
Quarterly distributions | (676,000) | $ 0 | 0 | (660,000) | (16,000) | (660,000) |
Net income (loss) | (230,000) | 0 | 0 | (217,000) | (13,000) | (217,000) |
BALANCE at Sep. 30, 2017 | 52,593,000 | $ 111,000 | 96,283,000 | (44,985,000) | 1,184,000 | 51,409,000 |
BALANCE (in shares) at Sep. 30, 2017 | 11,012,726 | |||||
BALANCE at Dec. 31, 2017 | 52,518,000 | $ 111,000 | 96,097,000 | (44,741,000) | 1,051,000 | 51,467,000 |
BALANCE (in shares) at Dec. 31, 2017 | 10,988,438 | |||||
Redemption of common shares (in shares) | (61,925) | |||||
Redemption of common shares, value | (380,000) | $ 0 | (380,000) | 0 | 0 | (380,000) |
Stock Dividends, Shares | 0 | |||||
Quarterly distributions | (2,015,000) | $ 0 | 0 | (1,973,000) | (42,000) | (1,973,000) |
Cumulative effect from change in accounting principle (Note 2) | 668,000 | 0 | 0 | 668,000 | 0 | 668,000 |
Net income (loss) | 3,940,000 | 0 | 0 | 3,857,000 | 83,000 | 3,857,000 |
BALANCE at Sep. 30, 2018 | 54,731,000 | $ 111,000 | 95,717,000 | (42,189,000) | 1,092,000 | 53,639,000 |
BALANCE (in shares) at Sep. 30, 2018 | 10,926,513 | |||||
BALANCE at Jun. 30, 2018 | 54,238,000 | $ 111,000 | 95,940,000 | (42,890,000) | 1,077,000 | 53,161,000 |
BALANCE (in shares) at Jun. 30, 2018 | 10,963,416 | |||||
Redemption of common shares (in shares) | (36,903) | |||||
Redemption of common shares, value | (223,000) | $ 0 | (223,000) | 0 | 0 | (223,000) |
Stock Dividends, Shares | 0 | |||||
Quarterly distributions | (670,000) | $ 0 | 0 | (656,000) | (14,000) | (656,000) |
Net income (loss) | 1,386,000 | 0 | 0 | 1,357,000 | 29,000 | 1,357,000 |
BALANCE at Sep. 30, 2018 | $ 54,731,000 | $ 111,000 | $ 95,717,000 | $ (42,189,000) | $ 1,092,000 | $ 53,639,000 |
BALANCE (in shares) at Sep. 30, 2018 | 10,926,513 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 3,940 | $ 7,951 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Net gain on disposal of real estate | (3,741) | (9,131) |
Loss on extinguishment of debt | 0 | 80 |
Equity in (income) loss of unconsolidated joint ventures | (245) | 24 |
Straight-line rent | (109) | (179) |
Amortization of deferred costs | 443 | 404 |
Depreciation and amortization | 1,182 | 2,439 |
Amortization of above and below-market leases | (15) | (129) |
Bad debt expense | 75 | 20 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other assets | (72) | 803 |
Tenant receivables | 231 | 288 |
Accounts payable and accrued expenses | 52 | (118) |
Amounts due to affiliates | 3 | (73) |
Other liabilities | (87) | 87 |
Net cash provided by operating activities | 1,657 | 2,466 |
Cash flows from investing activities: | ||
Net proceeds from the sale of real estate | 9,314 | 32,398 |
Acquisition of real estate | 0 | (17,812) |
Investment in properties under development and development costs | (3,147) | (3,810) |
Improvements, capital expenditures, and leasing costs | (643) | (1,110) |
Investments in unconsolidated joint ventures | (191) | 0 |
Distributions from unconsolidated joint ventures | 111 | 1,998 |
Net cash provided by investing activities | 5,444 | 11,664 |
Cash flows from financing activities: | ||
Redemption of common shares | (380) | (558) |
Quarterly distributions | (2,018) | (2,038) |
Proceeds from notes payable | 15,950 | 29,700 |
Repayment of notes payable | (20,769) | (41,999) |
Loan proceeds from an affiliate | 0 | 2,500 |
Payment of penalties associated with early repayment of notes payable | 0 | (1) |
Payment of loan fees from investments in consolidated variable interest entities | (559) | (453) |
Payment of loan fees and financing costs | (79) | (1,314) |
Net cash used in financing activities | (7,855) | (14,163) |
Net decrease in cash, cash equivalents and restricted cash | (754) | (33) |
Cash, cash equivalents and restricted cash – beginning of period | 3,902 | 7,858 |
Cash, cash equivalents and restricted cash – end of period | 3,148 | 7,825 |
Supplemental disclosure of non-cash investing and financing activities and other cash flow information: | ||
Distributions declared but not paid | 670 | 676 |
Change in accrued liabilities capitalized to investment in development | (194) | (225) |
Change to accrued mortgage note payable interest capitalized to investment in development | (85) | 5 |
Amortization of deferred loan fees capitalized to investment in development | 441 | 367 |
Cumulative effect from change in accounting principle | 668 | 0 |
Cash paid for interest, net of amounts capitalized | $ 326 | $ 1,110 |
ORGANIZATION AND BUSINESS
ORGANIZATION AND BUSINESS | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BUSINESS | 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. Since the Company’s inception, its business has been managed by an external advisor. 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 every year through 2018. The current term of the Advisory Agreement terminates on August 10, 2019. 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 Company’s initial public offering (“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 both September 30, 2018 and December 31, 2017 , the Company owned 97.9% of the limited partnership interests in the OP. 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 as well as development of properties. 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 invests in and manages a portfolio of income-producing retail properties, located in the United States, real estate-owning entities and real estate-related assets, including the investment in or origination of mortgage, mezzanine, bridge and other loans related to commercial real estate. 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. During the first quarter of 2016, the Company invested, through joint ventures, in two significant retail projects under development. As of September 30, 2018 , in addition to the development projects, the Company’s portfolio of properties was comprised of 9 properties, including one property held for sale, with approximately 233,000 rentable square feet of retail space located in three states. As of September 30, 2018 , the rentable space at the Company’s retail properties was 89% leased. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Basis of Presentation The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) as contained within the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”), including the instructions to Form 10-Q and Regulation S-X. The interim 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 condensed consolidated 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 Topic 810, Consolidation (“ASC 810”). In determining whether the Company has a controlling interest in a joint venture or a variable interest entity and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the partners/members, as well as whether the entity is a variable interest entity for which the Company is the primary beneficiary. As of September 30, 2018 and December 31, 2017 , the Company held ownership interests in two unconsolidated joint ventures. Refer to Note 4. “Investments in Unconsolidated Joint Ventures” for additional information. As of September 30, 2018 and December 31, 2017 , the Company held variable interests in two variable interest entities and consolidated those entities. Refer to Note 5. “Variable Interest Entities” for additional information. Cash, Cash Equivalents and Restricted Cash 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. In November 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-18, Restricted Cash, which amends (Topic 230), Statement of Cash Flows (“ASU 2016-18”) . ASU 2016-18 requires that a statement of cash flows explains the change during the reporting period in the total of cash, cash equivalents, and restricted cash or restricted cash equivalents. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period. ASU 2016-18 requires adoption using a retrospective transition method. The Company adopted ASU 2016-18 on January 1, 2018. As a result of adopting ASU 2016-18, the Company revised the presentation of cash, cash equivalents and restricted cash on the condensed consolidated balance sheets and condensed consolidated statements of cash flows for all the periods presented. Upon adoption of ASU 2016-18, the Company recorded a decrease of $0.1 million in net cash provided by operating activities and $0.4 million in net cash provided by investing activities for the nine months ended September 30, 2017 , related to reclassifying the changes in the restricted cash balance from operating activities and investing activities to the cash, cash equivalents and restricted cash balances on the condensed consolidated statements of cash flows. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported on the condensed consolidated balance sheets that sum to the total of the same such amounts shown on the condensed consolidated statement of cash flows (amounts in thousands): September 30, 2018 December 31, 2017 Cash and cash equivalents $ 2,835 $ 3,086 Restricted cash 313 816 Total cash, cash equivalents, and restricted cash $ 3,148 $ 3,902 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 approximately $0.5 million at both September 30, 2018 and December 31, 2017. 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. