Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Apr. 30, 2015 |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2015 | |
Entity Registrant Name | Phillips Edison Grocery Center REIT I, Inc. | |
Entity Central Index Key | 1476204 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 183.8 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
ASSETS | ||
Land and improvements | $705,098 | $675,289 |
Building and improvements | 1,356,989 | 1,305,345 |
Acquired intangible lease assets | 229,659 | 220,601 |
Total investment in real estate assets | 2,291,746 | 2,201,235 |
Accumulated depreciation and amortization | -152,706 | -126,965 |
Total investment in real estate assets, net | 2,139,040 | 2,074,270 |
Cash and cash equivalents | 14,161 | 15,649 |
Restricted cash | 7,309 | 6,803 |
Deferred financing expense, net of accumulated amortization of $6,195 and $5,107, respectively | 12,979 | 13,727 |
Other assets, net | 43,520 | 40,320 |
Total assets | 2,217,009 | 2,150,769 |
Liabilities: | ||
Mortgages and loans payable | 729,983 | 650,462 |
Acquired below-market lease intangibles, less accumulated amortization of $9,276 and $7,619, respectively | 44,117 | 42,454 |
Accounts payable – affiliates | 2,469 | 975 |
Accounts payable and other liabilities | 41,421 | 48,738 |
Total liabilities | 817,990 | 742,629 |
Commitments and contingencies (Note 9) | 0 | 0 |
Redeemable common stock | 84,387 | 29,878 |
Equity: | ||
Preferred stock, $0.01 par value per share, 10,000 shares authorized, zero shares issued and outstanding at March 31, 2015 and December 31, 2014 | 0 | 0 |
Common stock, $0.01 par value per share, 1,000,000 shares authorized, 183,279 and 182,131 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively | 1,833 | 1,820 |
Additional paid-in capital | 1,525,588 | 1,567,653 |
Accumulated deficit | -239,240 | -213,975 |
Total stockholders’ equity | 1,288,181 | 1,355,498 |
Noncontrolling interests | 26,451 | 22,764 |
Total equity | 1,314,632 | 1,378,262 |
Total liabilities and equity | $2,217,009 | $2,150,769 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ||
Deferred financing expense, accumulated amortization | $6,195 | $5,107 |
Acquired below market lease intangibles, accumulated amortization | $9,276 | $7,619 |
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares outstanding | 183,279,000 | 182,131,000 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations and Comprehensive Income (Loss) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenues: | ||
Rental income | $44,500 | $27,224 |
Tenant recovery income | 14,104 | 8,306 |
Other property income | 343 | 147 |
Total revenues | 58,947 | 35,677 |
Expenses: | ||
Property operating | 9,986 | 6,125 |
Real estate taxes | 8,179 | 4,282 |
General and administrative | 2,362 | 1,771 |
Acquisition expenses | 1,735 | 5,386 |
Depreciation and amortization | 24,730 | 15,403 |
Total expenses | 46,992 | 32,967 |
Other income (expense): | ||
Interest expense, net | -6,794 | -3,680 |
Other (expense) income, net | -122 | 547 |
Net income (loss) | 5,039 | -423 |
Net income attributable to noncontrolling interests | -68 | 0 |
Net income (loss) attributable to stockholders | 4,971 | -423 |
Earnings per common share: | ||
Net income (loss) per share - basic and diluted | $0.03 | $0 |
Weighted-average common shares outstanding: | ||
Basic | 182,988 | 176,855 |
Diluted | 185,495 | 176,855 |
Comprehensive income (loss): | ||
Net income (loss) | 5,039 | -423 |
Other comprehensive income: | ||
Change in unrealized loss on interest rate swaps, net | 0 | -690 |
Comprehensive income (loss) | 5,039 | -1,113 |
Comprehensive income attributable to noncontrolling interests | -68 | 0 |
Comprehensive income (loss) attributable to stockholders | $4,971 | ($1,113) |
Consolidated_Statements_of_Equ
Consolidated Statements of Equity (USD $) | Total | Common Stock [Member] | Additional Paid In Capital [Member] | Accumulated Other Comprehensive Income [Member] | Accumulated Deficit [Member] | Total Stockholders' Equity [Member] | Noncontrolling Interest [Member] |
In Thousands, unless otherwise specified | |||||||
Balance, value at Dec. 31, 2013 | $1,469,532 | $1,756 | $1,538,185 | $690 | ($71,192) | $1,469,439 | $93 |
Balance, shares at Dec. 31, 2013 | 175,595 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock, value | 2,533 | 2 | 2,531 | 2,533 | |||
Issuance of common stock, shares | 256 | ||||||
Share repurchases, value | -153 | 0 | -153 | -153 | |||
Share repurchases, shares | -16 | ||||||
Dividend reinvestment plan (DRIP), value | 15,211 | 16 | 15,195 | 15,211 | |||
Dividend reinvestment plan (DRIP), shares | 1,601 | ||||||
Change in unrealized loss on interest rate swaps | -690 | -690 | -690 | ||||
Common distributions declared, $0.17 per share | -29,235 | -29,235 | -29,235 | ||||
Distributions to noncontrolling interests | -4 | -4 | |||||
Offering costs | -1,455 | -1,455 | -1,455 | ||||
Net income (loss) | -423 | -423 | -423 | 0 | |||
Balance, value at Mar. 31, 2014 | 1,455,316 | 1,774 | 1,554,303 | 0 | -100,850 | 1,455,227 | 89 |
Balance, shares at Mar. 31, 2014 | 177,436 | ||||||
Balance, value at Dec. 31, 2014 | 1,378,262 | 1,820 | 1,567,653 | 0 | -213,975 | 1,355,498 | 22,764 |
Balance, shares at Dec. 31, 2014 | 182,131 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share repurchases, value | -3,341 | -3 | -3,338 | -3,341 | |||
Share repurchases, shares | -514 | ||||||
Change in redeemable common stock | -54,509 | -54,509 | -54,509 | ||||
Dividend reinvestment plan (DRIP), value | 15,798 | 16 | 15,782 | 15,798 | |||
Dividend reinvestment plan (DRIP), shares | 1,662 | ||||||
Common distributions declared, $0.17 per share | -30,236 | -30,236 | -30,236 | ||||
Issuance of partnership units | 4,047 | 4,047 | |||||
Distributions to noncontrolling interests | -428 | -428 | |||||
Net income (loss) | 5,039 | 4,971 | 4,971 | 68 | |||
Balance, value at Mar. 31, 2015 | $1,314,632 | $1,833 | $1,525,588 | $0 | ($239,240) | $1,288,181 | $26,451 |
Balance, shares at Mar. 31, 2015 | 183,279 |
Consolidated_Statements_of_Equ1
Consolidated Statements of Equity (Parenthetical) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Statement of Stockholders' Equity [Abstract] | ||
Common distributions declared, per share | $0.17 | $0.17 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $5,039 | ($423) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 23,958 | 14,870 |
Net amortization of above- and below-market leases | -178 | 89 |
Amortization of deferred financing expense | 1,258 | 816 |
Loss on disposal of real estate assets | 100 | 0 |
Loss on write-off of capitalized leasing commissions and deferred financing expense | 81 | 10 |
Change in fair value of derivative | 47 | -392 |
Straight-line rental income | -1,244 | -831 |
Changes in operating assets and liabilities: | ||
Other assets | -2,063 | 60 |
Accounts payable and other liabilities | 469 | 1,771 |
Accounts payable – affiliates | 1,204 | 386 |
Net cash provided by operating activities | 28,671 | 16,356 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Real estate acquisitions | -61,839 | -201,808 |
Capital expenditures | -2,995 | -1,079 |
Change in restricted cash and investments | -506 | -1,243 |
Proceeds from sale of derivative | 0 | 520 |
Net cash used in investing activities | -65,340 | -203,610 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net change in credit facility borrowings | 66,800 | 0 |
Payments on mortgages and loans payable | -11,654 | -900 |
Payments of deferred financing expenses | -557 | -1,536 |
Distributions paid, net of DRIP | -14,366 | -13,699 |
Distributions to noncontrolling interests | -134 | 0 |
Repurchases of common stock | -4,908 | -155 |
Proceeds from issuance of common stock | 0 | 2,533 |
Payment of offering costs | 0 | -1,759 |
Net cash provided by (used in) financing activities | 35,181 | -15,516 |
NET DECREASE IN CASH AND CASH EQUIVALENTS | -1,488 | -202,770 |
CASH AND CASH EQUIVALENTS: | ||
Beginning of period | 15,649 | 460,250 |
End of period | 14,161 | 257,480 |
SUPPLEMENTAL CASHFLOW DISCLOSURE, INCLUDING NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Cash paid for interest | 6,021 | 2,876 |
Fair value of debt assumed | 24,982 | 86,644 |
Accrued capital expenditures | 853 | 1,961 |
Change in offering costs payable to sponsor(s) | 0 | -304 |
Change in distributions payable | 72 | 325 |
Change in distributions payable – noncontrolling interests | 294 | 4 |
Change in accrued share repurchase obligation | -1,567 | -2 |
Distributions reinvested | $15,798 | $15,211 |
Organization
Organization | 3 Months Ended |
Mar. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | ORGANIZATION |
Phillips Edison Grocery Center REIT I, Inc., (“we”, the “Company”, “our”, or “us”) was formed as a Maryland corporation in October 2009. Substantially all of our business is conducted through Phillips Edison Grocery Center Operating Partnership I, L.P., (the “Operating Partnership”), a Delaware limited partnership formed in December 2009. We are a limited partner of the Operating Partnership, and our wholly owned subsidiary, Phillips Edison Grocery Center OP GP I LLC, is the sole general partner of the Operating Partnership. | |
Our advisor is Phillips Edison NTR LLC (“PE-NTR”), which is directly or indirectly owned by Phillips Edison Limited Partnership (the “Phillips Edison sponsor”) and Michael Phillips and Jeffrey Edison, principals of our Phillips Edison sponsor. Under the terms of the advisory agreement between PE-NTR and us (the “PE-NTR Agreement”), PE-NTR is responsible for the management of our day-to-day activities and the implementation of our investment strategy. Prior to December 3, 2014, our advisor was American Realty Capital II Advisors, LLC (“ARC”). Under the terms of the previous advisory agreement between ARC and us (the “ARC Agreement”), ARC delegated most of its duties, including the management of our day-to-day operations and our portfolio of real estate assets, to PE-NTR. | |
We invest primarily in well-occupied grocery-anchored neighborhood and community shopping centers having a mix of creditworthy national and regional retailers selling necessity-based goods and services in strong demographic markets throughout the United States. As of March 31, 2015, we owned fee simple interests in 146 real estate properties acquired from third parties unaffiliated with us or PE-NTR. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Accounting Policies [Abstract] | |||||||
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||
Set forth below is a summary of the significant accounting estimates and policies that management believes are important to the preparation of our consolidated interim financial statements. Certain of our accounting estimates are particularly important for an understanding of our financial position and results of operations and require the application of significant judgment by management. As a result, these estimates are subject to a degree of uncertainty. There have been no changes to our significant accounting policies during the three months ended March 31, 2015. For a full summary of our accounting policies, refer to our Annual Report on Form 10-K for the year ended December 31, 2014 filed with the U.S. Securities and Exchange Commission (“SEC”) on March 9, 2015. | |||||||
Basis of Presentation and Principles of Consolidation—The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Readers of this Quarterly Report on Form 10-Q should refer to the audited consolidated financial statements of Phillips Edison Grocery Center REIT I, Inc. for the year ended December 31, 2014, which are included in our 2014 Annual Report on Form 10-K, as certain footnote disclosures contained in such audited consolidated financial statements have been omitted from this Quarterly Report on Form 10-Q. In the opinion of management, all normal and recurring adjustments necessary for the fair presentation have been included in this Quarterly Report. Our results of operations for the three months ended March 31, 2015 are not necessarily indicative of the operating results expected for the full year. | |||||||
The accompanying consolidated financial statements include our accounts and those of our majority-owned subsidiaries. All intercompany balances and transactions are eliminated upon consolidation. | |||||||
Redeemable Common Stock—Under our share repurchase program, the maximum amount of common stock that we may repurchase, at the shareholder’s election, during any calendar year is limited, among other things, to 5% of the weighted-average number of shares outstanding during the prior calendar year. The maximum amount is reduced each reporting period by the current year share repurchases to date. We record amounts that may be repurchased under the share repurchase program as redeemable common stock outside of permanent equity in our consolidated balance sheets because repurchases are at the option of the holders and are not solely within our control. There were 8.4 million and 3.0 million redeemable common shares represented on the consolidated balance sheets as of March 31, 2015 and December 31, 2014, respectively. Changes in the amount of redeemable common stock from period to period are recorded as an adjustment to capital in excess of par value. | |||||||
We offer a share repurchase program which may allow certain stockholders to have their shares repurchased subject to approval and certain limitations and restrictions (see Note 3). We account for those financial instruments that represent our mandatory obligation to repurchase shares as liabilities to be reported at settlement value. When shares are presented for repurchase, we will reclassify such obligations from redeemable common stock to a liability based upon their respective settlement values. | |||||||
Earnings Per Share—We use the two-class method of computing earnings per share (“EPS”), which is an earnings allocation formula that determines EPS for common stock and any participating securities (in our case, the limited partnership units of the Operating Partnership designated as “Class B units” that have vested) according to dividends declared (whether paid or unpaid). Under the two-class method, basic EPS is computed by dividing the sum of distributed earnings to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur from other share equivalent activity. | |||||||
