Document and Entity Information
Document and Entity Information - shares shares in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Aug. 02, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 000-54691 | |
Entity Registrant Name | PHILLIPS EDISON & COMPANY, INC. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 27-1106076 | |
Entity Address, Address Line One | 11501 Northlake Drive | |
Entity Address, City or Town | Cincinnati | |
Entity Address, State or Province | OH | |
Entity Address, Postal Zip Code | 45249 | |
City Area Code | (513) | |
Local Phone Number | 554-1110 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2021 | |
Amendment Flag | false | |
Entity Central Index Key | 0001476204 | |
Current Fiscal Year End Date | --12-31 | |
Security Exchange Name | NASDAQ | |
Trading Symbol | PECO | |
Title of 12(b) Security | Common stock, par value $0.01 per share | |
Common Class B | ||
Cover [Abstract] | ||
Entity Common Stock, Shares Outstanding | 93,700 | |
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 93,700 | |
Common Stock | ||
Cover [Abstract] | ||
Entity Common Stock, Shares Outstanding | 19,600 | |
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 19,600 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) shares in Thousands, $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Investment in real estate: | ||
Land and improvements | $ 1,529,803 | $ 1,549,362 |
Building and improvements | 3,184,601 | 3,237,986 |
In-place lease assets | 434,499 | 441,683 |
Above-market lease assets | 64,795 | 66,106 |
Total investment in real estate assets | 5,213,698 | 5,295,137 |
Accumulated depreciation and amortization | (1,021,456) | (941,413) |
Net investment in real estate assets | 4,192,242 | 4,353,724 |
Investment in unconsolidated joint ventures | 32,746 | 37,366 |
Total investment in real estate assets, net | 4,224,988 | 4,391,090 |
Cash and cash equivalents | 22,205 | 104,296 |
Restricted cash | 89,196 | 27,641 |
Goodwill | 29,066 | 29,066 |
Other assets, net | 126,056 | 126,470 |
Real estate investment and other assets held for sale | 14,261 | 0 |
Total assets | 4,505,772 | 4,678,563 |
Liabilities: | ||
Debt obligations, net | 2,228,232 | 2,292,605 |
Below-market lease liabilities, net | 93,949 | 101,746 |
Earn-out liability | 40,000 | 22,000 |
Derivative liabilities | 39,929 | 54,759 |
Deferred income | 18,978 | 14,581 |
Accounts payable and other liabilities | 88,436 | 176,943 |
Disposal Group, Including Discontinued Operation, Liabilities | 860 | 0 |
Total liabilities | 2,510,384 | 2,662,634 |
Commitments and contingencies (Note 8) | $ 0 | $ 0 |
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Authorized | 10,000 | 10,000 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Equity: | ||
Preferred stock, $0.01 par value per share, 10,000 shares authorized, zero shares issued and outstanding at June 30, 2021 and December 31, 2019, respectively | $ 0 | $ 0 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 1,000,000 | 1,000,000 |
Common Stock, Shares, Outstanding | 93,640 | 93,279 |
Common stock, $0.01 par value per share, 1,000,000 shares authorized, 0 and 289,047 shares issued and outstanding at June 30, 2021 and December 31, 2019, respectively | $ 2,808 | $ 2,798 |
Additional paid-in capital (“APIC”) | 2,749,680 | 2,739,358 |
Accumulated other comprehensive loss (“AOCI”) | (38,732) | (52,306) |
Accumulated deficit | (1,041,617) | (999,491) |
Total stockholders’ equity | 1,672,139 | 1,690,359 |
Noncontrolling interests | 323,249 | 325,570 |
Total equity | 1,995,388 | 2,015,929 |
Total liabilities and equity | $ 4,505,772 | $ 4,678,563 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Authorized | 10,000 | 10,000 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 1,000,000 | 1,000,000 |
Common Stock, Shares, Outstanding | 93,640 | 93,279 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenues: | ||||
Rental income | $ 130,335 | $ 115,654 | $ 257,958 | $ 244,120 |
Fees and management income | 2,374 | 2,760 | 4,660 | 4,925 |
Other property income | 361 | 626 | 833 | 1,518 |
Total revenues | 133,070 | 119,040 | 263,451 | 250,563 |
Operating Expenses: | ||||
Property operating | 21,974 | 19,629 | 44,176 | 41,391 |
Real estate taxes | 16,814 | 16,453 | 33,387 | 33,565 |
General and administrative | 11,937 | 9,806 | 21,278 | 20,546 |
Depreciation and amortization | 56,587 | 56,370 | 111,928 | 112,597 |
Impairment of Real Estate | 1,056 | 0 | 6,056 | 0 |
Total operating expenses | 108,368 | 102,258 | 216,825 | 208,099 |
Other: | ||||
Interest expense, net | (19,132) | (22,154) | (39,195) | (44,929) |
Gain (loss) on disposal of property, net | 3,744 | (541) | 17,585 | (2,118) |
Other (expense) income, net | (2,924) | (500) | (18,509) | 9,369 |
Net income (loss) | 6,390 | (6,413) | 6,507 | 4,786 |
Net (income) loss attributable to noncontrolling interests | (796) | 825 | (810) | (605) |
Net (loss) income attributable to stockholders | $ 5,594 | $ (5,588) | $ 5,697 | $ 4,181 |
Earnings per common share: | ||||
Net income (loss) per share attributable to stockholders - basic and diluted (see Note 10) | $ 0.06 | $ (0.06) | $ 0.06 | $ 0.04 |
Comprehensive loss: | ||||
Net income (loss) | $ 6,390 | $ (6,413) | $ 6,507 | $ 4,786 |
Other comprehensive income (loss): | ||||
Change in unrealized value on interest rate swaps | 3,373 | (1,747) | 15,493 | (45,111) |
Comprehensive income (loss) | 9,763 | (8,160) | 22,000 | (40,325) |
Net (income) loss attributable to noncontrolling interests | (796) | 825 | (810) | (605) |
Change in unrealized value on interest rate swaps attributable to noncontrolling interests | (400) | 224 | (1,909) | 5,798 |
Reallocation of comprehensive loss upon conversion of noncontrolling interests | (10) | 0 | (10) | 0 |
Comprehensive income (loss) attributable to stockholders | $ 8,557 | $ (7,111) | $ 19,271 | $ (35,132) |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | AOCI | Accumulated Deficit | Total Stockholders' Equity | Noncontrolling Interests |
Common Stock, Dividends, Per Share, Declared | $ 0.503 | ||||||
Balance, shares at Dec. 31, 2019 | 96,349 | ||||||
Balance, value at Dec. 31, 2019 | $ 2,168,794 | $ 2,890 | $ 2,779,130 | $ (20,762) | $ (947,252) | $ 1,814,006 | $ 354,788 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Dividend reinvestment plan (DRIP), shares | 479 | ||||||
Dividend reinvestment plan (DRIP), value | 15,940 | $ 14 | 15,926 | 15,940 | |||
Share repurchases, shares | (96) | ||||||
Share repurchases, value | (2,700) | $ (3) | (2,697) | (2,700) | |||
Change in unrealized value on interest rate swaps | (45,111) | (39,313) | (39,313) | (5,798) | |||
Common distributions declared | (48,809) | (48,809) | (48,809) | ||||
Distributions to noncontrolling interests | (7,105) | (7,105) | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 36 | ||||||
Shares Granted, Value, Share-based Payment Arrangement, after Forfeiture | $ 2 | ||||||
Share-based compensation expense | 1,992 | 1,472 | 1,474 | (1,861) | |||
Conversion of noncontrolling interests, shares | 56 | ||||||
Conversion of noncontrolling interests, value | 1,859 | 1,861 | |||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 518 | ||||||
Reallocation of operating partnership interests | (318) | $ (2) | (256) | (59) | (315) | (3) | |
Net income (loss) | 4,786 | 4,181 | 4,181 | 605 | |||
Balance, shares at Jun. 30, 2020 | 96,822 | ||||||
Balance, value at Jun. 30, 2020 | 2,087,469 | $ 2,905 | 2,795,434 | (60,075) | (991,939) | 1,746,325 | 341,144 |
Balance, shares at Mar. 31, 2020 | 96,805 | ||||||
Balance, value at Mar. 31, 2020 | 2,093,806 | $ 2,903 | 2,793,803 | (58,552) | (986,292) | 1,751,862 | 341,944 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Change in unrealized value on interest rate swaps | (1,747) | (1,523) | (1,523) | (224) | |||
Distributions to noncontrolling interests | 0 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 2 | ||||||
Shares Granted, Value, Share-based Payment Arrangement, after Forfeiture | $ 1 | ||||||
Share-based compensation expense | 2,141 | 1,332 | 1,333 | 808 | |||
Conversion of noncontrolling interests, shares | 17 | ||||||
Conversion of noncontrolling interests, value | $ 1 | 555 | 556 | ||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | (556) | ||||||
Reallocation of operating partnership interests | (318) | $ (2) | (256) | (59) | (315) | (3) | |
Net income (loss) | (6,413) | (5,588) | (5,588) | (825) | |||
Balance, shares at Jun. 30, 2020 | 96,822 | ||||||
Balance, value at Jun. 30, 2020 | $ 2,087,469 | $ 2,905 | 2,795,434 | (60,075) | (991,939) | 1,746,325 | 341,144 |
Common Stock, Dividends, Per Share, Declared | $ 0.510 | ||||||
Balance, shares at Dec. 31, 2020 | 93,279 | ||||||
Balance, value at Dec. 31, 2020 | $ 2,015,929 | $ 2,798 | 2,739,358 | (52,306) | (999,491) | 1,690,359 | 325,570 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Dividend reinvestment plan (DRIP), shares | 280 | ||||||
Dividend reinvestment plan (DRIP), value | 7,368 | $ 8 | 7,360 | 7,368 | |||
Share repurchases, shares | (24) | ||||||
Share repurchases, value | (123) | $ 0 | (123) | (123) | |||
Change in unrealized value on interest rate swaps | 15,493 | 13,584 | 13,584 | 1,909 | |||
Common distributions declared | (47,823) | (47,823) | (47,823) | ||||
Distributions to noncontrolling interests | (6,779) | (6,779) | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 77 | ||||||
Shares Granted, Value, Share-based Payment Arrangement, after Forfeiture | $ 2 | ||||||
Share-based compensation expense | 4,845 | 2,427 | 2,429 | 2,416 | |||
Conversion of noncontrolling interests, shares | 28 | ||||||
Conversion of noncontrolling interests, value | $ 0 | 743 | 743 | ||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 56 | 10 | 66 | (743) | |||
Noncontrolling Interest, Decrease from Deconsolidation | 66 | ||||||
Reallocation of operating partnership interests | (29) | $ 0 | (29) | 0 | (29) | 0 | |
Net income (loss) | 6,507 | 5,697 | 5,697 | 810 | |||
Balance, shares at Jun. 30, 2021 | 93,640 | ||||||
Balance, value at Jun. 30, 2021 | $ 1,995,388 | $ 2,808 | 2,749,680 | (38,732) | (1,041,617) | 1,672,139 | 323,249 |
Common Stock, Dividends, Per Share, Declared | $ 0.255 | ||||||
Balance, shares at Mar. 31, 2021 | 93,582 | ||||||
Balance, value at Mar. 31, 2021 | $ 2,009,406 | $ 2,807 | 2,746,891 | (41,695) | (1,023,155) | 1,684,848 | 324,558 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Change in unrealized value on interest rate swaps | 3,373 | 2,973 | 2,973 | 400 | |||
Common distributions declared | (24,056) | (24,056) | (24,056) | ||||
Distributions to noncontrolling interests | (3,460) | (3,460) | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 30 | ||||||
Shares Granted, Value, Share-based Payment Arrangement, after Forfeiture | $ 1 | ||||||
Share-based compensation expense | 3,735 | 2,102 | 2,103 | 1,632 | |||
Conversion of noncontrolling interests, shares | 28 | ||||||
Conversion of noncontrolling interests, value | 743 | 743 | |||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 56 | 10 | 66 | (743) | |||
Noncontrolling Interest, Decrease from Deconsolidation | 66 | ||||||
Net income (loss) | 6,390 | 5,594 | 5,594 | 796 | |||
Balance, shares at Jun. 30, 2021 | 93,640 | ||||||
Balance, value at Jun. 30, 2021 | $ 1,995,388 | $ 2,808 | $ 2,749,680 | $ (38,732) | $ (1,041,617) | $ 1,672,139 | $ 323,249 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ 6,507 | $ 4,786 |
Cost, Depreciation and Amortization | 109,995 | 109,709 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Impairment of Real Estate | 6,056 | 0 |
Other Depreciation and Amortization | 1,933 | 2,888 |
Net amortization of above- and below-market leases | (1,725) | (1,583) |
Amortization of deferred financing expenses | 2,448 | 2,495 |
Amortization of debt and derivative adjustments | 739 | 1,884 |
(Gain) loss on disposal of property, net | (17,585) | 2,118 |
Change in fair value of earn-out liability | 18,000 | (10,000) |
Straight-line rent | (4,400) | (1,331) |
Share-based compensation | 4,845 | 1,992 |
Proceeds from Equity Method Investment, Distribution | 1,533 | 32 |
Other assets, net | (900) | 12,853 |
Other | (519) | 1,239 |
Changes in operating assets and liabilities: | ||
Accounts payable and other liabilities | 1,170 | (11,470) |
Net cash provided by operating activities | 129,897 | 89,906 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Real estate acquisitions | (40,459) | (4,343) |
Payments to Develop Real Estate Assets | 30,230 | 28,540 |
Proceeds from sale of real estate | 119,638 | 25,778 |
Investment in third parties | (3,000) | 0 |
Return of investment in unconsolidated joint ventures | 3,888 | 639 |
Net cash provided by (used in) investing activities | 49,837 | (6,466) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Gross borrowings | 9,000 | 255,000 |
Gross payments | (9,000) | (255,000) |
Payments on mortgages and loans payable | (66,237) | (35,200) |
Distributions paid, net of DRIP | (48,308) | (49,083) |
Distributions to noncontrolling interests | (7,931) | (9,406) |
Repurchases of common stock | (77,765) | (5,211) |
Other | (29) | (318) |
Net cash used in financing activities | (200,270) | (99,218) |
NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | (20,536) | (15,778) |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH: | ||
Beginning of period | 131,937 | 95,108 |
