Cover
Cover - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2022 | Apr. 29, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
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 | |
Security Exchange Name | NASDAQ | |
Trading Symbol | PECO | |
Title of 12(b) Security | Common stock, par value $0.01 per share | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 113.9 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2022 | |
Amendment Flag | false | |
Entity Central Index Key | 0001476204 | |
Current Fiscal Year End Date | --12-31 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Investment in real estate: | ||
Land and improvements | $ 1,611,991 | $ 1,586,993 |
Building and improvements | 3,423,548 | 3,355,433 |
In-place lease assets | 460,127 | 452,504 |
Above-market lease assets | 69,187 | 68,736 |
Total investment in real estate assets | 5,564,853 | 5,463,666 |
Accumulated depreciation and amortization | (1,161,965) | (1,110,426) |
Net investment in real estate assets | 4,402,888 | 4,353,240 |
Investment in unconsolidated joint ventures | 30,491 | 31,326 |
Total investment in real estate assets, net | 4,433,379 | 4,384,566 |
Cash and cash equivalents | 5,063 | 92,585 |
Restricted cash | 12,406 | 22,944 |
Goodwill | 29,066 | 29,066 |
Other assets, net | 153,720 | 138,050 |
Real estate investments and other assets held for sale | 6,547 | 1,557 |
Total assets | 4,640,181 | 4,668,768 |
Liabilities: | ||
Debt obligations, net | 1,876,208 | 1,891,722 |
Below-market lease liabilities, net | 107,869 | 107,526 |
Earn-out liability | 0 | 52,436 |
Derivative liabilities | 2,217 | 24,096 |
Deferred income | 21,941 | 19,145 |
Accounts payable and other liabilities | 94,079 | 97,229 |
Liabilities of real estate investments held for sale | 198 | 288 |
Total liabilities | 2,102,512 | 2,192,442 |
Commitments and contingencies (see Note 8) | 0 | 0 |
Equity: | ||
Preferred stock | 0 | 0 |
Additional paid-in capital (“APIC”) | 3,276,151 | 3,264,038 |
Accumulated other comprehensive loss (“AOCI”) | (160) | (24,819) |
Accumulated deficit | (1,111,673) | (1,090,837) |
Total stockholders’ equity | 2,165,456 | 2,149,514 |
Noncontrolling interests | 372,213 | 326,812 |
Total equity | 2,537,669 | 2,476,326 |
Total liabilities and equity | 4,640,181 | 4,668,768 |
Common Stock | ||
Equity: | ||
Common stock | 1,138 | 196 |
Common Class B | ||
Equity: | ||
Common stock | $ 0 | $ 936 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 650,000,000 | |
Common stock, issued (in shares) | 113,819,000 | 19,550,000 |
Common stock, outstanding (in shares) | 113,819,000 | 19,550,000 |
Common Class B | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 350,000,000 | |
Common stock, issued (in shares) | 0 | 93,665,000 |
Common stock, outstanding (in shares) | 0 | 93,665,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenues: | ||
Rental income | $ 138,748,000 | $ 127,623,000 |
Fees and management income | 2,461,000 | 2,286,000 |
Other property income | 954,000 | 472,000 |
Total revenues | 142,163,000 | 130,381,000 |
Operating Expenses: | ||
Property operating | 23,320,000 | 22,202,000 |
Real estate taxes | 17,491,000 | 16,573,000 |
General and administrative | 11,532,000 | 9,341,000 |
Depreciation and amortization | 57,226,000 | 55,341,000 |
Impairment of real estate assets | 0 | 5,000,000 |
Total operating expenses | 109,569,000 | 108,457,000 |
Other: | ||
Interest expense, net | (18,199,000) | (20,063,000) |
Gain on disposal of property, net | 1,368,000 | 13,841,000 |
Other expense, net | (4,365,000) | (15,585,000) |
Net income | 11,398,000 | 117,000 |
Net income attributable to noncontrolling interests | (1,319,000) | (14,000) |
Net income attributable to stockholders | $ 10,079,000 | $ 103,000 |
Earnings per share of common stock: | ||
Net income per share attributable to stockholders - basic (in dollars per share) | $ 0.09 | $ 0 |
Net income per share attributable to stockholders - diluted (in dollars per share) | $ 0.09 | $ 0 |
Comprehensive loss: | ||
Net income | $ 11,398,000 | $ 117,000 |
Other comprehensive income: | ||
Change in unrealized value on interest rate swaps | 27,573,000 | 12,120,000 |
Comprehensive income | 38,971,000 | 12,237,000 |
Net income attributable to noncontrolling interests | (1,319,000) | (14,000) |
Change in unrealized value on interest rate swaps attributable to noncontrolling interests | (2,702,000) | (1,509,000) |
Reallocation of comprehensive loss upon conversion of noncontrolling interests | (212,000) | 0 |
Comprehensive income attributable to stockholders | $ 34,738,000 | $ 10,714,000 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands | Total | Total Stockholders’ Equity | Common StockCommon Stock | Common StockCommon Class B | APIC | AOCI | Accumulated Deficit | Noncontrolling Interests |
Beginning balance (in shares) at Dec. 31, 2020 | 0 | 93,279 | ||||||
Beginning balance at Dec. 31, 2020 | $ 2,015,929 | $ 1,690,359 | $ 0 | $ 2,798 | $ 2,739,358 | $ (52,306) | $ (999,491) | $ 325,570 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Dividend reinvestment plan (“DRIP”) (in shares) | 280 | |||||||
Dividend reinvestment plan (“DRIP”) | 7,368 | 7,368 | $ 8 | 7,360 | ||||
Share repurchases (in shares) | (24) | |||||||
Share repurchases | $ (123) | (123) | (123) | |||||
Conversion of Class B common stock (in shares) | 0 | |||||||
Change in unrealized value on interest rate swaps | $ 12,120 | 10,611 | 10,611 | 1,509 | ||||
Common distributions declared | (23,767) | (23,767) | (23,767) | |||||
Distributions to noncontrolling interests | (3,319) | (3,319) | ||||||
Share-based compensation (in shares) | 47 | |||||||
Share-based compensation | 1,110 | 326 | $ 1 | 325 | 784 | |||
Other | (29) | (29) | (29) | |||||
Net income (loss) | 117 | 103 | 103 | 14 | ||||
Ending balance (in shares) at Mar. 31, 2021 | 0 | 93,582 | ||||||
Ending balance at Mar. 31, 2021 | 2,009,406 | 1,684,848 | $ 0 | $ 2,807 | 2,746,891 | (41,695) | (1,023,155) | 324,558 |
Beginning balance (in shares) at Dec. 31, 2021 | 19,550 | 93,665 | ||||||
Beginning balance at Dec. 31, 2021 | 2,476,326 | 2,149,514 | $ 196 | $ 936 | 3,264,038 | (24,819) | (1,090,837) | 326,812 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Dividend reinvestment plan (“DRIP”) | $ 0 | |||||||
Conversion of Class B common stock (in shares) | 533 | 93,665 | (93,665) | |||||
Conversion of Class B common stock | $ 0 | $ 936 | $ (936) | |||||
Change in unrealized value on interest rate swaps | 27,573 | 24,871 | 24,871 | 2,702 | ||||
Common distributions declared | (30,915) | (30,915) | (30,915) | |||||
Distributions to noncontrolling interests | (4,104) | (4,104) | ||||||
Share-based compensation (in shares) | 71 | |||||||
Share-based compensation | 3,146 | 468 | $ 1 | 467 | 2,678 | |||
Conversion of noncontrolling interests (in shares) | 533 | |||||||
Conversion of noncontrolling interests | 0 | 17,318 | $ 5 | 17,313 | (17,318) | |||
Reallocation of operating partnership interests | 0 | (5,879) | (5,667) | (212) | 5,879 | |||
Settlement of earn-out liability | 54,245 | 54,245 | ||||||
Net income (loss) | 11,398 | 10,079 | 10,079 | 1,319 | ||||
Ending balance (in shares) at Mar. 31, 2022 | 113,819 | 0 | ||||||
Ending balance at Mar. 31, 2022 | $ 2,537,669 | $ 2,165,456 | $ 1,138 | $ 0 | $ 3,276,151 | $ (160) | $ (1,111,673) | $ 372,213 |
Consolidated Statements of Eq_2
Consolidated Statements of Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||
Common distributions declared (in dollars per share) | $ 0.27 | $ 0.255 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 11,398,000 | $ 117,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization of real estate assets | 56,321,000 | 54,341,000 |
Impairment of real estate assets | 0 | 5,000,000 |
Depreciation and amortization of corporate assets | 905,000 | 1,000,000 |
Net amortization of above- and below-market leases | (1,002,000) | (838,000) |
Amortization of deferred financing expenses | 801,000 | 1,227,000 |
Amortization of debt and derivative adjustments | 586,000 | 354,000 |
Gain on disposal of property, net | (1,368,000) | (13,841,000) |
Change in fair value of earn-out liability | 1,809,000 | 16,000,000 |
Straight-line rent | (1,818,000) | (1,424,000) |
Share-based compensation | 3,146,000 | 1,110,000 |
Return on investment in unconsolidated joint ventures | 0 | 1,546,000 |
Other | 487,000 | (567,000) |
Changes in operating assets and liabilities: | ||
Other assets, net | (10,978,000) | (10,787,000) |
Accounts payable and other liabilities | (66,000) | (4,487,000) |
Net cash provided by operating activities | 60,221,000 | 48,751,000 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Real estate acquisitions | (101,440,000) | (39,850,000) |
Capital expenditures | (18,608,000) | (13,537,000) |
Proceeds from sale of real estate, net | 12,770,000 | 58,356,000 |
Investment in third parties | 0 | (3,000,000) |
Return of investment in unconsolidated joint ventures | 781,000 | 2,721,000 |
Net cash (used in) provided by investing activities | (106,497,000) | 4,690,000 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from revolving credit facility | 102,000,000 | 0 |
