Document and Entity Information
Document and Entity Information Document - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 05, 2018 | Jun. 30, 2017 | |
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, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 64,700,782 | ||
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, 2017 | Dec. 31, 2016 |
Assets | ||
Real estate held for investment, net | $ 532,867 | $ 537,090 |
Real estate held for sale, net | 0 | 569,941 |
Real estate equity securities, net | 90,063 | 0 |
Real estate debt securities, net | 17,751 | 4,683 |
Total real estate and real estate-related investments, net | 640,681 | 1,111,714 |
Cash and cash equivalents | 366,512 | 40,432 |
Restricted cash | 10,670 | 24,018 |
Investments in unconsolidated joint ventures | 55,577 | 75,849 |
Rents and other receivables, net | 9,821 | 6,932 |
Above-market leases, net | 131 | 204 |
Prepaid expenses and other assets | 18,182 | 15,794 |
Assets related to real estate held for sale, net | 0 | 35,173 |
Total assets | 1,101,574 | 1,310,116 |
Notes and bonds payable, net | ||
Notes and bonds payable related to real estate held for investment, net | 603,043 | 573,928 |
Notes payable related to real estate held for sale, net | 0 | 376,696 |
Total notes and bonds payable, net | 603,043 | 950,624 |
Accounts payable and accrued liabilities | 16,686 | 26,624 |
Due to affiliate | 26 | 55 |
Distribution payable | 187,914 | 0 |
Below-market leases, net | 2,843 | 5,088 |
Liabilities related to real estate held for sale, net | 0 | 1,463 |
Other liabilities | 16,966 | 18,095 |
Redeemable common stock payable | 8,595 | 12,617 |
Total liabilities | 836,073 | 1,014,566 |
Commitments and contingencies (Note 15) | ||
Redeemable common stock | 4,518 | 0 |
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, 52,053,817 and 56,775,767 shares issued and outstanding as of December 31, 2017 and 2016, respectively | 521 | 568 |
Additional paid-in capital | 388,800 | 455,373 |
Accumulated other comprehensive income | 25,146 | 0 |
Cumulative distributions and net income | (155,454) | (162,289) |
Total KBS Strategic Opportunity REIT, Inc. stockholders’ equity | 259,013 | 293,652 |
Noncontrolling interests | 1,970 | 1,898 |
Total equity | 260,983 | 295,550 |
Total liabilities and equity | $ 1,101,574 | $ 1,310,116 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 52,053,817 | 56,775,767 |
Common stock, shares outstanding (in shares) | 52,053,817 | 56,775,767 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues: | |||
Rental income | $ 110,690 | $ 106,330 | $ 88,543 |
Tenant reimbursements | 21,710 | 20,762 | 18,313 |
Other operating income | 4,001 | 3,387 | 3,304 |
Interest income from real estate debt securities | 1,782 | 110 | 0 |
Dividend income from real estate equity securities | 2,531 | 0 | 0 |
Interest income from real estate loan receivable | 0 | 3,655 | 1,968 |
Total revenues | 140,714 | 134,244 | 112,128 |
Expenses: | |||
Operating, maintenance, and management | 42,611 | 41,906 | 37,512 |
Real estate taxes and insurance | 17,404 | 16,887 | 14,565 |
Asset management fees to affiliate | 10,686 | 9,628 | 8,348 |
Real estate acquisition fees to affiliate | 0 | 2,964 | 0 |
Real estate acquisition fees and expenses | 0 | 543 | 0 |
General and administrative expenses | 6,138 | 5,781 | 3,246 |
Foreign currency transaction loss, net | (15,298) | (2,997) | 0 |
Depreciation and amortization | 53,446 | 52,051 | 44,739 |
Interest expense | 37,149 | 29,249 | 14,986 |
Total expenses | 182,732 | 162,006 | 123,396 |
Other income (loss): | |||
Income from unconsolidated joint venture | 2,073 | 0 | 0 |
Other interest income | 1,105 | 44 | 18 |
Equity in loss of unconsolidated joint ventures | (6,037) | (1,408) | (368) |
Gain on sale of real estate | 255,935 | 0 | 13,665 |
Loss on extinguishment of debt | (478) | 0 | 0 |
Other income | 0 | 0 | 5,085 |
Total other income (loss), net | 252,598 | (1,364) | 18,400 |
Net income (loss) | 210,580 | (29,126) | 7,132 |
Net loss (income) attributable to noncontrolling interests | 64 | 208 | (4,688) |
Net income (loss) attributable to common stockholders | $ 210,644 | $ (28,918) | $ 2,444 |
Net income (loss) per common share, basic and diluted (in dollars per share) | $ 3.77 | $ (0.50) | $ 0.04 |
Weighted-average number of common shares outstanding, basic and diluted (in shares) | 55,829,708 | 58,273,335 | 59,656,667 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 210,580 | $ (29,126) | $ 7,132 |
Other comprehensive income: | |||
Unrealized gain on real estate securities | 25,146 | 0 | 0 |
Total other comprehensive income | 25,146 | 0 | 0 |
Total comprehensive income (loss) | 235,726 | (29,126) | 7,132 |
Total comprehensive loss (income) attributable to noncontrolling interests | 64 | 208 | (4,688) |
Total comprehensive income (loss) attributable to common stockholders | $ 235,790 | $ (28,918) | $ 2,444 |
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 Income | Accumulated Other Comprehensive Income | Noncontrolling Interests |
Balance (in shares) at Dec. 31, 2014 | 60,044,329 | ||||||
Balance 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 (in 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 (in 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 interests | (7,342) | (7,342) | |||||
Balance (in shares) at Dec. 31, 2015 | 58,696,115 | ||||||
Balance at Dec. 31, 2015 | 408,790 | 393,363 | $ 587 | 504,303 | (111,527) | 0 | 15,427 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (29,126) | (28,918) | (28,918) | (208) | |||
Other comprehensive income | 0 | ||||||
Issuance of common stock (in shares) | 938,662 | ||||||
Issuance of common stock | 12,616 | 12,616 | $ 9 | 12,607 | |||
Transfers from redeemable common stock | 957 | 957 | 957 | ||||
Redemptions of common stock (in shares) | (2,859,010) | ||||||
Redemptions of common stock | (38,573) | (38,573) | $ (28) | (38,545) | |||
Distributions declared | (21,844) | (21,844) | (21,844) | ||||
Acquisitions of noncontrolling interests | (37,986) | (23,942) | (23,942) | (14,044) | |||
Other offering costs | (7) | (7) | (7) | ||||
Noncontrolling interests contributions | 803 | 803 | |||||
Distributions to noncontrolling interests | $ (80) | (80) | |||||
Balance (in shares) at Dec. 31, 2016 | 56,775,767 | 56,775,767 | |||||
Balance at Dec. 31, 2016 | $ 295,550 | 293,652 | $ 568 | 455,373 | (162,289) | 0 | 1,898 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | 210,580 | 210,644 | 210,644 | (64) | |||
Other comprehensive income | 25,146 | 25,146 | 25,146 | ||||
Issuance of common stock (in shares) | 585,192 | ||||||
Issuance of common stock | 8,666 | 8,666 | $ 6 | 8,660 | |||
Transfers to redeemable common stock | (498) | (498) | (498) | ||||
Redemptions of common stock (in shares) | (5,307,142) | ||||||
Redemptions of common stock | (74,780) | (74,780) | $ (53) | (74,727) | |||
Distributions declared | (203,809) | (203,809) | (203,809) | ||||
Other offering costs | (8) | (8) | (8) | ||||
Noncontrolling interests contributions | 158 | 158 | |||||
Distributions to noncontrolling interests | $ (22) | (22) | |||||
Balance (in shares) at Dec. 31, 2017 | 52,053,817 | 52,053,817 | |||||
Balance at Dec. 31, 2017 | $ 260,983 | $ 259,013 | $ 521 | $ 388,800 | $ (155,454) | $ 25,146 | $ 1,970 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash Flows from Operating Activities: | |||
Net income (loss) | $ 210,580 | $ (29,126) | $ 7,132 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Loss due to property damages | 668 | 1,938 | 2,260 |
Equity in loss of unconsolidated joint ventures | 6,037 | 1,408 | 368 |
Depreciation and amortization | 53,446 | 52,051 | 44,739 |
Non-cash interest income on real estate related investments | 0 | 0 | (428) |
Gain on sale of real estate | (255,935) | 0 | (13,665) |
Loss on extinguishment of debt | 478 | 0 | 0 |
Other income | 0 | 0 | (5,085) |
Unrealized loss on interest rate caps | 105 | 3 | 0 |
Deferred rent | (2,416) | (3,084) | (4,499) |
Bad debt expense | 724 | 875 | 331 |
Amortization of above- and below-market leases, net | (2,575) | (2,330) | (645) |
Amortization of deferred financing costs | 4,363 | 4,289 | 2,703 |
Interest accretion on real estate debt securities | (565) | (47) | 0 |
Net amortization of discount and (premium) on bond and notes payable | 49 | 38 | 25 |
Foreign currency transaction loss, net | 15,298 | 2,997 | 0 |
Changes in assets and liabilities: | |||
Rents and other receivables | (1,810) | (2,128) | (1,126) |
Prepaid expenses and other assets | (5,995) | (8,498) | (7,884) |
Accounts payable and accrued liabilities | (4,270) | 5,809 | 595 |
Due to affiliates | (29) | (4) | 59 |
Other liabilities | (4,721) | 2,465 | 975 |
Net cash provided by operating activities | 13,432 | 26,656 | 25,855 |
Cash Flows from Investing Activities: | |||
Acquisitions of real estate | (165,465) | (293,831) | 0 |
Improvements to real estate | (41,224) | (30,581) | (35,548) |
Proceeds from sales of real estate, net | 872,091 | 0 | 38,772 |
Escrow deposits for future real estate purchases | 0 | (2,000) | 0 |
Principal proceeds from assignment of real estate loan receivable | 0 | 27,850 | 0 |
Proceeds from condemnation proceeds | 0 | 0 | 5,915 |
Insurance proceeds received for property damages | 744 | 2,453 | 894 |
Purchase of interest rate cap | (107) | (15) | 0 |
Purchase of foreign currency option | (3,434) | 0 | 0 |
Proceeds from termination of foreign currency collars | 6,557 | 0 | 0 |
Investment in unconsolidated joint venture | 0 | (2,820) | (2,760) |
Distribution of capital from unconsolidated joint venture | 59,800 | 0 | 0 |
Investment in real estate equity securities | (43,308) | 0 | 0 |
Investment in real estate debt securities, net | (12,514) | (4,625) | 0 |
Proceeds for future development obligations | 1,367 | 0 | 0 |
Funding of development obligations | (1,184) | (2,926) | (515) |
Net cash provided by (used in) investing activities | 673,323 | (306,495) | 6,758 |
Cash Flows from Financing Activities: | |||
Proceeds from notes and bonds payable | 187,204 | 564,336 | 61,189 |
Principal payments on notes and bonds payable | (477,089) | (154,802) | (40,631) |
Payments of deferred financing costs | (2,396) | (12,377) | (826) |
Payments to redeem common stock | (74,780) | (38,573) | (30,100) |
Payment of prepaid other offering costs | (480) | (865) | (9) |
Distributions paid | (7,229) | (9,228) | (8,707) |
Noncontrolling interests contributions | 158 | 803 | 1,343 |
Distributions to noncontrolling interests | (22) | (80) | (7,342) |
Acquisitions of noncontrolling interests | 0 | (37,986) | 0 |
Other financing proceeds, net | 0 | 647 | 0 |
Net cash (used in) provided by financing activities | (374,634) | 311,875 | (25,083) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 611 | 3,549 | 0 |
Net increase in cash, cash equivalents and restricted cash | 312,732 | 35,585 | 7,530 |
Cash, cash equivalents and restricted cash, beginning of period | 64,450 | 28,865 | 21,335 |
Cash, cash equivalents and restricted cash, end of period | $ 377,182 | $ 64,450 | $ 28,865 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 2017 | |
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 (BVI) Holdings, Ltd. (“KBS Strategic Opportunity BVI”), a private company limited by shares according to the British Virgin Islands Business Companies Act, 2004, which was incorporated on December 18, 2015 and is authorized to issue a maximum of 50,000 common shares with no par value. Upon incorporation, KBS Strategic Opportunity BVI issued one certificate containing 10,000 common shares with no par value to 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, 2017 (the “Advisory Agreement”). The Advisor conducts the Company’s operations and manages its portfolio of real estate, real estate-related debt securities and other real estate-related investments. 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, 2017 , the Company had sold 6,620,362 shares of common stock under its dividend reinvestment plan for gross offering proceeds of $74.0 million . Also, as of December 31, 2017 , the Company had redeemed 11,447,764 shares for $151.8 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. On March 2, 2016, KBS Strategic Opportunity BVI 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 Strategic Opportunity BVI commenced the institutional tender of the Debentures and accepted application for 842.5 million Israeli new Shekels. On March 7, 2016, KBS Strategic Opportunity BVI commenced the public tender of the Debentures and accepted 127.7 million Israeli new Shekels. In the aggregate, KBS Strategic Opportunity BVI accepted 970.2 million Israeli new Shekels (approximately $249.2 million as of March 8, 2016 ) in both the institutional and public tenders at an annual interest rate of 4.25% . KBS Strategic Opportunity 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. In connection with the above-referenced offering, on March 8, 2016, the Operating Partnership assigned to KBS Strategic Opportunity 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 Strategic Opportunity BVI. As a result of these transactions, the Company now holds all of its real estate and real estate-related investments indirectly through KBS Strategic Opportunity BVI. As of December 31, 2017 , the Company consolidated four office properties, one office portfolio consisting of four office buildings and 14 acres of undeveloped land, one office/flex/industrial portfolio consisting of 21 buildings, one retail property, two apartment properties, three investments in undeveloped land with approximately 1,100 developable acres. The Company also owned three investments in unconsolidated joint ventures, an investment in real estate debt securities and two investments in real estate equity securities. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
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, KBS Strategic Opportunity BVI 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 the prior period. During the year ended December 31, 2017 , the Company disposed of 12 office properties. As a result, certain assets and liabilities were reclassified to held for sale 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 Debt Securities Interest income on the Company’s real estate debt securities is recognized on an accrual basis over the life of the investment using the interest method. Direct origination or acquisition fees and costs, as well as acquisition premiums or discounts, are amortized over the term of the securities as an adjustment to interest income. Income is recognized at an interest rate equivalent to the estimated yield on the real estate debt security, as calculated using the carrying value of the real estate debt security and the expected cash flows. Changes in estimated cash flows are recognized through an adjustment to the yield on the real estate debt security on a prospective basis. Projecting cash flows for these types of real estate debt securities 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 places real estate debt securities on nonaccrual 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 real estate debt security is placed on nonaccrual status, the Company reserves for any unpaid accrued interest and generally does not recognize subsequent interest income until cash is received, or the real estate debt security returns to accrual status. The Company will resume the accrual of interest if it determines that the collection of interest, according to the contractual terms of the real estate debt security, is probable. Real Estate Equity Securities Dividend income from real estate equity securities is recognized on an accrual basis based on eligible shares as of the ex-dividend date. 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 As a result of the Company’s early adoption of ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, acquisitions of real estate beginning January 1, 2017 could qualify as asset acquisitions (as opposed to business combinations). The Company records the acquisition of income-producing real estate or real estate that will be used for the production of income as a business combination or an asset acquisition. If substantially all of the fair value of the gross assets acquired are concentrated in a single identifiable asset or group of similar identifiable assets, then the set is not a business. For purposes of this test, land and buildings can be combined along with the intangible assets for any in-place leases and accordingly, most acquisitions of investment properties would not meet the definition of a business and would be accounted for as an asset acquisition. To be considered a business, a set must include an input and a substantive process that together significantly contributes to the ability to create an output. All assets acquired and liabilities assumed in a business combination are measured at their acquisition-date fair values. For asset acquisitions, the cost of the acquisition is allocated to individual assets and liabilities on a relative fair value basis. Acquisition costs associated with business combinations are expensed as incurred. Acquisition costs associated with asset acquisitions are capitalized. 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. 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 years ended December 31, 2017 , 2016 and 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 probable 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. Operating results of properties and related gains on sale that were disposed of or classified as held for sale in the ordinary course of business during the years ended December 31, 2017 , 2016 and 2015 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, 2017 , 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, 2017 , 2016 and 2015 . 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. Real Estate Debt Securities The Company classifies its investment in real estate debt securities as held to maturity as the Company has the intent and ability to hold this investment until maturity. The Company’s real estate debt securities are recorded at amortized cost, net of other-than-temporary impairment (if any), and evaluated for other-than-temporary impairment at each balance sheet date. The amortized cost of a real estate debt security 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 real estate debt security. The amount of other-than-temporary impairment, if any, will be measured by comparing the amortized cost of the real estate debt security to the present value of the expected cash flows discounted at the real estate debt security’s effective interest rate, the real estate debt security’s observable market price, or the fair value of the collateral if the real estate debt security is collateral dependent and collection of principal and interest is not assured. If a real estate debt security is deemed to be other-than-temporarily impaired, the Company will record an other-than-temporary impairment on the consolidated statements of operations. The Company did not record any other-than-temporary impairment losses related to its real estate debt securities during the years ended December 31, 2017 and 2016 . Real Estate Equity Securities The Company determines the appropriate classification for real estate equity securities at acquisition (on the trade date) and reevaluates such designation as of each balance sheet date. As of December 31, 2017 , the Company classified its investments in real estate equity securities as available-for-sale as the Company intends to hold the securities for the purpose of collecting dividend income and for longer term price appreciation. These investments are carried at their estimated fair value based on quoted market prices for the security, net of any discounts for restrictions on the sale of the security. Any discount for lack of marketability is estimated using an option pricing model. Transaction costs that are directly attributable to the acquisition of real estate equity securities are capitalized to its cost basis. Unrealized gains and losses are reported in accumulated other comprehensive income (loss). Upon the sale of a security, the previously recognized unrealized gain (loss) would be reversed out of accumulated other comprehensive income (loss) and the actual realized gain (loss) recognized in earnings. Any non-temporary decline in the market value of an available-for-sale real estate equity security below cost results in a reduction in the carrying amount to fair value. The impairment is charged to earnings and a new cost basis for the real estate equity security is established. When a real estate equity security is impaired, the Company considers whether it has the ability and intent to hold the investment for a time sufficient to allow for any anticipated recovery in market value and considers whether evidence indicating the cost of the investment being recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and duration of the impairment, changes in value subsequent to period end and forecasted performance of the investee. 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, 2017 and 2016 , the Company did not identify any indicators of impairment related to its unconsolidated real estate joint ventures 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, 2017 and 2016 , 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, 2017 and 2016 . The Company’s cash and cash equivalents balance exceeded federally insurable limits as of December 31, 2017 . 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. Restricted Cash Restricted cash is comprised of lender impound reserve accounts on the Company’s borrowings for security deposits, property taxes, insurance, debt service obligations and capital improvements and replacements. 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 effective 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 non-financial and financial assets 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 |
REAL ESTATE HELD FOR INVESTMENT
REAL ESTATE HELD FOR INVESTMENT | 12 Months Ended |
Dec. 31, 2017 | |
Real Estate [Abstract] | |
REAL ESTATE HELD FOR INVESTMENT | REAL ESTATE HELD FOR INVESTMENT As of December 31, 2017 , the Company owned four office properties, one office portfolio consisting of four office buildings and 14 acres of undeveloped land, one office/flex/industrial portfolio consisting of 21 buildings and one retail property encompassing, in the aggregate, approximately 2.7 million rentable square feet. As of December 31, 2017 , these properties were 76% occupied. In addition, the Company owned two apartment properties containing 383 units and encompassing approximately 0.3 million rentable square feet, which were 96% occupied. The Company also owned three investments in undeveloped land with approximately 1,100 developable acres. The following table summarizes the Company’s real estate held for investment as of December 31, 2017 and 2016 , respectively (in thousands): December 31, 2017 December 31, 2016 Land $ 162,061 $ 193,341 Buildings and improvements 388,144 356,982 Tenant origination and absorption costs 24,479 18,819 Total real estate, cost 574,684 569,142 Accumulated depreciation and amortization (41,817 ) (32,052 ) Total real estate, net $ 532,867 $ 537,090 The following table provides summary information regarding the Company’s real estate held for investment as of December 31, 2017 (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 % Richardson Portfolio: Palisades Central I 11/23/2011 Richardson TX Office 1,037 10,970 — 12,007 (2,268 ) 9,739 90.0 % Palisades Central II 11/23/2011 Richardson TX Office 810 18,282 — 19,092 (4,144 ) 14,948 90.0 % Greenway I 11/23/2011 Richardson TX Office 561 2,364 — 2,925 (841 ) 2,084 90.0 % Greenway III 11/23/2011 Richardson TX Office 702 4,054 559 5,315 (1,790 ) 3,525 90.0 % Undeveloped Land 11/23/2011 Richardson TX Undeveloped Land 3,134 — — 3,134 — 3,134 90.0 % Total Richardson Portfolio 6,244 35,670 559 42,473 (9,043 ) 33,430 Park Highlands (1) 12/30/2011 North Las Vegas NV Undeveloped Land 34,428 — — 34,428 — 34,428 (1 ) Burbank Collection 12/12/2012 Burbank CA Retail 4,175 12,536 725 17,436 (2,389 ) 15,047 90.0 % Park Centre 03/28/2013 Austin TX Office 3,251 26,387 — 29,638 (3,703 ) 25,935 100.0 % Central Building 07/10/2013 Seattle WA Office 7,015 27,026 1,267 35,308 (4,663 ) 30,645 100.0 % 1180 Raymond 08/20/2013 Newark NJ Apartment 8,292 38,103 — 46,395 (5,283 ) 41,112 100.0 % Park Highlands II 12/10/2013 North Las Vegas NV Undeveloped Land 24,948 — — 24,948 — 24,948 100.0 % 424 Bedford 01/31/2014 Brooklyn NY Apartment 8,860 25,707 — 34,567 (2,810 ) 31,757 90.0 % Richardson Land II 09/04/2014 Richardson TX Undeveloped Land 3,418 — — 3,418 — 3,418 90.0 % Westpark Portfolio 05/10/2016 Redmond WA Office/Flex/Industrial 36,085 89,687 7,250 133,022 (8,730 ) 124,292 100.0 % Crown Pointe 02/14/2017 Dunwoody GA Office 22,590 59,443 5,796 87,829 (3,921 ) 83,908 100.0 % 125 John Carpenter 09/15/2017 Irving TX Office 2,755 73,585 8,882 85,222 (1,275 ) 83,947 100.0 % $ 162,061 $ 388,144 $ 24,479 $ 574,684 $ (41,817 ) $ 532,867 _____________________ (1) On September 7, 2016, a subsidiary of the Company that owns a portion of Park Highlands sold 820 units of 10% Class A non-voting preferred membership units for $0.8 million to accredited investors. The amount of the Class A non-voting preferred membership units raised, net of offering costs, is included in other liabilities on the accompanying consolidated balance sheets. 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, 2017 , 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 14.4 years with a weighted-average remaining term of 4.0 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 $4.3 million and $7.2 million as of December 31, 2017 and 2016 , respectively. During the years ended December 31, 2017 , 2016 and 2015 , the Company recognized deferred rent from tenants of $2.4 million , $3.1 million and $ 4.5 million , respectively, net of lease incentive amortization. As of December 31, 2017 and 2016 , the cumulative deferred rent receivable balance, including unamortized lease incentive receivables, was $7.7 million and $5.5 million , respectively, and is included in rents and other receivables on the accompanying balance sheets. The cumulative deferred rent balance included $0.9 million of unamortized lease incentives as of December 31, 2017 and 2016 , 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, 2017 , the future minimum rental income from the Company’s properties, excluding apartment leases, under non-cancelable operating leases was as follows (in thousands): 2018 $ 40,535 2019 37,646 2020 32,830 2021 27,164 2022 22,002 Thereafter 63,391 $ 223,568 As of December 31, 2017 , the Company’s commercial real estate properties were leased to approximately 300 tenants over a diverse range of industries and geographic areas. The Company’s highest tenant industry concentration (greater than 10% of annualized base rent) was as follows: Industry Number of Tenants Annualized Base Rent (1) (in thousands) Percentage of Annualized Base Rent Management Consulting 32 $ 4,489 10.7 % _____________________ (1) Annualized base rent represents annualized contractual base rental income as of December 31, 2017 , 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, 2017 , the Company’s real estate investments in Washington and Texas represented 14.1% and 13.3% , respectively, of the Company’s total assets. 