End of period | 111,401 | 79,330 |
RECONCILIATION TO CONSOLIDATED BALANCE SHEETS | ||
Cash and cash equivalents | 22,205 | 53,262 |
Restricted cash | 89,196 | 26,068 |
Cash, cash equivalents, and restricted cash at end of the period | 111,401 | 79,330 |
SUPPLEMENTAL CASH FLOW DISCLOSURE, INCLUDING NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Cash paid for interest | 36,845 | 40,980 |
Right-of-use (“ROU”) assets obtained in exchange for new lease liabilities | 239 | 551 |
Accrued capital expenditures | 6,053 | 2,884 |
Change in distributions payable | (7,853) | (16,214) |
Change in distributions payable - noncontrolling interests | (1,152) | (2,301) |
Change in accrued share repurchase obligation | (77,642) | (2,511) |
Distributions reinvested | $ 7,368 | $ 15,940 |
Organization
Organization | 6 Months Ended |
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | 1. ORGANIZATION Phillips Edison & Company, Inc. (“we,” the “Company,” “PECO,” “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. We are a real estate investment trust (“REIT”) that invests primarily in omni-channel grocery-anchored neighborhood and community shopping centers that have a mix of creditworthy national, regional, and local retailers that sell necessity-based goods and services in strong demographic markets throughout the United States. In addition to managing our own shopping centers, our third-party investment management business provides comprehensive real estate and asset management services to two unconsolidated institutional joint ventures, in which we have a partial ownership interest, and one private fund (collectively, the “Managed Funds”) as of June 30, 2021. As of June 30, 2021, we wholly-owned 272 real estate properties. Additionally, we owned a 14% interest in Grocery Retail Partners I LLC (“GRP I”), a joint venture that owned 20 properties, and a 20% equity interest in Necessity Retail Partners (“NRP”), a joint venture that owned two properties. On June 18, 2021, our stockholders approved an amendment to our charter (the “Articles of Amendment”) that effected a change of each share of our common stock outstanding at the time the amendment became effective into one share of a newly created class of Class B common stock (the “Recapitalization”). The Articles of Amendment became effective upon filing with, and acceptance by, the State Department of Assessments and Taxation of Maryland on July 2, 2021. Unless otherwise indicated, all information in this Form 10-Q disclosure gives effect to the Recapitalization and references to “shares” and per share metrics refer to our common stock and Class B common stock, collectively. On July 2, 2021, our board of directors (the “Board”) approved an amendment to our articles of incorporation to effect a one-for-three reverse stock split. Concurrent with the reverse split, the Operating Partnership enacted a one-for-three reverse split of its outstanding Operating Partnership units (“OP units”). Unless otherwise indicated, the information in this Form 10-Q gives effect to the reverse stock and OP unit splits (Note 9). On July 19, 2021, we closed our underwritten initial public offering (“underwritten IPO”), through which we offered 17.0 million shares of a new class of common stock, $0.01 par value per share, at an initial price of $28.00 per share, pursuant to a registration statement filed with the U.S. Securities and Exchange Commission (“SEC”) on Form S-11 (File No. 333-255846), as amended. These shares are listed on the Nasdaq Global Select Market under the trading symbol “PECO”. The underwriters have since exercised a 30-day option to purchase additional shares of common stock to cover overallotments, and, accordingly, on August 2, 2021 we settled the sale of an additional 2.55 million shares, with gross proceeds to us of $71.4 million. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. 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 condensed 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. For example, significant estimates and assumptions have been made with respect to the useful lives of assets, remaining hold period of assets, recoverable amounts of receivables, and other fair value measurement assessments required for the preparation of the consolidated interim financial statements. As a result, these estimates are subject to a degree of uncertainty. Beginning in 2020, the coronavirus (“COVID-19”) pandemic has caused significant disruption to our operations. All temporarily closed tenants have since been permitted to reopen; however, certain of our tenants have permanently closed. We have backfilled a number of these spaces, and continue to work on backfilling any remaining vacancies. The continuing economic impacts of the COVID-19 pandemic could result in increased permanent store closures, reduce the demand for leasing space in our shopping centers, and/or result in a decline in occupancy and rental revenues in our real estate portfolio. Because of the adverse economic conditions that have occurred as a result of the impacts of the COVID-19 pandemic and any remaining uncertainty related to the pandemic, it is possible that the estimates and assumptions that have been utilized in the preparation of the consolidated financial statements could change significantly. All of this activity impacts our estimates around the collectibility of revenue and valuation of real estate assets, goodwill and other intangible assets, and certain liabilities, among others. There were no changes to our significant accounting policies during the six months ended June 30, 2021, except for those discussed below. For a full summary of our accounting policies, refer to our 2020 Annual Report on Form 10-K as originally filed with the SEC on March 12, 2021. Basis of Presentation and Principles of Consolidation —The accompanying condensed 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 our audited consolidated financial statements for the year ended December 31, 2020, which are included in our 2020 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 and six months ended June 30, 2021 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. Underwritten IPO Costs —Deferred underwritten IPO costs are currently recorded as Other Assets, Net on our consolidated balance sheets as of June 30, 2021, and will be offset against underwritten IPO proceeds and reclassified as a component of APIC on the consolidated balance sheets upon the consummation of the offering. Costs incurred that were related to our underwritten IPO activities but were not directly related to our equity raise were not capitalized and are included as transaction costs, currently in Other (Expense) Income, Net on our consolidated statements of operations and comprehensive income (loss) (“consolidated statements of operations”). Income Taxes —Our consolidated financial statements include the operations of wholly-owned subsidiaries that have jointly elected to be treated as Taxable REIT Subsidiaries and are subject to U.S. federal, state, and local income taxes at regular corporate tax rates. We recognized an insignificant amount of federal, state, and local income tax expense for the three and six months ended June 30, 2021 and 2020, and we retain a full valuation allowance for our deferred tax asset. All income tax amounts are included in Other (Expense) Income, Net on our consolidated statements of operations. Recently Issued Accounting Pronouncements —On January 7, 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-01 to amend the scope of the guidance in ASU 2020-04 on facilitation of the effects of reference rate reform on financial reporting. Specifically, the amendments in ASU 2021-01 clarify that certain optional expedients and exceptions in Accounting Standards Codification (“ASC”) Topic 848, Reference Rate Reform for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. We adopted ASU 2021-01 upon its issuance and the adoption of this standard did not have a material impact on our consolidated financial statements. Reclassifications —The following line items on our consolidated statement of cash flows for the six months ended June 30, 2020 were reclassified to conform to current year presentation: • Return on Investment in Unconsolidated Joint Ventures was listed on a separate line from Other Assets, Net; and • Net Change in Credit Facility was separated into two lines, Proceeds from Revolving Credit Facility and Payments on Revolving Credit Facility. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2021 | |
Leases [Abstract] | |
Leases of Lessor Disclosure | 3. LEASES Lessor —The majority of our leases are largely similar in that the leased asset is retail space within our properties, and the lease agreements generally contain similar provisions and features, without substantial variations. All of our leases are currently classified as operating leases. Lease income related to our operating leases was as follows for the three and six months ended June 30, 2021 and 2020 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Rental income related to fixed lease payments (1) $ 94,485 $ 95,036 $ 189,451 $ 191,063 Rental income related to variable lease payments (1)(2) 27,454 30,659 58,855 62,497 Straight-line rent amortization (3) 2,893 (978) 4,262 1,331 Amortization of lease assets 877 786 1,704 1,565 Lease buyout income 1,781 214 2,578 308 Adjustments for collectibility (4) 2,845 (10,063) 1,108 (12,644) Total rental income $ 130,335 $ 115,654 $ 257,958 $ 244,120 (1) Includes rental income related to lease payments before assessing for collectibility. (2) Variable payments are primarily related to tenant recovery income. (3) Includes favorable revenue adjustments to straight-line rent for tenants previously considered non-creditworthy during the three months ended June 30, 2021 of $0.4 million, and unfavorable adjustments for non-creditworthy tenants during the six months ended June 30, 2021 of $0.4 million. Includes unfavorable adjustments for the three and six months ended June 30, 2020 of $3.2 million, and $3.1 million, respectively. (4) Includes general reserves as well as adjustments for tenants not considered creditworthy and thus for which we are recording revenue on a cash basis, per ASC Topic 842, Leases (“ASC 842”). For the three and six months ended June 30, 2021, we had net favorable changes to general reserves of $1.9 million and $4.1 million, respectively. Additionally, we had $1.0 million in net collections on receivables that were previously deemed unlikely to be collected for tenants not considered creditworthy for the three months ended June 30, 2021, and $3.0 million in net unfavorable revenue adjustments for non-creditworthy tenants for the six months ended June 30, 2021. For the three and six months ended June 30, 2020, we had net general reserve increases of $1.3 million and $0.9 million, respectively. Additionally, we had net unfavorable adjustments of $8.8 million and $11.7 million, respectively, related to monthly revenue for tenants that we deemed non-creditworthy and for which we were recording revenue on a cash basis. Approximate future fixed contractual lease payments to be received under non-cancelable operating leases in effect as of June 30, 2021, assuming no new or renegotiated leases or option extensions on lease agreements, and including the impact of rent abatements, payment plans, and tenants who have been moved to the cash basis of accounting for revenue recognition purposes are as follows (in thousands): Year Amount Remaining 2021 $ 191,000 2022 363,187 2023 317,301 2024 263,155 2025 209,307 Thereafter 514,528 Total $ 1,858,478 In response to the COVID-19 pandemic, we executed payment plans with our tenants. As of June 30, 2021, we had $5.4 million of outstanding payment plans with our tenants, which represented approximately 2.1% of rental income during the six months ended June 30, 2021. During the three months ended June 30, 2021, we had recorded an immaterial amount of rent abatements related to 2021 missed charges. During the six months ended June 30, 2021, we recorded approximately $0.5 million of rent abatements related to missed 2021 charges, which represented less than 1% of rental income for the six months ended June 30, 2021. No single tenant comprised 7% or more of our aggregate annualized base rent (“ABR”) as of June 30, 2021. As of June 30, 2021, our wholly-owned real estate investments in Florida and California represented 12.6% and 10.1% of our ABR, respectively. As a result, the geographic concentration of our portfolio makes it particularly susceptible to adverse weather or economic events, including the impact of the COVID-19 pandemic, in the Florida and California real estate markets. Lessee —Lease assets and liabilities, grouped by balance sheet line where they are recorded, consisted of the following as of June 30, 2021 and December 31, 2020 (in thousands): Balance Sheet Information Balance Sheet Location June 30, 2021 December 31, 2020 ROU assets, net - operating leases Investment in Real Estate $ 4,003 $ 3,867 ROU assets, net - operating and finance leases Other Assets, Net 1,190 1,438 Operating lease liability Accounts Payable and Other Liabilities 5,619 5,731 Finance lease liability Debt Obligations, Net 127 164 |
