Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2014 | 1-May-14 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'Hudson Pacific Properties, Inc. | ' |
Entity Central Index Key | '0001482512 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Mar-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Amendment Flag | 'false | ' |
Entity Common Stock, Shares Outstanding | ' | 67,029,422 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
REAL ESTATE ASSETS | ' | ' |
Land | $622,880 | $578,787 |
Building and improvements | 1,292,169 | 1,250,752 |
Tenant improvements | 112,848 | 107,628 |
Furniture and fixtures | 14,491 | 14,396 |
Property under development | 78,040 | 70,128 |
Total real estate held for investment | 2,120,428 | 2,021,691 |
Accumulated depreciation and amortization | -126,483 | -114,866 |
Investment in real estate, net | 1,993,945 | 1,906,825 |
Cash and cash equivalents | 29,063 | 30,356 |
Restricted cash | 17,714 | 16,750 |
Accounts receivable, net | 6,673 | 8,909 |
Straight-line rent receivables | 24,026 | 21,538 |
Deferred leasing costs and lease intangibles, net | 110,042 | 111,398 |
Deferred finance costs, net | 8,028 | 8,582 |
Interest rate contracts | 33 | 192 |
Goodwill | 8,754 | 8,754 |
Prepaid expenses and other assets | 5,143 | 5,170 |
Assets associated with real estate held for sale | 12,768 | 12,801 |
TOTAL ASSETS | 2,216,189 | 2,131,275 |
LIABILITIES AND EQUITY | ' | ' |
Notes payable | 827,438 | 931,308 |
Accounts payable and accrued liabilities | 22,545 | 27,490 |
Below-market leases, net | 46,853 | 45,439 |
Security deposits | 6,147 | 5,941 |
Prepaid rent | 10,565 | 7,623 |
Interest rate contracts | 475 | 0 |
Obligations associated with real estate held for sale | 170 | 133 |
TOTAL LIABILITIES | 914,193 | 1,017,934 |
Hudson Pacific Properties, Inc. stockholders’ equity: | ' | ' |
Preferred stock, $0.01 par value, 10,000,000 authorized; 8.375% series B cumulative redeemable preferred stock, $25.00 liquidation preference, 5,800,000 shares outstanding at March 31, 2014 and December 31, 2013, respectively | 145,000 | 145,000 |
Common stock, $0.01 par value, 490,000,000 authorized, 66,795,071 shares and 57,230,199 shares outstanding at March 31, 2014 and December 31, 2013, respectively | 668 | 572 |
Additional paid-in capital | 1,093,774 | 903,984 |
Accumulated other comprehensive loss | -1,529 | -997 |
Accumulated deficit | -43,784 | -45,113 |
Total Hudson Pacific Properties, Inc. stockholders’ equity | 1,194,129 | 1,003,446 |
TOTAL EQUITY | 1,291,819 | 1,102,866 |
TOTAL LIABILITIES AND EQUITY | 2,216,189 | 2,131,275 |
Series A Cumulative Redeemable Preferred Units Of The Operating Partnership [Member] | ' | ' |
LIABILITIES AND EQUITY | ' | ' |
6.25% series A cumulative redeemable preferred units of the Operating Partnership | 10,177 | 10,475 |
Non-controlling Interests Interests in Consolidated Entities [Member] | ' | ' |
Hudson Pacific Properties, Inc. stockholders’ equity: | ' | ' |
Non-controlling interest | 44,224 | 45,683 |
Non-controlling Interests Common units in the Operating Partnership [Member] | ' | ' |
Hudson Pacific Properties, Inc. stockholders’ equity: | ' | ' |
Non-controlling interest | 53,466 | 53,737 |
TOTAL EQUITY | $53,466 | $53,737 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parentheticals) (USD $) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2014 | Dec. 31, 2013 | |
Common Stock, Number of Shares, Par Value and Other Disclosures [Abstract] | ' | ' |
Common Stock, Par or Stated Value | $0.01 | 0.01 |
Common Stock, Shares Authorized | 490,000,000 | 490,000,000 |
Common Stock, Shares, Outstanding | 66,795,071 | 57,230,199 |
Series A Cumulative Redeemable Preferred Units Of The Operating Partnership [Member] | ' | ' |
Temporary Equity Dividend Rate Percentage | 6.25% | 6.25% |
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract] | ' | ' |
Shares Outstanding of Preferred Stock | 407,066 | ' |
Interest Rate of Preferred Stock | 6.25% | ' |
Liquidation Preference of Preferred Stock (dollars per share) | $25 | ' |
Series B Preferred Stock [Member] | ' | ' |
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract] | ' | ' |
Par Value of Preferred Stock | $0.01 | 0.01 |
Series B Cumulative Redeemable Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Shares Outstanding of Preferred Stock | 5,800,000 | 5,800,000 |
Interest Rate of Preferred Stock | 8.38% | 8.38% |
Liquidation Preference of Preferred Stock (dollars per share) | $25 | 25 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Revenues | ' | ' |
Total revenues | $55,596 | $47,384 |
Operating expenses | ' | ' |
General and administrative | 5,776 | 4,989 |
Depreciation and amortization | 16,668 | 18,431 |
Total operating expenses | 44,376 | 42,253 |
Income from operations | 11,220 | 5,131 |
Other expense (income) | ' | ' |
Interest expense | 6,524 | 5,592 |
Interest income | -9 | -150 |
Acquisition-related expenses | 105 | 0 |
Other expenses | 1 | 45 |
Total other income (expense) | 6,621 | 5,487 |
Income (loss) from continuing operations | 4,599 | -356 |
Net (loss) income from discontinued operations | -66 | 673 |
Net income | 4,533 | 317 |
Net income attributable to preferred stock and units | -3,200 | -3,231 |
Net income attributable to restricted shares | -69 | -79 |
Net loss (income) attributable to non-controlling interest in Consolidated Entities | 43 | -10 |
Net (income) loss attributable to common units in the Operating Partnership | -47 | 131 |
Net income (loss) attributable to Hudson Pacific Properties, Inc. common stockholders | 1,260 | -2,872 |
Net income (loss) from continuing operations attributable to common stockholders - basic and diluted (in dollars per share) | $0.02 | ($0.07) |
Net income from discontinued operations - basic and diluted (in dollars per share) | $0 | $0.01 |
Net income (loss) attributable to common shareholders’ per share - basic and diluted (in dollars per share) | $0.02 | ($0.06) |
Weighted average shares of common stock outstanding - basic and diluted (shares) | 63,625,751 | 52,184,280 |
Dividends declared per common share (dollars per share) | $0.13 | $0.13 |
Office [Member] | ' | ' |
Revenues | ' | ' |
Rental | 36,010 | 26,796 |
Tenant recoveries | 5,571 | 5,749 |
Parking and other | 4,479 | 3,927 |
Total revenues | 46,060 | 36,472 |
Operating expenses | ' | ' |
Operating expenses | 15,927 | 13,265 |
Income from operations | 30,133 | 23,207 |
Media & Entertainment [Member] | ' | ' |
Revenues | ' | ' |
Rental | 5,449 | 5,768 |
Tenant recoveries | 320 | 418 |
Other property-related revenue | 3,634 | 4,490 |
Parking and other | 133 | 236 |
Total revenues | 9,536 | 10,912 |
Operating expenses | ' | ' |
Operating expenses | 6,005 | 5,568 |
Income from operations | $3,531 | $5,344 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (Loss) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Statement of Comprehensive Income [Abstract] | ' | ' |
Net income | $4,533 | $317 |
Other comprehensive (loss) income: cash flow hedge adjustment | -552 | 17 |
Comprehensive income | 3,981 | 334 |
Comprehensive income attributable to preferred stock and units | -3,200 | -3,231 |
Comprehensive income attributable to restricted shares | -69 | -79 |
Comprehensive loss (income) attributable to non-controlling interest in consolidated real estate entities | 43 | -10 |
Comprehensive (income) loss attributable to common units in the Operating Partnership | -27 | 130 |
Comprehensive income (loss) attributable to Hudson Pacific Properties, Inc. stockholders | $728 | ($2,856) |
Consolidated_Statements_of_Equ
Consolidated Statements of Equity (USD $) | Total | Common Stock [Member] | Series B Cumulative Redeemable Preferred Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive (Deficit) Income [Member] | Non-controlling Interests- Common units in the Operating Partnership [Member] | Non-controlling Interests- Members in Consolidated Entities [Member] | Non-controlling Interests- Series A Cumulative Redeemable Preferred Units [Member] |
In Thousands, except Share data, unless otherwise specified | |||||||||
Beginning balance at Dec. 31, 2012 | $897,222 | $475 | ' | $726,605 | ' | ' | ' | ' | ' |
Beginning balance (in shares) at Dec. 31, 2012 | ' | 47,496,732 | ' | ' | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Forfeiture of restricted stock (in shares) | ' | 3,415 | ' | ' | ' | ' | ' | ' | ' |
Amortization of stock-based compensation | ' | ' | ' | 1,783 | ' | ' | ' | ' | ' |
Cash Flow Hedge Adjustment | 17 | ' | ' | ' | ' | ' | ' | ' | ' |
Ending balance at Mar. 31, 2013 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Beginning balance at Dec. 31, 2012 | 897,222 | 475 | 145,000 | 726,605 | -30,580 | -1,287 | 55,549 | 1,460 | 12,475 |
Beginning balance (in shares) at Dec. 31, 2012 | ' | 47,496,732 | ' | ' | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Contributions | 45,704 | ' | ' | ' | ' | ' | ' | 45,704 | ' |
Distributions | -1,160 | ' | ' | ' | ' | ' | ' | -1,160 | ' |
Proceeds from sale of stock (in shares) | ' | 9,812,644 | ' | ' | ' | ' | ' | ' | ' |
Proceeds from sale of common stock, net of underwriters’ discount | 202,542 | 98 | ' | 202,444 | ' | ' | ' | ' | ' |
Common stock issuance transaction costs | -577 | ' | ' | -577 | ' | ' | ' | ' | ' |
Issuance of unrestricted stock (in shares) | ' | 5,756 | ' | ' | ' | ' | ' | ' | ' |
Issuance of restricted stock (in shares) | ' | 44,219 | ' | ' | ' | ' | ' | ' | ' |
Shares repurchased (in shares) | ' | -125,737 | ' | ' | ' | ' | ' | ' | ' |
Shares repurchased | -2,756 | ' | ' | -2,755 | ' | ' | ' | ' | ' |
Declared Dividend | -41,751 | ' | -12,144 | -28,415 | ' | ' | -1,192 | ' | -749 |
Amortization of stock-based compensation | 6,682 | ' | ' | 6,682 | ' | ' | ' | ' | ' |
Net income (loss) | -3,343 | ' | 12,144 | ' | -14,533 | ' | -633 | -321 | 749 |
Cash Flow Hedge Adjustment | 303 | ' | ' | ' | ' | 290 | 13 | ' | ' |
Ending balance at Dec. 31, 2013 | 1,102,866 | 572 | 145,000 | 903,984 | -45,113 | -997 | 53,737 | 45,683 | 10,475 |
Ending balance (in shares) at Dec. 31, 2013 | 57,230,199 | 57,230,199 | ' | ' | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Distributions | -1,416 | ' | ' | ' | ' | ' | ' | -1,416 | ' |
Proceeds from sale of stock (in shares) | ' | 9,563,500 | ' | ' | ' | ' | ' | ' | ' |
Proceeds from sale of common stock, net of underwriters’ discount | 197,468 | 96 | ' | 197,372 | ' | ' | ' | ' | ' |
Common stock issuance transaction costs | -580 | ' | ' | -580 | ' | ' | ' | ' | ' |
Redemption of Series A Cumulative Redeemable Preferred Units | ' | ' | ' | ' | ' | ' | ' | ' | -298 |
Issuance of unrestricted stock (in shares) | ' | 1,372 | ' | ' | ' | ' | ' | ' | ' |
Declared Dividend | -11,712 | ' | -3,036 | -8,378 | ' | ' | -298 | ' | -164 |
Amortization of stock-based compensation | 1,376 | ' | ' | 1,376 | ' | ' | ' | ' | ' |
Net income (loss) | 4,369 | ' | 3,036 | ' | 1,329 | ' | 47 | -43 | 164 |
Cash Flow Hedge Adjustment | -552 | ' | ' | ' | ' | -532 | -20 | ' | ' |
Ending balance at Mar. 31, 2014 | $1,291,819 | $668 | $145,000 | $1,093,774 | ($43,784) | ($1,529) | $53,466 | $44,224 | $10,177 |
Ending balance (in shares) at Mar. 31, 2014 | 66,795,071 | 66,795,071 | ' | ' | ' | ' | ' | ' | ' |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
CASH FLOWS FROM OPERATING ACTIVITIES | ' | ' |
Net income | $4,533 | $317 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 16,668 | 18,905 |
Amortization of deferred financing costs and loan premium, net | 79 | 298 |
Amortization of stock-based compensation | 1,277 | 1,726 |
Straight-line rent receivables | -2,685 | -1,448 |
Amortization of above-market leases | 658 | 690 |
Amortization of below-market leases | -1,902 | -2,209 |
Amortization of lease incentive costs | 53 | 22 |
Bad debt expense | 83 | 31 |
Amortization of ground lease | 62 | 62 |
Change in operating assets and liabilities: | ' | ' |
Restricted cash | -964 | 1 |
Accounts receivable | 2,317 | -1,514 |
Deferred leasing costs and lease intangibles | -819 | -6,073 |
Prepaid expenses and other assets | -13 | 1,208 |
Accounts payable and accrued liabilities | -3,086 | 5,126 |
Security deposits | 206 | 265 |
Prepaid rent | 2,934 | -2,302 |
Net cash provided by operating activities | 19,401 | 15,105 |
CASH FLOWS FROM INVESTING ACTIVITIES | ' | ' |
Additions to investment property | -25,099 | -19,542 |
Property acquisitions | -75,580 | 0 |
Net cash used in investing activities | -100,679 | -19,542 |
CASH FLOWS FROM FINANCING ACTIVITIES | ' | ' |
Proceeds from notes payable | 52,843 | 8,692 |
Payments of notes payable | -156,147 | -60,564 |
Proceeds from issuance of common stock | 197,468 | 189,888 |
Common stock issuance transaction costs | -580 | -305 |
Dividends paid to common stock and unit holders | -8,676 | -7,385 |
Dividends paid to preferred stock and unit holders | -3,200 | -3,231 |
Redemption of 6.25% series A cumulative redeemable preferred units | -298 | 0 |
Distribution to non-controlling member in consolidated real estate entity | -1,416 | 0 |
Payment of loan costs | -9 | 0 |
Net cash provided by financing activities | 79,985 | 127,095 |
Net (decrease) increase in cash and cash equivalents | -1,293 | 122,658 |
Cash and cash equivalents—beginning of period | 30,356 | 18,904 |
Cash and cash equivalents—end of period | 29,063 | 141,562 |
SUPPLEMENTAL CASH FLOWS INFORMATION: | ' | ' |
Cash paid for interest, net of amounts capitalized | 7,363 | 5,331 |
NON-CASH INVESTING ACTIVITIES: | ' | ' |
Accounts payable and accrued liabilities for investment in property | 2,285 | 2,489 |
Assumption of other (assets) and liabilities in connection property acquisitions, net (Note 3) | ($449) | $0 |
Organization
Organization | 3 Months Ended |
Mar. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Organization | ' |
Organization | |
Hudson Pacific Properties, Inc. (which is referred to in these financial statements as the “Company,” “we,” “us,” or “our”) is a Maryland corporation formed on November 9, 2009 that did not have any meaningful operating activity until the consummation of our initial public offering and the related acquisition of our predecessor and certain other entities on June 29, 2010 (“IPO”). | |
Since the completion of the IPO, the concurrent private placement, and the related formation transactions, we have been a fully integrated, self-administered, and self-managed real estate investment trust (“REIT”). Through our controlling interest in Hudson Pacific Properties, L.P. (our “Operating Partnership”) and its subsidiaries, we own, manage, lease, acquire and develop real estate, consisting primarily of office and media and entertainment properties. As of March 31, 2014, we owned a portfolio of 26 office properties and two media and entertainment properties. These properties are located in California and Washington. The results of operations for properties acquired after our IPO are included in our consolidated statements of operations from the date of each such acquisition. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended | |||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||||||
Summary of Significant Accounting Policies | ' | |||||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||||||
Basis of Presentation | ||||||||||||||||||
The accompanying consolidated financial statements of the Company are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The effect of all significant intercompany balances and transactions has been eliminated. | ||||||||||||||||||
The accompanying unaudited interim financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States may have been condensed or omitted pursuant to SEC rules and regulations, although we believe that the disclosures are adequate to make their presentation not misleading. The accompanying unaudited financial statements include, in our opinion, all adjustments, consisting of normal recurring adjustments, necessary to present fairly the financial information set forth therein. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the year ended December 31, 2014. The interim financial statements should be read in conjunction with the consolidated financial statements in our 2013 Annual Report on Form 10-K and the notes thereto. Any reference to the number of properties and square footage are unaudited and outside the scope of our independent registered public accounting firm’s review of our financial statements in accordance with the standards of the United States Public Company Accounting Oversight Board. | ||||||||||||||||||
Use of Estimates | ||||||||||||||||||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of commitments and contingencies at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including those related to acquiring, developing and assessing the carrying values of its real estate properties, its accrued liabilities, and its performance-based equity compensation awards. The Company bases its estimates on historical experience, current market conditions, and various other assumptions that are believed to be reasonable under the circumstances. Actual results could materially differ from these estimates. | ||||||||||||||||||
Investment in Real Estate Properties | ||||||||||||||||||
The properties are carried at cost less accumulated depreciation and amortization. The Company assigns the cost of an acquisition, including the assumption of liabilities, to the acquired tangible assets and identifiable intangible assets and liabilities based on their estimated fair values in accordance with GAAP. The Company assesses fair value based on estimated cash flow projections that utilize discount and/or capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including historical operating results, known and anticipated trends, and market and economic conditions. The fair value of tangible assets of an acquired property considers the value of the property as if it was vacant. | ||||||||||||||||||
Acquisition-related expenses associated with acquisition of operating properties are expensed in the period incurred. | ||||||||||||||||||
The Company records acquired “above and below” market leases at fair value using discount rates that reflect the risks associated with the leases acquired. The amount recorded is based on the present value of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the initial term plus the extended term for any leases with below-market renewal options. Other intangible assets acquired include amounts for in-place lease values that are based on the Company’s evaluation of the specific characteristics of each tenant’s lease. Factors considered include estimates of carrying costs during hypothetical expected lease-up periods, market conditions and costs to execute similar leases. In estimating carrying costs, the Company includes estimates of lost rents at market rates during the hypothetical expected lease-up periods, which are dependent on local market conditions. In estimating costs to execute similar leases, the Company considers leasing commissions, legal and other related costs. | ||||||||||||||||||
The Company capitalizes direct construction and development costs, including predevelopment costs, interest, property taxes, insurance and other costs directly related and essential to the acquisition, development or construction of a real estate project. Indirect development costs, including salaries and benefits, office rent, and associated costs for those individuals directly responsible for and who spend their time on development activities are also capitalized and allocated to the projects to which they relate. Capitalized personnel costs were approximately $0.6 million and approximately $0.5 million for the three months ended March 31, 2014 and 2013, respectively. Interest is capitalized on the construction in progress at a rate equal to the Company’s weighted average cost of debt. Capitalized interest was approximately $1.6 million and $0.8 million for the three months ended March 31, 2014 and 2013, respectively. Construction and development costs are capitalized while substantial activities are ongoing to prepare an asset for its intended use. The Company considers a construction project as substantially complete and held available for occupancy upon the completion of tenant improvements but no later than one year after cessation of major construction activity. Costs incurred after a project is substantially complete and ready for its intended use, or after development activities have ceased, are expensed as they are incurred. Costs previously capitalized related to abandoned acquisitions or developments are charged to earnings. Expenditures for repairs and maintenance are expensed as they are incurred. | ||||||||||||||||||
The Company computes depreciation using the straight-line method over the estimated useful lives of 39 years for building and improvements, 15 years for land improvements, 5 or 7 years for furniture and fixtures and equipment, and over the shorter of asset life or life of the lease for tenant improvements. Above- and below-market lease intangibles are amortized to revenue over the remaining non-cancellable lease terms and bargain renewal periods, if applicable. Other in-place lease intangibles are amortized to expense over the remaining non-cancellable lease term. Depreciation is discontinued when a property is identified as held for sale. | ||||||||||||||||||
Impairment of Long-Lived Assets | ||||||||||||||||||
The Company assesses the carrying value of real estate assets and related intangibles whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable in accordance with GAAP. Impairment losses are recorded on real estate assets held for investment when indicators of impairment are present and the future undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amount. The Company recognizes impairment losses to the extent the carrying amount exceeds the fair value of the properties. Properties held for sale are recorded at the lower of cost or estimated fair value less cost to sell. There is one property held for sale at March 31, 2014 (which is presented as held for sale at December 31, 2013 for comparative purposes) and no properties were held for sale at December 31, 2013. No impairment indicators have been noted during the three months ended March 31, 2014 and 2013. | ||||||||||||||||||
