Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 04, 2019 | Jun. 30, 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-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 66,809,639 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 0 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Real estate held for investment, net | $ 649,868 | $ 346,173 |
Real estate held for sale, net | 31,252 | 186,694 |
Real estate equity securities | 73,876 | 90,063 |
Real estate debt securities, net | 10,859 | 17,751 |
Total real estate and real estate-related investments, net | 765,855 | 640,681 |
Cash and cash equivalents | 152,385 | 366,512 |
Restricted cash | 10,342 | 10,670 |
Investments in unconsolidated joint ventures | 44,869 | 55,577 |
Rents and other receivables, net | 12,292 | 7,111 |
Above-market leases, net | 3,377 | 0 |
Prepaid expenses and other assets | 13,123 | 12,735 |
Assets related to real estate held for sale, net | 2,746 | 8,288 |
Total assets | 1,004,989 | 1,101,574 |
Notes and bonds payable, net | ||
Notes and bonds payable related to real estate held for investment, net | 632,627 | 467,872 |
Notes payable related to real estate held for sale, net | 22,845 | 135,171 |
Total notes and bonds payable, net | 655,472 | 603,043 |
Accounts payable and accrued liabilities | 19,506 | 16,686 |
Due to affiliate | 36 | 26 |
Distribution payable | 0 | 187,914 |
Below-market leases, net | 5,005 | 2,582 |
Liabilities related to real estate held for sale, net | 0 | 261 |
Other liabilities | 21,006 | 16,966 |
Redeemable common stock payable | 10,000 | 8,595 |
Total liabilities | 711,025 | 836,073 |
Commitments and contingencies (Note 15) | ||
Redeemable common stock | 0 | 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, 66,822,861 and 52,053,817 shares issued and outstanding as of December 31, 2018 and 2017, respectively | 668 | 521 |
Additional paid-in capital | 547,770 | 388,800 |
Accumulated other comprehensive income | 0 | 25,146 |
Cumulative distributions and net income | (256,984) | (155,454) |
Total KBS Strategic Opportunity REIT, Inc. stockholders’ equity | 291,454 | 259,013 |
Noncontrolling interests | 2,510 | 1,970 |
Total equity | 293,964 | 260,983 |
Total liabilities and equity | $ 1,004,989 | $ 1,101,574 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 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) | 66,822,861 | 52,053,817 |
Common stock, shares outstanding (in shares) | 66,822,861 | 52,053,817 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues: | |||
Rental income | $ 72,334 | $ 110,690 | $ 106,330 |
Tenant reimbursements | 12,621 | 21,710 | 20,762 |
Other operating income | 2,812 | 4,001 | 3,387 |
Interest income from real estate debt securities | 2,018 | 1,782 | 110 |
Dividend income from real estate equity securities | 6,002 | 2,531 | 0 |
Interest income from real estate loan receivable | 0 | 0 | 3,655 |
Total revenues | 95,787 | 140,714 | 134,244 |
Expenses: | |||
Operating, maintenance, and management | 29,110 | 42,611 | 41,906 |
Real estate taxes and insurance | 11,762 | 17,404 | 16,887 |
Asset management fees to affiliate | 8,525 | 10,686 | 9,628 |
Real estate acquisition fees to affiliate | 0 | 0 | 2,964 |
Real estate acquisition fees and expenses | 0 | 0 | 543 |
General and administrative expenses | 7,784 | 5,983 | 5,761 |
Foreign currency transaction (gain) loss, net | (10,141) | 15,298 | 2,997 |
Depreciation and amortization | 35,006 | 53,446 | 52,051 |
Interest expense | 31,054 | 37,149 | 29,249 |
Other-than-temporary impairment of debt securities | 2,500 | 0 | 0 |
Total expenses | 115,600 | 182,577 | 161,986 |
Other income (loss): | |||
Income from unconsolidated joint venture | 428 | 2,073 | 0 |
Equity in loss of unconsolidated joint ventures | (9,830) | (6,037) | (1,408) |
Other interest income | 1,884 | 1,105 | 44 |
Loss on real estate equity securities | (19,010) | 0 | 0 |
Gain on sale of real estate | 80,594 | 255,935 | 0 |
Loss on extinguishment of debt | (493) | (478) | 0 |
Total other income (loss), net | 53,573 | 252,598 | (1,364) |
Net income (loss) before income taxes | 33,760 | 210,735 | (29,106) |
Income tax provision | (436) | (155) | (20) |
Net income (loss) | 33,324 | 210,580 | (29,126) |
Net loss attributable to noncontrolling interests | 222 | 64 | 208 |
Net income (loss) attributable to common stockholders | $ 33,546 | $ 210,644 | $ (28,918) |
Net income (loss) per common share, basic and diluted (in dollars per share) | $ 0.57 | $ 3.77 | $ (0.50) |
Weighted-average number of common shares outstanding, basic and diluted (in shares) | 58,738,732 | 55,829,708 | 58,273,335 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 33,324 | $ 210,580 | $ (29,126) |
Other comprehensive income: | |||
Unrealized gain on real estate securities | 0 | 25,146 | 0 |
Total other comprehensive income | 0 | 25,146 | 0 |
Total comprehensive income (loss) | 33,324 | 235,726 | (29,126) |
Total comprehensive loss attributable to noncontrolling interests | 222 | 64 | 208 |
Total comprehensive income (loss) attributable to common stockholders | $ 33,546 | $ 235,790 | $ (28,918) |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Cumulative Distributions and Net Income | Accumulated Other Comprehensive Income | Total Stockholders’ Equity | Noncontrolling Interests |
Balance (in shares) at Dec. 31, 2015 | 58,696,115 | ||||||
Balance at Dec. 31, 2015 | $ 408,790 | $ 587 | $ 504,303 | $ (111,527) | $ 0 | $ 393,363 | $ 15,427 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (29,126) | (28,918) | (28,918) | (208) | |||
Other comprehensive income | 0 | ||||||
Issuance of common stock (in shares) | 938,662 | ||||||
Issuance of common stock | 12,616 | $ 9 | 12,607 | 12,616 | |||
Transfers from redeemable common stock | 957 | 957 | 957 | ||||
Redemptions of common stock (in shares) | (2,859,010) | ||||||
Redemptions of common stock | (38,573) | $ (28) | (38,545) | (38,573) | |||
Distributions declared | (21,844) | (21,844) | (21,844) | ||||
Acquisitions of noncontrolling interests | (37,986) | (23,942) | (23,942) | (14,044) | |||
Other offering costs | (7) | (7) | (7) | ||||
Noncontrolling interests contributions | 803 | 803 | |||||
Distributions to noncontrolling interests | (80) | (80) | |||||
Balance (in shares) at Dec. 31, 2016 | 56,775,767 | ||||||
Balance at Dec. 31, 2016 | 295,550 | $ 568 | 455,373 | (162,289) | 0 | 293,652 | 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 | $ 6 | 8,660 | 8,666 | |||
Transfers to redeemable common stock | (498) | (498) | (498) | ||||
Redemptions of common stock (in shares) | (5,307,142) | ||||||
Redemptions of common stock | (74,780) | $ (53) | (74,727) | (74,780) | |||
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 | $ 521 | 388,800 | (155,454) | 25,146 | 259,013 | 1,970 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Cumulative effect adjustments to retained earnings | 2,472 | 27,618 | (25,146) | 2,472 | |||
Net income (loss) | 33,324 | 33,546 | 33,546 | (222) | |||
Other comprehensive income | 0 | ||||||
Issuance of common stock (in shares) | 123,264 | ||||||
Issuance of common stock | 1,418 | $ 1 | 1,417 | 1,418 | |||
Stock distribution issued (in shares) | 25,976,746 | ||||||
Stock distribution issued | 278,210 | $ 259 | 277,951 | 278,210 | |||
Transfers from redeemable common stock | 3,113 | 3,113 | 3,113 | ||||
Redemptions of common stock (in shares) | (11,330,966) | ||||||
Redemptions of common stock | (123,613) | $ (113) | (123,500) | (123,613) | |||
Distributions declared | (162,694) | (162,694) | (162,694) | ||||
Other offering costs | (11) | (11) | (11) | ||||
Noncontrolling interests contributions | $ 762 | 762 | |||||
Balance (in shares) at Dec. 31, 2018 | 66,822,861 | 66,822,861 | |||||
Balance at Dec. 31, 2018 | $ 293,964 | $ 668 | $ 547,770 | $ (256,984) | $ 0 | $ 291,454 | $ 2,510 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash Flows from Operating Activities: | |||
Net income (loss) | $ 33,324 | $ 210,580 | $ (29,126) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Loss due to property damages | 964 | 668 | 1,938 |
Equity in loss of unconsolidated joint ventures | 9,830 | 6,037 | 1,408 |
Depreciation and amortization | 35,006 | 53,446 | 52,051 |
Other-than-temporary impairment of debt securities | 2,500 | 0 | 0 |
Loss on real estate equity securities | 19,010 | 0 | 0 |
Gain on sale of real estate | (80,594) | (255,935) | 0 |
Loss on extinguishment of debt | 493 | 478 | 0 |
Unrealized loss on interest rate caps | 142 | 105 | 3 |
Deferred rent | (4,736) | (2,416) | (3,084) |
Bad debt expense | 161 | 724 | 875 |
Amortization of above- and below-market leases, net | (1,152) | (2,575) | (2,330) |
Amortization of deferred financing costs | 3,640 | 4,363 | 4,289 |
Interest accretion on real estate debt securities | (108) | (565) | (47) |
Net amortization of discount and (premium) on bond and notes payable | 61 | 49 | 38 |
Foreign currency transaction (gain) loss, net | (10,141) | 15,298 | 2,997 |
Changes in assets and liabilities: | |||
Rents and other receivables | (1,801) | (1,810) | (2,128) |
Prepaid expenses and other assets | (7,375) | (5,995) | (8,498) |
Accounts payable and accrued liabilities | 3,387 | (4,270) | 5,809 |
Due to affiliates | 10 | (29) | (4) |
Other liabilities | (478) | (4,721) | 2,465 |
Net cash provided by operating activities | 2,143 | 13,432 | 26,656 |
Cash Flows from Investing Activities: | |||
Acquisitions of real estate | (312,348) | (165,465) | (293,831) |
Improvements to real estate | (32,172) | (41,224) | (30,581) |
Proceeds from sales of real estate, net | 250,576 | 872,091 | 0 |
Reimbursement of construction costs | 1,636 | 0 | 0 |
Escrow deposits for future real estate purchases | 0 | 0 | (2,000) |
Principal proceeds from assignment of real estate loan receivable | 0 | 0 | 27,850 |
Insurance proceeds received for property damages | 0 | 744 | 2,453 |
Purchase of interest rate caps | (163) | (107) | (15) |
Purchase of foreign currency option | 0 | (3,434) | 0 |
Proceeds from termination of foreign currency collars | 0 | 6,557 | 0 |
Contributions to unconsolidated joint venture | (1,320) | 0 | (2,820) |
Distribution of capital from unconsolidated joint venture | 2,198 | 59,800 | 0 |
Investment in real estate equity securities | (30,609) | (43,308) | 0 |
Proceeds from the sale of real estate equity securities | 27,786 | 0 | 0 |
Investment in real estate debt securities, net | 0 | (12,514) | (4,625) |
Proceeds from principal repayment on real estate debt securities | 4,500 | 0 | 0 |
Proceeds for future development obligations | 2,113 | 1,367 | 0 |
Funding of development obligations | (1,258) | (1,184) | (2,926) |
Net cash (used in) provided by investing activities | (89,061) | 673,323 | (306,495) |
Cash Flows from Financing Activities: | |||
Proceeds from notes and bonds payable | 223,425 | 187,204 | 564,336 |
Principal payments on notes and bonds payable | (152,516) | (477,089) | (154,802) |
Payments of deferred financing costs | (3,391) | (2,396) | (12,377) |
Payments to redeem common stock | (123,613) | (74,780) | (38,573) |
Payment of prepaid other offering costs | (562) | (480) | (865) |
Distributions paid | (70,980) | (7,229) | (9,228) |
Noncontrolling interests contributions | 762 | 158 | 803 |
Distributions to noncontrolling interests | 0 | (22) | (80) |
Acquisitions of noncontrolling interests | 0 | 0 | (37,986) |
Other financing proceeds, net | 0 | 0 | 647 |
Net cash (used in) provided by financing activities | (126,875) | (374,634) | 311,875 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (662) | 611 | 3,549 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (214,455) | 312,732 | 35,585 |
Cash, cash equivalents and restricted cash, beginning of period | 377,182 | 64,450 | 28,865 |
Cash, cash equivalents and restricted cash, end of period | $ 162,727 | $ 377,182 | $ 64,450 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 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, 2018 (the “Advisory Agreement”). The Advisor conducts the Company’s operations and manages its portfolio of real estate, real estate-related debt securities and other real estate-related investments. On January 8, 2009, the Company filed a registration statement on Form S-11 with the Securities and Exchange Commission (the “SEC”) to offer a minimum of 250,000 shares and a maximum of 140,000,000 shares of common stock for sale to the public (the “Offering”), of which 100,000,000 shares were registered in a primary offering and 40,000,000 shares were registered to be sold under the Company’s dividend reinvestment plan. The SEC declared the Company’s registration statement effective on November 20, 2009. The Company ceased offering shares of common stock in its primary offering on November 14, 2012 and continues to offer shares under its dividend reinvestment plan. The Company sold 56,584,976 shares of common stock in its primary offering for gross offering proceeds of $561.7 million . As of December 31, 2018 , the Company had sold 6,743,625 shares of common stock under its dividend reinvestment plan for gross offering proceeds of $75.5 million . Also, as of December 31, 2018 , the Company had redeemed 22,778,730 shares for $275.4 million . As of December 31, 2018 , the Company had issued 25,976,746 shares of common stock in connection with special dividends. 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. In connection with the above-referenced offering, on March 8, 2016, the Operating Partnership assigned to KBS Strategic Opportunity BVI all of its interests in the subsidiaries through which the Company indirectly owns all of its real estate and real estate-related investments. The Operating Partnership owns all of the issued and outstanding equity of KBS Strategic Opportunity BVI. As a result of these transactions, the Company now holds all of its real estate and real estate-related investments indirectly through KBS Strategic Opportunity BVI. As of December 31, 2018 , the Company consolidated six office properties, one office portfolio consisting of four office buildings and 14 acres of undeveloped land, one retail property, two apartment properties (of which one apartment property was held for sale) and three investments in undeveloped land with approximately 1,000 developable acres and 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 | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of the Company, REIT Holdings, the Operating Partnership, KBS Strategic Opportunity BVI and their direct and indirect wholly owned subsidiaries, and joint ventures in which the Company has a controlling interest. All significant intercompany balances and transactions are eliminated in consolidation. The consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. Reclassifications Certain amounts in the Company’s prior period consolidated financial statements have been reclassified to conform to the current period presentation. These reclassifications have not changed the results of operations of the prior period. During the year ended December 31, 2018 , the Company disposed of one office building and one office/flex/industrial portfolio consisting of 21 buildings and classified one apartment property as held for sale. As a result, certain assets and liabilities were reclassified to held for sale on the consolidated balance sheets for all periods presented. Revenue Recognition Real Estate The Company recognizes minimum rent, including rental abatements, lease incentives and contractual fixed increases attributable to operating leases, on a straight-line basis over the term of the related leases when collectibility is reasonably assured and records amounts expected to be received in later years as deferred rent receivable. If the lease provides for tenant improvements, the Company determines whether the tenant improvements, for accounting purposes, are owned by the tenant or the Company. When the Company is the owner of the tenant improvements, the tenant is not considered to have taken physical possession or have control of the physical use of the leased asset until the tenant improvements are substantially completed. When the tenant is the owner of the tenant improvements, any tenant improvement allowance (including amounts that can be taken in the form of cash or a credit against the tenant’s rent) that is funded is treated as a lease incentive and amortized as a reduction of revenue over the lease term. Tenant improvement ownership is determined based on various factors including, but not limited to: • whether the lease stipulates how a tenant improvement allowance may be spent; • whether the amount of a tenant improvement allowance is in excess of market rates; • whether the tenant or landlord retains legal title to the improvements at the end of the lease term; • whether the tenant improvements are unique to the tenant or general-purpose in nature; and • whether the tenant improvements are expected to have any residual value at the end of the lease. The Company records property operating expense reimbursements due from tenants for common area maintenance, real estate taxes, and other recoverable costs in the period the related expenses are incurred. The Company makes estimates of the collectibility of its tenant receivables related to base rents, including deferred rent, expense reimbursements and other revenue or income. Management specifically analyzes accounts receivable, deferred rents receivable, historical bad debts, customer creditworthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. In addition, with respect to tenants in bankruptcy, management makes estimates of the expected recovery of pre-petition and post-petition claims in assessing the estimated collectibility of the related receivable. In some cases, the ultimate resolution of these claims can exceed one year. When a tenant is in bankruptcy, the Company will record a bad debt reserve for the tenant’s receivable balance and generally will not recognize subsequent rental revenue until cash is received or until the tenant is no longer in bankruptcy and has the ability to make rental payments. 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 year ended December 31, 2018 , tenant reimbursements for substantial services accounted for under ASU No. 2014-09 was $1.9 million , which was 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 December 31, 2018 , the Company had recorded contract liabilities of $1.7 million and $3.1 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 Loans Receivable Interest income on the Company’s real estate loans receivable is recognized on an accrual basis over the life of the investment using the interest method. Direct loan origination or acquisition fees and costs, as well as acquisition premiums or discounts, are amortized over the term of the loan as an adjustment to interest income. The Company places loans on non-accrual status when any portion of principal or interest is 90 days past due, or earlier when concern exists as to the ultimate collection of principal or interest. When a loan is placed on non-accrual status, the Company reserves for any unpaid accrued interest and generally does not recognize subsequent interest income until cash is received, or the loan returns to accrual status. The Company will resume the accrual of interest if it determines the collection of interest, according to the contractual terms of the loan, is probable. The Company generally recognizes income on impaired loans on either a cash basis, where interest income is only recorded when received in cash, or on a cost-recovery basis, where all cash receipts are applied against the carrying value of the loan. The Company considers the collectibility of the loan’s principal balance in determining whether to recognize income on impaired loans on a cash basis or a cost-recovery basis. The Company will recognize interest income on loans purchased at discounts to face value where the Company expects to collect less than the contractual amounts due under the loan when that expectation is due, at least in part, to the credit quality of the borrower. Income is recognized at an interest rate equivalent to the estimated yield on the loan, as calculated using the carrying value of the loan and the expected cash flows. Changes in estimated cash flows are recognized through an adjustment to the yield on the loan on a prospective basis. Projecting cash flows for these types of loans requires a significant amount of assumptions and judgment, which may have a significant impact on the amount and timing of revenue recognized on these investments. The Company recognizes interest income on non-performing loans on a cash basis or cost-recovery basis since these loans generally do not have an estimated yield and collection of principal and interest is not assured. Real Estate Debt Securities Interest income on the Company’s real estate debt securities is recognized on an accrual basis over the life of the investment using the interest method. Direct origination or acquisition fees and costs, as well as acquisition premiums or discounts, are amortized over the term of the securities as an adjustment to interest income. Income is recognized at an interest rate equivalent to the estimated yield on the real estate debt security, as calculated using the carrying value of the real estate debt security and the expected cash flows. Changes in estimated cash flows are recognized through an adjustment to the yield on the real estate debt security on a prospective basis. Projecting cash flows for these types of real estate debt securities requires a significant amount of assumptions and judgment, which may have a significant impact on the amount and timing of revenue recognized on these investments. The Company places real estate debt securities on nonaccrual status when any portion of principal or interest is 90 days past due, or earlier when concern exists as to the ultimate collection of principal or interest. When a real estate debt security is placed on nonaccrual status, the Company reserves for any unpaid accrued interest and generally does not recognize subsequent interest income until cash is received, or the real estate debt security returns to accrual status. The Company will resume the accrual of interest if it determines that the collection of interest, according to the contractual terms of the real estate debt security, is probable. Real Estate Equity Securities Dividend income from real estate equity securities is recognized on an accrual basis based on eligible shares as of the ex-dividend date. Cash and Cash Equivalents The Company recognizes interest income on its cash and cash equivalents as it is earned and records such amounts as other interest income. Real Estate Depreciation and Amortization Real estate costs related to the acquisition and improvement of properties are capitalized and depreciated over the expected useful life of the asset on a straight-line basis. Repair and maintenance costs are charged to expense as incurred and significant replacements and betterments are capitalized. Repair and maintenance costs include all costs that do not extend the useful life of the real estate asset. The Company considers the period of future benefit of an asset to determine its appropriate useful life. Expenditures for tenant improvements are capitalized and amortized over the shorter of the tenant’s lease term or expected useful life. The Company anticipates the estimated useful lives of its assets by class to be generally as follows: Land N/A Buildings 25-40 years Building improvements 10-40 years Tenant improvements Shorter of lease term or expected useful life Tenant origination and absorption costs Remaining term of related leases, including below-market renewal periods Real Estate Acquisition Valuation As a result of the Company’s adoption of ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, acquisitions of real estate beginning January 1, 2017 could qualify as asset acquisitions (as opposed to business combinations). The Company records the acquisition of income-producing real estate or real estate that will be used for the production of income as a business combination or an asset acquisition. If substantially all of the fair value of the gross assets acquired are concentrated in a single identifiable asset or group of similar identifiable assets, then the set is not a business. For purposes of this test, land and buildings can be combined along with the intangible assets for any in-place leases and accordingly, most acquisitions of investment properties would not meet the definition of a business and would be accounted for as an asset acquisition. To be considered a business, a set must include an input and a substantive process that together significantly contributes to the ability to create an output. All assets acquired and liabilities assumed in a business combination are measured at their acquisition-date fair values. For asset acquisitions, the cost of the acquisition is allocated to individual assets and liabilities on a relative fair value basis. Acquisition costs associated with business combinations are expensed as incurred. Acquisition costs associated with asset acquisitions are capitalized. Intangible assets include the value of in-place leases, which represents the estimated value of the net cash flows of the in-place leases to be realized, as compared to the net cash flows that would have occurred had the property been vacant at the time of acquisition and subject to lease-up. Acquired in-place lease value will be amortized to expense over the average remaining terms of the respective in-place leases, including any below-market renewal periods. The Company assesses the acquisition date fair values of all tangible assets, identifiable intangibles and assumed liabilities using methods similar to those used by independent appraisers, generally utilizing a discounted cash flow analysis that applies appropriate discount and/or capitalization rates and available market information. Estimates of future cash flows are based on a number of factors, including historical operating results, known and anticipated trends, and market and economic conditions. The fair value of tangible assets of an acquired property considers the value of the property as if it were vacant. The Company records above-market and below-market in-place lease values for acquired properties based on the present value (using a discount that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of above-market in-place leases and for the initial term plus any extended term for any leases with below-market renewal options. The Company amortizes any recorded above-market or below-market lease values as a reduction or increase, respectively, to rental income over the remaining non-cancelable terms of the respective lease, including any below-market renewal periods. The Company estimates the value of tenant origination and absorption costs by considering the estimated carrying costs during hypothetical expected lease up periods, considering current market conditions. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods. The Company amortizes the value of tenant origination and absorption costs to depreciation and amortization expense over the remaining non-cancelable term of the leases. Estimates of the fair values of the tangible assets, identifiable intangibles and assumed liabilities require the Company to make significant assumptions to estimate market lease rates, property-operating expenses, carrying costs during lease-up periods, discount rates, market absorption periods, and the number of years the property will be held for investment. Direct investments in undeveloped land or properties without leases in place at the time of acquisition are accounted for as an asset acquisition. Acquisition fees and expenses are capitalized into the cost basis of an asset acquisition. Additionally, during the time in which the Company is incurring costs necessary to bring these investments to their intended use, certain costs such as legal fees, real estate taxes and insurance and financing costs are also capitalized. Impairment of Real Estate and Related Intangible Assets and Liabilities The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate and related intangible assets and liabilities may not be recoverable or realized. When indicators of potential impairment suggest that the carrying value of real estate and related intangible assets and liabilities may not be recoverable, the Company assesses the recoverability by estimating whether the Company will recover the carrying value of the real estate and related intangible assets and liabilities through its undiscounted future cash flows and its eventual disposition. If, based on this analysis, the Company does not believe that it will be able to recover the carrying value of the real estate and related intangible assets and liabilities, the Company would record an impairment loss to the extent that the carrying value exceeds the estimated fair value of the real estate and related intangible assets and liabilities. The Company did not record any impairment losses on its real estate and related intangible assets and liabilities during the years ended December 31, 2018 , 2017 and 2016 . Projecting future cash flows involves estimating expected future operating income and expenses related to the real estate and its related intangible assets and liabilities as well as market and other trends. Using inappropriate assumptions to estimate cash flows could result in incorrect fair values of the real estate and its related intangible assets and liabilities and could result in the overstatement of the carrying values of the Company’s real estate and related intangible assets and liabilities and an overstatement of its net income. Insurance Proceeds for Property Damages The Company maintains an insurance policy that provides coverage for property damages and business interruption. Losses due to physical damages are recognized during the accounting period in which they occur, while the amount of monetary assets to be received from the insurance policy is recognized when receipt of insurance recoveries is probable. Losses, which are reduced by the related probable insurance recoveries, are recorded as operating, maintenance and management expenses on the accompanying consolidated statements of operations. Anticipated proceeds in excess of recognized losses would be considered a gain contingency and recognized when the contingency related to the insurance claim has been resolved. Anticipated recoveries for lost rental revenue due to property damages are also considered to be a gain contingency and recognized when the contingency related to the insurance claim has been resolved. Real Estate Held for Sale and Discontinued Operations The Company generally considers real estate to be “held for sale” when the following criteria are met: (i) management commits to a plan to sell the property, (ii) the property is available for sale immediately, (iii) the property is actively being marketed for sale at a price that is reasonable in relation to its current fair value, (iv) the sale of the property within one year is considered probable and (v) significant changes to the plan to sell are not expected. Real estate that is held for sale and its related assets are classified as “real estate held for sale” and “assets related to real estate held for sale,” respectively, for all periods presented in the accompanying consolidated financial statements. Notes payable and other liabilities related to real estate held for sale are classified as “notes payable related to real estate held for sale” and “liabilities related to real estate held for sale,” respectively, for all periods presented in the accompanying consolidated financial statements. Real estate classified as held for sale is no longer depreciated and is reported at the lower of its carrying value or its estimated fair value less estimated costs to sell. Operating results and related gains on sale of properties that were disposed of or classified as held for sale in the ordinary course of business are included in continuing operations on the Company’s consolidated statements of operations. Real Estate Loans Receivable and Loan Loss Reserves The Company’s real estate loans receivable are recorded at amortized cost, net of loan loss reserves (if any), and evaluated for impairment at each balance sheet date. The amortized cost of a real estate loan receivable is the outstanding unpaid principal balance, net of unamortized acquisition premiums or discounts and unamortized costs and fees directly associated with the origination or acquisition of the loan. The amount of impairment, if any, will be measured by comparing the amortized cost of the loan to the present value of the expected cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the fair value of the collateral if the loan is collateral dependent and collection of principal and interest is not assured. If a loan is deemed to be impaired, the Company will record a loan loss reserve and a provision for loan losses to recognize impairment. As of December 31, 2018 and 2017 , the Company did not own any real estate loans receivable and the Company did not record any impairment losses related to its real estate loans receivable during the year ended December 31, 2016 . The reserve for loan losses is a valuation allowance that reflects management’s estimate of loan losses inherent in the loan portfolio as of the balance sheet date. The reserve is adjusted through “Provision for loan losses” on the Company’s consolidated statements of operations and is decreased by charge-offs to specific loans when losses are confirmed. The Company considers a loan to be impaired when, based upon current information and events, it believes that it is probable that the Company will be unable to collect all amounts due under the contractual terms of the loan agreement. If the Company purchases a loan at a discount to face value and at the acquisition date the Company expects to collect less than the contractual amounts due under the terms of the loan based, at least in part, on the Company’s assessment of the credit quality of the borrower, the Company will consider such a loan to be impaired when, based upon current information and events, it believes that it is probable that the Company will be unable to collect all amounts the Company estimated to be collected at the time of acquisition. The Company also considers a loan to be impaired if it grants the borrower a concession through a modification of the loan terms or if it expects to receive assets (including equity interests in the borrower) with fair values that are less than the carrying value of the loan in satisfaction of the loan. A reserve is established when the present value of payments expected to be received, observable market prices, the estimated fair value of the collateral (for loans that are dependent on the collateral for repayment) or amounts expected to be received in satisfaction of a loan are lower than the carrying value of that loan. Failure to recognize impairments would result in the overstatement of earnings and the carrying value of the Company’s real estate loans held for investment. Actual losses, if any, could significantly differ from estimated amounts. Real Estate Debt Securities The Company classifies its investment in real estate debt securities as held to maturity as the Company has the intent and ability to hold this investment until maturity. The Company’s real estate debt securities are recorded at amortized cost, net of other-than-temporary impairment (if any), and evaluated for other-than-temporary impairment at each balance sheet date. The amortized cost of a real estate debt security is the outstanding unpaid principal balance, net of unamortized acquisition premiums or discounts and unamortized costs and fees directly associated with the origination or acquisition of the real estate debt security. The amount of other-than-temporary impairment, if any, will be measured by comparing the amortized cost of the real estate debt security to the present value of the expected cash flows discounted at the real estate debt security’s effective interest rate, the real estate debt security’s observable market price, or the fair value of the collateral if the real estate debt security is collateral dependent and collection of principal and interest is not assured. If a real estate debt security is deemed to be other-than-temporarily impaired, the Company will record an other-than-temporary impairment on the consolidated statements of operations. During the year ended December 31, 2018 , the Company recorded an other-than-temporary impairment loss of $2.5 million related to its investment in real estate debt securities. See note 6 , “Real Estate Debt Securities” for a further discussion on the other-than-temporary impairment loss recorded by the Company. The Company did not record any other-than-temporary impairment losses related to its real estate debt securities during the years ended December 31, 2017 and 2016 . Real Estate Equity Securities The Company determines the appropriate classification for real estate equity securities at acquisition (on the trade date) and reevaluates such designation as of each balance sheet date. As of December 31, 2018 and 2017 , the Company classified its investments in real estate equity securities as available-for-sale as the Company intends to hold the securities for the purpose of collecting dividend income and for longer term price appreciation. These investments are carried at their estimated fair value based on quoted market prices for the security, net of any discounts for restrictions on the sale of the security. Any discount for lack of marketability is estimated using an option pricing model. Transaction costs that are directly attributable to the acquisition of real estate equity securities are capitalized to its cost basis. 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. Investments in Unconsolidated Joint Ventures Equity Method The Company accounts for investments in unconsolidated joint venture entities in which the Company may exercise significant influence over, but does not control, using the equity method of accounting. Under the equity method, the investment is initially recorded at cost and subsequently adjusted to reflect additional contributions or distributions and the Company’s proportionate share of equity in the joint venture’s income (loss). The Company recognizes its proportionate share of the ongoing income or loss of the unconsolidated joint venture as equity in income (loss) of unconsolidated joint venture on the consolidated statements of operations. On a quarterly basis, the Company evaluates its investment in an unconsolidated joint venture for other-than-temporary impairments. The Company did not record any impairment losses related to its unconsolidated real estate joint ventures accounted for under the equity method during the years ended December 31, 2018 , 2017 and 2016 . 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. The Company did not record any impairment losses related to its unconsolidated real estate joint ventures accounted for under the cost method during the years ended December 31, 2017 and 2016 . 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 December 31, 2018 , recorded its investment in the NIP Joint Venture at a cost basis of $3.7 million and $1.5 million , respectively. As of December 31, 2018 , the Company did not identify any indicators of impairment related to its investment in the NIP Joint Venture. Distributions of income from the NIP Joint Venture are recognized in other income. Distributions that exceed the Company’s share of earnings are applied to reduce the carrying value of the Company’s investment and any capita |
