Document and Entity Information
Document and Entity Information Document - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 23, 2016 | Jun. 30, 2015 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | KBS Strategic Opportunity REIT, Inc. | ||
Entity Central Index Key | 1,452,936 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 58,692,893 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 0 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Assets | ||
Real estate held for investment, net | $ 822,514 | $ 845,134 |
Real estate held for sale, net | 0 | 9,954 |
Real estate loan receivable, net | 27,850 | 27,422 |
Total real estate and real estate-related investments, net | 850,364 | 882,510 |
Cash and cash equivalents | 23,058 | 19,093 |
Investments in unconsolidated joint ventures | 74,437 | 72,045 |
Rents and other receivables, net | 24,487 | 18,283 |
Above-market leases, net | 1,038 | 2,061 |
Assets related to real estate held for sale | 0 | 98 |
Prepaid expenses and other assets | 30,830 | 22,223 |
Total assets | 1,004,214 | 1,016,313 |
Notes and bond payable: | ||
Notes and bond payable, net | 547,323 | 519,528 |
Notes payable related to real estate held for sale, net | 0 | 4,534 |
Total notes payable and bond payable, net | 547,323 | 524,062 |
Accounts payable and accrued liabilities | 17,543 | 18,609 |
Due to affiliates | 59 | 0 |
Below-market leases, net | 2,735 | 4,403 |
Other liabilities | 17,905 | 9,192 |
Total liabilities | $ 585,565 | $ 556,266 |
Commitments and contingencies (Note 12) | ||
Redeemable common stock | $ 9,859 | $ 9,911 |
Equity | ||
Preferred stock, $.01 par value; 10,000,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Common stock, $.01 par value; 1,000,000,000 shares authorized, 58,696,115 and 60,044,329 shares issued and outstanding as of December 31, 2015 and December 31, 2014, respectively | 587 | 600 |
Additional paid-in capital | 504,303 | 524,489 |
Cumulative distributions and net losses | (111,527) | (91,691) |
Total KBS Strategic Opportunity REIT, Inc. stockholders’ equity | 393,363 | 433,398 |
Noncontrolling interests | 15,427 | 16,738 |
Total equity | 408,790 | 450,136 |
Total liabilities and equity | $ 1,004,214 | $ 1,016,313 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 58,696,115 | 60,044,329 |
Common stock, shares outstanding | 58,696,115 | 60,044,329 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues: | |||
Rental income | $ 88,543 | $ 83,682 | $ 46,191 |
Tenant reimbursements | 18,313 | 16,273 | 9,964 |
Interest income from real estate loans receivable | 1,968 | 3,366 | 10,276 |
Interest income from real estate securities | 0 | 0 | 91 |
Other operating income | 3,304 | 2,833 | 1,974 |
Total revenues | 112,128 | 106,154 | 68,496 |
Expenses: | |||
Operating, maintenance, and management | 37,512 | 35,957 | 22,804 |
Real estate taxes and insurance | 14,565 | 14,189 | 9,282 |
Asset management fees to affiliate | 8,348 | 7,648 | 4,068 |
Real estate acquisition fees to affiliate | 0 | 2,231 | 2,784 |
Real estate acquisition fees and expenses | 0 | 2,177 | 1,218 |
General and administrative expenses | 3,246 | 3,418 | 3,160 |
Depreciation and amortization | 44,739 | 47,063 | 28,677 |
Interest expense | 14,986 | 15,598 | 2,706 |
Impairment charges on real estate | 0 | 579 | 1,433 |
Total expenses | 123,396 | 128,860 | 76,132 |
Other income (loss): | |||
Other interest income | 18 | 22 | 62 |
Other income | 5,085 | 0 | 0 |
Income from unconsolidated joint venture | 0 | 0 | 95 |
Equity in loss of unconsolidated joint venture | (368) | (1,101) | (146) |
Gain on sale of real estate, net | 13,665 | 55 | 0 |
Gain on foreclosure of real estate loan receivable | 0 | 0 | 7,473 |
Total other income (loss), net | 18,400 | (1,024) | 7,484 |
Income (loss) from continuing operations | 7,132 | (23,730) | (152) |
Discontinued operations: | |||
Gain on sale of real estate, net | 0 | 0 | 13,108 |
Loss from discontinued operations | 0 | (18) | (1,367) |
Total (loss) income from discontinued operations | 0 | (18) | 11,741 |
Net income (loss) | 7,132 | (23,748) | 11,589 |
Net (income) loss attributable to noncontrolling interests | (4,688) | 554 | (96) |
Net income (loss) attributable to common stockholders | $ 2,444 | $ (23,194) | $ 11,493 |
Basic and diluted income (loss) per common share: | |||
Continuing operations (in dollars per share) | $ 0.04 | $ (0.39) | $ 0 |
Discontinued operations (in dollars per share) | 0 | 0 | 0.20 |
Net (loss) income per common share (in dollars per share) | $ 0.04 | $ (0.39) | $ 0.20 |
Weighted-average number of common shares outstanding, basic and diluted | 59,656,667 | 59,714,540 | 58,359,568 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 7,132 | $ (23,748) | $ 11,589 |
Other comprehensive income: | |||
Unrealized gain on real estate securities | 0 | 9 | 4 |
Total other comprehensive income | 0 | 9 | 4 |
Total comprehensive income (loss) | 7,132 | (23,739) | 11,593 |
Total comprehensive (income) loss attributable to noncontrolling interests | (4,688) | 554 | (96) |
Total comprehensive income (loss) attributable to common stockholders | $ 2,444 | $ (23,185) | $ 11,497 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Total Stockholders' Equity | Common Stock | Additional Paid-in Capital | Cumulative Distributions and Net Losses | Accumulated Other Comprehensive Gain (Loss) | Noncontrolling Interests |
Balance, shares at Dec. 31, 2012 | 58,127,627 | ||||||
Balance, value at Dec. 31, 2012 | $ 483,652 | $ 467,860 | $ 581 | $ 505,907 | $ (38,615) | $ (13) | $ 15,792 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | 11,589 | 11,493 | 11,493 | 96 | |||
Other comprehensive income | 4 | 4 | 4 | ||||
Issuance of common stock, shares | 1,751,478 | ||||||
Issuance of common stock | 16,641 | 16,641 | $ 18 | 16,623 | |||
Transfers to redeemable common stock | (7,922) | (7,922) | (7,922) | ||||
Redemptions of common stock, shares | (260,105) | ||||||
Redemptions of common stock | (2,450) | (2,450) | $ (3) | (2,447) | |||
Distributions declared | (25,679) | (25,679) | (25,679) | ||||
Other offering costs | (125) | (125) | (125) | ||||
Noncontrolling interests contributions | 1,213 | 1,213 | |||||
Distributions to noncontrolling interest | (2,237) | (2,237) | |||||
Balance, shares at Dec. 31, 2013 | 59,619,000 | ||||||
Balance, value at Dec. 31, 2013 | 474,686 | 459,822 | $ 596 | 512,036 | (52,801) | (9) | 14,864 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (23,748) | (23,194) | (23,194) | (554) | |||
Other comprehensive income | 9 | 9 | 9 | ||||
Issuance of common stock, shares | 901,146 | ||||||
Issuance of common stock | 9,911 | 9,911 | $ 9 | 9,902 | |||
Transfers from redeemable common stock | 7,662 | 7,662 | 7,662 | ||||
Redemptions of common stock, shares | (475,817) | ||||||
Redemptions of common stock | (5,104) | (5,104) | $ (5) | (5,099) | |||
Distributions declared | (15,696) | (15,696) | (15,696) | ||||
Other offering costs | (12) | (12) | (12) | ||||
Noncontrolling interests contributions | 2,585 | 2,585 | |||||
Distributions to noncontrolling interest | $ (157) | (157) | |||||
Balance, shares at Dec. 31, 2014 | 60,044,329 | 60,044,329 | |||||
Balance, value at Dec. 31, 2014 | $ 450,136 | 433,398 | $ 600 | 524,489 | (91,691) | 0 | 16,738 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | 7,132 | 2,444 | 2,444 | 4,688 | |||
Other comprehensive income | 0 | ||||||
Issuance of common stock, shares | 1,114,532 | ||||||
Issuance of common stock | 13,573 | 13,573 | $ 11 | 13,562 | |||
Transfers to redeemable common stock | (3,663) | (3,663) | (3,663) | ||||
Redemptions of common stock, shares | (2,462,746) | ||||||
Redemptions of common stock | (30,100) | (30,100) | $ (24) | (30,076) | |||
Distributions declared | (22,280) | (22,280) | (22,280) | ||||
Other offering costs | (9) | (9) | (9) | ||||
Noncontrolling interests contributions | 1,343 | 1,343 | |||||
Distributions to noncontrolling interest | $ (7,342) | (7,342) | |||||
Balance, shares at Dec. 31, 2015 | 58,696,115 | 58,696,115 | |||||
Balance, value at Dec. 31, 2015 | $ 408,790 | $ 393,363 | $ 587 | $ 504,303 | $ (111,527) | $ 0 | $ 15,427 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash Flows from Operating Activities: | |||
Net income (loss) | $ 7,132 | $ (23,748) | $ 11,589 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Loss due to property damages | 2,260 | 707 | 0 |
Equity in loss of unconsolidated joint venture | 368 | 1,101 | 146 |
Depreciation and amortization | |||
Continuing operations | 44,739 | 47,063 | 28,677 |
Discontinued operations | 0 | 0 | 1,057 |
Impairment charges on real estate | 0 | 579 | 1,433 |
Non-cash interest income on real estate related investments | (428) | (614) | (842) |
Gain on sale of real estate, net | (13,665) | (55) | (13,108) |
Other income | (5,085) | 0 | 0 |
Gain on foreclosure of real estate loan receivable, net | 0 | 0 | (7,473) |
Deferred rent | (4,499) | (8,392) | (4,694) |
Bad debt expense | 331 | 176 | 197 |
Amortization of above- and below-market leases, net | (645) | (1,339) | 138 |
Amortization of deferred financing costs | 2,703 | 2,778 | 976 |
Interest accretion on real estate securities | 0 | 9 | 36 |
Net amortization of discount and (premium) on bond and notes payable | 25 | (1) | (92) |
Changes in assets and liabilities: | |||
Rents and other receivables | (1,126) | (1,817) | (1,312) |
Deferred interest receivable | 0 | 0 | 1,001 |
Prepaid expenses and other assets | (6,683) | (8,314) | (2,299) |
Accounts payable and accrued liabilities | 595 | 606 | 6,089 |
Due to affiliates | 59 | 0 | (21) |
Other liabilities | 975 | 2,711 | 3,132 |
Net cash provided by operating activities | 27,056 | 11,450 | 24,630 |
Cash Flows from Investing Activities: | |||
Acquisitions of real estate | 0 | (191,925) | (295,167) |
Improvements to real estate | (35,586) | (33,892) | (22,398) |
Proceeds from sales of real estate, net | 38,772 | 1,393 | 30,658 |
Escrow deposits for future real estate purchases | 0 | 0 | (13,000) |
Investments in real estate loans receivable | 0 | (5,850) | (21,568) |
Proceeds from condemnation proceeds | 5,915 | 0 | 0 |
Insurance proceeds for property damages | 294 | 0 | 0 |
Payoff of real estate loan receivable | 0 | 0 | 35,750 |
Principal repayments on real estate securities | 0 | 333 | 4,452 |
Investment in unconsolidated joint venture | (2,760) | (58,987) | (9,000) |
Distribution of capital from unconsolidated joint venture | 0 | 2,179 | 398 |
Extension fee received on real estate loan receivable | 0 | 935 | 0 |
Funding of restricted cash for development obligations | (4,643) | 0 | 0 |
Net cash provided by (used in) investing activities | 1,992 | (285,814) | (289,875) |
Cash Flows from Financing Activities: | |||
Proceeds from notes payable | 61,189 | 307,254 | 251,065 |
Principal payments on notes payable | (40,631) | (59,203) | (36,084) |
Payments of deferred financing costs | (826) | (4,117) | (4,988) |
Payments to redeem common stock | (30,100) | (5,104) | (2,450) |
Payments of other offering costs | (9) | (12) | (200) |
Distributions paid | (8,707) | (5,785) | (9,038) |
Noncontrolling interests contributions | 1,343 | 2,585 | 1,213 |
Distributions to noncontrolling interests | (7,342) | (157) | (2,237) |
Net cash (used in) provided by financing activities | (25,083) | 235,461 | 197,281 |
Net increase (decrease) in cash and cash equivalents | 3,965 | (38,903) | (67,964) |
Cash and cash equivalents, beginning of period | 19,093 | 57,996 | 125,960 |
Cash and cash equivalents, end of period | 23,058 | 19,093 | 57,996 |
Supplemental Disclosure of Cash Flow Information: | |||
Interest paid, net of capitalized interest of $1,856, $1,987 and $2,718 for the years ended December 31, 2015, 2014 and 2013 respectively | 12,265 | 12,258 | 1,635 |
Supplemental Disclosure of Noncash Investing and Financing Activities: | |||
Increase in development obligations | 4,643 | 0 | 0 |
Decrease in restricted cash in connection with development obligations | (515) | 0 | 0 |
Mortgage debt assumed in connection with real estate acquisition (at fair value) | 0 | 24,793 | 0 |
Application of escrow deposits to acquisition of real estate | 0 | 13,000 | 0 |
Investments in real estate acquired through foreclosure | 0 | 0 | 45,943 |
Assets assumed in connection with foreclosure of real estate | 0 | 0 | 7,156 |
Liabilities assumed in connection with foreclosure of real estate | 0 | 0 | 9,671 |
Increase in accrued improvements to real estate | 0 | 3,095 | 2,583 |
Increase in redeemable common stock payable | 3,715 | 0 | 0 |
Distributions paid to common stockholders through common stock issuances pursuant to the dividend reinvestment plan | $ 13,573 | $ 9,911 | $ 16,641 |
CONSOLIDATED STATEMENTS OF CAS8
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Cash Flows [Abstract] | |||
Interest capitalized | $ 1,856 | $ 1,987 | $ 2,718 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | ORGANIZATION KBS Strategic Opportunity REIT, Inc. (the “Company”) was formed on October 8, 2008 as a Maryland corporation and elected to be taxed as a real estate investment trust (“REIT”) beginning with the taxable year ended December 31, 2010. The Company conducts its business primarily through KBS Strategic Opportunity Limited Partnership (the “Operating Partnership”), a Delaware limited partnership formed on December 10, 2008. The Company is the sole general partner of, and owns a 0.1% partnership interest in, the Operating Partnership. KBS Strategic Opportunity Holdings LLC (“REIT Holdings”), a Delaware limited liability company formed on December 9, 2008, owns the remaining 99.9% interest in the Operating Partnership and is its sole limited partner. The Company is the sole member and manager of REIT Holdings. Subject to certain restrictions and limitations, the business of the Company is externally managed by KBS Capital Advisors LLC (the “Advisor”), an affiliate of the Company, pursuant to an advisory agreement the Company renewed with the Advisor on October 8, 2015 (the “Advisory Agreement”). The Advisor conducts the Company’s operations and manages its portfolio of real estate-related loans, opportunistic real estate, real estate-related debt securities and other real estate-related investments. The Advisor owns 20,000 shares of the Company’s common stock. On January 8, 2009, the Company filed a registration statement on Form S-11 with the Securities and Exchange Commission (the “SEC”) to offer a minimum of 250,000 shares and a maximum of 140,000,000 shares of common stock for sale to the public (the “Offering”), of which 100,000,000 shares were registered in a primary offering and 40,000,000 shares were registered to be sold under the Company’s dividend reinvestment plan. The SEC declared the Company’s registration statement effective on November 20, 2009. The Company ceased offering shares of common stock in its primary offering on November 14, 2012 and continues to offer shares under its dividend reinvestment plan. The Company sold 56,584,976 shares of common stock in its primary offering for gross offering proceeds of $561.7 million . As of December 31, 2015 , the Company had sold 5,096,508 shares of common stock under its dividend reinvestment plan for gross offering proceeds of $ 52.8 million . Also, as of December 31, 2015 , the Company had redeemed 3,281,612 shares sold in the Offering for $ 38.4 million . Additionally, on December 29, 2011 and October 23, 2012, the Company issued 220,994 shares and 55,249 shares of common stock, respectively, for $2.0 million and $0.5 million , respectively, in private transactions exempt from the registration requirements pursuant to Section 4(2) of the Securities Act of 1933. As of December 31, 2015 , the Company owned 10 office properties, one office campus consisting of nine office buildings, one office portfolio consisting of four office buildings and 25 acres of undeveloped land, one office portfolio consisting of three office properties, one retail property, two apartment properties, two investments in undeveloped land encompassing an aggregate of 1,670 acres, one first mortgage loan and two investments in unconsolidated joint ventures. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of the Company, REIT Holdings, the Operating Partnership and their direct and indirect wholly owned subsidiaries, and joint ventures in which the Company has a controlling interest. All significant intercompany balances and transactions are eliminated in consolidation. The consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. Reclassifications Certain amounts in the Company’s prior period consolidated financial statements have been reclassified to conform to the current period presentation. These reclassifications have not changed the results of operations of prior periods. During the year ended December 31, 2015, the Company sold two office properties. As a result, certain assets and liabilities were reclassified to held for sale on the consolidated balance sheets for all periods presented. During the year ended December 31, 2015, the Company elected to early adopt ASU No. 2015-03 (defined below). As a result, the Company has reclassified debt issuance costs associated with a debt liability from prepaid expenses and other assets to notes and bond payable, net on the consolidated balance sheets for all periods presented. Revenue Recognition Real Estate The Company recognizes minimum rent, including rental abatements, lease incentives and contractual fixed increases attributable to operating leases, on a straight-line basis over the term of the related leases when collectibility is reasonably assured and records amounts expected to be received in later years as deferred rent receivable. If the lease provides for tenant improvements, the Company determines whether the tenant improvements, for accounting purposes, are owned by the tenant or the Company. When the Company is the owner of the tenant improvements, the tenant is not considered to have taken physical possession or have control of the physical use of the leased asset until the tenant improvements are substantially completed. When the tenant is the owner of the tenant improvements, any tenant improvement allowance (including amounts that can be taken in the form of cash or a credit against the tenant’s rent) that is funded is treated as a lease incentive and amortized as a reduction of revenue over the lease term. Tenant improvement ownership is determined based on various factors including, but not limited to: • whether the lease stipulates how a tenant improvement allowance may be spent; • whether the amount of a tenant improvement allowance is in excess of market rates; • whether the tenant or landlord retains legal title to the improvements at the end of the lease term; • whether the tenant improvements are unique to the tenant or general-purpose in nature; and • whether the tenant improvements are expected to have any residual value at the end of the lease. The Company records property operating expense reimbursements due from tenants for common area maintenance, real estate taxes, and other recoverable costs in the period the related expenses are incurred. The Company makes estimates of the collectibility of its tenant receivables related to base rents, including deferred rent, expense reimbursements and other revenue or income. Management specifically analyzes accounts receivable, deferred rents receivable, historical bad debts, customer creditworthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. In addition, with respect to tenants in bankruptcy, management makes estimates of the expected recovery of pre-petition and post-petition claims in assessing the estimated collectibility of the related receivable. In some cases, the ultimate resolution of these claims can exceed one year. When a tenant is in bankruptcy, the Company will record a bad debt reserve for the tenant’s receivable balance and generally will not recognize subsequent rental revenue until cash is received or until the tenant is no longer in bankruptcy and has the ability to make rental payments. Real Estate Loans Receivable Interest income on the Company’s real estate loans receivable is recognized on an accrual basis over the life of the investment using the interest method. Direct loan origination or acquisition fees and costs, as well as acquisition premiums or discounts, are amortized over the term of the loan as an adjustment to interest income. The Company places loans on non-accrual status when any portion of principal or interest is 90 days past due, or earlier when concern exists as to the ultimate collection of principal or interest. When a loan is placed on non-accrual status, the Company reserves for any unpaid accrued interest and generally does not recognize subsequent interest income until cash is received, or the loan returns to accrual status. The Company will resume the accrual of interest if it determines the collection of interest, according to the contractual terms of the loan, is probable. The Company generally recognizes income on impaired loans on either a cash basis, where interest income is only recorded when received in cash, or on a cost-recovery basis, where all cash receipts are applied against the carrying value of the loan. The Company considers the collectibility of the loan’s principal balance in determining whether to recognize income on impaired loans on a cash basis or a cost-recovery basis. The Company will recognize interest income on loans purchased at discounts to face value where the Company expects to collect less than the contractual amounts due under the loan when that expectation is due, at least in part, to the credit quality of the borrower. Income is recognized at an interest rate equivalent to the estimated yield on the loan, as calculated using the carrying value of the loan and the expected cash flows. Changes in estimated cash flows are recognized through an adjustment to the yield on the loan on a prospective basis. Projecting cash flows for these types of loans requires a significant amount of assumptions and judgment, which may have a significant impact on the amount and timing of revenue recognized on these investments. The Company recognizes interest income on non-performing loans on a cash basis or cost-recovery basis since these loans generally do not have an estimated yield and collection of principal and interest is not assured. Real Estate Securities The Company recognizes interest income on real estate securities that are beneficial interests in securitized financial assets and are rated “AA” and above on an accrual basis according to the contractual terms of the securities. Discounts or premiums are amortized to interest income over the life of the investment using the interest method. The Company recognizes interest income on real estate securities that are beneficial interests in securitized financial assets that are rated below “AA” using the effective yield method, which requires the Company to periodically project estimated cash flows related to these securities and recognize interest income at an interest rate equivalent to the estimated yield on the security, as calculated using the security’s estimated cash flows and amortized cost basis, or reference amount. Changes in the estimated cash flows are recognized through an adjustment to the yield on the security on a prospective basis. Projecting cash flows for these types of securities requires significant judgment, which may have a significant impact on the timing of revenue recognized on these investments. Cash and Cash Equivalents The Company recognizes interest income on its cash and cash equivalents as it is earned and records such amounts as other interest income. Real Estate Depreciation and Amortization Real estate costs related to the acquisition and improvement of properties are capitalized and amortized over the expected useful life of the asset on a straight-line basis. Repair and maintenance costs are charged to expense as incurred and significant replacements and betterments are capitalized. Repair and maintenance costs include all costs that do not extend the useful life of the real estate asset. The Company considers the period of future benefit of an asset to determine its appropriate useful life. Expenditures for tenant improvements are capitalized and amortized over the shorter of the tenant’s lease term or expected useful life. The Company anticipates the estimated useful lives of its assets by class to be generally as follows: Buildings 25-40 years Building improvements 10-40 years Tenant improvements Shorter of lease term or expected useful life Tenant origination and absorption costs Remaining term of related leases, including below-market renewal periods Real Estate Acquisition Valuation The Company records the acquisition of income-producing real estate or real estate that will be used for the production of income as a business combination. All assets acquired and liabilities assumed in a business combination are measured at their acquisition-date fair values. Acquisition costs are expensed as incurred and restructuring costs that do not meet the definition of a liability at the acquisition date are expensed in periods subsequent to the acquisition date. Real estate obtained in satisfaction of a loan is recorded at the estimated fair value of the real estate (net of liabilities assumed) or the fair value of the loan satisfied if more clearly evident. The excess of the carrying value of the loan over the fair value of the property is charged-off against the reserve for loan losses when title to the property is obtained. Costs of holding the property are expensed as incurred in the Company’s consolidated statements of operations. Intangible assets include the value of in-place leases, which represents the estimated value of the net cash flows of the in-place leases to be realized, as compared to the net cash flows that would have occurred had the property been vacant at the time of acquisition and subject to lease-up. Acquired in-place lease value will be amortized to expense over the average remaining terms of the respective in-place leases, including any below-market renewal periods. The Company assesses the acquisition date fair values of all tangible assets, identifiable intangibles and assumed liabilities using methods similar to those used by independent appraisers, generally utilizing a discounted cash flow analysis that applies appropriate discount and/or capitalization rates and available market information. Estimates of future cash flows are based on a number of factors, including historical operating results, known and anticipated trends, and market and economic conditions. The fair value of tangible assets of an acquired property considers the value of the property as if it were vacant. The Company records above-market and below-market in-place lease values for acquired properties based on the present value (using a discount that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of above-market in-place leases and for the initial term plus any extended term for any leases with below-market renewal options. The Company amortizes any recorded above-market or below-market lease values as a reduction or increase, respectively, to rental income over the remaining non-cancelable terms of the respective lease, including any below-market renewal periods. The Company estimates the value of tenant origination and absorption costs by considering the estimated carrying costs during hypothetical expected lease up periods, considering current market conditions. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods. The Company amortizes the value of tenant origination and absorption costs to depreciation and amortization expense over the remaining non-cancelable term of the leases. Estimates of the fair values of the tangible assets, identifiable intangibles and assumed liabilities require the Company to make significant assumptions to estimate market lease rates, property-operating expenses, carrying costs during lease-up periods, discount rates, market absorption periods, and the number of years the property will be held for investment. The use of inappropriate assumptions would result in an incorrect valuation of the Company’s acquired tangible assets, identifiable intangibles and assumed liabilities, which would impact the amount of the Company’s net income. Direct investments in undeveloped land or properties without leases in place at the time of acquisition are accounted for as an asset acquisition and not as a business combination. Acquisition fees and expenses are capitalized into the cost basis of an asset acquisition. Additionally, during the time in which the Company is incurring costs necessary to bring these investments to their intended use, certain costs such as legal fees, real estate taxes and insurance and financing costs are also capitalized. Impairment of Real Estate and Related Intangible Assets and Liabilities The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate and related intangible assets and liabilities may not be recoverable or realized. When indicators of potential impairment suggest that the carrying value of real estate and related intangible assets and liabilities may not be recoverable, the Company assesses the recoverability by estimating whether the Company will recover the carrying value of the real estate and related intangible assets and liabilities through its undiscounted future cash flows and its eventual disposition. If, based on this analysis, the Company does not believe that it will be able to recover the carrying value of the real estate and related intangible assets and liabilities, the Company would record an impairment loss to the extent that the carrying value exceeds the estimated fair value of the real estate and related intangible assets and liabilities. The Company did not record any impairment losses on its real estate and related intangible assets and liabilities during the year ended December 31, 2015. During the year ended December 31, 2014, the Company recorded an impairment charge of $ 0.6 million with respect to one real estate property, which was sold on September 10, 2015. During the year ended December 31, 2013, the Company recorded an impairment charge of $ 1.4 million with respect to two real estate properties, one of which was sold on August 29, 2014 and the other of which was sold on September 10, 2015. Projecting future cash flows involves estimating expected future operating income and expenses related to the real estate and its related intangible assets and liabilities as well as market and other trends. Using inappropriate assumptions to estimate cash flows could result in incorrect fair values of the real estate and its related intangible assets and liabilities and could result in the overstatement of the carrying values of the Company’s real estate and related intangible assets and liabilities and an overstatement of its net income. Insurance Proceeds for Property Damages The Company maintains an insurance policy that provides coverage for property damages and business interruption. Losses due to physical damages are recognized during the accounting period in which they occur, while the amount of monetary assets to be received from the insurance policy is recognized when receipt of insurance recoveries is probable. Losses, which are reduced by the related insurance recoveries, are recorded as operating, maintenance and management expenses on the accompanying consolidated statements of operations. Anticipated proceeds in excess of recognized losses would be considered a gain contingency and recognized when the contingency related to the insurance claim has been resolved. Anticipated recoveries for lost rental revenue due to property damages are also considered to be a gain contingency and recognized when the contingency related to the insurance claim has been resolved. Real Estate Held for Sale and Discontinued Operations The Company generally considers real estate to be “held for sale” when the following criteria are met: (i) management commits to a plan to sell the property, (ii) the property is available for sale immediately, (iii) the property is actively being marketed for sale at a price that is reasonable in relation to its current fair value, (iv) the sale of the property within one year is considered probable and (v) significant changes to the plan to sell are not expected. Real estate that is held for sale and its related assets are classified as “real estate held for sale” and “assets related to real estate held for sale,” respectively, for all periods presented in the accompanying consolidated financial statements. Notes payable and other liabilities related to real estate held for sale are classified as “notes payable related to real estate held for sale” and “liabilities related to real estate held for sale,” respectively, for all periods presented in the accompanying consolidated financial statements. Real estate classified as held for sale is no longer depreciated and is reported at the lower of its carrying value or its estimated fair value less estimated costs to sell. Additionally, with respect to properties that were classified as held for sale in financial statements prior to January 1, 2014, the Company records the operating results and related gains (losses) on sale as discontinued operations for all periods presented if the operations have been or are expected to be eliminated and the Company will not have any significant continuing involvement in the operations of the property following the sale. Operating results and related gains (losses) on sale of properties that were disposed of or classified as held for sale in the ordinary course of business during the years ended December 31, 2015 and 2014 that had not been classified as held for sale in financial statements prior to January 1, 2014 are included in continuing operations on the Company’s consolidated statements of operations. Real Estate Loans Receivable and Loan Loss Reserves The Company’s real estate loans receivable are recorded at amortized cost, net of loan loss reserves (if any), and evaluated for impairment at each balance sheet date. The amortized cost of a real estate loan receivable is the outstanding unpaid principal balance, net of unamortized acquisition premiums or discounts and unamortized costs and fees directly associated with the origination or acquisition of the loan. The amount of impairment, if any, will be measured by comparing the amortized cost of the loan to the present value of the expected cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the fair value of the collateral if the loan is collateral dependent and collection of principal and interest is not assured. If a loan is deemed to be impaired, the Company will record a loan loss reserve and a provision for loan losses to recognize impairment. As of December 31, 2015, there was no loan loss reserve and the Company did not record any impairment losses related to its real estate loans receivable during the years ended December 31, 2015, 2014 and 2013. The reserve for loan losses is a valuation allowance that reflects management’s estimate of loan losses inherent in the loan portfolio as of the balance sheet date. The reserve is adjusted through “Provision for loan losses” on the Company’s consolidated statements of operations and is decreased by charge-offs to specific loans when losses are confirmed. The Company considers a loan to be impaired when, based upon current information and events, it believes that it is probable that the Company will be unable to collect all amounts due under the contractual terms of the loan agreement. If the Company purchases a loan at a discount to face value and at the acquisition date the Company expects to collect less than the contractual amounts due under the terms of the loan based, at least in part, on the Company’s assessment of the credit quality of the borrower, the Company will consider such a loan to be impaired when, based upon current information and events, it believes that it is probable that the Company will be unable to collect all amounts the Company estimated to be collected at the time of acquisition. The Company also considers a loan to be impaired if it grants the borrower a concession through a modification of the loan terms or if it expects to receive assets (including equity interests in the borrower) with fair values that are less than the carrying value of the loan in satisfaction of the loan. A reserve is established when the present value of payments expected to be received, observable market prices, the estimated fair value of the collateral (for loans that are dependent on the collateral for repayment) or amounts expected to be received in satisfaction of a loan are lower than the carrying value of that loan. Failure to recognize impairments would result in the overstatement of earnings and the carrying value of the Company’s real estate loans held for investment. Actual losses, if any, could significantly differ from estimated amounts. Investments in Unconsolidated Joint Ventures Equity Method The Company accounts for investments in unconsolidated joint venture entities in which the Company may exercise significant influence over, but does not control, using the equity method of accounting. Under the equity method, the investment is initially recorded at cost and subsequently adjusted to reflect additional contributions or distributions and the Company’s proportionate share of equity in the joint venture’s income (loss). The Company recognizes its proportionate share of the ongoing income or loss of the unconsolidated joint venture as equity in income (loss) of unconsolidated joint venture on the consolidated statements of operations. On a quarterly basis, the Company evaluates its investment in an unconsolidated joint venture for other-than-temporary impairments. As of December 31, 2015, the Company did not identify any indicators of impairment related to its unconsolidated real estate joint venture accounted for under the equity method. Cost Method The Company accounts for investments in unconsolidated joint venture entities in which the Company does not have the ability to exercise significant influence and has virtually no influence over partnership operating and financial policies using the cost method of accounting. Under the cost method, income distributions from the partnership are recognized in other income. Distributions that exceed the Company’s share of earnings are applied to reduce the carrying value of the Company’s investment and any capital contributions will increase the carrying value of the Company’s investment. On a quarterly basis, the Company evaluates its cost method investment in an unconsolidated joint venture for other-than-temporary impairments. The fair value of a cost method investment is not estimated if there are no identified events or changes in circumstances that would indicate a significant adverse effect on the fair value of the investment. As of December 31, 2015, the Company did not identify any indicators of impairment related to its unconsolidated real estate joint venture accounted for under the cost method. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents may include cash and short-term investments. Cash and cash equivalents are stated at cost, which approximates fair value. There were no restrictions on the use of the Company’s cash and cash equivalents as of December 31, 2015 and 2014. The Company’s cash and cash equivalents balance exceeded federally insurable limits as of December 31, 2015 . The Company monitors the cash balances in its operating accounts and adjusts the cash balances as appropriate; however, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, the Company has experienced no loss or lack of access to cash in its operating accounts. Rents and Other Receivables The Company periodically evaluates the collectibility of amounts due from tenants and maintains an allowance for doubtful accounts for estimated losses resulting from the inability of tenants to make required payments under lease agreements. In addition, the Company maintains an allowance for deferred rent receivable that arises from the straight-lining of rents. The Company exercises judgment in establishing these allowances and considers payment history and current credit status of its tenants in developing these estimates. Deferred Financing Costs Deferred financing costs represent commitment fees, loan fees, legal fees and other third-party costs associated with obtaining financing and are presented on the balance sheet as a direct deduction from the carrying value of the associated debt liability. These costs are amortized over the terms of the respective financing agreements using the interest method. Unamortized deferred financing costs are generally expensed when the associated debt is refinanced or repaid before maturity unless specific rules are met that would allow for the carryover of such costs to the refinanced debt. Deferred financing costs incurred before an associated debt liability is recognized are included in prepaid and other assets on the balance sheet. Costs incurred in seeking financing transactions that do not close are expensed in the period in which it is determined that the financing will not close. Fair Value Measurements Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other financial instruments and balances at fair value on a non-recurring basis (e.g., carrying value of impaired real estate loans receivable and long-lived assets). Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories: • Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; • Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and • Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable. When available, the Company utilizes quoted market prices from an independent third-party source to determine fair value and classifies such items in Level 1 or Level 2. In instances where the market for a financial instrument is not active, regardless of the availability of a nonbinding quoted market price, observable inputs might not be relevant and could require the Company to make a significant adjustment to derive a fair value measurement. Additionally, in an inactive market, a market price quoted from an independent third party may rely more on models with inputs based on information available only to that independent third party. When the Company determines that the market for a financial instrument owned by the Company is illiquid or when market transactions for similar instruments do not appear orderly, the Company uses several valuation sources (including internal valuations, discounted cash flow analysis and quoted market prices) and establishes a fair value by assigning weights to the various valuation sources. Additionally, when determining the fair value of liabilities in circumstances in which a quoted price in an active market for an identical liability is not available, the Company measures fair value using (i) a valuation technique that uses the quoted price of the identical liability when traded as an asset or quoted prices for similar liabilities when traded as assets or (ii) another valuation technique that is consistent with the principles of fair value measurement, such as the income approach or the market approach. Changes in assumptions or estimation methodologies can have a material effect on these estimated fair values. In this regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, may not be realized in an immediate settlement of the instrument. The Company considers the following factors to be indicators of an inactive market: (i) there are few recent transactions, (ii) price quotations are not based on current information, (iii) price quotations vary substantially either over time or among market makers (for example, some brokered markets), (iv) indexes that previously were highly correlated with the fair values of the asset or liability are demonstrably uncorrelated with recent indications of fair value for that asset or liability, (v) there is a significant increase in implied liquidity risk premiums, yields, or performance indicators (such as delinquency rates or loss severities) for observed transactions or quoted prices when compared with the Company’s estimate of expected cash flows, considering all available market data about credit and other nonperformance risk for the asset or liability, (vi) there is a wide bid-ask spread or significant increase in the bid-ask spread, (vii) there is a significant decline or absence of a market for new issuances (that is, a primary market) for the asset or liability or similar assets or liabilities, and (viii) little information is released publicly (for example, a principal-to-principal market). The Company considers the following factors to be indicators of non-orderly transactions: (i) there was not adequate exposure to the market for a period before the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities under current market conditions, (ii) there was a usual and customary marketing period, but the seller marketed the asset or liability to a single market participant, (iii) the seller is in or near bankruptcy or receivership (that is, distressed), or the seller was required to sell to meet regulatory or legal requirements (that is, forced), and (iv) the transaction price is an outlier when compared with other recent transactions for the same or similar assets or liabilities. Dividend Reinvestment Plan The Company has adopted a dividend reinvestment plan (the “DRP”) through which future common stockholders may elect to reinvest an amount equal to the distributions declared on their shares in additional shares of the Company’s common stock in lieu of receiving cash distributions. On March 25, 2014, the Company’s board of directors approved a fourth amended and restated dividend reinvestment plan (the “Fourth Amended DRP”). The Fourth Amended DRP became effective for purchases under the plan on or after April 6, 2014. Pursuant to the Fourth Amended DRP, the purchase price of shares of the Company’s common stock is equal to 95% of the most recently announced estimated value per share of the Company’s common stock. Prior |
REAL ESTATE HELD FOR INVESTMENT
REAL ESTATE HELD FOR INVESTMENT | 12 Months Ended |
Dec. 31, 2015 | |
Real Estate [Abstract] | |
REAL ESTATE HELD FOR INVESTMENT | REAL ESTATE HELD FOR INVESTMENT As of December 31, 2015 , the Company owned 10 office properties, one office campus consisting of nine office buildings, one office portfolio consisting of four office buildings and 25 acres of undeveloped land, one office portfolio consisting of three office properties and one retail property encompassing, in the aggregate, approximately 4.4 million rentable square feet. As of December 31, 2015 , these properties were 84% occupied. In addition, the Company owned two apartment properties containing 383 units and encompassing approximately 0.3 million rentable square feet, which were 92% occupied. The Company also owned two investments in undeveloped land encompassing an aggregate of 1,670 acres. The following table summarizes the Company’s real estate held for investment as of December 31, 2015 and 2014, respectively (in thousands): December 31, 2015 December 31, 2014 Land $ 223,201 $ 229,053 Buildings and improvements 646,979 628,662 Tenant origination and absorption costs 43,894 50,807 Total real estate, cost 914,074 908,522 Accumulated depreciation and amortization (91,560 ) (63,388 ) Total real estate, net $ 822,514 $ 845,134 The following table provides summary information regarding the Company’s real estate held for investment as of December 31, 2015 (in thousands): Property Date Acquired or Foreclosed on City State Property Type Land Building and Improvements Tenant Origination and Absorption Total Real Estate, at Cost Accumulated Depreciation and Amortization Total Real Estate, Net Ownership % Northridge Center I & II 03/25/2011 Atlanta GA Office $ 2,234 $ 7,170 $ — $ 9,404 $ (1,986 ) $ 7,418 100.0 % Iron Point Business Park 06/21/2011 Folsom CA Office 2,671 19,445 — 22,116 (3,763 ) 18,353 100.0 % Richardson Portfolio: Palisades Central I 11/23/2011 Richardson TX Office 1,037 10,035 684 11,756 (2,028 ) 9,728 90.0 % Palisades Central II 11/23/2011 Richardson TX Office 810 17,820 1,219 19,849 (4,600 ) 15,249 90.0 % Greenway I 11/23/2011 Richardson TX Office 561 2,156 — 2,717 (568 ) 2,149 90.0 % Greenway III 11/23/2011 Richardson TX Office 702 3,928 785 5,415 (1,561 ) 3,854 90.0 % Undeveloped Land 11/23/2011 Richardson TX Undeveloped Land 3,058 — — 3,058 — 3,058 90.0 % Total Richardson Portfolio 6,168 33,939 2,688 42,795 (8,757 ) 34,038 Park Highlands 12/30/2011 North Las Vegas NV Undeveloped Land 30,695 — — 30,695 — 30,695 50.1 % Bellevue Technology Center 07/31/2012 Bellevue WA Office 25,506 55,863 3,813 85,182 (8,107 ) 77,075 100.0 % Powers Ferry Landing East 09/24/2012 Atlanta GA Office 1,643 8,039 105 9,787 (1,607 ) 8,180 100.0 % 1800 West Loop 12/04/2012 Houston TX Office 8,360 60,647 5,331 74,338 (10,360 ) 63,978 100.0 % West Loop I & II 12/07/2012 Houston TX Office 7,300 30,290 2,183 39,773 (4,582 ) 35,191 100.0 % Burbank Collection 12/12/2012 Burbank CA Retail 4,175 9,384 789 14,348 (1,284 ) 13,064 90.0 % Austin Suburban Portfolio 03/28/2013 Austin TX Office 8,288 67,428 3,129 78,845 (9,230 ) 69,615 100.0 % Westmoor Center 06/12/2013 Westminster CO Office 10,058 66,164 8,809 85,031 (13,542 ) 71,489 100.0 % Central Building 07/10/2013 Seattle WA Office 7,015 26,097 2,000 35,112 (3,188 ) 31,924 100.0 % 50 Congress Street 07/11/2013 Boston MA Office 9,876 40,731 2,634 53,241 (4,943 ) 48,298 100.0 % 1180 Raymond 08/20/2013 Newark NJ Apartment 8,292 36,958 136 45,386 (2,769 ) 42,617 100.0 % Park Highlands II 12/10/2013 North Las Vegas NV Undeveloped Land 22,192 — — 22,192 — 22,192 99.5 % Maitland Promenade II 12/18/2013 Orlando FL Office 3,434 23,825 4,295 31,554 (3,668 ) 27,886 100.0 % Plaza Buildings 01/14/2014 Bellevue WA Office 53,040 135,772 7,982 196,794 (12,458 ) 184,336 100.0 % 424 Bedford 01/31/2014 Brooklyn NY Apartment 8,860 25,227 — 34,087 (1,316 ) 32,771 90.0 % Richardson Land II 09/04/2014 Richardson TX Undeveloped Land 3,394 — — 3,394 — 3,394 90.0 % $ 223,201 $ 646,979 $ 43,894 $ 914,074 $ (91,560 ) $ 822,514 Operating Leases Certain of the Company’s real estate properties are leased to tenants under operating leases for which the terms and expirations vary. As of December 31, 2015 , the leases, excluding options to extend and apartment leases, which have terms that are generally one year or less, had remaining terms of up to 12.3 years with a weighted-average remaining term of 3.8 years. Some of the leases 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 a security deposit from tenants in the form of a cash deposit and/or a letter of credit. The amount required as a security deposit varies depending upon the terms of the respective 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 and assumed in real estate acquisitions or foreclosures related to tenant leases are included in other liabilities in the accompanying consolidated balance sheets and totaled $5.3 million and $5.0 million as of December 31, 2015 and 2014, respectively. During the years ended December 31, 2015 , 2014 and 2013, the Company recognized deferred rent from tenants of $4.5 million , $ 8.4 million and $4.6 million , respectively, net of lease incentive amortization. As of December 31, 2015 and 2014, the cumulative deferred rent receivable balance, including unamortized lease incentive receivables, was $22.8 million and $16.8 million , respectively, and is included in rents and other receivables on the accompanying balance sheets. The cumulative deferred rent balance included $2.8 million and $1.6 million of unamortized lease incentives as of December 31, 2015 and 2014, respectively. The Company records property operating expense reimbursements due from tenants for common area maintenance, real estate taxes, and other recoverable costs in the period the related expenses are incurred. As of December 31, 2015 , the future minimum rental income from the Company’s properties, excluding apartment leases, under non-cancelable operating leases was as follows (in thousands): 2016 $ 76,903 2017 71,825 2018 60,832 2019 48,637 2020 37,094 Thereafter 80,506 $ 375,797 As of December 31, 2015 , the Company’s commercial real estate properties were leased to approximately 500 tenants over a diverse range of industries and geographic areas. The Company’s highest tenant industry concentrations (greater than 10% of annualized base rent) were as follows: Industry Number of Tenants Annualized Base Rent (1) (in thousands) Percentage of Annualized Base Rent Finance 49 $ 10,952 13.8 % Computer System Design & Programming 42 10,250 12.9 % Insurance Carriers & Related Activities 28 8,704 11.0 % $ 29,906 37.7 % _____________________ (1) Annualized base rent represents annualized contractual base rental income as of December 31, 2015 , adjusted to straight-line any contractual tenant concessions (including free rent), rent increases and rent decreases from the lease’s inception through the balance of the lease term. No other tenant industries accounted for more than 10% of annualized base rent. No material tenant credit issues have been identified at this time. Geographic Concentration Risk As of December 31, 2015 , the Company’s real estate investments in Washington and Texas represented 29.2% and 20.5% of the Company’s total assets, respectively. As a result, the geographic concentration of the Company’s portfolio makes it particularly susceptible to adverse economic developments in the Washington and Texas real estate markets. Any adverse economic or real estate developments in these markets, such as business layoffs or downsizing, industry slowdowns, relocations of businesses, changing demographics and other factors, or any decrease in demand for office space resulting from the local business climate, could adversely affect the Company’s operating results and its ability to make distributions to stockholders. Condemnation Agreements During the year ended December 31, 2015 , the Company received $5.9 million in proceeds from condemnation agreements. The carrying value of the condemned land was $0.8 million , resulting in a gain of $5.1 million (including amounts for noncontrolling interests of $1.2 million ), which is included in other income in the accompanying consolidated statements of operations. Property Damage During the year ended December 31, 2015, 1800 West Loop suffered physical damages due to floods. The Company’s insurance policy provides coverage for property damage and business interruption subject to a deductible of up to $100,000 per incident. Based on management’s estimates, the Company recognized an estimated aggregate loss due to damages of $2.2 million during the year ended December 31, 2015, which was reduced by $2.1 million of estimated insurance recoveries related to such damages, which the Company determined were probable of collection. The aggregate net loss due to damages of $0.1 million during the year ended December 31, 2015 was classified as operating, maintenance and management expenses on the accompanying consolidated statements of operations and relates to the Company’s insurance deductible. Through December 31, 2015, the Company received $0.6 million of insurance proceeds related to this incident. As of December 31, 2015, the total estimated insurance proceeds to be collected of $1.5 million were classified as prepaid expenses and other assets on the accompanying consolidated balance sheets. Dispositions of Undeveloped Land On September 10, 2015, the Company sold an aggregate of 14.3 acres of undeveloped land in the Richardson Portfolio for $6.2 million less credits and closing costs. The purchaser is not affiliated with the Company or the Advisor. In connection with the sale, the Company conveyed 11.7 acres of the non-developable land in the Richardson Portfolio and Richardson Land II and contributed $4.6 million for the funding of certain infrastructure development costs to a non-profit owners association. This disposition resulted in a gain of approximately $2.2 million (including amounts for noncontrolling interests of $0.2 million ). On November 2, 2015, the Company sold an aggregate of 11.6 acres of undeveloped land in the Richardson Portfolio and Richardson Land II for $14.3 million less credits and closing costs. The purchaser is not affiliated with the Company or the Advisor. This disposition resulted in a gain of approximately $2.5 million (including amounts for noncontrolling interests of $0.3 million ). |
TENANT ORIGINATION AND ABSORPTI
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES | 12 Months Ended |
Dec. 31, 2015 | |
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Abstract] | |
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES | TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES As of December 31, 2015 and 2014, the Company’s tenant origination and absorption costs, above-market lease assets and below-market lease liabilities (excluding fully amortized assets and liabilities and accumulated amortization) were as follows (in thousands): Tenant Origination and Absorption Costs Above-Market Lease Assets Below-Market Lease Liabilities December 31, December 31, December 31, December 31, December 31, December 31, Cost $ 43,894 $ 50,807 $ 2,399 $ 3,752 $ (5,826 ) $ (7,585 ) Accumulated Amortization (22,749 ) (19,113 ) (1,361 ) (1,691 ) 3,091 3,182 Net Amount $ 21,145 $ 31,694 $ 1,038 $ 2,061 $ (2,735 ) $ (4,403 ) Increases (decreases) in net income as a result of amortization of the Company’s tenant origination and absorption costs, above-market lease assets and below-market lease liabilities for the years ended December 31, 2015 , 2014 and 2013 are as follows (in thousands): Tenant Origination and Absorption Costs Above-Market Lease Assets Below-Market Lease Liabilities For the Years Ended December 31, For the Years Ended December 31, For the Years Ended December 31, 2015 2014 2013 2015 2014 2013 2015 2014 2013 Amortization $ (10,555 ) $ (15,020 ) $ (10,942 ) $ (1,023 ) $ (1,070 ) $ (1,456 ) $ 1,668 $ 2,409 $ 1,565 The remaining unamortized balance for these outstanding intangible assets and liabilities as of December 31, 2015 will be amortized for the years ending December 31 as follows (in thousands): Tenant Above-Market Below-Market 2016 $ (7,417 ) $ (443 ) $ 1,115 2017 (5,209 ) (275 ) 745 2018 (3,383 ) (130 ) 488 2019 (1,998 ) (82 ) 159 2020 (1,282 ) (63 ) 110 Thereafter (1,856 ) (45 ) 118 $ (21,145 ) $ (1,038 ) $ 2,735 Weighted-Average Remaining Amortization Period 4.1 years 3.3 years 3.3 years Additionally, as of December 31, 2015 and 2014, the Company had recorded tax abatement intangible assets, net of amortization, which are included in prepaid expenses and other assets in the accompanying balance sheets, of $7.2 million and $8.2 million , respectively. During the years ended December 31, 2015 and 2014, the Company recorded amortization expense of $1.0 million and $0.9 million related to tax abatement intangible assets, respectively. |
REAL ESTATE LOAN RECEIVABLE
REAL ESTATE LOAN RECEIVABLE | 12 Months Ended |
Dec. 31, 2015 | |
Receivables [Abstract] | |
REAL ESTATE LOANS RECEIVABLE | REAL ESTATE LOAN RECEIVABLE As of December 31, 2015 and 2014, the Company owned one real estate loan receivable that it had originated. The information for that real estate loan receivable as of December 31, 2015 and 2014 is set forth below (in thousands): Loan Name Location of Related Property or Collateral Date Originated Property Type Loan Type Outstanding Principal Balance as of December 31, 2015 (1) Book Value as of December 31, 2015 (2) Book Value as of December 31, 2014 (2) Contractual Interest Rate (3) Annualized Effective Interest Rate (3) Maturity Date University House First Mortgage New York, New York 3/20/2013 Student Housing Mortgage $ 27,850 $ 27,850 $ 27,422 16.0% (4) (4) _____________________ (1) Outstanding principal balance as of December 31, 2015 represents original principal balance outstanding under the loan, increased for any subsequent fundings, including interest income deferred until maturity. (2) Book value of the real estate loan receivable represents outstanding principal balance adjusted for unamortized acquisition discounts, origination fees and direct origination and acquisition costs and additional interest accretion. (3) Contractual interest rate is the stated default interest rate on the face of the loan. Annualized effective interest rate is calculated as the actual interest income recognized in 2015, using the interest method, annualized (if applicable) and divided by the average amortized cost basis of the investment. The annualized effective interest rate and contractual interest rate presented are as of December 31, 2015 . (4) See below for a discussion of the maturity default on the University House First Mortgage. On June 30, 2015, the University House First Mortgage matured without repayment. The Company fully collected the 11% contractual interest income due under the loan through June 30, 2015. As a result, on July 1, 2015, the Company provided notice to the borrower of default and may commence foreclosure proceedings on, or otherwise take title to, the property securing the University House First Mortgage. As of July 1, 2015, the Company had determined the University House Mortgage to be impaired and will recognize income on a cash basis. The Company has not recognized any interest income under the cash basis. The Company generally recognizes income on impaired loans on either a cash basis, where interest income is only recorded when received in cash, or on a cost-recovery basis, where all cash receipts are applied against the carrying value of the loan. The Company will resume the accrual of interest if it determines the collection of interest according to the contractual terms of the loan is probable. The Company considers the collectibility or recoverability of the loan’s principal balance in determining whether to recognize income on impaired loans. The Company did not record a provision for loan loss reserves during the year ended December 31, 2015 or 2014 as the Company believes the entire principal balance of $27.9 million related to the University House First Mortgage to be fully recoverable. The following summarizes the activity related to the real estate loan receivable for the year ended December 31, 2015 (in thousands): Real estate loan receivable - December 31, 2014 $ 27,422 Accretion of closing costs, origination fees and extension fees on real estate loan receivable, net 428 Real estate loan receivable - December 31, 2015 $ 27,850 For the years ended December 31, 2015, 2014 and 2013 interest income from real estate loans receivable consisted of the following (in thousands): 2015 2014 2013 Contractual interest income (including deferred interest) $ 1,540 $ 2,752 $ 8,248 Accretion of closing costs, origination fees and extension fees, net 428 614 842 Interest accretion — — 1,186 Interest income from real estate loans receivable $ 1,968 $ 3,366 $ 10,276 |
REAL ESTATE SALES
REAL ESTATE SALES | 12 Months Ended |
Dec. 31, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