Goodwill | ||||||||||||||||||
Goodwill represents the excess of acquisition cost over the fair value of net tangible and identifiable intangible assets acquired and liabilities assumed in business combinations. Our goodwill balance as of March 31, 2014 was $8,754. We do not amortize this asset but instead analyze it on an annual basis for impairment. No impairment indicators have been noted during the three months ended March 31, 2014 and 2013. | ||||||||||||||||||
Cash and Cash Equivalents | ||||||||||||||||||
Cash and cash equivalents are defined as cash on hand and in banks, plus all short-term investments with a maturity of three months or less when purchased. | ||||||||||||||||||
The Company maintains some of its cash in bank deposit accounts that, at times, may exceed the federally insured limit. No losses have been experienced related to such accounts. | ||||||||||||||||||
Restricted Cash | ||||||||||||||||||
Restricted cash consists of amounts held by lenders to provide for future real estate taxes and insurance expenditures, repairs and capital improvements reserves, general and other reserves and security deposits. | ||||||||||||||||||
Accounts Receivable and Allowance for Doubtful Accounts | ||||||||||||||||||
Accounts receivable consist of amounts due for monthly rents and other charges. The Company maintains an allowance for doubtful accounts for estimated losses resulting from tenant defaults or the inability of tenants to make contractual rent and tenant recovery payments. The Company monitors the liquidity and creditworthiness of its tenants and operators on an ongoing basis. This evaluation considers industry and economic conditions, property performance, credit enhancements and other factors. For straight-line rent amounts, the Company’s assessment is based on amounts estimated to be recoverable over the term of the lease. At March 31, 2014 and December 31, 2013 the Company has reserved $516 and $328, respectively, of straight-line receivables. The Company evaluates the collectability of accounts receivable based on a combination of factors. The allowance for doubtful accounts is based on specific identification of uncollectible accounts and the Company’s historical collection experience. The Company recognizes an allowance for doubtful accounts based on the length of time the receivables are past due, the current business environment and the Company’s historical experience. Historical experience has been within management’s expectations. The Company recognized $83 and $31 of bad debt expense for the three months ended March 31, 2014 and 2013. | ||||||||||||||||||
The following summarizes our accounts receivable net of allowance for doubtful accounts as of: | ||||||||||||||||||
March 31, 2014 | December 31, 2013 | |||||||||||||||||
Accounts receivable | 7,763 | 10,152 | ||||||||||||||||
Allowance for doubtful accounts | (1,090 | ) | (1,243 | ) | ||||||||||||||
Accounts receivable, net | 6,673 | 8,909 | ||||||||||||||||
Revenue Recognition | ||||||||||||||||||
The Company recognizes rental revenue from tenants on a straight-line basis over the lease term when collectability is reasonably assured and the tenant has taken possession or controls the physical use of the leased asset. If the lease provides for tenant improvements, the Company determines whether the tenant improvements, for accounting purposes, are owned by the tenant or the Company. When the Company is the owner of the tenant improvements, the tenant is not considered to have taken physical possession or have control of the physical use of the leased asset until the tenant improvements are substantially completed. When the tenant is the owner of the tenant improvements, any tenant improvement allowance that is funded is treated as a lease incentive and amortized as a reduction of revenue over the lease term. Tenant improvement ownership is determined based on various factors including, but not limited to: | ||||||||||||||||||
• | whether the lease stipulates how and on what a tenant improvement allowance may be spent; | |||||||||||||||||
• | whether the tenant or landlord retains legal title to the improvements at the end of the lease term; | |||||||||||||||||
• | whether the tenant improvements are unique to the tenant or general-purpose in nature; and | |||||||||||||||||
• | whether the tenant improvements are expected to have any residual value at the end of the lease. | |||||||||||||||||
Certain leases provide for additional rents contingent upon a percentage of the tenant’s revenue in excess of specified base amounts or other thresholds. Such revenue is recognized when actual results reported by the tenant, or estimates of tenant results, exceed the base amount or other thresholds. Such revenue is recognized only after the contingency has been removed (when the related thresholds are achieved), which may result in the recognition of rental revenue in periods subsequent to when such payments are received. | ||||||||||||||||||
Other property-related revenue is revenue that is derived from the tenants’ use of lighting, equipment rental, parking, power, HVAC and telecommunications (phone and Internet). Other property-related revenue is recognized when these items are provided. | ||||||||||||||||||
Tenant recoveries related to reimbursement of real estate taxes, insurance, repairs and maintenance, and other operating expenses are recognized as revenue in the period during which the applicable expenses are incurred. The reimbursements are recognized and presented gross, as the Company is generally the primary obligor with respect to purchasing goods and services from third-party suppliers, has discretion in selecting the supplier and bears the associated credit risk. | ||||||||||||||||||
The Company recognizes gains on sales of properties upon the closing of the transaction with the purchaser. Gains on properties sold are recognized using the full accrual method when (i) the collectability of the sales price is reasonably assured, (ii) the Company is not obligated to perform significant activities after the sale, (iii) the initial investment from the buyer is sufficient and (iv) other profit recognition criteria have been satisfied. Gains on sales of properties may be deferred in whole or in part until the requirements for gain recognition have been met. | ||||||||||||||||||
Deferred Financing Costs | ||||||||||||||||||
Deferred financing costs are amortized over the term of the respective loan. | ||||||||||||||||||
Derivative Financial Instruments | ||||||||||||||||||
The Company manages interest rate risk associated with borrowings by entering into interest rate derivative contracts. The Company recognizes all derivatives on the consolidated balance sheet at fair value. Derivatives that are not hedges are adjusted to fair value and the changes in fair value are reflected as income or expense. If the derivative is a hedge, depending on the nature of the hedge, changes in the fair value of derivatives are either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings, or recognized in other comprehensive income, which is a component of equity. The ineffective portion of a derivative’s change in fair value is immediately recognized in earnings. | ||||||||||||||||||
The Company held three interest rate contracts as of March 31, 2014 and December 31, 2013, respectively, all of which have been accounted for as cash flow hedges as more fully described in note 6 below. | ||||||||||||||||||
Stock-Based Compensation | ||||||||||||||||||
Accounting Standard Codification, or ASC, Topic 718, Compensation—Stock Compensation (referred to as ASC Topic 718 and formerly known as FASB 123R), requires us to recognize an expense for the fair value of equity-based compensation awards. Grants of stock options, restricted stock, restricted stock units and performance units under our equity incentive award plans are accounted for under ASC Topic 718. Our compensation committee will regularly consider the accounting implications of significant compensation decisions, especially in connection with decisions that relate to our equity incentive award plans and programs. | ||||||||||||||||||
Income Taxes | ||||||||||||||||||
Our taxable income prior to the completion of our IPO is reportable by the members of the limited liability companies that comprise our predecessor. Our property-owning subsidiaries are limited liability companies and are treated as pass-through entities for income tax purposes. Accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements for the activities of these entities. | ||||||||||||||||||
We have elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”) commencing with our initial taxable year. To qualify as a REIT, we are required to distribute at least 90% of our REIT taxable income to our stockholders and meet the various other requirements imposed by the Code relating to such matters as operating results, asset holdings, distribution levels and diversity of stock ownership. Provided we qualify for taxation as a REIT, we are generally not subject to corporate level income tax on the earnings distributed currently to our stockholders that we derive from our REIT qualifying activities. If we fail to qualify as a REIT in any taxable year, and are unable to avail ourselves of certain savings provisions set forth in the Code, all of our taxable income would be subject to federal income tax at regular corporate rates, including any applicable alternative minimum tax. | ||||||||||||||||||
We have elected, together with one of our subsidiaries, to treat such subsidiary as a taxable REIT subsidiary (“TRS”) for federal income tax purposes. Certain activities that we undertake must be conducted by a TRS, such as non-customary services for our tenants, and holding assets that we cannot hold directly. A TRS is subject to federal and state income taxes. | ||||||||||||||||||
The Company is subject to the statutory requirements of the states in which it conducts business. | ||||||||||||||||||
The Company periodically evaluates its tax positions to determine whether it is more likely than not that such positions would be sustained upon examination by a tax authority for all open tax years, as defined by the statute of limitations, based on their technical merits. As of March 31, 2014, the Company has not established a liability for uncertain tax positions. | ||||||||||||||||||
Fair Value of Assets and Liabilities | ||||||||||||||||||
Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other financial instruments and balances at fair value on a non-recurring basis (e.g., carrying value of impaired real estate and long-lived assets). Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories: | ||||||||||||||||||
• | Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; | |||||||||||||||||
• | Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and | |||||||||||||||||
• | Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable. | |||||||||||||||||
When available, the Company utilizes quoted market prices from an independent third-party source to determine fair value and classifies such items in Level 1 or Level 2. In instances where the market for a financial instrument is not active, regardless of the availability of a nonbinding quoted market price, observable inputs might not be relevant and could require the Company to make a significant adjustment to derive a fair value measurement. Additionally, in an inactive market, a market price quoted from an independent third party may rely more on models with inputs based on information available only to that independent third party. When the Company determines the market for a financial instrument owned by the Company to be illiquid or when market transactions for similar instruments do not appear orderly, the Company uses several valuation sources (including internal valuations, discounted cash flow analysis and quoted market prices) and establishes a fair value by assigning weights to the various valuation sources. | ||||||||||||||||||
Changes in assumptions or estimation methodologies can have a material effect on these estimated fair values. In this regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, may not be realized in an immediate settlement of the instrument. | ||||||||||||||||||
The Company considers the following factors to be indicators of an inactive market: (i) there are few recent transactions, (ii) price quotations are not based on current information, (iii) price quotations vary substantially either over time or among market makers (for example, some brokered markets), (iv) indexes that previously were highly correlated with the fair values of the asset or liability are demonstrably uncorrelated with recent indications of fair value for that asset or liability, (v) there is a significant increase in implied liquidity risk premiums, yields, or performance indicators (such as delinquency rates or loss severities) for observed transactions or quoted prices when compared with the Company’s estimate of expected cash flows, considering all available market data about credit and other nonperformance risk for the asset or liability, (vi) there is a wide bid-ask spread or significant increase in the bid-ask spread, (vii) there is a significant decline or absence of a market for new issuances (that is, a primary market) for the asset or liability or similar assets or liabilities, and (viii) little information is released publicly (for example, a principal-to-principal market). | ||||||||||||||||||
The Company considers the following factors to be indicators of non-orderly transactions: (i) there was not adequate exposure to the market for a period before the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities under current market conditions, (ii) there was a usual and customary marketing period, but the seller marketed the asset or liability to a single market participant, (iii) the seller is in or near bankruptcy or receivership (that is, distressed), or the seller was required to sell to meet regulatory or legal requirements (that is, forced), and (iv) the transaction price is an outlier when compared with other recent transactions for the same or similar assets or liabilities. | ||||||||||||||||||
The Company’s interest rate contract agreements are classified as Level 2 and their fair value is derived from estimated values obtained from observable market data for similar instruments. | ||||||||||||||||||
As of March 31, 2014, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk: | ||||||||||||||||||
Interest Rate Derivative | Number of Instruments | Notional Amount | ||||||||||||||||
Interest Rate Caps | 2 | $97.0 million | ||||||||||||||||
Interest Rate Swaps | 1 | $64.5 million | ||||||||||||||||
Non-designated Hedges | ||||||||||||||||||
For the three months ended March 31, 2014 and 2013, all of the Company’s derivatives were designated as cash flow hedges. | ||||||||||||||||||
Tabular Disclosure of Fair Values of Derivative Instruments on the Balance Sheet | ||||||||||||||||||
The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of March 31, 2014 and December 31, 2013. The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the consolidated balance sheets. | ||||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||||
Fair Value as of | Fair Value as of | |||||||||||||||||
Balance Sheet Location | March 31, 2014 | December 31, 2013 | Balance Sheet Location | March 31, 2014 | December 31, 2013 | |||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||||
Interest rate products | Interest rate contracts | $ | 33 | $ | 192 | Interest rate contracts | $ | 475 | — | |||||||||
Total | $ | 33 | $ | 192 | $ | 475 | — | |||||||||||
Tabular Disclosure of the Effect of Derivative Instruments on the Income Statement | ||||||||||||||||||
The tables below present the effect of the Company’s derivative financial instruments on the Statement of Operations for the three months ended March 31, 2014 and 2013. | ||||||||||||||||||
Three Months Ended March 31, | ||||||||||||||||||
2014 | 2013 | |||||||||||||||||
Beginning Balance of OCI related to interest rate contracts | 1,162 | 1,465 | ||||||||||||||||
Unrealized Loss Recognized in OCI Due to Change in Fair Value of interest rate contracts | 634 | 7 | ||||||||||||||||
Loss Reclassified from OCI into Income (as Interest Expense) | (82 | ) | (24 | ) | ||||||||||||||
Net Change in OCI | 552 | (17 | ) | |||||||||||||||
Ending Balance of Accumulated OCI Related to Derivatives | 1,714 | 1,448 | ||||||||||||||||
Credit-Risk-Related Contingent Features | ||||||||||||||||||
As of March 31, 2014, the Company had one derivative that was in a net liability position. | ||||||||||||||||||
Recently Issued Accounting Literature | ||||||||||||||||||
Changes to GAAP are established by the FASB in the form of ASUs. We consider the applicability and impact of all ASUs. Recently issued ASUs not listed below are not expected to have a material impact on our consolidated financial position and results of operations, because either the ASU is not applicable or the impact is expected to be immaterial. | ||||||||||||||||||
In April 2014, the FASB issued amendments to guidance for reporting discontinued operations and disposals of components of an entity. The amended guidance requires that a disposal representing a strategic shift that has (or will have) a major effect on an entity’s financial results or a business activity classified as held for sale should be reported as discontinued operations. The amendments also expand the disclosure requirements for discontinued operations and add new disclosures for individually significant dispositions that do not qualify as discontinued operations. The amendments are effective prospectively for fiscal years, and interim reporting periods within those years, beginning after December 15, 2014 (early adoption is permitted only for disposals that have not been previously reported). We have early adopted the amended guidance and the result did not have a meaningful impact on our consolidated financial position or results of operations. |
Investment_in_Real_Estate
Investment in Real Estate | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||
Real Estate [Abstract] | ' | |||||||||||||||||||
Investment in Real Estate | ' | |||||||||||||||||||
Investment in Real Estate | ||||||||||||||||||||
Acquisitions | ||||||||||||||||||||
During the first quarter of 2014, we acquired the following: Merrill Place and 3402 Pico. The results of operations for each of these acquisitions are included in our consolidated statements of operations from the date of acquisition. The following table represents our purchase price accounting for each of these acquisitions: | ||||||||||||||||||||
Merrill Place | 3402 Pico Blvd | |||||||||||||||||||
Date of Acquisition | 12-Feb-14 | 28-Feb-14 | Total | |||||||||||||||||
Consideration paid | ||||||||||||||||||||
Cash consideration | $ | 57,034 | $ | 18,546 | $ | 75,580 | ||||||||||||||
Total consideration | $ | 57,034 | $ | 18,546 | $ | 75,580 | ||||||||||||||
Allocation of consideration paid | ||||||||||||||||||||
Investment in real estate, net | $ | 57,508 | $ | 18,500 | $ | 76,008 | ||||||||||||||
Above-market leases | 173 | — | 173 | |||||||||||||||||
Deferred leasing costs and lease intangibles, net | 3,163 | — | 3,163 | |||||||||||||||||
Below-market leases | (3,315 | ) | — | (3,315 | ) | |||||||||||||||
Other (liabilities) asset assumed, net | (495 | ) | 46 | (449 | ) | |||||||||||||||
Total consideration paid | $ | 57,034 | $ | 18,546 | $ | 75,580 | ||||||||||||||
During 2013, we acquired the following: 3401 Exposition, Pinnacle II, the Seattle portfolio and 1861 Bundy. The results of operations for each of these acquisitions are included in our consolidated statements of operations from the date of acquisition. The following table represents our purchase price accounting for each of these acquisitions: | ||||||||||||||||||||
3401 Exposition | Pinnacle II | Seattle Portfolio | 1861 Bundy | |||||||||||||||||
Date of Acquisition | May 22, 2013 | June 14, 2013 | July 31, 2013 | September 26, 2013 | Total | |||||||||||||||
Consideration paid | ||||||||||||||||||||
Cash consideration | $ | 8,489 | $ | 1,505 | $ | 368,389 | $ | 11,500 | $ | 389,883 | ||||||||||
Notes Receivable | 4,000 | — | — | — | 4,000 | |||||||||||||||
Debt Assumed | 13,233 | 89,066 | — | — | 102,299 | |||||||||||||||
Non-controlling interest in consolidated real estate entity | — | 45,704 | — | — | 45,704 | |||||||||||||||
Total consideration | $ | 25,722 | $ | 136,275 | $ | 368,389 | $ | 11,500 | $ | 541,886 | ||||||||||
Allocation of consideration paid | ||||||||||||||||||||
Investment in real estate, net | $ | 25,439 | $ | 134,289 | $ | 367,094 | $ | 11,500 | $ | 538,322 | ||||||||||
Deferred leasing costs and lease intangibles, net | — | 12,637 | 21,619 | — | 34,256 | |||||||||||||||
Fair market unfavorable debt value | — | (5,820 | ) | — | — | (5,820 | ) | |||||||||||||
Below-market leases | — | (7,783 | ) | (14,666 | ) | — | (22,449 | ) | ||||||||||||
Other (liabilities) asset assumed, net | 283 | 2,952 | (5,658 | ) | — | (2,423 | ) | |||||||||||||
Total consideration paid | $ | 25,722 | $ | 136,275 | $ | 368,389 | $ | 11,500 | $ | 541,886 | ||||||||||
The table below shows the pro forma financial information for the three months ended March 31, 2014 and 2013 as if these properties had been acquired as of January 1, 2013. | ||||||||||||||||||||
Three Months Ended March 31, | ||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
Total revenues | $ | 56,348 | $ | 48,888 | ||||||||||||||||
Net loss | $ | 4,504 | $ | 262 | ||||||||||||||||
Dispositions | ||||||||||||||||||||
During the quarter ended March 31, 2014, the Company began to market its Tierrasanta office property for sale | ||||||||||||||||||||