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. Recent Real Estate Land Sale On May 1, 2017, the Company sold an aggregate of 102 developable acres of Park Highlands undeveloped land for an aggregate sales price, net of closing credits, of $17.4 million , excluding closing costs. The purchasers are not affiliated with the Company or the Advisor. The Company recognized a gain on sale based on the percentage of completion method due to the Company’s continuing development obligations to the purchasers. The Company recognized a gain on sale of $5.1 million related to the land sale, which is net of deferred profit of $2.5 million . In addition, the Company deferred $1.7 million related to proceeds received from the purchasers and another developer for the value of land that was contributed to a master association which is consolidated by the Company. Recent Sale of Partial Interest of Real Estate On July 6, 2017, KBS SOR Properties, LLC, an indirect wholly owned affiliate of the Company, entered into (i) a Common Unit Purchase and Sale Agreement and Escrow Instructions with Migdal Insurance Company LTD., Migdal-Makefet Pension and Provident Funds LTD. and affiliates (the “Migdal Members”) (the “Purchase and Sale Agreement”), (ii) the Amended and Restated Limited Liability Company Agreement of KBS SOR Acquisition XXIX, LLC (the “Joint Venture Agreement”), (iii) an Investment Agreement with Migdal Members and Willowbrook Asset Management LLC, which is owned by Keith D. Hall and Peter McMillan III, who are principals of the Advisor and directors and officers of the Company (“WBAM”), and (iv) a waiver letter agreement with the Advisor (the “Waiver Agreement”). Pursuant to the Purchase and Sale Agreement, on July 6, 2017, KBS SOR Properties, LLC sold a 45% equity interest in an entity that owns an office building containing 284,751 rentable square feet located on approximately 0.35 acres of land in San Francisco, California (“353 Sacramento”) for approximately $39.1 million (the “353 Sacramento Transaction”) to the Migdal Members, third parties unaffiliated with the Company or the Advisor. The sale resulted in 353 Sacramento being owned by a joint venture (the “353 Sacramento Joint Venture”) in which the Company indirectly owns 55% of the equity interests and the Migdal Members indirectly own 45% in the aggregate of the equity interests. The Company exercises significant influence over the operations, financial policies and decision making with respect to the 353 Sacramento Joint Venture but significant decisions require approval from both members. Accordingly, the Company has accounted for its investment in the 353 Sacramento Joint Venture under the equity method of accounting. Income, losses, contributions and distributions are generally allocated based on the members’ respective equity interests. Therefore, as of July 6, 2017, the Company deconsolidated 353 Sacramento and accounted for this investment as an unconsolidated joint venture under the equity method of accounting. The Company recognized a gain on sale of $1.7 million related to the sale and deconsolidation. See note 12 , “Investment in Unconsolidated Joint Ventures” for a further discussion on the Company’s investment in the 353 Sacramento Joint Venture. See note 7 , “Real Estate Dispositions” for a further discussion on the Company’s real estate dispositions. Recent Acquisitions Crown Pointe On February 14, 2017, the Company, through an indirect wholly owned subsidiary, acquired an office property consisting of two office buildings containing an aggregate of 499,968 rentable square feet in Dunwoody, Georgia (“Crown Pointe”). The seller is not affiliated with the Company or the Advisor. The purchase price (net of closing credits) of Crown Pointe was $83.1 million plus $1.1 million of capitalized acquisition costs. The Company recorded this acquisition as an asset acquisition and recorded $22.6 million to land, $56.6 million to building and improvements, $6.0 million to tenant origination and absorption costs and $1.0 million to below-market lease liabilities. The intangible assets and liabilities acquired in connection with this acquisition have weighted-average amortization periods as of the date of acquisition of 4.9 years for tenant origination and absorption costs and 4.2 years for below-market lease liabilities. 125 John Carpenter On September 15, 2017, the Company, through an indirect wholly owned subsidiary, acquired an office property consisting of two office buildings containing an aggregate of 442,039 rentable square feet in Irving, Texas (“125 John Carpenter”). The seller is not affiliated with the Company or the Advisor. The purchase price (net of closing credits) of 125 John Carpenter was $82.8 million plus $0.5 million of capitalized acquisition costs. The Company recorded this acquisition as an asset acquisition and recorded $2.7 million to land, $73.6 million to building and improvements, $9.0 million to tenant origination and absorption costs and $2.1 million to below-market lease liabilities. The intangible assets and liabilities acquired in connection with this acquisition have weighted-average amortization periods as of the date of acquisition of 6.9 years for tenant origination and absorption costs and 5.2 years for below-market lease liabilities. |
TENANT ORIGINATION AND ABSORPTI
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 and 2016 , 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 $ 24,479 $ 18,819 $ 301 $ 423 $ (3,636 ) $ (6,626 ) Accumulated Amortization (6,448 ) (5,840 ) (170 ) (219 ) 793 1,538 Net Amount $ 18,031 $ 12,979 $ 131 $ 204 $ (2,843 ) $ (5,088 ) 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, 2017 , 2016 and 2015 were 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, 2017 2016 2015 2017 2016 2015 2017 2016 2015 Amortization $ (10,265 ) $ (10,850 ) $ (10,555 ) $ (283 ) $ (459 ) $ (1,023 ) $ 2,858 $ 2,789 $ 1,668 The remaining unamortized balance for these outstanding intangible assets and liabilities as of December 31, 2017 will be amortized for the years ending December 31 as follows (in thousands): Tenant Origination and Above-Market Below-Market 2018 $ (4,772 ) $ (41 ) $ 846 2019 (3,929 ) (39 ) 712 2020 (3,011 ) (35 ) 556 2021 (2,035 ) (16 ) 218 2022 (1,312 ) — 161 Thereafter (2,972 ) — 350 $ (18,031 ) $ (131 ) $ 2,843 Weighted-Average Remaining Amortization Period 5.4 years 3.3 years 4.6 years Additionally, as of December 31, 2017 and 2016 , 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 $5.3 million and $6.3 million , respectively. During each of the years ended December 31, 2017 , 2016 and 2015 , the Company recorded amortization expense of $1.0 million related to tax abatement intangible assets. |
REAL ESTATE EQUITY SECURITIES
REAL ESTATE EQUITY SECURITIES | 12 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
REAL ESTATE EQUITY SECURITIES | REAL ESTATE EQUITY SECURITIES During the year ended December 31, 2017 , the Company purchased 3,603,189 shares of common stock of Whitestone REIT (NYSE Ticker: WSR) for an aggregate purchase price of $43.3 million . Also during the year ended December 31, 2017 , the Company acquired 43,999,500 shares of common units of Keppel-KBS US REIT (SGX Ticker: CMOU) in connection with the Singapore Transaction (defined below). At the closing date of the Singapore Transaction, the carrying value of the units was $21.6 million , the carryover basis of the Company's retained interest in the Singapore Portfolio, which reflects the fair value of the units of $38.7 million , net of the deferred gain from the sale of the Singapore Portfolio of $17.1 million . The Company's investments in real estate equity securities are classified as available-for-sale as the Company intends to hold the securities for the purpose of collecting dividend income and for longer term price appreciation. These investments are carried at their estimated fair value primarily based on quoted market prices for the security. Transaction costs that are directly attributable to the acquisition of real estate equity securities are capitalized to its cost basis. Unrealized gains and losses are reported in accumulated other comprehensive income (loss). The Company agreed not to sell, transfer or assign 21,999,750 units of the Keppel-KBS US REIT issued to the Company at closing of the Singapore Transaction until May 8, 2018 and the remaining 21,999,750 units until November 8, 2018 (the “Unit Lockout Periods”). As of December 31, 2017 , a lack of marketability discount of $1.7 million was recorded as a result of the Unit Lockout Periods. For the investments in real estate equity securities, the Company recorded an unrealized gain of $25.1 million to other comprehensive income to reflect these investments at their estimated fair value at December 31, 2017 . The following summarizes the activity related to real estate equity securities for the year ended December 31, 2017 (in thousands): Amortized Cost Basis Unrealized Gains Total Real estate equity securities - December 31, 2016 $ — $ — $ — Acquisition of real estate equity securities 64,454 — 64,454 Acquisition fee to affiliate and purchase commission 463 — 463 Unrealized change in market value of real estate equity securities — 25,146 25,146 Real estate equity securities - December 31, 2017 $ 64,917 $ 25,146 $ 90,063 During the year ended December 31, 2017 , the Company recognized $2.5 million of dividend income from real estate equity securities. REAL ESTATE DEBT SECURITIES As of December 31, 2017 , the Company owned an investment in real estate debt securities. The Company’s investment in real estate debt securities is classified as held to maturity, as the Company has the intent and ability to hold its investment until maturity, and it is not more likely than not that the Company would be required to sell its investment before recovery of the Company’s amortized cost basis. The information for those real estate debt securities as of December 31, 2017 and 2016 is set forth below (in thousands): Debt Securities Name Date Acquired Debt Securities Type Outstanding Principal Balance as of December 31, 2017 (1) Book Value as of December 31, 2017 (2) Book Value as of December 31, 2016 Contractual Interest Rate (3) Annualized Effective Interest Rate (3) Maturity Date Battery Point Series B Preferred Units 10/28/2016 / 03/30/2017 / 05/12/2017 Series B Preferred Units $ 17,500 $ 17,751 $ 4,683 9.0 % 11.1 % 10/28/2019 _____________________ (1) Outstanding principal balance as of December 31, 2017 represents principal balance outstanding under the real estate debt securities. (2) Book value of the real estate debt securities 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 interest rate on the face of the real estate securities. Annualized effective interest rate is calculated as the actual interest income recognized in 2017 , 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, 2017 . The following summarizes the activity related to real estate debt securities for the year ended December 31, 2017 (in thousands): Real estate debt securities - December 31, 2016 $ 4,683 Face value of real estate debt securities acquired 12,500 Deferred interest receivable and interest accretion 315 Commitment fee, net of closing costs and acquisition fee 3 Accretion of commitment fee, net of closing costs 250 Real estate debt securities - December 31, 2017 $ 17,751 For the years ended December 31, 2017 and 2016 , interest income from real estate debt securities consisted of the following (in thousands): For the Years Ended December 31, 2017 2016 Contractual interest income $ 1,217 $ 63 Interest accretion 315 30 Accretion of commitment fee, net of closing costs and acquisition fee 250 17 Interest income from real estate debt securities $ 1,782 $ 110 |
REAL ESTATE DEBT SECURITIES
REAL ESTATE DEBT SECURITIES | 12 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
REAL ESTATE DEBT SECURITIES | REAL ESTATE EQUITY SECURITIES During the year ended December 31, 2017 , the Company purchased 3,603,189 shares of common stock of Whitestone REIT (NYSE Ticker: WSR) for an aggregate purchase price of $43.3 million . Also during the year ended December 31, 2017 , the Company acquired 43,999,500 shares of common units of Keppel-KBS US REIT (SGX Ticker: CMOU) in connection with the Singapore Transaction (defined below). At the closing date of the Singapore Transaction, the carrying value of the units was $21.6 million , the carryover basis of the Company's retained interest in the Singapore Portfolio, which reflects the fair value of the units of $38.7 million , net of the deferred gain from the sale of the Singapore Portfolio of $17.1 million . The Company's investments in real estate equity securities are classified as available-for-sale as the Company intends to hold the securities for the purpose of collecting dividend income and for longer term price appreciation. These investments are carried at their estimated fair value primarily based on quoted market prices for the security. Transaction costs that are directly attributable to the acquisition of real estate equity securities are capitalized to its cost basis. Unrealized gains and losses are reported in accumulated other comprehensive income (loss). The Company agreed not to sell, transfer or assign 21,999,750 units of the Keppel-KBS US REIT issued to the Company at closing of the Singapore Transaction until May 8, 2018 and the remaining 21,999,750 units until November 8, 2018 (the “Unit Lockout Periods”). As of December 31, 2017 , a lack of marketability discount of $1.7 million was recorded as a result of the Unit Lockout Periods. For the investments in real estate equity securities, the Company recorded an unrealized gain of $25.1 million to other comprehensive income to reflect these investments at their estimated fair value at December 31, 2017 . The following summarizes the activity related to real estate equity securities for the year ended December 31, 2017 (in thousands): Amortized Cost Basis Unrealized Gains Total Real estate equity securities - December 31, 2016 $ — $ — $ — Acquisition of real estate equity securities 64,454 — 64,454 Acquisition fee to affiliate and purchase commission 463 — 463 Unrealized change in market value of real estate equity securities — 25,146 25,146 Real estate equity securities - December 31, 2017 $ 64,917 $ 25,146 $ 90,063 During the year ended December 31, 2017 , the Company recognized $2.5 million of dividend income from real estate equity securities. REAL ESTATE DEBT SECURITIES As of December 31, 2017 , the Company owned an investment in real estate debt securities. The Company’s investment in real estate debt securities is classified as held to maturity, as the Company has the intent and ability to hold its investment until maturity, and it is not more likely than not that the Company would be required to sell its investment before recovery of the Company’s amortized cost basis. The information for those real estate debt securities as of December 31, 2017 and 2016 is set forth below (in thousands): Debt Securities Name Date Acquired Debt Securities Type Outstanding Principal Balance as of December 31, 2017 (1) Book Value as of December 31, 2017 (2) Book Value as of December 31, 2016 Contractual Interest Rate (3) Annualized Effective Interest Rate (3) Maturity Date Battery Point Series B Preferred Units 10/28/2016 / 03/30/2017 / 05/12/2017 Series B Preferred Units $ 17,500 $ 17,751 $ 4,683 9.0 % 11.1 % 10/28/2019 _____________________ (1) Outstanding principal balance as of December 31, 2017 represents principal balance outstanding under the real estate debt securities. (2) Book value of the real estate debt securities 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 interest rate on the face of the real estate securities. Annualized effective interest rate is calculated as the actual interest income recognized in 2017 , 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, 2017 . The following summarizes the activity related to real estate debt securities for the year ended December 31, 2017 (in thousands): Real estate debt securities - December 31, 2016 $ 4,683 Face value of real estate debt securities acquired 12,500 Deferred interest receivable and interest accretion 315 Commitment fee, net of closing costs and acquisition fee 3 Accretion of commitment fee, net of closing costs 250 Real estate debt securities - December 31, 2017 $ 17,751 For the years ended December 31, 2017 and 2016 , interest income from real estate debt securities consisted of the following (in thousands): For the Years Ended December 31, 2017 2016 Contractual interest income $ 1,217 $ 63 Interest accretion 315 30 Accretion of commitment fee, net of closing costs and acquisition fee 250 17 Interest income from real estate debt securities $ 1,782 $ 110 |
REAL ESTATE DISPOSITIONS
REAL ESTATE DISPOSITIONS | 12 Months Ended |
Dec. 31, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
REAL ESTATE DISPOSITIONS | REAL ESTATE DISPOSITIONS 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. During the year ended December 31, 2017 , the Company disposed of 12 office properties. During the year ended December 31, 2016 , the Company did not dispose of any real estate properties. During the year ended December 31, 2015 , the Company sold two office properties. On November 8, 2017, the Company, through 11 wholly owned subsidiaries, sold 11 of its properties (the “Singapore Portfolio”) to various subsidiaries of Keppel-KBS US REIT, a newly formed Singapore real estate investment trust (the “SREIT”) that was listed on the Singapore Stock Exchange (the “Singapore Transaction”). The sale price of the Singapore Portfolio was $804.0 million , before third-party closing costs of approximately $7.7 million and excluding any disposition fees payable to the Advisor. The SREIT paid a portion of the purchase price with approximately 44 million units of the SREIT (SGX Ticker: CMOU) representing 7% of outstanding units of the SREIT. The Singapore Portfolio consists of the following properties: 1800 West Loop, Westech 360 (part of the Austin Suburban Portfolio), Great Hills Plaza (part of the Austin Suburban Portfolio), Westmoor Center, Iron Point Business Park, the Plaza Buildings, Bellevue Technology Center, Northridge Center I and II, West Loop I and II, Powers Ferry Landing East and Maitland Promenade II. The carrying value of the Singapore Portfolio as of the disposition date was $543.2 million , which was net of $103.0 million of accumulated depreciation and amortization. The disposition of the Singapore Portfolio resulted in a gain of $236.9 million , of which $17.1 million was deferred based on the Company's percentage of the SREIT units owned, which reduced the carrying value of the SREIT units at closing. Additionally, the Company recognized a loss on extinguishment of debt of $0.5 million related to certain notes payable that were repaid in full with proceeds from the Singapore Transaction. On July 11, 2013, the Company, through an indirect wholly owned subsidiary, acquired an office building containing 179,872 rentable square feet located in Boston, Massachusetts (“50 Congress Street”). On May 15, 2017, the Company sold 50 Congress Street to a purchaser unaffiliated with the Company or the Advisor for $79.0 million , or $78.8 million net of concessions and credits. The carrying value of 50 Congress Street as of the disposition date was $47.7 million , which was net of $5.9 million of accumulated depreciation and amortization. The Company recognized a gain on sale of $29.4 million related to the disposition of 50 Congress Street. The following summary presents the major components of assets and liabilities related to real estate held for sale as of December 31, 2017 and December 31, 2016 (in thousands): December 31, 2017 December 31, 2016 Assets related to real estate held for sale Real estate, cost $ — $ 658,065 Accumulated depreciation and amortization — (88,124 ) Real estate, net — 569,941 Other assets — 35,173 Total assets related to real estate held for sale $ — $ 605,114 Liabilities related to real estate held for sale Notes payable, net — 376,696 Other liabilities — 1,463 Total liabilities related to real estate held for sale $ — $ 378,159 The operations of these properties and gain on sales 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, 2017 , 2016 and 2015 (in thousands): Years Ended December 31, 2017 2016 2015 Revenues Rental income $ 57,103 $ 67,982 $ 63,660 Tenant reimbursements and other operating income 16,888 17,809 17,152 Total revenues $ 73,991 $ 85,791 $ 80,812 Expenses Operating, maintenance, and management $ 21,931 $ 25,441 $ 25,837 Real estate taxes and insurance 9,935 11,337 10,864 Asset management fees to affiliate 4,572 5,404 5,300 Depreciation and amortization 27,043 33,893 34,309 Interest expense 11,681 12,890 11,659 Total expenses $ 75,162 $ 88,965 $ 87,969 |
NOTES AND BONDS PAYABLE
NOTES AND BONDS PAYABLE | 12 Months Ended |
Dec. 31, 2017 | |
Notes and Bonds Payable [Abstract] | |
NOTES AND BONDS PAYABLE | NOTES AND BONDS PAYABLE As of December 31, 2017 and December 31, 2016 , the Company’s notes and bonds payable, including notes payable related to real estate held for sale, consisted of the following (dollars in thousands): Book Value as of December 31, 2017 Book Value as of December 31, 2016 Contractual Interest Rate as of December 31, 2017 (1) Effective Interest Rate at December 31, 2017 (1) Payment Type Maturity Date (2) Richardson Portfolio Mortgage Loan $ 36,886 $ 40,594 One-Month LIBOR + 2.10% 3.46% Principal & Interest 05/01/2018 Bellevue Technology Center Mortgage Loan (3) — 59,400 (3) (3) (3) (3) Portfolio Revolving Loan Facility (3) — 11,799 (3) (3) (3) (3) Portfolio Mortgage Loan (4) 9,877 106,479 One-Month LIBOR + 2.25% 3.61% Principal & Interest 07/01/2018 Burbank Collection Mortgage Loan 10,958 9,812 One-Month LIBOR + 2.35% 3.79% Principal & Interest 09/30/2018 50 Congress Mortgage Loan (5) — 31,525 (5) (5) (5) (5) 1180 Raymond Bond Payable 6,460 6,635 6.50% 6.50% Principal & Interest 09/01/2036 Central Building Mortgage Loan 27,600 27,600 One-Month LIBOR + 1.75% 3.11% Interest Only 11/13/2018 Maitland Promenade II Mortgage Loan (3) — 20,877 (3) (3) (3) (3) Westmoor Center Mortgage Loan (3) — 62,000 (3) (3) (3) (3) Plaza Buildings Senior Loan (3) — 109,866 (3) (3) (3) (3) 424 Bedford Mortgage Loan 24,282 24,832 3.91% 3.91% Principal & Interest 10/01/2022 1180 Raymond Mortgage Loan 31,000 31,000 One-Month LIBOR + 2.25% 3.61% Interest Only 12/01/2018 KBS SOR (BVI) Holdings, Ltd. Series A Debentures (6) 278,801 251,811 4.25% 4.25% (6) 03/01/2023 Westpark Portfolio Mortgage Loan 85,200 83,200 One-Month LIBOR + 2.50% 3.86% Interest Only (7) 07/01/2020 353 Sacramento Mortgage Loan (8) — 85,500 (8) (8) (8) (8) Crown Pointe Mortgage Loan 50,500 — One-Month LIBOR + 2.60% 3.96% Interest Only 02/13/2020 125 John Carpenter Mortgage Loan 50,130 — (9) 3.12% Interest Only 10/01/2022 Total Notes and Bonds Payable principal outstanding 611,694 962,930 Net Premium/(Discount) on Notes and Bonds Payable (10) 137 88 Deferred financing costs, net (8,788 ) (12,394 ) Total Notes and Bonds Payable, net $ 603,043 $ 950,624 _____________________ (1) Contractual interest rate represents the interest rate in effect under the loan as of December 31, 2017 . Effective interest rate is calculated as the actual interest rate in effect as of December 31, 2017 (consisting of the contractual interest rate and contractual floor rates), using interest rate indices at December 31, 2017 , where applicable. (2) Represents the initial maturity date or the maturity date as extended as of December 31, 2017 ; subject to certain conditions, the maturity dates of certain loans may be extended beyond the date shown. (3) On November 8, 2017, in connection with the sale of the Singapore Portfolio, the Company repaid the entire principal balance and all other sums due under this loan. (4) On November 8, 2017, in connection with the sale of certain properties secured by this loan, the Company repaid all but $10.0 million principal balance. The Portfolio Mortgage Loan is now only secured by one office property, Park Centre. (5) On May 15, 2017, in connection with the disposition of 50 Congress Street, the Company repaid the entire principal balance and all other sums due under this loan. (6) See “ - Israeli Bond Financing” below. (7) Represents the payment type required under the loan as of December 31, 2017 . 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 bonds payable, see five-year maturity table below. (8) On July 6, 2017, in connection with the partial interest sale of 353 Sacramento, the 353 Sacramento Mortgage Loan was deconsolidated from the Company's balance sheet. See note 12 , “Investment in Unconsolidated Joint Ventures” for a further discussion on the Company’s partial sale of 353 Sacramento. (9) The 125 John Carpenter Mortgage Loan bears interest at a floating rate of the greater of (a) 2.0% or (b) 175 basis points over one-month LIBOR. (10) Represents the unamortized premium/discount on notes and bonds 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 bonds payable. During the years ended December 31, 2017 , 2016 and 2015 , the Company incurred $37.1 million , $29.2 million and $15.0 million of interest expense, respectively. Included in interest expense for the years ended December 31, 2017 , 2016 and 2015 , was $4.4 million , $4.3 million and $2.7 million of amortization of deferred financing costs, respectively. Additionally, during the years ended December 31, 2017 , 2016 and 2015 , the Company capitalized $2.3 million , $2.0 million and $1.9 million of interest, respectively, to its investments in undeveloped land. As of December 31, 2017 , the Company’s deferred financing costs were $8.8 million , net of amortization, which are included in notes and bonds payable, net on the accompanying consolidated balance sheets. As of December 31, 2016 , the Company’s deferred financing costs were $12.5 million , net of amortization, of which $12.4 million is included in notes and bonds payable, net and $0.1 million is included in prepaid expenses and other assets on the accompanying consolidated balance sheets. As of December 31, 2017 and 2016 , the Company’s interest payable was $5.1 million and $5.3 million , respectively. The following is a schedule of maturities, including principal amortization payments, for all notes and bonds payable outstanding as of December 31, 2017 (in thousands): 2018 $ 117,537 2019 57,649 2020 190,774 2021 56,639 2022 127,925 Thereafter 61,170 $ 611,694 The Company’s notes payable contain financial debt covenants. As of December 31, 2017 , the Company was in compliance with all of these debt covenants. Israeli Bond Financing On March 2, 2016, KBS Strategic Opportunity 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 Strategic Opportunity BVI commenced the institutional tender of the Debentures and accepted application for 842.5 million Israeli new Shekels. On March 7, 2016, KBS Strategic Opportunity BVI commenced the public tender of the Debentures and accepted 127.7 million Israeli new Shekels. In the aggregate, KBS Strategic Opportunity BVI accepted 970.2 million Israeli new Shekels (approximately $249.2 million as of March 8, 2016 ) in both the institutional and public tenders at an annual interest rate of 4.25% . KBS Strategic Opportunity 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. As of December 31, 2017 , the Company has one foreign currency option for an aggregate notional amount of $285.4 million to hedge its exposure to foreign currency exchange rate movements. See note 9 , “Derivative Instruments” for a further discussion on the Company’s foreign currency option. The deed of trust that governs the terms of the Debentures contains various financial covenants. As of December 31, 2017 , the Company was in compliance with all of these financial debt covenants. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS The Company enters into derivative instruments for risk management purposes to hedge its exposure to cash flow variability caused by changing interest rates and foreign currency exchange rate movements. The primary goal of the Company’s risk management practices related to interest rate risk is to prevent changes in interest rates from adversely impacting the Company’s ability to achieve its investment return objectives. The Company does not enter into derivatives for speculative purposes. The Company enters into foreign currency options and foreign currency collars to mitigate its exposure to foreign currency exchange rate movements on its bonds payable outstanding denominated in Israeli new Shekels. The foreign currency collar consists of a purchased call option to buy and a sold put option to sell Israeli new Shekels. A foreign currency collar guarantees that the exchange rate of the currency will not fluctuate beyond the range of the options’ strike prices. The foreign currency option consists of a call option to buy Israeli new Shekels. The following table summarizes the notional amount and other information related to the Company’s foreign currency collars as of December 31, 2016 . The notional amount is an indication of the extent of the Company’s involvement in each instrument at that time, but does not represent exposure to credit, interest rate or market risks (currency in thousands): Derivative Instruments Notional Amount Strike Price Trade Date Maturity Date Derivative instruments not designated as hedging instruments Foreign currency collar $ 100,000 3.72 - 3.83 ILS-USD 08/08/2016 08/08/2017 Foreign currency collar 50,000 3.67 - 3.77 ILS-USD 08/16/2016 08/16/2017 Foreign currency collar 50,000 3.68 - 3.78 ILS-USD 08/16/2016 08/16/2017 Foreign currency collar 50,000 3.67 - 3.77 ILS-USD 08/22/2016 08/22/2017 $ 250,000 On August 3, 2017, the Company terminated the foreign currency collars and as a result received $6.6 million . On August 3, 2017, the Company entered into a foreign currency option, a USD put/ILS call option, to hedge against a change in the exchange rate of the Israeli new Shekel versus the U.S. Dollar as it has the right, but not the obligation, to purchase up to 970.2 million Israeli Shekels at the rate of ILS 3.4 per USD. The cost of the foreign currency option was $3.4 million . The following table summarizes the notional amount and other information related to the Company’s foreign currency option as of December 31, 2017 . The notional amount is an indication of the extent of the Company’s involvement in each instrument at that time, but does not represent exposure to credit, interest rate or market risks (currency in thousands): Derivative Instrument Notional Amount Strike Price Trade Date Maturity Date Derivative instrument not designated as hedging instrument Foreign currency option $ 285,361 3.40 ILS-USD 08/03/2017 08/03/2018 The Company enters into interest rate caps to mitigate its exposure to rising interest rates on its variable rate notes payable. The values of interest rate caps are primarily impacted by interest rates, market expectations about interest rates, and the remaining life of the instrument. In general, increases in interest rates, or anticipated increases in interest rates, will increase the value of interest rate caps. As the remaining life of an interest rate cap decreases, the value of the instrument will generally decrease towards zero. As of December 31, 2017 , the Company had entered into an interest rate cap, which was not designated as a hedging instrument. The following table summarizes the notional amount and other information related to the Company’s derivative instrument as of December 31, 2017 . The notional amount is an indication of the extent of the Company’s involvement in the instrument at that time, but does not represent exposure to credit, interest rate or market risks (dollars in thousands): Derivative Instrument Effective Date Maturity Date Notional Value Reference Rate Interest rate cap 02/21/2017 02/13/2020 $ 46,875 One-month LIBOR at 3.00% The following table sets forth the fair value of the Company’s derivative instruments as well as their classification on the consolidated balance sheets as of December 31, 2017 and 2016 (dollars in thousands): December 31, 2017 December 31, 2016 Derivative Instruments Balance Sheet Location Number of Instruments Fair Value Number of Instruments Fair Value Derivative instruments not designated as hedging instruments Interest rate cap Prepaid expenses and other assets 1 $ 14 1 $ 12 Foreign currency collars Other liabilities — $ — 4 $ (3,910 ) Foreign currency option Prepaid expenses and other assets 1 $ 4,243 — $ — The change in fair value of foreign currency options and collars that are not designated as cash flow hedges are recorded as foreign currency transaction gains or losses in the accompanying consolidated statements of operations. During the year ended December 31, 2017 , the Company recognized a $11.3 million gain related to the foreign currency option and collars, which is shown net against $26.6 million of foreign currency transaction loss in the accompanying consolidated statements of operations as foreign currency transaction loss, net. During the year ended December 31, 2016 , the Company recognized a $3.9 million loss related to the foreign currency collars, which is shown net against $0.9 million of foreign currency transaction gain in the accompanying consolidated statements of operations as foreign currency transaction loss, net. During the year ended December 31, 2017 , the Company recorded an unrealized loss of $0.1 million on interest rate caps, which was included in interest expense on the accompanying consolidated statements of operations. |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 12 Months Ended |
Dec. 31, 2017 | |
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 non-financial and financial assets 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 and accounts payable and accrued liabilities: These balances approximate their fair values due to the short maturities of these items. Real estate equity securities : The Company's Whitestone REIT real estate equity securities are presented at fair value on the accompanying consolidated balance sheet. The fair value of Whitestone REIT real estate equity securities was based on a quoted price in an active market on a major stock exchange. The Company classifies these inputs as Level 1 inputs. In connection with the Singapore Transaction, the Company acquired 43,999,500 units of the SREIT. These securities are classified as available-for-sale and presented at fair value. The fair value measurement of these shares is based on a quoted price in an active market, adjusted for the lack of marketability during the Unit Lockout Periods. The Company utilized inputs, all of which were deemed to be significant, including the quoted stock price, risk-free rate and expected volatility, in determining the value of the shares and the Company notes that the most significant input in its valuation model is the quoted price in an active market. However, as the valuation of the stock is adjusted for the lack of marketability using market-corroborated inputs, the Company categorizes the measurement of such securities as Level 2 inputs. Real estate debt securities : The Company’s real estate debt securities are presented in the accompanying consolidated balance sheets at their amortized cost net of recorded loss reserves (if any) and not at fair value. The fair value of real estate debt securities 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 real estate debt securities 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 bonds payable: The fair values of the Company’s notes and bonds 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 Company’s bonds issued in Israel are publicly traded on the Tel-Aviv Stock Exchange. The Company used the quoted price as of December 31, 2017 for the fair value of its bonds issued in Israel. The Company classifies this input as a Level 1 input. Derivative instruments : The Company’s derivative instruments are presented at fair value on the accompanying consolidated balance sheets. The valuation of these instruments is determined using a proprietary model that utilizes observable inputs. As such, the Company classifies these inputs as Level 2 inputs. The fair value of interest rate caps (floors) are determined using the market standard methodology of discounting the future expected cash payments (receipts) which would occur if variable interest rates rise above (below) the strike rate of the caps (floors). The variable interest rates used in the calculation of projected payments (receipts) on the cap (floor) are based on an expectation of future interest rates derived from observed market interest rate curves and volatilities. The fair value of foreign currency option is based on a Black-Scholes model tailored for currency derivatives. The following were the face values, carrying amounts and fair values of the Company’s financial instruments as of December 31, 2017 and 2016 , which carrying amounts do not approximate the fair values (in thousands): December 31, 2017 December 31, 2016 Face Value Carrying Amount Fair Value Face Value Carrying Amount Fair Value Financial assets: Real estate debt securities $ 17,500 $ 17,751 $ 17,386 $ 5,000 $ 4,683 $ 4,683 Financial liabilities: Notes and bond payable $ 332,893 $ 330,727 $ 335,212 $ 711,119 $ 707,169 $ 711,425 KBS SOR (BVI) Holdings, Ltd. Series A Debentures $ 278,801 $ 272,316 $ 296,069 $ 251,811 $ 243,455 $ 253,120 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. This has made the estimation of fair values difficult and, therefore, both the actual results and the Company’s estimate of value at a future date could be materially different. As of December 31, 2017 , the Company measured the following assets at fair value (in thousands): Fair Value Measurements Using Total Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Recurring Basis: Real estate equity securities $ 90,063 $ 51,922 $ 38,141 $ — Asset derivative - interest rate cap $ 14 $ — $ 14 $ — Asset derivative - foreign currency option $ 4,243 $ — $ 4,243 $ — |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS The Advisory Agreement entitles the Advisor to specified fees upon the provision of certain services with regard to 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 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 KBS Capital Markets Group LLC, the dealer manager for the Company's initial public offering (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, or previously served 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. In June 2017, the Company renewed its participation in the program, and the program is effective through June 30, 2018. As KBS REIT I is implementing its plan of liquidation, at renewal in June 2017, KBS REIT I elected to cease participation in the program and obtain separate insurance coverage. During the years ended December 31, 2017 , 2016 and 2015 , 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, 2017 , 2016 and 2015 , respectively, and any related amounts payable as of December 31, 2017 and December 31, 2016 (in thousands): Incurred Payable as of December 31, 2017 2016 2015 2017 2016 Expensed Asset management fees $ 10,686 $ 9,628 $ 8,348 $ — $ — Acquisition fees on real estate (1) — 2,964 — — — Reimbursable operating expenses (2) 241 221 178 26 55 Disposition fees (3) 8,352 279 276 — — Capitalized Acquisition fees on real estate (1) 907 — — — — Acquisition fees on real estate equity securities 429 — — — — Acquisition fees on real estate debt securities — 250 — — — $ 20,615 $ 13,342 $ 8,802 $ 26 $ 55 _____________________ (1) As a result of the adoption of ASU No. 2017-01, the Company’s acquisitions of real estate properties beginning January 1, 2017 generally qualify as an asset acquisition (as opposed to a business combination). Acquisition fees associated with asset acquisitions will be capitalized, while costs associated with business combinations will continue to be expensed as incurred. (2) The Advisor may seek reimbursement for certain employee costs 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 $225,000 , $153,000 and $153,000 for the years ended December 31, 2017 , 2016 and 2015 , 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. In addition to the amounts above, the Company reimburses the Advisor for certain of the Company’s direct costs incurred from third parties that were initially paid by the Advisor on behalf of the Company. (3) Disposition fees with respect to real estate sold are included in the gain on sale of real estate in the accompanying consolidated statements of operations. Disposition fees with respect to the assignment of the Company's real estate loan receivable are included in general and administrative expenses in the accompanying consolidated statements of operations. During the year ended December 31, 2017 , the Advisor reimbursed the Company $0.4 million for expenses incurred to evaluate certain strategic transactions for which the Advisor has agreed to reimburse the Company and $0.1 million for a property insurance rebate. During the year ended December 31, 2016 , the Advisor reimbursed the Company $0.1 million for property insurance rebates and $0.1 million for legal and professional fees and travel expenses. Pursuant to the Waiver Agreement, the Advisor waived any right it may have had to receive a disposition fee in connection with the 353 Sacramento Transaction and also waived its rights to future acquisition fees in an amount equal to 45% of the acquisition fees paid to the Advisor in connection with the Company’s original purchase of 353 Sacramento in July of 2016. Accordingly, the Advisor waived $0.8 million of acquisition fees for the purchase of 125 John Carpenter. In connection with the 353 Sacramento Transaction, the Company paid a $0.1 million broker commission to Monarch Global Partners, LLC. The son of a member of the board of directors of KBS Strategic Opportunity BVI is a partner at Monarch Global Partners, LLC. Also in connection with the 353 Sacramento Transaction, the Migdal Members paid an acquisition fee of $0.2 million to WBAM and $0.2 million to the Company. On November 8, 2017, the Company sold the Singapore Portfolio to the SREIT. The SREIT is externally managed by a joint venture (the “Manager”) between (i) an entity in which Keith D. Hall, the Company’s Chief Executive Officer and a director, and Peter McMillan III, the Company’s President and Chairman of the board of directors, have an indirect ownership interest and (ii) Keppel Capital Holding Pte. Ltd., which is not affiliated with the Company. The SREIT is expected to pay certain purchase and sale commissions and asset management fees to the Manager in exchange for the provision of certain management services. |
INVESTMENT IN UNCONSOLIDATED JO
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES | 12 Months Ended |
Dec. 31, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES | INVESTMENT IN UNCONSOLIDATED JOINT VENTURES As of December 31, 2017 and 2016 , the Company’s investments in unconsolidated joint ventures were composed of the following (dollars in thousands): Investment Balance at Joint Venture Number of Properties Location Ownership % December 31, 2017 December 31, 2016 NIP Joint Venture 5 Various Less than 5.0% $ 3,674 $ 5,305 110 William Joint Venture 1 New York, New York 60.0% 7,160 70,544 353 Sacramento Joint Venture 1 San Francisco, California 55.0% 44,743 — $ 55,577 $ 75,849 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, 2017 , the NIP Joint Venture owned five industrial properties and a master lease with respect to another industrial property encompassing 3.4 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, 2017 . 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 had 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. On January 17, 2018, KBS REIT I assigned its participation interest in the NIP Joint Venture to one of the other joint venture partners in the NIP Joint Venture. None of the other joint venture partners are affiliated with the Company or the Advisor. As of December 31, 2017 and 2016 , the book value of the Company’s investment in the NIP Joint Venture was $3.7 million and $5.3 million , respectively. During the year ended December 31, 2017 , the Company received a distribution of $3.7 million related to its investment in the NIP Joint Venture. The Company recognized $2.1 million of income distributions and $1.6 million of return of capital from the NIP Joint Venture. During the years ended December 31, 2016 and 2015 , the Company did not receive any distributions related to its investment in 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, 2017 and 2016 , the book value of the Company’s investment in the 110 William Joint Venture was $7.2 million and $70.5 million , respectively, which include $1.5 million of unamortized acquisition fees and expenses incurred directly by the Company. During the year ended December 31, 2017 , the 110 William Joint Venture made a $58.2 million return of capital distribution to the Company and a $38.8 million return of capital distribution to the 110 William JV Partner funded with proceeds from the 110 William refinancing discussed below. Summarized financial information for the 110 William Joint Venture follows (in thousands): December 31, 2017 December 31, 2016 Assets: Real estate assets, net of accumulated depreciation and amortization $ 248,269 $ 262,192 Other assets 32,331 23,355 Total assets $ 280,600 $ 285,547 Liabilities and equity: Notes payable, net (1) $ 260,108 $ 157,628 Other liabilities 11,016 12,872 Partners’ capital 9,476 115,047 Total Liabilities and equity $ 280,600 $ 285,547 _____________________ (1) See “- 110 William Joint Venture Refinance” below. For the Years Ended December 31, 2017 2016 2015 Revenues $ 37,338 $ 33,458 $ 34,188 Expenses: Operating, maintenance, and management 10,056 10,778 10,549 Real estate taxes and insurance 6,281 6,017 5,748 Real estate acquisition fees and expenses — — 1 Depreciation and amortization 16,544 12,955 12,596 Interest expense 13,134 6,049 6,170 Total expenses 46,015 35,799 35,064 Total other income 56 63 334 Net loss $ (8,621 ) $ (2,278 ) $ (542 ) Company’s equity in loss of unconsolidated joint venture $ (5,214 ) $ (1,408 ) $ (368 ) 110 William Joint Venture Refinance On May 2, 2014, in connection with the acquisition of 110 William Street, the 110 William Joint Venture assumed a mortgage loan with a face amount of $141.5 million and a mezzanine loan with a face amount of $20.0 million (the “110 William Street Existing Loans”). On March 6, 2017, the 110 William Joint Venture closed the refinancing of the 110 William Street Existing Loans (the “Refinancing”). The 110 William Joint Venture repaid $156.0 million of principal related to the 110 William Street Existing Loans. The Refinancing was comprised of the following loans from unaffiliated lenders: (i) a mortgage loan in the maximum amount of up to $232.3 million from Morgan Stanley Bank, N.A., a national banking association (the “110 William Street Mortgage Loan”), (ii) a senior mezzanine loan in the maximum amount of up to $33.8 million from Morgan Stanley Mortgage Capital Holdings LLC, a New York limited liability company (the “110 William Street Senior Mezzanine Loan”), and (iii) a junior mezzanine loan in the maximum amount of up to $33.8 million from Morgan Stanley Mortgage Capital Holdings LLC, a New York limited liability company (the “110 William Street Junior Mezzanine Loan”). The loans under the Refinancing mature on March 7, 2019, with three one -year extension options. The 110 William Street Mortgage Loan bears interest at a floating rate of 2.2472% over one-month LIBOR. The 110 William Street Senior Mezzanine Loan and the 110 William Street Junior Mezzanine Loan bear interest at a floating rate of 6.25% over one-month LIBOR. The 110 William Joint Venture entered into three interest rate caps that effectively limit one-month LIBOR at 3.00% on $275.0 million of the Refinancing amount as of the effective date, up to $300.0 million , accreting according to a notional schedule, effective March 6, 2017 through March 7, 2019. The loans under the Refinancing have monthly payments that are interest-only with the entire unpaid principal balance and all outstanding interest and fees due at maturity. The 110 William Joint Venture has the right to prepay the loans in whole at any time or in part from time to time to the extent necessary, subject to the payment of certain expenses potentially incurred by the lender as a result of the prepayment, the payment of a prepayment premium and breakage costs in certain circumstances, and certain other conditions contained in the loan documents. At closing, $205.0 million had been disbursed from the 110 William Street Mortgage Loan to the 110 William Joint Venture with $27.3 million remaining available for future disbursements to be used for tenant improvements, leasing commissions and capital improvements, subject to certain terms and conditions contained in the loan documents. At closing, $29.85 million had been disbursed from the 110 William Street Senior Mezzanine Loan to the 110 William Joint Venture and $29.85 million had been disbursed from the 110 William Junior Mezzanine Loan to the 110 William Joint Venture, with $4.0 million remaining available under the 110 William Street Senior Mezzanine Loan and $4.0 million remaining available under the 110 William Street Junior Mezzanine Loan for future disbursements to be used for tenant improvements, leasing commissions and capital improvements, subject to certain terms and conditions contained in the loan documents under the 110 William Street Senior Mezzanine Loan and the 110 William Street Junior Mezzanine Loan. Investment in 353 Sacramento Joint Venture On July 6, 2017, the Company, through an indirect wholly owned subsidiary, entered into an agreement with the Migdal Members to form the 353 Sacramento Joint Venture. On July 6, 2017, the Company sold a 45% equity interest in an entity that owns 353 Sacramento to the Migdal Members. The sale resulted in 353 Sacramento being owned by the 353 Sacramento Joint Venture, in which the Company indirectly owns 55% of the equity interests and the Migdal Members indirectly own 45% in the aggregate of the equity interests. The Company exercises significant influence over the operations, financial policies and decision making with respect to the 353 Sacramento Joint Venture but significant decisions require approval from both members. Accordingly, the Company has accounted for its investment in the 353 Sacramento 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, 2017 , the book value of the Company’s investment in the 353 Sacramento Joint Venture was $44.7 million . During the year ended December 31, 2017 , the Company did not receive any distributions related to its investment in the 353 Sacramento Joint Venture. Summarized financial information for the 353 Sacramento Joint Venture follows (in thousands): December 31, 2017 Assets: Real estate assets, net of accumulated depreciation and amortization $ 171,066 Other assets 6,472 Total assets $ 177,538 Liabilities and equity: Notes payable, net $ 89,423 Other liabilities 7,313 Partners’ capital 80,802 Total liabilities and equity $ 177,538 For the Period from July 6, 2017 to December 31, 2017 Revenues $ 7,053 Expenses: Operating, maintenance, and management 2,189 Real estate taxes and insurance 1,198 Depreciation and amortization 3,408 Interest expense 2,302 Total expenses 9,097 Net loss $ (2,044 ) Company’s equity in loss of unconsolidated joint venture $ (823 ) |
SUPPLEMENTAL CASH FLOW AND SIGN
SUPPLEMENTAL CASH FLOW AND SIGNIFICANT NONCASH TRANSACTION DISCLOSURES | 12 Months Ended |
Dec. 31, 2017 | |
Supplemental Cash Flow and Significant Noncash Transaction Disclosures [Abstract] | |
SUPPLEMENTAL CASH FLOW AND SIGNIFICANT NONCASH TRANSACTION DISCLOSURES | SUPPLEMENTAL CASH FLOW AND SIGNIFICANT NONCASH TRANSACTION DISCLOSURES Supplemental cash flow and significant noncash transaction disclosures were as follows (in thousands): Years Ended December 31, 2017 2016 2015 Supplemental Disclosure of Cash Flow Information: Interest paid, net of capitalized interest of $2,339 , $2,025 and $1,856 for the years ended December 31, 2017, 2016 and 2015 , respectively $ 32,688 $ 20,759 12,265 Supplemental Disclosure of Significant Noncash Transactions: Assets and liabilities deconsolidated in connection with the 353 Sacramento partial sale: Real estate, net 170,586 — — Rents and other receivables, net 1,244 — — Prepaid expenses and other assets 555 — — Notes payable, net 87,132 — — Accounts payable and accrued liabilities 1,574 — — Below-market leases, net 2,960 — — Other liabilities 924 — — SREIT units received in connection with the Singapore Transaction 38,720 — — Increase in development obligations related to sale of real estate 3,816 — 4,128 Application of escrow deposits to acquisition of real estate 2,000 — — Increase in accrued improvements to real estate — 3,547 — Increase in redeemable common stock payable — 8,902 3,715 Distributions paid to common stockholders through common stock issuances pursuant to the dividend reinvestment plan 8,666 12,616 13,573 |
SELECTED QUARTERLY FINANCIAL DA
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 and 2016 (in thousands, except per share amounts): 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 37,996 $ 40,237 $ 36,414 $ 26,067 Net income (loss) $ (9,058 ) $ 23,809 $ (10,542 ) $ 206,371 Net income (loss) attributable to common stockholders $ (9,092 ) $ 23,846 $ (10,534 ) $ 206,424 Net income (loss) per common share, basic and diluted $ (0.16 ) $ 0.42 $ (0.19 ) $ 3.88 Distributions declared per common share $ 0.092 $ 0.093 $ 0.095 $ 3.610 2016 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 28,365 $ 33,866 $ 36,133 $ 35,880 Net loss $ (4,932 ) $ (1,989 ) $ (15,007 ) $ (7,198 ) Net loss attributable to common stockholders $ (4,894 ) $ (1,959 ) $ (14,951 ) $ (7,114 ) Net loss per common share, basic and diluted $ (0.08 ) $ (0.03 ) $ (0.25 ) $ (0.12 ) Distributions declared per common share $ 0.093 $ 0.093 $ 0.094 $ 0.095 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 . 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. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS The Company evaluates subsequent events up until the date the consolidated financial statements are issued. Acquisition and Financing of City Tower On March 6, 2018, the Company, through an indirect wholly owned subsidiary (the “Owner”), acquired an office building containing 431,007 rentable square feet located on approximately 4.92 acres of land in Orange, California (“City Tower”). The seller is not affiliated with the Company or the Advisor. The purchase price of City Tower was $147.3 million plus closing costs. City Tower was built in 1988 and partially renovated in 2016 and was 76% leased to 24 tenants as of the acquisition date. On March 6, 2018, in connection with the Company’s acquisition of City Tower, the Owner entered into a term loan facility with Compass Bank, an unaffiliated lender, for borrowings up to $103.4 million , secured by City Tower (the “City Tower Mortgage Loan”). At closing, $89.0 million of the loan was funded and the remaining $14.4 million was available for future disbursements to be used for leasing commissions and capital expenditures, subject to certain terms and conditions contained in the loan documents. The City Tower Mortgage Loan matures on March 5, 2021, with two one -year extension options, subject to certain terms and conditions contained in the loan documents, and bears interest at a floating rate of 155 basis points over one-month LIBOR. Monthly payments are interest only with the principal balance, all accrued and unpaid interest and all other sums due under the loan documents due at maturity. The Owner has the right to prepay all or a portion of the City Tower Mortgage Loan, subject to certain fees and conditions contained in the loan documents. KBS SOR Properties, LLC, the Company’s wholly owned subsidiary, in connection with the City Tower Mortgage Loan, is providing a guaranty of (i) the payment of all actual costs, losses, damages, claims and expenses incurred by Compass Bank relating to the City Tower Mortgage Loan as a result of certain intentional actions or omissions of the Owner in violation of the loan documents, as further described in the guaranty; (ii) the payment of the principal balance and any interest or other sums outstanding under the City Tower Mortgage Loan in the event of certain bankruptcy, insolvency or related proceedings involving the Owner as described in the guaranty; and (iii) certain other amounts as described in the guaranty. Acquisition of Marquette Plaza On March 1, 2018, the Company, through an indirect wholly owned subsidiary, acquired an office property containing 522,656 rentable square feet located on 2.5 acres of land in Minneapolis, Minnesota (“Marquette Plaza”). The seller is not affiliated with the Company or the Advisor. The purchase price of Marquette Plaza was $88.4 million plus closing costs. Marquette Plaza was built in 1972 and renovated in 2002 and was 70% leased to 21 tenants as of the acquisition date. Distribution Paid On December 7, 2017 , the Company's board of directors authorized the Special Dividend of $3.61 per share of common stock payable in either shares of the Company's common stock or cash to, and at the election of, the stockholders of record as of December 7, 2017 (the “Record Date”). The Special Dividend was paid on January 17, 2018 to stockholders of record as of the close of business on the Record Date. If stockholders elected all cash, their election was subject to adjustment such that the aggregate amount of cash to be distributed by the Company will be a maximum of 20% of the total Special Dividend (the “Maximum Cash Distribution”), with the remainder to be paid in shares of common stock. The aggregate amount of cash paid by the Company pursuant to the Special Dividend and the actual number of shares of common stock issued pursuant to the Special Dividend depended upon the number of stockholders who elected cash or stock and whether the Maximum Cash Distribution was met. Accordingly, on January 17, 2018 , the Company paid $37.6 million in cash and issued $150.3 million in stock pursuant to the Special Dividend. Distribution Declared On March 8 , 2018 , the Company's board of directors authorized a distribution in the amount of $0.015975 per share of common stock to stockholders of record as of the close of business on March 16 , 2018 . The Company expects to pay this distribution on March 21 , 2018 . |