REAL ESTATE HELD FOR INVESTMENT
REAL ESTATE HELD FOR INVESTMENT | 12 Months Ended |
Dec. 31, 2018 | |
Real Estate [Abstract] | |
REAL ESTATE HELD FOR INVESTMENT | REAL ESTATE HELD FOR INVESTMENT As of December 31, 2018 , the Company owned six office properties, one office portfolio consisting of four office buildings and 14 acres of undeveloped land and one retail property encompassing, in the aggregate, approximately 3.0 million rentable square feet. As of December 31, 2018 , these properties were 74% occupied. In addition, the Company owned one apartment property containing 317 units and encompassing approximately 0.3 million rentable square feet, which was 95% occupied. The Company also owned three investments in undeveloped land with approximately 1,000 developable acres. The following table summarizes the Company’s real estate held for investment as of December 31, 2018 and 2017 , respectively (in thousands): December 31, 2018 December 31, 2017 Land $ 148,880 $ 110,102 Buildings and improvements 515,705 245,723 Tenant origination and absorption costs 31,584 15,962 Total real estate, cost 696,169 371,787 Accumulated depreciation and amortization (46,301 ) (25,614 ) Total real estate, net $ 649,868 $ 346,173 The following table provides summary information regarding the Company’s real estate held for investment as of December 31, 2018 (in thousands): Property Date Acquired or Foreclosed on City State Property Type Land Building and Improvements Tenant Origination and Absorption Total Real Estate, at Cost Accumulated Depreciation and Amortization Total Real Estate, Net Ownership % Richardson Portfolio: Palisades Central I 11/23/2011 Richardson TX Office 1,037 10,896 — 11,933 (2,796 ) 9,137 90.0% Palisades Central II 11/23/2011 Richardson TX Office 810 18,370 — 19,180 (4,352 ) 14,828 90.0% Greenway I 11/23/2011 Richardson TX Office 561 2,136 — 2,697 (745 ) 1,952 90.0% Greenway III 11/23/2011 Richardson TX Office 702 3,688 114 4,504 (1,209 ) 3,295 90.0% Undeveloped Land 11/23/2011 Richardson TX Undeveloped Land 3,134 — — 3,134 — 3,134 90.0% Total Richardson Portfolio 6,244 35,090 114 41,448 (9,102 ) 32,346 Park Highlands (1) 12/30/2011 North Las Vegas NV Undeveloped Land 30,603 — — 30,603 — 30,603 100.0% (1) Burbank Collection 12/12/2012 Burbank CA Retail 4,175 12,322 363 16,860 (2,559 ) 14,301 90.0% Park Centre 03/28/2013 Austin TX Office 3,251 28,038 — 31,289 (4,656 ) 26,633 100.0% 1180 Raymond 08/20/2013 Newark NJ Apartment 8,292 38,606 — 46,898 (6,618 ) 40,280 100.0% Park Highlands II (1) 12/10/2013 North Las Vegas NV Undeveloped Land 25,834 — — 25,834 — 25,834 100.0% (1) Richardson Land II 09/04/2014 Richardson TX Undeveloped Land 3,418 — — 3,418 — 3,418 90.0% Crown Pointe 02/14/2017 Dunwoody GA Office 22,590 65,110 5,342 93,042 (7,653 ) 85,389 100.0% 125 John Carpenter 09/15/2017 Irving TX Office 2,755 76,779 8,749 88,283 (5,690 ) 82,593 100.0% Marquette Plaza 03/01/2018 Minneapolis MN Office 10,387 74,676 4,271 89,334 (2,902 ) 86,432 100.0% City Tower 03/06/2018 Orange CA Office 13,930 130,895 7,959 152,784 (5,469 ) 147,315 100.0% Eight & Nine Corporate Centre 06/08/2018 Franklin TN Office 17,401 54,189 4,786 76,376 (1,652 ) 74,724 100.0% $ 148,880 $ 515,705 $ 31,584 $ 696,169 $ (46,301 ) $ 649,868 _____________________ (1) The Company owns 100% of the common members’ equity of Park Highlands and Park Highlands II. On September 7, 2016, a subsidiary of the Company that owns a portion of Park Highlands and Park Highlands II sold 820 units of 10% Class A non-voting preferred membership units for $0.8 million to accredited investors. The amount of the Class A non-voting preferred membership units raised, net of offering costs, is included in other liabilities on the accompanying consolidated balance sheets. Operating Leases Certain of the Company’s real estate properties are leased to tenants under operating leases for which the terms and expirations vary. As of December 31, 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 13.4 years with a weighted-average remaining term of 4.9 years. Some of the leases have provisions to extend the lease agreements, options for early termination after paying a specified penalty 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 $3.7 million and $4.3 million as of December 31, 2018 and 2017 , respectively. During the years ended December 31, 2018 , 2017 and 2016 , the Company recognized deferred rent from tenants of $4.7 million , $2.4 million and $ 3.1 million , respectively, net of lease incentive amortization. As of December 31, 2018 and 2017 , the cumulative deferred rent receivable balance, including unamortized lease incentive receivables, was $9.8 million and $5.0 million , respectively, and is included in rents and other receivables on the accompanying balance sheets. The cumulative deferred rent balance included $1.3 million and $0.6 million of unamortized lease incentives as of December 31, 2018 and 2017 , respectively. As of December 31, 2018 , the future minimum rental income from the Company’s properties, excluding apartment leases, under non-cancelable operating leases was as follows (in thousands): 2019 $ 52,261 2020 50,946 2021 46,439 2022 40,071 2023 34,839 Thereafter 104,476 $ 329,032 As of December 31, 2018 , the Company’s commercial real estate properties were leased to approximately 250 tenants over a diverse range of industries and geographic areas. The Company’s highest tenant industry concentrations (greater than 10% of annualized base rent) were as follows: Industry Number of Tenants Annualized Base Rent (1) Percentage of Health Care and Social Services 16 $ 6,716 12.1 % Insurance 21 5,997 10.8 % $ 12,713 22.9 % _____________________ (1) Annualized base rent represents annualized contractual base rental income as of December 31, 2018 , adjusted to straight-line any contractual tenant concessions (including free rent), rent increases and rent decreases from the lease’s inception through the balance of the lease term. No other tenant industries accounted for more than 10% of annualized base rent. No material tenant credit issues have been identified at this time. Geographic Concentration Risk As of December 31, 2018 , the Company’s real estate investments in California and Texas represented 16.1% and 14.4% , 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 and Texas real estate markets. Any adverse economic or real estate developments in these markets, such as business layoffs or downsizing, industry slowdowns, relocations of businesses, changing demographics and other factors, or any decrease in demand for office space resulting from the local business climate, could adversely affect the Company’s operating results and its ability to make distributions to stockholders. Recent Real Estate 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 Sales Park Highlands 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. 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 $18.7 million , excluding closing costs. The purchaser is not affiliated with the Company or the Advisor. The Company recognized a gain on sale of $12.6 million related to the land sale, which is net of deferred profit of $1.1 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. On October 16, 2018 , the Company sold approximately 15 developable acres of Park Highlands undeveloped land for an aggregate sales price of $3.5 million , excluding closing costs. The purchaser is not affiliated with the Company or the Advisor. The Company recognized a gain on sale of $2.8 million related to the land sale. |
TENANT ORIGINATION AND ABSORPTI
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES | 12 Months Ended |
Dec. 31, 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 December 31, 2018 and 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 December 31, 2018 December 31, 2017 December 31, 2018 December 31, 2017 December 31, 2018 December 31, 2017 Cost $ 31,584 $ 15,962 $ 3,714 $ — $ (6,653 ) $ (3,178 ) Accumulated Amortization (7,421 ) (2,833 ) (337 ) — 1,648 596 Net Amount $ 24,163 $ 13,129 $ 3,377 $ — $ (5,005 ) $ (2,582 ) Increases (decreases) in net income as a result of amortization of the Company’s tenant origination and absorption costs, above-market lease assets and below-market lease liabilities for the years ended December 31, 2018 , 2017 and 2016 were as follows (in thousands): Tenant Origination and Absorption Costs Above-Market Lease Assets Below-Market Lease Liabilities For the Years Ended December 31, For the Years Ended December 31, For the Years Ended December 31, 2018 2017 2016 2018 2017 2016 2018 2017 2016 Amortization $ (7,895 ) $ (10,265 ) $ (10,850 ) $ (361 ) $ (283 ) $ (459 ) $ 1,513 $ 2,858 $ 2,789 The remaining unamortized balance for these outstanding intangible assets and liabilities as of December 31, 2018 will be amortized for the years ending December 31 as follows (in thousands): Tenant Origination and Above-Market Below-Market 2019 $ (6,133 ) $ (404 ) $ 1,315 2020 (5,048 ) (314 ) 1,013 2021 (4,031 ) (297 ) 611 2022 (2,784 ) (297 ) 548 2023 (1,904 ) (297 ) 510 Thereafter (4,263 ) (1,768 ) 1,008 $ (24,163 ) $ (3,377 ) $ 5,005 Weighted-Average Remaining Amortization Period 5.5 years 11.1 years 5.6 years Additionally, as of December 31, 2018 and 2017 , the Company had recorded tax abatement intangible assets, net of amortization, on real estate held for investment, which are included in prepaid expenses and other assets in the accompanying balance sheets, of $1.6 million and $2.2 million , respectively. Also, as of December 31, 2018 and 2017 , the Company had recorded tax abatement intangible assets, net of amortization, on real estate held for sale, which are included in assets related to real estate held for sale, net in the accompanying balance sheets, of $2.7 million and $3.1 million , respectively. During each of the years ended December 31, 2018 , 2017 and 2016 , the Company recorded amortization expense of $1.0 million related to tax abatement intangible assets. |
REAL ESTATE EQUITY SECURITIES
REAL ESTATE EQUITY SECURITIES | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
REAL ESTATE EQUITY SECURITIES | REAL ESTATE EQUITY SECURITIES As of December 31, 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 December 31, 2018 and December 31, 2017 (dollars in thousands): December 31, 2018 December 31, 2017 Real Estate Equity Security Number of Shares Owned Total Carrying Value Number of Shares Owned Total Carrying Value Whitestone REIT 1,781,894 $ 21,846 3,603,189 $ 51,922 Keppel-KBS US REIT 56,979,352 34,757 43,999,500 38,141 Franklin Street Properties Corp. 2,772,529 17,273 — — 61,533,775 $ 73,876 47,602,689 $ 90,063 During the year ended December 31, 2018 , the Company purchased 2,772,529 shares of common stock of Franklin Street Properties Corp. (NYSE Ticker: FSP) for an aggregate purchase price of $22.3 million . During the year ended December 31, 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 . Also during the year ended December 31, 2018 , the Company sold 1,986,295 shares of common stock of Whitestone REIT for an aggregate sale price of $27.8 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 various subsidiaries of Keppel-KBS US REIT (the “SREIT”). The Company agreed not to sell, transfer or assign 21,999,750 units of the SREIT 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 December 31, 2017 , the Company recorded a lack of marketability discount of $1.7 million as a result of the Unit Lockout Periods. As of December 31, 2018 , the Unit Lockout Periods had expired and, accordingly, no discount was recorded. On November 26, 2018 , the Company acquired an additional 12,979,852 common units of the SREIT for $6.5 million in connection with the sale of the Westpark Portfolio to a wholly owned subsidiary of the SREIT. See note 7 , “Real Estate Dispositions” for a further discussion on the Company’s sale of the Westpark Portfolio. The following summarizes the portion of gain and loss for the period related to real estate equity securities held during the year ended December 31, 2018 (in thousands): Net loss recognized during the period on real estate equity securities $ (19,010 ) Less: Net loss recognized during the period on real estate equity securities sold during the period (837 ) Unrealized loss recognized during the reporting period on real estate equity securities still held at December 31, 2018 $ (18,173 ) During the years ended December 31, 2018 and 2017 , the Company recognized $6.0 million and $2.5 million , respectively, of dividend income from real estate equity securities. REAL ESTATE DEBT SECURITIES As of December 31, 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 December 31, 2018 and 2017 is set forth below (in thousands): Debt Securities Name Date Acquired Debt Securities Type Outstanding Principal Balance as of (1) Book Value as of (2) Book Value as of 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 $ 13,000 $ 10,859 $ 17,751 12.0 % 11.4 % 10/28/2019 _____________________ (1) Outstanding principal balance as of December 31, 2018 represents principal balance outstanding under the real estate debt securities. On October 31, 2018, the Company received a partial principal prepayment of the real estate debt securities in the amount of $4.5 million . (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, additional interest accretion and other-than-temporary impairment. (3) Contractual interest rate is the stated interest rate on the face of the real estate debt 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 December 31, 2018 . The following summarizes the activity related to real estate debt securities for the year ended December 31, 2018 (in thousands): Real estate debt securities - December 31, 2017 $ 17,751 Principal repayment (4,500 ) Deferred interest receivable and interest accretion 59 Accretion of commitment fee, net of closing costs 49 Other-than-temporary impairment (2,500 ) Real estate debt securities - December 31, 2018 $ 10,859 For the years ended December 31, 2018 , 2017 and 2016 , interest income from real estate debt securities consisted of the following (in thousands): For the Years Ended December 31, 2018 2017 2016 Contractual interest income $ 1,910 $ 1,217 $ 63 Interest accretion 59 315 30 Accretion of commitment fee, net of closing costs and acquisition fee 49 250 17 Interest income from real estate debt securities $ 2,018 $ 1,782 $ 110 During the year ended December 31, 2018 , the Company recorded an other-than-temporary impairment loss of $2.5 million related to its investment in real estate debt securities as the Company does not believe it is probable that the Company will collect 100% of the contractual cash flows due under the original terms as the issuer under the debt securities is experiencing deteriorating operating performance. The amount of other-than temporary impairment was measured by comparing the amortized cost of the real estate debt securities to the expected cash flows based on a probability-weighted measure over a range of potential outcomes discounted at a 12% discount rate. |
REAL ESTATE DEBT SECURITIES
REAL ESTATE DEBT SECURITIES | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
REAL ESTATE DEBT SECURITIES | REAL ESTATE EQUITY SECURITIES As of December 31, 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 December 31, 2018 and December 31, 2017 (dollars in thousands): December 31, 2018 December 31, 2017 Real Estate Equity Security Number of Shares Owned Total Carrying Value Number of Shares Owned Total Carrying Value Whitestone REIT 1,781,894 $ 21,846 3,603,189 $ 51,922 Keppel-KBS US REIT 56,979,352 34,757 43,999,500 38,141 Franklin Street Properties Corp. 2,772,529 17,273 — — 61,533,775 $ 73,876 47,602,689 $ 90,063 During the year ended December 31, 2018 , the Company purchased 2,772,529 shares of common stock of Franklin Street Properties Corp. (NYSE Ticker: FSP) for an aggregate purchase price of $22.3 million . During the year ended December 31, 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 . Also during the year ended December 31, 2018 , the Company sold 1,986,295 shares of common stock of Whitestone REIT for an aggregate sale price of $27.8 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 various subsidiaries of Keppel-KBS US REIT (the “SREIT”). The Company agreed not to sell, transfer or assign 21,999,750 units of the SREIT 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 December 31, 2017 , the Company recorded a lack of marketability discount of $1.7 million as a result of the Unit Lockout Periods. As of December 31, 2018 , the Unit Lockout Periods had expired and, accordingly, no discount was recorded. On November 26, 2018 , the Company acquired an additional 12,979,852 common units of the SREIT for $6.5 million in connection with the sale of the Westpark Portfolio to a wholly owned subsidiary of the SREIT. See note 7 , “Real Estate Dispositions” for a further discussion on the Company’s sale of the Westpark Portfolio. The following summarizes the portion of gain and loss for the period related to real estate equity securities held during the year ended December 31, 2018 (in thousands): Net loss recognized during the period on real estate equity securities $ (19,010 ) Less: Net loss recognized during the period on real estate equity securities sold during the period (837 ) Unrealized loss recognized during the reporting period on real estate equity securities still held at December 31, 2018 $ (18,173 ) During the years ended December 31, 2018 and 2017 , the Company recognized $6.0 million and $2.5 million , respectively, of dividend income from real estate equity securities. REAL ESTATE DEBT SECURITIES As of December 31, 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 December 31, 2018 and 2017 is set forth below (in thousands): Debt Securities Name Date Acquired Debt Securities Type Outstanding Principal Balance as of (1) Book Value as of (2) Book Value as of 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 $ 13,000 $ 10,859 $ 17,751 12.0 % 11.4 % 10/28/2019 _____________________ (1) Outstanding principal balance as of December 31, 2018 represents principal balance outstanding under the real estate debt securities. On October 31, 2018, the Company received a partial principal prepayment of the real estate debt securities in the amount of $4.5 million . (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, additional interest accretion and other-than-temporary impairment. (3) Contractual interest rate is the stated interest rate on the face of the real estate debt 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 December 31, 2018 . The following summarizes the activity related to real estate debt securities for the year ended December 31, 2018 (in thousands): Real estate debt securities - December 31, 2017 $ 17,751 Principal repayment (4,500 ) Deferred interest receivable and interest accretion 59 Accretion of commitment fee, net of closing costs 49 Other-than-temporary impairment (2,500 ) Real estate debt securities - December 31, 2018 $ 10,859 For the years ended December 31, 2018 , 2017 and 2016 , interest income from real estate debt securities consisted of the following (in thousands): For the Years Ended December 31, 2018 2017 2016 Contractual interest income $ 1,910 $ 1,217 $ 63 Interest accretion 59 315 30 Accretion of commitment fee, net of closing costs and acquisition fee 49 250 17 Interest income from real estate debt securities $ 2,018 $ 1,782 $ 110 During the year ended December 31, 2018 , the Company recorded an other-than-temporary impairment loss of $2.5 million related to its investment in real estate debt securities as the Company does not believe it is probable that the Company will collect 100% of the contractual cash flows due under the original terms as the issuer under the debt securities is experiencing deteriorating operating performance. The amount of other-than temporary impairment was measured by comparing the amortized cost of the real estate debt securities to the expected cash flows based on a probability-weighted measure over a range of potential outcomes discounted at a 12% discount rate. |
REAL ESTATE DISPOSITIONS
REAL ESTATE DISPOSITIONS | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
REAL ESTATE DISPOSITIONS | REAL ESTATE DISPOSITIONS During the year ended December 31, 2018 , the Company disposed of one office building and one office/flex/industrial portfolio consisting of 21 buildings. Additionally, as of December 31, 2018 , the Company classified one apartment property as held for sale. During the year ended December 31, 2017 , the Company disposed of 12 office properties. During the year ended December 31, 2016 , the Company did no t dispose of any real estate properties. On November 30, 2018 , the Company, through an indirect wholly owned subsidiary, sold the Westpark Portfolio to Keppel-KBS Westpark, LLC, a wholly owned subsidiary of the SREIT. The sale price, net of closing credits, of the Westpark Portfolio was $166.4 million , before third-party closing costs of approximately $3.2 million and excluding any disposition fees payable to the Company’s external advisor. On November 26, 2018 , the SREIT issued an aggregate of 186,236,224 common units of the SREIT as a result of their renounceable and underwritten rights issue. The Company purchased 12,979,852 common units of the SREIT for $6.5 million in connection with this offering, maintaining its 7% ownership interest. The Company recognized a gain on sale of $32.5 million related to the disposition of the Westpark Portfolio. 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. The carrying value of the Central Building as of the disposition date was $32.6 million , which was net of $5.6 million of accumulated depreciation and amortization. The Company recognized a gain on sale of $32.1 million related to the disposition of the Central Building. On November 8, 2017, the Company, through 11 wholly owned subsidiaries, sold 11 of its properties (the “Singapore Portfolio”) to various subsidiaries of the SREIT, a newly formed Singapore real estate investment trust that was listed on the Singapore Stock Exchange (the “Singapore Transaction”). The sale price of the Singapore Portfolio was $804.0 million , before third-party closing costs of approximately $7.7 million and excluding any disposition fees payable to the Advisor. The SREIT paid a portion of the purchase price with approximately 44 million units of the SREIT (SGX Ticker: CMOU) representing 7% of outstanding units of the SREIT. The Singapore Portfolio consists of the following properties: 1800 West Loop, Westech 360 (part of the Austin Suburban Portfolio), Great Hills Plaza (part of the Austin Suburban Portfolio), Westmoor Center, Iron Point Business Park, the Plaza Buildings, Bellevue Technology Center, Northridge Center I and II, West Loop I and II, Powers Ferry Landing East and Maitland Promenade II. The carrying value of the Singapore Portfolio as of the disposition date was $543.2 million , which was net of $103.0 million of accumulated depreciation and amortization. The disposition of the Singapore Portfolio resulted in a gain of $236.9 million , of which $17.1 million was deferred based on the Company’s percentage of the SREIT units owned, which reduced the carrying value of the SREIT units at closing. Additionally, the Company recognized a loss on extinguishment of debt of $0.5 million related to certain notes payable that were repaid in full with proceeds from the Singapore Transaction. On May 15, 2017, the Company sold 50 Congress Street to a purchaser unaffiliated with the Company or the Advisor for $79.0 million , or $78.8 million net of concessions and credits. The carrying value of 50 Congress Street as of the disposition date was $47.7 million , which was net of $5.9 million of accumulated depreciation and amortization. The Company recognized a gain on sale of $29.4 million related to the disposition of 50 Congress Street. The following summary presents the major components of assets and liabilities related to real estate held for sale as of December 31, 2018 and December 31, 2017 (in thousands): December 31, 2018 December 31, 2017 Assets related to real estate held for sale Real estate, cost $ 34,793 $ 202,897 Accumulated depreciation and amortization (3,541 ) (16,203 ) Real estate, net 31,252 186,694 Other assets 2,746 8,288 Total assets related to real estate held for sale $ 33,998 $ 194,982 Liabilities related to real estate held for sale Notes payable, net 22,845 135,171 Other liabilities — 261 Total liabilities related to real estate held for sale $ 22,845 $ 135,432 The operations of these properties and gain on sales are included in continuing operations on the accompanying statements of operations. The following table summarizes certain revenue and expenses related to these properties for the years ended December 31, 2018 , 2017 and 2016 (in thousands): Years Ended December 31, 2018 2017 2016 Revenues Rental income $ 14,418 $ 73,529 $ 80,950 Tenant reimbursements and other operating income 3,278 20,438 19,831 Total revenues $ 17,696 $ 93,967 $ 100,781 Expenses Operating, maintenance, and management $ 5,055 $ 27,464 $ 29,710 Real estate taxes and insurance 1,293 11,510 12,470 Asset management fees to affiliate 1,673 6,152 6,598 Real estate acquisition fees to affiliate — — 1,274 Real estate acquisition fees and expenses — — 275 Depreciation and amortization 7,578 36,922 41,454 Interest expense 5,568 17,115 16,196 Total expenses $ 21,167 $ 99,163 $ 107,977 |
NOTES AND BONDS PAYABLE
NOTES AND BONDS PAYABLE | 12 Months Ended |
Dec. 31, 2018 | |
Notes and Bonds Payable [Abstract] | |
NOTES AND BONDS PAYABLE | NOTES AND BONDS PAYABLE As of December 31, 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 December 31, 2018 Book Value as of December 31, 2017 Contractual Interest Rate as of December 31, 2018 (1) Effective Interest Rate at December 31, 2018 (1) Payment Type Maturity Date (2) Richardson Portfolio Mortgage Loan $ 36,000 $ 36,886 One-Month LIBOR + 2.50% 4.85% Interest Only (3) 11/01/2021 Park Centre Mortgage Loan 8,404 9,877 One-Month LIBOR + 2.25% 4.60% Principal & Interest 07/01/2019 Burbank Collection Mortgage Loan 10,716 10,958 One-Month LIBOR + 2.35% 4.73% Principal & Interest 09/30/2019 1180 Raymond Mortgage Loan 30,637 31,000 One-Month LIBOR + 2.25% 4.60% Principal & Interest 12/01/2019 1180 Raymond Bond Payable 6,280 6,460 6.50% 6.50% Principal & Interest 09/01/2036 Central Building Mortgage Loan — 27,600 (4) (4) (4) (4) 424 Bedford Mortgage Loan (5) 23,710 24,282 3.91% 3.91% Principal & Interest 10/01/2022 KBS SOR (BVI) Holdings, Ltd. Series A Debentures (6) 259,516 278,801 4.25% 4.25% (6) 03/01/2023 Westpark Portfolio Mortgage Loan (7) — 85,200 (7) (7) (7) (7) Crown Pointe Mortgage Loan 51,171 50,500 One-Month LIBOR + 2.60% 4.95% Interest Only 02/13/2020 125 John Carpenter Mortgage Loan 53,204 50,130 (8) 4.10% Interest Only 10/01/2022 City Tower Mortgage Loan 89,000 — One-Month LIBOR + 1.55% 3.90% Interest Only 03/05/2021 Marquette Plaza Mortgage Loan 50,800 — One-Month LIBOR + 1.55% 3.90% Interest Only 06/06/2021 Eight & Nine Corporate Centre Mortgage Loan 43,880 — One-Month LIBOR + 1.60% 3.95% Interest Only 06/08/2021 Total Notes and Bonds Payable principal outstanding 663,318 611,694 Net Premium/(Discount) on Notes and Bonds Payable (9) 198 137 Deferred financing costs, net (8,044 ) (8,788 ) Total Notes and Bonds Payable, net $ 655,472 $ 603,043 _____________________ (1) Contractual interest rate represents the interest rate in effect under the loan as of December 31, 2018 . Effective interest rate is calculated as the actual interest rate in effect as of December 31, 2018 (consisting of the contractual interest rate and contractual floor rates), using interest rate indices at December 31, 2018 , where applicable. (2) Represents the initial maturity date or the maturity date as extended as of December 31, 2018 ; subject to certain conditions, the maturity dates of certain loans may be extended beyond the date shown. (3) Represents the payment type required under the loan as of December 31, 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. (4) On July 17, 2018, in connection with the disposition of the Central Building, the Company repaid the $27.6 million outstanding principal balance due under the Central Building Mortgage Loan. (5) On January 11, 2019 , in connection with the disposition of 424 Bedford, the buyer assumed the mortgage loan secured by 424 Bedford with an outstanding principal balance of $23.7 million . (6) See “ - Israeli Bond Financing” below. (7) On November 30, 2018 , in connection with the disposition of the Westpark Portfolio, the Company repaid the $84.8 million outstanding principal balance due under the Westpark Portfolio Mortgage Loan. (8) 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. (9) Represents the unamortized premium/discount on notes and bonds payable due to the above- and below-market interest rates when the debt was assumed. The discount/premium is amortized over the remaining life of the notes and bonds payable. During the years ended December 31, 2018 , 2017 and 2016 , the Company incurred $31.1 million , $37.1 million and $29.2 million of interest expense, respectively. Included in interest expense for the years ended December 31, 2018 , 2017 and 2016 , was $3.6 million , $4.4 million and $4.3 million of amortization of deferred financing costs, respectively. Additionally, during the years ended December 31, 2018 , 2017 and 2016 , the Company capitalized $2.6 million , $2.3 million and $2.0 million of interest, respectively, to its investments in undeveloped land. As of December 31, 2018 and 2017 , the Company’s interest payable was $5.2 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 December 31, 2018 (in thousands): 2019 $ 102,469 2020 104,070 2021 272,311 2022 127,155 2023 52,158 Thereafter 5,155 $ 663,318 The Company’s notes payable contain financial debt covenants. As of December 31, 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 five equal annual installment principal payments on March 1st of each year from 2019 to 2023. On March 1, 2019 , the Company paid the first principal installment payment of 194.0 million Israeli new Shekels (approximately $53.6 million as of March 1, 2019 ). As of December 31, 2018 , the Company had one foreign currency collar for an aggregate notional amount of 776.2 million Israeli new Shekels 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 collar. The deed of trust that governs the terms of the Debentures contains various financial covenants. As of December 31, 2018 , the Company was in compliance with all of these financial debt covenants. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 12 Months Ended |