Leases of Lessee Disclosure | 3. LEASES Lessor —The majority of our leases are largely similar in that the leased asset is retail space within our properties, and the lease agreements generally contain similar provisions and features, without substantial variations. All of our leases are currently classified as operating leases. Lease income related to our operating leases was as follows for the three and six months ended June 30, 2021 and 2020 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Rental income related to fixed lease payments (1) $ 94,485 $ 95,036 $ 189,451 $ 191,063 Rental income related to variable lease payments (1)(2) 27,454 30,659 58,855 62,497 Straight-line rent amortization (3) 2,893 (978) 4,262 1,331 Amortization of lease assets 877 786 1,704 1,565 Lease buyout income 1,781 214 2,578 308 Adjustments for collectibility (4) 2,845 (10,063) 1,108 (12,644) Total rental income $ 130,335 $ 115,654 $ 257,958 $ 244,120 (1) Includes rental income related to lease payments before assessing for collectibility. (2) Variable payments are primarily related to tenant recovery income. (3) Includes favorable revenue adjustments to straight-line rent for tenants previously considered non-creditworthy during the three months ended June 30, 2021 of $0.4 million, and unfavorable adjustments for non-creditworthy tenants during the six months ended June 30, 2021 of $0.4 million. Includes unfavorable adjustments for the three and six months ended June 30, 2020 of $3.2 million, and $3.1 million, respectively. (4) Includes general reserves as well as adjustments for tenants not considered creditworthy and thus for which we are recording revenue on a cash basis, per ASC Topic 842, Leases (“ASC 842”). For the three and six months ended June 30, 2021, we had net favorable changes to general reserves of $1.9 million and $4.1 million, respectively. Additionally, we had $1.0 million in net collections on receivables that were previously deemed unlikely to be collected for tenants not considered creditworthy for the three months ended June 30, 2021, and $3.0 million in net unfavorable revenue adjustments for non-creditworthy tenants for the six months ended June 30, 2021. For the three and six months ended June 30, 2020, we had net general reserve increases of $1.3 million and $0.9 million, respectively. Additionally, we had net unfavorable adjustments of $8.8 million and $11.7 million, respectively, related to monthly revenue for tenants that we deemed non-creditworthy and for which we were recording revenue on a cash basis. Approximate future fixed contractual lease payments to be received under non-cancelable operating leases in effect as of June 30, 2021, assuming no new or renegotiated leases or option extensions on lease agreements, and including the impact of rent abatements, payment plans, and tenants who have been moved to the cash basis of accounting for revenue recognition purposes are as follows (in thousands): Year Amount Remaining 2021 $ 191,000 2022 363,187 2023 317,301 2024 263,155 2025 209,307 Thereafter 514,528 Total $ 1,858,478 In response to the COVID-19 pandemic, we executed payment plans with our tenants. As of June 30, 2021, we had $5.4 million of outstanding payment plans with our tenants, which represented approximately 2.1% of rental income during the six months ended June 30, 2021. During the three months ended June 30, 2021, we had recorded an immaterial amount of rent abatements related to 2021 missed charges. During the six months ended June 30, 2021, we recorded approximately $0.5 million of rent abatements related to missed 2021 charges, which represented less than 1% of rental income for the six months ended June 30, 2021. No single tenant comprised 7% or more of our aggregate annualized base rent (“ABR”) as of June 30, 2021. As of June 30, 2021, our wholly-owned real estate investments in Florida and California represented 12.6% and 10.1% of our ABR, respectively. As a result, the geographic concentration of our portfolio makes it particularly susceptible to adverse weather or economic events, including the impact of the COVID-19 pandemic, in the Florida and California real estate markets. Lessee —Lease assets and liabilities, grouped by balance sheet line where they are recorded, consisted of the following as of June 30, 2021 and December 31, 2020 (in thousands): Balance Sheet Information Balance Sheet Location June 30, 2021 December 31, 2020 ROU assets, net - operating leases Investment in Real Estate $ 4,003 $ 3,867 ROU assets, net - operating and finance leases Other Assets, Net 1,190 1,438 Operating lease liability Accounts Payable and Other Liabilities 5,619 5,731 Finance lease liability Debt Obligations, Net 127 164 |
Real Estate Activity
Real Estate Activity | 6 Months Ended |
Jun. 30, 2021 | |
Real Estate Investments, Net [Abstract] | |
Real Estate Activity | 4. REAL ESTATE ACTIVITY Property Sales —The following table summarizes our real estate disposition activity (dollars in thousands): Six Months Ended June 30, 2021 2020 Number of properties sold (1) 13 4 Number of outparcels sold (2)(3) 1 — Proceeds from sale of real estate $ 119,638 $ 25,778 Gain (loss) on sale of properties, net (4) 18,713 (1,436) (1) We retained an outparcel for one property sold during the six months ended June 30, 2021, and therefore the sale did not result in a reduction in our total property count. (2) One outparcel sold during the six months ended June 30, 2021 was the only remaining portion of one of our properties, and therefore the sale resulted in a reduction in our total property count. (3) In addition to the one outparcel sold during the six months ended June 30, 2021, a tenant at one of our properties exercised a bargain purchase option to acquire a parcel of land that we previously owned. This generated minimal proceeds for us. (4) The gain (loss) on sale of properties, net does not include miscellaneous write-off activity, which is also recorded in Gain (Loss) on Disposal of Property, Net on the consolidated statements of operations. Subsequent to June 30, 2021, we sold two properties for $16.0 million. Acquisitions —The following table summarizes our real estate acquisition activity (dollars in thousands): Six Months Ended June 30, 2021 2020 Number of properties acquired 2 — Number of outparcels acquired (1) 3 2 Total acquisition price $ 40,459 $ 4,343 (1) Outparcels acquired are adjacent to shopping centers that we own. The fair value and weighted-average useful life at acquisition for lease intangibles acquired are as follows (dollars in thousands, weighted-average useful life in years): Six Months Ended June 30, 2021 Fair Value Weighted-Average Useful Life In-place leases $ 4,155 7 Above-market leases 52 5 Below-market leases (1,652) 6 Property Held for Sale —As of June 30, 2021, two properties were classified as held for sale. As of December 31, 2020, no properties were classified as held for sale. Properties classified as held for sale as of June 30, 2021 were under contract to sell, with no substantive contingencies, and the prospective buyers had significant funds at risk as of the reporting date. Subsequent to June 30, 2021, both of our held for sale properties were sold. A summary of assets and liabilities for the properties held for sale as of June 30, 2021 is below (in thousands): June 30, 2021 ASSETS Total investment in real estate assets, net $ 13,807 Other assets, net 454 Total assets $ 14,261 LIABILITIES Below-market lease liabilities, net $ 379 Accounts payable and other liabilities 481 Total liabilities $ 860 |
Other Assets, Net
Other Assets, Net | 6 Months Ended |
Jun. 30, 2021 | |
Other Assets [Abstract] | |
Other Assets, Net | 5. OTHER ASSETS, NET The following is a summary of Other Assets, Net outstanding as of June 30, 2021 and December 31, 2020, excluding amounts related to assets held for sale (in thousands): June 30, 2021 December 31, 2020 Other assets, net: Deferred leasing commissions and costs $ 44,428 $ 41,664 Deferred financing expenses (1) 13,971 13,971 Office equipment, ROU assets, and other 22,699 21,578 Corporate intangible assets 6,804 6,804 Total depreciable and amortizable assets 87,902 84,017 Accumulated depreciation and amortization (50,014) (45,975) Net depreciable and amortizable assets 37,888 38,042 Accounts receivable, net (2) 37,151 46,893 Accounts receivable - affiliates 522 543 Deferred rent receivable, net (3) 35,760 32,298 Prepaid expenses and other 11,735 8,694 Investment in third parties 3,000 — Total other assets, net $ 126,056 $ 126,470 (1) Deferred financing expenses per the above table are related to our revolving line of credit and as such we have elected to classify them as an asset rather than as a contra-liability. (2) Net of $7.4 million and $8.9 million of general reserves for uncollectible amounts as of June 30, 2021 and December 31, 2020, respectively. Receivables that were removed for tenants considered to be non-creditworthy were $16.2 million and $22.8 million as of June 30, 2021 and December 31, 2020, respectively. (3) Net of $4.7 million and $4.4 million of adjustments as of June 30, 2021 and December 31, 2020, respectively, related to straight-line rent for tenants previously or currently considered to be non-creditworthy. |
Debt Obligations
Debt Obligations | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt Obligations | 6. DEBT OBLIGATIONS The following is a summary of the outstanding principal balances and interest rates, which include the effect of derivative financial instruments, for our debt obligations as of June 30, 2021 and December 31, 2020 (dollars in thousands): Interest Rate (1) June 30, 2021 December 31, 2020 Revolving credit facility LIBOR + 1.4% $ — $ — Term loans (2) 1.3% - 4.6% 1,622,500 1,622,500 Secured loan facilities 3.4% - 3.5% 395,000 395,000 Mortgages 3.5% - 7.2% 223,868 290,022 Finance lease liability 127 164 Assumed market debt adjustments, net (1,553) (1,543) Deferred financing expenses, net (11,710) (13,538) Total $ 2,228,232 $ 2,292,605 Weighted-average interest rate 2.9 % 3.1 % (1) Interest rates are as of June 30, 2021. (2) Our term loans carry an interest rate of LIBOR plus a spread. While most of the rates are fixed through the use of swaps, there is a portion of these loans that are not subject to a swap, and thus are still indexed to LIBOR. Debt Activity —On July 2, 2021, we entered into a new $980 million credit facility comprised of a $500 million senior unsecured revolving credit facility and two $240 million senior unsecured term loan tranches (the “Refinancing”). In connection with the Refinancing, we paid off the $472.5 million term loan due in 2025. The revolving credit facility will mature in January 2026, and the two senior unsecured term loan tranches will mature in November 2025 and July 2026, respectively. On July 20, 2021, we used proceeds from the underwritten IPO to retire our $375 million term loan maturing in 2022. Debt Allocation —The allocation of total debt between fixed-rate and variable-rate as well as between secured and unsecured, excluding market debt adjustments and deferred financing expenses, net, and including the effects of derivative financial instruments (see Notes 7 and 12) as of June 30, 2021 and December 31, 2020 is summarized below (in thousands): June 30, 2021 December 31, 2020 As to interest rate: Fixed-rate debt $ 1,548,995 $ 1,727,186 Variable-rate debt 692,500 580,500 Total $ 2,241,495 $ 2,307,686 As to collateralization: Unsecured debt $ 1,622,500 $ 1,622,500 Secured debt 618,995 685,186 Total $ 2,241,495 $ 2,307,686 |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 6 Months Ended |