and therefore reclassified its assets and liabilities to held for sale as the March 31, 2014 and December 31, 2013. | ||||||||||||||||||||
On May 31, 2013, the Company entered into an agreement to sell its City Plaza property for approximately $56.0 million (before certain credits, prorations, and closing costs). The transaction closed on July 12, 2013. The transaction resulted in an approximately $5.6 million impairment loss which was recorded in the second quarter of 2013. The Company reclassified City Plaza’s results of operations for the three months ended March 31, 2014 and 2013 to discontinued operations on its consolidated statements of operations. | ||||||||||||||||||||
The following table sets forth the discontinued operations for the three months ended March 31, 2014 and 2013 for City Plaza: | ||||||||||||||||||||
Three Months Ended March 31, | ||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
Total office revenues | $ | — | $ | 1,997 | ||||||||||||||||
Office operating expenses | (66 | ) | (851 | ) | ||||||||||||||||
Depreciation and amortization | — | (473 | ) | |||||||||||||||||
Loss from discontinued operations | $ | (66 | ) | $ | 673 | |||||||||||||||
Lease_Intangibles
Lease Intangibles | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||
Lease Intangibles | ' | |||||||
Lease Intangibles | ||||||||
The following summarizes our deferred leasing cost and lease intangibles as of: | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Above-market leases | $ | 16,392 | $ | 16,517 | ||||
Leases in place | 88,673 | 86,417 | ||||||
Below-market ground leases | 7,513 | 7,513 | ||||||
Other lease intangibles | 37,807 | 37,162 | ||||||
Lease buy-out costs | 3,107 | 3,107 | ||||||
Deferred leasing costs | 30,704 | 29,759 | ||||||
$ | 184,196 | $ | 180,475 | |||||
Accumulated amortization | (74,154 | ) | (69,077 | ) | ||||
Deferred leasing costs and lease intangibles, net | $ | 110,042 | $ | 111,398 | ||||
Below-market leases | $ | 70,829 | $ | 67,513 | ||||
Accumulated accretion | (23,976 | ) | (22,074 | ) | ||||
Below-market leases, net | $ | 46,853 | $ | 45,439 | ||||
Notes_Payable
Notes Payable | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Debt Disclosure [Abstract] | ' | |||||||||||
Notes Payable | ' | |||||||||||
Notes Payable | ||||||||||||
Senior Unsecured Revolving Credit Facility | ||||||||||||
On August 3, 2012, we replaced our $200.0 million secured revolving credit facility with a $250.0 million unsecured revolving credit facility with a group of lenders for which Wells Fargo Bank, N.A. acts as administrative agent and its affiliate acts as joint lead arranger, Bank of America, N.A. acts as joint lead arranger and, together with Barclays Capital, acts as joint syndication agent, and Keybank, N.A., acts as documentation agent. Our Operating Partnership is the borrower under our new unsecured revolving credit facility. The facility is required to be guaranteed by us and all of our subsidiaries that own unencumbered properties. The facility includes an accordion feature that allows us to increase the availability by $150.0 million, to $400.0 million, under specified circumstances and subject to receiving commitments from lenders. | ||||||||||||
Our facility bears interest at a rate per annum equal to LIBOR plus 155 basis points to 220 basis points, depending on our leverage ratio. If the Company obtains a credit rating for its senior unsecured long-term indebtedness, it may make an irrevocable election to change the interest rate for the facility to a rate per annum equal to LIBOR plus 100 basis points to 185 basis points, depending on the credit rating. Our facility is subject to a facility fee in an amount equal to our unused commitments multiplied by a rate per annum equal to 25 basis points to 35 basis points, depending on our usage of the facility, or, if we make the credit rating election, in an amount equal to the aggregate amount of our commitments multiplied by a rate per annum equal to 15 basis points to 45 basis points, depending upon the credit rating. The amount available for us to borrow under the facility is subject to compliance with certain covenants, including the following financial covenants: | ||||||||||||
• | a maximum leverage ratio (defined as consolidated total indebtedness plus our pro rata share of indebtedness of unconsolidated affiliates to total asset value) of 0.60:1.00; | |||||||||||
• | a minimum fixed charge coverage ratio (defined as consolidated earnings before interest, taxes, depreciation and amortization (“EBITDA”) plus our pro rata share of EBITDA of unconsolidated affiliates to fixed charges) of 1.50:1.00; | |||||||||||
• | a maximum secured indebtedness leverage ratio (defined as consolidated secured indebtedness plus our pro rata share of secured indebtedness of unconsolidated affiliates to total asset value) of 0.60:1:00 through and including August 3, 2014 and 0.55:1:00 thereafter; | |||||||||||
• | a maximum unencumbered leverage ratio (defined as consolidated unsecured indebtedness plus our pro rata share of unsecured indebtedness of unconsolidated affiliates to total unencumbered asset value) of 0.60:1:00; | |||||||||||
• | a minimum unsecured interest coverage ratio (defined as consolidated net operating income from unencumbered properties plus our pro rata share of net operating income from unencumbered properties to unsecured interest expense) of 1.60:1.00; and | |||||||||||
• | a maximum recourse debt ratio (defined as recourse indebtedness other than indebtedness under the revolving credit facility but including unsecured lines of credit to total asset value) of 0.15:1.00. | |||||||||||
In addition to these covenants, the facility also includes certain limitations on dividend payouts and distributions, limits on certain types of investments outside of our primary business, and other customary affirmative and negative covenants. Our ability to borrow under the facility is subject to continued compliance with these covenants. | ||||||||||||
As of March 31, 2014, we were in compliance with our facility’s financial covenants. As of March 31, 2014, we had $250.0 million of total capacity under our unsecured revolving credit facility, of which $40.0 million had been drawn. | ||||||||||||
The following table sets forth information as of March 31, 2014 with respect to our outstanding indebtedness. | ||||||||||||
Outstanding | ||||||||||||
Debt | March 31, 2014 | December 31, 2013 | Interest Rate(1) | Maturity | ||||||||
Date | ||||||||||||
Unsecured Revolving Credit Facility | $ | 40,000 | $ | 155,000 | LIBOR+1.55% to 2.20% | 8/3/16 | ||||||
Mortgage loan secured by 3401 Exposition Boulevard(2) | 13,233 | 13,233 | LIBOR+3.80% | 6/9/14 | ||||||||
Mortgage loan secured by 6922 Hollywood Boulevard(3) | 40,151 | 40,396 | 5.58% | 1/1/15 | ||||||||
Mortgage loan secured by 275 Brannan | 15,000 | 15,000 | LIBOR+2.00% | 10/5/15 | ||||||||
Mortgage loan secured by Pinnacle II(4) | 88,248 | 88,540 | 6.31% | 9/6/16 | ||||||||
Mortgage loan secured by 901 Market(5) | 49,600 | 49,600 | LIBOR+2.25% | 10/31/16 | ||||||||
Mortgage loan secured by Element LA(6) | 13,287 | 566 | LIBOR+1.95% | 11/1/17 | ||||||||
Mortgage loan secured by Sunset Gower/Sunset Bronson(7) | 97,000 | 97,000 | LIBOR+2.25% | 2/11/18 | ||||||||
Mortgage loan secured by Rincon Center(8) | 105,544 | 105,853 | 5.13% | 5/1/18 | ||||||||
Mortgage loan secured by First & King(9) | 95,000 | 95,000 | LIBOR+1.60% | 8/31/18 | ||||||||
Mortgage loan secured by Met Park North(10) | 64,500 | 64,500 | LIBOR+1.55% | 8/1/20 | ||||||||
Mortgage loan secured by First Financial(11) | 42,933 | 43,000 | 4.58% | 2/1/22 | ||||||||
Mortgage loan secured by 10950 Washington(8) | 29,188 | 29,300 | 5.32% | 3/11/22 | ||||||||
Mortgage loan secured by Pinnacle I(12) | 129,000 | 129,000 | 3.95% | 11/7/22 | ||||||||
Subtotal | $ | 822,684 | $ | 925,988 | ||||||||
Unamortized loan premium, net(13) | 4,754 | 5,320 | ||||||||||
Total | $ | 827,438 | $ | 931,308 | ||||||||
__________________ | ||||||||||||
-1 | Interest rate with respect to indebtedness is calculated on the basis of a 360-day year for the actual days elapsed, excluding the amortization of loan fees and costs. | |||||||||||
-2 | This loan was assumed on May 22, 2013 in connection with the closing of our acquisition of the 3401 Exposition Boulevard property. | |||||||||||
-3 | This loan was assumed on November 22, 2011 in connection with the closing of our acquisition of the 6922 Hollywood Boulevard property. This loan is amortizing based on a 30-year amortization schedule. | |||||||||||
-4 | This loan was assumed on June 14, 2013 in connection with the contribution of the Pinnacle II building to the Company’s joint venture with M. David Paul & Associates/Worthe Real Estate Group. This loan bore interest only for the first five years. Beginning with the payment due October 6, 2011, monthly debt service includes annual debt amortization payments based on a 30-year amortization schedule. | |||||||||||
-5 | On October 29, 2012, we obtained a loan for our 901 Market property pursuant to which we borrowed $49,600 upon closing, with the ability to draw up to an additional $11,900 for budgeted base building, tenant improvements, and other costs associated with the renovation and lease-up of that property. | |||||||||||
-6 | We have the ability to draw up to $65,500 for budgeted site-work, construction of a parking garage, base building, tenant improvement, and leasing commission costs associated with the renovation and lease-up of the property. | |||||||||||
-7 | On March 16, 2011, we purchased an interest rate cap in order to cap one-month LIBOR at 3.715% with respect to $50,000 of the loan through February 11, 2016. On January 11, 2012 we purchased an interest rate cap in order to cap one-month LIBOR at 2.00% with respect to $42,000 of the loan through February 11, 2016. Effective August 22, 2013, the terms of this loan were amended to increase the outstanding balance from $92,000 to $97,000, reduce the interest rate from LIBOR plus 3.50% to LIBOR plus 2.25%, and extend the maturity date from February 11, 2016 to February 11, 2018. | |||||||||||
-8 | This loan is amortizing based on a 30-year amortization schedule. | |||||||||||
-9 | This loan bears interest only for the first two years. Beginning with the payment due August 1, 2015, monthly debt service will include annual debt amortization payments of $1,604 based on a 30-year amortization schedule. | |||||||||||
-10 | This loan bears interest only at a rate equal to one-month LIBOR plus 1.55%. The full loan amount is subject to an interest rate contract that swapped one-month LIBOR to a fixed rate of 2.1644% through the loan's maturity on August 1, 2020. | |||||||||||
-11 | This loan bears interest only for the first two years. Beginning with the payment due March 1, 2014, monthly debt service will include principal payments based on a 30-year amortization schedule, for total annual debt service of $2,639. | |||||||||||
-12 | This loan bears interest only for the first five years. Beginning with the payment due December 6, 2017, monthly debt service will include annual debt amortization payments based on a 30-year amortization schedule. | |||||||||||
-13 | Represents unamortized amount of the non-cash mark-to-market adjustment on debt associated with 6922 Hollywood Boulevard and Pinnacle II. | |||||||||||
The Company presents its financial statements on a consolidated basis. Notwithstanding such presentation, except to the extent expressly indicated, such as in the case of the project financing for our Sunset Gower and Sunset Bronson properties, our separate property-owning subsidiaries are not obligors of or under the debt of their respective affiliates and each property-owning subsidiary’s separate liabilities do not constitute obligations of its respective affiliates. | ||||||||||||
The minimum future annual principal payments due on our secured and unsecured notes payable at March 31, 2014, excluding the non-cash loan premium amortization, were as follows (in thousands): | ||||||||||||
2014 (nine months ending December 31, 2014) | $ | 16,871 | ||||||||||
2015 | 59,238 | |||||||||||
2016 | 180,512 | |||||||||||
2017 | 18,344 | |||||||||||
2018 | 290,228 | |||||||||||
2019 | 3,706 | |||||||||||
Thereafter | 253,785 | |||||||||||
Total | $ | 822,684 | ||||||||||
Interest_Rate_Contracts
Interest Rate Contracts | 3 Months Ended |
Mar. 31, 2014 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' |
Interest Rate Contracts | ' |
Interest Rate Contracts | |
On February 11, 2011, we closed a five-year term loan totaling $92.0 million with Wells Fargo Bank, N.A., secured by our Sunset Gower and Sunset Bronson media and entertainment campuses. The loan bears interest at a rate equal to one-month LIBOR plus 3.50%. On March 16, 2011, we purchased an interest rate cap in order to cap one-month LIBOR at 3.715% on $50.0 million of the loan through its maturity on February 11, 2016. On January 11, 2012, we purchased an interest rate cap in order to cap one-month LIBOR at 2.00% with respect to $42.0 million of the loan through its maturity on February 11, 2016. We designated each of these interest rate cap contracts as a cash flow hedge for accounting purposes. | |
Effective August 22, 2013, the terms of this loan were amended to, among other changes, increase the outstanding balance from $92.0 million to $97.0 million and extend the maturity date from February 11, 2016 to February 11, 2018. The interest rate contracts described above were not changed in connection with this loan amendment. | |
On July 31, 2013, we closed a seven-year loan totaling $64.5 million with Union Bank, N.A., secured by our Met Park North property. The loan bears interest at a rate equal to one-month LIBOR plus 1.55%. The full loan is subject to an interest rate contract that swapped one-month LIBOR to a fixed rate of 2.1644% through the loan’s maturity on August 1, 2020. | |
The combined fair market value of the interest rate caps at March 31, 2014 and December 31, 2013 was $33 and $55, respectively. The fair market value of the interest rate swap at March 31, 2014 and December 31, 2013 was $(475) and $137, respectively. |
Future_Minimum_Base_Rents_and_
Future Minimum Base Rents and Lease Payments Future Minimum Rents | 3 Months Ended | |||
Mar. 31, 2014 | ||||
Future Minimum Base Rents and Lease Payments Future Minimum Rents [Abstract] | ' | |||
Future Minimum Base Rents and Lease Payments Future Minimum Rents | ' | |||
Future Minimum Base Rents and Lease Payments Future Minimum Rents | ||||
Our properties are leased to tenants under operating leases with initial term expiration dates ranging from 2014 to 2020. Approximate future combined minimum rentals (excluding tenant reimbursements for operating expenses and without regard to cancellation options) for properties at March 31, 2014 are presented below for the years/periods ended December 31. The table below does not include rents under leases at our media and entertainment properties with terms of one year or less. | ||||
2014 (nine months ending December 31, 2014) | $ | 105,875 | ||
2015 | 152,830 | |||
2016 | 156,491 | |||
2017 | 138,939 | |||
2018 | 125,187 | |||
2019 | 112,903 | |||
Thereafter | 457,549 | |||
Total | $ | 1,249,774 | ||
Future Minimum Lease Payments | ||||
In conjunction with the acquisition of the Sunset Gower property, our subsidiary, SGS Realty II, LLC, assumed a ground lease agreement (expiring March 31, 2060) for a portion of the land with an unrelated party. As a result of the March 2011 rent adjustment, monthly rent increased to $31, whereas the monthly rent totaled $14 at the time of acquisition. The rental rate is subject to adjustment again in March 2018 and every seven years thereafter. | ||||
In conjunction with the acquisition of the Del Amo Office building, our subsidiary, Hudson Del Amo Office, LLC, assumed a ground sublease (expiring June 30, 2049) with an unrelated party. Rent under the ground sublease is $1.00 per year, with the sublessee being responsible for all impositions, insurance premiums, operating charges, maintenance charges, construction costs and other charges, costs and expenses that arise or may be contemplated under any provisions of the ground sublease. | ||||
In conjunction with the acquisition of the 9300 Wilshire Boulevard building, our subsidiary, Hudson 9300 Wilshire, LLC, assumed a ground lease (expiring August 14, 2032) with an unrelated party. Minimum rent under the ground lease is $75 per year (additional rent under this lease of 6% of gross rentals less minimum rent, as defined in such lease, is not included in this amount). | ||||
In conjunction with the acquisition of the 222 Kearny Street building, our subsidiary, Hudson 222 Kearny, LLC, assumed a ground lease (expiring June 14, 2054) with an unrelated party. Minimum rent under the ground lease is the greater of $975 per year or 20.0% of the first $8,000 of the tenant’s “Operating Income” during any “Lease Year,” as such terms are defined in the ground lease. The table below reflects the $975 per year lease payment. | ||||
The following table provides information regarding our future minimum lease payments at March 31, 2014 under these lease agreements. | ||||
2014 (nine months ending December 31, 2014) | $ | 1,063 | ||
2015 | 1,417 | |||
2016 | 1,417 | |||
2017 | 1,417 | |||
2018 | 1,417 | |||
2019 | 1,417 | |||
Thereafter | 49,408 | |||
Total | $ | 57,556 | ||
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||
Fair Value of Financial Instruments | ' | |||||||||||||||
Fair Value of Financial Instruments | ||||||||||||||||
The carrying values of cash and cash equivalents, restricted cash, receivables, payables, and accrued liabilities are reasonable estimates of fair value because of the short-term maturities of these instruments. Fair values for notes payable are estimates based on rates currently prevailing for similar instruments of similar maturities using Level 2 instruments. The estimated fair values of interest-rate contract/cap arrangements were derived from estimated values based on observable market data for similar instruments. | ||||||||||||||||
March 31, 2014 | December 31, 2013 | |||||||||||||||
Carrying | Fair Value | Carrying | Fair Value | |||||||||||||
Value | Value | |||||||||||||||
Notes payable | $ | 827,438 | $ | 835,502 | $ | 931,308 | $ | 940,435 | ||||||||
Derivative assets, disclosed as “Interest rate contracts” | 33 | 33 | 192 | 192 | ||||||||||||
Derivative liabilities, disclosed as “Interest rate contracts” | (475 | ) | (475 | ) | — | — | ||||||||||
Equity
Equity | 3 Months Ended | ||||||||||||||
Mar. 31, 2014 | |||||||||||||||
Equity [Abstract] | ' | ||||||||||||||
Equity | ' | ||||||||||||||
Equity | |||||||||||||||
Non-controlling Interests | |||||||||||||||
Common units in the Operating Partnership | |||||||||||||||
Common units in the operating partnership consisted of 2,382,563 common units of partnership interests, or common units, not owned by us. Common units and shares of our common stock have essentially the same economic characteristics, as they share equally in the total net income or loss distributions of our operating partnership. Investors who own common units have the right to cause our operating partnership to redeem any or all of their common units for cash equal to the then-current market value of one share of common stock or, at our election, issue shares of our common stock in exchange for common units on a one-for-one basis. | |||||||||||||||
Non-controlling interest—members in consolidated entities | |||||||||||||||
Non-controlling interest—members in consolidated entities refers to our joint venture partner, Media Center Partners, LLC, a California limited liability company (“MCP”), with which we have entered into a joint venture, Hudson MC Partners, LLC, a Delaware limited liability company (the “Pinnacle JV”), to acquire The Pinnacle, a two-building (Pinnacle I and Pinnacle II), 625,640 square-foot office property located in Burbank, California. As of March 31, 2014, we own a 65.0% in the Pinnacle JV, which owns the 625,640 square-foot project known as The Pinnacle. As of December 31, 2012 and until the acquisition by the Pinnacle JV of the 231,864 square-foot Pinnacle II building on June 14, 2013, we owned a 98.25% interest in the Pinnacle JV, which owns the 393,776 square-foot Pinnacle I building. | |||||||||||||||
6.25% series A cumulative redeemable preferred units of the Operating Partnership | |||||||||||||||
6.25% series A cumulative redeemable preferred units of the Operating Partnership are 407,066 series A preferred units of partnership interest in our operating partnership, or series A preferred units, that are not owned by us. These series A preferred units are entitled to preferential distributions at a rate of 6.25% per annum on the liquidation preference of $25.00 per unit and became convertible at the option of the holder into common units or redeemable into cash or, at our option, exchangeable for registered shares of common stock, after June 29, 2013. In October 2013, one of our series A preferred unit holders required us to redeem 80,000 series A preferred units. We elected to redeem these units for cash equal to the liquidation preference of $25.00 per unit. As a result of this redemption, our outstanding series A preferred units decreased from 499,014 units outstanding to 419,014 units outstanding. In March 2014, one of our series A preferred unit holders required us to redeem 11,948 series A preferred units. We elected to redeem these units for cash equal to the liquidation preference of $25.00 per unit. As a result of this redemption, our outstanding series A preferred units decreased from 419,014 units outstanding to the current 407,066 units outstanding as of March 31, 2014. For a description of the conversion and redemption rights of the series A preferred units, please see “Description of the Partnership Agreement of Hudson Pacific Properties, L.P.—Material Terms of Our Series A Preferred Units” in our June 23, 2010 Prospectus. | |||||||||||||||