The vesting of the Class B units is contingent upon a market condition and service condition. The vested Class B units were included in the diluted net income per share computations for the three months ended March 31, 2015. The unvested Class B units were not included in the diluted net income (loss) per share computations since the satisfaction of the market or service condition was not probable as of March 31, 2015 and 2014. There were 2.8 million vested Class B units of the Operating Partnership outstanding as of March 31, 2015. There were 0.2 million and 0.9 million unvested Class B units outstanding as of March 31, 2015 and 2014, respectively, which had no effect on EPS. The effects on EPS of the two-class method were immaterial to the consolidated financial statements as of March 31, 2015. | |||||||
Reclassifications—The following line items on our consolidated statement of cash flows for the three months ended March 31, 2014 were reclassified to conform to the current year presentation: | |||||||
• | The change in accounts receivable and the change in prepaid expenses and other were reclassified to the change in other assets; and | ||||||
• | The change in accounts payable and the change in accrued and other liabilities were reclassified to the change in | ||||||
accounts payable and other liabilities. | |||||||
Impact of Recently Issued Accounting Pronouncements—The following table provides a brief description of recent accounting pronouncements that could have a material effect on our financial statements: | |||||||
Standard | Description | Date of Adoption | Effect on the Financial Statements or Other Significant Matters | ||||
ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs | This update amends existing guidance to require the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge. It is effective for annual reporting periods beginning after December 15, 2015, but early adoption is permitted. | 1-Jan-16 | We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. |
Equity
Equity | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Stockholders' Equity Note [Abstract] | |||||||||
Equity | EQUITY | ||||||||
General—We have the authority to issue a total of 1 billion shares of common stock with a par value of $0.01 per share and 10 million shares of preferred stock, $0.01 par value per share. As of March 31, 2015, we had issued 184.2 million shares of common stock generating gross cash proceeds of $1.82 billion. As of March 31, 2015, there were 183.3 million shares of our common stock outstanding, which is net of 1.0 million shares repurchased from stockholders pursuant to our share repurchase program, and we had issued no shares of preferred stock. The holders of common stock are entitled to one vote per share on all matters voted on by stockholders, including election of the board of directors. Our charter does not provide for cumulative voting in the election of directors. | |||||||||
Dividend Reinvestment Plan—We have adopted a dividend reinvestment plan (the “DRIP”) that allows stockholders to invest distributions in additional shares of our common stock. We continue to offer up to a total of approximately 18.2 million shares of common stock under the DRIP. Stockholders who elect to participate in the DRIP may choose to invest all or a portion of their cash distributions in shares of our common stock at a purchase price of $9.50 per share. Stockholders who elect to participate in the DRIP, and who are subject to U.S. federal income taxation laws, will incur a tax liability on an amount equal to the fair value on the relevant distribution date of the shares of our common stock purchased with reinvested distributions, even though such stockholders have elected not to receive the distributions in cash. Distributions reinvested through the DRIP for the three months ended March 31, 2015 and 2014, were $15.8 million and $15.2 million, respectively. | |||||||||
Share Repurchase Program—Our share repurchase program may provide a limited opportunity for stockholders to have shares of common stock repurchased, subject to certain restrictions and limitations, at a price equal to or at a discount from the stockholders’ original purchase prices paid for the shares being repurchased. | |||||||||
Repurchase of shares of common stock will be made monthly upon written notice received by us at least five days prior to the end of the applicable month. Stockholders may withdraw their repurchase request at any time up to five business days prior to the repurchase date. | |||||||||
The board of directors may, in its sole discretion, amend, suspend, or terminate the share repurchase program at any time. If the board of directors decides to amend, suspend or terminate the share repurchase program, stockholders will be provided with no less than 30 days’ written notice. | |||||||||
The following table presents the activity of the share repurchase program for the three months ended March 31, 2015 and 2014 (in thousands, except per share amounts): | |||||||||
2015 | 2014 | ||||||||
Shares repurchased | 514 | 16 | |||||||
Cost of repurchases | $ | 4,908 | $ | 155 | |||||
Average repurchase price | $ | 9.54 | $ | 9.72 | |||||
We record a liability representing our obligation to repurchase shares of common stock submitted for repurchase as of period end but not yet repurchased. Below is a summary of our obligation to repurchase shares of common stock recorded as a component of accounts payable and other liabilities on our consolidated balance sheets as of March 31, 2015 and December 31, 2014 (in thousands): | |||||||||
31-Mar-15 | 31-Dec-14 | ||||||||
Shares submitted for repurchase | 11 | 177 | |||||||
Liability recorded | $ | 102 | $ | 1,669 | |||||
Class B Units—Under our prior advisory agreement, in connection with asset management services provided by ARC and PE-NTR, we issued 0.4 million Class B units during the three months ended March 31, 2015 for asset management services provided from October 1, 2014 through December 3, 2014, the date of the termination of our prior advisory agreement. In connection with the termination of the prior advisory agreement, we determined that the economic hurdle had been met as of that date and that the units issued to ARC and PE-NTR for asset management services provided through December 3, 2014 had vested. | |||||||||
Under the terms of the limited partnership agreement of the Operating Partnership, at any time following the first anniversary of the date of their issuance, the Class B units held by ARC may be redeemed at the election of the holder for cash or, at our option, for shares of our common stock, under the terms of exchange rights agreements to be prepared at a future date. Class B units held by PE-NTR may be redeemed in a similar fashion subsequent to the occurrence of a listing of our common stock or liquidation of our portfolio, provided that a year has passed since the issuance of the Class B Units at such time as the listing of our common stock or the liquidation of our portfolio occurs. | |||||||||
As the form of the redemptions for the vested Class B units is within our control, the Class B units issued as of March 31, 2015 are classified as noncontrolling interests within permanent equity on our consolidated balance sheets. As of March 31, 2015, the fair value of the vested Class B units was $27.9 million. Additionally, the cumulative distributions that have been paid on these Class B units are included in noncontrolling interests as distributions to noncontrolling interests. |
Fair_Value_Measurement
Fair Value Measurement | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Fair Value Disclosures [Abstract] | |||||||||
Fair Value Measurement | FAIR VALUE MEASUREMENT | ||||||||
ASC 820, Fair Value Measurement (“ASC 820”) defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosures about fair value measurements. ASC 820 emphasizes that fair value is intended to be a market-based measurement, as opposed to a transaction-specific measurement. Fair value is defined by ASC 820 as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Depending on the nature of the asset or liability, various techniques and assumptions can be used to estimate the fair value. Assets and liabilities are measured using inputs from three levels of the fair value hierarchy, as follows: | |||||||||
Level 1—Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access at the measurement date. An active market is defined as a market in which transactions for the assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis. | |||||||||
Level 2—Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active (markets with few transactions), inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data correlation or other means (market corroborated inputs). | |||||||||
Level 3—Unobservable inputs, only used to the extent that observable inputs are not available, reflect our assumptions about the pricing of an asset or liability. | |||||||||
The following describes the methods we use to estimate the fair value of our financial and non-financial assets and liabilities: | |||||||||
Cash and cash equivalents, restricted cash, accounts receivable, and accounts payable—We consider the carrying values of these financial instruments to approximate fair value because of the short period of time between origination of the instruments and their expected realization. | |||||||||
Real estate investments—The purchase prices of the investment properties, including related lease intangible assets and liabilities, were allocated at estimated fair value based on Level 3 inputs, such as discount rates, capitalization rates, comparable sales, replacement costs, income and expense growth rates and current market rents and allowances as determined by management. Real estate assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the individual property may not be recoverable. In such an event, a comparison will be made of the projected operating cash flows of each property on an undiscounted basis to the carrying amount of such property. Such carrying amount would be adjusted, if necessary, to estimated fair values to reflect impairment in the value of the asset. | |||||||||
Mortgages and loans payable —We estimate the fair value of our debt by discounting the future cash flows of each instrument at rates currently offered for similar debt instruments of comparable maturities by our lenders using Level 3 inputs. The discount rate used approximates current lending rates for loans or groups of loans with similar maturities and credit quality, assuming the debt is outstanding through maturity and considering the debt’s collateral (if applicable). We have utilized market information, as available, or present value techniques to estimate the amounts required to be disclosed. | |||||||||
The following is a summary of discount rates and borrowings as of March 31, 2015 and December 31, 2014 (dollars in thousands): | |||||||||
31-Mar-15 | 31-Dec-14 | ||||||||
Discount rates: | |||||||||
Fixed-rate debt | 3.35 | % | 3.4 | % | |||||
Secured variable-rate debt | 2.59 | % | 2.48 | % | |||||
Unsecured variable-rate debt | 1.99 | % | 1.93 | % | |||||
Borrowings: | |||||||||
Fair value | $ | 739,214 | $ | 665,982 | |||||
Recorded value | 729,983 | 650,462 | |||||||
Derivative instruments — As of March 31, 2015 and December 31, 2014, we were party to one interest rate swap agreement with a notional amount of $11.5 million and $11.6 million, respectively. The interest rate swap was assumed as part of an acquisition and is measured at fair value on a recurring basis. The interest rate swap agreement effectively fixes the variable interest rate of our secured variable-rate mortgage note at an annual interest rate of 5.22% through June 10, 2018. | |||||||||
The fair value of the interest rate swap agreement as of March 31, 2015 and December 31, 2014 was based on the estimated amount we would receive or pay to terminate the contract at the reporting date and was determined using interest rate pricing models and interest rate related observable inputs. Although we determined that the significant inputs used to value our derivative fell within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our counterparties and our own credit risk utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties. However, as of March 31, 2015 and December 31, 2014, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative position and have determined that the credit valuation adjustments are not significant to the overall valuation of our derivative. As a result, we have determined that our derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. | |||||||||
Considerable judgment is necessary to develop estimated fair values of financial and non-financial assets and liabilities. Accordingly, the estimates presented herein are not necessarily indicative of the amounts we did or could actually realize upon disposition of the financial assets and liabilities previously sold or currently held (see Note 10). | |||||||||
This interest rate swap was our only financial liability that was measured at fair value as of March 31, 2015 and December 31, 2014. The value recorded as a component of accounts payable and other liabilities for the interest rate swap was $0.6 million as of March 31, 2015 and December 31, 2014. |
Real_Estate_Acquisitions
Real Estate Acquisitions | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Business Combinations [Abstract] | |||||||||
Real Estate Acquisitions | REAL ESTATE ACQUISITIONS | ||||||||
During the three months ended March 31, 2015, we acquired eight retail centers for a purchase price of approximately $86.4 million, including $24.0 million of assumed debt with a fair value of $25.0 million. The following tables present certain additional information regarding our acquisitions of properties that were deemed individually immaterial when acquired, but are material in the aggregate. | |||||||||
For the three months ended March 31, 2015 and 2014, we allocated the purchase price of acquisitions to the fair value of the assets acquired and liabilities assumed as follows (in thousands): | |||||||||
2015 | 2014 | ||||||||
Land and improvements | $ | 29,516 | $ | 86,106 | |||||
Building and improvements | 51,186 | 168,704 | |||||||
Acquired in-place leases | 8,703 | 24,127 | |||||||
Acquired above-market leases | 356 | 9,257 | |||||||
Acquired below-market leases | (3,319 | ) | (2,485 | ) | |||||
Total assets and lease liabilities acquired | 86,442 | 285,709 | |||||||
Debt assumed | 24,982 | 86,644 | |||||||
Net assets acquired | $ | 61,460 | $ | 199,065 | |||||
The weighted-average amortization periods for acquired in-place lease, above-market lease, and below-market lease intangibles acquired during the three months ended March 31, 2015 and 2014 are as follows (in years): | |||||||||
2015 | 2014 | ||||||||
