Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 22, 2018 | |
Entity Information [Line Items] | ||
Entity Registrant Name | HEALTHCARE TRUST OF AMERICA, INC. | |
Entity Central Index Key | 1,360,604 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 206,940,894 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Current Reporting Status | Yes | |
Healthcare Trust of America Holdings, LP (HTALP) | ||
Entity Information [Line Items] | ||
Entity Registrant Name | Healthcare Trust of America Holdings, LP | |
Entity Central Index Key | 1,495,491 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Current Reporting Status | Yes |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Real estate investments: | ||
Land | $ 483,541 | $ 485,319 |
Building and improvements | 5,743,439 | 5,830,824 |
Lease intangibles | 604,215 | 639,199 |
Construction in progress | 27,273 | 14,223 |
Real estate investments, gross | 6,858,468 | 6,969,565 |
Accumulated depreciation and amortization | (1,151,490) | (1,021,691) |
Real estate investments, net | 5,706,978 | 5,947,874 |
Investment in unconsolidated joint venture | 67,592 | 68,577 |
Cash and cash equivalents | 225,518 | 100,356 |
Restricted cash | 14,639 | 18,204 |
Receivables and other assets, net | 213,482 | 207,857 |
Other intangibles, net | 100,475 | 106,714 |
Total assets | 6,328,684 | 6,449,582 |
Liabilities: | ||
Debt | 2,609,659 | 2,781,031 |
Accounts payable and accrued liabilities | 160,246 | 167,852 |
Derivative financial instruments - interest rate swaps | 0 | 1,089 |
Security deposits, prepaid rent and other liabilities | 55,753 | 61,222 |
Intangible liabilities, net | 62,887 | 68,203 |
Total liabilities | 2,888,545 | 3,079,397 |
Commitments and contingencies | ||
Redeemable noncontrolling interests | 6,610 | 6,737 |
Equity/Partners' Capital: | ||
Preferred stock, $0.01 par value; 200,000,000 shares authorized; none issued and outstanding | 0 | 0 |
Class A common stock, $0.01 par value; 1,000,000,000 shares authorized; 207,231,171 and 204,892,118 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively | 2,072 | 2,049 |
Additional paid-in capital | 4,574,913 | 4,508,528 |
Accumulated other comprehensive income | 648 | 274 |
Cumulative dividends in excess of earnings | (1,224,006) | (1,232,069) |
Total stockholders’ equity | 3,353,627 | 3,278,782 |
Noncontrolling interests | 79,902 | 84,666 |
Total equity | 3,433,529 | 3,363,448 |
Partners’ Capital: | ||
Total liabilities and equity/partners' capital | 6,328,684 | 6,449,582 |
Healthcare Trust of America Holdings, LP (HTALP) | ||
Real estate investments: | ||
Land | 483,541 | 485,319 |
Building and improvements | 5,743,439 | 5,830,824 |
Lease intangibles | 604,215 | 639,199 |
Construction in progress | 27,273 | 14,223 |
Real estate investments, gross | 6,858,468 | 6,969,565 |
Accumulated depreciation and amortization | (1,151,490) | (1,021,691) |
Real estate investments, net | 5,706,978 | 5,947,874 |
Investment in unconsolidated joint venture | 67,592 | 68,577 |
Cash and cash equivalents | 225,518 | 100,356 |
Restricted cash | 14,639 | 18,204 |
Receivables and other assets, net | 213,482 | 207,857 |
Other intangibles, net | 100,475 | 106,714 |
Total assets | 6,328,684 | 6,449,582 |
Liabilities: | ||
Debt | 2,609,659 | 2,781,031 |
Accounts payable and accrued liabilities | 160,246 | 167,852 |
Derivative financial instruments - interest rate swaps | 0 | 1,089 |
Security deposits, prepaid rent and other liabilities | 55,753 | 61,222 |
Intangible liabilities, net | 62,887 | 68,203 |
Total liabilities | 2,888,545 | 3,079,397 |
Commitments and contingencies | ||
Redeemable noncontrolling interests | 6,610 | 6,737 |
Partners’ Capital: | ||
Limited partners’ capital, 3,929,083 and 4,124,148 units issued and outstanding as of September 30, 2018 and December 31, 2017, respectively | 79,632 | 84,396 |
General partners’ capital, 207,231,171 and 204,892,118 units issued and outstanding as of September 30, 2018 and December 31, 2017, respectively | 3,353,897 | 3,279,052 |
Total partners’ capital | 3,433,529 | 3,363,448 |
Total liabilities and equity/partners' capital | $ 6,328,684 | $ 6,449,582 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Healthcare Trust of America Holdings, LP (HTALP) | ||
Partners’ Capital: | ||
Limited partner's capital, units issued (in shares) | 3,929,083 | 4,124,148 |
Limited partner's capital, units outstanding (in shares) | 3,929,083 | 4,124,148 |
General partner's capital, units issued (in shares) | 207,231,171 | 204,892,118 |
General partner's capital, units outstanding (in shares) | 207,231,171 | 204,892,118 |
Class A Common Stock | ||
Equity: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 207,231,171 | 204,892,118 |
Common stock, shares outstanding (in shares) | 207,231,171 | 204,892,118 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Revenues: | |||||
Rental income | $ 175,038,000 | $ 175,431,000 | $ 523,826,000 | $ 438,949,000 | |
Interest and other operating income | 97,000 | 563,000 | 302,000 | 1,271,000 | |
Total revenues | 175,135,000 | 175,994,000 | 524,128,000 | 440,220,000 | |
Expenses: | |||||
Rental | 55,789,000 | 56,331,000 | 165,364,000 | 138,874,000 | |
General and administrative | 8,770,000 | 8,283,000 | 26,281,000 | 25,178,000 | |
Transaction | 346,000 | 261,000 | 933,000 | 5,618,000 | |
Depreciation and amortization | 70,568,000 | 70,491,000 | 210,064,000 | 172,900,000 | |
Impairment | 4,281,000 | 0 | 8,887,000 | 5,093,000 | |
Total expenses | 139,754,000 | 135,366,000 | 411,529,000 | 347,663,000 | |
Income before other income (expense) | 35,381,000 | 40,628,000 | 112,599,000 | 92,557,000 | |
Interest income (expense): | |||||
Interest related to derivative financial instruments | 169,000 | (264,000) | 297,000 | (827,000) | |
Gain on change in fair value of derivative financial instruments, net | 0 | 0 | 0 | 884,000 | |
Total interest related to derivative financial instruments, including net change in fair value of derivative financial instruments | 169,000 | (264,000) | 297,000 | 57,000 | |
Interest related to debt | (25,003,000) | (25,924,000) | (77,689,000) | (59,688,000) | |
Gain on sale of real estate, net | 166,372,000 | 0 | 166,372,000 | 3,000 | |
Loss on extinguishment of debt, net | (1,092,000) | (774,000) | (1,092,000) | (11,192,000) | |
Income from unconsolidated joint venture | 432,000 | 318,000 | 1,405,000 | 381,000 | |
Other income (expense) | 89,000 | (27,000) | 129,000 | (13,000) | |
Net income | 176,348,000 | 13,957,000 | 202,021,000 | 22,105,000 | |
Net income attributable to noncontrolling interests | [1] | (3,362,000) | (194,000) | (3,887,000) | (715,000) |
Net income (loss) attributable to common stockholders/unitholders | $ 172,986,000 | $ 13,763,000 | $ 198,134,000 | $ 21,390,000 | |
Earnings per common share/unit - basic: | |||||
Net income (loss) attributable to common stockholders/unitholders (in dollars per share) | $ 0.83 | $ 0.07 | $ 0.96 | $ 0.12 | |
Earnings per common share/unit - diluted: | |||||
Net income (loss) attributable to common stockholders/unitholders (in dollars per share) | $ 0.82 | $ 0.07 | $ 0.94 | $ 0.12 | |
Weighted average common shares/units outstanding: | |||||
Basic (in shares/units) | 207,513 | 200,674 | 205,950 | 173,189 | |
Diluted (in shares/units) | 211,444 | 204,795 | 209,968 | 177,410 | |
Dividends declared per common share/common unit (in dollars per share) | $ 0.310 | $ 0.305 | $ 0.920 | $ 0.905 | |
Healthcare Trust of America Holdings, LP (HTALP) | |||||
Revenues: | |||||
Rental income | $ 175,038,000 | $ 175,431,000 | $ 523,826,000 | $ 438,949,000 | |
Interest and other operating income | 97,000 | 563,000 | 302,000 | 1,271,000 | |
Total revenues | 175,135,000 | 175,994,000 | 524,128,000 | 440,220,000 | |
Expenses: | |||||
Rental | 55,789,000 | 56,331,000 | 165,364,000 | 138,874,000 | |
General and administrative | 8,770,000 | 8,283,000 | 26,281,000 | 25,178,000 | |
Transaction | 346,000 | 261,000 | 933,000 | 5,618,000 | |
Depreciation and amortization | 70,568,000 | 70,491,000 | 210,064,000 | 172,900,000 | |
Impairment | 4,281,000 | 0 | 8,887,000 | 5,093,000 | |
Total expenses | 139,754,000 | 135,366,000 | 411,529,000 | 347,663,000 | |
Income before other income (expense) | 35,381,000 | 40,628,000 | 112,599,000 | 92,557,000 | |
Interest income (expense): | |||||
Interest related to derivative financial instruments | 169,000 | (264,000) | 297,000 | (827,000) | |
Gain on change in fair value of derivative financial instruments, net | 0 | 0 | 0 | 884,000 | |
Total interest related to derivative financial instruments, including net change in fair value of derivative financial instruments | 169,000 | (264,000) | 297,000 | 57,000 | |
Interest related to debt | (25,003,000) | (25,924,000) | (77,689,000) | (59,688,000) | |
Gain on sale of real estate, net | 166,372,000 | 0 | 166,372,000 | 3,000 | |
Loss on extinguishment of debt, net | (1,092,000) | (774,000) | (1,092,000) | (11,192,000) | |
Income from unconsolidated joint venture | 432,000 | 318,000 | 1,405,000 | 381,000 | |
Other income (expense) | 89,000 | (27,000) | 129,000 | (13,000) | |
Net income | 176,348,000 | 13,957,000 | 202,021,000 | 22,105,000 | |
Net income attributable to noncontrolling interests | (18,000) | (28,000) | (65,000) | (80,000) | |
Net income (loss) attributable to common stockholders/unitholders | $ 176,330,000 | $ 13,929,000 | $ 201,956,000 | $ 22,025,000 | |
Earnings per common share/unit - basic: | |||||
Net income (loss) attributable to common stockholders/unitholders (in dollars per share) | $ 0.83 | $ 0.07 | $ 0.96 | $ 0.12 | |
Earnings per common share/unit - diluted: | |||||
Net income (loss) attributable to common stockholders/unitholders (in dollars per share) | $ 0.83 | $ 0.07 | $ 0.96 | $ 0.12 | |
Weighted average common shares/units outstanding: | |||||
Basic (in shares/units) | 211,444 | 204,795 | 209,968 | 177,410 | |
Diluted (in shares/units) | 211,444 | 204,795 | 209,968 | 177,410 | |
Dividends declared per common share/common unit (in dollars per share) | $ 0.310 | $ 0.305 | $ 0.920 | $ 0.905 | |
[1] | Includes amounts attributable to redeemable noncontrolling interests. |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Net income | $ 176,348 | $ 13,957 | $ 202,021 | $ 22,105 |
Other comprehensive (loss) income | ||||
Change in unrealized (losses) gains on cash flow hedges | (732) | 205 | 382 | (631) |
Total other comprehensive (loss) income | (732) | 205 | 382 | (631) |
Total comprehensive income | 175,616 | 14,162 | 202,403 | 21,474 |
Comprehensive income attributable to noncontrolling interests | (3,331) | (170) | (3,830) | (619) |
Total comprehensive income attributable to common stockholders/unitholders | 172,285 | 13,992 | 198,573 | 20,855 |
Healthcare Trust of America Holdings, LP (HTALP) | ||||
Net income | 176,348 | 13,957 | 202,021 | 22,105 |
Other comprehensive (loss) income | ||||
Change in unrealized (losses) gains on cash flow hedges | (732) | 205 | 382 | (631) |
Total other comprehensive (loss) income | (732) | 205 | 382 | (631) |
Total comprehensive income | 175,616 | 14,162 | 202,403 | 21,474 |
Comprehensive income attributable to noncontrolling interests | (18) | (28) | (65) | (80) |
Total comprehensive income attributable to common stockholders/unitholders | $ 175,598 | $ 14,134 | $ 202,338 | $ 21,394 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Class A Common Stock | Total Stockholders’ Equity | Common StockClass A Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Cumulative Dividends in Excess of Earnings | Noncontrolling Interests |
Beginning balance at Dec. 31, 2016 | $ 1,780,417 | $ 1,687,274 | $ 1,417 | $ 2,754,818 | $ 0 | $ (1,068,961) | $ 93,143 | |
Beginning balance (in shares) at Dec. 31, 2016 | 141,719,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock in HTA | 1,624,222 | 1,624,222 | $ 586 | 1,623,636 | ||||
Issuance of common stock in HTA (in shares) | 58,623,000 | |||||||
Issuance of operating partnership units in HTALP in connection with an acquisition | 610 | 610 | ||||||
Share-based award transactions, net | 5,493 | 5,493 | $ 3 | 5,490 | ||||
Share-based award transactions, net (in shares) | 234,000 | |||||||
Repurchase and cancellation of common stock | (3,413) | (3,413) | $ (1) | (3,412) | ||||
Repurchase and cancellation of common stock (in shares) | (116,000) | |||||||
Redemption of noncontrolling interest and other | 0 | 5,694 | $ 2 | 5,692 | (5,694) | |||
Redemption of noncontrolling interest and other (in shares) | 227,000 | |||||||
Dividends declared | (168,416) | (164,480) | (164,480) | (3,936) | ||||
Net income | 22,025 | 21,390 | 21,390 | 635 | ||||
Other comprehensive income (loss) | (631) | (615) | (615) | (16) | ||||
Ending balance at Sep. 30, 2017 | 3,260,307 | 3,175,565 | $ 2,007 | 4,386,224 | (615) | (1,212,051) | 84,742 | |
Ending balance (in shares) at Sep. 30, 2017 | 200,687,000 | |||||||
Beginning balance at Dec. 31, 2017 | 3,363,448 | 3,278,782 | $ 2,049 | 4,508,528 | 274 | (1,232,069) | 84,666 | |
Beginning balance (in shares) at Dec. 31, 2017 | 204,892,118 | 204,892,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock in HTA | 72,814 | 72,814 | $ 25 | 72,789 | ||||
Issuance of common stock in HTA (in shares) | 2,550,000 | |||||||
Share-based award transactions, net | 8,241 | 7,830 | $ 3 | 7,827 | 411 | |||
Share-based award transactions, net (in shares) | 323,000 | |||||||
Repurchase and cancellation of common stock | (19,431) | (19,431) | $ (7) | (19,424) | ||||
Repurchase and cancellation of common stock (in shares) | (729,000) | |||||||
Redemption of noncontrolling interest and other | 0 | 5,195 | $ 2 | 5,193 | (5,195) | |||
Redemption of noncontrolling interest and other (in shares) | 195,000 | |||||||
Dividends declared | (193,881) | (190,071) | (190,071) | (3,810) | ||||
Net income | 201,956 | 198,134 | 198,134 | 3,822 | ||||
Other comprehensive income (loss) | 382 | 374 | 374 | 8 | ||||
Ending balance at Sep. 30, 2018 | $ 3,433,529 | $ 3,353,627 | $ 2,072 | $ 4,574,913 | $ 648 | $ (1,224,006) | $ 79,902 | |
Ending balance (in shares) at Sep. 30, 2018 | 207,231,171 | 207,231,000 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL - USD ($) shares in Thousands, $ in Thousands | Total | Healthcare Trust of America Holdings, LP (HTALP) | Healthcare Trust of America Holdings, LP (HTALP)General Partners’ Capital | Healthcare Trust of America Holdings, LP (HTALP)Limited Partners’ Capital |
Balance as of beginning of period at Dec. 31, 2016 | $ 1,780,417 | $ 1,687,544 | $ 92,873 | |
Balance as of beginning of period (in units) at Dec. 31, 2016 | 141,719 | 4,323 | ||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||
Issuance of general partner units | 1,624,222 | $ 1,624,222 | ||
Issuance of general partner units (in units) | 58,623 | |||
Issuance of limited partner units in connection with an acquisition | 610 | $ 610 | ||
Issuance of limited partner units in connection with an acquisition (in units) | 21 | |||
Share-based award transactions, net | 5,493 | $ 5,493 | ||
Share-based award transactions, net (in units) | 234 | |||
Redemption and cancellation of general partner units | (3,413) | $ (3,413) | ||
Redemption and cancellation of general partner units (in units) | (116) | |||
Redemption of limited partner units and other | 0 | $ 5,694 | $ (5,694) | |
Redemption of limited partner units and other (in units) | 227 | (227) | ||
Distributions declared | (168,416) | $ (164,480) | $ (3,936) | |
Net income | $ 21,390 | 22,025 | 21,390 | 635 |
Other comprehensive income (loss) | (631) | (631) | (615) | (16) |
Balance as of end of period at Sep. 30, 2017 | 3,260,307 | $ 3,175,835 | $ 84,472 | |
Balance as of end of period (in units) at Sep. 30, 2017 | 200,687 | 4,117 | ||
Balance as of beginning of period at Dec. 31, 2017 | 3,363,448 | $ 3,279,052 | $ 84,396 | |
Balance as of beginning of period (in units) at Dec. 31, 2017 | 204,892 | 4,124 | ||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||
Issuance of general partner units | 72,814 | $ 72,814 | ||
Issuance of general partner units (in units) | 2,550 | |||
Share-based award transactions, net | 8,241 | $ 7,830 | $ 411 | |
Share-based award transactions, net (in units) | 323 | |||
Redemption and cancellation of general partner units | (19,431) | $ (19,431) | ||
Redemption and cancellation of general partner units (in units) | (729) | |||
Redemption of limited partner units and other | 0 | $ 5,195 | $ (5,195) | |
Redemption of limited partner units and other (in units) | 195 | (195) | ||
Distributions declared | (193,881) | $ (190,071) | $ (3,810) | |
Net income | 198,134 | 201,956 | 198,134 | 3,822 |
Other comprehensive income (loss) | $ 382 | 382 | 374 | 8 |
Balance as of end of period at Sep. 30, 2018 | $ 3,433,529 | $ 3,353,897 | $ 79,632 | |
Balance as of end of period (in units) at Sep. 30, 2018 | 207,231 | 3,929 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 202,021,000 | $ 22,105,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation, amortization and other | 203,550,000 | 169,057,000 |
Share-based compensation expense | 7,830,000 | 5,493,000 |
Impairment | 8,887,000 | 5,093,000 |
Income from unconsolidated joint venture | (1,405,000) | (381,000) |
Distributions from unconsolidated joint venture | 1,680,000 | 0 |
Gain on sale of real estate, net | (166,372,000) | (3,000) |
Loss on extinguishment of debt, net | 1,092,000 | 11,192,000 |
Change in fair value of derivative financial instruments | 0 | (884,000) |
Changes in operating assets and liabilities: | ||
Receivables and other assets, net | (7,820,000) | (19,854,000) |
Accounts payable and accrued liabilities | (5,932,000) | 29,566,000 |
Prepaid rent and other liabilities | (2,780,000) | 7,158,000 |
Net cash provided by operating activities | 240,751,000 | 228,542,000 |
Cash flows from investing activities: | ||
Investments in real estate | (17,389,000) | (2,357,570,000) |
Investment in unconsolidated joint venture | 0 | (68,839,000) |
Development of real estate | (29,593,000) | (19,163,000) |
Proceeds from the sale of real estate | 302,440,000 | 4,746,000 |
Capital expenditures | (61,136,000) | (42,990,000) |
Collection of real estate notes receivable | 524,000 | 0 |
Net cash provided by (used in) investing activities | 194,846,000 | (2,483,816,000) |
Cash flows from financing activities: | ||
Borrowings on unsecured revolving credit facility | 145,000,000 | 515,000,000 |
Payments on unsecured revolving credit facility | (145,000,000) | (528,000,000) |
Proceeds from unsecured senior notes | 0 | 900,000,000 |
Payments on secured mortgage loans | (173,212,000) | (75,444,000) |
Deferred financing costs | (782,000) | (16,902,000) |
Debt extinguishment costs | (1,909,000) | (10,391,000) |
Security deposits | 499,000 | 1,932,000 |
Proceeds from issuance of common stock | 72,814,000 | 1,624,222,000 |
Issuance of limited partner units | 411,000 | 0 |
Repurchase and cancellation of common stock | (19,431,000) | (3,413,000) |
Dividends paid | (188,414,000) | (145,877,000) |
Distributions paid to noncontrolling interest of limited partners | (3,976,000) | (4,019,000) |
Net cash (used in) provided by financing activities | (314,000,000) | 2,257,108,000 |
Net change in cash, cash equivalents and restricted cash | 121,597,000 | 1,834,000 |
Cash, cash equivalents and restricted cash - beginning of period | 118,560,000 | 25,045,000 |
Cash, cash equivalents and restricted cash - end of period | 240,157,000 | 26,879,000 |
Healthcare Trust of America Holdings, LP (HTALP) | ||
Cash flows from operating activities: | ||
Net income | 202,021,000 | 22,105,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation, amortization and other | 203,550,000 | 169,057,000 |
Share-based compensation expense | 7,830,000 | 5,493,000 |
Impairment | 8,887,000 | 5,093,000 |
Income from unconsolidated joint venture | (1,405,000) | (381,000) |
Distributions from unconsolidated joint venture | 1,680,000 | 0 |
Gain on sale of real estate, net | (166,372,000) | (3,000) |
Loss on extinguishment of debt, net | 1,092,000 | 11,192,000 |
Change in fair value of derivative financial instruments | 0 | (884,000) |
Changes in operating assets and liabilities: | ||
Receivables and other assets, net | (7,820,000) | (19,854,000) |
Accounts payable and accrued liabilities | (5,932,000) | 29,566,000 |
Prepaid rent and other liabilities | (2,780,000) | 7,158,000 |
Net cash provided by operating activities | 240,751,000 | 228,542,000 |
Cash flows from investing activities: | ||
Investments in real estate | (17,389,000) | (2,357,570,000) |
Investment in unconsolidated joint venture | 0 | (68,839,000) |
Development of real estate | (29,593,000) | (19,163,000) |
Proceeds from the sale of real estate | 302,440,000 | 4,746,000 |
Capital expenditures | (61,136,000) | (42,990,000) |
Collection of real estate notes receivable | 524,000 | 0 |
Net cash provided by (used in) investing activities | 194,846,000 | (2,483,816,000) |
Cash flows from financing activities: | ||
Borrowings on unsecured revolving credit facility | 145,000,000 | 515,000,000 |
Payments on unsecured revolving credit facility | (145,000,000) | (528,000,000) |
Proceeds from unsecured senior notes | 0 | 900,000,000 |
Payments on secured mortgage loans | (173,212,000) | (75,444,000) |
Deferred financing costs | (782,000) | (16,902,000) |
Debt extinguishment costs | (1,909,000) | (10,391,000) |
Security deposits | 499,000 | 1,932,000 |
Proceeds from issuance of general partner units | 72,814,000 | 1,624,222,000 |
Issuance of limited partner units | 411,000 | 0 |
Repurchase and cancellation of general partner units | (19,431,000) | (3,413,000) |