8.375% Series B cumulative redeemable preferred stock | |||||||||||||||
8.375% series B cumulative redeemable preferred stock are 5,800,000 shares of 8.375% preferred stock, with a liquidation preference of $25.00 per share, $0.01 par value per share. In December 2010, we completed the public offering of 3,500,000 share of our series B preferred stock (including 300,000 shares of series B preferred stock issued and sold pursuant to the exercise of the underwriters’ option to purchase additional shares in part). Total proceeds from the offering, after deducting underwriting discount, were approximately $83.9 million (before transaction costs). On January 23, 2012, we completed the public offering of 2,300,000 of our series B cumulative preferred stock (including 300,000 shares of series B preferred stock issued and sold pursuant to the exercise of the underwriters’ option to purchase additional shares in full). Total proceeds from the offering, after deducting underwriting discount, were approximately $57.5 million (before transaction costs). | |||||||||||||||
Dividends on our series B preferred stock are cumulative from the date of original issue and payable quarterly on or about the last calendar day of each March, June, September and December, at the rate of 8.375% per annum of its $25.00 per share liquidation preference (equivalent to $2.0938 per share per annum). If, following a change of control of the Company, either our series B preferred stock (or any preferred stock of the surviving entity that is issued in exchange for our series B preferred stock) or the common stock of the surviving entity, as applicable, is not listed on the New York Stock Exchange, or NYSE, or quoted on the NASDAQ Stock Market, or NASDAQ (or listed or quoted on a successor exchange or quotation system), holders of our series B preferred stock will be entitled to receive cumulative cash dividends from, and including, the first date on which both the change of control occurred and either our series B preferred stock (or any preferred stock of the surviving entity that is issued in exchange for our series B preferred stock) or the common stock of the surviving entity, as applicable, is not so listed or quoted, at the increased rate of 12.375% per annum per share of the liquidation preference of our series B preferred stock (equivalent to $3.09375 per annum per share) for as long as either our series B preferred stock (or any preferred stock of the surviving entity that is issued in exchange for our series B preferred stock) or the common stock of the surviving entity, as applicable, is not so listed or quoted. Except in instances relating to preservation of our qualification as a REIT or in connection with a change of control of the Company, our series B preferred stock is not redeemable prior to December 10, 2015. On and after December 10, 2015, we may redeem our series B preferred stock in whole, at any time, or in part, from time to time, for cash at a redemption price of $25.00 per share, plus any accrued and unpaid dividends to, but not including, the date of redemption. If at any time following a change of control either our series B preferred stock (or any preferred stock of the surviving entity that is issued in exchange for our series B preferred stock) or the common stock of the surviving entity, as applicable, is not listed on the NYSE or quoted on NASDAQ (or listed or quoted on a successor exchange or quotation system), we will have the option to redeem our series B preferred stock, in whole but not in part, within 90 days after the first date on which both the change of control has occurred and either our series B preferred stock (or any preferred stock of the surviving entity that is issued in exchange for our series B preferred stock) or the common stock of the surviving entity, as applicable, is not so listed or quoted, for cash at $25.00 per share, plus accrued and unpaid dividends, if any, to, but not including, the redemption date. Our series B preferred stock has no maturity date and will remain outstanding indefinitely unless redeemed by us, and it is not subject to any sinking fund or mandatory redemption and is not convertible into any of our other securities. For a full description of the Series B cumulative redeemable preferred stock, please see “Description of our Preferred Stock” in our December 7, 2010 Prospectus. | |||||||||||||||
February 2013 Common Stock Offering | |||||||||||||||
On February 12, 2013, we completed the public offering of 8,000,000 shares of common stock and the exercise of the underwriters’ option to purchase an additional 1,200,000 shares of our common stock at the public offering price of $21.50 per share. Total proceeds from the public offering, after underwriters’ discount, were approximately $189.9 million (before transaction costs). | |||||||||||||||
January 2014 Common Stock Offering | |||||||||||||||
On January 28, 2014, we completed the public offering of 8,250,000 shares of common stock and the exercise of the underwriters’ option to purchase an additional 1,237,500 shares of our common stock at the public offering price of $21.50 per share. Total proceeds from the public offering, after underwriters’ discount, were approximately $195.8 million (before transaction costs). | |||||||||||||||
Dividends | |||||||||||||||
During the first quarter for 2014, we declared dividends on our common stock and non-controlling common partnership interests of $0.125 per share and unit. We also declared dividends on our series A preferred partnership interests of $0.3906 per unit. In addition, we declared dividends on our series B preferred shares of $0.5234 per share. The first quarter dividends were declared on March 10, 2014 to holders of record on March 20, 2014. | |||||||||||||||
Taxability of Dividends | |||||||||||||||
Earnings and profits, which determine the taxability of distributions to stockholders, may differ from income reported for financial reporting purposes due to the differences for federal income tax purposes in the treatment of loss on extinguishment of debt, revenue recognition, and compensation expense and in the basis of depreciable assets and estimated useful lives used to compute depreciation. | |||||||||||||||
Stock-Based Compensation | |||||||||||||||
The Board of Directors awards restricted shares to non-employee board members on an annual basis as part of such board members’ annual compensation and to newly elected non-employee board members in accordance with our Board of Directors compensation program. The share-based awards are generally issued in the second quarter, and the individual share awards vest in equal annual installments over the applicable service vesting period, which is three years. | |||||||||||||||
In addition, the Board of Directors awards restricted shares to employees on an annual basis as part of the employees’ annual compensation. The share-based awards are generally issued in the fourth quarter, and the individual share awards vest in equal annual installments over the applicable service vesting period, which is three years. | |||||||||||||||
The following table summarizes the restricted share activity for the three months ended March 31, 2014 and status of all unvested restricted share awards to our non-employee board members and employees at March 31, 2014: | |||||||||||||||
Non-vested Shares | Shares | Weighted-Average Grant-Date Fair Value | |||||||||||||
Outstanding at January 1, 2014 | 541,180 | $ | 19.98 | ||||||||||||
Granted | 13,581 | 22.09 | |||||||||||||
Vested | (3,306 | ) | 15.12 | ||||||||||||
Canceled | — | — | |||||||||||||
Outstanding at March 31, 2014 | 551,455 | $ | 20.06 | ||||||||||||
Three Months Ended March 31, | Non-Vested Shares Issued | Weighted Average Grant - dated Fair Value | Vested Shares | Total Vest-Date Fair Value (in thousands) | |||||||||||
2014 | 13,581 | $ | 22.09 | (3,306 | ) | $ | 73 | ||||||||
2013 | — | — | (3,036 | ) | 68 | ||||||||||
We recognize the total compensation expense for time-vested shares on a straight-line basis over the vesting period based on the fair value of the award on the date of grant. | |||||||||||||||
Hudson Pacific Properties, Inc. 2012 Outperformance Program | |||||||||||||||
On January 1, 2012, the Compensation Committee of our Board of Directors adopted the Hudson Pacific Properties, Inc. 2012 Outperformance Program, or the 2012 Outperformance Program. Participants in the 2012 Outperformance Program may earn, in the aggregate, up to $10.0 million of stock-settled awards based on our total shareholder return (“TSR”) for the three-year period beginning January 1, 2012 and ending December 31, 2014. Under the 2012 Outperformance Program, participants will be entitled to share in a performance pool with a value, subject to the $10.0 million cap, equal to the sum of: (i) 4% of the amount by which our TSR during the performance period exceeds 9% simple annual TSR (“the absolute TSR component”), plus (ii) 4% of the amount by which our TSR during the performance period exceeds that of the SNL Equity REIT Index over the performance period (“the relative TSR component”), except that the relative TSR component will be reduced on a linear basis from 100% to 0% for absolute TSR ranging from 7% to 0% simple annual TSR over the performance period. In addition, the relative TSR component may be a negative value equal to 4% of the amount by which we underperform the SNL Equity REIT Index by more than 3% per year during the performance period (if any). If we attain pro-rated TSR performance goals during 2012 and/or 2013 that yield hypothetical bonus pools of up to $2 million for 2012 performance and/or up to $4 million for combined 2012/2013 performance, stock awards issued under the final bonus pool at the end of the performance period will cover a number of shares in the aggregate at least equal to the number of shares that would have been subject to stock awards issued at the end of 2012 or 2013 (whichever is greater) based on our TSR performance and common stock price for such prior years (subject to reduction to comply with the $10.0 million bonus pool limitation). At the end of the three-year performance period, participants who remain employed with us will be paid their percentage interest in the bonus pool as stock awards based on the value of our common stock at the end of the performance period. Half of each such participant’s bonus pool interest will be paid in fully vested shares of our common stock and the other half will be paid in restricted stock units (“RSUs”) that vest in equal annual installments over the two years immediately following the performance period (based on continued employment). In addition to these share/RSU payments, each 2012 Outperformance Program award entitles its holder to a cash payment equal to the aggregate dividends that would have been paid during the performance period on the total number of shares and RSUs ultimately issued or granted in respect of such 2012 Outperformance Program award, had such shares and RSUs been outstanding throughout the performance period. | |||||||||||||||
If a participant’s employment is terminated without “cause,” for “good reason” or due to the participant’s death or disability during the performance period (referred to as qualifying terminations), the participant will be paid his or her 2012 Outperformance Program award at the end of the performance period entirely in fully vested shares (except for the performance period dividend equivalent, which will be paid in cash at the end of the performance period). Any such payment will be pro-rated in the case of a termination without “cause” or for “good reason” by reference to the participant’s period of employment during the performance period. If we experience a change in control or a participant experiences a qualifying termination of employment, in either case, after December 31, 2014, any unvested RSUs that remain outstanding will accelerate and vest in full upon such event. | |||||||||||||||
The cost of the 2012 Outperformance Plan (approximately $3.49 million, subject to a forfeiture adjustment equal to 6% of the total cost) will be amortized through the final vesting period under a graded vesting expense recognition schedule. | |||||||||||||||
The 2012 Outperformance Program was valued, in accordance with ASC Topic 718, at an aggregate of approximately $3.49 million utilizing a Monte Carlo simulation to estimate the probability of the performance vesting conditions being satisfied. The Monte Carlo simulation used a statistical formula underlying the Black-Scholes and binomial formulas and such simulation was run 100,000 times. For each simulation, the payoff is calculated at the settlement dates, which is then discounted to the award date at a risk-free interest rate. The average of the values over all simulations is the expected value of the unit on the award date. Assumptions used in the valuations included (1) factors associated with the underlying performance of the Company’s stock price and total shareholder return over the term of the performance awards including total stock return volatility and risk-free interest and (2) factors associated with the relative performance of the Company’s stock price and total shareholder return when compared to the SNL Equity REIT Index. The valuation was performed in a risk-neutral framework, so no assumption was made with respect to an equity risk premium. The fair value of the 2012 Outperformance Program awards is based on the sum of: (1) the present value of the expected payoff to the awards on the measurement dates, if the TSR over the applicable measurement period exceeds performance hurdles of the absolute and the relative TSR components; and (2) the present value of the distributions payable on the 2012 Outperformance Program awards. The ultimate reward realized on account of the awards by the holders of the 2012 Outperformance Program awards is contingent on the TSR achieved on the measurement dates, both in absolute terms and relative to the TSR of the SNL Equity REIT Index. The per unit fair value of each 2012 Outperformance Program awards was estimated on the date of grant using the following assumptions in the Monte Carlo valuation: expected price volatility for the Company and the SNL Equity REIT index of 36% and 35%, respectively; a risk free rate of 0.40%; and total dividend payments over the measurement period of $1.62 per share. | |||||||||||||||
Hudson Pacific Properties, Inc. 2013 Outperformance Program | |||||||||||||||
On January 1, 2013, the Compensation Committee of our Board of Directors adopted the Hudson Pacific Properties, Inc. 2013 Outperformance Program, or the 2013 Outperformance Program. Participants in the 2013 Outperformance Program may earn, in the aggregate, up to $11.0 million of stock-settled awards based on our total shareholder return (“TSR”) for the three-year period beginning January 1, 2013 and ending December 31, 2015. Under the 2013 Outperformance Program, participants will be entitled to share in a performance pool with a value, subject to the $11.0 million cap, equal to the sum of: (i) 4% of the amount by which our TSR during the performance period exceeds 9% simple annual TSR (the “absolute TSR component”), plus (ii) 4% of the amount by which our TSR during the performance period exceeds that of the SNL Equity REIT Index (determined on a percentage basis that is then multiplied by the sum of (A) our market capitalization on that date, plus (B) the aggregate per share dividend over the performance period through such date) (the “relative TSR component”), except that the relative TSR component will be reduced on a linear basis from 100% to zero percent for absolute TSR ranging from 7% to zero percent simple annual TSR over the performance period. In addition, the relative TSR component may be a negative value equal to 4% of the amount by which we underperform the SNL Equity REIT Index by more than 3% per year during the performance period (if any). If we attain pro-rated TSR performance goals during 2013 and/or 2014 that yield hypothetical bonus pools of up to $2 million for 2013 performance and/or up to $4 million for combined 2013/2014 performance, stock awards issued under the final bonus pool at the end of the performance period will cover a number of shares in the aggregate at least equal to the number of shares that would have been subject to stock awards issued at the end of 2013 or 2014 (whichever is greater) based on our TSR performance and common stock price for such prior years (subject to reduction to comply with the $11.0 million bonus pool limitation). At the end of the three-year performance period, participants who remain employed with us will be paid their percentage interest in the bonus pool as stock awards based on the value of our common stock at the end of the performance period. Half of each such participant’s bonus pool interest will be paid in fully vested shares of our common stock and the other half will be paid in restricted stock units (“RSUs”) that vest in equal annual installments over the two years immediately following the performance period (based on continued employment) and which carry tandem dividend equivalent rights. However, if the performance period is terminated prior to December 31, 2015 in connection with a change in control, 2013 Outperformance Program awards will be paid entirely in fully vested shares of our common stock immediately prior to the change in control. In addition to these share/RSU payments, each 2013 Outperformance Program award entitles its holder to a cash payment equal to the aggregate dividends that would have been paid during the performance period on the total number of shares and RSUs ultimately issued or granted in respect of such 2013 Outperformance Program award, had such shares and RSUs been outstanding throughout the performance period. | |||||||||||||||
If a participant’s employment is terminated without “cause,” for “good reason” or due to the participant’s death or disability during the performance period (referred to as qualifying terminations), the participant will be paid his or her 2013 Outperformance Program award at the end of the performance period entirely in fully vested shares (except for the performance period dividend equivalent, which will be paid in cash at the end of the performance period). Any such payment will be pro-rated in the case of a termination without “cause” or for “good reason” by reference to the participant’s period of employment during the performance period. If we experience a change in control or a participant experiences a qualifying termination of employment, in either case, after December 31, 2015, any unvested RSUs that remain outstanding will accelerate and vest in full upon such event. | |||||||||||||||
The cost of the 2013 Outperformance Program (approximately $4.14 million, subject to a forfeiture adjustment equal to 6% of the total cost) will be amortized through the final vesting period under a graded vesting expense recognition schedule. | |||||||||||||||
The 2013 Outperformance Program was valued, in accordance with ASC topic 718, at an aggregate of approximately $4.14 million utilizing a Monte Carlo simulation to estimate the probability of the performance vesting conditions being satisfied. The Monte Carlo simulation used a statistical formula underlying the Black-Scholes and binomial formulas and such simulation was run 100,000 times. For each simulation, the payoff is calculated at the settlement dates, which is then discounted to the award date at a risk-free interest rate. The average of the values over all simulations is the expected value of the unit on the award date. Assumptions used in the valuations included (1) factors associated with the underlying performance of the Company’s stock price and total shareholder return over the term of the performance awards including total stock return volatility and risk-free interest and (2) factors associated with the relative performance of the Company’s stock price and total shareholder return when compared to the SNL Equity REIT Index. The valuation was performed in a risk-neutral framework, so no assumption was made with respect to an equity risk premium. The fair value of the 2013 Outperformance Program awards is based on the sum of: (1) the present value of the expected payoff to the awards on the measurement dates, if the TSR over the applicable measurement period exceeds performance hurdles of the absolute and the relative TSR components; and (2) the present value of the distributions payable on the 2013 Outperformance Program awards. The ultimate reward realized on account of the awards by the holders of the 2013 Outperformance Program awards is contingent on the TSR achieved on the measurement dates, both in absolute terms and relative to the TSR of the SNL Equity REIT Index. The per unit fair value of each 2013 Outperformance Program awards was estimated on the date of grant using the following assumptions in the Monte Carlo valuation: expected price volatility for the Company and the SNL Equity REIT index of 33% and 25%, respectively; a risk free rate of 0.38%; and total dividend payments over the measurement period of $1.50 per share. | |||||||||||||||
Hudson Pacific Properties, Inc. 2014 Outperformance Program | |||||||||||||||