Payments on revolving credit facility | (56,000,000) | 0 |
Payments on mortgages and loans payable | (62,515,000) | (16,505,000) |
Distributions paid, net of DRIP | (30,926,000) | (24,296,000) |
Distributions to noncontrolling interests | (4,343,000) | (4,530,000) |
Repurchases of Class B common stock | 0 | (77,765,000) |
Other | 0 | (29,000) |
Net cash used in financing activities | (51,784,000) | (123,125,000) |
NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | (98,060,000) | (69,684,000) |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH: | ||
Beginning of period | 115,529,000 | 131,937,000 |
End of period | 17,469,000 | 62,253,000 |
RECONCILIATION TO CONSOLIDATED BALANCE SHEETS: | ||
Cash and cash equivalents | 5,063,000 | 20,258,000 |
Restricted cash | 12,406,000 | 41,995,000 |
Cash, cash equivalents, and restricted cash at end of period | 17,469,000 | 62,253,000 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for interest | 14,849,000 | 18,891,000 |
SUPPLEMENTAL SCHEDULE OF NON-CASH ACTIVITIES: | ||
Settlement of earn-out liability | 54,245,000 | 0 |
Right-of-use (“ROU”) assets obtained in exchange for new lease liabilities | 0 | 194,000 |
Accrued capital expenditures | 6,486,000 | 3,442,000 |
Change in distributions payable | (11,000) | (7,897,000) |
Change in distributions payable - noncontrolling interests | (239,000) | (1,211,000) |
Change in accrued share repurchase obligation | 0 | (77,642,000) |
Distributions reinvested | $ 0 | $ 7,368,000 |
Organization
Organization | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022. As of March 31, 2022, we wholly-owned 269 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 one property. Underwritten Initial Public Offering —On July 19, 2021, we closed our underwritten initial public offering (“underwritten IPO”), through which we issued 19.6 million shares, including the underwriters’ overallotment election, of a new class of common stock, $0.01 par value per share, at an initial price to the public of $28.00 per share. As a result of the underwritten IPO, we received gross proceeds of $547.4 million. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
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 periods 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. There were no changes to our significant accounting policies during the three months ended March 31, 2022, except for those discussed below. For a full summary of our significant accounting policies, refer to our 2021 Annual Report on Form 10-K, filed with the SEC on February 16, 2022. 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, 2021, which are included in our 2021 Annual Report on Form 10-K. In the opinion of management, all normal and recurring adjustments necessary for the fair presentation of the unaudited consolidated financial statements for the periods presented have been included in this Quarterly Report. Our results of operations for the three months ended March 31, 2022 are not necessarily indicative of the operating results expected for the full year. The accompanying consolidated financial statements include our accounts and the accounts of the Operating Partnership and its wholly-owned subsidiaries (over which we exercise financial and operating control). The financial statements of the Operating Partnership are prepared using accounting policies consistent with our accounting policies. All intercompany balances and transactions are eliminated upon consolidation. The basis of presentation of our shares of common stock is described as follows: • Reverse Stock Split—On July 2, 2021, our board of directors (the “Board”) approved an amendment to our charter 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 (see Note 9). • Recapitalization—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 on July 2, 2021. Unless otherwise indicated, all information in this Form 10-Q gives effect to the Recapitalization and references to “shares” and per share metrics refer to our common stock and Class B common stock, collectively. Our Class B common stock automatically converted into our publicly traded common stock on January 18, 2022 (see Note 9). Prior to the conversion, we have presented common stock and Class B common stock as separate classes within our consolidated balance sheets and consolidated statements of equity. Income Taxes —Our consolidated financial statements include the operations of wholly-owned subsidiaries that have jointly elected to be treated as taxable REIT subsidiary entities 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 months ended March 31, 2022 and 2021, and we retain a full valuation allowance for our deferred tax asset. All income tax amounts are included in Other Expense, Net on our consolidated statements of operations and comprehensive income (“consolidated statements of operations”). |
Leases
Leases | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Leases | 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 (in thousands): Three Months Ended March 31, 2022 2021 Rental income related to fixed lease payments (1) $ 101,510 $ 94,966 Rental income related to variable lease payments (1)(2) 33,467 31,401 Straight-line rent amortization (3) 1,695 1,369 Amortization of lease assets 992 827 Lease buyout income 1,964 797 Adjustments for collectibility (4) (880) (1,737) Total rental income $ 138,748 $ 127,623 (1) Includes rental income related to lease payments before assessing for collectibility. (2) Variable payments are primarily related to tenant recovery income. (3) For the three months ended March 31, 2022 and 2021, includes unfavorable revenue adjustments to straight-line rent for tenants considered non-creditworthy of $1.2 million and $0.8 million, respectively. (4) Includes general reserves as well as adjustments for tenants not considered creditworthy for which we are recording revenue on a cash basis, per Accounting Standards Codification (“ASC”) Topic 842, Leases . For the three months ended March 31, 2022 and 2021, we had net favorable changes to general reserves of $0.2 million and $2.3 million, respectively. Additionally, we had net unfavorable adjustments of $1.1 million and $4.0 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 March 31, 2022, assuming no new or renegotiated leases or option extensions on lease agreements, and including the impact of rent abatements and tenants who have been moved to the cash basis of accounting for revenue recognition purposes, are as follows (in thousands): Year Amount Remaining 2022 $ 303,902 2023 374,916 2024 322,431 2025 266,544 2026 201,848 Thereafter 513,911 Total $ 1,983,552 |
Real Estate Activity
Real Estate Activity | 3 Months Ended |
Mar. 31, 2022 | |
Real Estate Investments, Net [Abstract] | |
Real Estate Activity | 4. REAL ESTATE ACTIVITY Acquisitions —The following table summarizes our real estate acquisition activity (dollars in thousands): Three Months Ended March 31, 2022 2021 Number of properties acquired 3 2 Number of outparcels acquired (1) — 2 Contract price $ 100,400 $ 39,605 Total price of acquisitions (2) 101,440 39,850 (1) Outparcels acquired are adjacent to shopping centers that we own. (2) Total price of acquisitions includes closing costs and credits. The aggregate purchase price of the assets acquired during the three months ended March 31, 2022 and 2021 were allocated as follows (in thousands): March 31, 2022 March 31, 2021 ASSETS Land and improvements $ 30,274 $ 23,305 Building and improvements 65,028 13,990 In-place lease assets 8,557 4,155 Above-market lease assets 708 52 Total assets 104,567 41,502 LIABILITIES Below-market lease liabilities 3,127 1,652 Total liabilities 3,127 1,652 Net assets acquired $ 101,440 $ 39,850 The weighted-average amortization periods for in-place, above-market, and below-market lease intangibles acquired during the three months ended March 31, 2022 and 2021 are as follows (in years): March 31, 2022 March 31, 2021 Acquired in-place leases 14 7 Acquired above-market leases 6 5 Acquired below-market leases 24 6 Property Dispositions —The following table summarizes our real estate disposition activity (dollars in thousands): Three Months Ended March 31, 2022 2021 Number of properties sold 2 6 Number of outparcels sold (1) — 1 Contract Price $ 13,325 $ 60,563 Proceeds from sale of real estate, net (2) 12,770 58,356 Gain on sale of property, net (3) 1,368 14,355 (1) During the three months ended March 31, 2021, the one outparcel sale included the only remaining portion of a property we previously owned; therefore, the sale resulted in a reduction in our total property count. (2) Total proceeds from sale of real estate, net includes closing costs and credits. (3) During the three months ended March 31, 2021, Gain on Disposal of Property, Net on the consolidated statements of operations includes miscellaneous write-off activity, which is not included in gain on sale of property, net, presented above. Property Held for Sale —As of March 31, 2022 and December 31, 2021, one property was classified as held for sale. A property classified as held for sale is under contract to sell, with no substantive contingencies, and the prospective buyer had significant funds at risk. A summary of assets and liabilities for the properties held for sale as of March 31, 2022 and December 31, 2021 is below (in thousands): March 31, 2022 December 31, 2021 ASSETS Total investment in real estate assets, net $ 6,332 $ 1,554 Other assets, net 215 3 Total assets $ 6,547 $ 1,557 LIABILITIES Below-market lease liabilities, net $ 114 $ 284 Accounts payable and other liabilities 84 4 Total liabilities $ 198 $ 288 |
