Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 07, 2018 | |
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-Q | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 54,640,201 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Real estate held for investment, net | $ 811,338 | $ 502,222 |
Real estate held for sale, net | 30,684 | 30,645 |
Real estate equity securities | 98,627 | 90,063 |
Real estate debt securities, net | 17,879 | 17,751 |
Total real estate and real estate-related investments, net | 958,528 | 640,681 |
Cash and cash equivalents | 49,867 | 366,512 |
Restricted cash | 11,008 | 10,670 |
Investments in unconsolidated joint ventures | 50,986 | 55,577 |
Rents and other receivables, net | 12,464 | 8,755 |
Above-market leases, net | 3,587 | 10 |
Assets related to real estate held for sale, net | 1,945 | 1,965 |
Prepaid expenses and other assets | 16,069 | 17,404 |
Total assets | 1,104,454 | 1,101,574 |
Notes and bonds payable, net | ||
Notes and bonds payable related to real estate held for investment, net | 739,650 | 575,528 |
Notes payable related to real estate held for sale, net | 27,566 | 27,515 |
Notes and bonds payable, net | 767,216 | 603,043 |
Accounts payable and accrued liabilities | 18,700 | 16,686 |
Due to affiliate | 39 | 26 |
Distribution payable | 0 | 187,914 |
Below-market leases, net | 6,011 | 2,843 |
Other liabilities | 14,614 | 16,966 |
Redeemable common stock payable | 421 | 8,595 |
Total liabilities | 807,001 | 836,073 |
Commitments and contingencies (Note 14) | ||
Redeemable common stock | 2,720 | 4,518 |
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, 54,682,660 and 52,053,817 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively | 547 | 521 |
Additional paid-in capital | 434,935 | 388,800 |
Cumulative distributions and net income | (143,397) | (155,454) |
Accumulated other comprehensive income | 0 | 25,146 |
Total KBS Strategic Opportunity REIT, Inc. stockholders’ equity | 292,085 | 259,013 |
Noncontrolling interests | 2,648 | 1,970 |
Total equity | 294,733 | 260,983 |
Total liabilities and equity | $ 1,104,454 | $ 1,101,574 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
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) | 54,682,660 | 52,053,817 |
Common stock, shares outstanding (in shares) | 54,682,660 | 52,053,817 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues: | ||||
Rental income | $ 18,915 | $ 31,704 | $ 34,096 | $ 62,350 |
Tenant reimbursements | 3,703 | 6,456 | 6,384 | 12,094 |
Other operating income | 952 | 987 | 1,173 | 2,540 |
Interest income from real estate debt securities | 511 | 601 | 1,012 | 760 |
Dividend income from real estate equity securities | 1,209 | 489 | 2,260 | 489 |
Total revenues | 25,290 | 40,237 | 44,925 | 78,233 |
Expenses: | ||||
Operating, maintenance, and management | 7,571 | 11,299 | 13,058 | 22,207 |
Real estate taxes and insurance | 3,435 | 5,415 | 5,773 | 10,152 |
Asset management fees to affiliate | 2,217 | 2,856 | 4,043 | 5,603 |
General and administrative expenses | 2,250 | 1,378 | 4,302 | 3,123 |
Foreign currency transaction (gain) loss, net | (10,111) | 2,426 | (9,114) | 7,097 |
Depreciation and amortization | 9,042 | 15,307 | 16,307 | 29,908 |
Interest expense | 7,819 | 10,324 | 14,410 | 19,709 |
Total expenses | 22,223 | 49,005 | 48,779 | 97,799 |
Other income (loss): | ||||
Income from unconsolidated joint venture | 131 | 0 | 185 | 1,869 |
Equity in loss of unconsolidated joint ventures | (2,373) | (1,622) | (4,751) | (1,776) |
Other interest income | 419 | 171 | 1,349 | 196 |
Unrealized gain (loss) on real estate equity securities | 8,724 | 0 | (7,287) | 0 |
Gain on sale of real estate | 25 | 34,028 | 649 | 34,028 |
Total other income (loss), net | 6,926 | 32,577 | (9,855) | 34,317 |
Net income (loss) | 9,993 | 23,809 | (13,709) | 14,751 |
Net loss attributable to noncontrolling interests | 43 | 37 | 64 | 3 |
Net income (loss) attributable to common stockholders | $ 10,036 | $ 23,846 | $ (13,645) | $ 14,754 |
Net income (loss) per common share, basic and diluted (in dollars per share) | $ 0.16 | $ 0.42 | $ (0.22) | $ 0.26 |
Weighted-average number of common shares outstanding, basic and diluted (in shares) | 61,910,602 | 56,714,180 | 62,216,998 | 56,748,125 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 9,993 | $ 23,809 | $ (13,709) | $ 14,751 |
Other comprehensive income: | ||||
Unrealized gain on real estate securities | 0 | 849 | 0 | 849 |
Total other comprehensive income | 0 | 849 | 0 | 849 |
Total comprehensive income (loss) | 9,993 | 24,658 | (13,709) | 15,600 |
Total comprehensive loss attributable to noncontrolling interests | 43 | 37 | 64 | 3 |
Total comprehensive income (loss) attributable to common stockholders | $ 10,036 | $ 24,695 | $ (13,645) | $ 15,603 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY (unaudited) - 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, 2016 | 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 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Cumulative effect adjustments to retained earnings | 2,472 | 2,472 | 27,618 | (25,146) | |||
Net income (loss) | (13,709) | (13,645) | (13,645) | (64) | |||
Other comprehensive income | 0 | ||||||
Issuance of common stock (in shares) | 83,855 | ||||||
Issuance of common stock | 964 | 964 | $ 1 | 963 | |||
Stock distribution issued (in shares) | 13,069,487 | ||||||
Stock distribution issued | 150,299 | 150,299 | $ 130 | 150,169 | |||
Transfers from redeemable common stock | 9,969 | 9,969 | 9,969 | ||||
Redemptions of common stock (in shares) | (10,524,499) | ||||||
Redemptions of common stock | (115,071) | (115,071) | $ (105) | (114,966) | |||
Distributions declared | (1,916) | (1,916) | (1,916) | ||||
Noncontrolling interests contributions | $ 742 | 742 | |||||
Balance (in shares) at Jun. 30, 2018 | 54,682,660 | 54,682,660 | |||||
Balance at Jun. 30, 2018 | $ 294,733 | $ 292,085 | $ 547 | $ 434,935 | $ (143,397) | $ 0 | $ 2,648 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Cash Flows from Operating Activities: | |||||
Net (loss) income | $ 9,993 | $ 23,809 | $ (13,709) | $ 14,751 | $ 210,580 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||
Loss due to property damages | 600 | 430 | |||
Equity in loss of unconsolidated joint ventures | 2,373 | 1,622 | 4,751 | 1,776 | |
Depreciation and amortization | 9,042 | 15,307 | 16,307 | 29,908 | |
Unrealized loss on real estate equity securities | (8,724) | 0 | 7,287 | 0 | |
Gain on real estate | (25) | (34,028) | (649) | (34,028) | |
Unrealized loss on interest rate caps | 31 | 88 | |||
Deferred rent | (1,670) | (1,370) | |||
Bad debt recovery | (218) | (58) | |||
Amortization of above- and below-market leases, net | (500) | (2,037) | |||
Amortization of deferred financing costs | 900 | 1,300 | 1,699 | 2,592 | |
Interest accretion on real estate debt securities | (128) | (348) | |||
Net amortization of discount and (premium) on bond and notes payable | 29 | 23 | |||
Foreign currency transaction (gain) loss, net | (10,111) | 2,426 | (9,114) | 7,097 | |
Changes in assets and liabilities: | |||||
Rents and other receivables | (1,854) | (1,524) | |||
Prepaid expenses and other assets | (3,606) | (3,618) | |||
Accounts payable and accrued liabilities | 911 | (1,090) | |||
Due to affiliates | 13 | (29) | |||
Other liabilities | 388 | 294 | |||
Net cash provided by operating activities | 568 | 12,857 | |||
Cash Flows from Investing Activities: | |||||
Acquisitions of real estate | (312,348) | (82,235) | |||
Improvements to real estate | (14,108) | (18,784) | |||
Proceeds from sales of real estate, net | 2,567 | 94,914 | |||
Reimbursement of construction costs | 1,636 | 0 | |||
Insurance proceeds received for property damages | 0 | 744 | |||
Purchase of interest rate cap | (163) | (107) | |||
Contributions to unconsolidated joint venture | (1,320) | 0 | |||
Distributions of capital from unconsolidated joint venture | 1,160 | 59,157 | |||
Investment in real estate equity securities | (15,851) | (38,995) | |||
Proceeds for future development obligations | 0 | (12,514) | |||
Proceeds for future development obligations | 0 | 1,368 | |||
Funding of development obligations | (892) | (753) | |||
Net cash (used in) provided by investing activities | (339,319) | 2,795 | |||
Cash Flows from Financing Activities: | |||||
Proceeds from notes and bonds payable | 184,351 | 124,556 | |||
Principal payments on notes and bonds payable | (5,711) | (69,019) | |||
Payments of deferred financing costs | (2,702) | (1,793) | |||
Payments to redeem common stock | (115,071) | (7,511) | |||
Payments of prepaid other offering costs | (295) | (196) | |||
Distributions paid | (38,567) | (4,728) | |||
Noncontrolling interests contributions | 742 | 11 | |||
Distributions to noncontrolling interests | 0 | (10) | |||
Net cash provided by financing activities | 22,747 | 41,310 | |||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (303) | 596 | |||
Net (decrease) increase in cash, cash equivalents and restricted cash | (316,307) | 57,558 | |||
Cash, cash equivalents and restricted cash, beginning of period | 377,182 | 64,450 | 64,450 | ||
Cash, cash equivalents and restricted cash, end of period | $ 60,875 | $ 122,008 | $ 60,875 | $ 122,008 | $ 377,182 |
ORGANIZATION
ORGANIZATION | 6 Months Ended |
Jun. 30, 2018 | |
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 June 30, 2018 , the Company had sold 6,704,217 shares of common stock under its dividend reinvestment plan for gross offering proceeds of $75.0 million . Also, as of June 30, 2018 , the Company had redeemed 21,972,263 shares for $266.9 million . As of June 30, 2018 , the Company had issued 13,069,487 shares of common stock in connection with the December 2017 special dividend. 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 June 30, 2018 , the Company consolidated seven office properties (of which one office property was held for sale), 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 and 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 three investments in real estate equity securities. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES There have been no significant changes to the Company’s accounting policies since it filed its audited financial statements in its Annual Report on Form 10-K for the year ended December 31, 2017 , except for the Company’s adoption of the revenue recognition and financial instruments standards issued by the Financial Accounting Standards Board (“FASB”) effective on January 1, 2018. For further information about the Company’s accounting policies, refer to the Company’s consolidated financial statements and notes thereto for the year ended December 31, 2017 included in the Company’s Annual Report on Form 10-K filed with the SEC. Principles of Consolidation and Basis of Presentation The accompanying unaudited consolidated financial statements and condensed notes thereto have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as contained within the FASB Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair and consistent presentation of the results for such periods. Operating results for the three and six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018 . 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. 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. 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 each calendar year, redemptions are limited to the amount of net proceeds from the sale of shares under the dividend reinvestment plan during the prior calendar year. • 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. Based on the amount of net proceeds raised from the sale of shares under the dividend reinvestment plan during 2017 , as of June 30, 2018 , the Company had $2.2 million available for all share redemption requests for the remainder of 2018 . On August 9, 2018, the Company’s board of directors approved an additional $6.0 million of funds available for the redemption of shares in 2018. • 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. 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. In anticipation of a self-tender offer in order to make liquidity available to stockholders in excess of that permitted under the share redemption program, on March 14, 2018 , the Company’s board of directors approved a temporary suspension of the share redemption program starting with the March 2018 redemption period, including any unsatisfied requests from prior redemption periods. In connection with its approval of the Self-Tender (defined below), the Company’s board of directors approved the reopening of the share redemption program for the June 2018 redemption period, meaning no redemptions were made in March, April or May 2018 (including those requested following a stockholder’s death, qualifying disability or determination of incompetence). On April 23, 2018 , the Company commenced a self-tender offer (the “Self-Tender”) for up to 8,234,217 shares of common stock at a price of $10.93 per share, or approximately $90.0 million of shares. The Company increased the number of shares accepted for payment in the Self-Tender by up to 1,294,910 shares at a price of $10.93 per share, or approximately $14.1 million of shares. On June 1, 2018 , the Company accepted for purchase 9,527,724 shares at a purchase price of $10.93 per share, or approximately $104.1 million of shares, excluding fees and expenses related to 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 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 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 six months ended June 30, 2018 , the Company had redeemed $10.9 million of common stock, of which $4.4 million relates to delayed December 2017 redemptions. The Company recorded $0.4 million and $8.6 million of other liabilities on the Company’s balance sheet as of June 30, 2018 and December 31, 2017 , 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 $2.2 million available for redemptions in the remainder of 2018 as of June 30, 2018 , including shares that are redeemed in connection with a stockholders’ death, “qualifying disability” or “determination of incompetence,” subject to the limitations described above. Revenue Recognition Effective January 1, 2018, the Company adopted ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU No. 2014-09”), using the modified retrospective approach, which requires a cumulative effect adjustment as of the date of the Company’s adoption. 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 were 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 were not completed as of January 1, 2018. Based on the Company’s evaluation of contracts within the scope of ASU No. 2014-09, revenue that is impacted by ASU No. 2014-09 includes revenue generated by sales of real estate, other operating income and tenant reimbursements for substantial services earned at the Company’s properties. The recognition of such revenue will occur when the services are provided and the performance obligations are satisfied. For the three and six months ended June 30, 2018 , tenant reimbursements for substantial services accounted for under ASU No. 2014-09 were $0.5 million and $0.9 million , respectively, which were included in tenant reimbursements on the accompanying statements of operations. Sale of Real Estate Prior to January 1, 2018, gains on real estate sold were recognized using the full accrual method at closing when collectibility of the sales price was reasonably assured, the Company was not obligated to perform additional activities that may be considered significant, the initial investment from the buyer was sufficient and other profit recognition criteria had been satisfied. Gain on sales of real estate may have been deferred in whole or in part until the requirements for gain recognition had been met. Effective January 1, 2018, the Company adopted the guidance of ASC 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”), which applies to sales or transfers to noncustomers of nonfinancial assets or in substance nonfinancial assets that do not meet the definition of a business. Generally, the Company’s sales of real estate would be considered a sale of a nonfinancial asset as defined by ASC 610-20. ASC 610-20 refers to the revenue recognition principles under ASU No. 2014-09. Under ASC 610-20, if the Company determines it does not have a controlling financial interest in the entity that holds the asset and the arrangement meets the criteria to be accounted for as a contract, the Company would derecognize the asset and recognize a gain or loss on the sale of the real estate when control of the underlying asset transfers to the buyer. As a result of the adoption of ASC 610-20 on January 1, 2018, the Company recorded a cumulative effect adjustment to increase retained earnings by $2.5 million to recognize the deferred gain from the sale of 102 developable acres at Park Highlands that closed on May 1, 2017, as control of the sold acres had transferred to the buyers at closing. As of January 1, 2018 and June 30, 2018 , the Company had recorded contract liabilities of $1.7 million and $2.0 million , respectively, related to deferred proceeds received from the buyers of the Park Highlands land sales and another developer for the value of land that was contributed to a master association that is consolidated by the Company, which was included in other liabilities on the accompanying consolidated balance sheets. Real Estate Equity Securities The Company’s real estate equity securities 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. Prior to the Company’s adoption of ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU No. 2016-01”) on January 1, 2018, the Company classified its investments in real estate equity securities as available-for-sale and unrealized gains and losses were 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. Effective January 1, 2018, unrealized gains and losses on real estate equity securities are recognized in earnings. Upon adoption of ASU No. 2016-01 on January 1, 2018, the Company recorded a $25.1 million cumulative effect adjustment to retained earnings related to the unrealized gain on real estate equity securities previously reported in accumulated other comprehensive income prior to January 1, 2018. Investment in Unconsolidated Joint Ventures Equity Investment Without Readily Determinable Value Prior to the adoption of ASU No. 2016-01 on January 1, 2018, the Company accounted for investments in unconsolidated joint venture entities in which the Company did not have the ability to exercise significant influence and had virtually no influence over partnership operating and financial policies using the cost method of accounting. Under the cost method, income distributions from the partnership were recognized in other income. Distributions that exceed the Company’s share of earnings were applied to reduce the carrying value of the Company’s investment and any capital contributions increased the carrying value of the Company’s investment. On a quarterly basis, the Company evaluated its cost method investment in an unconsolidated joint venture for other-than-temporary impairments. The fair value of a cost method investment was not estimated if there were no identified events or changes in circumstances that indicated a significant adverse effect on the fair value of the investment. In accordance with ASU No. 2016-01, the Company may elect to measure an equity investment without a readily determinable value that does not qualify for the practical expedient to estimate fair value using the net asset value per share, at its cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Company elected to measure its investment in the NIP Joint Venture (defined in Note 12 ) in accordance with the above guidance, applying it prospectively, and as of January 1, 2018 and June 30, 2018 , recorded its investment in the NIP Joint Venture at a cost basis of $3.7 million and $2.5 million , respectively. 