Dec. 31, 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. The following table summarizes the notional amount and other information related to the Company’s foreign currency collar and foreign currency option as of December 31, 2018 and 2017 . The notional amount is an indication of the extent of the Company’s involvement in each instrument at that time, but does not represent exposure to credit, interest rate or market risks (currency in thousands): December 31, 2018 December 31, 2017 Strike Price Trade Date Maturity Date Derivative Instruments Number of Instruments Notional Amount Number of Instruments Notional Amount Derivative instruments not designated as hedging instruments Foreign currency collar 1 776,182 ILS — — 3.54 - 3.66 ILS - USD 08/20/2018 02/28/2019 (1) Foreign currency option — $ — 1 $285,361 3.40 08/03/2017 08/03/2018 _____________________ (1) On February 27, 2019 , the Company entered into a foreign currency collar with an aggregate Israeli new Shekels notional amount of 776.2 million which expires on August 23, 2019 . The foreign currency collar consists of a purchased call option to buy Israeli new Shekels at 3.4860 and a sold put option to sell the Israeli new Shekels at 3.6185 . The foreign currency collar is intended to permit the Company to exchange, on the settlement date of the collar, 776.2 million Israeli new Shekels for an amount ranging from $214.5 million to $222.7 million . The Company enters into interest rate caps to mitigate its exposure to rising interest rates on its variable rate notes payable. The values of interest rate caps are primarily impacted by interest rates, market expectations about interest rates, and the remaining life of the instrument. In general, increases in interest rates, or anticipated increases in interest rates, will increase the value of interest rate caps. As the remaining life of an interest rate cap decreases, the value of the instrument will generally decrease towards zero. As of December 31, 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 December 31, 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 December 31, 2018 and 2017 (dollars in thousands): December 31, 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 $ 34 1 $ 14 Foreign currency option Prepaid expenses and other assets — $ — 1 $ 4,243 Foreign currency collar Other liabilities 1 $ (4,393 ) — $ — The change in fair value of foreign currency options and collars that are not designated as cash flow hedges are recorded as foreign currency transaction gains or losses in the accompanying consolidated statements of operations. During the year ended December 31, 2018 , the Company recognized an $8.7 million loss related to the foreign currency option and collars, which is shown net against $18.8 million of foreign currency transaction gain in the accompanying consolidated statements of operations as foreign currency transaction gain , net. During the year ended December 31, 2017 , the Company recognized a $11.3 million gain related to the foreign currency option and collars, which is shown net against $26.6 million of foreign currency transaction loss in the accompanying consolidated statements of operations as foreign currency transaction loss, net. During the year ended December 2016 , the Company recognized a $3.9 million loss related to the foreign currency collars, which is shown net against $0.9 million of foreign currency transaction gain in the accompanying consolidated statements of operations as foreign currency transaction loss, net. During each of the years ended December 31, 2018 and 2017 , the Company recorded an unrealized loss of $0.1 million on interest rate caps, which was included in interest expense on the accompanying consolidated statements of operations. |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 12 Months Ended |
Dec. 31, 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 December 31, 2017 , the Company owned 43,999,500 shares of common units of Keppel-KBS US REIT. The fair value measurement of these shares was based on a quoted price in an active market, adjusted for the lack of marketability during the Unit Lockout Periods. The Company utilized inputs, all of which were deemed to be significant, including the quoted stock price, risk-free rate and expected volatility, in determining the value of the shares and the Company notes that the most significant input in its valuation model is the quoted price in an active market. However, as the valuation of the stock is adjusted for the lack of marketability using market-corroborated inputs, the Company categorizes the measurement of such securities as Level 2 inputs. On each of May 8, 2018 and November 8, 2018 , 21,999,750 shares of common units of Keppel-KBS US REIT were transfered from Level 2 to Level 1 inputs as a result of the Unit Lockout Periods expiring. 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 debt securities, underlying collateral values (for collateral dependent securities) and estimated yield requirements of institutional investors for real estate debt securities with similar characteristics, including remaining term, type of collateral and other credit enhancements. The Company classifies these inputs as Level 3 inputs. Notes and bonds payable: The fair values of the Company’s notes and bonds payable are estimated using a discounted cash flow analysis based on management’s estimates of current market interest rates for instruments with similar characteristics, including remaining loan term, loan-to-value ratio, type of collateral and other credit enhancements. Additionally, when determining the fair value of liabilities in circumstances in which a quoted price in an active market for an identical liability is not available, the Company measures fair value using (i) a valuation technique that uses the quoted price of the identical liability when traded as an asset or quoted prices for similar liabilities or similar liabilities when traded as assets or (ii) another valuation technique that is consistent with the principles of fair value measurement, such as the income approach or the market approach. The Company classifies these inputs as Level 3 inputs. The Company’s bonds issued in Israel are publicly traded on the Tel-Aviv Stock Exchange. The Company used the quoted price as of December 31, 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 and collar is based on a Black-Scholes model tailored for currency derivatives. The following were the face values, carrying amounts and fair values of the Company’s financial instruments as of December 31, 2018 and 2017 , which carrying amounts do not approximate the fair values (in thousands): December 31, 2018 December 31, 2017 Face Value Carrying Amount Fair Value Face Value Carrying Amount Fair Value Financial assets: Real estate debt securities (1) $ 13,000 $ 10,859 $ 10,859 $ 17,500 $ 17,751 $ 17,386 Financial liabilities: Notes and bond payable $ 403,802 $ 400,470 $ 407,449 $ 332,893 $ 330,727 $ 335,212 KBS SOR (BVI) Holdings, Ltd. Series A Debentures $ 259,516 $ 255,002 $ 255,814 $ 278,801 $ 272,316 $ 296,069 _____________________ (1) Carrying amount of real estate debt securities includes other-than-temporary impairment. Disclosure of the fair value of financial instruments is based on pertinent information available to the Company as of the period end and requires a significant amount of judgment. This has made the estimation of fair values difficult and, therefore, both the actual results and the Company’s estimate of value at a future date could be materially different. As of December 31, 2018 , the Company measured the following assets at fair value (in thousands): Fair Value Measurements Using Total Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Recurring Basis: Real estate equity securities $ 73,876 $ 73,876 $ — $ — Asset derivative - interest rate caps $ 34 $ — $ 34 $ — Liability derivative - foreign currency collar $ (4,393 ) $ — $ (4,393 ) $ — |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 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. 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. On November 8, 2017, the Company sold the Singapore Portfolio to the SREIT. On November 30, 2018 , the Company sold the Westpark Portfolio to the SREIT. The SREIT is externally managed by a joint venture (the “Manager”) between (i) an entity in which Keith D. Hall, the Company’s Chief Executive Officer and a director, and Peter McMillan III, the Company’s President and Chairman of the board of directors, have an indirect ownership interest and (ii) Keppel Capital Holding Pte. Ltd., which is not affiliated with the Company. The SREIT is expected to pay certain purchase and sale commissions and asset management fees to the Manager in exchange for the provision of certain management services. During the years ended December 31, 2018 , 2017 and 2016 , no other business transactions occurred between the Company and these other KBS-sponsored programs. Pursuant to the terms of these agreements, summarized below are the related-party costs incurred by the Company for the years ended December 31, 2018 , 2017 and 2016 , respectively, and any related amounts payable as of December 31, 2018 and December 31, 2017 (in thousands): Incurred Payable as of December 31, 2018 2017 2016 2018 2017 Expensed Asset management fees $ 8,525 $ 10,686 $ 9,628 $ — $ — Acquisition fees on real estate (1) — — 2,964 — — Reimbursable operating expenses (2) 410 241 221 29 26 Disposition fees (3) 2,494 8,352 279 — — Capitalized Acquisition fees on real estate (1) 3,094 907 — — — Acquisition fees on real estate equity securities 239 429 — 7 — Acquisition fees on real estate debt securities — — 250 — — $ 14,762 $ 20,615 $ 13,342 $ 36 $ 26 _____________________ (1) As a result of the adoption of ASU No. 2017-01, the Company’s acquisitions of real estate properties beginning January 1, 2017 generally qualify as an asset acquisition (as opposed to a business combination). Acquisition fees associated with asset acquisitions will be capitalized, while costs associated with business combinations will continue to be expensed as incurred. (2) The Advisor may seek reimbursement for certain employee costs under the Advisory Agreement. The Company has reimbursed the Advisor for the Company’s allocable portion of the salaries, benefits and overhead of internal audit department personnel providing services to the Company. These amounts totaled $305,000 , $225,000 and $153,000 for the years ended December 31, 2018 , 2017 and 2016 , respectively, and were the only employee costs reimbursed under the Advisory Agreement during these periods. The Company will not reimburse for employee costs in connection with services for which the Advisor earns acquisition, origination or disposition fees (other than reimbursement of travel and communication expenses) or for the salaries or benefits the Advisor or its affiliates may pay to the Company’s executive officers. In addition to the amounts above, the Company reimburses the Advisor for certain of the Company’s direct costs incurred from third parties that were initially paid by the Advisor on behalf of the Company. (3) Disposition fees with respect to real estate sold are included in the gain on sale of real estate in the accompanying consolidated statements of operations. Disposition fees with respect to the assignment of the Company's real estate loan receivable are included in general and administrative expenses in the accompanying consolidated statements of operations. During the year ended December 31, 2018 , the Advisor reimbursed the Company $0.1 million for a property insurance rebate. During the year ended December 31, 2017 , the Advisor reimbursed the Company $0.4 million for expenses incurred to evaluate certain strategic transactions for which the Advisor has agreed to reimburse the Company and $0.1 million for a property insurance rebate. During the year ended December 31, 2016 , the Advisor reimbursed the Company $0.1 million for property insurance rebates and $0.1 million for legal and professional fees and travel expenses. On July 6, 2017, KBS SOR Properties, LLC, an indirect wholly owned affiliate of the Company, entered into (i) a Common Unit Purchase and Sale Agreement and Escrow Instructions with Migdal Insurance Company LTD., Migdal-Makefet Pension and Provident Funds LTD. and affiliates (the “Migdal Members”) (the “Purchase and Sale Agreement”), (ii) the Amended and Restated Limited Liability Company Agreement of KBS SOR Acquisition XXIX, LLC, (iii) an Investment Agreement with Migdal Members and Willowbrook Asset Management LLC, which is owned by Keith D. Hall and Peter McMillan III, who are principals of the Advisor and directors and officers of the Company (“WBAM”), and (iv) a waiver letter agreement with the Advisor (the “Waiver Agreement”). Pursuant to the Purchase and Sale Agreement, on July 6, 2017, KBS SOR Properties, LLC sold a 45% equity interest in an entity that owns an office building containing 284,751 rentable square feet located on approximately 0.35 acres of land in San Francisco, California (“353 Sacramento”) for approximately $39.1 million (the “353 Sacramento Transaction”) to the Migdal Members, third parties unaffiliated with the Company or the Advisor. The sale resulted in 353 Sacramento being owned by a joint venture (the “353 Sacramento Joint Venture”) in which the Company indirectly owns 55% of the equity interests and the Migdal Members indirectly own 45% in the aggregate of the equity interests. Pursuant to the Waiver Agreement, the Advisor waived any right it may have had to receive a disposition fee in connection with the 353 Sacramento Transaction and also waived its rights to future acquisition fees in an amount equal to 45% of the acquisition fees paid to the Advisor in connection with the Company’s original purchase of 353 Sacramento in July of 2016. Accordingly, the Advisor waived $0.8 million of acquisition fees for the purchase of an office property consisting of two office buildings containing an aggregate of 442,039 rentable square feet in Irving, Texas (“125 John Carpenter”). In connection with the 353 Sacramento Transaction, the Company paid a $0.1 million broker commission to Monarch Global Partners, LLC. The son of a member of the board of directors of KBS Strategic Opportunity BVI is a partner at Monarch Global Partners, LLC. Also in connection with the 353 Sacramento Transaction, the Migdal Members paid an acquisition fee of $0.2 million to WBAM and $0.2 million to the Company. |
INVESTMENT IN UNCONSOLIDATED JO
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES | 12 Months Ended |
Dec. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES | INVESTMENT IN UNCONSOLIDATED JOINT VENTURES As of December 31, 2018 and 2017 , the Company’s investments in unconsolidated joint ventures were composed of the following (dollars in thousands): Number of Properties at December 31, 2018 Investment Balance at Joint Venture Location Ownership % December 31, 2018 December 31, 2017 NIP Joint Venture 2 Various Less than 5.0% $ 1,476 $ 3,674 110 William Joint Venture 1 New York, New York 60.0% 325 7,160 353 Sacramento Joint Venture 1 San Francisco, California 55.0% 43,068 44,743 $ 44,869 $ 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 December 31, 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. During the year ended December 31, 2018 , the Company received aggregate distributions of $2.6 million related to its investment in the NIP Joint Venture. The Company recognized $0.4 million of income distributions and $2.2 million of return of capital from the NIP Joint Venture. During the year ended December 31, 2017 , the Company received a distribution of $3.7 million related to its investment in the NIP Joint Venture. The Company recognized $2.1 million of income distributions and $1.6 million of return of capital from the NIP Joint Venture. During the year ended December 31, 2016 , the Company did no t receive any distributions related to its investment in the NIP Joint Venture. Investment in 110 William Joint Venture On December 23, 2013, the Company, through an indirect wholly owned subsidiary, entered into an agreement with SREF III 110 William JV, LLC (the “110 William JV Partner”) to form a joint venture (the “110 William Joint Venture”). On May 2, 2014, the 110 William Joint Venture acquired an office property containing 928,157 rentable square feet located on approximately 0.8 acres of land in New York, New York (“110 William Street”). Each of the Company and the 110 William JV Partner hold a 60% and 40% ownership interest in the 110 William Joint Venture, respectively. The Company exercises significant influence over the operations, financial policies and decision making with respect to the 110 William Joint Venture but significant decisions require approval from both members. Accordingly, the Company has accounted for its investment in the 110 William Joint Venture under the equity method of accounting. Income, losses, contributions and distributions are generally allocated based on the members’ respective equity interests. As of December 31, 2018 and 2017 , the book value of the Company’s investment in the 110 William Joint Venture was $0.3 million and $7.2 million , respectively, which includes $1.4 million and $1.5 million , respectively, of unamortized acquisition fees and expenses incurred directly by the Company. During the years ended December 31, 2018 and 2016 , the Company did not receive any distributions related to its investment in the 110 William Joint Venture. During the year ended December 31, 2017 , the 110 William Joint Venture made a $58.2 million return of capital distribution to the Company and a $38.8 million return of capital distribution to the 110 William JV Partner funded with proceeds from the 110 William refinancing. Summarized financial information for the 110 William Joint Venture follows (in thousands): December 31, 2018 December 31, 2017 Assets: Real estate assets, net of accumulated depreciation and amortization $ 235,613 $ 248,269 Other assets 37,337 32,331 Total assets $ 272,950 $ 280,600 Liabilities and equity: Notes payable, net $ 267,311 $ 260,108 Other liabilities 7,485 11,016 Partners’ (deficit) capital (1,846 ) 9,476 Total Liabilities and equity $ 272,950 $ 280,600 For the Years Ended December 31, 2018 2017 2016 Revenues $ 38,539 $ 37,338 $ 33,458 Expenses: Operating, maintenance, and management 9,844 10,056 10,778 Real estate taxes and insurance 6,718 6,281 6,017 Depreciation and amortization 15,596 16,544 12,955 Interest expense 17,815 13,134 6,049 Total expenses 49,973 46,015 35,799 Total other income 112 56 63 Net loss $ (11,322 ) $ (8,621 ) $ (2,278 ) Company’s equity in loss of unconsolidated joint venture $ (6,835 ) $ (5,214 ) $ (1,408 ) 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. During the year ended December 31, 2018 , the Company made a $1.3 million contribution to the 353 Sacramento Joint Venture. During the year ended December 31, 2017 , the Company did no t receive any distributions related to its investment in the 353 Sacramento Joint Venture. Summarized financial information for the 353 Sacramento Joint Venture follows (in thousands): December 31, 2018 December 31, 2017 Assets: Real estate assets, net of accumulated depreciation and amortization $ 180,852 $ 171,066 Other assets 13,123 6,472 Total assets $ 193,975 $ 177,538 Liabilities and equity: Notes payable, net $ 105,593 $ 89,423 Other liabilities 10,863 7,313 Partners’ capital 77,519 80,802 Total liabilities and equity $ 193,975 $ 177,538 For the Year Ended December 31, 2018 For the Period from July 6, 2017 to December 31, 2017 Revenues $ 11,397 $ 7,053 Expenses: Operating, maintenance, and management 3,654 2,189 Real estate taxes and insurance 2,372 1,198 Depreciation and amortization 5,680 3,408 Interest expense 5,374 2,302 Total expenses 17,080 9,097 Net loss $ (5,683 ) $ (2,044 ) Company’s equity in loss of unconsolidated joint venture $ (2,995 ) $ (823 ) |
SUPPLEMENTAL CASH FLOW AND SIGN
SUPPLEMENTAL CASH FLOW AND SIGNIFICANT NONCASH TRANSACTION DISCLOSURES | 12 Months Ended |
Dec. 31, 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): Years Ended December 31, 2018 2017 2016 Supplemental Disclosure of Cash Flow Information: Interest paid, net of capitalized interest of $2,565, $2,339 and $2,025 for the years ended December 31, 2018, 2017 and 2016 , respectively $ 27,029 $ 32,688 20,759 Supplemental Disclosure of Significant Noncash Transactions: Assets and liabilities deconsolidated in connection with the 353 Sacramento partial sale: Real estate, net — 170,586 — Rents and other receivables, net — 1,244 — Prepaid expenses and other assets — 555 — Notes payable, net — 87,132 — Accounts payable and accrued liabilities — 1,574 — Below-market leases, net — 2,960 — Other liabilities — 924 — SREIT units received in connection with the Singapore Transaction — 38,720 — Increase in development obligations related to sale of real estate — 3,816 — Application of escrow deposits to acquisition of real estate — 2,000 — Increase in accrued improvements to real estate — — 3,547 Increase in redeemable common stock payable 1,405 — 8,902 Distributions paid to common stockholders through common stock issuances pursuant to the dividend reinvestment plan 1,418 8,666 12,616 Distributions paid to common stockholders through common stock issuances pursuant to the December 2017 special dividend 150,299 — — Distributions paid to common stockholders through common stock issuances pursuant to the November 2018 special dividend 127,911 — — |
SELECTED QUARTERLY FINANCIAL DA
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) Presented below is a summary of the unaudited quarterly financial information for the years ended December 31, 2018 and 2017 (in thousands, except per share amounts): 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 19,636 $ 25,290 $ 27,156 $ 23,705 Net (loss) income $ (23,702 ) $ 9,993 $ 36,421 $ 10,612 Net (loss) income attributable to common stockholders $ (23,681 ) $ 10,036 $ 36,497 $ 10,694 Net (loss) income per common share, basic and diluted $ (0.38 ) $ 0.16 $ 0.67 $ 0.19 Distributions declared per common share $ 0.016 $ 0.016 $ 0.016 $ 2.950 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 37,996 $ 40,237 $ 36,414 $ 26,067 Net (loss) income $ (9,058 ) $ 23,809 $ (10,542 ) $ 206,371 Net (loss) income attributable to common stockholders $ (9,092 ) $ 23,846 $ (10,534 ) $ 206,424 Net (loss) income per common share, basic and diluted $ (0.16 ) $ 0.42 $ (0.19 ) $ 3.88 Distributions declared per common share $ 0.092 $ 0.093 $ 0.095 $ 3.610 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 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 December 31, 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 $43 million as of December 31, 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 December 31, 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 | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS The Company evaluates subsequent events up until the date the consolidated financial statements are issued. Real Estate Disposition Subsequent to December 31, 2018 424 Bedford On January 11, 2019 , the 424 Bedford joint venture sold 424 Bedford to a purchaser unaffiliated with the Company or the Advisor, for $43.8 million before closing costs and credits. As of December 31, 2018 , the carrying value of 424 Bedford was $34.0 million , which was net of $5.3 million of accumulated depreciation and amortization. In connection with the disposition of 424 Bedford, the buyer assumed the mortgage loan secured by 424 Bedford with an outstanding principal balance of $23.7 million at the time of the sale. Distribution Declared On March 7 , 2019 , the Company’s board of directors authorized a distribution in the amount of $0.00860000 per share of common stock to stockholders of record as of the close of business on March 14 , 2019 . The Company expects to pay this distribution on March 19 , 2019 . 110 William Street Refinancing On March 7, 2019, the 110 William Joint Venture closed on refinancing of the 110 William Street existing loans (the “Refinancing”). The 110 William Joint Venture repaid $268.0 million of principal related to the existing 110 William Street loans. The Refinancing is comprised of a mortgage loan with Invesco CMI Investments, L.P., an unaffiliated lender, for borrowings of up to $261.4 million , which is secured by 110 William Street (the “110 William Street Mortgage Loan”) and a mezzanine loan with Invesco CMI Investments, L.P., an unaffiliated lender, for borrowings of up to $87.1 million (the “110 William Street Mezzanine Loan”). The 110 William Street Mortgage Loan is comprised of a senior mortgage loan of $215.5 million (the “Senior Mortgage Loan”) and an amended and restated building loan of $45.9 million (the “Building Loan”) to be use for future tenant improvements, leasing commissions and capital expenditures. The 110 William Street Mortgage Loan and the 110 William Street Mezzanine Loan mature on April 9, 2021, with three one -year extension options. The 110 William Street Mortgage Loan bears interest at a rate of the greater of (a) 3.5% or (b) 150 basis points over one-month LIBOR. The 110 William Street Mezzanine Loan bears interest at a rate of the greater of (a) 6.9% or (b) 490 basis points over one-month LIBOR. The 110 William Joint Venture entered into an interest rate cap that effectively limits one-month LIBOR at 3.75% on $348.5 million , effective March 7, 2019 through March 15, 2021 . The 110 William Street Mortgage Loan has monthly payments that are interest-only with the entire unpaid principal balance and all outstanding interest and fees due at maturity. The 110 William Joint Venture has the right to prepay the loans at any time in whole, but not in part, subject to a prepayment fee if prepaid prior to May 9, 2020 and subject to certain other conditions contained in the loan documents. At closing, $210.8 million of the Senior Mortgage Loan and $70.3 million of the 110 William Street Mezzanine Loan was funded with $4.7 million of the Senior Mortgage Loan, $45.9 million of the Building Loan and $16.8 million of the 110 William Street Mezzanine Loan available for future funding, subject to certain terms and conditions contained in the loan documents. |
SCHEDULE III REAL ESTATE ASSETS
SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION | 12 Months Ended |
Dec. 31, 2018 | |
SEC Schedule III, Real Estate and Accumulated Depreciation Disclosure [Abstract] | |
SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION | SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION December 31, 2018 (dollar amounts in thousands) Initial Cost to Company Gross Amount at which Carried at Close of Period Description Location Ownership Percent Encumbrances Land Building and Improvements (1) Total Cost Capitalized Subsequent to Acquisition (2) Land Building and Improvements (1) Total (3) Accumulated Depreciation and Amortization Original Date of Construction Date Properties Held for Investment Richardson Portfolio: Palisades Central I Richardson, TX 90.0% $ (4) $ 1,037 $ 8,628 $ 9,665 $ 2,268 $ 1,037 $ 10,896 $ 11,933 $ (2,796 ) 1980 11/23/2011 Palisades Central II Richardson, TX 90.0% (4) 810 17,117 17,927 1,253 810 18,370 19,180 (4,352 ) 1985 11/23/2011 Greenway I Richardson, TX 90.0% (4) 561 1,170 1,731 966 561 2,136 2,697 (745 ) 1983 11/23/2011 Greenway III Richardson, TX 90.0% (4) 702 4,083 4,785 (281 ) 702 3,802 4,504 (1,209 ) 1983 11/23/2011 Undeveloped Land Richardson, TX 90.0% — 1,997 — 1,997 1,137 3,134 — 3,134 — N/A 11/23/2011 Total Richardson Portfolio 36,000 5,107 30,998 36,105 5,343 6,244 35,204 41,448 (9,102 ) Park Highlands (5) North Las Vegas, NV 100.0% (5) — 17,066 — 17,066 13,537 30,603 — 30,603 — N/A 12/30/2011 Burbank Collection Burbank, CA 90.0% 10,716 4,175 8,799 12,974 3,886 4,175 12,685 16,860 (2,559 ) 2008 12/12/2012 Park Centre Austin, TX 100.0% 8,404 3,251 27,941 31,192 97 3,251 28,038 31,289 (4,656 ) 2000 03/28/2013 1180 Raymond Newark, NJ 100.0% 30,637 8,292 37,651 45,943 955 8,292 38,606 46,898 (6,618 ) 1929 08/20/2013 Park Highlands II (5) North Las Vegas, NV 100.0% (5) — 20,118 — 20,118 5,716 25,834 — 25,834 — N/A 12/10/2013 Richardson Land II Richardson, TX 90.0% — 3,096 — 3,096 322 3,418 — 3,418 — N/A 09/04/2014 Crown Pointe Dunwoody, GA 100.0% 51,171 22,590 62,610 85,200 7,842 22,590 70,452 93,042 (7,653 ) 1985/1989 02/14/2017 125 John Carpenter Irving, TX 100.0% 53,204 2,755 82,550 85,305 2,978 2,755 85,528 88,283 (5,690 ) 1982/1983 09/15/2017 Marquette Plaza Minneapolis, MN 100.0% 50,800 10,387 75,878 86,265 3,069 10,387 78,947 89,334 (2,902 ) 1972 03/01/2018 City Tower Orange, CA 100.0% 89,000 13,930 136,068 149,998 2,786 13,930 138,854 152,784 (5,469 ) 1988 03/06/2018 Eight & Nine Corporate Centre Franklin, TN 100.0% 43,880 17,401 58,794 76,195 181 17,401 58,975 76,376 (1,652 ) 2007 06/08/2018 Total Properties Held for Investment $ 128,168 $ 521,289 $ 649,457 $ 46,712 $ 148,880 $ 547,289 $ 696,169 $ (46,301 ) Property Held for Sale 424 Bedford Brooklyn, NY 90.0% 23,710 8,860 24,820 33,680 1,113 8,860 25,933 34,793 (3,541 ) 2010 01/31/2014 Total Property Held for Sale $ 8,860 $ 24,820 $ 33,680 $ 1,113 $ 8,860 $ 25,933 $ 34,793 $ (3,541 ) Total Properties $ 137,028 $ 546,109 $ 683,137 $ 47,825 $ 157,740 $ 573,222 $ 730,962 $ (49,842 ) ____________________ (1) Building and improvements includes tenant origination and absorption costs. (2) Costs capitalized subsequent to acquisition is net of write-offs of fully depreciated/amortized assets. (3) The aggregate cost of real estate for federal income tax purposes was $866.5 million (unaudited) as of December 31, 2018 . (4) As of December 31, 2018 , $36.0 million of debt was outstanding secured by the Richardson Portfolio. (5) The Company owns 100% of the common members’ equity of Park Highlands and Park Highlands II. On September 7, 2016, a subsidiary of the Company that owns a portion of Park Highlands and Park Highlands II, sold 820 units of 10% Class A non-voting preferred membership units for $0.8 million to accredited investors. The amount of the Class A non-voting preferred membership units raised, net of offering costs, is included in other liabilities on the accompanying consolidated balance sheets. SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION (CONTINUED) December 31, 2018 (dollar amounts in thousands) 2018 2017 2016 Real Estate (1) : Balance at the beginning of the year $ 574,684 $ 1,227,207 $ 914,074 Acquisitions 312,457 170,505 300,382 Improvements 31,818 37,219 33,909 Write-off of fully depreciated and fully amortized assets (7,329 ) (18,735 ) (19,220 ) Loss due to property damages (964 ) (668 ) (1,938 ) Sales (178,068 ) (664,114 ) — Reimbursement of construction costs (1,636 ) — — Deconsolidation — (176,730 ) — Balance at the end of the year $ 730,962 $ 574,684 $ 1,227,207 Accumulated depreciation and amortization (1) : Balance at the beginning of the year $ 41,817 $ 120,176 $ 91,560 Depreciation and amortization expense 32,661 48,994 47,836 Write-off of fully depreciated and fully amortized assets (7,329 ) (18,735 ) (19,220 ) Sales (17,307 ) (102,474 ) — Deconsolidation — (6,144 ) — Balance at the end of the year $ 49,842 $ 41,817 $ 120,176 ____________________ (1) Amounts include real estate held for sale. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | The consolidated financial statements include the accounts of the Company, REIT Holdings, the Operating Partnership, KBS Strategic Opportunity BVI and their direct and indirect wholly owned subsidiaries, and joint ventures in which the Company has a controlling interest. All significant intercompany balances and transactions are eliminated in consolidation. The consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC. |
Use of Estimates | The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. |
Reclassifications | Certain amounts in the Company’s prior period consolidated financial statements have been reclassified to conform to the current period presentation. These reclassifications have not changed the results of operations of the prior period. During the year ended December 31, 2018 , the Company disposed of one office building and one office/flex/industrial portfolio consisting of 21 buildings and classified one apartment property as held for sale. As a result, certain assets and liabilities were reclassified to held for sale on the consolidated balance sheets for all periods presented. |