REAL ESTATE SALES | REAL ESTATE SALES AND DISCONTINUED OPERATIONS In accordance with ASU No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU No. 2014-08”), results of operations and related gains (losses) on sale from properties that are classified as held for sale in the ordinary course of business on or subsequent to January 1, 2014 would generally be included in continuing operations on the Company’s consolidated statements of operations. Results of operations and related gains (losses) on sale from properties that were classified as held for sale in financial statements issued prior to January 1, 2014 will remain in discontinued operations on the Company’s consolidated statements of operations. Prior to the adoption of ASU 2014-08, the operations of properties held for sale or to be disposed of and the aggregate net gains recognized upon their disposition were presented as discontinued operations in the accompanying consolidated statements of operations for all periods presented. During the year ended December 31, 2015, the Company disposed of two office properties and no properties were classified as held for sale as of December 31, 2015. During the years ended December 31, 2014 and 2015, the Company sold one office property and two office properties, respectively, all of which were not classified as held for sale in financial statements issued for the reporting period prior to January 1, 2014. The operations of these properties and gain on sale are included in continuing operations on the accompanying statements of operations. The following table summarizes certain revenue and expenses related to these properties for the years ended December 31, 2015, 2014 and 2013 (in thousands): Years Ended December 31, 2015 2014 2013 Total revenues $ 215 $ 1,134 $ 1,017 Total expenses 645 2,473 3,496 Discontinued Operations The following table summarizes certain revenue and expenses related to properties sold prior to January 1, 2014 for the years ended December 31, 2015, 2014, and 2013 (in thousands): Years Ended December 31, 2015 2014 2013 Total revenues and other income $ — $ — $ 1,387 Total expenses — 18 2,754 Loss from discontinued operations before gain on sales of real estate — (18 ) (1,367 ) Gain on sales of real estate, net — — 13,108 Total (loss) income from discontinued operations $ — $ (18 ) $ 11,741 |
NOTES AND BOND PAYABLE
NOTES AND BOND PAYABLE | 12 Months Ended |
Dec. 31, 2015 | |
Notes and Bonds Payable [Abstract] | |
NOTES AND BOND PAYABLE | NOTES AND BOND PAYABLE As of December 31, 2015 and December 31, 2014, the Company’s notes and bond payable consisted of the following (dollars in thousands): Book Value as of Book Value as of December 31, 2014 Contractual Interest Rate as of December 31, 2015 (1) Effective Interest Rate at December 31, 2015 (1) Payment Type Maturity Date (2) Richardson Portfolio Mortgage Loan $ 41,177 $ 38,000 One-Month LIBOR + 2.10% 2.34% Principal & Interest 05/01/2017 Bellevue Technology Center Mortgage Loan 52,960 49,836 One-Month LIBOR + 2.25% 2.49% Interest Only (3) 03/01/2017 Portfolio Revolving Loan Facility (4) 47,087 12,447 One-Month LIBOR + 2.25% 2.49% Interest Only (3) 05/01/2017 Portfolio Mortgage Loan 100,032 93,751 One-Month LIBOR + 2.25% 2.49% Interest Only (3) 07/01/2017 1635 N. Cahuenga Mortgage Loan (5) — 4,650 (5) (5) (5) (5) Burbank Collection Mortgage Loan 9,098 9,043 One-Month LIBOR + 2.35% 2.60% Interest Only 09/30/2016 50 Congress Mortgage Loan 28,075 26,935 One-Month LIBOR + 1.90% 2.14% Interest Only (3) 10/01/2017 1180 Raymond Bond Payable 6,795 6,945 6.50% 6.50% Principal & Interest 09/01/2036 Central Building Mortgage Loan 24,896 24,896 One-Month LIBOR + 1.75% 1.99% Interest Only 11/13/2018 Maitland Promenade II Mortgage Loan (6) 20,182 20,182 One-Month LIBOR + 2.90% 3.25% Interest Only (3) 01/01/2017 Westmoor Center Mortgage Loan 56,036 54,880 One-Month LIBOR + 2.25% 2.49% Interest Only (3) 02/01/2018 Plaza Buildings Senior Loan 111,000 109,707 One-Month LIBOR + 1.90% 2.14% Interest Only (3) 01/14/2017 Plaza Buildings Mezzanine Loan (7) — 25,000 (7) (7) (7) (7) 424 Bedford Mortgage Loan 25,358 25,866 3.91% 3.91% Principal & Interest 10/01/2022 1180 Raymond Mortgage Loan 28,100 28,100 One-Month LIBOR + 2.25% 2.49% Interest Only 12/01/2017 Total Notes and Bond Payable principal outstanding 550,796 530,238 Net Premium/(Discount) on Notes and Bond Payable (8) 50 25 Deferred financing costs, net (3,523 ) (6,201 ) Total Notes and Bond Payable, net $ 547,323 $ 524,062 _____________________ (1) Contractual interest rate represents the interest rate in effect under the loan as of December 31, 2015 . Effective interest rate is calculated as the actual interest rate in effect as of December 31, 2015 (consisting of the contractual interest rate and contractual floor rates), using interest rate indices at December 31, 2015 , where applicable. (2) Represents the initial maturity date or the maturity date as extended as of December 31, 2015 ; subject to certain conditions, the maturity dates of certain loans may be extended beyond the date shown. (3) Represents the payment type required under the loan as of December 31, 2015 . Certain future monthly payments due under this loan also include amortizing principal payments. For more information of the Company’s contractual obligations under its notes and bond payable, see five-year maturity table below. (4) The Portfolio Revolving Loan Facility is secured by the 1800 West Loop Building and the Iron Point Business Park. The Portfolio Revolving Loan Facility is comprised of $59.5 million of revolving debt and $13.0 million of non-revolving debt available to be used for tenant improvements, leasing commissions and capital improvements, subject to certain terms and conditions contained in the loan documents. As of December 31, 2015 , $36.5 million of revolving debt and $10.6 million of non-revolving debt had been disbursed to the Company and the remaining $23.0 million of revolving debt and $2.4 million of non-revolving debt is available for future disbursements, subject to certain conditions contained in the loan documents. Monthly payments are initially interest only. Beginning June 1, 2016, and to the extent that there are amounts outstanding under the non-revolving portion of the loan, monthly payments will include interest and principal amortization payments of up to $80,000 per month. (5) On March 11, 2015, in connection with the disposition of 1635 N. Cahuenga, the joint venture paid off the outstanding principal balance and all other sums due under this loan. (6) Interest on the Maitland Promenade II Mortgage Loan is calculated at a variable annual rate of 290 basis points over one-month LIBOR, but at no point shall the interest rate be less than 3.25% . (7) On April 1, 2015, the Company paid off the outstanding principal balance and all other sums due under this loan. (8) Represents the unamortized premium/discount on notes and bond payable due to the above- and below-market interest rates when the debt was assumed. The discount/premium is amortized over the remaining life of the notes and bond payable. During the years ended December 31, 2015 , 2014 and 2013 , the Company incurred $ 15.0 million , $15.6 million and $2.7 million of interest expense, respectively. Included in interest expense for the years ended December 31, 2015 , 2014 and 2013 , was $2.7 million , $ 2.8 million and $0.7 million of amortization of deferred financing costs, respectively. Additionally, during the years ended December 31, 2015, 2014 and 2013 the Company capitalized $ 1.9 million , $ 2.0 million and $2.7 million of interest, respectively, to our investments in undeveloped land. As of December 31, 2015 , the Company’s deferred financing costs were $4.7 million , net of amortization, of which $3.5 million is included in notes and bond payable, net and $1.2 million is included in prepaid expenses and other assets on the accompanying consolidated balance sheets. As of December 31, 2014, the Company’s deferred financing costs were $6.2 million , net of amortization, and are included in notes and bond payable, net and on the accompanying consolidated balance sheets. As of December 31, 2015 and 2014 , the Company’s interest payable was $ 1.2 million . The following is a schedule of maturities, including principal amortization payments, for all notes and bond payable outstanding as of December 31, 2015 (in thousands): 2016 $ 13,649 2017 426,026 2018 81,182 2019 812 2020 846 Thereafter 28,281 $ 550,796 The Company’s notes payable contain financial debt covenants. As of December 31, 2015 , the Company was in compliance with all of these debt covenants. |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE DISCLOSURES | FAIR VALUE DISCLOSURES Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other financial instruments and balances at fair value on a non-recurring basis (e.g., carrying value of impaired real estate loans receivable and long-lived assets). Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories: • Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; • Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and • Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable. The fair value for certain financial instruments is derived using valuation techniques that involve significant management judgment. The price transparency of financial instruments is a key determinant of the degree of judgment involved in determining the fair value of the Company’s financial instruments. Financial instruments for which actively quoted prices or pricing parameters are available and for which markets contain orderly transactions will generally have a higher degree of price transparency than financial instruments for which markets are inactive or consist of non-orderly trades. The Company evaluates several factors when determining if a market is inactive or when market transactions are not orderly. The following is a summary of the methods and assumptions used by management in estimating the fair value of each class of financial instruments for which it is practicable to estimate the fair value: Cash and cash equivalents, rent and other receivables, prepaid expenses and other assets and accounts payable and accrued liabilities: These balances approximate their fair values due to the short maturities of these items. Real estate loan receivable: The Company’s real estate loan receivable is presented in the accompanying consolidated balance sheets at its amortized cost net of recorded loan loss reserves and not at fair value. The fair value of real estate loan receivable was estimated using an internal valuation model that considers the expected cash flows for the loans, underlying collateral values (for collateral dependent loans) and estimated yield requirements of institutional investors for loans with similar characteristics, including remaining loan term, loan-to-value, type of collateral and other credit enhancements. The Company classifies these inputs as Level 3 inputs. Notes and bond payable: The fair values of the Company’s notes and bond payable are estimated using a discounted cash flow analysis based on management’s estimates of current market interest rates for instruments with similar characteristics, including remaining loan term, loan-to-value ratio, type of collateral and other credit enhancements. Additionally, when determining the fair value of liabilities in circumstances in which a quoted price in an active market for an identical liability is not available, the Company measures fair value using (i) a valuation technique that uses the quoted price of the identical liability when traded as an asset or quoted prices for similar liabilities or similar liabilities when traded as assets or (ii) another valuation technique that is consistent with the principles of fair value measurement, such as the income approach or the market approach. The Company classifies these inputs as Level 3 inputs. The following were the face values, carrying amounts and fair values of the Company’s financial instruments as of December 31, 2015 and December 31, 2014 , which carrying amounts do not approximate the fair values (in thousands): December 31, 2015 December 31, 2014 Face Value Carrying Amount Fair Value Face Value Carrying Amount Fair Value Financial assets: Real estate loan receivable $ 27,850 $ 27,850 $ 27,850 $ 27,850 $ 27,422 $ 27,813 Financial liabilities: Notes and bond payable $ 550,796 $ 547,323 $ 554,007 $ 530,238 $ 524,062 $ 534,045 Disclosure of the fair value of financial instruments is based on pertinent information available to the Company as of the period end and requires a significant amount of judgment. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS The Advisory Agreement entitles the Advisor and the Dealer Manager Agreement previously entitled the Dealer Manager, to specified fees upon the provision of certain services with regard to the Offering, the investment of funds in real estate and real estate-related investments and the disposition of real estate and real estate-related investments (including the discounted payoff of non-performing loans) among other services, as well as reimbursement of organization and offering costs incurred by the Advisor and the Dealer Manager on behalf of the Company and certain costs incurred by the Advisor in providing services to the Company. The Advisory Agreement may also entitle the Advisor to certain back-end cash flow participation fees. The Company also entered into a fee reimbursement agreement (the “AIP Reimbursement Agreement”) with the Dealer Manager, pursuant to which the Company agreed to reimburse the Dealer Manager for certain fees and expenses it incurs for administering the Company’s participation in the Depository Trust & Clearing Corporation Alternative Investment Product Platform with respect to certain accounts of the Company’s investors serviced through the platform. The Advisor and Dealer Manager also serve as the advisor and dealer manager, respectively, for KBS Real Estate Investment Trust, Inc. (“KBS REIT I”), KBS Real Estate Investment Trust II, Inc. (“KBS REIT II”), KBS Real Estate Investment Trust III, Inc. (“KBS REIT III”), KBS Legacy Partners Apartment REIT, Inc. (“KBS Legacy Partners Apartment REIT”), KBS Strategic Opportunity REIT II, Inc. (“KBS Strategic Opportunity REIT II”) and KBS Growth & Income REIT, Inc. (“KBS Growth & Income REIT”). On January 6, 2014, the Company, together with KBS REIT I, KBS REIT II, KBS REIT III, KBS Legacy Partners Apartment REIT, KBS Strategic Opportunity REIT II, the Dealer Manager, the Advisor and other KBS-affiliated entities, entered into an errors and omissions and directors and officers liability insurance program where the lower tiers of coverage are shared. The cost of these lower tiers is allocated by the Advisor and its insurance broker among each of the various entities covered by the plan, and is billed directly to each entity. The allocation of these shared coverage costs is proportionate to the pricing by the insurance marketplace for the first tiers of directors and officers liability coverage purchased individually by each REIT. The Advisor’s and the Dealer Manager’s portion of the shared lower tiers’ cost is proportionate to the respective entities’ prior cost for the errors and omissions insurance. In June 2015, KBS Growth & Income REIT was added to the insurance program at terms similar to those described above. During the years ended December 31, 2015, 2014 and 2013, no other business transactions occurred between the Company and these other KBS-sponsored programs. Pursuant to the terms of these agreements, summarized below are the related-party costs incurred by the Company for the years ended December 31, 2015 , 2014 and 2013, respectively, and any related amounts payable as of December 31, 2015 and December 31, 2014 (in thousands): Incurred Payable as of December 31, 2015 2014 2013 2015 2014 Expensed Asset management fees (1) $ 8,348 $ 7,648 $ 4,173 $ — $ — Real estate acquisition fees — 2,231 2,784 — — Reimbursable operating expenses (2) 178 157 139 59 — Disposition fees (3) 276 — 322 — — Capitalized Acquisition and origination fees on real estate loans receivable — — 220 — — Acquisition fee on investment in unconsolidated joint venture — 1,573 — — — Acquisition fee on undeveloped land — 67 199 — — $ 8,802 $ 11,676 $ 7,837 $ 59 $ — _____________________ (1) Amounts include asset management fees from discontinued operations. (2) Reimbursable operating expenses primarily consists of internal audit personnel costs, accounting software and cybersecurity related expenses incurred by the Advisor under the Advisory Agreement. The Company has reimbursed the Advisor for the Company’s allocable portion of the salaries, benefits and overhead of internal audit department personnel providing services to the Company. These amounts totaled $ 153,000 , $ 141,000 and $ 134,000 for the years ended December 31, 2015 , 2014 and 2013, respectively, and were the only employee costs reimbursed under the Advisory Agreement during these periods. The Company will not reimburse for employee costs in connection with services for which the Advisor earns acquisition, origination or disposition fees (other than reimbursement of travel and communication expenses) or for the salaries or benefits the Advisor or its affiliates may pay to the Company’s executive officers. (3) Disposition fees with respect to real estate sold are included in the gain on sales of real estate in the accompanying consolidated statements of operations. |
INVESTMENT IN UNCONSOLIDATED JO
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES | 12 Months Ended |
Dec. 31, 2015 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES | INVESTMENT IN UNCONSOLIDATED JOINT VENTURES As of December 31, 2015 and 2014, the Company’s investments in unconsolidated joint ventures were composed of the following (dollars in thousands): Investment Balance at December 31, Joint Venture Number of Properties Location Ownership % 2015 2014 NIP Joint Venture 21 Various Less than 5.0% $ 5,305 $ 5,305 110 William Joint Venture 1 New York, New York 60.0% 69,132 66,740 $ 74,437 $ 72,045 Investment in National Industrial Portfolio Joint Venture On May 18, 2012, the Company, through an indirect wholly owned subsidiary, entered into a joint venture (the “NIP Joint Venture”) with OCM NIP JV Holdings, L.P. and HC KBS NIP JV, LLC (“HC-KBS”). As of December 31, 2015, the NIP Joint Venture owned 21 industrial properties and a master lease with respect to another industrial property encompassing 10.8 million square feet. The Company made an initial capital contribution of $ 8.0 million which represents less than a 5.0% ownership interest in the NIP Joint Venture as of December 31, 2015 . The Company has virtually no influence over the NIP Joint Venture’s operations, financial policies or decision making. Accordingly, the Company has accounted for its investment in the NIP Joint Venture under the cost method of accounting. Income, losses and distributions from the NIP Joint Venture are generally allocated among the members based on their respective equity interests. KBS REIT I, an affiliate of the Advisor, is a member of HC-KBS and has a participation interest in certain future potential profits generated by the NIP Joint Venture. However, KBS REIT I does not have any equity interest in the NIP Joint Venture. None of the other joint venture partners are affiliated with the Company or the Advisor. As of December 31, 2015 and 2014, the book value of the Company’s investment in the NIP Joint Venture was $ 5.3 million . During the year ended December 31, 2015 , the Company did not receive any distributions related to its investment in the NIP Joint Venture. During the year ended December 31, 2014, the Company recognized $2.2 million of return of capital from the NIP Joint Venture. During the year ended December 31, 2013, the Company recognized $0.1 million of income distributions and $0.4 million of return of capital from the NIP Joint Venture. Investment in 110 William Joint Venture On December 23, 2013, the Company, through an indirect wholly owned subsidiary, entered into an agreement with SREF III 110 William JV, LLC (the “110 William JV Partner”) to form a joint venture (the “110 William Joint Venture”). On May 2, 2014, the 110 William Joint Venture acquired an office property containing 928,157 rentable square feet located on approximately 0.8 acres of land in New York, New York (“110 William Street”). Each of the Company and the 110 William JV Partner hold a 60% and 40% ownership interest in the 110 William Joint Venture, respectively. The Company exercises significant influence over the operations, financial policies and decision making with respect to the 110 William Joint Venture but significant decisions require approval from both members. Accordingly, the Company has accounted for its investment in the 110 William Joint Venture under the equity method of accounting. Income, losses, contributions and distributions are generally allocated based on the members’ respective equity interests. As of December 31, 2015 and 2014, the book value of the Company’s investment in the 110 William Joint Venture was $69.1 million and $66.7 million , respectively, which includes $1.6 million of unamortized acquisition fees and expenses incurred directly by the Company. During the years ended December 31, 2015, 2014 and 2013, the Company recognized an equity in loss of unconsolidated joint venture of $0.4 million , $1.1 million and $0.1 million , respectively, related to the Company’s share of income and expenses earned and incurred by the 110 William Joint Venture. Summarized financial information for the 110 William Joint Venture follows (in thousands): (Unaudited) December 31, 2015 (Unaudited) December 31, 2014 Assets: Real estate assets, net of accumulated depreciation and amortization $ 269,664 $ 276,683 Other assets 18,973 14,716 Total assets $ 288,637 $ 291,399 Liabilities and Equity: Notes payable, net (1) $ 162,395 $ 167,036 Other liabilities 13,617 15,796 Members’ capital 112,625 108,567 Total Liabilities and Equity $ 288,637 $ 291,399 _____________________ (1) Includes (i) a first mortgage loan with an outstanding principal balance of $138.6 million and $140.7 million as of December 31, 2015 and December 31, 2014, respectively, bearing interest at a fixed rate of 4.8% per annum and maturing on July 6, 2017 and (ii) a mezzanine loan with an outstanding principal balance of $20.0 million as of December 31, 2015 and December 31, 2014 bearing interest at a fixed rate of 9.5% per annum and maturing on July 6, 2017. The amount presented includes a premium on notes payable of $4.5 million and $7.5 million as of December 31, 2015 and 2014, respectively, and deferred financing costs, net of $0.7 million and $1.1 million as of December 31, 2015 and 2014, respectively. (Unaudited) For the Years Ended December 31, 2015 2014 2013 Revenues $ 34,188 $ 22,536 $ — Expenses: Operating, maintenance, and management 10,549 6,869 — Real estate taxes and insurance 5,748 3,476 — Real estate acquisition fees and expenses 1 1,016 244 Depreciation and amortization 12,596 8,806 — Interest expense 6,170 4,193 — Total expenses 35,064 24,360 244 Total other income 334 36 — Net loss $ (542 ) $ (1,788 ) $ (244 ) Company ’ s equity in loss of unconsolidated joint venture $ (368 ) $ (1,101 ) $ (146 ) |
SELECTED QUARTERLY FINANCIAL DA
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) Presented below is a summary of the unaudited quarterly financial information for the years ended December 31, 2015 and 2014 (in thousands, except per share amounts): 2015 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 27,943 $ 28,667 $ 28,158 $ 27,360 Net income (loss) $ 5,385 $ 2,639 $ (277 ) $ (682 ) Net income (loss) attributable to common stockholders $ 2,235 $ 1,526 $ (462 ) $ (922 ) Net income (loss) per common share, basic and diluted $ 0.04 $ 0.03 $ (0.01 ) $ (0.02 ) Distributions declared per common share $ 0.092 $ 0.093 $ 0.095 $ 0.095 2014 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 24,626 $ 26,244 $ 27,598 $ 27,686 Net loss $ (9,894 ) $ (5,480 ) $ (3,426 ) $ (4,948 ) Net loss attributable to common stockholders $ (9,617 ) $ (5,331 ) $ (3,367 ) $ (4,879 ) Net loss per common share, basic and diluted $ (0.16 ) $ (0.09 ) $ (0.06 ) $ (0.08 ) Distributions declared per common share $ 0.049 $ 0.056 $ 0.069 $ 0.088 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Economic Dependency The Company is dependent on the Advisor for certain services that are essential to the Company, including the identification, evaluation, negotiation, origination, acquisition and disposition of investments; management of the daily operations of the Company’s investment portfolio; and other general and administrative responsibilities. In the event that the Advisor is unable to provide these services, the Company will be required to obtain such services from other sources. Environmental As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. Although there can be no assurance, the Company is not aware of any environmental liability that could have a material adverse effect on its financial condition or results of operations as of December 31, 2015 . However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s properties, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to the properties could result in future environmental liabilities. Legal Matters From time to time, the Company is a party to legal proceedings that arise in the ordinary course of its business. Management is not aware of any legal proceedings of which the outcome is probable or reasonably possible to have a material adverse effect on the Company’s results of operations or financial condition, which would require accrual or disclosure of the contingency and the possible range of loss. Additionally, the Company has not recorded any loss contingencies related to legal proceedings in which the potential loss is deemed to be remote. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following table presents the computation of basic and diluted earnings per share (in thousands, except share and per share amounts): For the Year Ended December 31, 2015 2014 2013 Numerator Income (loss) from continuing operations $ 7,132 $ (23,730 ) $ (152 ) Loss (income) from continuing operations attributable to noncontrolling interests (4,688 ) 554 302 Income (loss) from continuing operations attributable to common stockholders 2,444 (23,176 ) 150 Total (loss) income from discontinued operations — (18 ) 11,741 Total income from discontinued operations attributable to noncontrolling interests — — (398 ) Total (loss) income from discontinued operations attributable to common stockholders — (18 ) 11,343 Net income (loss) attributable to common stockholders $ 2,444 $ (23,194 ) $ 11,493 Denominator Weighted-average number of common shares outstanding, basic and diluted 59,656,667 59,714,540 58,359,568 Basic and diluted (loss) income per common share: Continuing operations $ 0.04 $ (0.39 ) $ — Discontinued operations — — 0.20 Net income (loss) per common share $ 0.04 $ (0.39 ) $ 0.20 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS The Company evaluates subsequent events up until the date the consolidated financial statements are issued. Distribution Declared On March 9, 2016, the Company’s board of directors authorized a distribution in the amount of $0.09323770 per share of common stock to stockholders of record as of the close of business on March 22, 2016. The Company expects to pay this distribution on March 29, 2016. The board of directors will declare distributions from time to time based on the Company’s income, cash flow and investing and financing activities. As such, the Company can also give no assurances as to the timing, amount or notice with respect to any other future distribution declarations. Bond Financing On March 2, 2016, KBS SOR (BVI) Holdings, Ltd. (“KBS SOR BVI”), a wholly owned subsidiary of the Company, filed a final prospectus with the Israel Securities Authority for a proposed offering of up to 1,000,000,000 Israeli new Shekels of Series A debentures (the “Debentures”) at an annual interest rate not to exceed 4.25% . On March 1, 2016, KBS SOR BVI commenced the institutional tender of the Debentures and accepted application for 842.5 million Israeli new Shekels. On March 7, 2016, KBS SOR BVI commenced the public tender of the Debentures and accepted 127.7 million Israeli new Shekels. In the aggregate, KBS SOR BVI accepted 970.2 million Israeli new Shekels (approximately $250.0 million as of March 23, 2016) in both the institutional and public tenders at an annual interest rate of 4.25% . KBS SOR BVI issued the Debentures on March 8, 2016. The terms of the Debentures require principal installment payments equal to 20% of the face value of the Debentures on March 1st of each year from 2019 to 2023. At closing, the Company paid legal, rating and underwriting fees of approximately 30.5 million Israeli new Shekels (approximately $7.8 million ) in connection with the offering. In addition, the Company funded interest reserves of 20.0 million Israeli new Shekels (approximately $5.1 million ) and 1.0 million Israeli new Shekels (approximately $0.3 million ) of expense reserve required by the Debenture documents. The net proceeds of 918.8 million Israeli new Shekels (approximately $239.2 million as of March 23, 2016) remain available to the Company. In addition, the Company incurred approximately $1.9 million of legal, accounting and valuation fees that were payable outside of closing for a total of approximately $9.7 million of issuance costs related to the Debentures. In connection with the above-referenced offering, on March 8, 2016, the Operating Partnership assigned to KBS SOR BVI all of its interests in the subsidiaries through which the Company indirectly owns all of its real estate and real estate-related investments. The Operating Partnership owns all of the issued and outstanding equity of KBS SOR BVI. As a result of these transactions, the Company now holds all of its real estate and real estate-related investments indirectly through KBS SOR BVI. |
SCHEDULE III REAL ESTATE ASSETS
SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION | 12 Months Ended |
Dec. 31, 2015 | |
SEC Schedule III, Real Estate and Accumulated Depreciation Disclosure [Abstract] | |
SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION | SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION December 31, 2015 (dollar amounts in thousands) Initial Cost to Company Gross Amount at which Carried at Close of Period Description Location Ownership Percent Encumbrances Land Building and Improvements (1) Total Cost Capitalized Subsequent to Acquisition (2) Land Building and Improvements (1) Total (3) Accumulated Depreciation and Amortization Original Date of Construction Date Properties Held for Investment Northridge Center I & II Atlanta, GA 100.0% (6) $ 2,234 $ 4,457 $ 6,691 $ 2,713 $ 2,234 $ 7,170 $ 9,404 $ (1,986 ) 1985/1989 03/25/2011 Iron Point Business Park Folsom, CA 100.0% (5) 2,671 16,576 19,247 2,869 2,671 19,445 22,116 (3,763 ) 1999/2001 06/21/2011 Richardson Portfolio Palisades Central I Richardson, TX 90.0% (4) 1,037 8,628 9,665 2,091 1,037 10,719 11,756 (2,028 ) 1980 11/23/2011 Palisades Central II Richardson, TX 90.0% (4) 810 17,117 17,927 1,922 810 19,039 19,849 (4,600 ) 1985 11/23/2011 Greenway I Richardson, TX 90.0% (4) 561 1,170 1,731 986 561 2,156 2,717 (568 ) 1983 11/23/2011 Greenway III Richardson, TX 90.0% (4) 702 4,083 4,785 630 702 4,713 5,415 (1,561 ) 1983 11/23/2011 Undeveloped Land Richardson, TX 90.0% (4) 1,997 — 1,997 1,061 3,058 — 3,058 — N/A 11/23/2011 Total Richardson Portfolio 41,177 5,107 30,998 36,105 6,690 6,168 36,627 42,795 (8,757 ) Park Highlands North Las Vegas, NV 50.1% — 20,307 — 20,307 10,388 30,695 — 30,695 — N/A 12/30/2011 Bellevue Technology Center Bellevue, WA 100.0% 52,960 25,506 52,411 77,917 7,265 25,506 59,676 85,182 (8,107 ) 1973-2000 07/31/2012 Powers Ferry Landing East Atlanta, GA 100.0% (6) 1,643 3,761 5,404 4,383 1,643 8,144 9,787 (1,607 ) 1980/1982/1985 09/24/2012 1800 West Loop Houston, TX 100.0% (5) 8,360 59,292 67,652 6,686 8,360 65,978 74,338 (10,360 ) 1982 12/04/2012 West Loop I & II Houston, TX 100.0% (6) 7,300 29,742 37,042 2,731 7,300 32,473 39,773 (4,582 ) 1980/1981 12/07/2012 Burbank Collection Burbank, CA 90.0% 9,098 4,175 8,799 12,974 1,374 4,175 10,173 14,348 (1,284 ) 2008 12/12/2012 Austin Suburban Portfolio Austin, TX 100.0% (6) 8,288 67,745 76,033 2,812 8,288 70,557 78,845 (9,230 ) 1985/1986/2000 03/28/2013 Westmoor Center Westminster, CO 100.0% 56,036 10,058 73,510 83,568 1,463 10,058 74,973 85,031 (13,542 ) 1998/1999 06/12/2013 Central Building Seattle, WA 100.0% 24,896 7,015 26,124 33,139 1,973 7,015 28,097 35,112 (3,188 ) 1907 07/10/2013 50 Congress Street Boston, MA 100.0% 28,075 9,876 43,455 53,331 (90 ) 9,876 43,365 53,241 (4,943 ) 1910/1915 07/11/2013 1180 Raymond Newark, NJ 100.0% 34,895 8,292 37,651 45,943 (557 ) 8,292 37,094 45,386 (2,769 ) 1929 08/20/2013 Park Highlands II North Las Vegas, NV 99.5% — 20,118 — 20,118 2,074 22,192 — 22,192 — N/A 12/10/2013 Maitland Promenade II Orlando, FL 100.0% 20,182 3,434 27,282 30,716 838 3,434 28,120 31,554 (3,668 ) 2001 12/18/2013 Plaza Buildings Bellevue, WA 100.0% 111,000 53,040 133,157 186,197 10,597 53,040 143,754 196,794 (12,458 ) 1978/1983 01/14/2014 424 Bedford Brooklyn, NY 90.0% 25,358 8,860 24,820 33,680 407 8,860 25,227 34,087 (1,316 ) 2010 01/31/2014 Richardson Land II Richardson, TX 90.0% — 3,096 — 3,096 298 3,394 — 3,394 — N/A 09/04/2014 Total Properties Held for Investment $ 209,380 $ 639,780 $ 849,160 $ 64,914 $ 223,201 $ 690,873 $ 914,074 $ (91,560 ) ____________________ (1) Building and improvements include tenant origination and absorption costs. (2) Costs capitalized subsequent to acquisition is net of write-offs of fully depreciated/amortized assets. (3) The aggregate cost of real estate for federal income tax purposes was $ 957.1 million as of December 31, 2015. (4) As of December 31, 2015, $ 41.2 million of debt was outstanding secured by the Richardson Portfolio. (5) As of December 31, 2015, $47.1 million of debt was outstanding secured by 1800 West Loop and Iron Point Business Park. (6) As of December 31, 2015, $100.0 million of debt was outstanding secured by Northridge Center I & II, Powers Ferry Landing East, West Loop I & II and the Austin Suburban Portfolio. SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION (CONTINUED) December 31, 2015 (dollar amounts in thousands) 2015 2014 2013 Real Estate (1) : Balance at the beginning of the year $ 919,259 $ 668,018 $ 326,154 Acquisitions (2) — 227,339 342,985 Improvements 32,385 36,942 24,670 Write-off of fully depreciated and fully amortized assets (13,212 ) (10,362 ) (5,835 ) Impairments — (697 ) (2,025 ) Loss due to property damages (2,260 ) (707 ) — Sales (22,098 ) (1,274 ) (17,931 ) Balance at the end of the year $ 914,074 $ 919,259 $ 668,018 Accumulated depreciation and amortization (1) : Balance at the beginning of the year $ 64,171 $ 29,859 $ 8,521 Depreciation and amortization expense 41,513 44,848 28,956 Write-off of fully depreciated and fully amortized assets (13,212 ) (10,362 ) (5,835 ) Impairments — (118 ) (638 ) Sales (912 ) (56 ) (1,145 ) Balance at the end of the year $ 91,560 $ 64,171 $ 29,859 ____________________ (1) Amounts include real estate held for sale. (2) Acquisitions includes properties which the Company acquired through foreclosure on or to which it otherwise received title. |