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. As of June 30, 2018 , the Company had classified one office property as held for sale. As a result, certain assets and liabilities were reclassified as held for sale on the consolidated balance sheets for all periods presented. Segments The Company has invested in opportunistic real estate and other real estate-related assets. In general, the Company intends to hold its investments in opportunistic real estate and other real estate‑related assets for capital appreciation. Traditional performance metrics of 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 and other real estate-related assets as similar investments. Substantially all of its revenue and net income (loss) is from 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 three and six months ended June 30, 2018 and 2017 . Distributions declared per share were $0.01597500 and $0.03195000 during the three and six months ended June 30, 2018 , respectively, and $0.09349315 and $0.18595890 during the three and six months ended June 30, 2017 , respectively. Square Footage, Occupancy and Other Measures Any references to square footage, occupancy or annualized base rent are unaudited and outside the scope of the Company’s independent registered public accounting firm’s review of the Company’s financial statements in accordance with the standards of the United States Public Company Accounting Oversight Board. Recently Issued Accounting Standards Updates In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU No. 2016-02”). The amendments in ASU No. 2016-02 change the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU No. 2016-02 is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption of ASU No. 2016-02 as of its issuance is permitted. ASU No. 2016-02 requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company is currently evaluating the impact of adopting the new lease accounting standard on its consolidated financial statements. Upon adoption of ASU No. 2016-02, the Company expects to adopt the package of practical expedients for all leases that commenced before the effective date of January 1, 2019. Accordingly, the Company will 1) not reassess whether any expired or existing contracts are or contain leases, 2) not reassess the lease classification for any expired or existing lease, and 3) not reassess initial direct costs for any existing leases. The Company does not expect to elect the practical expedient related to using hindsight to reevaluate the lease term. In addition, the Company expects to adopt the practical expedient for land easements to not assess whether existing or expired land easements that were not previously accounted for as leases under the current lease accounting standards of Topic 840 are or contain a lease under Topic 842. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842), Targeted Improvements (“ASU No. 2018-11”), which provides lessors with a practical expedient, by class of underlying asset, to not separate nonlease components from the associated lease component and, instead to account for those components as a single component if the nonlease components otherwise would be accounted for under the new revenue recognition standard (Topic 606) and if certain conditions are met. Upon adoption of the lease accounting standard under Topic 842, the Company expects to adopt this practical expedient, specifically related to its tenant reimbursements which would otherwise be accounted for under the new revenue recognition standard. The Company believes the two conditions have been met for tenant reimbursements as 1) the timing and pattern of transfer of the nonlease components and associated lease components are the same and 2) the lease component would be classified as an operating lease. In addition, ASU No. 2018-11 provides an additional optional transition method to allow entities to apply the new lease accounting standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings. An entity’s reporting for the comparative periods presented in the financial statements in which it adopts the new lease accounting standard will continue to be reported under the current lease accounting standards of Topic 840. The Company expects to adopt this transition method upon adoption of the lease accounting standard of Topic 842 on January 1, 2019. 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. |
REAL ESTATE HELD FOR INVESTMENT
REAL ESTATE HELD FOR INVESTMENT | 6 Months Ended |
Jun. 30, 2018 | |
Real Estate [Abstract] | |
REAL ESTATE FOR INVESTMENT | REAL ESTATE HELD FOR INVESTMENT As of June 30, 2018 , the Company owned six 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 3.8 million rentable square feet. As of June 30, 2018 , these properties were 77% occupied. In addition, the Company owned two apartment properties, containing 383 units and encompassing approximately 0.3 million rentable square feet, which were 94% 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 June 30, 2018 and December 31, 2017 , respectively (in thousands): June 30, 2018 December 31, 2017 Land $ 196,052 $ 155,046 Buildings and improvements 624,299 361,118 Tenant origination and absorption costs 39,677 23,212 Total real estate, cost 860,028 539,376 Accumulated depreciation and amortization (48,690 ) (37,154 ) Total real estate, net $ 811,338 $ 502,222 The following table provides summary information regarding the Company’s real estate held for investment as of June 30, 2018 (in thousands): Property Date Acquired or Foreclosed on City State Property Type Land Building 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 $ 10,709 $ — $ 11,746 $ (2,479 ) $ 9,267 90.0 % Palisades Central II 11/23/2011 Richardson TX Office 810 18,397 — 19,207 (4,230 ) 14,977 90.0 % Greenway I 11/23/2011 Richardson TX Office 561 2,113 — 2,674 (692 ) 1,982 90.0 % Greenway III 11/23/2011 Richardson TX Office 702 4,061 559 5,322 (1,858 ) 3,464 90.0 % Undeveloped Land 11/23/2011 Richardson TX Undeveloped Land 3,134 — — 3,134 — 3,134 90.0 % Total Richardson Portfolio 6,244 35,280 559 42,083 (9,259 ) 32,824 Park Highlands (1) 12/30/2011 North Las Vegas NV Undeveloped Land 33,430 — — 33,430 — 33,430 (1) Burbank Collection 12/12/2012 Burbank CA Retail 4,175 12,536 725 17,436 (2,769 ) 14,667 90.0 % Park Centre 03/28/2013 Austin TX Office 3,251 27,228 — 30,479 (4,144 ) 26,335 100.0 % 1180 Raymond 08/20/2013 Newark NJ Apartment 8,292 38,260 — 46,552 (5,980 ) 40,572 100.0 % Park Highlands II 12/10/2013 North Las Vegas NV Undeveloped Land 25,234 — — 25,234 — 25,234 100.0 % 424 Bedford 01/31/2014 Brooklyn NY Apartment 8,860 25,837 — 34,697 (3,204 ) 31,493 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 92,354 6,588 135,027 (10,557 ) 124,470 100.0 % Crown Pointe 02/14/2017 Dunwoody GA Office 22,590 62,613 5,559 90,762 (5,734 ) 85,028 100.0 % 125 John Carpenter 09/15/2017 Irving TX Office 2,755 76,010 8,840 87,605 (3,416 ) 84,189 100.0 % Marquette Plaza 03/01/2018 Minneapolis MN Office 10,387 71,385 4,470 86,242 (1,334 ) 84,908 100.0 % City Tower 03/06/2018 Orange CA Office 13,930 128,787 8,150 150,867 (2,166 ) 148,701 100.0 % Eight & Nine Corporate Centre 06/08/2018 Franklin TN Office 17,401 54,009 4,786 76,196 (127 ) 76,069 100.0 % $ 196,052 $ 624,299 $ 39,677 $ 860,028 $ (48,690 ) $ 811,338 _____________________ (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 June 30, 2018 , 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 13.9 years with a weighted-average remaining term of 4.6 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 related to tenant leases are included in other liabilities in the accompanying consolidated balance sheets and totaled $5.2 million and $4.3 million as of June 30, 2018 and December 31, 2017 , respectively. During the six months ended June 30, 2018 and 2017 , the Company recognized deferred rent from tenants of $1.7 million and $1.4 million , respectively, net of lease incentive amortization. As of June 30, 2018 and December 31, 2017 , the cumulative deferred rent receivable balance, including unamortized lease incentive receivables, was $8.6 million and $6.6 million , respectively, and is included in rents and other receivables on the accompanying balance sheets. The cumulative deferred rent balance included $1.0 million and $0.8 million of unamortized lease incentives as of June 30, 2018 and December 31, 2017 , respectively. As of June 30, 2018 , the future minimum rental income from the Company’s properties, excluding apartment leases, under non-cancelable operating leases was as follows (in thousands): July 1, 2018 through December 31, 2018 $ 30,024 2019 58,632 2020 52,340 2021 45,997 2022 38,248 Thereafter 124,051 $ 349,292 As of June 30, 2018 , the Company’s commercial real estate properties were leased to approximately 350 tenants over a diverse range of industries and geographic areas. No tenant industry concentration accounted for more than 10% of annualized base rent and no tenant 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 June 30, 2018 , the Company’s real estate investments in California , Texas and Washington represented 14.8% , 13.3% and 11.3% , 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 California , Texas and Washington 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 Acquisitions 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 (net of closing credits) of Marquette Plaza was $88.3 million plus $1.1 million of capitalized acquisition costs. The Company recorded this acquisition as an asset acquisition and recorded $10.4 million to land, $71.4 million to building and improvements, $4.5 million to tenant origination and absorption costs, $3.7 million to above-market lease assets and $0.6 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 6.6 years for tenant origination and absorption costs, 11.7 years for above-market lease assets and 2.4 years for below-market lease liabilities. City Tower On March 6, 2018 , the Company, through an indirect wholly owned subsidiary, acquired an office building containing 431,007 rentable square feet located on approximately 4.9 acres of land in Orange, California (“City Tower”). The seller is not affiliated with the Company or the Advisor. The purchase price (net of closing credits) of City Tower was $147.1 million plus $1.6 million of capitalized acquisition costs. The Company recorded this acquisition as an asset acquisition and recorded $13.9 million to land, $127.9 million to building and improvements, $8.1 million to tenant origination and absorption costs and $1.2 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 5.2 years for tenant origination and absorption costs and 6.6 years for below-market lease liabilities. Eight & Nine Corporate Centre On June 8, 2018 , the Company, through an indirect wholly owned subsidiary, acquired an office building consisting of two buildings containing an aggregate of 311,864 rentable square feet located on approximately 27.6 acres of land in Franklin, Tennessee (“Eight & Nine Corporate Centre”). The seller is not affiliated with the Company or the Advisor. The purchase price (net of closing credits) of Eight & Nine Corporate Centre was $73.0 million plus $1.2 million of capitalized acquisition costs. The Company recorded this acquisition as an asset acquisition and recorded $17.4 million to land, $54.0 million to building and improvements, $4.8 million to tenant origination and absorption costs and $2.0 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 6.4 years for tenant origination and absorption costs and 7.4 years for below-market lease liabilities. Recent Real Estate Land Sale On February 28, 2018, the Company sold approximately 26 developable acres of Park Highlands undeveloped land for an aggregate sales price, net of closing credits, of $2.5 million , excluding closing costs. The purchasers are not affiliated with the Company or the Advisor. The Company recognized a gain on sale of $0.7 million related to the land sale, which is net of deferred profit of $0.3 million related to proceeds received from the purchaser for the value of land that was contributed to a master association which is consolidated by the Company. |
TENANT ORIGINATION AND ABSORPTI
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES | 6 Months Ended |
Jun. 30, 2018 | |
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 June 30, 2018 and December 31, 2017 , 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 June 30, 2018 December 31, 2017 June 30, 2018 December 31, 2017 June 30, 2018 December 31, 2017 Cost $ 39,677 $ 23,212 $ 3,731 $ 17 $ (7,298 ) $ (3,636 ) Accumulated Amortization (8,331 ) (5,733 ) (144 ) (7 ) 1,287 793 Net Amount $ 31,346 $ 17,479 $ 3,587 $ 10 $ (6,011 ) $ (2,843 ) 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 three and six months ended June 30, 2018 and 2017 were as follows (in thousands): Tenant Origination and Above-Market Below-Market For the Three Months Ended June 30, For the Three Months Ended June 30, For the Three Months Ended June 30, 2018 2017 2018 2017 2018 2017 Amortization $ (2,088 ) $ (3,135 ) $ (111 ) $ (78 ) $ 385 $ 1,221 Tenant Origination and Above-Market Below-Market For the Six Months Ended For the Six Months Ended For the Six Months Ended 2018 2017 2018 2017 2018 2017 Amortization $ (3,625 ) $ (6,078 ) $ (155 ) $ (167 ) $ 655 $ 2,204 Additionally, as of June 30, 2018 and December 31, 2017 , 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 $4.8 million and $5.3 million , respectively. During the three and six months ended June 30, 2018 , the Company recorded amortization expense of $0.2 million and $0.5 million , respectively, related to tax abatement intangible assets. During the three and six months ended June 30, 2017 , the Company recorded amortization expense of $0.2 million and $0.5 million , respectively, related to tax abatement intangible assets. |
REAL ESTATE EQUITY SECURITIES
REAL ESTATE EQUITY SECURITIES | 6 Months Ended |
Jun. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
REAL ESTATE EQUITY SECURITIES | REAL ESTATE EQUITY SECURITIES As of June 30, 2018 , the Company owned three investments in real estate equity securities. The following table sets forth the number of shares owned by the Company and the related carrying value of the shares as of June 30, 2018 and December 31, 2017 (dollars in thousands): June 30, 2018 December 31, 2017 Real Estate Equity Security Number of Shares Owned Total Carrying Value Number of Shares Owned Total Carrying Value Whitestone REIT 3,768,189 $ 47,027 3,603,189 $ 51,922 Keppel-KBS US REIT 43,999,500 38,102 43,999,500 38,141 Franklin Street Properties Corp. 1,576,809 13,498 — — 49,344,498 $ 98,627 47,602,689 $ 90,063 During the six months ended June 30, 2018 , the Company purchased 165,000 shares of common stock of Whitestone REIT (NYSE Ticker: WSR) for an aggregate purchase price of $1.9 million and 1,576,809 shares of common stock of Franklin Street Properties Corp. (NYSE Ticker: FSP) for an aggregate purchase price of $14.0 million . On November 8, 2017, the Company acquired 43,999,500 shares of common units of Keppel-KBS US REIT (SGX Ticker: CMOU) in connection with the sale of 11 properties to Keppel-KBS US REIT. 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 transaction until May 8, 2018 and the remaining 21,999,750 units until November 8, 2018 (the “Unit Lockout Periods”). As of June 30, 2018 and December 31, 2017 , a lack of marketability discount of $0.6 million and $1.7 million , respectively, was recorded as a result of the remaining Unit Lockout Period. The following summarizes the activity related to real estate equity securities for the six months ended June 30, 2018 (in thousands): Amortized Cost Basis Unrealized Gains (Losses) (1) Total Real estate equity securities - December 31, 2017 $ 64,917 $ 25,146 $ 90,063 Acquisition of real estate equity securities 15,676 — 15,676 Acquisition fee to affiliate and purchase commission 175 — 175 Unrealized change in market value of real estate equity securities — (7,287 ) (7,287 ) Real estate equity securities - June 30, 2018 $ 80,768 $ 17,859 $ 98,627 _____________________ (1) As of December 31, 2017 , unrealized gain (losses) due to the change in market value of real estate equity securities was recorded to accumulated other comprehensive income. Effective January 1, 2018, upon the adoption of ASU No. 2016-01, unrealized gain (losses) on real estate equity securities are recorded in earnings on the accompanying consolidated statement of operations. During the three and six months ended June 30, 2018 , the Company recognized $1.2 million and $2.3 million , respectively, of dividend income from real estate equity securities. During the three and six months ended June 30, 2017 , the Company recognized $0.5 million of dividend income from real estate equity securities. REAL ESTATE DEBT SECURITIES As of June 30, 2018 , 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 June 30, 2018 and December 31, 2017 is set forth below (in thousands): Debt Securities Name Dates Acquired Debt Securities Type Outstanding Principal Balance as of June 30, 2018 (1) Book Value as of June 30, 2018 (2) Book Value as of December 31, 2017 (2) 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 $ 17,879 $ 17,751 12.0 % 11.1 % 10/28/2019 _____________________ (1) Outstanding principal balance as of June 30, 2018 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 2018 , 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 June 30, 2018 . The following summarizes the activity related to real estate debt securities for the six months ended June 30, 2018 (in thousands): Real estate debt securities - December 31, 2017 $ 17,751 Deferred interest receivable and interest accretion 104 Accretion of commitment fee, net of closing costs 24 Real estate debt securities - June 30, 2018 $ 17,879 For the three and six months ended June 30, 2018 and 2017 , interest income from real estate debt securities consisted of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Contractual interest income $ 490 $ 321 $ 884 $ 412 Interest accretion 9 78 104 121 Accretion of commitment fee, net of closing costs and acquisition fee 12 202 24 227 Interest income from real estate debt securities $ 511 $ 601 $ 1,012 $ 760 |
REAL ESTATE DEBT SECURITIES
REAL ESTATE DEBT SECURITIES | 6 Months Ended |
Jun. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