Revenue Recognition, Real Estate | The Company recognizes minimum rent, including rental abatements, lease incentives and contractual fixed increases attributable to operating leases, on a straight-line basis over the term of the related leases when collectibility is reasonably assured and records amounts expected to be received in later years as deferred rent receivable. If the lease provides for tenant improvements, the Company determines whether the tenant improvements, for accounting purposes, are owned by the tenant or the Company. When the Company is the owner of the tenant improvements, the tenant is not considered to have taken physical possession or have control of the physical use of the leased asset until the tenant improvements are substantially completed. When the tenant is the owner of the tenant improvements, any tenant improvement allowance (including amounts that can be taken in the form of cash or a credit against the tenant’s rent) that is funded is treated as a lease incentive and amortized as a reduction of revenue over the lease term. Tenant improvement ownership is determined based on various factors including, but not limited to: • whether the lease stipulates how a tenant improvement allowance may be spent; • whether the amount of a tenant improvement allowance is in excess of market rates; • whether the tenant or landlord retains legal title to the improvements at the end of the lease term; • whether the tenant improvements are unique to the tenant or general-purpose in nature; and • whether the tenant improvements are expected to have any residual value at the end of the lease. The Company records property operating expense reimbursements due from tenants for common area maintenance, real estate taxes, and other recoverable costs in the period the related expenses are incurred. The Company makes estimates of the collectibility of its tenant receivables related to base rents, including deferred rent, expense reimbursements and other revenue or income. Management specifically analyzes accounts receivable, deferred rents receivable, historical bad debts, customer creditworthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. In addition, with respect to tenants in bankruptcy, management makes estimates of the expected recovery of pre-petition and post-petition claims in assessing the estimated collectibility of the related receivable. In some cases, the ultimate resolution of these claims can exceed one year. When a tenant is in bankruptcy, the Company will record a bad debt reserve for the tenant’s receivable balance and generally will not recognize subsequent rental revenue until cash is received or until the tenant is no longer in bankruptcy and has the ability to make rental payments. 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 year ended December 31, 2018 , tenant reimbursements for substantial services accounted for under ASU No. 2014-09 was $1.9 million , which was 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 December 31, 2018 , the Company had recorded contract liabilities of $1.7 million and $3.1 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. |
Revenue Recognition, Real Estate Loans Receivable | Interest income on the Company’s real estate loans receivable is recognized on an accrual basis over the life of the investment using the interest method. Direct loan origination or acquisition fees and costs, as well as acquisition premiums or discounts, are amortized over the term of the loan as an adjustment to interest income. The Company places loans on non-accrual status when any portion of principal or interest is 90 days past due, or earlier when concern exists as to the ultimate collection of principal or interest. When a loan is placed on non-accrual status, the Company reserves for any unpaid accrued interest and generally does not recognize subsequent interest income until cash is received, or the loan returns to accrual status. The Company will resume the accrual of interest if it determines the collection of interest, according to the contractual terms of the loan, is probable. The Company generally recognizes income on impaired loans on either a cash basis, where interest income is only recorded when received in cash, or on a cost-recovery basis, where all cash receipts are applied against the carrying value of the loan. The Company considers the collectibility of the loan’s principal balance in determining whether to recognize income on impaired loans on a cash basis or a cost-recovery basis. The Company will recognize interest income on loans purchased at discounts to face value where the Company expects to collect less than the contractual amounts due under the loan when that expectation is due, at least in part, to the credit quality of the borrower. Income is recognized at an interest rate equivalent to the estimated yield on the loan, as calculated using the carrying value of the loan and the expected cash flows. Changes in estimated cash flows are recognized through an adjustment to the yield on the loan on a prospective basis. Projecting cash flows for these types of loans requires a significant amount of assumptions and judgment, which may have a significant impact on the amount and timing of revenue recognized on these investments. The Company recognizes interest income on non-performing loans on a cash basis or cost-recovery basis since these loans generally do not have an estimated yield and collection of principal and interest is not assured. |
Revenue Recognition, Real Estate Debt Securities | Interest income on the Company’s real estate debt securities is recognized on an accrual basis over the life of the investment using the interest method. Direct origination or acquisition fees and costs, as well as acquisition premiums or discounts, are amortized over the term of the securities as an adjustment to interest income. Income is recognized at an interest rate equivalent to the estimated yield on the real estate debt security, as calculated using the carrying value of the real estate debt security and the expected cash flows. Changes in estimated cash flows are recognized through an adjustment to the yield on the real estate debt security on a prospective basis. Projecting cash flows for these types of real estate debt securities requires a significant amount of assumptions and judgment, which may have a significant impact on the amount and timing of revenue recognized on these investments. The Company places real estate debt securities on nonaccrual status when any portion of principal or interest is 90 days past due, or earlier when concern exists as to the ultimate collection of principal or interest. When a real estate debt security is placed on nonaccrual status, the Company reserves for any unpaid accrued interest and generally does not recognize subsequent interest income until cash is received, or the real estate debt security returns to accrual status. The Company will resume the accrual of interest if it determines that the collection of interest, according to the contractual terms of the real estate debt security, is probable. |
Revenue Recognition, Real Estate Equity Securities | Dividend income from real estate equity securities is recognized on an accrual basis based on eligible shares as of the ex-dividend date. |
Revenue Recognition, Cash and Cash Equivalents | The Company recognizes interest income on its cash and cash equivalents as it is earned and records such amounts as other interest income. |
Real Estate, Depreciation and Amortization | Real estate costs related to the acquisition and improvement of properties are capitalized and depreciated over the expected useful life of the asset on a straight-line basis. Repair and maintenance costs are charged to expense as incurred and significant replacements and betterments are capitalized. Repair and maintenance costs include all costs that do not extend the useful life of the real estate asset. The Company considers the period of future benefit of an asset to determine its appropriate useful life. Expenditures for tenant improvements are capitalized and amortized over the shorter of the tenant’s lease term or expected useful life. The Company anticipates the estimated useful lives of its assets by class to be generally as follows: Land N/A Buildings 25-40 years Building improvements 10-40 years Tenant improvements Shorter of lease term or expected useful life Tenant origination and absorption costs Remaining term of related leases, including below-market renewal periods |
Real Estate, Real Estate Acquisition Valuation | As a result of the Company’s adoption of ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, acquisitions of real estate beginning January 1, 2017 could qualify as asset acquisitions (as opposed to business combinations). The Company records the acquisition of income-producing real estate or real estate that will be used for the production of income as a business combination or an asset acquisition. If substantially all of the fair value of the gross assets acquired are concentrated in a single identifiable asset or group of similar identifiable assets, then the set is not a business. For purposes of this test, land and buildings can be combined along with the intangible assets for any in-place leases and accordingly, most acquisitions of investment properties would not meet the definition of a business and would be accounted for as an asset acquisition. To be considered a business, a set must include an input and a substantive process that together significantly contributes to the ability to create an output. All assets acquired and liabilities assumed in a business combination are measured at their acquisition-date fair values. For asset acquisitions, the cost of the acquisition is allocated to individual assets and liabilities on a relative fair value basis. Acquisition costs associated with business combinations are expensed as incurred. Acquisition costs associated with asset acquisitions are capitalized. Intangible assets include the value of in-place leases, which represents the estimated value of the net cash flows of the in-place leases to be realized, as compared to the net cash flows that would have occurred had the property been vacant at the time of acquisition and subject to lease-up. Acquired in-place lease value will be amortized to expense over the average remaining terms of the respective in-place leases, including any below-market renewal periods. The Company assesses the acquisition date fair values of all tangible assets, identifiable intangibles and assumed liabilities using methods similar to those used by independent appraisers, generally utilizing a discounted cash flow analysis that applies appropriate discount and/or capitalization rates and available market information. Estimates of future cash flows are based on a number of factors, including historical operating results, known and anticipated trends, and market and economic conditions. The fair value of tangible assets of an acquired property considers the value of the property as if it were vacant. The Company records above-market and below-market in-place lease values for acquired properties based on the present value (using a discount that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of above-market in-place leases and for the initial term plus any extended term for any leases with below-market renewal options. The Company amortizes any recorded above-market or below-market lease values as a reduction or increase, respectively, to rental income over the remaining non-cancelable terms of the respective lease, including any below-market renewal periods. The Company estimates the value of tenant origination and absorption costs by considering the estimated carrying costs during hypothetical expected lease up periods, considering current market conditions. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods. The Company amortizes the value of tenant origination and absorption costs to depreciation and amortization expense over the remaining non-cancelable term of the leases. Estimates of the fair values of the tangible assets, identifiable intangibles and assumed liabilities require the Company to make significant assumptions to estimate market lease rates, property-operating expenses, carrying costs during lease-up periods, discount rates, market absorption periods, and the number of years the property will be held for investment. Direct investments in undeveloped land or properties without leases in place at the time of acquisition are accounted for as an asset acquisition. Acquisition fees and expenses are capitalized into the cost basis of an asset acquisition. Additionally, during the time in which the Company is incurring costs necessary to bring these investments to their intended use, certain costs such as legal fees, real estate taxes and insurance and financing costs are also capitalized. |
Real Estate, Impairments of Real Estate and Related Intangible Assets and Liabilities | The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate and related intangible assets and liabilities may not be recoverable or realized. When indicators of potential impairment suggest that the carrying value of real estate and related intangible assets and liabilities may not be recoverable, the Company assesses the recoverability by estimating whether the Company will recover the carrying value of the real estate and related intangible assets and liabilities through its undiscounted future cash flows and its eventual disposition. If, based on this analysis, the Company does not believe that it will be able to recover the carrying value of the real estate and related intangible assets and liabilities, the Company would record an impairment loss to the extent that the carrying value exceeds the estimated fair value of the real estate and related intangible assets and liabilities. The Company did not record any impairment losses on its real estate and related intangible assets and liabilities during the years ended December 31, 2018 , 2017 and 2016 . Projecting future cash flows involves estimating expected future operating income and expenses related to the real estate and its related intangible assets and liabilities as well as market and other trends. Using inappropriate assumptions to estimate cash flows could result in incorrect fair values of the real estate and its related intangible assets and liabilities and could result in the overstatement of the carrying values of the Company’s real estate and related intangible assets and liabilities and an overstatement of its net income. |
Real Estate, Insurance Proceeds for Property Damages | The Company maintains an insurance policy that provides coverage for property damages and business interruption. Losses due to physical damages are recognized during the accounting period in which they occur, while the amount of monetary assets to be received from the insurance policy is recognized when receipt of insurance recoveries is probable. Losses, which are reduced by the related probable insurance recoveries, are recorded as operating, maintenance and management expenses on the accompanying consolidated statements of operations. Anticipated proceeds in excess of recognized losses would be considered a gain contingency and recognized when the contingency related to the insurance claim has been resolved. Anticipated recoveries for lost rental revenue due to property damages are also considered to be a gain contingency and recognized when the contingency related to the insurance claim has been resolved. |
Real Estate, Real Estate Held for Sale and Discontinued Operations | The Company generally considers real estate to be “held for sale” when the following criteria are met: (i) management commits to a plan to sell the property, (ii) the property is available for sale immediately, (iii) the property is actively being marketed for sale at a price that is reasonable in relation to its current fair value, (iv) the sale of the property within one year is considered probable and (v) significant changes to the plan to sell are not expected. Real estate that is held for sale and its related assets are classified as “real estate held for sale” and “assets related to real estate held for sale,” respectively, for all periods presented in the accompanying consolidated financial statements. Notes payable and other liabilities related to real estate held for sale are classified as “notes payable related to real estate held for sale” and “liabilities related to real estate held for sale,” respectively, for all periods presented in the accompanying consolidated financial statements. Real estate classified as held for sale is no longer depreciated and is reported at the lower of its carrying value or its estimated fair value less estimated costs to sell. Operating results and related gains on sale of properties that were disposed of or classified as held for sale in the ordinary course of business are included in continuing operations on the Company’s consolidated statements of operations. |
Loans Receivables and Loan Loss Reserves | The Company’s real estate loans receivable are recorded at amortized cost, net of loan loss reserves (if any), and evaluated for impairment at each balance sheet date. The amortized cost of a real estate loan receivable is the outstanding unpaid principal balance, net of unamortized acquisition premiums or discounts and unamortized costs and fees directly associated with the origination or acquisition of the loan. The amount of impairment, if any, will be measured by comparing the amortized cost of the loan to the present value of the expected cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the fair value of the collateral if the loan is collateral dependent and collection of principal and interest is not assured. If a loan is deemed to be impaired, the Company will record a loan loss reserve and a provision for loan losses to recognize impairment. As of December 31, 2018 and 2017 , the Company did not own any real estate loans receivable and the Company did not record any impairment losses related to its real estate loans receivable during the year ended December 31, 2016 . The reserve for loan losses is a valuation allowance that reflects management’s estimate of loan losses inherent in the loan portfolio as of the balance sheet date. The reserve is adjusted through “Provision for loan losses” on the Company’s consolidated statements of operations and is decreased by charge-offs to specific loans when losses are confirmed. The Company considers a loan to be impaired when, based upon current information and events, it believes that it is probable that the Company will be unable to collect all amounts due under the contractual terms of the loan agreement. If the Company purchases a loan at a discount to face value and at the acquisition date the Company expects to collect less than the contractual amounts due under the terms of the loan based, at least in part, on the Company’s assessment of the credit quality of the borrower, the Company will consider such a loan to be impaired when, based upon current information and events, it believes that it is probable that the Company will be unable to collect all amounts the Company estimated to be collected at the time of acquisition. The Company also considers a loan to be impaired if it grants the borrower a concession through a modification of the loan terms or if it expects to receive assets (including equity interests in the borrower) with fair values that are less than the carrying value of the loan in satisfaction of the loan. A reserve is established when the present value of payments expected to be received, observable market prices, the estimated fair value of the collateral (for loans that are dependent on the collateral for repayment) or amounts expected to be received in satisfaction of a loan are lower than the carrying value of that loan. Failure to recognize impairments would result in the overstatement of earnings and the carrying value of the Company’s real estate loans held for investment. Actual losses, if any, could significantly differ from estimated amounts. |
Real Estate Debt Securities | The Company classifies its investment in real estate debt securities as held to maturity as the Company has the intent and ability to hold this investment until maturity. The Company’s real estate debt securities are recorded at amortized cost, net of other-than-temporary impairment (if any), and evaluated for other-than-temporary impairment at each balance sheet date. The amortized cost of a real estate debt security is the outstanding unpaid principal balance, net of unamortized acquisition premiums or discounts and unamortized costs and fees directly associated with the origination or acquisition of the real estate debt security. The amount of other-than-temporary impairment, if any, will be measured by comparing the amortized cost of the real estate debt security to the present value of the expected cash flows discounted at the real estate debt security’s effective interest rate, the real estate debt security’s observable market price, or the fair value of the collateral if the real estate debt security is collateral dependent and collection of principal and interest is not assured. If a real estate debt security is deemed to be other-than-temporarily impaired, the Company will record an other-than-temporary impairment on the consolidated statements of operations. During the year ended December 31, 2018 , the Company recorded an other-than-temporary impairment loss of $2.5 million related to its investment in real estate debt securities. See note 6 , “Real Estate Debt Securities” for a further discussion on the other-than-temporary impairment loss recorded by the Company. The Company did not record any other-than-temporary impairment losses related to its real estate debt securities during the years ended December 31, 2017 and 2016 . |
Real Estate Equity Securities | The Company determines the appropriate classification for real estate equity securities at acquisition (on the trade date) and reevaluates such designation as of each balance sheet date. As of December 31, 2018 and 2017 , the Company classified its investments in real estate equity securities as available-for-sale as the Company intends to hold the securities for the purpose of collecting dividend income and for longer term price appreciation. These investments are carried at their estimated fair value based on quoted market prices for the security, net of any discounts for restrictions on the sale of the security. Any discount for lack of marketability is estimated using an option pricing model. Transaction costs that are directly attributable to the acquisition of real estate equity securities are capitalized to its cost basis. 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 Venture, Equity Method | The Company accounts for investments in unconsolidated joint venture entities in which the Company may exercise significant influence over, but does not control, using the equity method of accounting. Under the equity method, the investment is initially recorded at cost and subsequently adjusted to reflect additional contributions or distributions and the Company’s proportionate share of equity in the joint venture’s income (loss). The Company recognizes its proportionate share of the ongoing income or loss of the unconsolidated joint venture as equity in income (loss) of unconsolidated joint venture on the consolidated statements of operations. On a quarterly basis, the Company evaluates its investment in an unconsolidated joint venture for other-than-temporary impairments. The Company did not record any impairment losses related to its unconsolidated real estate joint ventures accounted for under the equity method during the years ended December 31, 2018 , 2017 and 2016 |
Investment in Unconsolidated Joint Venture, 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. The Company did not record any impairment losses related to its unconsolidated real estate joint ventures accounted for under the cost method during the years ended December 31, 2017 and 2016 . 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 December 31, 2018 , recorded its investment in the NIP Joint Venture at a cost basis of $3.7 million and $1.5 million , respectively. As of December 31, 2018 , the Company did not identify any indicators of impairment related to its investment in the NIP Joint Venture. Distributions of income from the NIP Joint Venture are recognized in other income. Distributions that exceed the Company’s share of earnings are applied to reduce the carrying value of the Company’s investment and any capital contributions would increase the carrying value of the Company’s investment. |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents may include cash and short-term investments. Cash and cash equivalents are stated at cost, which approximates fair value. There were no restrictions on the use of the Company’s cash and cash equivalents as of December 31, 2018 and 2017 . The Company’s cash and cash equivalents balance exceeded federally insurable limits as of December 31, 2018 . The Company monitors the cash balances in its operating accounts and adjusts the cash balances as appropriate; however, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, the Company has experienced no loss or lack of access to cash in its operating accounts. Restricted Cash Restricted cash is comprised of lender impound reserve accounts on the Company’s borrowings for security deposits, property taxes, insurance, debt service obligations and capital improvements and replacements. |
Rent and Other Receivables | The Company periodically evaluates the collectibility of amounts due from tenants and maintains an allowance for doubtful accounts for estimated losses resulting from the inability of tenants to make required payments under lease agreements. In addition, the Company maintains an allowance for deferred rent receivable that arises from the straight-lining of rents. The Company exercises judgment in establishing these allowances and considers payment history and current credit status of its tenants in developing these estimates. |
Deferred Financing Costs | Deferred financing costs represent commitment fees, loan fees, legal fees and other third-party costs associated with obtaining financing and are presented on the balance sheet as a direct deduction from the carrying value of the associated debt liability. These costs are amortized over the terms of the respective financing agreements using the effective interest method. Unamortized deferred financing costs are generally expensed when the associated debt is refinanced or repaid before maturity unless specific rules are met that would allow for the carryover of such costs to the refinanced debt. Deferred financing costs incurred before an associated debt liability is recognized are included in prepaid and other assets on the balance sheet. Costs incurred in seeking financing transactions that do not close are expensed in the period in which it is determined that the financing will not close. |
Fair Value Measurements | Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other non-financial and financial assets at fair value on a non-recurring basis (e.g., carrying value of impaired real estate loans receivable and long-lived assets). Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories: • Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; • Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and • Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable. When available, the Company utilizes quoted market prices from an independent third-party source to determine fair value and classifies such items in Level 1 or Level 2. The Company would classify items as Level 3 in instances where the market for a financial instrument is not active, regardless of the availability of a nonbinding quoted market price, observable inputs might not be relevant and could require the Company to make a significant adjustment to derive a fair value measurement. Additionally, in an inactive market, a market price quoted from an independent third party may rely more on models with inputs based on information available only to that independent third party. When the Company determines that the market for a financial instrument owned by the Company is illiquid or when market transactions for similar instruments do not appear orderly, the Company uses several valuation sources (including internal valuations, discounted cash flow analysis and quoted market prices) and establishes a fair value by assigning weights to the various valuation sources. Additionally, when determining the fair value of liabilities in circumstances in which a quoted price in an active market for an identical liability is not available, the Company measures fair value using (i) a valuation technique that uses the quoted price of the identical liability when traded as an asset or quoted prices for similar liabilities when traded as assets or (ii) another valuation technique that is consistent with the principles of fair value measurement, such as the income approach or the market approach. Changes in assumptions or estimation methodologies can have a material effect on these estimated fair values. In this regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, may not be realized in an immediate settlement of the instrument. The Company considers the following factors to be indicators of an inactive market: (i) there are few recent transactions, (ii) price quotations are not based on current information, (iii) price quotations vary substantially either over time or among market makers (for example, some brokered markets), (iv) indexes that previously were highly correlated with the fair values of the asset or liability are demonstrably uncorrelated with recent indications of fair value for that asset or liability, (v) there is a significant increase in implied liquidity risk premiums, yields, or performance indicators (such as delinquency rates or loss severities) for observed transactions or quoted prices when compared with the Company’s estimate of expected cash flows, considering all available market data about credit and other nonperformance risk for the asset or liability, (vi) there is a wide bid-ask spread or significant increase in the bid-ask spread, (vii) there is a significant decline or absence of a market for new issuances (that is, a primary market) for the asset or liability or similar assets or liabilities, and (viii) little information is released publicly (for example, a principal-to-principal market). The Company considers the following factors to be indicators of non-orderly transactions: (i) there was not adequate exposure to the market for a period before the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities under current market conditions, (ii) there was a usual and customary marketing period, but the seller marketed the asset or liability to a single market participant, (iii) the seller is in or near bankruptcy or receivership (that is, distressed), or the seller was required to sell to meet regulatory or legal requirements (that is, forced), and (iv) the transaction price is an outlier when compared with other recent transactions for the same or similar assets or liabilities. |
Dividend Reinvestment Plan | The Company has adopted a dividend reinvestment plan (the “DRP”) through which future common stockholders may elect to reinvest an amount equal to the distributions declared on their shares in additional shares of the Company’s common stock in lieu of receiving cash distributions. On May 12, 2015, the Company’s board of directors adopted a fifth amended and restated dividend reinvestment plan (the “Fifth Amended DRP”). Pursuant to the Fifth Amended DRP, shares may be purchased at a price equal to the estimated value per share most recently announced in a public filing. There were no other changes to the Fifth Amended DRP, which became effective on July 1, 2015. On December 8, 2015, the Company’s board of directors approved an estimated value per share of the Company’s common stock of $13.44 (unaudited) based on the estimated value of the Company’s assets less the estimated value of the Company’s liabilities, or net asset value, divided by the number of shares outstanding as of September 30, 2015. Commencing December 20, 2015, the purchase price per share under the DRP was $13.44 . On December 8, 2016, the Company’s board of directors approved an estimated value per share of the Company’s common stock of $14.81 (unaudited) based on the estimated value of the Company’s assets less the estimated value of the Company’s liabilities, or net asset value, divided by the number of shares outstanding as of September 30, 2016. Commencing December 25, 2016, the purchase price per share under the DRP was $14.81 . On December 7, 2017, the Company’s board of directors approved an estimated value per share of the Company’s common stock of $11.50 (unaudited) based on the estimated value of the Company’s assets less the estimated value of the Company’s liabilities, or net asset value, divided by the number of shares outstanding as of September 30, 2017, after giving effect to the December 7, 2017 declaration of a special dividend of $3.61 per share on the outstanding shares of the Company’s common stock to the stockholders of record as of the close of business on December 7, 2017 and the results of a self-tender. Commencing December 23, 2017, the purchase price per share under the DRP was $11.50 . The Company’s board of directors has determined that any portion of the special dividend that was paid in cash in January 2018 would not be used to purchase additional shares under the dividend reinvestment plan. No selling commissions or dealer manager fees will be paid on shares sold under the DRP. On November 12, 2018 , the Company’s board of directors approved an estimated value per share of the Company’s common stock of $ 9.91 (unaudited) based on the estimated value of the Company’s assets less the estimated value of the Company’s liabilities, or net asset value, divided by the number of shares outstanding as of September 30, 2018 , after giving effect to the November 12, 2018 declaration of a special dividend of $2.95 per share on the outstanding shares of the Company’s common stock to the stockholders of record as of the close of business on November 12, 2018 . Commencing November 25, 2018, the purchase price per share under the DRP was $ 9.91 . The Company’s board of directors has determined that any portion of the special dividend that was paid in cash in December 2018 would not be used to purchase additional shares under the dividend reinvestment plan. No selling commissions or dealer manager fees will be paid on shares sold under the DRP. |
