Document and Entity Information
Document and Entity Information - shares shares in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Nov. 10, 2015 | |
Entity Information | ||
Entity Registrant Name | COLE REAL ESTATE INCOME STRATEGY (DAILY NAV), INC. | |
Entity Central Index Key | 1,498,542 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Wrap Class common stock | ||
Entity Information | ||
Entity Common Stock, Shares Outstanding | 8,900 | |
Advisor Class common stock | ||
Entity Information | ||
Entity Common Stock, Shares Outstanding | 1,100 | |
Institutional Class common stock | ||
Entity Information | ||
Entity Common Stock, Shares Outstanding | 547 |
Condensed Consolidated Unaudite
Condensed Consolidated Unaudited Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Investment in real estate assets: | ||
Land | $ 39,952 | $ 46,455 |
Buildings and improvements, less accumulated depreciation of $6,991 and $4,459, respectively | 148,105 | 152,197 |
Acquired intangible lease assets, less accumulated amortization of $3,896 and $2,521, respectively | 24,659 | 26,853 |
Total investment in real estate assets, net | 212,716 | 225,505 |
Investment in marketable securities | 4,623 | 490 |
Total investment in real estate assets and marketable securities, net | 217,339 | 225,995 |
Cash and cash equivalents | 13,250 | 4,489 |
Restricted cash | 512 | 25 |
Rents and tenant receivables | 1,826 | 1,267 |
Property escrow deposits, prepaid expenses and other assets | 883 | 364 |
Deferred financing costs, less accumulated amortization of $1,540 and $1,216, respectively | 2,699 | 1,796 |
Total assets | 236,509 | 233,936 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Line of credit and notes payable | 100,254 | 120,304 |
Accounts payable and accrued expenses | 1,313 | 1,188 |
Escrowed investor proceeds | 457 | 25 |
Due to affiliates | 1,280 | 1,816 |
Acquired below market lease intangibles, less accumulated amortization of $419 and $279, respectively | 1,902 | 2,058 |
Distributions payable | 664 | 595 |
Derivative liability, deferred rental income and other liabilities | 1,461 | 585 |
Total liabilities | $ 107,331 | $ 126,571 |
Commitments and contingencies | ||
Redeemable common stock | $ 15,149 | $ 12,545 |
STOCKHOLDERS’ EQUITY | ||
Preferred stock, $0.01 par value; 10,000,000 shares authorized, none issued and outstanding | 0 | 0 |
Capital in excess of par value | 122,207 | 104,284 |
Accumulated distributions in excess of earnings | (7,498) | (9,539) |
Accumulated other comprehensive (loss) income | (763) | 3 |
Total stockholders’ equity | 114,029 | 94,820 |
Total liabilities and stockholders’ equity | 236,509 | 233,936 |
A Shares common stock, $0.01 par value; 163,000,000 shares authorized, 1,016,684 and 897,376 shares issued and outstanding, respectively | ||
STOCKHOLDERS’ EQUITY | ||
Common stock | 10 | 9 |
I Shares common stock, $0.01 par value; 163,000,000 shares authorized, 543,296 and 256,525 shares issued and outstanding, respectively | ||
STOCKHOLDERS’ EQUITY | ||
Common stock | 6 | 3 |
W Shares common stock, $0.01 par value; 164,000,000 shares authorized, 6,781,306 and 6,012,043 shares issued and outstanding, respectively | ||
STOCKHOLDERS’ EQUITY | ||
Common stock | $ 67 | $ 60 |
Condensed Consolidated Unaudit3
Condensed Consolidated Unaudited Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Buildings and improvements, less accumulated depreciation of $6,991 and $4,459, respectively | $ 6,991 | $ 4,459 |
Acquired intangible lease assets, less accumulated amortization of $3,896 and $2,521, respectively | 3,896 | 2,521 |
Deferred financing costs, less accumulated amortization of $1,540 and $1,216, respectively | 1,540 | 1,216 |
Acquired below market lease intangibles, less accumulated amortization of $419 and $279, respectively | $ 419 | $ 279 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common Class A | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 163,000,000 | 163,000,000 |
Common stock, shares issued | 1,016,684 | 897,376 |
Common stock, shares outstanding | 1,016,684 | 897,376 |
Common Class I | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 163,000,000 | 163,000,000 |
Common stock, shares issued | 543,296 | 256,525 |
Common stock, shares outstanding | 543,296 | 256,525 |
Common Class W | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 164,000,000 | 164,000,000 |
Common stock, shares issued | 6,781,306 | 6,012,043 |
Common stock, shares outstanding | 6,781,306 | 6,012,043 |
Condensed Consolidated Unaudit4
Condensed Consolidated Unaudited Statement of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenues: | ||||
Rental and other property income | $ 4,170 | $ 3,224 | $ 12,895 | $ 7,884 |
Tenant reimbursement income | 547 | 216 | 1,194 | 593 |
Interest income on marketable securities | 28 | 2 | 48 | 6 |
Total revenue | 4,745 | 3,442 | 14,137 | 8,483 |
Expenses: | ||||
General and administrative expenses | 452 | 396 | 1,305 | 936 |
Property operating expenses | 162 | 94 | 494 | 294 |
Real estate tax expenses | 426 | 165 | 841 | 404 |
Advisory expenses | 693 | 304 | 1,686 | 676 |
Acquisition related expenses | 150 | 639 | 217 | 1,222 |
Depreciation | 1,048 | 815 | 3,194 | 1,953 |
Amortization | 498 | 407 | 1,548 | 979 |
Total operating expenses | 3,429 | 2,820 | 9,285 | 6,464 |
Operating income before gain on disposition | 1,316 | 622 | 4,852 | 2,019 |
Gain on disposition of real estate, net | 964 | 0 | 5,642 | 0 |
Income from operations | 2,280 | 622 | 10,494 | 2,019 |
Other expense: | ||||
Interest and other expense, net | (1,152) | (703) | (2,920) | (1,704) |
Net income (loss) | $ 1,128 | $ (81) | $ 7,574 | $ 315 |
Weighted average number of common shares outstanding: | ||||
Basic and diluted (shares) | 8,031,003 | 6,800,702 | 7,567,349 | 5,551,843 |
Net income (loss) per common share: | ||||
Basic and diluted (usd per share) | $ 0.14 | $ (0.01) | $ 1 | $ 0.06 |
Distributions declared per common share (usd per share) | $ 0.25 | $ 0.25 | $ 0.73 | $ 0.72 |
Condensed Consolidated Unaudit5
Condensed Consolidated Unaudited Statement of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 1,128 | $ (81) | $ 7,574 | $ 315 |
Other comprehensive (loss) income: | ||||
Unrealized gain (loss) on marketable securities | 25 | (2) | (29) | 4 |
Unrealized loss on interest rate swaps | (700) | 0 | (874) | 0 |
Amount of loss reclassified from other comprehensive (loss) income into income as interest expense | 137 | 0 | 137 | 0 |
Total other comprehensive (loss) income | (538) | (2) | (766) | 4 |
Comprehensive income (loss) | $ 590 | $ (83) | $ 6,808 | $ 319 |
Condensed Consolidated Unaudit6
Condensed Consolidated Unaudited Statement of Stockholders' Equity - 9 months ended Sep. 30, 2015 - USD ($) $ in Thousands | Total | Common Class A | Common Class I | Common Class W | Common StockCommon Class A | Common StockCommon Class I | Common StockCommon Class W | Capital in Excess of Par Value | Accumulated Distributions in Excess of Earnings | Accumulated Other Comprehensive Income (loss) |
Balance, shares at Dec. 31, 2014 | 897,376 | 256,525 | 6,012,043 | 897,376 | 256,525 | 6,012,043 | ||||
Balance at Dec. 31, 2014 | $ 94,820 | $ 9 | $ 3 | $ 60 | $ 104,284 | $ (9,539) | $ 3 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Issuance of common stock, shares | 176,510 | 61,491 | 1,458,136 | |||||||
Issuance of common stock | 30,810 | $ 2 | $ 1 | $ 14 | 30,793 | |||||
Conversion of shares, shares | 225,280 | (226,091) | ||||||||
Conversion of shares | $ 2 | $ (2) | ||||||||
Distributions to investors | (5,533) | (5,533) | ||||||||
Commissions on stock sales and related distribution and dealer manager fees | (674) | (674) | ||||||||
Other offering costs | (230) | (230) | ||||||||
