Document and Entity Information
Document and Entity Information - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2017 | Apr. 30, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,017 | |
Entity Registrant Name | Phillips Edison Grocery Center REIT I, Inc. | |
Entity Central Index Key | 1,476,204 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 182.8 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Investment in real estate: | ||
Land and improvements | $ 802,626 | $ 796,192 |
Building and improvements | 1,543,837 | 1,532,888 |
Acquired in-place lease assets | 214,732 | 212,916 |
Acquired above-market lease assets | 42,120 | 42,009 |
Total investment in real estate assets | 2,603,315 | 2,584,005 |
Accumulated depreciation and amortization | (362,306) | (334,348) |
Total investment in real estate assets, net | 2,241,009 | 2,249,657 |
Cash and cash equivalents | 5,894 | 8,224 |
Restricted cash | 5,065 | 41,722 |
Other assets, net | 89,542 | 80,585 |
Total assets | 2,341,510 | 2,380,188 |
Liabilities: | ||
Mortgages and loans payable, net | 1,075,247 | 1,056,156 |
Acquired below-market lease liabilities, net of accumulated amortization of $21,811 and $20,255, respectively | 42,069 | 43,032 |
Accounts payable – affiliates | 4,805 | 4,571 |
Accounts payable and other liabilities | 49,060 | 51,642 |
Total liabilities | 1,171,181 | 1,155,401 |
Commitments and contingencies (Note 6) | 0 | 0 |
Equity: | ||
Preferred stock, $0.01 par value per share, 10,000 shares authorized, zero shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively | 0 | 0 |
Common stock, $0.01 par value per share, 1,000,000 shares authorized, 182,452 and 185,062 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively | 1,825 | 1,851 |
Additional paid-in capital | 1,600,515 | 1,627,098 |
Accumulated other comprehensive income | 12,403 | 10,587 |
Accumulated deficit | (467,383) | (438,155) |
Total stockholders’ equity | 1,147,360 | 1,201,381 |
Noncontrolling interests | 22,969 | 23,406 |
Total equity | 1,170,329 | 1,224,787 |
Total liabilities and equity | $ 2,341,510 | $ 2,380,188 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Acquired below-market lease intangibles, accumulated amortization | $ 21,811 | $ 20,255 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000 | 10,000 |
Preferred stock, shares issued and outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,000,000 | 1,000,000 |
Common stock, shares issued and outstanding | 182,452 | 185,062 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenues: | ||
Rental income | $ 51,093 | $ 46,939 |
Tenant recovery income | 16,936 | 15,944 |
Other property income | 274 | 199 |
Total revenues | 68,303 | 63,082 |
Expenses: | ||
Property operating | 11,432 | 10,291 |
Real estate taxes | 10,258 | 9,411 |
General and administrative | 7,830 | 7,553 |
Depreciation and amortization | 27,624 | 25,706 |
Total expenses | 57,144 | 52,961 |
Other: | ||
Interest expense, net | (8,390) | (7,732) |
Other expense, net | (1,635) | (136) |
Net income | 1,134 | 2,253 |
Net income attributable to noncontrolling interests | (28) | (34) |
Net income attributable to stockholders | $ 1,106 | $ 2,219 |
Earnings per common share: | ||
Net income per share attributable to stockholders - basic and diluted | $ 0.01 | $ 0.01 |
Weighted-average common shares outstanding: | ||
Basic | 183,230 | 182,246 |
Diluted | 186,022 | 185,031 |
Comprehensive income (loss): | ||
Net income | $ 1,134 | $ 2,253 |
Other comprehensive income (loss): | ||
Unrealized gain (loss) on derivatives | 1,219 | (8,307) |
Reclassification of derivative loss to interest expense | 597 | 946 |
Comprehensive income (loss) | 2,950 | (5,108) |
Comprehensive income attributable to noncontrolling interests | (28) | (34) |
Comprehensive income (loss) attributable to stockholders | $ 2,922 | $ (5,142) |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total Stockholders' Equity | Noncontrolling Interest |
Balance, value at Dec. 31, 2015 | $ 1,291,792 | $ 1,813 | $ 1,588,541 | $ 22 | $ (323,761) | $ 1,266,615 | $ 25,177 |
Balance, shares at Dec. 31, 2015 | 181,308 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share repurchases, value | (2,162) | $ (2) | (2,160) | (2,162) | |||
Share repurchases, shares | (212) | ||||||
Dividend reinvestment plan (DRIP), value | 15,256 | $ 15 | 15,241 | 15,256 | |||
Dividend reinvestment plan (DRIP), shares | 1,496 | ||||||
Change in loss on interest rate swaps | (7,361) | (7,361) | (7,361) | ||||
Common distributions declared, $0.17 per share | (30,377) | (30,377) | (30,377) | ||||
Distributions to noncontrolling interests | (468) | (468) | |||||
Net income | 2,253 | 2,219 | 2,219 | 34 | |||
Balance, value at Mar. 31, 2016 | 1,268,933 | $ 1,826 | 1,601,622 | (7,339) | (351,919) | 1,244,190 | 24,743 |
Balance, shares at Mar. 31, 2016 | 182,592 | ||||||
Balance, value at Dec. 31, 2016 | 1,224,787 | $ 1,851 | 1,627,098 | 10,587 | (438,155) | 1,201,381 | 23,406 |
Balance, shares at Dec. 31, 2016 | 185,062 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share repurchases, value | (40,340) | $ (40) | (40,300) | (40,340) | |||
Share repurchases, shares | (3,955) | ||||||
Dividend reinvestment plan (DRIP), value | 13,716 | $ 14 | 13,702 | 13,716 | |||
Dividend reinvestment plan (DRIP), shares | 1,345 | ||||||
Change in loss on interest rate swaps | 1,816 | 1,816 | 1,816 | ||||
Common distributions declared, $0.17 per share | (30,334) | (30,334) | (30,334) | ||||
Distributions to noncontrolling interests | (465) | (465) | |||||
Share-based compensation | 15 | 15 | 15 | ||||
Net income | 1,134 | 1,106 | 1,106 | 28 | |||
Balance, value at Mar. 31, 2017 | $ 1,170,329 | $ 1,825 | $ 1,600,515 | $ 12,403 | $ (467,383) | $ 1,147,360 | $ 22,969 |
Balance, shares at Mar. 31, 2017 | 182,452 |
Consolidated Statements of Equ6
Consolidated Statements of Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Statement of Stockholders' Equity [Abstract] | ||
Common distributions declared, per share | $ 0.17 | $ 0.17 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 1,134 | $ 2,253 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 27,284 | 24,933 |
Net amortization of above- and below-market leases | (331) | (272) |
Amortization of deferred financing expense | 1,192 | 1,063 |
Net (gain) loss on write-off of unamortized capitalized leasing commissions, market debt adjustment, and deferred financing expense | (477) | 52 |
Straight-line rental income | (493) | (899) |
Other | 36 | 175 |
Changes in operating assets and liabilities: | ||
Other assets | (6,929) | 424 |
Accounts payable – affiliates | 234 | (1,286) |
Accounts payable and other liabilities | (1,194) | (1,484) |
Net cash provided by operating activities | 20,456 | 24,959 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Real estate acquisitions | (16,069) | 0 |
Capital expenditures | (5,457) | (4,274) |
Proceeds from sale of real estate | 36,150 | 0 |
Change in restricted cash | 757 | 71 |
Net cash provided by (used in) investing activities | 15,381 | (4,203) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net change in credit facility | 57,000 | (9,000) |
Payments on mortgages and loans payable | 37,710 | 25,026 |
Distributions paid, net of DRIP | (16,656) | (15,064) |
Distributions to noncontrolling interests | (461) | (306) |
Repurchases of common stock | (40,340) | (1,182) |
Net cash used in financing activities | (38,167) | (50,578) |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (2,330) | (29,822) |
CASH AND CASH EQUIVALENTS: | ||
Beginning of period | 8,224 | 40,680 |
End of period | 5,894 | 10,858 |
SUPPLEMENTAL CASH FLOW DISCLOSURE, INCLUDING NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Cash paid for interest | 8,178 | 7,478 |
Accrued capital expenditures | 1,970 | 1,018 |
Change in distributions payable | (38) | 57 |
Change in distributions payable - noncontrolling interests | 4 | 162 |
Change in accrued share repurchase obligation | 0 | 980 |
Distributions reinvested | 13,716 | 15,256 |
Utilization of funds held for acquisitions | $ (35,900) | $ 0 |
Organization
Organization | 3 Months Ended |
Mar. 31, 2017 | |
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”). Under the terms of the advisory agreement between PE-NTR and us (“PE-NTR Agreement”), PE-NTR is responsible for the management of our day-to-day activities and the implementation of our investment strategy. We invest primarily in well-occupied, grocery-anchored, neighborhood and community shopping centers that have a mix of creditworthy national and regional retailers that sell necessity-based goods and services in strong demographic markets throughout the United States. As of March 31, 2017 , we owned fee simple interests in 154 real estate properties acquired from third parties unaffiliated with us or PE-NTR. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