Redeemable Common Stock | The Company has adopted a share redemption program that may enable stockholders to sell their shares to the Company in limited circumstances. Pursuant to the share redemption program there are several limitations on the Company’s ability to redeem shares: • Unless the shares are being redeemed in connection with a stockholder’s death, “qualifying disability” or “determination of incompetence” (each as defined under the share redemption program), the Company may not redeem shares until the stockholder has held the shares for one year. • During 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. During 2019 : • The Company may redeem no more than $2.0 million of shares in connection with a stockholder’s death, “qualifying disability” or “determination of incompetence.” • The Company may redeem no more than $2.0 million of shares per fiscal quarter, excluding shares redeemed in connection with a stockholder’s death, “qualifying disability” or “determination of incompetence.” To the extent any of such capacity is unused in a fiscal quarter, it will be carried over to the next fiscal quarter for redemption of shares excluding shares redeemed in connection with a stockholder’s death, “qualifying disability” or “determination of incompetence.” In addition, to the extent extra capacity from the bullet above is available with respect to redemptions in the last month of 2019 , such capacity will be made available for redemption of shares other than in connection with a stockholder’s death, “qualifying disability” or “determination of incompetence.” After 2019 : • During any calendar year, the Company may redeem only the number of shares that the Company can purchase with the amount of net proceeds from the sale of shares under the its dividend reinvestment plan during the prior calendar year; provided, however, that this limit may be increased or decreased by us upon ten business days’ notice to the Company’s stockholders. To the extent that the Company redeems less than the number of shares that the Company can purchase in any calendar year with the amount of net proceeds from the sale of shares under the Company’s dividend reinvestment plan during the prior calendar year plus any additional funds approved by the Company, such excess capacity to redeem shares during any calendar year shall be added to the Company’s capacity to otherwise redeem shares during the subsequent calendar year. Furthermore, during any calendar year, once the Company has received requests for redemptions, whether in connection with a stockholder’s death, “qualifying disability or “determination of incompetence”, or otherwise, that if honored, and when combined with all prior redemptions made during the calendar year, would result in the amount of remaining funds available for the redemption of additional shares in such calendar year being $1.0 million or less, the last $1.0 million of available funds shall be reserved exclusively for shares being redeemed in connection with a stockholder’s death, “qualifying disability or “determination of incompetence.” 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 amount of available funds reserved for such redemptions in accordance with the previous sentence, any excess funds may be used to redeem shares not in connection with a stockholder’s death, “qualifying disability or “determination of incompetence” during such month. • 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, in a given fiscal quarter, the Company redeems less than the sum of (a) $3.0 million of shares (excluding shares redeemed in connection with a stockholder’s death, “qualifying disability” or “determination of incompetence”) and (b) any excess capacity carried over to such fiscal quarter from a prior fiscal quarter as described below, any remaining excess capacity to redeem shares in such fiscal quarter will be added to our capacity to otherwise redeem shares (excluding shares redeemed in connection with a stockholder’s death, “qualifying disability” or “determination of incompetence”) during succeeding fiscal quarter. The Company may increase or decrease this limit upon ten business days’ notice to stockholders. 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). The Company cancelled all outstanding redemption requests under the share redemption program and did not accept any redemption requests under the share redemption program during the term of the Self-Tender. 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 mandatorily redeemable at the option of the holder and therefore their redemption will be outside the control of the Company. However, because the amounts that can be redeemed will be determinable and only contingent on an event that is likely to occur (e.g., the passage of time), the Company presents the net proceeds from the current year and prior year DRP, net of current year redemptions, as redeemable common stock in its consolidated balance sheets. The Company classifies as liabilities financial instruments that represent a mandatory obligation of the Company to redeem shares. The Company’s redeemable common shares are contingently redeemable at the option of the holder. When the Company determines it has a mandatory obligation to repurchase shares under the share redemption program, it will reclassify such obligations from temporary equity to a liability based upon their respective settlement values. The Company limits the dollar value of shares that may be redeemed under the program as described above. During the year ended December 31, 2018 , the Company had redeemed $19.1 million of common stock, of which $4.4 million relates to delayed December 2017 redemptions, under the share redemption program. The Company processed all redemption requests received in good order and eligible for redemption through the December 2018 redemption date, except for 2,199,077 shares totaling $20.7 million due to the limitations described above. The Company recorded $10.0 million and $8.6 million of redeemable common stock payable on the Company’s balance sheet as of December 31, 2018 and 2017 , respectively, related to unfulfilled redemption requests received in good order under the share redemption program. Based on the eleventh amended and restated share redemption program, the Company has $10.0 million available for redemptions during 2019 , including shares that are redeemed in connection with a stockholders’ death, “qualifying disability” or “determination of incompetence,” subject to the limitations described above. In addition to the redemptions under the program described above, during the year ended December 31, 2018, the Company repurchased an additional 33,163 shares of common stock at $10.93 per share for an aggregate price of $0.4 million . |
Related Party Transactions | Pursuant to the Advisory Agreement, the Company is obligated to pay the Advisor specified fees upon the provision of certain services related to the investment of funds in real estate and real estate-related investments, management of the Company’s investments and for other services (including, but not limited to, the disposition of investments). The Company is or was obligated to reimburse the Advisor for acquisition and origination expenses and certain operating expenses incurred on behalf of the Company or incurred in connection with providing services to the Company. In addition, the Advisor is entitled to certain other fees, including an incentive fee upon achieving certain performance goals, as detailed in the Advisory Agreement. See note 11 , “Related Party Transactions.” The Company records all related party fees as incurred, subject to any limitations described in the Advisory Agreement. The Company had not incurred any subordinated participation in net cash flows or subordinated incentive listing fees payable to the Advisor through December 31, 2018 . |
Related Party Transactions, Acquisition and Origination Fees | The Company pays the Advisor an acquisition and origination fee equal to 1% of the cost of investments acquired, or the amount funded by the Company to acquire or originate mortgage, mezzanine, bridge or other loans, including any acquisition and origination expenses related to such investments and any debt attributable to such investments. |
Related Party Transactions, Asset Management Fees | With respect to investments in loans and any investments other than real estate, the Company pays the Advisor a monthly fee calculated, each month, as one-twelfth of 0.75% of the lesser of (i) the amount paid or allocated to acquire or fund the loan or other investment, inclusive of acquisition and origination fees and expenses related thereto and the amount of any debt associated with or used to acquire or fund such investment and (ii) the outstanding principal amount of such loan or other investment, plus the acquisition and origination fees and expenses related to the acquisition or funding of such investment, as of the time of calculation. With respect to investments in real estate, the Company pays the Advisor a monthly asset management fee equal to one-twelfth of 0.75% of the amount paid or allocated to acquire the investment, including the cost of subsequent capital improvements, inclusive of acquisition fees and expenses related thereto and the amount of any debt associated with or used to acquire such investment. In the case of investments made through joint ventures, the asset management fee is determined based on the Company’s proportionate share of the underlying investment, inclusive of the Company’s proportionate share of any fees and expenses related thereto. |
Related Party Transactions, Disposition Fee | For substantial assistance in connection with the sale of properties or other investments, the Company pays the Advisor or its affiliates 1.0% of the contract sales price of each property or other investment sold; provided, however, in no event may the disposition fees paid to the Advisor, its affiliates and unaffiliated third parties exceed 6.0% of the contract sales price. |
Foreign Currency Transactions | The U.S. Dollar is the Company’s functional currency. Transactions denominated in currency other than the Company’s functional currency are recorded upon initial recognition at the exchange rate on the date of the transaction. After initial recognition, monetary assets and liabilities denominated in foreign currency are remeasured at each reporting date into the foreign currency at the exchange rate on that date. Exchange rate differences, other than those accounted for as hedging transactions, are recognized as foreign currency transaction gain or loss included in the Company’s consolidated statements of operations. |
Derivative Instruments | The Company enters into derivative instruments for risk management purposes to hedge its exposure to cash flow variability caused by changing interest rates on its variable rate notes payable and enters into derivative instruments such as cross currency swaps, forward contracts, puts or calls for risk management purposes to hedge its exposure to variability in foreign currency exchange rates of the Israeli new Shekel versus the U.S. Dollar. The Company records these derivative instruments at fair value on the accompanying consolidated balance sheets. Derivative instruments designated and qualifying as a hedge of the exposure to variability in expected future cash flows or other types of forecasted transactions are considered cash flow hedges. The change in fair value of the effective portion of a derivative instrument that is designated as a cash flow hedge is recorded as other comprehensive income (loss) on the accompanying consolidated statements of comprehensive income (loss) and consolidated statements of stockholders’ equity. The changes in fair value for derivative instruments that are not designated as a hedge or that do not meet the hedge accounting criteria are recorded as gain or loss on derivative instruments and included in earnings in the accompanying consolidated statements of operations. |
Income Taxes | The Company has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended. To qualify as a REIT, the Company must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of the Company’s annual REIT taxable income to its stockholders (which is computed without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). As a REIT, the Company generally will not be subject to federal income tax to the extent it distributes qualifying dividends to its stockholders. The Company conducts certain business activities through taxable REIT subsidiaries. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income tax on its taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four taxable years following the year during which qualification is lost unless the Internal Revenue Service grants the Company relief under certain statutory provisions. Such an event could materially and adversely affect the Company’s net income and net cash available for distribution to stockholders. However, the Company intends to organize and operate in such a manner as to qualify for treatment as a REIT. The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases, and for net operating loss, capital loss and tax credit carryforwards. The deferred tax assets and liabilities are measured using the enacted income tax rates in effect for the year in which those temporary differences are expected to be realized or settled. The effect on the deferred tax assets and liabilities from a change in tax rates is recognized in earnings in the period when the new rate is enacted. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on consideration of all available evidence, including the future reversals of existing taxable temporary differences, future projected taxable income and tax planning strategies. Valuation allowances are provided if, based upon the weight of the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company has concluded that there are no significant uncertain tax positions requiring recognition in its financial statements. Neither the Company nor its subsidiaries have been assessed interest or penalties by any major tax jurisdictions. The Company’s evaluations were performed for all open tax years through December 31, 2018 . As of December 31, 2018 , returns for the calendar year 2014 through 2017 remain subject to examination by major tax jurisdictions. |
Segments | The Company has invested in non-performing loans, opportunistic real estate and other real estate-related assets. In general, the Company intends to hold its investments in opportunistic real estate, non-performing loans and other real estate-related assets for capital appreciation. Traditional performance metrics of non-performing loans, opportunistic real estate and other real estate-related assets may not be meaningful as these investments are generally non-stabilized and do not provide a consistent stream of interest income or rental revenue. These investments exhibit similar long-term financial performance and have similar economic characteristics. These investments typically involve a higher degree of risk and do not provide a constant stream of ongoing cash flows. As a result, the Company’s management views opportunistic real estate, non-performing loans and other real estate-related assets as similar investments. Substantially all of its revenue and net income (loss) is from non-performing loans, opportunistic real estate and other real estate-related assets, and therefore, the Company currently aggregates its operating segments into one reportable business segment. |
Per Share Data | Basic net income (loss) per share of common stock is calculated by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock issued and outstanding during such period. Diluted net income (loss) per share of common stock equals basic net income (loss) per share of common stock as there were no potentially dilutive securities outstanding during the years ended December 31, 2018 , 2017 and 2016 . Distributions declared per share were $3.00 , $3.89 and $0.38 during the years ended December 31, 2018 , 2017 and 2016 , respectively. |
Square Footage, Occupancy and Other Measures | Square footage, occupancy, number of tenants and other measures including annualized base rents and annualized base rents per square foot used to describe real estate and real-estate related investments included in these Notes to Consolidated Financial Statements are presented on an unaudited basis. |
Recently Issued Accounting Standards Update | In 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. Upon its adoption of ASU No. 2016-02 on January 1, 2019, the Company adopted the package of practical expedients for all leases that commenced before the effective date of January 1, 2019. Accordingly, the Company 1) did not reassess whether any expired or existing contracts are or contain leases, 2) did not reassess the lease classification for any expired or existing lease, and 3) did not reassess initial direct costs for any existing leases. The Company did not elect the practical expedient related to using hindsight to reevaluate the lease term. In addition, the Company adopted the practical expedient for land easements and did 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 its adoption of the lease accounting standard under Topic 842, the Company adopted this practical expedient, specifically related to its tenant reimbursements for common area maintenance which would otherwise be accounted for under the revenue recognition standard. The Company believes the two conditions have been met for tenant reimbursements for common area maintenance 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. Accordingly, tenant reimbursements for common area maintenance will be accounted for as rental income on the Company’s statement of operations beginning January 1, 2019. 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 adopted this transition method upon its adoption of the lease accounting standard of Topic 842, which did not result in a cumulative effect adjustment to the opening balance of retained earnings on January 1, 2019. In December 2018, the FASB issued ASU No. 2018-20, Leases (Topic 842), Narrow-Scope Improvements for Lessors (“ASU No. 2018-20”), which permits lessors, as an accounting policy election, to not evaluate whether certain sales taxes and other similar taxes are lessor costs or lessee costs and instead to account for these costs as if they were lessee costs. In addition, ASU No. 2018-20 requires lessors to 1) exclude lessor costs paid directly by lessees to third parties on the lessor’s behalf from variable payments and 2) include lessor costs that are reimbursed by the lessee in the measurement of variable lease revenue and the associated expense. The amendments also clarify that lessors are required to allocate the variable payments to the lease and non-lease components and follow the recognition guidance in Topic 842 for the lease component and other applicable guidance, such as ASC 606, for the non-lease component. The Company made the accounting policy election related to sales taxes upon adoption of the lease accounting standard of Topic 842 on January 1, 2019. The Company created an inventory of its leases where the Company may be a lessee to assess the potential impact to the Company’s financial statements. The adoption of the new lease accounting standard did not have a material impact to the Company’s financial statements on January 1, 2019. Beginning January 1, 2019, the Company, as a lessor, will record legal costs incurred to negotiate an operating lease as an expense, classified as operating, maintenance, and management on the Company’s consolidated statement of operations, as these costs are no longer capitalizable under the definition of initial direct costs under Topic 842. In addition, the Company will account for new leases, including modifications of existing leases, entered into on and after January 1, 2019 under the new lease accounting standard under Topic 842 and follow the related presentation and disclosure requirements for reporting periods subsequent to 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 debt 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 debt 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. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, which clarified that receivables from operating leases are not within the scope of Topic 326 and instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework -Changes to the Disclosure Requirements for Fair Value Measurement (“ASU No. 2018-13”). The primary focus of ASU 2018-13 is to improve the effectiveness of the disclosure requirements for fair value measurements. ASU No. 2018-13 removes the requirement to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for the timing of transfers between levels and the valuation processes for Level 3 fair value measurements. It also adds a requirement to disclose changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and to disclose the range and weighted average of significant unobservable inputs used to develop recurring and nonrecurring Level 3 fair value measurements. For certain unobservable inputs, entities may disclose other quantitative information in lieu of the weighted average if the other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop the Level 3 fair value measurement. In addition, public entities are required to provide information about the measurement uncertainty of recurring Level 3 fair value measurements from the use of significant unobservable inputs if those inputs reasonably could have been different at the reporting date. ASU No. 2018-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. Entities are permitted to early adopt either the entire standard or only the provisions that eliminate or modify the requirements. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The Company is still evaluating the impact of adopting ASU No. 2018-13 on its financial statements, but does not expect the adoption of ASU No. 2018-13 to have a material impact on its financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Life | The Company anticipates the estimated useful lives of its assets by class to be generally as follows: Land N/A Buildings 25-40 years Building improvements 10-40 years Tenant improvements Shorter of lease term or expected useful life Tenant origination and absorption costs Remaining term of related leases, including below-market renewal periods |
REAL ESTATE HELD FOR INVESTME_2
REAL ESTATE HELD FOR INVESTMENT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Real Estate [Abstract] | |
Schedule of Real Estate Investments | The following table summarizes the Company’s real estate held for investment as of December 31, 2018 and 2017 , respectively (in thousands): December 31, 2018 December 31, 2017 Land $ 148,880 $ 110,102 Buildings and improvements 515,705 245,723 Tenant origination and absorption costs 31,584 15,962 Total real estate, cost 696,169 371,787 Accumulated depreciation and amortization (46,301 ) (25,614 ) Total real estate, net $ 649,868 $ 346,173 The following table provides summary information regarding the Company’s real estate held for investment as of December 31, 2018 (in thousands): Property Date Acquired or Foreclosed on City State Property Type Land Building and Improvements Tenant Origination and Absorption Total Real Estate, at Cost Accumulated Depreciation and Amortization Total Real Estate, Net Ownership % Richardson Portfolio: Palisades Central I 11/23/2011 Richardson TX Office 1,037 10,896 — 11,933 (2,796 ) 9,137 90.0% Palisades Central II 11/23/2011 Richardson TX Office 810 18,370 — 19,180 (4,352 ) 14,828 90.0% Greenway I 11/23/2011 Richardson TX Office 561 2,136 — 2,697 (745 ) 1,952 90.0% Greenway III 11/23/2011 Richardson TX Office 702 3,688 114 4,504 (1,209 ) 3,295 90.0% Undeveloped Land 11/23/2011 Richardson TX Undeveloped Land 3,134 — — 3,134 — 3,134 90.0% Total Richardson Portfolio 6,244 35,090 114 41,448 (9,102 ) 32,346 Park Highlands (1) 12/30/2011 North Las Vegas NV Undeveloped Land 30,603 — — 30,603 — 30,603 100.0% (1) Burbank Collection 12/12/2012 Burbank CA Retail 4,175 12,322 363 16,860 (2,559 ) 14,301 90.0% Park Centre 03/28/2013 Austin TX Office 3,251 28,038 — 31,289 (4,656 ) 26,633 100.0% 1180 Raymond 08/20/2013 Newark NJ Apartment 8,292 38,606 — 46,898 (6,618 ) 40,280 100.0% Park Highlands II (1) 12/10/2013 North Las Vegas NV Undeveloped Land 25,834 — — 25,834 — 25,834 100.0% (1) Richardson Land II 09/04/2014 Richardson TX Undeveloped Land 3,418 — — 3,418 — 3,418 90.0% Crown Pointe 02/14/2017 Dunwoody GA Office 22,590 65,110 5,342 93,042 (7,653 ) 85,389 100.0% 125 John Carpenter 09/15/2017 Irving TX Office 2,755 76,779 8,749 88,283 (5,690 ) 82,593 100.0% Marquette Plaza 03/01/2018 Minneapolis MN Office 10,387 74,676 4,271 89,334 (2,902 ) 86,432 100.0% City Tower 03/06/2018 Orange CA Office 13,930 130,895 7,959 152,784 (5,469 ) 147,315 100.0% Eight & Nine Corporate Centre 06/08/2018 Franklin TN Office 17,401 54,189 4,786 76,376 (1,652 ) 74,724 100.0% $ 148,880 $ 515,705 $ 31,584 $ 696,169 $ (46,301 ) $ 649,868 _____________________ (1) The Company owns 100% of the common members’ equity of Park Highlands and Park Highlands II. On September 7, 2016, a subsidiary of the Company that owns a portion of Park Highlands and Park Highlands II sold 820 units of 10% Class A non-voting preferred membership units for $0.8 million to accredited investors. The amount of the Class A non-voting preferred membership units raised, net of offering costs, is included in other liabilities on the accompanying consolidated balance sheets. |
Schedule of Future Minimum Rental Income for Company's Properties | As of December 31, 2018 , the future minimum rental income from the Company’s properties, excluding apartment leases, under non-cancelable operating leases was as follows (in thousands): 2019 $ 52,261 2020 50,946 2021 46,439 2022 40,071 2023 34,839 Thereafter 104,476 $ 329,032 |
Schedules of Concentration of Risk, by Risk Factor | As of December 31, 2018 , the Company’s commercial real estate properties were leased to approximately 250 tenants over a diverse range of industries and geographic areas. The Company’s highest tenant industry concentrations (greater than 10% of annualized base rent) were as follows: Industry Number of Tenants Annualized Base Rent (1) Percentage of Health Care and Social Services 16 $ 6,716 12.1 % Insurance 21 5,997 10.8 % $ 12,713 22.9 % _____________________ (1) Annualized base rent represents annualized contractual base rental income as of December 31, 2018 , adjusted to straight-line any contractual tenant concessions (including free rent), rent increases and rent decreases from the lease’s inception through the balance of the lease term. |
TENANT ORIGINATION AND ABSORP_2
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 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 December 31, 2018 and 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 December 31, 2018 December 31, 2017 December 31, 2018 December 31, 2017 December 31, 2018 December 31, 2017 Cost $ 31,584 $ 15,962 $ 3,714 $ — $ (6,653 ) $ (3,178 ) Accumulated Amortization (7,421 ) (2,833 ) (337 ) — 1,648 596 Net Amount $ 24,163 $ 13,129 $ 3,377 $ — $ (5,005 ) $ (2,582 ) |
Amortization of Tenant Origination and Absorption Costs, Above-Market Leases and Below-Market Lease Liabilities | Increases (decreases) in net income as a result of amortization of the Company’s tenant origination and absorption costs, above-market lease assets and below-market lease liabilities for the years ended December 31, 2018 , 2017 and 2016 were as follows (in thousands): Tenant Origination and Absorption Costs Above-Market Lease Assets Below-Market Lease Liabilities For the Years Ended December 31, For the Years Ended December 31, For the Years Ended December 31, 2018 2017 2016 2018 2017 2016 2018 2017 2016 Amortization $ (7,895 ) $ (10,265 ) $ (10,850 ) $ (361 ) $ (283 ) $ (459 ) $ 1,513 $ 2,858 $ 2,789 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The remaining unamortized balance for these outstanding intangible assets and liabilities as of December 31, 2018 will be amortized for the years ending December 31 as follows (in thousands): Tenant Origination and Above-Market Below-Market 2019 $ (6,133 ) $ (404 ) $ 1,315 2020 (5,048 ) (314 ) 1,013 2021 (4,031 ) (297 ) 611 2022 (2,784 ) (297 ) 548 2023 (1,904 ) (297 ) 510 Thereafter (4,263 ) (1,768 ) 1,008 $ (24,163 ) $ (3,377 ) $ 5,005 Weighted-Average Remaining Amortization Period 5.5 years 11.1 years 5.6 years |
REAL ESTATE EQUITY SECURITIES (
REAL ESTATE EQUITY SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 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 December 31, 2018 and December 31, 2017 (dollars in thousands): December 31, 2018 December 31, 2017 Real Estate Equity Security Number of Shares Owned Total Carrying Value Number of Shares Owned Total Carrying Value Whitestone REIT 1,781,894 $ 21,846 3,603,189 $ 51,922 Keppel-KBS US REIT 56,979,352 34,757 43,999,500 38,141 Franklin Street Properties Corp. 2,772,529 17,273 — — 61,533,775 $ 73,876 47,602,689 $ 90,063 |
Gain (Loss) on Investments | The following summarizes the portion of gain and loss for the period related to real estate equity securities held during the year ended December 31, 2018 (in thousands): Net loss recognized during the period on real estate equity securities $ (19,010 ) Less: Net loss recognized during the period on real estate equity securities sold during the period (837 ) Unrealized loss recognized during the reporting period on real estate equity securities still held at December 31, 2018 $ (18,173 ) |
REAL ESTATE DEBT SECURITIES (Ta
REAL ESTATE DEBT SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Activity of Real Estate Debt Securities | The information for those real estate debt securities as of December 31, 2018 and 2017 is set forth below (in thousands): Debt Securities Name Date Acquired Debt Securities Type Outstanding Principal Balance as of (1) Book Value as of (2) Book Value as of 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 $ 13,000 $ 10,859 $ 17,751 12.0 % 11.4 % 10/28/2019 _____________________ (1) Outstanding principal balance as of December 31, 2018 represents principal balance outstanding under the real estate debt securities. On October 31, 2018, the Company received a partial principal prepayment of the real estate debt securities in the amount of $4.5 million . (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, additional interest accretion and other-than-temporary impairment. (3) Contractual interest rate is the stated interest rate on the face of the real estate debt 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 December 31, 2018 . The following summarizes the activity related to real estate debt securities for the year ended December 31, 2018 (in thousands): Real estate debt securities - December 31, 2017 $ 17,751 Principal repayment (4,500 ) Deferred interest receivable and interest accretion 59 Accretion of commitment fee, net of closing costs 49 Other-than-temporary impairment (2,500 ) Real estate debt securities - December 31, 2018 $ 10,859 |
Schedule of Interest Income from Real Estate Debt Securities | For the years ended December 31, 2018 , 2017 and 2016 , interest income from real estate debt securities consisted of the following (in thousands): For the Years Ended December 31, 2018 2017 2016 Contractual interest income $ 1,910 $ 1,217 $ 63 Interest accretion 59 315 30 Accretion of commitment fee, net of closing costs and acquisition fee 49 250 17 Interest income from real estate debt securities $ 2,018 $ 1,782 $ 110 |
REAL ESTATE DISPOSITIONS (Table
REAL ESTATE DISPOSITIONS (Tables) | 12 Months Ended |
Dec. 31, 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 December 31, 2018 and December 31, 2017 (in thousands): December 31, 2018 December 31, 2017 Assets related to real estate held for sale Real estate, cost $ 34,793 $ 202,897 Accumulated depreciation and amortization (3,541 ) (16,203 ) Real estate, net 31,252 186,694 Other assets 2,746 8,288 Total assets related to real estate held for sale $ 33,998 $ 194,982 Liabilities related to real estate held for sale Notes payable, net 22,845 135,171 Other liabilities — 261 Total liabilities related to real estate held for sale $ 22,845 $ 135,432 |
Schedule of Revenue and Expenses of Real Estate Held-for-Sale | The following table summarizes certain revenue and expenses related to these properties for the years ended December 31, 2018 , 2017 and 2016 (in thousands): Years Ended December 31, 2018 2017 2016 Revenues Rental income $ 14,418 $ 73,529 $ 80,950 Tenant reimbursements and other operating income 3,278 20,438 19,831 Total revenues $ 17,696 $ 93,967 $ 100,781 Expenses Operating, maintenance, and management $ 5,055 $ 27,464 $ 29,710 Real estate taxes and insurance 1,293 11,510 12,470 Asset management fees to affiliate 1,673 6,152 6,598 Real estate acquisition fees to affiliate — — 1,274 Real estate acquisition fees and expenses — — 275 Depreciation and amortization 7,578 36,922 41,454 Interest expense 5,568 17,115 16,196 Total expenses $ 21,167 $ 99,163 $ 107,977 |
NOTES AND BONDS PAYABLE (Tables
NOTES AND BONDS PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Notes and Bonds Payable [Abstract] | |
Schedule of Long-term Debt Instruments | As of December 31, 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 December 31, 2018 Book Value as of December 31, 2017 Contractual Interest Rate as of December 31, 2018 (1) Effective Interest Rate at December 31, 2018 (1) Payment Type Maturity Date (2) Richardson Portfolio Mortgage Loan $ 36,000 $ 36,886 One-Month LIBOR + 2.50% 4.85% Interest Only (3) 11/01/2021 Park Centre Mortgage Loan 8,404 9,877 One-Month LIBOR + 2.25% 4.60% Principal & Interest 07/01/2019 Burbank Collection Mortgage Loan 10,716 10,958 One-Month LIBOR + 2.35% 4.73% Principal & Interest 09/30/2019 1180 Raymond Mortgage Loan 30,637 31,000 One-Month LIBOR + 2.25% 4.60% Principal & Interest 12/01/2019 1180 Raymond Bond Payable 6,280 6,460 6.50% 6.50% Principal & Interest 09/01/2036 Central Building Mortgage Loan — 27,600 (4) (4) (4) (4) 424 Bedford Mortgage Loan (5) 23,710 24,282 3.91% 3.91% Principal & Interest 10/01/2022 KBS SOR (BVI) Holdings, Ltd. Series A Debentures (6) 259,516 278,801 4.25% 4.25% (6) 03/01/2023 Westpark Portfolio Mortgage Loan (7) — 85,200 (7) (7) (7) (7) Crown Pointe Mortgage Loan 51,171 50,500 One-Month LIBOR + 2.60% 4.95% Interest Only 02/13/2020 125 John Carpenter Mortgage Loan 53,204 50,130 (8) 4.10% Interest Only 10/01/2022 City Tower Mortgage Loan 89,000 — One-Month LIBOR + 1.55% 3.90% Interest Only 03/05/2021 Marquette Plaza Mortgage Loan 50,800 — One-Month LIBOR + 1.55% 3.90% Interest Only 06/06/2021 Eight & Nine Corporate Centre Mortgage Loan 43,880 — One-Month LIBOR + 1.60% 3.95% Interest Only 06/08/2021 Total Notes and Bonds Payable principal outstanding 663,318 611,694 Net Premium/(Discount) on Notes and Bonds Payable (9) 198 137 Deferred financing costs, net (8,044 ) (8,788 ) Total Notes and Bonds Payable, net $ 655,472 $ 603,043 _____________________ (1) Contractual interest rate represents the interest rate in effect under the loan as of December 31, 2018 . Effective interest rate is calculated as the actual interest rate in effect as of December 31, 2018 (consisting of the contractual interest rate and contractual floor rates), using interest rate indices at December 31, 2018 , where applicable. (2) Represents the initial maturity date or the maturity date as extended as of December 31, 2018 ; subject to certain conditions, the maturity dates of certain loans may be extended beyond the date shown. (3) Represents the payment type required under the loan as of December 31, 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. (4) On July 17, 2018, in connection with the disposition of the Central Building, the Company repaid the $27.6 million outstanding principal balance due under the Central Building Mortgage Loan. (5) On January 11, 2019 , in connection with the disposition of 424 Bedford, the buyer assumed the mortgage loan secured by 424 Bedford with an outstanding principal balance of $23.7 million . (6) See “ - Israeli Bond Financing” below. (7) On November 30, 2018 , in connection with the disposition of the Westpark Portfolio, the Company repaid the $84.8 million outstanding principal balance due under the Westpark Portfolio Mortgage Loan. (8) 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. (9) Represents the unamortized premium/discount on notes and bonds payable due to the above- and below-market interest rates when the debt was assumed. The discount/premium is amortized over the remaining life of the notes and bonds payable. |