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which was added to the ASC under Topic 606 (“ASC 606”). ASC 606 outlines a single comprehensive model for entities to use in accounting for revenues arising from contracts with customers. As the Company’s revenues are primarily generated through leasing arrangements, the Company’s revenues fall outside the scope of this standard. As part of ASU 2014-09, ASC 610-20, Gains and Losses from Derecognition of Nonfinancial Assets , (“ASC 610-20”) was issued. ASC 610-20 provided guidance for recognizing gains and losses from the transfer of nonfinancial assets, which includes the sale of real estate. In February 2017, the FASB issued ASU No. 2017-05, Other Income-Gains and Losses for the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (“ASU 2017-05”). ASU 2017-05 amends the guidance on nonfinancial assets in ASC 610-20. The amendments clarify that (i) a financial asset is within the scope of ASC 610-20 if it meets the definition of an in-substance nonfinancial asset and may include nonfinancial assets transferred within a legal entity to a counter-party, (ii) an entity should identify each distinct nonfinancial asset or in substance nonfinancial asset promised to a counter-party and de-recognize each asset when a counter-party obtains control of it, and (iii) an entity should allocate consideration to each distinct asset by applying the guidance in ASC 606 on allocating the transaction price to performance obligations. Further, ASU 2017-05 provides guidance on accounting for partial sales of nonfinancial assets. Effective January 1, 2018, the Company applied the provisions of ASC 610-20, for gains on sale of real estate, and recognizes any gains at the time control of a property is transferred and when it is probable that substantially all of the related consideration will be collected. As a result of adopting ASC 610-20, using the modified retrospective method, the sales criteria in ASC 360, Property, Plant, and Equipment , no longer applied. As such, the Company recognized $0.7 million of deferred gains related to sales of properties to the SGO Retail Acquisitions Venture, LLC, through a cumulative effect adjustment to accumulated deficit. Other than the cumulative effect adjustment relating to such deferred gains, the adoption of ASC 606 and ASC 610-20 did not have an impact on the Company’s condensed consolidated financial statements. Reclassifications Certain prior period amounts have been reclassified to conform with current period’s presentation as a result of adoption of ASU 2016-18. See Cash, Cash Equivalents and Restricted Cash section above for discussion of the impact of these reclassifications. Recent Accounting Pronouncements The FASB issued the following ASUs which could have potential impact to the Company’s condensed consolidated financial statements: In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). ASU 2018-13 modifies the disclosure requirements on fair value measurements in Topic 820. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted for any removed or modified disclosures upon issuance of ASU 2018-13 and delayed adoption of the additional disclosures until the effective date. The adoption of ASU 2016-13 will not have an impact on the Company’s condensed consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). ASU 2016-15 addresses eight specific cash flow issues with the objective of reducing diversity in practice. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period. ASU 2016-15 will require adoption on a retrospective basis. The Company adopted ASU 2016-15 on January 1, 2018. Adoption of ASU 2016-15 did not have an impact on the Company’s condensed consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (“ASU 2016-13”). ASU 2016-13 requires a financial asset, measured at amortized cost basis to be presented at the net amount expected to be collected. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, with adoption permitted for fiscal years beginning after December 15, 2018. Adjustments resulting from adopting ASU 2016-13 shall be applied through a cumulative-effect adjustment to retained earnings. The adoption of ASU 2016-13 will not have an impact on the Company’s condensed consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02 Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 requires entities to recognize lease assets and lease liabilities on the consolidated balance sheet and disclose key information about leasing arrangements. The guidance retains a distinction between finance leases and operating leases. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from previous guidance. However, the principal difference from previous guidance is that the lease assets and lease liabilities arising from operating leases should be recognized in the statement of financial position. The accounting applied by a lessor is largely unchanged from that applied under the previous guidance. Lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. In July 2018, the FASB also issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases (“ASU 2018-10”). ASU 2018-10 provides narrow amendments that clarify how to apply certain aspects of the guidance in ASU 2016-02. Additionally, in July 2018, the FASB issued ASU No. 2018-11, Targeted Improvements to Topic 842, Leases (“ASU 2018-11”) to amend ASU 2016-02, which would provide lessors with a practical expedient, by class of underlying assets, to not separate non-lease components from the related lease components and, instead, to account for those components as a single lease component, if certain criteria are met. The amendments in this guidance as well as ASU 2018-10 and ASU 2018-11 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Earlier application is permitted. The Company believes that the adoption of ASU 2016-02 will not change the accounting for operating leases on its condensed consolidated financial statements. The Company expects to utilize the practical expedients proposed in ASU 2018-11 as part of its adoption of ASU 2016-02. |
REAL ESTATE INVESTMENTS
REAL ESTATE INVESTMENTS | 9 Months Ended |
Sep. 30, 2018 | |
Real Estate Investments, Net [Abstract] | |
REAL ESTATE INVESTMENTS | REAL ESTATE INVESTMENTS Sales of Properties On July 17, 2018, the Company consummated the disposition of Ensenada Square, located in Arlington, Texas, for a sales price of approximately $5.8 million in cash. The Company used the net proceeds from the sale of Ensenada Square to repay $5.3 million of the outstanding balance on its line of credit. The disposition of Ensenada Square resulted in a gain of $1.3 million , which was included on the Company’s condensed consolidated statement of operations. On June 21, 2018, the Company consummated the disposition of a portion of Topaz Marketplace, located in Hesperia, California, for a sales price of approximately $4.2 million in cash. The Company used the net proceeds from the sale of a portion of Topaz Marketplace to repay $4.0 million of the outstanding balance on its line of credit. The disposition of a portion of Topaz Marketplace resulted in a gain of $2.4 million , which was included on the Company’s condensed consolidated statement of operations. The sales of the above properties did not represent a strategic shift that will have a major effect on the Company’s operations and financial results and their results of operations were not reported as discontinued operations on the Company’s condensed consolidated financial statements. The following table summarizes net operating income related to Ensenada Square and the disposed portion of Topaz Marketplace, which is included in the Company’s condensed consolidated statements of operations for the three and nine months ended September 30, 2018 and 2017 (amounts in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Operating income (loss) $ (17 ) $ 56 $ 288 $ 140 Assets Held for Sale and Liabilities Related to Assets Held for Sale At September 30, 2018 and December 31, 2017 , Florissant Marketplace, located in Florissant, Missouri, was classified as held for sale in the condensed consolidated balance sheets. Since the sale of this property does not represent a strategic shift that will have a major effect on the Company’s operations and financial results, the results of operations of this property were not reported as discontinued operations in the Company’s condensed consolidated financial statements. Initially, the Company intends to use the net proceeds from the sale of this property to repay a portion of the outstanding balance on its line of credit. On September 20, 2018, the Company entered into a Purchase and Sale Agreement with an unrelated third party purchaser (the “Purchaser”) for the sale of Florissant Marketplace. The contractual sale price of Florissant Marketplace is approximately $16.6 million . Pursuant to the Purchase and Sale Agreement, the Purchaser would be obligated to purchase the property and the Company would be obligated to sell the property only after satisfaction of agreed upon closing conditions. There can be no assurance that the Company will complete the sale. As of September 30, 2018 , Shops at Turkey Creek, located in Knoxville, Tennessee, no longer met certain criteria to be classified as held for sale. As such, all the related assets, net of depreciation, and liabilities were recorded within the relevant categories in the condensed consolidated balance sheets. Depreciation catch up of approximately $80 thousand was recorded upon the assets being placed back in service. The Company’s condensed consolidated statements of operations include net operating income of approximately $0.3 million and $0.1 million for the three months ended September 30, 2018 and 2017 , respectively, and $0.9 million and $0.1 million for the nine months ended September 30, 2018 and 2017 , related to the assets held for sale. At December 31, 2017 , Florissant Marketplace, Ensenada Square and Shops at Turkey Creek were classified as held for sale in the consolidated balance sheet. The major classes of assets and liabilities related to assets held for sale included in the condensed consolidated balance sheets are as follows (amounts in thousands): September 30, December 31, 2018 2017 ASSETS Investments in real estate Land $ 2,817 $ 5,248 Building and improvements 11,671 17,522 Tenant improvements 596 1,189 15,084 23,959 Accumulated depreciation (3,596 ) (5,178 ) Investments in real estate, net 11,488 18,781 Tenant receivables, net 187 248 Lease intangibles, net 1,008 1,617 Assets held for sale $ 12,683 $ 20,646 LIABILITIES Notes payable $ 4,056 $ 10,749 Below-market lease intangibles, net 1,907 2,268 Liabilities related to assets held for sale $ 5,963 $ 13,017 Amounts above are being presented at their carrying value, which the Company believes to be lower than their estimated fair value less costs to sell. |
INVESTMENTS IN UNCONSOLIDATED J
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES | 9 Months Ended |
Sep. 30, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES | INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES The following table summarizes the Company’s investments in unconsolidated joint ventures as of September 30, 2018 and December 31, 2017 (amounts in thousands): Ownership Interest Investment Joint Venture Date of Investment September 30, December 31, September 30, December 31, SGO Retail Acquisitions Venture, LLC 3/11/2015 19 % 19 % $ 1,084 $ 978 SGO MN Retail Acquisitions Venture, LLC 9/30/2015 10 % 10 % 1,946 1,727 Total $ 3,030 $ 2,705 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 September 30, 2018 and December 31, 2017 , 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 | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