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, 2017 , except for the items discussed below. For a full summary of our accounting policies, refer to our 2016 Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on March 9, 2017. 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, 2016 , which are included in our 2016 Annual Report on Form 10-K. In the opinion of management, all normal and recurring adjustments necessary for the fair presentation of the unaudited consolidated financial statements for the periods presented have been included in this Quarterly Report. Our results of operations for the three months ended March 31, 2017 , 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. Reclassifications —The following line items on our consolidated statement of cash flows for the three months ended March 31, 2016 , were reclassified to conform to the current year presentation: • Change in Fair Value of Derivative and Loss on Disposal of Real Estate Assets were reclassified to Other. Newly Adopted and Recently Issued Accounting Pronouncements —We adopted Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, on January 1, 2017, and applied it prospectively. For a more detailed discussion of this adoption, see Note 4 . 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 2014-09, Revenue from Contracts with Customers (Topic 606) This update outlines a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU 2014-09 states that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” While ASU 2014-09 specifically references contracts with customers, it may apply to certain other transactions such as the sale of real estate or equipment. In 2015, the Financial Accounting Standard Board (“FASB”) provided for a one-year deferral of the effective date for ASU 2014-09, making it effective for annual reporting periods beginning after December 15, 2017. January 1, 2018 Our revenue-producing contracts are primarily leases that are not within the scope of this standard. As a result, we do not expect the adoption of this standard to have a material impact on our rental income. We continue to evaluate the effect of this standard on our other sources of revenue. These include reimbursement amounts we receive from tenants for operating expenses such as real estate taxes, insurance, and other common area maintenance. However, we currently do not believe the adoption of this standard will significantly affect the timing of the recognition of our reimbursement revenue. We currently plan to adopt this guidance on a modified retrospective basis. ASU 2016-02, Leases (Topic 842) This update amends existing guidance by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This update is effective for annual reporting periods beginning after December 15, 2018, but early adoption is permitted. January 1, 2019 We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. We have identified areas within our accounting policies we believe could be impacted by the new standard. We may have a change in presentation on our consolidated statement of income with regards to Tenant Recovery Income, which includes reimbursement amounts we receive from tenants for operating expenses such as real estate taxes, insurance, and other common area maintenance. Additionally, this standard impacts the lessor’s ability to capitalize certain costs related to the leasing of vacant space. ASU 2016-15, Statement of Cash Flows (Topic 230) This update addresses the presentation of eight specific cash receipts and cash payments on the statement of cash flows. It is effective for annual reporting periods beginning after December 15, 2017, but early adoption is permitted. January 1, 2018 We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. Of the eight specific cash receipts and cash payments listed within this guidance, we believe only two would be applicable to our business as it stands currently: debt prepayment or debt extinguishment costs and proceeds from settlement of insurance claims. We will continue to evaluate the impact that adoption of the standard will have on our presentation of these and any other applicable cash receipts and cash payments. ASU 2016-18, Statement of Cash Flows (Topic 230) This update amends existing guidance in order to clarify the classification and presentation of restricted cash on the statement of cash flows. It is effective for annual reporting periods beginning after December 15, 2017, but early adoption is permitted. January 1, 2018 Upon adoption, we will include amounts generally described as restricted cash within the beginning-of-period, change, and end-of-period total amounts on the statement of cash flows rather than within an activity on the statement of cash flows. ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20) This update amends existing guidance in order to provide consistency in accounting for the derecognition of a business or nonprofit activity. It is effective for annual reporting periods beginning after December 15, 2017, but early adoption is permitted. January 1, 2018 We will adopt this standard concurrently with ASU 2014-09, listed above. We expect the adoption will impact our transactions that are subject to the amendments, which, although expected to be infrequent, would include a partial sale of real estate or contribution of a nonfinancial asset to form a joint venture. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS 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 and Other Liabilities —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. 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 borrowings as of March 31, 2017 and December 31, 2016 (dollars in thousands): March 31, 2017 December 31, 2016 Fair value $ 1,086,123 $ 1,056,990 Recorded value (1) 1,083,631 1,065,180 (1) Recorded value does not include deferred financing costs, net of $8.4 million and $9.0 million as of March 31, 2017 and December 31, 2016 , respectively. Derivative Instruments — As of March 31, 2017 and December 31, 2016 , we had three interest rate swaps that fixed the LIBOR rate on $387 million of our unsecured term loan facility (“Term Loans”), as well as a forward starting interest rate swap agreement that will fix the LIBOR rate on $255 million of our Term Loans effective July 2017. As of March 31, 2017 and December 31, 2016 , we were also party to an interest rate swap agreement that fixed the variable interest rate on $11.0 million of one of our secured variable-rate mortgage notes. For a more detailed discussion of our derivatives and hedging activities, see Note 7 . All interest rate swap agreements are measured at fair value on a recurring basis. The fair values of the interest rate swap agreements as of March 31, 2017 and December 31, 2016 , were based on the estimated amount we would receive or pay to terminate the contract at the reporting date and were determined using interest rate pricing models and interest rate-related observable inputs. Although we determined that the significant inputs used to value our derivatives 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, 2017 and December 31, 2016 , 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 derivatives. As a result, we have determined that our derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. We record derivative assets in Other Assets, Net and derivative liabilities in Accounts Payable and Other Liabilities on our consolidated balance sheets. The fair value measurements of our financial asset and liability as of March 31, 2017 and December 31, 2016 , were as follows (in thousands): March 31, 2017 December 31, 2016 Derivative asset: Interest rate swaps designated as hedging instruments - Term Loans $ 13,661 $ 11,916 Derivative liability: Interest rate swap not designated as hedging instrument - mortgage note 194 262 |
Real Estate Acquisitions
Real Estate Acquisitions | 3 Months Ended |
Mar. 31, 2017 | |
Real Estate Investments, Net [Abstract] | |
Real Estate Acquisitions | REAL ESTATE ACQUISITIONS In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business . This update amends existing guidance in order to clarify when an integrated set of assets and activities is considered a business. We adopted ASU 2017-01 on January 1, 2017, and applied it prospectively. Under this new guidance, most of our acquisition activity will no longer be considered a business combination and will instead be classified as an asset acquisition. As a result, most acquisition-related costs that would have been recorded on our consolidated statements of income and comprehensive income (loss) have been capitalized and will be amortized over the life of the related assets. During the three months ended March 31, 2017 , we acquired one grocery-anchored shopping center for a cost of $15.0 million , including acquisition costs. This acquisition closed out the reverse Section 1031 like-kind exchange outstanding as of December 31, 2016. We did not acquire any properties during the three months ended March 31, 2016 . For the three months ended March 31, 2017 , we allocated the purchase price of our acquisition to the fair value of the assets acquired and liabilities assumed as follows (in thousands): 2017 Land and improvements $ 6,113 Building and improvements 7,594 Acquired in-place leases 1,817 Acquired above-market leases 110 Acquired below-market leases (593 ) Net assets acquired $ 15,041 The weighted-average amortization periods for in-place, above-market, and below-market lease intangibles acquired during the three months ended March 31, 2017 , are as follows (in years): 2017 Acquired in-place leases 15 Acquired above-market leases 4 Acquired below-market leases 24 |
Mortgages and Loans Payable