Jun. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities | 7. 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 through the use of derivative financial instruments. Specifically, we enter into interest rate swaps 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 —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 changes in the fair value of derivatives designated, and that qualify, as cash flow hedges are recorded in AOCI and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the six months ended June 30, 2021 and 2020, such derivatives were used to hedge the variable cash flows associated with certain variable-rate debt. 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 $18.2 million will be reclassified from AOCI as an increase 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 June 30, 2021 and December 31, 2020 (dollars in thousands): June 30, 2021 December 31, 2020 Count 5 6 Notional amount $ 930,000 $ 1,042,000 Fixed LIBOR 1.3% - 2.9% 1.3% - 2.9% Maturity date 2022 - 2025 2021 - 2025 We assumed five hedges with a notional amount of $570 million as a part of a merger. The fair value of the five hedges assumed was $14.7 million and is amortized over the remaining lives of the respective hedges and recorded in Interest Expense, Net in the consolidated statements of operations. The net unamortized amount remaining as of June 30, 2021 and December 31, 2020 was $4.3 million and $5.0 million, respectively. The table below details the nature of the gain and loss recognized on interest rate derivatives designated as cash flow hedges in the consolidated statements of operations (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Amount of (loss) gain recognized in Other Comprehensive Income (Loss) $ (1,451) $ (6,614) $ 5,814 $ (51,530) Amount of loss reclassified from AOCI into interest expense 4,824 4,867 9,679 6,419 Credit-risk-related Contingent Features —We have agreements with our derivative counterparties that contain provisions where, if we 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 June 30, 2021, the fair value of our derivatives in a net liability position, which included accrued interest but excluded any adjustment for nonperformance risk related to these agreements, was approximately $39.9 million. As of June 30, 2021, we had not posted any collateral related to these agreements and were not in breach of any agreement provisions. If we had breached any of these provisions, we could have been required to settle our obligations under the agreements at their termination value of $39.9 million. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. COMMITMENTS AND CONTINGENCIES Litigation —We are involved in various claims and litigation matters arising in the ordinary course of business, some of which involve claims for damages. Many of these matters are covered by insurance, although they may nevertheless be subject to deductibles or retentions. Although the ultimate liability for these matters cannot be determined, based upon information currently available, we believe the resolution of such claims and litigation will not have a material adverse effect on our consolidated financial statements. Environmental Matters —In connection with the ownership and operation of real estate, we may potentially be liable for costs and damages related to environmental matters. In addition, we may own or acquire certain properties that are subject to environmental remediation. Depending on the nature of the environmental matter, the seller of the property, a tenant of the property, and/or another third party may be responsible for environmental remediation costs related to a property. Additionally, in connection with the purchase of certain properties, the respective sellers and/or tenants may agree to indemnify us against future remediation costs. We also carry environmental liability insurance on our properties that provides limited coverage for any remediation liability and/or pollution liability for third-party bodily injury and/or property damage claims for which we may be liable. We are not aware of any environmental matters which we believe are reasonably likely to have a material effect on our consolidated financial statements. Captive Insurance —Our captive insurance company, Silver Rock Insurance, Inc. (“Silver Rock”) provides general liability insurance, wind, reinsurance, and other coverage to us and our related-party joint ventures. We capitalize Silver Rock in accordance with applicable regulatory requirements. Silver Rock established annual premiums based on the past loss experience of the insured properties. An independent third party was engaged to perform an actuarial estimate of projected future claims, related deductibles, and projected future expenses necessary to fund associated risk management programs. Premiums paid to Silver Rock may be adjusted based on these estimates, and such premiums may be reimbursed by tenants pursuant to specific lease terms. As of June 30, 2021, we had four letters of credit outstanding totaling approximately $9.0 million to provide security for our obligations under Silver Rock’s insurance and reinsurance contracts. |
Equity
Equity | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Equity | 9. EQUITY General —The holders of common stock are entitled to one vote per share on all matters voted on by stockholders, including one vote per nominee in the election of the Board. Our charter does not provide for cumulative voting in the election of directors. Reverse Stock Split —On July 2, 2021, we effected a one-for-three reverse stock split. Concurrent with the reverse split, the Operating Partnership enacted a one-for-three reverse split of its outstanding OP units. Neither the number of authorized shares nor the par value of the common stock were impacted. As a result of the reverse split, every three shares of our common stock or OP units were automatically combined and converted into one issued and outstanding share of common stock or OP unit rounded to the nearest 1/100th share. The reverse stock split impacts all common stock and OP units proportionately and had no impact on any stockholder’s percentage ownership of common stock. In connection with the reverse stock split, the number of shares of common stock and OP units underlying the outstanding share-based awards was also proportionately reduced. All references to shares of common stock, number of OP units, and per share data for all periods presented in our consolidated financial statements and notes have been adjusted to reflect the reverse split on a retroactive basis. Class B Common Stock —Our stockholders approved Articles of Amendment that effected a change of each share of our common stock outstanding at the time the amendment became effective into one share of a newly-created class of Class B common stock (the “Recapitalization”). The Articles of Amendment became effective upon filing with, and acceptance by, the State Department of Assessments and Taxation of Maryland on July 2, 2021. Our Class B common stock is identical to our common stock, except that (i) we do not intend to list our Class B common stock on a national securities exchange, and (ii) upon the six month anniversary of the listing of our common stock for trading on a national securities exchange, or January 15, 2022 (or such earlier date or dates as may be approved by our Board in certain circumstances with respect to all or any portion of the outstanding shares of our Class B common stock), each share of our Class B common stock will automatically, and without any stockholder action, convert into one share of our listed common stock. Underwritten IPO —On July 19, 2021, we completed an underwritten IPO and issued 17.0 million shares of common stock at an offering price of $28.00 per share. We used a portion of the net proceeds to reduce our leverage and expect to use the remaining amount to fund external growth with property acquisitions and for other general corporate uses. As part of the underwritten IPO, underwriters were granted an option exercisable within 30 days from July 14, 2021 to purchase up to an additional 2.55 million shares of common stock at the underwritten IPO price, less underwriting discounts and commissions. On July 29, 2021, the underwriters exercised their option. Distributions —Distributions paid to stockholders and OP unit holders of record subsequent to June 30, 2021 were as follows (dollars in thousands, excluding per share amounts): Month Date of Record Monthly Distribution Rate Date Distribution Paid Cash Distribution June 2021 6/15/2021 $ 0.085 7/1/2021 $ 9,063 July 2021 7/15/2021 0.085 8/2/2021 9,065 On August 4, 2021, our Board authorized distributions to the stockholders of record at the close of business on August 16, 2021, equal to a monthly amount of $0.085 per share of common stock. OP unit holders will receive distributions at the same rate as common stockholders. Convertible Noncontrolling Interests —As of June 30, 2021 and December 31, 2020, we had approximately 13.4 million and 13.3 million outstanding OP units, respectively. Additionally, certain of our outstanding restricted share and performance share awards will result in the issuance of OP units upon vesting in future periods. Under the terms of the Fourth Amended and Restated Agreement of Limited Partnership (the “Partnership Agreement”), OP unit holders may elect to exchange their OP units. The Operating Partnership controls the form of the redemption, and may elect to exchange OP units either for shares of our common stock, provided that the OP units have been outstanding for at least one year, or for cash. As the form of redemption for OP units is within our control, the OP units outstanding as of June 30, 2021 and December 31, 2020 are classified as Noncontrolling Interests within permanent equity on our consolidated balance sheets. The table below is a summary of our OP unit activity for the three and six months ended June 30, 2021 and 2020 (dollars and shares in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 OP units converted into shares of our common stock (1) 28 17 28 56 Distributions paid on OP units (2) $ 3,460 $ — $ 6,779 $ 7,105 (1) OP units are converted into shares of our common stock at a 1:1 ratio. (2) Distributions paid on OP units are included in Distributions to Noncontrolling Interests on the consolidated statements of equity. Underwritten IPO Grants —In connection with our underwritten IPO, we issued a total of 0.5 million RSUs and restricted stock awards in the form of time-based stock compensation awards. The shares have a grant price of $28.00 per share and, with the exception of one individual whose award is subject to accelerated vesting provisions, 50% of the shares will vest after 18 months and the remaining 50% will vest after 36 months. Estimated Value per Share —Prior to our underwritten IPO, on April 29, 2021, our Board increased the estimated value per share (“EVPS”) of our common stock to $31.65 based substantially on the estimated market value of our portfolio of real estate properties and our third-party investment management business as of March 31, 2021. We engaged a third-party valuation firm to provide a calculation of the range in EVPS of our common stock as of March 31, 2021, which reflected certain balance sheet assets and liabilities as of that date. Previously, our EVPS was $26.25, based substantially on the estimated market value of our portfolio of real estate properties and our third-party investment management business as of March 31, 2020. Dividend Reinvestment Plan and Share Repurchase Program (“SRP”) —On August 4, 2021, as a result of our underwritten IPO, our Board approved the termination of the DRIP and the SRP. The DRIP has been suspended since April 2021. The SRP, which was limited to repurchases resulting from the death, qualifying disability, or the declaration of incompetence (“DDI”) of stockholders, has been suspended since March 2021, and the SRP for standard repurchases had been suspended since August 2019. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 10. 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 Net Income (Loss) Attributable to Stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted EPS reflects the potential dilution that could occur from share equivalent activity. EPS reflects earnings per common share prior to the Recapitalization. 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 have the potential to be exchanged for an equal number of shares of our common stock in accordance with the terms of the Partnership Agreement. The impact of these outstanding OP units on basic and diluted EPS has been calculated using the two-class method whereby earnings are allocated to the OP units based on dividends declared and the OP 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 during the three and six months ended June 30, 2021 and 2020. The following table provides a reconciliation of the numerator and denominator of the earnings per share calculations, restated for prior periods to display the effect of the reverse split, and excluding the effects of the Recapitalization as it occurred after June 30, 2021 (in thousands, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Numerator: Net income (loss) attributable to stockholders - basic $ 5,594 $ (5,588) $ 5,697 $ 4,181 Net income (loss) attributable to convertible OP units (1) 796 (825) 810 605 Net income (loss) - diluted $ 6,390 $ (6,413) $ 6,507 $ 4,786 Denominator: Weighted-average shares - basic 93,625 96,821 93,558 96,736 OP units (1) 13,381 14,248 13,368 14,273 Dilutive restricted stock awards 169 — 176 131 Adjusted weighted-average shares - diluted 107,175 111,069 107,102 111,140 Earnings per common share: Basic and diluted income (loss) per share $ 0.06 $ (0.06) $ 0.06 $ 0.04 (1) OP units include units that are convertible into common stock or cash, at the Operating Partnership’s option. The Operating Partnership income or loss attributable to these OP units, which is included as a component of Net (Income) Loss Attributable to Noncontrolling Interests on the consolidated statements of operations, has been added back in the numerator as these OP units were included in the denominator for all periods presented. Approximately 0.4 million time-based and 0.9 million performance-based unvested stock awards were outstanding as of June 30, 2020. These securities were anti-dilutive for the three months ended June 30, 2020. As a result, their impact was excluded from the weighted-average common shares used to calculate diluted EPS for that period. |
Revenue Recognition and Related
Revenue Recognition and Related Party Revenue | 6 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions [Abstract] | |