Other Assets, Net
Other Assets, Net | 3 Months Ended |
Mar. 31, 2022 | |
Other Assets [Abstract] | |
Other Assets, Net | 5. OTHER ASSETS, NET The following is a summary of Other Assets, Net outstanding as of March 31, 2022 and December 31, 2021, excluding amounts related to assets classified as held for sale (in thousands): March 31, 2022 December 31, 2021 Other assets, net: Deferred leasing commissions and costs $ 45,688 $ 44,968 Deferred financing expenses (1) 4,898 4,898 Office equipment, including capital lease assets, and other 25,833 24,823 Corporate intangible assets 6,690 6,706 Total depreciable and amortizable assets 83,109 81,395 Accumulated depreciation and amortization (42,867) (41,236) Net depreciable and amortizable assets 40,242 40,159 Accounts receivable, net (2) 39,002 36,762 Accounts receivable - affiliates 638 711 Deferred rent receivable, net (3) 41,756 40,212 Derivative assets 5,365 — Prepaid expenses and other 18,528 11,655 Investment in third parties 3,000 3,000 Investment in marketable securities 5,189 5,551 Total other assets, net $ 153,720 $ 138,050 (1) Deferred financing expenses per the above table are related to our revolving credit facility, and as such we have elected to classify them as an asset rather than as a contra-liability. (2) Net of $4.1 million and $3.5 million of general reserves for uncollectible amounts as of March 31, 2022 and December 31, 2021, respectively. Receivables that were removed for tenants considered to be non-creditworthy were $7.3 million and $9.2 million as of March 31, 2022 and December 31, 2021, respectively. (3) Net of $5.8 million and $4.7 million of receivables removed as of March 31, 2022 and December 31, 2021, respectively, related to straight-line rent for tenants previously or currently considered to be non-creditworthy. |
Debt Obligations
Debt Obligations | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 and December 31, 2021 (dollars in thousands): Interest Rate (1) March 31, 2022 December 31, 2021 Revolving credit facility LIBOR + 1.1% $ 46,000 $ — Term loans (2) 1.6% - 4.2% 955,000 955,000 Senior unsecured notes due 2031 2.6% 350,000 350,000 Secured loan facilities 3.4% - 3.5% 395,000 395,000 Mortgages 3.5% - 6.4% 150,805 213,316 Finance lease liability 762 766 Discount on notes payable (7,512) (7,680) Assumed market debt adjustments, net (1,546) (1,530) Deferred financing expenses, net (12,301) (13,150) Total $ 1,876,208 $ 1,891,722 Weighted-average interest rate (3) 3.2 % 3.3 % (1) Interest rates are as of March 31, 2022. (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. (3) Includes the effects of derivative financial instruments (see Notes 7 and 12). 2022 Debt Activity— During the three months ended March 31, 2022, we executed early repayments of $61.0 million in mortgage debt. Debt Allocation —The allocation of total debt between fixed-rate and variable-rate as well as between secured and unsecured, excluding market debt adjustments, discount on senior notes, and deferred financing expenses, net, and including the effects of derivative financial instruments as of March 31, 2022 and December 31, 2021 is summarized below (in thousands): March 31, 2022 December 31, 2021 As to interest rate: Fixed-rate debt (1) $ 1,826,567 $ 1,889,082 Variable-rate debt 71,000 25,000 Total $ 1,897,567 $ 1,914,082 As to collateralization: Unsecured debt $ 1,351,000 $ 1,305,000 Secured debt 546,567 609,082 Total $ 1,897,567 $ 1,914,082 (1) Fixed-rate debt includes, and variable-rate debt excludes, the portion of such debt that has been hedged by interest rate derivatives. As of March 31, 2022, $930.0 million in variable rate debt is hedged to a fixed rate for a weighted-average of 1.9 years. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 3 Months Ended |
Mar. 31, 2022 | |
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 three months ended March 31, 2022 and 2021, 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 $3.2 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 March 31, 2022 and December 31, 2021 (dollars in thousands): March 31, 2022 December 31, 2021 Count 5 5 Notional amount $ 930,000 $ 930,000 Fixed LIBOR 1.3% - 2.9% 1.3% - 2.9% Maturity date 2022-2025 2022 - 2025 Weighted-average term (in years) 1.6 1.9 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 March 31, 2022 2021 Amount of gain recognized in Other Comprehensive Income $ 22,899 $ 7,265 Amount of loss reclassified from AOCI into Interest Expense, Net 4,674 4,855 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 March 31, 2022, 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 $2.2 million. As of March 31, 2022, 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 $2.2 million. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
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 certain 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 this estimate, and such premiums may be reimbursed by tenants pursuant to specific lease terms. As of March 31, 2022, 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 | 3 Months Ended |
Mar. 31, 2022 | |
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. At-the-Market Offering (“ATM”) —On February 10, 2022, we and the Operating Partnership entered into a sales agreement relating to the potential sale of shares of common stock pursuant to a continuous offering program. In accordance with the terms of the sales agreement, we may offer and sell shares of our common stock having an aggregate offering price of up to $250 million from time to time through our sales agents, or, if applicable, as forward sellers. As of March 31, 2022, we have issued zero shares under the ATM program. 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 impacted all common stock and OP units proportionately and had no impact on any stockholder’s percentage ownership of common stock. Class B Common Stock —On June 18, 2021, our stockholders approved Articles of Amendment that effected the Recapitalization, wherein each share of our common stock outstanding at the time the amendment became effective was converted into one share of a newly created class of Class B common stock. Our Class B common stock was identical to our common stock, except that it was not listed on a national securities exchange. Per the terms of the Recapitalization, on January 18, 2022, each share of our Class B common stock automatically converted into one share of our listed common stock. On May 5, 2022, we filed Articles Supplementary to our charter with the Maryland State Department of Assessments and Taxation in order to reclassify and designate all of the 350 million authorized shares of our Class B common stock, $0.01 par value per share, all of which were unissued at such time, as shares of our common stock, $0.01 par value per share. Underwritten IPO —On July 19, 2021, we completed an underwritten IPO and issued 17.0 million shares of common stock at an offering price to the public of $28.00 per share. We used a portion of the net proceeds to reduce our leverage and used 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 2.6 million shares of common stock at the underwritten IPO price, less underwriting discounts and commissions. On July 29, 2021, the underwriters exercised their option. The underwritten IPO, including the underwriters’ overallotment election, resulted in gross proceeds of $547.4 million. Distributions —Distributions paid to stockholders and OP unit holders of record subsequent to March 31, 2022 were as follows (dollars in thousands, excluding per share amounts): Month Date of Record Date Distribution Paid Monthly Distribution Rate Cash Distribution March 3/15/2022 4/1/2022 $ 0.09 $ 11,520 April 4/15/2022 5/2/2022 0.09 11,520 On May 4, 2022, our Board authorized 2022 distributions for May, June, and July of $0.09 per share to the stockholders of record at the close of business on May 16, 2022, June 15, 2022, and July 15, 2022, respectively. OP unit holders will receive distributions at the same rate as common stockholders, subject to certain withholdings. Convertible Noncontrolling Interests —As of March 31, 2022 and December 31, 2021, we had approximately 14.5 million and 13.4 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, OP unit holders may elect to cause the Operating Partnership to redeem their OP units. The Operating Partnership controls the form of the redemption, and may elect to redeem OP units 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 March 31, 2022 and December 31, 2021 are classified as Noncontrolling Interests within permanent equity on our consolidated balance sheets. On January 18, 2022, we issued approximately 1.6 million OP units in full settlement of the earn-out liability (see note 12). The table below is a summary of our OP unit activity for the three months ended March 31, 2022 and 2021 (dollars and shares in thousands): Three Months Ended March 31, 2022 2021 OP units converted into shares of common stock (1) 533 — Distributions paid on OP units (2) $ 4,104 $ 3,319 (1) Prior to the Recapitalization, OP units were converted to shares of common stock at a 1:1 ratio. From the Recapitalization through January 18, 2022, OP units were converted into shares of our Class B common stock at a 1:1 ratio. On January 18, 2022, each share of our Class B common stock automatically converted into one share of our listed common stock, and going forward, OP units will be 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 and cash flows. 