Mortgages and Loans Payable | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Mortgages and Loans Payable | MORTGAGES AND LOANS PAYABLE The following is a summary of the outstanding principal balances of our debt obligations as of March 31, 2017 and December 31, 2016 (in thousands): Interest Rate (1) March 31, 2017 December 31, 2016 Revolving credit facility (2)(3) 2.23% $ 233,968 $ 176,969 Term loan due 2019 (3) 2.46% 100,000 100,000 Term loan due 2020 (3) 2.65% 175,000 175,000 Term loan due 2021 2.18%-2.80% 125,000 125,000 Term loan due 2023 2.63% 255,000 255,000 Mortgages payable (4) 3.43%-7.91% 191,011 228,721 Assumed market debt adjustments, net (5) 3,652 4,490 Deferred financing costs, net (6) (8,384 ) (9,024 ) Total $ 1,075,247 $ 1,056,156 (1) Includes the effects of derivative financial instruments (see Notes 3 and 7 ). (2) The gross borrowings under our revolving credit facility were $108 million during the three months ended March 31, 2017 . The gross payments on our revolving credit facility were $51 million during the three months ended March 31, 2017 . The revolving credit facility had a capacity of $500 million as of March 31, 2017 and December 31, 2016 . (3) The revolving credit facility matures in December 2017. The revolving credit facility and term loans have options to extend their maturities to 2018 and 2021, respectively. A maturity date extension for the first or second tranche on the term loans requires the payment of an extension fee of 0.15% of the outstanding principal amount of the corresponding tranche. (4) Due to the non-recourse nature of our fixed-rate mortgages, the assets and liabilities of the properties securing such mortgages are neither available to pay the debts of the consolidated property-holding limited liability companies, nor do they constitute obligations of such consolidated limited liability companies as of March 31, 2017 and December 31, 2016 . (5) Net of accumulated amortization of $4.1 million and $6.1 million as of March 31, 2017 and December 31, 2016 , respectively. (6) Deferred financing costs shown are related to our Term Loans and mortgages payable and are net of accumulated amortization of $4.1 million and $3.9 million as of March 31, 2017 and December 31, 2016 , respectively. Deferred financing costs related to the revolving credit facility, which are included in Other Assets, Net, were $1.6 million and $2.2 million as of March 31, 2017 and December 31, 2016 , respectively, and are net of accumulated amortization of $7.3 million and $6.7 million , respectively. As of March 31, 2017 and December 31, 2016 , the weighted-average interest rate for all of our mortgages and loans payable was 3.0% . The allocation of total debt between fixed and variable-rate as well as between secured and unsecured, excluding market debt adjustments and deferred financing costs, as of March 31, 2017 and December 31, 2016 , is summarized below (in thousands): March 31, 2017 December 31, 2016 As to interest rate: (1) Fixed-rate debt $ 578,011 $ 615,721 Variable-rate debt 501,968 444,969 Total $ 1,079,979 $ 1,060,690 As to collateralization: Unsecured debt $ 888,968 $ 831,969 Secured debt 191,011 228,721 Total $ 1,079,979 $ 1,060,690 (1) Includes the effects of derivative financial instruments (see Notes 3 and 7 ). |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
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 Activit
Derivatives and Hedging Activities | 3 Months Ended |
Mar. 31, 2017 | |
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 (“AOCI”), and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the three months ended March 31, 2017 and 2016 , 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, which resulted in a loss of $0.1 million for the three months ended March 31, 2017 . A floor feature on the interest rate of our hedged debt that was not included on the associated interest rate swap caused this ineffectiveness. Amounts reported in AOCI related to these derivatives will be reclassified to Interest Expense, Net as interest payments are made on the variable-rate debt. During the next twelve months, we estimate that an additional $0.7 million will be reclassified from Other Comprehensive Income (Loss) to Interest Expense, Net. The following is a summary of our interest rate swaps that were designated as cash flow hedges of interest rate risk as of March 31, 2017 and December 31, 2016 , and includes an interest rate swap that we entered into in October 2016 with a notional amount of $255 million that is not effective until July 2017 (notional amount in thousands): Count Notional Amount Fixed LIBOR Maturity Date 4 $642,000 1.2% - 1.5% 2019 - 2023 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, as well as any payments, are recorded directly in Other Expense, Net and resulted in a gain of approximately $14,000 and a loss of $119,000 for the three months ended March 31, 2017 and 2016 , respectively. Credit-risk-related Contingent Features We have agreements with our derivative counterparties that contain provisions 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, 2017 and December 31, 2016 , the fair value of our derivatives excluded any adjustment for nonperformance risk related to these agreements. As of March 31, 2017 and December 31, 2016 , we had not posted any collateral related to these agreements. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Equity | EQUITY On May 9, 2017 , our board of directors reaffirmed its estimated value per share of our common stock of $10.20 based substantially on the estimated market value of our portfolio of real estate properties as of March 31, 2017 . We engaged a third party valuation firm to provide a calculation of the range in estimated value per share of our common stock as of March 31, 2017 , which reflected certain balance sheet assets and liabilities as of that date. Dividend Reinvestment Plan —We have adopted a DRIP that allows stockholders to invest distributions in additional shares of our common stock. For the three months ended March 31, 2017 and 2016 , shares were issued under the DRIP at a price of $10.20 per share. Share Repurchase Program —Our share repurchase program (“SRP”) provides an opportunity for stockholders to have shares of common stock repurchased, subject to certain restrictions and limitations. The cash available for repurchases on any particular date will generally be limited to the proceeds from the DRIP during the preceding four fiscal quarters, less amounts already used for repurchases since the beginning of that period. The board of directors reserves the right, in its sole discretion, at any time and from time to time, to reject any request for repurchase. During the three months ended March 31, 2017 , repurchase requests surpassed the funding limits under the SRP. Approximately $40.3 million of shares of common stock were repurchased under our SRP during the three months ended March 31, 2017 . Repurchase requests in connection with a stockholder’s death, “qualifying disability,” or “determination of incompetence” were completed in full. The remaining repurchase requests that were in good order were fulfilled on a pro rata basis. As of March 31, 2017 , we had 6.5 million shares of unfulfilled repurchase requests, which will be treated as requests for repurchase during future months until satisfied or withdrawn. Due to the program’s funding limits, the funds available for repurchases during the remainder of 2017 will be insufficient to meet all requests. Because we are unable to fulfill all repurchase requests in any month, we will honor requests on a pro rata basis to the extent possible. We continue to fulfill repurchases sought upon a stockholder’s death, “qualifying disability,” or “determination of incompetence” in accordance with the terms of the SRP. Class B and Operating Partnership Units —The Operating Partnership issues limited partnership units that are designated as Class B units for asset management services provided by PE-NTR. The vesting of the Class B units is contingent upon a market condition and service condition. Once vested, Class B units may be converted into Operating Partnership units (“OP units”) in accordance with the terms of the Operating Partnership’s Second Amended and Restated Agreement of Limited Partnership, as amended (the “Partnership Agreement”). OP units may be exchanged at the election of the holder for cash or, at the option of the Operating Partnership, for shares of our common stock, under the terms of exchange rights agreements to be prepared at a future date, provided, however, that the OP units have been outstanding for at least one year. PE-NTR has agreed under the PE-NTR Agreement not to exchange any OP units it may hold until the listing of our common stock or the liquidation of our portfolio occurs. As the form of the redemptions for the OP units is within our control, the OP units outstanding as of March 31, 2017 and December 31, 2016 , are classified as Noncontrolling Interests within permanent equity on our consolidated balance sheets. Additionally, the cumulative distributions that have been paid on these OP units are included in Distributions to Noncontrolling Interests on the consolidated statements of equity. Below is a summary of our number of outstanding OP units and unvested Class B units as of March 31, 2017 and December 31, 2016 (in thousands): March 31, 2017 December 31, 2016 OP units 2,785 2,785 Class B units 2,750 2,610 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
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 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 share equivalent activity. Class B units and OP units held by limited partners other than us are considered to be participating securities because they contain non-forfeitable rights to dividends or dividend equivalents and they have the potential to be exchanged for shares of our common stock in accordance with the terms of the Partnership Agreement. The impact of these Class B units and OP units on basic and diluted EPS has been calculated using the two-class method whereby earnings are allocated to the Class B units and OP units based on dividends declared and the units’ participation rights in undistributed earnings. The effects of the two-class method on basic and diluted EPS were immaterial to the consolidated financial statements as of March 31, 2017 and 2016 . Since the OP units are fully vested, they were included in the diluted net income per share computations for the three months ended March 31, 2017 and 2016 . The vesting of the Class B units is contingent upon a market condition and service condition. Since the satisfaction of both conditions was not probable as of March 31, 2017 and 2016 , the Class B units remained unvested and thus were not included in the diluted net income per share computations. There were 2.8 million and 2.2 million unvested Class B units outstanding as of March 31, 2017 and 2016 , respectively, which had no effect on EPS. The following table provides a reconciliation of the numerator and denominator of the earnings per unit calculations for the three months ended March 31, 2017 and 2016 (in thousands, except per share amounts): 2017 2016 Numerator for basic and diluted earnings per share: Net income attributable to stockholders $ 1,106 $ 2,219 Denominator: Denominator for basic earnings per share - weighted-average shares 183,230 182,246 Effect of dilutive OP units 2,785 2,785 Effect of restricted stock awards 7 — Denominator for diluted earnings per share - adjusted weighted-average shares 186,022 185,031 Earnings per common share: Net income attributable to stockholders - basic and diluted $ 0.01 $ 0.01 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2017 | |