SUMMARY OF SIGNIFICANT ACCOUN24
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | The consolidated financial statements include the accounts of the Company, REIT Holdings, the Operating Partnership and their direct and indirect wholly owned subsidiaries, and joint ventures in which the Company has a controlling interest. All significant intercompany balances and transactions are eliminated in consolidation. The consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC. |
Use of Estimates | The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. |
Reclassifications | Certain amounts in the Company’s prior period consolidated financial statements have been reclassified to conform to the current period presentation. These reclassifications have not changed the results of operations of prior periods. During the year ended December 31, 2015, the Company sold two office properties. As a result, certain assets and liabilities were reclassified to held for sale on the consolidated balance sheets for all periods presented. During the year ended December 31, 2015, the Company elected to early adopt ASU No. 2015-03 (defined below). As a result, the Company has reclassified debt issuance costs associated with a debt liability from prepaid expenses and other assets to notes and bond payable, net on the consolidated balance sheets for all periods presented. |
Revenue Recognition, Real Estate | The Company recognizes minimum rent, including rental abatements, lease incentives and contractual fixed increases attributable to operating leases, on a straight-line basis over the term of the related leases when collectibility is reasonably assured and records amounts expected to be received in later years as deferred rent receivable. If the lease provides for tenant improvements, the Company determines whether the tenant improvements, for accounting purposes, are owned by the tenant or the Company. When the Company is the owner of the tenant improvements, the tenant is not considered to have taken physical possession or have control of the physical use of the leased asset until the tenant improvements are substantially completed. When the tenant is the owner of the tenant improvements, any tenant improvement allowance (including amounts that can be taken in the form of cash or a credit against the tenant’s rent) that is funded is treated as a lease incentive and amortized as a reduction of revenue over the lease term. Tenant improvement ownership is determined based on various factors including, but not limited to: • whether the lease stipulates how a tenant improvement allowance may be spent; • whether the amount of a tenant improvement allowance is in excess of market rates; • whether the tenant or landlord retains legal title to the improvements at the end of the lease term; • whether the tenant improvements are unique to the tenant or general-purpose in nature; and • whether the tenant improvements are expected to have any residual value at the end of the lease. The Company records property operating expense reimbursements due from tenants for common area maintenance, real estate taxes, and other recoverable costs in the period the related expenses are incurred. The Company makes estimates of the collectibility of its tenant receivables related to base rents, including deferred rent, expense reimbursements and other revenue or income. Management specifically analyzes accounts receivable, deferred rents receivable, historical bad debts, customer creditworthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. In addition, with respect to tenants in bankruptcy, management makes estimates of the expected recovery of pre-petition and post-petition claims in assessing the estimated collectibility of the related receivable. In some cases, the ultimate resolution of these claims can exceed one year. When a tenant is in bankruptcy, the Company will record a bad debt reserve for the tenant’s receivable balance and generally will not recognize subsequent rental revenue until cash is received or until the tenant is no longer in bankruptcy and has the ability to make rental payments. |
Revenue Recognition, Real Estate Loans Receivable | Interest income on the Company’s real estate loans receivable is recognized on an accrual basis over the life of the investment using the interest method. Direct loan origination or acquisition fees and costs, as well as acquisition premiums or discounts, are amortized over the term of the loan as an adjustment to interest income. The Company places loans on non-accrual status when any portion of principal or interest is 90 days past due, or earlier when concern exists as to the ultimate collection of principal or interest. When a loan is placed on non-accrual status, the Company reserves for any unpaid accrued interest and generally does not recognize subsequent interest income until cash is received, or the loan returns to accrual status. The Company will resume the accrual of interest if it determines the collection of interest, according to the contractual terms of the loan, is probable. The Company generally recognizes income on impaired loans on either a cash basis, where interest income is only recorded when received in cash, or on a cost-recovery basis, where all cash receipts are applied against the carrying value of the loan. The Company considers the collectibility of the loan’s principal balance in determining whether to recognize income on impaired loans on a cash basis or a cost-recovery basis. The Company will recognize interest income on loans purchased at discounts to face value where the Company expects to collect less than the contractual amounts due under the loan when that expectation is due, at least in part, to the credit quality of the borrower. Income is recognized at an interest rate equivalent to the estimated yield on the loan, as calculated using the carrying value of the loan and the expected cash flows. Changes in estimated cash flows are recognized through an adjustment to the yield on the loan on a prospective basis. Projecting cash flows for these types of loans requires a significant amount of assumptions and judgment, which may have a significant impact on the amount and timing of revenue recognized on these investments. The Company recognizes interest income on non-performing loans on a cash basis or cost-recovery basis since these loans generally do not have an estimated yield and collection of principal and interest is not assured. |
Revenue Recognition, Real Estate Securities | The Company recognizes interest income on real estate securities that are beneficial interests in securitized financial assets and are rated “AA” and above on an accrual basis according to the contractual terms of the securities. Discounts or premiums are amortized to interest income over the life of the investment using the interest method. The Company recognizes interest income on real estate securities that are beneficial interests in securitized financial assets that are rated below “AA” using the effective yield method, which requires the Company to periodically project estimated cash flows related to these securities and recognize interest income at an interest rate equivalent to the estimated yield on the security, as calculated using the security’s estimated cash flows and amortized cost basis, or reference amount. Changes in the estimated cash flows are recognized through an adjustment to the yield on the security on a prospective basis. Projecting cash flows for these types of securities requires significant judgment, which may have a significant impact on the timing of revenue recognized on these investments. |
Revenue Recognition, Cash and Cash Equivalents | The Company recognizes interest income on its cash and cash equivalents as it is earned and records such amounts as other interest income. |
Real Estate, Depreciation and Amortization | Real estate costs related to the acquisition and improvement of properties are capitalized and amortized over the expected useful life of the asset on a straight-line basis. Repair and maintenance costs are charged to expense as incurred and significant replacements and betterments are capitalized. Repair and maintenance costs include all costs that do not extend the useful life of the real estate asset. The Company considers the period of future benefit of an asset to determine its appropriate useful life. Expenditures for tenant improvements are capitalized and amortized over the shorter of the tenant’s lease term or expected useful life. The Company anticipates the estimated useful lives of its assets by class to be generally as follows: Buildings 25-40 years Building improvements 10-40 years Tenant improvements Shorter of lease term or expected useful life Tenant origination and absorption costs Remaining term of related leases, including below-market renewal periods |
Real Estate, Real Estate Acquisition Valuation | The Company records the acquisition of income-producing real estate or real estate that will be used for the production of income as a business combination. All assets acquired and liabilities assumed in a business combination are measured at their acquisition-date fair values. Acquisition costs are expensed as incurred and restructuring costs that do not meet the definition of a liability at the acquisition date are expensed in periods subsequent to the acquisition date. Real estate obtained in satisfaction of a loan is recorded at the estimated fair value of the real estate (net of liabilities assumed) or the fair value of the loan satisfied if more clearly evident. The excess of the carrying value of the loan over the fair value of the property is charged-off against the reserve for loan losses when title to the property is obtained. Costs of holding the property are expensed as incurred in the Company’s consolidated statements of operations. Intangible assets include the value of in-place leases, which represents the estimated value of the net cash flows of the in-place leases to be realized, as compared to the net cash flows that would have occurred had the property been vacant at the time of acquisition and subject to lease-up. Acquired in-place lease value will be amortized to expense over the average remaining terms of the respective in-place leases, including any below-market renewal periods. The Company assesses the acquisition date fair values of all tangible assets, identifiable intangibles and assumed liabilities using methods similar to those used by independent appraisers, generally utilizing a discounted cash flow analysis that applies appropriate discount and/or capitalization rates and available market information. Estimates of future cash flows are based on a number of factors, including historical operating results, known and anticipated trends, and market and economic conditions. The fair value of tangible assets of an acquired property considers the value of the property as if it were vacant. The Company records above-market and below-market in-place lease values for acquired properties based on the present value (using a discount that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of above-market in-place leases and for the initial term plus any extended term for any leases with below-market renewal options. The Company amortizes any recorded above-market or below-market lease values as a reduction or increase, respectively, to rental income over the remaining non-cancelable terms of the respective lease, including any below-market renewal periods. The Company estimates the value of tenant origination and absorption costs by considering the estimated carrying costs during hypothetical expected lease up periods, considering current market conditions. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods. The Company amortizes the value of tenant origination and absorption costs to depreciation and amortization expense over the remaining non-cancelable term of the leases. Estimates of the fair values of the tangible assets, identifiable intangibles and assumed liabilities require the Company to make significant assumptions to estimate market lease rates, property-operating expenses, carrying costs during lease-up periods, discount rates, market absorption periods, and the number of years the property will be held for investment. The use of inappropriate assumptions would result in an incorrect valuation of the Company’s acquired tangible assets, identifiable intangibles and assumed liabilities, which would impact the amount of the Company’s net income. Direct investments in undeveloped land or properties without leases in place at the time of acquisition are accounted for as an asset acquisition and not as a business combination. Acquisition fees and expenses are capitalized into the cost basis of an asset acquisition. Additionally, during the time in which the Company is incurring costs necessary to bring these investments to their intended use, certain costs such as legal fees, real estate taxes and insurance and financing costs are also capitalized. |
Real Estate, Impairments of Real Estate and Related Intangible Assets and Liabilities | The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate and related intangible assets and liabilities may not be recoverable or realized. When indicators of potential impairment suggest that the carrying value of real estate and related intangible assets and liabilities may not be recoverable, the Company assesses the recoverability by estimating whether the Company will recover the carrying value of the real estate and related intangible assets and liabilities through its undiscounted future cash flows and its eventual disposition. If, based on this analysis, the Company does not believe that it will be able to recover the carrying value of the real estate and related intangible assets and liabilities, the Company would record an impairment loss to the extent that the carrying value exceeds the estimated fair value of the real estate and related intangible assets and liabilities. The Company did not record any impairment losses on its real estate and related intangible assets and liabilities during the year ended December 31, 2015. During the year ended December 31, 2014, the Company recorded an impairment charge of $ 0.6 million with respect to one real estate property, which was sold on September 10, 2015. During the year ended December 31, 2013, the Company recorded an impairment charge of $ 1.4 million with respect to two real estate properties, one of which was sold on August 29, 2014 and the other of which was sold on September 10, 2015. Projecting future cash flows involves estimating expected future operating income and expenses related to the real estate and its related intangible assets and liabilities as well as market and other trends. Using inappropriate assumptions to estimate cash flows could result in incorrect fair values of the real estate and its related intangible assets and liabilities and could result in the overstatement of the carrying values of the Company’s real estate and related intangible assets and liabilities and an overstatement of its net income. |
Real Estate, Insurance Proceeds for Property Damages | The Company maintains an insurance policy that provides coverage for property damages and business interruption. Losses due to physical damages are recognized during the accounting period in which they occur, while the amount of monetary assets to be received from the insurance policy is recognized when receipt of insurance recoveries is probable. Losses, which are reduced by the related insurance recoveries, are recorded as operating, maintenance and management expenses on the accompanying consolidated statements of operations. Anticipated proceeds in excess of recognized losses would be considered a gain contingency and recognized when the contingency related to the insurance claim has been resolved. Anticipated recoveries for lost rental revenue due to property damages are also considered to be a gain contingency and recognized when the contingency related to the insurance claim has been resolved. |
Real Estate, Real Estate Held for Sale and Discontinued Operations | The Company generally considers real estate to be “held for sale” when the following criteria are met: (i) management commits to a plan to sell the property, (ii) the property is available for sale immediately, (iii) the property is actively being marketed for sale at a price that is reasonable in relation to its current fair value, (iv) the sale of the property within one year is considered probable and (v) significant changes to the plan to sell are not expected. Real estate that is held for sale and its related assets are classified as “real estate held for sale” and “assets related to real estate held for sale,” respectively, for all periods presented in the accompanying consolidated financial statements. Notes payable and other liabilities related to real estate held for sale are classified as “notes payable related to real estate held for sale” and “liabilities related to real estate held for sale,” respectively, for all periods presented in the accompanying consolidated financial statements. Real estate classified as held for sale is no longer depreciated and is reported at the lower of its carrying value or its estimated fair value less estimated costs to sell. Additionally, with respect to properties that were classified as held for sale in financial statements prior to January 1, 2014, the Company records the operating results and related gains (losses) on sale as discontinued operations for all periods presented if the operations have been or are expected to be eliminated and the Company will not have any significant continuing involvement in the operations of the property following the sale. Operating results and related gains (losses) on sale of properties that were disposed of or classified as held for sale in the ordinary course of business during the years ended December 31, 2015 and 2014 that had not been classified as held for sale in financial statements prior to January 1, 2014 are included in continuing operations on the Company’s consolidated statements of operations. |
Loans Receivables and Loan Loss Reserves | The Company’s real estate loans receivable are recorded at amortized cost, net of loan loss reserves (if any), and evaluated for impairment at each balance sheet date. The amortized cost of a real estate loan receivable is the outstanding unpaid principal balance, net of unamortized acquisition premiums or discounts and unamortized costs and fees directly associated with the origination or acquisition of the loan. The amount of impairment, if any, will be measured by comparing the amortized cost of the loan to the present value of the expected cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the fair value of the collateral if the loan is collateral dependent and collection of principal and interest is not assured. If a loan is deemed to be impaired, the Company will record a loan loss reserve and a provision for loan losses to recognize impairment. As of December 31, 2015, there was no loan loss reserve and the Company did not record any impairment losses related to its real estate loans receivable during the years ended December 31, 2015, 2014 and 2013. The reserve for loan losses is a valuation allowance that reflects management’s estimate of loan losses inherent in the loan portfolio as of the balance sheet date. The reserve is adjusted through “Provision for loan losses” on the Company’s consolidated statements of operations and is decreased by charge-offs to specific loans when losses are confirmed. The Company considers a loan to be impaired when, based upon current information and events, it believes that it is probable that the Company will be unable to collect all amounts due under the contractual terms of the loan agreement. If the Company purchases a loan at a discount to face value and at the acquisition date the Company expects to collect less than the contractual amounts due under the terms of the loan based, at least in part, on the Company’s assessment of the credit quality of the borrower, the Company will consider such a loan to be impaired when, based upon current information and events, it believes that it is probable that the Company will be unable to collect all amounts the Company estimated to be collected at the time of acquisition. The Company also considers a loan to be impaired if it grants the borrower a concession through a modification of the loan terms or if it expects to receive assets (including equity interests in the borrower) with fair values that are less than the carrying value of the loan in satisfaction of the loan. A reserve is established when the present value of payments expected to be received, observable market prices, the estimated fair value of the collateral (for loans that are dependent on the collateral for repayment) or amounts expected to be received in satisfaction of a loan are lower than the carrying value of that loan. Failure to recognize impairments would result in the overstatement of earnings and the carrying value of the Company’s real estate loans held for investment. Actual losses, if any, could significantly differ from estimated amounts. |
Investment in Unconsolidated Joint Venture, Equity Method | The Company accounts for investments in unconsolidated joint venture entities in which the Company may exercise significant influence over, but does not control, using the equity method of accounting. Under the equity method, the investment is initially recorded at cost and subsequently adjusted to reflect additional contributions or distributions and the Company’s proportionate share of equity in the joint venture’s income (loss). The Company recognizes its proportionate share of the ongoing income or loss of the unconsolidated joint venture as equity in income (loss) of unconsolidated joint venture on the consolidated statements of operations. On a quarterly basis, the Company evaluates its investment in an unconsolidated joint venture for other-than-temporary impairments. As of December 31, 2015, the Company did not identify any indicators of impairment related to its unconsolidated real estate joint venture accounted for under the equity method. |
Investment in Unconsolidated Joint Venture, Cost Method | The Company accounts for investments in unconsolidated joint venture entities in which the Company does not have the ability to exercise significant influence and has virtually no influence over partnership operating and financial policies using the cost method of accounting. Under the cost method, income distributions from the partnership are recognized in other income. Distributions that exceed the Company’s share of earnings are applied to reduce the carrying value of the Company’s investment and any capital contributions will increase the carrying value of the Company’s investment. On a quarterly basis, the Company evaluates its cost method investment in an unconsolidated joint venture for other-than-temporary impairments. The fair value of a cost method investment is not estimated if there are no identified events or changes in circumstances that would indicate a significant adverse effect on the fair value of the investment. As of December 31, 2015, the Company did not identify any indicators of impairment related to its unconsolidated real estate joint venture accounted for under the cost method. |
Cash and Cash Equivalents | The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents may include cash and short-term investments. Cash and cash equivalents are stated at cost, which approximates fair value. There were no restrictions on the use of the Company’s cash and cash equivalents as of December 31, 2015 and 2014. The Company’s cash and cash equivalents balance exceeded federally insurable limits as of December 31, 2015 . The Company monitors the cash balances in its operating accounts and adjusts the cash balances as appropriate; however, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, the Company has experienced no loss or lack of access to cash in its operating accounts. |
Rent and Other Receivables | The Company periodically evaluates the collectibility of amounts due from tenants and maintains an allowance for doubtful accounts for estimated losses resulting from the inability of tenants to make required payments under lease agreements. In addition, the Company maintains an allowance for deferred rent receivable that arises from the straight-lining of rents. The Company exercises judgment in establishing these allowances and considers payment history and current credit status of its tenants in developing these estimates. |
Deferred Financing Costs | Deferred financing costs represent commitment fees, loan fees, legal fees and other third-party costs associated with obtaining financing and are presented on the balance sheet as a direct deduction from the carrying value of the associated debt liability. These costs are amortized over the terms of the respective financing agreements using the interest method. Unamortized deferred financing costs are generally expensed when the associated debt is refinanced or repaid before maturity unless specific rules are met that would allow for the carryover of such costs to the refinanced debt. Deferred financing costs incurred before an associated debt liability is recognized are included in prepaid and other assets on the balance sheet. Costs incurred in seeking financing transactions that do not close are expensed in the period in which it is determined that the financing will not close. |
Fair Value Measurements | Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other financial instruments and balances at fair value on a non-recurring basis (e.g., carrying value of impaired real estate loans receivable and long-lived assets). Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories: • Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; • Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and • Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable. When available, the Company utilizes quoted market prices from an independent third-party source to determine fair value and classifies such items in Level 1 or Level 2. In instances where the market for a financial instrument is not active, regardless of the availability of a nonbinding quoted market price, observable inputs might not be relevant and could require the Company to make a significant adjustment to derive a fair value measurement. Additionally, in an inactive market, a market price quoted from an independent third party may rely more on models with inputs based on information available only to that independent third party. When the Company determines that the market for a financial instrument owned by the Company is illiquid or when market transactions for similar instruments do not appear orderly, the Company uses several valuation sources (including internal valuations, discounted cash flow analysis and quoted market prices) and establishes a fair value by assigning weights to the various valuation sources. Additionally, when determining the fair value of liabilities in circumstances in which a quoted price in an active market for an identical liability is not available, the Company measures fair value using (i) a valuation technique that uses the quoted price of the identical liability when traded as an asset or quoted prices for similar liabilities when traded as assets or (ii) another valuation technique that is consistent with the principles of fair value measurement, such as the income approach or the market approach. Changes in assumptions or estimation methodologies can have a material effect on these estimated fair values. In this regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, may not be realized in an immediate settlement of the instrument. The Company considers the following factors to be indicators of an inactive market: (i) there are few recent transactions, (ii) price quotations are not based on current information, (iii) price quotations vary substantially either over time or among market makers (for example, some brokered markets), (iv) indexes that previously were highly correlated with the fair values of the asset or liability are demonstrably uncorrelated with recent indications of fair value for that asset or liability, (v) there is a significant increase in implied liquidity risk premiums, yields, or performance indicators (such as delinquency rates or loss severities) for observed transactions or quoted prices when compared with the Company’s estimate of expected cash flows, considering all available market data about credit and other nonperformance risk for the asset or liability, (vi) there is a wide bid-ask spread or significant increase in the bid-ask spread, (vii) there is a significant decline or absence of a market for new issuances (that is, a primary market) for the asset or liability or similar assets or liabilities, and (viii) little information is released publicly (for example, a principal-to-principal market). The Company considers the following factors to be indicators of non-orderly transactions: (i) there was not adequate exposure to the market for a period before the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities under current market conditions, (ii) there was a usual and customary marketing period, but the seller marketed the asset or liability to a single market participant, (iii) the seller is in or near bankruptcy or receivership (that is, distressed), or the seller was required to sell to meet regulatory or legal requirements (that is, forced), and (iv) the transaction price is an outlier when compared with other recent transactions for the same or similar assets or liabilities. |