Acquired in-place leases | 16 | 6 | |||||||
Acquired above-market leases | 16 | 11 | |||||||
Acquired below-market leases | 21 | 6 | |||||||
The amounts recognized for revenues, acquisition expenses and net loss from each respective acquisition date to March 31, 2015 and 2014 related to the operating activities of our acquisitions are as follows (in thousands): | |||||||||
2015 | 2014 | ||||||||
Revenues | $ | 752 | $ | 2,164 | |||||
Acquisition expenses | 1,458 | 5,188 | |||||||
Net loss | 1,498 | 5,511 | |||||||
The following unaudited pro forma information summarizes selected financial information from our combined results of operations, as if all of our acquisitions for 2014 and 2015 had been acquired on January 1, 2014 (in thousands). This pro forma information is presented for informational purposes only and may not be indicative of what actual results of operations would have been had the transactions occurred at the beginning of the period, nor does it purport to represent the results of future operations. | |||||||||
For the Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Pro forma revenues | $ | 60,115 | $ | 58,433 | |||||
Pro forma net income attributable to stockholders | 6,891 | 7,947 | |||||||
Acquired_Intangible_Assets
Acquired Intangible Assets | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Finite Lived Intangible Assets Disclosure [Abstract] | |||||||||
Acquired Intangible Assets | ACQUIRED INTANGIBLE ASSETS | ||||||||
Acquired intangible lease assets consisted of the following as of March 31, 2015 and December 31, 2014 (in thousands): | |||||||||
31-Mar-15 | 31-Dec-14 | ||||||||
Acquired in-place leases | $ | 191,393 | $ | 182,690 | |||||
Acquired above-market leases | 38,266 | 37,911 | |||||||
Total acquired intangible lease assets | 229,659 | 220,601 | |||||||
Accumulated amortization | (52,856 | ) | (43,915 | ) | |||||
Net acquired intangible lease assets | $ | 176,803 | $ | 176,686 | |||||
Summarized below is the amortization recorded on the intangible assets for the three months ended March 31, 2015 and 2014 (in thousands): | |||||||||
2015 | 2014 | ||||||||
Acquired in-place leases(1) | $ | 7,462 | $ | 4,722 | |||||
Acquired above-market leases(2) | 1,479 | 978 | |||||||
Total | $ | 8,941 | $ | 5,700 | |||||
(1) Amortization recorded on acquired in-place leases was included in depreciation and amortization in the consolidated statements of operations. | |||||||||
(2) Amortization recorded on acquired above-market leases was an adjustment to rental revenue in the consolidated statements of operations. | |||||||||
Estimated future amortization on the respective acquired intangible lease assets as of March 31, 2015 for the remainder of 2015 and for each of the four succeeding calendar years and thereafter is as follows (in thousands): | |||||||||
Year | In-Place Leases | Above-Market Leases | |||||||
April 1 to December 31, 2015 | $ | 22,240 | $ | 4,241 | |||||
2016 | 27,427 | 4,819 | |||||||
2017 | 24,477 | 3,996 | |||||||
2018 | 19,284 | 3,213 | |||||||
2019 | 14,136 | 2,457 | |||||||
2020 and thereafter | 41,404 | 9,109 | |||||||
Total | $ | 148,968 | $ | 27,835 | |||||
Mortgages_and_Loans_Payable
Mortgages and Loans Payable | 3 Months Ended | |||||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||
Mortgages and Loans Payable | MORTGAGES AND LOANS PAYABLE | |||||||||||||||||||||||||||
As of March 31, 2015 and December 31, 2014, we had approximately $363.3 million and $350.9 million, respectively, of outstanding mortgage notes payable, excluding fair value of debt adjustments. Each mortgage note payable is secured by the respective property on which the debt was placed. | ||||||||||||||||||||||||||||
As of March 31, 2015, we also had access to a $700 million unsecured revolving credit facility, which may be expanded to $1 billion, with a $358.5 million outstanding principal balance from which we may draw additional funds to pay certain long-term debt obligations as they mature. The interest rate on amounts outstanding under this credit facility is currently LIBOR plus 1.30%. The credit facility matures on December 18, 2017, with two six-month options to extend the maturity to December 18, 2018. | ||||||||||||||||||||||||||||
Of the amount outstanding on our mortgage notes and loans payable at March 31, 2015, $49.5 million is for loans that mature in 2015, excluding monthly scheduled principal payments. Of the amount that matures in 2015, $32.2 million was repaid subsequent to March 31, 2015. As of March 31, 2015 and December 31, 2014, the weighted-average interest rates for the loans were 3.5% and 3.7%, respectively. | ||||||||||||||||||||||||||||
The table below summarizes our loan assumptions in conjunction with property acquisitions for the three months ended March 31, 2015 and 2014 (dollars in thousands): | ||||||||||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||||||||||
Number of properties acquired with loan assumptions | 5 | 7 | ||||||||||||||||||||||||||
Carrying value of assumed debt | $ | 24,000 | $ | 84,425 | ||||||||||||||||||||||||
Fair value of assumed debt | 24,982 | 86,644 | ||||||||||||||||||||||||||
The assumed net below-market debt adjustment will be amortized over the remaining life of the loans, and this amortization is classified as a component of interest expense. The amortization recorded on the assumed below-market debt adjustment was $0.6 million and $0.5 million for the three months ended March 31, 2015 and 2014, respectively. | ||||||||||||||||||||||||||||
The following is a summary of our debt obligations as of March 31, 2015 and December 31, 2014 (in thousands): | ||||||||||||||||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||||
Fixed-rate mortgages payable(1)(2) | $ | 363,268 | $ | 350,922 | ||||||||||||||||||||||||
Unsecured credit facility - variable-rate(3) | 358,500 | 291,700 | ||||||||||||||||||||||||||
Assumed below-market debt adjustment | 8,215 | 7,840 | ||||||||||||||||||||||||||
Total | $ | 729,983 | $ | 650,462 | ||||||||||||||||||||||||
(1) | Due to the non-recourse nature of certain mortgages, the assets and liabilities of the following properties are neither available to pay the debts of the consolidated property-holding limited liability companies nor constitute obligations of such consolidated limited liability companies as of March 31, 2015: Broadway Plaza, Publix at Northridge, Kleinwood Center, Murray Landing, Vineyard Center, Sunset Center, Westwoods Shopping Center, Stockbridge Commons, East Burnside Plaza, Fresh Market, Collington Plaza, Stop & Shop Plaza, Savoy Plaza, Coppell Market Center, Statler Square, Hamilton Village, Waynesboro Plaza, Thompson Valley Towne Center, Lumina Commons, Driftwood Village, Orchard Square, Breakfast Point Marketplace, Falcon Valley, Lakeshore Crossing, Lake Wales, and Onalaska. The outstanding principal balance of these non-recourse mortgages as of March 31, 2015 and December 31, 2014 was $265.3 million and $252.1 million, respectively. | |||||||||||||||||||||||||||
(2) | As of March 31, 2015, the interest rate on $11.5 million outstanding under one of our variable-rate mortgage notes payable was, in effect, fixed at 5.22% by an interest rate swap agreement (see Notes 4 and 10). | |||||||||||||||||||||||||||
(3) | As of March 31, 2015 and December 31, 2014, the maximum borrowing capacity of the unsecured credit facility was $700.0 million. The gross borrowings under credit facilities were $70.3 million during the the three months ended March 31, 2015. The gross payments on credit facilities were $3.5 million during the the three months ended March 31, 2015. | |||||||||||||||||||||||||||
Below is a listing of our maturity schedule with the respective principal payment obligations (in thousands) and weighted-average interest rates: | ||||||||||||||||||||||||||||
2015(1) | 2016 | 2017 | 2018 | 2019 | Thereafter | Total | ||||||||||||||||||||||
Maturing debt:(2) | ||||||||||||||||||||||||||||
Fixed-rate mortgages payable(3)(4) | $ | 54,230 | $ | 104,797 | $ | 47,290 | $ | 44,857 | $ | 4,206 | $ | 107,888 | $ | 363,268 | ||||||||||||||
Unsecured credit facility - variable-rate | — | — | 358,500 | — | — | — | 358,500 | |||||||||||||||||||||
Total maturing debt | $ | 54,230 | $ | 104,797 | $ | 405,790 | $ | 44,857 | $ | 4,206 | $ | 107,888 | $ | 721,768 | ||||||||||||||
Weighted-average interest rate on debt: | ||||||||||||||||||||||||||||
Fixed-rate mortgages payable(3)(4) | 5.1 | % | 5.7 | % | 5.3 | % | 5.3 | % | 5.8 | % | 5.2 | % | 5.5 | % | ||||||||||||||
Unsecured credit facility - variable-rate | — | % | — | % | 1.5 | % | — | % | — | % | — | % | 1.5 | % | ||||||||||||||
Total | 5.1 | % | 5.7 | % | 1.9 | % | 5.3 | % | 5.8 | % | 5.2 | % | 3.5 | % | ||||||||||||||
(1) | Includes only April 1, 2015 through December 31, 2015. | |||||||||||||||||||||||||||
(2) | The debt maturity table does not include any below-market debt adjustment, of which $8.2 million, net of accumulated amortization, was outstanding as of March 31, 2015. | |||||||||||||||||||||||||||
(3) | As of March 31, 2015, the interest rate on $11.5 million outstanding under one of our variable-rate mortgage notes payable was, in effect, fixed at 5.22% by an interest rate swap agreement (see Notes 4 and 10). | |||||||||||||||||||||||||||
(4) | All but $6.3 million of the fixed-rate debt represents loans assumed as part of certain acquisitions. |
Acquired_BelowMarket_Lease_Int
Acquired Below-Market Lease Intangibles | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Below Market Lease [Abstract] | |||||||||
Acquired Below-Market Lease Intangibles | ACQUIRED BELOW-MARKET LEASE INTANGIBLES | ||||||||
Summarized is the amortization recorded on the below-market lease intangible liabilities for the three months ended March 31, 2015 and 2014 (in thousands): | |||||||||
2015 | 2014 | ||||||||
Acquired below-market leases(1) | $ | 1,657 | $ | 888 | |||||
(1) Amortization recorded on acquired below-market leases was an adjustment to rental revenue in the consolidated statements of operations. | |||||||||
Estimated future amortization income of the intangible lease liabilities as of March 31, 2015 for the remainder of 2015 and for each of the four succeeding calendar years and thereafter is as follows (in thousands): | |||||||||
Year | Below-Market Leases | ||||||||
April 1 to December 31, 2015 | $ | 4,938 | |||||||
2016 | 6,124 | ||||||||
2017 | 5,192 | ||||||||
2018 | 4,150 | ||||||||
2019 | 3,414 | ||||||||
2020 and thereafter | 20,299 | ||||||||
Total | $ | 44,117 | |||||||
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES |
Litigation | |
In the ordinary course of business, we may become subject to litigation or claims. There are no material legal proceedings pending, or known to be contemplated, against us. | |
Environmental Matters | |
In connection with the ownership and operation of real estate, we may be potentially liable for costs and damages related to environmental matters. We record liabilities as they arise related to environmental obligations. We have not been notified by any governmental authority of any material non-compliance, liability or other claim, nor are we aware of any other environmental condition that we believe will have a material impact on our consolidated financial statements. |
Derivatives_and_Hedging_Activi
Derivatives and Hedging Activities | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||
Derivatives and Hedging Activities | DERIVATIVES AND HEDGING ACTIVITIES | ||||||||
Risk Management Objective of Using Derivatives | |||||||||
We are exposed to certain risks arising from both our business operations and economic conditions. We principally manage our exposure to a wide variety of business and operational risks through management of our core business activities. We manage economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of our debt funding and the use of derivative financial instruments. Specifically, we enter into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Our derivative financial instruments are used to manage differences in the amount, timing, and duration of our known or expected cash receipts and our known or expected cash payments principally related to our investments and borrowings. | |||||||||
Cash Flow Hedges of Interest Rate Risk | |||||||||
Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to interest rate movements. To accomplish this objective, we primarily use interest rate swaps as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for our making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. | |||||||||
The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the three months ended March 31, 2014, such derivatives were used to hedge the variable cash flows associated with certain variable-rate debt. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings prior to de-designation. | |||||||||
During the three months ended March 31, 2014, we terminated our only designated interest rate swap and accelerated the reclassification of amounts in other comprehensive income to earnings as a result of the hedged forecasted transactions becoming probable not to occur. The accelerated amounts resulted in a gain of $690,000 recorded in other income, net in the consolidated statements of operations and comprehensive loss for the three months ended March 31, 2014. As a result of the hedged forecasted transaction becoming probable not to occur, the swap was de-designated as a cash flow hedge in February 2014, and changes in fair value of a loss of $326,000 were recorded directly in other income, net during the three months ended March 31, 2014. | |||||||||
As of March 31, 2015, we had no active outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk. | |||||||||
Derivatives Not Designated as Hedging Instruments | |||||||||
Derivatives not designated as hedges are not speculative and are used to manage our exposure to interest rate movements and other identified risks, but do not meet the strict hedge accounting requirements to be classified as hedging instruments. Changes in the fair value of these derivative instruments are recorded directly in other (expense) income, net and resulted in a loss of $121,000 and $326,000 for the three months ended March 31, 2015 and 2014, respectively, including the loss recorded in relation to the aforementioned de-designated swap. | |||||||||
Tabular Disclosure of the Effect of Derivative Instruments on the Consolidated Statements of Operations and Comprehensive Income (Loss) | |||||||||
The table below presents the effect of our derivative financial instruments on the consolidated statements of operations and comprehensive income (loss) for the three months ended March 31, 2015 and 2014, respectively (in thousands). | |||||||||