Distributions paid to general partner | (188,414,000) | (145,877,000) |
Distributions paid to limited partners and redeemable noncontrolling interests | (3,976,000) | (4,019,000) |
Net cash (used in) provided by financing activities | (314,000,000) | 2,257,108,000 |
Net change in cash, cash equivalents and restricted cash | 121,597,000 | 1,834,000 |
Cash, cash equivalents and restricted cash - beginning of period | 118,560,000 | 25,045,000 |
Cash, cash equivalents and restricted cash - end of period | $ 240,157,000 | $ 26,879,000 |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business HTA, a Maryland corporation, and HTALP , a Delaware limited partnership, were incorporated or formed, as applicable, on April 20, 2006 . HTA operates as a REIT and is the general partner of HTALP , which is the operating partnership, in an umbrella partnership, or “UPREIT” structure. HTA has qualified and intends to continue to be taxed as a REIT for federal income tax purposes under the applicable sections of the Internal Revenue Code. We own real estate primarily consisting of medical office buildings (“MOBs”) located on or adjacent to hospital campuses or in off-campus, community core outpatient locations across 32 states within the United States, and we lease space to tenants primarily consisting of health systems, research and academic institutions, and various sized physician practices. We generate substantially all of our revenues from rents and rental-related activities, such as property and facilities management and other incidental revenues related to the operation of real estate. Our primary objective is to maximize stockholder value with growth through strategic investments that provide an attractive risk-adjusted return for our stockholders by consistently increasing our cash flow. In pursuing this objective, we: (i) seek internal growth through proactive asset management, leasing, building services and property management oversight; (ii) target accretive acquisitions and developments of MOBs in markets with attractive demographics that complement our existing portfolio; and (iii) actively manage our balance sheet to maintain flexibility with conservative leverage. Additionally, from time to time we consider, on an opportunistic basis, significant portfolio acquisitions that we believe fit our core business and we expect to enhance our existing portfolio. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies The summary of significant accounting policies presented below is designed to assist in understanding our condensed consolidated financial statements. Such condensed consolidated financial statements and the accompanying notes are the representations of our management, who are responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles in the U.S. (“GAAP”) in all material respects and have been consistently applied in preparing our accompanying condensed consolidated financial statements. Basis of Presentation Our accompanying condensed consolidated financial statements include our accounts and those of our subsidiaries and any consolidated variable interest entities (“VIEs”). All inter-company balances and transactions have been eliminated in the accompanying condensed consolidated financial statements. Interim Unaudited Financial Data Our accompanying condensed consolidated financial statements have been prepared by us in accordance with GAAP in conjunction with the rules and regulations of the SEC. Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, our accompanying condensed consolidated financial statements do not include all information and footnotes required by GAAP for complete financial statements. Our accompanying condensed consolidated financial statements reflect all adjustments, which are, in our opinion, of a normal recurring nature and necessary for a fair presentation of our financial position, results of operations and cash flows for the interim periods. Interim results of operations are not necessarily indicative of the results to be expected for the full year; such results may be less favorable for the full year. Our accompanying condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto included in our 2017 Annual Report on Form 10-K. Principles of Consolidation The condensed consolidated financial statements include the accounts of our subsidiaries and consolidated joint venture arrangements. The portions of the HTALP operating partnership not owned by us are presented as noncontrolling interests in our consolidated balance sheets and statements of operations, consolidated statements of comprehensive income or loss, consolidated statements of equity, and consolidated statements of changes in partners’ capital. The portions of other joint venture arrangements not owned by us are presented as redeemable noncontrolling interests on the accompanying condensed consolidated balance sheets. In addition, as described in Note 1 - Organization and Description of Business , certain third parties have been issued OP Units in HTALP. Holders of OP Units are considered to be noncontrolling interest holders in HTALP and their ownership interests are reflected as equity on the accompanying condensed consolidated balance sheets. Further, a portion of the earnings and losses of HTALP are allocated to noncontrolling interest holders based on their respective ownership percentages. Upon conversion of OP Units to common stock, any difference between the fair value of the common stock issued and the carrying value of the OP Units converted to common stock is recorded as a component of equity. As of September 30, 2018 and December 31, 2017 , there were approximately 3.9 million and 4.1 million , respectively, of OP Units issued and outstanding. VIEs are entities where investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or where equity investors, as a group, lack one of the following: (i) the power to direct the activities that most significantly impact the entity’s economic performance; (ii) the obligation to absorb the expected losses of the entity; and (iii) the right to receive the expected returns of the entity. We consolidate our investment in VIEs when we determine that we are the primary beneficiary. A primary beneficiary is one that has both: (i) the power to direct the activities of the VIE that most significantly impacts the entity’s economic performance; and (ii) the obligation to absorb losses or the right to receive benefits of the VIE that could be significant to the entity. The HTALP operating partnership and our other joint venture arrangements are VIEs because the limited partners in those partnerships, although entitled to vote on certain matters, do not possess kick-out rights or substantive participating rights. Additionally, we determined that we are the primary beneficiary of our VIEs. Accordingly, we consolidate our interests in the HTALP operating partnership and in our other joint venture arrangements. However, because we hold what is deemed a majority voting interest in the HTALP operating partnership and our other joint venture arrangements, it qualifies for the exemption from providing certain disclosure requirements associated with investments in VIEs. We will evaluate on an ongoing basis the need to consolidate entities based on the standards set forth in GAAP as described above. Reclassification In November 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-18 Statement of Cash Flows: Restricted Cash. ASU 2016-18 requires that a statement of cash flows explain the change during the period in cash, cash equivalents and restricted cash and restricted cash equivalents. Therefore, restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning of period and end of period amounts shown on the accompanying condensed consolidated statements of cash flows. We adopted ASU 2016-18 in the fourth quarter of 2017, as set forth in our 2017 Annual Report on Form 10-K as of January 1, 2017, and as a result of the adoption, the guidance requires retrospective adoption for all periods presented. The following table represents the previously reported balances and the reclassified balances for the impacted items for the nine months ended September 30, 2017 in the accompanying condensed consolidated statements of cash flows (in thousands): Nine Months Ended September 30, 2017 As Previously Reported As Reclassified Cash flows from investing activities: Other assets (1) $ (3,655 ) $ — Net cash used in investing activities (2,487,471 ) (2,483,816 ) Net change in cash, cash equivalents and restricted cash (2) $ (1,821 ) $ 1,834 Cash, cash equivalents and restricted cash - beginning of period (2) 11,231 25,045 Cash, cash equivalents and restricted cash - end of period (2) $ 9,410 $ 26,879 (1) Prior to adoption of ASU 2016-18, the line item description was “Restricted cash, escrow deposits and other assets”. (2) With the adoption of ASU 2016-18, the line item description now includes restricted cash. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents consist of all highly liquid investments with a maturity of three months or less when purchased. Restricted cash is comprised of (i) reserve accounts for property taxes, insurance, capital improvements and tenant improvements; (ii) collateral accounts for debt and interest rate swaps; and (iii) deposits for future investments. With our adoption of ASU 2016-18 in the fourth quarter of 2017, as set forth in our 2017 Annual Report on Form 10-K as of January 1, 2017, the following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the accompanying condensed consolidated balance sheets to the combined amounts shown on the accompanying condensed consolidated statements of cash flows as of September 30, 2018 and 2017 , respectively (in thousands): September 30, 2018 2017 Cash and cash equivalents $ 225,518 $ 9,410 Restricted cash 14,639 17,469 Total cash, cash equivalents and restricted cash $ 240,157 $ 26,879 Revenue Recognition Minimum annual rental revenue is recognized on a straight-line basis over the term of the related lease (including rent holidays). Differences between rental income recognized and amounts contractually due under the lease agreements are recorded as straight-line rent receivables. Tenant reimbursement revenue, which is comprised of additional amounts recoverable from tenants for real estate taxes, common area maintenance and other certain operating expenses are recognized as revenue on a gross basis in the period in which the related recoverable expenses are incurred. We accrue revenue corresponding to these expenses on a quarterly basis to adjust recorded amounts to our best estimate of the final annual amounts to be billed. Subsequent to year-end, on a calendar year basis, we perform reconciliations on a lease-by-lease basis and bill or credit each tenant for any differences between the estimated expenses we billed and the actual expenses that were incurred. We recognize lease termination fees when there is a signed termination letter agreement, all of the conditions of the agreement have been met, and the tenant is no longer occupying the property. Rental income is reported net of amortization of inducements. Effective January 1, 2018, with the adoption of Topic 606 and corresponding amendments, the revenue recognition process will be based on a five-step model to account for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. Topic 606 requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. We have identified all of our revenue streams and we have concluded that rental income from leasing arrangements represents a substantial portion of our revenue and, therefore, is specifically excluded from Topic 606 and will be governed and evaluated with the anticipated adoption of Topic 842. The other revenue stream identified as impacting Topic 606 is concentrated in the recognition of real estate sales and the adoption of Topic 606 did not have a material impact on our financial statements. For more detailed information on Topic 606 see “Recently Issued or Adopted Accounting Pronouncements” below. Investments in Real Estate Depreciation expense of buildings and improvements for the three months ended September 30, 2018 and 2017 was $50.2 million and $49.8 million , respectively. Depreciation expense of buildings and improvements for the nine months ended September 30, 2018 and 2017 was $151.5 million and $121.5 million , respectively. Redeemable Noncontrolling Interests We account for redeemable equity securities in accordance with ASU 2009-04 Liabilities (Topic 480): Accounting for Redeemable Equity Instruments, which requires that equity securities redeemable at the option of the holder be classified outside permanent stockholders’ equity. We classify redeemable equity securities as redeemable noncontrolling interests in the accompanying condensed consolidated balances sheets. We measure the redemption value and record an adjustment to the carrying value of the equity securities as a component of redeemable noncontrolling interest. As of September 30, 2018 and December 31, 2017 , we had redeemable noncontrolling interests of $6.6 million and $6.7 million , respectively. Refer to Note 10 - Redeemable Noncontrolling Interests in the accompanying notes to the condensed consolidated financial statements for more detail relating to our redeemable noncontrolling interests. Unconsolidated Joint Ventures We account for our investments in unconsolidated joint ventures using the equity method of accounting because we have the ability to exercise significant influence, but not control, over the financial and operational policy decisions of the investments. Using the equity method of accounting, the initial investment is recognized at cost and subsequently adjusted for our share of the net income or loss and any distributions from the joint venture. As of September 30, 2018 , we had a 50% interest in one such investment with a carrying value and maximum exposure to risk of $67.6 million , which is recorded in investment in unconsolidated joint venture in the accompanying condensed consolidated balance sheets. We record our share of net income (loss) in income (loss) from unconsolidated joint venture in the accompanying condensed consolidated statements of operations. For the three and nine months ended September 30, 2018 , we recognized income of $0.4 million and $1.4 million , respectively. For the three and nine months ended September 30, 2017 , we recognized income of $0.3 million and $0.4 million , respectively. Recently Issued or Adopted Accounting Pronouncements The following table provides a brief description of recently adopted accounting pronouncements: Accounting Pronouncement Description Effective Date Effect on financial statements Topic 606; collectively, ASU 2014-09, 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-11, ASU 2016-12, ASU 2016-20, ASU 2017-05, ASU 2017-10, ASU 2017-13 and ASU 2017-14 Revenue from Contracts with Customers (Issued May 2014, August 2015, March 2016, April 2016, May 2016, December 2016, February 2017, May 2017, September 2017 and November 2017) In May 2014, the FASB issued Topic 606. The objective of Topic 606 is to establish a comprehensive new five-step model requiring a company to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (i.e., payment) to which the company expects to be entitled in exchange for those goods or services. Expanded quantitative and qualitative disclosures regarding revenue recognition will be required for contracts that are subject to Topic 606. Topic 606 does not apply to revenue from lease contracts until the adoption of the new leases standard in ASU 2016-02, in January 2019. ASU 2017-05 applies to all nonfinancial assets (including real estate) for which the counterparty is not a customer and requires an entity to derecognize a nonfinancial asset in a partial sale transaction when it ceases to have a controlling financial interest in the asset and has transferred control of the asset. Once an entity transfers control of the nonfinancial asset, the entity is required to measure any noncontrolling interest it receives or retains at fair value. Under the current guidance, a partial sale is recognized and carryover basis is used for the retained interest resulting in only partial gain recognition by the entity, however, the new guidance eliminates the use of carryover basis and generally requires the full gain to be recognized. In adopting Topic 606, companies may use either a full retrospective or a modified retrospective approach. Topic 606 is effective for fiscal years beginning after December 15, 2017 along with the right of early adoption as of the original effective date. We adopted Topic 606 effective January 1, 2018 to all open contracts using the modified retrospective approach. As part of the adoption, we identified all revenue streams and concluded that revenues from leasing arrangements represented substantially all of our revenue and is generally excluded from the scope of Topic 606. Rather, rental revenue, including any executory type costs, will be governed and evaluated with the adoption of Topic 842 as described below. In addition, under Topic 606, revenue recognition for real estate sales will be substantially based on a principles-based approach to determine whether there has been transfer of control versus continuing involvement under the current guidance. There have not been, nor do we anticipate, any reclassifications or material impacts on our consolidated financial statements as a result of this adoption. ASU 2017-09 Compensation - Stock Compensation (Topic 718): Clarifying the Scope of Modification (Issued May 2017) ASU 2017-09 amends the scope of modification accounting for share-based payment arrangements and provides guidance on the types of changes to the terms and conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718. ASU 2017-09 is effective for fiscal years beginning after December 15, 2017 with early adoption permitted. We adopted ASU 2017-09 as of January 1, 2018. There have not been, nor do we anticipate, any reclassifications or material impacts on our consolidated financial statements as a result of this adoption. ASU 2017-12 Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (Issued August 2017) ASU 2017-12 expands and refines hedge accounting for both financial (e.g., interest rate) and non-financial risk components, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. ASU 2017-12 is effective for fiscal years beginning after December 15, 2018 with early adoption permitted. We adopted ASU 2017-12 as of January 1, 2018. Using the modified retrospective approach, the cumulative effect of the ineffective ness for the year ended December 31, 2017 was immaterial; therefore, no adjustment was made to beginning retained earnings. Additionally, as a result of the adoption, we no longer disclose the ineffective portion of the change in fair value of our derivative financial instruments. The entire change in the fair value of the hedging instruments included in the assessment of hedge effectiveness will now be recorded in other comprehensive income and subsequently reclassified to interest expense in the period the hedging instrument affects earnings. The following table provides a brief description of recently issued accounting pronouncements: Accounting Pronouncement Description Effective Date Effect on financial statements Topic 842; collectively ASU 2016-02, 2018-01 and 2018-11 Leases (Issued February 2016, January 2018 and July 2018) In February 2016, the FASB issued Topic 842. Topic 842 will supersede the existing guidance for lease accounting and states that companies will be required to recognize lease assets and lease liabilities on the balance sheet and disclose key information about leasing arrangements. Topic 842 requires qualitative and quantitative disclosures to supplement the amounts recorded in the financial statements so that users can understand the nature of the entity’s leasing activities, including significant judgments and changes in judgments. ASU 2018-01 provides an optional transition practical expedient to not evaluate under Topic 842 existing or expired land easements that were not previously accounted for as leases under the current lease guidance in Topic 840. An entity that elects this practical expedient should evaluate new or modified land easements under Topic 842 beginning at the date the entity adopts Topic 842; otherwise, an entity should evaluate all existing or expired land easements in connection with the adoption of the new lease requirements in Topic 842 to assess whether they meet the definition of a lease. Within Topic 842, lessor accounting remained fairly unchanged. In adopting Topic 842, companies will be required to either use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements or with the adoption of ASU 2018-11, an optional transition method whereby an entity initially applies the new lease standard at the adoption date and recognizes a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. Topic 842 is effective for the fiscal years beginning after December 15, 2018 with early adoption permitted. We will adopt the provisions of Topic 842 as of January 1, 2019. We anticipate that we will elect (a) the practical expedient offered that allows an entity to not reassess upon adoption (i) whether an expired or existing contract contains a lease arrangement, (ii) lease classification related to expired or existing lease arrangements, or (iii) whether costs incurred on expired or existing leases qualify as initial direct costs, and (b) as part of ASU 