Dividend Reinvestment Plan | The Company has adopted a dividend reinvestment plan (the “DRP”) through which future common stockholders may elect to reinvest an amount equal to the distributions declared on their shares in additional shares of the Company’s common stock in lieu of receiving cash distributions. On March 25, 2014, the Company’s board of directors approved a fourth amended and restated dividend reinvestment plan (the “Fourth Amended DRP”). The Fourth Amended DRP became effective for purchases under the plan on or after April 6, 2014. Pursuant to the Fourth Amended DRP, the purchase price of shares of the Company’s common stock is equal to 95% of the most recently announced estimated value per share of the Company’s common stock. Prior to April 6, 2014 (the effective date of the Fourth Amended DRP), the purchase price per share under the DRP was $9.50 . On March 25, 2014, the Company’s board of directors approved an updated primary offering price for the Company’s common stock of $11.27 (unaudited) based on the estimated value of the Company’s assets less the estimated value of the Company’s liabilities, or net asset value, divided by the number of shares outstanding as of December 31, 2013, with the exception of certain adjustments for actual and expected acquisition-related costs subsequent to December 31, 2013. Commencing on April 6, 2014, the purchase price per share under the DRP was $10.71 . On December 9, 2014, the Company’s board of directors approved an updated primary offering price for the Company’s common stock of $12.24 (unaudited) based on the estimated value of the Company’s assets less the estimated value of the Company’s liabilities, or net asset value, divided by the number of shares outstanding as of September 30, 2014. Commencing December 29, 2014, the purchase price per share under the DRP was $11.63 . On May 12, 2015, the Company’s board of directors adopted a fifth amended and restated dividend reinvestment plan (the “Fifth Amended DRP”). Pursuant to the Fifth Amended DRP, shares may be purchased at a price equal to the estimated value per share most recently announced in a public filing. There were no other changes to the Fifth Amended DRP, which became effective on July 1, 2015. On December 8, 2015, the Company’s board of directors approved an updated primary offering price for the Company’s common stock of $13.44 (unaudited) based on the estimated value of the Company’s assets less the estimated value of the Company’s liabilities, or net asset value, divided by the number of shares outstanding as of September 30, 2015. Commencing January 4, 2016, the purchase price per share under the DRP was $13.44 . No selling commissions or dealer manager fees will be paid on shares sold under the DRP. |
Redeemable Common Stock | The Company has adopted a share redemption program that may enable stockholders to sell their shares to the Company in limited circumstances. Pursuant to the share redemption program there are several limitations on the Company’s ability to redeem shares: • Unless the shares are being redeemed in connection with a stockholder’s death, “qualifying disability” or “determination of incompetence” (each as defined under the share redemption program), the Company may not redeem shares until the stockholder has held the shares for one year. • During 2015, redemptions were limited to the amount of net proceeds from the sale of shares under the Company’s dividend reinvestment plan during 2014 plus an additional $21.0 million . The last $1.0 million of net proceeds from the dividend reinvestment plan during 2014 was reserved exclusively for shares redeemed in connection with a stockholder’s death, “qualifying disability,” or “determination of incompetence”. • In 2016, the Company may not redeem more than $3.0 million of shares in a given quarter (excluding shares redeemed in connection with a stockholder’s death, “qualifying disability” or “determination of incompetence”). To the extent that the Company redeems less than $3.0 million of shares (excluding shares redeemed in connection with a stockholder’s death, “qualifying disability” or “determination of incompetence”) in a given fiscal quarter, any remaining excess capacity to redeem shares in such fiscal quarter will be added to the Company’s capacity to otherwise redeem shares (excluding shares redeemed in connection with a stockholder’s death, “qualifying disability” or “determination of incompetence”) during the succeeding fiscal quarter. The Company may increase or decrease this limit upon ten business days’ notice to stockholders. The Company’s board of directors may approve an increase in this limit to the extent that the Company has received proceeds from asset sales or the refinancing of debt or for any other reason deemed appropriate by the board of directors. • During any calendar year, the Company may redeem no more than 5% of the weighted-average number of shares outstanding during the prior calendar year. • The Company has no obligation to redeem shares if the redemption would violate the restrictions on distributions under Maryland law, which prohibits distributions that would cause a corporation to fail to meet statutory tests of solvency. Pursuant to the program, the Company redeemed shares from January 1, 2015 to June 12, 2015 at prices determined as follows: • 92.5% of the Company’s most recent estimated value per share as of the applicable redemption date for those shares held for at least one year; • 95.0% of the Company’s most recent estimated value per share as of the applicable redemption date for those shares held for at least two years; • 97.5% of the Company’s most recent estimated value per share as of the applicable redemption date for those shares held for at least three years; and • 100% of the Company’s most recent estimated value per share as of the applicable redemption date for those shares held for at least four years. Pursuant to the fifth amended and restated share redemption program, the Company redeemed shares effective June 13, 2015 at a price equal to the most recent estimated value per share as of the applicable redemption date, regardless of how long such shares have been held or whether shares are being redeemed in connection with a stockholder’s death, “qualifying disability” or “determination of incompetence.” Effective January 9, 2016, pursuant to the eighth amended and restated share redemption program, the Company will redeem shares at prices determined as follows: • 97.5% of the Company’s most recent estimated value per share as of the applicable redemption date for those shares held for at least one year but less than four years; and • 100% of the Company’s most recent estimated value per share as of the applicable redemption date for those shares held for at least four years. The Company’s board of directors may amend, suspend or terminate the share redemption program with 30 days’ notice to its stockholders. The Company may provide this notice by including such information in a Current Report on Form 8-K or in the Company’s annual or quarterly reports, all publicly filed with the SEC, or by a separate mailing to its stockholders. The Company records amounts that are redeemable under the share redemption program as redeemable common stock in its consolidated balance sheets because the shares will be mandatorily redeemable at the option of the holder and therefore their redemption will be outside the control of the Company. However, because the amounts that can be redeemed will be determinable and only contingent on an event that is likely to occur (e.g., the passage of time) the Company presents the net proceeds from the current year and prior year DRP, net of current year redemptions, as redeemable common stock in its consolidated balance sheets. The Company classifies as liabilities financial instruments that represent a mandatory obligation of the Company to redeem shares. The Company’s redeemable common shares are contingently redeemable at the option of the holder. When the Company determines it has a mandatory obligation to repurchase shares under the share redemption program, it will reclassify such obligations from temporary equity to a liability based upon their respective settlement values. The Company limits the dollar value of shares that may be redeemed under the program as described above. For the year ended December 31, 2015 , the Company had redeemed $30.1 million of common stock, which represented all redemption requests received in good order and eligible for redemption through the December 2015 redemption date, except for 276,386 shares due to the limitations described above. The Company recorded $3.7 million of other liabilities on the Company’s balance sheet as of December 31, 2015 related to these unfulfilled redemption requests. Based on the amount of net proceeds raised from the sale of shares under the dividend reinvestment plan during 2015, the Company has $13.6 million available for all redemptions in 2016, including shares that are redeemed in connection with a stockholders’ death, qualifying disability or determination of incompetence. |
Related Party Transactions | Pursuant to the Advisory Agreement and Dealer Manager Agreement, the Company is or was obligated to pay the Advisor and KBS Capital Markets Group, LLC (the “Dealer Manager”) specified fees upon the provision of certain services related to the Offering, the investment of funds in real estate and real estate-related investments, management of the Company’s investments and for other services (including, but not limited to, the disposition of investments). The Company is or was also obligated to reimburse the Advisor and Dealer Manager for organization and offering costs incurred by the Advisor and the Dealer Manager on behalf of the Company, and the Company is or was obligated to reimburse the Advisor for acquisition and origination expenses and certain operating expenses incurred on behalf of the Company or incurred in connection with providing services to the Company. In addition, the Advisor is entitled to certain other fees, including an incentive fee upon achieving certain performance goals, as detailed in the Advisory Agreement. See note 9, “Related Party Transactions.” The Company records all related party fees as incurred, subject to any limitations described in the Advisory Agreement. The Company had not incurred any subordinated participation in net cash flows or subordinated incentive listing fees payable to the Advisor through December 31, 2015. |
Related Party Transactions, Selling Commissions and Dealer Manager Fees | The Company paid the Dealer Manager up to 6.5% and 3.0% of the gross offering proceeds from the primary offering as selling commissions and dealer manager fees, respectively. A reduced sales commission and dealer manager fee was paid with respect to certain volume discount sales. All or a portion of the selling commissions was not charged with regard to shares sold to certain categories of purchasers. No sales commission or dealer manager fee is paid with respect to shares issued through the dividend reinvestment plan. The Dealer Manager reallowed 100% of sales commissions earned to participating broker-dealers. The Dealer Manager could reallow to certain participating broker-dealer up to 1% of the gross offering proceeds attributable to that participating broker-dealer as a marketing fee and, in special cases, the Dealer Manager could increase the reallowance. |
Related Party Transactions, Organization and Offering Costs | Organization and offering costs (other than selling commissions and dealer manager fees) of the Company may be paid by the Advisor, the Dealer Manager or their affiliates on behalf of the Company or may be paid directly by the Company. These offering costs include all expenses incurred by the Company in connection with the Offering. Organization costs include all expenses incurred by the Company in connection with the formation of the Company, including but not limited to legal fees and other costs to incorporate the Company. The Company reimburses the Advisor for organization and offering costs up to an amount that, when combined with selling commissions, dealer manager fees and all other amounts spent by the Company on organization and offering expenses, does not exceed 15% of the gross proceeds of the Company’s primary offering and the offering under the DRP as of the date of reimbursement. At the termination of the primary offering and at the termination of the offering under the DRP, the Advisor agreed to reimburse the Company to the extent that selling commissions, dealer manager fees and other organization and offering expenses incurred by the Company exceed 15% of the gross offering proceeds of the respective offering. In connection with the primary portion of the Offering, the Company reimbursed the Dealer Manager for underwriting compensation, provided that within 30 days after the end of the month in which the primary initial public offering terminated, the Dealer Manager was required to reimburse the Company to the extent that the Company’s reimbursements caused total underwriting compensation for the primary initial public offering to exceed 10% of the gross offering proceeds from such offering. The Company also paid directly or reimbursed the Dealer Manager for bona fide invoiced due diligence expenses of broker dealers. However, no reimbursements made by the Company to the Dealer Manager were allowed to cause total organization and offering expenses incurred by the Company (including selling commissions, dealer manager fees and all other items of organization and offering expenses) to exceed 15% of the aggregate gross proceeds from the Company’s primary offering and the offering under its DRP as of the date of reimbursement. As of December 31, 2015, the Company’s selling commissions, dealer manager fees, and organization and other offering costs did not exceed 15% of the gross offering proceeds. Through December 31, 2015 , including shares issued through the Company’s dividend reinvestment plan, the Company had issued 61,681,484 shares in the Offering for gross offering proceeds of $614.5 million and recorded selling commissions and dealer manager fees of $49.6 million and other offering costs of $10.7 million . Organization costs are expensed as incurred and offering costs, which include selling commissions and dealer manager fees, are charged as incurred as a reduction to stockholders’ equity. The Company ceased offering shares of common stock in its primary offering on November 14, 2012 and continues to offer shares under its dividend reinvestment plan. |
Related Party Transactions, Acquisition and Origination Fees | The Company pays the Advisor an acquisition and origination fee equal to 1% of the cost of investments acquired, or the amount funded by the Company to acquire or originate mortgage, mezzanine, bridge or other loans, including any acquisition and origination expenses related to such investments and any debt attributable to such investments. |
Related Party Transactions, Asset Management Fees | With respect to investments in loans and any investments other than real estate, the Company pays the Advisor a monthly fee calculated, each month, as one-twelfth of 0.75% of the lesser of (i) the amount paid or allocated to acquire or fund the loan or other investment, inclusive of acquisition and origination fees and expenses related thereto and the amount of any debt associated with or used to acquire or fund such investment and (ii) the outstanding principal amount of such loan or other investment, plus the acquisition and origination fees and expenses related to the acquisition or funding of such investment, as of the time of calculation. With respect to investments in real estate, the Company pays the Advisor a monthly asset management fee equal to one-twelfth of 0.75% of the amount paid or allocated to acquire the investment, including the cost of subsequent capital improvements, inclusive of acquisition fees and expenses related thereto and the amount of any debt associated with or used to acquire such investment. In the case of investments made through joint ventures, the asset management fee is determined based on the Company’s proportionate share of the underlying investment, inclusive of the Company’s proportionate share of any fees and expenses related thereto. |
Related Party Transactions, Disposition Fee | For substantial assistance in connection with the sale of properties or other investments, the Company pays the Advisor or its affiliates 1.0% of the contract sales price of each property or other investment sold; provided, however, in no event may the disposition fees paid to the Advisor, its affiliates and unaffiliated third parties exceed 6.0% of the contract sales price. |
Income Taxes | The Company has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended. To qualify as a REIT, the Company must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of the Company’s annual REIT taxable income to its stockholders (which is computed without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). As a REIT, the Company generally will not be subject to federal income tax to the extent it distributes qualifying dividends to its stockholders. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income tax on its taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four taxable years following the year during which qualification is lost unless the Internal Revenue Service grants the Company relief under certain statutory provisions. Such an event could materially and adversely affect the Company’s net income and net cash available for distribution to stockholders. However, the Company intends to organize and operate in such a manner as to qualify for treatment as a REIT. The Company has concluded that there are no significant uncertain tax positions requiring recognition in its financial statements. Neither the Company nor its subsidiaries have been assessed interest or penalties by any major tax jurisdictions. The Company’s evaluations were performed for the tax years ended December 31, 2015, 2014 and 2013. As of December 31, 2015 , returns for the calendar year 2011 through 2014 remain subject to examination by major tax jurisdictions. |
Segments | The Company has invested in non-performing loans, opportunistic real estate and other real estate-related assets. In general, the Company intends to hold its investments in non-performing loans, opportunistic real estate and other real estate-related assets for capital appreciation. Traditional performance metrics of non-performing loans, opportunistic real estate and other real estate-related assets may not be meaningful as these investments are generally non-stabilized and do not provide a consistent stream of interest income or rental revenue. These investments exhibit similar long-term financial performance and have similar economic characteristics. These investments typically involve a higher degree of risk and do not provide a constant stream of ongoing cash flows. As a result, the Company’s management views non-performing loans, opportunistic real estate and other real estate-related assets as similar investments. Substantially all of its revenue and net income (loss) is from non-performing loans, opportunistic real estate and other real estate-related assets, and therefore, the Company currently aggregates its operating segments into one reportable business segment. |
Per Share Data | Basic net income (loss) per share of common stock is calculated by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock issued and outstanding during such period. Diluted net income (loss) per share of common stock equals basic net income (loss) per share of common stock as there were no potentially dilutive securities outstanding during the years ended December 31, 2015 , 2014 and 2013. Distributions declared per share were $0.38 , $0.26 and $0.44 during the years ended December 31, 2015, 2014 and 2013, respectively. |
Square Footage, Occupancy and Other Measures | Square footage, number of acres, occupancy and other measures used to describe real estate and real estate-related investments included in the Notes to Consolidated Financial Statements are presented on an unaudited basis. |
Recently Issued Accounting Standards Update | In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU No. 2014-09”). ASU No. 2014-09 requires an entity to recognize the revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. ASU No. 2014-09 supersedes the revenue requirements in Revenue Recognition (Topic 605) and most industry-specific guidance throughout the Industry Topics of the Codification. ASU No. 2014-09 does not apply to lease contracts within the scope of Leases (Topic 840). ASU No. 2014-09 was to be effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and is to be applied retrospectively, with early application not permitted. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (“ASU No. 2015-14”), which defers the effective date of ASU No. 2014-09 by one year. Early adoption is permitted but not before the original effective date. The Company is still evaluating the impact of adopting ASU No. 2014-09 on its financial statements, but does not expect the adoption of ASU No. 2014-09 to have a material impact on its financial statements. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU No. 2014-15”). The amendments in ASU No. 2014-15 require management to evaluate, for each annual and interim reporting period, whether there are conditions or events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or are available to be issued when applicable) and, if so, provide related disclosures. ASU No. 2014-15 is effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early adoption is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. The Company does not expect the adoption of ASU No. 2014-15 to have a significant impact on its financial statements. In January 2015, the FASB issued ASU No. 2015-01, Income Statement - Extraordinary and Unusual Items (Subtopic 225-20), Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items (“ASU No. 2015-01”). The amendments in ASU No. 2015-01 eliminate from GAAP the concept of extraordinary items. Although the amendments will eliminate the requirements in Subtopic 225-20 for reporting entities to consider whether an underlying event or transaction is extraordinary, the presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and will be expanded to include items that are both unusual in nature and infrequently occurring. ASU No. 2015-01 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The Company does not expect the adoption of ASU No. 2015-01 to have a significant impact on its financial statements. In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis (“ASU No. 2015-02”), which amended the existing accounting standards for consolidation under both the variable interest model and the voting model. ASU No. 2015-02 modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities (“VIEs”) or voting interest entities, eliminates the presumption that a general partner should consolidate a limited partnership and affects the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships. ASU No. 2015-02 is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. A reporting entity may apply the amendments in ASU No. 2015-02 using: (a) a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption; or (b) by applying the amendments retrospectively. The Company is still evaluating the impact of adopting ASU No. 2015-02 on its financial statements, but does not expect the adoption of ASU No. 2015-02 to have a material impact on its financial statements. In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs (“ASU No. 2015-03”). The amendments in ASU No. 2015-03 require debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. ASU No. 2015-03 is limited to the presentation of debt issuance costs and does not affect the recognition and measurement of debt issuance costs. Given the absence of authoritative guidance within ASU No. 2015-03 for debt issuance costs related to line-of-credit arrangements, in August 2015, the FASB issued ASU No. 2015-15, Interest - Imputation of Interest (Subtopic 835-30), Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements (“ASU No. 2015-15”), which clarifies ASU No. 2015-03 by stating that the staff of the SEC would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. ASU No. 2015-03 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015 and is to be applied retrospectively. Early adoption is permitted for financial statements that have not been previously issued. The Company elected to early adopt ASU No. 2015-03 for the reporting period ending December 31, 2015. As a result of adoption of ASU No. 2015-03, the Company reclassified debt issuance costs associated with a debt liability from prepaid expenses and other assets to notes and bond payable, net on the accompanying consolidated balance sheets. All periods presented have been retroactively adjusted. In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805), Simplifying the Accounting for Measurement-Period Adjustments (“ASU No. 2015-16”). The amendments in ASU No. 2015-16 require that, in a business combination, an acquirer recognizes adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. ASU No. 2015-16 is effective for annual periods beginning after December 15, 2015, and interim periods within those fiscal years and is to be applied prospectively. Early adoption is permitted for financial statements that have not been previously issued. The Company does not expect the adoption of ASU No. 2015-16 to have a significant impact on its financial statements. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU No. 2016-01”). The amendments in ASU No. 2016-01 address certain aspects of recognition, measurement, presentation and disclosure of financial instruments. ASU No. 2016-01 primarily affects accounting for equity investments and financial liabilities where the fair value option has been elected. ASU No. 2016-01 also requires entities to present financial assets and financial liabilities separately, grouped by measurement category and form of financial asset in the balance sheet or in the accompanying notes to the financial statements. ASU No. 2016-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. Early application is permitted for financial statements that have not been previously issued. The Company does not expect the adoption of ASU No. 2016-01 to have a significant impact on its financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU No. 2016-02”). The amendments in ASU No. 2016-02 change the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU No. 2016-02 is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption of ASU No. 2016-02 is permitted. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company is currently evaluating the impact of adopting the new leases standard on its consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN25
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Life | The Company anticipates the estimated useful lives of its assets by class to be generally as follows: Buildings 25-40 years Building improvements 10-40 years Tenant improvements Shorter of lease term or expected useful life Tenant origination and absorption costs Remaining term of related leases, including below-market renewal periods |
REAL ESTATE HELD FOR INVESTME26
REAL ESTATE HELD FOR INVESTMENT (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Real Estate [Abstract] | |
Schedule of Real Estate Investments | The following table summarizes the Company’s real estate held for investment as of December 31, 2015 and 2014, respectively (in thousands): December 31, 2015 December 31, 2014 Land $ 223,201 $ 229,053 Buildings and improvements 646,979 628,662 Tenant origination and absorption costs 43,894 50,807 Total real estate, cost 914,074 908,522 Accumulated depreciation and amortization (91,560 ) (63,388 ) Total real estate, net $ 822,514 $ 845,134 The following table provides summary information regarding the Company’s real estate held for investment as of December 31, 2015 (in thousands): Property Date Acquired or Foreclosed on City State Property Type Land Building and Improvements Tenant Origination and Absorption Total Real Estate, at Cost Accumulated Depreciation and Amortization Total Real Estate, Net Ownership % Northridge Center I & II 03/25/2011 Atlanta GA Office $ 2,234 $ 7,170 $ — $ 9,404 $ (1,986 ) $ 7,418 100.0 % Iron Point Business Park 06/21/2011 Folsom CA Office 2,671 19,445 — 22,116 (3,763 ) 18,353 100.0 % Richardson Portfolio: Palisades Central I 11/23/2011 Richardson TX Office 1,037 10,035 684 11,756 (2,028 ) 9,728 90.0 % Palisades Central II 11/23/2011 Richardson TX Office 810 17,820 1,219 19,849 (4,600 ) 15,249 90.0 % Greenway I 11/23/2011 Richardson TX Office 561 2,156 — 2,717 (568 ) 2,149 90.0 % Greenway III 11/23/2011 Richardson TX Office 702 3,928 785 5,415 (1,561 ) 3,854 90.0 % Undeveloped Land 11/23/2011 Richardson TX Undeveloped Land 3,058 — — 3,058 — 3,058 90.0 % Total Richardson Portfolio 6,168 33,939 2,688 42,795 (8,757 ) 34,038 Park Highlands 12/30/2011 North Las Vegas NV Undeveloped Land 30,695 — — 30,695 — 30,695 50.1 % Bellevue Technology Center 07/31/2012 Bellevue WA Office 25,506 55,863 3,813 85,182 (8,107 ) 77,075 100.0 % Powers Ferry Landing East 09/24/2012 Atlanta GA Office 1,643 8,039 105 9,787 (1,607 ) 8,180 100.0 % 1800 West Loop 12/04/2012 Houston TX Office 8,360 60,647 5,331 74,338 (10,360 ) 63,978 100.0 % West Loop I & II 12/07/2012 Houston TX Office 7,300 30,290 2,183 39,773 (4,582 ) 35,191 100.0 % Burbank Collection 12/12/2012 Burbank CA Retail 4,175 9,384 789 14,348 (1,284 ) 13,064 90.0 % Austin Suburban Portfolio 03/28/2013 Austin TX Office 8,288 67,428 3,129 78,845 (9,230 ) 69,615 100.0 % Westmoor Center 06/12/2013 Westminster CO Office 10,058 66,164 8,809 85,031 (13,542 ) 71,489 100.0 % Central Building 07/10/2013 Seattle WA Office 7,015 26,097 2,000 35,112 (3,188 ) 31,924 100.0 % 50 Congress Street 07/11/2013 Boston MA Office 9,876 40,731 2,634 53,241 (4,943 ) 48,298 100.0 % 1180 Raymond 08/20/2013 Newark NJ Apartment 8,292 36,958 136 45,386 (2,769 ) 42,617 100.0 % Park Highlands II 12/10/2013 North Las Vegas NV Undeveloped Land 22,192 — — 22,192 — 22,192 99.5 % Maitland Promenade II 12/18/2013 Orlando FL Office 3,434 23,825 4,295 31,554 (3,668 ) 27,886 100.0 % Plaza Buildings 01/14/2014 Bellevue WA Office 53,040 135,772 7,982 196,794 (12,458 ) 184,336 100.0 % 424 Bedford 01/31/2014 Brooklyn NY Apartment 8,860 25,227 — 34,087 (1,316 ) 32,771 90.0 % Richardson Land II 09/04/2014 Richardson TX Undeveloped Land 3,394 — — 3,394 — 3,394 90.0 % $ 223,201 $ 646,979 $ 43,894 $ 914,074 $ (91,560 ) $ 822,514 |
Schedule of Future Minimum Rental Income for Company's Properties | As of December 31, 2015 , the future minimum rental income from the Company’s properties, excluding apartment leases, under non-cancelable operating leases was as follows (in thousands): 2016 $ 76,903 2017 71,825 2018 60,832 2019 48,637 2020 37,094 Thereafter 80,506 $ 375,797 |
Schedules of Concentration of Risk, by Risk Factor | As of December 31, 2015 , the Company’s commercial real estate properties were leased to approximately 500 tenants over a diverse range of industries and geographic areas. The Company’s highest tenant industry concentrations (greater than 10% of annualized base rent) were as follows: Industry Number of Tenants Annualized Base Rent (1) (in thousands) Percentage of Annualized Base Rent Finance 49 $ 10,952 13.8 % Computer System Design & Programming 42 10,250 12.9 % Insurance Carriers & Related Activities 28 8,704 11.0 % $ 29,906 37.7 % _____________________ (1) Annualized base rent represents annualized contractual base rental income as of December 31, 2015 , adjusted to straight-line any contractual tenant concessions (including free rent), rent increases and rent decreases from the lease’s inception through the balance of the lease term. |