Derivatives in Cash Flow Hedging Relationships (Interest Rate Swap) | 2015 | 2014 | |||||||
Amount of gain recognized in income on derivative (ineffective portion, reclassifications of missed forecasted transactions and amounts excluded from effectiveness testing) | $ | — | $ | 690 | |||||
Credit-risk-related Contingent Features | |||||||||
We have an agreement with our derivative counterparty that contains a provision where, if we either default or are capable of being declared in default on any of our indebtedness, we could also be declared to be in default on our derivative obligations. | |||||||||
As of March 31, 2015, the fair value of our derivative was a net liability position including accrued interest, but excluding any adjustment for nonperformance risk related to this agreement. As of March 31, 2015, we have not posted any collateral related to this agreement. |
Related_Party_Transactions
Related Party Transactions | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||
Related Party Transactions | RELATED PARTY TRANSACTIONS | ||||||||||||||||
Economic Dependency—We are dependent on PE-NTR, Phillips Edison & Company Ltd. (the “Property Manager”), and their respective affiliates for certain services that are essential to us, including asset acquisition and disposition decisions, asset management, operating and leasing of our properties, and other general and administrative responsibilities. In the event that PE-NTR, and/or the Property Manager, and their respective affiliates are unable to provide such services, we would be required to find alternative service providers, which could result in higher costs and expenses. | |||||||||||||||||
Advisory Agreement—Pursuant to the PE-NTR Agreement effective on December 3, 2014, PE-NTR is entitled to specified fees for certain services, including managing our day-to-day activities and implementing our investment strategy. PE-NTR manages our day-to-day affairs and our portfolio of real estate investments subject to the board’s supervision. Expenses are to be reimbursed to PE-NTR based on amounts incurred on our behalf by PE-NTR. | |||||||||||||||||
Pursuant to the ARC Agreement in effect through December 2, 2014, ARC was entitled to specified fees for certain services, including managing our day-to-day activities and implementing our investment strategy. ARC had entered into a Sub-advisory Agreement with PE-NTR, who managed our day-to-day affairs and our portfolio of real estate investments on behalf of ARC, subject to the board’s supervision and certain major decisions requiring the consent of PE-NTR and ARC. The expenses to be reimbursed to ARC and PE-NTR were reimbursed in proportion to the amount of expenses incurred on our behalf by PE-NTR and ARC, respectively. | |||||||||||||||||
Organization and Offering Costs—Under the terms of the ARC Agreement, we were to reimburse, on a monthly basis, PE-NTR, ARC or their respective affiliates for cumulative organization and offering costs and future organization and offering costs they might incur on our behalf, but only to the extent that the reimbursement would not exceed 1.5% of gross offering proceeds over the life of our primary initial public offering and our DRIP offering. | |||||||||||||||||
Summarized below are the cumulative organization and offering costs charged by and the cumulative costs reimbursed to PE-NTR, ARC and their affiliates for the three months ended March 31, 2015 and December 31, 2014, and any related amounts unpaid as of March 31, 2015 and December 31, 2014 (in thousands): | |||||||||||||||||
31-Mar-15 | 31-Dec-14 | ||||||||||||||||
Total Organization and Offering costs charged | $ | 27,104 | $ | 27,104 | |||||||||||||
Total Organization and Offering costs reimbursed | 27,029 | 27,029 | |||||||||||||||
Total unpaid Organization and Offering costs(1) | $ | 75 | $ | 75 | |||||||||||||
(1) | Certain of these cumulative organization and offering costs were charged to us by ARC. The net payable of $75 was due to ARC as of March 31, 2015 and December 31, 2014. | ||||||||||||||||
Acquisition Fee—We pay PE-NTR under the PE-NTR Agreement and we paid ARC under the ARC Agreement an acquisition fee related to services provided in connection with the selection and purchase or origination of real estate and real estate-related investments. The acquisition fee is equal to 1.0% of the cost of investments we acquire or originate, including any debt attributable to such investments. | |||||||||||||||||
Acquisition Expenses—We reimburse PE-NTR for expenses actually incurred related to selecting, evaluating, and acquiring assets on our behalf. During the three months ended March 31, 2015 and 2014, we reimbursed PE-NTR for personnel costs related to due diligence services for assets we acquired during the period. | |||||||||||||||||
Asset Management Subordinated Participation—Within 60 days after the end of each calendar quarter (subject to the approval of our board of directors), we will pay an asset management subordinated participation by issuing a number of restricted operating partnership units designated as Class B Units to PE-NTR and ARC equal to: (i) the product of (x) the cost of our assets multiplied by (y) 0.25%; divided by (ii) the value of one share of common stock as of the last day of such calendar quarter net of the selling commissions and dealer manager fees payable on shares of our common stock in our initial public offering. | |||||||||||||||||
PE-NTR and ARC are entitled to receive distributions on the unvested and vested Class B units they receive in connection with their asset management subordinated participation at the same rate as distributions are paid to common stockholders. Such distributions are in addition to the incentive fees that PE-NTR, ARC and their affiliates may receive from us. | |||||||||||||||||
On December 3, 2014, we terminated the ARC Agreement. As a result, 2.8 million Class B units issued in connection with asset management services provided as of that date vested upon our determination that the requisite economic hurdle had been met on the same date. Such economic hurdle required that the value of the Operating Partnership’s assets plus all distributions made equaled or exceeded the total amount of capital contributed by investors plus a 6% cumulative, pre-tax, non-compounded annual return thereon. | |||||||||||||||||
We continue to issue Class B units to PE-NTR and ARC in connection with the asset management services provided by PE-NTR under the PE-NTR Agreement. Such Class B units will not vest until the economic hurdle is met in conjunction with (i) a termination of the PE-NTR Agreement by our independent directors without cause, (ii) a listing event, or (iii) a liquidity event; provided that PE-NTR serves as our advisor at the time of any of the foregoing events. During the three months ended March 31, 2015, the Operating Partnership issued 404,735 Class B units to PE-NTR and ARC under the ARC Agreement for the asset management services performed by PE-NTR and ARC during the period from October 1, 2014 to December 3, 2014, and 189,177 Class B units to PE-NTR and ARC under the PE-NTR Agreement for the asset management services performed by PE-NTR during the period from December 3, 2014 through December 31, 2014. | |||||||||||||||||
Financing Fee—We pay PE-NTR under the PE-NTR Agreement and we paid ARC under the ARC Agreement a financing fee equal to 0.75% of all amounts made available under any loan or line of credit. | |||||||||||||||||
Disposition Fee—We pay PE-NTR under the PE-NTR Agreement and we paid ARC under the ARC Agreement for substantial assistance by PE-NTR, ARC or any of their affiliates in connection with the sale of properties or other investments, 2.0% of the contract sales price of each property or other investment sold. The conflicts committee of our board of directors will determine whether PE-NTR, ARC or their respective affiliates have provided substantial assistance to us in connection with the sale of an asset. Substantial assistance in connection with the sale of a property includes PE-NTR, ARC or their respective affiliates’ preparation of an investment package for the property (including an investment analysis, rent rolls, tenant information regarding credit, a property title report, an environmental report, a structural report and exhibits) or such other substantial services performed by PE-NTR, ARC or their respective affiliates in connection with a sale. However, if we sold an asset to an affiliate, our organizational documents would prohibit us from paying PE-NTR, ARC or their respective affiliates a disposition fee. | |||||||||||||||||
General and Administrative Expenses—As of March 31, 2015 and December 31, 2014, we owed PE-NTR $59,000 and $26,000, respectively, for general and administrative expenses paid on our behalf. As of March 31, 2015, PE-NTR has not allocated any portion of their employees’ salaries to general and administrative expenses. | |||||||||||||||||
Summarized below are the fees earned by and the expenses reimbursable to PE-NTR and ARC, except for organization and offering costs and general and administrative expenses, which we disclose above, for the three months ended March 31, 2015 and 2014 and any related amounts unpaid as of March 31, 2015 and December 31, 2014 (in thousands): | |||||||||||||||||
For the Three Months Ended | Unpaid Amount as of | ||||||||||||||||
March 31, | March 31, | December 31, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
Acquisition fees | $ | 855 | $ | 2,842 | $ | — | $ | — | |||||||||
Acquisition expenses | 139 | 265 | — | — | |||||||||||||
Class B unit distribution(1) | 440 | 118 | 305 | 135 | |||||||||||||
Financing fees | 180 | 633 | — | — | |||||||||||||
Total | $ | 1,614 | $ | 3,858 | $ | 305 | $ | 135 | |||||||||
(1) | The distribution recorded for the three months ended March 31, 2015 of $440 represents the distributions paid to PE-NTR and ARC as holders of unvested and vested Class B units of the Operating Partnership. Of the amount, $12 was related to the unvested Class B units and is presented as expense on the consolidated statements of operations, with $428 related to the vested Class B units presented as distributions to noncontrolling interests on the consolidated statements of equity. The unpaid amount as of March 31, 2015 includes the distribution payable on both the vested and unvested Class B units. | ||||||||||||||||
Subordinated Participation in Net Sales Proceeds—The Operating Partnership may pay to Phillips Edison Special Limited Partner LLC (the “Special Limited Partner”) a subordinated participation in the net sales proceeds of the sale of real estate assets equal to 15.0% of remaining net sales proceeds after return of capital contributions to stockholders plus payment to stockholders of a 7.0% cumulative, pre-tax, non-compounded return on the capital contributed by stockholders. ARC has a 15.0% interest and PE-NTR has an 85.0% interest in the Special Limited Partner. No subordinated participation in net sales proceeds has been paid to date. | |||||||||||||||||
Subordinated Incentive Listing Distribution—The Operating Partnership may pay to the Special Limited Partner a subordinated incentive listing distribution upon the listing of our common stock on a national securities exchange. Such incentive listing distribution is equal to 15.0% of the amount by which the market value of all of our issued and outstanding common stock plus distributions exceeds the aggregate capital contributed by stockholders plus an amount equal to a 7.0% cumulative, pre-tax non-compounded annual return to stockholders. | |||||||||||||||||
Neither the Special Limited Partner nor any of its affiliates can earn both the subordinated participation in net sales proceeds and the subordinated incentive listing distribution. No subordinated incentive listing distribution has been earned to date. | |||||||||||||||||
Subordinated Distribution Upon Termination of the Advisor Agreement—Upon termination or non-renewal of the PE-NTR Agreement, the Special Limited Partner shall be entitled to a subordinated termination distribution in the form of a non-interest bearing promissory note equal to 15.0% of the amount by which the cost of our assets plus distributions exceeds the aggregate capital contributed by stockholders plus an amount equal to a 7.0% cumulative, pre-tax non-compounded annual return to stockholders. In addition, the Special Limited Partner may elect to defer its right to receive a subordinated distribution upon termination until either a listing on a national securities exchange or a liquidity event occurs. No such termination has occurred to date. | |||||||||||||||||
Property Manager—All of our real properties are managed and leased by the Property Manager. The Property Manager is wholly owned by our Phillips Edison sponsor. The Property Manager also manages real properties acquired by the Phillips Edison affiliates or other third parties. | |||||||||||||||||
Commencing June 1, 2014, the amount we pay to the Property Manager in monthly property management fees decreased from 4.5% to 4.0% of the monthly gross cash receipts from the properties managed by the Property Manager. In the event that we contract directly with a non-affiliated third-party property manager with respect to a property, we will pay the Property Manager a monthly oversight fee equal to 1.0% of the gross revenues of the property managed. In addition to the property management fee or oversight fee, if the Property Manager provides leasing services with respect to a property, we pay the Property Manager leasing fees in an amount equal to the leasing fees charged by unaffiliated persons rendering comparable services based on national market rates. The Property Manager shall be paid a leasing fee in connection with a tenant’s exercise of an option to extend an existing lease, and the leasing fees payable to the Property Manager may be increased by up to 50% in the event that the Property Manager engages a co-broker to lease a particular vacancy. We reimburse the costs and expenses incurred by the Property Manager on our behalf, including employee compensation, legal, travel and other out-of-pocket expenses that are directly related to the management of specific properties, as well as fees and expenses of third-party accountants. | |||||||||||||||||
If we engage the Property Manager to provide construction management services with respect to a particular property, we pay a construction management fee in an amount that is usual and customary for comparable services rendered to similar projects in the geographic market of the property. | |||||||||||||||||