Revenue Recognition and Related Party Revenue | 11. REVENUE RECOGNITION AND RELATED PARTY TRANSACTIONS Revenue —We have entered into agreements with the Managed Funds related to certain advisory, management, and administrative services we provide to their real estate assets in exchange for fees and reimbursement of certain expenses. Summarized below are amounts included in Fees and Management Income. The revenue includes the fees and reimbursements earned by us from the Managed Funds, and other revenues that are not in the scope of ASC Topic 606, Revenue from Contracts with Customers, but that are included in this table for the purpose of disclosing all related party revenues (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Recurring fees (1) $ 1,103 $ 1,182 $ 2,228 $ 2,398 Transactional revenue and reimbursements (2) 461 960 929 1,390 Insurance premiums (3) 810 618 1,503 1,137 Total fees and management income $ 2,374 $ 2,760 $ 4,660 $ 4,925 (1) Recurring fees include asset management fees and property management fees. (2) Transactional revenue includes items such as leasing commissions, construction management fees, and acquisition fees. (3) Insurance premium income includes amounts for reinsurance from third parties not affiliated with us. Tax Protection Agreement —Through our Operating Partnership, we are currently party to a tax protection agreement (the “2017 TPA”) with certain partners that contributed property to our Operating Partnership on October 4, 2017, among them certain of our executive officers, including Jeffrey S. Edison, our Chairman and Chief Executive Officer, under which the Operating Partnership has agreed to indemnify such partners for tax liabilities that could accrue to them personally related to our potential disposition of certain properties within our portfolio. The 2017 TPA will expire on October 4, 2027. On July 19, 2021, we entered into an additional tax protection agreement (the “2021 TPA”) with certain of our executive officers, including Mr. Edison. The 2021 TPA carries a term of four years and will become effective upon the expiration of the 2017 TPA. As of June 30, 2021, the potential “make-whole amount” on the estimated aggregate amount of built-in gain subject to protection under the agreements is approximately $152.6 million. The protection provided under the terms of the 2021 TPA will expire in 2031. We have not recorded any liability related to the 2017 TPA or the 2021 TPA on our consolidated balance sheets for any periods presented, nor recognized any expense since the inception of the 2017 TPA, owing to the fact that any potential liability under the agreements is controlled by us and we will either (i) continue to own and operate the protected properties or (ii) be able to successfully complete Section 1031 Exchanges (unless there is a change in applicable law) or complete other tax-efficient transactions to avoid any liability under the agreements. Other Related Party Matters —We are the limited guarantor for up to $190 million, capped at $50 million in most instances, of debt for our NRP joint venture. As of June 30, 2021, the outstanding loan balance related to our NRP joint venture was $32.1 million. As of June 30, 2021, we were also the limited guarantor of a $175 million mortgage loan secured by GRP I properties. Our guaranty for both the NRP and GRP I debt is limited to being the non-recourse carveout guarantor and the environmental indemnitor. Further, in both cases, we are also party to an agreement with our institutional joint venture partners in which any potential liability under such guarantees will be apportioned between us and our applicable joint venture partner based on our respective ownership percentages in the applicable joint venture. We have no liability recorded on our consolidated balance sheets for either guaranty as of June 30, 2021 and December 31, 2020. Additionally, during 2021, we made a cash investment of $3.0 million into a third-party company in exchange for preferred shares of their stock. As part of the investment agreement, the third-party company committed to enter into leases at two of our properties. As of August 5, 2021, we had entered into two leases under the terms of the investment agreement, both of which carry a term of 10 years, over which period we expect to receive contractual rents of $2.6 million in total for both leases. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 12. FAIR VALUE MEASUREMENTS The following describes the methods we use to estimate the fair value of our financial and nonfinancial assets and liabilities: Cash and Cash Equivalents, Restricted Cash, Accounts Receivable, and Accounts Payable —We consider the carrying values of these financial instruments to approximate fair value because of the short period of time between origination of the instruments and their expected realization. Real Estate Investments —The purchase prices of the investment properties, including related lease intangible assets and liabilities, were allocated at estimated fair value based on Level 3 inputs, such as discount rates, capitalization rates, comparable sales, replacement costs, income and expense growth rates, and current market rents and allowances as determined by management. Debt Obligations —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 rates used approximate 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 June 30, 2021 and December 31, 2020 (in thousands): June 30, 2021 December 31, 2020 Recorded Principal Balance (1) Fair Value Recorded Principal Balance (1) Fair Value Term loans $ 1,612,031 $ 1,631,088 $ 1,610,204 $ 1,621,902 Secured portfolio loan facilities 391,371 411,209 391,131 404,715 Mortgages (2) 224,830 234,766 291,270 303,647 Total $ 2,228,232 $ 2,277,063 $ 2,292,605 $ 2,330,264 (1) Recorded principal balances include net deferred financing expenses of $11.7 million and $13.5 million as of June 30, 2021 and December 31, 2020, respectively. Recorded principal balances also include assumed market debt adjustments of $1.6 million and $1.5 million as of June 30, 2021 and December 31, 2020, respectively. We have recorded deferred financing expenses related to our revolving credit facility, which are not included in these balances, in Other Assets, Net on our consolidated balance sheets. (2) Our finance lease liability is included in the mortgages line item, as presented . Recurring and Nonrecurring Fair Value Measurements —Our earn-out liability and interest rate swaps are measured and recognized at fair value on a recurring basis, while certain real estate assets and liabilities are measured and recognized at fair value as needed. Fair value measurements that occurred as of and during the six months ended June 30, 2021 and the year ended December 31, 2020, were as follows (in thousands): June 30, 2021 December 31, 2020 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Recurring Derivative liabilities (1) $ — $ (39,929) $ — $ — $ (54,759) $ — Earn-out liability — — (40,000) — — (22,000) Nonrecurring Impaired real estate assets, net (2) $ — $ 22,850 $ — $ — $ 19,350 $ — Impaired corporate ROU asset, net — — — — 537 — (1) We record derivative liabilities in Derivative Liabilities on our consolidated balance sheets. (2) The carrying value of impaired real estate assets may have subsequently increased or decreased after the measurement date due to capital improvements, depreciation, or sale. Derivative Instruments— As of June 30, 2021 and December 31, 2020, we had interest rate swaps that fixed LIBOR on portions of our unsecured term loan facilities. All interest rate swap agreements are measured at fair value on a recurring basis. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. To comply with the provisions of ASC Topic 820, Fair Value Measurement , we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. 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 June 30, 2021 and December 31, 2020, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions 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. Earn-out —As part of our acquisition of PELP in 2017, an earn-out structure was established which gave PELP the opportunity to earn additional OP units based upon the potential achievement of certain performance targets subsequent to the acquisition. After the expiration of certain provisions in 2019, PELP is now eligible to earn a minimum of 1.0 million and a maximum of approximately 1.7 million OP units as contingent consideration based upon the timing and valuation of a liquidity event for PECO. Certain of these performance targets are tied to the post-underwritten IPO trading price of our common stock. The number of OP units awarded will vary based on the highest volume weighted average price per share of our common stock over any 30 consecutive trading day period during the 180 days following the underwritten IPO commencement (the “liquidity event price per share”): • if the liquidity event price per share is greater than or equal to $33.60, PELP will receive approximately 1.7 million OP units; • if the liquidity event price per share is less than $33.60 but greater than or equal to $26.40, PELP will receive a number of OP units equal to (i) 1.0 million plus (ii) the product of (A) approximately 0.7 million and (B) the quotient obtained by dividing the liquidity event price per share in excess of $26.40 by $7.20; or • if the liquidity event price per share is less than $26.40, PELP will receive 1.0 million OP units. Prior to the second quarter of 2021, we estimated the fair value of the earn-out liability on a quarterly basis using the Monte Carlo method. As of June 30, 2021, our underwritten IPO process had commenced and thus the only remaining variable for calculating final amounts to be paid under the earn-out agreement was the liquidity event price per share. Therefore, we estimated the fair value of the liability related to the earn-out using a probability-weighted model to estimate the liquidity event price per share. In calculating the fair value of this liability as of June 30, 2021, we have determined that 1.0 million OP units have been earned and the most likely range of potential outcomes includes a possibility of no additional OP units issued as well as up to a maximum of approximately 0.667 million units being issued. For the three months ended June 30, 2021, we recorded expense of $2.0 million related to the change in fair value of the earn-out liability. There was no change to the fair value of our earn-out liability for the three months ended June 30, 2020. We recorded expense of $18.0 million and income of $10.0 million, respectively, for the six months ended June 30, 2021 and June 30, 2020 related to changes in the fair value of the earn-out liability. The increase in the fair value of the liability as of June 30, 2021 was attributable to the commencement of our underwritten IPO as well as improved market conditions in 2021. The change in fair value for each period has been recognized in Other (Expense) Income, Net in the consolidated statements of operations. Real Estate Asset Impairment —Our real estate assets are measured and recognized at fair value, less costs to sell for held-for-sale properties, on a nonrecurring basis dependent upon when we determine an impairment has occurred. During the three and six months ended June 30, 2021, we impaired assets that were under contract at a disposition price that was less than carrying value, or that had other operational impairment indicators. The valuation technique used for the fair value of all impaired real estate assets was the expected net sales proceeds, which we consider to be a Level 2 input in the fair value hierarchy. There were no impairment charges recorded during the three and six months ended June 30, 2020. On a quarterly basis, we employ a multi-step approach to assess our real estate assets for possible impairment and record any impairment charges identified. The first step is the identification of potential triggering events, such as significant decreases in occupancy or the presence of large dark or vacant spaces. If we observe any of these indicators for a shopping center, we then perform an additional screen test consisting of a years-to-recover analysis to determine if we will recover the net carrying value of the property over its remaining economic life based upon net operating income (“NOI”) as forecasted for the current year. In the event that the results of this first step indicate a triggering event for a center, we proceed to the second step, utilizing an undiscounted cash flow model for the center to identify potential impairment. If the undiscounted cash flows are less than the net book value of the center as of the balance sheet date, we proceed to the third step. In performing the third step, we utilize market data such as capitalization rates and sales price per square foot on comparable recent real estate transactions to estimate fair value of the real estate assets. We also utilize expected net sales proceeds to estimate the fair value of any centers that are actively being marketed for sale. If the estimated fair value of the property is less than the recorded net book value at the balance sheet date, we record an impairment charge. In addition to these procedures, we also review undeveloped or unimproved land parcels that we own for evidence of impairment and record any impairment charges as necessary. Primary impairment triggers for these land parcels are changes to our plans or intentions with regards to such properties, or planned dispositions at prices that are less than the current carrying values. Our quarterly impairment procedures have not been altered by the COVID-19 pandemic, as we believe key impairment indicators such as temporary store closings and large dark or vacant spaces will continue to be identified in our review. We have utilized forecasts that incorporate estimated decreases in NOI and cash flows as a result of the COVID-19 pandemic in performing our review procedures for the three and six months ended June 30, 2021 and 2020. However, it is possible that we could experience unanticipated changes in assumptions that are employed in our impairment review which could impact our cash flows and fair value conclusions. Such unanticipated changes relative to our expectations may include but are not limited to: increases or decreases in the duration or permanence of tenant closures, increases or decreases in collectibility reserves and write-offs, additional capital required to fill vacancies, extended lease-up periods, future closings of large tenants, changes in macroeconomic assumptions such as rate of inflation and capitalization rates, and changes to the estimated timing of disposition of the properties under review. We recorded the following expense upon impairment of real estate assets (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Impairment of real estate assets $ 1,056 $ — $ 6,056 $ — |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. SUBSEQUENT EVENTS In preparing the condensed and unaudited consolidated financial statements, we have evaluated subsequent events through the filing of this report on Form 10-Q for recognition and/or disclosure purposes. Based on this evaluation, we have determined that there were no events that have occurred that require recognition or disclosure, other than certain events and transactions that have been disclosed elsewhere in these consolidated financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation —The accompanying condensed 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 our audited consolidated financial statements for the year ended December 31, 2020, which are included in our 2020 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 and six months ended June 30, 2021 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. |