REAL ESTATE DEBT SECURITIES | REAL ESTATE EQUITY SECURITIES As of June 30, 2018 , the Company owned three investments in real estate equity securities. The following table sets forth the number of shares owned by the Company and the related carrying value of the shares as of June 30, 2018 and December 31, 2017 (dollars in thousands): June 30, 2018 December 31, 2017 Real Estate Equity Security Number of Shares Owned Total Carrying Value Number of Shares Owned Total Carrying Value Whitestone REIT 3,768,189 $ 47,027 3,603,189 $ 51,922 Keppel-KBS US REIT 43,999,500 38,102 43,999,500 38,141 Franklin Street Properties Corp. 1,576,809 13,498 — — 49,344,498 $ 98,627 47,602,689 $ 90,063 During the six months ended June 30, 2018 , the Company purchased 165,000 shares of common stock of Whitestone REIT (NYSE Ticker: WSR) for an aggregate purchase price of $1.9 million and 1,576,809 shares of common stock of Franklin Street Properties Corp. (NYSE Ticker: FSP) for an aggregate purchase price of $14.0 million . On November 8, 2017, the Company acquired 43,999,500 shares of common units of Keppel-KBS US REIT (SGX Ticker: CMOU) in connection with the sale of 11 properties to Keppel-KBS US REIT. 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 transaction until May 8, 2018 and the remaining 21,999,750 units until November 8, 2018 (the “Unit Lockout Periods”). As of June 30, 2018 and December 31, 2017 , a lack of marketability discount of $0.6 million and $1.7 million , respectively, was recorded as a result of the remaining Unit Lockout Period. The following summarizes the activity related to real estate equity securities for the six months ended June 30, 2018 (in thousands): Amortized Cost Basis Unrealized Gains (Losses) (1) Total Real estate equity securities - December 31, 2017 $ 64,917 $ 25,146 $ 90,063 Acquisition of real estate equity securities 15,676 — 15,676 Acquisition fee to affiliate and purchase commission 175 — 175 Unrealized change in market value of real estate equity securities — (7,287 ) (7,287 ) Real estate equity securities - June 30, 2018 $ 80,768 $ 17,859 $ 98,627 _____________________ (1) As of December 31, 2017 , unrealized gain (losses) due to the change in market value of real estate equity securities was recorded to accumulated other comprehensive income. Effective January 1, 2018, upon the adoption of ASU No. 2016-01, unrealized gain (losses) on real estate equity securities are recorded in earnings on the accompanying consolidated statement of operations. During the three and six months ended June 30, 2018 , the Company recognized $1.2 million and $2.3 million , respectively, of dividend income from real estate equity securities. During the three and six months ended June 30, 2017 , the Company recognized $0.5 million of dividend income from real estate equity securities. REAL ESTATE DEBT SECURITIES As of June 30, 2018 , 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 June 30, 2018 and December 31, 2017 is set forth below (in thousands): Debt Securities Name Dates Acquired Debt Securities Type Outstanding Principal Balance as of June 30, 2018 (1) Book Value as of June 30, 2018 (2) Book Value as of December 31, 2017 (2) 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 $ 17,879 $ 17,751 12.0 % 11.1 % 10/28/2019 _____________________ (1) Outstanding principal balance as of June 30, 2018 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 2018 , 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 June 30, 2018 . The following summarizes the activity related to real estate debt securities for the six months ended June 30, 2018 (in thousands): Real estate debt securities - December 31, 2017 $ 17,751 Deferred interest receivable and interest accretion 104 Accretion of commitment fee, net of closing costs 24 Real estate debt securities - June 30, 2018 $ 17,879 For the three and six months ended June 30, 2018 and 2017 , interest income from real estate debt securities consisted of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Contractual interest income $ 490 $ 321 $ 884 $ 412 Interest accretion 9 78 104 121 Accretion of commitment fee, net of closing costs and acquisition fee 12 202 24 227 Interest income from real estate debt securities $ 511 $ 601 $ 1,012 $ 760 |
REAL ESTATE SALES
REAL ESTATE SALES | 6 Months Ended |
Jun. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
REAL ESTATE SALES | REAL ESTATE SALES As of June 30, 2018 , the Company classified one office property as held for sale. During the three and six months ended June 30, 2018 , the Company did not dispose of any real estate properties. During the year ended December 31, 2017, the Company disposed of 12 office properties. The following summary presents the major components of assets and liabilities related to real estate held for sale as of June 30, 2018 and December 31, 2017 (in thousands): June 30, 2018 December 31, 2017 Assets related to real estate held for sale Real estate, cost $ 35,739 $ 35,308 Accumulated depreciation and amortization (5,055 ) (4,663 ) Real estate, net 30,684 30,645 Other assets 1,945 1,965 Total assets related to real estate held for sale $ 32,629 $ 32,610 Liabilities related to real estate held for sale Notes payable, net 27,566 27,515 Total liabilities related to real estate held for sale $ 27,566 $ 27,515 The operations of properties sold and real estate held for sale and related 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 three and six months ended June 30, 2018 and 2017 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Revenues Rental income $ 1,049 $ 17,621 $ 2,070 $ 36,134 Tenant reimbursements and other operating income 111 5,477 251 10,482 Total revenues $ 1,160 $ 23,098 $ 2,321 $ 46,616 Expenses Operating, maintenance, and management $ 506 $ 6,208 $ 433 $ 12,751 Real estate taxes and insurance 154 3,376 287 6,479 Asset management fees to affiliate 137 1,401 272 2,826 Depreciation and amortization 122 7,825 483 16,232 Interest expense 282 3,676 540 7,000 Total expenses $ 1,201 $ 22,486 $ 2,015 $ 45,288 |
NOTES AND BOND PAYABLE
NOTES AND BOND PAYABLE | 6 Months Ended |
Jun. 30, 2018 | |
Notes and Bonds Payable [Abstract] | |
NOTES AND BOND PAYABLE | NOTES AND BONDS PAYABLE As of June 30, 2018 and December 31, 2017 , 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 June 30, 2018 Book Value as of December 31, 2017 Contractual Interest Rate as of June 30, 2018 (1) Effective Interest Rate at June 30, 2018 (1) Payment Type Maturity Date (2) Richardson Portfolio Mortgage Loan $ 32,586 $ 36,886 One-Month LIBOR + 2.10% 4.08% Principal & Interest 11/01/2018 Portfolio Mortgage Loan (3) 9,140 9,877 One-Month LIBOR + 2.25% 4.23% Principal & Interest 07/01/2019 Burbank Collection Mortgage Loan 10,837 10,958 One-Month LIBOR + 2.35% 4.41% Principal & Interest 09/30/2018 1180 Raymond Bond Payable 6,370 6,460 6.50% 6.50% Principal & Interest 09/01/2036 Central Building Mortgage Loan 27,600 27,600 One-Month LIBOR + 1.75% 3.73% Interest Only 11/13/2018 (4) 424 Bedford Mortgage Loan 23,998 24,282 3.91% 3.91% Principal & Interest 10/01/2022 1180 Raymond Mortgage Loan 30,821 31,000 One-Month LIBOR + 2.25% 4.23% Principal & Interest 12/01/2018 KBS SOR (BVI) Holdings, Ltd. Series A Debentures (5) 265,285 278,801 4.25% 4.25% (5) 03/01/2023 Westpark Portfolio Mortgage Loan 85,200 85,200 One-Month LIBOR + 2.50% 4.48% Interest Only (6) 07/01/2020 Crown Pointe Mortgage Loan 51,171 50,500 One-Month LIBOR + 2.60% 4.58% Interest Only 02/13/2020 125 John Carpenter Mortgage Loan 50,130 50,130 (7) 3.74% Interest Only 10/01/2022 City Tower Mortgage Loan 89,000 — One-Month LIBOR + 1.55% 3.53% Interest Only 03/05/2021 Marquette Plaza Mortgage Loan 50,800 — One-Month LIBOR + 1.55% 3.56% Interest Only 06/06/2021 Eight & Nine Corporate Centre Mortgage Loan 43,880 — One-Month LIBOR + 1.60% 3.58% Interest Only 06/08/2021 Total Notes and Bonds Payable principal outstanding 776,818 611,694 Net Premium/(Discount) on Notes and Bonds Payable (8) 167 137 Deferred financing costs, net (9,769 ) (8,788 ) Total Notes and Bonds Payable, net $ 767,216 $ 603,043 _____________________ (1) Contractual interest rate represents the interest rate in effect under the loan as of June 30, 2018 . Effective interest rate is calculated as the actual interest rate in effect as of June 30, 2018 (consisting of the contractual interest rate and contractual floor rates), using interest rate indices at June 30, 2018 , where applicable. (2) Represents the initial maturity date or the maturity date as extended as of June 30, 2018 ; subject to certain conditions, the maturity dates of certain loans may be extended beyond the date shown. (3) The Portfolio Mortgage Loan is secured by Park Centre. (4) On July 17, 2018 , the Central Building Mortgage Loan was repaid. See note 15 , “Subsequent Events – Real Estate Disposition Subsequent to June 30, 2018 .” (5) See “ – Israeli Bond Financing” below. (6) Represents the payment type required under the loan as of June 30, 2018 . 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. (7) 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. (8) 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 three and six months ended June 30, 2018 , the Company incurred $7.8 million and $14.4 million , respectively, of interest expense. Included in interest expense for the three and six months ended June 30, 2018 was $0.9 million and $1.7 million , respectively, of amortization of deferred financing costs. Additionally, during the three and six months ended June 30, 2018 , the Company capitalized $0.6 million and $1.3 million , respectively, of interest related to its investments in undeveloped land. During the three and six months ended June 30, 2017 , the Company incurred $10.3 million and $19.7 million , respectively, of interest expense. Included in interest expense for the three and six months ended June 30, 2017 was $1.3 million and $2.6 million , respectively, of amortization of deferred financing costs. Additionally, during the three and six months ended June 30, 2017 , the Company capitalized $0.6 million and $1.1 million , respectively, of interest related to its investments in undeveloped land. As of June 30, 2018 and December 31, 2017 , the Company’s interest payable was $5.4 million and $5.1 million , respectively. The following is a schedule of maturities, including principal amortization payments, for all notes and bonds payable outstanding as of June 30, 2018 (in thousands): July 1, 2018 through December 31, 2018 $ 103,416 2019 63,350 2020 188,742 2021 237,616 2022 125,227 Thereafter 58,467 $ 776,818 The Company’s notes payable contain financial debt covenants. As of June 30, 2018 , 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 June 30, 2018 , 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 June 30, 2018 , the Company was in compliance with all of these financial debt covenants. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 6 Months Ended |
Jun. 30, 2018 | |
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. A 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. A foreign currency option consists of a call option to buy Israeli new Shekels. As of June 30, 2018 , the Company had 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 June 30, 2018 . 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 June 30, 2018 , the Company had entered into two interest rate caps, which were not designated as a hedging instruments. The following table summarizes the notional amounts and other information related to the Company’s derivative instruments as of June 30, 2018 . 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% Interest rate cap 04/02/2018 03/05/2021 $ 77,513 One-month LIBOR at 3.50% 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 June 30, 2018 and December 31, 2017 (dollars in thousands): June 30, 2018 December 31, 2017 Derivative Instruments Balance Sheet Location Number of Instruments Fair Value Number of Instruments Fair Value Derivative instruments not designated as hedging instruments Interest rate caps Prepaid expenses and other assets 2 $ 146 1 $ 14 Foreign currency option Prepaid expenses and other assets 1 $ — 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 three months ended June 30, 2018 , the Company recognized a $2.2 million loss related to the foreign currency option, which is shown net against $12.3 million of foreign currency transaction gain in the accompanying consolidated statements of operations as foreign currency transaction gain , net. During the six months ended June 30, 2018 , the Company recognized a $4.3 million loss related to the foreign currency option, which is shown net against $13.4 million of foreign currency transaction gain in the accompanying consolidated statements of operations as foreign currency transaction gain , net. During the three months ended June 30, 2017 , the Company recognized a $7.8 million gain related to the foreign currency collars, which is shown net against $10.2 million of foreign currency transaction loss in the accompanying consolidated statements of operations as foreign currency transaction loss, net, respectively. During the six months ended June 30, 2017 , the Company recognized a $19.0 million gain related to the foreign currency collars, which is shown net against $26.1 million of foreign currency transaction loss in the accompanying consolidated statements of operations as foreign currency transaction loss, net. During the three and six months ended June 30, 2018 , the Company recorded unrealized losses of $62,000 and $31,000 , respectively, on interest rate caps, which were included in interest expense on the accompanying consolidated statements of operations. During the three and six months ended June 30, 2017 , the Company recorded unrealized losses of $31,000 and $88,000 , respectively, on interest rate caps, which were included in interest expense on the accompanying consolidated statements of operations. |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 6 Months Ended |
Jun. 30, 2018 | |
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, restricted cash, 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 and Franklin Street Properties Corp. real estate equity securities are presented at fair value on the accompanying consolidated balance sheet. The fair values of Whitestone REIT and Franklin Street Properties Corp. real estate equity securities were based on quoted prices in an active market on a major stock exchange. The Company classifies these inputs as Level 1 inputs. As of June 30, 2018 , the Company owned 43,999,500 shares of common units of Keppel-KBS US REIT. The fair value measurement on 21,999,750 shares are based on a quoted price in an active market on a major stock exchange. The Company classifies these inputs as Level 1 inputs. The fair value measurement on the remaining 21,999,750 shares are based on a quoted price in an active market on a major stock exchange, adjusted for the lack of marketability during the remaining Unit Lockout Period. 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 June 30, 2018 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 June 30, 2018 and December 31, 2017 , which carrying amounts do not approximate the fair values (in thousands): June 30, 2018 December 31, 2017 Face Value Carrying Amount Fair Value Face Value Carrying Amount Fair Value Financial asset: Real estate debt securities $ 17,500 $ 17,879 $ 17,461 $ 17,500 $ 17,751 $ 17,386 Financial liabilities: Notes and bond payable $ 511,533 $ 507,452 $ 516,473 $ 332,893 $ 330,727 $ 335,212 KBS SOR (BVI) Holdings, Ltd. Series A Debentures $ 265,285 $ 259,764 $ 274,093 $ 278,801 $ 272,316 $ 296,069 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 June 30, 2018 , the Company measured the following assets at fair value (in thousands): Fair Value Measurements Using Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Recurring Basis: Real estate equity securities $ 98,627 $ 79,885 $ 18,742 $ — Asset derivative - interest rate caps $ 146 $ — $ 146 $ — Asset derivative - foreign currency option $ — $ — $ — $ — |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2018 | |
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 such insurance 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 program, 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. KBS REIT I elected to cease participation in the program at the June 2017 renewal and obtained separate insurance coverage. At renewal in June 2018, the Company, KBS Strategic Opportunity REIT II and KBS Legacy Partners Apartment REIT elected to cease participation in the program and obtain separate insurance coverage. The Company, together with KBS Strategic Opportunity REIT II, entered into an errors and omissions and directors and officers liability insurance program where the lower tiers of such insurance coverage are shared. The cost of these lower tiers is allocated by the Advisor and its insurance broker among each REIT covered by the program, and is billed directly to each REIT. The program is effective through June 30, 2019. During the three and six months ended June 30, 2018 and 2017 , 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 three and six months ended June 30, 2018 and 2017 , respectively, and any related amounts payable as of June 30, 2018 and December 31, 2017 (in thousands): Incurred Payable as of Three Months Ended June 30, Six Months Ended June 30, June 30, 2018 December 31, 2017 2018 2017 2018 2017 Expensed Asset management fees $ 2,217 $ 2,856 $ 4,043 $ 5,603 $ — $ — Reimbursable operating expenses (1) 115 64 198 133 39 26 Disposition fees (2) — 785 — 785 — — Capitalized Acquisition fees on real estate 734 — 3,094 836 — — Acquisition fees on real estate equity securities 9 386 157 386 — — $ 3,075 $ 4,091 $ 7,492 $ 7,743 $ 39 $ 26 _____________________ (1) 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 $78,000 and $161,000 for the three and six months ended June 30, 2018 , respectively, and $64,000 and $119,000 for the three and six months ended June 30, 2017 , 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. (2) 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. During the three and six months ended June 30, 2018 , the Advisor reimbursed the Company $0.1 million for a property insurance rebate. During the three and six months ended June 30, 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. On November 8, 2017, the Company sold 11 properties to Keppel-KBS US REIT. Keppel-KBS US REIT 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. Keppel-KBS US REIT 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 | 6 Months Ended |