The Property Manager hires, directs and establishes policies for employees who have direct responsibility for the operations of each real property it manages, which may include, but is not limited to, on-site managers and building and maintenance personnel. Certain employees of the Property Manager may be employed on a part-time basis and may also be employed by the Sub-advisor or certain of its affiliates. The Property Manager also directs the purchase of equipment and supplies and will supervise all maintenance activity. | |||||||||||||||||
Summarized below are the fees earned by and the expenses reimbursable to the Property Manager for the three months ended March 31, 2015 and 2014 and any related amounts unpaid as of March 31, 2015 and December 31, 2014 (in thousands): | |||||||||||||||||
For the Three Months Ended | Unpaid Amount as of | ||||||||||||||||
March 31, | March 31, | December 31, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
Property management fees | $ | 2,185 | $ | 1,582 | $ | 846 | $ | 474 | |||||||||
Leasing commissions | 2,028 | 570 | 774 | 191 | |||||||||||||
Construction management fees | 165 | 40 | 8 | 73 | |||||||||||||
Other fees and reimbursements | 1,003 | 292 | 361 | — | |||||||||||||
Total | $ | 5,381 | $ | 2,484 | $ | 1,989 | $ | 738 | |||||||||
Share Purchases by PE-NTR—PE-NTR agreed to purchase on a monthly basis sufficient shares sold in our public offering such that the total shares owned by PE-NTR was equal to at least 0.10% of our outstanding shares (excluding shares issued after the commencement of, and outside of, the initial public offering) at the end of each immediately preceding month. PE-NTR purchased shares at a purchase price of $9.00 per share, reflecting no dealer manager fee or selling commissions paid on such shares. | |||||||||||||||||
As of March 31, 2015, PE-NTR owned 176,509 shares of our common stock, or approximately 0.10% of our common stock issued during our initial public offering period, which closed on February 7, 2014. PE-NTR may not sell any of these shares while serving as our advisor or sub-advisor. |
Operating_Leases
Operating Leases | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Leases, Operating [Abstract] | ||||
Operating Leases | OPERATING LEASES | |||
The terms and expirations of our operating leases with our tenants vary. The lease agreements frequently contain options to extend the terms of leases and other terms and conditions as negotiated. We retain substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. | ||||
Approximate future rentals to be received under non-cancelable operating leases in effect at March 31, 2015, assuming no new or renegotiated leases or option extensions on lease agreements, are as follows (in thousands): | ||||
Year | Amount | |||
April 1 to December 31, 2015 | $ | 129,998 | ||
2016 | 162,577 | |||
2017 | 146,906 | |||
2018 | 128,558 | |||
2019 | 106,110 | |||
2020 and thereafter | 460,506 | |||
Total | $ | 1,134,655 | ||
No single tenant comprised 10% or more of our aggregate annualized effective rent as of March 31, 2015. |
Subsequent_Events
Subsequent Events | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Subsequent Events [Abstract] | ||||||||||||||||
Subsequent Events | SUBSEQUENT EVENTS | |||||||||||||||
Distributions to Stockholders | ||||||||||||||||
Distributions equal to a daily amount of $0.00183562 per share of common stock outstanding were paid subsequent to March 31, 2015 to the stockholders of record from March 1, 2015 through April 30, 2015 as follows (in thousands): | ||||||||||||||||
Distribution Period | Date Distribution Paid | Gross Amount of Distribution Paid | Distribution Reinvested through the DRIP | Net Cash Distribution | ||||||||||||
March 1, 2015 through March 31, 2015 | 4/1/15 | $ | 10,436 | $ | 5,427 | $ | 5,009 | |||||||||
April 1, 2015 through April 30, 2015 | 5/1/15 | 10,124 | 5,274 | 4,850 | ||||||||||||
On March 4, 2015, our board of directors authorized distributions to the stockholders of record at the close of business each day in the period commencing May 1, 2015 through and including May 31, 2015. We expect to pay these distributions on June 1, 2015. On May 5, 2015, our board of directors authorized distributions to the stockholders of record at the close of business each day in the period commencing June 1, 2015 through and including July 31, 2015. The authorized distributions equal a daily amount of $0.00183562 per share of common stock, par value $0.01 per share. | ||||||||||||||||
Acquisition | ||||||||||||||||
Subsequent to March 31, 2015, we acquired the following property (dollars in thousands): | ||||||||||||||||
Property Name | Location | Anchor Tenant | Acquisition Date | Purchase Price | Square Footage | Leased % of Rentable Square Feet at Acquisition | ||||||||||
Coronado Center | Santa Fe, NM | Trader Joe’s | 5/1/15 | $ | 22,740 | 117,006 | 89.6 | % | ||||||||
The supplemental purchase accounting disclosures required by GAAP relating to the recent acquisitions of the aforementioned properties have not been presented as the initial accounting for these acquisitions was incomplete at the time this Quarterly Report on Form 10-Q was filed with the SEC. The initial accounting was incomplete due to the late closing dates of the acquisitions. | ||||||||||||||||
Interest Rate Swap | ||||||||||||||||
On April 22, 2015, we entered into three interest rate swap agreements with Bank of America, N.A. to fix the LIBOR portion of the interest rate on $387.0 million of outstanding debt under our existing credit facility beginning May 1, 2015. The first swap has a notional amount $100.0 million and fixes LIBOR at 1.20625% with a maturity date of February 1, 2019. The second swap has a notional amount of $175.0 million and fixes LIBOR at 1.39750% with a maturity date of February 3, 2020. The third swap has a notional amount of $112.0 million and fixes LIBOR at 1.54875% with a maturity date of February 1, 2021. These swaps qualify and have been designated as a cash flow hedge. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Accounting Policies [Abstract] | |||||||
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation—The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Readers of this Quarterly Report on Form 10-Q should refer to the audited consolidated financial statements of Phillips Edison Grocery Center REIT I, Inc. for the year ended December 31, 2014, which are included in our 2014 Annual Report on Form 10-K, as certain footnote disclosures contained in such audited consolidated financial statements have been omitted from this Quarterly Report on Form 10-Q. In the opinion of management, all normal and recurring adjustments necessary for the fair presentation have been included in this Quarterly Report. Our results of operations for the three months ended March 31, 2015 are not necessarily indicative of the operating results expected for the full year. | ||||||
The accompanying consolidated financial statements include our accounts and those of our majority-owned subsidiaries. All intercompany balances and transactions are eliminated upon consolidation. | |||||||
Redeemable Common Stock | Redeemable Common Stock—Under our share repurchase program, the maximum amount of common stock that we may repurchase, at the shareholder’s election, during any calendar year is limited, among other things, to 5% of the weighted-average number of shares outstanding during the prior calendar year. The maximum amount is reduced each reporting period by the current year share repurchases to date. We record amounts that may be repurchased under the share repurchase program as redeemable common stock outside of permanent equity in our consolidated balance sheets because repurchases are at the option of the holders and are not solely within our control. There were 8.4 million and 3.0 million redeemable common shares represented on the consolidated balance sheets as of March 31, 2015 and December 31, 2014, respectively. Changes in the amount of redeemable common stock from period to period are recorded as an adjustment to capital in excess of par value. | ||||||
We offer a share repurchase program which may allow certain stockholders to have their shares repurchased subject to approval and certain limitations and restrictions (see Note 3). We account for those financial instruments that represent our mandatory obligation to repurchase shares as liabilities to be reported at settlement value. When shares are presented for repurchase, we will reclassify such obligations from redeemable common stock to a liability based upon their respective settlement values. | |||||||
Earnings Per Share | Earnings Per Share—We use the two-class method of computing earnings per share (“EPS”), which is an earnings allocation formula that determines EPS for common stock and any participating securities (in our case, the limited partnership units of the Operating Partnership designated as “Class B units” that have vested) according to dividends declared (whether paid or unpaid). Under the two-class method, basic EPS is computed by dividing the sum of distributed earnings to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur from other share equivalent activity. | ||||||
The vesting of the Class B units is contingent upon a market condition and service condition. The vested Class B units were included in the diluted net income per share computations for the three months ended March 31, 2015. The unvested Class B units were not included in the diluted net income (loss) per share computations since the satisfaction of the market or service condition was not probable as of March 31, 2015 and 2014. | |||||||
Reclassifications | Reclassifications—The following line items on our consolidated statement of cash flows for the three months ended March 31, 2014 were reclassified to conform to the current year presentation: | ||||||
• | The change in accounts receivable and the change in prepaid expenses and other were reclassified to the change in other assets; and | ||||||
• | The change in accounts payable and the change in accrued and other liabilities were reclassified to the change in | ||||||
accounts payable and other liabilities. | |||||||
Impact of Recently Issued Accounting Pronouncements | Impact of Recently Issued Accounting Pronouncements—The following table provides a brief description of recent accounting pronouncements that could have a material effect on our financial statements: | ||||||
Standard | Description | Date of Adoption | Effect on the Financial Statements or Other Significant Matters | ||||
ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs | This update amends existing guidance to require the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge. It is effective for annual reporting periods beginning after December 15, 2015, but early adoption is permitted. | 1-Jan-16 | We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Accounting Policies [Abstract] | |||||||
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The following table provides a brief description of recent accounting pronouncements that could have a material effect on our financial statements: | ||||||
Standard | Description | Date of Adoption | Effect on the Financial Statements or Other Significant Matters | ||||
ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs | This update amends existing guidance to require the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge. It is effective for annual reporting periods beginning after December 15, 2015, but early adoption is permitted. | 1-Jan-16 | We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. |
Equity_Tables
Equity (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Stockholders' Equity Note [Abstract] | |||||||||
Share repurchase program | The following table presents the activity of the share repurchase program for the three months ended March 31, 2015 and 2014 (in thousands, except per share amounts): | ||||||||
2015 | 2014 | ||||||||
Shares repurchased | 514 | 16 | |||||||
Cost of repurchases | $ | 4,908 | $ | 155 | |||||
Average repurchase price | $ | 9.54 | $ | 9.72 | |||||
Share repurchase program, repurchase obligations | We record a liability representing our obligation to repurchase shares of common stock submitted for repurchase as of period end but not yet repurchased. Below is a summary of our obligation to repurchase shares of common stock recorded as a component of accounts payable and other liabilities on our consolidated balance sheets as of March 31, 2015 and December 31, 2014 (in thousands): | ||||||||
31-Mar-15 | 31-Dec-14 | ||||||||
Shares submitted for repurchase | 11 | 177 | |||||||
Liability recorded | $ | 102 | $ | 1,669 | |||||
Fair_Value_Measurement_Tables
Fair Value Measurement (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Fair Value Disclosures [Abstract] | |||||||||
Fair Value Inputs, Liabilities, Quantitative Information | The following is a summary of discount rates and borrowings as of March 31, 2015 and December 31, 2014 (dollars in thousands): | ||||||||
31-Mar-15 | 31-Dec-14 | ||||||||
Discount rates: | |||||||||
Fixed-rate debt | 3.35 | % | 3.4 | % | |||||
Secured variable-rate debt | 2.59 | % | 2.48 | % | |||||
Unsecured variable-rate debt | 1.99 | % | 1.93 | % | |||||
Borrowings: | |||||||||
Fair value | $ | 739,214 | $ | 665,982 | |||||
Recorded value | 729,983 | 650,462 | |||||||
Real_Estate_Acquisitions_Table
Real Estate Acquisitions (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Business Combinations [Abstract] | |||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | For the three months ended March 31, 2015 and 2014, we allocated the purchase price of acquisitions to the fair value of the assets acquired and liabilities assumed as follows (in thousands): | ||||||||
2015 | 2014 | ||||||||
Land and improvements | $ | 29,516 | $ | 86,106 | |||||
Building and improvements | 51,186 | 168,704 | |||||||
Acquired in-place leases | 8,703 | 24,127 | |||||||
Acquired above-market leases | 356 | 9,257 | |||||||
Acquired below-market leases | (3,319 | ) | (2,485 | ) | |||||
Total assets and lease liabilities acquired | 86,442 | 285,709 | |||||||
Debt assumed | 24,982 | 86,644 | |||||||
Net assets acquired | $ | 61,460 | $ | 199,065 | |||||
Weighted-average Amortization Periods of Acquired Lease Intangibles | The weighted-average amortization periods for acquired in-place lease, above-market lease, and below-market lease intangibles acquired during the three months ended March 31, 2015 and 2014 are as follows (in years): | ||||||||