Income Tax | Income Taxes —Our consolidated financial statements include the operations of wholly-owned subsidiaries that have jointly elected to be treated as Taxable REIT Subsidiaries and are subject to U.S. federal, state, and local income taxes at regular corporate tax rates. We recognized an insignificant amount of federal, state, and local income tax expense for the three and six months ended June 30, 2021 and 2020, and we retain a full valuation allowance for our deferred tax asset. All income tax amounts are included in Other (Expense) Income, Net on our consolidated statements of operations. |
Newly Adopted and Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements —On January 7, 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-01 to amend the scope of the guidance in ASU 2020-04 on facilitation of the effects of reference rate reform on financial reporting. Specifically, the amendments in ASU 2021-01 clarify that certain optional expedients and exceptions in Accounting Standards Codification (“ASC”) Topic 848, Reference Rate Reform |
Reclassifications | Reclassifications —The following line items on our consolidated statement of cash flows for the six months ended June 30, 2020 were reclassified to conform to current year presentation: • Return on Investment in Unconsolidated Joint Ventures was listed on a separate line from Other Assets, Net; and • Net Change in Credit Facility was separated into two lines, Proceeds from Revolving Credit Facility and Payments on Revolving Credit Facility. |
Initial Public Offering Costs Policy | Underwritten IPO Costs —Deferred underwritten IPO costs are currently recorded as Other Assets, Net on our consolidated balance sheets as of June 30, 2021, and will be offset against underwritten IPO proceeds and reclassified as a component of APIC on the consolidated balance sheets upon the consummation of the offering. Costs incurred that were related to our underwritten IPO activities but were not directly related to our equity raise were not capitalized and are included as transaction costs, currently in Other (Expense) Income, Net on our consolidated statements of operations and comprehensive income (loss) (“consolidated statements of operations”). |
Earnings Per Share Earnings Per
Earnings Per Share Earnings Per Share (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
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 Net Income (Loss) Attributable to Stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted EPS reflects the potential dilution that could occur from share equivalent activity. EPS reflects earnings per common share prior to the Recapitalization. |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Leases [Abstract] | |
Lessor, Operating Leases | The majority of our leases are largely similar in that the leased asset is retail space within our properties, and the lease agreements generally contain similar provisions and features, without substantial variations. All of our leases are currently classified as operating leases. Lease income related to our operating leases was as follows for the three and six months ended June 30, 2021 and 2020 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Rental income related to fixed lease payments (1) $ 94,485 $ 95,036 $ 189,451 $ 191,063 Rental income related to variable lease payments (1)(2) 27,454 30,659 58,855 62,497 Straight-line rent amortization (3) 2,893 (978) 4,262 1,331 Amortization of lease assets 877 786 1,704 1,565 Lease buyout income 1,781 214 2,578 308 Adjustments for collectibility (4) 2,845 (10,063) 1,108 (12,644) Total rental income $ 130,335 $ 115,654 $ 257,958 $ 244,120 (1) Includes rental income related to lease payments before assessing for collectibility. (2) Variable payments are primarily related to tenant recovery income. (3) Includes favorable revenue adjustments to straight-line rent for tenants previously considered non-creditworthy during the three months ended June 30, 2021 of $0.4 million, and unfavorable adjustments for non-creditworthy tenants during the six months ended June 30, 2021 of $0.4 million. Includes unfavorable adjustments for the three and six months ended June 30, 2020 of $3.2 million, and $3.1 million, respectively. (4) Includes general reserves as well as adjustments for tenants not considered creditworthy and thus for which we are recording revenue on a cash basis, per ASC Topic 842, Leases (“ASC 842”). |
Lessor - Operating Lease, Payments to be Received, Maturity | Approximate future fixed contractual lease payments to be received under non-cancelable operating leases in effect as of June 30, 2021, assuming no new or renegotiated leases or option extensions on lease agreements, and including the impact of rent abatements, payment plans, and tenants who have been moved to the cash basis of accounting for revenue recognition purposes are as follows (in thousands): Year Amount Remaining 2021 $ 191,000 2022 363,187 2023 317,301 2024 263,155 2025 209,307 Thereafter 514,528 Total $ 1,858,478 |
Schedule of Leases | Lease assets and liabilities, grouped by balance sheet line where they are recorded, consisted of the following as of June 30, 2021 and December 31, 2020 (in thousands): Balance Sheet Information Balance Sheet Location June 30, 2021 December 31, 2020 ROU assets, net - operating leases Investment in Real Estate $ 4,003 $ 3,867 ROU assets, net - operating and finance leases Other Assets, Net 1,190 1,438 Operating lease liability Accounts Payable and Other Liabilities 5,619 5,731 Finance lease liability Debt Obligations, Net 127 164 |
Real Estate Activity (Tables)
Real Estate Activity (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Real Estate Investments, Net [Abstract] | |
Schedule of Real Estate Disposal | The following table summarizes our real estate disposition activity (dollars in thousands): Six Months Ended June 30, 2021 2020 Number of properties sold (1) 13 4 Number of outparcels sold (2)(3) 1 — Proceeds from sale of real estate $ 119,638 $ 25,778 Gain (loss) on sale of properties, net (4) 18,713 (1,436) (1) We retained an outparcel for one property sold during the six months ended June 30, 2021, and therefore the sale did not result in a reduction in our total property count. (2) One outparcel sold during the six months ended June 30, 2021 was the only remaining portion of one of our properties, and therefore the sale resulted in a reduction in our total property count. (3) In addition to the one outparcel sold during the six months ended June 30, 2021, a tenant at one of our properties exercised a bargain purchase option to acquire a parcel of land that we previously owned. This generated minimal proceeds for us. (4) The gain (loss) on sale of properties, net does not include miscellaneous write-off activity, which is also recorded in Gain (Loss) on Disposal of Property, Net on the consolidated statements of operations. |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes our real estate acquisition activity (dollars in thousands): Six Months Ended June 30, 2021 2020 Number of properties acquired 2 — Number of outparcels acquired (1) 3 2 Total acquisition price $ 40,459 $ 4,343 |
Schedule of Acquired Intangible Leases | The fair value and weighted-average useful life at acquisition for lease intangibles acquired are as follows (dollars in thousands, weighted-average useful life in years): Six Months Ended June 30, 2021 Fair Value Weighted-Average Useful Life In-place leases $ 4,155 7 Above-market leases 52 5 Below-market leases (1,652) 6 |
Schedule of Real Estate Held-for-sale | A summary of assets and liabilities for the properties held for sale as of June 30, 2021 is below (in thousands): June 30, 2021 ASSETS Total investment in real estate assets, net $ 13,807 Other assets, net 454 Total assets $ 14,261 LIABILITIES Below-market lease liabilities, net $ 379 Accounts payable and other liabilities 481 Total liabilities $ 860 |
Other Assets, Net (Tables)
Other Assets, Net (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Other Assets [Abstract] | |
Schedule of Other Assets | The following is a summary of Other Assets, Net outstanding as of June 30, 2021 and December 31, 2020, excluding amounts related to assets held for sale (in thousands): June 30, 2021 December 31, 2020 Other assets, net: Deferred leasing commissions and costs $ 44,428 $ 41,664 Deferred financing expenses (1) 13,971 13,971 Office equipment, ROU assets, and other 22,699 21,578 Corporate intangible assets 6,804 6,804 Total depreciable and amortizable assets 87,902 84,017 Accumulated depreciation and amortization (50,014) (45,975) Net depreciable and amortizable assets 37,888 38,042 Accounts receivable, net (2) 37,151 46,893 Accounts receivable - affiliates 522 543 Deferred rent receivable, net (3) 35,760 32,298 Prepaid expenses and other 11,735 8,694 Investment in third parties 3,000 — Total other assets, net $ 126,056 $ 126,470 (1) Deferred financing expenses per the above table are related to our revolving line of credit and as such we have elected to classify them as an asset rather than as a contra-liability. (2) Net of $7.4 million and $8.9 million of general reserves for uncollectible amounts as of June 30, 2021 and December 31, 2020, respectively. Receivables that were removed for tenants considered to be non-creditworthy were $16.2 million and $22.8 million as of June 30, 2021 and December 31, 2020, respectively. (3) Net of $4.7 million and $4.4 million of adjustments as of June 30, 2021 and December 31, 2020, respectively, related to straight-line rent for tenants previously or currently considered to be non-creditworthy. |
Debt Obligations (Tables)
Debt Obligations (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Obligations | The following is a summary of the outstanding principal balances and interest rates, which include the effect of derivative financial instruments, for our debt obligations as of June 30, 2021 and December 31, 2020 (dollars in thousands): Interest Rate (1) June 30, 2021 December 31, 2020 Revolving credit facility LIBOR + 1.4% $ — $ — Term loans (2) 1.3% - 4.6% 1,622,500 1,622,500 Secured loan facilities 3.4% - 3.5% 395,000 395,000 Mortgages 3.5% - 7.2% 223,868 290,022 Finance lease liability 127 164 Assumed market debt adjustments, net (1,553) (1,543) Deferred financing expenses, net (11,710) (13,538) Total $ 2,228,232 $ 2,292,605 Weighted-average interest rate 2.9 % 3.1 % (1) Interest rates are as of June 30, 2021. |
Schedule of Long-term Debt Instruments, Alternative | The allocation of total debt between fixed-rate and variable-rate as well as between secured and unsecured, excluding market debt adjustments and deferred financing expenses, net, and including the effects of derivative financial instruments (see Notes 7 and 12) as of June 30, 2021 and December 31, 2020 is summarized below (in thousands): June 30, 2021 December 31, 2020 As to interest rate: Fixed-rate debt $ 1,548,995 $ 1,727,186 Variable-rate debt 692,500 580,500 Total $ 2,241,495 $ 2,307,686 As to collateralization: Unsecured debt $ 1,622,500 $ 1,622,500 Secured debt 618,995 685,186 Total $ 2,241,495 $ 2,307,686 |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activities (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