Jun. 30, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES | INVESTMENT IN UNCONSOLIDATED JOINT VENTURES As of June 30, 2018 and December 31, 2017 , 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 % June 30, 2018 December 31, 2017 NIP Joint Venture 4 Various Less than 5.0% $ 2,514 $ 3,674 110 William Joint Venture 1 New York, New York 60.0% 4,058 7,160 353 Sacramento Joint Venture 1 San Francisco, California 55.0% 44,414 44,743 $ 50,986 $ 55,577 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”). The NIP Joint Venture has invested in a portfolio of industrial properties. 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 June 30, 2018 . Prior to the Company’s adoption of ASU No. 2016-01 on January 1, 2018, the Company accounted for its investment in the NIP Joint Venture using the cost method of accounting. Effective January 1, 2018, the Company elected to measure its investment in the NIP Joint Venture, which is an equity investment without a readily determinable value, at its cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. Prior to January 17, 2018, KBS REIT I, an affiliate of the Advisor, was 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 did 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 June 30, 2018 and December 31, 2017 , the book value of the Company’s investment in the NIP Joint Venture was $2.5 million and $3.7 million , respectively. During the three months ended June 30, 2018 , the Company received a distribution of $0.9 million related to its investment in the NIP Joint Venture. The Company recognized $0.1 million of income distributions and $0.8 million of return of capital from the NIP Joint Venture. During the six months ended June 30, 2018 , the Company received a distribution of $1.3 million related to its investment in the NIP Joint Venture. The Company recognized $0.2 million of income distributions and $1.1 million of return of capital from the NIP Joint Venture. During the three months ended June 30, 2017 , the Company did not receive any distributions related to its investment in the NIP Joint Venture. During the six months ended June 30, 2017 , the Company received a distribution of $2.9 million related to its investment in the NIP Joint Venture. The Company recognized $1.9 million of income distributions and $1.0 million of return of capital from the NIP Joint Venture. Investment in 110 William Joint Venture On December 23, 2013, the Company, through an indirect wholly owned subsidiary, entered into an agreement with SREF III 110 William JV, LLC (the “110 William JV Partner”) to form a joint venture (the “110 William Joint Venture”). On May 2, 2014, the 110 William Joint Venture acquired an office property containing 928,157 rentable square feet located on approximately 0.8 acres of land in New York, New York (“110 William Street”). Each of the Company and the 110 William JV Partner hold a 60% and 40% ownership interest in the 110 William Joint Venture, respectively. The Company exercises significant influence over the operations, financial policies and decision making with respect to the 110 William Joint Venture but significant decisions require approval from both members. Accordingly, the Company has accounted for its investment in the 110 William Joint Venture under the equity method of accounting. Income, losses, contributions and distributions are generally allocated based on the members’ respective equity interests. As of June 30, 2018 and December 31, 2017 , the book value of the Company’s investment in the 110 William Joint Venture was $4.1 million and $7.2 million , respectively, which includes $1.5 million of unamortized acquisition fees and expenses incurred directly by the Company. During the six months ended June 30, 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. Summarized financial information for the 110 William Joint Venture follows (in thousands): June 30, 2018 December 31, 2017 Assets: Real estate assets, net of accumulated depreciation and amortization $ 240,577 $ 248,269 Other assets 34,886 32,331 Total assets $ 275,463 $ 280,600 Liabilities and equity: Notes payable, net $ 263,377 $ 260,108 Other liabilities 7,745 11,016 Partners’ capital 4,341 9,476 Total liabilities and equity $ 275,463 $ 280,600 Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Revenues $ 9,951 $ 9,322 $ 19,760 $ 17,714 Expenses: Operating, maintenance, and management 2,296 2,370 4,763 4,766 Real estate taxes and insurance 1,655 1,472 3,290 3,088 Depreciation and amortization 4,126 4,381 8,345 7,614 Interest expense 4,418 3,799 8,535 5,198 Total expenses 12,495 12,022 24,933 20,666 Other income 24 14 38 28 Net loss $ (2,520 ) $ (2,686 ) $ (5,135 ) $ (2,924 ) Company’s equity in loss of unconsolidated joint venture $ (1,522 ) $ (1,622 ) $ (3,102 ) $ (1,776 ) 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 June 30, 2018 and December 31, 2017 , the book value of the Company’s investment in the 353 Sacramento Joint Venture was $44.4 million and $44.7 million , respectively. During the three and six months ended June 30, 2018 , the Company made a $1.3 million contribution to the 353 Sacramento Joint Venture. Summarized financial information for the 353 Sacramento Joint Venture follows (in thousands): June 30, 2018 December 31, 2017 Assets: Real estate assets, net of accumulated depreciation and amortization $ 172,339 $ 171,066 Other assets 8,574 6,472 Total assets $ 180,913 $ 177,538 Liabilities and equity: Notes payable, net $ 94,191 $ 89,423 Other liabilities 6,393 7,313 Partners’ capital 80,329 80,802 Total liabilities and equity $ 180,913 $ 177,538 For the Three Months Ended June 30, 2018 For the Six Months Ended June 30, 2018 Revenues $ 2,627 $ 5,296 Expenses: Operating, maintenance, and management 891 1,769 Real estate taxes and insurance 605 1,217 Depreciation and amortization 1,387 2,837 Interest expense 1,348 2,587 Total expenses 4,231 8,410 Net loss $ (1,604 ) $ (3,114 ) Company’s equity in loss of unconsolidated joint venture $ (851 ) $ (1,649 ) |
SUPPLEMENTAL CASH FLOW AND SIGN
SUPPLEMENTAL CASH FLOW AND SIGNIFICANT NONCASH TRANSACTION DISCLOSURES | 6 Months Ended |
Jun. 30, 2018 | |
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): Six Months Ended June 30, 2018 2017 Supplemental Disclosure of Cash Flow Information: Interest paid, net of capitalized interest of $ 1,282 and $1,142 for the six months ended June 30, 2018 and 2017 , respectively $ 12,247 $ 16,257 Supplemental Disclosure of Significant Noncash Transactions: Application of escrow deposits to acquisition of real estate — 2,000 Increase in accrued improvements to real estate 1,265 3,551 Distributions paid to common stockholders through common stock issuances pursuant to the dividend reinvestment plan 964 5,817 Distributions paid to common stockholders through common stock issuances pursuant to the December 2017 special dividend 150,299 — |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2018 | |
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 June 30, 2018 . 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. Participation Fee Liability Pursuant to the Advisory Agreement currently in effect with the Advisor, the Advisor is due a subordinated participation in the Company’s net cash flows (the “Incentive Fee”) if, after the stockholders have received, together as a collective group, aggregate distributions (including distributions that may constitute a return of capital for federal income tax purposes) sufficient to provide (i) a return of their net invested capital, or the amount calculated by multiplying the total number of shares purchased by stockholders by the issue price, reduced by any amounts to repurchase shares pursuant to the share redemption program, and (ii) a 7.0% per year cumulative, noncompounded return on such net invested capital, the Advisor is entitled to receive 15.0% of the Company’s net cash flows, whether from continuing operations, net sale proceeds or otherwise. Net sales proceeds means the net cash proceeds realized by the Company after deduction of all expenses incurred in connection with a sale, including disposition fees paid to the Advisor. The 7.0% per year cumulative, noncompounded return on net invested capital is calculated on a daily basis. In making this calculation, the net invested capital is reduced to the extent distributions in excess of a cumulative, noncompounded, annual return of 7.0% are paid (from whatever source), except to the extent such distributions would be required to supplement prior distributions paid in order to achieve a cumulative, noncompounded, annual return of 7.0% (invested capital is only reduced as described in this sentence; it is not reduced simply because a distribution constitutes a return of capital for federal income tax purposes). The 7.0% per year cumulative, noncompounded return is not based on the return provided to any individual stockholder. Accordingly, it is not necessary for each of the stockholders to have received any minimum return in order for the Advisor to participate in the Company’s net cash flows. In fact, if the Advisor is entitled to participate in the Company’s net cash flows, the returns of the stockholders will differ, and some may be less than a 7.0% per year cumulative, noncompounded return. This fee is payable only if we are not listed on an exchange. On April 4, 2018, the Company’s stockholders approved the acceleration of the payment of such incentive compensation, subject to certain conditions. Such accelerated payment would require approval by a special committee of the Company’s board of directors in connection with the anticipated conversion of the Company into a net asset value REIT. The Advisor estimated the fair value of this liability to be as much as $34 million as of June 30, 2018 , based on a hypothetical liquidation of the assets and liabilities at their estimated fair values, after considering the impact of any potential closing costs and fees related to the disposition of real estate properties. The fair value of the Incentive Fee liability as of June 30, 2018 is based on the estimated fair values of the Company’s assets and liabilities as of that date and changes to the fair values of assets and liabilities could have a material impact to the Incentive Fee calculation. The Incentive Fee is not currently payable to the Advisor, as it remains subject to further approval by the special committee and the Company’s conversion to a perpetual-life NAV REIT, and there is no guarantee that it will ever be payable. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS The Company evaluates subsequent events up until the date the consolidated financial statements are issued. Partial Real Estate Land Sale Subsequent to June 30, 2018 Park Highlands On July 2, 2018 , the Company sold approximately 83 developable acres of Park Highlands undeveloped land for an aggregate sales price, net of closing credits, of $18.2 million , excluding closing costs. The purchasers are not affiliated with the Company or the Advisor. Real Estate Disposition Subsequent to June 30, 2018 Central Building On July 17, 2018 , the Company sold the Central Building to a purchaser unaffiliated with the Company or the Advisor, for $67.5 million before closing costs and credits. As of June 30, 2018 , the carrying value of the Central Building was $32.6 million , which was net of $5.1 million of accumulated depreciation and amortization. On July 17, 2018 , in connection with the disposition of the Central Building, the Company repaid $27.6 million of the outstanding principal balance due under the Central Building mortgage loan. |
SUMMARY OF SIGNIFICANT ACCOUN23
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited consolidated financial statements and condensed notes thereto have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as contained within the FASB Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair and consistent presentation of the results for such periods. Operating results for the three and six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018 . |
Principles of Consolidation | 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. |
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. |
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 each calendar year, redemptions are limited to the amount of net proceeds from the sale of shares under the dividend reinvestment plan during the prior calendar year. • 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. Based on the amount of net proceeds raised from the sale of shares under the dividend reinvestment plan during 2017 , as of June 30, 2018 , the Company had $2.2 million available for all share redemption requests for the remainder of 2018 . On August 9, 2018, the Company’s board of directors approved an additional $6.0 million of funds available for the redemption of shares in 2018. • 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. 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. In anticipation of a self-tender offer in order to make liquidity available to stockholders in excess of that permitted under the share redemption program, on March 14, 2018 , the Company’s board of directors approved a temporary suspension of the share redemption program starting with the March 2018 redemption period, including any unsatisfied requests from prior redemption periods. In connection with its approval of the Self-Tender (defined below), the Company’s board of directors approved the reopening of the share redemption program for the June 2018 redemption period, meaning no redemptions were made in March, April or May 2018 (including those requested following a stockholder’s death, qualifying disability or determination of incompetence). On April 23, 2018 , the Company commenced a self-tender offer (the “Self-Tender”) for up to 8,234,217 shares of common stock at a price of $10.93 per share, or approximately $90.0 million of shares. The Company increased the number of shares accepted for payment in the Self-Tender by up to 1,294,910 shares at a price of $10.93 per share, or approximately $14.1 million of shares. On June 1, 2018 , the Company accepted for purchase 9,527,724 shares at a purchase price of $10.93 per share, or approximately $104.1 million of shares, excluding fees and expenses related to 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 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 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 six months ended June 30, 2018 , the Company had redeemed $10.9 million of common stock, of which $4.4 million relates to delayed December 2017 redemptions. The Company recorded $0.4 million and $8.6 million of other liabilities on the Company’s balance sheet as of June 30, 2018 and December 31, 2017 , 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 $2.2 million available for redemptions in the remainder of 2018 as of June 30, 2018 , including shares that are redeemed in connection with a stockholders’ death, “qualifying disability” or “determination of incompetence,” subject to the limitations described above. |
Revenue Recognition | Effective January 1, 2018, the Company adopted ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU No. 2014-09”), using the modified retrospective approach, which requires a cumulative effect adjustment as of the date of the Company’s adoption. 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 were 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 were not completed as of January 1, 2018. Based on the Company’s evaluation of contracts within the scope of ASU No. 2014-09, revenue that is impacted by ASU No. 2014-09 includes revenue generated by sales of real estate, other operating income and tenant reimbursements for substantial services earned at the Company’s properties. The recognition of such revenue will occur when the services are provided and the performance obligations are satisfied. For the three and six months ended June 30, 2018 , tenant reimbursements for substantial services accounted for under ASU No. 2014-09 were $0.5 million and $0.9 million , respectively, which were included in tenant reimbursements on the accompanying statements of operations. |
Revenue Recognition, Sale of Real Estate | Prior to January 1, 2018, gains on real estate sold were recognized using the full accrual method at closing when collectibility of the sales price was reasonably assured, the Company was not obligated to perform additional activities that may be considered significant, the initial investment from the buyer was sufficient and other profit recognition criteria had been satisfied. Gain on sales of real estate may have been deferred in whole or in part until the requirements for gain recognition had been met. Effective January 1, 2018, the Company adopted the guidance of ASC 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”), which applies to sales or transfers to noncustomers of nonfinancial assets or in substance nonfinancial assets that do not meet the definition of a business. Generally, the Company’s sales of real estate would be considered a sale of a nonfinancial asset as defined by ASC 610-20. ASC 610-20 refers to the revenue recognition principles under ASU No. 2014-09. Under ASC 610-20, if the Company determines it does not have a controlling financial interest in the entity that holds the asset and the arrangement meets the criteria to be accounted for as a contract, the Company would derecognize the asset and recognize a gain or loss on the sale of the real estate when control of the underlying asset transfers to the buyer. As a result of the adoption of ASC 610-20 on January 1, 2018, the Company recorded a cumulative effect adjustment to increase retained earnings by $2.5 million to recognize the deferred gain from the sale of 102 developable acres at Park Highlands that closed on May 1, 2017, as control of the sold acres had transferred to the buyers at closing. As of January 1, 2018 and June 30, 2018 , the Company had recorded contract liabilities of $1.7 million and $2.0 million , respectively, related to deferred proceeds received from the buyers of the Park Highlands land sales and another developer for the value of land that was contributed to a master association that is consolidated by the Company, which was included in other liabilities on the accompanying consolidated balance sheets. |
Real Estate Equity Securities | The Company’s real estate equity securities 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. Prior to the Company’s adoption of ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU No. 2016-01”) on January 1, 2018, the Company classified its investments in real estate equity securities as available-for-sale and unrealized gains and losses were 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. Effective January 1, 2018, unrealized gains and losses on real estate equity securities are recognized in earnings. Upon adoption of ASU No. 2016-01 on January 1, 2018, the Company recorded a $25.1 million cumulative effect adjustment to retained earnings related to the unrealized gain on real estate equity securities previously reported in accumulated other comprehensive income prior to January 1, 2018. |
Investment in Unconsolidated Joint Ventures | Equity Investment Without Readily Determinable Value Prior to the adoption of ASU No. 2016-01 on January 1, 2018, the Company accounted for investments in unconsolidated joint venture entities in which the Company did not have the ability to exercise significant influence and had virtually no influence over partnership operating and financial policies using the cost method of accounting. Under the cost method, income distributions from the partnership were recognized in other income. Distributions that exceed the Company’s share of earnings were applied to reduce the carrying value of the Company’s investment and any capital contributions increased the carrying value of the Company’s investment. On a quarterly basis, the Company evaluated its cost method investment in an unconsolidated joint venture for other-than-temporary impairments. The fair value of a cost method investment was not estimated if there were no identified events or changes in circumstances that indicated a significant adverse effect on the fair value of the investment. In accordance with ASU No. 2016-01, the Company may elect to measure an equity investment without a readily determinable value that does not qualify for the practical expedient to estimate fair value using the net asset value per share, at its cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Company elected to measure its investment in the NIP Joint Venture (defined in Note 12 ) in accordance with the above guidance, applying it prospectively, and as of January 1, 2018 and June 30, 2018 , recorded its investment in the NIP Joint Venture at a cost basis of $3.7 million and $2.5 million , respectively. |
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. As of June 30, 2018 , the Company had classified one office property as held for sale. As a result, certain assets and liabilities were reclassified as held for sale on the consolidated balance sheets for all periods presented. |