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 from $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, 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. 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. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 10. EARNINGS PER SHARE Basic earnings per share (“EPS”) is computed by dividing Net Income 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. The following table provides a reconciliation of the numerator and denominator of the earnings per share calculations (in thousands, except per share amounts): Three Months Ended March 31, 2022 2021 Numerator: Net income attributable to stockholders - basic $ 10,079 $ 103 Net income attributable to convertible OP units (1) 1,319 14 Net income - diluted $ 11,398 $ 117 Denominator: Weighted-average shares - basic 113,571 93,490 OP units (1) 14,558 13,354 Dilutive restricted stock awards 374 151 Adjusted weighted-average shares - diluted 128,503 106,995 Earnings per common share: Basic and diluted income per share $ 0.09 $ 0.00 (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 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. OP units are allocated income on a consistent basis with the common stockholder and therefore have no dilutive impact to earnings per share of common stock. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 11. 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 March 31, 2022 2021 Recurring fees (1) $ 1,271 $ 1,125 Transactional revenue and reimbursements (2) 394 468 Insurance premiums (3) 796 693 Total fees and management income $ 2,461 $ 2,286 (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 March 31, 2022, the potential “make-whole amount” on the estimated aggregate amount of built-in gain subject to protection under the agreements is approximately $143.3 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 believe we will either (i) continue to own and operate the protected properties or (ii) be able to successfully complete tax-deferred exchanges under Section 1031 of the Internal Revenue Code of 1986, as amended (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 March 31, 2022, the outstanding loan balance related to our NRP joint venture was $15.3 million. As of March 31, 2022, 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 March 31, 2022 and December 31, 2021. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2022 | |
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, are 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 revolving credit facility, term loans, secured portfolio of loans, and mortgages 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. We estimate the fair value of our senior unsecured notes by using quoted prices in active markets, which are considered Level 1 inputs. The following is a summary of borrowings as of March 31, 2022 and December 31, 2021 (in thousands): March 31, 2022 December 31, 2021 Recorded Principal Balance (1) Fair Value Recorded Principal Balance (1) Fair Value Revolving credit facility $ 46,000 $ 46,017 $ — $ — Term loans 943,949 955,934 943,127 955,919 Senior unsecured notes due 2031 342,488 307,339 342,320 344,099 Secured portfolio loan facilities 391,732 390,898 391,612 394,356 Mortgages (2) 152,039 157,036 214,663 221,741 Total $ 1,876,208 $ 1,857,224 $ 1,891,722 $ 1,916,115 (1) As of March 31, 2022 and December 31, 2021, respectively, recorded principal balances include: (i) net deferred financing fees of $12.3 million and $13.2 million; (ii) assumed market debt adjustments of $1.5 million and $1.5 million; and (iii) notes payable discounts of $7.5 million and $7.7 million. (2) Our finance lease liability is included in the mortgages line item, as presented . Recurring and Nonrecurring Fair Value Measurements —Our marketable securities, 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 three months ended March 31, 2022 and the year ended December 31, 2021 were as follows (in thousands): March 31, 2022 December 31, 2021 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Recurring Marketable securities $ 5,189 $ — $ — $ 5,551 $ — $ — Derivative assets (1) — 5,365 — — — — Derivative liabilities (2) — (2,217) — — (24,096) — Earn-out liability — — — — (52,436) — Nonrecurring Impaired real estate assets, net (3) $ — $ — $ — $ — $ 24,000 $ — (1) We record derivative assets in Other Assets, Net on our consolidated balance sheets. (2) We record derivative liabilities in Derivative Liabilities on our consolidated balance sheets. (3) 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. Marketable Securities— We estimate the fair value of marketable securities using Level 1 inputs. We utilize unadjusted quoted prices for identical assets in active markets that we have the ability to access. Derivative Instruments— As of March 31, 2022 and December 31, 2021, 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 March 31, 2022 and December 31, 2021, 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 Phillips Edison Limited Partnership (“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 was eligible to earn a minimum of 1.0 million and a maximum of approximately 1.7 million OP units as contingent consideration based on the timing and valuation of a liquidity event for PECO. Certain of these performance targets were tied to the post-underwritten IPO trading price of our common stock. The number of OP units awarded varied 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 was greater than or equal to $33.60, PELP would receive approximately 1.7 million OP units; • if the liquidity event price per share was less than $33.60 but greater than or equal to $26.40, PELP would 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 was less than $26.40, PELP would receive 1.0 million OP units. Prior to the second quarter of 2021, we estimated the fair value of this liability on a quarterly basis using the Monte Carlo method. Following our underwritten IPO, the only remaining variable for calculating final amounts to be paid under the earn-out agreement was the liquidity event price per share. On January 11, 2022, at the end of the 180-day period following our underwritten IPO commencement, we finalized the fair value of the earn-out liability and issued approximately 1.6 million OP units in full settlement of the liability with a value of $54.2 million. We recorded expense of $1.8 million and $16.0 million, respectively, for the three months ended March 31, 2022 and March 31, 2021 related to changes in the fair value of the earn-out liability in Other Expense, 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 months ended March 31, 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 months ended March 31, 2022. 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 book 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 record an impairment charge based on the fair value determined in 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 the 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. 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. We recorded the following expense upon impairment of real estate assets (in thousands): Three Months Ended March 31, 2022 2021 Impairment of real estate assets $ — $ 5,000 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. SUBSEQUENT EVENTS In preparing the condensed and unaudited consolidated financial statements, we have evaluated subsequent events through the date of 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) | 3 Months Ended |
Mar. 31, 2022 | |