Effective January 1, 2014, the Compensation Committee of our Board of Directors adopted the Hudson Pacific Properties, Inc. 2014 Outperformance Program, or the 2014 Outperformance Program. Participants in the 2014 Outperformance Program may earn, in the aggregate, up to $12.0 million of stock-settled awards based on our total shareholder return (“TSR”) for the three-year period beginning January 1, 2014 and ending December 31, 2016. Under the 2014 Outperformance Program, participants will be entitled to share in a performance pool with a value, subject to the $12.0 million cap, equal to the sum of: (i) 4% of the amount by which our TSR during the performance period exceeds 9% simple annual TSR (the “absolute TSR component”), plus (ii) 4% of the amount by which our TSR during the performance period exceeds that of the SNL Equity REIT Index (determined on a percentage basis that is then multiplied by the sum of (A) our market capitalization on that date, plus (B) the aggregate per share dividend over the performance period through such date) (the “relative TSR component”), except that the relative TSR component will be reduced on a linear basis from 100% to zero percent for absolute TSR ranging from 7% to zero percent simple annual TSR over the performance period. In addition, the relative TSR component may be a negative value equal to 4% of the amount by which we underperform the SNL Equity REIT Index by more than 3% per year during the performance period (if any). At the end of the three-year performance period, participants who remain employed with us will be paid their percentage interest in the bonus pool as stock awards based on the value of our common stock at the end of the performance period. Half of each such participant’s bonus pool interest will be paid in fully vested shares of our common stock and the other half will be paid in restricted stock units (“RSUs”) that vest in equal annual installments over the two years immediately following the performance period (based on continued employment) and which carry tandem dividend equivalent rights. However, if the performance period is terminated prior to December 31, 2016 in connection with a change in control, 2014 Outperformance Program awards will be paid entirely in fully vested shares of our common stock immediately prior to the change in control. In addition to these share/RSU payments, each 2014 Outperformance Program award entitles its holder to a cash payment equal to the aggregate dividends that would have been paid during the performance period on the total number of shares and RSUs ultimately issued or granted in respect of such 2014 Outperformance Program award, had such shares and RSUs been outstanding throughout the performance period. | |||||||||||||||
If a participant’s employment is terminated without “cause,” for “good reason” or due to the participant’s death or disability during the performance period (referred to as qualifying terminations), the participant will be paid his or her 2014 Outperformance Program award at the end of the performance period entirely in fully vested shares (except for the performance period dividend equivalent, which will be paid in cash at the end of the performance period). Any such payment will be pro-rated in the case of a termination without “cause” or for “good reason” by reference to the participant’s period of employment during the performance period. If we experience a change in control or a participant experiences a qualifying termination of employment, in either case, after December 31, 2016, any unvested RSUs that remain outstanding will accelerate and vest in full upon such event. | |||||||||||||||
The cost of the 2014 Outperformance Program (approximately $3.21 million, subject to a forfeiture adjustment equal to 10% of the total cost) will be amortized through the final vesting period under a graded vesting expense recognition schedule. | |||||||||||||||
The 2014 Outperformance Program was valued, in accordance with ASC topic 718, at an aggregate of approximately $3.21 million utilizing a Monte Carlo simulation to estimate the probability of the performance vesting conditions being satisfied. The Monte Carlo simulation used a statistical formula underlying the Black-Scholes and binomial formulas and such simulation was run 100,000 times. For each simulation, the payoff is calculated at the settlement date, which is then discounted to the award date at a risk-free interest rate. The average of the values over all simulations is the expected value of the unit on the award date. Assumptions used in the valuations included (1) factors associated with the underlying performance of the Company’s stock price and total shareholder return over the term of the performance awards including total stock return volatility and risk-free interest and (2) factors associated with the relative performance of the Company’s stock price and total shareholder return when compared to the SNL Equity REIT Index. The valuation was performed in a risk-neutral framework, so no assumption was made with respect to an equity risk premium. The fair value of the 2014 Outperformance Program awards is based on the sum of: (1) the present value of the expected payoff to the awards on the measurement date, if the TSR over the applicable measurement period exceeds performance hurdles of the absolute and the relative TSR components; and (2) the present value of the distributions payable on the awards. The ultimate reward realized on account of the 2014 Outperformance Program awards by the holders of the awards is contingent on the TSR achieved on the measurement date, both in absolute terms and relative to the TSR of the SNL Equity REIT Index. The per unit fair value of each 2014 Outperformance Program award was estimated on the date of grant using the following assumptions in the Monte Carlo valuation: expected price volatility for the Company and the SNL Equity REIT index of 28% and 26%, respectively; a risk free rate of 0.77%; and total dividend payments over the measurement period of $1.50 per share. | |||||||||||||||
For the three months ended March 31, 2014 and 2013, $1,376 and $1,783, respectively, of non-cash compensation expense for all stock compensation was recognized as additional paid-in capital, of which $1,277 and $1,726, respectively, was included in general and administrative expenses, with the remaining $99 and $57, respectively, of stock compensation capitalized to tenant improvement and deferred leasing costs and lease intangibles, net. |
Related_Party_Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2014 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions | ' |
Related Party Transactions | |
Effective July 31, 2012, we consented to the assignment of a lease with a tenant of our 222 Kearny Street property to its subtenant, FJM Investments, LLC. The lease comprises approximately 3,708 square feet of the property’s space and has a remaining term through May 31, 2014. On March 26, 2014, we agreed to a renewal of the lease assignment to FJM Investments, LLC for an additional one-year term commencing on June 1, 2014 through May 31, 2015. The rental obligation under the lease for the term is $148. FJM Investments, LLC was co-founded by and is co-owned by one of our independent directors, Robert M. Moran, Jr. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies | ' |
Commitments and Contingencies | |
Legal | |
From time to time, the Company is party to various lawsuits, claims and other legal proceedings arising out of, or incident to, our ordinary course of business. Management believes, based in part upon consultation with legal counsel, that the ultimate resolution of all such claims will not have a material adverse effect on the Company’s results of operations, financial position or cash flows. As of March 31, 2014, the risk of material loss from such legal actions impacting the Company’s financial condition or results from operations has been assessed as remote. | |
Concentrations | |
As of March 31, 2014, the majority of the Company’s properties were located in California, which exposes the Company to greater economic risks than if it owned a more geographically dispersed portfolio. Further, for the three months ended March 31, 2014 and 2013, approximately 17% and 23%, respectively, of the Company’s revenues were derived from tenants in the media and entertainment industry, which makes the Company susceptible to demand for rental space in such industry. Consequently, the Company is subject to the risks associated with an investment in real estate with a concentration of tenants in that industry. |
Segment_Reporting
Segment Reporting | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||
Segment Reporting | ' | |||||||||||
Segment Reporting | ||||||||||||
The Company’s reporting segments are based on the Company’s method of internal reporting, which classifies its operations into two reporting segments: (i) office properties, and (ii) media and entertainment properties. The Company evaluates performance based upon property net operating income from continuing operations (“NOI”) of the combined properties in each segment. NOI is not a measure of operating results or cash flows from operating activities as measured by GAAP, is not indicative of cash available to fund cash needs and should not be considered an alternative to cash flows as a measure of liquidity. All companies may not calculate NOI in the same manner. The Company considers NOI to be an appropriate supplemental financial measure to net income because it helps both investors and management to understand the core operations of the Company’s properties. The Company defines NOI as operating revenues (including rental revenues, other property-related revenue, tenant recoveries and other operating revenues), less property-level operating expenses (which includes external management fees and property-level general and administrative expenses). NOI excludes corporate general and administrative expenses, depreciation and amortization, impairments, gain/loss on sale of real estate, interest expense, acquisition-related expenses and other non-operating items. | ||||||||||||
Summary information for the reportable segments for the three months ended March 31, 2014 is as follows: | ||||||||||||
Office Properties | Media and Entertainment | Total | ||||||||||
Properties | ||||||||||||
Revenue | $ | 46,060 | $ | 9,536 | $ | 55,596 | ||||||
Operating expenses | 15,927 | 6,005 | 21,932 | |||||||||
Net operating income | $ | 30,133 | $ | 3,531 | $ | 33,664 | ||||||
Summary information for the reportable segments for the three months ended March 31, 2013 is as follows: | ||||||||||||
Office Properties | Media and Entertainment | Total | ||||||||||
Properties | ||||||||||||
Revenue | $ | 36,472 | $ | 10,912 | $ | 47,384 | ||||||
Operating expenses | 13,265 | 5,568 | 18,833 | |||||||||
Net operating income | $ | 23,207 | $ | 5,344 | $ | 28,551 | ||||||
The following is reconciliation from NOI to reported net income, the most direct comparable financial measure calculated and presented in accordance with GAAP: | ||||||||||||
March 31, 2014 | March 31, 2013 | |||||||||||
Net operating income | $ | 33,664 | $ | 28,551 | ||||||||
General and administrative | (5,776 | ) | (4,989 | ) | ||||||||
Depreciation and amortization | (16,668 | ) | (18,431 | ) | ||||||||
Interest expense | (6,524 | ) | (5,592 | ) | ||||||||
Interest income | 9 | 150 | ||||||||||
Acquisition-related expenses | (105 | ) | — | |||||||||
Other expense | (1 | ) | (45 | ) | ||||||||
Income from continuing operations | $ | 4,599 | $ | (356 | ) | |||||||
There were no inter-segment sales or transfers during either of the three months ended March 31, 2014 and 2013 |
Subsequent_Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
Subsequent Events | |
Leasing Activities | |
On April 9, 2014, the Company entered a new seven-year lease with Rocket Fuel, Inc., a leading provider of artificial intelligence advertising solutions for digital marketers, at its 1455 Market Street property. The lease provides for an initial 24,438 square feet of occupancy filling a currently vacant floor commencing during the third quarter of 2014. An additional 24,438 square feet is expected to backfill another full floor subject to the early termination of a lease that is expected to expire in the first quarter of 2015. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | |
Mar. 31, 2014 | ||
Accounting Policies [Abstract] | ' | |
Use of Estimates | ' | |
Use of Estimates | ||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of commitments and contingencies at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including those related to acquiring, developing and assessing the carrying values of its real estate properties, its accrued liabilities, and its performance-based equity compensation awards. The Company bases its estimates on historical experience, current market conditions, and various other assumptions that are believed to be reasonable under the circumstances. Actual results could materially differ from these estimates. | ||
Investment in Real Estate Properties | ' | |
Investment in Real Estate Properties | ||
The properties are carried at cost less accumulated depreciation and amortization. The Company assigns the cost of an acquisition, including the assumption of liabilities, to the acquired tangible assets and identifiable intangible assets and liabilities based on their estimated fair values in accordance with GAAP. The Company assesses fair value based on estimated cash flow projections that utilize discount and/or capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including historical operating results, known and anticipated trends, and market and economic conditions. The fair value of tangible assets of an acquired property considers the value of the property as if it was vacant. | ||
Acquisition-related expenses associated with acquisition of operating properties are expensed in the period incurred. | ||
The Company records acquired “above and below” market leases at fair value using discount rates that reflect the risks associated with the leases acquired. The amount recorded is based on the present value of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the initial term plus the extended term for any leases with below-market renewal options. Other intangible assets acquired include amounts for in-place lease values that are based on the Company’s evaluation of the specific characteristics of each tenant’s lease. Factors considered include estimates of carrying costs during hypothetical expected lease-up periods, market conditions and costs to execute similar leases. In estimating carrying costs, the Company includes estimates of lost rents at market rates during the hypothetical expected lease-up periods, which are dependent on local market conditions. In estimating costs to execute similar leases, the Company considers leasing commissions, legal and other related costs. | ||
The Company capitalizes direct construction and development costs, including predevelopment costs, interest, property taxes, insurance and other costs directly related and essential to the acquisition, development or construction of a real estate project. Indirect development costs, including salaries and benefits, office rent, and associated costs for those individuals directly responsible for and who spend their time on development activities are also capitalized and allocated to the projects to which they relate. Capitalized personnel costs were approximately $0.6 million and approximately $0.5 million for the three months ended March 31, 2014 and 2013, respectively. Interest is capitalized on the construction in progress at a rate equal to the Company’s weighted average cost of debt. Capitalized interest was approximately $1.6 million and $0.8 million for the three months ended March 31, 2014 and 2013, respectively. Construction and development costs are capitalized while substantial activities are ongoing to prepare an asset for its intended use. The Company considers a construction project as substantially complete and held available for occupancy upon the completion of tenant improvements but no later than one year after cessation of major construction activity. Costs incurred after a project is substantially complete and ready for its intended use, or after development activities have ceased, are expensed as they are incurred. Costs previously capitalized related to abandoned acquisitions or developments are charged to earnings. Expenditures for repairs and maintenance are expensed as they are incurred. | ||
Depreciation | ' | |
The Company computes depreciation using the straight-line method over the estimated useful lives of 39 years for building and improvements, 15 years for land improvements, 5 or 7 years for furniture and fixtures and equipment, and over the shorter of asset life or life of the lease for tenant improvements. Above- and below-market lease intangibles are amortized to revenue over the remaining non-cancellable lease terms and bargain renewal periods, if applicable. Other in-place lease intangibles are amortized to expense over the remaining non-cancellable lease term. Depreciation is discontinued when a property is identified as held for sale. | ||
Impairment of Long-Lived Assets | ' | |
Impairment of Long-Lived Assets | ||
The Company assesses the carrying value of real estate assets and related intangibles whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable in accordance with GAAP. Impairment losses are recorded on real estate assets held for investment when indicators of impairment are present and the future undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amount. The Company recognizes impairment losses to the extent the carrying amount exceeds the fair value of the properties. Properties held for sale are recorded at the lower of cost or estimated fair value less cost to sell. | ||
Goodwill | ' | |
Goodwill | ||
Goodwill represents the excess of acquisition cost over the fair value of net tangible and identifiable intangible assets acquired and liabilities assumed in business combinations. Our goodwill balance as of March 31, 2014 was $8,754. We do not amortize this asset but instead analyze it on an annual basis for impairment. | ||
Cash and Cash Equivalents | ' | |
Cash and Cash Equivalents | ||
Cash and cash equivalents are defined as cash on hand and in banks, plus all short-term investments with a maturity of three months or less when purchased. | ||
The Company maintains some of its cash in bank deposit accounts that, at times, may exceed the federally insured limit. No losses have been experienced related to such accounts. | ||
Restricted Cash | ' | |
Restricted Cash | ||
Restricted cash consists of amounts held by lenders to provide for future real estate taxes and insurance expenditures, repairs and capital improvements reserves, general and other reserves and security deposits. | ||
Accounts Receivable and Allowance for Doubtful Accounts | ' | |
Accounts Receivable and Allowance for Doubtful Accounts | ||
Accounts receivable consist of amounts due for monthly rents and other charges. The Company maintains an allowance for doubtful accounts for estimated losses resulting from tenant defaults or the inability of tenants to make contractual rent and tenant recovery payments. The Company monitors the liquidity and creditworthiness of its tenants and operators on an ongoing basis. This evaluation considers industry and economic conditions, property performance, credit enhancements and other factors. For straight-line rent amounts, the Company’s assessment is based on amounts estimated to be recoverable over the term of the lease. At March 31, 2014 and December 31, 2013 the Company has reserved $516 and $328, respectively, of straight-line receivables. The Company evaluates the collectability of accounts receivable based on a combination of factors. The allowance for doubtful accounts is based on specific identification of uncollectible accounts and the Company’s historical collection experience. The Company recognizes an allowance for doubtful accounts based on the length of time the receivables are past due, the current business environment and the Company’s historical experience. Historical experience has been within management’s expectations. | ||
Revenue Recognition | ' | |
Revenue Recognition | ||
The Company recognizes rental revenue from tenants on a straight-line basis over the lease term when collectability is reasonably assured and the tenant has taken possession or controls the physical use of the leased asset. If the lease provides for tenant improvements, the Company determines whether the tenant improvements, for accounting purposes, are owned by the tenant or the Company. When the Company is the owner of the tenant improvements, the tenant is not considered to have taken physical possession or have control of the physical use of the leased asset until the tenant improvements are substantially completed. When the tenant is the owner of the tenant improvements, any tenant improvement allowance that is funded is treated as a lease incentive and amortized as a reduction of revenue over the lease term. Tenant improvement ownership is determined based on various factors including, but not limited to: | ||
• | whether the lease stipulates how and on what a tenant improvement allowance may be spent; | |
• | whether the tenant or landlord retains legal title to the improvements at the end of the lease term; | |
• | whether the tenant improvements are unique to the tenant or general-purpose in nature; and | |
• | whether the tenant improvements are expected to have any residual value at the end of the lease. | |
Certain leases provide for additional rents contingent upon a percentage of the tenant’s revenue in excess of specified base amounts or other thresholds. Such revenue is recognized when actual results reported by the tenant, or estimates of tenant results, exceed the base amount or other thresholds. Such revenue is recognized only after the contingency has been removed (when the related thresholds are achieved), which may result in the recognition of rental revenue in periods subsequent to when such payments are received. | ||
Other property-related revenue is revenue that is derived from the tenants’ use of lighting, equipment rental, parking, power, HVAC and telecommunications (phone and Internet). Other property-related revenue is recognized when these items are provided. | ||