Redemptions of common stock, shares | (57,202) | (462,782) | ||||||||
Redemptions of common stock | (9,368) | $ (1) | $ (5) | (9,362) | ||||||
Changes in redeemable common stock | (2,604) | (2,604) | ||||||||
Comprehensive income (loss) | 6,808 | 7,574 | (766) | |||||||
Balance, shares at Sep. 30, 2015 | 1,016,684 | 543,296 | 6,781,306 | 1,016,684 | 543,296 | 6,781,306 | ||||
Balance at Sep. 30, 2015 | $ 114,029 | $ 10 | $ 6 | $ 67 | $ 122,207 | $ (7,498) | $ (763) |
Condensed Consolidated Unaudit7
Condensed Consolidated Unaudited Statement of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Net income | $ 7,574 | $ 315 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 3,194 | 1,953 |
Amortization of intangible lease assets and below market lease intangibles, net | 1,688 | 979 |
Straight-line rental income | (543) | (214) |
Amortization of deferred financing costs | 324 | 637 |
Amortization on marketable securities, net | 8 | 1 |
Gain on disposition of real estate assets, net | (5,642) | 0 |
Loss (Gain) on sale of marketable securities | 12 | (2) |
Bad debt expense | 2 | 0 |
Changes in assets and liabilities: | ||
Rents and tenant receivables | (422) | (182) |
Prepaid expenses and other assets | 66 | (191) |
Accounts payable and accrued expenses | 125 | 351 |
Derivative liability, deferred rental income and other liabilities | 139 | 271 |
Due to affiliates | (597) | (187) |
Net cash provided by operating activities | 5,928 | 3,731 |
Cash flows from investing activities: | ||
Investment in real estate assets and capital expenditures | (7,601) | (121,499) |
Investment in marketable securities | (5,899) | (265) |
Proceeds from sale and maturities of marketable securities | 1,717 | 226 |
Proceeds from disposition of real estate assets | 21,398 | 0 |
Payment of property escrow deposits | (585) | 0 |
Change in restricted cash | (487) | 29 |
Net cash provided by (used in) investing activities | 8,543 | (121,509) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 28,445 | 57,657 |
Offering costs on issuance of common stock | (843) | (1,187) |
Redemptions of common stock | (9,368) | (3,113) |
Distributions to investors | (3,099) | (2,222) |
Proceeds from line of credit and note payable | 62,950 | 111,804 |
Repayments of line of credit | (83,000) | (42,954) |
Proceeds from line of credit with affiliate | 10,000 | 0 |
Repayments of line of credit with affiliate | (10,000) | 0 |
Deferred financing costs paid | (1,227) | (2,037) |
Change in escrowed investor proceeds liability | 432 | (29) |
Net cash (used in) provided by financing activities | (5,710) | 117,919 |
Net increase in cash and cash equivalents | 8,761 | 141 |
Cash and cash equivalents, beginning of period | 4,489 | 5,370 |
Cash and cash equivalents, end of period | 13,250 | 5,511 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Accrued dealer manager fee, distribution fee, and other offering costs | 334 | 340 |
Distributions declared and unpaid | 664 | 580 |
Common stock issued through distribution reinvestment plan | 2,365 | 1,531 |
Unrealized (loss) gain on marketable securities | (29) | 4 |
Net unrealized loss on interest rate swap | (737) | 0 |
Accrued capital expenditures and deferred financing costs | 0 | 125 |
Supplemental cash flow disclosures: | ||
Interest paid | $ 2,460 | $ 1,029 |
Organization and Business
Organization and Business | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BUSINESS | ORGANIZATION AND BUSINESS Cole Real Estate Income Strategy (Daily NAV), Inc. (the “Company”) is a Maryland corporation, incorporated on July 27, 2010, that qualified, as a real estate investment trust (“REIT”) for U.S. federal income tax purposes beginning in the taxable year ended December 31, 2012. Substantially all of the Company’s business is conducted through Cole Real Estate Income Strategy (Daily NAV) Operating Partnership, LP (“Cole OP”), a Delaware limited partnership. The Company is the sole general partner of, and owns, directly or indirectly, 100% of the partnership interest in, Cole OP. The Company is externally managed by Cole Real Estate Income Strategy (Daily NAV) Advisors, LLC, a Delaware limited liability company (“Cole Advisors”), an affiliate of the Company’s sponsor, Cole Capital ® , which is a trade name used to refer to a group of affiliated entities directly or indirectly controlled by VEREIT, Inc. (formerly known as American Realty Capital Properties, Inc.) (“VEREIT”), a self-managed publicly traded REIT, organized as a Maryland corporation, listed on the New York Stock Exchange (NYSE: VER). On February 7, 2014, VEREIT acquired Cole Real Estate Investments, Inc. (“Cole”), which, prior to its acquisition, indirectly owned and/or controlled the Company’s external advisor, Cole Advisors, the Company’s dealer manager, Cole Capital Corporation (“CCC”), the Company’s property manager, CREI Advisors, LLC (“CREI Advisors”), and Cole Capital. As a result of VEREIT’s acquisition of Cole, VEREIT indirectly owns and/or controls Cole Advisors, CCC, CREI Advisors and Cole Capital. Effective as of June 10, 2015, Michael T. Ezzell resigned as a director, the chairman of the board of directors of the Company, the chief executive officer and the president of the Company. In addition, effective as of June 10, 2015, Mr. Ezzell resigned as the chief executive officer and president of Cole Advisors and as president and treasurer of CCC. Mr. Ezzell’s resignation was not a result of any disagreements with the Company on any matter relating to the Company’s operations, policies or practices. Effective June 10, 2015, Glenn J. Rufrano was appointed as the chief executive officer, the president and a director of the Company by the Company’s board of directors. Also effective as of June 10, 2015, Mr. Rufrano was appointed as chief executive officer and president of Cole Advisors. Furthermore, effective as of June 10, 2015, the board of directors appointed George N. Fugelsang, one of the Company’s independent directors, to serve as the non-executive chairman of the board. Effective September 4, 2015, T. Patrick Duncan resigned as a member of the Company’s board of directors. As a result of his resignation, the Company’s board of directors now has four members, three of whom are independent directors. Mr. Duncan resigned in order to devote more time and attention to other business activities, including his duties as a new member of the board of directors of Cole Credit Property Trust IV, Inc., and his resignation is not due to any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. On December 6, 2011, pursuant to a registration statement filed on Form S-11 (Registration No. 333-169535) (the “Initial Registration Statement”) under the Securities Act of 1933, as amended (the “Securities Act”), the Company commenced its initial public offering on a “best efforts” basis of $4.0 billion in shares of common stock. On August 26, 2013, pursuant to a registration statement filed on Form S-11 (Registration No. 333-186656) (the “Multi-Class Registration Statement”) under the Securities Act, the Company designated the existing shares of the Company’s common stock that were sold prior to such date to be Wrap Class shares (“W Shares”) of common stock and registered two new classes of the Company’s common stock, Advisor Class shares (“A Shares”) and Institutional Class shares (“I Shares”). Pursuant to the Multi-Class Registration Statement, the Company is offering up to $4.0 billion in shares of common stock of the three classes (the “Offering”), consisting of $3.5 billion in shares in the Company’s primary offering (the “Primary Offering”) and $500.0 million in shares pursuant to a distribution reinvestment plan (the “DRIP”). The Company is offering