Segments | The Company has invested in opportunistic real estate and other real estate-related assets. In general, the Company intends to hold its investments in opportunistic real estate and other real estate‑related assets for capital appreciation. Traditional performance metrics of 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 and other real estate-related assets as similar investments. Substantially all of its revenue and net income (loss) is from 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 three and six months ended June 30, 2018 and 2017 . |
Square Footage, Occupancy and Other Measures | Any references to square footage, occupancy or annualized base rent are unaudited and outside the scope of the Company’s independent registered public accounting firm’s review of the Company’s financial statements in accordance with the standards of the United States Public Company Accounting Oversight Board. |
Recently Issued Accounting Standards Updates | In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU No. 2016-02”). The amendments in ASU No. 2016-02 change the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU No. 2016-02 is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption of ASU No. 2016-02 as of its issuance is permitted. ASU No. 2016-02 requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company is currently evaluating the impact of adopting the new lease accounting standard on its consolidated financial statements. Upon adoption of ASU No. 2016-02, the Company expects to adopt the package of practical expedients for all leases that commenced before the effective date of January 1, 2019. Accordingly, the Company will 1) not reassess whether any expired or existing contracts are or contain leases, 2) not reassess the lease classification for any expired or existing lease, and 3) not reassess initial direct costs for any existing leases. The Company does not expect to elect the practical expedient related to using hindsight to reevaluate the lease term. In addition, the Company expects to adopt the practical expedient for land easements to not assess whether existing or expired land easements that were not previously accounted for as leases under the current lease accounting standards of Topic 840 are or contain a lease under Topic 842. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842), Targeted Improvements (“ASU No. 2018-11”), which provides lessors with a practical expedient, by class of underlying asset, to not separate nonlease components from the associated lease component and, instead to account for those components as a single component if the nonlease components otherwise would be accounted for under the new revenue recognition standard (Topic 606) and if certain conditions are met. Upon adoption of the lease accounting standard under Topic 842, the Company expects to adopt this practical expedient, specifically related to its tenant reimbursements which would otherwise be accounted for under the new revenue recognition standard. The Company believes the two conditions have been met for tenant reimbursements as 1) the timing and pattern of transfer of the nonlease components and associated lease components are the same and 2) the lease component would be classified as an operating lease. In addition, ASU No. 2018-11 provides an additional optional transition method to allow entities to apply the new lease accounting standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings. An entity’s reporting for the comparative periods presented in the financial statements in which it adopts the new lease accounting standard will continue to be reported under the current lease accounting standards of Topic 840. The Company expects to adopt this transition method upon adoption of the lease accounting standard of Topic 842 on January 1, 2019. 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. |
Fair Value Measurements | Cash and cash equivalents, restricted cash, 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 and Franklin Street Properties Corp. real estate equity securities are presented at fair value on the accompanying consolidated balance sheet. The fair values of Whitestone REIT and Franklin Street Properties Corp. real estate equity securities were based on quoted prices in an active market on a major stock exchange. The Company classifies these inputs as Level 1 inputs. As of June 30, 2018 , the Company owned 43,999,500 shares of common units of Keppel-KBS US REIT. The fair value measurement on 21,999,750 shares are based on a quoted price in an active market on a major stock exchange. The Company classifies these inputs as Level 1 inputs. The fair value measurement on the remaining 21,999,750 shares are based on a quoted price in an active market on a major stock exchange, adjusted for the lack of marketability during the remaining Unit Lockout Period. 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 June 30, 2018 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. |
REAL ESTATE HELD FOR INVESTME24
REAL ESTATE HELD FOR INVESTMENT (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Real Estate [Abstract] | |
Schedule of Real Estate Investments | The following table summarizes the Company’s real estate held for investment as of June 30, 2018 and December 31, 2017 , respectively (in thousands): June 30, 2018 December 31, 2017 Land $ 196,052 $ 155,046 Buildings and improvements 624,299 361,118 Tenant origination and absorption costs 39,677 23,212 Total real estate, cost 860,028 539,376 Accumulated depreciation and amortization (48,690 ) (37,154 ) Total real estate, net $ 811,338 $ 502,222 The following table provides summary information regarding the Company’s real estate held for investment as of June 30, 2018 (in thousands): Property Date Acquired or Foreclosed on City State Property Type Land Building 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 $ 10,709 $ — $ 11,746 $ (2,479 ) $ 9,267 90.0 % Palisades Central II 11/23/2011 Richardson TX Office 810 18,397 — 19,207 (4,230 ) 14,977 90.0 % Greenway I 11/23/2011 Richardson TX Office 561 2,113 — 2,674 (692 ) 1,982 90.0 % Greenway III 11/23/2011 Richardson TX Office 702 4,061 559 5,322 (1,858 ) 3,464 90.0 % Undeveloped Land 11/23/2011 Richardson TX Undeveloped Land 3,134 — — 3,134 — 3,134 90.0 % Total Richardson Portfolio 6,244 35,280 559 42,083 (9,259 ) 32,824 Park Highlands (1) 12/30/2011 North Las Vegas NV Undeveloped Land 33,430 — — 33,430 — 33,430 (1) Burbank Collection 12/12/2012 Burbank CA Retail 4,175 12,536 725 17,436 (2,769 ) 14,667 90.0 % Park Centre 03/28/2013 Austin TX Office 3,251 27,228 — 30,479 (4,144 ) 26,335 100.0 % 1180 Raymond 08/20/2013 Newark NJ Apartment 8,292 38,260 — 46,552 (5,980 ) 40,572 100.0 % Park Highlands II 12/10/2013 North Las Vegas NV Undeveloped Land 25,234 — — 25,234 — 25,234 100.0 % 424 Bedford 01/31/2014 Brooklyn NY Apartment 8,860 25,837 — 34,697 (3,204 ) 31,493 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 92,354 6,588 135,027 (10,557 ) 124,470 100.0 % Crown Pointe 02/14/2017 Dunwoody GA Office 22,590 62,613 5,559 90,762 (5,734 ) 85,028 100.0 % 125 John Carpenter 09/15/2017 Irving TX Office 2,755 76,010 8,840 87,605 (3,416 ) 84,189 100.0 % Marquette Plaza 03/01/2018 Minneapolis MN Office 10,387 71,385 4,470 86,242 (1,334 ) 84,908 100.0 % City Tower 03/06/2018 Orange CA Office 13,930 128,787 8,150 150,867 (2,166 ) 148,701 100.0 % Eight & Nine Corporate Centre 06/08/2018 Franklin TN Office 17,401 54,009 4,786 76,196 (127 ) 76,069 100.0 % $ 196,052 $ 624,299 $ 39,677 $ 860,028 $ (48,690 ) $ 811,338 _____________________ (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 June 30, 2018 , the future minimum rental income from the Company’s properties, excluding apartment leases, under non-cancelable operating leases was as follows (in thousands): July 1, 2018 through December 31, 2018 $ 30,024 2019 58,632 2020 52,340 2021 45,997 2022 38,248 Thereafter 124,051 $ 349,292 |
TENANT ORIGINATION AND ABSORP25
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 June 30, 2018 and December 31, 2017 , 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 June 30, 2018 December 31, 2017 June 30, 2018 December 31, 2017 June 30, 2018 December 31, 2017 Cost $ 39,677 $ 23,212 $ 3,731 $ 17 $ (7,298 ) $ (3,636 ) Accumulated Amortization (8,331 ) (5,733 ) (144 ) (7 ) 1,287 793 Net Amount $ 31,346 $ 17,479 $ 3,587 $ 10 $ (6,011 ) $ (2,843 ) |
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 three and six months ended June 30, 2018 and 2017 were as follows (in thousands): Tenant Origination and Above-Market Below-Market For the Three Months Ended June 30, For the Three Months Ended June 30, For the Three Months Ended June 30, 2018 2017 2018 2017 2018 2017 Amortization $ (2,088 ) $ (3,135 ) $ (111 ) $ (78 ) $ 385 $ 1,221 Tenant Origination and Above-Market Below-Market For the Six Months Ended For the Six Months Ended For the Six Months Ended 2018 2017 2018 2017 2018 2017 Amortization $ (3,625 ) $ (6,078 ) $ (155 ) $ (167 ) $ 655 $ 2,204 |
REAL ESTATE EQUITY SECURITIES (
REAL ESTATE EQUITY SECURITIES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Real Estate Equity Securities | The following table sets forth the number of shares owned by the Company and the related carrying value of the shares as of June 30, 2018 and December 31, 2017 (dollars in thousands): June 30, 2018 December 31, 2017 Real Estate Equity Security Number of Shares Owned Total Carrying Value Number of Shares Owned Total Carrying Value Whitestone REIT 3,768,189 $ 47,027 3,603,189 $ 51,922 Keppel-KBS US REIT 43,999,500 38,102 43,999,500 38,141 Franklin Street Properties Corp. 1,576,809 13,498 — — 49,344,498 $ 98,627 47,602,689 $ 90,063 |
Schedule of Activity of Real Estate Securities | The following summarizes the activity related to real estate equity securities for the six months ended June 30, 2018 (in thousands): Amortized Cost Basis Unrealized Gains (Losses) (1) Total Real estate equity securities - December 31, 2017 $ 64,917 $ 25,146 $ 90,063 Acquisition of real estate equity securities 15,676 — 15,676 Acquisition fee to affiliate and purchase commission 175 — 175 Unrealized change in market value of real estate equity securities — (7,287 ) (7,287 ) Real estate equity securities - June 30, 2018 $ 80,768 $ 17,859 $ 98,627 _____________________ (1) As of December 31, 2017 , unrealized gain (losses) due to the change in market value of real estate equity securities was recorded to accumulated other comprehensive income. Effective January 1, 2018, upon the adoption of ASU No. 2016-01, unrealized gain (losses) on real estate equity securities are recorded in earnings on the accompanying consolidated statement of operations. |
REAL ESTATE DEBT SECURITIES (Ta
REAL ESTATE DEBT SECURITIES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Activity of Real Estate Debt Securities | As of June 30, 2018 , 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 June 30, 2018 and December 31, 2017 is set forth below (in thousands): Debt Securities Name Dates Acquired Debt Securities Type Outstanding Principal Balance as of June 30, 2018 (1) Book Value as of June 30, 2018 (2) Book Value as of December 31, 2017 (2) 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 $ 17,879 $ 17,751 12.0 % 11.1 % 10/28/2019 _____________________ (1) Outstanding principal balance as of June 30, 2018 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 2018 , 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 June 30, 2018 . The following summarizes the activity related to real estate debt securities for the six months ended June 30, 2018 (in thousands): Real estate debt securities - December 31, 2017 $ 17,751 Deferred interest receivable and interest accretion 104 Accretion of commitment fee, net of closing costs 24 Real estate debt securities - June 30, 2018 $ 17,879 |
Schedule of Interest Income from Real Estate Debt Securities | For the three and six months ended June 30, 2018 and 2017 , interest income from real estate debt securities consisted of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Contractual interest income $ 490 $ 321 $ 884 $ 412 Interest accretion 9 78 104 121 Accretion of commitment fee, net of closing costs and acquisition fee 12 202 24 227 Interest income from real estate debt securities $ 511 $ 601 $ 1,012 $ 760 |
REAL ESTATE SALES (Tables)
REAL ESTATE SALES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 June 30, 2018 and December 31, 2017 (in thousands): June 30, 2018 December 31, 2017 Assets related to real estate held for sale Real estate, cost $ 35,739 $ 35,308 Accumulated depreciation and amortization (5,055 ) (4,663 ) Real estate, net 30,684 30,645 Other assets 1,945 1,965 Total assets related to real estate held for sale $ 32,629 $ 32,610 Liabilities related to real estate held for sale Notes payable, net 27,566 27,515 Total liabilities related to real estate held for sale $ 27,566 $ 27,515 |
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 three and six months ended June 30, 2018 and 2017 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Revenues Rental income $ 1,049 $ 17,621 $ 2,070 $ 36,134 Tenant reimbursements and other operating income 111 5,477 251 10,482 Total revenues $ 1,160 $ 23,098 $ 2,321 $ 46,616 Expenses Operating, maintenance, and management $ 506 $ 6,208 $ 433 $ 12,751 Real estate taxes and insurance 154 3,376 287 6,479 Asset management fees to affiliate 137 1,401 272 2,826 Depreciation and amortization 122 7,825 483 16,232 Interest expense 282 3,676 540 7,000 Total expenses $ 1,201 $ 22,486 $ 2,015 $ 45,288 |
NOTES AND BOND PAYABLE (Tables)
NOTES AND BOND PAYABLE (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Notes and Bonds Payable [Abstract] | |
Schedule of Long-term Debt Instruments | As of June 30, 2018 and December 31, 2017 , 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 June 30, 2018 Book Value as of December 31, 2017 Contractual Interest Rate as of June 30, 2018 (1) Effective Interest Rate at June 30, 2018 (1) Payment Type Maturity Date (2) Richardson Portfolio Mortgage Loan $ 32,586 $ 36,886 One-Month LIBOR + 2.10% 4.08% Principal & Interest 11/01/2018 Portfolio Mortgage Loan (3) 9,140 9,877 One-Month LIBOR + 2.25% 4.23% Principal & Interest 07/01/2019 Burbank Collection Mortgage Loan 10,837 10,958 One-Month LIBOR + 2.35% 4.41% Principal & Interest 09/30/2018 1180 Raymond Bond Payable 6,370 6,460 6.50% 6.50% Principal & Interest 09/01/2036 Central Building Mortgage Loan 27,600 27,600 One-Month LIBOR + 1.75% 3.73% Interest Only 11/13/2018 (4) 424 Bedford Mortgage Loan 23,998 24,282 3.91% 3.91% Principal & Interest 10/01/2022 1180 Raymond Mortgage Loan 30,821 31,000 One-Month LIBOR + 2.25% 4.23% Principal & Interest 12/01/2018 KBS SOR (BVI) Holdings, Ltd. Series A Debentures (5) 265,285 278,801 4.25% 4.25% (5) 03/01/2023 Westpark Portfolio Mortgage Loan 85,200 85,200 One-Month LIBOR + 2.50% 4.48% Interest Only (6) 07/01/2020 Crown Pointe Mortgage Loan 51,171 50,500 One-Month LIBOR + 2.60% 4.58% Interest Only 02/13/2020 125 John Carpenter Mortgage Loan 50,130 50,130 (7) 3.74% Interest Only 10/01/2022 City Tower Mortgage Loan 89,000 — One-Month LIBOR + 1.55% 3.53% Interest Only 03/05/2021 Marquette Plaza Mortgage Loan 50,800 — One-Month LIBOR + 1.55% 3.56% Interest Only 06/06/2021 Eight & Nine Corporate Centre Mortgage Loan 43,880 — One-Month LIBOR + 1.60% 3.58% Interest Only 06/08/2021 Total Notes and Bonds Payable principal outstanding 776,818 611,694 Net Premium/(Discount) on Notes and Bonds Payable (8) 167 137 Deferred financing costs, net (9,769 ) (8,788 ) Total Notes and Bonds Payable, net $ 767,216 $ 603,043 _____________________ (1) Contractual interest rate represents the interest rate in effect under the loan as of June 30, 2018 . Effective interest rate is calculated as the actual interest rate in effect as of June 30, 2018 (consisting of the contractual interest rate and contractual floor rates), using interest rate indices at June 30, 2018 , where applicable. (2) Represents the initial maturity date or the maturity date as extended as of June 30, 2018 ; subject to certain conditions, the maturity dates of certain loans may be extended beyond the date shown. (3) The Portfolio Mortgage Loan is secured by Park Centre. (4) On July 17, 2018 , the Central Building Mortgage Loan was repaid. See note 15 , “Subsequent Events – Real Estate Disposition Subsequent to June 30, 2018 .” (5) See “ – Israeli Bond Financing” below. (6) Represents the payment type required under the loan as of June 30, 2018 . 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. (7) 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. (8) 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 June 30, 2018 (in thousands): July 1, 2018 through December 31, 2018 $ 103,416 2019 63,350 2020 188,742 2021 237,616 2022 125,227 Thereafter 58,467 $ 776,818 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Interest Rate Derivatives | The following table summarizes the notional amounts and other information related to the Company’s derivative instruments as of June 30, 2018 . 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% Interest rate cap 04/02/2018 03/05/2021 $ 77,513 One-month LIBOR at 3.50% The following table summarizes the notional amount and other information related to the Company’s foreign currency option as of June 30, 2018 . 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 |
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 June 30, 2018 and December 31, 2017 (dollars in thousands): June 30, 2018 December 31, 2017 Derivative Instruments Balance Sheet Location Number of Instruments Fair Value Number of Instruments Fair Value Derivative instruments not designated as hedging instruments Interest rate caps Prepaid expenses and other assets 2 $ 146 1 $ 14 Foreign currency option Prepaid expenses and other assets 1 $ — 1 $ 4,243 |
FAIR VALUE DISCLOSURES (Tables)
FAIR VALUE DISCLOSURES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 June 30, 2018 and December 31, 2017 , which carrying amounts do not approximate the fair values (in thousands): June 30, 2018 December 31, 2017 Face Value Carrying Amount Fair Value Face Value Carrying Amount Fair Value Financial asset: Real estate debt securities $ 17,500 $ 17,879 $ 17,461 $ 17,500 $ 17,751 $ 17,386 Financial liabilities: Notes and bond payable $ 511,533 $ 507,452 $ 516,473 $ 332,893 $ 330,727 $ 335,212 KBS SOR (BVI) Holdings, Ltd. Series A Debentures $ 265,285 $ 259,764 $ 274,093 $ 278,801 $ 272,316 $ 296,069 |
Fair Value, Assets Measured on Recurring Basis | As of June 30, 2018 , the Company measured the following assets at fair value (in thousands): Fair Value Measurements Using Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Recurring Basis: Real estate equity securities $ 98,627 $ 79,885 $ 18,742 $ — Asset derivative - interest rate caps $ 146 $ — $ 146 $ — Asset derivative - foreign currency option $ — $ — $ — $ — |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 three and six months ended June 30, 2018 and 2017 , respectively, and any related amounts payable as of June 30, 2018 and December 31, 2017 (in thousands): Incurred Payable as of Three Months Ended June 30, Six Months Ended June 30, June 30, 2018 December 31, 2017 2018 2017 2018 2017 Expensed Asset management fees $ 2,217 $ 2,856 $ 4,043 $ 5,603 $ — $ — Reimbursable operating expenses (1) 115 64 198 133 39 26 Disposition fees (2) — 785 — 785 — — Capitalized Acquisition fees on real estate 734 — 3,094 836 — — Acquisition fees on real estate equity securities 9 386 157 386 — — $ 3,075 $ 4,091 $ 7,492 $ 7,743 $ 39 $ 26 _____________________ (1) 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 $78,000 and $161,000 for the three and six months ended June 30, 2018 , respectively, and $64,000 and $119,000 for the three and six months ended June 30, 2017 , 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. (2) 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. |