Tenant recoveries related to reimbursement of real estate taxes, insurance, repairs and maintenance, and other operating expenses are recognized as revenue in the period during which the applicable expenses are incurred. The reimbursements are recognized and presented gross, as the Company is generally the primary obligor with respect to purchasing goods and services from third-party suppliers, has discretion in selecting the supplier and bears the associated credit risk. | ||
The Company recognizes gains on sales of properties upon the closing of the transaction with the purchaser. Gains on properties sold are recognized using the full accrual method when (i) the collectability of the sales price is reasonably assured, (ii) the Company is not obligated to perform significant activities after the sale, (iii) the initial investment from the buyer is sufficient and (iv) other profit recognition criteria have been satisfied. Gains on sales of properties may be deferred in whole or in part until the requirements for gain recognition have been met. | ||
Deferred Financing Costs | ' | |
Deferred Financing Costs | ||
Deferred financing costs are amortized over the term of the respective loan. | ||
Derivative Financial Instruments | ' | |
Derivative Financial Instruments | ||
The Company manages interest rate risk associated with borrowings by entering into interest rate derivative contracts. The Company recognizes all derivatives on the consolidated balance sheet at fair value. Derivatives that are not hedges are adjusted to fair value and the changes in fair value are reflected as income or expense. If the derivative is a hedge, depending on the nature of the hedge, changes in the fair value of derivatives are either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings, or recognized in other comprehensive income, which is a component of equity. The ineffective portion of a derivative’s change in fair value is immediately recognized in earnings. | ||
Stock Based Compensation | ' | |
Stock-Based Compensation | ||
Accounting Standard Codification, or ASC, Topic 718, Compensation—Stock Compensation (referred to as ASC Topic 718 and formerly known as FASB 123R), requires us to recognize an expense for the fair value of equity-based compensation awards. Grants of stock options, restricted stock, restricted stock units and performance units under our equity incentive award plans are accounted for under ASC Topic 718. Our compensation committee will regularly consider the accounting implications of significant compensation decisions, especially in connection with decisions that relate to our equity incentive award plans and programs. | ||
Income Taxes | ' | |
Income Taxes | ||
Our taxable income prior to the completion of our IPO is reportable by the members of the limited liability companies that comprise our predecessor. Our property-owning subsidiaries are limited liability companies and are treated as pass-through entities for income tax purposes. Accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements for the activities of these entities. | ||
We have elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”) commencing with our initial taxable year. To qualify as a REIT, we are required to distribute at least 90% of our REIT taxable income to our stockholders and meet the various other requirements imposed by the Code relating to such matters as operating results, asset holdings, distribution levels and diversity of stock ownership. Provided we qualify for taxation as a REIT, we are generally not subject to corporate level income tax on the earnings distributed currently to our stockholders that we derive from our REIT qualifying activities. If we fail to qualify as a REIT in any taxable year, and are unable to avail ourselves of certain savings provisions set forth in the Code, all of our taxable income would be subject to federal income tax at regular corporate rates, including any applicable alternative minimum tax. | ||
We have elected, together with one of our subsidiaries, to treat such subsidiary as a taxable REIT subsidiary (“TRS”) for federal income tax purposes. Certain activities that we undertake must be conducted by a TRS, such as non-customary services for our tenants, and holding assets that we cannot hold directly. A TRS is subject to federal and state income taxes. | ||
The Company is subject to the statutory requirements of the states in which it conducts business. | ||
The Company periodically evaluates its tax positions to determine whether it is more likely than not that such positions would be sustained upon examination by a tax authority for all open tax years, as defined by the statute of limitations, based on their technical merits. As of March 31, 2014, the Company has not established a liability for uncertain tax positions. | ||
Fair Value of Assets and Liabilities | ' | |
Fair Value of Assets and Liabilities | ||
Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other financial instruments and balances at fair value on a non-recurring basis (e.g., carrying value of impaired real estate and long-lived assets). Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories: | ||
• | Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; | |
• | Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and | |
• | Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable. | |
When available, the Company utilizes quoted market prices from an independent third-party source to determine fair value and classifies such items in Level 1 or Level 2. In instances where the market for a financial instrument is not active, regardless of the availability of a nonbinding quoted market price, observable inputs might not be relevant and could require the Company to make a significant adjustment to derive a fair value measurement. Additionally, in an inactive market, a market price quoted from an independent third party may rely more on models with inputs based on information available only to that independent third party. When the Company determines the market for a financial instrument owned by the Company to be illiquid or when market transactions for similar instruments do not appear orderly, the Company uses several valuation sources (including internal valuations, discounted cash flow analysis and quoted market prices) and establishes a fair value by assigning weights to the various valuation sources. | ||
Changes in assumptions or estimation methodologies can have a material effect on these estimated fair values. In this regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, may not be realized in an immediate settlement of the instrument. | ||
The Company considers the following factors to be indicators of an inactive market: (i) there are few recent transactions, (ii) price quotations are not based on current information, (iii) price quotations vary substantially either over time or among market makers (for example, some brokered markets), (iv) indexes that previously were highly correlated with the fair values of the asset or liability are demonstrably uncorrelated with recent indications of fair value for that asset or liability, (v) there is a significant increase in implied liquidity risk premiums, yields, or performance indicators (such as delinquency rates or loss severities) for observed transactions or quoted prices when compared with the Company’s estimate of expected cash flows, considering all available market data about credit and other nonperformance risk for the asset or liability, (vi) there is a wide bid-ask spread or significant increase in the bid-ask spread, (vii) there is a significant decline or absence of a market for new issuances (that is, a primary market) for the asset or liability or similar assets or liabilities, and (viii) little information is released publicly (for example, a principal-to-principal market). | ||
The Company considers the following factors to be indicators of non-orderly transactions: (i) there was not adequate exposure to the market for a period before the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities under current market conditions, (ii) there was a usual and customary marketing period, but the seller marketed the asset or liability to a single market participant, (iii) the seller is in or near bankruptcy or receivership (that is, distressed), or the seller was required to sell to meet regulatory or legal requirements (that is, forced), and (iv) the transaction price is an outlier when compared with other recent transactions for the same or similar assets or liabilities. | ||
The Company’s interest rate contract agreements are classified as Level 2 and their fair value is derived from estimated values obtained from observable market data for similar instruments. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 3 Months Ended | |||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||||||
Schedule of Accounts Receivable Net of Allowance for Uncollectible Tenant Receivables | ' | |||||||||||||||||
The following summarizes our accounts receivable net of allowance for doubtful accounts as of: | ||||||||||||||||||
March 31, 2014 | December 31, 2013 | |||||||||||||||||
Accounts receivable | 7,763 | 10,152 | ||||||||||||||||
Allowance for doubtful accounts | (1,090 | ) | (1,243 | ) | ||||||||||||||
Accounts receivable, net | 6,673 | 8,909 | ||||||||||||||||
Schedule of Interest Rate Derivatives | ' | |||||||||||||||||
As of March 31, 2014, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk: | ||||||||||||||||||
Interest Rate Derivative | Number of Instruments | Notional Amount | ||||||||||||||||
Interest Rate Caps | 2 | $97.0 million | ||||||||||||||||
Interest Rate Swaps | 1 | $64.5 million | ||||||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | ' | |||||||||||||||||
The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of March 31, 2014 and December 31, 2013. The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the consolidated balance sheets. | ||||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||||
Fair Value as of | Fair Value as of | |||||||||||||||||
Balance Sheet Location | March 31, 2014 | December 31, 2013 | Balance Sheet Location | March 31, 2014 | December 31, 2013 | |||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||||
Interest rate products | Interest rate contracts | $ | 33 | $ | 192 | Interest rate contracts | $ | 475 | — | |||||||||
Total | $ | 33 | $ | 192 | $ | 475 | — | |||||||||||
Schedule of Derivative Instruments, Gain (Loss) on the Income Statement | ' | |||||||||||||||||
The tables below present the effect of the Company’s derivative financial instruments on the Statement of Operations for the three months ended March 31, 2014 and 2013. | ||||||||||||||||||
Three Months Ended March 31, | ||||||||||||||||||
2014 | 2013 | |||||||||||||||||
Beginning Balance of OCI related to interest rate contracts | 1,162 | 1,465 | ||||||||||||||||
Unrealized Loss Recognized in OCI Due to Change in Fair Value of interest rate contracts | 634 | 7 | ||||||||||||||||
Loss Reclassified from OCI into Income (as Interest Expense) | (82 | ) | (24 | ) | ||||||||||||||
Net Change in OCI | 552 | (17 | ) | |||||||||||||||
Ending Balance of Accumulated OCI Related to Derivatives | 1,714 | 1,448 | ||||||||||||||||
Investment_in_Real_Estate_Tabl
Investment in Real Estate (Tables) | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||
Real Estate [Abstract] | ' | |||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition | ' | |||||||||||||||||||
The following table represents our purchase price accounting for each of these acquisitions: | ||||||||||||||||||||
Merrill Place | 3402 Pico Blvd | |||||||||||||||||||
Date of Acquisition | 12-Feb-14 | 28-Feb-14 | Total | |||||||||||||||||
Consideration paid | ||||||||||||||||||||
Cash consideration | $ | 57,034 | $ | 18,546 | $ | 75,580 | ||||||||||||||
Total consideration | $ | 57,034 | $ | 18,546 | $ | 75,580 | ||||||||||||||
Allocation of consideration paid | ||||||||||||||||||||
Investment in real estate, net | $ | 57,508 | $ | 18,500 | $ | 76,008 | ||||||||||||||
Above-market leases | 173 | — | 173 | |||||||||||||||||
Deferred leasing costs and lease intangibles, net | 3,163 | — | 3,163 | |||||||||||||||||
Below-market leases | (3,315 | ) | — | (3,315 | ) | |||||||||||||||
Other (liabilities) asset assumed, net | (495 | ) | 46 | (449 | ) | |||||||||||||||
Total consideration paid | $ | 57,034 | $ | 18,546 | $ | 75,580 | ||||||||||||||
The following table represents our purchase price accounting for each of these acquisitions: | ||||||||||||||||||||
3401 Exposition | Pinnacle II | Seattle Portfolio | 1861 Bundy | |||||||||||||||||
Date of Acquisition | May 22, 2013 | June 14, 2013 | July 31, 2013 | September 26, 2013 | Total | |||||||||||||||
Consideration paid | ||||||||||||||||||||
Cash consideration | $ | 8,489 | $ | 1,505 | $ | 368,389 | $ | 11,500 | $ | 389,883 | ||||||||||
Notes Receivable | 4,000 | — | — | — | 4,000 | |||||||||||||||
Debt Assumed | 13,233 | 89,066 | — | — | 102,299 | |||||||||||||||
Non-controlling interest in consolidated real estate entity | — | 45,704 | — | — | 45,704 | |||||||||||||||
Total consideration | $ | 25,722 | $ | 136,275 | $ | 368,389 | $ | 11,500 | $ | 541,886 | ||||||||||
Allocation of consideration paid | ||||||||||||||||||||
Investment in real estate, net | $ | 25,439 | $ | 134,289 | $ | 367,094 | $ | 11,500 | $ | 538,322 | ||||||||||
Deferred leasing costs and lease intangibles, net | — | 12,637 | 21,619 | — | 34,256 | |||||||||||||||
Fair market unfavorable debt value | — | (5,820 | ) | — | — | (5,820 | ) | |||||||||||||
Below-market leases | — | (7,783 | ) | (14,666 | ) | — | (22,449 | ) | ||||||||||||
Other (liabilities) asset assumed, net | 283 | 2,952 | (5,658 | ) | — | (2,423 | ) | |||||||||||||
Total consideration paid | $ | 25,722 | $ | 136,275 | $ | 368,389 | $ | 11,500 | $ | 541,886 | ||||||||||
Business Acquisition, Pro Forma Information | ' | |||||||||||||||||||
The table below shows the pro forma financial information for the three months ended March 31, 2014 and 2013 as if these properties had been acquired as of January 1, 2013. | ||||||||||||||||||||
Three Months Ended March 31, | ||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
Total revenues | $ | 56,348 | $ | 48,888 | ||||||||||||||||
Net loss | $ | 4,504 | $ | 262 | ||||||||||||||||
Schedule of Discontinued Operations | ' | |||||||||||||||||||
The following table sets forth the discontinued operations for the three months ended March 31, 2014 and 2013 for City Plaza: | ||||||||||||||||||||
Three Months Ended March 31, | ||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
Total office revenues | $ | — | $ | 1,997 | ||||||||||||||||
Office operating expenses | (66 | ) | (851 | ) | ||||||||||||||||
Depreciation and amortization | — | (473 | ) | |||||||||||||||||
Loss from discontinued operations | $ | (66 | ) | $ | 673 | |||||||||||||||
Lease_Intangibles_Tables
Lease Intangibles (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||
Schedule of Finite-Lived Intangible Assets and Liabilities | ' | |||||||
The following summarizes our deferred leasing cost and lease intangibles as of: | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Above-market leases | $ | 16,392 | $ | 16,517 | ||||
Leases in place | 88,673 | 86,417 | ||||||
Below-market ground leases | 7,513 | 7,513 | ||||||
Other lease intangibles | 37,807 | 37,162 | ||||||
Lease buy-out costs | 3,107 | 3,107 | ||||||
Deferred leasing costs | 30,704 | 29,759 | ||||||
$ | 184,196 | $ | 180,475 | |||||
Accumulated amortization | (74,154 | ) | (69,077 | ) | ||||
Deferred leasing costs and lease intangibles, net | $ | 110,042 | $ | 111,398 | ||||
Below-market leases | $ | 70,829 | $ | 67,513 | ||||
Accumulated accretion | (23,976 | ) | (22,074 | ) | ||||
Below-market leases, net | $ | 46,853 | $ | 45,439 | ||||
Notes_Payable_Tables
Notes Payable (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Debt Disclosure [Abstract] | ' | |||||||||||
Schedule of Long-term Debt Instruments | ' | |||||||||||
The following table sets forth information as of March 31, 2014 with respect to our outstanding indebtedness. | ||||||||||||
Outstanding | ||||||||||||
Debt | March 31, 2014 | December 31, 2013 | Interest Rate(1) | Maturity | ||||||||
Date | ||||||||||||
Unsecured Revolving Credit Facility | $ | 40,000 | $ | 155,000 | LIBOR+1.55% to 2.20% | 8/3/16 | ||||||
Mortgage loan secured by 3401 Exposition Boulevard(2) | 13,233 | 13,233 | LIBOR+3.80% | 6/9/14 | ||||||||
Mortgage loan secured by 6922 Hollywood Boulevard(3) | 40,151 | 40,396 | 5.58% | 1/1/15 | ||||||||
Mortgage loan secured by 275 Brannan | 15,000 | 15,000 | LIBOR+2.00% | 10/5/15 | ||||||||
Mortgage loan secured by Pinnacle II(4) | 88,248 | 88,540 | 6.31% | 9/6/16 | ||||||||
Mortgage loan secured by 901 Market(5) | 49,600 | 49,600 | LIBOR+2.25% | 10/31/16 | ||||||||
Mortgage loan secured by Element LA(6) | 13,287 | 566 | LIBOR+1.95% | 11/1/17 | ||||||||
Mortgage loan secured by Sunset Gower/Sunset Bronson(7) | 97,000 | 97,000 | LIBOR+2.25% | 2/11/18 | ||||||||
Mortgage loan secured by Rincon Center(8) | 105,544 | 105,853 | 5.13% | 5/1/18 | ||||||||
Mortgage loan secured by First & King(9) | 95,000 | 95,000 | LIBOR+1.60% | 8/31/18 | ||||||||
Mortgage loan secured by Met Park North(10) | 64,500 | 64,500 | LIBOR+1.55% | 8/1/20 | ||||||||
Mortgage loan secured by First Financial(11) | 42,933 | 43,000 | 4.58% | 2/1/22 | ||||||||
Mortgage loan secured by 10950 Washington(8) | 29,188 | 29,300 | 5.32% | 3/11/22 | ||||||||
Mortgage loan secured by Pinnacle I(12) | 129,000 | 129,000 | 3.95% | 11/7/22 | ||||||||
Subtotal | $ | 822,684 | $ | 925,988 | ||||||||
Unamortized loan premium, net(13) | 4,754 | 5,320 | ||||||||||
Total | $ | 827,438 | $ | 931,308 | ||||||||
__________________ | ||||||||||||
-1 | Interest rate with respect to indebtedness is calculated on the basis of a 360-day year for the actual days elapsed, excluding the amortization of loan fees and costs. | |||||||||||
-2 | This loan was assumed on May 22, 2013 in connection with the closing of our acquisition of the 3401 Exposition Boulevard property. | |||||||||||
-3 | This loan was assumed on November 22, 2011 in connection with the closing of our acquisition of the 6922 Hollywood Boulevard property. This loan is amortizing based on a 30-year amortization schedule. | |||||||||||
-4 | This loan was assumed on June 14, 2013 in connection with the contribution of the Pinnacle II building to the Company’s joint venture with M. David Paul & Associates/Worthe Real Estate Group. This loan bore interest only for the first five years. Beginning with the payment due October 6, 2011, monthly debt service includes annual debt amortization payments based on a 30-year amortization schedule. | |||||||||||
-5 | On October 29, 2012, we obtained a loan for our 901 Market property pursuant to which we borrowed $49,600 upon closing, with the ability to draw up to an additional $11,900 for budgeted base building, tenant improvements, and other costs associated with the renovation and lease-up of that property. | |||||||||||
-6 | We have the ability to draw up to $65,500 for budgeted site-work, construction of a parking garage, base building, tenant improvement, and leasing commission costs associated with the renovation and lease-up of the property. | |||||||||||
-7 | On March 16, 2011, we purchased an interest rate cap in order to cap one-month LIBOR at 3.715% with respect to $50,000 of the loan through February 11, 2016. On January 11, 2012 we purchased an interest rate cap in order to cap one-month LIBOR at 2.00% with respect to $42,000 of the loan through February 11, 2016. Effective August 22, 2013, the terms of this loan were amended to increase the outstanding balance from $92,000 to $97,000, reduce the interest rate from LIBOR plus 3.50% to LIBOR plus 2.25%, and extend the maturity date from February 11, 2016 to February 11, 2018. | |||||||||||
-8 | This loan is amortizing based on a 30-year amortization schedule. | |||||||||||
-9 | This loan bears interest only for the first two years. Beginning with the payment due August 1, 2015, monthly debt service will include annual debt amortization payments of $1,604 based on a 30-year amortization schedule. | |||||||||||
-10 | This loan bears interest only at a rate equal to one-month LIBOR plus 1.55%. The full loan amount is subject to an interest rate contract that swapped one-month LIBOR to a fixed rate of 2.1644% through the loan's maturity on August 1, 2020. | |||||||||||
-11 | This loan bears interest only for the first two years. Beginning with the payment due March 1, 2014, monthly debt service will include principal payments based on a 30-year amortization schedule, for total annual debt service of $2,639. | |||||||||||
-12 | This loan bears interest only for the first five years. Beginning with the payment due December 6, 2017, monthly debt service will include annual debt amortization payments based on a 30-year amortization schedule. | |||||||||||
-13 | Represents unamortized amount of the non-cash mark-to-market adjustment on debt associated with 6922 Hollywood Boulevard and Pinnacle II. | |||||||||||
Schedule of Maturities of Long-term Debt | ' | |||||||||||
The minimum future annual principal payments due on our secured and unsecured notes payable at March 31, 2014, excluding the non-cash loan premium amortization, were as follows (in thousands): | ||||||||||||
2014 (nine months ending December 31, 2014) | $ | 16,871 | ||||||||||
2015 | 59,238 | |||||||||||
2016 | 180,512 | |||||||||||
2017 | 18,344 | |||||||||||
2018 | 290,228 | |||||||||||
2019 | 3,706 | |||||||||||
Thereafter | 253,785 | |||||||||||
Total | $ | 822,684 | ||||||||||
Future_Minimum_Base_Rents_and_1
Future Minimum Base Rents and Lease Payments Future Minimum Rents (Tables) | 3 Months Ended | |||
Mar. 31, 2014 | ||||
Future Minimum Base Rents and Lease Payments Future Minimum Rents [Abstract] | ' | |||
Schedule of Future Minimum Rental Payments for Operating Leases | ' | |||