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, 2021, which are included in our 2021 Annual Report on Form 10-K. In the opinion of management, all normal and recurring adjustments necessary for the fair presentation of the unaudited consolidated financial statements for the periods presented have been included in this Quarterly Report. Our results of operations for the three months ended March 31, 2022 are not necessarily indicative of the operating results expected for the full year. The accompanying consolidated financial statements include our accounts and the accounts of the Operating Partnership and its wholly-owned subsidiaries (over which we exercise financial and operating control). The financial statements of the Operating Partnership are prepared using accounting policies consistent with our accounting policies. All intercompany balances and transactions are eliminated upon consolidation. The basis of presentation of our shares of common stock is described as follows: • Reverse Stock Split—On July 2, 2021, our board of directors (the “Board”) approved an amendment to our charter 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 (see Note 9). • Recapitalization—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 |
Income Taxes | Income Taxes —Our consolidated financial statements include the operations of wholly-owned subsidiaries that have jointly elected to be treated as taxable REIT subsidiary entities 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 months ended March 31, 2022 and 2021, and we retain a full valuation allowance for our deferred tax asset. All income tax amounts are included in Other Expense, Net on our consolidated statements of operations and comprehensive income (“consolidated statements of operations”). |
Recently Issued Accounting Pronouncements | Newly Adopted Accounting Pronouncements—There were no newly adopted accounting pronouncements during the three months ended March 31, 2022 that impacted the Company. |
Earnings per Share | Basic earnings per share (“EPS”) is computed by dividing Net Income 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. |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Summary of Operating Leases | All of our leases are currently classified as operating leases. Lease income related to our operating leases was as follows (in thousands): Three Months Ended March 31, 2022 2021 Rental income related to fixed lease payments (1) $ 101,510 $ 94,966 Rental income related to variable lease payments (1)(2) 33,467 31,401 Straight-line rent amortization (3) 1,695 1,369 Amortization of lease assets 992 827 Lease buyout income 1,964 797 Adjustments for collectibility (4) (880) (1,737) Total rental income $ 138,748 $ 127,623 (1) Includes rental income related to lease payments before assessing for collectibility. (2) Variable payments are primarily related to tenant recovery income. (3) For the three months ended March 31, 2022 and 2021, includes unfavorable revenue adjustments to straight-line rent for tenants considered non-creditworthy of $1.2 million and $0.8 million, respectively. (4) Includes general reserves as well as adjustments for tenants not considered creditworthy for which we are recording revenue on a cash basis, per Accounting Standards Codification (“ASC”) Topic 842, Leases . |
Schedule of Operating Lease Maturity | Approximate future fixed contractual lease payments to be received under non-cancelable operating leases in effect as of March 31, 2022, assuming no new or renegotiated leases or option extensions on lease agreements, and including the impact of rent abatements and tenants who have been moved to the cash basis of accounting for revenue recognition purposes, are as follows (in thousands): Year Amount Remaining 2022 $ 303,902 2023 374,916 2024 322,431 2025 266,544 2026 201,848 Thereafter 513,911 Total $ 1,983,552 |
Real Estate Activity (Tables)
Real Estate Activity (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Real Estate Investments, Net [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes our real estate acquisition activity (dollars in thousands): Three Months Ended March 31, 2022 2021 Number of properties acquired 3 2 Number of outparcels acquired (1) — 2 Contract price $ 100,400 $ 39,605 Total price of acquisitions (2) 101,440 39,850 (1) Outparcels acquired are adjacent to shopping centers that we own. (2) Total price of acquisitions includes closing costs and credits. |
Schedule of Asset Acquisition | The aggregate purchase price of the assets acquired during the three months ended March 31, 2022 and 2021 were allocated as follows (in thousands): March 31, 2022 March 31, 2021 ASSETS Land and improvements $ 30,274 $ 23,305 Building and improvements 65,028 13,990 In-place lease assets 8,557 4,155 Above-market lease assets 708 52 Total assets 104,567 41,502 LIABILITIES Below-market lease liabilities 3,127 1,652 Total liabilities 3,127 1,652 Net assets acquired $ 101,440 $ 39,850 |
Schedule of Acquired Intangible Leases | The weighted-average amortization periods for in-place, above-market, and below-market lease intangibles acquired during the three months ended March 31, 2022 and 2021 are as follows (in years): March 31, 2022 March 31, 2021 Acquired in-place leases 14 7 Acquired above-market leases 6 5 Acquired below-market leases 24 6 |
Schedule of Real Estate Disposal | The following table summarizes our real estate disposition activity (dollars in thousands): Three Months Ended March 31, 2022 2021 Number of properties sold 2 6 Number of outparcels sold (1) — 1 Contract Price $ 13,325 $ 60,563 Proceeds from sale of real estate, net (2) 12,770 58,356 Gain on sale of property, net (3) 1,368 14,355 (1) During the three months ended March 31, 2021, the one outparcel sale included the only remaining portion of a property we previously owned; therefore, the sale resulted in a reduction in our total property count. (2) Total proceeds from sale of real estate, net includes closing costs and credits. |
Schedule of Real Estate Held-for-sale | A summary of assets and liabilities for the properties held for sale as of March 31, 2022 and December 31, 2021 is below (in thousands): March 31, 2022 December 31, 2021 ASSETS Total investment in real estate assets, net $ 6,332 $ 1,554 Other assets, net 215 3 Total assets $ 6,547 $ 1,557 LIABILITIES Below-market lease liabilities, net $ 114 $ 284 Accounts payable and other liabilities 84 4 Total liabilities $ 198 $ 288 |
Other Assets, Net (Tables)
Other Assets, Net (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Other Assets [Abstract] | |
Schedule of Other Assets | The following is a summary of Other Assets, Net outstanding as of March 31, 2022 and December 31, 2021, excluding amounts related to assets classified as held for sale (in thousands): March 31, 2022 December 31, 2021 Other assets, net: Deferred leasing commissions and costs $ 45,688 $ 44,968 Deferred financing expenses (1) 4,898 4,898 Office equipment, including capital lease assets, and other 25,833 24,823 Corporate intangible assets 6,690 6,706 Total depreciable and amortizable assets 83,109 81,395 Accumulated depreciation and amortization (42,867) (41,236) Net depreciable and amortizable assets 40,242 40,159 Accounts receivable, net (2) 39,002 36,762 Accounts receivable - affiliates 638 711 Deferred rent receivable, net (3) 41,756 40,212 Derivative assets 5,365 — Prepaid expenses and other 18,528 11,655 Investment in third parties 3,000 3,000 Investment in marketable securities 5,189 5,551 Total other assets, net $ 153,720 $ 138,050 (1) Deferred financing expenses per the above table are related to our revolving credit facility, and as such we have elected to classify them as an asset rather than as a contra-liability. (2) Net of $4.1 million and $3.5 million of general reserves for uncollectible amounts as of March 31, 2022 and December 31, 2021, respectively. Receivables that were removed for tenants considered to be non-creditworthy were $7.3 million and $9.2 million as of March 31, 2022 and December 31, 2021, respectively. (3) Net of $5.8 million and $4.7 million of receivables removed as of March 31, 2022 and December 31, 2021, respectively, related to straight-line rent for tenants previously or currently considered to be non-creditworthy. |
Debt Obligations (Tables)
Debt Obligations (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 and December 31, 2021 (dollars in thousands): Interest Rate (1) March 31, 2022 December 31, 2021 Revolving credit facility LIBOR + 1.1% $ 46,000 $ — Term loans (2) 1.6% - 4.2% 955,000 955,000 Senior unsecured notes due 2031 2.6% 350,000 350,000 Secured loan facilities 3.4% - 3.5% 395,000 395,000 Mortgages 3.5% - 6.4% 150,805 213,316 Finance lease liability 762 766 Discount on notes payable (7,512) (7,680) Assumed market debt adjustments, net (1,546) (1,530) Deferred financing expenses, net (12,301) (13,150) Total $ 1,876,208 $ 1,891,722 Weighted-average interest rate (3) 3.2 % 3.3 % (1) Interest rates are as of March 31, 2022. (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. (3) Includes the effects of derivative financial instruments (see Notes 7 and 12). |