2015 | 2014 | ||||||||
Acquired in-place leases | 16 | 6 | |||||||
Acquired above-market leases | 16 | 11 | |||||||
Acquired below-market leases | 21 | 6 | |||||||
Real Estate Acquisitions | The amounts recognized for revenues, acquisition expenses and net loss from each respective acquisition date to March 31, 2015 and 2014 related to the operating activities of our acquisitions are as follows (in thousands): | ||||||||
2015 | 2014 | ||||||||
Revenues | $ | 752 | $ | 2,164 | |||||
Acquisition expenses | 1,458 | 5,188 | |||||||
Net loss | 1,498 | 5,511 | |||||||
Business Acquisition, Pro Forma Information | The following unaudited pro forma information summarizes selected financial information from our combined results of operations, as if all of our acquisitions for 2014 and 2015 had been acquired on January 1, 2014 (in thousands). This pro forma information is presented for informational purposes only and may not be indicative of what actual results of operations would have been had the transactions occurred at the beginning of the period, nor does it purport to represent the results of future operations. | ||||||||
For the Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Pro forma revenues | $ | 60,115 | $ | 58,433 | |||||
Pro forma net income attributable to stockholders | 6,891 | 7,947 | |||||||
Acquired_Intangible_Assets_Tab
Acquired Intangible Assets (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Finite Lived Intangible Assets Disclosure [Abstract] | |||||||||
Acquired Intangible Assets | Acquired intangible lease assets consisted of the following as of March 31, 2015 and December 31, 2014 (in thousands): | ||||||||
31-Mar-15 | 31-Dec-14 | ||||||||
Acquired in-place leases | $ | 191,393 | $ | 182,690 | |||||
Acquired above-market leases | 38,266 | 37,911 | |||||||
Total acquired intangible lease assets | 229,659 | 220,601 | |||||||
Accumulated amortization | (52,856 | ) | (43,915 | ) | |||||
Net acquired intangible lease assets | $ | 176,803 | $ | 176,686 | |||||
Finite-lived Intangible Assets Amortization Expense | Summarized below is the amortization recorded on the intangible assets for the three months ended March 31, 2015 and 2014 (in thousands): | ||||||||
2015 | 2014 | ||||||||
Acquired in-place leases(1) | $ | 7,462 | $ | 4,722 | |||||
Acquired above-market leases(2) | 1,479 | 978 | |||||||
Total | $ | 8,941 | $ | 5,700 | |||||
(1) Amortization recorded on acquired in-place leases was included in depreciation and amortization in the consolidated statements of operations. | |||||||||
(2) Amortization recorded on acquired above-market leases was an adjustment to rental revenue in the consolidated statements of operations. | |||||||||
Schedule of Acquired Intangible Assets, Future Amortization Expense | Estimated future amortization on the respective acquired intangible lease assets as of March 31, 2015 for the remainder of 2015 and for each of the four succeeding calendar years and thereafter is as follows (in thousands): | ||||||||
Year | In-Place Leases | Above-Market Leases | |||||||
April 1 to December 31, 2015 | $ | 22,240 | $ | 4,241 | |||||
2016 | 27,427 | 4,819 | |||||||
2017 | 24,477 | 3,996 | |||||||
2018 | 19,284 | 3,213 | |||||||
2019 | 14,136 | 2,457 | |||||||
2020 and thereafter | 41,404 | 9,109 | |||||||
Total | $ | 148,968 | $ | 27,835 | |||||
Mortgages_and_Loans_Payable_Ta
Mortgages and Loans Payable (Tables) | 3 Months Ended | |||||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||
Schedule of Assumed Debt | The table below summarizes our loan assumptions in conjunction with property acquisitions for the three months ended March 31, 2015 and 2014 (dollars in thousands): | |||||||||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||||||||||
Number of properties acquired with loan assumptions | 5 | 7 | ||||||||||||||||||||||||||
Carrying value of assumed debt | $ | 24,000 | $ | 84,425 | ||||||||||||||||||||||||
Fair value of assumed debt | 24,982 | 86,644 | ||||||||||||||||||||||||||
Schedule of Debt Obligations | The following is a summary of our debt obligations as of March 31, 2015 and December 31, 2014 (in thousands): | |||||||||||||||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||||
Fixed-rate mortgages payable(1)(2) | $ | 363,268 | $ | 350,922 | ||||||||||||||||||||||||
Unsecured credit facility - variable-rate(3) | 358,500 | 291,700 | ||||||||||||||||||||||||||
Assumed below-market debt adjustment | 8,215 | 7,840 | ||||||||||||||||||||||||||
Total | $ | 729,983 | $ | 650,462 | ||||||||||||||||||||||||
(1) | Due to the non-recourse nature of certain mortgages, the assets and liabilities of the following properties are neither available to pay the debts of the consolidated property-holding limited liability companies nor constitute obligations of such consolidated limited liability companies as of March 31, 2015: Broadway Plaza, Publix at Northridge, Kleinwood Center, Murray Landing, Vineyard Center, Sunset Center, Westwoods Shopping Center, Stockbridge Commons, East Burnside Plaza, Fresh Market, Collington Plaza, Stop & Shop Plaza, Savoy Plaza, Coppell Market Center, Statler Square, Hamilton Village, Waynesboro Plaza, Thompson Valley Towne Center, Lumina Commons, Driftwood Village, Orchard Square, Breakfast Point Marketplace, Falcon Valley, Lakeshore Crossing, Lake Wales, and Onalaska. The outstanding principal balance of these non-recourse mortgages as of March 31, 2015 and December 31, 2014 was $265.3 million and $252.1 million, respectively. | |||||||||||||||||||||||||||
(2) | As of March 31, 2015, the interest rate on $11.5 million outstanding under one of our variable-rate mortgage notes payable was, in effect, fixed at 5.22% by an interest rate swap agreement (see Notes 4 and 10). | |||||||||||||||||||||||||||
(3) | As of March 31, 2015 and December 31, 2014, the maximum borrowing capacity of the unsecured credit facility was $700.0 million. The gross borrowings under credit facilities were $70.3 million during the the three months ended March 31, 2015. The gross payments on credit facilities were $3.5 million during the the three months ended March 31, 2015. | |||||||||||||||||||||||||||
Schedule of Maturities of Long-term Debt | Below is a listing of our maturity schedule with the respective principal payment obligations (in thousands) and weighted-average interest rates: | |||||||||||||||||||||||||||
2015(1) | 2016 | 2017 | 2018 | 2019 | Thereafter | Total | ||||||||||||||||||||||
Maturing debt:(2) | ||||||||||||||||||||||||||||
Fixed-rate mortgages payable(3)(4) | $ | 54,230 | $ | 104,797 | $ | 47,290 | $ | 44,857 | $ | 4,206 | $ | 107,888 | $ | 363,268 | ||||||||||||||
Unsecured credit facility - variable-rate | — | — | 358,500 | — | — | — | 358,500 | |||||||||||||||||||||
Total maturing debt | $ | 54,230 | $ | 104,797 | $ | 405,790 | $ | 44,857 | $ | 4,206 | $ | 107,888 | $ | 721,768 | ||||||||||||||
Weighted-average interest rate on debt: | ||||||||||||||||||||||||||||
Fixed-rate mortgages payable(3)(4) | 5.1 | % | 5.7 | % | 5.3 | % | 5.3 | % | 5.8 | % | 5.2 | % | 5.5 | % | ||||||||||||||
Unsecured credit facility - variable-rate | — | % | — | % | 1.5 | % | — | % | — | % | — | % | 1.5 | % | ||||||||||||||
Total | 5.1 | % | 5.7 | % | 1.9 | % | 5.3 | % | 5.8 | % | 5.2 | % | 3.5 | % | ||||||||||||||
(1) | Includes only April 1, 2015 through December 31, 2015. | |||||||||||||||||||||||||||
(2) | The debt maturity table does not include any below-market debt adjustment, of which $8.2 million, net of accumulated amortization, was outstanding as of March 31, 2015. | |||||||||||||||||||||||||||
(3) | As of March 31, 2015, the interest rate on $11.5 million outstanding under one of our variable-rate mortgage notes payable was, in effect, fixed at 5.22% by an interest rate swap agreement (see Notes 4 and 10). | |||||||||||||||||||||||||||
(4) | All but $6.3 million of the fixed-rate debt represents loans assumed as part of certain acquisitions. |
Acquired_BelowMarket_Lease_Int1
Acquired Below-Market Lease Intangibles (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Below Market Lease [Abstract] | |||||||||
Below-market lease, amortization | Summarized is the amortization recorded on the below-market lease intangible liabilities for the three months ended March 31, 2015 and 2014 (in thousands): | ||||||||
2015 | 2014 | ||||||||
Acquired below-market leases(1) | $ | 1,657 | $ | 888 | |||||
(1) Amortization recorded on acquired below-market leases was an adjustment to rental revenue in the consolidated statements of operations. | |||||||||
Acquired below-market leases, future amortization | Estimated future amortization income of the intangible lease liabilities as of March 31, 2015 for the remainder of 2015 and for each of the four succeeding calendar years and thereafter is as follows (in thousands): | ||||||||
Year | Below-Market Leases | ||||||||
April 1 to December 31, 2015 | $ | 4,938 | |||||||
2016 | 6,124 | ||||||||
2017 | 5,192 | ||||||||
2018 | 4,150 | ||||||||
2019 | 3,414 | ||||||||
2020 and thereafter | 20,299 | ||||||||
Total | $ | 44,117 | |||||||
Derivatives_and_Hedging_Activi1
Derivatives and Hedging Activities (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||
Effect of Derivative Instruments | The table below presents the effect of our derivative financial instruments on the consolidated statements of operations and comprehensive income (loss) for the three months ended March 31, 2015 and 2014, respectively (in thousands). | ||||||||
Derivatives in Cash Flow Hedging Relationships (Interest Rate Swap) | 2015 | 2014 | |||||||
Amount of gain recognized in income on derivative (ineffective portion, reclassifications of missed forecasted transactions and amounts excluded from effectiveness testing) | $ | — | $ | 690 | |||||
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||
Summary of Organization and Offering Costs | Summarized below are the cumulative organization and offering costs charged by and the cumulative costs reimbursed to PE-NTR, ARC and their affiliates for the three months ended March 31, 2015 and December 31, 2014, and any related amounts unpaid as of March 31, 2015 and December 31, 2014 (in thousands): | ||||||||||||||||
31-Mar-15 | 31-Dec-14 | ||||||||||||||||
Total Organization and Offering costs charged | $ | 27,104 | $ | 27,104 | |||||||||||||
Total Organization and Offering costs reimbursed | 27,029 | 27,029 | |||||||||||||||
Total unpaid Organization and Offering costs(1) | $ | 75 | $ | 75 | |||||||||||||
(1) | Certain of these cumulative organization and offering costs were charged to us by ARC. The net payable of $75 was due to ARC as of March 31, 2015 and December 31, 2014. | ||||||||||||||||
Advisor Transactions | Summarized below are the fees earned by and the expenses reimbursable to PE-NTR and ARC, except for organization and offering costs and general and administrative expenses, which we disclose above, for the three months ended March 31, 2015 and 2014 and any related amounts unpaid as of March 31, 2015 and December 31, 2014 (in thousands): | ||||||||||||||||
For the Three Months Ended | Unpaid Amount as of | ||||||||||||||||
March 31, | March 31, | December 31, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
Acquisition fees | $ | 855 | $ | 2,842 | $ | — | $ | — | |||||||||
Acquisition expenses | 139 | 265 | — | — | |||||||||||||
Class B unit distribution(1) | 440 | 118 | 305 | 135 | |||||||||||||
Financing fees | 180 | 633 | — | — | |||||||||||||
Total | $ | 1,614 | $ | 3,858 | $ | 305 | $ | 135 | |||||||||
(1) | The distribution recorded for the three months ended March 31, 2015 of $440 represents the distributions paid to PE-NTR and ARC as holders of unvested and vested Class B units of the Operating Partnership. Of the amount, $12 was related to the unvested Class B units and is presented as expense on the consolidated statements of operations, with $428 related to the vested Class B units presented as distributions to noncontrolling interests on the consolidated statements of equity. The unpaid amount as of March 31, 2015 includes the distribution payable on both the vested and unvested Class B units. | ||||||||||||||||
Property Manager Transactions | Summarized below are the fees earned by and the expenses reimbursable to the Property Manager for the three months ended March 31, 2015 and 2014 and any related amounts unpaid as of March 31, 2015 and December 31, 2014 (in thousands): | ||||||||||||||||
For the Three Months Ended | Unpaid Amount as of | ||||||||||||||||
March 31, | March 31, | December 31, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
Property management fees | $ | 2,185 | $ | 1,582 | $ | 846 | $ | 474 | |||||||||
Leasing commissions | 2,028 | 570 | 774 | 191 | |||||||||||||
Construction management fees | 165 | 40 | 8 | 73 | |||||||||||||
Other fees and reimbursements | 1,003 | 292 | 361 | — | |||||||||||||
Total | $ | 5,381 | $ | 2,484 | $ | 1,989 | $ | 738 | |||||||||
Operating_Leases_Tables
Operating Leases (Tables) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Leases, Operating [Abstract] | ||||
Schedule of future minimum rental payments for operating leases | Approximate future rentals to be received under non-cancelable operating leases in effect at March 31, 2015, assuming no new or renegotiated leases or option extensions on lease agreements, are as follows (in thousands): | |||
Year | Amount | |||
April 1 to December 31, 2015 | $ | 129,998 | ||
2016 | 162,577 | |||
2017 | 146,906 | |||
2018 | 128,558 | |||
2019 | 106,110 | |||
2020 and thereafter | 460,506 | |||
Total | $ | 1,134,655 | ||
Subsequent_Events_Tables
Subsequent Events (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Subsequent Events [Abstract] | ||||||||||||||||
Dividends Paid | Distributions equal to a daily amount of $0.00183562 per share of common stock outstanding were paid subsequent to March 31, 2015 to the stockholders of record from March 1, 2015 through April 30, 2015 as follows (in thousands): | |||||||||||||||
Distribution Period | Date Distribution Paid | Gross Amount of Distribution Paid | Distribution Reinvested through the DRIP | Net Cash Distribution | ||||||||||||
March 1, 2015 through March 31, 2015 | 4/1/15 | $ | 10,436 | $ | 5,427 | $ | 5,009 | |||||||||
April 1, 2015 through April 30, 2015 | 5/1/15 | 10,124 | 5,274 | 4,850 | ||||||||||||
Schedule of Business Acquisitions | Subsequent to March 31, 2015, we acquired the following property (dollars in thousands): | |||||||||||||||
Property Name | Location | Anchor Tenant | Acquisition Date | Purchase Price | Square Footage | Leased % of Rentable Square Feet at Acquisition | ||||||||||