to sell any combination of W Shares, A Shares and I Shares with a dollar value up to the maximum offering amount. The per share purchase price for each class of common stock varies from day-to-day and, on each business day, is equal to, for each class of common stock, the Company’s net asset value (“NAV”) for such class, divided by the number of shares of that class outstanding as of the close of business on such day, plus, for A Shares sold in the Primary Offering, applicable selling commissions. The Company’s NAV per share is calculated daily as of the close of business by an independent fund accountant using a process that reflects (1) estimated values of each of the Company’s commercial real estate assets, related liabilities and notes receivable secured by real estate provided periodically by the Company’s independent valuation expert in individual appraisal reports, (2) daily updates in the price of liquid assets for which third party market quotes are available, (3) accruals of daily distributions and (4) estimates of daily accruals, on a net basis, of operating revenues, expenses, debt service costs and fees. As of September 30, 2015 , the NAV per share for W Shares, A Shares and I Shares was $18.16 , $18.12 and $18.23 , respectively. The Company’s NAV is not audited or reviewed by its independent registered public accounting firm. The Company intends to use substantially all of the net proceeds from the Offering to acquire and operate a diversified portfolio primarily consisting of (1) necessity retail, office and industrial properties that are leased to creditworthy tenants under long-term net leases and are strategically located throughout the United States and U.S. protectorates, (2) notes receivable secured by commercial real estate, including the origination of loans, and (3) cash, cash equivalents, other short-term investments and traded real estate-related securities. As of September 30, 2015 , the Company owned 73 commercial properties located in 28 states, containing 1.6 million rentable square feet of commercial space, including the square feet of buildings which are on land subject to ground leases. As of September 30, 2015 , these properties were 99.6% leased. The Company is structured as a perpetual-life, non-exchange traded REIT. This means that, subject to regulatory approval of our filing for additional offerings, the Company will be selling shares of common stock on a continuous basis and for an indefinite period of time to the extent permissible under applicable law. The Company will endeavor to take all reasonable actions to avoid interruptions in the continuous offering of shares of common stock. The Company reserves the right to terminate the Offering at any time. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Basis of Presentation The condensed consolidated unaudited financial statements of the Company have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting, including the instructions to Form 10-Q and Article 10 of Regulation S-X, and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. In the opinion of management, the statements for the interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair presentation of the results for such periods. Results for these interim periods are not necessarily indicative of full year results. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended December 31, 2014 , and related notes thereto set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 . The condensed consolidated unaudited financial statements should also be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this Quarterly Report on Form 10-Q. The condensed consolidated unaudited financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Reclassifications Certain amounts in the Company’s prior period consolidated financial statements have been reclassified to conform to the current period presentation. The Company has chosen to break out the details of (i) real estate tax expenses in the Company’s condensed consolidated statements of operations and (ii) straight-line rental income, in the Company’s condensed consolidated statement of cash flows. As such, the corresponding prior period amounts have also been broken out into separate line items to conform to the current financial statement presentation. The reclassifications for the three and nine months ended September 30, 2014 had no effect on previously reported totals or subtotals. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Investment in and Recoverability of Real Estate Assets Real estate assets are stated at cost, less accumulated depreciation and amortization. Amounts capitalized to real estate assets consist of the cost of acquisition, excluding acquisition related expenses, construction and any tenant improvements, major improvements and betterments that extend the useful life of the real estate assets and leasing costs. All repairs and maintenance are expensed as incurred. The Company is required to make subjective assessments as to the useful lives of its depreciable assets. The Company considers the period of future benefit of each respective asset to determine the appropriate useful life of the assets. Real estate assets, other than land, are depreciated or amortized on a straight-line basis. The estimated useful lives of the Company’s real estate assets by class are generally as follows: Buildings 40 years Tenant improvements Lesser of useful life or lease term Intangible lease assets Lease term The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate assets may not be recoverable. Impairment indicators that the Company considers include, but are not limited to, bankruptcy or other credit concerns of a property’s major tenant, such as a history of late payments, rental concessions and other factors, a significant decrease in a property’s revenues due to lease terminations, vacancies, co-tenancy clauses, reduced lease rates or other circumstances. When indicators of potential impairment are present, the Company assesses the recoverability of the assets by determining whether the carrying amount of the assets will be recovered through the undiscounted future cash flows expected from the use of the assets and their eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying amount, the Company will adjust the real estate assets to their respective fair values and recognize an impairment loss. Generally, fair value is determined using a discounted cash flow analysis and recent comparable sales transactions. As of September 30, 2015 , the Company noted potential impairment indicators at a property with an aggregate carrying value of $1.1 million due to a fire loss at the property. However, based on insurance coverage and the continued receipt of rental income from the tenant, the Company’s estimate of undiscounted cash flows indicated that such carrying amount was expected to be recovered as of September 30, 2015 , and as such no impairment loss was recorded. Nonetheless, it is reasonably possible that the estimate of undiscounted cash flows may change in the near term, which may result in the need to record an impairment loss to reduce such asset to fair value. Any such impairment losses will affect the Company’s assets and stockholders’ equity, operating and net income. The evaluation of properties for potential impairment requires the Company’s management to exercise significant judgment and to make certain assumptions. The use of different judgments and assumptions could result in different conclusions. No impairment indicators were identified and no impairment losses were recorded during the nine months ended September 30, 2014 . When developing estimates of expected future cash