INVESTMENT IN UNCONSOLIDATED 33
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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): June 30, 2018 December 31, 2017 Assets: Real estate assets, net of accumulated depreciation and amortization $ 172,339 $ 171,066 Other assets 8,574 6,472 Total assets $ 180,913 $ 177,538 Liabilities and equity: Notes payable, net $ 94,191 $ 89,423 Other liabilities 6,393 7,313 Partners’ capital 80,329 80,802 Total liabilities and equity $ 180,913 $ 177,538 For the Three Months Ended June 30, 2018 For the Six Months Ended June 30, 2018 Revenues $ 2,627 $ 5,296 Expenses: Operating, maintenance, and management 891 1,769 Real estate taxes and insurance 605 1,217 Depreciation and amortization 1,387 2,837 Interest expense 1,348 2,587 Total expenses 4,231 8,410 Net loss $ (1,604 ) $ (3,114 ) Company’s equity in loss of unconsolidated joint venture $ (851 ) $ (1,649 ) Summarized financial information for the 110 William Joint Venture follows (in thousands): June 30, 2018 December 31, 2017 Assets: Real estate assets, net of accumulated depreciation and amortization $ 240,577 $ 248,269 Other assets 34,886 32,331 Total assets $ 275,463 $ 280,600 Liabilities and equity: Notes payable, net $ 263,377 $ 260,108 Other liabilities 7,745 11,016 Partners’ capital 4,341 9,476 Total liabilities and equity $ 275,463 $ 280,600 Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Revenues $ 9,951 $ 9,322 $ 19,760 $ 17,714 Expenses: Operating, maintenance, and management 2,296 2,370 4,763 4,766 Real estate taxes and insurance 1,655 1,472 3,290 3,088 Depreciation and amortization 4,126 4,381 8,345 7,614 Interest expense 4,418 3,799 8,535 5,198 Total expenses 12,495 12,022 24,933 20,666 Other income 24 14 38 28 Net loss $ (2,520 ) $ (2,686 ) $ (5,135 ) $ (2,924 ) Company’s equity in loss of unconsolidated joint venture $ (1,522 ) $ (1,622 ) $ (3,102 ) $ (1,776 ) As of June 30, 2018 and December 31, 2017 , 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 % June 30, 2018 December 31, 2017 NIP Joint Venture 4 Various Less than 5.0% $ 2,514 $ 3,674 110 William Joint Venture 1 New York, New York 60.0% 4,058 7,160 353 Sacramento Joint Venture 1 San Francisco, California 55.0% 44,414 44,743 $ 50,986 $ 55,577 |
SUPPLEMENTAL CASH FLOW AND SI34
SUPPLEMENTAL CASH FLOW AND SIGNIFICANT NONCASH TRANSACTION DISCLOSURES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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): Six Months Ended June 30, 2018 2017 Supplemental Disclosure of Cash Flow Information: Interest paid, net of capitalized interest of $ 1,282 and $1,142 for the six months ended June 30, 2018 and 2017 , respectively $ 12,247 $ 16,257 Supplemental Disclosure of Significant Noncash Transactions: Application of escrow deposits to acquisition of real estate — 2,000 Increase in accrued improvements to real estate 1,265 3,551 Distributions paid to common stockholders through common stock issuances pursuant to the dividend reinvestment plan 964 5,817 Distributions paid to common stockholders through common stock issuances pursuant to the December 2017 special dividend 150,299 — |
ORGANIZATION (Details)
ORGANIZATION (Details) $ in Thousands | Mar. 08, 2016USD ($) | Mar. 08, 2016ILS (₪) | Mar. 08, 2016ILS (₪) | Mar. 07, 2016ILS (₪) | Mar. 02, 2016ILS (₪) | Mar. 01, 2016ILS (₪) | Dec. 31, 2017USD ($)shares | Jun. 30, 2018USD ($)aportfoliopropertyinvestmentshares | Dec. 31, 2017USD ($)shares | Nov. 14, 2012USD ($)shares | Jun. 30, 2018USD ($)aportfoliopropertyinvestmentshares | Dec. 18, 2015shares | 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 | 54,682,660 | 52,053,817 | 54,682,660 | 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, value | $ | $ 964 | $ 8,666 | $ 561,700 | ||||||||||||
Shares of common stock sold under dividend reinvestment plan, value | $ | $ 75,000 | ||||||||||||||
Redemptions of common stock | $ | 115,071 | 74,780 | 266,900 | ||||||||||||
Common stock, value, issued | $ | $ 521 | $ 547 | $ 521 | $ 547 | $ 500 | $ 2,000 | |||||||||
Number of investments in unconsolidated joint venture | investment | 3 | 3 | |||||||||||||
Number of investments in debt securities | investment | 1 | 1 | |||||||||||||
Number of investments in equity securities | investment | 3 | 3 | |||||||||||||
Held-for-sale | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Number of real estate properties | property | 1 | 1 | |||||||||||||
Office Properties | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Number of real estate properties consolidated | property | 7 | 7 | |||||||||||||
Number of real estate properties | property | 6 | 6 | |||||||||||||
Office Properties | Held-for-sale | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Number of real estate properties | property | 1 | 1 | |||||||||||||
Office Portfolio | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Number of real estate properties | portfolio | 1 | 1 | |||||||||||||
Office Buildings, Portfolio | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Number of real estate properties | property | 4 | 4 | |||||||||||||
Undeveloped Land, Portfolio | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Real estate area of undeveloped land | a | 14 | 14 | |||||||||||||
Office/Flex/Industrial Portfolio | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Number of real estate properties | property | 1 | 1 | |||||||||||||
Office/Flex/Industrial Buildings | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Number of real estate properties | property | 21 | 21 | |||||||||||||
Retail Property, Portfolio | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Number of real estate properties | property | 1 | 1 | |||||||||||||
Undeveloped Land | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Real estate area of undeveloped land | a | 1,100 | 1,100 | |||||||||||||
Number of investments in real estate | investment | 3 | 3 | |||||||||||||
Series A Debentures | Bonds Payable | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Maximum borrowing capacity (in shares) | ₪ | ₪ 1,000,000,000 | ||||||||||||||
Contractual interest rate, percentage | 4.25% | ||||||||||||||
Proceeds from issuance of debt | $ 249,200 | ₪ 970,200,000 | ₪ 970,200,000 | ₪ 127,700,000 | ₪ 842,500,000 | ||||||||||
Principal installment payments required as percent of total debt | 20.00% | ||||||||||||||
Special Dividends | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Common stock, shares issued (in shares) | 13,069,487 | 13,069,487 | |||||||||||||
Maximum | Series A Debentures | Bonds Payable | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Contractual interest rate, percentage | 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) | 83,855 | 585,192 | 56,584,976 | ||||||||||||
Issuance of common stock, value | $ | $ 1 | $ 6 | |||||||||||||
Shares of common stock sold under dividend reinvestment plan, (in shares) | 6,704,217 | ||||||||||||||
Redemptions of common stock (in shares) | 10,524,499 | 5,307,142 | 21,972,263 | ||||||||||||
Redemptions of common stock | $ | $ 4,400 | $ 105 | $ 53 | ||||||||||||
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 | ||||||||||||||
KBS Strategic Opportunity BVI | Operating Partnership | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Common stock, shares issued (in shares) | 10,000 |
SUMMARY OF SIGNIFICANT ACCOUN36
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Redeemable Common Stock) (Details) - USD ($) | Jun. 01, 2018 | Apr. 23, 2018 | Dec. 30, 2016 | Dec. 31, 2017 | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2018 | Aug. 09, 2018 |
Summary of Significant Accounting Policies [Line Items] | ||||||||
Maximum number of shares redeemable per quarter, value | $ 3,000,000 | |||||||
Redemption value | $ 1,000,000 | $ 1,000,000 | ||||||
Maximum percentage of weighted-average shares outstanding available for redemption during any calendar year | 5.00% | |||||||
Redemption price percentage of most recent estimated value per share | 95.00% | |||||||
Share redemption program, termination period | 10 days | |||||||
Redemptions of common stock | $ 115,071,000 | $ 74,780,000 | 266,900,000 | |||||
Other liabilities | $ 16,966,000 | 14,614,000 | 16,966,000 | 14,614,000 | ||||
Remaining authorized repurchase amount | 2,200,000 | 2,200,000 | ||||||
Common Stock | ||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||
Number of shares non-redeemable do to limitation, value | 10,900,000 | |||||||
Redemptions of common stock | 4,400,000 | 105,000 | 53,000 | |||||
SOR Offer | ||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||
Stock repurchase program, number of shares authorized to be repurchased (in shares) | 8,234,217 | |||||||
Treasury stock acquired, cost per share (in dollars per share) | $ 10.93 | $ 10.93 | ||||||
Stock repurchase program, authorized amount | $ 90,000,000 | |||||||
Treasury stock, shares, acquired (in shares) | 9,527,724 | 1,294,910 | ||||||
Treasury stock, value, acquired | $ 104,100,000 | $ 14,100,000 | ||||||
Unfulfilled Redemption Request | ||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||
Other liabilities | $ 8,600,000 | $ 400,000 | $ 8,600,000 | $ 400,000 | ||||
Subsequent Event | ||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||
Additional increase in authorized amount | $ 6,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN37
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Revenue Recognition, Real Estate Sale and Equity Securities) (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Feb. 28, 2018a | Jan. 01, 2018USD ($) | Dec. 31, 2017USD ($)a | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Tenant reimbursements | $ 3,703 | $ 6,456 | $ 6,384 | $ 12,094 | |||
Cumulative effect adjustments to retained earnings | $ 2,472 | ||||||
Contract liability | 1,700 | 1,700 | $ 2,000 | ||||
Park Highlands | Undeveloped Land | Disposed of by Sale | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Area of land sold | a | 26 | 102 | |||||
Retained Earnings | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Cumulative effect adjustments to retained earnings | $ 27,618 | ||||||
Accounting Standards Update 2014-09 | Retained Earnings | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Cumulative effect adjustments to retained earnings | $ 2,500 | ||||||
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Tenant reimbursements | $ 500 | $ 900 | |||||
Accounting Standards Update 2016-01 | Retained Earnings | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Cumulative effect adjustments to retained earnings | $ 25,100 |
SUMMARY OF SIGNIFICANT ACCOUN38
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Investments and Reclassifications) (Details) $ in Thousands | Jun. 30, 2018USD ($)property | Dec. 31, 2017USD ($) |
Investment [Line Items] | ||
Investments in unconsolidated joint ventures | $ | $ 50,986 | $ 55,577 |
Office Properties | ||
Investment [Line Items] | ||
Number of real estate properties | 6 | |
Held-for-sale | ||
Investment [Line Items] | ||
Number of real estate properties | 1 | |
Held-for-sale | Office Properties | ||
Investment [Line Items] | ||
Number of real estate properties | 1 | |
NIP Joint Venture | ||
Investment [Line Items] | ||
Investments in unconsolidated joint ventures | $ | $ 2,514 | $ 3,674 |
Number of real estate properties | 4 |
SUMMARY OF SIGNIFICANT ACCOUN39
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Segments and Per Share Data) (Narrative) (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018$ / shares | Jun. 30, 2017$ / shares | Jun. 30, 2018segment$ / shares | Jun. 30, 2017$ / shares | |
Accounting Policies [Abstract] | ||||
Number of reportable segments | segment | 1 | |||
Distributions declared per common share (in dollars per share) | $ / shares | $ 0.015975 | $ 0.09349315 | $ 0.03195 | $ 0.1859589 |
REAL ESTATE HELD FOR INVESTME40
REAL ESTATE HELD FOR INVESTMENT (Narrative) (Details) ft² in Millions | Jun. 30, 2018aft²unitpropertyinvestment |
Real Estate Properties [Line Items] | |
Rentable square feet | ft² | 3.8 |
Percentage of portfolio occupied | 77.00% |
Office Properties | |
Real Estate Properties [Line Items] | |
Number of real estate properties | 6 |
Undeveloped Land, Portfolio | |
Real Estate Properties [Line Items] | |
Real estate area of undeveloped land | a | 14 |
Office/Flex/Industrial Portfolio | |
Real Estate Properties [Line Items] | |
Number of real estate properties | 1 |
Office/Flex/Industrial Buildings | |
Real Estate Properties [Line Items] | |
Number of real estate properties | 21 |
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 |
Apartment Building | |
Real Estate Properties [Line Items] | |
Rentable square feet | ft² | 0.3 |
Percentage of portfolio occupied | 94.00% |
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 INVESTME41
REAL ESTATE HELD FOR INVESTMENT (Schedule of Real Estate Investments) (Details) $ in Thousands | Sep. 07, 2016USD ($)unit | Jun. 30, 2018USD ($) | Dec. 31, 2017USD ($) |
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 860,028 | $ 539,376 | |
Accumulated depreciation and amortization | (48,690) | (37,154) | |
Total real estate, net | 811,338 | 502,222 | |
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 | ||
Subsidiary of Common Parent | Disposed of by Sale | |||
Real Estate Properties [Line Items] | |||
Number of real estate units | unit | 820 | ||
Richardson Portfolio | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 42,083 | ||
Accumulated depreciation and amortization | (9,259) | ||
Total real estate, net | $ 32,824 | ||
Palisades Central I | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Nov. 23, 2011 | ||
Total real estate, cost | $ 11,746 | ||
Accumulated depreciation and amortization | (2,479) | ||
Total real estate, net | $ 9,267 | ||
Ownership % | 90.00% | ||
Palisades Central II | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Nov. 23, 2011 | ||
Total real estate, cost | $ 19,207 | ||
Accumulated depreciation and amortization | (4,230) | ||
Total real estate, net | $ 14,977 | ||
Ownership % | 90.00% | ||
Greenway I | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Nov. 23, 2011 | ||
Total real estate, cost | $ 2,674 | ||
Accumulated depreciation and amortization | (692) | ||
Total real estate, net | $ 1,982 | ||
Ownership % | 90.00% | ||
Greenway III | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Nov. 23, 2011 | ||
Total real estate, cost | $ 5,322 | ||
Accumulated depreciation and amortization | (1,858) | ||
Total real estate, net | $ 3,464 | ||
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 | $ 33,430 | ||
Accumulated depreciation and amortization | 0 | ||
Total real estate, net | $ 33,430 | ||
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 | (2,769) | ||
Total real estate, net | $ 14,667 | ||
Ownership % | 90.00% | ||
Park Centre | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Mar. 28, 2013 | ||
Total real estate, cost | $ 30,479 | ||
Accumulated depreciation and amortization | (4,144) | ||
Total real estate, net | $ 26,335 | ||
Ownership % | 100.00% | ||
1180 Raymond | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Aug. 20, 2013 | ||
Total real estate, cost | $ 46,552 | ||
Accumulated depreciation and amortization | (5,980) | ||
Total real estate, net | $ 40,572 | ||
Ownership % | 100.00% | ||
Park Highlands II | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Dec. 10, 2013 | ||
Total real estate, cost | $ 25,234 | ||
Accumulated depreciation and amortization | 0 | ||
Total real estate, net | $ 25,234 | ||
Ownership % | 100.00% | ||
424 Bedford | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Jan. 31, 2014 | ||
Total real estate, cost | $ 34,697 | ||
Accumulated depreciation and amortization | (3,204) | ||
Total real estate, net | $ 31,493 | ||
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 | $ 135,027 | ||
Accumulated depreciation and amortization | (10,557) | ||
Total real estate, net | $ 124,470 | ||
Ownership % | 100.00% | ||
Crown Pointe | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Feb. 14, 2017 | ||
Total real estate, cost | $ 90,762 | ||
Accumulated depreciation and amortization | (5,734) | ||
Total real estate, net | $ 85,028 | ||
Ownership % | 100.00% | ||
125 John Carpenter | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Sep. 15, 2017 | ||
Total real estate, cost | $ 87,605 | ||
Accumulated depreciation and amortization | (3,416) | ||
Total real estate, net | $ 84,189 | ||
Ownership % | 100.00% | ||
Marquette Plaza | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Mar. 1, 2018 | ||
Total real estate, cost | $ 86,242 | ||
Accumulated depreciation and amortization | (1,334) | ||
Total real estate, net | $ 84,908 | ||
Ownership % | 100.00% | ||
City Tower | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Mar. 6, 2018 | ||
Total real estate, cost | $ 150,867 | ||
Accumulated depreciation and amortization | (2,166) | ||
Total real estate, net | $ 148,701 | ||
Ownership % | 100.00% | ||
Eight & Nine Corporate Centre | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Jun. 8, 2018 | ||
Total real estate, cost | $ 76,196 | ||
Accumulated depreciation and amortization | (127) | ||
Total real estate, net | $ 76,069 | ||
Ownership % | 100.00% | ||
Land | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 196,052 | 155,046 | |
Land | 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 | 33,430 | ||
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 | 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 | 25,234 | ||
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 | ||
Land | Marquette Plaza | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 10,387 | ||
Land | City Tower | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 13,930 | ||
Land | Eight & Nine Corporate Centre | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 17,401 | ||
Buildings and improvements | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 624,299 | 361,118 | |
Buildings and improvements | Richardson Portfolio | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 35,280 | ||
Buildings and improvements | Palisades Central I | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 10,709 | ||
Buildings and improvements | Palisades Central II | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 18,397 | ||
Buildings and improvements | Greenway I | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 2,113 | ||
Buildings and improvements | Greenway III | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 4,061 | ||
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 | 27,228 | ||
Buildings and improvements | 1180 Raymond | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 38,260 | ||
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 | 25,837 | ||
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 | 92,354 | ||
Buildings and improvements | Crown Pointe | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 62,613 | ||
Buildings and improvements | 125 John Carpenter | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 76,010 | ||
Buildings and improvements | Marquette Plaza | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 71,385 | ||