TENANT ORIGINATION AND ABSORP27
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Abstract] | |
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities | As of December 31, 2015 and 2014, the Company’s tenant origination and absorption costs, above-market lease assets and below-market lease liabilities (excluding fully amortized assets and liabilities and accumulated amortization) were as follows (in thousands): Tenant Origination and Absorption Costs Above-Market Lease Assets Below-Market Lease Liabilities December 31, December 31, December 31, December 31, December 31, December 31, Cost $ 43,894 $ 50,807 $ 2,399 $ 3,752 $ (5,826 ) $ (7,585 ) Accumulated Amortization (22,749 ) (19,113 ) (1,361 ) (1,691 ) 3,091 3,182 Net Amount $ 21,145 $ 31,694 $ 1,038 $ 2,061 $ (2,735 ) $ (4,403 ) |
Amortization of Tenant Origination and Absorption Costs, Above-Market Leases and Below-Market Lease Liabilities | Increases (decreases) in net income as a result of amortization of the Company’s tenant origination and absorption costs, above-market lease assets and below-market lease liabilities for the years ended December 31, 2015 , 2014 and 2013 are as follows (in thousands): Tenant Origination and Absorption Costs Above-Market Lease Assets Below-Market Lease Liabilities For the Years Ended December 31, For the Years Ended December 31, For the Years Ended December 31, 2015 2014 2013 2015 2014 2013 2015 2014 2013 Amortization $ (10,555 ) $ (15,020 ) $ (10,942 ) $ (1,023 ) $ (1,070 ) $ (1,456 ) $ 1,668 $ 2,409 $ 1,565 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The remaining unamortized balance for these outstanding intangible assets and liabilities as of December 31, 2015 will be amortized for the years ending December 31 as follows (in thousands): Tenant Above-Market Below-Market 2016 $ (7,417 ) $ (443 ) $ 1,115 2017 (5,209 ) (275 ) 745 2018 (3,383 ) (130 ) 488 2019 (1,998 ) (82 ) 159 2020 (1,282 ) (63 ) 110 Thereafter (1,856 ) (45 ) 118 $ (21,145 ) $ (1,038 ) $ 2,735 Weighted-Average Remaining Amortization Period 4.1 years 3.3 years 3.3 years |
REAL ESTATE LOAN RECEIVABLE (Ta
REAL ESTATE LOAN RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Receivables [Abstract] | |
Schedule of Real Estate Loans Receivable | As of December 31, 2015 and 2014, the Company owned one real estate loan receivable that it had originated. The information for that real estate loan receivable as of December 31, 2015 and 2014 is set forth below (in thousands): Loan Name Location of Related Property or Collateral Date Originated Property Type Loan Type Outstanding Principal Balance as of December 31, 2015 (1) Book Value as of December 31, 2015 (2) Book Value as of December 31, 2014 (2) Contractual Interest Rate (3) Annualized Effective Interest Rate (3) Maturity Date University House First Mortgage New York, New York 3/20/2013 Student Housing Mortgage $ 27,850 $ 27,850 $ 27,422 16.0% (4) (4) _____________________ (1) Outstanding principal balance as of December 31, 2015 represents original principal balance outstanding under the loan, increased for any subsequent fundings, including interest income deferred until maturity. (2) Book value of the real estate loan receivable represents outstanding principal balance adjusted for unamortized acquisition discounts, origination fees and direct origination and acquisition costs and additional interest accretion. (3) Contractual interest rate is the stated default interest rate on the face of the loan. Annualized effective interest rate is calculated as the actual interest income recognized in 2015, using the interest method, annualized (if applicable) and divided by the average amortized cost basis of the investment. The annualized effective interest rate and contractual interest rate presented are as of December 31, 2015 . (4) See below for a discussion of the maturity default on the University House First Mortgage. |
Schedule of Activity Related to Real Estate Loans Receivable | The following summarizes the activity related to the real estate loan receivable for the year ended December 31, 2015 (in thousands): Real estate loan receivable - December 31, 2014 $ 27,422 Accretion of closing costs, origination fees and extension fees on real estate loan receivable, net 428 Real estate loan receivable - December 31, 2015 $ 27,850 |
Schedule of Interest Income from Real Estate Loans Receivable | For the years ended December 31, 2015, 2014 and 2013 interest income from real estate loans receivable consisted of the following (in thousands): 2015 2014 2013 Contractual interest income (including deferred interest) $ 1,540 $ 2,752 $ 8,248 Accretion of closing costs, origination fees and extension fees, net 428 614 842 Interest accretion — — 1,186 Interest income from real estate loans receivable $ 1,968 $ 3,366 $ 10,276 |
REAL ESTATE SALES (Tables)
REAL ESTATE SALES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Revenue and Expenses of Real Estate Held-for-Sale | The following table summarizes certain revenue and expenses related to these properties for the years ended December 31, 2015, 2014 and 2013 (in thousands): Years Ended December 31, 2015 2014 2013 Total revenues $ 215 $ 1,134 $ 1,017 Total expenses 645 2,473 3,496 |
Disposal Groups, Including Discontinued Operations | The following table summarizes certain revenue and expenses related to properties sold prior to January 1, 2014 for the years ended December 31, 2015, 2014, and 2013 (in thousands): Years Ended December 31, 2015 2014 2013 Total revenues and other income $ — $ — $ 1,387 Total expenses — 18 2,754 Loss from discontinued operations before gain on sales of real estate — (18 ) (1,367 ) Gain on sales of real estate, net — — 13,108 Total (loss) income from discontinued operations $ — $ (18 ) $ 11,741 |
NOTES AND BOND PAYABLE (Tables)
NOTES AND BOND PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes and Bonds Payable [Abstract] | |
Schedule of Long-term Debt Instruments | As of December 31, 2015 and December 31, 2014, the Company’s notes and bond payable consisted of the following (dollars in thousands): Book Value as of Book Value as of December 31, 2014 Contractual Interest Rate as of December 31, 2015 (1) Effective Interest Rate at December 31, 2015 (1) Payment Type Maturity Date (2) Richardson Portfolio Mortgage Loan $ 41,177 $ 38,000 One-Month LIBOR + 2.10% 2.34% Principal & Interest 05/01/2017 Bellevue Technology Center Mortgage Loan 52,960 49,836 One-Month LIBOR + 2.25% 2.49% Interest Only (3) 03/01/2017 Portfolio Revolving Loan Facility (4) 47,087 12,447 One-Month LIBOR + 2.25% 2.49% Interest Only (3) 05/01/2017 Portfolio Mortgage Loan 100,032 93,751 One-Month LIBOR + 2.25% 2.49% Interest Only (3) 07/01/2017 1635 N. Cahuenga Mortgage Loan (5) — 4,650 (5) (5) (5) (5) Burbank Collection Mortgage Loan 9,098 9,043 One-Month LIBOR + 2.35% 2.60% Interest Only 09/30/2016 50 Congress Mortgage Loan 28,075 26,935 One-Month LIBOR + 1.90% 2.14% Interest Only (3) 10/01/2017 1180 Raymond Bond Payable 6,795 6,945 6.50% 6.50% Principal & Interest 09/01/2036 Central Building Mortgage Loan 24,896 24,896 One-Month LIBOR + 1.75% 1.99% Interest Only 11/13/2018 Maitland Promenade II Mortgage Loan (6) 20,182 20,182 One-Month LIBOR + 2.90% 3.25% Interest Only (3) 01/01/2017 Westmoor Center Mortgage Loan 56,036 54,880 One-Month LIBOR + 2.25% 2.49% Interest Only (3) 02/01/2018 Plaza Buildings Senior Loan 111,000 109,707 One-Month LIBOR + 1.90% 2.14% Interest Only (3) 01/14/2017 Plaza Buildings Mezzanine Loan (7) — 25,000 (7) (7) (7) (7) 424 Bedford Mortgage Loan 25,358 25,866 3.91% 3.91% Principal & Interest 10/01/2022 1180 Raymond Mortgage Loan 28,100 28,100 One-Month LIBOR + 2.25% 2.49% Interest Only 12/01/2017 Total Notes and Bond Payable principal outstanding 550,796 530,238 Net Premium/(Discount) on Notes and Bond Payable (8) 50 25 Deferred financing costs, net (3,523 ) (6,201 ) Total Notes and Bond Payable, net $ 547,323 $ 524,062 _____________________ (1) Contractual interest rate represents the interest rate in effect under the loan as of December 31, 2015 . Effective interest rate is calculated as the actual interest rate in effect as of December 31, 2015 (consisting of the contractual interest rate and contractual floor rates), using interest rate indices at December 31, 2015 , where applicable. (2) Represents the initial maturity date or the maturity date as extended as of December 31, 2015 ; subject to certain conditions, the maturity dates of certain loans may be extended beyond the date shown. (3) Represents the payment type required under the loan as of December 31, 2015 . Certain future monthly payments due under this loan also include amortizing principal payments. For more information of the Company’s contractual obligations under its notes and bond payable, see five-year maturity table below. (4) The Portfolio Revolving Loan Facility is secured by the 1800 West Loop Building and the Iron Point Business Park. The Portfolio Revolving Loan Facility is comprised of $59.5 million of revolving debt and $13.0 million of non-revolving debt available to be used for tenant improvements, leasing commissions and capital improvements, subject to certain terms and conditions contained in the loan documents. As of December 31, 2015 , $36.5 million of revolving debt and $10.6 million of non-revolving debt had been disbursed to the Company and the remaining $23.0 million of revolving debt and $2.4 million of non-revolving debt is available for future disbursements, subject to certain conditions contained in the loan documents. Monthly payments are initially interest only. Beginning June 1, 2016, and to the extent that there are amounts outstanding under the non-revolving portion of the loan, monthly payments will include interest and principal amortization payments of up to $80,000 per month. (5) On March 11, 2015, in connection with the disposition of 1635 N. Cahuenga, the joint venture paid off the outstanding principal balance and all other sums due under this loan. (6) Interest on the Maitland Promenade II Mortgage Loan is calculated at a variable annual rate of 290 basis points over one-month LIBOR, but at no point shall the interest rate be less than 3.25% . (7) On April 1, 2015, the Company paid off the outstanding principal balance and all other sums due under this loan. (8) Represents the unamortized premium/discount on notes and bond payable due to the above- and below-market interest rates when the debt was assumed. The discount/premium is amortized over the remaining life of the notes and bond payable. |
Schedule of Maturities of Long-term Debt | The following is a schedule of maturities, including principal amortization payments, for all notes and bond payable outstanding as of December 31, 2015 (in thousands): 2016 $ 13,649 2017 426,026 2018 81,182 2019 812 2020 846 Thereafter 28,281 $ 550,796 |
FAIR VALUE DISCLOSURES (Tables)
FAIR VALUE DISCLOSURES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of Face Value, Carrying Amounts and Fair Value | The following were the face values, carrying amounts and fair values of the Company’s financial instruments as of December 31, 2015 and December 31, 2014 , which carrying amounts do not approximate the fair values (in thousands): December 31, 2015 December 31, 2014 Face Value Carrying Amount Fair Value Face Value Carrying Amount Fair Value Financial assets: Real estate loan receivable $ 27,850 $ 27,850 $ 27,850 $ 27,850 $ 27,422 $ 27,813 Financial liabilities: Notes and bond payable $ 550,796 $ 547,323 $ 554,007 $ 530,238 $ 524,062 $ 534,045 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Costs | Pursuant to the terms of these agreements, summarized below are the related-party costs incurred by the Company for the years ended December 31, 2015 , 2014 and 2013, respectively, and any related amounts payable as of December 31, 2015 and December 31, 2014 (in thousands): Incurred Payable as of December 31, 2015 2014 2013 2015 2014 Expensed Asset management fees (1) $ 8,348 $ 7,648 $ 4,173 $ — $ — Real estate acquisition fees — 2,231 2,784 — — Reimbursable operating expenses (2) 178 157 139 59 — Disposition fees (3) 276 — 322 — — Capitalized Acquisition and origination fees on real estate loans receivable — — 220 — — Acquisition fee on investment in unconsolidated joint venture — 1,573 — — — Acquisition fee on undeveloped land — 67 199 — — $ 8,802 $ 11,676 $ 7,837 $ 59 $ — _____________________ (1) Amounts include asset management fees from discontinued operations. (2) Reimbursable operating expenses primarily consists of internal audit personnel costs, accounting software and cybersecurity related expenses incurred by the Advisor under the Advisory Agreement. The Company has reimbursed the Advisor for the Company’s allocable portion of the salaries, benefits and overhead of internal audit department personnel providing services to the Company. These amounts totaled $ 153,000 , $ 141,000 and $ 134,000 for the years ended December 31, 2015 , 2014 and 2013, respectively, and were the only employee costs reimbursed under the Advisory Agreement during these periods. The Company will not reimburse for employee costs in connection with services for which the Advisor earns acquisition, origination or disposition fees (other than reimbursement of travel and communication expenses) or for the salaries or benefits the Advisor or its affiliates may pay to the Company’s executive officers. (3) Disposition fees with respect to real estate sold are included in the gain on sales of real estate in the accompanying consolidated statements of operations. |
INVESTMENT IN UNCONSOLIDATED 33
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Investments in Unconsolidated Joint Ventures | Summarized financial information for the 110 William Joint Venture follows (in thousands): (Unaudited) December 31, 2015 (Unaudited) December 31, 2014 Assets: Real estate assets, net of accumulated depreciation and amortization $ 269,664 $ 276,683 Other assets 18,973 14,716 Total assets $ 288,637 $ 291,399 Liabilities and Equity: Notes payable, net (1) $ 162,395 $ 167,036 Other liabilities 13,617 15,796 Members’ capital 112,625 108,567 Total Liabilities and Equity $ 288,637 $ 291,399 _____________________ (1) Includes (i) a first mortgage loan with an outstanding principal balance of $138.6 million and $140.7 million as of December 31, 2015 and December 31, 2014, respectively, bearing interest at a fixed rate of 4.8% per annum and maturing on July 6, 2017 and (ii) a mezzanine loan with an outstanding principal balance of $20.0 million as of December 31, 2015 and December 31, 2014 bearing interest at a fixed rate of 9.5% per annum and maturing on July 6, 2017. The amount presented includes a premium on notes payable of $4.5 million and $7.5 million as of December 31, 2015 and 2014, respectively, and deferred financing costs, net of $0.7 million and $1.1 million as of December 31, 2015 and 2014, respectively. (Unaudited) For the Years Ended December 31, 2015 2014 2013 Revenues $ 34,188 $ 22,536 $ — Expenses: Operating, maintenance, and management 10,549 6,869 — Real estate taxes and insurance 5,748 3,476 — Real estate acquisition fees and expenses 1 1,016 244 Depreciation and amortization 12,596 8,806 — Interest expense 6,170 4,193 — Total expenses 35,064 24,360 244 Total other income 334 36 — Net loss $ (542 ) $ (1,788 ) $ (244 ) Company ’ s equity in loss of unconsolidated joint venture $ (368 ) $ (1,101 ) $ (146 ) As of December 31, 2015 and 2014, the Company’s investments in unconsolidated joint ventures were composed of the following (dollars in thousands): Investment Balance at December 31, Joint Venture Number of Properties Location Ownership % 2015 2014 NIP Joint Venture 21 Various Less than 5.0% $ 5,305 $ 5,305 110 William Joint Venture 1 New York, New York 60.0% 69,132 66,740 $ 74,437 $ 72,045 |
SELECTED QUARTERLY FINANCIAL 34
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | Presented below is a summary of the unaudited quarterly financial information for the years ended December 31, 2015 and 2014 (in thousands, except per share amounts): 2015 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 27,943 $ 28,667 $ 28,158 $ 27,360 Net income (loss) $ 5,385 $ 2,639 $ (277 ) $ (682 ) Net income (loss) attributable to common stockholders $ 2,235 $ 1,526 $ (462 ) $ (922 ) Net income (loss) per common share, basic and diluted $ 0.04 $ 0.03 $ (0.01 ) $ (0.02 ) Distributions declared per common share $ 0.092 $ 0.093 $ 0.095 $ 0.095 2014 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 24,626 $ 26,244 $ 27,598 $ 27,686 Net loss $ (9,894 ) $ (5,480 ) $ (3,426 ) $ (4,948 ) Net loss attributable to common stockholders $ (9,617 ) $ (5,331 ) $ (3,367 ) $ (4,879 ) Net loss per common share, basic and diluted $ (0.16 ) $ (0.09 ) $ (0.06 ) $ (0.08 ) Distributions declared per common share $ 0.049 $ 0.056 $ 0.069 $ 0.088 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | The following table presents the computation of basic and diluted earnings per share (in thousands, except share and per share amounts): For the Year Ended December 31, 2015 2014 2013 Numerator Income (loss) from continuing operations $ 7,132 $ (23,730 ) $ (152 ) Loss (income) from continuing operations attributable to noncontrolling interests (4,688 ) 554 302 Income (loss) from continuing operations attributable to common stockholders 2,444 (23,176 ) 150 Total (loss) income from discontinued operations — (18 ) 11,741 Total income from discontinued operations attributable to noncontrolling interests — — (398 ) Total (loss) income from discontinued operations attributable to common stockholders — (18 ) 11,343 Net income (loss) attributable to common stockholders $ 2,444 $ (23,194 ) $ 11,493 Denominator Weighted-average number of common shares outstanding, basic and diluted 59,656,667 59,714,540 58,359,568 Basic and diluted (loss) income per common share: Continuing operations $ 0.04 $ (0.39 ) $ — Discontinued operations — — 0.20 Net income (loss) per common share $ 0.04 $ (0.39 ) $ 0.20 |
ORGANIZATION (Details)
ORGANIZATION (Details) $ in Thousands | 12 Months Ended | 73 Months Ended | |||||||||||
Dec. 31, 2015USD ($)ashares | Dec. 31, 2014USD ($)shares | Dec. 31, 2013USD ($)shares | Dec. 31, 2015USD ($)ashares | Dec. 31, 2015USD ($) | Dec. 31, 2015Portfolios | Dec. 31, 2015shares | Dec. 31, 2015MortgageLoans | Dec. 31, 2015property | Dec. 31, 2015Investments | Oct. 23, 2012USD ($)shares | Dec. 29, 2011USD ($)shares | Jan. 08, 2009shares | |
Organizational Structure [Line Items] | |||||||||||||
Partnership interest in Operating Partnership | 0.10% | ||||||||||||
Partnership interest in the Operating Partnership and is its sole limited partner | 99.90% | ||||||||||||
Issuance of common stock, value | $ | $ 13,573 | $ 9,911 | $ 16,641 | ||||||||||
Stock issued during period, value | $ | $ 52,800 | ||||||||||||
Redemptions of common stock, value | $ | $ 30,100 | $ 5,104 | $ 2,450 | $ 38,400 | |||||||||
Common stock, shares issued | 60,044,329 | 58,696,115 | 55,249 | 220,994 | |||||||||
Common stock, value, issued | $ | $ 600 | $ 587 | $ 500 | $ 2,000 | |||||||||
Number of investments in unconsolidated joint venture | Investments | 2 | ||||||||||||
Office Properties [Member] | |||||||||||||
Organizational Structure [Line Items] | |||||||||||||
Number of real estate properties | property | 10 | ||||||||||||
Office Campus [Member] | |||||||||||||
Organizational Structure [Line Items] | |||||||||||||
Number of real estate properties | property | 1 | ||||||||||||
Office Buildings, Campus [Member] | |||||||||||||
Organizational Structure [Line Items] | |||||||||||||
Number of real estate properties | property | 9 | ||||||||||||
Office Portfolio [Member] | |||||||||||||
Organizational Structure [Line Items] | |||||||||||||
Number of real estate properties | 1 | 1 | |||||||||||
Number of first mortgage loans | MortgageLoans | 1 | ||||||||||||
Office Properties, Portfolio [Member] | |||||||||||||
Organizational Structure [Line Items] | |||||||||||||
Number of real estate properties | property | 3 | ||||||||||||
Office Buildings, Portfolio [Member] | |||||||||||||
Organizational Structure [Line Items] | |||||||||||||
Number of real estate properties | property | 4 | ||||||||||||
Retail Property, Portfolio [Member] | |||||||||||||
Organizational Structure [Line Items] | |||||||||||||
Number of real estate properties | property | 1 | ||||||||||||
Apartment Properties, Portfolio [Member] | |||||||||||||
Organizational Structure [Line Items] | |||||||||||||
Number of real estate properties acquired through foreclosure | property | 2 | ||||||||||||
Undeveloped Land [Member] | |||||||||||||
Organizational Structure [Line Items] | |||||||||||||
Number of investments in real estate | Investments | 2 | ||||||||||||
Real estate area of undeveloped land | a | 1,670 | 1,670 | |||||||||||
Undeveloped Land, Portfolio [Member] | |||||||||||||
Organizational Structure [Line Items] | |||||||||||||
Real estate area of undeveloped land | a | 25 | 25 | |||||||||||
Common Stock [Member] | |||||||||||||
Organizational Structure [Line Items] | |||||||||||||
Shares registered in primary offering | 100,000,000 | ||||||||||||
Shares registered for sale under dividend reinvestment plan | 40,000,000 | ||||||||||||
Issuance of common stock, shares | 1,114,532 | 901,146 | 1,751,478 | 56,584,976 | |||||||||
Issuance of common stock, value | $ | $ 11 | $ 9 | $ 18 | $ 561,700 | |||||||||
Shares of common stock sold under dividend reinvestment plan, shares | 5,096,508 | ||||||||||||
Redemptions of common stock, shares | 2,462,746 | 475,817 | 260,105 | 3,281,612 | |||||||||
Redemptions of common stock, value | $ | $ 24 | $ 5 | $ 3 | ||||||||||
Common Stock [Member] | Minimum [Member] | |||||||||||||
Organizational Structure [Line Items] | |||||||||||||
Stock offering, shares authorized for issuance | 250,000 | ||||||||||||
Common Stock [Member] | Maximum [Member] | |||||||||||||
Organizational Structure [Line Items] | |||||||||||||
Stock offering, shares authorized for issuance | 140,000,000 | ||||||||||||
KBS Capital Advisors LLC [Member] | |||||||||||||
Organizational Structure [Line Items] | |||||||||||||
Shares held by affiliate | 20,000 |
SUMMARY OF SIGNIFICANT ACCOUN37
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Useful Life) (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Building [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 25 years |
Building [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 40 years |
Building Improvements [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 10 years |
Building Improvements [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 40 years |
Tenant Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | Shorter of lease term or expected useful life |
Tenant Origination and Absorption Costs [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | Remaining term of related leases, including below-market renewal periods |
SUMMARY OF SIGNIFICANT ACCOUN38
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) | Mar. 09, 2016$ / shares | Jan. 09, 2016 | Dec. 31, 2015USD ($)$ / shares | Sep. 30, 2015$ / shares | Jun. 30, 2015$ / shares | Mar. 31, 2015$ / shares | Dec. 31, 2014USD ($)property$ / shares | Sep. 30, 2014$ / shares | Jun. 30, 2014$ / shares | Mar. 31, 2014$ / shares | Jun. 12, 2015 | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($)property$ / sharesshares | Dec. 31, 2014USD ($)property$ / shares | Dec. 31, 2013USD ($)property$ / shares | Jan. 04, 2016$ / shares | Dec. 08, 2015$ / shares | Dec. 29, 2014$ / shares | Dec. 09, 2014$ / shares | Apr. 06, 2014$ / shares | Mar. 25, 2014$ / shares |
Summary of Significant Accounting Policies [Line Items] | |||||||||||||||||||||
Property management fee, percent fee | 0.75% | ||||||||||||||||||||
Impairment charges on real estate | $ 0 | $ 579,000 | $ 1,433,000 | ||||||||||||||||||
Number of properties held for investment | property | 1 | 1 | 2 | ||||||||||||||||||
Restricted cash and cash equivalents | $ 0 | $ 0 | 0 | $ 0 | |||||||||||||||||
Purchase price per share as percent of estimated value | 95.00% | ||||||||||||||||||||
Updated primary offering price | $ / shares | $ 13.44 | $ 12.24 | $ 11.27 | ||||||||||||||||||
Purchase price per share | $ / shares | $ 11.63 | $ 10.71 | $ 9.50 | ||||||||||||||||||
Additional limitation, amount | 21,000,000 | 21,000,000 | |||||||||||||||||||
Redemption value | 1,000,000 | $ 1,000,000 | |||||||||||||||||||
Maximum percentage of weighted-average shares outstanding available for redemption during any calendar year | 5.00% | ||||||||||||||||||||
Redemptions of common stock, value | $ 30,100,000 | ||||||||||||||||||||
Number of shares non-redeemable do to limitation | shares | 276,386 | ||||||||||||||||||||
Other liabilities | 17,905,000 | $ 9,192,000 | $ 17,905,000 | $ 9,192,000 | |||||||||||||||||
Remaining authorized repurchase amount | $ 13,600,000 | $ 13,600,000 | |||||||||||||||||||
Distributions declared per common share (in dollars per share) | $ / shares | $ 0.095 | $ 0.095 | $ 0.093 | $ 0.092 | $ 0.088 | $ 0.069 | $ 0.056 | $ 0.049 | $ 0.38 | $ 0.26 | $ 0.44 | ||||||||||
Scenario, Forecast [Member] | |||||||||||||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||||||||||||
Maximum number of shares redeemable per quarter, value | $ 3,000,000 | ||||||||||||||||||||
Held for One Year [Member] | |||||||||||||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||||||||||||
Redemption price percentage of most recent estimated value per share | 92.50% | ||||||||||||||||||||
Held for Two Years [Member] | |||||||||||||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||||||||||||
Redemption price percentage of most recent estimated value per share | 95.00% | ||||||||||||||||||||
Held for Three Years [Member] | |||||||||||||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||||||||||||
Redemption price percentage of most recent estimated value per share | 97.50% | ||||||||||||||||||||
Held for Four Years [Member] | |||||||||||||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||||||||||||
Redemption price percentage of most recent estimated value per share | 100.00% | ||||||||||||||||||||
Unfulfilled Redemption Request [Member] | |||||||||||||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||||||||||||
Other liabilities | $ 3,700,000 | $ 3,700,000 | |||||||||||||||||||
Subsequent Event [Member] | |||||||||||||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||||||||||||
Purchase price per share | $ / shares | $ 13.44 | ||||||||||||||||||||
Distributions declared per common share (in dollars per share) | $ / shares | $ 0.09323770 | ||||||||||||||||||||
Subsequent Event [Member] | Eighth Amended and Restated Share Redemption Program [Member] | Held for Four Years [Member] | |||||||||||||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||||||||||||
Redemption price percentage of most recent estimated value per share | 100.00% | ||||||||||||||||||||
Subsequent Event [Member] | Eighth Amended and Restated Share Redemption Program [Member] | Held for at Least One Year but Less than Four Years [Member] | |||||||||||||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||||||||||||
Redemption price percentage of most recent estimated value per share | 97.50% | ||||||||||||||||||||
Office Building [Member] | |||||||||||||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||||||||||||
Number of real estate properties disposed | property | 2 | 1 | |||||||||||||||||||
Office Building [Member] | Office Building [Member] | |||||||||||||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||||||||||||
Number of real estate properties disposed | property | 2 |
SUMMARY OF SIGNIFICANT ACCOUN39
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Related Party Transactions) (Details) $ in Millions | 12 Months Ended | 73 Months Ended |
Dec. 31, 2015 | Dec. 31, 2015USD ($)shares | |
Related Party Transaction [Line Items] | ||
Percent of dealer manager reallows of sales commissions earned to participating broker-dealer | 100.00% | 100.00% |
Stock issued during period, value | $ 614.5 | |
Selling commissions and dealer manager fees | 49.6 | |
Other offering cost | $ 10.7 | |
Maximum [Member] | ||
Related Party Transaction [Line Items] | ||
Selling commissions fees paid, percent of gross offering proceeds | 6.50% | 6.50% |
Dealer managers fees paid, percent of gross offering proceeds | 3.00% | 3.00% |
Sales commissions, broker dealer, percentage | 1.00% | 1.00% |
Reimbursed offering costs determination, gross offering costs, percentage | 15.00% | |
KBS Capital Advisors LLC [Member] | ||
Related Party Transaction [Line Items] | ||
Acquisition advisory fee, percent | 1.00% | 1.00% |
Monthly asset management fee, percent of acquisition expense | 0.00063% | 0.00063% |
KBS Capital Advisors LLC [Member] | Minimum [Member] | ||
Related Party Transaction [Line Items] | ||
Reimbursable offering costs determination, gross offering costs, percentage | 15.00% | 15.00% |
Underwriting compensation for initial public offering as percent of gross offering proceeds | 10.00% | 10.00% |
KBS Capital Advisors LLC or Affiliates [Member] | ||
Related Party Transaction [Line Items] | ||
Selling commissions fees paid, percent of sales price | 1.00% | 1.00% |
KBS Capital Advisors LLC, Affiliates or Unaffiliated Third Parties [Member] | Maximum [Member] | ||
Related Party Transaction [Line Items] | ||
Selling commissions fees paid, percent of sales price | 6.00% | 6.00% |
Common Stock [Member] | ||
Related Party Transaction [Line Items] | ||
Stock issued during period, shares | shares | 61,681,484 |
REAL ESTATE HELD FOR INVESTME40
REAL ESTATE HELD FOR INVESTMENT (Narrative) (Details) $ in Thousands, ft² in Millions | 12 Months Ended | ||||||||
Dec. 31, 2015USD ($)a | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2015Portfolios | Dec. 31, 2015 | Dec. 31, 2015property | Dec. 31, 2015ft² | Mar. 14, 2012Units | |
Real Estate Properties [Line Items] | |||||||||
Rentable square feet | ft² | 4.4 | ||||||||
Percentage of portfolio occupied | 84.00% | ||||||||
Proceeds from condemnation proceeds | $ | $ 5,915 | $ 0 | $ 0 | ||||||
Condemnation, at carrying value | $ | $ 800 | ||||||||
Gain on condemnation | $ | 5,100 | ||||||||
Noncontrolling Interest [Member] | |||||||||
Real Estate Properties [Line Items] | |||||||||
Gain on condemnation | $ | $ 1,200 | ||||||||
Office Properties [Member] | |||||||||
Real Estate Properties [Line Items] | |||||||||
Number of real estate properties | 10 | ||||||||
Office Campus [Member] | |||||||||
Real Estate Properties [Line Items] | |||||||||
Number of real estate properties | 1 | ||||||||
Office Buildings, Campus [Member] | |||||||||
Real Estate Properties [Line Items] | |||||||||
Number of real estate properties | 9 | ||||||||
Office Portfolio [Member] | |||||||||
Real Estate Properties [Line Items] | |||||||||
Number of real estate properties | 1 | 1 | |||||||
Office Buildings, Portfolio [Member] | |||||||||
Real Estate Properties [Line Items] | |||||||||
Number of real estate properties | 4 | ||||||||
Undeveloped Land, Portfolio [Member] | |||||||||
Real Estate Properties [Line Items] | |||||||||
Real estate area of undeveloped land | a | 25 | ||||||||
Office Properties, Portfolio [Member] | |||||||||
Real Estate Properties [Line Items] | |||||||||
Number of real estate properties | 3 | ||||||||
Retail Property, Portfolio [Member] | |||||||||
Real Estate Properties [Line Items] | |||||||||
Number of real estate properties | 1 | ||||||||
Apartment Property [Member] | |||||||||
Real Estate Properties [Line Items] | |||||||||
Number of real estate properties | 2 | ||||||||
Rentable square feet | ft² | 0.3 | ||||||||
Percentage of portfolio occupied | 92.00% | ||||||||
Apartment Property [Member] | 1180 Raymond [Member] | Multifamily Tower [Member] | |||||||||
Real Estate Properties [Line Items] | |||||||||
Number of units in real estate property | Units | 383 | ||||||||
Undeveloped Land [Member] | |||||||||