Schedule of Debt Allocation | The allocation of total debt between fixed-rate and variable-rate as well as between secured and unsecured, excluding market debt adjustments, discount on senior notes, and deferred financing expenses, net, and including the effects of derivative financial instruments as of March 31, 2022 and December 31, 2021 is summarized below (in thousands): March 31, 2022 December 31, 2021 As to interest rate: Fixed-rate debt (1) $ 1,826,567 $ 1,889,082 Variable-rate debt 71,000 25,000 Total $ 1,897,567 $ 1,914,082 As to collateralization: Unsecured debt $ 1,351,000 $ 1,305,000 Secured debt 546,567 609,082 Total $ 1,897,567 $ 1,914,082 (1) Fixed-rate debt includes, and variable-rate debt excludes, the portion of such debt that has been hedged by interest rate derivatives. As of March 31, 2022, $930.0 million in variable rate debt is hedged to a fixed rate for a weighted-average of 1.9 years. |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activities (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Interest Rate Derivatives | The following is a summary of our interest rate swaps that were designated as cash flow hedges of interest rate risk as of March 31, 2022 and December 31, 2021 (dollars in thousands): March 31, 2022 December 31, 2021 Count 5 5 Notional amount $ 930,000 $ 930,000 Fixed LIBOR 1.3% - 2.9% 1.3% - 2.9% Maturity date 2022-2025 2022 - 2025 Weighted-average term (in years) 1.6 1.9 |
Schedule of Cash Flow Hedges Included in Accumulated 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 March 31, 2022 2021 Amount of gain recognized in Other Comprehensive Income $ 22,899 $ 7,265 Amount of loss reclassified from AOCI into Interest Expense, Net 4,674 4,855 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Schedule of Dividends Payable | Distributions —Distributions paid to stockholders and OP unit holders of record subsequent to March 31, 2022 were as follows (dollars in thousands, excluding per share amounts): Month Date of Record Date Distribution Paid Monthly Distribution Rate Cash Distribution March 3/15/2022 4/1/2022 $ 0.09 $ 11,520 April 4/15/2022 5/2/2022 0.09 11,520 On May 4, 2022, our Board authorized 2022 distributions for May, June, and July of $0.09 per share to the stockholders of record at the close of business on May 16, 2022, June 15, 2022, and July 15, 2022, respectively. OP unit holders will receive distributions at the same rate as common stockholders, subject to certain withholdings. |
Schedule of OP Unit Activity | The table below is a summary of our OP unit activity for the three months ended March 31, 2022 and 2021 (dollars and shares in thousands): Three Months Ended March 31, 2022 2021 OP units converted into shares of common stock (1) 533 — Distributions paid on OP units (2) $ 4,104 $ 3,319 (1) Prior to the Recapitalization, OP units were converted to shares of common stock at a 1:1 ratio. From the Recapitalization through January 18, 2022, OP units were converted into shares of our Class B common stock at a 1:1 ratio. On January 18, 2022, each share of our Class B common stock automatically converted into one share of our listed common stock, and going forward, OP units will be 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 and cash flows. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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 (in thousands, except per share amounts): Three Months Ended March 31, 2022 2021 Numerator: Net income attributable to stockholders - basic $ 10,079 $ 103 Net income attributable to convertible OP units (1) 1,319 14 Net income - diluted $ 11,398 $ 117 Denominator: Weighted-average shares - basic 113,571 93,490 OP units (1) 14,558 13,354 Dilutive restricted stock awards 374 151 Adjusted weighted-average shares - diluted 128,503 106,995 Earnings per common share: Basic and diluted income per share $ 0.09 $ 0.00 (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 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. OP units are allocated income on a consistent basis with the common stockholder and therefore have no dilutive impact to earnings per share of common stock. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Disaggregation of Revenue | 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 March 31, 2022 2021 Recurring fees (1) $ 1,271 $ 1,125 Transactional revenue and reimbursements (2) 394 468 Insurance premiums (3) 796 693 Total fees and management income $ 2,461 $ 2,286 (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) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Summary of Borrowings | The following is a summary of borrowings as of March 31, 2022 and December 31, 2021 (in thousands): March 31, 2022 December 31, 2021 Recorded Principal Balance (1) Fair Value Recorded Principal Balance (1) Fair Value Revolving credit facility $ 46,000 $ 46,017 $ — $ — Term loans 943,949 955,934 943,127 955,919 Senior unsecured notes due 2031 342,488 307,339 342,320 344,099 Secured portfolio loan facilities 391,732 390,898 391,612 394,356 Mortgages (2) 152,039 157,036 214,663 221,741 Total $ 1,876,208 $ 1,857,224 $ 1,891,722 $ 1,916,115 (1) As of March 31, 2022 and December 31, 2021, respectively, recorded principal balances include: (i) net deferred financing fees of $12.3 million and $13.2 million; (ii) assumed market debt adjustments of $1.5 million and $1.5 million; and (iii) notes payable discounts of $7.5 million and $7.7 million. (2) Our finance lease liability is included in the mortgages line item, as presented |
Summary of Recurring and Nonrecurring Fair Value | Fair value measurements that occurred as of and during the three months ended March 31, 2022 and the year ended December 31, 2021 were as follows (in thousands): March 31, 2022 December 31, 2021 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Recurring Marketable securities $ 5,189 $ — $ — $ 5,551 $ — $ — Derivative assets (1) — 5,365 — — — — Derivative liabilities (2) — (2,217) — — (24,096) — Earn-out liability — — — — (52,436) — Nonrecurring Impaired real estate assets, net (3) $ — $ — $ — $ — $ 24,000 $ — (1) We record derivative assets in Other Assets, Net on our consolidated balance sheets. (2) We record derivative liabilities in Derivative Liabilities on our consolidated balance sheets. (3) 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. |
Summary of Nonrecurring Fair Value | We recorded the following expense upon impairment of real estate assets (in thousands): Three Months Ended March 31, 2022 2021 Impairment of real estate assets $ — $ 5,000 |
Organization (Details)
Organization (Details) $ / shares in Units, shares in Millions, $ in Millions | Jul. 19, 2021$ / sharesshares | Mar. 31, 2022property | Aug. 02, 2021USD ($) |
Schedule of Equity Method Investments [Line Items] | |||
Number of real estate properties | 269 | ||
Issuance of common stock (in shares) | shares | 19.6 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | ||
Over-allotment, gross proceeds | $ | $ 547.4 | ||
Grocery Retail Partners I | |||
Schedule of Equity Method Investments [Line Items] | |||
Number of real estate properties | 20 | ||
Equity method investment, ownership percentage | 14.00% | ||
Necessity Retail Partners | |||
Schedule of Equity Method Investments [Line Items] | |||
Number of real estate properties | 1 | ||
Equity method investment, ownership percentage | 20.00% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | Jul. 02, 2021 |
Accounting Policies [Abstract] | |
Reverse stock split, conversion ratio | 0.33 |
Leases - Lessor (Details)
Leases - Lessor (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating Lease, Lease Income | ||
Rental income related to fixed lease payments | $ 101,510 | $ 94,966 |
Rental income related to variable lease payments | 33,467 | 31,401 |
Straight-line rent amortization | 1,695 | 1,369 |
Amortization of lease assets | 992 | 827 |
Lease buyout income | 1,964 | 797 |
Adjustments for collectability | (880) | (1,737) |
Total rental income | 138,748 | 127,623 |
Favorable (unfavorable) adjustments for straight line rent, non-creditworthy | (1,200) | (800) |
Favorable (unfavorable) adjustments for collectability, general reserves | 200 | 2,300 |
Unfavorable adjustments for collectability, collections received, non-creditworthy | 1,100 | $ 4,000 |
Future Minimum Payments Due, Maturity | ||
Remaining 2022 | 303,902 | |
2023 | 374,916 | |
2024 | 322,431 | |
2025 | 266,544 | |
2026 | 201,848 | |
Thereafter | 513,911 | |
Total | $ 1,983,552 | |
Florida | Geographic Concentration Risk | Revenue Benchmark | ||
Future Minimum Payments Due, Maturity | ||
Concentration risk, percentage | 12.00% | |
California | Geographic Concentration Risk | Revenue Benchmark | ||
Future Minimum Payments Due, Maturity | ||
Concentration risk, percentage | 10.70% |
Real Estate Activity - Schedule
Real Estate Activity - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022USD ($)propertylandParcel | Mar. 31, 2021USD ($)propertylandParcel | |
Real Estate Investments, Net [Abstract] | ||
Number of properties acquired | property | 3 | 2 |
Number of outparcels acquired | landParcel | 0 | 2 |
Contract price | $ 100,400 | $ 39,605 |
Total price of acquisitions | $ 101,440 | $ 39,850 |
Real Estate Activity - Schedu_2
Real Estate Activity - Schedule of Asset Acquisition (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Asset Acquisition [Line Items] | ||
Total assets | $ 104,567 | $ 41,502 |