VARIABLE INTEREST ENTITIES | VARIABLE INTEREST ENTITIES The Company has variable interests in, and is the primary beneficiary of, variable interest entities (“VIEs”) through its investments in (i) the Sunset & Gardner Joint Venture (formerly known as Gelson’s Joint Venture) and (ii) the 3032 Wilshire Joint Venture (“Wilshire Joint Venture”). The Company has consolidated the accounts of these variable interest entities. On April 27, 2018, the Company made an additional contribution of $0.8 million to the Sunset & Gardner Joint Venture. On April 23, 2018, the Company made an additional contribution of $1.0 million to the Sunset & Gardner Joint Venture. On March 21, 2018, the Company made an additional contribution of $0.9 million to the Wilshire Joint Venture. The following reflects the aggregate assets and liabilities of the Sunset & Gardner Joint Venture and the Wilshire Joint Venture, which were consolidated by the Company, as of September 30, 2018 and December 31, 2017 (amounts in thousands): September 30, December 31, 2018 2017 ASSETS Properties under development and development costs: Land $ 25,851 $ 25,851 Buildings 574 585 Development costs 12,928 9,609 Properties under development and development costs 39,353 36,045 Cash, cash equivalents and restricted cash 526 1,099 Prepaid expenses and other assets, net 12 9 Lease intangibles, net 4 — TOTAL ASSETS (1) $ 39,895 $ 37,153 LIABILITIES Notes payable, net (2) $ 18,248 $ 19,116 Accounts payable and accrued expenses 199 478 Amounts due to affiliates 8 9 Other liabilities 9 9 TOTAL LIABILITIES $ 18,464 $ 19,612 (1) The assets of the Sunset & Gardner Joint Venture and Wilshire Joint Venture can be used only to settle obligations of the respective consolidated joint ventures. (2) As of September 30, 2018 and December 31, 2017 , includes reclassification of approximately $0.2 million and $0.1 million , respectively, 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. |
FUTURE MINIMUM RENTAL INCOME
FUTURE MINIMUM RENTAL INCOME | 9 Months Ended |
Sep. 30, 2018 | |
Operating Leases, Future Minimum Payments Receivable [Abstract] | |
FUTURE MINIMUM RENTAL INCOME | FUTURE MINIMUM RENTAL INCOME Operating Leases The Company’s real estate properties are leased to tenants under operating leases for which the terms and expirations vary. As of September 30, 2018 , the leases at the Company’s properties, excluding properties classified as held for sale, have remaining terms (excluding options to extend) of up to 13.2 years with a weighted-average remaining term (excluding options to extend) of approximately 6.1 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 approximately $0.2 million as of both September 30, 2018 and December 31, 2017 . As of September 30, 2018 , the future minimum rental income from the Company’s properties under non-cancelable operating leases, excluding properties classified as held for sale, was as follows (amounts in thousands): Remainder of 2018 $ 659 2019 2,691 2020 2,533 2021 2,270 2022 2,256 Thereafter 9,935 Total $ 20,344 |
LEASE INTANGIBLES AND BELOW-MAR
LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES | 9 Months Ended |
Sep. 30, 2018 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
ACQUIRED LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES | LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES, NET As of September 30, 2018 and December 31, 2017 , the Company’s acquired lease intangibles and below-market lease liabilities were as follows (amounts in thousands): Lease Intangibles Below-Market Lease Liabilities September 30, December 31, September 30, December 31, Cost $ 2,973 $ 2,783 $ (526 ) $ (571 ) Accumulated amortization (1,063 ) (722 ) 140 133 Total $ 1,910 $ 2,061 $ (386 ) $ (438 ) The Company’s amortization of lease intangibles and below-market lease liabilities for the three and nine months ended September 30, 2018 and 2017 , were as follows (amounts in thousands): Lease Intangibles Below-Market Lease Liabilities Three Months Ended Three Months Ended 2018 2017 2018 2017 Amortization $ (156 ) $ (164 ) $ 18 $ 40 Lease Intangibles Below-Market Lease Liabilities Nine Months Ended Nine Months Ended 2018 2017 2018 2017 Amortization $ (314 ) $ (761 ) $ 51 $ 176 |
NOTES PAYABLE, NET
NOTES PAYABLE, NET | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTES PAYABLE, NET Line of Credit The Company’s line of credit is a revolving credit facility with an initial maximum aggregate commitment of $30.0 million . Effective February 15, 2017, the Company’s line of credit was refinanced to increase the maximum aggregate commitment under the credit facility from $30.0 million to $60.0 million . The credit facility matures on February 15, 2020 . Each loan made pursuant to the 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 the lender an unused commitment fee, quarterly in arrears, which will accrue at 0.30% per annum, if the usage under the the Company’s line of credit is less than or equal to 50% of the line of credit amount, and 0.20% per annum if the usage under the Company’s line of credit is greater than 50% of the line of credit amount. The Company is providing a guaranty of all of its obligations under the Company’s line of credit and all other loan documents. As of September 30, 2018 and December 31, 2017, the Company’s line of credit had an outstanding principal balance of $25.7 million and $23.1 million , respectively. These balances exclude $4.1 million and $10.7 million which have been classified as held for sale as of September 30, 2018 and December 31, 2017, respectively. As of September 30, 2018 and December 31, 2017, the Company’s line of credit was secured by Topaz Marketplace, 8 Octavia Street, 400 Grove Street, the Fulton Shops, 450 Hayes, 388 Fulton, Silver Lake, Florissant Marketplace, and The Shops at Turkey Creek. Mortgage Loans Secured by Properties Under Development During the three months ended September 30, 2018, the Company refinanced and repaid its initial financing (outstanding balance of $8.5 million at the time of refinancing) with a new loan from Lone Oak Fund LLC (the “Wilshire Loan”). The Wilshire Loan has a principal balance of approximately $8.8 million , and bears an interest rate of 6.9% per annum, payable monthly, commencing on November 1, 2018. The Wilshire Loan is scheduled to mature on September 30, 2019 . The Wilshire Loan is secured by, a first Deed of Trust on the Wilshire property. In connection with the Company’s investment in the Sunset & Gardner Joint Venture and the acquisition of the Sunset & Gardner Property, the Company has consolidated borrowings of $9.7 million (the “Sunset & Gardner Loan”). The Sunset & Gardner Loan bears interest at a rate of 9.25% plus 30 -day LIBOR with a minimum of 9.5% per annum, payable monthly, commencing on April 1, 2016. The loan was scheduled to mature on January 27, 2017 , with an option to extend for an additional six-month period, subject to certain conditions as stated in the loan agreement. Those conditions were not met, but the Company negotiated a six month extension of the term on January 27, 2017 to mature on July 27, 2017. The Company negotiated a nine month extension of the term on July 27, 2017. The extension was scheduled to mature on April 27, 2018. On April 23, 2018, the Company made a mandatory principal payment of $1.0 million . The Company extended the loan, for an additional six months, effective April 26, 2018. The new maturity date was October 27, 2018 . On October 29, 2018, the Company refinanced and repaid its initial financing with a new loan from Lone Oak Fund LLC, refer to Note 14. “Subsequent Events” for additional information. The loan is secured by, among other things, a lien on the Sunset & Gardner development project and other joint venture collateral as defined in the loan agreement. The following is a schedule of future principal payments for all of the Company’s notes payable outstanding as of September 30, 2018 (amounts in thousands): Remainder of 2018 $ 9,700 2019 8,750 2020 29,787 Total (1) $ 48,237 (1) Total future principal payments reflect actual amounts due to creditors, and excludes reclassification of $0.2 million deferred financing costs, net. During the three months ended September 30, 2018 and 2017 , the Company incurred and expensed approximately $0.1 million and $0.4 million , respectively, of interest costs, which included the amortization of deferred financing costs of approximately $0.2 million and $0.1 million , respectively, for each period. Also during the three months ended September 30, 2018 and 2017 , the Company incurred and capitalized approximately $1.1 million and $0.8 million , respectively, of interest expense related to the variable interest entities, which included the amortization of deferred financing costs of approximately $0.2 million and $0.1 million for each period. During the nine months ended September 30, 2018 and 2017 , the Company incurred and expensed approximately $0.7 million and $1.5 million , respectively, of interest costs, which included the amortization of deferred financing costs of approximately $0.4 million for each period. Also during the nine months ended September 30, 2018 and 2017 , the Company incurred and capitalized approximately $2.9 million and $2.5 million , respectively, of interest expense related to the variable interest entities, which included amortization of deferred financing costs of approximately $0.4 million for each period. As of September 30, 2018 and December 31, 2017 , interest expense payable was approximately $0.2 million and $0.3 million , respectively, including an amount related to the variable interest entities of approximately $0.1 million and $0.2 million , respectively, for each period. |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE DISCLOSURES | FAIR VALUE DISCLOSURES Certain financial assets and liabilities are measured at fair value on a recurring basis. The Company determines fair value using the following hierarchy: • 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. The Company believes the total carrying values reflected on its condensed consolidated balance sheets for cash, cash equivalents and restricted cash, accounts receivable, accounts payable and accrued expenses, amounts due to affiliates, mortgage loans secured by properties under development, and the Company’s line of credit reasonably approximate their fair values due to their short-term nature. As part of the Company’s ongoing evaluation of the Company’s real estate portfolio, the Company estimates the fair value of its investments in real estate by obtaining outside independent appraisals on all of the properties. The appraised values are compared with the carrying values of its real estate portfolio to determine if there are indications of impairment. For both the three and nine months ended September 30, 2018 and September 30, 2017 , the Company did not record any impairment losses. |