flows, the Company makes certain assumptions regarding future market rental income amounts subsequent to the expiration of current lease agreements, property operating expenses, terminal capitalization and discount rates, the expected number of months it takes to re-lease the property, required tenant improvements and the number of years the property will be held for investment. The use of alternative assumptions in estimating expected future cash flows could result in a different determination of the property’s expected future cash flows and a different conclusion regarding the existence of an impairment, the extent of such loss, if any, as well as the fair value of the real estate assets. When a real estate asset is identified by the Company as held for sale, the Company will cease depreciation and amortization of the assets related to the property and estimate the fair value, net of selling costs. If, in management’s opinion, the fair value, net of selling costs, of the asset is less than the carrying amount of the asset, an adjustment to the carrying amount would be recorded to reflect the estimated fair value of the property, net of selling costs. There were no assets identified as held for sale as of September 30, 2015 or December 31, 2014 . Allocation of Purchase Price of Real Estate Assets Upon the acquisition of real properties, the Company allocates the purchase price to acquired tangible assets, consisting of land, buildings and improvements, and identified intangible assets and liabilities, consisting of the value of above market and below market leases and the value of in-place leases, based in each case on their respective fair values. Acquisition related expenses are expensed as incurred. The Company utilizes independent appraisals to assist in the determination of the fair values of the tangible assets of an acquired property (which includes land and buildings). The information in the appraisal, along with any additional information available to the Company’s management, is used in estimating the amount of the purchase price that is allocated to land. Other information in the appraisal, such as building value and market rents, may be used by the Company’s management in estimating the allocation of purchase price to the building and to intangible lease assets and liabilities. The appraisal firm has no involvement in management’s allocation decisions other than providing this market information. The fair values of above market and below market lease intangibles are recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (1) the contractual amounts to be paid pursuant to the in-place leases and (2) an estimate of fair market lease rates for the corresponding in-place leases, which is generally obtained from independent appraisals, measured over a period equal to the remaining non-cancelable term of the lease including, for below market leases, any bargain renewal periods. The above market and below market lease intangibles are capitalized as intangible lease assets or liabilities, respectively. Above market leases are amortized as a reduction to rental income over the remaining terms of the respective leases. Below market leases are amortized as an increase to rental income over the remaining terms of the respective leases, including any bargain renewal periods. In considering whether or not the Company expects a tenant to execute a bargain renewal option, the Company evaluates economic factors and certain qualitative factors at the time of acquisition, such as the financial strength of the tenant, the remaining lease term, the tenant mix of the leased property, the Company’s relationship with the tenant and the availability of competing tenant space. If a lease were to be terminated prior to its stated expiration, all unamortized amounts of above market or below market lease intangibles relating to that lease would be recorded as an adjustment to rental income. The fair values of in-place leases include estimates of direct costs associated with obtaining a new tenant and opportunity costs associated with lost rental and other property income, which are avoided by acquiring a property with an in-place lease. Direct costs associated with obtaining a new tenant include commissions and other direct costs, and are estimated in part by utilizing information obtained from independent appraisals and management’s consideration of current market costs to execute a similar lease. The intangible values of opportunity costs, which are calculated using the contractual amounts to be paid pursuant to the in-place leases over a market absorption period for a similar lease, are capitalized as intangible lease assets and are amortized to expense over the remaining term of the respective leases. If a lease were to be terminated prior to its stated expiration, all unamortized amounts of in-place lease assets relating to that lease would be expensed. The Company may acquire certain properties subject to contingent consideration arrangements that may obligate the Company to pay additional consideration to the seller based on the outcome of future events. Additionally, the Company may acquire certain properties for which it funds certain contingent consideration amounts into an escrow account pending the outcome of certain future events. The outcome may result in the release of all or a portion of the escrow funds to the Company or the seller or a combination thereof. Contingent consideration arrangements will be based on a predetermined formula and have set time periods regarding the obligation to make future payments, including funds released to the seller from escrow accounts, or the right to receive escrowed funds as set forth in the respective purchase and sale agreement. Contingent consideration arrangements, including amounts funded through an escrow account, will be recorded upon acquisition of the respective property at their estimated fair value, and any changes to the estimated fair value subsequent to acquisition will be reflected in the accompanying condensed consolidated unaudited statements of operations. The determination of the amount of contingent consideration arrangements is based on the probability of several possible outcomes, as identified by management. The Company will estimate the fair value of assumed mortgage notes payable based upon indications of current market pricing for similar types of debt financing with similar maturities. Assumed mortgage notes payable will initially be recorded at their estimated fair value as of the assumption date, and any difference between such estimated fair value and the mortgage note’s outstanding principal balance will be amortized to interest expense over the term of the respective mortgage note payable. The determination of the fair values of the real estate assets and liabilities acquired requires the use of significant assumptions with regard to the current market rental rates, rental growth rates, capitalization and discount rates, interest rates and other variables. The use of alternative estimates may result in a different allocation of the Company’s purchase price, which could materially impact the Company’s results of operations. Investment in Marketable Securities Investment in marketable securities consists primarily of the Company’s investment in corporate and government debt securities. The Company determines the appropriate classification for debt securities at the time of purchase and reevaluates such designation as of each balance sheet date. As of September 30, 2015 , the Company classified its investments as available-for-sale as the Company is not actively trading the securities; however, the Company may sell them prior to their maturity. These investments are carried at their estimated fair value with unrealized gains and losses reported in accumulated other comprehensive income. The Company monitors its available-for-sale securities for impairments. A loss is recognized when the Company determines that a decline in the estimated fair value of a security below its amortized cost is other-than-temporary. The Company considers many factors in determining whether the impairment of a security is deemed to be other-than-temporary, including, but not limited to, the length of time the security has had a decline in estimated fair value below its amortized cost, the amount of the unrealized loss, the intent and ability of the Company to hold the security for a period of time sufficient for a recovery in value, recent events specific to the issuer or industry, external credit ratings and recent changes in such ratings. The analysis of determining whether the impairment of a security is deemed to be other-than-temporary requires significant judgment and assumptions. The use of alternative judgments and assumptions could result in a different conclusion. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity computed under the effective interest method and is recorded in the accompanying condensed consolidated unaudited statements of operations in interest and other expense, net. Upon the sale of a security, the realized net gain or loss is computed on the specific identification method. Restricted Cash and Escrows The Company had $512,000 in restricted cash as of September 30, 2015 . Included in restricted cash were escrowed investor proceeds of $457,000 for which shares of common stock had not been issued as of September 30, 2015 , and $55,000 in lender cash management accounts. As part of certain debt agreements, rent from certain of the Company’s tenants is deposited directly into a lockbox account, from which funds in excess of the required minimum balance are disbursed on a weekly basis to the Company. Cash and Cash Equivalents As of September 30, 2015 , the Company had cash on deposit, including restricted cash, at four financial institutions, three of which had Company deposits in excess of federally insured levels, totaling $13.0 million ; however, the Company has not experienced any losses in such accounts. The Company limits significant cash deposits to accounts held by financial institutions with high credit standing; therefore, the Company believes it is not exposed to any significant credit risk on its cash deposits. Property Concentrations As of September 30, 2015 , no single tenant accounted for greater than 10% of the Company’s 2015 gross annualized rental revenues. Tenants in the discount store , drugstore , and grocery industries accounted for 16% , 11% , and 10% , respectively, of the Company’s 2015 gross annualized rental revenues. Additionally, the Company has certain geographic concentrations in its property holdings. In particular, as of September 30, 2015 , six of the Company’s properties were located in Texas , and seven of the Company’s properties were located in Ohio , accounting for 12% and 10% , respectively, of the Company’s 2015 gross annualized rental revenues. Derivative Instruments and Hedging Activities The Company accounts for its derivative instruments at fair value. Accounting for changes in the fair value of a derivative instrument depends on the intended use of the derivative instrument and the designation of the derivative instrument. The change in fair value of the effective portion of any derivative instrument that is designated as a hedge is recorded as other comprehensive (loss) income. The changes in fair value for derivative instruments that are not designated as hedges or that do not meet the hedge accounting criteria are recorded as a gain or loss to operations. Revenue Recognition Certain properties have leases where minimum rental payments increase during the term of the lease. The Company records rental income for the full term of each lease on a straight-line basis. When the Company acquires a property, the terms of any existing leases are considered to commence as of the acquisition date for the purpose of this calculation. The Company defers the recognition of contingent rental income, such as percentage rents, until the specific target that triggers the contingent rental income is achieved. Expected reimbursements from tenants for recoverable real estate taxes and operating expenses are included in tenant reimbursement income in the period when such costs are incurred. The Company continually reviews receivables related to rent and unbilled rent receivables and determines collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. In the event that the collectability of a receivable is in doubt, the Company will record an increase in the allowance for uncollectible accounts or record a direct write-off of the receivable in the condensed consolidated unaudited statements of operations and comprehensive income (loss). As of September 30, 2015 and December 31, 2014 , the Company did not have an allowance for uncollectible accounts. Earnings per Share We have three classes of common stock with nonforfeitable dividend rights that are determined based on a different NAV for each class. Accordingly, we utilize the two-class method to determine our earnings per share, which results in the same earnings per share for each of the classes. Recent Accounting Pronouncements In May 2014, the U.S. Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which supersedes the revenue recognition requirements in Revenue Recognition (Topic 605) and requires an entity to recognize revenue in a way that depicts the transfer of promised goods or services to customers, including real estate sales, in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB provided for a one-year deferral of the effective date for ASU 2014-09, which is now effective for fiscal years and interim periods beginning after December 15, 2017. Early adoption is permitted for annual reporting periods beginning after December 15, 2016 and the interim periods within that year. The Company is currently evaluating the impact of the new standard on the Company’s condensed consolidated unaudited financial statements. In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis (“ASU 2015-02”), which eliminates the deferral of Financial Accounting Standard 167, modifies the evaluation of whether limited partnerships and similar legal entities are variable or voting interest entities, eliminates the presumption that the general partner should consolidate a limited partnership, modifies the consolidation analysis for reporting entities that are involved with variable interest entities, particularly those that have fee arrangements and related party relationships, and provides a scope exception for reporting entities with interests in legal entities that operate as registered money market funds. These changes will require re-evaluation of the consolidation conclusion for certain entities and will require the Company to revise its analysis regarding the consolidation or deconsolidation of such entities. ASU 2015-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, with early adoption permitted. Companies may elect to apply the amendments in ASU 2015-02 using a modified retrospective approach or by applying the amendments retrospectively. The Company is currently evaluating the impact of the new standard on the Company’s condensed consolidated unaudited financial statements. In April 2015, the FASB issued ASU No. 2015-03 Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation and Subsequent Measurement of Debt Issuance Costs (“ASU 2015-03”). The update requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability rather than presenting the deferred charge as an asset. The previous requirement to recognize debt issuance costs as deferred charges conflicts with the guidance in FASB Concepts Statement No. 6, “Elements of Financial Statements”, which states that debt issuance costs are similar to debt discounts and effectively reduce the proceeds of borrowing, thereby increasing the effective interest rate. FASB Concepts Statement No. 6 further states that debt issuance costs cannot be an asset because they provide no future economic benefit. After the update is adopted, debt disclosures would include the face amount of the debt liability and the effective interest rate. In August 2015, the FASB sought to clarify questions that arose after ASU 2015-03 was issued by issuing ASU No. 2015-15, Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements (“ASU 2015-15”). The update clarifies that debt issuance costs related to securing a revolving line of credit may be presented as an asset and subsequently amortized ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. Both ASU 2015-03 and ASU 2015-15 are effective for fiscal years beginning after December 15, 2015, and are to be applied retrospectively, with early adoption permitted. The Company is currently evaluating the impact of these new standards on the Company’s condensed consolidated unaudited financial statements. In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805), Simplifying the Accounting for Measurement-Period Adjustments (“ASU 2015-16”), which eliminates the requirement that an acquirer in a business combination retrospectively account for measurement-period adjustments. Measurement-period adjustments should be recognized during the period in which the adjustment amount is determined, including any earnings impact that the acquirer would have recorded in prior periods if the accounting was completed at the acquisition date. ASU 2015-16 is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this new standard on the Company’s condensed consolidated unaudited financial statements. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS GAAP defines fair value, establishes a framework for measuring fair value and requires disclosures about fair value measurements. GAAP emphasizes that fair value is intended to be a market-based measurement, as opposed to a transaction-specific measurement. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Depending on the nature of the asset or liability, various techniques and assumptions can be used to estimate the fair value. Assets and liabilities are measured using inputs from three levels of the fair value hierarchy, as follows: Level 1 – Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. An active market is defined as a market in which transactions for the assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 – Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active (markets with few transactions), inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data correlation or other means (market corroborated inputs). Level 3 – Unobservable inputs, which are only used to the extent that observable inputs are not available, reflect the Company’s assumptions about the pricing of an asset or liability. The following describes the methods the Company uses to estimate the fair value of the Company’s financial assets and liabilities: Line of credit and notes payable – The fair value is estimated by discounting the expected cash flows based on estimated borrowing rates available to the Company as of the measurement date. As of September 30, 2015 , the estimated fair value of the Company’s debt was $100.0 million compared to the carrying value of $100.3 million . As of December 31, 2014 , the estimated fair value of the Company’s debt was $120.3 million , which approximated the carrying value on that date. The fair value of the Company’s debt is estimated using Level 2 inputs. Marketable securities – The Company’s marketable securities are carried at fair value and are valued using Level 1 inputs. The estimated fair value of the Company’s marketable securities are based on quoted market prices that are readily and regularly available in an active market. Derivative instruments – The Company’s derivative instruments are comprised of interest rate swaps. All derivative instruments are carried at fair value and are valued using Level 2 inputs. The fair value of these instruments is determined using interest rate market pricing models. The Company includes the impact of credit valuation adjustments on derivative instruments measured at fair value. Other financial instruments – The Company considers the carrying values of its cash and cash equivalents, restricted cash, tenant and other receivables, accounts payable and accrued expenses, other liabilities, due to affiliates and distributions payable to approximate their fair values because of the short period of time between their origination and their expected realization and based on their highly-liquid nature. Due to the short-term maturities of these instruments, Level 1 inputs are utilized to estimate the fair value of these financial instruments. Considerable judgment is necessary to develop estimated fair values of financial assets and liabilities. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize, or be liable for, on disposition of the financial assets and liabilities. As of September 30, 2015 , there have been no transfers of financial assets or liabilities between fair value hierarchy levels. In accordance with the fair value hierarchy described above, the following tables show the fair value of the Company’s financial assets and liabilities that are required to be measured at fair value on a recurring basis as of September 30, 2015 and December 31, 2014 (in thousands): Balance as of Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs September 30, 2015 (Level 1) (Level 2) (Level 3) Financial asset: Marketable securities $ 4,623 $ 4,623 $ — $ — Financial liability: Interest rate swaps $ (737 ) $ — $ (737 ) $ — Balance as of Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs December 31, 2014 (Level 1) (Level 2) (Level 3) Financial asset: Marketable Securities $ 490 $ 490 $ — $ — |
Real Estate Acquisitions
Real Estate Acquisitions | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
REAL ESTATE ACQUISITIONS | REAL ESTATE ACQUISITIONS 2015 Property Acquisitions During the nine months ended September 30, 2015 , the Company acquired a 100% interest in three commercial properties for an aggregate purchase price of $7.3 million (the “ 2015 Acquisitions ”). The Company purchased the 2015 Acquisitions with net proceeds from the Offering combined with proceeds from borrowings, as discussed in Note 7 to these condensed consolidated unaudited financial statements. The purchase price allocation for each of the Company’s acquisitions is preliminary and subject to change as it finalizes the allocation, which will be no later than twelve months from the acquisition date. The Company preliminarily allocated the purchase price of these properties to the fair value of the assets acquired and liabilities assumed. The following table summarizes the preliminary purchase price allocation for the properties purchased during the nine months ended September 30, 2015 (in thousands): 2015 Acquisitions Land $ 1,672 Building and improvements 4,910 Acquired in-place leases 759 Acquired below market leases (21 ) Total purchase price $ 7,320 The Company recorded revenue of $55,000 and $58,000 , respectively, and net loss of $23,000 and $42,000 , respectively, for the three and nine months ended