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, the Property Manager, and/or 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. As of March 31, 2017 and December 31, 2016 , PE-NTR owned 176,509 shares of our common stock, or approximately 0.1% of our outstanding common stock issued during our initial public offering period, which closed in February 2014. PE-NTR may not sell any of these shares while serving as our advisor. Advisory Agreement —Pursuant to the PE-NTR Agreement effective as of 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. Expenditures are reimbursed to PE-NTR based on amounts incurred on our behalf. Acquisition Fee —We pay PE-NTR, under the PE-NTR Agreement, and we pay American Realty Capital II Advisors, LLC (“ARC”), according to the former advisory 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% of the cost of investments we acquire or originate, including any debt attributable to such investments. Due Diligence Fee —We reimburse PE-NTR for expenses incurred related to selecting, evaluating, and acquiring assets on our behalf, including certain personnel costs. 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 partially 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) 0.05% (0.25% prior to October 1, 2015); divided by (ii) the most recent primary offering price for a share of our common stock as of the last day of such calendar quarter less any selling commissions and dealer manager fees that would have been payable in connection with that offering. PE-NTR and ARC are entitled to receive distributions on the Class B units (and OP units converted from previously issued and vested Class B units) at the same rate as distributions are paid to common stockholders. Such distributions are in addition to the incentive compensation that PE-NTR, ARC, and their affiliates may receive from us. The asset management fee is equal to 1% of the cost of our assets, and is paid 80% in cash and 20% in Class B units of the Operating Partnership. The cash portion is paid on a monthly basis in arrears, in the amount of 0.06667% multiplied by the cost of our assets as of the last day of the preceding monthly period. We continue to issue Class B units to PE-NTR and ARC in connection with the asset management services provided by PE-NTR under our current advisory agreement. These 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, 2017 and 2016 , the Operating Partnership issued 0.1 million Class B units to PE-NTR and ARC under the PE-NTR Agreement for asset management services performed by PE-NTR. Disposition Fee —We pay PE-NTR for substantial assistance by PE-NTR or any of its affiliates in connection with the sale of properties or other investments 2% of the contract sales price of each property or other investment sold. The conflicts committee of our board of directors determines whether PE-NTR or its 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 or its 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 or its affiliates in connection with a sale. However, if we sold an asset to an affiliate, our organizational documents would prohibit us from paying a disposition fee to PE-NTR or its affiliates. General and Administrative Expenses —As of March 31, 2017 and December 31, 2016 , we owed PE-NTR approximately $94,000 and $43,000 , respectively, for general and administrative expenses paid on our behalf. Summarized below are the fees earned by and the expenses reimbursable to PE-NTR and ARC, except for unpaid general and administrative expenses, which we disclose above, for the three months ended March 31, 2017 and 2016 , and any related amounts unpaid as of March 31, 2017 and December 31, 2016 (in thousands): Three Months Ended Unpaid Amount as of March 31, March 31, December 31, 2017 2016 2017 2016 Acquisition fees (1) $ 148 $ — $ — $ — Due diligence fees (1) 30 — — 29 Asset management fees (2) 5,089 4,619 1,701 1,687 OP units distribution (3) 460 464 158 158 Class B units distribution (4) 438 354 155 148 Total $ 6,165 $ 5,437 $ 2,014 $ 2,022 (1) Prior to January 1, 2017, acquisition and due diligence fees were recorded on our consolidated statements of income. These are now capitalized and allocated to the related investment in real estate assets on the consolidated balance sheet based on the acquisition-date fair values of the respective assets and liability acquired. (2) Asset management fees are presented in General and Administrative on the consolidated statements of income. (3) The distributions paid to holders of OP units are presented as Distributions to Noncontrolling Interests on the consolidated statements of equity. (4) The distributions paid to holders of unvested Class B units are presented in General and Administrative on the consolidated statements of income. 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 Phillips Edison affiliates and other third parties. Property Management Fee —We pay to the Property Manager a monthly property management fee of 4% of the monthly gross cash receipts from the properties it manages. Leasing Commissions —In addition to the property management 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. Construction Management Fee —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. Expenses and Reimbursements —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 PE-NTR or certain of its affiliates. The Property Manager also directs the purchase of equipment and supplies and supervises all maintenance activity. 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 and corporate matters, as well as fees and expenses of third-party accountants. Summarized below are the fees earned by and the expenses reimbursable to the Property Manager for the three months ended March 31, 2017 and 2016 , and any related amounts unpaid as of March 31, 2017 and December 31, 2016 (in thousands): Three Months Ended Unpaid Amount as of March 31, March 31, December 31, 2017 2016 2017 2016 Property management fees (1) $ 2,586 $ 2,427 $ 878 $ 840 Leasing commissions (2) 2,323 2,195 815 705 Construction management fees (2) 304 159 59 165 Other fees and reimbursements (3) 1,709 1,170 945 796 Total $ 6,922 $ 5,951 $ 2,697 $ 2,506 (1) The property management fees are included in Property Operating on the consolidated statements of income. (2) Leasing commissions paid for leases with terms less than one year are expensed immediately and included in Depreciation and Amortization on the consolidated statements of income. Leasing commissions paid for leases with terms greater than one year, and construction management fees, are capitalized and amortized over the life of the related leases or assets. (3) Other fees and reimbursements are included in Property Operating and General and Administrative on the consolidated statements of income based on the nature of the expense. |
Operating Leases
Operating Leases | 3 Months Ended |
Mar. 31, 2017 | |
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 rental income to be received under non-cancelable operating leases in effect as of March 31, 2017 , assuming no new or renegotiated leases or option extensions on lease agreements, was as follows (in thousands): Year Amount Remaining 2017 $ 148,387 2018 183,998 2019 159,931 2020 137,984 2021 114,519 2022 and thereafter 376,418 Total $ 1,121,237 No single tenant comprised 10% or more of our aggregate annualized base rent as of March 31, 2017 . |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2017 | |
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, 2017 , to the stockholders of record from March 1, 2017, through April 30, 2017, as follows (in thousands): Distribution Period Date Distribution Paid Gross Amount of Distribution Paid Distribution Reinvested through the DRIP Net Cash Distribution March 1, 2017, through March 31, 2017 4/3/2017 $ 10,467 $ 4,667 $ 5,800 April 1, 2017, through April 30, 2017 5/1/2017 10,070 4,465 5,605 In May 2017 our board of directors authorized distributions to the stockholders of record at the close of business each day in the period commencing June 1, 2017, through August 31, 2017, equal to a daily amount of $0.00183562 per share of common stock. Acquisitions Subsequent to March 31, 2017 , we acquired the following properties (dollars in thousands): Property Name Location Anchor Tenant Acquisition Date Contractual Purchase Price Square Footage Leased % of Rentable Square Feet at Acquisition Rocky Ridge Town Center Roseville, CA Sprouts 4/18/2017 $36,000 93,338 96.3% Greentree Centre Racine, WI Pick 'n Save 5/5/2017 12,050 82,659 90.3% |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
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, 2016 , which are included in our 2016 Annual Report on Form 10-K. In the opinion of management, all normal and recurring adjustments necessary for the fair presentation of the unaudited consolidated financial statements for the periods presented have been included in this Quarterly Report. Our results of operations for the three months ended March 31, 2017 , 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. |
Reclassifications | Reclassifications —The following line items on our consolidated statement of cash flows for the three months ended March 31, 2016 , were reclassified to conform to the current year presentation: • Change in Fair Value of Derivative and Loss on Disposal of Real Estate Assets were reclassified to Other. |