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 June 30, 2021 and December 31, 2020 (dollars in thousands): June 30, 2021 December 31, 2020 Count 5 6 Notional amount $ 930,000 $ 1,042,000 Fixed LIBOR 1.3% - 2.9% 1.3% - 2.9% Maturity date 2022 - 2025 2021 - 2025 |
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) | The table below details the nature of the gain and loss recognized on interest rate derivatives designated as cash flow hedges in the consolidated statements of operations (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Amount of (loss) gain recognized in Other Comprehensive Income (Loss) $ (1,451) $ (6,614) $ 5,814 $ (51,530) Amount of loss reclassified from AOCI into interest expense 4,824 4,867 9,679 6,419 |
Equity (Tables)
Equity (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Schedule of Dividends Payable | Distributions —Distributions paid to stockholders and OP unit holders of record subsequent to June 30, 2021 were as follows (dollars in thousands, excluding per share amounts): Month Date of Record Monthly Distribution Rate Date Distribution Paid Cash Distribution June 2021 6/15/2021 $ 0.085 7/1/2021 $ 9,063 July 2021 7/15/2021 0.085 8/2/2021 9,065 |
Schedule of Noncontrolling Interests, Conversions to Common Stock and Distributions | The table below is a summary of our OP unit activity for the three and six months ended June 30, 2021 and 2020 (dollars and shares in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 OP units converted into shares of our common stock (1) 28 17 28 56 Distributions paid on OP units (2) $ 3,460 $ — $ 6,779 $ 7,105 (1) OP units are converted into shares of our common stock at a 1:1 ratio. (2) Distributions paid on OP units are included in Distributions to Noncontrolling Interests on the consolidated statements of equity. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
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 share calculations, restated for prior periods to display the effect of the reverse split, and excluding the effects of the Recapitalization as it occurred after June 30, 2021 (in thousands, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Numerator: Net income (loss) attributable to stockholders - basic $ 5,594 $ (5,588) $ 5,697 $ 4,181 Net income (loss) attributable to convertible OP units (1) 796 (825) 810 605 Net income (loss) - diluted $ 6,390 $ (6,413) $ 6,507 $ 4,786 Denominator: Weighted-average shares - basic 93,625 96,821 93,558 96,736 OP units (1) 13,381 14,248 13,368 14,273 Dilutive restricted stock awards 169 — 176 131 Adjusted weighted-average shares - diluted 107,175 111,069 107,102 111,140 Earnings per common share: Basic and diluted income (loss) per share $ 0.06 $ (0.06) $ 0.06 $ 0.04 (1) OP units include units that are convertible into common stock or cash, at the Operating Partnership’s option. The Operating Partnership income or loss attributable to these OP units, which is included as a component of Net (Income) Loss Attributable to Noncontrolling Interests on the consolidated statements of operations, has been added back in the numerator as these OP units were included in the denominator for all periods presented. |
Revenue Recognition and Relat_2
Revenue Recognition and Related Party Revenue (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions [Abstract] | |
Fees Earned By and Expenses Reimbursable from Managed Funds | Summarized below are amounts included in Fees and Management Income. The revenue includes the fees and reimbursements earned by us from the Managed Funds, and other revenues that are not in the scope of ASC Topic 606, Revenue from Contracts with Customers, but that are included in this table for the purpose of disclosing all related party revenues (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Recurring fees (1) $ 1,103 $ 1,182 $ 2,228 $ 2,398 Transactional revenue and reimbursements (2) 461 960 929 1,390 Insurance premiums (3) 810 618 1,503 1,137 Total fees and management income $ 2,374 $ 2,760 $ 4,660 $ 4,925 (1) Recurring fees include asset management fees and property management fees. (2) Transactional revenue includes items such as leasing commissions, construction management fees, and acquisition fees. (3) Insurance premium income includes amounts for reinsurance from third parties not affiliated with us. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Inputs, Liabilities, Quantitative Information | The following is a summary of borrowings as of June 30, 2021 and December 31, 2020 (in thousands): June 30, 2021 December 31, 2020 Recorded Principal Balance (1) Fair Value Recorded Principal Balance (1) Fair Value Term loans $ 1,612,031 $ 1,631,088 $ 1,610,204 $ 1,621,902 Secured portfolio loan facilities 391,371 411,209 391,131 404,715 Mortgages (2) 224,830 234,766 291,270 303,647 Total $ 2,228,232 $ 2,277,063 $ 2,292,605 $ 2,330,264 (1) Recorded principal balances include net deferred financing expenses of $11.7 million and $13.5 million as of June 30, 2021 and December 31, 2020, respectively. Recorded principal balances also include assumed market debt adjustments of $1.6 million and $1.5 million as of June 30, 2021 and December 31, 2020, respectively. We have recorded deferred financing expenses related to our revolving credit facility, which are not included in these balances, in Other Assets, Net on our consolidated balance sheets. (2) Our finance lease liability is included in the mortgages line item, as presented |
Fair Value, Liabilities Measured on Recurring Basis | Fair value measurements that occurred as of and during the six months ended June 30, 2021 and the year ended December 31, 2020, were as follows (in thousands): June 30, 2021 December 31, 2020 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Recurring Derivative liabilities (1) $ — $ (39,929) $ — $ — $ (54,759) $ — Earn-out liability — — (40,000) — — (22,000) Nonrecurring Impaired real estate assets, net (2) $ — $ 22,850 $ — $ — $ 19,350 $ — Impaired corporate ROU asset, net — — — — 537 — (1) We record derivative liabilities in Derivative Liabilities on our consolidated balance sheets. (2) The carrying value of impaired real estate assets may have subsequently increased or decreased after the measurement date due to capital improvements, depreciation, or sale. |
Fair Value Measurements, Nonrecurring | We recorded the following expense upon impairment of real estate assets (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Impairment of real estate assets $ 1,056 $ — $ 6,056 $ — |
Organization (Details)
Organization (Details) $ / shares in Units, shares in Thousands, $ in Millions | Jul. 19, 2021$ / sharesshares | Aug. 02, 2021USD ($) | Jun. 30, 2021property$ / shares | Dec. 31, 2020$ / shares |
Schedule of Equity Method Investments [Line Items] | ||||
Number of real estate properties | property | 272 | |||
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 | ||
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 | ||
Subsequent Event | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Stock Issued During Period, Shares, New Issues | shares | 17,000 | |||
Common Stock, Par or Stated Value Per Share | $ 0.01 | |||
Initial Public Offering, Over-Allotment, Gross Proceeds | $ | $ 71.4 | |||
Stock Issued During Period, Shares, New Issues | shares | 17,000 | |||
Common Stock, Par or Stated Value Per Share | $ 0.01 | |||
Sale of Stock, Price Per Share | $ 28 | |||
Initial Public Offering, Over-Allotment, Gross Proceeds | $ | $ 71.4 | |||
Subsequent Event | Over-Allotment Option | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Maximum Additional Shares Granted to Underwriters | shares | 2,550 | |||
Maximum Additional Shares Granted to Underwriters | shares | 2,550 | |||
Necessity Retail Partners | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of real estate properties | 2 | |||
Equity method investment, ownership percentage | 20.00% | |||
Grocery Retail Partners I | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of real estate properties | 20 | |||
Equity method investment, ownership percentage | 14.00% |
Leases Lessor (Details)
Leases Lessor (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Operating Lease, Lease Income [Abstract] | ||||
Rental income related to fixed lease payments | $ 94,485 | $ 95,036 | $ 189,451 | $ 191,063 |
Rental income related to variable lease payments | 27,454 | 30,659 | 58,855 | 62,497 |
Straight Line Rent Adjustments | 2,893 | (978) | 4,262 | 1,331 |
Amortization of lease assets | 877 | 786 | 1,704 | 1,565 |
Lease buyout income | 1,781 | 214 | 2,578 | 308 |
Adjustments for collectability | (2,845) | 10,063 | (1,108) | 12,644 |
Total rental income | 130,335 | 115,654 | 257,958 | 244,120 |
Adjustments for straight line rent, non-creditworthy | (400) | (3,200) | 400 | (3,100) |
Adjustments for Collectibility, General Reserves | (1,900) | (1,300) | (4,100) | (900) |
Adjustments for Collectibillity, Collections Received, Non-creditworthy | 1,000 | $ 8,800 | 3,000 | $ 11,700 |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||
Remaining 2021 | 191,000 | 191,000 | ||
2022 | 363,187 | 363,187 | ||
2023 | 317,301 | 317,301 | ||
2024 | 263,155 | 263,155 | ||
2025 | 209,307 | 209,307 | ||
Thereafter | 514,528 | 514,528 | ||
Total | 1,858,478 | 1,858,478 | ||
Concentration Risk [Line Items] | ||||
Lease Income Deferred | 5,400 | 5,400 | ||
Lease Rental Income Abatement | $ 500 | |||
Percentage Lease Revenue Subject to Payment Plan | 2.10% | |||
Percentage Lease Income Subject to Rent Abatement | 1.00% | |||
Lease Income Deferred | $ 5,400 | $ 5,400 | ||
Lease Rental Income Abatement | $ 500 | |||
Percentage Lease Revenue Subject to Payment Plan | 2.10% | |||
Percentage Lease Income Subject to Rent Abatement | 1.00% | |||
Florida | Geographic Concentration Risk | Revenue Benchmark | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 12.60% | |||
CALIFORNIA | Geographic Concentration Risk | Revenue Benchmark | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 10.10% |
Leases Lessee (Details)
Leases Lessee (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Assets and Liabilities, Lessee [Abstract] | ||
ROU assets, net - operating leases | $ 4,003 | $ 3,867 |
ROU assets, net - operating and finance leases | 1,190 | 1,438 |
Operating lease, liability | 5,619 | 5,731 |
Finance lease, liability | $ 127 | $ 164 |
Real Estate Activity Dispositio
Real Estate Activity Dispositions (Details) $ in Thousands | 1 Months Ended | 6 Months Ended | |
Aug. 06, 2021USD ($) | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of real estate dispositions | 13 | 4 | |
Number of Land Parcel Sold | 1 | 0 | |
Proceeds from Sale of Real Estate | $ 119,638 | $ 25,778 | |
Gains (Losses) on Sales of Investment Real Estate | $ 18,713 | $ (1,436) | |
Subsequent Event | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of real estate dispositions | 2 | ||
Proceeds from Sale of Real Estate | $ 16,000 |
Real Estate Activity Acquisitio
Real Estate Activity Acquisitions (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | |
Payments to Acquire Real Estate [Abstract] | ||
Number of real estate acquisitions | 2 | 0 |
Number of Land Parcels Purchased | 3 | 2 |
Payments to Acquire Real Estate | $ 40,459 | $ 4,343 |
Real Estate Activity Acquisit_2
Real Estate Activity Acquisition of Intangible Leases (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2021USD ($) | |
In-place leases | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | $ 4,155 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 7 years |
Above-market leases | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | $ 52 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 5 years |
Below-market leases | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 6 years |
Below Market Lease, Acquired | $ (1,652) |
Real Estate Activity Property H
Real Estate Activity Property Held-for-Sale (Details) $ in Thousands | Jun. 30, 2021USD ($)property | Dec. 31, 2020USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Disposal Group, Including Discontinued Operation, Liabilities | $ 860 | $ 0 |
Number of real estate properties | property | 272 | |
Disposal Group, Held-for-sale, Not Discontinued Operations | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Disposal Group, Including Discontinued Operation, Real Estate | $ 13,807 | |
Disposal Group, Including Discontinued Operation, Other Assets | 454 | |
Total assets - held for sale | 14,261 | |
Disposal Group, Including Discontinued Operation, Below Market Leases | 379 | |
Disposal Group, Including Discontinued Operation, Accounts Payable and Accrued Liabilities | 481 | |
Disposal Group, Including Discontinued Operation, Liabilities | $ 860 | |
Number of real estate properties | property | 2 |
Other Assets, Net (Details)
Other Assets, Net (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Other Assets [Abstract] | ||
Deferred leasing commissions and costs | $ 44,428 | $ 41,664 |
Deferred financing expenses(1) | 13,971 | 13,971 |
Office equipment, ROU assets, and other | 22,699 | 21,578 |
Corporate intangible assets | 6,804 | 6,804 |
Total depreciable and amortizable assets | 87,902 | 84,017 |
Accumulated depreciation and amortization | (50,014) | (45,975) |
Net depreciable and amortizable assets | 37,888 | 38,042 |
Accounts Receivable, net(2) | 37,151 | 46,893 |
Accounts receivable - affiliates | 522 | 543 |
Deferred rent receivable, net(3) | 35,760 | 32,298 |
Prepaid expenses and other | 11,735 | 8,694 |
Equity Method Investments | 3,000 | 0 |