2018-11, the practical expedient to not separate certain non-lease components, such as common area maintenance from lease revenue if (i) the timing and pattern of revenue recognition are the same for the non-lease component, and (ii) the related lease component and the combined single lease component would be classified as an operating lease. As part of the adoption, all leases for which we are the lessee, including ground leases and certain other corporate leases, will be recorded in our consolidated financial statements as either financing or operating leases with corresponding right of use assets and lease liability obligations. Management has commenced the reevaluation of all leases where we are the lessee to determine (a) the total future lease payments, including an assessment of the availability and likelihood of our exercising extension options available to us under the terms of the respective leases, (b) an appropriate incremental borrowing rate in light of the extended term of our ground leases, and (c) an abstract of all applicable lease provisions that may cause the treatment of these leases to be classified differently under ASC 842 than what they are currently being classified as under current accounting guidance. We anticipate that our assessment will be concluded by December 31, 2018 and that we will have evaluated all leases sufficiently to provide a range of potential impact to our financial statements. Further, with respect to initial direct costs, we are currently assessing the projected impact to the accounting of such costs, including the impact of potential changes to our use of internal and external leasing and leasing-related personnel, potential changes in compensation structures to such individuals, and other considerations of related costs that could have an impact to our financial statements. For the nine months ended September 30, 2018, we have capitalized approximately $3.7 million of internal initial direct costs (as defined by the current lease standard, ASC 840 - Leases). Utilizing a traditional third party leasing commission structure of 3% of gross lease value, total leasing commissions would have totaled over $9 million during the nine months ended September 30, 2018. Upon the adoption of Topic 842, these internal initial direct costs will either in part or in their entirety be classified as additional general and administrative expenses on our consolidated statements of operations, depending on the finalization of our assessment of the impact of such adoption. We estimate the range of these expenses to be approximately $6 million to $8 million and effecting Earnings Per Share by approximately $0.03 to $0.04 per share on an annualized basis. In addition, operating expenses and income for real estate taxes and insurance will likely increase by offsetting amounts. This however will not have a material impact on our consolidated financial statements. Accounting Pronouncement Description Effective Date Effect on financial statements ASU 2016-13 Financial Instruments Credit Losses: Measurement of Credit Losses on Financial Instruments (Issued June 2016) ASU 2016-13 is intended to improve financial reporting by requiring more timely recognition of credit losses on loans and other financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investment in leases and other such commitments. ASU 2016-13 requires that financial statement assets measured at an amortized cost be presented at the net amount expected to be collected through an allowance for credit losses that is deducted from the amortized cost basis. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019 with early adoption permitted. We do not anticipate early adoption or there to be a material impact to our consolidated financial statements based on our ongoing evaluation. ASU 2018-07 Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (Issued June 2018) ASU 2018-07 expands the scope of Topic 718 and the amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (i) financing to the issuer or (ii) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018 with early adoption permitted, but not earlier than an entity’s adoption date of Topic 606. We will adopt ASU 2018-07 as of January 1, 2019. We do not expect there to be a material impact to our consolidated financial statements and related notes. ASU 2018-13 Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement (Issued August 2018) ASU 2018-13 modifies the disclosure requirements on fair value measurements in Topic 820 as follows: (A) Disclosure removals: (i) the amount of and reasons for transfers between Level 1 and Level 2; (ii) the policy for timing of transfers between levels; and (iii) the valuation process for Level 3 fair value measurements. (B) Disclosure modifications: (i) no requirement to disclose the timing of liquidation unless the investee has communicated the timing to the reporting entity or announced the timing publicly; and (ii) for Level 3 fair value measurements, a narrative description of measurement uncertainty at the reporting date, not the sensitivity to future changes. (C) Disclosure additions: (i) for recurring Level 3 measurements, disclose the changes in unrealized gains and losses for the period included in OCI and the statement of comprehensive income; and (ii) for Level 3 fair value measurements in the table of significant input, disclose the range and weighted average of the significant unobservable inputs and the way it is calculated. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019 with early adoption permitted. We will adopt ASU 2018-07 as of January 1, 2020. We will consider all level inputs in our ongoing evaluation but do not anticipate there to be a material impact to our consolidated financial statements. |
Investments in Real Estate
Investments in Real Estate | 9 Months Ended |
Sep. 30, 2018 | |
Investments [Abstract] | |
Investments in Real Estate | Investments in Real Estate For the nine months ended September 30, 2018 , our investments had an aggregate purchase price of $17.8 million . As part of these investments, we incurred approximately $0.1 million of capitalized costs. The allocations for these investments, in which we own a controlling financial interest, are set forth below in the aggregate for the nine months ended September 30, 2018 and 2017 , respectively (in thousands): Nine Months Ended September 30, 2018 2017 Land $ 1,895 $ 93,064 Building and improvements 14,458 2,336,544 In place leases 1,237 187,890 Below market leases (201 ) (27,817 ) Above market leases — 11,718 Below market leasehold interests — 54,252 Above market leasehold interests — (8,978 ) Net assets acquired 17,389 2,646,673 Other, net (1) 447 60,781 Aggregate purchase price $ 17,836 $ 2,707,454 (1) For the nine months ended September 30, 2017, other, net, consisted primarily of capital expenditures and tenant improvements received as credits at the time of acquisition. The acquired intangible assets and liabilities referenced above had weighted average lives of the following terms for the nine months ended September 30, 2018 and 2017 , respectively (in years): Nine Months Ended September 30, 2018 2017 Acquired intangible assets 5.8 20.6 Acquired intangible liabilities 6.5 19.9 |
Dispositions and Impairment
Dispositions and Impairment | 9 Months Ended |
Sep. 30, 2018 | |
Disposal Group, Not Discontinued Operation, Disposal Disclosures [Abstract] | |
Dispositions and Impairment | Dispositions and Impairment Dispositions During the nine months ended September 30, 2018 , we completed the disposition of 17 MOBs totaling approximately 965,000 square feet of gross leasable area (“GLA”) located in Greenville, South Carolina (the “Greenville Disposition”) for an aggregate gross sales price of $294.3 million in two transactions, including the sale of a single MOB which we classified as held for sale as of June 30, 2018. Additionally, we completed the disposition of two MOBs located in Derry, New Hampshire and North Adams, Massachusetts for an aggregate gross sales price of $11.6 million , totaling approximately 120,000 square feet of GLA. During the nine months ended September 30, 2017 , we completed the disposition of an MOB located in Texas for a gross sales price of $5.0 million totaling approximately 48,000 square feet of GLA. Impairment During the three and nine months ended September 30, 2018 , we recorded impairment charges of $4.3 million and $8.9 million , respectively, on six MOBs located in Tennessee, Texas and South Carolina. During the nine months ended September 30, 2017 , we recorded impairment charges of $5.1 million related to one MOB located in Massachusetts. |
Intangible Assets and Liabiliti
Intangible Assets and Liabilities | 9 Months Ended |
Sep. 30, 2018 | |
Identified Intangibles, Net [Abstract] | |
Intangible Assets and Liabilities | Intangible Assets and Liabilities Intangible assets and liabilities consisted of the following as of September 30, 2018 and December 31, 2017 , respectively (in thousands, except weighted average remaining amortization terms): September 30, 2018 December 31, 2017 Balance Weighted Average Remaining Amortization in Years Balance Weighted Average Remaining Amortization in Years Assets: In place leases $ 451,990 9.8 $ 474,252 9.8 Tenant relationships 152,225 9.4 164,947 10.2 Above market leases 37,537 6.1 40,082 6.3 Below market leasehold interests 91,759 64.5 92,362 63.4 733,511 771,643 Accumulated amortization (343,251 ) (312,655 ) Total $ 390,260 21.6 $ 458,988 19.5 Liabilities: Below market leases $ 61,525 14.6 $ 61,820 14.7 Above market leasehold interests 20,610 49.5 20,610 50.1 82,135 82,430 Accumulated amortization (19,248 ) (14,227 ) Total $ 62,887 25.1 $ 68,203 25.0 The following is a summary of the net intangible amortization for the three and nine months ended September 30, 2018 and 2017 , respectively (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Amortization recorded against rental income related to above and (below) market leases $ (352 ) $ (108 ) $ (660 ) $ (371 ) Rental expense related to above and (below) market leasehold interests 287 322 850 617 Amortization expense related to in place leases and tenant relationships 18,475 18,757 52,800 45,944 |
Receivables and Other Assets
Receivables and Other Assets | 9 Months Ended |
Sep. 30, 2018 | |
Receivables and Other Assets [Abstract] | |
Receivables and Other Assets | Receivables and Other Assets Receivables and other assets consisted of the following as of September 30, 2018 and December 31, 2017 , respectively (in thousands): September 30, 2018 December 31, 2017 Tenant receivables, net $ 13,062 $ 20,269 Other receivables, net 15,067 9,305 Deferred financing costs, net 6,480 7,759 Deferred leasing costs, net 28,783 25,494 Straight-line rent receivables, net 89,531 85,143 Prepaid expenses, deposits, equipment and other, net 58,971 58,358 Derivative financial instruments - interest rate swaps 1,588 1,529 Total $ 213,482 $ 207,857 The following is a summary of the amortization of deferred leasing costs and financing costs for the three and nine months ended September 30, 2018 , and 2017 , respectively (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Amortization expense related to deferred leasing costs $ 1,357 $ 1,445 $ 4,166 $ 4,179 Interest expense related to deferred financing costs 431 398 1,293 1,061 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt consisted of the following as of September 30, 2018 and December 31, 2017 , respectively (in thousands): September 30, 2018 December 31, 2017 Unsecured revolving credit facility $ — $ — Unsecured term loans 500,000 500,000 Unsecured senior notes 1,850,000 1,850,000 Fixed rate mortgages 279,230 414,524 Variable rate mortgages — 37,918 2,629,230 2,802,442 Deferred financing costs, net (14,448 ) (15,850 ) Discount, net (5,123 ) (5,561 ) Total $ 2,609,659 $ 2,781,031 Unsecured Credit Agreement Unsecured Revolving Credit Facility due 2022 In 2017, HTALP entered into an amended and restated $1.3 billion unsecured credit agreement (the “Unsecured Credit Agreement”) which increased the amount available under the unsecured revolving credit facility to $1.0 billion and extended the maturities of the unsecured revolving credit facility to June 30, 2022 and for the $300.0 million unsecured term loan referenced below until February 1, 2023 . The maximum principal amount of the Unsecured Credit Agreement may be increased by up to $750.0 million , subject to certain conditions, for a total principal amount of $2.05 billion . Borrowings under the unsecured revolving credit facility accrue interest at a rate equal to adjusted LIBOR , plus a margin ranging from 0.83% to 1.55% per annum based on our credit rating. We also pay a facility fee ranging from 0.13% to 0.30% per annum on the aggregate commitments under the unsecured revolving credit facility. As of September 30, 2018 , the margin associated with our borrowings was 1.00% per annum and the facility fee was 0.20% per annum. Unsecured Term Loan due 2023 In 2017, we entered into an amended and restated Unsecured Credit Agreement as noted above. As part of this agreement, we obtained a $300.0 million unsecured term loan that was guaranteed by us with a maturity date of February 1, 2023 . Borrowings under this unsecured term loan accrue interest equal to adjusted LIBOR , plus a margin ranging from 0.90% to 1.75% per annum based on our credit rating. The margin associated with our borrowings as of September 30, 2018 was 1.10% per annum. Including the impact of the interest rate swaps associated with our unsecured term loan, the interest rate was 3.46% per annum, based on our current credit rating. As of September 30, 2018 , HTALP had $300.0 million under this unsecured term loan outstanding. $200.0 Million Unsecured Term Loan due 2024 On August 1, 2018, HTALP entered into a modification of our $200.0 million unsecured term loan previously due in 2023. The modification decreased pricing at our current credit rating by 65 basis points . Borrowings under the unsecured term loan accrue interest at a rate equal to LIBOR, plus a margin ranging from 0.75% to 1.65% per annum based on our credit rating. The margin associated with our borrowings as of September 30, 2018 was 1.00% per annum. HTALP had interest rate swaps on a portion of the balance, which resulted in a fixed interest rate at 2.70% per annum. The maturity date was also extended by five months to January 2024. The other material terms of the unsecured term loan prior to the modification remained substantially unchanged. As of September 30, 2018 , HTALP had $200.0 million under this unsecured term loan outstanding. $300.0 Million Unsecured Senior Notes due 2021 As of September 30, 2018 , HTALP had $300.0 million of unsecured senior notes outstanding that are guaranteed by us. These unsecured senior notes are registered under the Securities Act of 1933, as amended (the “Securities Act”), bear interest at 3.38% per annum and are payable semi-annually. Additionally, these unsecured senior notes were offered at 99.21% of the principal amount thereof, with an effective yield to maturity of 3.50% per annum. As of September 30, 2018 , HTALP had $300.0 million of these unsecured senior notes outstanding that mature on July 15, 2021. $400.0 Million Unsecured Senior Notes due 2022 In 2017, in connection with the $500.0 million unsecured senior notes due 2027 referenced below, HTALP issued $400.0 million of unsecured senior notes that are guaranteed by us. These unsecured senior notes are registered under the Securities Act, bear interest at 2.95% per annum and are payable semi-annually. Additionally, these unsecured senior notes were offered at 99.94% of the principal amount thereof, with an effective yield to maturity of 2.96% per annum. As of September 30, 2018 , HTALP had $400.0 million of these unsecured senior notes outstanding that mature on July 1, 2022. $300.0 Million Unsecured Senior Notes due 2023 As of September 30, 2018 , HTALP had $300.0 million of unsecured senior notes outstanding that are guaranteed by us. These unsecured senior notes are registered under the Securities Act, bear interest at 3.70% per annum and are payable semi-annually. Additionally, these unsecured senior notes were offered at 99.19% of the principal amount thereof, with an effective yield to maturity of 3.80% per annum. As of September 30, 2018 , HTALP had $300.0 million of these unsecured senior notes outstanding that mature on April 15, 2023. $350.0 Million Unsecured Senior Notes due 2026 As of September 30, 2018 , HTALP had $350.0 million of unsecured senior notes outstanding that are guaranteed by us. These unsecured senior notes are registered under the Securities Act, bear interest at 3.50% per annum and are payable semi-annually. Additionally, these unsecured senior notes were offered at 99.72% of the principal amount thereof, with an effective yield to maturity of 3.53% per annum. As of September 30, 2018 , HTALP had $350.0 million of these unsecured senior notes outstanding that mature on August 1, 2026. $500.0 Million Unsecured Senior Notes due 2027 In 2017, in connection with the $400.0 million unsecured senior notes due 2022 referenced above, HTALP issued $500.0 million of unsecured senior notes that are guaranteed by us. These unsecured senior notes are registered under the Securities Act, bear interest at 3.75% per annum and are payable semi-annually. Additionally, these unsecured senior notes were offered at 99.49% of the principal amount thereof, with an effective yield to maturity of 3.81% per annum. As of September 30, 2018 , HTALP had $500.0 million of these unsecured senior notes outstanding that mature on July 1, 2027. Fixed and Variable Rate Mortgages In 2017, we were required by the seller under the Duke acquisition to execute a promissory note (the “Promissory Note”), as the borrower, for a part of the purchase price, a senior secured first lien loan, subject to customary non-recourse carve-outs, in the amount of $286.0 million . The Promissory Note bears interest at 4.0% per annum and is payable in three equal payments maturing on January 10, 2020 and is guaranteed by us. In June 2018, the first principal installment of $96.0 million was paid and as of September 30, 2018 , the outstanding balance was $190.0 million . In August 2018, we prepaid approximately $72.6 million of our fixed and variable rate mortgages, including the settlement of three cash flow hedges, utilizing net proceeds from the Greenville Disposition to do so, resulting in a loss on extinguishment of debt of $1.1 million , primarily due to prepayment fees we incurred. See Note 4 - Impairment and Dispositions for more detail on the Greenville Disposition. As of September 30, 2018 , HTALP and its subsidiaries had only fixed rate mortgages with interest rates ranging from 2.85% to 5.50% per annum and a weighted average interest rate of 4.32% per annum. Subsequent to September 30, 2018 , we prepaid approximately $67.2 million of our fixed rate mortgages. We did not incur any prepayment fees related to this transaction. Future Debt Maturities The following table summarizes the debt maturities and scheduled principal repayments of our indebtedness as of September 30, 2018 (in thousands): Year Amount 2018 $ 1,086 2019 99,453 2020 99,641 2021 304,840 2022 462,089 Thereafter 1,662,121 Total $ 2,629,230 Deferred Financing Costs As of September 30, 2018 , the future amortization of our deferred financing costs is as follows (in thousands): Year Amount 2018 $ 764 2019 2,956 2020 2,894 2021 2,721 2022 2,098 Thereafter 3,015 Total $ 14,448 Debt Covenants We are required by the terms of our applicable loan agreements to meet various affirmative and negative covenants that we believe are customary for these types of facilities, such as limitations on the incurrence of debt by us and our subsidiaries that own unencumbered assets, limitations on the nature of HTALP ’s business, and limitations on distributions by HTALP and its subsidiaries that own unencumbered assets. Our loan agreements also impose various financial covenants on us, such as a maximum ratio of total indebtedness to total asset value, a minimum ratio of EBITDA to fixed charges, a minimum tangible net worth covenant, a maximum ratio of unsecured indebtedness to unencumbered asset value, rent coverage ratios and a minimum ratio of unencumbered Net Operating Income (“NOI”) to unsecured interest expense. As of September 30, 2018 , we believe that we were in compliance with all such financial covenants and reporting requirements. In addition, certain of our loan agreements include events of default provisions that we believe are customary for these types of facilities, including restricting us from making dividend distributions to our stockholders in the event we are in default thereunder, except to the extent necessary for us to maintain our REIT status. |
Derivative Financial Instrument