Newly Adopted and Recently Issued Accounting Pronouncements | Newly Adopted and Recently Issued Accounting Pronouncements —We adopted Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, on January 1, 2017, and applied it prospectively. For a more detailed discussion of this adoption, see Note 4 . 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 2014-09, Revenue from Contracts with Customers (Topic 606) This update outlines a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU 2014-09 states that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” While ASU 2014-09 specifically references contracts with customers, it may apply to certain other transactions such as the sale of real estate or equipment. In 2015, the Financial Accounting Standard Board (“FASB”) provided for a one-year deferral of the effective date for ASU 2014-09, making it effective for annual reporting periods beginning after December 15, 2017. January 1, 2018 Our revenue-producing contracts are primarily leases that are not within the scope of this standard. As a result, we do not expect the adoption of this standard to have a material impact on our rental income. We continue to evaluate the effect of this standard on our other sources of revenue. These include reimbursement amounts we receive from tenants for operating expenses such as real estate taxes, insurance, and other common area maintenance. However, we currently do not believe the adoption of this standard will significantly affect the timing of the recognition of our reimbursement revenue. We currently plan to adopt this guidance on a modified retrospective basis. ASU 2016-02, Leases (Topic 842) This update amends existing guidance by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This update is effective for annual reporting periods beginning after December 15, 2018, but early adoption is permitted. January 1, 2019 We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. We have identified areas within our accounting policies we believe could be impacted by the new standard. We may have a change in presentation on our consolidated statement of income with regards to Tenant Recovery Income, which includes reimbursement amounts we receive from tenants for operating expenses such as real estate taxes, insurance, and other common area maintenance. Additionally, this standard impacts the lessor’s ability to capitalize certain costs related to the leasing of vacant space. ASU 2016-15, Statement of Cash Flows (Topic 230) This update addresses the presentation of eight specific cash receipts and cash payments on the statement of cash flows. It is effective for annual reporting periods beginning after December 15, 2017, but early adoption is permitted. January 1, 2018 We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. Of the eight specific cash receipts and cash payments listed within this guidance, we believe only two would be applicable to our business as it stands currently: debt prepayment or debt extinguishment costs and proceeds from settlement of insurance claims. We will continue to evaluate the impact that adoption of the standard will have on our presentation of these and any other applicable cash receipts and cash payments. ASU 2016-18, Statement of Cash Flows (Topic 230) This update amends existing guidance in order to clarify the classification and presentation of restricted cash on the statement of cash flows. It is effective for annual reporting periods beginning after December 15, 2017, but early adoption is permitted. January 1, 2018 Upon adoption, we will include amounts generally described as restricted cash within the beginning-of-period, change, and end-of-period total amounts on the statement of cash flows rather than within an activity on the statement of cash flows. ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20) This update amends existing guidance in order to provide consistency in accounting for the derecognition of a business or nonprofit activity. It is effective for annual reporting periods beginning after December 15, 2017, but early adoption is permitted. January 1, 2018 We will adopt this standard concurrently with ASU 2014-09, listed above. We expect the adoption will impact our transactions that are subject to the amendments, which, although expected to be infrequent, would include a partial sale of real estate or contribution of a nonfinancial asset to form a joint venture. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business . This update amends existing guidance in order to clarify when an integrated set of assets and activities is considered a business. We adopted ASU 2017-01 on January 1, 2017, and applied it prospectively. Under this new guidance, most of our acquisition activity will no longer be considered a business combination and will instead be classified as an asset acquisition. As a result, most acquisition-related costs that would have been recorded on our consolidated statements of income and comprehensive income (loss) have been capitalized and will be amortized over the life of the related assets. |
Real Estate Acquisitions Asset
Real Estate Acquisitions Asset Acquisition (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Asset Acquisition [Abstract] | |
Newly Adopted and Recently Issued Accounting Pronouncements | Newly Adopted and Recently Issued Accounting Pronouncements —We adopted Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, on January 1, 2017, and applied it prospectively. For a more detailed discussion of this adoption, see Note 4 . 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 2014-09, Revenue from Contracts with Customers (Topic 606) This update outlines a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU 2014-09 states that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” While ASU 2014-09 specifically references contracts with customers, it may apply to certain other transactions such as the sale of real estate or equipment. In 2015, the Financial Accounting Standard Board (“FASB”) provided for a one-year deferral of the effective date for ASU 2014-09, making it effective for annual reporting periods beginning after December 15, 2017. January 1, 2018 Our revenue-producing contracts are primarily leases that are not within the scope of this standard. As a result, we do not expect the adoption of this standard to have a material impact on our rental income. We continue to evaluate the effect of this standard on our other sources of revenue. These include reimbursement amounts we receive from tenants for operating expenses such as real estate taxes, insurance, and other common area maintenance. However, we currently do not believe the adoption of this standard will significantly affect the timing of the recognition of our reimbursement revenue. We currently plan to adopt this guidance on a modified retrospective basis. ASU 2016-02, Leases (Topic 842) This update amends existing guidance by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This update is effective for annual reporting periods beginning after December 15, 2018, but early adoption is permitted. January 1, 2019 We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. We have identified areas within our accounting policies we believe could be impacted by the new standard. We may have a change in presentation on our consolidated statement of income with regards to Tenant Recovery Income, which includes reimbursement amounts we receive from tenants for operating expenses such as real estate taxes, insurance, and other common area maintenance. Additionally, this standard impacts the lessor’s ability to capitalize certain costs related to the leasing of vacant space. ASU 2016-15, Statement of Cash Flows (Topic 230) This update addresses the presentation of eight specific cash receipts and cash payments on the statement of cash flows. It is effective for annual reporting periods beginning after December 15, 2017, but early adoption is permitted. January 1, 2018 We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. Of the eight specific cash receipts and cash payments listed within this guidance, we believe only two would be applicable to our business as it stands currently: debt prepayment or debt extinguishment costs and proceeds from settlement of insurance claims. We will continue to evaluate the impact that adoption of the standard will have on our presentation of these and any other applicable cash receipts and cash payments. ASU 2016-18, Statement of Cash Flows (Topic 230) This update amends existing guidance in order to clarify the classification and presentation of restricted cash on the statement of cash flows. It is effective for annual reporting periods beginning after December 15, 2017, but early adoption is permitted. January 1, 2018 Upon adoption, we will include amounts generally described as restricted cash within the beginning-of-period, change, and end-of-period total amounts on the statement of cash flows rather than within an activity on the statement of cash flows. ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20) This update amends existing guidance in order to provide consistency in accounting for the derecognition of a business or nonprofit activity. It is effective for annual reporting periods beginning after December 15, 2017, but early adoption is permitted. January 1, 2018 We will adopt this standard concurrently with ASU 2014-09, listed above. We expect the adoption will impact our transactions that are subject to the amendments, which, although expected to be infrequent, would include a partial sale of real estate or contribution of a nonfinancial asset to form a joint venture. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business . This update amends existing guidance in order to clarify when an integrated set of assets and activities is considered a business. We adopted ASU 2017-01 on January 1, 2017, and applied it prospectively. Under this new guidance, most of our acquisition activity will no longer be considered a business combination and will instead be classified as an asset acquisition. As a result, most acquisition-related costs that would have been recorded on our consolidated statements of income and comprehensive income (loss) have been capitalized and will be amortized over the life of the related assets. |
Earnings Per Share Earnings Per