EQUITY
EQUITY | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
EQUITY | EQUITY 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 “SRP”). The SRP was subsequently amended on August 7, 2015 and August 10, 2016. On October 5, 2016, the board of directors approved, pursuant to Section 3(a) of the SRP, an additional $0.5 million of funds available for the redemption of shares in connection with the death of a stockholder. On August 2, 2017, the board of directors of the Company approved, pursuant to Section 3(a) of the SRP, an additional $1.0 million of funds available for the redemption of shares in connection with the death of a stockholder. The following table summarizes share redemption activity during the three and nine months ended September 30, 2018 and 2017 (amounts in thousands, except shares): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Shares of common stock redeemed 36,903 18,233 61,925 87,928 Purchase price $ 223 $ 115 $ 380 $ 558 Cumulatively, through September 30, 2018 , the Company has redeemed 674,040 shares sold in the Offering and/or its dividend reinvestment plan for $4.9 million . Quarterly Distributions In order to qualify as a REIT, the Company is required to distribute at least 90% of its annual REIT taxable income, subject to certain adjustments, to its stockholders. Some or all of the Company’s distributions have been paid, and in the future may continue to be paid from sources other than cash flows from operations. Under the terms of the amended Key Bank credit facility, the Company may pay distributions to its investors so long as the total amount paid does not exceed 100% of the cumulative Adjusted Funds From Operations plus up to an additional $2.0 million of the Company’s net proceeds from property dispositions, as defined in the amended Company’s line of credit; provided, however, that the Company is not restricted from making any distributions necessary in order to maintain its status as a REIT. The Company’s board of directors evaluates the Company’s ability to make quarterly distributions based on the Company’s operational cash needs. The following tables set forth the quarterly distributions declared to the Company’s common stockholders and Common Unit holders for the nine months ended September 30, 2018 , and the year ended December 31, 2017 (amounts in thousands, except per share amounts): Distribution Record Date Distribution Payable Date Distribution Per Share of Common Stock / Common Unit Total Common Stockholders Distribution Total Common Unit Holders Distribution Total Distribution First Quarter 2018 3/31/2018 4/30/2018 $ 0.06 $ 659 $ 14 $ 673 Second Quarter 2018 6/30/2018 7/31/2018 0.06 658 14 672 Third Quarter 2018 9/30/2018 10/31/2018 0.06 656 14 670 Total $ 1,973 $ 42 $ 2,015 Distribution Record Date Distribution Payable Date Distribution Per Share of Common Stock / Common Unit Total Common Stockholders Distribution Total Common Unit Holders Distribution Total Distribution First Quarter 2017 3/31/2017 4/28/2017 $ 0.06 $ 655 $ 25 $ 680 Second Quarter 2017 6/30/2017 7/31/2017 0.06 652 25 677 Third Quarter 2017 9/30/2017 10/31/2017 0.06 660 16 676 Fourth Quarter 2017 12/31/2017 1/31/2018 0.06 659 14 673 Total $ 2,626 $ 80 $ 2,706 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | 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 was no unvested stock as of September 30, 2018 . The Company’s excess of distributions over earnings related to participating securities are shown as a reduction in income (loss) attributable to common stockholders in the Company’s computation of EPS. The following table sets forth the computation of the Company’s basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2018 and 2017 (amounts in thousands, except shares and per share amounts): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Numerator - basic and diluted Net income $ 1,386 $ (230 ) $ 3,940 $ 7,951 Net income attributable to non-controlling interests 29 (13 ) 83 293 Net income attributable to common shares $ 1,357 $ (217 ) $ 3,857 $ 7,658 Denominator - basic and diluted Basic weighted average common shares 10,962,529 10,885,095 10,976,030 10,909,141 Common Units (1) — — — — Diluted weighted average common shares 10,962,529 10,885,095 10,976,030 10,909,141 Earnings per common share - basic and diluted Net earnings attributable to common shares $ 0.12 $ (0.02 ) $ 0.35 $ 0.70 (1) The effect of 235,194 convertible Common Units pursuant to the redemption rights outlined in the Company’s registration statement on Form S-11 have not been included as they would not be dilutive. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transaction, Due from (to) Related Party [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS On August 7, 2013, the Company entered into the Advisory Agreement with the Advisor. The Advisory Agreement with the Advisor was renewed for an additional 12 months, beginning on August 10, 2018. The 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 the 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 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, refer to Note 4. “Investments in Unconsolidated Joint Ventures.” Although paid in full on December 14, 2017, on September 27, 2017, the Company, through the OP, entered into a $2.5 million bridge loan with Glenborough Property Partners, LLC, an affiliate of the Advisor (the “Bridge Loan”). The Bridge Loan was scheduled to mature on March 31, 2018, at which point the outstanding balance of the principal and all accrued and unpaid interest would be due and payable. The Bridge Loan incurred interest at an adjustable rate equal to the KeyBank prime rate. Interest was payable monthly in arrears. The Company had the right to prepay the Bridge Loan at any time in whole or in part without premium or penalty. There were no other loan fees or financing coordination fees paid or payable in connection with this loan. During the year ended December 31, 2017, the Company incurred $23 thousand of interest expense related to the Bridge Loan. Summary of Related Party Fees The following table sets forth the Advisor related party costs incurred and payable by the Company for the periods presented (amounts in thousands): Incurred Payable as of Three Months Ended Nine Months Ended September 30, December 31, Expensed 2018 2017 2018 2017 2018 2017 Financing coordination fees $ — $ — $ 30 $ — $ — $ — Asset management fees 187 232 566 667 — — Reimbursement of operating expenses 35 73 116 173 — — Property management fees 56 81 203 280 24 21 Disposition fees 79 — 133 430 — — Total $ 357 $ 386 $ 1,048 $ 1,550 $ 24 $ 21 Capitalized Acquisition fees $ — $ — $ 46 $ 194 $ — $ — Leasing fees — 80 4 145 — — Legal leasing fees — 35 8 86 — — Construction management fees 12 19 17 19 — — Financing coordination fees 44 107 226 814 — — Total $ 56 $ 241 $ 301 $ 1,258 $ — $ — Acquisition Fees Under the Advisory Agreement, the Advisor is entitled to receive an acquisition fee equal to 1% of (1) the cost of each investment acquired directly by the Company or (2) the Company’s allocable cost of an investment acquired pursuant to a joint venture, in each case including purchase price, acquisition expenses and any debt attributable to such investments. An acquisition fee is capitalized by the Company when the related transaction does not qualify as a business combination; otherwise an acquisition fee is expensed. Financing Coordination Fees Under the Advisory Agreement, the Advisor is entitled to receive a financing coordination fee equal to 1% of the amount made available and/or outstanding under any (1) financing obtained or assumed, directly or indirectly, by the Company or the OP and used to acquire or originate investments, or (2) the refinancing of any financing obtained or assumed, directly or indirectly, by the Company or the OP. Asset Management Fees 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% of the higher of (1) aggregate cost on a GAAP basis (before non-cash reserves and depreciation) of all investments the Company owns, including any debt attributable to such investments, or (2) the fair market value of the Company’s investments (before non-cash reserves and depreciation) if the board of directors has authorized the estimate of a fair market value of the Company’s investments; provided, however, that the asset management fee will not be less than $250,000 in the aggregate during any one calendar year. 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 Company’s Articles of Amendment and Restatement (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 and nine months ended September 30, 2018 and 2017 , the Company’s total operating expenses (as defined in the Charter) did not exceed the 2%/25% Guideline. Property Management Fees 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% of the properties’ gross revenue. The property management agreements with Glenborough have been renewed for an additional 12 months, beginning on August 10, 2018. Property management agreements with Glenborough automatically renew every year, unless expressly terminated. Disposition Fees 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% of a customary and competitive real estate commission, but not to exceed 3% of the contract sales price of each property sold. Leasing Fees 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 Fees 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 Fees 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% of the hard costs for the project in question. 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. For the three months ended September 30, 2018 and 2017 , the SGO Joint Venture recognized related party fees and reimbursements of $62 thousand and $58 thousand , respectively. For each of the nine months ended September 30, 2018 and 2017 , the SGO Joint Venture recognized related party fees and reimbursements of $0.2 million . For the three months ended September 30, 2018 and 2017 , the SGO MN Joint Venture recognized related party fees and reimbursements of $0.1 million and $0.2 million , respectively. For the nine months ended September 30, 2018 and 2017 , the SGO MN Joint Venture recognized related party fees and reimbursements of $0.6 million and $0.5 million , respectively.The related-party amounts consist of property management, asset management, leasing commission, legal leasing, construction management fees and salary reimbursements. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 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 condensed consolidated 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 EV