SCHEDULE III REAL ESTATE ASSETS
SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 (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 Richardson Portfolio: Palisades Central I Richardson, TX 90.0% (4) 1,037 8,628 9,665 2,342 1,037 10,970 12,007 (2,268 ) 1980 11/23/2011 Palisades Central II Richardson, TX 90.0% (4) 810 17,117 17,927 1,165 810 18,282 19,092 (4,144 ) 1985 11/23/2011 Greenway I Richardson, TX 90.0% (4) 561 1,170 1,731 1,194 561 2,364 2,925 (841 ) 1983 11/23/2011 Greenway III Richardson, TX 90.0% (4) 702 4,083 4,785 530 702 4,613 5,315 (1,790 ) 1983 11/23/2011 Undeveloped Land Richardson, TX 90.0% — 1,997 — 1,997 1,137 3,134 — 3,134 — N/A 11/23/2011 Total Richardson Portfolio 36,886 5,107 30,998 36,105 6,368 6,244 36,229 42,473 (9,043 ) Park Highlands (5) North Las Vegas, NV (5) — 20,307 — 20,307 14,121 34,428 — 34,428 — N/A 12/30/2011 Burbank Collection Burbank, CA 90.0% 10,958 4,175 8,799 12,974 4,462 4,175 13,261 17,436 (2,389 ) 2008 12/12/2012 Park Centre Austin, TX 100.0% 9,877 3,251 27,941 31,192 (1,554 ) 3,251 26,387 29,638 (3,703 ) 2000 03/28/2013 Central Building Seattle, WA 100.0% 27,600 7,015 26,124 33,139 2,169 7,015 28,293 35,308 (4,663 ) 1907 07/10/2013 1180 Raymond Newark, NJ 100.0% 31,000 8,292 37,651 45,943 452 8,292 38,103 46,395 (5,283 ) 1929 08/20/2013 Park Highlands II North Las Vegas, NV 100.0% — 20,118 — 20,118 4,830 24,948 — 24,948 — N/A 12/10/2013 424 Bedford Brooklyn, NY 90.0% 24,282 8,860 24,820 33,680 887 8,860 25,707 34,567 (2,810 ) 2010 01/31/2014 Richardson Land II Richardson, TX 90.0% — 3,096 — 3,096 322 3,418 — 3,418 — N/A 09/04/2014 Westpark Portfolio Redmond, WA 100.0% 85,200 36,085 90,227 126,312 6,710 36,085 96,937 133,022 (8,730 ) 1984-1992 05/10/2016 Crown Pointe Dunwoody, GA 100.0% 50,500 22,590 62,610 85,200 2,629 22,590 65,239 87,829 (3,921 ) 1985/1989 02/14/2017 125 John Carpenter Irving, TX 100.0% 50,130 2,755 82,550 85,305 (83 ) 2,755 82,467 85,222 (1,275 ) 1982/1983 09/15/2017 Total Properties Held for Investment $ 141,651 $ 391,720 $ 533,371 $ 41,313 $ 162,061 $ 412,623 $ 574,684 $ (41,817 ) ____________________ (1) Building and improvements includes 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 $607.2 million (unaudited) as of December 31, 2017 . (4) As of December 31, 2017 , $36.9 million of debt was outstanding secured by the Richardson Portfolio. (5) On September 7, 2016, a subsidiary of the Company that owns a portion of Park Highlands, sold 820 units of 10% Class A non-voting preferred membership units for $0.8 million to accredited investors. The amount of the Class A non-voting preferred membership units raised, net of offering costs, is included in other liabilities on the accompanying consolidated balance sheets. SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION (CONTINUED) December 31, 2017 (dollar amounts in thousands) 2017 2016 2015 Real Estate (1) : Balance at the beginning of the year $ 1,227,207 $ 914,074 $ 919,259 Acquisitions 170,505 300,382 — Improvements 37,219 33,909 32,385 Write-off of fully depreciated and fully amortized assets (18,735 ) (19,220 ) (13,212 ) Loss due to property damages (668 ) (1,938 ) (2,260 ) Sales (664,114 ) — (22,098 ) Deconsolidation (176,730 ) — — Balance at the end of the year $ 574,684 $ 1,227,207 $ 914,074 Accumulated depreciation and amortization (1) : Balance at the beginning of the year $ 120,176 $ 91,560 $ 64,171 Depreciation and amortization expense 48,994 47,836 41,513 Write-off of fully depreciated and fully amortized assets (18,735 ) (19,220 ) (13,212 ) Sales (102,474 ) — (912 ) Deconsolidation (6,144 ) — — Balance at the end of the year $ 41,817 $ 120,176 $ 91,560 ____________________ (1) Amounts include real estate held for sale. |
SUMMARY OF SIGNIFICANT ACCOUN25
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
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, KBS Strategic Opportunity BVI 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. |
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 Debt Securities | Interest income on the Company’s real estate debt securities is recognized on an accrual basis over the life of the investment using the interest method. Direct origination or acquisition fees and costs, as well as acquisition premiums or discounts, are amortized over the term of the securities as an adjustment to interest income. Income is recognized at an interest rate equivalent to the estimated yield on the real estate debt security, as calculated using the carrying value of the real estate debt security and the expected cash flows. Changes in estimated cash flows are recognized through an adjustment to the yield on the real estate debt security on a prospective basis. Projecting cash flows for these types of real estate debt securities 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 places real estate debt securities on nonaccrual 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 real estate debt security is placed on nonaccrual status, the Company reserves for any unpaid accrued interest and generally does not recognize subsequent interest income until cash is received, or the real estate debt security returns to accrual status. The Company will resume the accrual of interest if it determines that the collection of interest, according to the contractual terms of the real estate debt security, is probable. |
Revenue Recognition, Real Estate Equity Securities | Dividend income from real estate equity securities is recognized on an accrual basis based on eligible shares as of the ex-dividend date. |
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 | As a result of the Company’s early adoption of ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, acquisitions of real estate beginning January 1, 2017 could qualify as asset acquisitions (as opposed to business combinations). The Company records the acquisition of income-producing real estate or real estate that will be used for the production of income as a business combination or an asset acquisition. If substantially all of the fair value of the gross assets acquired are concentrated in a single identifiable asset or group of similar identifiable assets, then the set is not a business. For purposes of this test, land and buildings can be combined along with the intangible assets for any in-place leases and accordingly, most acquisitions of investment properties would not meet the definition of a business and would be accounted for as an asset acquisition. To be considered a business, a set must include an input and a substantive process that together significantly contributes to the ability to create an output. All assets acquired and liabilities assumed in a business combination are measured at their acquisition-date fair values. For asset acquisitions, the cost of the acquisition is allocated to individual assets and liabilities on a relative fair value basis. Acquisition costs associated with business combinations are expensed as incurred. Acquisition costs associated with asset acquisitions are capitalized. 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. 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 years ended December 31, 2017 , 2016 and 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 probable 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. Operating results of properties and related gains on sale that were disposed of or classified as held for sale in the ordinary course of business during the years ended December 31, 2017 , 2016 and 2015 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, 2017 , 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, 2017 , 2016 and 2015 . 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. |
Real Estate Debt Securities | The Company classifies its investment in real estate debt securities as held to maturity as the Company has the intent and ability to hold this investment until maturity. The Company’s real estate debt securities are recorded at amortized cost, net of other-than-temporary impairment (if any), and evaluated for other-than-temporary impairment at each balance sheet date. The amortized cost of a real estate debt security 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 real estate debt security. The amount of other-than-temporary impairment, if any, will be measured by comparing the amortized cost of the real estate debt security to the present value of the expected cash flows discounted at the real estate debt security’s effective interest rate, the real estate debt security’s observable market price, or the fair value of the collateral if the real estate debt security is collateral dependent and collection of principal and interest is not assured. If a real estate debt security is deemed to be other-than-temporarily impaired, the Company will record an other-than-temporary impairment on the consolidated statements of operations. The Company did not record any other-than-temporary impairment losses related to its real estate debt securities during the years ended December 31, 2017 |
Real Estate Equity Securities | determines the appropriate classification for real estate equity securities at acquisition (on the trade date) and reevaluates such designation as of each balance sheet date. As of December 31, 2017 , the Company classified its investments in real estate equity securities as available-for-sale as the Company intends to hold the securities for the purpose of collecting dividend income and for longer term price appreciation. These investments are carried at their estimated fair value based on quoted market prices for the security, net of any discounts for restrictions on the sale of the security. Any discount for lack of marketability is estimated using an option pricing model. Transaction costs that are directly attributable to the acquisition of real estate equity securities are capitalized to its cost basis. Unrealized gains and losses are reported in accumulated other comprehensive income (loss). Upon the sale of a security, the previously recognized unrealized gain (loss) would be reversed out of accumulated other comprehensive income (loss) and the actual realized gain (loss) recognized in earnings. Any non-temporary decline in the market value of an available-for-sale real estate equity security below cost results in a reduction in the carrying amount to fair value. The impairment is charged to earnings and a new cost basis for the real estate equity security is established. When a real estate equity security is impaired, the Company considers whether it has the ability and intent to hold the investment for a time sufficient to allow for any anticipated recovery in market value and considers whether evidence indicating the cost of the investment being recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and duration of the impairment, changes in value subsequent to period end and forecasted performance of the investee. |
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, 2017 and 2016 , the Company did not identify any indicators of impairment related to its unconsolidated real estate joint ventures 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, 2017 and 2016 , 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, 2017 and 2016 . The Company’s cash and cash equivalents balance exceeded federally insurable limits as of December 31, 2017 . 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. |
Restricted Cash | Restricted cash is comprised of lender impound reserve accounts on the Company’s borrowings for security deposits, property taxes, insurance, debt service obligations and capital improvements and replacements. |
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 effective 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 non-financial and financial assets 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 December 9, 2014, the Company’s board of directors approved an estimated value per share of 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 21, 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 estimated value per share of 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 December 20, 2015, the purchase price per share under the DRP was $13.44 . On December 8, 2016, the Company’s board of directors approved an estimated value per share of the Company’s common stock of $14.81 (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, 2016. Commencing December 25, 2016, the purchase price per share under the DRP was $14.81 . On December 7, 2017 , the Company’s board of directors approved an estimated value per share of the Company’s common stock of $ 11.50 (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, 2017 , after giving effect to the December 7, 2017 declaration of a special dividend of $3.61 per share on the outstanding shares of the Company's common stock to the stockholders of record as of the close of business on December 7, 2017 and the results of the Self-Tender (defined below). Commencing December 23, 2017, the purchase price per share under the DRP was $ 11.50 . The Company’s board of directors has determined that any portion of the Special Dividend that was paid in cash in January 2018 would not be used to purchase additional shares under the dividend reinvestment plan. 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 2017 , redemptions were limited to the amount of net proceeds from the sale of shares under the Company’s dividend reinvestment plan during 2016 . The last $1.0 million of net proceeds from the dividend reinvestment plan during 2016 was reserved exclusively for shares redeemed in connection with a stockholder’s death, “qualifying disability,” or “determination of incompetence”. Any portion of this last $1.0 million not used to redeem shares in connection with a stockholder's death, “qualifying disability”, or “determination of incompetence” were used to redeem shares not requested in connection with a stockholder’s death, “qualifying disability” or “determination of incompetence” during December 2017 redemption, which was made in January 2018. • 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 succeeding fiscal quarters. The last $1.0 million of net proceeds from the dividend reinvestment plan during the prior year is reserved exclusively for shares redeemed in connection with a stockholder’s death, “qualifying disability,” or “determination of incompetence”. The share redemption plan also provides that, to the extent that in the last month of any calendar year the amount of redemption requests in connection with a stockholder’s death, “qualifying disability or “determination of incompetence” is less than the $1.0 million reserved for such redemptions under the share redemption plan, any excess funds may be used to redeem shares not requested in connection with a stockholder’s death, “qualifying disability or “determination of incompetence” during such month. 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 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 redeemed 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. Effective December 30, 2016, pursuant to the tenth amended and restated share redemption program, except for redemptions made upon a stockholder’s death, “qualifying disability” or “determination of incompetence”, the price at which the Company began to redeem shares is 95% of the Company’s most recent estimated value per share as of the applicable redemption date. Upon the death, “qualifying disability” or “determination of incompetence” of a stockholder, the redemption price continued to be equal to the Company’s most recent estimated value per share. The Company’s board of directors may amend, suspend or terminate the share redemption program with ten business 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. On September 14, 2017, the Company commenced a self-tender offer (the “Self-Tender”) for up to 3,553,660 shares of common stock at a price of $14.07 per share, or approximately $50.0 million of shares. On October 18, 2017, the Company increased the number of shares accepted for payment in the Self-Tender by up to 1,135,912 shares at a price of $14.07 per share, or approximately $16.0 million of shares. On October 23, 2017, the Company accepted for purchase 4,686,503 shares for an aggregate cost of $65.9 million , excluding fees and expenses related to the Self-Tender. Because of the Self-Tender, the tenth amended share redemption program was suspended from September 29, 2017 through October 31, 2017, meaning no redemptions were made in September or October (including those requested following a stockholder’s death, “qualifying disability” or “determination of incompetence”). The Company cancelled all outstanding redemption requests under the share redemption program as of the commencement of the Self-Tender and was not accepting any redemption requests under the share redemption program during the term of the Self-Tender. 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. During the year ended December 31, 2017 , the Company had redeemed $8.2 million of common stock, which represented all redemption requests received in good order and eligible for redemption through the December 2017 redemption date, except for 786,174 shares totaling $8.6 million , of which $4.4 million relates to delayed December 2017 redemptions made in January 2018, in connection with redemption requests not made upon a stockholder’s death, “qualifying disability” or “determination of incompetence,” which redemption requests will be fulfilled subject to the limitations described above. The Company recorded $8.6 million and $12.6 million of other liabilities on the Company’s balance sheet as of December 31, 2017 and 2016 , respectively, related to unfulfilled redemption requests received in good order under the share redemption program. Based on the amount of net proceeds raised from the sale of shares under the dividend reinvestment plan during 2017 , the Company has $8.7 million available for redemptions during 2018 , including shares that are redeemed in connection with a stockholders’ death, “qualifying disability” or “determination of incompetence,” subject to the limitations described above. In addition to the redemptions under the program described above, during the year ended December 31, 2017 , the Company repurchased an additional 47,750 shares of common stock at $14.07 per share for an aggregate price of $0.7 million . |
Related Party Transactions | Pursuant to the Advisory Agreement, the Company is obligated to pay the Advisor specified fees upon the provision of certain services related to the investment of funds in real estate and real estate-related investments, management of the Company’s investments and for other services (including, but not limited to, the disposition of investments). 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 11 , “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, 2017 . |
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. |
Foreign Currency Transactions | The U.S. Dollar is the Company’s functional currency. Transactions denominated in currency other than the Company’s functional currency are recorded upon initial recognition at the exchange rate on the date of the transaction. After initial recognition, monetary assets and liabilities denominated in foreign currency are remeasured at each reporting date into the foreign currency at the exchange rate on that date. Exchange rate differences, other than those accounted for as hedging transactions, are recognized as foreign currency transaction gain or loss included in the Company’s consolidated statements of operations. |
Derivative Instruments | The Company enters into derivative instruments for risk management purposes to hedge its exposure to cash flow variability caused by changing interest rates on its variable rate notes payable and enters into derivative instruments such as cross currency swaps, forward contracts, puts or calls for risk management purposes to hedge its exposure to variability in foreign currency exchange rates of the Israeli new Shekel versus the U.S. Dollar. The Company records these derivative instruments at fair value on the accompanying consolidated balance sheets. Derivative instruments designated and qualifying as a hedge of the exposure to variability in expected future cash flows or other types of forecasted transactions are considered cash flow hedges. The change in fair value of the effective portion of a derivative instrument that is designated as a cash flow hedge is recorded as other comprehensive income (loss) on the accompanying consolidated statements of comprehensive income (loss) and consolidated statements of stockholders’ equity. The changes in fair value for derivative instruments that are not designated as a hedge or that do not meet the hedge accounting criteria are recorded as gain or loss on derivative instruments and included in earnings in the accompanying consolidated statements of operations. |
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. The Company conducts certain business activities through taxable REIT subsidiaries. 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 all open tax years through December 31, 2017 . As of December 31, 2017 , returns for the calendar year 2013 through 2016 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 opportunistic real estate, non-performing loans 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 opportunistic real estate, non-performing loans 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, 2017 , 2016 and 2015 . Distributions declared per share were $3.89 , $0.38 and $0.38 during the years ended December 31, 2017 , 2016 and 2015 , respectively. |
Square Footage, Occupancy and Other Measures | Square footage, occupancy, number of tenants and other measures including annualized base rents and annualized base rents per square foot used to describe real estate and real-estate related investments included in these 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. In addition, the standard provided guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers upon transfer of control. 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 deferred the effective date of ASU No. 2014-09 by one year. Early adoption is permitted but not before the original effective date. The Company elected to adopt the standard using the modified retrospective approach, which requires a cumulative effect adjustment as of the date of the Company’s adoption, January 1, 2018. Under the modified retrospective approach, an entity may also elect to apply this standard to either (i) all contracts as of January 1, 2018 or (ii) only to contracts that are not completed as of January 1, 2018. A completed contract is a contract for which all (or substantially all) of the revenue was recognized under legacy GAAP that was in effect before the date of initial application. The Company elected to apply this standard only to contracts that are not completed as of January 1, 2018. The primary source of revenue for the Company is generated through leasing arrangements, which are excluded from this standard. Based on the Company’s evaluation of contracts within the scope of ASU No. 2014-09, revenue that may be impacted by the new standard include sales of real estate, other operating income and tenant reimbursements for substantial services earned at its properties. The Company evaluated all of its real estate sales contracts through December 31, 2017 and determined they qualified as sales to noncustomers. With the exception of the partial sale of 102 developable acres of Park Highlands, the gains on sales of real estate recognized for the Company’s real estate sales contracts were recognized on the full accrual method based on the existing accounting standards and determined to be completed contracts as of January 1, 2018, therefore the adoption of the ASU No. 2014-09 did not have an impact to these real estate sale contracts. The purchase and sale agreements for the partial sale of Park Highlands are not completed contracts given substantially all of the revenue was not recognized under current accounting standards. For the year ended December 31, 2017, other operating income including parking revenues and tenant reimbursements for substantial services and other ancillary income in scope of ASC 606 were approximately 5% of consolidated revenue. Under current accounting standards, the Company typically recognizes other operating income when the amounts are fixed or determinable, collectability is reasonably assured, and services have been rendered. Under the new revenue recognition ASU, the recognition of such revenue will occur when the services are provided and the performance obligations are satisfied. These services are normally provided at a point in time or over a specified period of time with respect to monthly parking revenue; therefore, revenue recognition under the new revenue recognition ASU is expected to be substantially similar to the recognition pattern under existing accounting standards. Based on the Company’s evaluation of its contracts in scope, the adoption of the new revenue recognition standard is not expected to have a material impact to the Company’s financial statements on January 1, 2018. 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 supersedes the guidance to classify equity securities with readily determinable fair values into different categories (that is, trading or available-for-sale) and requires equity securities (including other ownership interests, such as partnerships, unincorporated joint ventures, and limited liability companies) to be measured at fair value with changes in the fair value recognized through net income. 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 of certain provisions of the standard is permitted for financial statements that have not been previously issued. Upon adoption, the Company will be required to record net unrealized gain or loss on real estate equity securities in earnings and record a cumulative effect adjustment to the balance sheet for the unrealized gain on real estate securities included in accumulated other comprehensive income as of December 31, 2017. 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. The standard requires lessors to identify lease and non-lease components under their leasing arrangements and allocate the total consideration in the lease agreement to these lease and non-lease components based on their relative standalone selling prices. Non-lease components will be subject to the new revenue recognition standard upon the Company’s adoption of the new leasing standard on January 1, 2019. 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 as of its issuance 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. In January 2018, the FASB issued a proposed amendment to the leases ASU, which would add a transition option to the new leases standard that would allow entities to apply the transition provisions of the new standard at its adoption date instead of the earliest comparative periods presented in its financial statements. The FASB also proposed a practical expedient that would permit lessors to not separate lease and non-lease components if certain conditions are met. The Company is currently evaluating the impact of adopting the new leases standard on its consolidated financial statements and if adopted by the FASB, applying the transition option and electing the practical expedient of the proposed amendment. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments (“ASU No. 2016-13”). ASU No. 2016-13 affects entities holding financial assets and net investments in leases that are not accounted for at fair value through net income. The amendments in ASU No. 2016-13 require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. ASU No. 2016-13 also amends the impairment model for available-for-sale securities. An entity will recognize an allowance for credit losses on available-for-sale debt securities as a contra-account to the amortized cost basis rather than as a direct reduction of the amortized cost basis of the investment, as is currently required. ASU No. 2016-13 also requires new disclosures. For financial assets measured at amortized cost, an entity will be required to disclose information about how it developed its allowance for credit losses, including changes in the factors that influenced management’s estimate of expected credit losses and the reasons for those changes. For financing receivables and net investments in leases measured at amortized cost, an entity will be required to further disaggregate the information it currently discloses about the credit quality of these assets by year of the asset’s origination for as many as five annual periods. For available for sale securities, an entity will be required to provide a roll-forward of the allowance for credit losses and an aging analysis for securities that are past due. ASU No. 2016-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is still evaluating the impact of adopting ASU No. 2016-13 on its financial statements, but does not expect the adoption of ASU No. 2016-13 to have a material impact on its financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU No. 2016-15”). ASU No. 2016-15 is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. The amendments in ASU No. 2016-15 provide guidance on eight specific cash flow issues, including the following that are or may be relevant to the Company: (a) Cash payments for debt prepayment or debt extinguishment costs should be classified as cash outflows for financing activities; (b) Cash payments relating to contingent consideration made soon after an acquisition’s consummation date (i.e., approximately three months or less) should be classified as cash outflows for investing activities. Payments made thereafter should be classified as cash outflows for financing activities up to the amount of the original contingent consideration liability. Payments made in excess of the amount of the original contingent consideration liability should be classified as cash outflows for operating activities; (c) Cash payments received from the settlement of insurance claims should be classified on the basis of the nature of the loss (or each component loss, if an entity receives a lump-sum settlement); and (d) Relating to distributions received from equity method investments, ASU No. 2016-15 provides an accounting policy election for classifying distributions received from equity method investments. Such amounts can be classified using a (1) cumulative earnings approach, or (2) nature of distribution approach. Under the cumulative earnings approach, an investor would compare the distributions received to its cumulative equity method earnings since inception. Any distributions received up to the amount of cumulative equity earnings would be considered a return on investment and classified in operating activities. Any excess distributions would be considered a return of investment and classified in investing activities. Alternatively, an investor can choose to classify the distributions based on the nature of activities of the investee that generated the distribution. If the necessary information is subsequently not available for an investee to determine the nature of the activities, the entity should use the cumulative earnings approach for that investee and report a change in accounting principle on a retrospective basis; (e) In the absence of specific guidance, an entity should classify each separately identifiable cash source and use on the basis of the nature of the underlying cash flows. For cash flows with aspects of more than one class that cannot be separated, the classification should be based on the activity that is likely to be the predominant source or use of cash flow. ASU No. 2016-15 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The Company does not expect the adoption of ASU No. 2016-15 to have a material impact on its financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU No. 2016-18”). ASU No. 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, restricted cash and restricted cash equivalents. Therefore, amounts generally described as restricted cash should be included with cash and cash equivalents when reconciling the beginning of period and end of period total amounts shown on the statement of cash flows. ASU No. 2016-18 is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. The Company elected to early adopt ASU No. 2016-18 for the reporting period ending December 31, 2016 and was applied retrospectively. As a result of adoption of ASU No. 2016-18, the Company no longer presents the changes within restricted cash in the consolidated statements of cash flows. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU No. 2017-01”) to add guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. ASU No. 2017-01 provides a screen to determine when an integrated set of assets and activities (collectively referred to as a “set”) is not a business. The screen requires that, when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. If the screen is not met, ASU No. 2017-01 (1) requires that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) removes the evaluation of whether a market participant could replace missing elements. ASU No. 2017-01 provides a framework to assist entities in evaluating whether both an input and a substantive process are present. The framework includes two sets of criteria to consider that depend on whether a set has outputs. Although outputs are not required for a set to be a business, outputs generally are a key element of a business; therefore, the FASB has developed more stringent criteria for sets without outputs. ASU No. 2017-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. The amendments can be applied to transactions occurring before the guidance was issued (January 5, 2017) as long as the applicable financial statements have not been issued. The Company elected to early adopt ASU No. 2017-01 for the reporting period beginning January 1, 2017. As a result of the adoption of ASU No. 2017-01, the Company’s acquisitions of investment properties beginning January 1, 2017 could qualify as asset acquisitions (as opposed to business combinations). Transaction costs associated with asset acquisitions are capitalized, while transaction costs associated with business combinations will continue to be expensed as incurred. |
SUMMARY OF SIGNIFICANT ACCOUN26
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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 INVESTME27
REAL ESTATE HELD FOR INVESTMENT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Real Estate [Abstract] | |
Schedule of Real Estate Investments | The following table summarizes the Company’s real estate held for investment as of December 31, 2017 and 2016 , respectively (in thousands): December 31, 2017 December 31, 2016 Land $ 162,061 $ 193,341 Buildings and improvements 388,144 356,982 Tenant origination and absorption costs 24,479 18,819 Total real estate, cost 574,684 569,142 Accumulated depreciation and amortization (41,817 ) (32,052 ) Total real estate, net $ 532,867 $ 537,090 The following table provides summary information regarding the Company’s real estate held for investment as of December 31, 2017 (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 % Richardson Portfolio: Palisades Central I 11/23/2011 Richardson TX Office 1,037 10,970 — 12,007 (2,268 ) 9,739 90.0 % Palisades Central II 11/23/2011 Richardson TX Office 810 18,282 — 19,092 (4,144 ) 14,948 90.0 % Greenway I 11/23/2011 Richardson TX Office 561 2,364 — 2,925 (841 ) 2,084 90.0 % Greenway III 11/23/2011 Richardson TX Office 702 4,054 559 5,315 (1,790 ) 3,525 90.0 % Undeveloped Land 11/23/2011 Richardson TX Undeveloped Land 3,134 — — 3,134 — 3,134 90.0 % Total Richardson Portfolio 6,244 35,670 559 42,473 (9,043 ) 33,430 Park Highlands (1) 12/30/2011 North Las Vegas NV Undeveloped Land 34,428 — — 34,428 — 34,428 (1 ) Burbank Collection 12/12/2012 Burbank CA Retail 4,175 12,536 725 17,436 (2,389 ) 15,047 90.0 % Park Centre 03/28/2013 Austin TX Office 3,251 26,387 — 29,638 (3,703 ) 25,935 100.0 % Central Building 07/10/2013 Seattle WA Office 7,015 27,026 1,267 35,308 (4,663 ) 30,645 100.0 % 1180 Raymond 08/20/2013 Newark NJ Apartment 8,292 38,103 — 46,395 (5,283 ) 41,112 100.0 % Park Highlands II 12/10/2013 North Las Vegas NV Undeveloped Land 24,948 — — 24,948 — 24,948 100.0 % 424 Bedford 01/31/2014 Brooklyn NY Apartment 8,860 25,707 — 34,567 (2,810 ) 31,757 90.0 % Richardson Land II 09/04/2014 Richardson TX Undeveloped Land 3,418 — — 3,418 — 3,418 90.0 % Westpark Portfolio 05/10/2016 Redmond WA Office/Flex/Industrial 36,085 89,687 7,250 133,022 (8,730 ) 124,292 100.0 % Crown Pointe 02/14/2017 Dunwoody GA Office 22,590 59,443 5,796 87,829 (3,921 ) 83,908 100.0 % 125 John Carpenter 09/15/2017 Irving TX Office 2,755 73,585 8,882 85,222 (1,275 ) 83,947 100.0 % $ 162,061 $ 388,144 $ 24,479 $ 574,684 $ (41,817 ) $ 532,867 _____________________ (1) On September 7, 2016, a subsidiary of the Company that owns a portion of Park Highlands sold 820 units of 10% Class A non-voting preferred membership units for $0.8 million to accredited investors. The amount of the Class A non-voting preferred membership units raised, net of offering costs, is included in other liabilities on the accompanying consolidated balance sheets. |
Schedule of Future Minimum Rental Income for Company's Properties | As of December 31, 2017 , the future minimum rental income from the Company’s properties, excluding apartment leases, under non-cancelable operating leases was as follows (in thousands): 2018 $ 40,535 2019 37,646 2020 32,830 2021 27,164 2022 22,002 Thereafter 63,391 $ 223,568 |
Schedules of Concentration of Risk, by Risk Factor | As of December 31, 2017 , the Company’s commercial real estate properties were leased to approximately 300 tenants over a diverse range of industries and geographic areas. The Company’s highest tenant industry concentration (greater than 10% of annualized base rent) was as follows: Industry Number of Tenants Annualized Base Rent (1) (in thousands) Percentage of Annualized Base Rent Management Consulting 32 $ 4,489 10.7 % _____________________ (1) Annualized base rent represents annualized contractual base rental income as of December 31, 2017 , 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 ABSORP28
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 and 2016 , 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 $ 24,479 $ 18,819 $ 301 $ 423 $ (3,636 ) $ (6,626 ) Accumulated Amortization (6,448 ) (5,840 ) (170 ) (219 ) 793 1,538 Net Amount $ 18,031 $ 12,979 $ 131 $ 204 $ (2,843 ) $ (5,088 ) |
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, 2017 , 2016 and 2015 were 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, 2017 2016 2015 2017 2016 2015 2017 2016 2015 Amortization $ (10,265 ) $ (10,850 ) $ (10,555 ) $ (283 ) $ (459 ) $ (1,023 ) $ 2,858 $ 2,789 $ 1,668 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The remaining unamortized balance for these outstanding intangible assets and liabilities as of December 31, 2017 will be amortized for the years ending December 31 as follows (in thousands): Tenant Origination and Above-Market Below-Market 2018 $ (4,772 ) $ (41 ) $ 846 2019 (3,929 ) (39 ) 712 2020 (3,011 ) (35 ) 556 2021 (2,035 ) (16 ) 218 2022 (1,312 ) — 161 Thereafter (2,972 ) — 350 $ (18,031 ) $ (131 ) $ 2,843 Weighted-Average Remaining Amortization Period 5.4 years 3.3 years 4.6 years |
REAL ESTATE EQUITY SECURITIES (
REAL ESTATE EQUITY SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Activity of Real Estate Securities | The following summarizes the activity related to real estate equity securities for the year ended December 31, 2017 (in thousands): Amortized Cost Basis Unrealized Gains Total Real estate equity securities - December 31, 2016 $ — $ — $ — Acquisition of real estate equity securities 64,454 — 64,454 Acquisition fee to affiliate and purchase commission 463 — 463 Unrealized change in market value of real estate equity securities — 25,146 25,146 Real estate equity securities - December 31, 2017 $ 64,917 $ 25,146 $ 90,063 |
REAL ESTATE DEBT SECURITIES (Ta
REAL ESTATE DEBT SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Activity of Real Estate Debt Securities | As of December 31, 2017 , the Company owned an investment in real estate debt securities. The Company’s investment in real estate debt securities is classified as held to maturity, as the Company has the intent and ability to hold its investment until maturity, and it is not more likely than not that the Company would be required to sell its investment before recovery of the Company’s amortized cost basis. The information for those real estate debt securities as of December 31, 2017 and 2016 is set forth below (in thousands): Debt Securities Name Date Acquired Debt Securities Type Outstanding Principal Balance as of December 31, 2017 (1) Book Value as of December 31, 2017 (2) Book Value as of December 31, 2016 Contractual Interest Rate (3) Annualized Effective Interest Rate (3) Maturity Date Battery Point Series B Preferred Units 10/28/2016 / 03/30/2017 / 05/12/2017 Series B Preferred Units $ 17,500 $ 17,751 $ 4,683 9.0 % 11.1 % 10/28/2019 _____________________ (1) Outstanding principal balance as of December 31, 2017 represents principal balance outstanding under the real estate debt securities. (2) Book value of the real estate debt securities 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 interest rate on the face of the real estate securities. Annualized effective interest rate is calculated as the actual interest income recognized in 2017 , 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, 2017 . The following summarizes the activity related to real estate debt securities for the year ended December 31, 2017 (in thousands): Real estate debt securities - December 31, 2016 $ 4,683 Face value of real estate debt securities acquired 12,500 Deferred interest receivable and interest accretion 315 Commitment fee, net of closing costs and acquisition fee 3 Accretion of commitment fee, net of closing costs 250 Real estate debt securities - December 31, 2017 $ 17,751 |
Schedule of Interest Income from Real Estate Debt Securities | For the years ended December 31, 2017 and 2016 , interest income from real estate debt securities consisted of the following (in thousands): For the Years Ended December 31, 2017 2016 Contractual interest income $ 1,217 $ 63 Interest accretion 315 30 Accretion of commitment fee, net of closing costs and acquisition fee 250 17 Interest income from real estate debt securities $ 1,782 $ 110 |
REAL ESTATE DISPOSITIONS (Table
REAL ESTATE DISPOSITIONS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Assets and Liabilities of Real Estate Held-for-Sale | The following summary presents the major components of assets and liabilities related to real estate held for sale as of December 31, 2017 and December 31, 2016 (in thousands): December 31, 2017 December 31, 2016 Assets related to real estate held for sale Real estate, cost $ — $ 658,065 Accumulated depreciation and amortization — (88,124 ) Real estate, net — 569,941 Other assets — 35,173 Total assets related to real estate held for sale $ — $ 605,114 Liabilities related to real estate held for sale Notes payable, net — 376,696 Other liabilities — 1,463 Total liabilities related to real estate held for sale $ — $ 378,159 |
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, 2017 , 2016 and 2015 (in thousands): Years Ended December 31, 2017 2016 2015 Revenues Rental income $ 57,103 $ 67,982 $ 63,660 Tenant reimbursements and other operating income 16,888 17,809 17,152 Total revenues $ 73,991 $ 85,791 $ 80,812 Expenses Operating, maintenance, and management $ 21,931 $ 25,441 $ 25,837 Real estate taxes and insurance 9,935 11,337 10,864 Asset management fees to affiliate 4,572 5,404 5,300 Depreciation and amortization 27,043 33,893 34,309 Interest expense 11,681 12,890 11,659 Total expenses $ 75,162 $ 88,965 $ 87,969 |
NOTES AND BONDS PAYABLE (Tables
NOTES AND BONDS PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Notes and Bonds Payable [Abstract] | |
Schedule of Long-term Debt Instruments | As of December 31, 2017 and December 31, 2016 , the Company’s notes and bonds payable, including notes payable related to real estate held for sale, consisted of the following (dollars in thousands): Book Value as of December 31, 2017 Book Value as of December 31, 2016 Contractual Interest Rate as of December 31, 2017 (1) Effective Interest Rate at December 31, 2017 (1) Payment Type Maturity Date (2) Richardson Portfolio Mortgage Loan $ 36,886 $ 40,594 One-Month LIBOR + 2.10% 3.46% Principal & Interest 05/01/2018 Bellevue Technology Center Mortgage Loan (3) — 59,400 (3) (3) (3) (3) Portfolio Revolving Loan Facility (3) — 11,799 (3) (3) (3) (3) Portfolio Mortgage Loan (4) 9,877 106,479 One-Month LIBOR + 2.25% 3.61% Principal & Interest 07/01/2018 Burbank Collection Mortgage Loan 10,958 9,812 One-Month LIBOR + 2.35% 3.79% Principal & Interest 09/30/2018 50 Congress Mortgage Loan (5) — 31,525 (5) (5) (5) (5) 1180 Raymond Bond Payable 6,460 6,635 6.50% 6.50% Principal & Interest 09/01/2036 Central Building Mortgage Loan 27,600 27,600 One-Month LIBOR + 1.75% 3.11% Interest Only 11/13/2018 Maitland Promenade II Mortgage Loan (3) — 20,877 (3) (3) (3) (3) Westmoor Center Mortgage Loan (3) — 62,000 (3) (3) (3) (3) Plaza Buildings Senior Loan (3) — 109,866 (3) (3) (3) (3) 424 Bedford Mortgage Loan 24,282 24,832 3.91% 3.91% Principal & Interest 10/01/2022 1180 Raymond Mortgage Loan 31,000 31,000 One-Month LIBOR + 2.25% 3.61% Interest Only 12/01/2018 KBS SOR (BVI) Holdings, Ltd. Series A Debentures (6) 278,801 251,811 4.25% 4.25% (6) 03/01/2023 Westpark Portfolio Mortgage Loan 85,200 83,200 One-Month LIBOR + 2.50% 3.86% Interest Only (7) 07/01/2020 353 Sacramento Mortgage Loan (8) — 85,500 (8) (8) (8) (8) Crown Pointe Mortgage Loan 50,500 — One-Month LIBOR + 2.60% 3.96% Interest Only 02/13/2020 125 John Carpenter Mortgage Loan 50,130 — (9) 3.12% Interest Only 10/01/2022 Total Notes and Bonds Payable principal outstanding 611,694 962,930 Net Premium/(Discount) on Notes and Bonds Payable (10) 137 88 Deferred financing costs, net (8,788 ) (12,394 ) Total Notes and Bonds Payable, net $ 603,043 $ 950,624 _____________________ (1) Contractual interest rate represents the interest rate in effect under the loan as of December 31, 2017 . Effective interest rate is calculated as the actual interest rate in effect as of December 31, 2017 (consisting of the contractual interest rate and contractual floor rates), using interest rate indices at December 31, 2017 , where applicable. (2) Represents the initial maturity date or the maturity date as extended as of December 31, 2017 ; subject to certain conditions, the maturity dates of certain loans may be extended beyond the date shown. (3) On November 8, 2017, in connection with the sale of the Singapore Portfolio, the Company repaid the entire principal balance and all other sums due under this loan. (4) On November 8, 2017, in connection with the sale of certain properties secured by this loan, the Company repaid all but $10.0 million principal balance. The Portfolio Mortgage Loan is now only secured by one office property, Park Centre. (5) On May 15, 2017, in connection with the disposition of 50 Congress Street, the Company repaid the entire principal balance and all other sums due under this loan. (6) See “ - Israeli Bond Financing” below. (7) Represents the payment type required under the loan as of December 31, 2017 . 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 bonds payable, see five-year maturity table below. (8) On July 6, 2017, in connection with the partial interest sale of 353 Sacramento, the 353 Sacramento Mortgage Loan was deconsolidated from the Company's balance sheet. See note 12 , “Investment in Unconsolidated Joint Ventures” for a further discussion on the Company’s partial sale of 353 Sacramento. (9) The 125 John Carpenter Mortgage Loan bears interest at a floating rate of the greater of (a) 2.0% or (b) 175 basis points over one-month LIBOR. (10) Represents the unamortized premium/discount on notes and bonds 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 bonds payable. |
Schedule of Maturities of Long-term Debt | The following is a schedule of maturities, including principal amortization payments, for all notes and bonds payable outstanding as of December 31, 2017 (in thousands): 2018 $ 117,537 2019 57,649 2020 190,774 2021 56,639 2022 127,925 Thereafter 61,170 $ 611,694 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional and Fair Value of Interest Rate Swaps Designated as Cash Flow Hedges | The following table summarizes the notional amount and other information related to the Company’s foreign currency collars as of December 31, 2016 . The notional amount is an indication of the extent of the Company’s involvement in each instrument at that time, but does not represent exposure to credit, interest rate or market risks (currency in thousands): Derivative Instruments Notional Amount Strike Price Trade Date Maturity Date Derivative instruments not designated as hedging instruments Foreign currency collar $ 100,000 3.72 - 3.83 ILS-USD 08/08/2016 08/08/2017 Foreign currency collar 50,000 3.67 - 3.77 ILS-USD 08/16/2016 08/16/2017 Foreign currency collar 50,000 3.68 - 3.78 ILS-USD 08/16/2016 08/16/2017 Foreign currency collar 50,000 3.67 - 3.77 ILS-USD 08/22/2016 08/22/2017 $ 250,000 The following table summarizes the notional amount and other information related to the Company’s foreign currency option as of December 31, 2017 . The notional amount is an indication of the extent of the Company’s involvement in each instrument at that time, but does not represent exposure to credit, interest rate or market risks (currency in thousands): Derivative Instrument Notional Amount Strike Price Trade Date Maturity Date Derivative instrument not designated as hedging instrument Foreign currency option $ 285,361 3.40 ILS-USD 08/03/2017 08/03/2018 The following table summarizes the notional amount and other information related to the Company’s derivative instrument as of December 31, 2017 . The notional amount is an indication of the extent of the Company’s involvement in the instrument at that time, but does not represent exposure to credit, interest rate or market risks (dollars in thousands): Derivative Instrument Effective Date Maturity Date Notional Value Reference Rate Interest rate cap 02/21/2017 02/13/2020 $ 46,875 One-month LIBOR at 3.00% |
Schedule of Derivative Instruments in Statement of Financial Position | The following table sets forth the fair value of the Company’s derivative instruments as well as their classification on the consolidated balance sheets as of December 31, 2017 and 2016 (dollars in thousands): December 31, 2017 December 31, 2016 Derivative Instruments Balance Sheet Location Number of Instruments Fair Value Number of Instruments Fair Value Derivative instruments not designated as hedging instruments Interest rate cap Prepaid expenses and other assets 1 $ 14 1 $ 12 Foreign currency collars Other liabilities — $ — 4 $ (3,910 ) Foreign currency option Prepaid expenses and other assets 1 $ 4,243 — $ — |
FAIR VALUE DISCLOSURES (Tables)
FAIR VALUE DISCLOSURES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 and 2016 , which carrying amounts do not approximate the fair values (in thousands): December 31, 2017 December 31, 2016 Face Value Carrying Amount Fair Value Face Value Carrying Amount Fair Value Financial assets: Real estate debt securities $ 17,500 $ 17,751 $ 17,386 $ 5,000 $ 4,683 $ 4,683 Financial liabilities: Notes and bond payable $ 332,893 $ 330,727 $ 335,212 $ 711,119 $ 707,169 $ 711,425 KBS SOR (BVI) Holdings, Ltd. Series A Debentures $ 278,801 $ 272,316 $ 296,069 $ 251,811 $ 243,455 $ 253,120 |
Fair Value, Assets Measured on Recurring Basis | As of December 31, 2017 , the Company measured the following assets at fair value (in thousands): Fair Value Measurements Using Total Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Recurring Basis: Real estate equity securities $ 90,063 $ 51,922 $ 38,141 $ — Asset derivative - interest rate cap $ 14 $ — $ 14 $ — Asset derivative - foreign currency option $ 4,243 $ — $ 4,243 $ — |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 , 2016 and 2015 , respectively, and any related amounts payable as of December 31, 2017 and December 31, 2016 (in thousands): Incurred Payable as of December 31, 2017 2016 2015 2017 2016 Expensed Asset management fees $ 10,686 $ 9,628 $ 8,348 $ — $ — Acquisition fees on real estate (1) — 2,964 — — — Reimbursable operating expenses (2) 241 221 178 26 55 Disposition fees (3) 8,352 279 276 — — Capitalized Acquisition fees on real estate (1) 907 — — — — Acquisition fees on real estate equity securities 429 — — — — Acquisition fees on real estate debt securities — 250 — — — $ 20,615 $ 13,342 $ 8,802 $ 26 $ 55 _____________________ (1) As a result of the adoption of ASU No. 2017-01, the Company’s acquisitions of real estate properties beginning January 1, 2017 generally qualify as an asset acquisition (as opposed to a business combination). Acquisition fees associated with asset acquisitions will be capitalized, while costs associated with business combinations will continue to be expensed as incurred. (2) The Advisor may seek reimbursement for certain employee costs 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 $225,000 , $153,000 and $153,000 for the years ended December 31, 2017 , 2016 and 2015 , 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. In addition to the amounts above, the Company reimburses the Advisor for certain of the Company’s direct costs incurred from third parties that were initially paid by the Advisor on behalf of the Company. (3) Disposition fees with respect to real estate sold are included in the gain on sale of real estate in the accompanying consolidated statements of operations. Disposition fees with respect to the assignment of the Company's real estate loan receivable are included in general and administrative expenses in the accompanying consolidated statements of operations. |
INVESTMENT IN UNCONSOLIDATED 36
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Investments in Unconsolidated Joint Ventures | Summarized financial information for the 353 Sacramento Joint Venture follows (in thousands): December 31, 2017 Assets: Real estate assets, net of accumulated depreciation and amortization $ 171,066 Other assets 6,472 Total assets $ 177,538 Liabilities and equity: Notes payable, net $ 89,423 Other liabilities 7,313 Partners’ capital 80,802 Total liabilities and equity $ 177,538 For the Period from July 6, 2017 to December 31, 2017 Revenues $ 7,053 Expenses: Operating, maintenance, and management 2,189 Real estate taxes and insurance 1,198 Depreciation and amortization 3,408 Interest expense 2,302 Total expenses 9,097 Net loss $ (2,044 ) Company’s equity in loss of unconsolidated joint venture $ (823 ) As of December 31, 2017 and 2016 , the Company’s investments in unconsolidated joint ventures were composed of the following (dollars in thousands): Investment Balance at Joint Venture Number of Properties Location Ownership % December 31, 2017 December 31, 2016 NIP Joint Venture 5 Various Less than 5.0% $ 3,674 $ 5,305 110 William Joint Venture 1 New York, New York 60.0% 7,160 70,544 353 Sacramento Joint Venture 1 San Francisco, California 55.0% 44,743 — $ 55,577 $ 75,849 Summarized financial information for the 110 William Joint Venture follows (in thousands): December 31, 2017 December 31, 2016 Assets: Real estate assets, net of accumulated depreciation and amortization $ 248,269 $ 262,192 Other assets 32,331 23,355 Total assets $ 280,600 $ 285,547 Liabilities and equity: Notes payable, net (1) $ 260,108 $ 157,628 Other liabilities 11,016 12,872 Partners’ capital 9,476 115,047 Total Liabilities and equity $ 280,600 $ 285,547 _____________________ (1) See “- 110 William Joint Venture Refinance” below. For the Years Ended December 31, 2017 2016 2015 Revenues $ 37,338 $ 33,458 $ 34,188 Expenses: Operating, maintenance, and management 10,056 10,778 10,549 Real estate taxes and insurance 6,281 6,017 5,748 Real estate acquisition fees and expenses — — 1 Depreciation and amortization 16,544 12,955 12,596 Interest expense 13,134 6,049 6,170 Total expenses 46,015 35,799 35,064 Total other income 56 63 334 Net loss $ (8,621 ) $ (2,278 ) $ (542 ) Company’s equity in loss of unconsolidated joint venture $ (5,214 ) $ (1,408 ) $ (368 ) |