September 30, 2015 related to the 2015 Acquisitions . In addition, the Company recorded $150,000 and $217,000 of acquisition related expenses for the three and nine months ended September 30, 2015 , which is included in acquisition related expenses on the condensed consolidated statement of operations. The following information summarizes selected financial information of the Company as if the 2015 Acquisitions were completed on January 1, 2014 for each period presented below. The table below presents the Company’s estimated revenue and net income, on a pro forma basis, for the three and nine months ended September 30, 2015 and 2014 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Pro forma basis Revenue $ 4,832 $ 3,584 $ 14,505 $ 8,909 Net income $ 1,195 $ (37 ) $ 7,749 $ 372 The pro forma information for the three and nine months ended September 30, 2015 was adjusted to exclude acquisition related expenses recorded during such periods related to the 2015 Acquisitions . Accordingly, these expenses were instead recognized in the pro forma information for the nine months ended September 30, 2014 . The pro forma information is presented for informational purposes only and may not be indicative of what actual results of operations would have been had the transaction occurred at the beginning of 2014 , nor does it purport to represent the results of future operations. 2014 Property Acquisitions During the nine months ended September 30, 2014 , the Company acquired a 100% interest in 39 commercial properties for an aggregate purchase price of $121.4 million (the “ 2014 Acquisitions ”). The Company purchased the 2014 Acquisitions with net proceeds from the Offering combined with proceeds from borrowings, as discussed in Note 7 to these condensed consolidated unaudited financial statements. The Company allocated the purchase price of these properties to the fair value of the assets acquired and liabilities assumed. The following table summarizes the purchase price allocation (in thousands): 2014 Acquisitions Land $ 21,067 Building and improvements 85,060 Acquired in-place leases 12,898 Acquired above market leases 3,286 Acquired below market leases (863 ) Total purchase price $ 121,448 The Company recorded revenue of $1.2 million and $1.8 million , respectively, and a net loss of $192,000 and $579,000 , respectively, for the three and nine months ended September 30, 2014 related to the 2014 Acquisitions . In addition, the Company recorded $639,000 and $1.2 million , respectively, of acquisition related expenses for the three and nine months ended September 30, 2014 , which is included in acquisition related expenses and reimbursements, net on the condensed consolidated statement of operations. The following information summarizes selected financial information of the Company as if all of the 2014 Acquisitions were completed on January 1, 2013 for each period presented below. The table below presents the Company’s estimated revenue and net income (loss), on a pro forma basis, for the three and nine months ended September 30, 2014 and 2013 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2014 2013 2014 2013 Pro forma basis: Revenue $ 3,993 $ 3,158 $ 12,037 $ 8,526 Net income (loss) $ 234 $ (266 ) $ 1,264 $ (1,015 ) The pro forma information for the three and nine months ended September 30, 2014 was adjusted to exclude acquisition related expenses recorded during such periods related to the 2014 Acquisitions . Accordingly, these expenses were instead recognized in the pro forma information for the nine months ended September 30, 2013 . The pro forma information is presented for informational purposes only and may not be indicative of what actual results of operations would have been had the transactions occurred at the beginning of 2013 , nor does it purport to represent the results of future operations. |
Marketable Securities
Marketable Securities | 9 Months Ended |
Sep. 30, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
MARKETABLE SECURITIES | MARKETABLE SECURITIES The Company owned marketable securities with an estimated fair value of $4.6 million and $490,000 as of September 30, 2015 and December 31, 2014 , respectively. The following is a summary of the Company’s available-for-sale securities as of September 30, 2015 (in thousands): Available-for-Sale Securities Amortized Cost Basis Unrealized Loss Fair Value U.S. Treasury Bonds $ 933 $ 8 $ 941 U.S. Agency Bonds 1,134 1 1,135 Corporate Bonds 2,582 (35 ) 2,547 Total available-for-sale securities $ 4,649 $ (26 ) $ 4,623 The following table provides the activity for the marketable securities during the nine months ended September 30, 2015 (in thousands): Amortized Cost Basis Unrealized Gain (Loss) Fair Value Marketable securities as of December 31, 2014 $ 487 $ 3 $ 490 Face value of marketable securities acquired 5,765 — 5,765 Premiums and discounts on purchase of marketable securities, net of acquisition costs 134 — 134 Amortization on marketable securities (8 ) — (8 ) Sales and maturities of securities (1,729 ) — (1,729 ) Decrease in fair value of marketable securities — (29 ) (29 ) Marketable securities as of September 30, 2015 $ 4,649 $ (26 ) $ 4,623 During the nine months ended September 30, 2015 , the Company sold 48 marketable securities for aggregate proceeds of $1.7 million and realized a loss of $12,000 . In addition, the Company recorded an unrealized loss of $29,000 on its investments, which is included in accumulated other comprehensive income on the accompanying condensed consolidated unaudited statement of stockholders’ equity for the nine months ended September 30, 2015 and the condensed consolidated unaudited balance sheet as of September 30, 2015 . The scheduled maturities of the Company’s marketable securities as of September 30, 2015 are as follows (in thousands): Available-for-Sale Securities Amortized Cost Estimated Fair Value Due within one year $ 377 $ 377 Due after one year through five years 1,244 1,244 Due after five years through ten years 2,305 2,279 Due after ten years 723 723 Total $ 4,649 $ 4,623 Actual maturities of marketable securities can differ from contractual maturities because borrowers on certain debt securities may have the right to prepay their respective debt obligations at any time. In addition, factors such as prepayments and interest rates may affect the yields on such securities. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES In the normal course of business, the Company uses certain types of derivative instruments for the purpose of managing or hedging its interest rate risk. During the nine months ended September 30, 2015 , the Company entered into one interest rate swap agreement. The following table summarizes the terms of the Company’s executed swap agreements designated as hedging instruments as of September 30, 2015 (in thousands). The Company did not have any executed swap agreements as of September 30, 2014 . Outstanding Notional Amount as of Interest Effective Maturity Fair Value of Liabilities as of Balance Sheet Location September 30, 2015 Rate (1) Date Date September 30, 2015 Interest Rate Swaps Derivative liability, deferred rental income, and other liabilities $ 40,000 3.49 % 6/30/2015 9/12/2019 $ (737 ) (1) The interest rate consists of the underlying index swapped to a fixed rate and the applicable interest rate spread. Additional disclosures related to the fair value of the Company’s derivative instruments are included in Note 3 to these condensed consolidated unaudited financial statements. The notional amount under the interest rate swap agreements is an indication of the extent of the Company’s involvement in each instrument, but does not represent exposure to