SUBSEQUENT EVENTS SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | SUBSEQUENT EVENTS Distributions On August 9, 2018, the Company’s board of directors declared a third quarter distribution in the amount of $0.06 per share/unit to common stockholders and holders of common units of record as of September 30, 2018. The distribution was paid on October 31, 2018. Variable Interest Entities On October 23, 2018, the Company made an additional contribution of approximately $0.2 million to the Wilshire Joint Venture. On October 26, 2018, the Company made an additional contribution of approximately $1.0 million to the Sunset & Gardner Joint Venture. Mortgage Loans Secured by Properties Under Development On October 29, 2018, the Company refinanced its initial financing (outstanding balance of $9.7 million at the time of refinancing) with a new loan from Lone Oak Fund LLC (the “Sunset & Gardner Loan”). The Sunset & Gardner Loan has a principal balance of approximately $8.7 million , and bears an interest rate of 6.9% per annum. The Sunset & Gardner Loan is scheduled to mature on October 31, 2019 . The Sunset & Gardner Joint Venture used working capital funds to repay the $1.0 million difference between the new loan and the prior maturing loan. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) as contained within the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”), including the instructions to Form 10-Q and Regulation S-X. The interim 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 condensed consolidated 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 Topic 810, Consolidation (“ASC 810”). In determining whether the Company has a controlling interest in a joint venture or a variable interest entity and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the partners/members, as well as whether the entity is a variable interest entity for which the Company is the primary beneficiary. As of September 30, 2018 and December 31, 2017 , the Company held ownership interests in two unconsolidated joint ventures. Refer to Note 4. “Investments in Unconsolidated Joint Ventures” for additional information. As of September 30, 2018 and December 31, 2017 , the Company held variable interests in two variable interest entities and consolidated those entities. Refer to Note 5. “Variable Interest Entities” for additional information. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash 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. In November 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-18, Restricted Cash, which amends (Topic 230), Statement of Cash Flows (“ASU 2016-18”) . ASU 2016-18 requires that a statement of cash flows explains the change during the reporting period in the total of cash, cash equivalents, and restricted cash or restricted cash equivalents. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period. ASU 2016-18 requires adoption using a retrospective transition method. The Company adopted ASU 2016-18 on January 1, 2018. As a result of adopting ASU 2016-18, the Company revised the presentation of cash, cash equivalents and restricted cash on the condensed consolidated balance sheets and condensed consolidated statements of cash flows for all the periods presented. Upon adoption of ASU 2016-18, the Company recorded a decrease of $0.1 million in net cash provided by operating activities and $0.4 million in net cash provided by investing activities for the nine months ended September 30, 2017 , related to reclassifying the changes in the restricted cash balance from operating activities and investing activities to the cash, cash equivalents and restricted cash balances on the condensed consolidated statements of cash flows. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported on the condensed consolidated balance sheets that sum to the total of the same such amounts shown on the condensed consolidated statement of cash flows (amounts in thousands): September 30, 2018 December 31, 2017 Cash and cash equivalents $ 2,835 $ 3,086 Restricted cash 313 816 Total cash, cash equivalents, and restricted cash $ 3,148 $ 3,902 |
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 approximately $0.5 million at both September 30, 2018 and December 31, 2017. 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. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which was added to the ASC under Topic 606 (“ASC 606”). ASC 606 outlines a single comprehensive model for entities to use in accounting for revenues arising from contracts with customers. As the Company’s revenues are primarily generated through leasing arrangements, the Company’s revenues fall outside the scope of this standard. As part of ASU 2014-09, ASC 610-20, Gains and Losses from Derecognition of Nonfinancial Assets , (“ASC 610-20”) was issued. ASC 610-20 provided guidance for recognizing gains and losses from the transfer of nonfinancial assets, which includes the sale of real estate. In February 2017, the FASB issued ASU No. 2017-05, Other Income-Gains and Losses for the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (“ASU 2017-05”). ASU 2017-05 amends the guidance on nonfinancial assets in ASC 610-20. The amendments clarify that (i) a financial asset is within the scope of ASC 610-20 if it meets the definition of an in-substance nonfinancial asset and may include nonfinancial assets transferred within a legal entity to a counter-party, (ii) an entity should identify each distinct nonfinancial asset or in substance nonfinancial asset promised to a counter-party and de-recognize each asset when a counter-party obtains control of it, and (iii) an entity should allocate consideration to each distinct asset by applying the guidance in ASC 606 on allocating the transaction price to performance obligations. Further, ASU 2017-05 provides guidance on accounting for partial sales of nonfinancial assets. Effective January 1, 2018, the Company applied the provisions of ASC 610-20, for gains on sale of real estate, and recognizes any gains at the time control of a property is transferred and when it is probable that substantially all of the related consideration will be collected. As a result of adopting ASC 610-20, using the modified retrospective method, the sales criteria in ASC 360, Property, Plant, and Equipment , no longer applied. As such, the Company recognized $0.7 million of deferred gains related to sales of properties to the SGO Retail Acquisitions Venture, LLC, through a cumulative effect adjustment to accumulated deficit. Other than the cumulative effect adjustment relating to such deferred gains, the adoption of ASC 606 and ASC 610-20 did not have an impact on the Company’s condensed consolidated financial statements. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform with current period’s presentation as a result of adoption of ASU 2016-18. See Cash, Cash Equivalents and Restricted Cash section above for discussion of the impact of these reclassifications. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The FASB issued the following ASUs which could have potential impact to the Company’s condensed consolidated financial statements: In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). ASU 2018-13 modifies the disclosure requirements on fair value measurements in Topic 820. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted for any removed or modified disclosures upon issuance of ASU 2018-13 and delayed adoption of the additional disclosures until the effective date. The adoption of ASU 2016-13 will not have an impact on the Company’s condensed consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). ASU 2016-15 addresses eight specific cash flow issues with the objective of reducing diversity in practice. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period. ASU 2016-15 will require adoption on a retrospective basis. The Company adopted ASU 2016-15 on January 1, 2018. Adoption of ASU 2016-15 did not have an impact on the Company’s condensed consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (“ASU 2016-13”). ASU 2016-13 requires a financial asset, measured at amortized cost basis to be presented at the net amount expected to be collected. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, with adoption permitted for fiscal years beginning after December 15, 2018. Adjustments resulting from adopting ASU 2016-13 shall be applied through a cumulative-effect adjustment to retained earnings. The adoption of ASU 2016-13 will not have an impact on the Company’s condensed consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02 Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 requires entities to recognize lease assets and lease liabilities on the consolidated balance sheet and disclose key information about leasing arrangements. The guidance retains a distinction between finance leases and operating leases. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from previous guidance. However, the principal difference from previous guidance is that the lease assets and lease liabilities arising from operating leases should be recognized in the statement of financial position. The accounting applied by a lessor is largely unchanged from that applied under the previous guidance. Lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. In July 2018, the FASB also issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases (“ASU 2018-10”). ASU 2018-10 provides narrow amendments that clarify how to apply certain aspects of the guidance in ASU 2016-02. Additionally, in July 2018, the FASB issued ASU No. 2018-11, Targeted Improvements to Topic 842, Leases (“ASU 2018-11”) to amend ASU 2016-02, which would provide lessors with a practical expedient, by class of underlying assets, to not separate non-lease components from the related lease components and, instead, to account for those components as a single lease component, if certain criteria are met. The amendments in this guidance as well as ASU 2018-10 and ASU 2018-11 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Earlier application is permitted. The Company believes that the adoption of ASU 2016-02 will not change the accounting for operating leases on its condensed consolidated financial statements. The Company expects to utilize the practical expedients proposed in ASU 2018-11 as part of its adoption of ASU 2016-02. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | |
Cash, Cash Equivalents and Restricted Cash [Table Text Block] | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported on the condensed consolidated balance sheets that sum to the total of the same such amounts shown on the condensed consolidated statement of cash flows (amounts in thousands): September 30, 2018 December 31, 2017 Cash and cash equivalents $ 2,835 $ 3,086 Restricted cash 313 816 Total cash, cash equivalents, and restricted cash $ 3,148 $ 3,902 |
REAL ESTATE INVESTMENTS (Tables
REAL ESTATE INVESTMENTS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |
Disposal Groups, Including Discontinued Operations [Table Text Block] | The major classes of assets and liabilities related to assets held for sale included in the condensed consolidated balance sheets are as follows (amounts in thousands): September 30, December 31, 2018 2017 ASSETS Investments in real estate Land $ 2,817 $ 5,248 Building and improvements 11,671 17,522 Tenant improvements 596 1,189 15,084 23,959 Accumulated depreciation (3,596 ) (5,178 ) Investments in real estate, net 11,488 18,781 Tenant receivables, net 187 248 Lease intangibles, net 1,008 1,617 Assets held for sale $ 12,683 $ 20,646 LIABILITIES Notes payable $ 4,056 $ 10,749 Below-market lease intangibles, net 1,907 2,268 Liabilities related to assets held for sale $ 5,963 $ 13,017 The following table summarizes net operating income related to Ensenada Square and the disposed portion of Topaz Marketplace, which is included in the Company’s condensed consolidated statements of operations for the three and nine months ended September 30, 2018 and 2017 (amounts in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Operating income (loss) $ (17 ) $ 56 $ 288 $ 140 |
INVESTMENTS IN UNCONSOLIDATED_2
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 September 30, 2018 and December 31, 2017 (amounts in thousands): Ownership Interest Investment Joint Venture Date of Investment September 30, December 31, September 30, December 31, SGO Retail Acquisitions Venture, LLC 3/11/2015 19 % 19 % $ 1,084 $ 978 SGO MN Retail Acquisitions Venture, LLC 9/30/2015 10 % 10 % 1,946 1,727 Total $ 3,030 $ 2,705 |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Variable Interest Entities | The following reflects the aggregate assets and liabilities of the Sunset & Gardner Joint Venture and the Wilshire Joint Venture, which were consolidated by the Company, as of September 30, 2018 and December 31, 2017 (amounts in thousands): September 30, December 31, 2018 2017 ASSETS Properties under development and development costs: Land $ 25,851 $ 25,851 Buildings 574 585 Development costs 12,928 9,609 Properties under development and development costs 39,353 36,045 Cash, cash equivalents and restricted cash 526 1,099 Prepaid expenses and other assets, net 12 9 Lease intangibles, net 4 — TOTAL ASSETS (1) $ 39,895 $ 37,153 LIABILITIES Notes payable, net (2) $ 18,248 $ 19,116 Accounts payable and accrued expenses 199 478 Amounts due to affiliates 8 9 Other liabilities 9 9 TOTAL LIABILITIES $ 18,464 $ 19,612 (1) The assets of the Sunset & Gardner Joint Venture and Wilshire Joint Venture can be used only to settle obligations of the respective consolidated joint ventures. (2) As of September 30, 2018 and December 31, 2017 , includes reclassification of approximately $0.2 million and $0.1 million , respectively, 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. |
FUTURE MINIMUM RENTAL INCOME (T
FUTURE MINIMUM RENTAL INCOME (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Operating Leases, Future Minimum Payments Receivable [Abstract] | |
Schedule of Future Minimum Rental Receivable For Operating Leases | As of September 30, 2018 , the future minimum rental income from the Company’s properties under non-cancelable operating leases, excluding properties classified as held for sale, was as follows (amounts in thousands): Remainder of 2018 $ 659 2019 2,691 2020 2,533 2021 2,270 2022 2,256 Thereafter 9,935 Total $ 20,344 |
LEASE INTANGIBLES AND BELOW-M_2
LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Acquired Lease Intangibles and Below Market Lease Liabilities | As of September 30, 2018 and December 31, 2017 , the Company’s acquired lease intangibles and below-market lease liabilities were as follows (amounts in thousands): Lease Intangibles Below-Market Lease Liabilities September 30, December 31, September 30, December 31, Cost $ 2,973 $ 2,783 $ (526 ) $ (571 ) Accumulated amortization (1,063 ) (722 ) 140 133 Total $ 1,910 $ 2,061 $ (386 ) $ (438 ) |
Amortization Of Finite Lease Intangibles and Below-Market Lease Liabilities | The Company’s amortization of lease intangibles and below-market lease liabilities for the three and nine months ended September 30, 2018 and 2017 , were as follows (amounts in thousands): Lease Intangibles Below-Market Lease Liabilities Three Months Ended Three Months Ended 2018 2017 2018 2017 Amortization $ (156 ) $ (164 ) $ 18 $ 40 Lease Intangibles Below-Market Lease Liabilities Nine Months Ended Nine Months Ended 2018 2017 2018 2017 Amortization $ (314 ) $ (761 ) $ 51 $ 176 |
NOTES PAYABLE, NET (Tables)
NOTES PAYABLE, NET (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of maturities for notes payable outstanding | The following is a schedule of future principal payments for all of the Company’s notes payable outstanding as of September 30, 2018 (amounts in thousands): Remainder of 2018 $ 9,700 2019 8,750 2020 29,787 Total (1) $ 48,237 (1) Total future principal payments reflect actual amounts due to creditors, and excludes reclassification of $0.2 million deferred financing costs, net. |
EQUITY (Tables)
EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
Share Redemption Program | The following table summarizes share redemption activity during the three and nine months ended September 30, 2018 and 2017 (amounts in thousands, except shares): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Shares of common stock redeemed 36,903 18,233 61,925 87,928 Purchase price $ 223 $ 115 $ 380 $ 558 |
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 nine months ended September 30, 2018 , and the year ended December 31, 2017 (amounts in thousands, except per share amounts): Distribution Record Date Distribution Payable Date Distribution Per Share of Common Stock / Common Unit Total Common Stockholders Distribution Total Common Unit Holders Distribution Total Distribution First Quarter 2018 3/31/2018 4/30/2018 $ 0.06 $ 659 $ 14 $ 673 Second Quarter 2018 6/30/2018 7/31/2018 0.06 658 14 672 Third Quarter 2018 9/30/2018 10/31/2018 0.06 656 14 670 Total $ 1,973 $ 42 $ 2,015 Distribution Record Date Distribution Payable Date Distribution Per Share of Common Stock / Common Unit Total Common Stockholders Distribution Total Common Unit Holders Distribution Total Distribution First Quarter 2017 3/31/2017 4/28/2017 $ 0.06 $ 655 $ 25 $ 680 Second Quarter 2017 6/30/2017 7/31/2017 0.06 652 25 677 Third Quarter 2017 9/30/2017 10/31/2017 0.06 660 16 676 Fourth Quarter 2017 12/31/2017 1/31/2018 0.06 659 14 673 Total $ 2,626 $ 80 $ 2,706 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 and nine months ended September 30, 2018 and 2017 (amounts in thousands, except shares and per share amounts): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Numerator - basic and diluted Net income $ 1,386 $ (230 ) $ 3,940 $ 7,951 Net income attributable to non-controlling interests 29 (13 ) 83 293 Net income attributable to common shares $ 1,357 $ (217 ) $ 3,857 $ 7,658 Denominator - basic and diluted Basic weighted average common shares 10,962,529 10,885,095 10,976,030 10,909,141 Common Units (1) — — — — Diluted weighted average common shares 10,962,529 10,885,095 10,976,030 10,909,141 Earnings per common share - basic and diluted Net earnings attributable to common shares $ 0.12 $ (0.02 ) $ 0.35 $ 0.70 (1) The effect of 235,194 convertible Common Units pursuant to the redemption rights outlined in the Company’s registration statement on Form S-11 have not been included as they would not be dilutive. |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transaction, Due from (to) Related Party [Abstract] | |
Related Party Transactions | The following table sets forth the Advisor related party costs incurred and payable by the Company for the periods presented (amounts in thousands): Incurred Payable as of Three Months Ended Nine Months Ended September 30, December 31, Expensed 2018 2017 2018 2017 2018 2017 Financing coordination fees $ — $ — $ 30 $ — $ — $ — Asset management fees 187 232 566 667 — — Reimbursement of operating expenses 35 73 116 173 — — Property management fees 56 81 203 280 24 21 Disposition fees 79 — 133 430 — — Total $ 357 $ 386 $ 1,048 $ 1,550 $ 24 $ 21 Capitalized Acquisition fees $ — $ — $ 46 $ 194 $ — $ — Leasing fees — 80 4 145 — — Legal leasing fees — 35 8 86 — — Construction management fees 12 19 17 19 — — Financing coordination fees 44 107 226 814 — — Total $ 56 $ 241 $ 301 $ 1,258 $ — $ — |
ORGANIZATION AND BUSINESS (Deta
ORGANIZATION AND BUSINESS (Details Textual) - ft² | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Real Estate Properties [Line Items] | ||
Partnership Interest Ownership Percentage | 97.90% | 97.90% |
Number of Real Estate Properties | 9 | |
Net Rentable Area | 232,509 | |
Number of States in which Entity Operates | 3 | |
Percent of Real Estate Properties Leased | 89.00% | |
Held-for-sale [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Real Estate Properties | 1 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | |
Cash and Cash Equivalents, at Carrying Value | $ 2,835 | $ 3,086 | ||
Restricted Cash and Cash Equivalents | 313 | 816 | ||
Total cash, cash equivalents, and restricted cash | 3,148 | $ 3,902 | $ 7,825 | $ 7,858 |
Accounting Standards Update 2016-18 [Member] | ||||
Change in Operating Cash Flows | 100 | |||
Change in Investing Cash Flows | $ 400 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Revenue Recognition (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | |||
Deferred Rent Receivables, Net | $ 500 | $ 500 | |
Cumulative effect from change in accounting principle | $ 668 | $ 0 |
REAL ESTATE INVESTMENTS DISPOSI