SUPPLEMENTAL CASH FLOW AND SI37
SUPPLEMENTAL CASH FLOW AND SIGNIFICANT NONCASH TRANSACTION DISCLOSURES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Supplemental Cash Flow and Significant Noncash Transaction Disclosures [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | Supplemental cash flow and significant noncash transaction disclosures were as follows (in thousands): Years Ended December 31, 2017 2016 2015 Supplemental Disclosure of Cash Flow Information: Interest paid, net of capitalized interest of $2,339 , $2,025 and $1,856 for the years ended December 31, 2017, 2016 and 2015 , respectively $ 32,688 $ 20,759 12,265 Supplemental Disclosure of Significant Noncash Transactions: Assets and liabilities deconsolidated in connection with the 353 Sacramento partial sale: Real estate, net 170,586 — — Rents and other receivables, net 1,244 — — Prepaid expenses and other assets 555 — — Notes payable, net 87,132 — — Accounts payable and accrued liabilities 1,574 — — Below-market leases, net 2,960 — — Other liabilities 924 — — SREIT units received in connection with the Singapore Transaction 38,720 — — Increase in development obligations related to sale of real estate 3,816 — 4,128 Application of escrow deposits to acquisition of real estate 2,000 — — Increase in accrued improvements to real estate — 3,547 — Increase in redeemable common stock payable — 8,902 3,715 Distributions paid to common stockholders through common stock issuances pursuant to the dividend reinvestment plan 8,666 12,616 13,573 |
SELECTED QUARTERLY FINANCIAL 38
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 and 2016 (in thousands, except per share amounts): 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 37,996 $ 40,237 $ 36,414 $ 26,067 Net income (loss) $ (9,058 ) $ 23,809 $ (10,542 ) $ 206,371 Net income (loss) attributable to common stockholders $ (9,092 ) $ 23,846 $ (10,534 ) $ 206,424 Net income (loss) per common share, basic and diluted $ (0.16 ) $ 0.42 $ (0.19 ) $ 3.88 Distributions declared per common share $ 0.092 $ 0.093 $ 0.095 $ 3.610 2016 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 28,365 $ 33,866 $ 36,133 $ 35,880 Net loss $ (4,932 ) $ (1,989 ) $ (15,007 ) $ (7,198 ) Net loss attributable to common stockholders $ (4,894 ) $ (1,959 ) $ (14,951 ) $ (7,114 ) Net loss per common share, basic and diluted $ (0.08 ) $ (0.03 ) $ (0.25 ) $ (0.12 ) Distributions declared per common share $ 0.093 $ 0.093 $ 0.094 $ 0.095 |
ORGANIZATION (Details)
ORGANIZATION (Details) $ in Thousands | Mar. 08, 2016USD ($) | Mar. 08, 2016ILS (â‚Ş) | Mar. 07, 2016ILS (â‚Ş) | Mar. 02, 2016ILS (â‚Ş) | Mar. 01, 2016ILS (â‚Ş) | Mar. 31, 2016 | Dec. 31, 2017USD ($)aportfoliopropertyinvestmentshares | Dec. 31, 2016USD ($)shares | Dec. 31, 2015USD ($)shares | Dec. 31, 2017USD ($)aportfoliopropertyinvestmentshares | Dec. 31, 2017USD ($)aportfoliopropertyinvestmentshares | Dec. 18, 2015certificateshares | Oct. 23, 2012USD ($)shares | Dec. 29, 2011USD ($)shares | Jan. 08, 2009shares |
Organizational Structure [Line Items] | |||||||||||||||
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | |||||||||||
Common stock, shares issued (in shares) | 52,053,817 | 56,775,767 | 52,053,817 | 52,053,817 | 55,249 | 220,994 | |||||||||
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 | $ | $ 8,666 | $ 12,616 | $ 13,573 | ||||||||||||
Shares of common stock sold under dividend reinvestment plan | $ | $ 74,000 | ||||||||||||||
Redemptions of common stock | $ | 74,780 | 38,573 | $ 30,100 | 151,800 | |||||||||||
Common stock, value, issued | $ | $ 521 | $ 568 | $ 521 | $ 521 | $ 500 | $ 2,000 | |||||||||
Number of investments in unconsolidated joint venture | investment | 3 | 3 | 3 | ||||||||||||
Number of investments in debt securities | investment | 1 | 1 | 1 | ||||||||||||
Number of investments in equity securities | investment | 2 | 2 | 2 | ||||||||||||
Office Properties | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Number of real estate properties | property | 4 | 4 | 4 | ||||||||||||
Office Portfolio | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Number of real estate properties | portfolio | 1 | 1 | 1 | ||||||||||||
Office Buildings, Portfolio | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Number of real estate properties | property | 4 | 4 | 4 | ||||||||||||
Undeveloped Land, Portfolio | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Real estate area of undeveloped land | a | 14 | 14 | 14 | ||||||||||||
Office/Flex/Industrial Portfolio | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Number of real estate properties | property | 1 | 1 | 1 | ||||||||||||
Office/Flex/Industrial Buildings | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Number of real estate properties | property | 21 | 21 | 21 | ||||||||||||
Retail Property, Portfolio | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Number of real estate properties | property | 1 | 1 | 1 | ||||||||||||
Apartment Properties, Portfolio | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Number of real estate properties acquired through foreclosure | property | 2 | 2 | 2 | ||||||||||||
Undeveloped Land | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Real estate area of undeveloped land | a | 1,100 | 1,100 | 1,100 | ||||||||||||
Number of investments in real estate | investment | 3 | 3 | 3 | ||||||||||||
KBS SOR (BVI) Holdings, Ltd. Series A Debentures | Bonds Payable | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Maximum borrowing capacity | â‚Ş | â‚Ş 1,000,000,000 | ||||||||||||||
Interest rate during period | 4.25% | ||||||||||||||
Proceeds from issuance of debt | $ 249,200 | â‚Ş 970,200,000 | â‚Ş 127,700,000 | â‚Ş 842,500,000 | |||||||||||
Principal installment payments required as percent of total debt | 20.00% | ||||||||||||||
Maximum | KBS SOR (BVI) Holdings, Ltd. Series A Debentures | Bonds Payable | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Interest rate during period | 4.25% | ||||||||||||||
Common Stock | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Shares registered in primary offering (in shares) | 100,000,000 | ||||||||||||||
Shares registered for sale under dividend reinvestment plan (in shares) | 40,000,000 | ||||||||||||||
Issuance of common stock (in shares) | 585,192 | 938,662 | 1,114,532 | 56,584,976 | |||||||||||
Issuance of common stock | $ | $ 6 | $ 9 | $ 11 | $ 561,700 | |||||||||||
Shares of common stock sold under dividend reinvestment plan (in shares) | 6,620,362 | ||||||||||||||
Redemptions of common stock (in shares) | 5,307,142 | 2,859,010 | 2,462,746 | 11,447,764 | |||||||||||
Redemptions of common stock | $ | $ 53 | $ 28 | $ 24 | $ 8,200 | |||||||||||
Common Stock | Minimum | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Stock offering, shares authorized for issuance (in shares) | 250,000 | ||||||||||||||
Common Stock | Maximum | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Stock offering, shares authorized for issuance (in shares) | 140,000,000 | ||||||||||||||
KBS Strategic Opportunity BVI | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Common stock, shares authorized (in shares) | 50,000 | ||||||||||||||
Number of certificates issued | certificate | 1 | ||||||||||||||
KBS Strategic Opportunity BVI | Operating Partnership | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Common stock, shares issued (in shares) | 10,000 |
SUMMARY OF SIGNIFICANT ACCOUN40
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Reclassification and Restricted Cash) (Details) | 12 Months Ended | ||
Dec. 31, 2017USD ($)property | Dec. 31, 2016USD ($)property | Dec. 31, 2015USD ($)property | |
Accounting Policies [Abstract] | |||
Impairment of real estate | $ 0 | $ 0 | $ 0 |
Restricted cash and cash equivalents | $ 0 | $ 0 | |
Office Properties | Disposed of by Sale | |||
Real Estate [Line Items] | |||
Number of real estate properties disposed | property | 12 | 0 | 2 |
SUMMARY OF SIGNIFICANT ACCOUN41
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Useful Life) (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Buildings | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 25 years |
Buildings | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 40 years |
Building improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 10 years |
Building improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 40 years |
Tenant improvements | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | Shorter of lease term or expected useful life |
Tenant origination and absorption costs | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | Remaining term of related leases, including below-market renewal periods |
SUMMARY OF SIGNIFICANT ACCOUN42
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Dividend Reinvestment Plan) (Details) - $ / shares | Dec. 07, 2017 | Dec. 25, 2016 | Dec. 08, 2016 | Dec. 20, 2015 | Dec. 08, 2015 | Dec. 21, 2014 | Dec. 09, 2014 | Apr. 06, 2014 | Mar. 25, 2014 |
Accounting Policies [Abstract] | |||||||||
Purchase price per share as percent of estimated value | 95.00% | ||||||||
Purchase price per share (in dollars per share) | $ 14.81 | $ 13.44 | $ 11.63 | $ 9.50 | |||||
Updated primary offering price (in dollars per share) | $ 11.50 | $ 14.81 | $ 13.44 | $ 12.24 | |||||
Special dividends declared (in dollars per share) | $ 3.61 |
SUMMARY OF SIGNIFICANT ACCOUN43
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Redeemable Common Stock) (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 18, 2017 | Sep. 14, 2017 | Dec. 30, 2016 | Jan. 09, 2016 | Oct. 23, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2017 |
Summary of Significant Accounting Policies [Line Items] | ||||||||||
Redemption value | $ 1,000 | $ 1,000 | $ 1,000 | $ 1,000 | ||||||
Maximum number of shares redeemable per quarter, value | $ 3,000 | |||||||||
Maximum percentage of weighted-average shares outstanding available for redemption during any calendar year | 5.00% | |||||||||
Redemption price percentage of most recent estimated value per share | 95.00% | |||||||||
Share holding term | 4 years | |||||||||
Share redemption program, termination period | 10 days | |||||||||
Redemptions of common stock | $ 74,780 | 38,573 | $ 30,100 | 151,800 | ||||||
Other liabilities | 16,966 | 18,095 | 16,966 | 16,966 | ||||||
Remaining authorized repurchase amount | 8,700 | 8,700 | 8,700 | |||||||
Common Stock | ||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||
Redemptions of common stock | $ 53 | 28 | $ 24 | 8,200 | ||||||
Number of shares non-redeemable do to limitation, shares | 786,174 | |||||||||
Number of shares non-redeemable do to limitation, value | $ 8,600 | |||||||||
Common Stock | Redemption made in January | ||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||
Redemptions of common stock | $ 4,400 | |||||||||
Minimum | ||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||
Share holding term | 1 year | |||||||||
Maximum | ||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||
Share holding term | 4 years | |||||||||
Eighth Amended and Restated Share Redemption Program | Held for at Least One Year but Less than Four Years | ||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||
Redemption price percentage of most recent estimated value per share | 97.50% | |||||||||
Eighth Amended and Restated Share Redemption Program | Held for Four Years | ||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||
Redemption price percentage of most recent estimated value per share | 100.00% | |||||||||
Self-tender Offer (SOR Offer) | ||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||
Number of shares authorized to be repurchased | 1,135,912 | 3,553,660 | ||||||||
Average cost per share | $ 14.07 | $ 14.07 | $ 14.07 | |||||||
Authorized amount | $ 16,000 | $ 50,000 | ||||||||
Treasury stock, acquired (in shares) | 4,686,503 | |||||||||
Treasury stock, acquired | $ 65,900 | |||||||||
Stock repurchased during period (in shares) | 47,750 | |||||||||
Stock repurchased during period | $ 700 | |||||||||
Unfulfilled Redemption Request | ||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||
Other liabilities | $ 8,600 | $ 12,600 | $ 8,600 | $ 8,600 |
SUMMARY OF SIGNIFICANT ACCOUN44
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Fees) (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies [Line Items] | |
Property management fee, percent fee | 0.75% |
KBS Capital Advisors LLC | |
Summary of Significant Accounting Policies [Line Items] | |
Acquisition advisory fee, percent | 1.00% |
Monthly asset management fee, percent of acquisition expense | 0.00063% |
KBS Capital Advisors LLC or Affiliates | |
Summary of Significant Accounting Policies [Line Items] | |
Selling commissions fees paid, percent of sales price | 1.00% |
Maximum | KBS Capital Advisors LLC, Affiliates or Unaffiliated Third Parties | |
Summary of Significant Accounting Policies [Line Items] | |
Selling commissions fees paid, percent of sales price | 6.00% |
SUMMARY OF SIGNIFICANT ACCOUN45
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (EPS and Accounting Standards) (Details) | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2017a$ / shares | Sep. 30, 2017$ / shares | Jun. 30, 2017$ / shares | Mar. 31, 2017$ / shares | Dec. 31, 2016$ / shares | Sep. 30, 2016$ / shares | Jun. 30, 2016$ / shares | Mar. 31, 2016$ / shares | Dec. 31, 2017a$ / shares | Dec. 31, 2016$ / shares | Dec. 31, 2015$ / shares | May 01, 2017a | |
Accounting Policies [Abstract] | ||||||||||||
Distributions declared per common share (in dollars per share) | $ / shares | $ 3.610 | $ 0.095 | $ 0.093 | $ 0.092 | $ 0.095 | $ 0.094 | $ 0.093 | $ 0.093 | $ 3.89000 | $ 0.38 | $ 0.38 | |
Accounting Standards Update 2014-09 | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Other operating income and other ancillary income as percent of consolidated revenue | 5.00% | |||||||||||
Disposed of by Sale | Park Highlands | Undeveloped Land | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Area of land sold | a | 102 | 102 | 102 |
REAL ESTATE HELD FOR INVESTME46
REAL ESTATE HELD FOR INVESTMENT (Narrative) (Details) ft² in Millions | Dec. 31, 2017aft²portfoliounitpropertyinvestment |
Real Estate Properties [Line Items] | |
Rentable square feet | ft² | 2.7 |
Percentage of portfolio occupied | 76.00% |
Office/Flex/Industrial Buildings | |
Real Estate Properties [Line Items] | |
Number of real estate properties | 21 |
Office Portfolio | |
Real Estate Properties [Line Items] | |
Number of real estate properties | portfolio | 1 |
Office Buildings, Portfolio | |
Real Estate Properties [Line Items] | |
Number of real estate properties | 4 |
Undeveloped Land, Portfolio | |
Real Estate Properties [Line Items] | |
Real estate area of undeveloped land | a | 14 |
Office Properties | |
Real Estate Properties [Line Items] | |
Number of real estate properties | 4 |
Retail Property, Portfolio | |
Real Estate Properties [Line Items] | |
Number of real estate properties | 1 |
Apartment Property | |
Real Estate Properties [Line Items] | |
Number of real estate properties | 2 |
Rentable square feet | ft² | 0.3 |
Percentage of portfolio occupied | 96.00% |
Apartment Property | 1180 Raymond | Multifamily Tower | |
Real Estate Properties [Line Items] | |
Number of units in real estate property | unit | 383 |
Undeveloped Land | |
Real Estate Properties [Line Items] | |
Real estate area of undeveloped land | a | 1,100 |
Number of investments in real estate | investment | 3 |
REAL ESTATE HELD FOR INVESTME47
REAL ESTATE HELD FOR INVESTMENT (Schedule of Real Estate Investments) (Details) $ in Thousands | Sep. 07, 2016USD ($)unit | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 574,684 | $ 569,142 | |
Accumulated depreciation and amortization | (41,817) | (32,052) | |
Total real estate, net | 532,867 | 537,090 | |
Subsidiary of Common Parent | |||
Real Estate Properties [Line Items] | |||
Interest rate on Class A non-voting preferred membership units | 10.00% | ||
Proceeds from sale of units | $ 800 | ||
Disposed of by Sale | Subsidiary of Common Parent | |||
Real Estate Properties [Line Items] | |||
Number of real estate units | unit | 820 | ||
Total Richardson Portfolio | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 42,473 | ||
Accumulated depreciation and amortization | (9,043) | ||
Total real estate, net | $ 33,430 | ||
Palisades Central I | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Nov. 23, 2011 | ||
Total real estate, cost | $ 12,007 | ||
Accumulated depreciation and amortization | (2,268) | ||
Total real estate, net | $ 9,739 | ||
Ownership % | 90.00% | ||
Palisades Central II | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Nov. 23, 2011 | ||
Total real estate, cost | $ 19,092 | ||
Accumulated depreciation and amortization | (4,144) | ||
Total real estate, net | $ 14,948 | ||
Ownership % | 90.00% | ||
Greenway I | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Nov. 23, 2011 | ||
Total real estate, cost | $ 2,925 | ||
Accumulated depreciation and amortization | (841) | ||
Total real estate, net | $ 2,084 | ||
Ownership % | 90.00% | ||
Greenway III | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Nov. 23, 2011 | ||
Total real estate, cost | $ 5,315 | ||
Accumulated depreciation and amortization | (1,790) | ||
Total real estate, net | $ 3,525 | ||
Ownership % | 90.00% | ||
Undeveloped Land | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Nov. 23, 2011 | ||
Total real estate, cost | $ 3,134 | ||
Accumulated depreciation and amortization | 0 | ||
Total real estate, net | $ 3,134 | ||
Ownership % | 90.00% | ||
Park Highlands | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Dec. 30, 2011 | ||
Total real estate, cost | $ 34,428 | ||
Accumulated depreciation and amortization | 0 | ||
Total real estate, net | $ 34,428 | ||
Burbank Collection | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Dec. 12, 2012 | ||
Total real estate, cost | $ 17,436 | ||
Accumulated depreciation and amortization | (2,389) | ||
Total real estate, net | $ 15,047 | ||
Ownership % | 90.00% | ||
Park Centre | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Mar. 28, 2013 | ||
Total real estate, cost | $ 29,638 | ||
Accumulated depreciation and amortization | (3,703) | ||
Total real estate, net | $ 25,935 | ||
Ownership % | 100.00% | ||
Central Building | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Jul. 10, 2013 | ||
Total real estate, cost | $ 35,308 | ||
Accumulated depreciation and amortization | (4,663) | ||
Total real estate, net | $ 30,645 | ||
Ownership % | 100.00% | ||
1180 Raymond | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Aug. 20, 2013 | ||
Total real estate, cost | $ 46,395 | ||
Accumulated depreciation and amortization | (5,283) | ||
Total real estate, net | $ 41,112 | ||
Ownership % | 100.00% | ||
Park Highlands II | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Dec. 10, 2013 | ||
Total real estate, cost | $ 24,948 | ||
Accumulated depreciation and amortization | 0 | ||
Total real estate, net | $ 24,948 | ||
Ownership % | 100.00% | ||
424 Bedford | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Jan. 31, 2014 | ||
Total real estate, cost | $ 34,567 | ||
Accumulated depreciation and amortization | (2,810) | ||
Total real estate, net | $ 31,757 | ||
Ownership % | 90.00% | ||
Richardson Land II | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Sep. 4, 2014 | ||
Total real estate, cost | $ 3,418 | ||
Accumulated depreciation and amortization | 0 | ||
Total real estate, net | $ 3,418 | ||
Ownership % | 90.00% | ||
Westpark Portfolio | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | May 10, 2016 | ||
Total real estate, cost | $ 133,022 | ||
Accumulated depreciation and amortization | (8,730) | ||
Total real estate, net | $ 124,292 | ||
Ownership % | 100.00% | ||
Crown Pointe | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Feb. 14, 2017 | ||
Total real estate, cost | $ 87,829 | ||
Accumulated depreciation and amortization | (3,921) | ||
Total real estate, net | $ 83,908 | ||
Ownership % | 100.00% | ||
125 John Carpenter | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Sep. 15, 2017 | ||
Total real estate, cost | $ 85,222 | ||
Accumulated depreciation and amortization | (1,275) | ||
Total real estate, net | $ 83,947 | ||
Ownership % | 100.00% | ||
Land | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 162,061 | 193,341 | |
Land | Total Richardson Portfolio | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 6,244 | ||
Land | Palisades Central I | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 1,037 | ||
Land | Palisades Central II | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 810 | ||
Land | Greenway I | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 561 | ||
Land | Greenway III | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 702 | ||
Land | Undeveloped Land | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 3,134 | ||
Land | Park Highlands | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 34,428 | ||
Land | Burbank Collection | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 4,175 | ||
Land | Park Centre | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 3,251 | ||
Land | Central Building | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 7,015 | ||
Land | 1180 Raymond | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 8,292 | ||
Land | Park Highlands II | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 24,948 | ||
Land | 424 Bedford | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 8,860 | ||
Land | Richardson Land II | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 3,418 | ||
Land | Westpark Portfolio | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 36,085 | ||
Land | Crown Pointe | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 22,590 | ||
Land | 125 John Carpenter | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 2,755 | ||
Buildings and improvements | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 388,144 | 356,982 | |
Buildings and improvements | Total Richardson Portfolio | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 35,670 | ||
Buildings and improvements | Palisades Central I | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 10,970 | ||
Buildings and improvements | Palisades Central II | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 18,282 | ||
Buildings and improvements | Greenway I | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 2,364 | ||
Buildings and improvements | Greenway III | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 4,054 | ||
Buildings and improvements | Undeveloped Land | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 0 | ||
Buildings and improvements | Park Highlands | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 0 | ||
Buildings and improvements | Burbank Collection | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 12,536 | ||
Buildings and improvements | Park Centre | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 26,387 | ||
Buildings and improvements | Central Building | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 27,026 | ||
Buildings and improvements | 1180 Raymond | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 38,103 | ||
Buildings and improvements | Park Highlands II | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 0 | ||
Buildings and improvements | 424 Bedford | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 25,707 | ||
Buildings and improvements | Richardson Land II | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 0 | ||
Buildings and improvements | Westpark Portfolio | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 89,687 | ||
Buildings and improvements | Crown Pointe | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 59,443 | ||
Buildings and improvements | 125 John Carpenter | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 73,585 | ||
Tenant origination and absorption costs | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 24,479 | $ 18,819 | |
Tenant origination and absorption costs | Total Richardson Portfolio | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 559 | ||
Tenant origination and absorption costs | Palisades Central I | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 0 | ||
Tenant origination and absorption costs | Palisades Central II | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 0 | ||
Tenant origination and absorption costs | Greenway I | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 0 | ||
Tenant origination and absorption costs | Greenway III | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 559 | ||
Tenant origination and absorption costs | Undeveloped Land | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 0 | ||
Tenant origination and absorption costs | Park Highlands | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 0 | ||
Tenant origination and absorption costs | Burbank Collection | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 725 | ||
Tenant origination and absorption costs | Park Centre | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 0 | ||
Tenant origination and absorption costs | Central Building | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 1,267 | ||
Tenant origination and absorption costs | 1180 Raymond | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 0 | ||
Tenant origination and absorption costs | Park Highlands II | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 0 | ||
Tenant origination and absorption costs | 424 Bedford | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 0 | ||
Tenant origination and absorption costs | Richardson Land II | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 0 | ||
Tenant origination and absorption costs | Westpark Portfolio | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 7,250 | ||
Tenant origination and absorption costs | Crown Pointe | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 5,796 | ||
Tenant origination and absorption costs | 125 John Carpenter | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 8,882 |
REAL ESTATE HELD FOR INVESTME48
REAL ESTATE HELD FOR INVESTMENT (Operating Leases) (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Leased Assets [Line Items] | |||
Deferred rent recognized | $ 2.4 | $ 3.1 | $ 4.5 |
Deferred rent receivables | 7.7 | 5.5 | |
Incentive to lessee | 0.9 | 0.9 | |
Other liabilities | |||
Operating Leased Assets [Line Items] | |||
Security deposit liability | $ 4.3 | $ 7.2 | |
Maximum | |||
Operating Leased Assets [Line Items] | |||
Operating lease, term | 14 years 4 months 24 days | ||
Weighted Average | |||
Operating Leased Assets [Line Items] | |||
Operating lease, term | 4 years |
REAL ESTATE HELD FOR INVESTME49
REAL ESTATE HELD FOR INVESTMENT (Future Minimum Rental Income) (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Real Estate [Abstract] | |
2,018 | $ 40,535 |
2,019 | 37,646 |
2,020 | 32,830 |
2,021 | 27,164 |
2,022 | 22,002 |
Thereafter | 63,391 |
Future minimum rental income | $ 223,568 |
REAL ESTATE HELD FOR INVESTME50
REAL ESTATE HELD FOR INVESTMENT (Highes Tenant Industry Concentrations- Grater than 10% of Annual Base Rent) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)tenant | |
Concentration Risk [Line Items] | |
Number of Tenants | 300 |
Management Consulting | |
Concentration Risk [Line Items] | |
Number of Tenants | 32 |
Annualized Base Rent | $ | $ 4,489 |
Percentage of Annualized Base Rent | 10.70% |
REAL ESTATE HELD FOR INVESTME51
REAL ESTATE HELD FOR INVESTMENT (Geographic Concentration Risk) (Details) - Assets, Total | 12 Months Ended |
Dec. 31, 2017 | |
Washington | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 14.10% |
Texas | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 13.30% |
REAL ESTATE HELD FOR INVESTME52
REAL ESTATE HELD FOR INVESTMENT (Dispositions) (Details) $ in Millions | Jul. 06, 2017USD ($)aft² | May 01, 2017USD ($)a | Dec. 31, 2017a |