Schedule of Maturities of Long-term Debt | The following is a schedule of maturities, including principal amortization payments, for all notes and bonds payable outstanding as of December 31, 2018 (in thousands): 2019 $ 102,469 2020 104,070 2021 272,311 2022 127,155 2023 52,158 Thereafter 5,155 $ 663,318 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional and Fair Value of Interest Rate Swaps Designated as Cash Flow Hedges | The following table summarizes the notional amounts and other information related to the Company’s derivative instruments as of December 31, 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 collar and foreign currency option as of December 31, 2018 and 2017 . The notional amount is an indication of the extent of the Company’s involvement in each instrument at that time, but does not represent exposure to credit, interest rate or market risks (currency in thousands): December 31, 2018 December 31, 2017 Strike Price Trade Date Maturity Date Derivative Instruments Number of Instruments Notional Amount Number of Instruments Notional Amount Derivative instruments not designated as hedging instruments Foreign currency collar 1 776,182 ILS — — 3.54 - 3.66 ILS - USD 08/20/2018 02/28/2019 (1) Foreign currency option — $ — 1 $285,361 3.40 08/03/2017 08/03/2018 _____________________ (1) On February 27, 2019 , the Company entered into a foreign currency collar with an aggregate Israeli new Shekels notional amount of 776.2 million which expires on August 23, 2019 . The foreign currency collar consists of a purchased call option to buy Israeli new Shekels at 3.4860 and a sold put option to sell the Israeli new Shekels at 3.6185 . The foreign currency collar is intended to permit the Company to exchange, on the settlement date of the collar, 776.2 million Israeli new Shekels for an amount ranging from $214.5 million to $222.7 million . |
Schedule of Derivative Instruments in Statement of Financial Position | The following table sets forth the fair value of the Company’s derivative instruments as well as their classification on the consolidated balance sheets as of December 31, 2018 and 2017 (dollars in thousands): December 31, 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 $ 34 1 $ 14 Foreign currency option Prepaid expenses and other assets — $ — 1 $ 4,243 Foreign currency collar Other liabilities 1 $ (4,393 ) — $ — |
FAIR VALUE DISCLOSURES (Tables)
FAIR VALUE DISCLOSURES (Tables) | 12 Months Ended |
Dec. 31, 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 December 31, 2018 and 2017 , which carrying amounts do not approximate the fair values (in thousands): December 31, 2018 December 31, 2017 Face Value Carrying Amount Fair Value Face Value Carrying Amount Fair Value Financial assets: Real estate debt securities (1) $ 13,000 $ 10,859 $ 10,859 $ 17,500 $ 17,751 $ 17,386 Financial liabilities: Notes and bond payable $ 403,802 $ 400,470 $ 407,449 $ 332,893 $ 330,727 $ 335,212 KBS SOR (BVI) Holdings, Ltd. Series A Debentures $ 259,516 $ 255,002 $ 255,814 $ 278,801 $ 272,316 $ 296,069 _____________________ (1) Carrying amount of real estate debt securities includes other-than-temporary impairment. |
Fair Value, Assets Measured on Recurring Basis | As of December 31, 2018 , the Company measured the following assets at fair value (in thousands): Fair Value Measurements Using Total Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Recurring Basis: Real estate equity securities $ 73,876 $ 73,876 $ — $ — Asset derivative - interest rate caps $ 34 $ — $ 34 $ — Liability derivative - foreign currency collar $ (4,393 ) $ — $ (4,393 ) $ — |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 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 years ended December 31, 2018 , 2017 and 2016 , respectively, and any related amounts payable as of December 31, 2018 and December 31, 2017 (in thousands): Incurred Payable as of December 31, 2018 2017 2016 2018 2017 Expensed Asset management fees $ 8,525 $ 10,686 $ 9,628 $ — $ — Acquisition fees on real estate (1) — — 2,964 — — Reimbursable operating expenses (2) 410 241 221 29 26 Disposition fees (3) 2,494 8,352 279 — — Capitalized Acquisition fees on real estate (1) 3,094 907 — — — Acquisition fees on real estate equity securities 239 429 — 7 — Acquisition fees on real estate debt securities — — 250 — — $ 14,762 $ 20,615 $ 13,342 $ 36 $ 26 _____________________ (1) As a result of the adoption of ASU No. 2017-01, the Company’s acquisitions of real estate properties beginning January 1, 2017 generally qualify as an asset acquisition (as opposed to a business combination). Acquisition fees associated with asset acquisitions will be capitalized, while costs associated with business combinations will continue to be expensed as incurred. (2) The Advisor may seek reimbursement for certain employee costs under the Advisory Agreement. The Company has reimbursed the Advisor for the Company’s allocable portion of the salaries, benefits and overhead of internal audit department personnel providing services to the Company. These amounts totaled $305,000 , $225,000 and $153,000 for the years ended December 31, 2018 , 2017 and 2016 , respectively, and were the only employee costs reimbursed under the Advisory Agreement during these periods. The Company will not reimburse for employee costs in connection with services for which the Advisor earns acquisition, origination or disposition fees (other than reimbursement of travel and communication expenses) or for the salaries or benefits the Advisor or its affiliates may pay to the Company’s executive officers. In addition to the amounts above, the Company reimburses the Advisor for certain of the Company’s direct costs incurred from third parties that were initially paid by the Advisor on behalf of the Company. (3) Disposition fees with respect to real estate sold are included in the gain on sale of real estate in the accompanying consolidated statements of operations. Disposition fees with respect to the assignment of the Company's real estate loan receivable are included in general and administrative expenses in the accompanying consolidated statements of operations. |
INVESTMENT IN UNCONSOLIDATED _2
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Investments in Unconsolidated Joint Ventures | Summarized financial information for the 110 William Joint Venture follows (in thousands): December 31, 2018 December 31, 2017 Assets: Real estate assets, net of accumulated depreciation and amortization $ 235,613 $ 248,269 Other assets 37,337 32,331 Total assets $ 272,950 $ 280,600 Liabilities and equity: Notes payable, net $ 267,311 $ 260,108 Other liabilities 7,485 11,016 Partners’ (deficit) capital (1,846 ) 9,476 Total Liabilities and equity $ 272,950 $ 280,600 For the Years Ended December 31, 2018 2017 2016 Revenues $ 38,539 $ 37,338 $ 33,458 Expenses: Operating, maintenance, and management 9,844 10,056 10,778 Real estate taxes and insurance 6,718 6,281 6,017 Depreciation and amortization 15,596 16,544 12,955 Interest expense 17,815 13,134 6,049 Total expenses 49,973 46,015 35,799 Total other income 112 56 63 Net loss $ (11,322 ) $ (8,621 ) $ (2,278 ) Company’s equity in loss of unconsolidated joint venture $ (6,835 ) $ (5,214 ) $ (1,408 ) Summarized financial information for the 353 Sacramento Joint Venture follows (in thousands): December 31, 2018 December 31, 2017 Assets: Real estate assets, net of accumulated depreciation and amortization $ 180,852 $ 171,066 Other assets 13,123 6,472 Total assets $ 193,975 $ 177,538 Liabilities and equity: Notes payable, net $ 105,593 $ 89,423 Other liabilities 10,863 7,313 Partners’ capital 77,519 80,802 Total liabilities and equity $ 193,975 $ 177,538 For the Year Ended December 31, 2018 For the Period from July 6, 2017 to December 31, 2017 Revenues $ 11,397 $ 7,053 Expenses: Operating, maintenance, and management 3,654 2,189 Real estate taxes and insurance 2,372 1,198 Depreciation and amortization 5,680 3,408 Interest expense 5,374 2,302 Total expenses 17,080 9,097 Net loss $ (5,683 ) $ (2,044 ) Company’s equity in loss of unconsolidated joint venture $ (2,995 ) $ (823 ) As of December 31, 2018 and 2017 , the Company’s investments in unconsolidated joint ventures were composed of the following (dollars in thousands): Number of Properties at December 31, 2018 Investment Balance at Joint Venture Location Ownership % December 31, 2018 December 31, 2017 NIP Joint Venture 2 Various Less than 5.0% $ 1,476 $ 3,674 110 William Joint Venture 1 New York, New York 60.0% 325 7,160 353 Sacramento Joint Venture 1 San Francisco, California 55.0% 43,068 44,743 $ 44,869 $ 55,577 |
SUPPLEMENTAL CASH FLOW AND SI_2
SUPPLEMENTAL CASH FLOW AND SIGNIFICANT NONCASH TRANSACTION DISCLOSURES (Tables) | 12 Months Ended |
Dec. 31, 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): Years Ended December 31, 2018 2017 2016 Supplemental Disclosure of Cash Flow Information: Interest paid, net of capitalized interest of $2,565, $2,339 and $2,025 for the years ended December 31, 2018, 2017 and 2016 , respectively $ 27,029 $ 32,688 20,759 Supplemental Disclosure of Significant Noncash Transactions: Assets and liabilities deconsolidated in connection with the 353 Sacramento partial sale: Real estate, net — 170,586 — Rents and other receivables, net — 1,244 — Prepaid expenses and other assets — 555 — Notes payable, net — 87,132 — Accounts payable and accrued liabilities — 1,574 — Below-market leases, net — 2,960 — Other liabilities — 924 — SREIT units received in connection with the Singapore Transaction — 38,720 — Increase in development obligations related to sale of real estate — 3,816 — Application of escrow deposits to acquisition of real estate — 2,000 — Increase in accrued improvements to real estate — — 3,547 Increase in redeemable common stock payable 1,405 — 8,902 Distributions paid to common stockholders through common stock issuances pursuant to the dividend reinvestment plan 1,418 8,666 12,616 Distributions paid to common stockholders through common stock issuances pursuant to the December 2017 special dividend 150,299 — — Distributions paid to common stockholders through common stock issuances pursuant to the November 2018 special dividend 127,911 — — |
SELECTED QUARTERLY FINANCIAL _2
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | Presented below is a summary of the unaudited quarterly financial information for the years ended December 31, 2018 and 2017 (in thousands, except per share amounts): 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 19,636 $ 25,290 $ 27,156 $ 23,705 Net (loss) income $ (23,702 ) $ 9,993 $ 36,421 $ 10,612 Net (loss) income attributable to common stockholders $ (23,681 ) $ 10,036 $ 36,497 $ 10,694 Net (loss) income per common share, basic and diluted $ (0.38 ) $ 0.16 $ 0.67 $ 0.19 Distributions declared per common share $ 0.016 $ 0.016 $ 0.016 $ 2.950 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 37,996 $ 40,237 $ 36,414 $ 26,067 Net (loss) income $ (9,058 ) $ 23,809 $ (10,542 ) $ 206,371 Net (loss) income attributable to common stockholders $ (9,092 ) $ 23,846 $ (10,534 ) $ 206,424 Net (loss) income per common share, basic and diluted $ (0.16 ) $ 0.42 $ (0.19 ) $ 3.88 Distributions declared per common share $ 0.092 $ 0.093 $ 0.095 $ 3.610 |
ORGANIZATION (Details)
ORGANIZATION (Details) $ in Thousands | Mar. 08, 2016USD ($) | Mar. 08, 2016ILS (â‚Ş) | Mar. 07, 2016ILS (â‚Ş) | Mar. 02, 2016ILS (â‚Ş) | Mar. 01, 2016ILS (â‚Ş) | Mar. 31, 2016 | Dec. 31, 2018USD ($)aportfoliopropertyinvestmentshares | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($)shares | Dec. 31, 2018USD ($)aportfoliopropertyinvestmentshares | Dec. 31, 2018USD ($)aportfoliopropertyinvestmentshares | Dec. 18, 2015certificateshares | Oct. 23, 2012USD ($)shares | Dec. 29, 2011USD ($)shares | Jan. 08, 2009shares |
Organizational Structure [Line Items] | |||||||||||||||
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | |||||||||||
Common stock, shares issued (in shares) | 66,822,861 | 52,053,817 | 66,822,861 | 66,822,861 | 55,249 | 220,994 | |||||||||
Issuance of common stock | $ | $ 1,418 | $ 8,666 | $ 12,616 | ||||||||||||
Shares of common stock sold under dividend reinvestment plan | $ | $ 75,500 | ||||||||||||||
Redemptions of common stock | $ | $ 123,613 | 74,780 | $ 38,573 | $ 275,400 | |||||||||||
Common stock, special dividends, amount of shares issued | 25,976,746 | 25,976,746 | 25,976,746 | ||||||||||||
Common stock, value, issued | $ | $ 668 | $ 521 | $ 668 | $ 668 | $ 500 | $ 2,000 | |||||||||
Number of investments in unconsolidated joint venture | investment | 3 | 3 | 3 | ||||||||||||
Number of investments in debt securities | investment | 1 | 1 | 1 | ||||||||||||
Number of investments in equity securities | investment | 3 | 3 | 3 | ||||||||||||
Office Properties | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Number of real estate properties | property | 6 | 6 | 6 | ||||||||||||
Office Portfolio | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Number of real estate properties | portfolio | 1 | 1 | 1 | ||||||||||||
Office Buildings, Portfolio | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Number of real estate properties | property | 4 | 4 | 4 | ||||||||||||
Undeveloped Land, Portfolio | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Real estate area of undeveloped land | a | 14 | 14 | 14 | ||||||||||||
Retail Property, Portfolio | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Number of real estate properties | property | 1 | 1 | 1 | ||||||||||||
Apartment Properties, Portfolio | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Number of real estate properties | property | 2 | 2 | 2 | ||||||||||||
Apartment Properties, Portfolio | Held-for-sale | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Number of real estate properties | property | 1 | 1 | 1 | ||||||||||||
Undeveloped Land | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Real estate area of undeveloped land | a | 1,000 | 1,000 | 1,000 | ||||||||||||
Number of investments in real estate | investment | 3 | 3 | 3 | ||||||||||||
KBS SOR (BVI) Holdings, Ltd. Series A Debentures | Bonds Payable | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Maximum borrowing capacity | â‚Ş | â‚Ş 1,000,000,000 | ||||||||||||||
Interest rate during period | 4.25% | ||||||||||||||
Proceeds from issuance of debt | $ 249,200 | â‚Ş 970,200,000 | â‚Ş 127,700,000 | â‚Ş 842,500,000 | |||||||||||
Maximum | KBS SOR (BVI) Holdings, Ltd. Series A Debentures | Bonds Payable | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Interest rate during period | 4.25% | ||||||||||||||
Common Stock | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Shares registered in primary offering (in shares) | 100,000,000 | ||||||||||||||
Shares registered for sale under dividend reinvestment plan (in shares) | 40,000,000 | ||||||||||||||
Issuance of common stock (in shares) | 123,264 | 585,192 | 938,662 | 56,584,976 | |||||||||||
Issuance of common stock | $ | $ 1 | $ 6 | $ 9 | $ 561,700 | |||||||||||
Shares of common stock sold under dividend reinvestment plan (in shares) | 6,743,625 | ||||||||||||||
Redemptions of common stock (in shares) | 11,330,966 | 5,307,142 | 2,859,010 | 22,778,730 | |||||||||||
Redemptions of common stock | $ | $ 113 | $ 53 | $ 28 | $ 19,100 | |||||||||||
Common Stock | Minimum | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Stock offering, shares authorized for issuance (in shares) | 250,000 | ||||||||||||||
Common Stock | Maximum | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Stock offering, shares authorized for issuance (in shares) | 140,000,000 | ||||||||||||||
KBS Strategic Opportunity BVI | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Common stock, shares authorized (in shares) | 50,000 | ||||||||||||||
Number of certificates issued | certificate | 1 | ||||||||||||||
KBS Strategic Opportunity BVI | Operating Partnership | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Common stock, shares issued (in shares) | 10,000 | ||||||||||||||
Operating Partnership | |||||||||||||||
Organizational Structure [Line Items] | |||||||||||||||
Partnership interest in operating partnership | 0.10% | ||||||||||||||
Partnership interest in the operating partnership and is its sole limited partner | 99.90% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Reclassification and Restricted Cash) (Details) | 12 Months Ended | ||
Dec. 31, 2018USD ($)property | Dec. 31, 2017USD ($)property | Dec. 31, 2016USD ($)property | |
Accounting Policies [Abstract] | |||
Impairment of real estate | $ | $ 0 | $ 0 | $ 0 |
Restricted cash and cash equivalents | $ | $ 0 | $ 0 | |
Disposed of by Sale | |||
Real Estate [Line Items] | |||
Number of real estate properties disposed | 0 | ||
Office Properties | |||
Real Estate [Line Items] | |||
Number of real estate properties | 6 | ||
Office Properties | Disposed of by Sale | |||
Real Estate [Line Items] | |||
Number of real estate properties disposed | 1 | 12 | |
Office/Flex/Industrial Portfolio | Disposed of by Sale | |||
Real Estate [Line Items] | |||
Number of real estate properties disposed | 1 | ||
Office/Flex/Industrial Buildings | Disposed of by Sale | |||
Real Estate [Line Items] | |||
Number of real estate properties disposed | 21 | ||
Apartment Properties, Portfolio | |||
Real Estate [Line Items] | |||
Number of real estate properties | 2 | ||
Apartment Properties, Portfolio | Held-for-sale | |||
Real Estate [Line Items] | |||
Number of real estate properties | 1 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Revenue Recognition and Equity Securities) (Details) $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Oct. 16, 2018a | Jul. 02, 2018a | Feb. 28, 2018a | Jan. 01, 2018USD ($)a | |
Summary of Significant Accounting Policies [Line Items] | |||||||
Tenant reimbursements | $ 12,621 | $ 21,710 | $ 20,762 | ||||
Other-than-temporary impairment of debt securities | 2,500 | 0 | $ 0 | ||||
Cumulative effect adjustments to retained earnings | 2,472 | ||||||
Contract with customer, liability | 3,100 | $ 1,700 | |||||
Park Highlands | Undeveloped Land | Disposed of by Sale | |||||||
Summary of Significant Accounting Policies [Line Items] | |||||||
Area of land sold | a | 15 | 83 | 26 | 102 | |||
Retained Earnings | |||||||
Summary of Significant Accounting Policies [Line Items] | |||||||
Cumulative effect adjustments to retained earnings | $ 27,618 | ||||||
Accounting Standards Update 2014-09 | Retained Earnings | |||||||
Summary of Significant Accounting Policies [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 | |||||||
Summary of Significant Accounting Policies [Line Items] | |||||||
Tenant reimbursements | $ 1,900 | ||||||
Accounting Standards Update 2016-01 | Retained Earnings | |||||||
Summary of Significant Accounting Policies [Line Items] | |||||||
Cumulative effect adjustments to retained earnings | $ 25,100 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Useful Life) (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Buildings | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 25 years |
Buildings | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 40 years |
Building improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 10 years |
Building improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 40 years |
Tenant improvements | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | Shorter of lease term or expected useful life |
Tenant origination and absorption costs | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | Remaining term of related leases, including below-market renewal periods |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Investments in Unconsolidated Joint Ventures) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Investment [Line Items] | |||
Investments in unconsolidated joint ventures | $ 44,869 | $ 55,577 | |
NIP Joint Venture | |||
Investment [Line Items] | |||
Investments in unconsolidated joint ventures | $ 1,476 | $ 3,700 | $ 3,674 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Dividend Reinvestment Plan) (Details) - $ / shares | Nov. 12, 2018 | Dec. 07, 2017 | Dec. 25, 2016 | Dec. 08, 2016 | Dec. 20, 2015 | Dec. 08, 2015 |
Accounting Policies [Abstract] | ||||||
Updated primary offering price (in dollars per share) | $ 9.91 | $ 11.50 | $ 14.81 | $ 13.44 | ||
Purchase price per share (in dollars per share) | $ 14.81 | $ 13.44 | ||||
Special dividends declared (in dollars per share) | $ 2.95 | $ 3.61 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Redeemable Common Stock) (Details) - USD ($) | Jun. 01, 2018 | Apr. 23, 2018 | Dec. 30, 2016 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2018 |
Summary of Significant Accounting Policies [Line Items] | |||||||||
Share holding term | 1 year | ||||||||
Maximum percentage of weighted-average shares outstanding available for redemption during any calendar year | 5.00% | ||||||||
Maximum number of shares redeemable per quarter, value | $ 3,000,000 | ||||||||
Redemption price percentage of most recent estimated value per share | 95.00% | ||||||||
Share redemption program, termination period | 10 days | 10 days | |||||||
Redemptions of common stock | $ 123,613,000 | $ 74,780,000 | $ 38,573,000 | $ 275,400,000 | |||||
Other liabilities | 21,006,000 | 16,966,000 | $ 21,006,000 | 21,006,000 | |||||
Common Stock | |||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||
Redemptions of common stock | $ 113,000 | 53,000 | $ 28,000 | 19,100,000 | |||||
Number of shares non-redeemable do to limitation, shares | 2,199,077 | ||||||||
Number of shares non-redeemable do to limitation, value | $ 20,700,000 | ||||||||
Self-tender Offer (SOR Offer) | |||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||
Number of shares authorized to be repurchased | 8,234,217 | ||||||||
Average cost per share | $ 10.93 | $ 10.93 | $ 10.93 | ||||||
Authorized amount | $ 90,000,000 | ||||||||
Treasury stock, acquired (in shares) | 9,527,724 | 1,294,910 | |||||||
Treasury stock, acquired | $ 104,100,000 | $ 14,100,000 | |||||||
Stock repurchased during period (in shares) | 33,163 | ||||||||
Stock repurchased during period | $ 400,000 | ||||||||
Unfulfilled Redemption Request | |||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||
Other liabilities | 10,000,000 | $ 8,600,000 | $ 10,000,000 | $ 10,000,000 | |||||
After 2,019 | |||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||
Maximum number of shares redeemable per year, value | 1,000,000 | ||||||||
Funds available for redemption of shares | $ 1,000,000 | ||||||||
Share redemption program, termination period | 10 days | ||||||||
Redemption made in January | Common Stock | |||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||
Redemptions of common stock | $ 4,400,000 | ||||||||
Forecast | |||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||
Maximum number of shares redeemable per year, value | $ 2,000,000 | ||||||||
Maximum number of shares redeemable per quarter, value | 2,000,000 | ||||||||
Remaining authorized repurchase amount | $ 10,000,000 |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Fees) (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies [Line Items] | |
Property management fee, percent fee | 0.75% |
KBS Capital Advisors LLC | |
Summary of Significant Accounting Policies [Line Items] | |
Acquisition advisory fee, percent | 1.00% |
Monthly asset management fee, percent of acquisition expense | 0.00063% |
KBS Capital Advisors LLC or Affiliates | |
Summary of Significant Accounting Policies [Line Items] | |
Selling commissions fees paid, percent of sales price | 1.00% |
Maximum | KBS Capital Advisors LLC, Affiliates or Unaffiliated Third Parties | |
Summary of Significant Accounting Policies [Line Items] | |
Selling commissions fees paid, percent of sales price | 6.00% |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (EPS and Accounting Standards) (Details) - $ / shares | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | |||||||||||
Antidilutive securities | 0 | 0 | 0 | ||||||||
Distributions declared per common share (in dollars per share) | $ 2.95 | $ 0.016 | $ 0.016 | $ 0.016 | $ 3.610 | $ 0.095 | $ 0.093 | $ 0.092 | $ 2.998000 | $ 3.89 | $ 0.38 |
REAL ESTATE HELD FOR INVESTME_3
REAL ESTATE HELD FOR INVESTMENT (Narrative) (Details) ft² in Millions | Dec. 31, 2018aft²portfoliopropertyinvestmentunit |
Real Estate Properties [Line Items] | |
Percentage of portfolio occupied | 74.00% |
Office Properties | |
Real Estate Properties [Line Items] | |
Number of real estate properties | 6 |
Office Portfolio | |
Real Estate Properties [Line Items] | |
Number of real estate properties | portfolio | 1 |
Office Buildings, Portfolio | |
Real Estate Properties [Line Items] | |
Number of real estate properties | 4 |
Undeveloped Land, Portfolio | |
Real Estate Properties [Line Items] | |
Real estate area of undeveloped land | a | 14 |
Retail Property, Portfolio | |
Real Estate Properties [Line Items] | |
Number of real estate properties | 1 |
Rentable square feet | ft² | 3 |
Apartment Property | |
Real Estate Properties [Line Items] | |
Number of real estate properties | 1 |
Rentable square feet | ft² | 0.3 |
Percentage of portfolio occupied | 95.00% |
Undeveloped Land | |
Real Estate Properties [Line Items] | |
Real estate area of undeveloped land | a | 1,000 |
Number of investments in real estate | investment | 3 |
1180 Raymond | Apartment Property | |
Real Estate Properties [Line Items] | |
Number of units in real estate property | unit | 317 |
REAL ESTATE HELD FOR INVESTME_4
REAL ESTATE HELD FOR INVESTMENT (Schedule of Real Estate Investments) (Details) $ in Thousands | Sep. 07, 2016USD ($)unit | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 696,169 | $ 371,787 | |
Accumulated depreciation and amortization | (46,301) | (25,614) | |
Total real estate, net | 649,868 | 346,173 | |
Subsidiary of Common Parent | |||
Real Estate Properties [Line Items] | |||
Interest rate on Class A non-voting preferred membership units | 10.00% | ||
Proceeds from sale of units | $ 800 | ||
Disposed of by Sale | Subsidiary of Common Parent | |||
Real Estate Properties [Line Items] | |||
Number of real estate units | unit | 820 | ||
Land | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 148,880 | 110,102 | |
Buildings and improvements | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 515,705 | 245,723 | |
Tenant origination and absorption costs | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 31,584 | $ 15,962 | |
Total Richardson Portfolio | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 41,448 | ||
Accumulated depreciation and amortization | (9,102) | ||
Total real estate, net | 32,346 | ||
Total Richardson Portfolio | Land | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 6,244 | ||
Total Richardson Portfolio | Buildings and improvements | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 35,090 | ||
Total Richardson Portfolio | Tenant origination and absorption costs | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 114 | ||
Palisades Central I | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Nov. 23, 2011 | ||
Total real estate, cost | $ 11,933 | ||
Accumulated depreciation and amortization | (2,796) | ||
Total real estate, net | $ 9,137 | ||
Ownership % | 90.00% | ||
Palisades Central I | Land | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 1,037 | ||
Palisades Central I | Buildings and improvements | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 10,896 | ||
Palisades Central I | Tenant origination and absorption costs | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 0 | ||
Palisades Central II | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Nov. 23, 2011 | ||
Total real estate, cost | $ 19,180 | ||
Accumulated depreciation and amortization | (4,352) | ||
Total real estate, net | $ 14,828 | ||
Ownership % | 90.00% | ||
Palisades Central II | Land | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 810 | ||
Palisades Central II | Buildings and improvements | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 18,370 | ||
Palisades Central II | Tenant origination and absorption costs | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 0 | ||
Greenway I | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Nov. 23, 2011 | ||
Total real estate, cost | $ 2,697 | ||
Accumulated depreciation and amortization | (745) | ||
Total real estate, net | $ 1,952 | ||
Ownership % | 90.00% | ||
Greenway I | Land | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 561 | ||
Greenway I | Buildings and improvements | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 2,136 | ||
Greenway I | Tenant origination and absorption costs | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 0 | ||
Greenway III | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Nov. 23, 2011 | ||
Total real estate, cost | $ 4,504 | ||
Accumulated depreciation and amortization | (1,209) | ||
Total real estate, net | $ 3,295 | ||
Ownership % | 90.00% | ||
Greenway III | Land | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 702 | ||
Greenway III | Buildings and improvements | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 3,688 | ||
Greenway III | Tenant origination and absorption costs | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 114 | ||
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% | ||
Undeveloped Land | Land | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 3,134 | ||
Undeveloped Land | Buildings and improvements | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 0 | ||
Undeveloped Land | Tenant origination and absorption costs | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 0 | ||
Park Highlands | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Dec. 30, 2011 | ||
Total real estate, cost | $ 30,603 | ||
Accumulated depreciation and amortization | 0 | ||
Total real estate, net | $ 30,603 | ||
Ownership % | 100.00% | ||
Park Highlands | Land | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 30,603 | ||
Park Highlands | Buildings and improvements | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 0 | ||
Park Highlands | Tenant origination and absorption costs | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 0 | ||
Burbank Collection | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Dec. 12, 2012 | ||
Total real estate, cost | $ 16,860 | ||
Accumulated depreciation and amortization | (2,559) | ||
Total real estate, net | $ 14,301 | ||
Ownership % | 90.00% | ||
Burbank Collection | Land | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 4,175 | ||
Burbank Collection | Buildings and improvements | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 12,322 | ||
Burbank Collection | Tenant origination and absorption costs | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 363 | ||
Park Centre | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Mar. 28, 2013 | ||
Total real estate, cost | $ 31,289 | ||
Accumulated depreciation and amortization | (4,656) | ||
Total real estate, net | $ 26,633 | ||
Ownership % | 100.00% | ||
Park Centre | Land | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 3,251 | ||
Park Centre | Buildings and improvements | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 28,038 | ||
Park Centre | Tenant origination and absorption costs | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 0 | ||
1180 Raymond | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Aug. 20, 2013 | ||
Total real estate, cost | $ 46,898 | ||
Accumulated depreciation and amortization | (6,618) | ||
Total real estate, net | $ 40,280 | ||
Ownership % | 100.00% | ||
1180 Raymond | Land | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 8,292 | ||
1180 Raymond | Buildings and improvements | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 38,606 | ||
1180 Raymond | Tenant origination and absorption costs | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 0 | ||
Park Highlands II | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Dec. 10, 2013 | ||
Total real estate, cost | $ 25,834 | ||
Accumulated depreciation and amortization | 0 | ||
Total real estate, net | $ 25,834 | ||
Ownership % | 100.00% | ||
Park Highlands II | Land | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 25,834 | ||
Park Highlands II | Buildings and improvements | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 0 | ||
Park Highlands II | Tenant origination and absorption costs | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 0 | ||
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% | ||
Richardson Land II | Land | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 3,418 | ||
Richardson Land II | Buildings and improvements | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 0 | ||
Richardson Land II | Tenant origination and absorption costs | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 0 | ||
Crown Pointe | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Feb. 14, 2017 | ||
Total real estate, cost | $ 93,042 | ||
Accumulated depreciation and amortization | (7,653) | ||
Total real estate, net | $ 85,389 | ||
Ownership % | 100.00% | ||
Crown Pointe | Land | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 22,590 | ||
Crown Pointe | Buildings and improvements | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 65,110 | ||
Crown Pointe | Tenant origination and absorption costs | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 5,342 | ||
125 John Carpenter | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Sep. 15, 2017 | ||
Total real estate, cost | $ 88,283 | ||
Accumulated depreciation and amortization | (5,690) | ||
Total real estate, net | $ 82,593 | ||
Ownership % | 100.00% | ||
125 John Carpenter | Land | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 2,755 | ||
125 John Carpenter | Buildings and improvements | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 76,779 | ||
125 John Carpenter | Tenant origination and absorption costs | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 8,749 | ||
Marquette Plaza | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Mar. 1, 2018 | ||
Total real estate, cost | $ 89,334 | ||
Accumulated depreciation and amortization | (2,902) | ||
Total real estate, net | $ 86,432 | ||
Ownership % | 100.00% | ||