REAL ESTATE INVESTMENTS DISPOSITIONS (Details) (Details) - USD ($) $ in Thousands | Jul. 17, 2018 | Jun. 21, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Gains (Losses) on Sales of Investment Real Estate | $ 1,293 | $ 0 | $ 3,741 | $ 9,131 | ||
Operating Income (loss) | (202) | (214) | (27) | (977) | ||
Ensenada [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Sales Price | $ 5,800 | |||||
Repayments of Lines of Credit | $ 5,300 | |||||
Gains (Losses) on Sales of Investment Real Estate | 1,300 | |||||
Topaz-Davita [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Sales Price | $ 4,200 | |||||
Repayments of Lines of Credit | $ 4,000 | |||||
Gains (Losses) on Sales of Investment Real Estate | 2,400 | |||||
Topaz-Davita [Member] | Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Operating Income (loss) | $ (17) | $ 56 | $ 288 | $ 140 |
REAL ESTATE INVESTMENTS ASSETS
REAL ESTATE INVESTMENTS ASSETS AND LIABILITIES HELD FOR SALE (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 20, 2018 | Dec. 31, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Operating Income (loss) | $ (202) | $ (214) | $ (27) | $ (977) | ||
Land | 15,217 | 15,217 | $ 14,020 | |||
Building and improvements | 32,013 | 32,013 | 30,825 | |||
Tenant improvements | 1,466 | 1,466 | 1,188 | |||
Real Estate Investment Property, at Cost | 48,696 | 48,696 | 46,033 | |||
Real Estate Investment Property, Accumulated Depreciation | (3,619) | (3,619) | (2,579) | |||
Real Estate Investment Property, Net | 45,077 | 45,077 | 43,454 | |||
Accounts Receivable, Net | 791 | 791 | 1,007 | |||
Lease intangibles, net | 1,910 | 1,910 | 2,061 | |||
Assets Held-for-sale | 12,683 | 12,683 | 20,646 | |||
Notes Payable | 43,979 | 43,979 | 42,223 | |||
Below-market lease liabilities, net | 386 | 386 | 438 | |||
Disposal Group, Including Discontinued Operation, Liabilities | 5,963 | 5,963 | 13,017 | |||
Held-for-sale [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Operating Income (loss) | 300 | $ 100 | 900 | $ 100 | ||
Land | 2,817 | 2,817 | 5,248 | |||
Building and improvements | 11,671 | 11,671 | 17,522 | |||
Tenant improvements | 596 | 596 | 1,189 | |||
Real Estate Investment Property, at Cost | 15,084 | 15,084 | 23,959 | |||
Real Estate Investment Property, Accumulated Depreciation | (3,596) | (3,596) | (5,178) | |||
Real Estate Investment Property, Net | 11,488 | 11,488 | 18,781 | |||
Accounts Receivable, Net | 187 | 187 | 248 | |||
Lease intangibles, net | 1,008 | 1,008 | 1,617 | |||
Assets Held-for-sale | 12,683 | 12,683 | 20,646 | |||
Notes Payable | 4,056 | 4,056 | 10,749 | |||
Below-market lease liabilities, net | 1,907 | 1,907 | 2,268 | |||
Disposal Group, Including Discontinued Operation, Liabilities | $ 5,963 | $ 5,963 | $ 13,017 | |||
Florissant [Member] | Held-for-sale [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Sales Price | $ 16,600 |
INVESTMENTS IN UNCONSOLIDATED_3
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Schedule of Equity Method Investments [Line Items] | ||
Investment | $ 3,030 | $ 2,705 |
SGO Retail Acquisitions Venture, LLC | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity Method Investment, Ownership Percentage | 19.00% | 19.00% |
Investment | $ 1,084 | $ 978 |
SGO MN Retail Acquisitions Venture, LLC | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity Method Investment, Ownership Percentage | 10.00% | 10.00% |
Investment | $ 1,946 | $ 1,727 |
VARIABLE INTEREST ENTITIES (Det
VARIABLE INTEREST ENTITIES (Details Textual) - USD ($) $ in Thousands | Apr. 27, 2018 | Apr. 23, 2018 | Mar. 21, 2018 | Sep. 30, 2018 | Sep. 30, 2017 |
Payments to Acquire Interest in Joint Venture | $ 191 | $ 0 | |||
Wilshire Joint Venture [Member] | Subsequent Contributuion [Member] | |||||
Payments to Acquire Interest in Joint Venture | $ 900 | ||||
Sunset and Gardner Joint Venture [Member] | Subsequent Contributuion [Member] | |||||
Payments to Acquire Interest in Joint Venture | $ 800 | ||||
Repayments of Secured Debt | $ 1,000 |
VARIABLE INTEREST ENTITIES (D_2
VARIABLE INTEREST ENTITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | ||
Properties under development and development costs: | ||||||
Land | $ 25,851 | $ 25,851 | ||||
Buildings | 574 | 585 | ||||
Development costs | 12,928 | 9,609 | ||||
Properties under development and development costs | 39,353 | 36,045 | ||||
Cash, cash equivalents and restricted cash | 3,148 | 3,902 | $ 7,825 | $ 7,858 | ||
Prepaid expenses and other assets, net | 272 | 200 | ||||
Lease intangibles, net | 1,910 | 2,061 | ||||
TOTAL ASSETS (1) | 107,158 | [1] | 111,278 | |||
LIABILITIES | ||||||
Notes payable, net | 43,979 | 42,223 | ||||
Accounts payable and accrued expenses | 1,775 | 2,006 | ||||
Amounts due to affiliates | 24 | 21 | ||||
Other liabilities | 300 | 387 | ||||
TOTAL LIABILITIES (1) | 52,427 | 58,760 | ||||
Variable Interest Entity, Primary Beneficiary [Member] | ||||||
Properties under development and development costs: | ||||||
Land | 25,851 | 25,851 | ||||
Buildings | 574 | 585 | ||||
Development costs | 12,928 | 9,609 | ||||
Properties under development and development costs | 39,353 | 36,045 | ||||
Cash, cash equivalents and restricted cash | 526 | 1,099 | ||||
Prepaid expenses and other assets, net | 12 | 9 | ||||
Lease intangibles, net | 4 | 0 | ||||
TOTAL ASSETS (1) | [2] | 39,895 | 37,153 | |||
LIABILITIES | ||||||
Notes payable, net | [3] | 18,248 | 19,116 | |||
Accounts payable and accrued expenses | 199 | 478 | ||||
Amounts due to affiliates | 8 | 9 | ||||
Other liabilities | 9 | 9 | ||||
TOTAL LIABILITIES (1) | 18,464 | 19,612 | ||||
Deferred Costs | $ 200 | $ 100 | ||||
[1] | As of September 30, 2018 and December 31, 2017, includes approximately $39.9 million and $37.2 million, respectively, of assets related to consolidated variable interest entities that can be used only to settle obligations of the consolidated variable interest entities and approximately $18.5 million and $19.6 million, respectively, of liabilities of consolidated variable interest entities for which creditors do not have recourse to the general credit of the Company. Refer to Note 5. “Variable Interest Entities”. | |||||
[2] | The assets of the Sunset & Gardner Joint Venture and Wilshire Joint Venture can be used only to settle obligations of the respective consolidated joint ventures. | |||||
[3] | As of September 30, 2018 and December 31, 2017, includes reclassification of approximately $0.2 million and $0.1 million, respectively, of deferred financing costs, net, as a contra-liability. The creditors of the consolidated joint ventures do not have recourse to the general credit of the Company. The notes payable of the consolidated joint ventures are not guaranteed by the Company. |
FUTURE MINIMUM RENTAL INCOME (D
FUTURE MINIMUM RENTAL INCOME (Details Textual) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Leases [Abstract] | ||
Lessee, Operating Lease, Term of Contract | 13 years 2 months 5 days | |
Operating Leases Weighted Average Remaining Term | 6 years 1 month 13 days | |
Security Deposit | $ 0.2 | $ 0.2 |
FUTURE MINIMUM RENTAL INCOME _2
FUTURE MINIMUM RENTAL INCOME (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Operating Leases, Future Minimum Payments Receivable [Abstract] | |
Remainder of 2018 | $ 659 |
2,019 | 2,691 |
2,020 | 2,533 |
2,021 | 2,270 |
2,022 | 2,256 |
Thereafter | 9,935 |
Total | $ 20,344 |
LEASE INTANGIBLES AND BELOW-M_3
LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Lease Intangibles, Cost | $ 2,973 | $ 2,783 |
Lease Intangibles, Accumulated amortization | (1,063) | (722) |
Lease intangibles, net | 1,910 | 2,061 |
Below - Market Lease Liabilities, Cost | (526) | (571) |
Below - Market Lease Liabilities, Accumulated amortization | 140 | 133 |
Below market lease intangibles, net | $ (386) | $ (438) |
LEASE INTANGIBLES AND BELOW-M_4
LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES Lease Intangibles Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Amortization [Abstract] | ||||
Amortization of Intangible Assets | $ (156) | $ (164) | $ (314) | $ (761) |
Amortization of Below-Market Lease Liabilities | $ 18 | $ 40 | $ 51 | $ 176 |
NOTES PAYABLE, NET (Line Of Cre
NOTES PAYABLE, NET (Line Of Credit) (Details) - USD ($) $ in Millions | Feb. 15, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||||||
Amortization of Debt Issuance Costs | $ 0.2 | $ 0.1 | $ 0.4 | $ 0.4 | ||
Secured Line of Credit [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Long-term Debt, Gross | 25.7 | 25.7 | $ 23.1 | |||
Variable Interest Entity, Primary Beneficiary [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Amortization of Debt Issuance Costs | $ 0.2 | $ 0.1 | $ 0.4 | $ 0.4 | ||
Secured Line of Credit [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of Credit Facility, Current Borrowing Capacity | $ 60 | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 30 | |||||
Line of Credit Facility, Expiration Date | Feb. 15, 2020 | |||||
Usage Under Credit Facility | 50.00% | 50.00% | ||||
Secured Line of Credit [Member] | Minimum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.20% | |||||
Secured Line of Credit [Member] | Maximum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.30% | |||||
Held-for-sale [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Long-term Debt, Gross | $ 4.1 | $ 4.1 | $ 10.7 |
NOTES PAYABLE, NET (Mortgage Lo
NOTES PAYABLE, NET (Mortgage Loans Secured by Properties Under Development) (Details) - USD ($) $ in Millions | Apr. 26, 2018 | Apr. 23, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Short-term Debt [Line Items] | ||||||||
Amortization of Debt Issuance Costs | $ 0.2 | $ 0.1 | $ 0.4 | $ 0.4 | ||||
Interest Payable | 0.2 | $ 0.2 | $ 0.3 | |||||
LIBOR period, days | 30 | |||||||
Variable Interest Entity, Primary Beneficiary [Member] | ||||||||
Short-term Debt [Line Items] | ||||||||
Amortization of Debt Issuance Costs | 0.2 | 0.1 | $ 0.4 | 0.4 | ||||
Interest Costs Capitalized | 1.1 | $ 0.8 | 2.9 | $ 2.5 | ||||
Interest Payable | $ 0.1 | 0.1 | $ 0.2 | |||||
Wilshire Joint Venture [Member] | ||||||||
Short-term Debt [Line Items] | ||||||||
Proceeds from Loan Originations | $ 8.5 | $ 8.8 | ||||||
Interest Rate | 6.90% | 6.90% | ||||||
Debt Instrument, Maturity Date | Sep. 30, 2019 | |||||||
Sunset and Gardner Joint Venture [Member] | ||||||||
Short-term Debt [Line Items] | ||||||||
Proceeds from Loan Originations | $ 9.7 | |||||||
Spread over LIBOR | 9.25% | |||||||
Debt Instrument, Maturity Date | Oct. 27, 2018 | |||||||
Minimum [Member] | Sunset and Gardner Joint Venture [Member] | ||||||||