Derivative Financial Instruments and Hedging Activities | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments and Hedging Activities | Derivative Financial Instruments and Hedging Activities Risk Management Objective of Using Derivative Financial Instruments We may use derivative financial instruments, including interest rate swaps, caps, options, floors and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with our borrowings. The principal objective of such arrangements is to minimize the risks and/or costs associated with our operating and financial structure as well as to hedge specific anticipated transactions. We do not intend to utilize derivatives for speculative or other purposes other than interest rate risk management. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, we only enter into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which we and our affiliates may also have other financial relationships. We do not anticipate that any of the counterparties will fail to meet their obligations. We record counterparty credit risk valuation adjustments on interest rate swap derivative assets in order to properly reflect the credit quality of the counterparty. In addition, our fair value of interest rate swap derivative liabilities is adjusted to reflect the impact of our credit quality. Cash Flow Hedges of Interest Rate Risk Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to interest rate movements. To accomplish this objective, we primarily use interest rate swaps and treasury locks as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable rate amounts from a counterparty in exchange for us making fixed rate payments over the life of the agreements without exchange of the underlying notional amount. A treasury lock is a synthetic forward sale of a U.S. treasury note, which is settled in cash based upon the difference between an agreed upon treasury rate and the prevailing treasury rate at settlement. Such treasury locks are entered into to effectively fix the treasury component of an upcoming debt issuance. As a result of our adoption of ASU 2017-12 as of January 1, 2018, the entire change in the fair value of derivatives designated and qualify as cash flow hedges are recorded in accumulated other comprehensive income (loss) in the accompanying condensed consolidated balance sheets and are subsequently reclassified into earnings in the period in which the hedged forecasted transaction affects earnings. During the nine months ended September 30, 2018 , such derivatives were used to hedge the variable cash flows associated with variable rate debt. Additionally, as a result of the foregoing adoption of ASU 2017-12, we no longer disclose the ineffective portion of the change in fair value of our derivatives financial instruments designated as hedges. Amounts reported in accumulated other comprehensive income (loss) in the accompanying condensed consolidated balance sheets related to derivatives will be reclassified to interest expense as interest payments are made on our variable rate debt. During the next twelve months, we estimate that an additional $1.2 million will be reclassified from other comprehensive income (loss) in the accompanying condensed consolidated balance sheets as an increase to interest related to derivative financial instruments in the accompanying condensed consolidated statements of operations. In August 2018, we settled three of our five cash flow hedges utilizing net proceeds from the Greenville Disposition to do so. See Note 4 - Impairment and Dispositions in the accompanying notes to the condensed consolidated financial statements for more detail on the Greenville Disposition. As of September 30, 2018 , we had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (in thousands, except number of instruments): Cash Flow Hedges September 30, 2018 Number of instruments 2 Notional amount $ 155,000 The table below presents the fair value of our derivative financial instruments designated as a hedge as well as our classification in the accompanying condensed consolidated balance sheets as of September 30, 2018 and December 31, 2017 , respectively (in thousands). Asset Derivatives Liability Derivatives Fair Value at: Fair Value at: Derivatives Designated as Hedging Instruments: Balance Sheet Location September 30, 2018 December 31, 2017 Balance Sheet Location September 30, 2018 December 31, 2017 Interest rate swaps Receivables and other assets $ 1,588 $ 1,529 Derivative financial instruments $ — $ 1,089 The table below presents the gain or loss recognized on our derivative financial instruments designated as hedges as well as our classification in the accompanying condensed consolidated statements of operations for the three and nine months ended September 30, 2018 and 2017 , respectively (in thousands). As a result of the foregoing adoption of ASU 2017-12, we no longer disclose the ineffective portion of the change in fair value of our derivative financial instruments designated as hedges. Gain (Loss) Recognized in OCI on Derivative Gain (Loss) Reclassified from Accumulated OCI into Income (1) Three Months Ended September 30, Three Months Ended September 30, Derivatives Cash Flow Hedging Relationships: 2018 2017 Statement of Operations Location 2018 2017 Interest rate swaps $ 96 $ 9 Interest related to derivative financial instruments $ 223 $ (196 ) Gain (Loss) Recognized in OCI on Derivative Gain (Loss) Reclassified from Accumulated OCI into Income (1) Nine Months Ended September 30, Nine Months Ended September 30, Derivatives Cash Flow Hedging Relationships: 2018 2017 Statement of Operations Location 2018 2017 Interest rate swaps $ 1,437 $ (1,196 ) Interest related to derivative financial instruments $ 450 $ (565 ) (1) For the three and nine months ended September 30, 2018, due to the settlement of three cash flow hedges that was a result of the prepayment of its associated debt, a forecasted amount of gain reclassified from accumulated OCI to income in the amount of approximately $0.6 million will not occur. This reclassification was reported in loss on extinguishment of debt on the accompanying condensed consolidated statements of operations. Non-Designated Hedges Derivatives not designated as hedges are not speculative and are used to manage our exposure to interest rate movements and other identified risks, but do not meet the strict hedge accounting requirements of ASC 815 - Derivatives and Hedging. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly to gain or loss on change in fair value of derivative financial instruments in the accompanying condensed consolidated statements of operations. For the nine months ended September 30, 2017 , we recorded a gain on change in fair value of derivative financial instruments of $0.9 million . There were no non-designated hedges during the three months ended September 30, 2017 and the three and nine months ended September 30, 2018 . Tabular Disclosure of Offsetting Derivatives The table below sets forth the net effects of offsetting and net presentation of our derivatives as of September 30, 2018 and December 31, 2017 , respectively (in thousands). 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 or liabilities are presented in the consolidated balance sheets. Offsetting of Derivative Assets Gross Amounts of Recognized Assets Gross Amounts in the Consolidated Balance Sheets Net Amounts of Assets Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Received Net Amount September 30, 2018 $ 1,588 $ — $ 1,588 $ — $ — $ 1,588 December 31, 2017 1,529 — 1,529 — — 1,529 Offsetting of Derivative Liabilities Gross Amounts of Recognized Liabilities Gross Amounts in the Consolidated Balance Sheets Net Amounts of Liabilities Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Received Net Amount September 30, 2018 $ — $ — $ — $ — $ — $ — December 31, 2017 1,089 — 1,089 — — 1,089 Credit Risk Related Contingent Features We have agreements with each of our derivative counterparties that contain a provision that if we default on any of our indebtedness, including a default where repayment of the indebtedness has not been accelerated by the lender, then we could also be declared in default on our derivative obligations. We also have agreements with each of our derivative counterparties that incorporate provisions from our indebtedness with a lender affiliate of the derivative counterparty requiring it to maintain certain minimum financial covenant ratios on our indebtedness. Failure to comply with the covenant provisions would result in us being in default on any derivative instrument obligations covered by these agreements. As of September 30, 2018 , due to the settlement of three of our cash flow hedges, there is no fair value of derivatives in a net liability position. As of September 30, 2018 , we have not posted any collateral related to these agreements and we were not in breach of any of the provisions of these agreements. As such, there is no termination value as of September 30, 2018 . If we had breached any of the provisions of these agreements, we could have been required to settle our obligations under these agreements. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation We engage in litigation from time to time with various parties as a routine part of our business, including tenant defaults. However, we are not presently subject to any material litigation nor, to our knowledge, is any material litigation threatened against us, which if determined unfavorably to us, would have a material effect on our condensed consolidated financial position, results of operations or cash flows. Environmental Matters We follow the policy of monitoring our properties for the presence of hazardous or toxic substances. While there can be no assurance that a material environmental liability does not exist at our properties, we are not currently aware of any environmental liability with respect to our properties that would have a material effect on our condensed consolidated financial position, results of operations or cash flows. Further, we are not aware of any material environmental liability or any unasserted claim or assessment with respect to an environmental liability at our properties that we believe would require additional disclosure or the recording of a loss contingency. Other Our other commitments and contingencies include the usual obligations of real estate owners and operators in the normal course of business. In our opinion, these matters are not expected to have a material effect on our condensed consolidated financial position, results of operations or cash flows. |
Redeemable NCI
Redeemable NCI | 9 Months Ended |
Sep. 30, 2018 | |
Temporary Equity Disclosure [Abstract] | |
Redeemable Noncontrolling Interests | Redeemable Noncontrolling Interests Redeemable noncontrolling interests in the accompanying condensed consolidated balance sheets represent the noncontrolling interest in one joint venture in which we own the majority interest. As of September 30, 2018 , approximately 14.3% of the earnings of the joint venture are allocated to redeemable noncontrolling interests. The following is summary of the activity of our redeemable noncontrolling interests as of September 30, 2018 and December 31, 2017 , respectively (in thousands): September 30, 2018 December 31, 2017 Beginning balance $ 6,737 $ 4,653 Net income attributable to noncontrolling interests 65 123 Distributions (192 ) (53 ) Fair value adjustment — 2,014 Ending balance $ 6,610 $ 6,737 |
Stockholders' Equity and Partne
Stockholders' Equity and Partners' Capital | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Stockholders' Equity and Partners' Capital | Stockholders’ Equity and Partners’ Capital HTALP ’s operating partnership agreement provides that it will distribute cash flow from operations and net sale proceeds to its partners in accordance with their overall ownership interests at such times and in such amounts as the general partner determines. Dividend distributions are made such that a holder of one OP Unit in HTALP will receive distributions from HTALP in an amount equal to the dividend distributions paid to the holder of one share of our common stock. In addition, for each share of common stock issued or redeemed by us, HTALP issues or redeems a corresponding number of OP Units. Common Stock Offerings In June 2018, we settled a forward sale arrangement pursuant to a forward equity agreement that we entered into in October 2017, which included the sale of approximately 2.6 million shares of our common stock for net proceeds of approximately $73.8 million , adjusted for costs to borrow equating to a net price to us of $28.94 per share of common stock. Refer to Note 13 - Per Share Data of HTA in the accompanying notes to the condensed consolidated financial statements for a more detailed discussion related to our forward equity agreement. Stock Repurchase Plan In August 2018, our Board of Directors approved a stock repurchase plan authorizing us to purchase up to $300.0 million of our common stock from time to time prior to the expiration thereof on June 7, 2020 . During the nine months ended September 30, 2018 , we repurchased 628,002 shares of our common stock, at an average price of $26.25 per share, for an aggregate amount of approximately $16.5 million , pursuant to this stock repurchase plan. As of September 30, 2018 , the remaining amount of common stock available for repurchase under the stock repurchase plan was approximately $283.5 million . Subsequent to September 30, 2018 , we repurchased 289,519 shares of our common stock at an average price of $25.69 per share, for an aggregate amount of approximately $7.4 million under this stock repurchase plan. Common Stock Dividends See our accompanying condensed consolidated statements of operations for the dividends declared during the three and nine months ended September 30, 2018 and 2017 . On October 25, 2018 , our Board of Directors announced a quarterly dividend of $0.310 per share of common stock and per OP unit to be paid on January 9, 2019 to stockholders of record of our common stock and holders of our OP Units on January 2, 2019 . Incentive Plan Our Incentive Plan permits the grant of incentive awards to our employees, officers, non-employee directors and consultants as selected by our Board of Directors. The Plan authorizes us to grant awards in any of the following forms: options; stock appreciation rights; restricted stock; restricted or deferred stock units; performance awards; dividend equivalents; other stock-based awards, including units in HTALP ; and cash-based awards. Subject to adjustment as provided in the Plan, the aggregate number of awards reserved and available for issuance under the Plan is 5,000,000 shares. As of September 30, 2018 , there were 1,370,792 awards available for grant under the Plan. Restricted Common Stock For the three and nine months ended September 30, 2018 , we recognized compensation expense of $2.1 million and $7.8 million , respectively. For the three and nine months ended September 30, 2017 , we recognized compensation expense of $1.7 million and $5.5 million , respectively. Substantially all compensation expense was recorded in general and administrative expenses in the accompanying condensed consolidated statements of operations. As of September 30, 2018 , we had $8.8 million of unrecognized compensation expense, net of estimated forfeitures, which we will recognize over a remaining weighted average period of 1.5 years. The following is a summary of our restricted common stock activity as of September 30, 2018 and 2017 , respectively: September 30, 2018 September 30, 2017 Restricted Common Stock Weighted Average Grant Date Fair Value Restricted Common Stock Weighted Average Grant Date Fair Value Beginning balance 589,606 $ 29.38 640,870 $ 27.36 Granted 360,700 28.70 292,109 29.75 Vested (255,946 ) 28.68 (278,821 ) 25.31 Forfeited (38,882 ) 28.97 (58,384 ) 28.86 Ending balance 655,478 $ 29.30 595,774 $ 29.39 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Financial Instruments Reported at Fair Value - Recurring The table below presents our assets and liabilities measured at fair value on a recurring basis as of September 30, 2018 , aggregated by the applicable level in the fair value hierarchy (in thousands): Level 1 Level 2 Level 3 Total Assets: Derivative financial instruments $ — $ 1,588 $ — $ 1,588 Liabilities: Derivative financial instruments $ — $ — $ — $ — The table below presents our assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 , aggregated by the applicable level in the fair value hierarchy (in thousands): Level 1 Level 2 Level 3 Total Assets: Derivative financial instruments $ — $ 1,529 $ — $ 1,529 Liabilities: Derivative financial instruments $ — $ 1,089 $ — $ 1,089 Financial Instruments Reported at Fair Value - Non-Recurring The table below presents our assets measured at fair value on a non-recurring basis as of September 30, 2018 , aggregated by the applicable level in the fair value hierarchy (in thousands): Level 1 Level 2 Level 3 Total Assets: MOB (1) $ — $ 10,110 $ — $ 10,110 (1) During the nine months ended September 30, 2018, we recognized $8.9 million of impairment charges to the carrying value of six MOBs, one of which had been sold as of September 30, 2018 and one subsequent to September 30, 2018. The estimated fair value as of September 30, 2018 for the remaining four MOBs was based on the purchase price set forth in executed letters of intent for the purchase thereof and a pending, executed sales agreement. The table below presents our assets measured at fair value on a non-recurring basis as of December 31, 2017 , aggregated by the applicable level in the fair value hierarchy (in thousands): Level 1 Level 2 Level 3 Total Assets: MOB (1) $ — $ 10,271 $ — $ 10,271 (1) During the year ended December 31, 2017, we recognized $13.9 million of impairment charges to the carrying value of two MOBs and a portfolio of MOBs. The estimated fair value as of December 31, 2017 for these MOBs was based upon a pending, executed sales agreement and real estate market comparables. There have been no transfers of assets or liabilities between levels. We will record any such transfers at the end of the reporting period in which a change of event occurs that results in a transfer. Although we have determined that the majority of the inputs used to value our interest rate swap derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with these instruments utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties. However, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our interest rate swap derivative positions and have determined that the credit valuation adjustments are not significant to their overall valuation. As a result, we have determined that our interest rate swap derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. Financial Instruments Disclosed at Fair Value We consider the carrying values of cash and cash equivalents, tenant and other receivables, restricted cash and accounts payable, and accrued liabilities, to approximate fair value for these financial instruments because of the short period of time between origination of the instruments and their expected realization. All of these financial instruments are measured using Level 2. The fair value of debt is estimated using borrowing rates available to us with similar terms and maturities, which is considered a Level 2 input. As of September 30, 2018 , the fair value of the debt was $2,550.0 million compared to the carrying value of $2,609.7 million . As of December 31, 2017 , the fair value of the debt was $2,826.3 million compared to the carrying value of $2,781.0 million . |
Per Share Data of HTA
Per Share Data of HTA | 9 Months Ended |
Sep. 30, 2018 | |
HTA, Inc. | |
Earnings Per Share | |
Per Share Data of HTA | Per Share Data of HTA In October 2017, we entered a forward sale arrangement pursuant to a forward equity agreement to sell approximately 2.6 million shares of our common stock through our at-the-market program (the “ATM”). In June 2018, we settled our forward sale arrangement for proceeds of approximately $73.8 million , adjusted for costs to borrow equating to a net price to us of $28.94 per share of common stock. To account for the forward equity agreement, we considered the accounting guidance governing financial instruments and derivatives and concluded that our forward equity agreement was not a liability as it did not embody obligations to repurchase our shares of common stock nor did it embody obligations to issue a variable number of shares for which the monetary value was predominately fixed, varying with something other than the fair value of the shares, or varying inversely in relation to our shares. We also evaluated whether the agreement met the derivatives and hedging guidance scope exception to be accounted for as an equity instrument and concluded that the agreement can be classified as an equity contract based on the following assessment: (i) the agreement did not exercise contingencies were based on observable markets or indices besides those related to the market for our own stock price and operations; and (ii) none of the settlement provisions precluded the agreement from being indexed to our own common stock. In addition, we considered the potential dilution resulting from the forward equity agreement on our earnings per common share calculations. We used the treasury method to determine the dilution resulting from the forward equity agreement during the period of time prior to settlement. The number of weighted-average shares outstanding diluted used in the computation of earnings per common share for the nine months ended September 30, 2018 , included the effect from the assumed issuance of 2.6 million shares of our common stock pursuant to the settlement of the forward equity agreement at the contractual price, less the assumed repurchase of our common stock at the average market price using the proceeds of approximately $73.8 million , adjusted for costs to borrow. For the nine months ended September 30, 2018 , approximately 330,000 weighted-average incremental shares of our common stock were excluded from the computation of our weighted-average shares-diluted, as their impact was anti-dilutive. We include unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents as “participating securities” pursuant to the two-class method. The resulting classes are our common stock and restricted stock. Our forward equity agreement is not considered a participating security and, therefore, is not included in the computation of earnings per share using the two-class method. For the three and nine months ended September 30, 2018 and 2017 , all of our earnings were distributed and the calculated earnings per share amount would be the same for all classes. The following is the reconciliation of the numerator and denominator used in basic and diluted earnings per share of HTA for the three and nine months ended September 30, 2018 and 2017 , respectively (in thousands, except per share data): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Numerator: Net income $ 176,348 $ 13,957 $ 202,021 $ 22,105 Net income attributable to noncontrolling interests (3,362 ) (194 ) (3,887 ) (715 ) Net income attributable to common stockholders $ 172,986 $ 13,763 $ 198,134 $ 21,390 Denominator: Weighted average shares outstanding - basic 207,513 200,674 205,950 173,189 Dilutive shares - partnership units convertible into common stock 3,931 4,121 4,018 4,221 Adjusted weighted average shares outstanding - diluted 211,444 204,795 209,968 177,410 Earnings per common share - basic Net income attributable to common stockholders $ 0.83 $ 0.07 $ 0.96 $ 0.12 Earnings per common share - diluted Net income attributable to common stockholders $ 0.82 $ 0.07 $ 0.94 $ 0.12 |