Marquette Plaza | Land | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 10,387 | ||
Marquette Plaza | Buildings and improvements | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 74,676 | ||
Marquette Plaza | Tenant origination and absorption costs | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 4,271 | ||
City Tower | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Mar. 6, 2018 | ||
Total real estate, cost | $ 152,784 | ||
Accumulated depreciation and amortization | (5,469) | ||
Total real estate, net | $ 147,315 | ||
Ownership % | 100.00% | ||
City Tower | Land | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 13,930 | ||
City Tower | Buildings and improvements | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 130,895 | ||
City Tower | Tenant origination and absorption costs | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 7,959 | ||
Eight & Nine Corporate Centre | |||
Real Estate Properties [Line Items] | |||
Date Acquired or Foreclosed on | Jun. 8, 2018 | ||
Total real estate, cost | $ 76,376 | ||
Accumulated depreciation and amortization | (1,652) | ||
Total real estate, net | $ 74,724 | ||
Ownership % | 100.00% | ||
Eight & Nine Corporate Centre | Land | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 17,401 | ||
Eight & Nine Corporate Centre | Buildings and improvements | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | 54,189 | ||
Eight & Nine Corporate Centre | Tenant origination and absorption costs | |||
Real Estate Properties [Line Items] | |||
Total real estate, cost | $ 4,786 |
REAL ESTATE HELD FOR INVESTME_5
REAL ESTATE HELD FOR INVESTMENT (Operating Leases) (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Leased Assets [Line Items] | |||
Deferred rent recognized | $ 4.7 | $ 2.4 | $ 3.1 |
Deferred rent receivables | 9.8 | 5 | |
Incentive to lessee | 1.3 | 0.6 | |
Other liabilities | |||
Operating Leased Assets [Line Items] | |||
Security deposit liability | $ 3.7 | $ 4.3 | |
Maximum | |||
Operating Leased Assets [Line Items] | |||
Operating lease, term | 13 years 4 months 24 days | ||
Weighted Average | |||
Operating Leased Assets [Line Items] | |||
Operating lease, term | 4 years 10 months 24 days |
REAL ESTATE HELD FOR INVESTME_6
REAL ESTATE HELD FOR INVESTMENT (Future Minimum Rental Income) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Real Estate [Abstract] | |
2,019 | $ 52,261 |
2,020 | 50,946 |
2,021 | 46,439 |
2,022 | 40,071 |
2,023 | 34,839 |
Thereafter | 104,476 |
Future minimum rental income | $ 329,032 |
REAL ESTATE HELD FOR INVESTME_7
REAL ESTATE HELD FOR INVESTMENT (Highes Tenant Industry Concentrations- Grater than 10% of Annual Base Rent) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($)tenant | |
Concentration Risk [Line Items] | |
Number of Tenants | tenant | 250 |
Annualized Base Rent | $ | $ 12,713 |
Percentage of Annualized Base Rent | 22.90% |
Health Care and Social Services | |
Concentration Risk [Line Items] | |
Number of Tenants | tenant | 16 |
Annualized Base Rent | $ | $ 6,716 |
Percentage of Annualized Base Rent | 12.10% |
Industry - Insurance | |
Concentration Risk [Line Items] | |
Number of Tenants | tenant | 21 |
Annualized Base Rent | $ | $ 5,997 |
Percentage of Annualized Base Rent | 10.80% |
REAL ESTATE HELD FOR INVESTME_8
REAL ESTATE HELD FOR INVESTMENT (Geographic Concentration Risk) (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 22.90% |
California | Assets, Total | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 16.10% |
Texas | Assets, Total | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 14.40% |
REAL ESTATE HELD FOR INVESTME_9
REAL ESTATE HELD FOR INVESTMENT (Acquisitions) (Details) $ in Thousands | Jun. 08, 2018USD ($)aft² | Mar. 06, 2018USD ($)aft²property | Mar. 01, 2018USD ($)aft²property | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Total real estate, cost | $ 696,169 | $ 371,787 | |||
Above-market leases, net | 3,377 | 0 | |||
Below-market leases, net | 5,005 | 2,582 | |||
Land | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Total real estate, cost | 148,880 | 110,102 | |||
Buildings and improvements | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Total real estate, cost | 515,705 | 245,723 | |||
Tenant origination and absorption costs | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Total real estate, cost | $ 31,584 | $ 15,962 | |||
Marquette Plaza | Office Properties | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of real estate properties acquired | property | 1,000 | ||||
Rentable square feet | ft² | 522,656 | ||||
Area of land | a | 2.5 | ||||
Purchase price | $ 88,300 | ||||
Amortization of acquisition costs | 1,100 | ||||
Above-market leases, net | 3,700 | ||||
Below-market leases, net | $ 600 | ||||
Marquette Plaza | Office Properties | Tenant origination and absorption costs | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Remaining amortization period | 6 years 7 months 6 days | ||||
Marquette Plaza | Office Properties | Above-Market Lease Assets | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Remaining amortization period | 11 years 8 months 12 days | ||||
Marquette Plaza | Office Properties | Below-Market Lease Liabilities | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Remaining amortization period | 2 years 4 months 24 days | ||||
Marquette Plaza | Office Properties | Land | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Total real estate, cost | $ 10,400 | ||||
Marquette Plaza | Office Properties | Buildings and improvements | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Total real estate, cost | 71,400 | ||||
Marquette Plaza | Office Properties | Tenant origination and absorption costs | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Total real estate, cost | $ 4,500 | ||||
City Tower | Office Properties | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of real estate properties acquired | property | 1,000 | ||||
Rentable square feet | ft² | 431,007 | ||||
Area of land | a | 4.9 | ||||
Purchase price | $ 147,100 | ||||
Amortization of acquisition costs | 1,600 | ||||
Below-market leases, net | $ 1,200 | ||||
City Tower | Office Properties | Tenant origination and absorption costs | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Remaining amortization period | 5 years 2 months 12 days | ||||
City Tower | Office Properties | Below-Market Lease Liabilities | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Remaining amortization period | 6 years 7 months 6 days | ||||
City Tower | Office Properties | Land | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Total real estate, cost | $ 13,900 | ||||
City Tower | Office Properties | Buildings and improvements | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Total real estate, cost | 127,900 | ||||
City Tower | Office Properties | Tenant origination and absorption costs | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Total real estate, cost | $ 8,100 | ||||
Eight & Nine Corporate Centre | Office Properties | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of real estate properties acquired | property | 1,000 | ||||
Rentable square feet | ft² | 311,864 | ||||
Area of land | a | 27.6 | ||||
Purchase price | $ 73,000 | ||||
Amortization of acquisition costs | 1,200 | ||||
Below-market leases, net | $ 2,000 | ||||
Eight & Nine Corporate Centre | Office Properties | Tenant origination and absorption costs | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Remaining amortization period | 6 years 4 months 24 days | ||||
Eight & Nine Corporate Centre | Office Properties | Below-Market Lease Liabilities | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Remaining amortization period | 7 years 4 months 24 days | ||||
Eight & Nine Corporate Centre | Office Properties | Land | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Total real estate, cost | $ 17,400 | ||||
Eight & Nine Corporate Centre | Office Properties | Buildings and improvements | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Total real estate, cost | 54,000 | ||||
Eight & Nine Corporate Centre | Office Properties | Tenant origination and absorption costs | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Total real estate, cost | $ 4,800 | ||||
Eight & Nine Corporate Centre | Office Buildings | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of real estate properties acquired | property | 2 |
REAL ESTATE HELD FOR INVESTM_10
REAL ESTATE HELD FOR INVESTMENT (Dispositions) (Details) - Park Highlands - Undeveloped Land - Disposed of by Sale $ in Millions | Oct. 16, 2018USD ($)a | Jul. 02, 2018USD ($)a | Feb. 28, 2018USD ($)a | Jan. 01, 2018a |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Area of land sold | a | 15 | 83 | 26 | 102 |
Proceeds from sale of land | $ 3.5 | $ 18.7 | $ 2.5 | |
Gains on sales of investment real estate | $ 2.8 | 12.6 | 0.7 | |
Gross profit, deferred | $ 1.1 | $ 0.3 |
TENANT ORIGINATION AND ABSORP_3
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Abstract] | |||
Tenant Origination And Absorption Costs, Cost | $ 31,584 | $ 15,962 | |
Tenant Origination and Absorption Costs, Accumulated Amortization | (7,421) | (2,833) | |
Tenant Origination and Absorption Costs, Net Amount | 24,163 | 13,129 | |
Above-Market Lease Assets, Cost | 3,714 | 0 | |
Above-Market Lease Assets, Accumulated Amortization | (337) | 0 | |
Above-Market Lease Assets, Net Amount | 3,377 | 0 | |
Below-Market Lease Liabilities, Cost | (6,653) | (3,178) | |
Below-Market Lease Liabilities, Accumulated Amortization | 1,648 | 596 | |
Below-Market Lease Liabilities, Net Amount | (5,005) | (2,582) | |
Tenant Origination And Absorption Costs, Amortization | (7,895) | (10,265) | $ (10,850) |
Above-Market Lease Assets, Amortization | (361) | (283) | (459) |
Below-Market Lease Liabilities, Amortization | $ 1,513 | $ 2,858 | $ 2,789 |
TENANT ORIGINATION AND ABSORP_4
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES (Remaining Unamortized Balance) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Below Market Lease, Net, Amortization Income, Fiscal Year Maturity [Abstract] | |
2,019 | $ 1,315 |
2,020 | 1,013 |
2,021 | 611 |
2,022 | 548 |
2,023 | 510 |
Thereafter | 1,008 |
Net Amount | 5,005 |
Tenant origination and absorption costs | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
2,019 | (6,133) |
2,020 | (5,048) |
2,021 | (4,031) |
2,022 | (2,784) |
2,023 | (1,904) |
Thereafter | (4,263) |
Net Amount | $ (24,163) |
Below Market Lease, Net, Amortization Income, Fiscal Year Maturity [Abstract] | |
Weighted-Average Remaining Amortization Period | 5 years 6 months |
Above-Market Lease Assets | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
2,019 | $ (404) |
2,020 | (314) |
2,021 | (297) |
2,022 | (297) |
2,023 | (297) |
Thereafter | (1,768) |
Net Amount | $ (3,377) |
Below Market Lease, Net, Amortization Income, Fiscal Year Maturity [Abstract] | |
Weighted-Average Remaining Amortization Period | 11 years 1 month 6 days |
Below-Market Lease Liabilities | |
Below Market Lease, Net, Amortization Income, Fiscal Year Maturity [Abstract] | |
Weighted-Average Remaining Amortization Period | 5 years 7 months 6 days |
TENANT ORIGINATION AND ABSORP_5
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Line Items] | |||
Amortization expense | $ 35,006 | $ 53,446 | $ 52,051 |
Prepaid expenses and other assets | |||
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Line Items] | |||
Tax abatement intangible assets | 1,600 | 2,200 | |
Real estate held-for-sale | |||
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Line Items] | |||
Tax abatement intangible assets | 2,700 | 3,100 | |
Property tax abatement intangible assets | |||
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Line Items] | |||
Amortization expense | $ 1,000 | $ 1,000 | $ 1,000 |
REAL ESTATE EQUITY SECURITIES_2
REAL ESTATE EQUITY SECURITIES (Narrative) (Details) | Nov. 26, 2018USD ($)shares | Nov. 08, 2017propertyshares | Dec. 31, 2018USD ($)investmentshares | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($)shares | Dec. 31, 2018USD ($)investmentshares |
Schedule of Available-for-sale Securities [Line Items] | ||||||
Number of investments in equity securities | investment | 3 | 3 | ||||
Issuance of common stock | $ 1,418,000 | $ 8,666,000 | $ 12,616,000 | |||
Available-for-sale securities, lack of marketability | 0 | 1,700,000 | $ 0 | |||
Dividend income from real estate equity securities | $ 6,002,000 | $ 2,531,000 | $ 0 | |||
Singapore Portfolio | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Number of real estate properties disposed | property | 11 | |||||
Common Stock | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Issuance of common stock (in shares) | shares | 123,264 | 585,192 | 938,662 | 56,584,976 | ||
Issuance of common stock | $ 1,000 | $ 6,000 | $ 9,000 | $ 561,700,000 | ||
Franklin Street Properties Corp. | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Cost basis | 22,300,000 | 22,300,000 | ||||
Whitestone REIT | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Cost basis | $ 1,900,000 | $ 1,900,000 | ||||
Whitestone REIT | Common Stock | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Issuance of common stock (in shares) | shares | 1,986,295 | |||||
Issuance of common stock | $ 27,800,000 | |||||
Available-for-sale Securities | Franklin Street Properties Corp. | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Shares purchased (in shares) | shares | 2,772,529 | |||||
Available-for-sale Securities | Whitestone REIT | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Shares purchased (in shares) | shares | 165,000 | |||||
Available-for-sale Securities | Keppel-KBS US REIT | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Shares purchased (in shares) | shares | 12,979,852 | 43,999,500 | ||||
Cost basis | $ 6,500,000 | |||||
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) | 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) | shares | 21,999,750 |
REAL ESTATE EQUITY SECURITIES_3
REAL ESTATE EQUITY SECURITIES (Shares Owned) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Total Carrying Value | $ 73,876 | $ 90,063 |
Available-for-sale Securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Number of Shares Owned (in shares) | 61,533,775 | 47,602,689 |
Whitestone REIT | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Total Carrying Value | $ 21,846 | $ 51,922 |
Whitestone REIT | Available-for-sale Securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Number of Shares Owned (in shares) | 1,781,894 | 3,603,189 |
Keppel-KBS US REIT | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Total Carrying Value | $ 34,757 | $ 38,141 |
Keppel-KBS US REIT | Available-for-sale Securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Number of Shares Owned (in shares) | 56,979,352 | 43,999,500 |
Franklin Street Properties Corp. | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Total Carrying Value | $ 17,273 | $ 0 |
Franklin Street Properties Corp. | Available-for-sale Securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Number of Shares Owned (in shares) | 2,772,529 | 0 |
REAL ESTATE EQUITY SECURITIES_4
REAL ESTATE EQUITY SECURITIES (Portion of Gain and Loss) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Investments, Debt and Equity Securities [Abstract] | |
Net loss recognized during the period on real estate equity securities | $ (19,010) |
Less: Net loss recognized during the period on real estate equity securities sold during the period | (837) |
Unrealized loss recognized during the reporting period on real estate equity securities still held at December 31, 2018 | $ (18,173) |
REAL ESTATE DEBT SECURITIES (Sc
REAL ESTATE DEBT SECURITIES (Schedule of Investments in Debt Securities) (Details) $ in Thousands | Oct. 31, 2018USD ($) | Dec. 31, 2018USD ($)instrument | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Investments, Debt and Equity Securities [Abstract] | ||||
Number of debt investments | instrument | 1,000 | |||
Investment [Line Items] | ||||
Outstanding Principal Balance | $ 13,000 | $ 17,500 | ||
Debt Securities | ||||
Investment [Line Items] | ||||
Investment Income, Net | $ 4,500 | 2,018 | 1,782 | $ 110 |
Battery Point Series B Preferred Units | Series B Preferred Units | ||||
Investment [Line Items] | ||||
Outstanding Principal Balance | 13,000 | |||
Book Value | $ 10,859 | $ 17,751 | ||
Contractual Interest Rate | 12.00% | |||
Annualized Effective Interest Rate | 11.40% |
REAL ESTATE DEBT SECURITIES (_2
REAL ESTATE DEBT SECURITIES (Schedule of Activity of Real Estate Securities) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Held-to-maturity Securities [Roll Forward] | |||
Real estate debt securities - December 31, 2017 | $ 17,500 | ||
Other-than-temporary impairment | (2,500) | $ 0 | $ 0 |
Real estate debt securities - December 31, 2018 | 13,000 | 17,500 | |
Debt Securities | |||
Held-to-maturity Securities [Roll Forward] | |||
Real estate debt securities - December 31, 2017 | 17,751 | ||
Principal repayment | (4,500) | ||
Deferred interest receivable and interest accretion | 59 | ||
Accretion of commitment fee, net of closing costs | 49 | ||
Real estate debt securities - December 31, 2018 | $ 10,859 | $ 17,751 |
REAL ESTATE DEBT SECURITIES (In
REAL ESTATE DEBT SECURITIES (Interest Income) (Details) - USD ($) $ in Thousands | Oct. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Investment [Line Items] | ||||
Contractual interest income | $ 1,884 | $ 1,105 | $ 44 | |
Other-than-temporary impairment of debt securities | $ 2,500 | 0 | 0 | |
Discount rate | 12.00% | |||
Debt Securities | ||||
Investment [Line Items] | ||||
Contractual interest income | $ 1,910 | 1,217 | 63 | |
Interest accretion | 59 | 315 | 30 | |
Accretion of commitment fee, net of closing costs and acquisition fee | 49 | 250 | 17 | |
Interest income from real estate debt securities | $ 4,500 | $ 2,018 | $ 1,782 | $ 110 |
REAL ESTATE DISPOSITIONS (Narra
REAL ESTATE DISPOSITIONS (Narrative) (Details) $ in Thousands | Nov. 30, 2018USD ($) | Nov. 26, 2018USD ($)shares | Jul. 17, 2018USD ($) | Nov. 08, 2017USD ($)propertysubsidiaryshares | May 15, 2017USD ($) | Jul. 11, 2013property | Dec. 31, 2018USD ($)propertyshares | Dec. 31, 2017USD ($)property | Dec. 31, 2016USD ($)property |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Common stock, shares acquired | $ 6,500 | ||||||||
Real estate held for sale | $ 31,252 | $ 186,694 | |||||||
Accumulated depreciation and amortization | 46,301 | 25,614 | |||||||
Loss on extinguishment of debt | (493) | (478) | $ 0 | ||||||
Proceeds from sales of real estate, net | 250,576 | 872,091 | $ 0 | ||||||
Real estate held for investment, net | $ 649,868 | 346,173 | |||||||
SREIT | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Issuance of common stock (in shares) | shares | 186,236,224 | ||||||||
SREIT | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Common stock, shares acquired (in shares) | shares | 12,979,852 | ||||||||
Ownership interest | 7.00% | ||||||||
Westpark Portfolio | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Consideration | $ 166,400 | ||||||||
Total expenses | 3,200 | ||||||||
Gain on sale of real estate, net | $ 32,500 | ||||||||
Central Building | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Consideration | $ 67,500 | ||||||||
Gain on sale of real estate, net | 32,100 | ||||||||
Real estate held for sale | 32,600 | ||||||||
Accumulated depreciation and amortization | $ 5,600 | ||||||||
Singapore Portfolio | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Number of real estate properties disposed | property | 11 | ||||||||
Consideration | $ 804,000 | ||||||||
Total expenses | 7,700 | ||||||||
Common stock, shares acquired (in shares) | shares | 43,999,500 | ||||||||
Real estate held for sale | $ 543,200 | ||||||||
Number of wholly owned subsidiaries | subsidiary | 11 | ||||||||
Loss on extinguishment of debt | $ 500 | ||||||||
Singapore Portfolio | SREIT | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Shares received as part of consideration | shares | 44,000,000 | ||||||||
Shares outstanding, percent | 7.00% | ||||||||
Disposed of by Sale | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Number of real estate properties disposed | property | 0 | ||||||||
Total expenses | $ 21,167 | $ 99,163 | $ 107,977 | ||||||
Office Properties | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Number of real estate properties | property | 6 | ||||||||
Office Properties | 50 Congress Street | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Number of real estate properties disposed | property | 1 | ||||||||
Office Properties | Disposed of by Sale | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Number of real estate properties disposed | property | 1 | 12 | |||||||
Office Properties | Disposed of by Sale | Singapore Portfolio | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Gain on sale of real estate, net | $ 236,900 | ||||||||
Accumulated depreciation and amortization | 103,000 | ||||||||
Deferred gains on sale | $ 17,100 | ||||||||
Office Properties | Disposed of by Sale | 50 Congress Street | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Gain on sale of real estate, net | $ 29,400 | ||||||||
Accumulated depreciation and amortization | 5,900 | ||||||||
Proceeds from sales of real estate, net | 79,000 | ||||||||
Proceeds from sales of real estate, net of concessions and credits | 78,800 | ||||||||
Real estate held for investment, net | $ 47,700 | ||||||||
Office/Flex/Industrial Portfolio | Disposed of by Sale | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Number of real estate properties disposed | property | 1 | ||||||||
Office/Flex/Industrial Buildings | Disposed of by Sale | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Number of real estate properties disposed | property | 21 | ||||||||
Apartment Properties, Portfolio | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Number of real estate properties | property | 2 | ||||||||
Apartment Properties, Portfolio | Held-for-sale | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Number of real estate properties | property | 1 |
REAL ESTATE DISPOSITIONS (Sched
REAL ESTATE DISPOSITIONS (Schedule of Major Components of Real Estate Held for Sale and Liabilities Related to Real Estate Held for Sale) (Details) - Held-for-sale - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Real estate, cost | $ 34,793 | $ 202,897 |
Accumulated depreciation and amortization | (3,541) | (16,203) |
Real estate, net | 31,252 | 186,694 |
Other assets | 2,746 | 8,288 |
Total assets related to real estate held for sale | 33,998 | 194,982 |
Notes payable, net | 22,845 | 135,171 |
Other liabilities | 0 | 261 |
Total liabilities related to real estate held for sale | $ 22,845 | $ 135,432 |
REAL ESTATE DISPOSITIONS (Reven
REAL ESTATE DISPOSITIONS (Revenue and Expenses for Real Estate Held-for-Sale) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Expenses | |||
Real estate acquisition fees to affiliate | $ 0 | $ 0 | $ 2,964 |
Real estate acquisition fees and expenses | 0 | 0 | 543 |
Disposed of by Sale | |||
Revenues | |||
Rental income | 14,418 | 73,529 | 80,950 |
Tenant reimbursements and other operating income | 3,278 | 20,438 | 19,831 |
Total revenues | 17,696 | 93,967 | 100,781 |
Expenses | |||
Operating, maintenance, and management | 5,055 | 27,464 | 29,710 |
Real estate taxes and insurance | 1,293 | 11,510 | 12,470 |
Asset management fees to affiliate | 1,673 | 6,152 | 6,598 |
Real estate acquisition fees to affiliate | 0 | 0 | 1,274 |
Real estate acquisition fees and expenses | 0 | 0 | 275 |
Depreciation and amortization | 7,578 | 36,922 | 41,454 |
Interest expense | 5,568 | 17,115 | 16,196 |
Total expenses | $ 21,167 | $ 99,163 | $ 107,977 |
NOTES AND BONDS PAYABLE (Schedu
NOTES AND BONDS PAYABLE (Schedule of Long-term Debt Instruments) (Details) - USD ($) $ in Thousands | Nov. 30, 2018 | Jul. 17, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||||
Total Notes and Bond Payable principal outstanding | $ 663,318 | $ 611,694 | ||
Net Premium/Discount on Notes and Bond Payable | 198 | 137 | ||
Deferred financing costs, net | (8,044) | (8,788) | ||
Total notes and bonds payable, net | 655,472 | 603,043 | ||
Debt, outstanding amount | 663,318 | |||
Mortgages | ||||
Debt Instrument [Line Items] | ||||
Debt, outstanding amount | 36,000 | |||
Mortgages | Richardson Portfolio Mortgage Loan | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 36,000 | 36,886 | ||
Interest rate, effective percentage | 4.85% | |||
Mortgages | Richardson Portfolio Mortgage Loan | One-month LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 2.50% | |||
Mortgages | Park Centre Mortgage Loan | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 8,404 | 9,877 | ||
Interest rate, effective percentage | 4.60% | |||
Mortgages | Park Centre Mortgage Loan | 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 | $ 10,716 | 10,958 | ||
Interest rate, effective percentage | 4.73% | |||
Mortgages | Burbank Collection Mortgage Loan | One-month LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 2.35% | |||
Mortgages | 1180 Raymond Mortgage Loan | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 30,637 | 31,000 | ||
Interest rate, effective percentage | 4.60% | |||
Mortgages | 1180 Raymond Mortgage Loan | One-month LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 2.25% | |||
Mortgages | 1180 Raymond Bond Payable | ||||
Debt Instrument [Line Items] | ||||
Bonds payable | $ 6,280 | 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 | $ 0 | 27,600 | ||
Extinguishment of debt | $ 27,600 | |||
Mortgages | 424 Bedford Mortgage Loan | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 23,710 | 24,282 | ||
Contractual interest rate, percentage | 3.91% | |||
Interest rate, effective percentage | 3.91% | |||
Mortgages | KBS SOR (BVI) Holdings, Ltd. Series A Debentures | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 259,516 | 278,801 | ||
Contractual interest rate, percentage | 4.25% | |||
Interest rate, effective percentage | 4.25% | |||
Interest rate during period | 2.00% | |||
Mortgages | Westpark Portfolio Mortgage Loan | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 0 | 85,200 | ||
Extinguishment of debt | $ 84,800 | |||
Mortgages | Crown Pointe Mortgage Loan | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 51,171 | 50,500 | ||
Interest rate, effective percentage | 4.95% | |||
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 | $ 53,204 | 50,130 | ||
Interest rate, effective percentage | 4.10% | |||
Mortgages | City Tower Mortgage Loan | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 89,000 | 0 | ||
Interest rate, effective percentage | 3.90% | |||
Mortgages | City Tower Mortgage Loan | One-month LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1.55% | |||
Mortgages | Marquette Plaza Mortgage Loan | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 50,800 | 0 | ||
Interest rate, effective percentage | 3.90% | |||
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 | 3.95% | |||
Mortgages | Eight & Nine Corporate Centre Mortgage Loan | One-month LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1.60% |
NOTES AND BONDS PAYABLE (Narrat
NOTES AND BONDS PAYABLE (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Notes and Bonds Payable [Abstract] | |||
Interest expense | $ 31,054 | $ 37,149 | $ 29,249 |
Amortization of deferred financing costs | 3,640 | 4,363 | 4,289 |
Interest capitalized | 2,565 | 2,339 | $ 2,025 |
Interest payable | $ 5,200 | $ 5,100 |
NOTES AND BONDS PAYABLE (Sche_2
NOTES AND BONDS PAYABLE (Schedule of Maturities of Long-term Debt) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Notes and Bonds Payable [Abstract] | |
2,019 | $ 102,469 |
2,020 | 104,070 |
2,021 | 272,311 |
2,022 | 127,155 |
2,023 | 52,158 |
Thereafter | 5,155 |
Notes and bond payable outstanding | $ 663,318 |
NOTES AND BONDS PAYABLE (Israel
NOTES AND BONDS PAYABLE (Israeli Bond Financing) (Details) | Mar. 01, 2019USD ($) | Mar. 01, 2019ILS (â‚Ş) | Mar. 08, 2016USD ($) | Mar. 08, 2016ILS (â‚Ş) | Mar. 07, 2016ILS (â‚Ş) | Mar. 02, 2016ILS (â‚Ş) | Mar. 01, 2016ILS (â‚Ş) | Mar. 31, 2016 | Feb. 27, 2019USD ($) | Dec. 31, 2018USD ($)instrument | Dec. 31, 2017ILS (â‚Ş)instrument |
Foreign currency collar | Not Designated as Hedging Instrument | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Number of instruments | instrument | 1 | 0 | |||||||||
Notional amount | $ 776,182,000 | â‚Ş 0 | |||||||||
Subsequent Event | Foreign currency collar | Not Designated as Hedging Instrument | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Notional amount | $ | $ 776,200,000 | ||||||||||
Bonds Payable | KBS SOR (BVI) Holdings, Ltd. Series A Debentures | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowing capacity | â‚Ş | â‚Ş 1,000,000,000 | ||||||||||
Interest rate during period | 4.25% | ||||||||||
Proceeds from issuance of debt | $ 249,200,000 | â‚Ş 970,200,000 | â‚Ş 127,700,000 | â‚Ş 842,500,000 | |||||||
Bonds Payable | KBS SOR (BVI) Holdings, Ltd. Series A Debentures | Subsequent Event | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Periodic payment | $ 53,600,000 | â‚Ş 194,000,000 | |||||||||
Bonds Payable | KBS SOR (BVI) Holdings, Ltd. Series A Debentures | Maximum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate during period | 4.25% |
DERIVATIVE INSTRUMENTS (Notiona
DERIVATIVE INSTRUMENTS (Notional Amount) (Details) | Aug. 23, 2019USD ($) | Mar. 07, 2019USD ($) | Feb. 27, 2019USD ($) | Dec. 31, 2018USD ($)instrument | Aug. 20, 2018 | Dec. 31, 2017USD ($)instrument | Dec. 31, 2017ILS (â‚Ş)instrument | Aug. 03, 2017 |
Interest rate caps | Subsequent Event | ||||||||
Derivative [Line Items] | ||||||||
Notional Amount | $ 348,500,000 | |||||||
Interest rate caps | One-month LIBOR | Subsequent Event | ||||||||
Derivative [Line Items] | ||||||||
Variable interest rate | 3.75% | |||||||
Not Designated as Hedging Instrument | Foreign currency collar | ||||||||
Derivative [Line Items] | ||||||||
Number of Instruments | instrument | 1 | 0 | 0 | |||||
Notional Amount | $ 776,182,000 | â‚Ş 0 | ||||||
Not Designated as Hedging Instrument | Foreign currency collar | Subsequent Event | ||||||||
Derivative [Line Items] | ||||||||
Notional Amount | $ 776,200,000 | |||||||
Strike Price | 3.4860 | |||||||
Sale price | 3.6185 | |||||||
Not Designated as Hedging Instrument | Foreign currency collar | Minimum | ||||||||
Derivative [Line Items] | ||||||||
Strike Price | 3.54 | |||||||
Not Designated as Hedging Instrument | Foreign currency collar | Minimum | Forecast | ||||||||
Derivative [Line Items] | ||||||||
Proceeds from derivatives | $ 214,500,000 | |||||||
Not Designated as Hedging Instrument | Foreign currency collar | Maximum | ||||||||
Derivative [Line Items] | ||||||||
Strike Price | 3.66 | |||||||
Not Designated as Hedging Instrument | Foreign currency collar | Maximum | Forecast | ||||||||
Derivative [Line Items] | ||||||||
Proceeds from derivatives | $ 222,700,000 | |||||||
Not Designated as Hedging Instrument | Foreign currency option | ||||||||
Derivative [Line Items] | ||||||||
Number of Instruments | instrument | 0 | 1 | 1 | |||||
Notional Amount | $ 0 | $ 285,361,000 | ||||||
Strike Price | 3.40 | |||||||
Not Designated as Hedging Instrument | Interest rate caps | ||||||||
Derivative [Line Items] | ||||||||
Number of Instruments | instrument | 2 | |||||||
Notional Amount | $ 46,875,000 | |||||||
Not Designated as Hedging Instrument | Interest rate caps | One-month LIBOR | ||||||||
Derivative [Line Items] | ||||||||
Variable interest rate | 3.00% | |||||||
Not Designated as Hedging Instrument | Interest Rate Cap 1 | ||||||||
Derivative [Line Items] | ||||||||
Notional Amount | $ 77,513,000 | |||||||
Not Designated as Hedging Instrument | Interest Rate Cap 1 | One-month LIBOR | ||||||||
Derivative [Line Items] | ||||||||
Variable interest rate | 3.50% |
DERIVATIVE INSTRUMENTS (Balance
DERIVATIVE INSTRUMENTS (Balance Sheets) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($)instrument | Dec. 31, 2017USD ($)instrument | Dec. 31, 2016USD ($) | |
Interest rate caps | |||
Derivative [Line Items] | |||
Unrealized gain (loss) on derivatives | $ | $ 100 | $ 100 | |
Foreign currency collar | |||
Derivative [Line Items] | |||
Loss recognized on derivatives | $ | 8,700 | 26,600 | $ 3,900 |
Foreign currency transaction gain, net | $ | $ 18,800 | $ 11,300 | $ 900 |
Not Designated as Hedging Instrument | Interest rate caps | |||
Derivative [Line Items] | |||
Number of Instruments | instrument | 2 | ||
Not Designated as Hedging Instrument | Interest rate caps | Prepaid expenses and other assets | |||
Derivative [Line Items] | |||
Number of Instruments | instrument | 2 | 1 | |
Derivative Asset | $ | $ 34 | $ 14 | |
Not Designated as Hedging Instrument | Foreign currency option | |||
Derivative [Line Items] | |||
Number of Instruments | instrument | 0 | 1 | |
Not Designated as Hedging Instrument | Foreign currency option | Prepaid expenses and other assets | |||
Derivative [Line Items] | |||
Number of Instruments | instrument | 0 | 1 | |
Derivative Asset | $ | $ 0 | $ 4,243 | |
Not Designated as Hedging Instrument | Foreign currency collar | |||
Derivative [Line Items] | |||
Number of Instruments | instrument | 1 | 0 | |
Not Designated as Hedging Instrument | Foreign currency collar | Other liabilities | |||
Derivative [Line Items] | |||
Number of Instruments | instrument | 1 | 0 | |
Derivative Liability | $ | $ (4,393) | $ 0 |
FAIR VALUE DISCLOSURES (Narrati
FAIR VALUE DISCLOSURES (Narrative) (Details) - shares | 12 Months Ended | ||
Dec. 31, 2018 | Nov. 08, 2018 | May 08, 2018 | |
Available-for-sale Securities | Keppel-KBS US REIT | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Level 2 to Level 1 transfers (in shares) | 21,999,750 | 21,999,750 | |
Singapore Portfolio | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Common stock, shares acquired (in shares) | 43,999,500 |
FAIR VALUE DISCLOSURES (Schedul
FAIR VALUE DISCLOSURES (Schedule of Face Value, Carrying Amounts and Fair Value) (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Real estate debt securities, Face Value | $ 13,000,000 | $ 17,500,000 |
Financial liabilities, Face Value | 403,802,000 | 332,893,000 |
KBS SOR (BVI) Holdings, Ltd. Series A Debentures | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial liabilities, Face Value | 259,516,000 | 278,801,000 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Real estate debt securities, Value | 10,859,000 | 17,751,000 |
Financial liabilities, Value | 400,470,000 | 330,727,000 |
Carrying Amount | KBS SOR (BVI) Holdings, Ltd. Series A Debentures | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial liabilities, Value | 255,002,000 | 272,316,000 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Real estate debt securities, Value | 10,859,000 | 17,386,000 |
Financial liabilities, Value | 407,449,000 | 335,212,000 |