Office Properties | 353 Sacramento | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Ownership interest | 55.00% | ||
Ownership percentage of co-investee | 45.00% | ||
Park Highlands | Undeveloped Land | Disposed of by Sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Area of land sold | a | 102 | 102 | |
Proceeds from sale of land | $ 17.4 | ||
Gains on sales of investment real estate | 5.1 | ||
Deferred profit | 2.5 | ||
Deferred gains on sale | $ 1.7 | ||
353 Sacramento | Office Properties | Disposed of by Sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Gains on sales of investment real estate | $ 1.7 | ||
Ownership interest | 45.00% | ||
Net rentable area | ft² | 284,751 | ||
Area of land | a | 0.35 | ||
Consideration | $ 39.1 |
REAL ESTATE HELD FOR INVESTME53
REAL ESTATE HELD FOR INVESTMENT (Acquisitions) (Details) $ in Thousands | Sep. 15, 2017USD ($)ft²property | Feb. 14, 2017USD ($)ft²property | Dec. 31, 2017USD ($)ft² | Dec. 31, 2016USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Rentable square feet | ft² | 2,700,000 | |||
Total real estate, cost | $ 574,684 | $ 569,142 | ||
Below-market leases, net | 2,843 | 5,088 | ||
Land | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Total real estate, cost | 162,061 | 193,341 | ||
Buildings and improvements | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Total real estate, cost | 388,144 | 356,982 | ||
Tenant origination and absorption costs | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Total real estate, cost | $ 24,479 | $ 18,819 | ||
Crown Pointe | Office Properties | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of real estate properties acquired | property | 2 | |||
Rentable square feet | ft² | 499,968 | |||
Purchase price | $ 83,100 | |||
Amortization of acquisition costs | 1,100 | |||
Below-market leases, net | $ 1,000 | |||
Crown Pointe | Office Properties | Tenant origination and absorption costs | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Remaining amortization period | 4 years 10 months 24 days | |||
Crown Pointe | Office Properties | Below-Market Lease Liabilities | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Remaining amortization period | 4 years 2 months 12 days | |||
Crown Pointe | Office Properties | Land | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Total real estate, cost | $ 22,600 | |||
Crown Pointe | Office Properties | Buildings and improvements | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Total real estate, cost | 56,600 | |||
Crown Pointe | Office Properties | Tenant origination and absorption costs | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Total real estate, cost | $ 6,000 | |||
125 John Carpenter | Office Properties | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of real estate properties acquired | property | 2 | |||
Rentable square feet | ft² | 442,039 | |||
Purchase price | $ 82,800 | |||
Amortization of acquisition costs | 500 | |||
Below-market leases, net | $ 2,100 | |||
125 John Carpenter | Office Properties | Tenant origination and absorption costs | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Remaining amortization period | 6 years 10 months 24 days | |||
125 John Carpenter | Office Properties | Below-Market Lease Liabilities | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Remaining amortization period | 5 years 2 months 12 days | |||
125 John Carpenter | Office Properties | Land | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Total real estate, cost | $ 2,700 | |||
125 John Carpenter | Office Properties | Buildings and improvements | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Total real estate, cost | 73,600 | |||
125 John Carpenter | Office Properties | Tenant origination and absorption costs | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Total real estate, cost | $ 9,000 |
TENANT ORIGINATION AND ABSORP54
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Abstract] | |||
Tenant Origination And Absorption Costs, Cost | $ 24,479 | $ 18,819 | |
Tenant Origination and Absorption Costs, Accumulated Amortization | (6,448) | (5,840) | |
Tenant Origination and Absorption Costs, Net Amount | 18,031 | 12,979 | |
Above-Market Lease Assets, Cost | 301 | 423 | |
Above-Market Lease Assets, Accumulated Amortization | (170) | (219) | |
Above-Market Lease Assets, Net Amount | 131 | 204 | |
Below-Market Lease Liabilities, Cost | (3,636) | (6,626) | |
Below-Market Lease Liabilities, Accumulated Amortization | 793 | 1,538 | |
Below-Market Lease Liabilities, Net Amount | (2,843) | (5,088) | |
Tenant Origination And Absorption Costs, Amortization | (10,265) | (10,850) | $ (10,555) |
Above-Market Lease Assets, Amortization | (283) | (459) | (1,023) |
Below-Market Lease Liabilities, Amortization | $ 2,858 | $ 2,789 | $ 1,668 |
TENANT ORIGINATION AND ABSORP55
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, 2017USD ($) | |
Below Market Lease, Net, Amortization Income, Fiscal Year Maturity [Abstract] | |
2,018 | $ 846 |
2,019 | 712 |
2,020 | 556 |
2,021 | 218 |
2,022 | 161 |
Thereafter | 350 |
Net Amount | 2,843 |
Tenant origination and absorption costs | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
2,018 | (4,772) |
2,019 | (3,929) |
2,020 | (3,011) |
2,021 | (2,035) |
2,022 | (1,312) |
Thereafter | (2,972) |
Net Amount | $ (18,031) |
Below Market Lease, Net, Amortization Income, Fiscal Year Maturity [Abstract] | |
Weighted-Average Remaining Amortization Period | 5 years 4 months 24 days |
Above-Market Lease Assets | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
2,018 | $ (41) |
2,019 | (39) |
2,020 | (35) |
2,021 | (16) |
2,022 | 0 |
Thereafter | 0 |
Net Amount | $ (131) |
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 | |
Below Market Lease, Net, Amortization Income, Fiscal Year Maturity [Abstract] | |
Weighted-Average Remaining Amortization Period | 4 years 7 months 6 days |
TENANT ORIGINATION AND ABSORP56
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Line Items] | |||
Tax abatement asset | $ 5,300 | $ 6,300 | |
Amortization expense | 53,446 | 52,051 | $ 44,739 |
Property Tax Abatement Intangible Asset | |||
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Line Items] | |||
Amortization expense | $ 1,000 | $ 1,000 | $ 1,000 |
REAL ESTATE EQUITY SECURITIES57
REAL ESTATE EQUITY SECURITIES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Cost basis | $ 64,917 | $ 0 | |
Lack of marketability | (1,700) | ||
Unrealized change in market value of real estate equity securities | 25,146 | ||
Dividend income from real estate equity securities | 2,531 | $ 0 | $ 0 |
Whitestone REIT | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Cost basis | $ 43,300 | ||
Whitestone REIT | Available-for-sale Securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Shares purchased | 3,603,189 | ||
Kepple-KBS US REIT | Available-for-sale Securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Shares purchased | 43,999,500 | ||
Kepple-KBS US REIT | Available-for-sale Securities | Not to Sell, Transfer or Assign until May 8, 2018 | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Number of units not to be sold, transferred or assigned | 21,999,750 | ||
Kepple-KBS US REIT | Available-for-sale Securities | Not to Sell, Transfer or Assign until November 8, 2018 | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Number of units not to be sold, transferred or assigned | 21,999,750 | ||
Singapore Portfolio | Available-for-sale Securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Investments | $ 21,600 | ||
Investments, fair value | 38,700 | ||
Deferred gains on sale | $ 17,100 |
REAL ESTATE EQUITY SECURITIES58
REAL ESTATE EQUITY SECURITIES (Schedule of Activity of Real Estate Securities) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Available-for-sale Securities [Roll Forward] | |
Real estate equity securities, Amortized Cost Basis | $ 0 |
Real estate equity securities, Unrealized Gain | 0 |
Real estate equity securities, Total | 0 |
Acquisition of real estate equity securities | 64,454 |
Acquisition fee to affiliate and purchase commission | 463 |
Unrealized change in market value of real estate equity securities | 25,146 |
Real estate equity securities, Amortized Cost Basis | 64,917 |
Real estate equity securities, Unrealized Gain | 25,146 |
Real estate equity securities, Total | $ 90,063 |
REAL ESTATE DEBT SECURITIES (Sc
REAL ESTATE DEBT SECURITIES (Schedule of Investments in Debt Securities) (Details) $ in Thousands | Dec. 31, 2017USD ($)instrument | Dec. 31, 2016USD ($) |
Investments, Debt and Equity Securities [Abstract] | ||
Number of debt investments | instrument | 1,000 | |
Investment [Line Items] | ||
Outstanding Principal Balance | $ 17,500 | $ 5,000 |
Battery Point Series B Preferred Units | Series B Preferred Units | ||
Investment [Line Items] | ||
Outstanding Principal Balance | 17,500 | |
Book Value | $ 17,751 | $ 4,683 |
Contractual Interest Rate | 9.00% | |
Annualized Effective Interest Rate | 11.10% |
REAL ESTATE DEBT SECURITIES (60
REAL ESTATE DEBT SECURITIES (Schedule of Activity of Real Estate Securities) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Held-to-maturity Securities [Roll Forward] | |
Real estate debt securities - December 31, 2016 | $ 5,000 |
Real estate debt securities - December 31, 2017 | 17,500 |
Debt Securities | |
Held-to-maturity Securities [Roll Forward] | |
Real estate debt securities - December 31, 2016 | 4,683 |
Face value of real estate debt securities acquired | 12,500 |
Deferred interest receivable and interest accretion | 315 |
Commitment fee, net of closing costs and acquisition fee | 3 |
Accretion of commitment fee, net of closing costs | 250 |
Real estate debt securities - December 31, 2017 | $ 17,751 |
REAL ESTATE DEBT SECURITIES (In
REAL ESTATE DEBT SECURITIES (Interest Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Investment [Line Items] | |||
Contractual interest income | $ 1,105 | $ 44 | $ 18 |
Debt Securities | |||
Investment [Line Items] | |||
Contractual interest income | 1,217 | 63 | |
Interest accretion | 315 | 30 | |
Accretion of commitment fee, net of closing costs and acquisition fee | 250 | 17 | |
Interest income from real estate debt securities | $ 1,782 | $ 110 |
REAL ESTATE DISPOSITIONS (Narra
REAL ESTATE DISPOSITIONS (Narrative) (Details) $ in Thousands, shares in Millions | Nov. 08, 2017USD ($)propertysubsidiaryshares | May 15, 2017USD ($) | Jul. 11, 2013ft²property | Dec. 31, 2017USD ($)property | Dec. 31, 2016USD ($)property | Dec. 31, 2015USD ($)property |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Real estate held for sale | $ 0 | $ 569,941 | ||||
Accumulated depreciation and amortization | 41,817 | 32,052 | ||||
Loss on extinguishment of debt | (478) | 0 | $ 0 | |||
Proceeds from sales of real estate, net | 872,091 | 0 | 38,772 | |||
Real estate held for investment, net | 532,867 | 537,090 | ||||
Singapore Portfolio | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Number of real estate properties disposed | property | 11 | |||||
Number of wholly owned subsidiaries | subsidiary | 11 | |||||
Consideration | $ 804,000 | |||||
Total expenses | 7,700 | |||||
Real estate held for sale | $ 543,200 | |||||
Loss on extinguishment of debt | (500) | |||||
Singapore Portfolio | SREIT | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Shares received as part of consideration | shares | 44 | |||||
Shares outstanding, percent | 7.00% | |||||
Office Properties | 50 Congress Street | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Number of real estate properties disposed | property | 1 | |||||
Net rentable area | ft² | 179,872 | |||||
Disposed of by Sale | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Total expenses | $ 75,162 | $ 88,965 | $ 87,969 | |||
Disposed of by Sale | Office Properties | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Number of real estate properties disposed | property | 12 | 0 | 2 | |||
Disposed of by Sale | Office Properties | 50 Congress Street | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Accumulated depreciation and amortization | $ 103,000 | $ 5,900 | ||||
Gain on sale of real estate, net | 29,400 | $ 236,900 | ||||
Deferred gains on sale | $ 17,100 | |||||
Proceeds from sales of real estate, net | 79,000 | |||||
Proceeds from sales of real estate, net of concessions and credits | 78,800 | |||||
Real estate held for investment, net | $ 47,700 |
REAL ESTATE DISPOSITIONS (Sched
REAL ESTATE DISPOSITIONS (Schedule of Major Components of Real Estate Held for Sale and Liabilities Related to Real Estate Held for Sale) (Details) - Held-for-sale - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Real estate, cost | $ 0 | $ 658,065 |
Accumulated depreciation and amortization | 0 | (88,124) |
Real estate, net | 0 | 569,941 |
Other assets | 0 | 35,173 |
Total assets related to real estate held for sale | 0 | 605,114 |
Notes payable, net | 0 | 376,696 |
Other liabilities | 0 | 1,463 |
Total liabilities related to real estate held for sale | $ 0 | $ 378,159 |
REAL ESTATE DISPOSITIONS (Reven
REAL ESTATE DISPOSITIONS (Revenue and Expenses for Real Estate Held-for-Sale) (Details) - Disposed of by Sale - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues | |||
Rental income | $ 57,103 | $ 67,982 | $ 63,660 |
Tenant reimbursements and other operating income | 16,888 | 17,809 | 17,152 |
Total revenues | 73,991 | 85,791 | 80,812 |
Expenses | |||
Operating, maintenance, and management | 21,931 | 25,441 | 25,837 |
Real estate taxes and insurance | 9,935 | 11,337 | 10,864 |
Asset management fees to affiliate | 4,572 | 5,404 | 5,300 |
Depreciation and amortization | 27,043 | 33,893 | 34,309 |
Interest expense | 11,681 | 12,890 | 11,659 |
Total expenses | $ 75,162 | $ 88,965 | $ 87,969 |
NOTES AND BONDS PAYABLE (Narrat
NOTES AND BONDS PAYABLE (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Notes and Bonds Payable [Abstract] | |||
Interest expense | $ 37,149 | $ 29,249 | $ 14,986 |
Amortization of deferred financing costs | 4,363 | 4,289 | 2,703 |
Interest capitalized | 2,339 | 2,025 | $ 1,856 |
Interest payable | 5,100 | 5,300 | |
Debt Instrument [Line Items] | |||
Deferred finance costs | $ 8,800 | 12,500 | |
Notes and Bonds Payable | |||
Debt Instrument [Line Items] | |||
Deferred finance costs | 12,400 | ||
Prepaid expenses and other assets | |||
Debt Instrument [Line Items] | |||
Deferred finance costs | $ 100 |
NOTES AND BONDS PAYABLE (Schedu
NOTES AND BONDS PAYABLE (Schedule of Long-term Debt Instruments) (Details) - USD ($) $ in Thousands | Nov. 08, 2017 | Mar. 06, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||||
Total Notes and Bond Payable principal outstanding | $ 611,694 | $ 962,930 | ||
Net Premium/Discount on Notes and Bond Payable | 137 | 88 | ||
Deferred financing costs, net | (8,788) | (12,394) | ||
Total notes and bonds payable, net | 603,043 | 950,624 | ||
Extinguishment of debt | $ 156,000 | |||
Mortgages | Richardson Portfolio Mortgage Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 36,886 | 40,594 | ||
Interest rate, effective percentage | 3.46% | |||
Mortgages | Richardson Portfolio Mortgage Loan [Member] | One-month LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 2.10% | |||
Mortgages | Bellevue Technology Center Mortgage Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 0 | 59,400 | ||
Mortgages | Portfolio Revolving Loan Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 0 | 11,799 | ||
Mortgages | Portfolio Mortgage Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes payable | 106,479 | |||
Interest rate, effective percentage | 3.61% | |||
Extinguishment of debt | $ 10,000 | |||
Mortgages | Portfolio Mortgage Loan [Member] | One-month LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 2.25% | |||
Mortgages | Burbank Collection Mortgage Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 10,958 | 9,812 | ||
Interest rate, effective percentage | 3.79% | |||
Mortgages | Burbank Collection Mortgage Loan [Member] | One-month LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 2.35% | |||
Mortgages | 50 Congress Mortgage Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 0 | 31,525 | ||
Mortgages | 1180 Raymond Bond [Member] | ||||
Debt Instrument [Line Items] | ||||
Bonds payable | $ 6,460 | 6,635 | ||
Contractual interest rate, percentage | 6.50% | |||
Interest rate, effective percentage | 6.50% | |||
Mortgages | Central Building Mortgage Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 27,600 | 27,600 | ||
Interest rate, effective percentage | 3.11% | |||
Mortgages | Central Building Mortgage Loan [Member] | One-month LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1.75% | |||
Mortgages | Maitland Promenade II Mortgage Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 0 | 20,877 | ||
Mortgages | Westmoor Center Mortgage Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes payable | 0 | 62,000 | ||
Mortgages | Plaza Buildings Senior Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes payable | 0 | 109,866 | ||
Mortgages | 424 Bedford Mortgage Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 24,282 | 24,832 | ||
Contractual interest rate, percentage | 3.91% | |||
Interest rate, effective percentage | 3.91% | |||
Mortgages | 1180 Raymond Mortgage Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 31,000 | 31,000 | ||
Interest rate, effective percentage | 3.61% | |||
Mortgages | 1180 Raymond Mortgage Loan [Member] | One-month LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 2.25% | |||
Mortgages | KBS SOR (BVI) Holdings, Ltd. [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 278,801 | 251,811 | ||
Contractual interest rate, percentage | 4.25% | |||
Interest rate, effective percentage | 4.25% | |||
Interest rate during period | 2.00% | |||
Mortgages | Westpark Portfolio Mortgage Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 85,200 | 83,200 | ||
Interest rate, effective percentage | 3.86% | |||
Mortgages | Westpark Portfolio Mortgage Loan [Member] | One-month LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 2.50% | |||
Mortgages | 353 Sacramento Mortgage Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 0 | 85,500 | ||
Mortgages | Crown Pointe Mortgage Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 50,500 | 0 | ||
Interest rate, effective percentage | 3.96% | |||
Mortgages | Crown Pointe Mortgage Loan [Member] | One-month LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 2.60% | |||
Mortgages | 125 John Carpenter Mortgage Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 50,130 | $ 0 | ||
Interest rate, effective percentage | 3.12% |
NOTES AND BONDS PAYABLE (Sche67
NOTES AND BONDS PAYABLE (Schedule of Maturities of Long-term Debt) (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Notes and Bonds Payable [Abstract] | |
2,018 | $ 117,537 |
2,019 | 57,649 |
2,020 | 190,774 |
2,021 | 56,639 |
2,022 | 127,925 |
Thereafter | 61,170 |
Notes and bond payable outstanding | $ 611,694 |
NOTES AND BONDS PAYABLE (Israel
NOTES AND BONDS PAYABLE (Israeli Bond Financing) (Details) | Mar. 08, 2016USD ($) | Mar. 08, 2016ILS (â‚Ş) | Mar. 07, 2016ILS (â‚Ş) | Mar. 02, 2016ILS (â‚Ş) | Mar. 01, 2016ILS (â‚Ş) | Mar. 31, 2016 | Dec. 31, 2017USD ($)instrument |
Foreign currency option | Not Designated as Hedging Instrument | |||||||
Debt Instrument [Line Items] | |||||||
Number of instruments | instrument | 1 | ||||||
Notional amount | $ | $ 285,361,000 | ||||||
Bonds Payable | KBS SOR (BVI) Holdings, Ltd. Series A Debentures | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | â‚Ş | â‚Ş 1,000,000,000 | ||||||
Interest rate during period | 4.25% | ||||||
Proceeds from issuance of debt | $ 249,200,000 | â‚Ş 970,200,000 | â‚Ş 127,700,000 | â‚Ş 842,500,000 | |||
Principal installment payments required as percent of total debt | 20.00% | ||||||
Bonds Payable | KBS SOR (BVI) Holdings, Ltd. Series A Debentures | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate during period | 4.25% |
DERIVATIVE INSTRUMENTS (Notiona
DERIVATIVE INSTRUMENTS (Notional Amount) (Details) â‚Ş in Millions | Aug. 03, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Aug. 03, 2017ILS (â‚Ş) |
Derivative [Line Items] | |||||
Purchase of interest rate cap | $ 107,000 | $ 15,000 | $ 0 | ||
Not Designated as Hedging Instrument | Foreign currency collars | |||||
Derivative [Line Items] | |||||
Notional Amount | 250,000,000 | â‚Ş 970.2 | |||
Strike Price | 3.4 | ||||
Proceeds from derivatives | $ 6,600,000 | ||||
Purchase of interest rate cap | $ 3,400,000 | ||||
Not Designated as Hedging Instrument | Foreign Currency Collar 1 | |||||
Derivative [Line Items] | |||||
Notional Amount | $ 100,000,000 | ||||
Maturity Date | Aug. 8, 2017 | ||||
Not Designated as Hedging Instrument | Foreign Currency Collar 1 | Minimum | |||||
Derivative [Line Items] | |||||
Strike Price | 3.72 | ||||
Not Designated as Hedging Instrument | Foreign Currency Collar 1 | Maximum | |||||
Derivative [Line Items] | |||||
Strike Price | 3.83 | ||||
Not Designated as Hedging Instrument | Foreign Currency Collar 2 | |||||
Derivative [Line Items] | |||||
Notional Amount | $ 50,000,000 | ||||
Maturity Date | Aug. 16, 2017 | ||||
Not Designated as Hedging Instrument | Foreign Currency Collar 2 | Minimum | |||||
Derivative [Line Items] | |||||
Strike Price | 3.67 | ||||
Not Designated as Hedging Instrument | Foreign Currency Collar 2 | Maximum | |||||
Derivative [Line Items] | |||||
Strike Price | 3.77 | ||||
Not Designated as Hedging Instrument | Foreign Currency Collar 3 | |||||
Derivative [Line Items] | |||||
Notional Amount | $ 50,000,000 | ||||
Maturity Date | Aug. 16, 2017 | ||||
Not Designated as Hedging Instrument | Foreign Currency Collar 3 | Minimum | |||||
Derivative [Line Items] | |||||
Strike Price | 3.68 | ||||
Not Designated as Hedging Instrument | Foreign Currency Collar 3 | Maximum | |||||
Derivative [Line Items] | |||||
Strike Price | 3.78 | ||||
Not Designated as Hedging Instrument | Foreign Currency Collar 4 | |||||
Derivative [Line Items] | |||||
Notional Amount | $ 50,000,000 | ||||
Maturity Date | Aug. 22, 2017 | ||||
Not Designated as Hedging Instrument | Foreign Currency Collar 4 | Minimum | |||||
Derivative [Line Items] | |||||
Strike Price | 3.67 | ||||
Not Designated as Hedging Instrument | Foreign Currency Collar 4 | Maximum | |||||
Derivative [Line Items] | |||||
Strike Price | 3.77 | ||||
Not Designated as Hedging Instrument | Foreign currency option | |||||
Derivative [Line Items] | |||||
Notional Amount | $ 285,361,000 | ||||
Strike Price | 3.40 | ||||
Maturity Date | Aug. 3, 2018 | ||||
Not Designated as Hedging Instrument | Interest rate cap | |||||
Derivative [Line Items] | |||||
Notional Amount | $ 46,875,000 | ||||
Maturity Date | Feb. 13, 2020 | ||||
Not Designated as Hedging Instrument | Interest rate cap | One-month LIBOR | |||||
Derivative [Line Items] | |||||
Variable interest rate | 3.00% |
DERIVATIVE INSTRUMENTS (Balance
DERIVATIVE INSTRUMENTS (Balance Sheets) (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017USD ($)instrument | Dec. 31, 2016USD ($)instrument | |
Interest rate cap | ||
Derivative [Line Items] | ||
Unrealized gain (loss) on derivatives | $ (100) | $ 900 |
Foreign currency collars | ||
Derivative [Line Items] | ||
Gain recognized on derivatives | (11,300) | |
Foreign currency transaction loss, net | $ 26,600 | $ 3,900 |
Not Designated as Hedging Instrument | Interest rate cap | Prepaid expenses and other assets | ||
Derivative [Line Items] | ||
Number of Instruments | instrument | 1 | 1,000 |
Derivative Asset | $ 14 | $ 12 |
Not Designated as Hedging Instrument | Foreign currency collars | Other liabilities | ||
Derivative [Line Items] | ||
Number of Instruments | instrument | 0 | 4,000 |
Derivative Liability | $ 0 | $ (3,910) |
Not Designated as Hedging Instrument | Foreign currency option | ||
Derivative [Line Items] | ||
Number of Instruments | instrument | 1 | |
Not Designated as Hedging Instrument | Foreign currency option | Prepaid expenses and other assets | ||
Derivative [Line Items] | ||
Number of Instruments | instrument | 1 | 0 |
Derivative Asset | $ 4,243 | $ 0 |
FAIR VALUE DISCLOSURES (Narrati
FAIR VALUE DISCLOSURES (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2017shares | |
Singapore Portfolio | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Common stock, shares acquired (in shares) | 43,999,500 |
FAIR VALUE DISCLOSURES (Schedul
FAIR VALUE DISCLOSURES (Schedule of Face Value, Carrying Amounts and Fair Value) (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Real estate debt securities, Face Value | $ 17,500,000 | $ 5,000,000 |
Financial liabilities, Face Value | 332,893,000 | 711,119,000 |
KBS SOR (BVI) Holdings, Ltd. Series A Debentures | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial liabilities, Face Value | 278,801,000 | 251,811,000 |
Carrying Amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Real estate debt securities, Value | 17,751,000 | 4,683,000 |
Financial liabilities, Value | 330,727,000 | 707,169,000 |
Carrying Amount [Member] | KBS SOR (BVI) Holdings, Ltd. Series A Debentures | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial liabilities, Value | 272,316,000 | 243,455,000 |
Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Real estate debt securities, Value | 17,386,000 | 4,683,000 |
Financial liabilities, Value | 335,212,000 | 711,425,000 |
Fair Value [Member] | KBS SOR (BVI) Holdings, Ltd. Series A Debentures | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial liabilities, Value | $ 296,069,000 | $ 253,120,000 |
FAIR VALUE DISCLOSURES (Sched73
FAIR VALUE DISCLOSURES (Schedule of Assets at Fair Value) (Details) - Recurring Basis $ in Thousands | Dec. 31, 2017USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Real estate equity securities | $ 90,063 |
Asset derivative - interest rate cap | 14 |
Asset derivative - foreign currency option | 4,243 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Real estate equity securities | 51,922 |
Asset derivative - interest rate cap | 0 |
Asset derivative - foreign currency option | 0 |
Significant Other Observable Inputs (Level 2) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Real estate equity securities | 38,141 |
Asset derivative - interest rate cap | 14 |
Asset derivative - foreign currency option | 4,243 |
Significant Unobservable Inputs (Level 3) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Real estate equity securities | 0 |
Asset derivative - interest rate cap | 0 |
Asset derivative - foreign currency option | $ 0 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | Sep. 15, 2017 | Jul. 06, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jul. 31, 2016 |
Related Party Transaction [Line Items] | ||||||
Payable as of | $ 26 | $ 55 | ||||
Payment for administrative fees | 225 | 153 | $ 153 | |||
Acquisition related costs | 0 | 543 | 0 | |||
353 Sacramento | Migdal Members | Parent Company | ||||||
Related Party Transaction [Line Items] | ||||||
Acquisition related costs | $ 200 | |||||
353 Sacramento | WBAM | Migdal Members | ||||||
Related Party Transaction [Line Items] | ||||||
Acquisition related costs | 200 | |||||
Advisor and Dealer Manager | ||||||
Related Party Transaction [Line Items] | ||||||
Incurred | 20,615 | 13,342 | 8,802 | |||
Payable as of | 26 | 55 | ||||
Advisor and Dealer Manager | Asset management fees | ||||||
Related Party Transaction [Line Items] | ||||||
Expensed | 10,686 | 9,628 | 8,348 | |||
Payable as of | 0 | 0 | ||||
Advisor and Dealer Manager | Acquisition fees on real estate | ||||||
Related Party Transaction [Line Items] | ||||||
Expensed | 0 | 2,964 | 0 | |||
Incurred | 907 | 0 | 0 | |||
Payable as of | 0 | 0 | ||||
Advisor and Dealer Manager | Reimbursable operating expenses | ||||||
Related Party Transaction [Line Items] | ||||||
Expensed | 241 | 221 | 178 | |||
Payable as of | 26 | 55 | ||||
Advisor and Dealer Manager | Disposition fees | ||||||
Related Party Transaction [Line Items] | ||||||
Expensed | 8,352 | 279 | 276 | |||
Payable as of | 0 | 0 | ||||
Advisor and Dealer Manager | Acquisition fees on real estate equity securities | ||||||
Related Party Transaction [Line Items] | ||||||
Incurred | 429 | 0 | 0 | |||
Payable as of | 0 | 0 | ||||
Advisor and Dealer Manager | Acquisition fees on real estate debt securities | ||||||
Related Party Transaction [Line Items] | ||||||
Incurred | 0 | 250 | $ 0 | |||
Payable as of | 0 | 0 | ||||
KBS Capital Advisors LLC | 353 Sacramento | ||||||
Related Party Transaction [Line Items] | ||||||
Acquisition fees waved, percent | 45.00% | |||||