Approximate future combined minimum rentals (excluding tenant reimbursements for operating expenses and without regard to cancellation options) for properties at March 31, 2014 are presented below for the years/periods ended December 31. The table below does not include rents under leases at our media and entertainment properties with terms of one year or less. | ||||
2014 (nine months ending December 31, 2014) | $ | 105,875 | ||
2015 | 152,830 | |||
2016 | 156,491 | |||
2017 | 138,939 | |||
2018 | 125,187 | |||
2019 | 112,903 | |||
Thereafter | 457,549 | |||
Total | $ | 1,249,774 | ||
Schedule of Future Minimum Lease Payments | ' | |||
The following table provides information regarding our future minimum lease payments at March 31, 2014 under these lease agreements. | ||||
2014 (nine months ending December 31, 2014) | $ | 1,063 | ||
2015 | 1,417 | |||
2016 | 1,417 | |||
2017 | 1,417 | |||
2018 | 1,417 | |||
2019 | 1,417 | |||
Thereafter | 49,408 | |||
Total | $ | 57,556 | ||
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||
Fair Value Measurements, Recurring and Nonrecurring | ' | |||||||||||||||
The estimated fair values of interest-rate contract/cap arrangements were derived from estimated values based on observable market data for similar instruments. | ||||||||||||||||
March 31, 2014 | December 31, 2013 | |||||||||||||||
Carrying | Fair Value | Carrying | Fair Value | |||||||||||||
Value | Value | |||||||||||||||
Notes payable | $ | 827,438 | $ | 835,502 | $ | 931,308 | $ | 940,435 | ||||||||
Derivative assets, disclosed as “Interest rate contracts” | 33 | 33 | 192 | 192 | ||||||||||||
Derivative liabilities, disclosed as “Interest rate contracts” | (475 | ) | (475 | ) | — | — | ||||||||||
Equity_Tables
Equity (Tables) | 3 Months Ended | ||||||||||||||
Mar. 31, 2014 | |||||||||||||||
Equity [Abstract] | ' | ||||||||||||||
Schedule of Nonvested Restricted Stock Units Activity | ' | ||||||||||||||
The following table summarizes the restricted share activity for the three months ended March 31, 2014 and status of all unvested restricted share awards to our non-employee board members and employees at March 31, 2014: | |||||||||||||||
Non-vested Shares | Shares | Weighted-Average Grant-Date Fair Value | |||||||||||||
Outstanding at January 1, 2014 | 541,180 | $ | 19.98 | ||||||||||||
Granted | 13,581 | 22.09 | |||||||||||||
Vested | (3,306 | ) | 15.12 | ||||||||||||
Canceled | — | — | |||||||||||||
Outstanding at March 31, 2014 | 551,455 | $ | 20.06 | ||||||||||||
Three Months Ended March 31, | Non-Vested Shares Issued | Weighted Average Grant - dated Fair Value | Vested Shares | Total Vest-Date Fair Value (in thousands) | |||||||||||
2014 | 13,581 | $ | 22.09 | (3,306 | ) | $ | 73 | ||||||||
2013 | — | — | (3,036 | ) | 68 | ||||||||||
Segment_Reporting_Tables
Segment Reporting (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||
Schedule of Segment Reporting Information, by Segment | ' | |||||||||||
Summary information for the reportable segments for the three months ended March 31, 2014 is as follows: | ||||||||||||
Office Properties | Media and Entertainment | Total | ||||||||||
Properties | ||||||||||||
Revenue | $ | 46,060 | $ | 9,536 | $ | 55,596 | ||||||
Operating expenses | 15,927 | 6,005 | 21,932 | |||||||||
Net operating income | $ | 30,133 | $ | 3,531 | $ | 33,664 | ||||||
Summary information for the reportable segments for the three months ended March 31, 2013 is as follows: | ||||||||||||
Office Properties | Media and Entertainment | Total | ||||||||||
Properties | ||||||||||||
Revenue | $ | 36,472 | $ | 10,912 | $ | 47,384 | ||||||
Operating expenses | 13,265 | 5,568 | 18,833 | |||||||||
Net operating income | $ | 23,207 | $ | 5,344 | $ | 28,551 | ||||||
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | ' | |||||||||||
The following is reconciliation from NOI to reported net income, the most direct comparable financial measure calculated and presented in accordance with GAAP: | ||||||||||||
March 31, 2014 | March 31, 2013 | |||||||||||
Net operating income | $ | 33,664 | $ | 28,551 | ||||||||
General and administrative | (5,776 | ) | (4,989 | ) | ||||||||
Depreciation and amortization | (16,668 | ) | (18,431 | ) | ||||||||
Interest expense | (6,524 | ) | (5,592 | ) | ||||||||
Interest income | 9 | 150 | ||||||||||
Acquisition-related expenses | (105 | ) | — | |||||||||
Other expense | (1 | ) | (45 | ) | ||||||||
Income from continuing operations | $ | 4,599 | $ | (356 | ) | |||||||
Organization_Details
Organization (Details) | Mar. 31, 2014 |
property | |
Office Properties [Member] | ' |
Business Acquisition [Line Items] | ' |
Number of real estate properties | 26 |
Media and Entertainment Properties [Member] | ' |
Business Acquisition [Line Items] | ' |
Number of real estate properties | 2 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Narrative (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
subsidiary | indicator | property | |
property | |||
derivative | |||
indicator | |||
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Capitalized personnel costs | $600,000 | $500,000 | ' |
Capitalized interest | 1,600,000 | 800,000 | ' |
Construction costs capitalization period after substantially complete | '1 year | ' | ' |
Impairment of Long-Lived Assets | ' | ' | ' |
Number of properties held for sale | 1 | ' | 0 |
Goodwill | ' | ' | ' |
Goodwill | 8,754,000 | ' | 8,754,000 |
Goodwill Impairment Indicators | 0 | 0 | ' |
Accounts Receivable and Allowance for Doubtful Accounts | ' | ' | ' |
Allowance for doubtful accounts | 1,090,000 | ' | 1,243,000 |
Bad debt expense | 83,000 | 31,000 | ' |
Derivative Financial Instruments | ' | ' | ' |
Number of derivatives in a liability position | 1 | ' | ' |
Income Taxes | ' | ' | ' |
Income tax expense | 0 | 0 | ' |
Number of subsidiaries | 1 | ' | ' |
Cash Flow Hedging [Member] | ' | ' | ' |
Derivative Financial Instruments | ' | ' | ' |
Number of interest rate contracts | 3 | ' | 3 |
Allowance for Straight-Line Receivables [Member] | ' | ' | ' |
Accounts Receivable and Allowance for Doubtful Accounts | ' | ' | ' |
Allowance for doubtful accounts | $516,000 | ' | $328,000 |
Building Improvements [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Estimated useful life | '39 years | ' | ' |
Land Improvements [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Estimated useful life | '15 years | ' | ' |
Furniture and Fixtures [Member] | Minimum [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Estimated useful life | '5 years | ' | ' |
Furniture and Fixtures [Member] | Maximum [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Estimated useful life | '7 years | ' | ' |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies - Accounts Receivable and Allowance for Doubtful Accounts (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accounting Policies [Abstract] | ' | ' |
Accounts receivable | $7,763 | $10,152 |
Allowance for doubtful accounts | -1,090 | -1,243 |
Accounts receivable, net | $6,673 | $8,909 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies - Derivative Instruments (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Interest Rate Cap [Member] | ' | ' |
Derivative [Line Items] | ' | ' |
Number of Instruments | 2 | ' |
Notional Amount | $97,000,000 | ' |
Interest Rate Swap [Member] | ' | ' |
Derivative [Line Items] | ' | ' |
Number of Instruments | 1 | ' |
Notional Amount | 64,500,000 | ' |
Designated as Hedging Instrument [Member] | ' | ' |
Derivative [Line Items] | ' | ' |
Asset Derivatives | 33,000 | 192,000 |
Liability Derivative | 475,000 | 0 |
Designated as Hedging Instrument [Member] | Interest rate contracts [Member] | Interest rate products [Member] | ' | ' |
Derivative [Line Items] | ' | ' |
Asset Derivatives | 33,000 | 192,000 |
Liability Derivative | $475,000 | $0 |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies - Effects of Derivative Instruments on Income Statement (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Other Comprehensive Income [Roll Forward] | ' | ' |
Beginning Balance of OCI related to interest rate contracts | $1,162 | $1,465 |
Unrealized Loss Recognized in OCI Due to Change in Fair Value of interest rate contracts | 634 | 7 |
Loss Reclassified from OCI into Income (as Interest Expense) | -82 | -24 |
Net Change in OCI | 552 | -17 |
Ending Balance of Accumulated OCI Related to Derivatives | $1,714 | $1,448 |
Investment_in_Real_Estate_Purc
Investment in Real Estate - Purchase Price Allocation for Acquisition (Details) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | ||||||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | Feb. 12, 2014 | Feb. 28, 2014 | 22-May-13 | Jun. 14, 2013 | Jul. 31, 2013 | Sep. 26, 2013 |
Merrill Place [Member] | 3402 Pico [Member] | 3401 Exposition [Member] | Pinnacle II [Member] | Seattle Portfolio [Member] | 1861 Bundy [Member] | ||||
Consideration paid | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash consideration | $75,580 | $389,883 | ' | $57,034 | $18,546 | $8,489 | $1,505 | $368,389 | $11,500 |
Notes Receivable | ' | 4,000 | ' | ' | ' | 4,000 | 0 | 0 | 0 |
Debt Assumed | ' | 102,299 | ' | ' | ' | 13,233 | 89,066 | 0 | 0 |
Non-controlling interest in consolidated real estate entity | ' | 45,704 | ' | ' | ' | 0 | 45,704 | 0 | 0 |
Total consideration | 75,580 | 541,886 | ' | 57,034 | 18,546 | 25,722 | 136,275 | 368,389 | 11,500 |
Allocation of consideration paid | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Investment in real estate, net | 76,008 | 538,322 | ' | 57,508 | 18,500 | 25,439 | 134,289 | 367,094 | 11,500 |
Above-market leases | 173 | ' | ' | 173 | 0 | ' | ' | ' | ' |
Deferred leasing costs and lease intangibles, net | 3,163 | 34,256 | ' | 3,163 | 0 | 0 | 12,637 | 21,619 | 0 |
Fair market unfavorable debt value | ' | -5,820 | ' | ' | ' | 0 | -5,820 | 0 | 0 |
Below-market leases | -3,315 | -22,449 | ' | -3,315 | 0 | 0 | -7,783 | -14,666 | 0 |
Other (liabilities) asset assumed, net | -449 | -2,423 | 0 | -495 | 46 | 283 | 2,952 | -5,658 | 0 |
Total consideration paid | $75,580 | $541,886 | ' | $57,034 | $18,546 | $25,722 | $136,275 | $368,389 | $11,500 |
Investment_in_Real_Estate_Pro_
Investment in Real Estate - Pro Forma Information (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Real Estate [Abstract] | ' | ' |
Total revenues | $56,348 | $48,888 |
Net loss | $4,504 | $262 |
Investment_in_Real_Estate_Sche
Investment in Real Estate Schedule of Discontinued Operations (Details) (City Plaza [Member], USD $) | 3 Months Ended | |||
Mar. 31, 2014 | Jun. 30, 2013 | Mar. 31, 2013 | 31-May-13 | |
City Plaza [Member] | ' | ' | ' | ' |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' | ' | ' |
Sale price | ' | ' | ' | $56,000,000 |
Impairment loss | ' | 5,600,000 | ' | ' |
Total office revenues | 0 | ' | 1,997,000 | ' |
Office operating expenses | -66,000 | ' | -851,000 | ' |
Depreciation and amortization | 0 | ' | -473,000 | ' |
Loss from discontinued operations | ($66,000) | ' | $673,000 | ' |
Lease_Intangibles_Details
Lease Intangibles (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Finite-Lived Intangible Assets, Net [Abstract] | ' | ' |
Deferred leasing costs and lease intangibles | $184,196 | $180,475 |
Accumulated amortization | -74,154 | -69,077 |
Deferred leasing costs and lease intangibles, net | 110,042 | 111,398 |
Other Liabilities, Unclassified [Abstract] | ' | ' |
Below-market leases | 70,829 | 67,513 |
Accumulated accretion | -23,976 | -22,074 |
Below-market leases, net | 46,853 | 45,439 |
Above-market leases [Member] | ' | ' |
Finite-Lived Intangible Assets, Net [Abstract] | ' | ' |
Deferred leasing costs and lease intangibles | 16,392 | 16,517 |
Leases in place [Member] | ' | ' |
Finite-Lived Intangible Assets, Net [Abstract] | ' | ' |
Deferred leasing costs and lease intangibles | 88,673 | 86,417 |
Below-market ground leases [Member] | ' | ' |
Finite-Lived Intangible Assets, Net [Abstract] | ' | ' |
Deferred leasing costs and lease intangibles | 7,513 | 7,513 |
Other lease intangibles [Member] | ' | ' |
Finite-Lived Intangible Assets, Net [Abstract] | ' | ' |
Deferred leasing costs and lease intangibles | 37,807 | 37,162 |
Lease buy-out costs [Member] | ' | ' |
Finite-Lived Intangible Assets, Net [Abstract] | ' | ' |
Deferred leasing costs and lease intangibles | 3,107 | 3,107 |
Deferred leasing costs [Member] | ' | ' |
Finite-Lived Intangible Assets, Net [Abstract] | ' | ' |
Deferred leasing costs and lease intangibles | $30,704 | $29,759 |
Notes_Payable_Narrative_Detail
Notes Payable Narrative (Details) (Unsecured Revolving Credit Facility [Member], USD $) | 0 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | ||||||
Aug. 03, 2012 | Mar. 31, 2014 | Aug. 02, 2012 | Aug. 03, 2012 | Aug. 03, 2012 | Aug. 03, 2012 | Mar. 31, 2014 | Aug. 03, 2012 | Mar. 31, 2014 | |||
First Two Years [Member] | After Two Years [Member] | Minimum [Member] | Minimum [Member] | Maximum [Member] | Maximum [Member] | ||||||
LIBOR [Member] | LIBOR [Member] | LIBOR [Member] | LIBOR [Member] | ||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Line of credit facility, current borrowing capacity | $250,000,000 | ' | $200,000,000 | ' | ' | ' | ' | ' | ' | ||
Line of credit facility, additional commitments with accordion feature | 150,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ||
Line of credit facility, maximum borrowing capacity | 400,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ||
Covenant compliance, maximum leverage ratio | 0.6 | ' | ' | ' | ' | ' | ' | ' | ' | ||
Basis spread on variable rate | ' | ' | ' | ' | ' | 1.55% | 1.55% | [1] | 2.20% | 2.20% | [1] |
Line of credit facility, potential basis spread on variable rate, post credit rating | ' | ' | ' | ' | ' | 1.00% | ' | 1.85% | ' | ||
Line of credit facility, commitment fee percentage | ' | ' | ' | ' | ' | 0.25% | ' | 0.35% | ' | ||
Line of credit facility, potential commitment fee percentage, post credit rating | ' | ' | ' | ' | ' | 0.15% | ' | 0.45% | ' | ||
Covenant compliance, minimum fixed charge coverage ratio | 1.5 | ' | ' | ' | ' | ' | ' | ' | ' | ||
Covenant compliance, maximum secured indebtedness leverage ratio | ' | ' | ' | 0.6 | 0.55 | ' | ' | ' | ' | ||
Covenant compliance, maximum unencumbered leverage ratio | 0.6 | ' | ' | ' | ' | ' | ' | ' | ' | ||
Covenant compliance, minimum unsecured interest coverage ratio | 1.6 | ' | ' | ' | ' | ' | ' | ' | ' | ||
Covenant compliance, maximum recourse debt ratio | 0.15 | ' | ' | ' | ' | ' | ' | ' | ' | ||
Line of credit facility, remaining borrowing capacity | ' | 250,000,000 | ' | ' | ' | ' | ' | ' | ' | ||
Line of credit facility, amount outstanding | ' | $40,000,000 | ' | ' | ' | ' | ' | ' | ' | ||
[1] | Interest rate with respect to indebtedness is calculated on the basis of a 360-day year for the actual days elapsed, excluding the amortization of loan fees and costs. |
Notes_Payable_Schedule_of_Long
Notes Payable Schedule of Long-term Debt Instruments (Details) (USD $) | 3 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Aug. 03, 2012 | Mar. 31, 2014 | Aug. 03, 2012 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Oct. 29, 2012 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Aug. 22, 2013 | Aug. 20, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Feb. 11, 2012 | Mar. 16, 2011 | Feb. 11, 2011 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Jul. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | |||||||||||||||||||||||||||||||||||||
Unsecured Revolving Credit Facility [Member] | Unsecured Revolving Credit Facility [Member] | Unsecured Revolving Credit Facility [Member] | Unsecured Revolving Credit Facility [Member] | Unsecured Revolving Credit Facility [Member] | Unsecured Revolving Credit Facility [Member] | 3401 Exposition [Member] | 3401 Exposition [Member] | 3401 Exposition [Member] | 6922 Hollywood Boulevard [Member] | 6922 Hollywood Boulevard [Member] | 275 Brannan [Member] | 275 Brannan [Member] | 275 Brannan [Member] | Pinnacle II [Member] | Pinnacle II [Member] | 901 Market [Member] | 901 Market [Member] | 901 Market [Member] | 901 Market [Member] | Element LA [Member] | Element LA [Member] | Element LA [Member] | Sunset Gower Sunset Bronson [Member] | Sunset Gower Sunset Bronson [Member] | Sunset Gower Sunset Bronson [Member] | Sunset Gower Sunset Bronson [Member] | Sunset Gower Sunset Bronson [Member] | Sunset Gower Sunset Bronson [Member] | Sunset Gower Sunset Bronson [Member] | Sunset Gower Sunset Bronson [Member] | Rincon Center and 10950 Washington [Member] | Rincon Center and 10950 Washington [Member] | Rincon Center [Member] | Rincon Center [Member] | 10950 Washington [Member] | First and King [Member] | First and King [Member] | First and King [Member] | Met Park North [Member] | Met Park North [Member] | Met Park North [Member] | Met Park North [Member] | First Financial [Member] | First Financial [Member] | Pinnacle I [Member] | Pinnacle I [Member] | |||||||||||||||||||||||||||||||||||||||
LIBOR [Member] | LIBOR [Member] | LIBOR [Member] | LIBOR [Member] | LIBOR [Member] | LIBOR [Member] | LIBOR [Member] | LIBOR [Member] | LIBOR [Member] | LIBOR [Member] | LIBOR [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Minimum [Member] | Minimum [Member] | Maximum [Member] | Maximum [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||||||||||||||||||||||
Outstanding | $822,684,000 | $925,988,000 | $40,000,000 | $155,000,000 | ' | ' | ' | ' | $13,233,000 | [1] | $13,233,000 | [1] | ' | $40,151,000 | [2] | $40,396,000 | [2] | $15,000,000 | $15,000,000 | ' | $88,248,000 | [3] | $88,540,000 | [3] | $49,600,000 | [4] | $49,600,000 | [4] | $49,600,000 | ' | $13,287,000 | [5] | $566,000 | [5] | ' | $97,000,000 | $92,000,000 | $97,000,000 | [6] | $97,000,000 | [6] | ' | ' | $92,000,000 | ' | $29,188,000 | [7] | $29,300,000 | [7] | $105,544,000 | [7] | $105,853,000 | [7] | ' | $95,000,000 | [8] | $95,000,000 | [8] | ' | $64,500,000 | [9] | $64,500,000 | [9] | $64,500,000 | ' | $42,933,000 | [10] | $43,000,000 | [10] | $129,000,000 | [11] | $129,000,000 | [11] | ||||||||||||
Unamortized loan premium, net | 4,754,000 | [12] | 5,320,000 | [12] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||||||||||||||||||||
Total | 827,438,000 | 931,308,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||||||||||||||||||||||
Interest Rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.58% | [13],[2] | ' | ' | ' | ' | 6.31% | [13],[3] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.13% | [13],[7] | ' | 5.32% | [13],[7] | ' | ' | ' | ' | ' | ' | ' | 4.58% | [10],[13] | ' | 3.95% | [11],[13] | ' | ||||||||||||||||||||||||||||||
Basis spread on variable rate | ' | ' | ' | ' | 1.55% | 1.55% | [13] | 2.20% | 2.20% | [13] | ' | ' | 3.80% | [1],[13] | ' | ' | ' | ' | 2.00% | [13] | ' | ' | ' | ' | ' | 2.25% | [13],[4] | ' | ' | 1.95% | [13],[5] | 2.25% | 3.50% | ' | ' | ' | ' | ' | 2.25% | [13],[6] | ' | ' | ' | ' | ' | ' | ' | 1.60% | [13],[8] | 1.55% | ' | ' | 1.55% | [13],[9] | ' | ' | ' | ' | |||||||||||||||||||||||||||
Duration used in interest rate calculation | '360 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||||||||||||||||||||||
Periodic payment, debt service payment term | '30 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '30 years | ' | ' | ' | ' | '30 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '30 years | ' | ' | '30 years | ' | ' | ' | ' | ' | ' | '30 years | ' | ' | ' | ||||||||||||||||||||||||||||||||||||
Interest only term of loan | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2 years | ' | ' | ' | ' | ' | ' | '2 years | ' | ' | ' | ||||||||||||||||||||||||||||||||||||
Unused borrowing capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||||||||||||||||||||||
Face Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 65,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||||||||||||||||||||||
Interest rate cap | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.00% | 3.72% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||||||||||||||||||||||
Notional Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 42,000,000 | 50,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||||||||||||||||||||||
Annual debt service | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,604,000 | ' | ' | ' | ' | ' | ' | $2,639,000 | ' | ' | ' | ||||||||||||||||||||||||||||||||||||
Fixed interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.16% | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||||||||||||||||||||||