Fair Value | KBS SOR (BVI) Holdings, Ltd. Series A Debentures | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial liabilities, Value | $ 255,814,000 | $ 296,069,000 |
FAIR VALUE DISCLOSURES (Sched_2
FAIR VALUE DISCLOSURES (Schedule of Assets at Fair Value) (Details) - Recurring Basis $ in Thousands | Dec. 31, 2018USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Real estate equity securities | $ 73,876 |
Asset derivative - interest rate caps | 34 |
Liability derivative - foreign currency collar | (4,393) |
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 | 73,876 |
Asset derivative - interest rate caps | 0 |
Liability derivative - foreign currency collar | 0 |
Significant Other Observable Inputs (Level 2) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Real estate equity securities | 0 |
Asset derivative - interest rate caps | 34 |
Liability derivative - foreign currency collar | (4,393) |
Significant Unobservable Inputs (Level 3) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Real estate equity securities | 0 |
Asset derivative - interest rate caps | 0 |
Liability derivative - foreign currency collar | $ 0 |
RELATED PARTY TRANSACTIONS (Cos
RELATED PARTY TRANSACTIONS (Costs) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||
Payable as of | $ 36 | $ 26 | |
Payment for administrative fees | 305 | 225 | $ 153 |
Property insurance rebate | KBS Capital Advisors LLC | |||
Related Party Transaction [Line Items] | |||
Incurred | 100 | 100 | |
Evaluate certain strategic transactions | KBS Capital Advisors LLC | |||
Related Party Transaction [Line Items] | |||
Incurred | 400 | 100 | |
Advisor and Dealer Manager | |||
Related Party Transaction [Line Items] | |||
Incurred | 14,762 | 20,615 | 13,342 |
Payable as of | 36 | 26 | |
Advisor and Dealer Manager | Asset management fees | |||
Related Party Transaction [Line Items] | |||
Expensed | 8,525 | 10,686 | 9,628 |
Payable as of | 0 | 0 | |
Advisor and Dealer Manager | Acquisition fees on real estate | |||
Related Party Transaction [Line Items] | |||
Expensed | 0 | 0 | 2,964 |
Incurred | 3,094 | 907 | 0 |
Payable as of | 0 | 0 | |
Advisor and Dealer Manager | Reimbursable operating expenses | |||
Related Party Transaction [Line Items] | |||
Expensed | 410 | 241 | 221 |
Payable as of | 29 | 26 | |
Advisor and Dealer Manager | Disposition fees | |||
Related Party Transaction [Line Items] | |||
Expensed | 2,494 | 8,352 | 279 |
Payable as of | 0 | 0 | |
Advisor and Dealer Manager | Acquisition fees on real estate equity securities | |||
Related Party Transaction [Line Items] | |||
Incurred | 239 | 429 | 0 |
Payable as of | 7 | 0 | |
Advisor and Dealer Manager | Acquisition fees on real estate debt securities | |||
Related Party Transaction [Line Items] | |||
Incurred | 0 | 0 | $ 250 |
Payable as of | 0 | $ 0 | |
KBS Capital Advisors LLC | Property insurance rebate | |||
Related Party Transaction [Line Items] | |||
Due from related parties | $ 100 |
RELATED PARTY TRANSACTIONS (Sal
RELATED PARTY TRANSACTIONS (Sale Agreement) (Details) $ in Thousands | Jul. 06, 2017USD ($)aft²property | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Related Party Transaction [Line Items] | ||||
Payment for administrative fees | $ 305 | $ 225 | $ 153 | |
Real estate acquisition fees and expenses | 0 | 0 | 543 | |
Joint Venture | ||||
Related Party Transaction [Line Items] | ||||
Ownership % | 55.00% | |||
Disposed of by Sale | ||||
Related Party Transaction [Line Items] | ||||
Real estate acquisition fees and expenses | $ 0 | $ 0 | $ 275 | |
353 Sacramento | Office Properties | Disposed of by Sale | ||||
Related Party Transaction [Line Items] | ||||
Ownership % | 45.00% | |||
Net rentable area | ft² | 284,751 | |||
Area of land | a | 0.35 | |||
Consideration | $ 39,100 | |||
Migdal Members | ||||
Related Party Transaction [Line Items] | ||||
Ownership % | 45.00% | |||
125 John Carpenter | KBS Capital Advisors LLC | ||||
Related Party Transaction [Line Items] | ||||
Acquisition fees waved | $ 800 | |||
125 John Carpenter | Office Properties | KBS Capital Advisors LLC | ||||
Related Party Transaction [Line Items] | ||||
Net rentable area | ft² | 442,039 | |||
Number of real estate properties | property | 2 | |||
353 Sacramento | KBS Capital Advisors LLC | ||||
Related Party Transaction [Line Items] | ||||
Acquisition fees waved as percent of acquisition fees paid | 45.00% | |||
Monarch Global Partners, LLC | Immediate Family Member of Management or Principal Owner | ||||
Related Party Transaction [Line Items] | ||||
Payment for administrative fees | $ 100 | |||
WBAM | 353 Sacramento | Migdal Members | ||||
Related Party Transaction [Line Items] | ||||
Real estate acquisition fees and expenses | 200 | |||
Parent Company | 353 Sacramento | Migdal Members | ||||
Related Party Transaction [Line Items] | ||||
Real estate acquisition fees and expenses | $ 200 |
INVESTMENT IN UNCONSOLIDATED _3
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Investments in Unconsolidated Joint Ventures) (Details) $ in Thousands | Dec. 31, 2018USD ($)property | Jan. 01, 2018USD ($) | Dec. 31, 2017USD ($) | May 02, 2014 |
Schedule of Equity Method Investments [Line Items] | ||||
Investment Balance | $ 44,869 | $ 55,577 | ||
NIP Joint Venture | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of Properties | property | 2 | |||
Investment Balance | $ 1,476 | $ 3,700 | 3,674 | |
110 William Joint Venture | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of Properties | property | 1 | |||
Ownership % | 60.00% | 60.00% | ||
Investment Balance | $ 325 | 7,160 | ||
353 Sacramento Joint Venture | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of Properties | property | 1 | |||
Ownership % | 55.00% | |||
Investment Balance | $ 43,068 | $ 44,743 |
INVESTMENT IN UNCONSOLIDATED _4
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Narrative) (Details) | May 09, 2012USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Jan. 01, 2018USD ($) | Jul. 06, 2017a | May 02, 2014ft² |
Schedule of Equity Method Investments [Line Items] | |||||||
Initial capital contribution | $ 1,320,000 | $ 0 | $ 2,820,000 | ||||
Income from unconsolidated joint venture | 428,000 | 2,073,000 | 0 | ||||
Investments in unconsolidated joint ventures | 44,869,000 | 55,577,000 | |||||
Joint Venture | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Ownership interest | 55.00% | ||||||
353 Sacramento | Office Properties | Disposed of by Sale | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Ownership interest | 45.00% | ||||||
Area of land | a | 0.35 | ||||||
110 William JV Partner | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Return of capital | 58,200,000 | ||||||
Capital distribution | 38,800,000 | ||||||
Migdal Members | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Ownership interest | 45.00% | ||||||
NIP Joint Venture | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Initial capital contribution | $ 8,000,000 | ||||||
Distributions | 2,600,000 | 3,700,000 | $ 0 | ||||
Income from unconsolidated joint venture | 400,000 | 2,100,000 | |||||
Return of capital | 2,200,000 | 1,600,000 | |||||
Investments in unconsolidated joint ventures | $ 1,476,000 | 3,674,000 | $ 3,700,000 | ||||
NIP Joint Venture | Maximum | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Ownership interest | 5.00% | ||||||
110 William Joint Venture | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Ownership interest | 60.00% | 60.00% | |||||
Rentable square feet | ft² | 928,157 | ||||||
Area of land | ft² | 0.8 | ||||||
Investments in unconsolidated joint ventures | $ 325,000 | 7,160,000 | |||||
Amortization of acquisition costs | 1,400,000 | 1,500,000 | |||||
110 William Joint Venture | 110 William JV Partner | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Ownership interest | 40.00% | ||||||
353 Sacramento Joint Venture | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Initial capital contribution | $ 1,300,000 | ||||||
Ownership interest | 55.00% | ||||||
Distributions | 0 | ||||||
Investments in unconsolidated joint ventures | $ 43,068,000 | $ 44,743,000 |
INVESTMENT IN UNCONSOLIDATED _5
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Summarized Financial Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | 18 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | |
Balance Sheet Related Disclosures [Abstract] | ||||||||||||
Real estate assets, net of accumulated depreciation and amortization | $ 649,868 | $ 346,173 | $ 649,868 | $ 346,173 | $ 649,868 | |||||||
Total assets | 1,004,989 | 1,101,574 | 1,004,989 | 1,101,574 | 1,004,989 | |||||||
Other liabilities | 21,006 | 16,966 | 21,006 | 16,966 | 21,006 | |||||||
Total liabilities and equity | 1,004,989 | 1,101,574 | 1,004,989 | 1,101,574 | 1,004,989 | |||||||
Income Statement [Abstract] | ||||||||||||
Revenues | 23,705 | $ 27,156 | $ 25,290 | $ 19,636 | 26,067 | $ 36,414 | $ 40,237 | $ 37,996 | 95,787 | 140,714 | $ 134,244 | |
Operating, maintenance, and management | 29,110 | 42,611 | 41,906 | |||||||||
Real estate taxes and insurance | 11,762 | 17,404 | 16,887 | |||||||||
Depreciation and amortization | 35,006 | 53,446 | 52,051 | |||||||||
Interest expense | 31,054 | 37,149 | 29,249 | |||||||||
Total expenses | 115,600 | 182,577 | 161,986 | |||||||||
Net income (loss) attributable to common stockholders | 10,694 | $ 36,497 | $ 10,036 | $ (23,681) | 206,424 | $ (10,534) | $ 23,846 | $ (9,092) | 33,546 | 210,644 | (28,918) | |
Company’s equity in loss of unconsolidated joint venture | (9,830) | (6,037) | (1,408) | |||||||||
110 William Joint Venture | ||||||||||||
Balance Sheet Related Disclosures [Abstract] | ||||||||||||
Real estate assets, net of accumulated depreciation and amortization | 235,613 | 248,269 | 235,613 | 248,269 | 235,613 | |||||||
Other assets | 37,337 | 32,331 | 37,337 | 32,331 | 37,337 | |||||||
Total assets | 272,950 | 280,600 | 272,950 | 280,600 | 272,950 | |||||||
Notes payable, net | 267,311 | 260,108 | 267,311 | 260,108 | 267,311 | |||||||
Other liabilities | 7,485 | 11,016 | 7,485 | 11,016 | 7,485 | |||||||
Partners’ (deficit) capital | (1,846) | 9,476 | (1,846) | 9,476 | (1,846) | |||||||
Total liabilities and equity | 272,950 | 280,600 | 272,950 | 280,600 | 272,950 | |||||||
Income Statement [Abstract] | ||||||||||||
Revenues | 38,539 | 37,338 | 33,458 | |||||||||
Operating, maintenance, and management | 9,844 | 10,056 | 10,778 | |||||||||
Real estate taxes and insurance | 6,718 | 6,281 | 6,017 | |||||||||
Depreciation and amortization | 15,596 | 16,544 | 12,955 | |||||||||
Interest expense | 17,815 | 13,134 | 6,049 | |||||||||
Total expenses | 49,973 | 46,015 | 35,799 | |||||||||
Total other income | 112 | 56 | 63 | |||||||||
Net income (loss) attributable to common stockholders | (11,322) | (8,621) | (2,278) | |||||||||
Company’s equity in loss of unconsolidated joint venture | (6,835) | (5,214) | $ (1,408) | |||||||||
353 Sacramento Joint Venture | ||||||||||||
Balance Sheet Related Disclosures [Abstract] | ||||||||||||
Real estate assets, net of accumulated depreciation and amortization | 180,852 | 171,066 | 180,852 | 171,066 | 180,852 | |||||||
Other assets | 13,123 | 6,472 | 13,123 | 6,472 | 13,123 | |||||||
Total assets | 193,975 | 177,538 | 193,975 | 177,538 | 193,975 | |||||||
Notes payable, net | 105,593 | 89,423 | 105,593 | 89,423 | 105,593 | |||||||
Other liabilities | 10,863 | 7,313 | 10,863 | 7,313 | 10,863 | |||||||
Partners’ (deficit) capital | 77,519 | 80,802 | 77,519 | 80,802 | 77,519 | |||||||
Total liabilities and equity | $ 193,975 | $ 177,538 | 193,975 | $ 177,538 | 193,975 | |||||||
Income Statement [Abstract] | ||||||||||||
Revenues | 11,397 | 7,053 | ||||||||||
Operating, maintenance, and management | 3,654 | 2,189 | ||||||||||
Real estate taxes and insurance | 2,372 | 1,198 | ||||||||||
Depreciation and amortization | 5,680 | 3,408 | ||||||||||
Interest expense | 5,374 | 2,302 | ||||||||||
Total expenses | 17,080 | 9,097 | ||||||||||
Net income (loss) attributable to common stockholders | (5,683) | (2,044) | ||||||||||
Company’s equity in loss of unconsolidated joint venture | $ 2,995 | $ 823 |
SUPPLEMENTAL CASH FLOW AND SI_3
SUPPLEMENTAL CASH FLOW AND SIGNIFICANT NONCASH TRANSACTION DISCLOSURES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Supplemental Disclosure of Cash Flow Information: | |||
Interest paid, net of capitalized interest of $2,565, $2,339 and $2,025 for the years ended December 31, 2018, 2017 and 2016, respectively | $ 27,029 | $ 32,688 | $ 20,759 |
Interest capitalized | 2,565 | 2,339 | 2,025 |
Assets and liabilities deconsolidated in connection with the 353 Sacramento partial sale: | |||
Real estate, net | 649,868 | 346,173 | |
Rents and other receivables, net | 12,292 | 7,111 | |
Prepaid expenses and other assets | 13,123 | 12,735 | |
Accounts payable and accrued liabilities | 19,506 | 16,686 | |
Below-market leases, net | 5,005 | 2,582 | |
Other liabilities | 21,006 | 16,966 | |
SREIT units received in connection with the Singapore Transaction | 0 | 38,720 | 0 |
Increase in development obligations related to sale of real estate | 0 | 3,816 | 0 |
Application of escrow deposits to acquisition of real estate | 0 | 2,000 | 0 |
Increase in accrued improvements to real estate | 0 | 0 | 3,547 |
Increase in redemption common stock payable | 1,405 | 0 | 8,902 |
Distributions paid to common stockholders through common stock issuances pursuant to the dividend reinvestment plan | 1,418 | 8,666 | 12,616 |
Distributions paid to common stockholders through common stock issuances pursuant to the December 2017 special dividend | 150,299 | 0 | 0 |
Distributions paid to common stockholders through common stock issuances pursuant to the November 2018 special dividend | 127,911 | 0 | 0 |
353 Sacramento | |||
Assets and liabilities deconsolidated in connection with the 353 Sacramento partial sale: | |||
Real estate, net | 0 | 170,586 | 0 |
Rents and other receivables, net | 0 | 1,244 | 0 |
Prepaid expenses and other assets | 0 | 555 | 0 |
Notes payable, net | 0 | 87,132 | 0 |
Accounts payable and accrued liabilities | 0 | 1,574 | 0 |
Below-market leases, net | 0 | 2,960 | 0 |
Other liabilities | $ 0 | $ 924 | $ 0 |
SELECTED QUARTERLY FINANCIAL _3
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 23,705 | $ 27,156 | $ 25,290 | $ 19,636 | $ 26,067 | $ 36,414 | $ 40,237 | $ 37,996 | $ 95,787 | $ 140,714 | $ 134,244 |
Net (loss) income | 10,612 | 36,421 | 9,993 | (23,702) | 206,371 | (10,542) | 23,809 | (9,058) | 33,324 | 210,580 | (29,126) |
Net (loss) income attributable to common stockholders | $ 10,694 | $ 36,497 | $ 10,036 | $ (23,681) | $ 206,424 | $ (10,534) | $ 23,846 | $ (9,092) | $ 33,546 | $ 210,644 | $ (28,918) |
Net (loss) income per common share, basic and diluted (in dollars per share) | $ 0.19 | $ 0.67 | $ 0.16 | $ (0.38) | $ 3.88 | $ (0.19) | $ 0.42 | $ (0.16) | $ 0.57 | $ 3.77 | $ (0.50) |
Distributions declared per common share (in dollars per share) | $ 2.95 | $ 0.016 | $ 0.016 | $ 0.016 | $ 3.610 | $ 0.095 | $ 0.093 | $ 0.092 | $ 2.998000 | $ 3.89 | $ 0.38 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - KBS Capital Advisors LLC $ in Millions | Dec. 31, 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 | $ 43 |
SUBSEQUENT EVENTS (Narrative) (
SUBSEQUENT EVENTS (Narrative) (Details) - USD ($) $ in Thousands | Jan. 11, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Subsequent Event [Line Items] | |||
Real estate held for sale | $ 31,252 | $ 186,694 | |
Accumulated depreciation and amortization | 46,301 | $ 25,614 | |
Debt, outstanding amount | $ 663,318 | ||
Subsequent Event | 424 Bedford | |||
Subsequent Event [Line Items] | |||
Consideration | $ 43,800 | ||
Real estate held for sale | 34,000 | ||
Accumulated depreciation and amortization | 5,300 | ||
Debt, outstanding amount | $ 23,700 |
SUBSEQUENT EVENTS (Distribution
SUBSEQUENT EVENTS (Distributions) (Details) - $ / shares | Mar. 07, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Subsequent Event [Line Items] | ||||||||||||
Distributions declared per common share (in dollars per share) | $ 2.95 | $ 0.016 | $ 0.016 | $ 0.016 | $ 3.610 | $ 0.095 | $ 0.093 | $ 0.092 | $ 2.998000 | $ 3.89 | $ 0.38 | |
Subsequent Event | Dividend Declared | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Distributions declared per common share (in dollars per share) | $ 0.00860000 |
SUBSEQUENT EVENTS (110 William
SUBSEQUENT EVENTS (110 William Street Refinancing) (Details) | Mar. 07, 2019USD ($)extension | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Subsequent Event [Line Items] | |||
Face amount | $ 403,802,000 | $ 332,893,000 | |
Subsequent Event | Interest rate caps | |||
Subsequent Event [Line Items] | |||
Notional amount | $ 348,500,000 | ||
Subsequent Event | One-month LIBOR | Interest rate caps | |||
Subsequent Event [Line Items] | |||
Variable interest rate | 3.75% | ||
Subsequent Event | 110 William Joint Venture | 110 William Street Mortgage Loan | |||
Subsequent Event [Line Items] | |||
Extinguishment of debt | $ 268,000,000 | ||
Face amount | $ 261,400,000 | ||
Number of extensions | extension | 3 | ||
Extension period | 1 year | ||
Contractual interest rate, percentage | 3.50% | ||
Subsequent Event | 110 William Joint Venture | 110 William Street Mortgage Loan | One-month LIBOR | |||
Subsequent Event [Line Items] | |||
Basis spread on variable rate | 1.50% | ||
Subsequent Event | 110 William Joint Venture | Mezzanine Loan | |||
Subsequent Event [Line Items] | |||
Face amount | $ 87,100,000 | ||
Contractual interest rate, percentage | 6.90% | ||
Amount outstanding | $ 70,300,000 | ||
Subsequent Event | 110 William Joint Venture | Mezzanine Loan | One-month LIBOR | |||
Subsequent Event [Line Items] | |||
Basis spread on variable rate | 4.90% | ||
Subsequent Event | 110 William Joint Venture | Senior Mortgage Loan | |||
Subsequent Event [Line Items] | |||
Extinguishment of debt | $ 215,500,000 | ||
Amount outstanding | 210,800,000 | ||
Unused borrowing capacity, amount | 4,700,000 | ||
Subsequent Event | 110 William Joint Venture | Building Loan | |||
Subsequent Event [Line Items] | |||
Extinguishment of debt | 45,900,000 | ||
Unused borrowing capacity, amount | 45,900,000 | ||
Subsequent Event | 110 William Joint Venture | 110 William Street Mezzanine Loan | |||
Subsequent Event [Line Items] | |||
Unused borrowing capacity, amount | $ 16,800,000 |
SCHEDULE III REAL ESTATE ASSE_2
SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION (Schedule) (Details) $ in Thousands | Sep. 07, 2016USD ($)unit | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Real Estate and Accumulated Depreciation [Line Items] | |||||
Initial Cost to Company, Land | $ 137,028 | ||||
Initial Cost to Company, Building and Improvements | 546,109 | ||||
Initial Cost to Company, Total | 683,137 | ||||
Cost Capitalized Subsequent to Acquisition | 47,825 | ||||
Gross Amount at which Carried at Close of Period, Land | 157,740 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 573,222 | ||||
Gross Amount at which Carried at Close of Period, Total | 730,962 | $ 574,684 | $ 1,227,207 | $ 914,074 | |
Accumulated Depreciation and Amortization | (49,842) | $ (41,817) | $ (120,176) | $ (91,560) | |
Aggregate cost of real estate for federal income tax purposes | 866,500 | ||||
Debt, outstanding amount | 663,318 | ||||
Subsidiary of Common Parent | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Interest rate on Class A non-voting preferred membership units | 10.00% | ||||
Proceeds from sale of units | $ 800 | ||||
Disposed of by Sale | Subsidiary of Common Parent | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Number of real estate units | unit | 820 | ||||
Mortgages | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Debt, outstanding amount | 36,000 | ||||
Properties Held for Investment | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Initial Cost to Company, Land | 128,168 | ||||
Initial Cost to Company, Building and Improvements | 521,289 | ||||
Initial Cost to Company, Total | 649,457 | ||||
Cost Capitalized Subsequent to Acquisition | 46,712 | ||||
Gross Amount at which Carried at Close of Period, Land | 148,880 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 547,289 | ||||
Gross Amount at which Carried at Close of Period, Total | 696,169 | ||||
Accumulated Depreciation and Amortization | (46,301) | ||||
Properties Held for Investment | Total Richardson Portfolio | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Encumbrances | 36,000 | ||||
Initial Cost to Company, Land | 5,107 | ||||
Initial Cost to Company, Building and Improvements | 30,998 | ||||
Initial Cost to Company, Total | 36,105 | ||||
Cost Capitalized Subsequent to Acquisition | 5,343 | ||||
Gross Amount at which Carried at Close of Period, Land | 6,244 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 35,204 | ||||
Gross Amount at which Carried at Close of Period, Total | 41,448 | ||||
Accumulated Depreciation and Amortization | $ (9,102) | ||||
Properties Held for Investment | Palisades Central I | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Ownership Percent | 90.00% | ||||
Initial Cost to Company, Land | $ 1,037 | ||||
Initial Cost to Company, Building and Improvements | 8,628 | ||||
Initial Cost to Company, Total | 9,665 | ||||
Cost Capitalized Subsequent to Acquisition | 2,268 | ||||
Gross Amount at which Carried at Close of Period, Land | 1,037 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 10,896 | ||||
Gross Amount at which Carried at Close of Period, Total | 11,933 | ||||
Accumulated Depreciation and Amortization | $ (2,796) | ||||
Original Date of Construction | 1,980 | ||||
Date Acquired or Foreclosed on | Nov. 23, 2011 | ||||
Properties Held for Investment | Palisades Central II | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Ownership Percent | 90.00% | ||||
Initial Cost to Company, Land | $ 810 | ||||
Initial Cost to Company, Building and Improvements | 17,117 | ||||
Initial Cost to Company, Total | 17,927 | ||||
Cost Capitalized Subsequent to Acquisition | 1,253 | ||||
Gross Amount at which Carried at Close of Period, Land | 810 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 18,370 | ||||
Gross Amount at which Carried at Close of Period, Total | 19,180 | ||||
Accumulated Depreciation and Amortization | $ (4,352) | ||||
Original Date of Construction | 1,985 | ||||
Date Acquired or Foreclosed on | Nov. 23, 2011 | ||||
Properties Held for Investment | Greenway I | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Ownership Percent | 90.00% | ||||
Initial Cost to Company, Land | $ 561 | ||||
Initial Cost to Company, Building and Improvements | 1,170 | ||||
Initial Cost to Company, Total | 1,731 | ||||
Cost Capitalized Subsequent to Acquisition | 966 | ||||
Gross Amount at which Carried at Close of Period, Land | 561 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 2,136 | ||||
Gross Amount at which Carried at Close of Period, Total | 2,697 | ||||
Accumulated Depreciation and Amortization | $ (745) | ||||
Original Date of Construction | 1,983 | ||||
Date Acquired or Foreclosed on | Nov. 23, 2011 | ||||
Properties Held for Investment | Greenway III | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Ownership Percent | 90.00% | ||||
Initial Cost to Company, Land | $ 702 | ||||
Initial Cost to Company, Building and Improvements | 4,083 | ||||
Initial Cost to Company, Total | 4,785 | ||||
Cost Capitalized Subsequent to Acquisition | (281) | ||||
Gross Amount at which Carried at Close of Period, Land | 702 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 3,802 | ||||
Gross Amount at which Carried at Close of Period, Total | 4,504 | ||||
Accumulated Depreciation and Amortization | $ (1,209) | ||||
Original Date of Construction | 1,983 | ||||
Date Acquired or Foreclosed on | Nov. 23, 2011 | ||||
Properties Held for Investment | Undeveloped Land | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Ownership Percent | 90.00% | ||||
Encumbrances | $ 0 | ||||
Initial Cost to Company, Land | 1,997 | ||||
Initial Cost to Company, Building and Improvements | 0 | ||||
Initial Cost to Company, Total | 1,997 | ||||
Cost Capitalized Subsequent to Acquisition | 1,137 | ||||
Gross Amount at which Carried at Close of Period, Land | 3,134 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 0 | ||||
Gross Amount at which Carried at Close of Period, Total | 3,134 | ||||
Accumulated Depreciation and Amortization | $ 0 | ||||
Date Acquired or Foreclosed on | Nov. 23, 2011 | ||||
Properties Held for Investment | Park Highlands | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Ownership Percent | 100.00% | ||||
Encumbrances | $ 0 | ||||
Initial Cost to Company, Land | 17,066 | ||||
Initial Cost to Company, Building and Improvements | 0 | ||||
Initial Cost to Company, Total | 17,066 | ||||
Cost Capitalized Subsequent to Acquisition | 13,537 | ||||
Gross Amount at which Carried at Close of Period, Land | 30,603 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 0 | ||||
Gross Amount at which Carried at Close of Period, Total | 30,603 | ||||
Accumulated Depreciation and Amortization | $ 0 | ||||
Date Acquired or Foreclosed on | Dec. 30, 2011 | ||||
Properties Held for Investment | Burbank Collection | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Ownership Percent | 90.00% | ||||
Encumbrances | $ 10,716 | ||||
Initial Cost to Company, Land | 4,175 | ||||
Initial Cost to Company, Building and Improvements | 8,799 | ||||
Initial Cost to Company, Total | 12,974 | ||||
Cost Capitalized Subsequent to Acquisition | 3,886 | ||||
Gross Amount at which Carried at Close of Period, Land | 4,175 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 12,685 | ||||
Gross Amount at which Carried at Close of Period, Total | 16,860 | ||||
Accumulated Depreciation and Amortization | $ (2,559) | ||||
Original Date of Construction | 2,008 | ||||
Date Acquired or Foreclosed on | Dec. 12, 2012 | ||||
Properties Held for Investment | Park Centre | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Ownership Percent | 100.00% | ||||
Encumbrances | $ 8,404 | ||||
Initial Cost to Company, Land | 3,251 | ||||
Initial Cost to Company, Building and Improvements | 27,941 | ||||
Initial Cost to Company, Total | 31,192 | ||||
Cost Capitalized Subsequent to Acquisition | 97 | ||||
Gross Amount at which Carried at Close of Period, Land | 3,251 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 28,038 | ||||
Gross Amount at which Carried at Close of Period, Total | 31,289 | ||||
Accumulated Depreciation and Amortization | $ (4,656) | ||||
Original Date of Construction | 2,000 | ||||
Date Acquired or Foreclosed on | Mar. 28, 2013 | ||||
Properties Held for Investment | 1180 Raymond | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Ownership Percent | 100.00% | ||||
Encumbrances | $ 30,637 | ||||
Initial Cost to Company, Land | 8,292 | ||||
Initial Cost to Company, Building and Improvements | 37,651 | ||||
Initial Cost to Company, Total | 45,943 | ||||
Cost Capitalized Subsequent to Acquisition | 955 | ||||
Gross Amount at which Carried at Close of Period, Land | 8,292 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 38,606 | ||||
Gross Amount at which Carried at Close of Period, Total | 46,898 | ||||
Accumulated Depreciation and Amortization | $ (6,618) | ||||
Original Date of Construction | 1,929 | ||||
Date Acquired or Foreclosed on | Aug. 20, 2013 | ||||
Properties Held for Investment | Park Highlands II | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Ownership Percent | 100.00% | ||||
Encumbrances | $ 0 | ||||
Initial Cost to Company, Land | 20,118 | ||||
Initial Cost to Company, Building and Improvements | 0 | ||||
Initial Cost to Company, Total | 20,118 | ||||
Cost Capitalized Subsequent to Acquisition | 5,716 | ||||
Gross Amount at which Carried at Close of Period, Land | 25,834 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 0 | ||||
Gross Amount at which Carried at Close of Period, Total | 25,834 | ||||
Accumulated Depreciation and Amortization | $ 0 | ||||
Date Acquired or Foreclosed on | Dec. 10, 2013 | ||||
Properties Held for Investment | Richardson Land II | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Ownership Percent | 90.00% | ||||
Encumbrances | $ 0 | ||||
Initial Cost to Company, Land | 3,096 | ||||
Initial Cost to Company, Building and Improvements | 0 | ||||
Initial Cost to Company, Total | 3,096 | ||||
Cost Capitalized Subsequent to Acquisition | 322 | ||||
Gross Amount at which Carried at Close of Period, Land | 3,418 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 0 | ||||
Gross Amount at which Carried at Close of Period, Total | 3,418 | ||||
Accumulated Depreciation and Amortization | $ 0 | ||||
Date Acquired or Foreclosed on | Sep. 4, 2014 | ||||
Properties Held for Investment | Crown Pointe | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Ownership Percent | 100.00% | ||||
Encumbrances | $ 51,171 | ||||
Initial Cost to Company, Land | 22,590 | ||||
Initial Cost to Company, Building and Improvements | 62,610 | ||||
Initial Cost to Company, Total | 85,200 | ||||
Cost Capitalized Subsequent to Acquisition | 7,842 | ||||
Gross Amount at which Carried at Close of Period, Land | 22,590 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 70,452 | ||||
Gross Amount at which Carried at Close of Period, Total | 93,042 | ||||
Accumulated Depreciation and Amortization | $ (7,653) | ||||
Original Date of Construction | 1985/1989 | ||||
Date Acquired or Foreclosed on | Feb. 14, 2017 | ||||
Properties Held for Investment | 125 John Carpenter | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Ownership Percent | 100.00% | ||||
Encumbrances | $ 53,204 | ||||
Initial Cost to Company, Land | 2,755 | ||||
Initial Cost to Company, Building and Improvements | 82,550 | ||||
Initial Cost to Company, Total | 85,305 | ||||
Cost Capitalized Subsequent to Acquisition | 2,978 | ||||
Gross Amount at which Carried at Close of Period, Land | 2,755 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 85,528 | ||||
Gross Amount at which Carried at Close of Period, Total | 88,283 | ||||
Accumulated Depreciation and Amortization | $ (5,690) | ||||
Original Date of Construction | 1982/1983 | ||||
Date Acquired or Foreclosed on | Sep. 15, 2017 | ||||
Properties Held for Investment | Marquette Plaza | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Ownership Percent | 100.00% | ||||
Encumbrances | $ 50,800 | ||||
Initial Cost to Company, Land | 10,387 | ||||
Initial Cost to Company, Building and Improvements | 75,878 | ||||
Initial Cost to Company, Total | 86,265 | ||||
Cost Capitalized Subsequent to Acquisition | 3,069 | ||||
Gross Amount at which Carried at Close of Period, Land | 10,387 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 78,947 | ||||
Gross Amount at which Carried at Close of Period, Total | 89,334 | ||||
Accumulated Depreciation and Amortization | $ (2,902) | ||||
Original Date of Construction | 1,972 | ||||
Date Acquired or Foreclosed on | Mar. 1, 2018 | ||||
Properties Held for Investment | City Tower | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Ownership Percent | 100.00% | ||||
Encumbrances | $ 89,000 | ||||
Initial Cost to Company, Land | 13,930 | ||||
Initial Cost to Company, Building and Improvements | 136,068 | ||||
Initial Cost to Company, Total | 149,998 | ||||
Cost Capitalized Subsequent to Acquisition | 2,786 | ||||
Gross Amount at which Carried at Close of Period, Land | 13,930 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 138,854 | ||||
Gross Amount at which Carried at Close of Period, Total | 152,784 | ||||
Accumulated Depreciation and Amortization | $ (5,469) | ||||
Original Date of Construction | 1,988 | ||||
Date Acquired or Foreclosed on | Mar. 6, 2018 | ||||
Properties Held for Investment | Eight & Nine Corporate Centre | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Ownership Percent | 100.00% | ||||
Encumbrances | $ 43,880 | ||||
Initial Cost to Company, Land | 17,401 | ||||
Initial Cost to Company, Building and Improvements | 58,794 | ||||
Initial Cost to Company, Total | 76,195 | ||||
Cost Capitalized Subsequent to Acquisition | 181 | ||||
Gross Amount at which Carried at Close of Period, Land | 17,401 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 58,975 | ||||
Gross Amount at which Carried at Close of Period, Total | 76,376 | ||||
Accumulated Depreciation and Amortization | $ (1,652) | ||||
Original Date of Construction | 2,007 | ||||
Date Acquired or Foreclosed on | Jun. 8, 2018 | ||||
Property Held for Sale | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Initial Cost to Company, Land | $ 8,860 | ||||
Initial Cost to Company, Building and Improvements | 24,820 | ||||
Initial Cost to Company, Total | 33,680 | ||||
Cost Capitalized Subsequent to Acquisition | 1,113 | ||||
Gross Amount at which Carried at Close of Period, Land | 8,860 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 25,933 | ||||
Gross Amount at which Carried at Close of Period, Total | 34,793 | ||||
Accumulated Depreciation and Amortization | $ (3,541) | ||||
Property Held for Sale | 424 Bedford | |||||
Real Estate and Accumulated Depreciation [Line Items] | |||||
Ownership Percent | 90.00% | ||||
Encumbrances | $ 23,710 | ||||
Initial Cost to Company, Land | 8,860 | ||||
Initial Cost to Company, Building and Improvements | 24,820 | ||||
Initial Cost to Company, Total | 33,680 | ||||
Cost Capitalized Subsequent to Acquisition | 1,113 | ||||
Gross Amount at which Carried at Close of Period, Land | 8,860 | ||||
Gross Amount at which Carried at Close of Period, Building and Improvements | 25,933 | ||||
Gross Amount at which Carried at Close of Period, Total | 34,793 | ||||
Accumulated Depreciation and Amortization | $ (3,541) | ||||
Original Date of Construction | 2,010 | ||||
Date Acquired or Foreclosed on | Jan. 31, 2014 |
SCHEDULE III REAL ESTATE ASSE_3
SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION (Reconciliation) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Real Estate | |||
Balance at the beginning of the year | $ 574,684 | $ 1,227,207 | $ 914,074 |
Acquisitions | 312,457 | 170,505 | 300,382 |
Improvements | 31,818 | 37,219 | 33,909 |
Write-off of fully depreciated and fully amortized assets | (7,329) | (18,735) | (19,220) |
Loss due to property damages | (964) | (668) | (1,938) |
Sales | (178,068) | (664,114) | 0 |
Reimbursement of construction costs | (1,636) | 0 | 0 |
Deconsolidation | 0 | (176,730) | 0 |
Balance at the end of the year | 730,962 | 574,684 | 1,227,207 |
Accumulated depreciation and amortization: | |||
Balance at the beginning of the year | 41,817 | 120,176 | 91,560 |
Depreciation and amortization expense | 32,661 | 48,994 | 47,836 |
Write-off of fully depreciated and fully amortized assets | (7,329) | (18,735) | (19,220) |
Sales | (17,307) | (102,474) | 0 |
Deconsolidation | 0 | (6,144) | 0 |
Balance at the end of the year | $ 49,842 | $ 41,817 | $ 120,176 |