Below-market lease liabilities | 3,127 | 1,652 |
Total liabilities | 3,127 | 1,652 |
Net assets acquired | 101,440 | 39,850 |
In-place lease assets | ||
Asset Acquisition [Line Items] | ||
Intangible assets acquired | 8,557 | 4,155 |
Above-market lease assets | ||
Asset Acquisition [Line Items] | ||
Intangible assets acquired | 708 | 52 |
Land and improvements | ||
Asset Acquisition [Line Items] | ||
Property, plant and equipment | 30,274 | 23,305 |
Building and improvements | ||
Asset Acquisition [Line Items] | ||
Property, plant and equipment | $ 65,028 | $ 13,990 |
Real Estate Activity - Acquisit
Real Estate Activity - Acquisition of intangible leases amortization periods (Details) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted-average useful life, below-market leases | 24 years | 6 years |
In-place lease assets | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted-average useful life, acquired leases | 14 years | 7 years |
Above-market lease assets | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted-average useful life, acquired leases | 6 years | 5 years |
Real Estate Activity - Property
Real Estate Activity - Property Sales (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022USD ($)landParcelproperty | Mar. 31, 2021USD ($)landParcelproperty | |
Real Estate Investments, Net [Abstract] | ||
Number of properties sold | property | 2 | 6 |
Number of outparcels sold | landParcel | 0 | 1 |
Contract Price | $ 13,325 | $ 60,563 |
Proceeds from sale of real estate, net | 12,770 | 58,356 |
Gain on sale of properties, net | $ 1,368 | $ 14,355 |
Real Estate Activity - Narrativ
Real Estate Activity - Narrative (Details) - property | Mar. 31, 2022 | Dec. 31, 2021 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Number of real estate properties | 269 | |
Held for sale | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Number of real estate properties | 1 | 1 |
Real Estate Activity - Proper_2
Real Estate Activity - Property Held-for-Sale (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
LIABILITIES | ||
Total liabilities | $ 198 | $ 288 |
Held for sale | ||
ASSETS | ||
Total investment in real estate assets, net | 6,332 | 1,554 |
Other assets, net | 215 | 3 |
Total assets | 6,547 | 1,557 |
LIABILITIES | ||
Below-market lease liabilities, net | 114 | 284 |
Accounts payable and other liabilities | 84 | 4 |
Total liabilities | $ 198 | $ 288 |
Other Assets, Net (Details)
Other Assets, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Other Assets [Abstract] | ||
Deferred leasing commissions and costs | $ 45,688 | $ 44,968 |
Deferred financing expenses | 4,898 | 4,898 |
Office equipment, including capital lease assets, and other | 25,833 | 24,823 |
Corporate intangible assets | 6,690 | 6,706 |
Total depreciable and amortizable assets | 83,109 | 81,395 |
Accumulated depreciation and amortization | (42,867) | (41,236) |
Net depreciable and amortizable assets | 40,242 | 40,159 |
Accounts receivable, net | 39,002 | 36,762 |
Accounts receivable - affiliates | 638 | 711 |
Deferred rent receivable, net | 41,756 | 40,212 |
Derivative assets | 5,365 | 0 |
Prepaid expenses and other | 18,528 | 11,655 |
Investment in third parties | 3,000 | 3,000 |
Investment in marketable securities | 5,189 | 5,551 |
Total other assets, net | 153,720 | 138,050 |
Uncollectable lease receivables, general reserves | 4,100 | 3,500 |
Lease billings, nonaccrual basis | 7,300 | 9,200 |
Uncollectible lease receivables - straight line rent | $ 5,800 | $ 4,700 |
Debt Obligations - Schedule of
Debt Obligations - Schedule of Debt Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||
Finance lease liability | $ 762 | $ 766 |
Discount on notes payable | (7,512) | (7,680) |
Assumed market debt adjustments, net | (1,546) | (1,530) |
Deferred financing expenses, net | (12,301) | (13,150) |
Total | $ 1,876,208 | $ 1,891,722 |
Weighted-average interest rate on debt | 3.20% | 3.30% |
Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Line of credit - interest spread | 1.10% | |
Outstanding principal balance | $ 46,000 | $ 0 |
Term loans | ||
Debt Instrument [Line Items] | ||
Outstanding principal balance | $ 955,000 | 955,000 |
Term loans | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate | 1.60% | |
Term loans | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate | 4.20% | |
Senior notes | Senior unsecured notes due 2031 | ||
Debt Instrument [Line Items] | ||
Interest rate | 2.60% | |
Outstanding principal balance | $ 350,000 | 350,000 |
Secured loan facilities | Secured loan facilities | ||
Debt Instrument [Line Items] | ||
Outstanding principal balance | $ 395,000 | 395,000 |
Secured loan facilities | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.40% | |
Secured loan facilities | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.50% | |
Mortgages | ||
Debt Instrument [Line Items] | ||
Outstanding principal balance | $ 150,805 | $ 213,316 |
Mortgages | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.50% | |
Mortgages | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate | 6.40% |
Debt Obligations - Narrative (D
Debt Obligations - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Mortgages | |
Debt Instrument [Line Items] | |
Repayments of debt | $ 61 |
Debt Obligations - Schedule o_2
Debt Obligations - Schedule of Debt Allocation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||
Fixed-rate debt | $ 1,826,567 | $ 1,889,082 |
Variable-rate debt | 71,000 | 25,000 |
Unsecured debt | 1,351,000 | 1,305,000 |
Secured debt | 546,567 | 609,082 |
Total | 1,897,567 | $ 1,914,082 |
Long-term Debt | ||
Debt Instrument [Line Items] | ||
Derivative liabilities | $ 930,000 | |
Weighted-average term (in years) | 1 year 10 months 24 days |
Derivatives and Hedging Activ_3
Derivatives and Hedging Activities (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022USD ($)Debt_Instrument | Mar. 31, 2021USD ($) | Jun. 30, 2021 | Dec. 31, 2021USD ($)Debt_Instrument | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain recognized in Other Comprehensive Income | $ 22,899 | $ 7,265 | ||
Contingent credit-risk-related derivative liabilities, fair value | 2,200 | |||
Interest Expense, Net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of loss reclassified from AOCI into Interest Expense, Net | 4,674 | $ 4,855 | ||
Interest rate swap | Designated as hedging instrument | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Reclassification from OCI to income, estimated net amount to be transferred | $ 3,200 | |||
Count | Debt_Instrument | 5 | 5 | ||
Notional amount | $ 930,000 | $ 930,000 | ||
Weighted-average term (in years) | 1 year 7 months 6 days | 1 year 10 months 24 days | ||
Interest rate swap | Designated as hedging instrument | Minimum | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Fixed LIBOR | 1.30% | 1.30% | ||
Interest rate swap | Designated as hedging instrument | Maximum | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Fixed LIBOR | 2.90% | 2.90% |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Mar. 31, 2022USD ($)obligation |
Commitments and Contingencies Disclosure [Abstract] | |
Number of letters of credit outstanding | obligation | 4 |
Letters of credit outstanding | $ | $ 9 |
Equity - Narrative (Details)
Equity - Narrative (Details) $ / shares in Units, $ in Millions | Jan. 11, 2022shares | Jul. 19, 2021$ / sharesshares | Dec. 31, 2019shares | May 05, 2022$ / sharesshares | Mar. 31, 2022vote$ / sharesshares | Feb. 10, 2022USD ($) | Jan. 18, 2022 | Dec. 31, 2021$ / sharesshares | Aug. 02, 2021USD ($) | Jun. 18, 2021 | Apr. 29, 2021$ / shares | Mar. 31, 2021$ / shares |
Class of Stock [Line Items] | ||||||||||||
Common stock, votes per share | vote | 1 | |||||||||||
Common stock, sales agreement, authorized amount | $ | $ 250 | |||||||||||
Common stock, sales agreement, number of shares issued | 0 | |||||||||||
OP conversion ratio | 1 | 1 | ||||||||||
Common stock, conversion ratio | 1 | |||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | |||||||||||
Issuance of common stock (in shares) | 19,600,000 | |||||||||||
Over-allotment, gross proceeds | $ | $ 547.4 | |||||||||||
OP units outstanding, shares | 14,500,000 | 13,400,000 | ||||||||||
Share price (in dollars per share) | $ / shares | $ 31.65 | $ 26.25 | ||||||||||
Common Class B | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
OP conversion ratio | 1 | |||||||||||
Common stock, authorized (in shares) | 350,000,000 | |||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||||||||||
Common Class B | Subsequent event | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Common stock, authorized (in shares) | 350,000,000 | |||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | |||||||||||
Common Stock | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Common stock, authorized (in shares) | 650,000,000 | |||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||||||||||
Common Stock | Subsequent event | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | |||||||||||
Phillips Edison Limited Partnership | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