Real Estate Properties [Line Items] | |||||||||
Real estate area of undeveloped land | a | 1,670 |
REAL ESTATE HELD FOR INVESTME41
REAL ESTATE HELD FOR INVESTMENT (Schedule of Real Estate Investments) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Real Estate Properties [Line Items] | ||
Total real estate, cost | $ 914,074 | $ 908,522 |
Accumulated depreciation and amortization | (91,560) | (63,388) |
Total real estate, net | $ 822,514 | 845,134 |
Northridge Center I & II [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired or Foreclosed on | Mar. 25, 2011 | |
Total real estate, cost | $ 9,404 | |
Accumulated depreciation and amortization | (1,986) | |
Total real estate, net | $ 7,418 | |
Ownership % | 100.00% | |
Iron Point Business Park [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired or Foreclosed on | Jun. 21, 2011 | |
Total real estate, cost | $ 22,116 | |
Accumulated depreciation and amortization | (3,763) | |
Total real estate, net | $ 18,353 | |
Ownership % | 100.00% | |
Richardson Portfolio [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | $ 42,795 | |
Accumulated depreciation and amortization | (8,757) | |
Total real estate, net | $ 34,038 | |
Palisades Central I [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired or Foreclosed on | Nov. 23, 2011 | |
Total real estate, cost | $ 11,756 | |
Accumulated depreciation and amortization | (2,028) | |
Total real estate, net | $ 9,728 | |
Ownership % | 90.00% | |
Palisades Central II [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired or Foreclosed on | Nov. 23, 2011 | |
Total real estate, cost | $ 19,849 | |
Accumulated depreciation and amortization | (4,600) | |
Total real estate, net | $ 15,249 | |
Ownership % | 90.00% | |
Greenway I [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired or Foreclosed on | Nov. 23, 2011 | |
Total real estate, cost | $ 2,717 | |
Accumulated depreciation and amortization | (568) | |
Total real estate, net | $ 2,149 | |
Ownership % | 90.00% | |
Greenway III [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired or Foreclosed on | Nov. 23, 2011 | |
Total real estate, cost | $ 5,415 | |
Accumulated depreciation and amortization | (1,561) | |
Total real estate, net | $ 3,854 | |
Ownership % | 90.00% | |
Undeveloped Land [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired or Foreclosed on | Nov. 23, 2011 | |
Total real estate, cost | $ 3,058 | |
Accumulated depreciation and amortization | 0 | |
Total real estate, net | $ 3,058 | |
Ownership % | 90.00% | |
Park Highlands [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired or Foreclosed on | Dec. 30, 2011 | |
Total real estate, cost | $ 30,695 | |
Accumulated depreciation and amortization | 0 | |
Total real estate, net | $ 30,695 | |
Ownership % | 50.10% | |
Bellevue Technology Center [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired or Foreclosed on | Jul. 31, 2012 | |
Total real estate, cost | $ 85,182 | |
Accumulated depreciation and amortization | (8,107) | |
Total real estate, net | $ 77,075 | |
Ownership % | 100.00% | |
Powers Ferry Landing East [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired or Foreclosed on | Sep. 24, 2012 | |
Total real estate, cost | $ 9,787 | |
Accumulated depreciation and amortization | (1,607) | |
Total real estate, net | $ 8,180 | |
Ownership % | 100.00% | |
1800 West Loop [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired or Foreclosed on | Dec. 4, 2012 | |
Total real estate, cost | $ 74,338 | |
Accumulated depreciation and amortization | (10,360) | |
Total real estate, net | $ 63,978 | |
Ownership % | 100.00% | |
West Loop I & II [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired or Foreclosed on | Dec. 7, 2012 | |
Total real estate, cost | $ 39,773 | |
Accumulated depreciation and amortization | (4,582) | |
Total real estate, net | $ 35,191 | |
Ownership % | 100.00% | |
Burbank Collection [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired or Foreclosed on | Dec. 12, 2012 | |
Total real estate, cost | $ 14,348 | |
Accumulated depreciation and amortization | (1,284) | |
Total real estate, net | $ 13,064 | |
Ownership % | 90.00% | |
Austin Suburban Portfolio [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired or Foreclosed on | Mar. 28, 2013 | |
Total real estate, cost | $ 78,845 | |
Accumulated depreciation and amortization | (9,230) | |
Total real estate, net | $ 69,615 | |
Ownership % | 100.00% | |
Westmoor Center [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired or Foreclosed on | Jun. 12, 2013 | |
Total real estate, cost | $ 85,031 | |
Accumulated depreciation and amortization | (13,542) | |
Total real estate, net | $ 71,489 | |
Ownership % | 100.00% | |
Central Building [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired or Foreclosed on | Jul. 10, 2013 | |
Total real estate, cost | $ 35,112 | |
Accumulated depreciation and amortization | (3,188) | |
Total real estate, net | $ 31,924 | |
Ownership % | 100.00% | |
50 Congress Street [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired or Foreclosed on | Jul. 11, 2013 | |
Total real estate, cost | $ 53,241 | |
Accumulated depreciation and amortization | (4,943) | |
Total real estate, net | $ 48,298 | |
Ownership % | 100.00% | |
1180 Raymond [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired or Foreclosed on | Aug. 20, 2013 | |
Total real estate, cost | $ 45,386 | |
Accumulated depreciation and amortization | (2,769) | |
Total real estate, net | $ 42,617 | |
Ownership % | 100.00% | |
Park Highlands II [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired or Foreclosed on | Dec. 10, 2013 | |
Total real estate, cost | $ 22,192 | |
Accumulated depreciation and amortization | 0 | |
Total real estate, net | $ 22,192 | |
Ownership % | 99.50% | |
Maitland Promenade II [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired or Foreclosed on | Dec. 18, 2013 | |
Total real estate, cost | $ 31,554 | |
Accumulated depreciation and amortization | (3,668) | |
Total real estate, net | $ 27,886 | |
Ownership % | 100.00% | |
Plaza Building [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired or Foreclosed on | Jan. 14, 2014 | |
Total real estate, cost | $ 196,794 | |
Accumulated depreciation and amortization | (12,458) | |
Total real estate, net | $ 184,336 | |
Ownership % | 100.00% | |
424 Bedford [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired or Foreclosed on | Jan. 31, 2014 | |
Total real estate, cost | $ 34,087 | |
Accumulated depreciation and amortization | (1,316) | |
Total real estate, net | $ 32,771 | |
Ownership % | 90.00% | |
Richardson Land II [Member] | ||
Real Estate Properties [Line Items] | ||
Date Acquired or Foreclosed on | Sep. 4, 2014 | |
Total real estate, cost | $ 3,394 | |
Accumulated depreciation and amortization | 0 | |
Total real estate, net | $ 3,394 | |
Ownership % | 90.00% | |
Land [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | $ 223,201 | 229,053 |
Land [Member] | Northridge Center I & II [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 2,234 | |
Land [Member] | Iron Point Business Park [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 2,671 | |
Land [Member] | Richardson Portfolio [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 6,168 | |
Land [Member] | Palisades Central I [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 1,037 | |
Land [Member] | Palisades Central II [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 810 | |
Land [Member] | Greenway I [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 561 | |
Land [Member] | Greenway III [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 702 | |
Land [Member] | Undeveloped Land [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 3,058 | |
Land [Member] | Park Highlands [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 30,695 | |
Land [Member] | Bellevue Technology Center [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 25,506 | |
Land [Member] | Powers Ferry Landing East [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 1,643 | |
Land [Member] | 1800 West Loop [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 8,360 | |
Land [Member] | West Loop I & II [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 7,300 | |
Land [Member] | Burbank Collection [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 4,175 | |
Land [Member] | Austin Suburban Portfolio [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 8,288 | |
Land [Member] | Westmoor Center [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 10,058 | |
Land [Member] | Central Building [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 7,015 | |
Land [Member] | 50 Congress Street [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 9,876 | |
Land [Member] | 1180 Raymond [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 8,292 | |
Land [Member] | Park Highlands II [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 22,192 | |
Land [Member] | Maitland Promenade II [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 3,434 | |
Land [Member] | Plaza Building [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 53,040 | |
Land [Member] | 424 Bedford [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 8,860 | |
Land [Member] | Richardson Land II [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 3,394 | |
Buildings and Improvements [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 646,979 | 628,662 |
Buildings and Improvements [Member] | Northridge Center I & II [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 7,170 | |
Buildings and Improvements [Member] | Iron Point Business Park [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 19,445 | |
Buildings and Improvements [Member] | Richardson Portfolio [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 33,939 | |
Buildings and Improvements [Member] | Palisades Central I [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 10,035 | |
Buildings and Improvements [Member] | Palisades Central II [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 17,820 | |
Buildings and Improvements [Member] | Greenway I [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 2,156 | |
Buildings and Improvements [Member] | Greenway III [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 3,928 | |
Buildings and Improvements [Member] | Undeveloped Land [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 0 | |
Buildings and Improvements [Member] | Park Highlands [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 0 | |
Buildings and Improvements [Member] | Bellevue Technology Center [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 55,863 | |
Buildings and Improvements [Member] | Powers Ferry Landing East [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 8,039 | |
Buildings and Improvements [Member] | 1800 West Loop [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 60,647 | |
Buildings and Improvements [Member] | West Loop I & II [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 30,290 | |
Buildings and Improvements [Member] | Burbank Collection [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 9,384 | |
Buildings and Improvements [Member] | Austin Suburban Portfolio [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 67,428 | |
Buildings and Improvements [Member] | Westmoor Center [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 66,164 | |
Buildings and Improvements [Member] | Central Building [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 26,097 | |
Buildings and Improvements [Member] | 50 Congress Street [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 40,731 | |
Buildings and Improvements [Member] | 1180 Raymond [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 36,958 | |
Buildings and Improvements [Member] | Park Highlands II [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 0 | |
Buildings and Improvements [Member] | Maitland Promenade II [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 23,825 | |
Buildings and Improvements [Member] | Plaza Building [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 135,772 | |
Buildings and Improvements [Member] | 424 Bedford [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 25,227 | |
Buildings and Improvements [Member] | Richardson Land II [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 0 | |
Tenant Origination and Absorption Costs [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 43,894 | $ 50,807 |
Tenant Origination and Absorption Costs [Member] | Northridge Center I & II [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 0 | |
Tenant Origination and Absorption Costs [Member] | Iron Point Business Park [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 0 | |
Tenant Origination and Absorption Costs [Member] | Richardson Portfolio [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 2,688 | |
Tenant Origination and Absorption Costs [Member] | Palisades Central I [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 684 | |
Tenant Origination and Absorption Costs [Member] | Palisades Central II [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 1,219 | |
Tenant Origination and Absorption Costs [Member] | Greenway I [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 0 | |
Tenant Origination and Absorption Costs [Member] | Greenway III [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 785 | |
Tenant Origination and Absorption Costs [Member] | Undeveloped Land [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 0 | |
Tenant Origination and Absorption Costs [Member] | Park Highlands [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 0 | |
Tenant Origination and Absorption Costs [Member] | Bellevue Technology Center [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 3,813 | |
Tenant Origination and Absorption Costs [Member] | Powers Ferry Landing East [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 105 | |
Tenant Origination and Absorption Costs [Member] | 1800 West Loop [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 5,331 | |
Tenant Origination and Absorption Costs [Member] | West Loop I & II [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 2,183 | |
Tenant Origination and Absorption Costs [Member] | Burbank Collection [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 789 | |
Tenant Origination and Absorption Costs [Member] | Austin Suburban Portfolio [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 3,129 | |
Tenant Origination and Absorption Costs [Member] | Westmoor Center [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 8,809 | |
Tenant Origination and Absorption Costs [Member] | Central Building [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 2,000 | |
Tenant Origination and Absorption Costs [Member] | 50 Congress Street [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 2,634 | |
Tenant Origination and Absorption Costs [Member] | 1180 Raymond [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 136 | |
Tenant Origination and Absorption Costs [Member] | Park Highlands II [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 0 | |
Tenant Origination and Absorption Costs [Member] | Maitland Promenade II [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 4,295 | |
Tenant Origination and Absorption Costs [Member] | Plaza Building [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 7,982 | |
Tenant Origination and Absorption Costs [Member] | 424 Bedford [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | 0 | |
Tenant Origination and Absorption Costs [Member] | Richardson Land II [Member] | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost | $ 0 |
REAL ESTATE HELD FOR INVESTME42
REAL ESTATE HELD FOR INVESTMENT (Operating Leases) (Narrative) (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015USD ($)Tenants | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Operating Leased Assets [Line Items] | |||
Deferred rent recognized | $ 4.5 | $ 8.4 | $ 4.6 |
Deferred rent receivables | $ 22.8 | 16.8 | |
Number of tenants | Tenants | 500 | ||
Incentive to lessee | $ 2.8 | 1.6 | |
Maximum [Member] | |||
Operating Leased Assets [Line Items] | |||
Operating lease, term | 12 years 3 months 18 days | ||
Weighted Average [Member] | |||
Operating Leased Assets [Line Items] | |||
Operating lease, term | 3 years 9 months 18 days | ||
Other Liabilities [Member] | |||
Operating Leased Assets [Line Items] | |||
Security deposit liability | $ 5.3 | $ 5 |
REAL ESTATE HELD FOR INVESTME43
REAL ESTATE HELD FOR INVESTMENT (Future Minimum Rental Income) (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Real Estate [Abstract] | |
2,016 | $ 76,903 |
2,017 | 71,825 |
2,018 | 60,832 |
2,019 | 48,637 |
2,020 | 37,094 |
Thereafter | 80,506 |
Future minimum rental income | $ 375,797 |
REAL ESTATE HELD FOR INVESTME44
REAL ESTATE HELD FOR INVESTMENT (Highes Tenant Industry Concentrations- Grater than 10% of Annual Base Rent) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($)Tenants | |
Concentration Risk [Line Items] | |
Number of Tenants | Tenants | 500 |
Annualized Base Rent | $ | $ 29,906 |
Percentage of Annualized Base Rent | 37.70% |
Industry - Finance [Member] | |
Concentration Risk [Line Items] | |
Number of Tenants | Tenants | 49 |
Annualized Base Rent | $ | $ 10,952 |
Percentage of Annualized Base Rent | 13.80% |
Industry - Computer System Design & Programming [Member] | |
Concentration Risk [Line Items] | |
Number of Tenants | Tenants | 42 |
Annualized Base Rent | $ | $ 10,250 |
Percentage of Annualized Base Rent | 12.90% |
Industry - Insurance Carriers & Related Activities [Member] | |
Concentration Risk [Line Items] | |
Number of Tenants | Tenants | 28 |
Annualized Base Rent | $ | $ 8,704 |
Percentage of Annualized Base Rent | 11.00% |
REAL ESTATE HELD FOR INVESTME45
REAL ESTATE HELD FOR INVESTMENT (Geographic Concentration Risk) (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 37.70% |
WASHINGTON [Member] | Assets, Total [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 29.20% |
TEXAS [Member] | Assets, Total [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 20.50% |
REAL ESTATE HELD FOR INVESTME46
REAL ESTATE HELD FOR INVESTMENT (Property Damages) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Real Estate Properties [Line Items] | |||
Real estate insurance, maximum deductable per incident | $ 100,000 | ||
Property damages | 2,200,000 | ||
Estimated insurance recoveries | 2,100,000 | ||
Operating, maintenance, and management | 37,512,000 | $ 35,957,000 | $ 22,804,000 |
Proceeds from property damage insurance policies | 600,000 | ||
Estimated insurance recoveries to be collected | 1,500,000 | ||
Damaged Properties [Member] | |||
Real Estate Properties [Line Items] | |||
Operating, maintenance, and management | $ 100,000 |
REAL ESTATE HELD FOR INVESTME47
REAL ESTATE HELD FOR INVESTMENT (Dispositions) (Details) $ in Millions | Nov. 02, 2015USD ($)a | Sep. 10, 2015USD ($)a |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Infrastructure costs contributed to an HOA | $ 4.6 | |
Undeveloped Land [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Area of land sold | a | 11.6 | 14.3 |
Area of land conveyed | a | 11.7 | |
Gain on sale of properties | $ 2.5 | $ 2.2 |
Proceeds from divestiture of businesses | 14.3 | 6.2 |
Undeveloped Land [Member] | Noncontrolling Interest [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Gain on sale of properties | $ 0.3 | $ 0.2 |
TENANT ORIGINATION AND ABSORP48
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Abstract] | |||
Tenant Origination And Absorption Costs, Cost | $ 43,894 | $ 50,807 | |
Tenant Origination and Absorption Costs, Accumulated Amortization | (22,749) | (19,113) | |
Tenant Origination and Absorption Costs, Net Amount | 21,145 | 31,694 | |
Above-Market Lease Assets, Cost | 2,399 | 3,752 | |
Above-Market Lease Assets, Accumulated Amortization | (1,361) | (1,691) | |
Above-Market Lease Assets, Net Amount | 1,038 | 2,061 | |
Below-Market Lease Liabilities, Cost | (5,826) | (7,585) | |
Below-Market Lease Liabilities, Accumulated Amortization | 3,091 | 3,182 | |
Below-Market Lease Liabilities, Net Amount | (2,735) | (4,403) | |
Tenant Origination And Absorption Costs, Amortization | (10,555) | (15,020) | $ (10,942) |
Above-Market Lease Assets, Amortization | (1,023) | (1,070) | (1,456) |
Below-Market Lease Liabilities, Amortization | $ 1,668 | $ 2,409 | $ 1,565 |
TENANT ORIGINATION AND ABSORP49
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES (Remaining Unamortized Balance) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Below Market Lease, Net, Amortization Income, Fiscal Year Maturity [Abstract] | |
2,016 | $ 1,115 |
2,017 | 745 |
2,018 | 488 |
2,019 | 159 |
2,020 | 110 |
Thereafter | 118 |
Net Amount | 2,735 |
Tenant Origination and Absorption Costs [Member] | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
2,016 | (7,417) |
2,017 | (5,209) |
2,018 | (3,383) |
2,019 | (1,998) |
2,020 | (1,282) |
Thereafter | (1,856) |
Net Amount | $ (21,145) |
Below Market Lease, Net, Amortization Income, Fiscal Year Maturity [Abstract] | |
Weighted-Average Remaining Amortization Period | 4 years 1 month 6 days |
Above-Market Lease Assets [Member] | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
2,016 | $ (443) |
2,017 | (275) |
2,018 | (130) |
2,019 | (82) |
2,020 | (63) |
Thereafter | (45) |
Net Amount | $ (1,038) |
Below Market Lease, Net, Amortization Income, Fiscal Year Maturity [Abstract] | |
Weighted-Average Remaining Amortization Period | 3 years 3 months 18 days |
Below-Market Lease Liabilities [Member] | |
Below Market Lease, Net, Amortization Income, Fiscal Year Maturity [Abstract] | |
Weighted-Average Remaining Amortization Period | 3 years 3 months 18 days |
TENANT ORIGINATION AND ABSORP50
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Line Items] | |||
Tax abatement asset | $ 7,200 | $ 8,200 | |
Amortization expense | 44,739 | 47,063 | $ 28,677 |
Property Tax Abatement Intangible Asset [Member] | |||
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Line Items] | |||
Amortization expense | $ 1,000 | $ 900 |
REAL ESTATE LOAN RECEIVABLE (Sc
REAL ESTATE LOAN RECEIVABLE (Schedule of Real Estate Loans Receivable) (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015USD ($)LoansReceivables | Dec. 31, 2014USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of real estate loans and leases receivable | LoansReceivables | 1 | |
Book Value | $ 27,850 | $ 27,422 |
Mortgages [Member] | University House First Mortgage [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Outstanding Principal Balance | $ 27,900 | |
University House First Mortgage [Member] | Mortgages [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Date Originated | Mar. 20, 2013 | |
Outstanding Principal Balance | $ 27,850 | |
Book Value | $ 27,850 | $ 27,422 |
Contractual interest rate, percentage | 16.00% |
REAL ESTATE LOAN RECEIVABLE (52
REAL ESTATE LOAN RECEIVABLE (Schedule of Activity Related to Real Estate Loans Receivable) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Jun. 30, 2015 | |
Receivables [Abstract] | ||
Percent of contractual interest income collected | 11.00% | |
Real Estate Loans Receivable [Roll Forward] | ||
Real estate loan receivable - December 31, 2014 | $ 27,422 | |
Accretion of closing costs, origination fees and extension fees on real estate loan receivable, net | 428 | |
Real estate loan receivable - December 31, 2015 | $ 27,850 |
REAL ESTATE LOAN RECEIVABLE (53
REAL ESTATE LOAN RECEIVABLE (Schedule of Interest Income from Real Estate Loans Receivable) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Receivables [Abstract] | |||
Contractual interest income (including deferred interest) | $ 1,540 | $ 2,752 | $ 8,248 |
Accretion of closing costs, origination fees and extension fees, net | 428 | 614 | 842 |
Interest accretion | 0 | 0 | 1,186 |
Interest income from real estate loans receivable | $ 1,968 | $ 3,366 | $ 10,276 |
REAL ESTATE SALES (Narrative) (
REAL ESTATE SALES (Narrative) (Details) - property | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Number of real estate properties classified as held for sale during period | 0 | |
Office Building [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Number of real estate properties disposed | 2 | 1 |
REAL ESTATE SALES (Revenue and
REAL ESTATE SALES (Revenue and Expenses for Real Estate Held-for-Sale) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Discontinued Operations and Disposal Groups [Abstract] | |||
Total revenues | $ 215 | $ 1,134 | $ 1,017 |
Total expenses | $ 645 | $ 2,473 | $ 3,496 |
REAL ESTATE SALES (Schedule of
REAL ESTATE SALES (Schedule of Operating Income from Discontinued Operations) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Discontinued Operations and Disposal Groups [Abstract] | |||
Total revenues and other income | $ 0 | $ 0 | $ 1,387 |
Total expenses | 0 | 18 | 2,754 |
Loss from discontinued operations before gain on sales of real estate | 0 | (18) | (1,367) |
Gain on sales of real estate, net | 0 | 0 | 13,108 |
Total (loss) income from discontinued operations | $ 0 | $ (18) | $ 11,741 |
NOTES AND BOND PAYABLE (Narrati
NOTES AND BOND PAYABLE (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Notes and Bonds Payable [Abstract] | |||
Interest expense | $ 14,986 | $ 15,598 | $ 2,706 |
Amortization of deferred financing costs, net of discontinued operations | 2,700 | 2,800 | 700 |
Interest capitalized | 1,856 | 1,987 | $ 2,718 |
Interest payable | 1,200 | 1,200 | |
Debt Instrument [Line Items] | |||
Deferred finance costs | 4,700 | $ 6,200 | |
Notes and Bonds Payable [Member] | |||
Debt Instrument [Line Items] | |||
Deferred finance costs | 3,500 | ||
Prepaid Expenses and Other Current Assets [Member] | |||
Debt Instrument [Line Items] | |||
Deferred finance costs | $ 1,200 |
NOTES AND BOND PAYABLE (Schedul
NOTES AND BOND PAYABLE (Schedule of Long-term Debt Instruments) (Details) - USD ($) | May. 01, 2013 | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | |||
Total Notes and Bond Payable principal outstanding | $ 550,796,000 | $ 530,238,000 | |
Net Premium/Discount on Notes and Bond Payable | 50,000 | 25,000 | |
Deferred financing costs, net | (3,523,000) | (6,201,000) | |
Total notes payable and bond payable, net | 547,323,000 | 524,062,000 | |
Richardson Portfolio [Member] | Mortgages [Member] | |||
Debt Instrument [Line Items] | |||
Notes payable | $ 41,177,000 | 38,000,000 | |
Interest rate, effective percentage | 2.34% | ||
Maturity date | May 1, 2017 | ||
Richardson Portfolio [Member] | One-month LIBOR [Member] | Mortgages [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.10% | ||
Bellevue Technology Center [Member] | Mortgages [Member] | |||
Debt Instrument [Line Items] | |||
Notes payable | $ 52,960,000 | 49,836,000 | |
Interest rate, effective percentage | 2.49% | ||
Maturity date | Mar. 1, 2017 | ||
Bellevue Technology Center [Member] | One-month LIBOR [Member] | Mortgages [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.25% | ||
Portfolio Revolving Loan Facility [Member] | Mortgages [Member] | |||
Debt Instrument [Line Items] | |||
Notes payable | $ 47,087,000 | 12,447,000 | |
Interest rate, effective percentage | 2.49% | ||
Maturity date | May 1, 2017 | ||
Portfolio Revolving Loan Facility [Member] | Secured Debt [Member] | Mortgages [Member] | Beginning June 1, 2016 [Member] | |||
Debt Instrument [Line Items] | |||
Principal amortization payment | $ 80,000 | ||
Portfolio Revolving Loan Facility [Member] | Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 59,500,000 | ||
Portfolio Revolving Loan Facility [Member] | Revolving Credit Facility [Member] | Mortgages [Member] | |||
Debt Instrument [Line Items] | |||
Amount outstanding | $ 36,500,000 | ||
Unused borrowing capacity, amount | 23,000,000 | ||
Portfolio Revolving Loan Facility [Member] | Non-Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 13,000,000 | ||
Portfolio Revolving Loan Facility [Member] | Non-Revolving Credit Facility [Member] | Mortgages [Member] | |||
Debt Instrument [Line Items] | |||
Amount outstanding | 10,600,000 | ||
Unused borrowing capacity, amount | $ 2,400,000 | ||
Portfolio Revolving Loan Facility [Member] | One-month LIBOR [Member] | Mortgages [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.25% | ||
Portfolio Mortgage Loan [Member] | Mortgages [Member] | |||
Debt Instrument [Line Items] | |||
Notes payable | $ 100,032,000 | 93,751,000 | |
Interest rate, effective percentage | 2.49% | ||
Maturity date | Jul. 1, 2017 | ||
Portfolio Mortgage Loan [Member] | One-month LIBOR [Member] | Mortgages [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.25% | ||
1635 N. Cahuenga Building [Member] | Mortgages [Member] | |||
Debt Instrument [Line Items] | |||
Notes payable | $ 0 | 4,650,000 | |
1635 N. Cahuenga Building [Member] | One-month LIBOR [Member] | Mortgages [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.35% | ||
Burbank Collection Mortgage Loan [Member] | Mortgages [Member] | |||
Debt Instrument [Line Items] | |||
Notes payable | $ 9,098,000 | 9,043,000 | |
Interest rate, effective percentage | 2.60% | ||
Maturity date | Sep. 30, 2016 | ||
Burbank Collection Mortgage Loan [Member] | One-month LIBOR [Member] | Mortgages [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.35% | ||
50 Congress Mortgage Loan [Member] | Mortgages [Member] | |||
Debt Instrument [Line Items] | |||
Notes payable | $ 28,075,000 | 26,935,000 | |
Interest rate, effective percentage | 2.14% | ||
Maturity date | Oct. 1, 2017 | ||
50 Congress Mortgage Loan [Member] | One-month LIBOR [Member] | Mortgages [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.90% | ||
1180 Raymond Bond [Member] | Mortgages [Member] | |||
Debt Instrument [Line Items] | |||
Bonds payable | $ 6,795,000 | 6,945,000 | |
Contractual interest rate, percentage | 6.50% | ||
Interest rate, effective percentage | 6.50% | ||
Maturity date | Sep. 1, 2036 | ||
Central Building [Member] | Mortgages [Member] | |||
Debt Instrument [Line Items] | |||
Notes payable | $ 24,896,000 | 24,896,000 | |
Interest rate, effective percentage | 1.99% | ||
Maturity date | Nov. 13, 2018 | ||
Central Building [Member] | One-month LIBOR [Member] | Mortgages [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.75% | ||
Maitland Promenade II Mortgage Loan [Member] | Mortgages [Member] | |||
Debt Instrument [Line Items] | |||
Notes payable | $ 20,182,000 | 20,182,000 | |
Interest rate, effective percentage | 3.25% | ||
Maturity date | Jan. 1, 2017 | ||
Maitland Promenade II Mortgage Loan [Member] | Secured Debt [Member] | Mortgages [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate, effective percentage | 3.25% | ||
Maitland Promenade II Mortgage Loan [Member] | One-month LIBOR [Member] | Mortgages [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.90% | ||
Westmoor Center Mortgage Loan [Member] | Mortgages [Member] | |||
Debt Instrument [Line Items] | |||
Notes payable | $ 56,036,000 | 54,880,000 | |
Interest rate, effective percentage | 2.49% | ||
Maturity date | Feb. 1, 2018 | ||
Westmoor Center Mortgage Loan [Member] | One-month LIBOR [Member] | Mortgages [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.25% | ||
Plaza Buildings Senior Loan [Member] | Mortgages [Member] | |||
Debt Instrument [Line Items] | |||
Notes payable | $ 111,000,000 | 109,707,000 | |
Interest rate, effective percentage | 2.14% | ||
Maturity date | Jan. 14, 2017 | ||
Plaza Buildings Mezzanine Loan [Member] | Mortgages [Member] | |||
Debt Instrument [Line Items] | |||
Notes payable | $ 0 | 25,000,000 | |
424 Bedford Mortgage Loan [Member] | Mortgages [Member] | |||
Debt Instrument [Line Items] | |||
Notes payable | $ 25,358,000 | 25,866,000 | |
Contractual interest rate, percentage | 3.91% | ||
Interest rate, effective percentage | 3.91% | ||
Maturity date | Oct. 1, 2022 | ||
1180 Raymond Mortgage Loan [Member] | Mortgages [Member] | |||
Debt Instrument [Line Items] | |||
Notes payable | $ 28,100,000 | $ 28,100,000 | |
Interest rate, effective percentage | 2.49% | ||
Maturity date | Dec. 1, 2017 | ||
1180 Raymond Mortgage Loan [Member] | One-month LIBOR [Member] | Mortgages [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.25% |