[1] | This loan was assumed on May 22, 2013 in connection with the closing of our acquisition of the 3401 Exposition Boulevard property. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[2] | This loan was assumed on November 22, 2011 in connection with the closing of our acquisition of the 6922 Hollywood Boulevard property. This loan is amortizing based on a 30-year amortization schedule. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[3] | This loan was assumed on June 14, 2013 in connection with the contribution of the Pinnacle II building to the Company’s joint venture with M. David Paul & Associates/Worthe Real Estate Group. This loan bore interest only for the first five years. Beginning with the payment due October 6, 2011, monthly debt service includes annual debt amortization payments based on a 30-year amortization schedule. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[4] | On October 29, 2012, we obtained a loan for our 901 Market property pursuant to which we borrowed $49,600 upon closing, with the ability to draw up to an additional $11,900 for budgeted base building, tenant improvements, and other costs associated with the renovation and lease-up of that property. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[5] | We have the ability to draw up to $65,500 for budgeted site-work, construction of a parking garage, base building, tenant improvement, and leasing commission costs associated with the renovation and lease-up of the property. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[6] | On March 16, 2011, we purchased an interest rate cap in order to cap one-month LIBOR at 3.715% with respect to $50,000 of the loan through February 11, 2016. On January 11, 2012 we purchased an interest rate cap in order to cap one-month LIBOR at 2.00% with respect to $42,000 of the loan through February 11, 2016. Effective August 22, 2013, the terms of this loan were amended to increase the outstanding balance from $92,000 to $97,000, reduce the interest rate from LIBOR plus 3.50% to LIBOR plus 2.25%, and extend the maturity date from February 11, 2016 to February 11, 2018. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[7] | This loan is amortizing based on a 30-year amortization schedule. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[8] | This loan bears interest only for the first two years. Beginning with the payment due August 1, 2015, monthly debt service will include annual debt amortization payments of $1,604 based on a 30-year amortization schedule. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[9] | This loan bears interest only at a rate equal to one-month LIBOR plus 1.55%. The full loan amount is subject to an interest rate contract that swapped one-month LIBOR to a fixed rate of 2.1644% through the loan's maturity on August 1, 2020. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[10] | This loan bears interest only for the first two years. Beginning with the payment due March 1, 2014, monthly debt service will include principal payments based on a 30-year amortization schedule, for total annual debt service of $2,639. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[11] | This loan bears interest only for the first five years. Beginning with the payment due December 6, 2017, monthly debt service will include annual debt amortization payments based on a 30-year amortization schedule. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[12] | Represents unamortized amount of the non-cash mark-to-market adjustment on debt associated with 6922 Hollywood Boulevard and Pinnacle II. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[13] | Interest rate with respect to indebtedness is calculated on the basis of a 360-day year for the actual days elapsed, excluding the amortization of loan fees and costs. |
Notes_Payable_Minimum_Future_P
Notes Payable - Minimum Future Payments Due on Notes Payable (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Debt Disclosure [Abstract] | ' | ' |
2014 (nine months ending December 31, 2014) | $16,871 | ' |
2015 | 59,238 | ' |
2016 | 180,512 | ' |
2017 | 18,344 | ' |
2018 | 290,228 | ' |
2019 | 3,706 | ' |
Thereafter | 253,785 | ' |
Total | $822,684 | $925,988 |
Interest_Rate_Contracts_Detail
Interest Rate Contracts (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Aug. 22, 2013 | Aug. 20, 2013 | Feb. 11, 2011 | Mar. 31, 2014 | Dec. 31, 2013 | Feb. 11, 2012 | Mar. 16, 2011 | Feb. 11, 2011 | Jan. 11, 2012 | Mar. 16, 2011 | Jan. 11, 2012 | Mar. 16, 2011 | Jul. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Jul. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | ||||
Interest Rate Contract [Member] | Interest Rate Contract [Member] | Sunset Gower Sunset Bronson [Member] | Sunset Gower Sunset Bronson [Member] | Sunset Gower Sunset Bronson [Member] | Sunset Gower Sunset Bronson [Member] | Sunset Gower Sunset Bronson [Member] | Sunset Gower Sunset Bronson [Member] | Sunset Gower Sunset Bronson [Member] | Sunset Gower Sunset Bronson [Member] | Sunset Gower Sunset Bronson [Member] | Sunset Gower Sunset Bronson [Member] | Sunset Gower Sunset Bronson [Member] | Sunset Gower Sunset Bronson [Member] | Met Park North [Member] | Met Park North [Member] | Met Park North [Member] | Met Park North [Member] | Interest Rate Cap [Member] | Interest Rate Cap [Member] | Interest Rate Cap [Member] | |||||||
Fair Value [Member] | Fair Value [Member] | One-Month LIBOR [Member] | One-Month LIBOR [Member] | One-Month LIBOR [Member] | Interest Rate Cap [Member] | Interest Rate Cap [Member] | One-Month LIBOR [Member] | Interest Rate Contract [Member] | Interest Rate Contract [Member] | ||||||||||||||||||
Fair Value [Member] | Fair Value [Member] | ||||||||||||||||||||||||||
Derivative [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Term of loan | ' | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | '7 years | ' | ' | ' | ' | ' | ' | ||||
Debt instrument carrying amount | $822,684,000 | $925,988,000 | ' | ' | $97,000,000 | $92,000,000 | $92,000,000 | $97,000,000 | [1] | $97,000,000 | [1] | ' | ' | ' | ' | ' | ' | ' | $64,500,000 | $64,500,000 | [2] | $64,500,000 | [2] | ' | ' | ' | ' |
Basis spread on variable rate | ' | ' | ' | ' | 2.25% | 3.50% | ' | ' | ' | ' | ' | 3.50% | ' | ' | ' | ' | ' | 1.55% | ' | 1.55% | ' | ' | ' | ||||
Interest rate cap | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.00% | 3.72% | ' | 2.00% | 3.72% | ' | ' | ' | ' | ' | 2.16% | ' | ' | ' | ||||
Notional amount of interest rate cash flow hedge derivatives | ' | ' | ' | ' | ' | ' | ' | ' | ' | 42,000,000 | 50,000,000 | ' | ' | ' | 42,000,000 | 50,000,000 | ' | ' | ' | ' | 97,000,000 | ' | ' | ||||
Derivative liabilities, disclosed as “Interest rate contracts†| 33,000 | 192,000 | 33,000 | 192,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 33,000 | 55,000 | ||||
Fair value of interest rate swap | ' | ' | ($475,000) | $137,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
[1] | On March 16, 2011, we purchased an interest rate cap in order to cap one-month LIBOR at 3.715% with respect to $50,000 of the loan through February 11, 2016. On January 11, 2012 we purchased an interest rate cap in order to cap one-month LIBOR at 2.00% with respect to $42,000 of the loan through February 11, 2016. Effective August 22, 2013, the terms of this loan were amended to increase the outstanding balance from $92,000 to $97,000, reduce the interest rate from LIBOR plus 3.50% to LIBOR plus 2.25%, and extend the maturity date from February 11, 2016 to February 11, 2018. | ||||||||||||||||||||||||||
[2] | This loan bears interest only at a rate equal to one-month LIBOR plus 1.55%. The full loan amount is subject to an interest rate contract that swapped one-month LIBOR to a fixed rate of 2.1644% through the loan's maturity on August 1, 2020. |
Future_Minimum_Base_Rents_and_2
Future Minimum Base Rents and Lease Payments Future Minimum Rents - Future Minimum Base Rents (Details) (USD $) | Mar. 31, 2014 |
In Thousands, unless otherwise specified | |
Operating Leases, Future Minimum Payments Receivable [Abstract] | ' |
2014 (nine months ending December 31, 2014) | $105,875 |
2015 | 152,830 |
2016 | 156,491 |
2017 | 138,939 |
2018 | 125,187 |
2019 | 112,903 |
Thereafter | 457,549 |
Total future minimum rents | $1,249,774 |
Future_Minimum_Base_Rents_and_3
Future Minimum Base Rents and Lease Payments Future Minimum Rents - Narrative (Details) (USD $) | 0 Months Ended | 3 Months Ended | ||||
Mar. 31, 2011 | Aug. 17, 2007 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | |
Sunset Gower [Member] | Sunset Gower [Member] | Del Amo [Member] | Location 9300 Wilshire Boulevard [Member] | Location 222 Kearny Street [Member] | Location 222 Kearny Street [Member] | |
Greater of [Member] | ||||||
Ground Leases [Line Items] | ' | ' | ' | ' | ' | ' |
Ground lease monthly rent | $31,000 | $14,000 | ' | ' | ' | ' |
Period for rental rate adjustment | '7 years | ' | ' | ' | ' | ' |
Annual rent | ' | ' | 1 | ' | ' | ' |
Minimum annual rent | ' | ' | ' | 75,000 | 975,000 | 975,000 |
Percent of gross rentals | ' | ' | ' | 6.00% | ' | ' |
Percent of operating income | ' | ' | ' | ' | ' | 20.00% |
Operating income amount | ' | ' | ' | ' | $8,000,000 | ' |
Future_Minimum_Base_Rents_and_4
Future Minimum Base Rents and Lease Payments Future Minimum Rents - Future Minimum Lease Payments (Details) (USD $) | Mar. 31, 2014 |
In Thousands, unless otherwise specified | |
Future Minimum Base Rents and Lease Payments Future Minimum Rents [Abstract] | ' |
2014 (nine months ending December 31, 2014) | $1,063 |
2015 | 1,417 |
2016 | 1,417 |
2017 | 1,417 |
2018 | 1,417 |
2019 | 1,417 |
Thereafter | 49,408 |
Total future minimum rents | $57,556 |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Derivative liabilities, disclosed as “Interest rate contracts†| $33 | $192 |
Derivative liabilities, disclosed as “Interest rate contracts†| -475 | 0 |
Carrying Value [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Notes payable | 827,438 | 931,308 |
Fair Value [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Notes payable | 835,502 | 940,435 |
Interest Rate Contract [Member] | Carrying Value [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Derivative liabilities, disclosed as “Interest rate contracts†| 33 | 192 |
Derivative liabilities, disclosed as “Interest rate contracts†| -475 | 0 |
Interest Rate Contract [Member] | Fair Value [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Derivative liabilities, disclosed as “Interest rate contracts†| 33 | 192 |
Derivative liabilities, disclosed as “Interest rate contracts†| ($475) | $0 |
Equity_Noncontrolling_Interest
Equity Non-controlling Interests Narrative (Details) | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Jun. 14, 2013 |
Pinnacle JV [Member] | Pinnacle II [Member] | Pinnacle I [Member] | ||
sqft | sqft | sqft | ||
building | ||||
Class of Stock [Line Items] | ' | ' | ' | ' |
Noncontrolling Interest, Ownership by Noncontrolling Owners Amount | 2,382,563 | ' | ' | ' |
Number of buildings in property | ' | 2 | ' | ' |
Area of real estate property | ' | 625,640 | ' | ' |
Ownership interest in property | ' | 65.00% | ' | 98.25% |
Business acquisition, area of real estate property (in sqft) | ' | ' | 231,864 | 393,776 |
Equity_625_series_A_cumulative
Equity 6.25% series A cumulative redeemable preferred units of the Operating Partnership Narrative (Details) (USD $) | 1 Months Ended | 3 Months Ended | ||
Mar. 31, 2014 | Oct. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | |
Class of Stock [Line Items] | ' | ' | ' | ' |
Number of common unit holders | 1 | 1 | ' | ' |
Series A Cumulative Redeemable Preferred Units Of The Operating Partnership [Member] | ' | ' | ' | ' |
Class of Stock [Line Items] | ' | ' | ' | ' |
Shares outstanding of preferred stock | 407,066 | 419,014 | 407,066 | 499,014 |
Interest rate of preferred stock | ' | ' | 6.25% | ' |
Liquidation preference of preferred stock (dollars per share) | $25 | $25 | $25 | ' |
Noncontrolling interest, decrease from redemptions or purchase of interests (in shares) | 11,948 | 80,000 | ' | ' |
Equity_8375_Series_B_cumulativ
Equity 8.375% Series B cumulative redeemable preferred stock Narrative (Details) (Series B Preferred Stock [Member], USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended |
In Millions, except Share data, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 | Jan. 23, 2012 | Dec. 31, 2010 | Jan. 23, 2012 | Dec. 31, 2010 | Mar. 31, 2014 |
Public Offering [Member] | Public Offering [Member] | Public Offering, Exercise of Over-allotment Option [Member] | Public Offering, Exercise of Over-allotment Option [Member] | Change of Control [Member] | |||
Class of Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Interest rate of preferred stock | 8.38% | 8.38% | ' | ' | ' | ' | 12.38% |
Shares outstanding of preferred stock | 5,800,000 | 5,800,000 | ' | ' | ' | ' | ' |
Liquidation Preference of Preferred Stock (dollars per share) | $25 | $25 | ' | ' | ' | ' | ' |
Par value of preferred stock | $0.01 | $0.01 | ' | ' | ' | ' | ' |
Proceeds from sale of common stock (in shares) | ' | ' | 2,300,000 | 3,500,000 | 300,000 | 300,000 | ' |
Proceeds from the offering before transaction costs | ' | ' | $57.50 | $83.90 | ' | ' | ' |
Liquidation preference of preferred stock, per annum (dollars per share) | $2.09 | ' | ' | ' | ' | ' | $3.09 |
Preferred stock, redemption period after change in control | '90 days | ' | ' | ' | ' | ' | ' |
Equity_Common_Stock_Offering_N
Equity Common Stock Offering Narrative (Details) (USD $) | 3 Months Ended | 0 Months Ended | ||||||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Jan. 28, 2014 | Feb. 12, 2013 | Jan. 28, 2014 | Feb. 12, 2013 | Jan. 28, 2014 | Feb. 12, 2013 |
Common Stock [Member] | Common Stock [Member] | Public Offering [Member] | Public Offering [Member] | Public Offering, Exercise of Over-allotment Option [Member] | Public Offering, Exercise of Over-allotment Option [Member] | |||
Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | |||||
Class of Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from sale of common stock (in shares) | ' | ' | ' | ' | 8,250,000 | 8,000,000 | 1,237,500 | 1,200,000 |
Public offering price (dollars per share) | ' | ' | ' | ' | ' | ' | $21.50 | $21.50 |
Proceeds from issuance of common stock | $197,468 | $189,888 | $195,800 | $189,900 | ' | ' | ' | ' |
Equity_Dividends_Narrative_Det
Equity Dividends Narrative (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Class of Stock [Line Items] | ' | ' |
Common dividends declared (dollars per share) | $0.13 | $0.13 |
Series A Cumulative Redeemable Preferred Units Of The Operating Partnership [Member] | ' | ' |
Class of Stock [Line Items] | ' | ' |
Preferred dividends declared (dollars per share) | $0.39 | ' |
Series B Preferred Stock [Member] | ' | ' |
Class of Stock [Line Items] | ' | ' |
Preferred dividends declared (dollars per share) | $0.52 | ' |
Equity_StockBased_Compensation
Equity Stock-Based Compensation Narrative (Details) | 3 Months Ended |
Mar. 31, 2014 | |
Existing and Newly Elected Board Member [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Award vesting period | '3 years |
Employees [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Award vesting period | '3 years |
Equity_Summary_of_Restricted_S
Equity Summary of Restricted Share Activity (Details) (Restricted Stock [Member], USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Restricted Stock [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ' | ' |
Beginning balance, Shares | 541,180 | ' |
Granted, Shares | 13,581 | 0 |
Vested, Shares | -3,306 | -3,036 |
Canceled, Shares | 0 | ' |
Ending balance, Shares | 551,455 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ' | ' |
Beginning balance, Weighted-Average Grant-Date Fair Value | $19.98 | ' |
Granted, Weighted-Average Grant-Date Fair Value | $22.09 | $0 |
Vested, Weighted-Average Grant-Date Fair Value | $15.12 | ' |
Canceled, Weighted-Average Grant-Date Fair Value | $0 | ' |
Ending balance, Weighted-Average Grant-Date Fair Value | $20.06 | ' |
Total Vest-Date Fair Value | $73 | $68 |
Equity_Outperformance_Program_
Equity Outperformance Program (Details) (USD $) | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 0 Months Ended | ||||||||||||||||||||||
Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Jan. 02, 2012 | Jan. 02, 2012 | Jan. 02, 2012 | Jan. 02, 2012 | Jan. 02, 2012 | Jan. 02, 2012 | Jan. 02, 2013 | Jan. 02, 2013 | Jan. 02, 2013 | Jan. 02, 2013 | Jan. 02, 2013 | Jan. 02, 2013 | Jan. 02, 2014 | Jan. 02, 2014 | Jan. 02, 2014 | Jan. 02, 2014 | Jan. 02, 2014 | Jan. 02, 2014 | |
General and Administrative Expense [Member] | General and Administrative Expense [Member] | Deferred Leasing Costs and Lease Intatngibles, Net [Member] | Deferred Leasing Costs and Lease Intatngibles, Net [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member] | 2012 Outperformance Program [Member] | 2012 Outperformance Program [Member] | 2012 Outperformance Program [Member] | 2012 Outperformance Program [Member] | 2012 Outperformance Program [Member] | 2012 Outperformance Program [Member] | 2013 Outperformance Program [Member] | 2013 Outperformance Program [Member] | 2013 Outperformance Program [Member] | 2013 Outperformance Program [Member] | 2013 Outperformance Program [Member] | 2013 Outperformance Program [Member] | 2014 Outperformance Program [Member] | 2014 Outperformance Program [Member] | 2014 Outperformance Program [Member] | 2014 Outperformance Program [Member] | 2014 Outperformance Program [Member] | 2014 Outperformance Program [Member] | |||
The Company [Member] | SNL Equity REIT Index [Member] | Maximum [Member] | Minimum [Member] | Restricted Stock Units (RSUs) [Member] | The Company [Member] | SNL Equity REIT Index [Member] | Maximum [Member] | Minimum [Member] | Restricted Stock Units (RSUs) [Member] | The Company [Member] | SNL Equity REIT Index [Member] | Maximum [Member] | Minimum [Member] | Restricted Stock Units (RSUs) [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum share value authorized under plan | ' | ' | ' | ' | ' | ' | ' | ' | ' | $10,000,000 | ' | ' | ' | ' | ' | $11,000,000 | ' | ' | ' | ' | ' | $12,000,000 | ' | ' | ' | ' | ' |
Performance period | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | ' |
Percentage Amount TSR Exceeds Simple Annual TSR | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.00% | ' | ' | ' | ' | ' | 4.00% | ' | ' | ' | ' | ' | 4.00% | ' | ' | ' | ' | ' |
Simple Annual TSR | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9.00% | ' | ' | ' | ' | ' | 9.00% | ' | ' | ' | ' | ' | 9.00% | ' | ' | ' | ' | ' |
Percent TSR Exceeds SNL Equity REIT Index | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.00% | ' | ' | ' | ' | ' | 4.00% | ' | ' | ' | ' | ' | 4.00% | ' | ' | ' | ' | ' |
Absolute TSR Reduced on a Linear Basis | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | 0.00% | ' | ' | ' | ' | 100.00% | 0.00% | ' | ' | ' | ' | 100.00% | 0.00% | ' |
Simple TSR Reduced on a Linear Basis | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7.00% | 0.00% | ' | ' | ' | ' | 7.00% | 0.00% | ' | ' | ' | ' | 7.00% | 0.00% | ' |
Percent of Underperformance of SNL Equity REIT Index | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.00% | ' | ' | ' | ' | ' | 4.00% | ' | ' | ' | ' | ' | 4.00% | ' | ' | ' | ' | ' |
Underperformance of SNL Equity REIT Index per Year | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.00% | ' | ' | ' | ' | ' | 3.00% | ' | ' | ' | ' | ' | 3.00% | ' | ' | ' | ' | ' |
Hypothetical bonus pool for stock settled award | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,000,000 | 2,000,000 | ' | ' | ' | ' | 4,000,000 | 2,000,000 | ' | ' | ' | ' | ' | ' | ' |
Award vesting period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2 years | ' | ' | ' | ' | ' | '2 years | ' | ' | ' | ' | ' | '2 years |
Stock settled awards | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,490,000 | ' | ' | ' | ' | ' | 4,140,000 | ' | ' | ' | ' | ' | 3,210,000 | ' | ' | ' | ' | ' |
Forfeiture adjustment as percent of total cost | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6.00% | ' | ' | ' | ' | ' | 6.00% | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' |
Expected volatility rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 36.00% | 35.00% | ' | ' | ' | ' | 33.00% | 25.00% | ' | ' | ' | ' | 28.00% | 26.00% | ' | ' | ' |
Risk free interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.40% | ' | ' | ' | ' | ' | 0.38% | ' | ' | ' | ' | ' | 0.77% | ' | ' | ' | ' | ' |
Expected dividend payment per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1.62 | ' | ' | ' | ' | ' | $1.50 | ' | ' | ' | ' | ' | $1.50 | ' | ' | ' | ' | ' |
Amortization of stock-based compensation | 1,376,000 | 6,682,000 | ' | ' | ' | ' | 1,376,000 | 1,783,000 | 6,682,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allocated Share-based Compensation Expense | ' | ' | $1,277,000 | $1,726,000 | $99,000 | $57,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Related_Party_Transactions_Det
Related Party Transactions (Details) (FJM Investments, LLC [Member], USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2014 |
sqft | |
FJM Investments, LLC [Member] | ' |
Related Party Transaction [Line Items] | ' |
Area of real estate property | 3,708 |
Lease term | '1 year |
Annual rental obligation under the lease | $148 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (Customer Concentration Risk [Member], Sales [Member]) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Customer Concentration Risk [Member] | Sales [Member] | ' | ' |
Loss Contingencies [Line Items] | ' | ' |
Percentage of revenue from one industry | 17.00% | 23.00% |
Segment_Reporting_Summary_of_R
Segment Reporting - Summary of Reportable Segments (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Segments | ||
Segment Reporting Information [Line Items] | ' | ' |
Number of Reportable Segments | 2 | ' |
Segment Reporting Information, Profit (Loss) [Abstract] | ' | ' |
Revenue | $55,596 | $47,384 |
Income from operations | 11,220 | 5,131 |
Operating Segments [Member] | ' | ' |
Segment Reporting Information, Profit (Loss) [Abstract] | ' | ' |
Revenue | 55,596 | 47,384 |
Operating expenses | 21,932 | 18,833 |
Income from operations | 33,664 | 28,551 |
Office Properties [Member] | ' | ' |
Segment Reporting Information, Profit (Loss) [Abstract] | ' | ' |
Revenue | 46,060 | 36,472 |
Operating expenses | 15,927 | 13,265 |
Income from operations | 30,133 | 23,207 |
Media and Entertainment Properties [Member] | ' | ' |
Segment Reporting Information, Profit (Loss) [Abstract] | ' | ' |
Revenue | 9,536 | 10,912 |
Operating expenses | 6,005 | 5,568 |
Income from operations | $3,531 | $5,344 |
Segment_Reporting_Reconciliati
Segment Reporting - Reconciliation of Income (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ' | ' |
Net operating income | $11,220,000 | $5,131,000 |
General and administrative | -5,776,000 | -4,989,000 |
Depreciation and amortization | -16,668,000 | -18,431,000 |
Interest expense | -6,524,000 | -5,592,000 |
Interest income | 9,000 | 150,000 |
Acquisition-related expenses | -105,000 | 0 |
Other expense | -1,000 | -45,000 |
Income (loss) from continuing operations | 4,599,000 | -356,000 |
Intersegment sales | 0 | 0 |
Intersegment transfers | 0 | 0 |
Operating Segments [Member] | ' | ' |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ' | ' |
Net operating income | $33,664,000 | $28,551,000 |
Subsequent_Events_Details
Subsequent Events (Details) (Subsequent Event [Member], Location 1455 Market Street [Member]) | 0 Months Ended |
Apr. 09, 2014 | |
sqft | |
Subsequent Event [Member] | Location 1455 Market Street [Member] | ' |
Subsequent Event [Line Items] | ' |
Term of lease | '7 years |
Area of real estate property | 24,438 |