Per Unit Data of HTALP
Per Unit Data of HTALP | 9 Months Ended |
Sep. 30, 2018 | |
Healthcare Trust of America Holdings, LP (HTALP) | |
Earnings Per Share | |
Per Unit Data of HTALP | Per Unit Data of HTALP In October 2017, we entered a forward sale arrangement pursuant to a forward equity agreement to sell approximately 2.6 million shares of our common stock through our ATM. Refer to Note 13 - Per Share Data of HTA in the accompanying notes to the condensed consolidated financial statements for a more detailed discussion related to our forward equity agreement settled in June 2018. The following is the reconciliation of the numerator and denominator used in basic and diluted earnings per unit of HTALP for the three and nine months ended September 30, 2018 , and 2017 , respectively (in thousands, except per unit data): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Numerator: Net income $ 176,348 $ 13,957 $ 202,021 $ 22,105 Net income attributable to noncontrolling interests (18 ) (28 ) (65 ) (80 ) Net income attributable to common unitholders $ 176,330 $ 13,929 $ 201,956 $ 22,025 Denominator: Weighted average units outstanding - basic 211,444 204,795 209,968 177,410 Dilutive units - partnership units convertible into common units — — — — Adjusted weighted average units outstanding - diluted 211,444 204,795 209,968 177,410 Earnings per common unit - basic: Net income attributable to common unitholders $ 0.83 $ 0.07 $ 0.96 $ 0.12 Earnings per common unit - diluted: Net income attributable to common unitholders $ 0.83 $ 0.07 $ 0.96 $ 0.12 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Sep. 30, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information The following is the supplemental cash flow information for the nine months ended September 30, 2018 and 2017 , respectively (in thousands): Nine Months Ended September 30, 2018 2017 Supplemental Disclosure of Cash Flow Information: Interest paid $ 87,303 $ 51,066 Income taxes paid 1,656 997 Supplemental Disclosure of Noncash Investing and Financing Activities: Accrued capital expenditures $ 243 $ 4,185 Debt assumed and entered into in connection with an acquisition — 286,000 Dividend distributions declared, but not paid 65,544 62,494 Issuance of operating partnership units in HTALP in connection with an acquisition — 610 Note receivable retired in connection with an acquisition — 2,494 Redemption of noncontrolling interest 5,195 5,694 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Our accompanying condensed consolidated financial statements include our accounts and those of our subsidiaries and any consolidated variable interest entities (“VIEs”). All inter-company balances and transactions have been eliminated in the accompanying condensed consolidated financial statements. |
Principles of Consolidation | The condensed consolidated financial statements include the accounts of our subsidiaries and consolidated joint venture arrangements. The portions of the HTALP operating partnership not owned by us are presented as noncontrolling interests in our consolidated balance sheets and statements of operations, consolidated statements of comprehensive income or loss, consolidated statements of equity, and consolidated statements of changes in partners’ capital. The portions of other joint venture arrangements not owned by us are presented as redeemable noncontrolling interests on the accompanying condensed consolidated balance sheets. In addition, as described in Note 1 - Organization and Description of Business , certain third parties have been issued OP Units in HTALP. Holders of OP Units are considered to be noncontrolling interest holders in HTALP and their ownership interests are reflected as equity on the accompanying condensed consolidated balance sheets. Further, a portion of the earnings and losses of HTALP are allocated to noncontrolling interest holders based on their respective ownership percentages. Upon conversion of OP Units to common stock, any difference between the fair value of the common stock issued and the carrying value of the OP Units converted to common stock is recorded as a component of equity. As of September 30, 2018 and December 31, 2017 , there were approximately 3.9 million and 4.1 million , respectively, of OP Units issued and outstanding. VIEs are entities where investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or where equity investors, as a group, lack one of the following: (i) the power to direct the activities that most significantly impact the entity’s economic performance; (ii) the obligation to absorb the expected losses of the entity; and (iii) the right to receive the expected returns of the entity. We consolidate our investment in VIEs when we determine that we are the primary beneficiary. A primary beneficiary is one that has both: (i) the power to direct the activities of the VIE that most significantly impacts the entity’s economic performance; and (ii) the obligation to absorb losses or the right to receive benefits of the VIE that could be significant to the entity. The HTALP operating partnership and our other joint venture arrangements are VIEs because the limited partners in those partnerships, although entitled to vote on certain matters, do not possess kick-out rights or substantive participating rights. Additionally, we determined that we are the primary beneficiary of our VIEs. Accordingly, we consolidate our interests in the HTALP operating partnership and in our other joint venture arrangements. However, because we hold what is deemed a majority voting interest in the HTALP operating partnership and our other joint venture arrangements, it qualifies for the exemption from providing certain disclosure requirements associated with investments in VIEs. We will evaluate on an ongoing basis the need to consolidate entities based on the standards set forth in GAAP as described above. |
Cash, Cash Equivalents and Restricted Cash | Cash and cash equivalents consist of all highly liquid investments with a maturity of three months or less when purchased. Restricted cash is comprised of (i) reserve accounts for property taxes, insurance, capital improvements and tenant improvements; (ii) collateral accounts for debt and interest rate swaps; and (iii) deposits for future investments. |
Revenue Recognition | Minimum annual rental revenue is recognized on a straight-line basis over the term of the related lease (including rent holidays). Differences between rental income recognized and amounts contractually due under the lease agreements are recorded as straight-line rent receivables. Tenant reimbursement revenue, which is comprised of additional amounts recoverable from tenants for real estate taxes, common area maintenance and other certain operating expenses are recognized as revenue on a gross basis in the period in which the related recoverable expenses are incurred. We accrue revenue corresponding to these expenses on a quarterly basis to adjust recorded amounts to our best estimate of the final annual amounts to be billed. Subsequent to year-end, on a calendar year basis, we perform reconciliations on a lease-by-lease basis and bill or credit each tenant for any differences between the estimated expenses we billed and the actual expenses that were incurred. We recognize lease termination fees when there is a signed termination letter agreement, all of the conditions of the agreement have been met, and the tenant is no longer occupying the property. Rental income is reported net of amortization of inducements. Effective January 1, 2018, with the adoption of Topic 606 and corresponding amendments, the revenue recognition process will be based on a five-step model to account for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. Topic 606 requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. We have identified all of our revenue streams and we have concluded that rental income from leasing arrangements represents a substantial portion of our revenue and, therefore, is specifically excluded from Topic 606 and will be governed and evaluated with the anticipated adoption of Topic 842. The other revenue stream identified as impacting Topic 606 is concentrated in the recognition of real estate sales and the adoption of Topic 606 did not have a material impact on our financial statements. |
Redeemable Noncontrolling Interests | We account for redeemable equity securities in accordance with ASU 2009-04 Liabilities (Topic 480): Accounting for Redeemable Equity Instruments, which requires that equity securities redeemable at the option of the holder be classified outside permanent stockholders’ equity. We classify redeemable equity securities as redeemable noncontrolling interests in the accompanying condensed consolidated balances sheets. We measure the redemption value and record an adjustment to the carrying value of the equity securities as a component of redeemable noncontrolling interest. |
Unconsolidated Joint Ventures | We account for our investments in unconsolidated joint ventures using the equity method of accounting because we have the ability to exercise significant influence, but not control, over the financial and operational policy decisions of the investments. Using the equity method of accounting, the initial investment is recognized at cost and subsequently adjusted for our share of the net income or loss and any distributions from the joint venture. |
Recently Issued or Adopted Accounting Pronouncements | The following table provides a brief description of recently adopted accounting pronouncements: Accounting Pronouncement Description Effective Date Effect on financial statements Topic 606; collectively, ASU 2014-09, 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-11, ASU 2016-12, ASU 2016-20, ASU 2017-05, ASU 2017-10, ASU 2017-13 and ASU 2017-14 Revenue from Contracts with Customers (Issued May 2014, August 2015, March 2016, April 2016, May 2016, December 2016, February 2017, May 2017, September 2017 and November 2017) In May 2014, the FASB issued Topic 606. The objective of Topic 606 is to establish a comprehensive new five-step model requiring a company to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (i.e., payment) to which the company expects to be entitled in exchange for those goods or services. Expanded quantitative and qualitative disclosures regarding revenue recognition will be required for contracts that are subject to Topic 606. Topic 606 does not apply to revenue from lease contracts until the adoption of the new leases standard in ASU 2016-02, in January 2019. ASU 2017-05 applies to all nonfinancial assets (including real estate) for which the counterparty is not a customer and requires an entity to derecognize a nonfinancial asset in a partial sale transaction when it ceases to have a controlling financial interest in the asset and has transferred control of the asset. Once an entity transfers control of the nonfinancial asset, the entity is required to measure any noncontrolling interest it receives or retains at fair value. Under the current guidance, a partial sale is recognized and carryover basis is used for the retained interest resulting in only partial gain recognition by the entity, however, the new guidance eliminates the use of carryover basis and generally requires the full gain to be recognized. In adopting Topic 606, companies may use either a full retrospective or a modified retrospective approach. Topic 606 is effective for fiscal years beginning after December 15, 2017 along with the right of early adoption as of the original effective date. We adopted Topic 606 effective January 1, 2018 to all open contracts using the modified retrospective approach. As part of the adoption, we identified all revenue streams and concluded that revenues from leasing arrangements represented substantially all of our revenue and is generally excluded from the scope of Topic 606. Rather, rental revenue, including any executory type costs, will be governed and evaluated with the adoption of Topic 842 as described below. In addition, under Topic 606, revenue recognition for real estate sales will be substantially based on a principles-based approach to determine whether there has been transfer of control versus continuing involvement under the current guidance. There have not been, nor do we anticipate, any reclassifications or material impacts on our consolidated financial statements as a result of this adoption. ASU 2017-09 Compensation - Stock Compensation (Topic 718): Clarifying the Scope of Modification (Issued May 2017) ASU 2017-09 amends the scope of modification accounting for share-based payment arrangements and provides guidance on the types of changes to the terms and conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718. ASU 2017-09 is effective for fiscal years beginning after December 15, 2017 with early adoption permitted. We adopted ASU 2017-09 as of January 1, 2018. There have not been, nor do we anticipate, any reclassifications or material impacts on our consolidated financial statements as a result of this adoption. ASU 2017-12 Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (Issued August 2017) ASU 2017-12 expands and refines hedge accounting for both financial (e.g., interest rate) and non-financial risk components, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. ASU 2017-12 is effective for fiscal years beginning after December 15, 2018 with early adoption permitted. We adopted ASU 2017-12 as of January 1, 2018. Using the modified retrospective approach, the cumulative effect of the ineffective ness for the year ended December 31, 2017 was immaterial; therefore, no adjustment was made to beginning retained earnings. Additionally, as a result of the adoption, we no longer disclose the ineffective portion of the change in fair value of our derivative financial instruments. The entire change in the fair value of the hedging instruments included in the assessment of hedge effectiveness will now be recorded in other comprehensive income and subsequently reclassified to interest expense in the period the hedging instrument affects earnings. The following table provides a brief description of recently issued accounting pronouncements: Accounting Pronouncement Description Effective Date Effect on financial statements Topic 842; collectively ASU 2016-02, 2018-01 and 2018-11 Leases (Issued February 2016, January 2018 and July 2018) In February 2016, the FASB issued Topic 842. Topic 842 will supersede the existing guidance for lease accounting and states that companies will be required to recognize lease assets and lease liabilities on the balance sheet and disclose key information about leasing arrangements. Topic 842 requires qualitative and quantitative disclosures to supplement the amounts recorded in the financial statements so that users can understand the nature of the entity’s leasing activities, including significant judgments and changes in judgments. ASU 2018-01 provides an optional transition practical expedient to not evaluate under Topic 842 existing or expired land easements that were not previously accounted for as leases under the current lease guidance in Topic 840. An entity that elects this practical expedient should evaluate new or modified land easements under Topic 842 beginning at the date the entity adopts Topic 842; otherwise, an entity should evaluate all existing or expired land easements in connection with the adoption of the new lease requirements in Topic 842 to assess whether they meet the definition of a lease. Within Topic 842, lessor accounting remained fairly unchanged. In adopting Topic 842, companies will be required to either use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements or with the adoption of ASU 2018-11, an optional transition method whereby an entity initially applies the new lease standard at the adoption date and recognizes a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. Topic 842 is effective for the fiscal years beginning after December 15, 2018 with early adoption permitted. We will adopt the provisions of Topic 842 as of January 1, 2019. We anticipate that we will elect (a) the practical expedient offered that allows an entity to not reassess upon adoption (i) whether an expired or existing contract contains a lease arrangement, (ii) lease classification related to expired or existing lease arrangements, or (iii) whether costs incurred on expired or existing leases qualify as initial direct costs, and (b) as part of ASU 2018-11, the practical expedient to not separate certain non-lease components, such as common area maintenance from lease revenue if (i) the timing and pattern of revenue recognition are the same for the non-lease component, and (ii) the related lease component and the combined single lease component would be classified as an operating lease. As part of the adoption, all leases for which we are the lessee, including ground leases and certain other corporate leases, will be recorded in our consolidated financial statements as either financing or operating leases with corresponding right of use assets and lease liability obligations. Management has commenced the reevaluation of all leases where we are the lessee to determine (a) the total future lease payments, including an assessment of the availability and likelihood of our exercising extension options available to us under the terms of the respective leases, (b) an appropriate incremental borrowing rate in light of the extended term of our ground leases, and (c) an abstract of all applicable lease provisions that may cause the treatment of these leases to be classified differently under ASC 842 than what they are currently being classified as under current accounting guidance. We anticipate that our assessment will be concluded by December 31, 2018 and that we will have evaluated all leases sufficiently to provide a range of potential impact to our financial statements. Further, with respect to initial direct costs, we are currently assessing the projected impact to the accounting of such costs, including the impact of potential changes to our use of internal and external leasing and leasing-related personnel, potential changes in compensation structures to such individuals, and other considerations of related costs that could have an impact to our financial statements. For the nine months ended September 30, 2018, we have capitalized approximately $3.7 million of internal initial direct costs (as defined by the current lease standard, ASC 840 - Leases). Utilizing a traditional third party leasing commission structure of 3% of gross lease value, total leasing commissions would have totaled over $9 million during the nine months ended September 30, 2018. Upon the adoption of Topic 842, these internal initial direct costs will either in part or in their entirety be classified as additional general and administrative expenses on our consolidated statements of operations, depending on the finalization of our assessment of the impact of such adoption. We estimate the range of these expenses to be approximately $6 million to $8 million and effecting Earnings Per Share by approximately $0.03 to $0.04 per share on an annualized basis. In addition, operating expenses and income for real estate taxes and insurance will likely increase by offsetting amounts. This however will not have a material impact on our consolidated financial statements. Accounting Pronouncement Description Effective Date Effect on financial statements ASU 2016-13 Financial Instruments Credit Losses: Measurement of Credit Losses on Financial Instruments (Issued June 2016) ASU 2016-13 is intended to improve financial reporting by requiring more timely recognition of credit losses on loans and other financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investment in leases and other such commitments. ASU 2016-13 requires that financial statement assets measured at an amortized cost be presented at the net amount expected to be collected through an allowance for credit losses that is deducted from the amortized cost basis. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019 with early adoption permitted. We do not anticipate early adoption or there to be a material impact to our consolidated financial statements based on our ongoing evaluation. ASU 2018-07 Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (Issued June 2018) ASU 2018-07 expands the scope of Topic 718 and the amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (i) financing to the issuer or (ii) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018 with early adoption permitted, but not earlier than an entity’s adoption date of Topic 606. We will adopt ASU 2018-07 as of January 1, 2019. We do not expect there to be a material impact to our consolidated financial statements and related notes. ASU 2018-13 Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement (Issued August 2018) ASU 2018-13 modifies the disclosure requirements on fair value measurements in Topic 820 as follows: (A) Disclosure removals: (i) the amount of and reasons for transfers between Level 1 and Level 2; (ii) the policy for timing of transfers between levels; and (iii) the valuation process for Level 3 fair value measurements. (B) Disclosure modifications: (i) no requirement to disclose the timing of liquidation unless the investee has communicated the timing to the reporting entity or announced the timing publicly; and (ii) for Level 3 fair value measurements, a narrative description of measurement uncertainty at the reporting date, not the sensitivity to future changes. (C) Disclosure additions: (i) for recurring Level 3 measurements, disclose the changes in unrealized gains and losses for the period included in OCI and the statement of comprehensive income; and (ii) for Level 3 fair value measurements in the table of significant input, disclose the range and weighted average of the significant unobservable inputs and the way it is calculated. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019 with early adoption permitted. We will adopt ASU 2018-07 as of January 1, 2020. We will consider all level inputs in our ongoing evaluation but do not anticipate there to be a material impact to our consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Effect of Adoption of Recently Issuance Accounting Pronouncements | The following table represents the previously reported balances and the reclassified balances for the impacted items for the nine months ended September 30, 2017 in the accompanying condensed consolidated statements of cash flows (in thousands): Nine Months Ended September 30, 2017 As Previously Reported As Reclassified Cash flows from investing activities: Other assets (1) $ (3,655 ) $ — Net cash used in investing activities (2,487,471 ) (2,483,816 ) Net change in cash, cash equivalents and restricted cash (2) $ (1,821 ) $ 1,834 Cash, cash equivalents and restricted cash - beginning of period (2) 11,231 25,045 Cash, cash equivalents and restricted cash - end of period (2) $ 9,410 $ 26,879 (1) Prior to adoption of ASU 2016-18, the line item description was “Restricted cash, escrow deposits and other assets”. (2) With the adoption of ASU 2016-18, the line item description now includes restricted cash. |
Schedule of Cash and Cash Equivalents | With our adoption of ASU 2016-18 in the fourth quarter of 2017, as set forth in our 2017 Annual Report on Form 10-K as of January 1, 2017, the following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the accompanying condensed consolidated balance sheets to the combined amounts shown on the accompanying condensed consolidated statements of cash flows as of September 30, 2018 and 2017 , respectively (in thousands): September 30, 2018 2017 Cash and cash equivalents $ 225,518 $ 9,410 Restricted cash 14,639 17,469 Total cash, cash equivalents and restricted cash $ 240,157 $ 26,879 |
Schedule of Restricted Cash | With our adoption of ASU 2016-18 in the fourth quarter of 2017, as set forth in our 2017 Annual Report on Form 10-K as of January 1, 2017, the following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the accompanying condensed consolidated balance sheets to the combined amounts shown on the accompanying condensed consolidated statements of cash flows as of September 30, 2018 and 2017 , respectively (in thousands): September 30, 2018 2017 Cash and cash equivalents $ 225,518 $ 9,410 Restricted cash 14,639 17,469 Total cash, cash equivalents and restricted cash $ 240,157 $ 26,879 |
Schedule of Effect of Recently Issued or Adopted Accounting Pronouncements | The following table provides a brief description of recently adopted accounting pronouncements: Accounting Pronouncement Description Effective Date Effect on financial statements Topic 606; collectively, ASU 2014-09, 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-11, ASU 2016-12, ASU 2016-20, ASU 2017-05, ASU 2017-10, ASU 2017-13 and ASU 2017-14 Revenue from Contracts with Customers (Issued May 2014, August 2015, March 2016, April 2016, May 2016, December 2016, February 2017, May 2017, September 2017 and November 2017) In May 2014, the FASB issued Topic 606. The objective of Topic 606 is to establish a comprehensive new five-step model requiring a company to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (i.e., payment) to which the company expects to be entitled in exchange for those goods or services. Expanded quantitative and qualitative disclosures regarding revenue recognition will be required for contracts that are subject to Topic 606. Topic 606 does not apply to revenue from lease contracts until the adoption of the new leases standard in ASU 2016-02, in January 2019. ASU 2017-05 applies to all nonfinancial assets (including real estate) for which the counterparty is not a customer and requires an entity to derecognize a nonfinancial asset in a partial sale transaction when it ceases to have a controlling financial interest in the asset and has transferred control of the asset. Once an entity transfers control of the nonfinancial asset, the entity is required to measure any noncontrolling interest it receives or retains at fair value. Under the current guidance, a partial sale is recognized and carryover basis is used for the retained interest resulting in only partial gain recognition by the entity, however, the new guidance eliminates the use of carryover basis and generally requires the full gain to be recognized. In adopting Topic 606, companies may use either a full retrospective or a modified retrospective approach. Topic 606 is effective for fiscal years beginning after December 15, 2017 along with the right of early adoption as of the original effective date. We adopted Topic 606 effective January 1, 2018 to all open contracts using the modified retrospective approach. As part of the adoption, we identified all revenue streams and concluded that revenues from leasing arrangements represented substantially all of our revenue and is generally excluded from the scope of Topic 606. Rather, rental revenue, including any executory type costs, will be governed and evaluated with the adoption of Topic 842 as described below. In addition, under Topic 606, revenue recognition for real estate sales will be substantially based on a principles-based approach to determine whether there has been transfer of control versus continuing involvement under the current guidance. There have not been, nor do we anticipate, any reclassifications or material impacts on our consolidated financial statements as a result of this adoption. ASU 2017-09 Compensation - Stock Compensation (Topic 718): Clarifying the Scope of Modification (Issued May 2017) ASU 2017-09 amends the scope of modification accounting for share-based payment arrangements and provides guidance on the types of changes to the terms and conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718. ASU 2017-09 is effective for fiscal years beginning after December 15, 2017 with early adoption permitted. We adopted ASU 2017-09 as of January 1, 2018. There have not been, nor do we anticipate, any reclassifications or material impacts on our consolidated financial statements as a result of this adoption. ASU 2017-12 Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (Issued August 2017) ASU 2017-12 expands and refines hedge accounting for both financial (e.g., interest rate) and non-financial risk components, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. ASU 2017-12 is effective for fiscal years beginning after December 15, 2018 with early adoption permitted. We adopted ASU 2017-12 as of January 1, 2018. Using the modified retrospective approach, the cumulative effect of the ineffective ness for the year ended December 31, 2017 was immaterial; therefore, no adjustment was made to beginning retained earnings. Additionally, as a result of the adoption, we no longer disclose the ineffective portion of the change in fair value of our derivative financial instruments. The entire change in the fair value of the hedging instruments included in the assessment of hedge effectiveness will now be recorded in other comprehensive income and subsequently reclassified to interest expense in the period the hedging instrument affects earnings. The following table provides a brief description of recently issued accounting pronouncements: Accounting Pronouncement Description Effective Date Effect on financial statements Topic 842; collectively ASU 2016-02, 2018-01 and 2018-11 Leases (Issued February 2016, January 2018 and July 2018) In February 2016, the FASB issued Topic 842. Topic 842 will supersede the existing guidance for lease accounting and states that companies will be required to recognize lease assets and lease liabilities on the balance sheet and disclose key information about leasing arrangements. Topic 842 requires qualitative and quantitative disclosures to supplement the amounts recorded in the financial statements so that users can understand the nature of the entity’s leasing activities, including significant judgments and changes in judgments. ASU 2018-01 provides an optional transition practical expedient to not evaluate under Topic 842 existing or expired land easements that were not previously accounted for as leases under the current lease guidance in Topic 840. An entity that elects this practical expedient should evaluate new or modified land easements under Topic 842 beginning at the date the entity adopts Topic 842; otherwise, an entity should evaluate all existing or expired land easements in connection with the adoption of the new lease requirements in Topic 842 to assess whether they meet the definition of a lease. Within Topic 842, lessor accounting remained fairly unchanged. In adopting Topic 842, companies will be required to either use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements or with the adoption of ASU 2018-11, an optional transition method whereby an entity initially applies the new lease standard at the adoption date and recognizes a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. Topic 842 is effective for the fiscal years beginning after December 15, 2018 with early adoption permitted. We will adopt the provisions of Topic 842 as of January 1, 2019. We anticipate that we will elect (a) the practical expedient offered that allows an entity to not reassess upon adoption (i) whether an expired or existing contract contains a lease arrangement, (ii) lease classification related to expired or existing lease arrangements, or (iii) whether costs incurred on expired or existing leases qualify as initial direct costs, and (b) as part of ASU 2018-11, the practical expedient to not separate certain non-lease components, such as common area maintenance from lease revenue if (i) the timing and pattern of revenue recognition are the same for the non-lease component, and (ii) the related lease component and the combined single lease component would be classified as an operating lease. As part of the adoption, all leases for which we are the lessee, including ground leases and certain other corporate leases, will be recorded in our consolidated financial statements as either financing or operating leases with corresponding right of use assets and lease liability obligations. Management has commenced the reevaluation of all leases where we are the lessee to determine (a) the total future lease payments, including an assessment of the availability and likelihood of our exercising extension options available to us under the terms of the respective leases, (b) an appropriate incremental borrowing rate in light of the extended term of our ground leases, and (c) an abstract of all applicable lease provisions that may cause the treatment of these leases to be classified differently under ASC 842 than what they are currently being classified as under current accounting guidance. We anticipate that our assessment will be concluded by December 31, 2018 and that we will have evaluated all leases sufficiently to provide a range of potential impact to our financial statements. Further, with respect to initial direct costs, we are currently assessing the projected impact to the accounting of such costs, including the impact of potential changes to our use of internal and external leasing and leasing-related personnel, potential changes in compensation structures to such individuals, and other considerations of related costs that could have an impact to our financial statements. For the nine months ended September 30, 2018, we have capitalized approximately $3.7 million of internal initial direct costs (as defined by the current lease standard, ASC 840 - Leases). Utilizing a traditional third party leasing commission structure of 3% of gross lease value, total leasing commissions would have totaled over $9 million during the nine months ended September 30, 2018. Upon the adoption of Topic 842, these internal initial direct costs will either in part or in their entirety be classified as additional general and administrative expenses on our consolidated statements of operations, depending on the finalization of our assessment of the impact of such adoption. We estimate the range of these expenses to be approximately $6 million to $8 million and effecting Earnings Per Share by approximately $0.03 to $0.04 per share on an annualized basis. In addition, operating expenses and income for real estate taxes and insurance will likely increase by offsetting amounts. This however will not have a material impact on our consolidated financial statements. Accounting Pronouncement Description Effective Date Effect on financial statements ASU 2016-13 Financial Instruments Credit Losses: Measurement of Credit Losses on Financial Instruments (Issued June 2016) ASU 2016-13 is intended to improve financial reporting by requiring more timely recognition of credit losses on loans and other financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investment in leases and other such commitments. ASU 2016-13 requires that financial statement assets measured at an amortized cost be presented at the net amount expected to be collected through an allowance for credit losses that is deducted from the amortized cost basis. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019 with early adoption permitted. We do not anticipate early adoption or there to be a material impact to our consolidated financial statements based on our ongoing evaluation. ASU 2018-07 Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (Issued June 2018) ASU 2018-07 expands the scope of Topic 718 and the amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (i) financing to the issuer or (ii) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018 with early adoption permitted, but not earlier than an entity’s adoption date of Topic 606. We will adopt ASU 2018-07 as of January 1, 2019. We do not expect there to be a material impact to our consolidated financial statements and related notes. ASU 2018-13 Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement (Issued August 2018) ASU 2018-13 modifies the disclosure requirements on fair value measurements in Topic 820 as follows: (A) Disclosure removals: (i) the amount of and reasons for transfers between Level 1 and Level 2; (ii) the policy for timing of transfers between levels; and (iii) the valuation process for Level 3 fair value measurements. (B) Disclosure modifications: (i) no requirement to disclose the timing of liquidation unless the investee has communicated the timing to the reporting entity or announced the timing publicly; and (ii) for Level 3 fair value measurements, a narrative description of measurement uncertainty at the reporting date, not the sensitivity to future changes. (C) Disclosure additions: (i) for recurring Level 3 measurements, disclose the changes in unrealized gains and losses for the period included in OCI and the statement of comprehensive income; and (ii) for Level 3 fair value measurements in the table of significant input, disclose the range and weighted average of the significant unobservable inputs and the way it is calculated. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019 with early adoption permitted. We will adopt ASU 2018-07 as of January 1, 2020. We will consider all level inputs in our ongoing evaluation but do not anticipate there to be a material impact to our consolidated financial statements. |
Investments in Real Estate (Tab
Investments in Real Estate (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Investments [Abstract] | |
Schedule of Purchase Price Allocation | The allocations for these investments, in which we own a controlling financial interest, are set forth below in the aggregate for the nine months ended September 30, 2018 and 2017 , respectively (in thousands): Nine Months Ended September 30, 2018 2017 Land $ 1,895 $ 93,064 Building and improvements 14,458 2,336,544 In place leases 1,237 187,890 Below market leases (201 ) (27,817 ) Above market leases — 11,718 Below market leasehold interests — 54,252 Above market leasehold interests — (8,978 ) Net assets acquired 17,389 2,646,673 Other, net (1) 447 60,781 Aggregate purchase price $ 17,836 $ 2,707,454 (1) For the nine months ended September 30, 2017, other, net, consisted primarily of capital expenditures and tenant improvements received as credits at the time of acquisition. |
Schedule of Weighted Average Lives of Acquired Intangible Assets and Liabilities | The acquired intangible assets and liabilities referenced above had weighted average lives of the following terms for the nine months ended September 30, 2018 and 2017 , respectively (in years): Nine Months Ended September 30, 2018 2017 Acquired intangible assets 5.8 20.6 Acquired intangible liabilities 6.5 19.9 |
Intangible Assets and Liabili_2
Intangible Assets and Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Identified Intangibles, Net [Abstract] | |
Schedule of Intangible Assets and Liabilities | Intangible assets and liabilities consisted of the following as of September 30, 2018 and December 31, 2017 , respectively (in thousands, except weighted average remaining amortization terms): September 30, 2018 December 31, 2017 Balance Weighted Average Remaining Amortization in Years Balance Weighted Average Remaining Amortization in Years Assets: In place leases $ 451,990 9.8 $ 474,252 9.8 Tenant relationships 152,225 9.4 164,947 10.2 Above market leases 37,537 6.1 40,082 6.3 Below market leasehold interests 91,759 64.5 92,362 63.4 733,511 771,643 Accumulated amortization (343,251 ) (312,655 ) Total $ 390,260 21.6 $ 458,988 19.5 Liabilities: Below market leases $ 61,525 14.6 $ 61,820 14.7 Above market leasehold interests 20,610 49.5 20,610 50.1 82,135 82,430 Accumulated amortization (19,248 ) (14,227 ) Total $ 62,887 25.1 $ 68,203 25.0 |
Summary of Net Intangible Amortization | The following is a summary of the net intangible amortization for the three and nine months ended September 30, 2018 and 2017 , respectively (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Amortization recorded against rental income related to above and (below) market leases $ (352 ) $ (108 ) $ (660 ) $ (371 ) Rental expense related to above and (below) market leasehold interests 287 322 850 617 Amortization expense related to in place leases and tenant relationships 18,475 18,757 52,800 45,944 |
Receivables and Other Assets (T
Receivables and Other Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Receivables and Other Assets [Abstract] | |
Schedule of Receivables and Other Assets | Receivables and other assets consisted of the following as of September 30, 2018 and December 31, 2017 , respectively (in thousands): September 30, 2018 December 31, 2017 Tenant receivables, net $ 13,062 $ 20,269 Other receivables, net 15,067 9,305 Deferred financing costs, net 6,480 7,759 Deferred leasing costs, net 28,783 25,494 Straight-line rent receivables, net 89,531 85,143 Prepaid expenses, deposits, equipment and other, net 58,971 58,358 Derivative financial instruments - interest rate swaps 1,588 1,529 Total $ 213,482 $ 207,857 |