NOTES AND BOND PAYABLE (Sched59
NOTES AND BOND PAYABLE (Schedule of Maturities of Long-term Debt) (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Notes and Bonds Payable [Abstract] | |
2,016 | $ 13,649 |
2,017 | 426,026 |
2,018 | 81,182 |
2,019 | 812 |
2,020 | 846 |
Thereafter | 28,281 |
Notes and bond payable outstanding | $ 550,796 |
FAIR VALUE DISCLOSURES (Schedul
FAIR VALUE DISCLOSURES (Schedule of Face Value, Carrying Amounts and Fair Value) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Real estate loans receivable, Face Value | $ 27,850 | $ 27,850 |
Notes and bond payable, Face Value | 550,796 | 530,238 |
Carrying Amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Real estate loans receivable, Value | 27,850 | 27,422 |
Notes and bond payable, Value | 547,323 | 524,062 |
Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Real estate loans receivable, Value | 27,850 | 27,813 |
Notes and bond payable, Value | $ 554,007 | $ 534,045 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Related Party Transaction [Line Items] | |||
Administrative fees, amount paid | $ 153 | $ 141 | $ 134 |
Advisor and Dealer Manager [Member] | |||
Related Party Transaction [Line Items] | |||
Incurred | 8,802 | 11,676 | 7,837 |
Payable as of | 59 | 0 | |
Advisor and Dealer Manager [Member] | Acquisition and Origination Fees on Real Estate Loans Receivable [Member] | |||
Related Party Transaction [Line Items] | |||
Incurred | 0 | 0 | 220 |
Payable as of | 0 | 0 | |
Advisor and Dealer Manager [Member] | Acquisition Fee on Investment in Unconsolidated Joint Venture [Member] | |||
Related Party Transaction [Line Items] | |||
Incurred | 0 | 1,573 | 0 |
Payable as of | 0 | 0 | |
Advisor and Dealer Manager [Member] | Acquisition Fee on Undeveloped Land [Member] | |||
Related Party Transaction [Line Items] | |||
Incurred | 0 | 67 | 199 |
Payable as of | 0 | 0 | |
Advisor and Dealer Manager [Member] | Expensed [Member] | Asset Management Fees [Member] | |||
Related Party Transaction [Line Items] | |||
Expenses | 8,348 | 7,648 | 4,173 |
Payable as of | 0 | 0 | |
Advisor and Dealer Manager [Member] | Expensed [Member] | Real Estate Acquisition Fee [Member] | |||
Related Party Transaction [Line Items] | |||
Expenses | 0 | 2,231 | 2,784 |
Payable as of | 0 | 0 | |
Advisor and Dealer Manager [Member] | Expensed [Member] | Reimbursement of Operating Expenses [Member] | |||
Related Party Transaction [Line Items] | |||
Expenses | 178 | 157 | 139 |
Payable as of | 59 | 0 | |
Advisor and Dealer Manager [Member] | Expensed [Member] | Dispositon Fees [Member] | |||
Related Party Transaction [Line Items] | |||
Expenses | 276 | 0 | $ 322 |
Payable as of | $ 0 | $ 0 |
INVESTMENT IN UNCONSOLIDATED 62
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Investments in Unconsolidated Joint Ventures) (Details) $ in Thousands | Dec. 31, 2015USD ($)property | Dec. 31, 2014USD ($) | May. 02, 2014 |
Schedule of Equity Method Investments [Line Items] | |||
Investment Balance | $ 74,437 | $ 72,045 | |
OCM NIP JV Holdings, L.P. and HC KBS NIP JV, LLC (“HC-KBS”) [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Number of Properties | property | 21 | ||
Investment Balance | $ 5,305 | 5,305 | |
OCM NIP JV Holdings, L.P. and HC KBS NIP JV, LLC (“HC-KBS”) [Member] | Maximum [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership % | 5.00% | ||
110 William Joint Venture [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Number of Properties | property | 1 | ||
Ownership % | 60.00% | 60.00% | |
Investment Balance | $ 69,132 | $ 66,740 |
INVESTMENT IN UNCONSOLIDATED 63
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Narrative) (Details) $ in Thousands | May. 09, 2012USD ($) | Dec. 31, 2015USD ($)ft²property | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | May. 02, 2014ft² | May. 18, 2012ft²property |
Schedule of Equity Method Investments [Line Items] | ||||||
Rentable square feet | ft² | 4,400,000 | |||||
Initial capital contribution | $ 2,760 | $ 58,987 | $ 9,000 | |||
Investments in unconsolidated joint ventures | 74,437 | 72,045 | ||||
Income (loss) from unconsolidated joint venture | 0 | 0 | 95 | |||
Loss from equity method investments | $ 368 | 1,101 | 146 | |||
NIP Joint Venture [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Number of real estate properties | property | 21 | |||||
Rentable square feet | ft² | 10,800,000 | |||||
Initial capital contribution | $ 8,000 | |||||
Investments in unconsolidated joint ventures | $ 5,305 | 5,305 | ||||
Income (loss) from unconsolidated joint venture | 2,200 | 100 | ||||
Return of capital from the joint venture | 400 | |||||
NIP Joint Venture [Member] | Maximum [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest | 5.00% | |||||
NIP Joint Venture [Member] | Industrial [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Number of real estate properties | property | 21 | |||||
110 William Joint Venture [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Number of real estate properties | property | 1 | |||||
Rentable square feet | ft² | 928,157 | |||||
Ownership interest | 60.00% | 60.00% | ||||
Investments in unconsolidated joint ventures | $ 69,132 | 66,740 | ||||
Area of land | ft² | 0.8 | |||||
Unamortized acquisition fees and expenses | 1,600 | |||||
Loss from equity method investments | $ 368 | $ 1,101 | $ 146 | |||
110 William Joint Venture [Member] | 110 William JV Partner [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Noncontrolling interest | 40.00% |
INVESTMENT IN UNCONSOLIDATED 64
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Summarized Financial Information - 110 William Joint Venture) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Balance Sheet Related Disclosures [Abstract] | |||||||||||
Real estate assets, net of accumulated depreciation and amortization | $ 822,514 | $ 845,134 | $ 822,514 | $ 845,134 | |||||||
Total assets | 1,004,214 | 1,016,313 | 1,004,214 | 1,016,313 | |||||||
Other liabilities | 17,905 | 9,192 | 17,905 | 9,192 | |||||||
Total liabilities and equity | 1,004,214 | 1,016,313 | 1,004,214 | 1,016,313 | |||||||
Income Statement [Abstract] | |||||||||||
Revenues | 27,360 | $ 28,158 | $ 28,667 | $ 27,943 | 27,686 | $ 27,598 | $ 26,244 | $ 24,626 | 112,128 | 106,154 | $ 68,496 |
Operating, maintenance, and management | 37,512 | 35,957 | 22,804 | ||||||||
Real estate taxes and insurance | 14,565 | 14,189 | 9,282 | ||||||||
Real estate acquisition fees and expenses | 0 | 2,177 | 1,218 | ||||||||
Depreciation and amortization | 44,739 | 47,063 | 28,677 | ||||||||
Interest expense | 14,986 | 15,598 | 2,706 | ||||||||
Total expenses | 123,396 | 128,860 | 76,132 | ||||||||
Total other income | 18,400 | (1,024) | 7,484 | ||||||||
Net income (loss) attributable to common stockholders | (922) | $ (462) | $ 1,526 | $ 2,235 | (4,879) | $ (3,367) | $ (5,331) | $ (9,617) | 2,444 | (23,194) | 11,493 |
Company’s equity in loss of unconsolidated joint venture | (368) | (1,101) | (146) | ||||||||
Premium on notes payable | 50 | 25 | 50 | 25 | |||||||
Deferred financing costs, net | 3,523 | 6,201 | 3,523 | 6,201 | |||||||
First Mortgage Loan [Member] | |||||||||||
Balance Sheet Related Disclosures [Abstract] | |||||||||||
Notes payable, net | $ 138,600 | 140,700 | $ 138,600 | 140,700 | |||||||
Income Statement [Abstract] | |||||||||||
Contractual interest rate, percentage | 4.80% | 4.80% | |||||||||
Mezzanine Loan [Member] | |||||||||||
Balance Sheet Related Disclosures [Abstract] | |||||||||||
Notes payable, net | $ 20,000 | 20,000 | $ 20,000 | 20,000 | |||||||
Income Statement [Abstract] | |||||||||||
Contractual interest rate, percentage | 9.50% | 9.50% | |||||||||
Premium on notes payable | $ 4,500 | 7,500 | $ 4,500 | 7,500 | |||||||
Deferred financing costs, net | 700 | 1,100 | 700 | 1,100 | |||||||
110 William Joint Venture [Member] | |||||||||||
Balance Sheet Related Disclosures [Abstract] | |||||||||||
Real estate assets, net of accumulated depreciation and amortization | 269,664 | 276,683 | 269,664 | 276,683 | |||||||
Total assets | 18,973 | 14,716 | 18,973 | 14,716 | |||||||
Total assets | 288,637 | 291,399 | 288,637 | 291,399 | |||||||
Notes payable, net | 162,395 | 167,036 | 162,395 | 167,036 | |||||||
Other liabilities | 13,617 | 15,796 | 13,617 | 15,796 | |||||||
Members’ capital | 112,625 | 108,567 | 112,625 | 108,567 | |||||||
Total liabilities and equity | $ 288,637 | $ 291,399 | 288,637 | 291,399 | |||||||
Income Statement [Abstract] | |||||||||||
Revenues | 34,188 | 22,536 | 0 | ||||||||
Operating, maintenance, and management | 10,549 | 6,869 | 0 | ||||||||
Real estate taxes and insurance | 5,748 | 3,476 | 0 | ||||||||
Real estate acquisition fees and expenses | 1 | 1,016 | 244 | ||||||||
Depreciation and amortization | 12,596 | 8,806 | 0 | ||||||||
Interest expense | 6,170 | 4,193 | 0 | ||||||||
Total expenses | 35,064 | 24,360 | 244 | ||||||||
Total other income | 334 | 36 | 0 | ||||||||
Net income (loss) attributable to common stockholders | (542) | (1,788) | (244) | ||||||||
Company’s equity in loss of unconsolidated joint venture | $ (368) | $ (1,101) | $ (146) |
SELECTED QUARTERLY FINANCIAL 65
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 27,360 | $ 28,158 | $ 28,667 | $ 27,943 | $ 27,686 | $ 27,598 | $ 26,244 | $ 24,626 | $ 112,128 | $ 106,154 | $ 68,496 |
Net income (loss) | (682) | (277) | 2,639 | 5,385 | (4,948) | (3,426) | (5,480) | (9,894) | 7,132 | (23,748) | 11,589 |
Net loss attributable to common stockholders | $ (922) | $ (462) | $ 1,526 | $ 2,235 | $ (4,879) | $ (3,367) | $ (5,331) | $ (9,617) | $ 2,444 | $ (23,194) | $ 11,493 |
Net loss per common share, basic and diluted | $ (0.02) | $ (0.01) | $ 0.03 | $ 0.04 | $ (0.08) | $ (0.06) | $ (0.09) | $ (0.16) | $ 0.04 | $ (0.39) | $ 0.20 |
Distributions declared per common share (in dollars per share) | $ 0.095 | $ 0.095 | $ 0.093 | $ 0.092 | $ 0.088 | $ 0.069 | $ 0.056 | $ 0.049 | $ 0.38 | $ 0.26 | $ 0.44 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Earnings Per Share [Abstract] | |||||||||||
Income (loss) from continuing operations | $ 7,132 | $ (23,730) | $ (152) | ||||||||
Loss (income) from continuing operations attributable to noncontrolling interests | (4,688) | 554 | 302 | ||||||||
Income (loss) from continuing operations attributable to common stockholders | 2,444 | (23,176) | 150 | ||||||||
Total (loss) income from discontinued operations | 0 | (18) | 11,741 | ||||||||
Total income from discontinued operations attributable to noncontrolling interests | 0 | 0 | (398) | ||||||||
Total (loss) income from discontinued operations attributable to common stockholders | 0 | (18) | 11,343 | ||||||||
Net income (loss) attributable to common stockholders | $ (922) | $ (462) | $ 1,526 | $ 2,235 | $ (4,879) | $ (3,367) | $ (5,331) | $ (9,617) | $ 2,444 | $ (23,194) | $ 11,493 |
Weighted-average number of common shares outstanding, basic and diluted | 59,656,667 | 59,714,540 | 58,359,568 | ||||||||
Basic and diluted (loss) income per common share: | |||||||||||
Continuing operations (in dollars per share) | $ 0.04 | $ (0.39) | $ 0 | ||||||||
Discontinued operations (in dollars per share) | 0 | 0 | 0.20 | ||||||||
Net (loss) income per common share (in dollars per share) | $ (0.02) | $ (0.01) | $ 0.03 | $ 0.04 | $ (0.08) | $ (0.06) | $ (0.09) | $ (0.16) | $ 0.04 | $ (0.39) | $ 0.20 |
SUBSEQUENT EVENTS (Distribution
SUBSEQUENT EVENTS (Distribution Declared) (Details) - $ / shares | Mar. 09, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Subsequent Event [Line Items] | ||||||||||||
Distributions declared per common share (in dollars per share) | $ 0.095 | $ 0.095 | $ 0.093 | $ 0.092 | $ 0.088 | $ 0.069 | $ 0.056 | $ 0.049 | $ 0.38 | $ 0.26 | $ 0.44 | |
Subsequent Event [Member] | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Distributions declared per common share (in dollars per share) | $ 0.09323770 |
SUBSEQUENT EVENTS (Bond Financi
SUBSEQUENT EVENTS (Bond Financing) (Details) - Subsequent Event [Member] - Series A Debentures [Member] - Bonds Payable [Member] $ in Millions | Mar. 23, 2016USD ($) | Mar. 23, 2016ILS (â‚Ş) | Mar. 07, 2016 | Mar. 07, 2016USD ($) | Mar. 07, 2016ILS (â‚Ş) | Mar. 02, 2016USD ($) | Mar. 02, 2016ILS (â‚Ş) | Mar. 01, 2016ILS (â‚Ş) | Mar. 23, 2016USD ($) | Mar. 23, 2016ILS (â‚Ş) | Mar. 02, 2016ILS (â‚Ş) |
Subsequent Event [Line Items] | |||||||||||
Maximum borrowing capacity | â‚Ş | â‚Ş 1,000,000,000 | ||||||||||
Interest rate during period | 4.25% | ||||||||||
Proceeds from issuance of debt | $ 239.2 | â‚Ş 918,800,000 | â‚Ş 127,700,000 | â‚Ş 842,500,000 | $ 250 | â‚Ş 970,200,000 | |||||
Principal installment payments required as percent of total debt | 20.00% | 20.00% | |||||||||
Payments of debt issuance costs | $ 7.8 | â‚Ş 30,500,000 | |||||||||
Interest reserves, funded amount | 5.1 | 20,000,000 | |||||||||
Required expense reserve | $ 0.3 | â‚Ş 1,000,000 | |||||||||
Debt issuance cost | $ | $ 9.7 | $ 1.9 | |||||||||
Maximum [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Interest rate during period | 4.25% | 4.25% |
SCHEDULE III REAL ESTATE ASSE69
SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Real Estate and Accumulated Depreciation [Line Items] | ||||
Gross Amount at which Carried at Close of Period, Total | $ 914,074 | $ 919,259 | $ 668,018 | $ 326,154 |
Accumulated Depreciation and Amortization | (91,560) | $ (64,171) | $ (29,859) | $ (8,521) |
Aggregate cost of real estate for federal income tax purposes | 957,100 | |||
Debt, outstanding amount | 550,796 | |||
Properties Held for Investment [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Initial Cost to Company, Land | 209,380 | |||
Initial Cost to Company, Building and Improvements | 639,780 | |||
Initial Cost to Company, Total | 849,160 | |||
Cost Capitalized Subsequent to Acquisition | 64,914 | |||
Gross Amount at which Carried at Close of Period, Land | 223,201 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 690,873 | |||
Gross Amount at which Carried at Close of Period, Total | 914,074 | |||
Accumulated Depreciation and Amortization | $ (91,560) | |||
Northridge Center I & II [Member] | Properties Held for Investment [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Initial Cost to Company, Land | $ 2,234 | |||
Initial Cost to Company, Building and Improvements | 4,457 | |||
Initial Cost to Company, Total | 6,691 | |||
Cost Capitalized Subsequent to Acquisition | 2,713 | |||
Gross Amount at which Carried at Close of Period, Land | 2,234 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 7,170 | |||
Gross Amount at which Carried at Close of Period, Total | 9,404 | |||
Accumulated Depreciation and Amortization | $ (1,986) | |||
Original Date of Construction | 1985/1989 | |||
Date Acquired or Foreclosed on | Mar. 25, 2011 | |||
Iron Point Business Park [Member] | Properties Held for Investment [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Initial Cost to Company, Land | $ 2,671 | |||
Initial Cost to Company, Building and Improvements | 16,576 | |||
Initial Cost to Company, Total | 19,247 | |||
Cost Capitalized Subsequent to Acquisition | 2,869 | |||
Gross Amount at which Carried at Close of Period, Land | 2,671 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 19,445 | |||
Gross Amount at which Carried at Close of Period, Total | 22,116 | |||
Accumulated Depreciation and Amortization | $ (3,763) | |||
Original Date of Construction | 1999/2001 | |||
Date Acquired or Foreclosed on | Jun. 21, 2011 | |||
Richardson Portfolio [Member] | Secured Debt [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Debt, outstanding amount | $ 41,200 | |||
Richardson Portfolio [Member] | Properties Held for Investment [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 41,177 | |||
Initial Cost to Company, Land | 5,107 | |||
Initial Cost to Company, Building and Improvements | 30,998 | |||
Initial Cost to Company, Total | 36,105 | |||
Cost Capitalized Subsequent to Acquisition | 6,690 | |||
Gross Amount at which Carried at Close of Period, Land | 6,168 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 36,627 | |||
Gross Amount at which Carried at Close of Period, Total | 42,795 | |||
Accumulated Depreciation and Amortization | $ (8,757) | |||
Palisades Central I [Member] | Properties Held for Investment [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 90.00% | |||
Initial Cost to Company, Land | $ 1,037 | |||
Initial Cost to Company, Building and Improvements | 8,628 | |||
Initial Cost to Company, Total | 9,665 | |||
Cost Capitalized Subsequent to Acquisition | 2,091 | |||
Gross Amount at which Carried at Close of Period, Land | 1,037 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 10,719 | |||
Gross Amount at which Carried at Close of Period, Total | 11,756 | |||
Accumulated Depreciation and Amortization | $ (2,028) | |||
Original Date of Construction | 1,980 | |||
Date Acquired or Foreclosed on | Nov. 23, 2011 | |||
Palisades Central II [Member] | Properties Held for Investment [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 90.00% | |||
Initial Cost to Company, Land | $ 810 | |||
Initial Cost to Company, Building and Improvements | 17,117 | |||
Initial Cost to Company, Total | 17,927 | |||
Cost Capitalized Subsequent to Acquisition | 1,922 | |||
Gross Amount at which Carried at Close of Period, Land | 810 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 19,039 | |||
Gross Amount at which Carried at Close of Period, Total | 19,849 | |||
Accumulated Depreciation and Amortization | $ (4,600) | |||
Original Date of Construction | 1,985 | |||
Date Acquired or Foreclosed on | Nov. 23, 2011 | |||
Greenway I [Member] | Properties Held for Investment [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 90.00% | |||
Initial Cost to Company, Land | $ 561 | |||
Initial Cost to Company, Building and Improvements | 1,170 | |||
Initial Cost to Company, Total | 1,731 | |||
Cost Capitalized Subsequent to Acquisition | 986 | |||
Gross Amount at which Carried at Close of Period, Land | 561 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 2,156 | |||
Gross Amount at which Carried at Close of Period, Total | 2,717 | |||
Accumulated Depreciation and Amortization | $ (568) | |||
Original Date of Construction | 1,983 | |||
Date Acquired or Foreclosed on | Nov. 23, 2011 | |||
Greenway III [Member] | Properties Held for Investment [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 90.00% | |||
Initial Cost to Company, Land | $ 702 | |||
Initial Cost to Company, Building and Improvements | 4,083 | |||
Initial Cost to Company, Total | 4,785 | |||
Cost Capitalized Subsequent to Acquisition | 630 | |||
Gross Amount at which Carried at Close of Period, Land | 702 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 4,713 | |||
Gross Amount at which Carried at Close of Period, Total | 5,415 | |||
Accumulated Depreciation and Amortization | $ (1,561) | |||
Original Date of Construction | 1,983 | |||
Date Acquired or Foreclosed on | Nov. 23, 2011 | |||
Undeveloped Land [Member] | Properties Held for Investment [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 90.00% | |||
Initial Cost to Company, Land | $ 1,997 | |||
Initial Cost to Company, Building and Improvements | 0 | |||
Initial Cost to Company, Total | 1,997 | |||
Cost Capitalized Subsequent to Acquisition | 1,061 | |||
Gross Amount at which Carried at Close of Period, Land | 3,058 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 0 | |||
Gross Amount at which Carried at Close of Period, Total | 3,058 | |||
Accumulated Depreciation and Amortization | $ 0 | |||
Date Acquired or Foreclosed on | Nov. 23, 2011 | |||
Park Highlands [Member] | Properties Held for Investment [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 50.10% | |||
Encumbrances | $ 0 | |||
Initial Cost to Company, Land | 20,307 | |||
Initial Cost to Company, Building and Improvements | 0 | |||
Initial Cost to Company, Total | 20,307 | |||
Cost Capitalized Subsequent to Acquisition | 10,388 | |||
Gross Amount at which Carried at Close of Period, Land | 30,695 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 0 | |||
Gross Amount at which Carried at Close of Period, Total | 30,695 | |||
Accumulated Depreciation and Amortization | $ 0 | |||
Date Acquired or Foreclosed on | Dec. 30, 2011 | |||
Bellevue Technology Center [Member] | Properties Held for Investment [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Encumbrances | $ 52,960 | |||
Initial Cost to Company, Land | 25,506 | |||
Initial Cost to Company, Building and Improvements | 52,411 | |||
Initial Cost to Company, Total | 77,917 | |||
Cost Capitalized Subsequent to Acquisition | 7,265 | |||
Gross Amount at which Carried at Close of Period, Land | 25,506 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 59,676 | |||
Gross Amount at which Carried at Close of Period, Total | 85,182 | |||
Accumulated Depreciation and Amortization | $ (8,107) | |||
Original Date of Construction | 1973-2000 | |||
Date Acquired or Foreclosed on | Jul. 31, 2012 | |||
Powers Ferry Landing East [Member] | Properties Held for Investment [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Initial Cost to Company, Land | $ 1,643 | |||
Initial Cost to Company, Building and Improvements | 3,761 | |||
Initial Cost to Company, Total | 5,404 | |||
Cost Capitalized Subsequent to Acquisition | 4,383 | |||
Gross Amount at which Carried at Close of Period, Land | 1,643 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 8,144 | |||
Gross Amount at which Carried at Close of Period, Total | 9,787 | |||
Accumulated Depreciation and Amortization | $ (1,607) | |||
Original Date of Construction | 1980/1982/1985 | |||
Date Acquired or Foreclosed on | Sep. 24, 2012 | |||
1800 West Loop [Member] | Properties Held for Investment [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Initial Cost to Company, Land | $ 8,360 | |||
Initial Cost to Company, Building and Improvements | 59,292 | |||
Initial Cost to Company, Total | 67,652 | |||
Cost Capitalized Subsequent to Acquisition | 6,686 | |||
Gross Amount at which Carried at Close of Period, Land | 8,360 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 65,978 | |||
Gross Amount at which Carried at Close of Period, Total | 74,338 | |||
Accumulated Depreciation and Amortization | $ (10,360) | |||
Original Date of Construction | 1,982 | |||
Date Acquired or Foreclosed on | Dec. 4, 2012 | |||
West Loop I & II [Member] | Properties Held for Investment [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Initial Cost to Company, Land | $ 7,300 | |||
Initial Cost to Company, Building and Improvements | 29,742 | |||
Initial Cost to Company, Total | 37,042 | |||
Cost Capitalized Subsequent to Acquisition | 2,731 | |||
Gross Amount at which Carried at Close of Period, Land | 7,300 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 32,473 | |||
Gross Amount at which Carried at Close of Period, Total | 39,773 | |||
Accumulated Depreciation and Amortization | $ (4,582) | |||
Original Date of Construction | 1980/1981 | |||
Date Acquired or Foreclosed on | Dec. 7, 2012 | |||
Burbank Collection [Member] | Properties Held for Investment [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 90.00% | |||
Encumbrances | $ 9,098 | |||
Initial Cost to Company, Land | 4,175 | |||
Initial Cost to Company, Building and Improvements | 8,799 | |||
Initial Cost to Company, Total | 12,974 | |||
Cost Capitalized Subsequent to Acquisition | 1,374 | |||
Gross Amount at which Carried at Close of Period, Land | 4,175 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 10,173 | |||
Gross Amount at which Carried at Close of Period, Total | 14,348 | |||
Accumulated Depreciation and Amortization | $ (1,284) | |||
Original Date of Construction | 2,008 | |||
Date Acquired or Foreclosed on | Dec. 12, 2012 | |||
Austin Suburban Portfolio [Member] | Properties Held for Investment [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Initial Cost to Company, Land | $ 8,288 | |||
Initial Cost to Company, Building and Improvements | 67,745 | |||
Initial Cost to Company, Total | 76,033 | |||
Cost Capitalized Subsequent to Acquisition | 2,812 | |||
Gross Amount at which Carried at Close of Period, Land | 8,288 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 70,557 | |||
Gross Amount at which Carried at Close of Period, Total | 78,845 | |||
Accumulated Depreciation and Amortization | $ (9,230) | |||
Original Date of Construction | 1985/1986/2000 | |||
Date Acquired or Foreclosed on | Mar. 28, 2013 | |||
Westmoor Center [Member] | Properties Held for Investment [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Encumbrances | $ 56,036 | |||
Initial Cost to Company, Land | 10,058 | |||
Initial Cost to Company, Building and Improvements | 73,510 | |||
Initial Cost to Company, Total | 83,568 | |||
Cost Capitalized Subsequent to Acquisition | 1,463 | |||
Gross Amount at which Carried at Close of Period, Land | 10,058 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 74,973 | |||
Gross Amount at which Carried at Close of Period, Total | 85,031 | |||
Accumulated Depreciation and Amortization | $ (13,542) | |||
Original Date of Construction | 1998/1999 | |||
Date Acquired or Foreclosed on | Jun. 12, 2013 | |||
Central Building [Member] | Properties Held for Investment [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Encumbrances | $ 24,896 | |||
Initial Cost to Company, Land | 7,015 | |||
Initial Cost to Company, Building and Improvements | 26,124 | |||
Initial Cost to Company, Total | 33,139 | |||
Cost Capitalized Subsequent to Acquisition | 1,973 | |||
Gross Amount at which Carried at Close of Period, Land | 7,015 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 28,097 | |||
Gross Amount at which Carried at Close of Period, Total | 35,112 | |||
Accumulated Depreciation and Amortization | $ (3,188) | |||
Original Date of Construction | 1,907 | |||
Date Acquired or Foreclosed on | Jul. 10, 2013 | |||
50 Congress Street [Member] | Properties Held for Investment [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Encumbrances | $ 28,075 | |||
Initial Cost to Company, Land | 9,876 | |||
Initial Cost to Company, Building and Improvements | 43,455 | |||
Initial Cost to Company, Total | 53,331 | |||
Cost Capitalized Subsequent to Acquisition | (90) | |||
Gross Amount at which Carried at Close of Period, Land | 9,876 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 43,365 | |||
Gross Amount at which Carried at Close of Period, Total | 53,241 | |||
Accumulated Depreciation and Amortization | $ (4,943) | |||
Original Date of Construction | 1910/1915 | |||
Date Acquired or Foreclosed on | Jul. 11, 2013 | |||
1180 Raymond [Member] | Properties Held for Investment [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Encumbrances | $ 34,895 | |||
Initial Cost to Company, Land | 8,292 | |||
Initial Cost to Company, Building and Improvements | 37,651 | |||
Initial Cost to Company, Total | 45,943 | |||
Cost Capitalized Subsequent to Acquisition | (557) | |||
Gross Amount at which Carried at Close of Period, Land | 8,292 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 37,094 | |||
Gross Amount at which Carried at Close of Period, Total | 45,386 | |||
Accumulated Depreciation and Amortization | $ (2,769) | |||
Original Date of Construction | 1,929 | |||
Date Acquired or Foreclosed on | Aug. 20, 2013 | |||
Park Highlands II [Member] | Properties Held for Investment [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 99.50% | |||
Encumbrances | $ 0 | |||
Initial Cost to Company, Land | 20,118 | |||
Initial Cost to Company, Building and Improvements | 0 | |||
Initial Cost to Company, Total | 20,118 | |||
Cost Capitalized Subsequent to Acquisition | 2,074 | |||
Gross Amount at which Carried at Close of Period, Land | 22,192 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 0 | |||
Gross Amount at which Carried at Close of Period, Total | 22,192 | |||
Accumulated Depreciation and Amortization | $ 0 | |||
Date Acquired or Foreclosed on | Dec. 10, 2013 | |||
Maitland Promenade II [Member] | Properties Held for Investment [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Encumbrances | $ 20,182 | |||
Initial Cost to Company, Land | 3,434 | |||
Initial Cost to Company, Building and Improvements | 27,282 | |||
Initial Cost to Company, Total | 30,716 | |||
Cost Capitalized Subsequent to Acquisition | 838 | |||
Gross Amount at which Carried at Close of Period, Land | 3,434 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 28,120 | |||
Gross Amount at which Carried at Close of Period, Total | 31,554 | |||
Accumulated Depreciation and Amortization | $ (3,668) | |||
Original Date of Construction | 2,001 | |||
Date Acquired or Foreclosed on | Dec. 18, 2013 | |||
Plaza Buildings [Member] | Properties Held for Investment [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Encumbrances | $ 111,000 | |||
Initial Cost to Company, Land | 53,040 | |||
Initial Cost to Company, Building and Improvements | 133,157 | |||
Initial Cost to Company, Total | 186,197 | |||
Cost Capitalized Subsequent to Acquisition | 10,597 | |||
Gross Amount at which Carried at Close of Period, Land | 53,040 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 143,754 | |||
Gross Amount at which Carried at Close of Period, Total | 196,794 | |||
Accumulated Depreciation and Amortization | $ (12,458) | |||
Original Date of Construction | 1978/1983 | |||
Date Acquired or Foreclosed on | Jan. 14, 2014 | |||
424 Bedford [Member] | Properties Held for Investment [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 90.00% | |||
Encumbrances | $ 25,358 | |||
Initial Cost to Company, Land | 8,860 | |||
Initial Cost to Company, Building and Improvements | 24,820 | |||
Initial Cost to Company, Total | 33,680 | |||
Cost Capitalized Subsequent to Acquisition | 407 | |||
Gross Amount at which Carried at Close of Period, Land | 8,860 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 25,227 | |||
Gross Amount at which Carried at Close of Period, Total | 34,087 | |||
Accumulated Depreciation and Amortization | $ (1,316) | |||
Original Date of Construction | 2,010 | |||
Date Acquired or Foreclosed on | Jan. 31, 2014 | |||
Richardson Land II [Member] | Properties Held for Investment [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 90.00% | |||
Encumbrances | $ 0 | |||
Initial Cost to Company, Land | 3,096 | |||
Initial Cost to Company, Building and Improvements | 0 | |||
Initial Cost to Company, Total | 3,096 | |||
Cost Capitalized Subsequent to Acquisition | 298 | |||
Gross Amount at which Carried at Close of Period, Land | 3,394 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 0 | |||
Gross Amount at which Carried at Close of Period, Total | 3,394 | |||
Accumulated Depreciation and Amortization | $ 0 | |||
Date Acquired or Foreclosed on | Sep. 4, 2014 | |||
1800 West Loop and Iron Point Business Park [Member] | Secured Debt [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Debt, outstanding amount | $ 47,100 | |||
Northridge Center I & II, Powers Ferry Landing East, West Loop I & II and the Austin Suburban Portfolio [Member] | Secured Debt [Member] | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Debt, outstanding amount | $ 100,000 |
SCHEDULE III REAL ESTATE ASSE70
SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION (Reconciliation) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Real Estate | |||
Balance at the beginning of the year | $ 919,259 | $ 668,018 | $ 326,154 |
Acquisitions | 0 | 227,339 | 342,985 |
Improvements | 32,385 | 36,942 | 24,670 |
Write-off of fully depreciated and fully amortized assets | (13,212) | (10,362) | (5,835) |
Impairments | 0 | (697) | (2,025) |
Loss due to property damages | (2,260) | (707) | 0 |
Sales | (22,098) | (1,274) | (17,931) |
Balance at the end of the year | 914,074 | 919,259 | 668,018 |
Accumulated depreciation and amortization: | |||
Balance at the beginning of the year | 64,171 | 29,859 | 8,521 |
Depreciation and amortization expense | 41,513 | 44,848 | 28,956 |
Write-off of fully depreciated and fully amortized assets | (13,212) | (10,362) | (5,835) |
Impairments | 0 | (118) | (638) |
Sales | (912) | (56) | (1,145) |
Balance at the end of the year | $ 91,560 | $ 64,171 | $ 29,859 |