Coronado Center | Santa Fe, NM | Trader Joe’s | 5/1/15 | $ | 22,740 | 117,006 | 89.6 | % | ||||||||
Organization_Details
Organization (Details) | Mar. 31, 2015 |
Properties | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of real estate properties owned | 146 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 |
In Millions, unless otherwise specified | |||
Accounting Policies [Abstract] | |||
Stock repurchase program, number of shares authorized to be repurchased, percentage of weighted-average shares | 5.00% | ||
Redeemable common stock, shares issued | 8.4 | 3 | |
Class B units of the Operating Partnership, vested and outstanding | 2.8 | ||
Class B units of the Operating Partnership, unvested and outstanding | 0.2 | 0.9 |
Equity_Details
Equity (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Class of Stock [Line Items] | |||
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 | |
Common stock, par value | $0.01 | $0.01 | |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | |
Preferred stock, par value | $0.01 | $0.01 | |
Common stock, shares issued | 184,200,000 | ||
Common stock, including additional paid in capital | $1,820,000,000 | ||
Common stock, shares outstanding | 183,279,000 | 182,131,000 | |
Common stock repurchased since inception | 1,000,000 | ||
Preferred stock, shares issued | 0 | 0 | |
Common stock, voting rights | The holders of common stock are entitled to one vote per share on all matters voted on by stockholders, including election of the board of directors. Our charter does not provide for cumulative voting in the election of directors. | ||
Distributions reinvested | 15,798,000 | 15,211,000 | |
Dividend Reinvestment Plan [Member] | |||
Class of Stock [Line Items] | |||
Remaining shares under the DRIP | 18,200,000 | ||
Common stock, price per share for DRIP | $9.50 | ||
Distributions reinvested | 15,800,000 | 15,200,000 | |
Share Repurchase Program [Member] | |||
Class of Stock [Line Items] | |||
Common stock, share repurchase notice days | 5 days | ||
Common stock, share repurchase withdrawal notice days | 5 days | ||
Common stock, share repurchase plan termination notice days | 30 days | ||
Common stock, shares repurchased | 514,000 | 16,000 | |
Common stock, cost of repurchases | 4,908,000 | 155,000 | |
Common stock, average repurchase price | $9.54 | $9.72 | |
Share repurchase program, shares submitted for repurchase | 11,000 | 177,000 | |
Share repurchase program, liability recorded | 102,000 | 1,669,000 | |
Class B units [Member] | |||
Class of Stock [Line Items] | |||
Class B units of Operating Partnership, issued | 400,000 | ||
Vested Class B units, value | $27,900,000 |
Fair_Value_Measurement_Details
Fair Value Measurement (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | |
Fair Value Disclosures [Abstract] | ||
Fair value discount rate, fixed-rate debt | 3.35% | 3.40% |
Fair value discount rate, secured, variable-rate debt | 2.59% | 2.48% |
Fair value discount rate, unsecured, variable-rate debt | 1.99% | 1.93% |
Mortgages and loans payable, fair value | $739,214,000 | $665,982,000 |
Mortgages and loans payable, recorded value | 729,983,000 | 650,462,000 |
Number of interest rate swap agreements | 1 | 1 |
Notional amount of interest rate swap agreement | 11,500,000 | 11,600,000 |
Variable-rate mortgage note payable swap agreement interest rate | 5.22% | |
Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | $600,000 | $600,000 |
Real_Estate_Acquisitions_Detai
Real Estate Acquisitions (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Business Acquisition [Line Items] | ||
Business acquisition, cost of acquired entity, debt assumed | $24,000 | $84,425 |
Fair value of assumed debt | 24,982 | 86,644 |
Series of Individually Immaterial Business Acquisitions | ||
Business Acquisition [Line Items] | ||
Number of properties acquired during period | 8 | |
Business acquisition, cost of acquired entity, purchase price | 86,440 | |
Business acquisition, cost of acquired entity, debt assumed | 24,000 | |
Fair value of assumed debt | $24,982 | $86,644 |
Real_Estate_Acquisitions_Detai1
Real Estate Acquisitions (Details) - Allocation (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Business Acquisition [Line Items] | ||
Fair value of assumed debt | $24,982 | $86,644 |
Series of Individually Immaterial Business Acquisitions | ||
Business Acquisition [Line Items] | ||
Purchase price allocation, land and land improvements | 29,516 | 86,106 |
Purchase price allocation, building and improvements | 51,186 | 168,704 |
Purchase price allocation, in-place leases | 8,703 | 24,127 |
Purchase price allocation, above-market leases | 356 | 9,257 |
Purchase price allocation, below-market leases | -3,319 | -2,485 |
Purchase price allocation, total assets and lease liabilities acquired | 86,442 | 285,709 |
Fair value of assumed debt | 24,982 | 86,644 |
Purchase price allocation, net assets acquired | $61,460 | $199,065 |
Real_Estate_Acquisitions_Detai2
Real Estate Acquisitions (Details) - Weighted-average amortization (Series of Individually Immaterial Business Acquisitions) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Acquired in-place leases | ||
Business Acquisition [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 16 years | 6 years |
Acquired above-market leases | ||
Business Acquisition [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 16 years | 11 years |
Acquired Below-Market Leases | ||
Business Acquisition [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 21 years | 6 years |
Real_Estate_Acquisitions_Detai3
Real Estate Acquisitions (Details) - Operations (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Business Acquisition [Line Items] | ||
Acquisition expenses | $1,735 | $5,386 |
Series of Individually Immaterial Business Acquisitions | ||
Business Acquisition [Line Items] | ||
Revenues | 752 | 2,164 |
Acquisition expenses | 1,458 | 5,188 |
Net loss | $1,498 | $5,511 |
Real_Estate_Acquisitions_Detai4
Real Estate Acquisitions (Details) - Pro Forma (Acquisitions in 2015 and 2014 [member], USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Acquisitions in 2015 and 2014 [member] | ||
Business Acquisition [Line Items] | ||
Pro forma revenues | $60,115 | $58,433 |
Pro forma net income attributable to stockholders | $6,891 | $7,947 |
Acquired_Intangible_Assets_Det
Acquired Intangible Assets (Details) - Period Ending (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Acquired intangible lease assets | $229,659 | $220,601 |
Acquired intangible assets, accumulated amortization | -52,856 | -43,915 |
Acquired intangible assets, net of accumulated amortization | 176,803 | 176,686 |
Acquired in-place leases | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Acquired intangible lease assets | 191,393 | 182,690 |
Acquired intangible assets, net of accumulated amortization | 148,968 | |
Acquired above-market leases | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Acquired intangible lease assets | 38,266 | 37,911 |
Acquired intangible assets, net of accumulated amortization | $27,835 |
Acquired_Intangible_Assets_Det1
Acquired Intangible Assets (Details) - Amortization Expense (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | ||
Finite-Lived Intangible Assets [Line Items] | ||||
Acquired intangible assets, amortization | $8,941 | $5,700 | ||
Acquired in-place leases | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Acquired intangible assets, amortization | 7,462 | [1] | 4,722 | [1] |
Acquired above-market leases | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Acquired intangible assets, amortization | $1,479 | [2] | $978 | [2] |
[1] | Amortization recorded on acquired in-place leases was included in depreciation and amortization in the consolidated statements of operations. | |||
[2] | Amortization recorded on acquired above-market leases was an adjustment to rental revenue in the consolidated statements of operations. |
Acquired_Intangible_Assets_Det2
Acquired Intangible Assets (Details) - Five Succeeding Calendar Years (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Acquired intangible assets, net of accumulated amortization | $176,803 | $176,686 |
Acquired in-place leases | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
April 1 to December 31, 2015 | 22,240 | |
2016 | 27,427 | |
2017 | 24,477 | |
2018 | 19,284 | |
2019 | 14,136 | |
2020 and thereafter | 41,404 | |
Acquired intangible assets, net of accumulated amortization | 148,968 | |
Acquired above-market leases | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
April 1 to December 31, 2015 | 4,241 | |
2016 | 4,819 | |
2017 | 3,996 | |
2018 | 3,213 | |
2019 | 2,457 | |
2020 and thereafter | 9,109 | |
Acquired intangible assets, net of accumulated amortization | $27,835 |
Mortgages_and_Loans_Payable_De
Mortgages and Loans Payable (Details) (USD $) | 3 Months Ended | ||||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |||
Properties | Properties | ||||
Debt Instrument [Line Items] | |||||
Outstanding principal balance | $721,768,000 | [1] | |||
Outstanding mortgage notes payable maturing in 2015 | 49,500,000 | ||||
Subsequent repayments of long-term debt | 32,200,000 | ||||
Weighted-average interest rate on debt | 3.50% | 3.70% | |||
Number of properties acquired with loan assumptions | 5 | 7 | |||
Carrying value of assumed debt | 24,000,000 | 84,425,000 | |||
Fair value of assumed debt | 24,982,000 | 86,644,000 | |||
Amortization on assumed below-market debt adjustment | 600,000 | 500,000 | |||
Fixed-rate Mortgages Payable [Member] | |||||
Debt Instrument [Line Items] | |||||
Outstanding principal balance | 363,268,000 | [1],[2],[3],[4] | 350,922,000 | [2] | |
Weighted-average interest rate on debt | 5.50% | [3],[4] | |||
Revolving Credit Facility [Member] | Unsecured Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Credit facility, borrowing capacity | 700,000,000 | ||||
Credit facility, maximum potential borrowing capacity | 1,000,000,000 | ||||
Credit facility, outstanding principal balance | $358,500,000 | ||||
Debt instrument, number of extension options | 2 | ||||
Revolving Credit Facility [Member] | Unsecured Debt [Member] | LIBOR [Member] | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.30% | ||||
[1] | The debt maturity table does not include any below-market debt adjustment, of which $8.2 million, net of accumulated amortization, was outstanding as of March 31, 2015. | ||||
[2] | Due to the non-recourse nature of certain mortgages, the assets and liabilities of the following properties are neither available to pay the debts of the consolidated property-holding limited liability companies nor constitute obligations of such consolidated limited liability companies as of March 31, 2015: Broadway Plaza, Publix at Northridge, Kleinwood Center, Murray Landing, Vineyard Center, Sunset Center, Westwoods Shopping Center, Stockbridge Commons, East Burnside Plaza, Fresh Market, Collington Plaza, Stop & Shop Plaza, Savoy Plaza, Coppell Market Center, Statler Square, Hamilton Village, Waynesboro Plaza, Thompson Valley Towne Center, Lumina Commons, Driftwood Village, Orchard Square, Breakfast Point Marketplace, Falcon Valley, Lakeshore Crossing, Lake Wales, and Onalaska. The outstanding principal balance of these non-recourse mortgages as of March 31, 2015 and December 31, 2014 was $265.3 million and $252.1 million, respectively. | ||||
[3] | As of March 31, 2015, the interest rate on $11.5 million outstanding under one of our variable-rate mortgage notes payable was, in effect, fixed at 5.22% by an interest rate swap agreement (see Notes 4 and 10). | ||||
[4] | All but $6.3 million of the fixed-rate debt represents loans assumed as part of certain acquisitions. |
Mortgages_and_Loans_Payable_De1
Mortgages and Loans Payable (Details) - Debt Obligations (USD $) | 3 Months Ended | |||
Mar. 31, 2015 | Dec. 31, 2014 | |||
Debt Instrument [Line Items] | ||||
Outstanding principal balance | $721,768,000 | [1] | ||
Variable-rate mortgage note payable swap agreement interest rate | 5.22% | |||
Credit facilities, gross borrowings | 70,300,000 | |||
Credit facilities, gross payments | 3,500,000 | |||
Fixed-rate Mortgages Payable [Member] | ||||
Debt Instrument [Line Items] | ||||
Outstanding principal balance | 363,268,000 | [1],[2],[3],[4] | 350,922,000 | [2] |
Non-recourse debt | 265,300,000 | 252,100,000 | ||
Unsecured Credit Facility - Variable-rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Outstanding principal balance | 358,500,000 | [1],[5] | 291,700,000 | [5] |
Credit facility, borrowing capacity | 700,000,000 | 700,000,000 | ||
Assumed Below-Market Debt Adjustment [Member] | ||||
Debt Instrument [Line Items] | ||||
Outstanding principal balance, assumed below-market debt adjustment | 8,215,000 | 7,840,000 | ||
Long-term Debt, Total [Member] | ||||
Debt Instrument [Line Items] | ||||
Outstanding principal balance, total long-term debt | 729,983,000 | 650,462,000 | ||
Interest Rate Swap [Member] | ||||
Debt Instrument [Line Items] | ||||
Portion of hedged debt | $11,500,000 | |||
Variable-rate mortgage note payable swap agreement interest rate | 5.22% | |||
[1] | The debt maturity table does not include any below-market debt adjustment, of which $8.2 million, net of accumulated amortization, was outstanding as of March 31, 2015. | |||
[2] | Due to the non-recourse nature of certain mortgages, the assets and liabilities of the following properties are neither available to pay the debts of the consolidated property-holding limited liability companies nor constitute obligations of such consolidated limited liability companies as of March 31, 2015: Broadway Plaza, Publix at Northridge, Kleinwood Center, Murray Landing, Vineyard Center, Sunset Center, Westwoods Shopping Center, Stockbridge Commons, East Burnside Plaza, Fresh Market, Collington Plaza, Stop & Shop Plaza, Savoy Plaza, Coppell Market Center, Statler Square, Hamilton Village, Waynesboro Plaza, Thompson Valley Towne Center, Lumina Commons, Driftwood Village, Orchard Square, Breakfast Point Marketplace, Falcon Valley, Lakeshore Crossing, Lake Wales, and Onalaska. The outstanding principal balance of these non-recourse mortgages as of March 31, 2015 and December 31, 2014 was $265.3 million and $252.1 million, respectively. | |||
[3] | As of March 31, 2015, the interest rate on $11.5 million outstanding under one of our variable-rate mortgage notes payable was, in effect, fixed at 5.22% by an interest rate swap agreement (see Notes 4 and 10). | |||
[4] | All but $6.3 million of the fixed-rate debt represents loans assumed as part of certain acquisitions. | |||