Total other assets, net | 126,056 | 126,470 |
Uncollectable lease receivables, general reserves | 7,400 | 8,900 |
Lease billings, nonaccrual basis | 16,200 | 22,800 |
Uncollectible Lease Receivables - Straight Line Rent | $ 4,700 | $ 4,400 |
Debt Obligations (Details)
Debt Obligations (Details) - USD ($) $ in Thousands | Jul. 20, 2021 | Jun. 30, 2021 | Jul. 02, 2021 | Dec. 31, 2020 | Jun. 30, 2020 |
Debt Instrument [Line Items] | |||||
Outstanding principal balance | $ 2,241,495 | $ 2,307,686 | |||
Finance lease, liability | 127 | 164 | |||
Assumed market debt adjustments, net | (1,553) | (1,543) | $ (1,500) | ||
Deferred financing costs, net | (11,710) | (13,538) | $ (13,500) | ||
Debt obligations, net | $ 2,228,232 | $ 2,292,605 | |||
Weighted-average interest rate on debt | 2.90% | 3.10% | |||
Unsecured debt | $ 1,622,500 | $ 1,622,500 | |||
Unsecured debt | $ 1,622,500 | 1,622,500 | |||
Subsequent Event | |||||
Debt Instrument [Line Items] | |||||
Outstanding principal balance | $ 980,000 | ||||
Revolving Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Line of credit variable rate base | LIBOR | ||||
LIne of credit - interest spread | 1.40% | ||||
Outstanding principal balance | $ 0 | 0 | |||
Revolving Credit Facility [Member] | Subsequent Event | |||||
Debt Instrument [Line Items] | |||||
Outstanding principal balance | 500,000 | ||||
Term Loans | |||||
Debt Instrument [Line Items] | |||||
Outstanding principal balance | $ 1,622,500 | 1,622,500 | |||
Term Loans | Maximum | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 4.60% | ||||
Term Loans | Minimum | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 1.30% | ||||
Secured Portfolio Loan Facilities | |||||
Debt Instrument [Line Items] | |||||
Outstanding principal balance | $ 395,000 | 395,000 | |||
Secured Portfolio Loan Facilities | Maximum | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 3.50% | ||||
Secured Portfolio Loan Facilities | Minimum | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 3.40% | ||||
Mortgages | |||||
Debt Instrument [Line Items] | |||||
Outstanding principal balance | $ 223,868 | 290,022 | |||
Debt obligations, net | $ 224,830 | $ 291,270 | |||
Mortgages | Maximum | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 7.20% | ||||
Mortgages | Minimum | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 3.50% | ||||
Term Loan Due 2025 | Subsequent Event | |||||
Debt Instrument [Line Items] | |||||
Payments for Loans | $ 472,500 | ||||
Term Loan Due 2022 | Subsequent Event | |||||
Debt Instrument [Line Items] | |||||
Payments for Loans | $ 375,000 | ||||
Term Loan Due November 2025 | Subsequent Event | |||||
Debt Instrument [Line Items] | |||||
Unsecured debt | 240,000 | ||||
Unsecured debt | 240,000 | ||||
Term Loan Due July 2026 | Subsequent Event | |||||
Debt Instrument [Line Items] | |||||
Unsecured debt | 240,000 | ||||
Unsecured debt | $ 240,000 |
Debt Obligations Debt Allocatio
Debt Obligations Debt Allocation (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Long-term Debt, by Type Alternative [Abstract] | ||
Fixed-rate debt | $ 1,548,995 | $ 1,727,186 |
Variable-rate debt | 692,500 | 580,500 |
Unsecured debt | 1,622,500 | 1,622,500 |
Secured debt | 618,995 | 685,186 |
Total | $ 2,241,495 | $ 2,307,686 |
Derivatives and Hedging Activ_3
Derivatives and Hedging Activities (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2021USD ($)Debt_Instrument | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($)Debt_Instrument | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($)Debt_Instrument | Nov. 16, 2018USD ($)numwords | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Amount of (loss) gain recognized in Other Comprehensive Income (Loss) | $ (1,451) | $ (6,614) | $ 5,814 | $ (51,530) | ||
Amount of loss reclassified from AOCI into interest expense | 4,824 | $ 4,867 | 9,679 | $ 6,419 | ||
Contingent credit-risk-related derivative liabilities, fair value | $ 39,900 | 39,900 | ||||
Interest Rate Swap | Designated as Hedging Instrument | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Derivative instruments, gain (loss) reclassification from OCI to income, estimated net amount to be transferred | $ 18,200 | |||||
Derivative, count | Debt_Instrument | 5 | 5 | 6 | |||
Derivative, notional amount | $ 930,000 | $ 930,000 | $ 1,042,000 | |||
Interest Rate Swap | Designated as Hedging Instrument | REIT II | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Derivative, count | numwords | 5 | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Assets | $ 14,700 | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Assets, Unamortized | $ 4,300 | $ 4,300 | $ 5,000 | |||
Interest Rate Swap | Designated as Hedging Instrument | Minimum | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Fixed LIBOR | 1.30% | 1.30% | 1.30% | |||
Interest Rate Swap | Designated as Hedging Instrument | Maximum | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Fixed LIBOR | 2.90% | 2.90% | 2.90% | |||
Interest Rate Swap | Not Designated as Hedging Instrument | REIT II | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Derivative, notional amount | $ 570,000 |
Commitments and Contingencies C
Commitments and Contingencies Collateralized letters of credit (Details) $ in Millions | Jun. 30, 2021USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Letters of Credit Outstanding, Amount | $ 9 |
Equity (Details)
Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 02, 2021 | Jul. 19, 2021 | Jul. 01, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Apr. 29, 2021 | Dec. 31, 2020 | Mar. 31, 2020 |
Equity, Class of Treasury Stock [Line Items] | ||||||||||
Common Stock, Dividends, Per Share, Declared | $ 0.255 | $ 0.510 | $ 0.503 | |||||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 28,000 | 17,000 | 28,000 | 56,000 | ||||||
OP units outstanding, shares | 13,400,000 | 13,400,000 | 13,300,000 | |||||||
Payments of Ordinary Dividends, Common Stock | $ 48,308 | $ 49,083 | ||||||||
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders | $ 3,460 | $ 0 | $ 6,779 | $ 7,105 | ||||||
Share price | $ 31.65 | $ 26.25 | ||||||||
Subsequent Event | ||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||
Sale of Stock, Price Per Share | $ 28 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted | 500,000 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 28 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted | 500,000 | |||||||||
Subsequent Event | Over-Allotment Option | ||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||
Maximum Additional Shares Granted to Underwriters | 2,550,000 | |||||||||
Dividend Declared [Member] | Subsequent Event | ||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||
Common Stock, Dividends, Per Share, Declared | $ 0.085 | $ 0.085 | ||||||||
Dividend Paid | Subsequent Event | ||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||
Payments of Ordinary Dividends, Common Stock | $ 9,065 | $ 9,063 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Numerator: | ||||
Net (loss) income attributable to stockholders - basic | $ 5,594 | $ (5,588) | $ 5,697 | $ 4,181 |
Net (loss) income attributable to convertible OP units | 796 | (825) | 810 | 605 |
Net loss - diluted | $ 6,390 | $ (6,413) | $ 6,507 | $ 4,786 |
Denominator: | ||||
Weighted-average shares - basic | 93,625 | 96,821 | 93,558 | 96,736 |
OP units | 13,381 | 14,248 | 13,368 | 14,273 |
Dilutive restricted stock awards | 169 | 0 | 176 | 131 |
Adjusted weighted-average shares - diluted | 107,175 | 111,069 | 107,102 | 111,140 |
Earnings per common share: | ||||
Basic and diluted | $ 0.06 | $ (0.06) | $ 0.06 | $ 0.04 |
Performance Shares | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 900 | |||
Share-based Payment Arrangement, Time-Based | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 400 |
Revenue Recognition and Relat_3
Revenue Recognition and Related Party Revenue Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | |||||
Fees and management income | $ 2,374 | $ 2,760 | $ 4,660 | $ 4,925 | |
Insurance premiums | 810 | 618 | 1,503 | 1,137 | |
Debt obligations, net | 2,228,232 | 2,228,232 | $ 2,292,605 | ||
Recurring Fees | Affiliated Entity | |||||
Related Party Transaction [Line Items] | |||||
Fees and management income | 1,103 | 1,182 | 2,228 | 2,398 | |
Transactional Revenue and Reimbursements | Affiliated Entity | |||||
Related Party Transaction [Line Items] | |||||
Fees and management income | $ 461 | $ 960 | $ 929 | $ 1,390 |
Revenue Recognition and Relat_4
Revenue Recognition and Related Party Revenue Other Related Party Matters (Details) - USD ($) $ in Thousands | Aug. 05, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Related Party Transaction [Line Items] | |||
Debt obligations, net | $ 2,228,232 | $ 2,292,605 | |
Equity Method Investments | 3,000 | $ 0 | |
Subsequent Event | |||
Related Party Transaction [Line Items] | |||
Related Party Transaction, Due from (to) Related Party | $ 2,600 | ||
Related Party Transaction, Terms and Manner of Settlement | 10 | ||
Loans and Leases Receivable, Related Parties, Description | two | ||
Necessity Retail Partners | |||
Related Party Transaction [Line Items] | |||
Guarantor Obligations, Maximum Exposure, Undiscounted | 190,000 | ||
Guarantee Obligations Expected Exposure | 50,000 | ||
Debt obligations, net | 32,100 | ||
Grocery Retail Partners I | |||
Related Party Transaction [Line Items] | |||
Guarantor Obligations, Maximum Exposure, Undiscounted | $ 175,000 | ||
Chief Executive Officer | |||
Related Party Transaction [Line Items] | |||
Fair Value Disclosure, Off-balance Sheet Risks, Description | 152.6 million |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Debt Obligations - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt obligations, net | $ 2,228,232 | $ 2,292,605 | |
Deferred financing costs, net | (11,710) | (13,538) | $ (13,500) |
Assumed market debt adjustments, net | (1,553) | (1,543) | $ (1,500) |
Fair Value, Inputs, Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term Debt, Fair Value | 2,277,063 | 2,330,264 | |
Term Loans | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt obligations, net | 1,612,031 | 1,610,204 | |
Term Loans | Fair Value, Inputs, Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term Debt, Fair Value | 1,631,088 | 1,621,902 | |
Secured Portfolio Loan Facilities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt obligations, net | 391,371 | 391,131 | |
Secured Portfolio Loan Facilities | Fair Value, Inputs, Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term Debt, Fair Value | 411,209 | 404,715 | |
Mortgages | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt obligations, net | 224,830 | 291,270 | |
Mortgages | Fair Value, Inputs, Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term Debt, Fair Value | $ 234,766 | $ 303,647 |
Fair Value Measurements (Deta_2
Fair Value Measurements (Details) - Recurring and Nonrecurring Fair Value Measurements - USD ($) $ / shares in Units, shares in Millions | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Apr. 29, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | |
Fair Value, Assets (Liabilities) Measured on Recurring Basis | ||||||||
Interest rate swap-mortgage note | $ (39,900,000) | $ (39,900,000) | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||
Impairment charge of real estate | 1,056,000 | $ 0 | 6,056,000 | $ 0 | ||||
Change in fair value of earn-out liability | 2,000,000 | $ 0 | (18,000,000) | $ 10,000,000 | ||||
Share price | $ 31.65 | $ 26.25 | ||||||
Phillips Edison Limited Partnership | ||||||||
Fair Value, Assets (Liabilities) Measured on Recurring Basis | ||||||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, Low | $ 26.40 | $ 26.40 | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||
Share price | $ 33.60 | $ 33.60 | ||||||
OP Units | Phillips Edison Limited Partnership | ||||||||
Fair Value, Assets (Liabilities) Measured on Recurring Basis | ||||||||
PELP transaction, OP units issued and issuable, shares | 1 | |||||||
Maximum | Phillips Edison Limited Partnership | ||||||||
Fair Value, Assets (Liabilities) Measured on Recurring Basis | ||||||||
PELP transaction, OP units issued and issuable, shares | 1.7 | |||||||
Minimum | Phillips Edison Limited Partnership | ||||||||
Fair Value, Assets (Liabilities) Measured on Recurring Basis | ||||||||
PELP transaction, OP units issued and issuable, shares | 1 | |||||||
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Interest Rate Swap | Designated as Hedging Instrument | ||||||||
Fair Value, Assets (Liabilities) Measured on Recurring Basis | ||||||||
Interest rate swap-mortgage note | $ (39,929,000) | $ (39,929,000) | $ (54,759,000) | |||||
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | ||||||||
Fair Value, Assets (Liabilities) Measured on Recurring Basis | ||||||||
Earn-out liability | (40,000,000) | (40,000,000) | (22,000,000) | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||
Business Combination, Contingent Consideration, Liability | $ 22,000,000 | 22,000,000 | ||||||
Business Combination, Contingent Consideration, Liability | 40,000,000 | 40,000,000 | ||||||
Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 2 | ||||||||
Fair Value, Assets (Liabilities) Measured on Recurring Basis | ||||||||
Impaired real estate assets, net | 22,850,000 | 22,850,000 | $ 19,350,000 | |||||
Impaired corporate intangible asset, net | $ 537,000 | $ 537,000 |