Short-term Debt [Line Items] | ||||||||
Interest Rate | 9.50% | 9.50% | ||||||
Subsequent Contributuion [Member] | Sunset and Gardner Joint Venture [Member] | ||||||||
Short-term Debt [Line Items] | ||||||||
Repayments of Secured Debt | $ 1 |
NOTES PAYABLE, NET (Future Prin
NOTES PAYABLE, NET (Future Principal Payments) (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Schedule of maturities for notes payable outstanding | |
2,018 | $ 9,700 |
2,019 | 8,750 |
2,020 | 29,787 |
Total (1) | 48,237 |
Accounting Standard Update 2015-03 [Member] | |
Debt Instrument [Line Items] | |
Deferred Costs | $ 200 |
NOTES PAYABLE, NET NOTES PAYABL
NOTES PAYABLE, NET NOTES PAYABLE, NET (Interest Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | |||||
Interest Expense | $ 147 | $ 449 | $ 667 | $ 1,505 | |
Amortization of Debt Issuance Costs | 200 | 100 | 400 | 400 | |
Interest Payable | 200 | 200 | $ 300 | ||
Variable Interest Entity, Primary Beneficiary [Member] | |||||
Debt Instrument [Line Items] | |||||
Amortization of Debt Issuance Costs | 200 | 100 | 400 | 400 | |
Interest Costs Capitalized | 1,100 | $ 800 | 2,900 | $ 2,500 | |
Interest Payable | $ 100 | $ 100 | $ 200 |
EQUITY (Share Redemption) (Deta
EQUITY (Share Redemption) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Aug. 02, 2017 | Oct. 05, 2016 | |
Class of Stock [Line Items] | ||||||
Stock Redeemed or Called During Period, Value | $ 223 | $ 115 | $ 380 | $ 558 | ||
Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Stock Redeemed or Called During Period, Shares | 36,903 | 18,233 | 61,925 | 87,928 | ||
Stock Redeemed or Called During Period, Value | $ 223 | $ 115 | $ 380 | $ 558 | ||
Cumulative stock redeemed to date, shares | 674,040 | 674,040 | ||||
Cumulative stock redeemed to date, value | $ 4,900 | $ 4,900 | ||||
Death of a shareholder [Member] | ||||||
Class of Stock [Line Items] | ||||||
Additional Shares Authorized for Redemption, Value | $ 1,000 | $ 500 |
EQUITY EQUITY (Quarterly Distri
EQUITY EQUITY (Quarterly Distribution (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2018 | Dec. 31, 2017 | |
Dividends [Line Items] | |||||||||
Dividends Payable, Date Declared | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | ||
Dividends Payable, Date to be Paid | Oct. 31, 2018 | Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 28, 2017 | ||
Common Stock, Dividends, Per Share, Declared | $ 0.06 | $ 0.06 | $ 0.06 | $ 0.06 | $ 0.06 | $ 0.06 | $ 0.06 | ||
Minimum Percentage of Taxable Income Distributed to Shareholders | 90.00% | ||||||||
Total Common Stockholders Distribution | $ 656 | $ 658 | $ 659 | $ 659 | $ 660 | $ 652 | $ 655 | $ 1,973 | $ 2,626 |
Total Common Unit Holders Distribution | 14 | 14 | 14 | 14 | 16 | 25 | 25 | 42 | 80 |
Total Distribution | $ 670 | $ 672 | $ 673 | $ 673 | $ 676 | $ 677 | $ 680 | $ 2,015 | $ 2,706 |
Maximum [Member] | |||||||||
Dividends [Line Items] | |||||||||
Distribution Limit, percentage | 100.00% | ||||||||
Distribution Limit, value | $ 2,000 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Numerator - basic and diluted | |||||
Net income | $ 1,386 | $ (230) | $ 3,940 | $ 7,951 | |
Net income attributable to non-controlling interests | 29 | (13) | 83 | 293 | |
Net income attributable to common stockholders | $ 1,357 | $ (217) | $ 3,857 | $ 7,658 | |
Denominator - basic and diluted | |||||
Basic weighted average common shares | 10,962,529 | 10,885,095 | 10,976,030 | 10,909,141 | |
Common Units (1) | [1] | 0 | 0 | 0 | 0 |
Diluted weighted average common shares | 10,962,529 | 10,885,095 | 10,976,030 | 10,909,141 | |
Earnings per common share - basic and diluted | |||||
Net earnings attributable to common shares | $ 0.12 | $ (0.02) | $ 0.35 | $ 0.70 | |
[1] | The effect of 235,194 convertible Common Units pursuant to the redemption rights outlined in the Company’s registration statement on Form S-11 have not been included as they would not be dilutive. |
EARNINGS PER SHARE (Details Tex
EARNINGS PER SHARE (Details Textual) | 9 Months Ended |
Sep. 30, 2018shares | |
Earnings Per Share [Abstract] | |
Antidiluted Convertible Common Units of Redemption | 235,194 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - Advisor Fees [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Financing Fees, Expensed [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | $ 0 | $ 0 | $ 30 | $ 0 | |
Related-party costs, Payable | 0 | 0 | $ 0 | ||
Expensed Asset management Fees [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | 187 | 232 | 566 | 667 | |
Related-party costs, Payable | 0 | 0 | 0 | ||
Expensed Reimbursement Of Operating Expenses [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | 35 | 73 | 116 | 173 | |
Related-party costs, Payable | 0 | 0 | 0 | ||
Expensed Property Management Fees [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | 56 | 81 | 203 | 280 | |
Related-party costs, Payable | 24 | 24 | 21 | ||
Expensed Disposition Fees [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | 79 | 0 | 133 | 430 | |
Related-party costs, Payable | 0 | 0 | 0 | ||
Capitalized Acquisition Fees [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | 0 | 0 | 46 | 194 | |
Related-party costs, Payable | 0 | 0 | 0 | ||
Capitalized Leasing Fees [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | 0 | 80 | 4 | 145 | |
Related-party costs, Payable | 0 | 0 | 0 | ||
Capitalized Legal Leasing Fees [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | 0 | 35 | 8 | 86 | |
Related-party costs, Payable | 0 | 0 | 0 | ||
Capitalized Construction Management Fees [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | 12 | 19 | 17 | 19 | |
Related-party costs, Payable | 0 | 0 | 0 | ||
Financing Coordination Fees, Capitalized [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | 44 | 107 | 226 | 814 | |
Related-party costs, Payable | 0 | 0 | 0 | ||
Expensed [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | 357 | 386 | 1,048 | 1,550 | |
Related-party costs, Payable | 24 | 24 | 21 | ||
Capitalized [Member] | |||||
Summarized below are the related-party transactions | |||||
Related-party costs, Incurred | 56 | $ 241 | 301 | $ 1,258 | |
Related-party costs, Payable | $ 0 | $ 0 | $ 0 |
RELATED PARTY TRANSACTIONS (D_2
RELATED PARTY TRANSACTIONS (Details) (Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | |||||
Interest Expense | $ 147,000 | $ 449,000 | $ 667,000 | $ 1,505,000 | |
SGO Retail Acquisition Venture LLC [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related Party Transaction, Expenses from Transactions with Related Party | 62,000 | 58,000 | 200,000 | 200,000 | |
SGO MN Retail Acquisition Venture LLC [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related Party Transaction, Expenses from Transactions with Related Party | $ 100,000 | 200,000 | $ 600,000 | 500,000 | |
Advisor Fees [Member] | |||||
Related Party Transaction [Line Items] | |||||
Company pays Advisor an acquisition and origination fee for cost of investments acquired | 1.00% | ||||
Financing Coordination Fee, percentage | 1.00% | ||||
Company pays Advisor a monthly asset management fee on all real estate investments | 0.60% | ||||
Percentage of Average Invested Assets | 2.00% | ||||
Percent of Net Income | 25.00% | ||||
Advisor or its affiliates also will be paid disposition fees of a customary and competitive real estate commission | 50.00% | ||||
SRT Manager [Member] | |||||
Related Party Transaction [Line Items] | |||||
Property Management Fee, Percent Fee | 4.00% | ||||
Construction Management Fee, percentage | 5.00% | ||||
Minimum [Member] | Advisor Fees [Member] | |||||
Related Party Transaction [Line Items] | |||||
Asset Management Fees | $ 250,000 | ||||
Maximum [Member] | Advisor Fees [Member] | |||||
Related Party Transaction [Line Items] | |||||
Advisor or its affiliates also will be paid disposition fees of the contract price | 3.00% | ||||
GlenboroughPropertyPartnersLLC [Member] | |||||
Related Party Transaction [Line Items] | |||||
Debt, Current | $ 2,500,000 | $ 2,500,000 | |||
Interest Expense | $ 23,000 |
SUBSEQUENT EVENTS SUBSEQUENT _2
SUBSEQUENT EVENTS SUBSEQUENT EVENTS (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 31, 2018 | Oct. 29, 2018 | Oct. 26, 2018 | Oct. 23, 2018 | Apr. 27, 2018 | Apr. 26, 2018 | Apr. 23, 2018 | Mar. 21, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 |
Subsequent Event [Line Items] | ||||||||||||||||||
Common Stock, Dividends, Per Share, Declared | $ 0.06 | $ 0.06 | $ 0.06 | $ 0.06 | $ 0.06 | $ 0.06 | $ 0.06 | |||||||||||
Payments to Acquire Interest in Joint Venture | $ 191 | $ 0 | ||||||||||||||||
Subsequent Event [Member] | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Common Stock, Dividends, Per Share, Declared | $ 0.06 | |||||||||||||||||
Wilshire Joint Venture [Member] | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Debt Instrument, Maturity Date | Sep. 30, 2019 | |||||||||||||||||
Proceeds from Loan Originations | $ 8,500 | $ 8,800 | ||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.90% | 6.90% | ||||||||||||||||
Sunset and Gardner Joint Venture [Member] | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Debt Instrument, Maturity Date | Oct. 27, 2018 | |||||||||||||||||
Proceeds from Loan Originations | $ 9,700 | |||||||||||||||||
Sunset and Gardner Joint Venture [Member] | Subsequent Event [Member] | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Debt Instrument, Maturity Date | Oct. 31, 2019 | |||||||||||||||||
Proceeds from Loan Originations | $ 8,700 | |||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.90% | |||||||||||||||||
Repayments of Secured Debt | $ 1,000 | |||||||||||||||||
Subsequent Contributuion [Member] | Wilshire Joint Venture [Member] | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Payments to Acquire Interest in Joint Venture | $ 900 | |||||||||||||||||
Subsequent Contributuion [Member] | Wilshire Joint Venture [Member] | Subsequent Event [Member] | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Payments to Acquire Interest in Joint Venture | $ 200 | |||||||||||||||||
Subsequent Contributuion [Member] | Sunset and Gardner Joint Venture [Member] | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Payments to Acquire Interest in Joint Venture | $ 800 | |||||||||||||||||
Repayments of Secured Debt | $ 1,000 | |||||||||||||||||
Subsequent Contributuion [Member] | Sunset and Gardner Joint Venture [Member] | Subsequent Event [Member] | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Payments to Acquire Interest in Joint Venture | $ 1,000 |