[5] | As of March 31, 2015 and December 31, 2014, the maximum borrowing capacity of the unsecured credit facility was $700.0 million. The gross borrowings under credit facilities were $70.3 million during the the three months ended March 31, 2015. The gross payments on credit facilities were $3.5 million during the the three months ended March 31, 2015. |
Mortgages_and_Loans_Payable_De2
Mortgages and Loans Payable (Details) - Principal Payment Obligations (USD $) | 3 Months Ended | |||
Mar. 31, 2015 | Dec. 31, 2014 | |||
Debt Instrument [Line Items] | ||||
Mortgage principal payment obligation, remainder of 2015 | $54,230,000 | [1],[2] | ||
Mortgage principal payment obligation, 2016 | 104,797,000 | [2] | ||
Mortgage principal payment obligation, 2017 | 405,790,000 | [2] | ||
Mortgage principal payment obligation, 2018 | 44,857,000 | [2] | ||
Mortgage principal payment obligation, 2019 | 4,206,000 | [2] | ||
Mortgage principal payment obligation, thereafter | 107,888,000 | [2] | ||
Total maturing debt | 721,768,000 | [2] | ||
Weighted-average interest rate on debt, remainder of 2015 | 5.10% | [1] | ||
Weighted-average interest rate on debt, 2016 | 5.70% | |||
Weighted-average interest rate on debt, 2017 | 1.90% | |||
Weighted-average interest rate on debt, 2018 | 5.30% | |||
Weighted-average interest rate on debt, 2019 | 5.80% | |||
Weighted-average interest rate on debt, thereafter | 5.20% | |||
Weighted-average interest rate on debt | 3.50% | 3.70% | ||
Variable-rate mortgage note payable swap agreement interest rate | 5.22% | |||
Fixed rate debt not assumed | 6,300,000 | |||
Fixed-rate Mortgages Payable [Member] | ||||
Debt Instrument [Line Items] | ||||
Mortgage principal payment obligation, remainder of 2015 | 54,230,000 | [1],[2],[3],[4] | ||
Mortgage principal payment obligation, 2016 | 104,797,000 | [2],[3],[4] | ||
Mortgage principal payment obligation, 2017 | 47,290,000 | [2],[3],[4] | ||
Mortgage principal payment obligation, 2018 | 44,857,000 | [2],[3],[4] | ||
Mortgage principal payment obligation, 2019 | 4,206,000 | [2],[3],[4] | ||
Mortgage principal payment obligation, thereafter | 107,888,000 | [2],[3],[4] | ||
Total maturing debt | 363,268,000 | [2],[3],[4],[5] | 350,922,000 | [5] |
Weighted-average interest rate on debt, remainder of 2015 | 5.10% | [1],[3],[4] | ||
Weighted-average interest rate on debt, 2016 | 5.70% | [3],[4] | ||
Weighted-average interest rate on debt, 2017 | 5.30% | [3],[4] | ||
Weighted-average interest rate on debt, 2018 | 5.30% | [3],[4] | ||
Weighted-average interest rate on debt, 2019 | 5.80% | [3],[4] | ||
Weighted-average interest rate on debt, thereafter | 5.20% | [3],[4] | ||
Weighted-average interest rate on debt | 5.50% | [3],[4] | ||
Unsecured Credit Facility - Variable-rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Mortgage principal payment obligation, remainder of 2015 | 0 | [1],[2] | ||
Mortgage principal payment obligation, 2016 | 0 | [2] | ||
Mortgage principal payment obligation, 2017 | 358,500,000 | [2] | ||
Mortgage principal payment obligation, 2018 | 0 | [2] | ||
Mortgage principal payment obligation, 2019 | 0 | [2] | ||
Mortgage principal payment obligation, thereafter | 0 | [2] | ||
Total maturing debt | 358,500,000 | [2],[6] | 291,700,000 | [6] |
Weighted-average interest rate on debt, remainder of 2015 | 0.00% | [1] | ||
Weighted-average interest rate on debt, 2016 | 0.00% | |||
Weighted-average interest rate on debt, 2017 | 1.50% | |||
Weighted-average interest rate on debt, 2018 | 0.00% | |||
Weighted-average interest rate on debt, 2019 | 0.00% | |||
Weighted-average interest rate on debt, thereafter | 0.00% | |||
Weighted-average interest rate on debt | 1.50% | |||
Assumed Below-Market Debt Adjustment [Member] | ||||
Debt Instrument [Line Items] | ||||
Below-market assumed debt adjustment | 8,215,000 | 7,840,000 | ||
Interest Rate Swap [Member] | ||||
Debt Instrument [Line Items] | ||||
Portion of hedged debt | $11,500,000 | |||
Variable-rate mortgage note payable swap agreement interest rate | 5.22% | |||
[1] | Includes only April 1, 2015 through December 31, 2015. | |||
[2] | The debt maturity table does not include any below-market debt adjustment, of which $8.2 million, net of accumulated amortization, was outstanding as of March 31, 2015. | |||
[3] | As of March 31, 2015, the interest rate on $11.5 million outstanding under one of our variable-rate mortgage notes payable was, in effect, fixed at 5.22% by an interest rate swap agreement (see Notes 4 and 10). | |||
[4] | All but $6.3 million of the fixed-rate debt represents loans assumed as part of certain acquisitions. | |||
[5] | Due to the non-recourse nature of certain mortgages, the assets and liabilities of the following properties are neither available to pay the debts of the consolidated property-holding limited liability companies nor constitute obligations of such consolidated limited liability companies as of March 31, 2015: Broadway Plaza, Publix at Northridge, Kleinwood Center, Murray Landing, Vineyard Center, Sunset Center, Westwoods Shopping Center, Stockbridge Commons, East Burnside Plaza, Fresh Market, Collington Plaza, Stop & Shop Plaza, Savoy Plaza, Coppell Market Center, Statler Square, Hamilton Village, Waynesboro Plaza, Thompson Valley Towne Center, Lumina Commons, Driftwood Village, Orchard Square, Breakfast Point Marketplace, Falcon Valley, Lakeshore Crossing, Lake Wales, and Onalaska. The outstanding principal balance of these non-recourse mortgages as of March 31, 2015 and December 31, 2014 was $265.3 million and $252.1 million, respectively. | |||
[6] | As of March 31, 2015 and December 31, 2014, the maximum borrowing capacity of the unsecured credit facility was $700.0 million. The gross borrowings under credit facilities were $70.3 million during the the three months ended March 31, 2015. The gross payments on credit facilities were $3.5 million during the the three months ended March 31, 2015. |
Acquired_BelowMarket_Lease_Int2
Acquired Below-Market Lease Intangibles (Details) - Amortization (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | ||
Below Market Lease [Abstract] | ||||
Acquired below-market leases, amortization | $1,657 | [1] | $888 | [1] |
[1] | Amortization recorded on acquired below-market leases was an adjustment to rental revenue in the consolidated statements of operations. |
Acquired_BelowMarket_Lease_Int3
Acquired Below-Market Lease Intangibles (Details) - Five Succeeding Calendar Years (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Below Market Lease, Net, Amortization Income, Fiscal Year Maturity [Abstract] | |
April 1 to December 31, 2015 | $4,938 |
2016 | 6,124 |
2017 | 5,192 |
2018 | 4,150 |
2019 | 3,414 |
2020 and thereafter | 20,299 |
Below market leases, net | $44,117 |
Derivatives_and_Hedging_Activi2
Derivatives and Hedging Activities (Details) (Interest Rate Swap [Member], USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Loss recorded in earnings for changes in fair value on discontinuation of cash flow hedge due to forecasted transaction becoming probable not to occur | $326 | |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of gain recognized in income on derivative (ineffective portion, reclassifications of missed forecasted transactions and amounts excluded from effectiveness testing) | 690 | |
Not Designated as Hedging Instrument [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Loss on derivative not designated as hedges | $121 | $326 |
Related_Party_Transactions_Det
Related Party Transactions (Details) - Advisor (USD $) | 3 Months Ended | ||||||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 03, 2014 | |||
Related Party Transactions [Abstract] | |||||||
Offering costs paid by sub-advisor maximum reimbursement percentage | 1.50% | ||||||
Total organization and offering costs charged | $27,104 | $27,104 | |||||
Total organization and offering costs reimbursed | 27,029 | 27,029 | |||||
Total unpaid organization and offering costs | 75 | [1] | 75 | [1] | |||
Acquisition fee percentage | 1.00% | ||||||
Class B units issuance due date | 60 days | ||||||
Class B units vested | 2,800,000 | ||||||
Operating partnership return for Class B units to vest | 6.00% | ||||||
Class B units issued under ARC agreement | 404,735 | ||||||
Class B units issued under PE-NTR agreement | 189,177 | ||||||
Financing fee percentage | 0.75% | ||||||
Disposition fee percentage | 2.00% | ||||||
General and administrative expenses payable to related parties | 59 | 26 | |||||
Related Party Transaction [Line Items] | |||||||
Acquisition fees | 855 | 2,842 | |||||
Acquisition expenses | 139 | 265 | |||||
Class B unit distribution | 440 | [2] | 118 | [2] | |||
Financing fees | 180 | 633 | |||||
Total fees and expenses | 1,614 | 3,858 | |||||
Acquisition fees, unpaid amount | 0 | 0 | |||||
Acquisition expenses, unpaid amount | 0 | 0 | |||||
Class B unit distribution, unpaid amount | 305 | [2] | 135 | [2] | |||
Financing fees, unpaid amount | 0 | 0 | |||||
Total unpaid fees and expenses | 305 | 135 | |||||
Subordinated participation in net sales proceeds percentage | 15.00% | ||||||
Investor return before subordinated participation in net sales proceeds | 7.00% | ||||||
Advisor interest in special limited partner | 15.00% | ||||||
Sub-advisor interest in special limited partner | 85.00% | ||||||
Subordinated incentive listing fee percentage | 15.00% | ||||||
Investor return before subordinated listing incentive fee | 7.00% | ||||||
Subordinated distribution upon termination of advisor agreement percentage | 15.00% | ||||||
Investor return before subordinated distribution upon termination of advisor agreement | 7.00% | ||||||
Class B distributions, unvested | |||||||
Related Party Transaction [Line Items] | |||||||
Class B unit distribution | 12 | [2] | |||||
Class B distributions, vested | |||||||
Related Party Transaction [Line Items] | |||||||
Class B unit distribution | $428 | [2] | |||||
[1] | Certain of these cumulative organization and offering costs were charged to us by ARC. The net payable of $75 was due to ARC as of March 31, 2015 and December 31, 2014. | ||||||
[2] | The distribution recorded for the three months ended March 31, 2015 of $440 represents the distributions paid to PE-NTR and ARC as holders of unvested and vested Class B units of the Operating Partnership. Of the amount, $12 was related to the unvested Class B units and is presented as expense on the consolidated statements of operations, with $428 related to the vested Class B units presented as distributions to noncontrolling interests on the consolidated statements of equity. The unpaid amount as of March 31, 2015 includes the distribution payable on both the vested and unvested Class B units. |
Related_Party_Transactions_Det1
Related Party Transactions (Details) - Property Manager Transactions (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Related Party Transactions [Abstract] | |||
Property management fee percentage | 4.00% | ||
Property management oversight fee percentage | 1.00% | ||
Property management fees | $2,185 | $1,582 | |
Leasing commissions | 2,028 | 570 | |
Construction management fees | 165 | 40 | |
Other fees and reimbursements | 1,003 | 292 | |
Total property manager fees and reimbursements | 5,381 | 2,484 | |
Property management fees, unpaid amount | 846 | 474 | |
Leasing commissions, unpaid amount | 774 | 191 | |
Construction management fees, unpaid amount | 8 | 73 | |
Other fees and reimbursements, unpaid amount | 361 | 0 | |
Total property manager fees and reimbursements, unpaid amount | $1,989 | $738 |
Related_Party_Transactions_Det2
Related Party Transactions (Details) - Other (USD $) | Mar. 31, 2015 |
Related Party Transactions [Abstract] | |
Minimum percentage of shares owned by sub-advisor | 0.10% |
Sub-advisor share purchase price | $9 |
Shares owned by sub-advisor | 176,509 |
Percentage of shares owned by sub-advisor | 0.10% |
Operating_Leases_Details
Operating Leases (Details) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 |
Future rentals to be received under non-cancelable operating leases: | |
April 1 to December 31, 2015 | 129,998 |
2016 | 162,577 |
2017 | 146,906 |
2018 | 128,558 |
2019 | 106,110 |
2020 and thereafter | 460,506 |
Total | 1,134,655 |
Other tenants maximum | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 10.00% |
Aggregate Annualized Effective Rent | Tenant concentration risk | |
Concentration Risk [Line Items] | |
Number of tenants accounting for 10% or more of aggregate annualized effective rent | 0 |
Subsequent_Events_Details_Dist
Subsequent Events (Details) - Distributions (USD $) | 3 Months Ended | 0 Months Ended | 2 Months Ended | 3 Months Ended | ||||
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | 1-May-15 | Apr. 01, 2015 | Apr. 30, 2015 | Jul. 31, 2015 | Dec. 31, 2014 | 31-May-15 |
Subsequent Event [Line Items] | ||||||||
Dividend reinvestment plan (DRIP), value | $15,798 | $15,211 | ||||||
Net cash distribution | 14,366 | 13,699 | ||||||
Common stock, par value | $0.01 | $0.01 | ||||||
Dividend Paid [Member] | Subsequent Event [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Gross amount of distribution paid | 10,124 | 10,436 | ||||||
Dividend reinvestment plan (DRIP), value | 5,274 | 5,427 | ||||||
Net cash distribution | $4,850 | $5,009 | ||||||
Common stock, distributions per share daily rate | $0.00 | |||||||
Dividend Declared [Member] | Subsequent Event [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Common stock, distributions per share daily rate | $0.00 | |||||||
Common stock, par value | $0.01 |
Subsequent_Events_Details_Acqu
Subsequent Events (Details) - Acquisition (Coronado Center [Member], Subsequent Event [Member], USD $) | 0 Months Ended | |
In Thousands, unless otherwise specified | 1-May-15 | 1-May-15 |
sqft | ||
Coronado Center [Member] | Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Purchase Price | $22,740 | |
Square Footage | 117,006 | 117,006 |
Leased % of Rentable Square Feet at Acquisition | 89.60% | 89.60% |
Subsequent_Events_Details_Inte
Subsequent Events (Details) - Interest Rate Swap (USD $) | 3 Months Ended | 45 Months Ended | 57 Months Ended | 69 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Feb. 01, 2019 | Feb. 03, 2020 | Feb. 01, 2021 | 1-May-15 |
Subsequent Event [Line Items] | |||||
Variable-rate credit facility swap agreement interest rate | 5.22% | ||||
Interest Rate Swap [Member] | Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Portion of hedged debt | 100 | 175 | 112 | $387 | |
LIBOR [Member] | Interest Rate Swap [Member] | Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Variable-rate credit facility swap agreement interest rate | 1.21% | 1.40% | 1.55% |