Summary of Amortization of Deferred Leasing Costs and Deferred Financing Costs | The following is a summary of the amortization of deferred leasing costs and financing costs for the three and nine months ended September 30, 2018 , and 2017 , respectively (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Amortization expense related to deferred leasing costs $ 1,357 $ 1,445 $ 4,166 $ 4,179 Interest expense related to deferred financing costs 431 398 1,293 1,061 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt consisted of the following as of September 30, 2018 and December 31, 2017 , respectively (in thousands): September 30, 2018 December 31, 2017 Unsecured revolving credit facility $ — $ — Unsecured term loans 500,000 500,000 Unsecured senior notes 1,850,000 1,850,000 Fixed rate mortgages 279,230 414,524 Variable rate mortgages — 37,918 2,629,230 2,802,442 Deferred financing costs, net (14,448 ) (15,850 ) Discount, net (5,123 ) (5,561 ) Total $ 2,609,659 $ 2,781,031 |
Summary of Debt Maturities and Scheduled Principal Debt Repayments | The following table summarizes the debt maturities and scheduled principal repayments of our indebtedness as of September 30, 2018 (in thousands): Year Amount 2018 $ 1,086 2019 99,453 2020 99,641 2021 304,840 2022 462,089 Thereafter 1,662,121 Total $ 2,629,230 |
Schedule of Amortization of Deferred Financing Costs | As of September 30, 2018 , the future amortization of our deferred financing costs is as follows (in thousands): Year Amount 2018 $ 764 2019 2,956 2020 2,894 2021 2,721 2022 2,098 Thereafter 3,015 Total $ 14,448 |
Derivative Financial Instrume_2
Derivative Financial Instruments and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Interest Rate Derivatives | As of September 30, 2018 , we had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (in thousands, except number of instruments): Cash Flow Hedges September 30, 2018 Number of instruments 2 Notional amount $ 155,000 The table below presents the fair value of our derivative financial instruments designated as a hedge as well as our classification in the accompanying condensed consolidated balance sheets as of September 30, 2018 and December 31, 2017 , respectively (in thousands). Asset Derivatives Liability Derivatives Fair Value at: Fair Value at: Derivatives Designated as Hedging Instruments: Balance Sheet Location September 30, 2018 December 31, 2017 Balance Sheet Location September 30, 2018 December 31, 2017 Interest rate swaps Receivables and other assets $ 1,588 $ 1,529 Derivative financial instruments $ — $ 1,089 The table below presents the gain or loss recognized on our derivative financial instruments designated as hedges as well as our classification in the accompanying condensed consolidated statements of operations for the three and nine months ended September 30, 2018 and 2017 , respectively (in thousands). As a result of the foregoing adoption of ASU 2017-12, we no longer disclose the ineffective portion of the change in fair value of our derivative financial instruments designated as hedges. Gain (Loss) Recognized in OCI on Derivative Gain (Loss) Reclassified from Accumulated OCI into Income (1) Three Months Ended September 30, Three Months Ended September 30, Derivatives Cash Flow Hedging Relationships: 2018 2017 Statement of Operations Location 2018 2017 Interest rate swaps $ 96 $ 9 Interest related to derivative financial instruments $ 223 $ (196 ) Gain (Loss) Recognized in OCI on Derivative Gain (Loss) Reclassified from Accumulated OCI into Income (1) Nine Months Ended September 30, Nine Months Ended September 30, Derivatives Cash Flow Hedging Relationships: 2018 2017 Statement of Operations Location 2018 2017 Interest rate swaps $ 1,437 $ (1,196 ) Interest related to derivative financial instruments $ 450 $ (565 ) (1) For the three and nine months ended September 30, 2018, due to the settlement of three cash flow hedges that was a result of the prepayment of its associated debt, a forecasted amount of gain reclassified from accumulated OCI to income in the amount of approximately $0.6 million will not occur. This reclassification was reported in loss on extinguishment of debt on the accompanying condensed consolidated statements of operations. |
Schedule of Derivative Assets Subject to Master Netting Arrangements | The table below sets forth the net effects of offsetting and net presentation of our derivatives as of September 30, 2018 and December 31, 2017 , respectively (in thousands). 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 or liabilities are presented in the consolidated balance sheets. Offsetting of Derivative Assets Gross Amounts of Recognized Assets Gross Amounts in the Consolidated Balance Sheets Net Amounts of Assets Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Received Net Amount September 30, 2018 $ 1,588 $ — $ 1,588 $ — $ — $ 1,588 December 31, 2017 1,529 — 1,529 — — 1,529 |
Schedule of Derivative Liabilities Subject to Master Netting Arrangements | Offsetting of Derivative Liabilities Gross Amounts of Recognized Liabilities Gross Amounts in the Consolidated Balance Sheets Net Amounts of Liabilities Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Received Net Amount September 30, 2018 $ — $ — $ — $ — $ — $ — December 31, 2017 1,089 — 1,089 — — 1,089 |
Redeemable NCI (Tables)
Redeemable NCI (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Temporary Equity Disclosure [Abstract] | |
Summary of Activity of Redeemable Noncontrolling Interests | The following is summary of the activity of our redeemable noncontrolling interests as of September 30, 2018 and December 31, 2017 , respectively (in thousands): September 30, 2018 December 31, 2017 Beginning balance $ 6,737 $ 4,653 Net income attributable to noncontrolling interests 65 123 Distributions (192 ) (53 ) Fair value adjustment — 2,014 Ending balance $ 6,610 $ 6,737 |
Stockholders' Equity and Part_2
Stockholders' Equity and Partners' Capital (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Schedule of Restricted Common Stock Activity | The following is a summary of our restricted common stock activity as of September 30, 2018 and 2017 , respectively: September 30, 2018 September 30, 2017 Restricted Common Stock Weighted Average Grant Date Fair Value Restricted Common Stock Weighted Average Grant Date Fair Value Beginning balance 589,606 $ 29.38 640,870 $ 27.36 Granted 360,700 28.70 292,109 29.75 Vested (255,946 ) 28.68 (278,821 ) 25.31 Forfeited (38,882 ) 28.97 (58,384 ) 28.86 Ending balance 655,478 $ 29.30 595,774 $ 29.39 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The table below presents our assets and liabilities measured at fair value on a recurring basis as of September 30, 2018 , aggregated by the applicable level in the fair value hierarchy (in thousands): Level 1 Level 2 Level 3 Total Assets: Derivative financial instruments $ — $ 1,588 $ — $ 1,588 Liabilities: Derivative financial instruments $ — $ — $ — $ — The table below presents our assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 , aggregated by the applicable level in the fair value hierarchy (in thousands): Level 1 Level 2 Level 3 Total Assets: Derivative financial instruments $ — $ 1,529 $ — $ 1,529 Liabilities: Derivative financial instruments $ — $ 1,089 $ — $ 1,089 |
Schedule of Fair Value, Assets Measured on Non-Recurring Basis | The table below presents our assets measured at fair value on a non-recurring basis as of September 30, 2018 , aggregated by the applicable level in the fair value hierarchy (in thousands): Level 1 Level 2 Level 3 Total Assets: MOB (1) $ — $ 10,110 $ — $ 10,110 (1) During the nine months ended September 30, 2018, we recognized $8.9 million of impairment charges to the carrying value of six MOBs, one of which had been sold as of September 30, 2018 and one subsequent to September 30, 2018. The estimated fair value as of September 30, 2018 for the remaining four MOBs was based on the purchase price set forth in executed letters of intent for the purchase thereof and a pending, executed sales agreement. The table below presents our assets measured at fair value on a non-recurring basis as of December 31, 2017 , aggregated by the applicable level in the fair value hierarchy (in thousands): Level 1 Level 2 Level 3 Total Assets: MOB (1) $ — $ 10,271 $ — $ 10,271 (1) During the year ended December 31, 2017, we recognized $13.9 million of impairment charges to the carrying value of two MOBs and a portfolio of MOBs. The estimated fair value as of December 31, 2017 for these MOBs was based upon a pending, executed sales agreement and real estate market comparables. |
Per Share Data of HTA (Tables)
Per Share Data of HTA (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
HTA, Inc. | |
Earnings Per Share | |
Schedule of Earnings Per Share, Basic and Diluted | The following is the reconciliation of the numerator and denominator used in basic and diluted earnings per share of HTA for the three and nine months ended September 30, 2018 and 2017 , respectively (in thousands, except per share data): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Numerator: Net income $ 176,348 $ 13,957 $ 202,021 $ 22,105 Net income attributable to noncontrolling interests (3,362 ) (194 ) (3,887 ) (715 ) Net income attributable to common stockholders $ 172,986 $ 13,763 $ 198,134 $ 21,390 Denominator: Weighted average shares outstanding - basic 207,513 200,674 205,950 173,189 Dilutive shares - partnership units convertible into common stock 3,931 4,121 4,018 4,221 Adjusted weighted average shares outstanding - diluted 211,444 204,795 209,968 177,410 Earnings per common share - basic Net income attributable to common stockholders $ 0.83 $ 0.07 $ 0.96 $ 0.12 Earnings per common share - diluted Net income attributable to common stockholders $ 0.82 $ 0.07 $ 0.94 $ 0.12 |
Per Unit Data of HTALP (Tables)
Per Unit Data of HTALP (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Healthcare Trust of America Holdings, LP (HTALP) | |
Earnings Per Share | |
Schedule of Earnings Per Unit, Basic and Diluted | The following is the reconciliation of the numerator and denominator used in basic and diluted earnings per unit of HTALP for the three and nine months ended September 30, 2018 , and 2017 , respectively (in thousands, except per unit data): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Numerator: Net income $ 176,348 $ 13,957 $ 202,021 $ 22,105 Net income attributable to noncontrolling interests (18 ) (28 ) (65 ) (80 ) Net income attributable to common unitholders $ 176,330 $ 13,929 $ 201,956 $ 22,025 Denominator: Weighted average units outstanding - basic 211,444 204,795 209,968 177,410 Dilutive units - partnership units convertible into common units — — — — Adjusted weighted average units outstanding - diluted 211,444 204,795 209,968 177,410 Earnings per common unit - basic: Net income attributable to common unitholders $ 0.83 $ 0.07 $ 0.96 $ 0.12 Earnings per common unit - diluted: Net income attributable to common unitholders $ 0.83 $ 0.07 $ 0.96 $ 0.12 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Supplemental Cash Flow Information | The following is the supplemental cash flow information for the nine months ended September 30, 2018 and 2017 , respectively (in thousands): Nine Months Ended September 30, 2018 2017 Supplemental Disclosure of Cash Flow Information: Interest paid $ 87,303 $ 51,066 Income taxes paid 1,656 997 Supplemental Disclosure of Noncash Investing and Financing Activities: Accrued capital expenditures $ 243 $ 4,185 Debt assumed and entered into in connection with an acquisition — 286,000 Dividend distributions declared, but not paid 65,544 62,494 Issuance of operating partnership units in HTALP in connection with an acquisition — 610 Note receivable retired in connection with an acquisition — 2,494 Redemption of noncontrolling interest 5,195 5,694 |
Organization and Description _2
Organization and Description of Business (Details) | Sep. 30, 2018States |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of states in which the Company operates | 32 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||||||
Cash and cash equivalents | $ 225,518 | $ 9,410 | $ 225,518 | $ 9,410 | $ 100,356 | |
Restricted cash | 14,639 | 17,469 | 14,639 | 17,469 | 18,204 | |
Total cash, cash equivalents and restricted cash | 240,157 | 26,879 | 240,157 | 26,879 | 118,560 | $ 25,045 |
Redeemable noncontrolling interests | 6,610 | 6,737 | 6,610 | 6,737 | 6,737 | 4,653 |
Investment in unconsolidated joint venture | $ 67,592 | $ 67,592 | $ 68,577 | |||
Investment in unconsolidated joint ventures, ownership percentage | 50.00% | 50.00% | ||||
Income (loss) from unconsolidated joint venture | $ 432 | 318 | $ 1,405 | 381 | ||
Capitalized indirect costs | $ 3,700 | |||||
Valuation assumptions, commission percent | 3.00% | |||||
Pro Forma | ||||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||||||
Leasing commissions expense | $ 9,000 | |||||
Pro Forma | Minimum | ||||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||||||
Operating lease expense | $ 6,000 | |||||
NFFO, annualized (in dollars per share) | $ 0.03 | |||||
Pro Forma | Maximum | ||||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||||||
Operating lease expense | $ 8,000 | |||||
NFFO, annualized (in dollars per share) | $ 0.04 | |||||
Building and Building Improvements | ||||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||||||
Depreciation expense | $ 50,200 | 49,800 | $ 151,500 | 121,500 | ||
Healthcare Trust of America Holdings, LP (HTALP) | ||||||
Partners' Capital Notes [Abstract] | ||||||
Limited partner's capital, units issued (in shares) | 3,929,083 | 3,929,083 | 4,124,148 | |||
Limited partner's capital, units outstanding (in shares) | 3,929,083 | 3,929,083 | 4,124,148 | |||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||||||
Cash and cash equivalents | $ 225,518 | $ 225,518 | $ 100,356 | |||
Restricted cash | 14,639 | 14,639 | 18,204 | |||
Total cash, cash equivalents and restricted cash | 240,157 | 26,879 | 240,157 | 26,879 | 118,560 | $ 25,045 |
Redeemable noncontrolling interests | 6,610 | 6,610 | 6,737 | |||
Investment in unconsolidated joint venture | 67,592 | 67,592 | $ 68,577 | |||
Income (loss) from unconsolidated joint venture | $ 432 | $ 318 | $ 1,405 | $ 381 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Reclassifications (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from investing activities: | ||
Other assets | $ 0 | |
Net cash provided by (used in) investing activities | $ 194,846 | (2,483,816) |
Net change in cash, cash equivalents and restricted cash | 1,834 | |
Cash, cash equivalents and restricted cash - beginning of period | 118,560 | 25,045 |
Cash, cash equivalents and restricted cash - end of period | $ 240,157 | 26,879 |
As Previously Reported | ||
Cash flows from investing activities: | ||
Other assets | (3,655) | |
Net cash provided by (used in) investing activities | (2,487,471) | |
Net change in cash, cash equivalents and restricted cash | (1,821) | |
Cash, cash equivalents and restricted cash - beginning of period | 11,231 | |
Cash, cash equivalents and restricted cash - end of period | $ 9,410 |
Investments in Real Estate - Ac
Investments in Real Estate - Acquisitions (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Investments [Abstract] | |
Aggregate purchase price | $ 17.8 |
Closing costs | $ 0.1 |
Investments in Real Estate - Pu
Investments in Real Estate - Purchase Price Allocation (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Asset Acquisition | ||
Land | $ 1,895 | $ 93,064 |
Building and improvements | 14,458 | 2,336,544 |
In place leases | 1,237 | 187,890 |
Below market leases | (201) | (27,817) |
Above market leases | 0 | 11,718 |
Below market leasehold interests | 0 | 54,252 |
Above market leasehold interests | 0 | (8,978) |
Net assets acquired | 17,389 | 2,646,673 |
Other, net | 447 | 60,781 |
Aggregate purchase price | $ 17,836 | $ 2,707,454 |
Investments in Real Estate - We
Investments in Real Estate - Weighted Average Lives (Details) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Investments [Abstract] | ||
Acquired intangible assets (in years) | 5 years 9 months 18 days | 20 years 7 months 6 days |
Acquired intangible liabilities (in years) | 6 years 6 months | 19 years 10 months 18 days |
Dispositions and Impairment (De
Dispositions and Impairment (Details) ft² in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)ft²building | Sep. 30, 2017USD ($)ft²building | Dec. 31, 2017Buildings | |
Real Estate [Line Items] | |||||
Number of disposed assets | 6 | 1 | 4 | ||
Gross leasable area of real estate disposed (in square feet) | ft² | 48 | ||||
Proceeds from the sale of real estate | $ 5,000 | ||||
Impairment | $ 4,281 | $ 0 | $ 8,887 | $ 5,093 | |
Property in Greenville, South Carolina | |||||
Real Estate [Line Items] | |||||
Number of disposed assets | building | 17 | ||||
Gross leasable area of real estate disposed (in square feet) | ft² | 965 | ||||
Proceeds from the sale of real estate | $ 294,300 | ||||
Medical Office Building in Massachusetts | |||||
Real Estate [Line Items] | |||||
Number of disposed assets | building | 2 | ||||
Gross leasable area of real estate disposed (in square feet) | ft² | 120 | ||||
Proceeds from the sale of real estate | $ 11,600 | ||||
Medical Office Buildings in Tennessee, Texas and South Carolina | |||||
Real Estate [Line Items] | |||||
Number of disposed assets | building | 6 | ||||
Impairment | $ 4,300 | $ 8,900 |
Intangible Assets and Liabili_3
Intangible Assets and Liabilities - Summary of Intangible Assets and Liabilities (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Assets | ||
Gross | $ 733,511 | $ 771,643 |
Accumulated amortization | (343,251) | (312,655) |
Total | $ 390,260 | $ 458,988 |
Weighted Average Remaining Amortization in Years | 21 years 7 months 12 days | 19 years 6 months |
Liabilities | ||
Gross | $ 82,135 | $ 82,430 |
Accumulated amortization | (19,248) | (14,227) |
Total | $ 62,887 | $ 68,203 |
Weighted Average Remaining Amortization in Years | 25 years 1 month 6 days | 25 years |
Below market leases | ||
Liabilities | ||
Gross | $ 61,525 | $ 61,820 |
Weighted Average Remaining Amortization in Years | 14 years 7 months 12 days | 14 years 8 months 12 days |
Above market leasehold interests | ||
Liabilities | ||
Gross | $ 20,610 | $ 20,610 |
Weighted Average Remaining Amortization in Years | 49 years 6 months | 50 years 1 month 6 days |
In place leases | ||
Assets | ||
Gross | $ 451,990 | $ 474,252 |
Weighted Average Remaining Amortization in Years | 9 years 9 months 18 days | 9 years 9 months 18 days |
Tenant relationships | ||
Assets | ||
Gross | $ 152,225 | $ 164,947 |
Weighted Average Remaining Amortization in Years | 9 years 4 months 24 days | 10 years 2 months 12 days |
Above market leases | ||
Assets | ||
Gross | $ 37,537 | $ 40,082 |
Weighted Average Remaining Amortization in Years | 6 years 1 month 6 days | 6 years 3 months 18 days |
Below market leasehold interests | ||
Assets | ||
Gross | $ 91,759 | $ 92,362 |
Weighted Average Remaining Amortization in Years | 64 years 6 months | 63 years 4 months 24 days |
Intangible Assets and Liabili_4
Intangible Assets and Liabilities - Summary of Intangible Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Amortization recorded against rental income related to above and (below) market leases | ||||
Schedule of Finite-Lived Intangible Assets and Liabilities [Line Items] | ||||
Amortization of intangible assets and liabilities | $ (352) | $ (108) | $ (660) | $ (371) |
Rental expense related to above and (below) market leasehold interests | ||||
Schedule of Finite-Lived Intangible Assets and Liabilities [Line Items] | ||||
Amortization of intangible assets and liabilities | 287 | 322 | 850 | 617 |
Amortization expense related to in place leases and tenant relationships | ||||
Schedule of Finite-Lived Intangible Assets and Liabilities [Line Items] | ||||
Amortization of intangible assets and liabilities | $ 18,475 | $ 18,757 | $ 52,800 | $ 45,944 |
Receivables and Other Assets -
Receivables and Other Assets - Schedule of Receivables and Other Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Receivables and Other Assets [Abstract] | ||
Tenant receivables, net | $ 13,062 | $ 20,269 |
Other receivables, net | 15,067 | 9,305 |
Deferred financing costs, net | 6,480 | 7,759 |
Deferred leasing costs, net | 28,783 | 25,494 |
Straight-line rent receivables, net | 89,531 | 85,143 |
Prepaid expenses, deposits, equipment and other, net | 58,971 | 58,358 |
Derivative financial instruments - interest rate swaps | 1,588 | 1,529 |
Total | $ 213,482 | $ 207,857 |
Receivables and Other Assets _2
Receivables and Other Assets - Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Receivables and Other Assets [Abstract] | ||||
Amortization expense related to deferred leasing costs | $ 1,357 | $ 1,445 | $ 4,166 | $ 4,179 |
Interest expense related to deferred financing costs | $ 431 | $ 398 | $ 1,293 | $ 1,061 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Instrument | ||
Total debt, gross | $ 2,629,230 | $ 2,802,442 |
Deferred financing costs, net | (14,448) | (15,850) |
Discount, net | (5,123) | (5,561) |
Total | 2,609,659 | 2,781,031 |
Unsecured term loans | ||
Debt Instrument | ||
Total debt, gross | 500,000 | 500,000 |
Unsecured senior notes | ||
Debt Instrument | ||
Total debt, gross | 1,850,000 | 1,850,000 |
Mortgages | Fixed rate mortgages | ||
Debt Instrument | ||
Total debt, gross | 279,230 | 414,524 |
Mortgages | Variable rate mortgages | ||
Debt Instrument | ||
Total debt, gross | 0 | 37,918 |
Unsecured revolving credit facility | ||
Debt Instrument | ||
Unsecured revolving credit facility | $ 0 | $ 0 |
Debt - Narrative (Details)
Debt - Narrative (Details) | Aug. 01, 2018 | Oct. 26, 2018USD ($) | Aug. 31, 2018USD ($) | Jun. 30, 2018USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($)payment |
Debt Instrument | |||||||||
Outstanding amount | $ 2,629,230,000 | $ 2,629,230,000 | $ 2,802,442,000 | ||||||