KBS Capital Advisors LLC | 125 John Carpenter | ||||||
Related Party Transaction [Line Items] | ||||||
Acquisition fees waved, amount | $ 800 | |||||
KBS Capital Advisors LLC | Legal and professional fees reimbursement | ||||||
Related Party Transaction [Line Items] | ||||||
Incurred | 400 | 100 | ||||
KBS Capital Advisors LLC | Property insurance rebate | ||||||
Related Party Transaction [Line Items] | ||||||
Incurred | $ 100 | |||||
Due from related parties | $ 100 | |||||
Immediate Family Member | Monarch Global Partners, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Payment for administrative fees | $ 100 |
INVESTMENT IN UNCONSOLIDATED 75
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Investments in Unconsolidated Joint Ventures) (Details) $ in Thousands | Dec. 31, 2017USD ($)property | Dec. 31, 2016USD ($) |
Schedule of Equity Method Investments [Line Items] | ||
Investment Balance | $ 55,577 | $ 75,849 |
NIP Joint Venture | ||
Schedule of Equity Method Investments [Line Items] | ||
Number of Properties | property | 5 | |
Investment Balance | $ 3,674 | 5,305 |
NIP Joint Venture | Maximum | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership % | 5.00% | |
110 William Joint Venture | ||
Schedule of Equity Method Investments [Line Items] | ||
Number of Properties | property | 1 | |
Ownership % | 60.00% | |
Investment Balance | $ 7,160 | 70,544 |
353 Sacramento Joint Venture | ||
Schedule of Equity Method Investments [Line Items] | ||
Number of Properties | property | 1 | |
Ownership % | 55.00% | |
Investment Balance | $ 44,743 | $ 0 |
INVESTMENT IN UNCONSOLIDATED 76
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Narrative) (Details) | May 09, 2012USD ($) | Dec. 31, 2017USD ($)ft²property | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Jul. 06, 2017 | May 02, 2014ft² | May 18, 2012ft²property |
Schedule of Equity Method Investments [Line Items] | |||||||
Rentable square feet | ft² | 2,700,000 | ||||||
Initial capital contribution | $ 0 | $ 2,820,000 | $ 2,760,000 | ||||
Investments in unconsolidated joint ventures | 55,577,000 | 75,849,000 | |||||
Income from unconsolidated joint venture | 2,073,000 | 0 | 0 | ||||
Acquisition related costs | 0 | 543,000 | 0 | ||||
Joint Venture | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Ownership interest | 55.00% | ||||||
110 William JV Partner | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Return of capital | 58,200,000 | ||||||
Capital distribution | $ 38,800,000 | ||||||
Migdal Members | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Ownership interest | 45.00% | ||||||
Office Properties | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Number of real estate properties | property | 4 | ||||||
Office Properties | 353 Sacramento | Disposed of by Sale | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Ownership interest | 45.00% | ||||||
NIP Joint Venture | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Number of real estate properties | property | 5 | ||||||
Rentable square feet | ft² | 3,400,000 | ||||||
Initial capital contribution | $ 8,000,000 | ||||||
Investments in unconsolidated joint ventures | $ 3,674,000 | 5,305,000 | |||||
Distributions | 3,700,000 | 0 | 0 | ||||
Income from unconsolidated joint venture | 2,100,000 | ||||||
Return of capital | $ 1,600,000 | ||||||
NIP Joint Venture | Maximum | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Ownership interest | 5.00% | ||||||
NIP Joint Venture | Industrial | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Number of real estate properties | property | 5 | ||||||
110 William Joint Venture | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Number of real estate properties | property | 1 | ||||||
Rentable square feet | ft² | 928,157 | ||||||
Ownership interest | 60.00% | ||||||
Investments in unconsolidated joint ventures | $ 7,160,000 | 70,544,000 | |||||
Amortization of acquisition costs | 1,500,000 | ||||||
Area of land | ft² | 0.8 | ||||||
Acquisition related costs | $ 0 | 0 | $ 1,000 | ||||
110 William Joint Venture | 110 William JV Partner | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Ownership interest | 60.00% | ||||||
Noncontrolling interest | 40.00% | ||||||
353 Sacramento Joint Venture | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Number of real estate properties | property | 1 | ||||||
Ownership interest | 55.00% | ||||||
Investments in unconsolidated joint ventures | $ 44,743,000 | $ 0 |
INVESTMENT IN UNCONSOLIDATED 77
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (110 William Joint Venture Refinance) (Details) | Mar. 06, 2017USD ($)extensioninstrument | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | May 02, 2014USD ($) |
Schedule of Equity Method Investments [Line Items] | ||||
Face amount | $ 332,893,000 | $ 711,119,000 | ||
Extinguishment of debt | $ 156,000,000 | |||
110 William Street Existing Loans | Mortgages | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Face amount | $ 141,500,000 | |||
110 William Street Existing Loans | Mezzanine Loan | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Face amount | $ 20,000,000 | |||
Refinancing Loans | Interest rate cap | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Notional amount | 275,000,000 | |||
Refinancing Loans | Interest rate cap | Maximum | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Notional amount | $ 300,000,000 | |||
Refinancing Loans | One-month LIBOR | Interest rate cap | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of instruments | instrument | 3 | |||
Variable interest rate | 3.00% | |||
Refinancing Loans | Mortgages | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of extensions | extension | 3 | |||
Extension period | 1 year | |||
110 William Street Mortgage Loan | Mortgages | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Face amount | $ 232,300,000 | |||
Amount outstanding | 205,000,000 | |||
Unused borrowing capacity, amount | $ 27,300,000 | |||
110 William Street Mortgage Loan | Mortgages | One-month LIBOR | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Basis spread on variable rate | 2.2472% | |||
110 William Street Senior Mezzanine Loan | Mezzanine Loan | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Face amount | $ 33,800,000 | |||
Amount outstanding | 29,850,000 | |||
Unused borrowing capacity, amount | $ 4,000,000 | |||
110 William Street Senior Mezzanine Loan | Mezzanine Loan | One-month LIBOR | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Basis spread on variable rate | 6.25% | |||
110 William Street Junior Mezzanine Loan | Mezzanine Loan | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Face amount | $ 33,800,000 | |||
Amount outstanding | 29,850,000 | |||
Unused borrowing capacity, amount | $ 4,000,000 |
INVESTMENT IN UNCONSOLIDATED 78
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Summarized Financial Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Balance Sheet Related Disclosures [Abstract] | ||||||||||||
Real estate assets, net of accumulated depreciation and amortization | $ 532,867 | $ 537,090 | $ 532,867 | $ 532,867 | $ 537,090 | |||||||
Total assets | 1,101,574 | 1,310,116 | 1,101,574 | 1,101,574 | 1,310,116 | |||||||
Other liabilities | 16,966 | 18,095 | 16,966 | 16,966 | 18,095 | |||||||
Total liabilities and equity | 1,101,574 | 1,310,116 | 1,101,574 | 1,101,574 | 1,310,116 | |||||||
Income Statement [Abstract] | ||||||||||||
Revenues | 26,067 | $ 36,414 | $ 40,237 | $ 37,996 | 35,880 | $ 36,133 | $ 33,866 | $ 28,365 | 140,714 | 134,244 | $ 112,128 | |
Operating, maintenance, and management | 42,611 | 41,906 | 37,512 | |||||||||
Real estate taxes and insurance | 17,404 | 16,887 | 14,565 | |||||||||
Real estate acquisition fees and expenses | 0 | 543 | 0 | |||||||||
Depreciation and amortization | 53,446 | 52,051 | 44,739 | |||||||||
Interest expense | 37,149 | 29,249 | 14,986 | |||||||||
Total expenses | 182,732 | 162,006 | 123,396 | |||||||||
Total other income | 0 | 0 | 5,085 | |||||||||
Net income (loss) attributable to common stockholders | 206,424 | $ (10,534) | $ 23,846 | $ (9,092) | (7,114) | $ (14,951) | $ (1,959) | $ (4,894) | 210,644 | (28,918) | 2,444 | |
Company’s equity in loss of unconsolidated joint venture | (6,037) | (1,408) | (368) | |||||||||
110 William Joint Venture | ||||||||||||
Balance Sheet Related Disclosures [Abstract] | ||||||||||||
Real estate assets, net of accumulated depreciation and amortization | 248,269 | 262,192 | 248,269 | 248,269 | 262,192 | |||||||
Other assets | 32,331 | 23,355 | 32,331 | 32,331 | 23,355 | |||||||
Total assets | 280,600 | 285,547 | 280,600 | 280,600 | 285,547 | |||||||
Notes payable, net | 260,108 | 157,628 | 260,108 | 260,108 | 157,628 | |||||||
Other liabilities | 11,016 | 12,872 | 11,016 | 11,016 | 12,872 | |||||||
Partners’ capital | 9,476 | 115,047 | 9,476 | 9,476 | 115,047 | |||||||
Total liabilities and equity | 280,600 | $ 285,547 | 280,600 | 280,600 | 285,547 | |||||||
Income Statement [Abstract] | ||||||||||||
Revenues | 37,338 | 33,458 | 34,188 | |||||||||
Operating, maintenance, and management | 10,056 | 10,778 | 10,549 | |||||||||
Real estate taxes and insurance | 6,281 | 6,017 | 5,748 | |||||||||
Real estate acquisition fees and expenses | 0 | 0 | 1 | |||||||||
Depreciation and amortization | 16,544 | 12,955 | 12,596 | |||||||||
Interest expense | 13,134 | 6,049 | 6,170 | |||||||||
Total expenses | 46,015 | 35,799 | 35,064 | |||||||||
Total other income | 56 | 63 | 334 | |||||||||
Net income (loss) attributable to common stockholders | (8,621) | (2,278) | (542) | |||||||||
Company’s equity in loss of unconsolidated joint venture | (5,214) | $ (1,408) | $ (368) | |||||||||
353 Sacramento Joint Venture | ||||||||||||
Balance Sheet Related Disclosures [Abstract] | ||||||||||||
Real estate assets, net of accumulated depreciation and amortization | 171,066 | 171,066 | 171,066 | |||||||||
Other assets | 6,472 | 6,472 | 6,472 | |||||||||
Total assets | 177,538 | 177,538 | 177,538 | |||||||||
Notes payable, net | 89,423 | 89,423 | 89,423 | |||||||||
Other liabilities | 7,313 | 7,313 | 7,313 | |||||||||
Partners’ capital | 80,802 | 80,802 | 80,802 | |||||||||
Total liabilities and equity | $ 177,538 | 177,538 | $ 177,538 | |||||||||
Income Statement [Abstract] | ||||||||||||
Revenues | 7,053 | |||||||||||
Operating, maintenance, and management | 2,189 | |||||||||||
Real estate taxes and insurance | 1,198 | |||||||||||
Depreciation and amortization | 3,408 | |||||||||||
Interest expense | 2,302 | |||||||||||
Total expenses | 9,097 | |||||||||||
Net income (loss) attributable to common stockholders | (2,044) | |||||||||||
Company’s equity in loss of unconsolidated joint venture | $ (823) |
SUPPLEMENTAL CASH FLOW AND SI79
SUPPLEMENTAL CASH FLOW AND SIGNIFICANT NONCASH TRANSACTION DISCLOSURES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Supplemental Disclosure of Cash Flow Information: | |||
Interest paid, net of capitalized interest of $2,339, $2,025 and $1,856 for the years ended December 31, 2017, 2016 and 2015, respectively | $ 32,688 | $ 20,759 | $ 12,265 |
Interest capitalized | 2,339 | 2,025 | 1,856 |
Assets and liabilities deconsolidated in connection with the 353 Sacramento partial sale: | |||
Real estate, net | 532,867 | 537,090 | |
Rents and other receivables, net | 9,821 | 6,932 | |
Prepaid expenses and other assets | 18,182 | 15,794 | |
Accounts payable and accrued liabilities | 16,686 | 26,624 | |
Below-market leases, net | 2,843 | 5,088 | |
Other liabilities | 16,966 | 18,095 | |
SREIT units received in connection with the Singapore Transaction | 38,720 | 0 | 0 |
Increase in development obligations related to sale of real estate | 3,816 | 0 | 4,128 |
Application of escrow deposits to acquisition of real estate | 2,000 | 0 | 0 |
Increase in accrued improvements to real estate | 0 | 3,547 | 0 |
Increase in redemption common stock payable | 0 | 8,902 | 3,715 |
Distributions paid to common stockholders through common stock issuances pursuant to the dividend reinvestment plan | 8,666 | 12,616 | 13,573 |
353 Sacramento | |||
Assets and liabilities deconsolidated in connection with the 353 Sacramento partial sale: | |||
Real estate, net | 170,586 | 0 | 0 |
Rents and other receivables, net | 1,244 | 0 | 0 |
Prepaid expenses and other assets | 555 | 0 | 0 |
Notes payable, net | 87,132 | 0 | 0 |
Accounts payable and accrued liabilities | 1,574 | 0 | 0 |
Below-market leases, net | 2,960 | 0 | 0 |
Other liabilities | $ 924 | $ 0 | $ 0 |
SELECTED QUARTERLY FINANCIAL 80
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 26,067 | $ 36,414 | $ 40,237 | $ 37,996 | $ 35,880 | $ 36,133 | $ 33,866 | $ 28,365 | $ 140,714 | $ 134,244 | $ 112,128 |
Net income (loss) | 206,371 | (10,542) | 23,809 | (9,058) | (7,198) | (15,007) | (1,989) | (4,932) | 210,580 | (29,126) | 7,132 |
Net income (loss) attributable to common stockholders | $ 206,424 | $ (10,534) | $ 23,846 | $ (9,092) | $ (7,114) | $ (14,951) | $ (1,959) | $ (4,894) | $ 210,644 | $ (28,918) | $ 2,444 |
Net income (loss) per common share, basic and diluted (in dollars per share) | $ 3.88 | $ (0.19) | $ 0.42 | $ (0.16) | $ (0.12) | $ (0.25) | $ (0.03) | $ (0.08) | $ 3.77 | $ (0.50) | $ 0.04 |
Distributions declared per common share (in dollars per share) | $ 3.610 | $ 0.095 | $ 0.093 | $ 0.092 | $ 0.095 | $ 0.094 | $ 0.093 | $ 0.093 | $ 3.89000 | $ 0.38 | $ 0.38 |
SUBSEQUENT EVENTS (Acquisition)
SUBSEQUENT EVENTS (Acquisition) (Details) | Mar. 06, 2018USD ($)aft²tenantpropertyextension | Mar. 01, 2018USD ($)aft²tenantproperty | Dec. 31, 2017USD ($)ft²tenant | Dec. 31, 2016USD ($) |
Subsequent Event [Line Items] | ||||
Rentable square feet | ft² | 2,700,000 | |||
Number of tenants | tenant | 300 | |||
Face amount | $ 332,893,000 | $ 711,119,000 | ||
Subsequent Event | Mortgages | City Tower Mortgage Loan | ||||
Subsequent Event [Line Items] | ||||
Number of extensions | extension | 2 | |||
Extension period | 1 year | |||
Face amount | $ 103,400,000 | |||
Amount outstanding | 89,000,000 | |||
Unused borrowing capacity, amount | $ 14,400,000 | |||
Subsequent Event | Mortgages | City Tower Mortgage Loan | One-month LIBOR | ||||
Subsequent Event [Line Items] | ||||
Basis spread on variable rate | 1.55% | |||
Subsequent Event | Office Properties | City Tower | ||||
Subsequent Event [Line Items] | ||||
Number of real estate properties acquired | property | 1 | |||
Rentable square feet | ft² | 431,007 | |||
Area of land | a | 4.92 | |||
Consideration transferred | $ 147,300,000 | |||
Percent of property leased | 76.00% | |||
Number of tenants | tenant | 24 | |||
Subsequent Event | Office Properties | Marquette Plaza | ||||
Subsequent Event [Line Items] | ||||
Number of real estate properties acquired | property | 1 | |||
Rentable square feet | ft² | 522,656 | |||
Area of land | a | 2.5 | |||
Consideration transferred | $ 88,400,000 | |||
Percent of property leased | 70.00% | |||
Number of tenants | tenant | 21 |
SUBSEQUENT EVENTS (Distribution
SUBSEQUENT EVENTS (Distributions) (Details) - USD ($) $ / shares in Units, $ in Millions | Mar. 08, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 17, 2018 | Dec. 07, 2017 |
Subsequent Event [Line Items] | ||||||||||||||
Special dividends declared (in dollars per share) | $ (3.61) | |||||||||||||
Distributions declared per common share (in dollars per share) | $ 3.610 | $ 0.095 | $ 0.093 | $ 0.092 | $ 0.095 | $ 0.094 | $ 0.093 | $ 0.093 | $ 3.89000 | $ 0.38 | $ 0.38 | |||
Dividend Declared | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Special dividends declared (in dollars per share) | $ (3.61) | |||||||||||||
Subsequent Event | Dividend Declared | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Maximum cash distribution, percent of special dividends | 20.00% | |||||||||||||
Common stock, special dividends, paid | $ 37.6 | |||||||||||||
Common stock, special dividends, amount of shares issued | $ 150.3 | |||||||||||||
Distributions declared per common share (in dollars per share) | $ 0.015975 |
SCHEDULE III REAL ESTATE ASSE83
SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION (Schedule) (Details) $ in Thousands | Sep. 07, 2016USD ($)unit | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Real Estate and Accumulated Depreciation [Line Items] | |||||
Gross Amount at which Carried at Close of Period, Total | $ 574,684 | $ 1,227,207 | $ 914,074 | $ 919,259 | |
Accumulated Depreciation and Amortization | (41,817) | $ (120,176) | $ (91,560) | $ (64,171) | |
Aggregate cost of real estate for federal income tax purposes | 607,200 | ||||
Debt, outstanding amount | 611,694 | ||||
Subsidiary of Common Parent | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Interest rate on Class A non-voting preferred membership units | 10.00% | ||||
Proceeds from sale of units | $ 800 | ||||
Disposed of by Sale | Subsidiary of Common Parent | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Number of real estate units | unit | 820 | ||||
Mortgages | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Debt, outstanding amount | 36,900 | ||||
Properties Held for Investment [Member] | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Initial Cost to Company, Land | 141,651 | ||||
Initial Cost to Company, Building and Improvements | 391,720 | ||||
Initial Cost to Company, Total | 533,371 | ||||
Cost Capitalized Subsequent to Acquisition | 41,313 | ||||
Gross Amount at which Carried at Close of Period, Land | 162,061 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 412,623 | ||||
Gross Amount at which Carried at Close of Period, Total | 574,684 | ||||
Accumulated Depreciation and Amortization | (41,817) | ||||
Properties Held for Investment [Member] | Total Richardson Portfolio | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Encumbrances | 36,886 | ||||
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 | 6,368 | ||||
Gross Amount at which Carried at Close of Period, Land | 6,244 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 36,229 | ||||
Gross Amount at which Carried at Close of Period, Total | 42,473 | ||||
Accumulated Depreciation and Amortization | $ (9,043) | ||||
Properties Held for Investment [Member] | Palisades Central I | |||||
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 | 2,342 | ||||
Gross Amount at which Carried at Close of Period, Land | 1,037 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 10,970 | ||||
Gross Amount at which Carried at Close of Period, Total | 12,007 | ||||
Accumulated Depreciation and Amortization | $ (2,268) | ||||
Original Date of Construction | 1,980 | ||||
Date Acquired or Foreclosed on | Nov. 23, 2011 | ||||
Properties Held for Investment [Member] | Palisades Central II | |||||
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 | 1,165 | ||||
Gross Amount at which Carried at Close of Period, Land | 810 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 18,282 | ||||
Gross Amount at which Carried at Close of Period, Total | 19,092 | ||||
Accumulated Depreciation and Amortization | $ (4,144) | ||||
Original Date of Construction | 1,985 | ||||
Date Acquired or Foreclosed on | Nov. 23, 2011 | ||||
Properties Held for Investment [Member] | Greenway I | |||||
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 | 1,194 | ||||
Gross Amount at which Carried at Close of Period, Land | 561 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 2,364 | ||||
Gross Amount at which Carried at Close of Period, Total | 2,925 | ||||
Accumulated Depreciation and Amortization | $ (841) | ||||
Original Date of Construction | 1,983 | ||||
Date Acquired or Foreclosed on | Nov. 23, 2011 | ||||
Properties Held for Investment [Member] | Greenway III | |||||
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 | 530 | ||||
Gross Amount at which Carried at Close of Period, Land | 702 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 4,613 | ||||
Gross Amount at which Carried at Close of Period, Total | 5,315 | ||||
Accumulated Depreciation and Amortization | $ (1,790) | ||||
Original Date of Construction | 1,983 | ||||
Date Acquired or Foreclosed on | Nov. 23, 2011 | ||||
Properties Held for Investment [Member] | Undeveloped Land | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Ownership Percent | 90.00% | ||||
Encumbrances | $ 0 | ||||
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 | 1,137 | ||||
Gross Amount at which Carried at Close of Period, Land | 3,134 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 0 | ||||
Gross Amount at which Carried at Close of Period, Total | 3,134 | ||||
Accumulated Depreciation and Amortization | $ 0 | ||||
Date Acquired or Foreclosed on | Nov. 23, 2011 | ||||
Properties Held for Investment [Member] | Park Highlands | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
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 | 14,121 | ||||
Gross Amount at which Carried at Close of Period, Land | 34,428 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 0 | ||||
Gross Amount at which Carried at Close of Period, Total | 34,428 | ||||
Accumulated Depreciation and Amortization | $ 0 | ||||
Date Acquired or Foreclosed on | Dec. 30, 2011 | ||||
Properties Held for Investment [Member] | Burbank Collection | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Ownership Percent | 90.00% | ||||
Encumbrances | $ 10,958 | ||||
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 | 4,462 | ||||
Gross Amount at which Carried at Close of Period, Land | 4,175 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 13,261 | ||||
Gross Amount at which Carried at Close of Period, Total | 17,436 | ||||
Accumulated Depreciation and Amortization | $ (2,389) | ||||
Original Date of Construction | 2,008 | ||||
Date Acquired or Foreclosed on | Dec. 12, 2012 | ||||
Properties Held for Investment [Member] | Park Centre | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Ownership Percent | 100.00% | ||||
Encumbrances | $ 9,877 | ||||
Initial Cost to Company, Land | 3,251 | ||||
Initial Cost to Company, Building and Improvements | 27,941 | ||||
Initial Cost to Company, Total | 31,192 | ||||
Cost Capitalized Subsequent to Acquisition | (1,554) | ||||
Gross Amount at which Carried at Close of Period, Land | 3,251 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 26,387 | ||||
Gross Amount at which Carried at Close of Period, Total | 29,638 | ||||
Accumulated Depreciation and Amortization | $ (3,703) | ||||
Original Date of Construction | 2,000 | ||||
Date Acquired or Foreclosed on | Mar. 28, 2013 | ||||
Properties Held for Investment [Member] | Central Building | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Ownership Percent | 100.00% | ||||
Encumbrances | $ 27,600 | ||||
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 | 2,169 | ||||
Gross Amount at which Carried at Close of Period, Land | 7,015 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 28,293 | ||||
Gross Amount at which Carried at Close of Period, Total | 35,308 | ||||
Accumulated Depreciation and Amortization | $ (4,663) | ||||
Original Date of Construction | 1,907 | ||||
Date Acquired or Foreclosed on | Jul. 10, 2013 | ||||
Properties Held for Investment [Member] | 1180 Raymond | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Ownership Percent | 100.00% | ||||
Encumbrances | $ 31,000 | ||||
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 | 452 | ||||
Gross Amount at which Carried at Close of Period, Land | 8,292 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 38,103 | ||||
Gross Amount at which Carried at Close of Period, Total | 46,395 | ||||
Accumulated Depreciation and Amortization | $ (5,283) | ||||
Original Date of Construction | 1,929 | ||||
Date Acquired or Foreclosed on | Aug. 20, 2013 | ||||
Properties Held for Investment [Member] | Park Highlands II | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Ownership Percent | 100.00% | ||||
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 | 4,830 | ||||
Gross Amount at which Carried at Close of Period, Land | 24,948 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 0 | ||||
Gross Amount at which Carried at Close of Period, Total | 24,948 | ||||
Accumulated Depreciation and Amortization | $ 0 | ||||
Date Acquired or Foreclosed on | Dec. 10, 2013 | ||||
Properties Held for Investment [Member] | 424 Bedford | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Ownership Percent | 90.00% | ||||
Encumbrances | $ 24,282 | ||||
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 | 887 | ||||
Gross Amount at which Carried at Close of Period, Land | 8,860 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 25,707 | ||||
Gross Amount at which Carried at Close of Period, Total | 34,567 | ||||
Accumulated Depreciation and Amortization | $ (2,810) | ||||
Original Date of Construction | 2,010 | ||||
Date Acquired or Foreclosed on | Jan. 31, 2014 | ||||
Properties Held for Investment [Member] | Richardson Land II | |||||
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 | 322 | ||||
Gross Amount at which Carried at Close of Period, Land | 3,418 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 0 | ||||
Gross Amount at which Carried at Close of Period, Total | 3,418 | ||||
Accumulated Depreciation and Amortization | $ 0 | ||||
Date Acquired or Foreclosed on | Sep. 4, 2014 | ||||
Properties Held for Investment [Member] | Westpark Portfolio | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Ownership Percent | 100.00% | ||||
Encumbrances | $ 85,200 | ||||
Initial Cost to Company, Land | 36,085 | ||||
Initial Cost to Company, Building and Improvements | 90,227 | ||||
Initial Cost to Company, Total | 126,312 | ||||
Cost Capitalized Subsequent to Acquisition | 6,710 | ||||
Gross Amount at which Carried at Close of Period, Land | 36,085 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 96,937 | ||||
Gross Amount at which Carried at Close of Period, Total | 133,022 | ||||
Accumulated Depreciation and Amortization | $ (8,730) | ||||
Original Date of Construction | 1984-1992 | ||||
Date Acquired or Foreclosed on | May 10, 2016 | ||||
Properties Held for Investment [Member] | Crown Pointe | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Ownership Percent | 100.00% | ||||
Encumbrances | $ 50,500 | ||||
Initial Cost to Company, Land | 22,590 | ||||
Initial Cost to Company, Building and Improvements | 62,610 | ||||
Initial Cost to Company, Total | 85,200 | ||||
Cost Capitalized Subsequent to Acquisition | 2,629 | ||||
Gross Amount at which Carried at Close of Period, Land | 22,590 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 65,239 | ||||
Gross Amount at which Carried at Close of Period, Total | 87,829 | ||||
Accumulated Depreciation and Amortization | $ (3,921) | ||||
Original Date of Construction | 1985/1989 | ||||
Date Acquired or Foreclosed on | Feb. 14, 2017 | ||||
Properties Held for Investment [Member] | 125 John Carpenter | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Ownership Percent | 100.00% | ||||
Encumbrances | $ 50,130 | ||||
Initial Cost to Company, Land | 2,755 | ||||
Initial Cost to Company, Building and Improvements | 82,550 | ||||
Initial Cost to Company, Total | 85,305 | ||||
Cost Capitalized Subsequent to Acquisition | (83) | ||||
Gross Amount at which Carried at Close of Period, Land | 2,755 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 82,467 | ||||
Gross Amount at which Carried at Close of Period, Total | 85,222 | ||||
Accumulated Depreciation and Amortization | $ (1,275) | ||||
Original Date of Construction | 1982/1983 | ||||
Date Acquired or Foreclosed on | Sep. 15, 2017 |
SCHEDULE III REAL ESTATE ASSE84
SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION (Reconciliation) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Real Estate | |||
Balance at the beginning of the year | $ 1,227,207 | $ 914,074 | $ 919,259 |
Acquisitions | 170,505 | 300,382 | 0 |
Improvements | 37,219 | 33,909 | 32,385 |
Write-off of fully depreciated and fully amortized assets | (18,735) | (19,220) | (13,212) |
Loss due to property damages | (668) | (1,938) | (2,260) |
Sales | (664,114) | 0 | (22,098) |
Deconsolidation | (176,730) | 0 | 0 |
Balance at the end of the year | 574,684 | 1,227,207 | 914,074 |
Accumulated depreciation and amortization: | |||
Balance at the beginning of the year | 120,176 | 91,560 | 64,171 |
Depreciation and amortization expense | 48,994 | 47,836 | 41,513 |
Write-off of fully depreciated and fully amortized assets | (18,735) | (19,220) | (13,212) |
Sales | (102,474) | 0 | (912) |
Deconsolidation | (6,144) | 0 | 0 |
Balance at the end of the year | $ 41,817 | $ 120,176 | $ 91,560 |