Earnings Per Share Earnings Per Share (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share, Policy | 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 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 share equivalent activity. Class B units and OP units held by limited partners other than us are considered to be participating securities because they contain non-forfeitable rights to dividends or dividend equivalents and they have the potential to be exchanged for shares of our common stock in accordance with the terms of the Partnership Agreement. The impact of these Class B units and OP units on basic and diluted EPS has been calculated using the two-class method whereby earnings are allocated to the Class B units and OP units based on dividends declared and the units’ participation rights in undistributed earnings. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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 2014-09, Revenue from Contracts with Customers (Topic 606) This update outlines a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU 2014-09 states that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” While ASU 2014-09 specifically references contracts with customers, it may apply to certain other transactions such as the sale of real estate or equipment. In 2015, the Financial Accounting Standard Board (“FASB”) provided for a one-year deferral of the effective date for ASU 2014-09, making it effective for annual reporting periods beginning after December 15, 2017. January 1, 2018 Our revenue-producing contracts are primarily leases that are not within the scope of this standard. As a result, we do not expect the adoption of this standard to have a material impact on our rental income. We continue to evaluate the effect of this standard on our other sources of revenue. These include reimbursement amounts we receive from tenants for operating expenses such as real estate taxes, insurance, and other common area maintenance. However, we currently do not believe the adoption of this standard will significantly affect the timing of the recognition of our reimbursement revenue. We currently plan to adopt this guidance on a modified retrospective basis. ASU 2016-02, Leases (Topic 842) This update amends existing guidance by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This update is effective for annual reporting periods beginning after December 15, 2018, but early adoption is permitted. January 1, 2019 We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. We have identified areas within our accounting policies we believe could be impacted by the new standard. We may have a change in presentation on our consolidated statement of income with regards to Tenant Recovery Income, which includes reimbursement amounts we receive from tenants for operating expenses such as real estate taxes, insurance, and other common area maintenance. Additionally, this standard impacts the lessor’s ability to capitalize certain costs related to the leasing of vacant space. ASU 2016-15, Statement of Cash Flows (Topic 230) This update addresses the presentation of eight specific cash receipts and cash payments on the statement of cash flows. It is effective for annual reporting periods beginning after December 15, 2017, but early adoption is permitted. January 1, 2018 We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. Of the eight specific cash receipts and cash payments listed within this guidance, we believe only two would be applicable to our business as it stands currently: debt prepayment or debt extinguishment costs and proceeds from settlement of insurance claims. We will continue to evaluate the impact that adoption of the standard will have on our presentation of these and any other applicable cash receipts and cash payments. ASU 2016-18, Statement of Cash Flows (Topic 230) This update amends existing guidance in order to clarify the classification and presentation of restricted cash on the statement of cash flows. It is effective for annual reporting periods beginning after December 15, 2017, but early adoption is permitted. January 1, 2018 Upon adoption, we will include amounts generally described as restricted cash within the beginning-of-period, change, and end-of-period total amounts on the statement of cash flows rather than within an activity on the statement of cash flows. ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20) This update amends existing guidance in order to provide consistency in accounting for the derecognition of a business or nonprofit activity. It is effective for annual reporting periods beginning after December 15, 2017, but early adoption is permitted. January 1, 2018 We will adopt this standard concurrently with ASU 2014-09, listed above. We expect the adoption will impact our transactions that are subject to the amendments, which, although expected to be infrequent, would include a partial sale of real estate or contribution of a nonfinancial asset to form a joint venture. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The following is a summary of borrowings as of March 31, 2017 and December 31, 2016 (dollars in thousands): March 31, 2017 December 31, 2016 Fair value $ 1,086,123 $ 1,056,990 Recorded value (1) 1,083,631 1,065,180 (1) Recorded value does not include deferred financing costs, net of $8.4 million and $9.0 million as of March 31, 2017 and December 31, 2016 , respectively. |
Schedule of Derivative Instruments, Fair Value | The fair value measurements of our financial asset and liability as of March 31, 2017 and December 31, 2016 , were as follows (in thousands): March 31, 2017 December 31, 2016 Derivative asset: Interest rate swaps designated as hedging instruments - Term Loans $ 13,661 $ 11,916 Derivative liability: Interest rate swap not designated as hedging instrument - mortgage note 194 262 |
Real Estate Acquisitions (Table
Real Estate Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Real Estate Investments, Net [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | For the three months ended March 31, 2017 , we allocated the purchase price of our acquisition to the fair value of the assets acquired and liabilities assumed as follows (in thousands): 2017 Land and improvements $ 6,113 Building and improvements 7,594 Acquired in-place leases 1,817 Acquired above-market leases 110 Acquired below-market leases (593 ) Net assets acquired $ 15,041 |
Schedule of Finite-lived Intangible Assets Acquired as Part of Business Combination | The weighted-average amortization periods for in-place, above-market, and below-market lease intangibles acquired during the three months ended March 31, 2017 , are as follows (in years): 2017 Acquired in-place leases 15 Acquired above-market leases 4 Acquired below-market leases 24 |
Mortgages and Loans Payable (Ta
Mortgages and Loans Payable (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Obligations | The following is a summary of the outstanding principal balances of our debt obligations as of March 31, 2017 and December 31, 2016 (in thousands): Interest Rate (1) March 31, 2017 December 31, 2016 Revolving credit facility (2)(3) 2.23% $ 233,968 $ 176,969 Term loan due 2019 (3) 2.46% 100,000 100,000 Term loan due 2020 (3) 2.65% 175,000 175,000 Term loan due 2021 2.18%-2.80% 125,000 125,000 Term loan due 2023 2.63% 255,000 255,000 Mortgages payable (4) 3.43%-7.91% 191,011 228,721 Assumed market debt adjustments, net (5) 3,652 4,490 Deferred financing costs, net (6) (8,384 ) (9,024 ) Total $ 1,075,247 $ 1,056,156 (1) Includes the effects of derivative financial instruments (see Notes 3 and 7 ). (2) The gross borrowings under our revolving credit facility were $108 million during the three months ended March 31, 2017 . The gross payments on our revolving credit facility were $51 million during the three months ended March 31, 2017 . The revolving credit facility had a capacity of $500 million as of March 31, 2017 and December 31, 2016 . (3) The revolving credit facility matures in December 2017. The revolving credit facility and term loans have options to extend their maturities to 2018 and 2021, respectively. A maturity date extension for the first or second tranche on the term loans requires the payment of an extension fee of 0.15% of the outstanding principal amount of the corresponding tranche. (4) Due to the non-recourse nature of our fixed-rate mortgages, the assets and liabilities of the properties securing such mortgages are neither available to pay the debts of the consolidated property-holding limited liability companies, nor do they constitute obligations of such consolidated limited liability companies as of March 31, 2017 and December 31, 2016 . (5) Net of accumulated amortization of $4.1 million and $6.1 million as of March 31, 2017 and December 31, 2016 , respectively. (6) Deferred financing costs shown are related to our Term Loans and mortgages payable and are net of accumulated amortization of $4.1 million and $3.9 million as of March 31, 2017 and December 31, 2016 , respectively. Deferred financing costs related to the revolving credit facility, which are included in Other Assets, Net, were $1.6 million and $2.2 million as of March 31, 2017 and December 31, 2016 , respectively, and are net of accumulated amortization of $7.3 million and $6.7 million , respectively. |
Schedule of Debt | The allocation of total debt between fixed and variable-rate as well as between secured and unsecured, excluding market debt adjustments and deferred financing costs, as of March 31, 2017 and December 31, 2016 , is summarized below (in thousands): March 31, 2017 December 31, 2016 As to interest rate: (1) Fixed-rate debt $ 578,011 $ 615,721 Variable-rate debt 501,968 444,969 Total $ 1,079,979 $ 1,060,690 As to collateralization: Unsecured debt $ 888,968 $ 831,969 Secured debt 191,011 228,721 Total $ 1,079,979 $ 1,060,690 (1) Includes the effects of derivative financial instruments (see Notes 3 and 7 ). |
Derivatives and Hedging Activ27