PELP transaction, OP units issued and issuable (in shares) | 1,600,000 | 700,000 | ||||||||||
IPO | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Issuance of common stock (in shares) | 17,000,000 | |||||||||||
Stock price (in dollars per share) | $ / shares | $ 28 | |||||||||||
Over-allotment option | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Maximum additional shares granted to underwriters (in shares) | 2,600,000 |
Equity - Schedule of Dividends
Equity - Schedule of Dividends Payable (Details) - USD ($) $ / shares in Units, $ in Thousands | May 02, 2022 | Apr. 01, 2022 | Jul. 31, 2022 | Jun. 30, 2022 | May 31, 2022 | Apr. 30, 2022 | Mar. 31, 2022 | Mar. 31, 2022 | Mar. 31, 2021 |
Equity, Class of Treasury Stock [Line Items] | |||||||||
Common distributions declared (in dollars per share) | $ 0.27 | $ 0.255 | |||||||
Distributions paid | $ 30,926 | $ 24,296 | |||||||
Dividend declared | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Common distributions declared (in dollars per share) | $ 0.09 | ||||||||
Dividend declared | Subsequent event | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Common distributions declared (in dollars per share) | $ 0.09 | ||||||||
Dividend declared | Subsequent event | Forecast | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Common distributions declared (in dollars per share) | $ 0.09 | $ 0.09 | $ 0.09 | ||||||
Dividend paid | Subsequent event | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Distributions paid | $ 11,520 | $ 11,520 |
Equity - Schedule of OP Unit Ac
Equity - Schedule of OP Unit Activity (Details) shares in Thousands, $ in Thousands | 3 Months Ended | |||
Mar. 31, 2022USD ($)shares | Mar. 31, 2021USD ($)shares | Jan. 18, 2022 | Jun. 18, 2021 | |
Class of Stock [Line Items] | ||||
Conversion of Class B common stock (in shares) | shares | 533 | 0 | ||
Distributions paid on OP units | $ | $ 4,104 | $ 3,319 | ||
OP conversion ratio | 1 | 1 | ||
Common stock, conversion ratio | 1 | |||
Common Class B | ||||
Class of Stock [Line Items] | ||||
OP conversion ratio | 1 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Numerator: | ||
Net (loss) income attributable to stockholders - basic | $ 10,079 | $ 103 |
Net (loss) income attributable to convertible OP units | 1,319 | 14 |
Net loss - diluted | $ 11,398 | $ 117 |
Denominator: | ||
Weighted-average shares - basic (in shares) | 113,571 | 93,490 |
OP units (in shares) | 14,558 | 13,354 |
Dilutive restricted stock awards (in shares) | 374 | 151 |
Adjusted weighted-average shares - diluted (in shares) | 128,503 | 106,995 |
Earnings per common share: | ||
Basic income per share (in dollars per share) | $ 0.09 | $ 0 |
Diluted income per share (in dollars per share) | $ 0.09 | $ 0 |
Related Party Transactions - Di
Related Party Transactions - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Related Party Transaction [Line Items] | ||
Fees and management income | $ 2,461 | $ 2,286 |
Insurance premiums | ||
Related Party Transaction [Line Items] | ||
Fees and management income | 796 | 693 |
Affiliated entity | Recurring fees | ||
Related Party Transaction [Line Items] | ||
Fees and management income | 1,271 | 1,125 |
Affiliated entity | Transactional revenue and reimbursements | ||
Related Party Transaction [Line Items] | ||
Fees and management income | $ 394 | $ 468 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - USD ($) $ in Thousands | Jul. 19, 2021 | Mar. 31, 2022 | Dec. 31, 2021 |
Related Party Transaction [Line Items] | |||
Debt obligations, net | $ 1,876,208 | $ 1,891,722 | |
Executive officers | 2021 TPA | |||
Related Party Transaction [Line Items] | |||
Term of contract | 4 years | ||
Off-balance sheet risks, liability | 143,300 | ||
Necessity Retail Partners | |||
Related Party Transaction [Line Items] | |||
Guarantor, maximum exposure | 190,000 | ||
Guarantee, expected exposure | 50,000 | ||
Debt obligations, net | 15,300 | ||
Grocery Retail Partners I | |||
Related Party Transaction [Line Items] | |||
Guarantor, maximum exposure | $ 175,000 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Borrowings (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Recorded Principal Balance | $ 1,876,208 | $ 1,891,722 |
Deferred financing costs | 12,301 | 13,150 |
Assumed market debt adjustments, net | 1,546 | 1,530 |
Discount on notes payable | 7,512 | 7,680 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 1,857,224 | 1,916,115 |
Term loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Recorded Principal Balance | 943,949 | 943,127 |
Term loans | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 955,934 | 955,919 |
Secured loan facilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Recorded Principal Balance | 391,732 | 391,612 |
Secured loan facilities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 390,898 | 394,356 |
Line of Credit | Revolving credit facility | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Recorded Principal Balance | 46,000 | 0 |
Line of Credit | Revolving credit facility | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 46,017 | 0 |
Senior notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Recorded Principal Balance | 342,488 | 342,320 |
Senior notes | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 307,339 | 344,099 |
Mortgages | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Recorded Principal Balance | 152,039 | 214,663 |
Mortgages | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | $ 157,036 | $ 221,741 |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Recurring and Nonrecurring Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets (Liabilities) Measured on Recurring Basis | ||
Marketable securities | $ 5,189 | $ 5,551 |
Derivative assets | 5,365 | 0 |
Derivative liabilities | (2,200) | |
Recurring | Level 1 | ||
Fair Value, Assets (Liabilities) Measured on Recurring Basis | ||
Marketable securities | 5,189 | 5,551 |
Derivative assets | 0 | 0 |
Earn-out liability | 0 | 0 |
Recurring | Level 1 | Interest rate swap | Designated as hedging instrument | ||
Fair Value, Assets (Liabilities) Measured on Recurring Basis | ||
Derivative liabilities | 0 | 0 |
Recurring | Level 2 | ||
Fair Value, Assets (Liabilities) Measured on Recurring Basis | ||
Marketable securities | 0 | 0 |
Derivative assets | (5,365) | 0 |
Earn-out liability | 0 | (52,436) |
Recurring | Level 2 | Interest rate swap | Designated as hedging instrument | ||
Fair Value, Assets (Liabilities) Measured on Recurring Basis | ||
Derivative liabilities | (2,217) | (24,096) |
Recurring | Level 3 | ||
Fair Value, Assets (Liabilities) Measured on Recurring Basis | ||
Marketable securities | 0 | 0 |
Derivative assets | 0 | 0 |
Earn-out liability | 0 | 0 |
Recurring | Level 3 | Interest rate swap | Designated as hedging instrument | ||
Fair Value, Assets (Liabilities) Measured on Recurring Basis | ||
Derivative liabilities | 0 | 0 |
Nonrecurring | Level 1 | ||
Fair Value, Assets (Liabilities) Measured on Recurring Basis | ||
Impaired real estate assets, net | 0 | 0 |
Nonrecurring | Level 2 | ||
Fair Value, Assets (Liabilities) Measured on Recurring Basis | ||
Impaired real estate assets, net | 0 | 24,000 |
Nonrecurring | Level 3 | ||
Fair Value, Assets (Liabilities) Measured on Recurring Basis | ||
Impaired real estate assets, net | $ 0 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ / shares in Units, shares in Millions | Jan. 11, 2022USD ($)tradingDayshares | Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($)$ / shares | Dec. 31, 2019tradingDay$ / sharesshares | Apr. 29, 2021$ / shares |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Share price (in dollars per share) | $ 26.25 | $ 31.65 | |||
Expense, change in fair value of earn-out liability | $ | $ 1,809,000 | $ 16,000,000 | |||
Impairment of real estate assets | $ | $ 0 | $ 5,000,000 | |||
Level 3 | Contingent Consideration | Recurring | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Settlement of liability | $ | $ 54,200,000 | ||||
Phillips Edison Limited Partnership | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
PELP transaction, OP units issued and issuable (in shares) | shares | 1.6 | 0.7 | |||
PELP transaction, consecutive trading days | tradingDay | 30 | ||||
PELP transaction, trading days | tradingDay | 180 | 180 | |||
Liquidity quotient denominator (in dollars per share) | $ 7.20 | ||||
Phillips Edison Limited Partnership | Minimum | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
PELP transaction, OP units issued and issuable (in shares) | shares | 1 | ||||
Share price (in dollars per share) | $ 33.60 | ||||
Phillips Edison Limited Partnership | Maximum | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
PELP transaction, OP units issued and issuable (in shares) | shares | 1.7 | ||||
Share price (in dollars per share) | $ 26.40 |
Fair Value Measurements - Sum_3
Fair Value Measurements - Summary of Nonrecurring Fair Value (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | ||
Impairment of real estate assets | $ 0 | $ 5,000,000 |