Loss on extinguishment of debt, net | (1,092,000) | $ (774,000) | (1,092,000) | $ (11,192,000) | |||||
Subsequent Event | |||||||||
Debt Instrument | |||||||||
Repayments of debt | $ 67,200,000 | ||||||||
Healthcare Trust of America Holdings, LP (HTALP) | |||||||||
Debt Instrument | |||||||||
Loss on extinguishment of debt, net | (1,092,000) | $ (774,000) | (1,092,000) | $ (11,192,000) | |||||
Unsecured term loans | |||||||||
Debt Instrument | |||||||||
Outstanding amount | 500,000,000 | 500,000,000 | 500,000,000 | ||||||
Unsecured term loans | $300.0 Million Unsecured Term Loan due 2023 | |||||||||
Debt Instrument | |||||||||
Outstanding amount | $ 300,000,000 | $ 300,000,000 | 300,000,000 | ||||||
Basis spread on variable rate | 1.10% | ||||||||
Weighted average interest rate with interest rate swap impact | 3.46% | 3.46% | |||||||
Unsecured term loans | $300.0 Million Unsecured Term Loan due 2023 | LIBOR | Minimum | |||||||||
Debt Instrument | |||||||||
Basis spread on variable rate | 0.90% | ||||||||
Unsecured term loans | $300.0 Million Unsecured Term Loan due 2023 | LIBOR | Maximum | |||||||||
Debt Instrument | |||||||||
Basis spread on variable rate | 1.75% | ||||||||
Unsecured term loans | $200.0 Million Unsecured Term Loan due 2023 | Healthcare Trust of America Holdings, LP (HTALP) | |||||||||
Debt Instrument | |||||||||
Outstanding amount | $ 200,000,000 | $ 200,000,000 | |||||||
Basis spread on variable rate | 0.65% | 1.00% | |||||||
Weighted average interest rate with interest rate swap impact | 2.70% | 2.70% | |||||||
Debt instrument, face amount | $ 200,000,000 | $ 200,000,000 | |||||||
Unsecured term loans | $200.0 Million Unsecured Term Loan due 2023 | LIBOR | Minimum | Healthcare Trust of America Holdings, LP (HTALP) | |||||||||
Debt Instrument | |||||||||
Basis spread on variable rate | 0.75% | ||||||||
Unsecured term loans | $200.0 Million Unsecured Term Loan due 2023 | LIBOR | Maximum | Healthcare Trust of America Holdings, LP (HTALP) | |||||||||
Debt Instrument | |||||||||
Basis spread on variable rate | 1.65% | ||||||||
Unsecured senior notes | |||||||||
Debt Instrument | |||||||||
Outstanding amount | 1,850,000,000 | $ 1,850,000,000 | 1,850,000,000 | ||||||
Unsecured senior notes | $300.0 Million Unsecured Senior Notes due 2021 | Healthcare Trust of America Holdings, LP (HTALP) | |||||||||
Debt Instrument | |||||||||
Outstanding amount | 300,000,000 | 300,000,000 | |||||||
Debt instrument, face amount | $ 300,000,000 | $ 300,000,000 | |||||||
Debt instrument, stated interest rate | 3.38% | 3.38% | |||||||
Debt instrument, percentage of principal amount received | 99.21% | 99.21% | |||||||
Debt instrument, effective interest rate | 3.50% | 3.50% | |||||||
Unsecured senior notes | $400.0 Million Unsecured Senior Notes due 2022 | Healthcare Trust of America Holdings, LP (HTALP) | |||||||||
Debt Instrument | |||||||||
Outstanding amount | $ 400,000,000 | $ 400,000,000 | |||||||
Debt instrument, face amount | $ 400,000,000 | ||||||||
Debt instrument, stated interest rate | 2.95% | ||||||||
Debt instrument, percentage of principal amount received | 99.94% | ||||||||
Debt instrument, effective interest rate | 2.96% | ||||||||
Unsecured senior notes | $500.0 Million Unsecured Senior Notes due 2027 | Healthcare Trust of America Holdings, LP (HTALP) | |||||||||
Debt Instrument | |||||||||
Outstanding amount | 500,000,000 | 500,000,000 | |||||||
Debt instrument, face amount | $ 500,000,000 | ||||||||
Debt instrument, stated interest rate | 3.75% | ||||||||
Debt instrument, percentage of principal amount received | 99.49% | ||||||||
Debt instrument, effective interest rate | 3.81% | ||||||||
Unsecured senior notes | $300.0 Million Unsecured Senior Notes due 2023 | Healthcare Trust of America Holdings, LP (HTALP) | |||||||||
Debt Instrument | |||||||||
Debt instrument, face amount | $ 300,000,000 | $ 300,000,000 | |||||||
Debt instrument, stated interest rate | 3.70% | 3.70% | |||||||
Debt instrument, percentage of principal amount received | 99.19% | 99.19% | |||||||
Debt instrument, effective interest rate | 3.80% | 3.80% | |||||||
Unsecured senior notes | $350.0 Million Unsecured Senior Notes due 2026 | Healthcare Trust of America Holdings, LP (HTALP) | |||||||||
Debt Instrument | |||||||||
Debt instrument, face amount | $ 350,000,000 | $ 350,000,000 | |||||||
Debt instrument, stated interest rate | 3.50% | 3.50% | |||||||
Debt instrument, percentage of principal amount received | 99.72% | 99.72% | |||||||
Debt instrument, effective interest rate | 3.53% | 3.53% | |||||||
Secured Debt | Seller Financing Debt | |||||||||
Debt Instrument | |||||||||
Outstanding amount | $ 190,000,000 | $ 190,000,000 | |||||||
Debt instrument, face amount | $ 286,000,000 | ||||||||
Debt instrument, stated interest rate | 4.00% | ||||||||
Debt instrument interest payable, number of payments | payment | 3 | ||||||||
Repayments of debt | $ 96,000,000 | ||||||||
Mortgages | |||||||||
Debt Instrument | |||||||||
Repayments of debt | $ 72,600,000 | ||||||||
Loss on extinguishment of debt, net | $ 1,100,000 | ||||||||
Mortgages | Healthcare Trust of America Holdings, LP (HTALP) | |||||||||
Debt Instrument | |||||||||
Weighted average interest rate | 4.32% | 4.32% | |||||||
Mortgages | Minimum | Healthcare Trust of America Holdings, LP (HTALP) | |||||||||
Debt Instrument | |||||||||
Debt instrument, effective interest rate | 2.85% | 2.85% | |||||||
Mortgages | Maximum | Healthcare Trust of America Holdings, LP (HTALP) | |||||||||
Debt Instrument | |||||||||
Debt instrument, effective interest rate | 5.50% | 5.50% | |||||||
Unsecured revolving credit facility | |||||||||
Debt Instrument | |||||||||
Line of credit facility, borrowing capacity | $ 1,300,000,000 | ||||||||
Maximum borrowing capacity, conditional increase | 750,000,000 | ||||||||
Conditional maximum borrowing capacity | 2,050,000,000 | ||||||||
Basis spread on variable rate | 1.00% | ||||||||
Line of credit facility, commitment fee | 0.20% | ||||||||
Unsecured revolving credit facility | Minimum | |||||||||
Debt Instrument | |||||||||
Line of credit facility, commitment fee | 0.13% | ||||||||
Unsecured revolving credit facility | Maximum | |||||||||
Debt Instrument | |||||||||
Line of credit facility, commitment fee | 0.30% | ||||||||
Unsecured revolving credit facility | LIBOR | Minimum | |||||||||
Debt Instrument | |||||||||
Basis spread on variable rate | 0.83% | ||||||||
Unsecured revolving credit facility | LIBOR | Maximum | |||||||||
Debt Instrument | |||||||||
Basis spread on variable rate | 1.55% | ||||||||
Unsecured revolving credit facility | Line of Credit | |||||||||
Debt Instrument | |||||||||
Line of credit facility, borrowing capacity | $ 1,000,000,000 |
Debt - Principal Maturity Sched
Debt - Principal Maturity Schedule (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
2,018 | $ 1,086 | |
2,019 | 99,453 | |
2,020 | 99,641 | |
2,021 | 304,840 | |
2,022 | 462,089 | |
Thereafter | 1,662,121 | |
Total | $ 2,629,230 | $ 2,802,442 |
Debt - Amortization of Deferred
Debt - Amortization of Deferred Financing Costs (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
2,018 | $ 764 | |
2,019 | 2,956 | |
2,020 | 2,894 | |
2,021 | 2,721 | |
2,022 | 2,098 | |
Thereafter | 3,015 | |
Total | $ 14,448 | $ 15,850 |
Derivative Financial Instrume_3
Derivative Financial Instruments and Hedging Activities - Table of Derivative Financial Instruments (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($)derivative | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)derivative | Sep. 30, 2017USD ($) | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Cash flow hedge gain (loss) expected to be reclassified during the next 12 months | $ 1,200,000 | |||
Derivative | ||||
Gain on change in fair value of derivative financial instruments, net | $ 0 | $ 0 | $ 0 | $ 884,000 |
Cash Flow Hedging | Designated as Hedging Instrument | Interest rate swaps | ||||
Derivative | ||||
Number of instruments (in derivatives) | derivative | 2 | 2 | ||
Notional amount | $ 155,000,000 | $ 155,000,000 |
Derivative Financial Instrume_4
Derivative Financial Instruments and Hedging Activities - Derivative Instruments Fair Value Table (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018USD ($)derivative | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)derivative | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Derivatives, Fair Value | |||||
Asset Derivatives | $ 1,588 | $ 1,588 | $ 1,529 | ||
Liability Derivatives | $ 0 | $ 0 | 1,089 | ||
Designated as Hedging Instrument | Cash Flow Hedging | |||||
Derivatives, Fair Value | |||||
Number of instruments canceled | derivative | 3 | 3 | |||
Forecasted gain to be reclassified but no longer expected to occur | $ 600 | $ 600 | |||
Designated as Hedging Instrument | Cash Flow Hedging | Interest rate swaps | |||||
Derivatives, Fair Value | |||||
Gain (Loss) Recognized in OCI on Derivative (Effective Portion) | 96 | $ 9 | 1,437 | $ (1,196) | |
Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | 223 | $ (196) | 450 | $ (565) | |
Designated as Hedging Instrument | Cash Flow Hedging | Interest rate swaps | Receivables and other assets | |||||
Derivatives, Fair Value | |||||
Asset Derivatives | 1,588 | 1,588 | 1,529 | ||
Designated as Hedging Instrument | Cash Flow Hedging | Interest rate swaps | Derivative financial instruments | |||||
Derivatives, Fair Value | |||||
Liability Derivatives | $ 0 | $ 0 | $ 1,089 |
Derivative Financial Instrume_5
Derivative Financial Instruments and Hedging Activities - Derivative Offsetting (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Offsetting of Derivative Assets | ||
Asset Derivatives | $ 1,588 | $ 1,529 |
Gross Amounts in the Consolidated Balance Sheets | 0 | 0 |
Net Amounts of Assets Presented in the Consolidated Balance Sheets | 1,588 | 1,529 |
Financial Instruments | 0 | 0 |
Cash Collateral Received | 0 | 0 |
Net Amount | 1,588 | 1,529 |
Offsetting of Derivative Liabilities | ||
Liability Derivatives | 0 | 1,089 |
Gross Amounts in the Consolidated Balance Sheets | 0 | 0 |
Net Amounts of Liabilities Presented in the Consolidated Balance Sheets | 0 | 1,089 |
Financial Instruments | 0 | 0 |
Cash Collateral Received | 0 | 0 |
Net Amount | $ 0 | $ 1,089 |
Redeemable NCI (Details)
Redeemable NCI (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Temporary Equity Disclosure [Abstract] | ||
Redeemable noncontrolling interests, percentage | 14.30% | |
Increase (Decrease) in Temporary Equity [Roll Forward] | ||
Beginning balance | $ 6,737 | $ 4,653 |
Net income attributable to noncontrolling interests | 65 | 123 |
Distributions | (192) | (53) |
Fair value adjustment | 0 | 2,014 |
Ending balance | $ 6,610 | $ 6,737 |
Stockholders' Equity and Part_3
Stockholders' Equity and Partners' Capital - Narrative (Details) | Oct. 25, 2018$ / shares | Oct. 26, 2018USD ($)$ / sharesshares | Jun. 30, 2018USD ($)$ / shares | Oct. 31, 2017shares | Sep. 30, 2018USD ($)$ / sharesshares | Sep. 30, 2017USD ($)$ / shares | Sep. 30, 2018USD ($)$ / sharesshares | Sep. 30, 2017USD ($)$ / shares | Aug. 31, 2018USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock issued on a forward basis | shares | 2,600,000 | 2,600,000 | 2,600,000 | ||||||
Stock issued, value, issued on a forward basis | $ 73,800,000 | ||||||||
Stock issued share price (in dollars per share) | $ / shares | $ 28.94 | ||||||||
Stock repurchase program, authorized amount | $ 300,000,000 | ||||||||
Shares repurchased during period | shares | 628,002 | ||||||||
Shares repurchased during period (in dollars per share) | $ / shares | $ 26.25 | ||||||||
Stock repurchased during period, value | $ 16,500,000 | ||||||||
Remaining amount of common stock available for repurchase | $ 283,500,000 | $ 283,500,000 | |||||||
Common Stock Dividends | |||||||||
Dividends declared (in dollars per share) | $ / shares | $ 0.310 | $ 0.305 | $ 0.920 | $ 0.905 | |||||
Restricted Common Stock | |||||||||
Incentive Plan | |||||||||
Nonvested awards, total compensation cost not yet recognized | $ 8,800,000 | $ 8,800,000 | |||||||
Period for recognition (in years) | 1 year 6 months | ||||||||
Restricted Common Stock | General and Administrative Expense | |||||||||
Incentive Plan | |||||||||
Compensation expense | $ 2,100,000 | $ 1,700,000 | $ 7,800,000 | $ 5,500,000 | |||||
2006 Incentive Plan | |||||||||
Incentive Plan | |||||||||
Number of shares authorized (in shares) | shares | 5,000,000 | 5,000,000 | |||||||
Number of shares available for grant (in shares) | shares | 1,370,792 | 1,370,792 | |||||||
Subsequent Event | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares repurchased during period | shares | 289,519 | ||||||||
Shares repurchased during period (in dollars per share) | $ / shares | $ 25.69 | ||||||||
Stock repurchased during period, value | $ 7,400,000 | ||||||||
Common Stock Dividends | |||||||||
Dividends declared (in dollars per share) | $ / shares | $ 0.310 | ||||||||
Healthcare Trust of America Holdings, LP (HTALP) | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Dividend distribution ratio | 1 | ||||||||
Common Stock Dividends | |||||||||
Dividends declared (in dollars per share) | $ / shares | $ 0.310 | $ 0.305 | $ 0.920 | $ 0.905 |
Stockholders' Equity and Part_4
Stockholders' Equity and Partners' Capital - Restricted Common Stock Activity (Details) - Restricted Common Stock - $ / shares | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Restricted Common Stock | ||
Balance as of beginning of period (in shares) | 589,606 | 640,870 |
Granted (in shares) | 360,700 | 292,109 |
Vested (in shares) | (255,946) | (278,821) |
Forfeited (in shares) | (38,882) | (58,384) |
Balance as of end of period (in shares) | 655,478 | 595,774 |
Weighted Average Grant Date Fair Value | ||
Balance as of beginning of period (in dollars per share) | $ 29.38 | $ 27.36 |
Granted (in dollars per share) | 28.70 | 29.75 |
Vested (in dollars per share) | 28.68 | 25.31 |
Forfeited (in dollars per share) | 28.97 | 28.86 |
Balance as of end of period (in dollars per share) | $ 29.30 | $ 29.39 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Assets and Liabilities at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Assets: | ||
Derivative financial instruments, asset | $ 1,588 | $ 1,529 |
Liabilities: | ||
Derivative financial instrument, liability | 0 | 1,089 |
Fair Value, Measurements, Recurring | ||
Assets: | ||
Derivative financial instruments, asset | 1,588 | 1,529 |
Liabilities: | ||
Derivative financial instrument, liability | 0 | 1,089 |
Fair Value, Measurements, Recurring | Level 1 | ||
Assets: | ||
Derivative financial instruments, asset | 0 | 0 |
Liabilities: | ||
Derivative financial instrument, liability | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | ||
Assets: | ||
Derivative financial instruments, asset | 1,588 | 1,529 |
Liabilities: | ||
Derivative financial instrument, liability | 0 | 1,089 |
Fair Value, Measurements, Recurring | Level 3 | ||
Assets: | ||
Derivative financial instruments, asset | 0 | 0 |
Liabilities: | ||
Derivative financial instrument, liability | $ 0 | $ 0 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Assets on Nonrecurring Basis (Details) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018USD ($)building | Sep. 30, 2017building | Dec. 31, 2017USD ($)Buildings | |
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Line Items] | |||
Impairment charges on MOB | $ 8,900 | $ 13,900 | |
Number of disposed assets | 6 | 1 | 4 |
Fair Value, Measurements, Nonrecurring | |||
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Line Items] | |||
Assets: MOB | $ 10,110 | $ 10,271 | |
Fair Value, Measurements, Nonrecurring | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Line Items] | |||
Assets: MOB | 0 | 0 | |
Fair Value, Measurements, Nonrecurring | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Line Items] | |||
Assets: MOB | 10,110 | 10,271 | |
Fair Value, Measurements, Nonrecurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Line Items] | |||
Assets: MOB | $ 0 | $ 0 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value Disclosures [Abstract] | ||
Debt, fair value | $ 2,550,000 | $ 2,826,300 |
Debt, carrying value | $ 2,609,659 | $ 2,781,031 |
Per Share Data of HTA (Details)
Per Share Data of HTA (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Jun. 30, 2018 | Oct. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Earnings Per Share | |||||||
Forward equity agreement, shares to be sold | 2,600 | 2,600 | 2,600 | ||||
Stock issued, value, issued on a forward basis | $ 73,800 | ||||||
Stock issued share price (in dollars per share) | $ 28.94 | ||||||
Antidilutive effect of forward equity sales agreement (in shares) | 330 | ||||||
Numerator: | |||||||
Net income | $ 176,348 | $ 13,957 | $ 202,021 | $ 22,105 | |||
Net income attributable to noncontrolling interests | [1] | (3,362) | (194) | (3,887) | (715) | ||
Net income (loss) attributable to common stockholders/unitholders | $ 172,986 | $ 13,763 | $ 198,134 | $ 21,390 | |||
Denominator: | |||||||
Weighted average shares/units outstanding - basic (in shares) | 207,513 | 200,674 | 205,950 | 173,189 | |||
Adjusted weighted average number of shares/units outstanding — diluted (in shares) | 211,444 | 204,795 | 209,968 | 177,410 | |||
Earnings per common share - basic | |||||||
Net income (loss) attributable to common stockholders/unitholders (in dollars per share) | $ 0.83 | $ 0.07 | $ 0.96 | $ 0.12 | |||
Earnings per common share - diluted | |||||||
Net income (loss) attributable to common stockholders/unitholders (in dollars per share) | $ 0.82 | $ 0.07 | $ 0.94 | $ 0.12 | |||
HTA, Inc. | |||||||
Numerator: | |||||||
Net income | $ 176,348 | $ 13,957 | $ 202,021 | $ 22,105 | |||
Net income attributable to noncontrolling interests | (3,362) | (194) | (3,887) | (715) | |||
Net income (loss) attributable to common stockholders/unitholders | $ 172,986 | $ 13,763 | $ 198,134 | $ 21,390 | |||
Denominator: | |||||||
Weighted average shares/units outstanding - basic (in shares) | 207,513 | 200,674 | 205,950 | 173,189 | |||
Dilutive shares - partnership units convertible into common stock (in shares) | 3,931 | 4,121 | 4,018 | 4,221 | |||
Adjusted weighted average number of shares/units outstanding — diluted (in shares) | 211,444 | 204,795 | 209,968 | 177,410 | |||
Earnings per common share - basic | |||||||
Net income (loss) attributable to common stockholders/unitholders (in dollars per share) | $ 0.83 | $ 0.07 | $ 0.96 | $ 0.12 | |||
Earnings per common share - diluted | |||||||
Net income (loss) attributable to common stockholders/unitholders (in dollars per share) | $ 0.82 | $ 0.07 | $ 0.94 | $ 0.12 | |||
[1] | Includes amounts attributable to redeemable noncontrolling interests. |
Per Unit Data of HTALP (Details
Per Unit Data of HTALP (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||||||
Forward equity agreement, shares to be sold | 2,600 | 2,600 | 2,600 | |||
Numerator: | ||||||
Net income | $ 176,348 | $ 13,957 | $ 202,021 | $ 22,105 | ||
Net income attributable to noncontrolling interests | [1] | (3,362) | (194) | (3,887) | (715) | |
Net income (loss) attributable to common stockholders/unitholders | $ 172,986 | $ 13,763 | $ 198,134 | $ 21,390 | ||
Denominator: | ||||||
Weighted average shares/units outstanding - basic (in shares) | 207,513 | 200,674 | 205,950 | 173,189 | ||
Adjusted weighted average number of shares/units outstanding — diluted (in shares) | 211,444 | 204,795 | 209,968 | 177,410 | ||
Earnings per common unit - basic: | ||||||
Net income (loss) attributable to common stockholders/unitholders (in dollars per share) | $ 0.83 | $ 0.07 | $ 0.96 | $ 0.12 | ||
Earnings per common unit - diluted: | ||||||
Net income (loss) attributable to common stockholders/unitholders (in dollars per share) | $ 0.82 | $ 0.07 | $ 0.94 | $ 0.12 | ||
Healthcare Trust of America Holdings, LP (HTALP) | ||||||
Numerator: | ||||||
Net income | $ 176,348 | $ 13,957 | $ 202,021 | $ 22,105 | ||
Net income attributable to noncontrolling interests | (18) | (28) | (65) | (80) | ||
Net income (loss) attributable to common stockholders/unitholders | $ 176,330 | $ 13,929 | $ 201,956 | $ 22,025 | ||
Denominator: | ||||||
Weighted average shares/units outstanding - basic (in shares) | 211,444 | 204,795 | 209,968 | 177,410 | ||
Dilutive units - partnership units convertible into common units (in shares) | 0 | 0 | 0 | 0 | ||
Adjusted weighted average number of shares/units outstanding — diluted (in shares) | 211,444 | 204,795 | 209,968 | 177,410 | ||
Earnings per common unit - basic: | ||||||
Net income (loss) attributable to common stockholders/unitholders (in dollars per share) | $ 0.83 | $ 0.07 | $ 0.96 | $ 0.12 | ||
Earnings per common unit - diluted: | ||||||
Net income (loss) attributable to common stockholders/unitholders (in dollars per share) | $ 0.83 | $ 0.07 | $ 0.96 | $ 0.12 | ||
[1] | Includes amounts attributable to redeemable noncontrolling interests. |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Supplemental Disclosure of Cash Flow Information: | ||
Interest paid | $ 87,303 | $ 51,066 |
Income taxes paid | 1,656 | 997 |
Supplemental Disclosure of Noncash Investing and Financing Activities: | ||
Accrued capital expenditures | 243 | 4,185 |
Debt assumed and entered into in connection with an acquisition | 0 | 286,000 |
Dividend distributions declared, but not paid | 65,544 | 62,494 |
Issuance of operating partnership units in HTALP in connection with an acquisition | 0 | 610 |
Note receivable retired in connection with an acquisition | 0 | 2,494 |
Redemption of noncontrolling interest | $ 5,195 | $ 5,694 |