Derivatives and Hedging Activities (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Interest Rate Derivatives | The following is a summary of our interest rate swaps that were designated as cash flow hedges of interest rate risk as of March 31, 2017 and December 31, 2016 , and includes an interest rate swap that we entered into in October 2016 with a notional amount of $255 million that is not effective until July 2017 (notional amount in thousands): Count Notional Amount Fixed LIBOR Maturity Date 4 $642,000 1.2% - 1.5% 2019 - 2023 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Outstanding OP Units and Unvested Class B Units | Below is a summary of our number of outstanding OP units and unvested Class B units as of March 31, 2017 and December 31, 2016 (in thousands): March 31, 2017 December 31, 2016 OP units 2,785 2,785 Class B units 2,750 2,610 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table provides a reconciliation of the numerator and denominator of the earnings per unit calculations for the three months ended March 31, 2017 and 2016 (in thousands, except per share amounts): 2017 2016 Numerator for basic and diluted earnings per share: Net income attributable to stockholders $ 1,106 $ 2,219 Denominator: Denominator for basic earnings per share - weighted-average shares 183,230 182,246 Effect of dilutive OP units 2,785 2,785 Effect of restricted stock awards 7 — Denominator for diluted earnings per share - adjusted weighted-average shares 186,022 185,031 Earnings per common share: Net income attributable to stockholders - basic and diluted $ 0.01 $ 0.01 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Advisor Transactions | Summarized below are the fees earned by and the expenses reimbursable to PE-NTR and ARC, except for unpaid general and administrative expenses, which we disclose above, for the three months ended March 31, 2017 and 2016 , and any related amounts unpaid as of March 31, 2017 and December 31, 2016 (in thousands): Three Months Ended Unpaid Amount as of March 31, March 31, December 31, 2017 2016 2017 2016 Acquisition fees (1) $ 148 $ — $ — $ — Due diligence fees (1) 30 — — 29 Asset management fees (2) 5,089 4,619 1,701 1,687 OP units distribution (3) 460 464 158 158 Class B units distribution (4) 438 354 155 148 Total $ 6,165 $ 5,437 $ 2,014 $ 2,022 (1) Prior to January 1, 2017, acquisition and due diligence fees were recorded on our consolidated statements of income. These are now capitalized and allocated to the related investment in real estate assets on the consolidated balance sheet based on the acquisition-date fair values of the respective assets and liability acquired. (2) Asset management fees are presented in General and Administrative on the consolidated statements of income. (3) The distributions paid to holders of OP units are presented as Distributions to Noncontrolling Interests on the consolidated statements of equity. (4) The distributions paid to holders of unvested Class B units are presented in General and Administrative on the consolidated statements of income. |
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, 2017 and 2016 , and any related amounts unpaid as of March 31, 2017 and December 31, 2016 (in thousands): Three Months Ended Unpaid Amount as of March 31, March 31, December 31, 2017 2016 2017 2016 Property management fees (1) $ 2,586 $ 2,427 $ 878 $ 840 Leasing commissions (2) 2,323 2,195 815 705 Construction management fees (2) 304 159 59 165 Other fees and reimbursements (3) 1,709 1,170 945 796 Total $ 6,922 $ 5,951 $ 2,697 $ 2,506 (1) The property management fees are included in Property Operating on the consolidated statements of income. (2) Leasing commissions paid for leases with terms less than one year are expensed immediately and included in Depreciation and Amortization on the consolidated statements of income. Leasing commissions paid for leases with terms greater than one year, and construction management fees, are capitalized and amortized over the life of the related leases or assets. (3) Other fees and reimbursements are included in Property Operating and General and Administrative on the consolidated statements of income based on the nature of the expense. |
Operating Leases (Tables)
Operating Leases (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Leases, Operating [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | Approximate future rental income to be received under non-cancelable operating leases in effect as of March 31, 2017 , assuming no new or renegotiated leases or option extensions on lease agreements, was as follows (in thousands): Year Amount Remaining 2017 $ 148,387 2018 183,998 2019 159,931 2020 137,984 2021 114,519 2022 and thereafter 376,418 Total $ 1,121,237 |
Subsequent Events (Tables)
Subsequent Events (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Distributions to Stockholders | Distributions equal to a daily amount of $0.00183562 per share of common stock outstanding were paid subsequent to March 31, 2017 , to the stockholders of record from March 1, 2017, through April 30, 2017, as follows (in thousands): Distribution Period Date Distribution Paid Gross Amount of Distribution Paid Distribution Reinvested through the DRIP Net Cash Distribution March 1, 2017, through March 31, 2017 4/3/2017 $ 10,467 $ 4,667 $ 5,800 April 1, 2017, through April 30, 2017 5/1/2017 10,070 4,465 5,605 |
Schedule of Business Acquisitions, by Acquisition | Subsequent to March 31, 2017 , we acquired the following properties (dollars in thousands): Property Name Location Anchor Tenant Acquisition Date Contractual Purchase Price Square Footage Leased % of Rentable Square Feet at Acquisition Rocky Ridge Town Center Roseville, CA Sprouts 4/18/2017 $36,000 93,338 96.3% Greentree Centre Racine, WI Pick 'n Save 5/5/2017 12,050 82,659 90.3% |
Organization (Details)
Organization (Details) | Mar. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of real estate properties owned | 154 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) Mortgages and Loans Payable - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Fair Value Inputs, Liabilities, Quantitative Information | ||
Recorded value | $ 1,083,631 | $ 1,065,180 |
Unamortized debt issuance expense | 8,384 | 9,024 |
Fair value, Level 3 inputs | ||
Fair Value Inputs, Liabilities, Quantitative Information | ||
Fair value | $ 1,086,123 | $ 1,056,990 |
Fair Value Measurements (Deta35
Fair Value Measurements (Details) - Derivative Instruments $ in Thousands | Mar. 31, 2017USD ($)derivative | Dec. 31, 2016USD ($)derivative |
Interest rate swap | Designated as hedging instrument | ||
Fair Value, (Assets) Liabilities Measured on Recurring Basis | ||
Number of interest rate swap agreements | derivative | 3 | 3 |
Derivative, notional amount | $ 642,000 | $ 642,000 |
Derivative assets/ liabilities, at fair value, net | 13,661 | 11,916 |
Interest rate swap | Designated as hedging instrument | Term loan facility | ||
Fair Value, (Assets) Liabilities Measured on Recurring Basis | ||
Derivative, notional amount | 387,000 | 387,000 |
Interest rate swap | Not designated as hedging instrument | ||
Fair Value, (Assets) Liabilities Measured on Recurring Basis | ||
Derivative, notional amount | 11,000 | 11,000 |
Derivative assets/ liabilities, at fair value, net | (194) | (262) |
Forward swap | Designated as hedging instrument | ||
Fair Value, (Assets) Liabilities Measured on Recurring Basis | ||
Derivative, notional amount | $ 255,000 | $ 255,000 |
Real Estate Acquisitions (Detai
Real Estate Acquisitions (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | |
Real Estate Investments, Net [Abstract] | ||
Number of real estate acquisitions | 1 | 0 |
Total assets and lease liabilities acquired | $ 15,000 | $ 0 |
Real Estate Acquisitions (Det37
Real Estate Acquisitions (Details) - Allocation $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Real Estate Investments, Net [Abstract] | |
Land and improvements | $ 6,113 |
Building and improvements | 7,594 |
Acquired in-place leases | 1,817 |
Acquired above-market leases | 110 |
Acquired below-market leases | (593) |
Net assets acquired | $ 15,041 |
Real Estate Acquisitions (Deta
Real Estate Acquisitions (Details) - Weighted-average amortization | 3 Months Ended |
Mar. 31, 2017 | |
Acquired in-place leases | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Acquired finite-lived intangible assets, weighted average useful life | 15 years |
Acquired above-market leases | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Acquired finite-lived intangible assets, weighted average useful life | 4 years |
Acquired below-market leases | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Acquired finite-lived intangible assets, weighted average useful life | 24 years |
Mortgages and Loans Payable (De
Mortgages and Loans Payable (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||
Outstanding principal balance | $ 1,079,979 | $ 1,060,690 |
Assumed market debt adjustments, net | 3,652 | 4,490 |
Deferred financing costs, net | (8,384) | (9,024) |
Total | 1,075,247 | 1,056,156 |
Accumulated amortization, assumed below-market debt adjustment | 4,100 | 6,100 |
Accumulated amortization, deferred finance costs | $ 4,100 | $ 3,900 |
Weighted-average interest rate on debt | 3.00% | 3.00% |
Mortgages | ||
Debt Instrument [Line Items] | ||
Outstanding principal balance | $ 191,011 | $ 228,721 |
Minimum | Mortgages | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.43% | |
Maximum | Mortgages | ||
Debt Instrument [Line Items] | ||
Interest rate | 7.91% | |
Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Interest rate | 2.23% | |
Outstanding principal balance | $ 233,968 | 176,969 |
Gross borrowings | 108,000 | |
Gross payments | 51,000 | |
Line of credit facility, maximum borrowing capacity | 500,000 | 500,000 |
Deferred financing costs, line of credit arrangements, net | 1,600 | 2,200 |
Accumulated amortization of deferred financing costs, line of credit arrangements | $ 7,300 | 6,700 |
Term loan due 2019 | ||
Debt Instrument [Line Items] | ||