Buildings and improvements | City Tower | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 128,787 | ||
Buildings and improvements | Eight & Nine Corporate Centre | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 54,009 | ||
Tenant origination and absorption costs | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 39,677 | $ 23,212 | |
Tenant origination and absorption costs | 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 | 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 | 6,588 | ||
Tenant origination and absorption costs | Crown Pointe | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 5,559 | ||
Tenant origination and absorption costs | 125 John Carpenter | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 8,840 | ||
Tenant origination and absorption costs | Marquette Plaza | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 4,470 | ||
Tenant origination and absorption costs | City Tower | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 8,150 | ||
Tenant origination and absorption costs | Eight & Nine Corporate Centre | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 4,786 |
REAL ESTATE HELD FOR INVESTME42
REAL ESTATE HELD FOR INVESTMENT (Operating Leases) (Narrative) (Details) $ in Millions | 6 Months Ended | ||
Jun. 30, 2018USD ($)tenant | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Operating Leased Assets [Line Items] | |||
Recognition of deferred revenue, net of discontinued operations | $ 1.7 | $ 1.4 | |
Deferred rent receivables | 8.6 | $ 6.6 | |
Incentive to Lessee | $ 1 | 0.8 | |
Number of tenants | tenant | 350 | ||
Other Liabilities | |||
Operating Leased Assets [Line Items] | |||
Security deposit liability | $ 5.2 | $ 4.3 | |
Maximum | |||
Operating Leased Assets [Line Items] | |||
Operating lease, term | 13 years 10 months 24 days | ||
Weighted Average | |||
Operating Leased Assets [Line Items] | |||
Operating lease, term | 4 years 7 months 6 days | ||
Apartment Building | |||
Operating Leased Assets [Line Items] | |||
Operating lease, term | 1 year |
REAL ESTATE HELD FOR INVESTME43
REAL ESTATE HELD FOR INVESTMENT (Future Minimum Rental Income) (Details) $ in Thousands | Jun. 30, 2018USD ($) |
Real Estate [Abstract] | |
July 1, 2018 through December 31, 2018 | $ 30,024 |
2,019 | 58,632 |
2,020 | 52,340 |
2,021 | 45,997 |
2,022 | 38,248 |
Thereafter | 124,051 |
Future minimum rental income | $ 349,292 |
REAL ESTATE HELD FOR INVESTME44
REAL ESTATE HELD FOR INVESTMENT (Geographic Concentration Risk) (Details) - Assets, Total | 6 Months Ended |
Jun. 30, 2018 | |
California | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 14.80% |
Texas | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 13.30% |
Washington | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 11.30% |
REAL ESTATE HELD FOR INVESTME45
REAL ESTATE HELD FOR INVESTMENT (Recent Acquisition) (Details) $ in Thousands | Jun. 08, 2018USD ($)aft² | Mar. 06, 2018USD ($)aft²property | Mar. 01, 2018USD ($)aft²property | Jun. 30, 2018USD ($)ft² | Dec. 31, 2017USD ($) |
Business Acquisition [Line Items] | |||||
Rentable square feet | ft² | 3,800,000 | ||||
Total real estate, cost | $ 860,028 | $ 539,376 | |||
Above market lease assets | 3,587 | 10 | |||
Below-market leases | 6,011 | 2,843 | |||
Land | |||||
Business Acquisition [Line Items] | |||||
Total real estate, cost | 196,052 | 155,046 | |||
Buildings and improvements | |||||
Business Acquisition [Line Items] | |||||
Total real estate, cost | 624,299 | 361,118 | |||
Tenant origination and absorption costs | |||||
Business Acquisition [Line Items] | |||||
Total real estate, cost | $ 39,677 | $ 23,212 | |||
Marquette Plaza | Office Properties | |||||
Business Acquisition [Line Items] | |||||
Number of real estate properties acquired | property | 1 | ||||
Rentable square feet | ft² | 522,656 | ||||
Area of land | a | 2.5 | ||||
Purchase price | $ 88,300 | ||||
Capitalized acquisition costs | 1,100 | ||||
Above market lease assets | 3,700 | ||||
Below-market leases | $ 600 | ||||
Marquette Plaza | Office Properties | Tenant origination and absorption costs | |||||
Business Acquisition [Line Items] | |||||
Remaining amortization period | 6 years 7 months 6 days | ||||
Marquette Plaza | Office Properties | Above-Market Lease Assets | |||||
Business Acquisition [Line Items] | |||||
Remaining amortization period | 11 years 8 months 12 days | ||||
Marquette Plaza | Office Properties | Below-market lease liabilities | |||||
Business Acquisition [Line Items] | |||||
Remaining amortization period | 2 years 4 months 24 days | ||||
Marquette Plaza | Office Properties | Land | |||||
Business Acquisition [Line Items] | |||||
Total real estate, cost | $ 10,400 | ||||
Marquette Plaza | Office Properties | Buildings and improvements | |||||
Business Acquisition [Line Items] | |||||
Total real estate, cost | 71,400 | ||||
Marquette Plaza | Office Properties | Tenant origination and absorption costs | |||||
Business Acquisition [Line Items] | |||||
Total real estate, cost | $ 4,500 | ||||
City Tower | Office Properties | |||||
Business Acquisition [Line Items] | |||||
Number of real estate properties acquired | property | 1 | ||||
Rentable square feet | ft² | 431,007 | ||||
Area of land | a | 4.9 | ||||
Purchase price | $ 147,100 | ||||
Capitalized acquisition costs | 1,600 | ||||
Below-market leases | $ 1,200 | ||||
City Tower | Office Properties | Tenant origination and absorption costs | |||||
Business Acquisition [Line Items] | |||||
Remaining amortization period | 5 years 2 months 12 days | ||||
City Tower | Office Properties | Below-market lease liabilities | |||||
Business Acquisition [Line Items] | |||||
Remaining amortization period | 6 years 7 months 6 days | ||||
City Tower | Office Properties | Land | |||||
Business Acquisition [Line Items] | |||||
Total real estate, cost | $ 13,900 | ||||
City Tower | Office Properties | Buildings and improvements | |||||
Business Acquisition [Line Items] | |||||
Total real estate, cost | 127,900 | ||||
City Tower | Office Properties | Tenant origination and absorption costs | |||||
Business Acquisition [Line Items] | |||||
Total real estate, cost | $ 8,100 | ||||
Eight & Nine Corporate Centre | Office Properties | |||||
Business Acquisition [Line Items] | |||||
Rentable square feet | ft² | 311,864 | ||||
Area of land | a | 27.6 | ||||
Purchase price | $ 73,000 | ||||
Capitalized acquisition costs | 1,200 | ||||
Below-market leases | $ 2,000 | ||||
Eight & Nine Corporate Centre | Office Properties | Tenant origination and absorption costs | |||||
Business Acquisition [Line Items] | |||||
Remaining amortization period | 6 years 4 months 24 days | ||||
Eight & Nine Corporate Centre | Office Properties | Below-market lease liabilities | |||||
Business Acquisition [Line Items] | |||||
Remaining amortization period | 7 years 4 months 24 days | ||||
Eight & Nine Corporate Centre | Office Properties | Land | |||||
Business Acquisition [Line Items] | |||||
Total real estate, cost | $ 17,400 | ||||
Eight & Nine Corporate Centre | Office Properties | Buildings and improvements | |||||
Business Acquisition [Line Items] | |||||
Total real estate, cost | 54,000 | ||||
Eight & Nine Corporate Centre | Office Properties | Tenant origination and absorption costs | |||||
Business Acquisition [Line Items] | |||||
Total real estate, cost | $ 4,800 |
REAL ESTATE HELD FOR INVESTME46
REAL ESTATE HELD FOR INVESTMENT (Recent Real Estate Land Sale) (Details) $ in Thousands | Feb. 28, 2018USD ($)a | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Dec. 31, 2017a |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Gain on sale of real estate | $ 25 | $ 34,028 | $ 649 | $ 34,028 | ||
Park Highlands | Disposed of by Sale | Undeveloped Land | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Area of land sold | a | 26 | 102 | ||||
Proceeds from sale of land | $ 2,500 | |||||
Gain on sale of real estate | $ 700 | |||||
Gross profit, deferred | $ 300 |
TENANT ORIGINATION AND ABSORP47
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Abstract] | |||||
Tenant Origination And Absorption Costs, Cost | $ 39,677 | $ 39,677 | $ 23,212 | ||
Tenant Origination and Absorption Costs, Accumulated Amortization | (8,331) | (8,331) | (5,733) | ||
Tenant Origination and Absorption Costs, Net Amount | 31,346 | 31,346 | 17,479 | ||
Tenant Origination and Absorption Costs, Amortization | (2,088) | $ (3,135) | (3,625) | $ (6,078) | |
Above-Market Lease Assets, Cost | 3,731 | 3,731 | 17 | ||
Above-Market Lease Assets, Accumulated Amortization | (144) | (144) | (7) | ||
Above-Market Lease Assets, Net Amount | 3,587 | 3,587 | 10 | ||
Above-Market Lease Assets, Amortization | (111) | (78) | (155) | (167) | |
Below-Market Lease Liabilities, Cost | (7,298) | (7,298) | (3,636) | ||
Below-Market Lease Liabilities, Accumulated Amortization | 1,287 | 1,287 | 793 | ||
Below-Market Lease Liabilities, Net Amount | (6,011) | (6,011) | $ (2,843) | ||
Below-Market Lease Liabilities, Amortization | $ 385 | $ 1,221 | $ 655 | $ 2,204 |
TENANT ORIGINATION AND ABSORP48
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Line Items] | |||||
Tax abatement asset | $ 4,800 | $ 4,800 | $ 5,300 | ||
Depreciation and amortization | 9,042 | $ 15,307 | 16,307 | $ 29,908 | |
Property Tax Abatement Intangible Asset | |||||
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Line Items] | |||||
Depreciation and amortization | $ 200 | $ 200 | $ 500 | $ 500 |
REAL ESTATE EQUITY SECURITIES49
REAL ESTATE EQUITY SECURITIES (Narrative) (Details) $ in Thousands | Mar. 31, 2018shares | Nov. 08, 2017propertyshares | Jun. 30, 2018USD ($)investment | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)investmentshares | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($) |
Schedule of Available-for-sale Securities [Line Items] | |||||||
Number of investments in equity securities | investment | 3 | 3 | |||||
Available-for-sale securities, lack of marketability | $ | $ 600 | $ 600 | $ 1,700 | ||||
Dividend income from real estate equity securities | $ | 1,209 | $ 489 | 2,260 | $ 489 | |||
Singapore Portfolio | |||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||
Number of real estate properties disposed | property | 11 | ||||||
Whitestone REIT | |||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||
Cost basis | $ | 1,900 | 1,900 | |||||
Franklin Street Properties Corp. | |||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||
Cost basis | $ | $ 14,000 | $ 14,000 | |||||
Available-for-sale Securities | Whitestone REIT | |||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||
Shares purchased (in shares) | 165,000 | ||||||
Available-for-sale Securities | Franklin Street Properties Corp. | |||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||
Shares purchased (in shares) | 1,576,809 | ||||||
Available-for-sale Securities | Keppel-KBS US REIT | |||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||
Shares purchased (in shares) | 43,999,500 | 43,999,500 | |||||
Available-for-sale Securities | Keppel-KBS US REIT | Not to Sell, Transfer or Assign until May 8, 2018 | |||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||
Sale of stock, number of shares issued in transaction upon specific arrangements (in shares) | 21,999,750 | ||||||
Available-for-sale Securities | Keppel-KBS US REIT | Not to Sell, Transfer or Assign until November 8, 2018 | |||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||
Sale of stock, number of shares issued in transaction upon specific arrangements (in shares) | 21,999,750 |
REAL ESTATE EQUITY SECURITIES50
REAL ESTATE EQUITY SECURITIES (Shares Owned) (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Total Carrying Value | $ 98,627 | $ 90,063 |
Available-for-sale Securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Number of Shares Owned (in shares) | 49,344,498 | 47,602,689 |
Whitestone REIT | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Total Carrying Value | $ 47,027 | $ 51,922 |
Whitestone REIT | Available-for-sale Securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Number of Shares Owned (in shares) | 3,768,189 | 3,603,189 |
Keppel-KBS US REIT | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Total Carrying Value | $ 38,102 | $ 38,141 |
Keppel-KBS US REIT | Available-for-sale Securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Number of Shares Owned (in shares) | 43,999,500 | 43,999,500 |
Franklin Street Properties Corp. | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Total Carrying Value | $ 13,498 | $ 0 |
Franklin Street Properties Corp. | Available-for-sale Securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Number of Shares Owned (in shares) | 1,576,809 | 0 |
REAL ESTATE EQUITY SECURITIES51
REAL ESTATE EQUITY SECURITIES (Schedule of Activity of Real Estate Securities) (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Available-for-sale Securities [Roll Forward] | |
Real estate securities, Amortized Cost Basis | $ 64,917 |
Real estate securities, Unrealized Gain | 25,146 |
Real estate securities, Total | 90,063 |
Acquisition of real estate equity securities | 15,676 |
Acquisition fee to affiliate and purchase commission | 175 |
Unrealized change in market value of real estate equity securities | (7,287) |
Real estate securities, Amortized Cost Basis | 80,768 |
Real estate securities, Unrealized Gain | 17,859 |
Real estate securities, Total | $ 98,627 |
REAL ESTATE DEBT SECURITIES (Sc
REAL ESTATE DEBT SECURITIES (Schedule of Investments in Debt Securities) (Details) $ in Thousands | Jun. 30, 2018USD ($)investment | Dec. 31, 2017USD ($) |
Investments, Debt and Equity Securities [Abstract] | ||
Number of debt investments | investment | 1,000 | |
Investment [Line Items] | ||
Outstanding Principal Balance | $ 17,500 | $ 17,500 |
Point Trust LLC | Series B Preferred Units | ||
Investment [Line Items] | ||
Outstanding Principal Balance | 17,500 | |
Book Value | $ 17,879 | $ 17,751 |
Contractual Interest Rate | 12.00% | |
Annualized Effective Interest Rate | 11.10% |
REAL ESTATE DEBT SECURITIES (53
REAL ESTATE DEBT SECURITIES (Schedule of Activity of Real Estate Securities) (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Held-to-maturity Securities [Roll Forward] | |
Real estate debt securities - December 31, 2017 | $ 17,500 |
Real estate debt securities - June 30, 2018 | 17,500 |
Debt Securities | |
Held-to-maturity Securities [Roll Forward] | |
Real estate debt securities - December 31, 2017 | 17,751 |
Deferred interest receivable and interest accretion | 104 |
Accretion of commitment fee, net of closing costs | 24 |
Real estate debt securities - June 30, 2018 | $ 17,879 |
REAL ESTATE DEBT SECURITIES (In
REAL ESTATE DEBT SECURITIES (Interest Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Investment [Line Items] | ||||
Contractual interest income | $ 419 | $ 171 | $ 1,349 | $ 196 |
Debt Securities | ||||
Investment [Line Items] | ||||
Contractual interest income | 490 | 321 | 884 | 412 |
Interest accretion | 9 | 78 | 104 | 121 |
Accretion of commitment fee, net of closing costs and acquisition fee | 12 | 202 | 24 | 227 |
Interest income from real estate debt securities | $ 511 | $ 601 | $ 1,012 | $ 760 |
REAL ESTATE SALES (Details)
REAL ESTATE SALES (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018USD ($)property | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)property | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($)property | |
Office Properties | |||||
Real Estate Properties [Line Items] | |||||
Number of real estate properties | property | 6 | 6 | |||
Held-for-sale | |||||
Real Estate Properties [Line Items] | |||||
Number of real estate properties | property | 1 | 1 | |||
Assets and Liabilities | |||||
Real estate, cost | $ 35,739 | $ 35,739 | $ 35,308 | ||
Accumulated depreciation and amortization | (5,055) | (5,055) | (4,663) | ||
Real estate, net | 30,684 | 30,684 | 30,645 | ||
Other assets | 1,945 | 1,945 | 1,965 | ||
Total assets related to real estate held for sale | 32,629 | 32,629 | 32,610 | ||
Notes payable, net | 27,566 | 27,566 | 27,515 | ||
Total liabilities related to real estate held for sale | $ 27,566 | $ 27,566 | $ 27,515 | ||
Held-for-sale | Office Properties | |||||
Real Estate Properties [Line Items] | |||||
Number of real estate properties | property | 1 | 1 | |||
Disposed of by Sale | |||||
Revenues | |||||
Rental income | $ 1,049 | $ 17,621 | $ 2,070 | $ 36,134 | |
Tenant reimbursements and other operating income | 111 | 5,477 | 251 | 10,482 | |
Total revenues | 1,160 | 23,098 | 2,321 | 46,616 | |
Expenses | |||||
Operating, maintenance, and management | 506 | 6,208 | 433 | 12,751 | |
Real estate taxes and insurance | 154 | 3,376 | 287 | 6,479 | |
Asset management fees to affiliate | 137 | 1,401 | 272 | 2,826 | |
Depreciation and amortization | 122 | 7,825 | 483 | 16,232 | |
Interest expense | 282 | 3,676 | 540 | 7,000 | |
Total expenses | $ 1,201 | $ 22,486 | $ 2,015 | $ 45,288 | |
Disposed of by Sale | Office Properties | |||||
Real Estate Properties [Line Items] | |||||
Number of real estate properties disposed | property | 0 | 12 |
NOTES AND BOND PAYABLE (Schedul
NOTES AND BOND PAYABLE (Schedule of Long-term Debt Instruments) (Details) - USD ($) $ in Thousands | Mar. 06, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | |||
Total Notes and Bonds Payable principal outstanding | $ 776,818 | $ 611,694 | |
Net Premium/(Discount) on Notes and Bonds Payable | 167 | 137 | |
Deferred financing costs, net | (9,769) | (8,788) | |
Notes and bonds payable, net | 767,216 | 603,043 | |
Mortgages | Richardson Portfolio Mortgage Loan | |||
Debt Instrument [Line Items] | |||
Notes payable | $ 32,586 | 36,886 | |
Interest rate, effective percentage | 4.08% | ||
Mortgages | Richardson Portfolio Mortgage Loan | One-month LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.10% | ||
Mortgages | Portfolio Mortgage Loan (3) | |||
Debt Instrument [Line Items] | |||
Notes payable | $ 9,140 | 9,877 | |
Interest rate, effective percentage | 4.23% | ||
Mortgages | Portfolio Mortgage Loan (3) | One-month LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.25% | ||
Mortgages | Burbank Collection Mortgage Loan | |||
Debt Instrument [Line Items] | |||
Notes payable | $ 10,837 | 10,958 | |
Interest rate, effective percentage | 4.41% | ||
Mortgages | Burbank Collection Mortgage Loan | One-month LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.35% | ||
Mortgages | 1180 Raymond Bond Payable | |||
Debt Instrument [Line Items] | |||
Bonds payable | $ 6,370 | 6,460 | |
Contractual interest rate, percentage | 6.50% | ||
Interest rate, effective percentage | 6.50% | ||
Mortgages | Central Building Mortgage Loan | |||
Debt Instrument [Line Items] | |||
Notes payable | $ 27,600 | 27,600 | |
Interest rate, effective percentage | 3.73% | ||
Mortgages | Central Building Mortgage Loan | One-month LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.75% | ||
Mortgages | 424 Bedford Mortgage Loan | |||
Debt Instrument [Line Items] | |||
Notes payable | $ 23,998 | 24,282 | |
Contractual interest rate, percentage | 3.91% | ||
Interest rate, effective percentage | 3.91% | ||
Mortgages | 1180 Raymond Mortgage Loan | |||
Debt Instrument [Line Items] | |||
Notes payable | $ 30,821 | 31,000 | |
Interest rate, effective percentage | 4.23% | ||
Mortgages | 1180 Raymond Mortgage Loan | One-month LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.25% | ||
Mortgages | KBS SOR (BVI) Holdings, Ltd. Series A Debentures | |||
Debt Instrument [Line Items] | |||
Notes payable | $ 265,285 | 278,801 | |
Contractual interest rate, percentage | 4.25% | ||
Interest rate, effective percentage | 4.25% | ||
Mortgages | Westpark Portfolio Mortgage Loan | |||
Debt Instrument [Line Items] | |||
Notes payable | $ 85,200 | 85,200 | |
Interest rate, effective percentage | 4.48% | ||
Mortgages | Westpark Portfolio Mortgage Loan | One-month LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.50% | ||
Mortgages | Crown Pointe Mortgage Loan | |||
Debt Instrument [Line Items] | |||
Notes payable | $ 51,171 | 50,500 | |
Interest rate, effective percentage | 4.58% | ||
Mortgages | Crown Pointe Mortgage Loan | One-month LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.60% | ||
Mortgages | 125 John Carpenter Mortgage Loan | |||
Debt Instrument [Line Items] | |||
Notes payable | $ 50,130 | 50,130 | |
Interest rate, effective percentage | 3.74% | ||
Interest rate during period | 2.00% | ||
Mortgages | 125 John Carpenter Mortgage Loan | One-month LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.75% | ||
Mortgages | City Tower Mortgage Loan | |||
Debt Instrument [Line Items] | |||
Notes payable | $ 89,000 | 0 | |
Interest rate, effective percentage | 3.53% | ||
Mortgages | City Tower Mortgage Loan | One-month LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.55% | 1.55% | |
Mortgages | Marquette Plaza Mortgage Loan | |||
Debt Instrument [Line Items] | |||
Notes payable | $ 50,800 | 0 | |
Interest rate, effective percentage | 3.56% | ||
Mortgages | Marquette Plaza Mortgage Loan | One-month LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.55% | ||
Mortgages | Eight & Nine Corporate Centre Mortgage Loan | |||
Debt Instrument [Line Items] | |||
Notes payable | $ 43,880 | $ 0 | |
Interest rate, effective percentage | 3.58% | ||
Mortgages | Eight & Nine Corporate Centre Mortgage Loan | One-month LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.60% |
NOTES AND BOND PAYABLE (Narrati
NOTES AND BOND PAYABLE (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | |||||
Interest expense | $ 7,819 | $ 10,324 | $ 14,410 | $ 19,709 | |
Amortization of deferred financing costs | 900 | 1,300 | 1,699 | 2,592 | |
Interest capitalized | 1,282 | 1,142 | |||
Interest payable | 5,400 | 5,400 | $ 5,100 | ||
Undeveloped Land | |||||
Debt Instrument [Line Items] | |||||
Interest capitalized | $ 600 | $ 600 | $ 1,300 | $ 1,100 |
NOTES AND BOND PAYABLE (Sched58
NOTES AND BOND PAYABLE (Schedule of Maturities of Long-term Debt) (Details) $ in Thousands | Jun. 30, 2018USD ($) |
Notes and Bonds Payable [Abstract] | |
July 1, 2018 through December 31, 2018 | $ 103,416 |
2,019 | 63,350 |
2,020 | 188,742 |
2,021 | 237,616 |
2,022 | 125,227 |
Thereafter | 58,467 |
Notes and bond payable outstanding | $ 776,818 |
NOTES AND BOND PAYABLE (Recent
NOTES AND BOND PAYABLE (Recent Bond Financing) (Details) | Mar. 08, 2016USD ($) | Mar. 08, 2016ILS (₪) | Mar. 08, 2016ILS (₪) | Mar. 07, 2016ILS (₪) | Mar. 02, 2016ILS (₪) | Mar. 01, 2016ILS (₪) | Jun. 30, 2018USD ($)instrument |
Foreign currency option | Derivative instruments not designated as hedging instruments | |||||||
Debt Instrument [Line Items] | |||||||
Number of Instruments | instrument | 1 | ||||||
Notional amount | $ | $ 285,361,000 | ||||||
Bonds Payable | Series A Debentures | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity (in shares) | ₪ | ₪ 1,000,000,000 | ||||||
Interest rate during period | 4.25% | 4.25% | |||||
Proceeds from issuance of debt | $ 249,200,000 | ₪ 970,200,000 | ₪ 970,200,000 | ₪ 127,700,000 | ₪ 842,500,000 | ||
Principal installment payments required as percent of total debt | 20.00% | ||||||
Bonds Payable | Series A Debentures | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate during period | 4.25% |
DERIVATIVE INSTRUMENTS (Details
DERIVATIVE INSTRUMENTS (Details) ₪ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018USD ($)instrument | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)instrument | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($)instrument | Aug. 03, 2017ILS (₪) | |
Derivative [Line Items] | ||||||
Purchase of derivative | $ 163,000 | $ 107,000 | ||||
Foreign currency collars | ||||||
Derivative [Line Items] | ||||||
Gain (loss) recognized on derivatives | $ 7,800,000 | 19,000,000 | ||||
Foreign currency transaction gain (loss) | $ (12,300,000) | (10,200,000) | 13,400,000 | (26,100,000) | ||
Foreign currency option | ||||||
Derivative [Line Items] | ||||||
Gain (loss) recognized on derivatives | $ (2,200,000) | $ (4,300,000) | ||||
Interest Rate Cap | ||||||
Derivative [Line Items] | ||||||
Number of Instruments | instrument | 2 | 2 | ||||
Unrealized loss on derivatives | $ (62,000) | $ (31,000) | $ (31,000) | $ (88,000) | ||
Derivative instruments not designated as hedging instruments | Foreign currency collars | ||||||
Derivative [Line Items] | ||||||
Notional Amount | ₪ | ₪ 970.2 | |||||
Strike Price | 3.4 | |||||
Purchase of derivative | 3,400,000 | |||||
Derivative instruments not designated as hedging instruments | Foreign currency option | ||||||
Derivative [Line Items] | ||||||
Notional Amount | $ 285,361,000 | $ 285,361,000 | ||||
Number of Instruments | instrument | 1 | 1 | ||||
Derivative instruments not designated as hedging instruments | Foreign currency option | Prepaid expenses and other assets | ||||||
Derivative [Line Items] | ||||||
Number of Instruments | instrument | 1 | 1 | 1 | |||
Derivative Asset | $ 0 | $ 0 | $ 4,243,000 | |||
Derivative instruments not designated as hedging instruments | Interest Rate Cap | ||||||
Derivative [Line Items] | ||||||
Notional Amount | $ 46,875,000 | $ 46,875,000 | ||||
Maturity Date | Feb. 13, 2020 | |||||
Derivative instruments not designated as hedging instruments | Interest Rate Cap | Prepaid expenses and other assets | ||||||
Derivative [Line Items] | ||||||
Number of Instruments | instrument | 2 | 2 | 1 | |||
Derivative Asset | $ 146,000 | $ 146,000 | $ 14,000 | |||
Derivative instruments not designated as hedging instruments | Interest Rate Cap | One-month LIBOR | ||||||
Derivative [Line Items] | ||||||
Reference Rate | 3.00% | 3.00% | ||||
Derivative instruments not designated as hedging instruments | Interest Rate Cap 1 | ||||||
Derivative [Line Items] | ||||||
Notional Amount | $ 77,513,000 | $ 77,513,000 | ||||
Maturity Date | Mar. 5, 2021 | |||||
Derivative instruments not designated as hedging instruments | Interest Rate Cap 1 | One-month LIBOR | ||||||
Derivative [Line Items] | ||||||
Reference Rate | 3.50% | 3.50% |
FAIR VALUE DISCLOSURES (Narrati
FAIR VALUE DISCLOSURES (Narrative) (Details) - Available-for-sale Securities - Keppel-KBS US REIT - shares | Mar. 31, 2018 | Nov. 08, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Shares purchased (in shares) | 43,999,500 | 43,999,500 |
Lack of Marketability | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Shares purchased (in shares) | 21,999,750 | |
Level 1 | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Shares purchased (in shares) | 21,999,750 |
FAIR VALUE DISCLOSURES (Schedul
FAIR VALUE DISCLOSURES (Schedule of Face Value, Carrying Amounts and Fair Value) (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Real estate debt securities, Face Value | $ 17,500,000 | $ 17,500,000 |
Notes and bond payable, Face Value | 511,533,000 | 332,893,000 |
Series A Debentures | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes and bond payable, Face Value | 265,285,000 | 278,801,000 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Real estate debt securities, Value | 17,879,000 | 17,751,000 |
Notes and bond payable, Value | 507,452,000 | 330,727,000 |
Carrying Amount | Series A Debentures | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes and bond payable, Value | 259,764,000 | 272,316,000 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Real estate debt securities, Value | 17,461,000 | 17,386,000 |
Notes and bond payable, Value | 516,473,000 | 335,212,000 |
Fair Value | Series A Debentures | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes and bond payable, Value | $ 274,093,000 | $ 296,069,000 |
FAIR VALUE DISCLOSURES (Sched63
FAIR VALUE DISCLOSURES (Schedule of Assets and Liabilities at Fair Value) (Details) - Recurring Basis $ in Thousands | Jun. 30, 2018USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Real estate equity securities | $ 98,627 |
Asset derivative - foreign currency option | 0 |
Interest Rate Cap | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Asset derivative - interest rate caps | 146 |
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 | 79,885 |
Asset derivative - foreign currency option | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Interest Rate Cap | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Asset derivative - interest rate caps | 0 |
Significant Other Observable Inputs (Level 2) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Real estate equity securities | 18,742 |
Asset derivative - foreign currency option | 0 |
Significant Other Observable Inputs (Level 2) | Interest Rate Cap | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Asset derivative - interest rate caps | 146 |
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 - foreign currency option | 0 |
Significant Unobservable Inputs (Level 3) | Interest Rate Cap | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Asset derivative - interest rate caps | $ 0 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) $ in Thousands | Nov. 08, 2017property | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($) |
Related Party Transaction [Line Items] | ||||||
Payable as of | $ 39 | $ 39 | $ 26 | |||
Payment for administrative fees | 78 | $ 64 | 161 | $ 119 | ||
Singapore Portfolio | ||||||
Related Party Transaction [Line Items] | ||||||
Number of real estate properties disposed | property | 11 | |||||
Advisor and Dealer Manager | ||||||
Related Party Transaction [Line Items] | ||||||
Capitalized | 3,075 | 4,091 | 7,492 | 7,743 | ||
Payable as of | 39 | 39 | 26 | |||
Advisor and Dealer Manager | Asset management fees | ||||||
Related Party Transaction [Line Items] | ||||||
Expensed | 2,217 | 2,856 | 4,043 | 5,603 | ||
Payable as of | 0 | 0 | 0 | |||
Advisor and Dealer Manager | Reimbursable operating expenses | ||||||
Related Party Transaction [Line Items] | ||||||
Expensed | 115 | 64 | 198 | 133 | ||
Payable as of | 39 | 39 | 26 | |||
Advisor and Dealer Manager | Disposition fees | ||||||
Related Party Transaction [Line Items] | ||||||
Expensed | 0 | 785 | 0 | 785 | ||
Payable as of | 0 | 0 | 0 | |||
Advisor and Dealer Manager | Acquisition fees on real estate | ||||||
Related Party Transaction [Line Items] | ||||||
Capitalized | 734 | 0 | 3,094 | 836 | ||
Payable as of | 0 | 0 | 0 | |||
Advisor and Dealer Manager | Acquisition fees on real estate equity securities | ||||||
Related Party Transaction [Line Items] | ||||||
Capitalized | 9 | 386 | 157 | 386 | ||
Payable as of | 0 | 0 | $ 0 | |||
KBS Capital Advisors LLC | Evaluate certain strategic transactions | ||||||
Related Party Transaction [Line Items] | ||||||
Capitalized | $ 400 | |||||
KBS Capital Advisors LLC | Property insurance rebate | ||||||
Related Party Transaction [Line Items] | ||||||
Capitalized | $ 100 | $ 100 | $ 100 |
INVESTMENT IN UNCONSOLIDATED 65
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Investments in Unconsolidated Joint Ventures) (Details) $ in Thousands | Jun. 30, 2018USD ($)property | Dec. 31, 2017USD ($) |
Schedule of Equity Method Investments [Line Items] | ||
Investment Balance | $ 50,986 | $ 55,577 |
NIP Joint Venture | ||
Schedule of Equity Method Investments [Line Items] | ||
Number of Properties | property | 4 | |
Investment Balance | $ 2,514 | 3,674 |
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 | $ 4,058 | 7,160 |
353 Sacramento Joint Venture | ||
Schedule of Equity Method Investments [Line Items] | ||
Number of Properties | property | 1 | |
Ownership % | 55.00% | |
Investment Balance | $ 44,414 | $ 44,743 |
INVESTMENT IN UNCONSOLIDATED 66
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Narrative) (Details) $ in Thousands | May 18, 2012USD ($) | Jun. 30, 2018USD ($)ft² | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)ft² | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($) | Jul. 06, 2017 | May 02, 2014ft² |
Schedule of Equity Method Investments [Line Items] | ||||||||
Contributions to joint venture | $ 1,320 | $ 0 | ||||||
Investments in unconsolidated joint ventures | $ 50,986 | 50,986 | $ 55,577 | |||||
Income from unconsolidated joint venture | $ 131 | $ 0 | $ 185 | 1,869 | ||||
Rentable square feet | ft² | 3,800,000 | 3,800,000 | ||||||
Joint Venture | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Ownership interest | 55.00% | |||||||
Office Properties | 353 Sacramento | Disposed of by Sale | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Ownership interest | 45.00% | |||||||
110 William JV Partner | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Return of capital | $ 58,200 | |||||||
Capital distribution | 38,800 | |||||||
Migdal Members | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Ownership interest | 45.00% | |||||||
NIP Joint Venture | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Contributions to joint venture | $ 8,000 | |||||||
Investments in unconsolidated joint ventures | $ 2,514 | 2,514 | 3,674 | |||||
Distributions | 900 | 1,300 | 2,900 | |||||
Income from unconsolidated joint venture | 100 | 200 | 1,900 | |||||
Return of capital | $ 800 | $ 1,100 | $ 1,000 | |||||
NIP Joint Venture | Maximum | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Ownership interest | 5.00% | 5.00% | ||||||
110 William Joint Venture | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Ownership interest | 60.00% | 60.00% | ||||||
Investments in unconsolidated joint ventures | $ 4,058 | $ 4,058 | 7,160 | |||||
Rentable square feet | ft² | 928,157 | |||||||
Area of land | ft² | 0.8 | |||||||
Acquisition related costs | 1,500 | |||||||
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] | ||||||||
Contributions to joint venture | $ 1,300 | $ 1,300 | ||||||
Ownership interest | 55.00% | 55.00% | ||||||
Investments in unconsolidated joint ventures | $ 44,414 | $ 44,414 | $ 44,743 |
INVESTMENT IN UNCONSOLIDATED 67
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Summarized Financial Information - 110 William Joint Venture) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Balance Sheet Related Disclosures [Abstract] | |||||
Real estate assets, net of accumulated depreciation and amortization | $ 811,338 | $ 811,338 | $ 502,222 | ||
Total assets | 1,104,454 | 1,104,454 | 1,101,574 | ||
Other liabilities | 14,614 | 14,614 | 16,966 | ||
Total liabilities and equity | 1,104,454 | 1,104,454 | 1,101,574 | ||
Income Statement [Abstract] | |||||
Revenues | 25,290 | $ 40,237 | 44,925 | $ 78,233 | |
Operating, maintenance, and management | 7,571 | 11,299 | 13,058 | 22,207 | |
Real estate taxes and insurance | 3,435 | 5,415 | 5,773 | 10,152 | |
Depreciation and amortization | 9,042 | 15,307 | 16,307 | 29,908 | |
Interest expense | 7,819 | 10,324 | 14,410 | 19,709 | |
Total expenses | 22,223 | 49,005 | 48,779 | 97,799 | |
Net income (loss) attributable to common stockholders | 10,036 | 23,846 | (13,645) | 14,754 | |
Company’s equity in loss of unconsolidated joint venture | (2,373) | (1,622) | (4,751) | (1,776) | |
110 William Joint Venture | |||||
Balance Sheet Related Disclosures [Abstract] | |||||
Real estate assets, net of accumulated depreciation and amortization | 240,577 | 240,577 | 248,269 | ||
Other assets | 34,886 | 34,886 | 32,331 | ||
Total assets | 275,463 | 275,463 | 280,600 | ||
Notes payable, net | 263,377 | 263,377 | 260,108 | ||
Other liabilities | 7,745 | 7,745 | 11,016 | ||
Partners’ capital | 4,341 | 4,341 | 9,476 | ||
Total liabilities and equity | 275,463 | 275,463 | 280,600 | ||
Income Statement [Abstract] | |||||
Revenues | 9,951 | 9,322 | 19,760 | 17,714 | |
Operating, maintenance, and management | 2,296 | 2,370 | 4,763 | 4,766 | |
Real estate taxes and insurance | 1,655 | 1,472 | 3,290 | 3,088 | |
Depreciation and amortization | 4,126 | 4,381 | 8,345 | 7,614 | |
Interest expense | 4,418 | 3,799 | 8,535 | 5,198 | |
Total expenses | 12,495 | 12,022 | 24,933 | 20,666 | |
Other income | 24 | 14 | 38 | 28 | |
Net income (loss) attributable to common stockholders | (2,520) | (2,686) | (5,135) | (2,924) | |
Company’s equity in loss of unconsolidated joint venture | (1,522) | $ (1,622) | (3,102) | $ (1,776) | |
353 Sacramento Joint Venture | |||||
Balance Sheet Related Disclosures [Abstract] | |||||
Real estate assets, net of accumulated depreciation and amortization | 172,339 | 172,339 | 171,066 | ||
Other assets | 8,574 | 8,574 | 6,472 | ||
Total assets | 180,913 | 180,913 | 177,538 | ||
Notes payable, net | 94,191 | 94,191 | 89,423 | ||
Other liabilities | 6,393 | 6,393 | 7,313 | ||
Partners’ capital | 80,329 | 80,329 | 80,802 | ||
Total liabilities and equity | 180,913 | 180,913 | $ 177,538 | ||
Income Statement [Abstract] | |||||
Revenues | 2,627 | 5,296 | |||
Operating, maintenance, and management | 891 | 1,769 | |||
Real estate taxes and insurance | 605 | 1,217 | |||
Depreciation and amortization | 1,387 | 2,837 | |||
Interest expense | 1,348 | 2,587 | |||
Total expenses | 4,231 | 8,410 | |||
Net income (loss) attributable to common stockholders | (1,604) | (3,114) | |||
Company’s equity in loss of unconsolidated joint venture | $ (851) | $ (1,649) |
SUPPLEMENTAL CASH FLOW AND SI68
SUPPLEMENTAL CASH FLOW AND SIGNIFICANT NONCASH TRANSACTION DISCLOSURES (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Supplemental Disclosure of Cash Flow Information: | ||
Interest paid, net of capitalized interest of $1,282 and $1,142 for the six months ended June 30, 2018 and 2017, respectively | $ 12,247 | $ 16,257 |
Interest capitalized | 1,282 | 1,142 |
Application of escrow deposits to acquisition of real estate | 0 | 2,000 |
Increase in accrued improvements to real estate | 1,265 | 3,551 |
Distributions paid to common stockholders through common stock issuances pursuant to the dividend reinvestment plan | 964 | 5,817 |
Distributions paid to common stockholders through common stock issuances pursuant to the December 2017 special dividend | $ 150,299 | $ 0 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - KBS Capital Advisors LLC $ in Millions | Jun. 30, 2018USD ($) |
Related Party Transaction [Line Items] | |
Noncompounded return on invested capital as percent per year, percent | 7.00% |
Percent of net cash flows to be received by related party, percent | 15.00% |
Distributions paid from operating cash flows, annual return, percent | 7.00% |
Incentive Compensation | |
Related Party Transaction [Line Items] | |
Liabilities at fair value | $ 34 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ in Thousands | Jul. 17, 2018USD ($) | Jul. 02, 2018USD ($)a | Jun. 30, 2018USD ($) | Dec. 31, 2017USD ($) |
Subsequent Event [Line Items] | ||||
Real estate held for sale, net | $ 30,684 | $ 30,645 | ||
Central Building | ||||
Subsequent Event [Line Items] | ||||
Real estate held for sale, net | 32,600 | |||
Accumulated depreciation | $ 5,100 | |||
Subsequent Event | Central Building Mortgage Loan | ||||
Subsequent Event [Line Items] | ||||
Extinguishment of debt | $ 27,600 | |||
Subsequent Event | Park Highlands Undeveloped Land | Disposed of by Sale | ||||
Subsequent Event [Line Items] | ||||
Area of land sold | a | 83 | |||
Sale price | $ 18,200 | |||
Subsequent Event | Central Building | Disposed of by Sale | ||||
Subsequent Event [Line Items] | ||||
Sale price | $ 67,500 |