Interest rate | 2.46% | |
Outstanding principal balance | $ 100,000 | 100,000 |
Term loan due 2020 | ||
Debt Instrument [Line Items] | ||
Interest rate | 2.65% | |
Outstanding principal balance | $ 175,000 | 175,000 |
Term loan due 2021 | ||
Debt Instrument [Line Items] | ||
Outstanding principal balance | $ 125,000 | 125,000 |
Term loan due 2021 | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate | 2.18% | |
Term loan due 2021 | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate | 2.80% | |
Term loan due 2023 | ||
Debt Instrument [Line Items] | ||
Interest rate | 2.63% | |
Outstanding principal balance | $ 255,000 | $ 255,000 |
Term loan facility | ||
Debt Instrument [Line Items] | ||
Maturity date extension fee, percent | 0.15% |
Mortgages and Loans Payable (40
Mortgages and Loans Payable (Details) - Debt Obligations - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
Fixed-rate debt | $ 578,011 | $ 615,721 |
Variable-rate debt | 501,968 | 444,969 |
Unsecured debt | 888,968 | 831,969 |
Secured debt | 191,011 | 228,721 |
Total | $ 1,079,979 | $ 1,060,690 |
Commitments and Contingencies N
Commitments and Contingencies Narrative (Details) | Mar. 31, 2017claim |
Commitments and Contingencies Disclosure [Abstract] | |
Loss contingency, pending claims, number | 0 |
Derivatives and Hedging Activ42
Derivatives and Hedging Activities (Details) | 3 Months Ended | ||
Mar. 31, 2017USD ($)derivative | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($)derivative | |
Interest rate swap | Designated as hedging instrument | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative instruments, loss recognized in income, ineffective portion, net | $ (100,000) | ||
Amount estimated to be reclassified from AOCI to interest expense over the next 12 months | $ (700,000) | ||
Derivative, number of instruments held | derivative | 4 | 4 | |
Derivative, notional amount | $ 642,000,000 | $ 642,000,000 | |
Interest rate swap | Designated as hedging instrument | Minimum | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative, fixed interest rate | 1.20% | 1.20% | |
Interest rate swap | Designated as hedging instrument | Maximum | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative, fixed interest rate | 1.50% | 1.50% | |
Interest rate swap | Not designated as hedging instrument | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative, notional amount | $ 11,000,000 | $ 11,000,000 | |
Derivative, gain (loss) on derivative not designated as hedges | 14,000 | $ (119,000) | |
Forward swap | Designated as hedging instrument | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative, notional amount | $ 255,000,000 | $ 255,000,000 |
Equity (Details)
Equity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Apr. 14, 2016 | |
Class of Stock [Line Items] | ||||
Share price | $ 10.20 | |||
Repurchases of common stock | $ (40,340) | $ (1,182) | ||
SRP, outstanding requests | 6,500 | |||
OP units | 2,785 | 2,785 | ||
Class B units | 2,750 | 2,200 | 2,610 | |
Dividend Reinvestment Plan | ||||
Class of Stock [Line Items] | ||||
Share price | $ 10.20 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |||
Class B units unvested | 2,750 | 2,200 | 2,610 |
Numerator for basic and diluted earnings per share: | |||
Net income attributable to stockholders | $ 1,106 | $ 2,219 | |
Denominator: | |||
Denominator for basic earnings per share - weighted-average shares | 183,230 | 182,246 | |
Effect of dilutive OP units | 2,785 | 2,785 | |
Effect of restricted stock awards | 7 | 0 | |
Denominator for diluted earnings per share - adjusted weighted-average shares | 186,022 | 185,031 | |
Earnings per common share: | |||
Net income per share attributable to stockholders - basic and diluted | $ 0.01 | $ 0.01 |
Related Party Transactions Rela
Related Party Transactions Related Party (Details) - Economic Dependency | Mar. 31, 2017shares |
Related Party Transactions [Abstract] | |
Shares owned by sub-advisor | 176,509 |
Percentage of shares owned by sub-advisor | 0.10% |
Related Party Transactions Re46
Related Party Transactions Related Party Transactions (Details) - USD ($) shares in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||
Accounts payable – affiliates | $ 4,805,000 | $ 4,571,000 | |
Advisory Agreement | |||
Related Party Transaction [Line Items] | |||
Expenses from transactions with related party | 6,165,000 | $ 5,437,000 | |
Accounts payable – affiliates | $ 2,014,000 | 2,022,000 | |
Advisory Agreement | Acquisition fee | |||
Related Party Transaction [Line Items] | |||
Related party transaction, rate | 1.00% | ||
Expenses from transactions with related party | $ 148,000 | $ 0 | |
Accounts payable – affiliates | $ 0 | 0 | |
Advisory Agreement | Asset management subordination agreement | |||
Related Party Transaction [Line Items] | |||
Class B units issuance due date | 60 days | ||
Class B units of operating partnership, issued in connection with asset management services | 0.1 | 0.1 | |
Advisory Agreement | Asset management fee | |||
Related Party Transaction [Line Items] | |||
Related party transaction, rate | 1.00% | ||
Expenses from transactions with related party | $ 5,089,000 | $ 4,619,000 | |
Accounts payable – affiliates | $ 1,701,000 | 1,687,000 | |
Advisory Agreement | Asset management fee, portion paid in cash, monthly payment | |||
Related Party Transaction [Line Items] | |||
Related party transaction, rate | 0.06667% | ||
Advisory Agreement | Disposition fee | |||
Related Party Transaction [Line Items] | |||
Related party transaction, rate | 2.00% | ||
Advisory Agreement | General and administrative reimbursements | |||
Related Party Transaction [Line Items] | |||
Accounts payable – affiliates | $ 94,000 | 43,000 | |
Advisory Agreement | Due diligence reimbursement | |||
Related Party Transaction [Line Items] | |||
Expenses from transactions with related party | 30,000 | 0 | |
Accounts payable – affiliates | 0 | 29,000 | |
Advisory Agreement | Operating partnership units distribution | |||
Related Party Transaction [Line Items] | |||
Expenses from transactions with related party | 460,000 | 464,000 | |
Accounts payable – affiliates | 158,000 | 158,000 | |
Advisory Agreement | Class B units distribution | |||
Related Party Transaction [Line Items] | |||
Expenses from transactions with related party | 438,000 | $ 354,000 | |
Accounts payable – affiliates | $ 155,000 | $ 148,000 | |
Advisory Agreement | Cash | Asset management fee | |||
Related Party Transaction [Line Items] | |||
Related party transaction, rate | 80.00% | ||
Advisory Agreement | Unit distribution | Asset management fee | |||
Related Party Transaction [Line Items] | |||
Related party transaction, rate | 20.00% |
Related Party Transactions Prop
Related Party Transactions Property Management Transactions (Details) Property Management Transactions - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||
Accounts payable – affiliates | $ 4,805 | $ 4,571 | |
Property Manager | |||
Related Party Transaction [Line Items] | |||
Expenses from transactions with related party | 6,922 | $ 5,951 | |
Accounts payable – affiliates | $ 2,697 | 2,506 | |
Property Manager | Property management fee | |||
Related Party Transaction [Line Items] | |||
Property management fee, percent fee | 4.00% | ||
Expenses from transactions with related party | $ 2,586 | 2,427 | |
Accounts payable – affiliates | $ 878 | 840 | |
Property Manager | Leasing commissions | |||
Related Party Transaction [Line Items] | |||
Allowed percentage increase to leasing fee payable | 50.00% | ||
Expenses from transactions with related party | $ 2,323 | 2,195 | |
Accounts payable – affiliates | 815 | 705 | |
Property Manager | Construction management fee | |||
Related Party Transaction [Line Items] | |||
Expenses from transactions with related party | 304 | 159 | |
Accounts payable – affiliates | 59 | 165 | |
Property Manager | Other fees and reimbursements | |||
Related Party Transaction [Line Items] | |||
Expenses from transactions with related party | 1,709 | $ 1,170 | |
Accounts payable – affiliates | $ 945 | $ 796 |
Operating Leases Future Minimum
Operating Leases Future Minimum Rents(Details) $ in Thousands | Mar. 31, 2017USD ($) |
Future rentals to be received under non-cancelable operating leases: | |
Remaining 2,017 | $ 148,387 |
2,018 | 183,998 |
2,019 | 159,931 |
2,020 | 137,984 |
2,021 | 114,519 |
2022 and thereafter | 376,418 |
Total | $ 1,121,237 |
Subsequent Events (Details) - D
Subsequent Events (Details) - Distributions - USD ($) $ / shares in Units, $ in Thousands | May 01, 2017 | Apr. 03, 2017 | Apr. 30, 2017 | Aug. 31, 2017 | Mar. 31, 2017 | Mar. 31, 2016 |
Subsequent Event [Line Items] | ||||||
Common stock, dividends, per share, declared | $ 0.17 | $ 0.17 | ||||
Distributions reinvested | $ 13,716 | $ 15,256 | ||||
Net cash distribution | $ 16,656 | $ 15,064 | ||||
Subsequent event | ||||||
Subsequent Event [Line Items] | ||||||
Gross amount of distribution paid | $ 10,070 | $ 10,467 | ||||
Distributions reinvested | 4,465 | 4,667 | ||||
Net cash distribution | $ 5,605 | $ 5,800 | ||||
Dividend paid | Subsequent event | ||||||
Subsequent Event [Line Items] | ||||||
Common stock, dividends, per share, declared | $ 0.00183562 | |||||
Dividend declared | Subsequent event | ||||||
Subsequent Event [Line Items] | ||||||
Common stock, dividends, per share, declared | $ 0.00183562 |
Subsequent Events (Details) - A
Subsequent Events (Details) - Acquisitions $ in Thousands | May 05, 2017USD ($)ft² | Apr. 18, 2017USD ($)ft² | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) |
Subsequent Event [Line Items] | ||||
Contractual purchase price | $ 15,000 | $ 0 | ||
Subsequent event | Rocky Ridge Town Center | ||||
Subsequent Event [Line Items] | ||||
Contractual purchase price | $ 36,000 | |||
Square footage | ft² | 93,338 | |||
Leased percentage | 96.30% | |||
Subsequent event | Greentree Centre | ||||
Subsequent Event [Line Items] | ||||
Contractual purchase price | $ 12,050 | |||
Square footage | ft² | 82,659 | |||
Leased percentage | 90.30% |