credit, interest rate or market risks. Accounting for changes in the fair value of a derivative instrument depends on the intended use and designation of the derivative instrument. The Company designated the interest rate swaps as cash flow hedges, to hedge the variability of the anticipated cash flows on its variable rate debt. The change in fair value of the effective portion of the derivative instruments that are designated as hedges is recorded in other comprehensive income (loss), with a portion of the amount subsequently reclassified to interest expense as interest payments are made on the Company’s variable-rate debt, and for the three and nine months ended September 30, 2015 was $137,000 . Any ineffective portion of the change in fair value of the derivative instruments is recorded in interest expense. During the next 12 months, the Company estimates that an additional $462,000 will be reclassified from other comprehensive income (loss) as an increase to interest expense. The following table summarizes the unrealized loss on the Company’s derivative instruments and hedging activities for the three and nine months ended September 30, 2015 (in thousands). The Company did not own any derivative instruments for the three and nine months ended September 30, 2014 . Amount of Loss Recognized as Other Comprehensive Loss Derivatives in Cash Flow Hedging Relationships Three Months Ended September 30, 2015 Nine Months Ended September 30, 2015 Interest Rate Swaps (1) $ (563 ) $ (737 ) (1) There were no portions of the change in the fair value of the interest rate swaps that were considered ineffective during the nine months ended September 30, 2015 . The Company has agreements with each of its derivative counterparties that contain provisions whereby, if the Company defaults on certain of its unsecured indebtedness, the Company could also be declared in default on its derivative obligations resulting in an acceleration of payment. If the Company had breached any of these provisions, it could have been required to settle its obligations, under the agreements at their aggregate termination value, inclusive of interest payments, of $751,000 , which includes accrued interest, at September 30, 2015 . In addition, the Company is exposed to credit risk in the event of non-performance by its derivative counterparties. The Company believes it mitigates its credit risk by entering into agreements with creditworthy counterparties. The Company records credit risk valuation adjustments on its interest rate swaps based on the credit quality of the Company and the respective counterparty. There were no termination events or events of default related to the interest rate swaps as of September 30, 2015 . |
Lines of Credit and Notes Payab
Lines of Credit and Notes Payable | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
LINES OF CREDIT AND NOTES PAYABLE | LINES OF CREDIT AND NOTES PAYABLE As of September 30, 2015 , the Company had $100.3 million of debt outstanding, with weighted average years to maturity of 5.9 years and a weighted average interest rate of 3.19% . The following table summarizes the debt activity for the nine months ended September 30, 2015 and the debt balances as of September 30, 2015 and December 31, 2014 (in thousands): During the Nine Months Ended September 30, 2015 Balance as of Debt Issuance Repayments Balance as of September 30, 2015 Line of credit $ 100,000 $ 23,000 $ (83,000 ) $ 40,000 Fixed rate debt 20,304 39,950 — 60,254 Line of credit with affiliate — 10,000 (10,000 ) — Total $ 120,304 $ 72,950 $ (93,000 ) $ 100,254 The Company entered into an amended and restated credit agreement (the “Amended Credit Agreement”) with JPMorgan Chase Bank, N.A. as administrative agent (“JPMorgan Chase”), U.S. Bank National Association, Bank of Arizona and other lending institutions that may become parties to the Amended Credit Agreement. The agreement increased the credit facility to $125.0 million , and allows the Company to borrow up to $85.0 million in revolving loans (the “Revolving Loans”), and includes a $40.0 million term loan (the “Term Loan”), collectively the line of credit (the “Line of Credit”). The Term Loan matures on September 12, 2019 and the Revolving Loans mature on September 12, 2017; however the Company may elect to extend the maturity date for the Revolving Loans to September 12, 2019, subject to satisfying certain conditions described in the Amended Credit Agreement. The maximum amount outstanding is not to exceed the borrowing base (the “Borrowing Base”), calculated as 65% of the aggregate value allocated to each qualified property comprising eligible collateral (collectively, the “Qualified Properties”) during the period from September 30, 2014 through September 11, 2015 and 60% of the Qualified Properties during the period from September 12, 2015 to maturity. As of September 30, 2015 , the Company had $40.0 million of debt outstanding and $23.3 million available for borrowing under the Line of Credit, based on the then-current Borrowing Base. The aggregate balance of gross real estate assets, net of gross intangible lease liabilities, securing the Line of Credit was $117.4 million as of September 30, 2015 . The Revolving Loans and Term Loan bear interest at rates dependent upon the type of loan specified by the Company. For a eurodollar rate loan, the interest rate will be equal to the one-month, two-month, three-month or six-month LIBOR for the interest period, as elected by the Company, multiplied by the Statutory Reserve Rate (as defined in the Amended Credit Agreement), plus the applicable rate (the “Eurodollar Applicable Rate”). The Eurodollar Applicable Rate is based upon the Company’s overall leverage ratio, generally defined in the Amended Credit Agreement as the total consolidated outstanding indebtedness of the Company divided by the total consolidated asset value of the Company (as defined in the Amended Credit Agreement) (the “Leverage Ratio”), and ranges from 1.90% at a Leverage Ratio of 50.0% or less to 2.45% at a Leverage Ratio greater than 60.0% . For base rate committed loans, the interest rate will be a per annum amount equal to the greatest of: (a) JPMorgan Chase’s Prime Rate; (b) the Federal Funds Effective Rate (as defined in the Amended Credit Agreement) plus 0.50% ; and (c) one-month LIBOR multiplied by the Statutory Reserve plus 1.0% plus the applicable rate (the “Base Rate Applicable Rate”). The Base Rate Applicable Rate is based upon the Leverage Ratio, and ranges from 0.90% at a Leverage Ratio of 50.0% or less to 1.45% at a Leverage Ratio greater than 60.0% . The Company executed a swap agreement on certain cash flows related to variable rate debt, which is currently associated with the $40.0 million Term Loan, (the “Swapped Term Loan”), which had the effect of fixing the variable interest rate per annum on June 30, 2015 through the maturity date of the loan at 1.53% (the “Swap Rate”). Based on the Company’s leverage ratio, the Swapped Term Loan bears interest at the Swap Rate plus the applicable spread, which totaled 3.49% as of September 30, 2015 . The Amended Credit Agreement contains customary representations, warranties, borrowing conditions and affirmative, negative and financial covenants, including minimum net worth, debt service coverage and leverage ratio requirements and dividend payout and REIT status requirements. The Amended Credit Agreement also includes usual and customary events of default and remedies for facilities of this nature. Based on the Company’s analysis and review of its results of operations and financial condition, as of September 30, 2015 , the Company believes it was in compliance with the covenants of the Amended Credit Agreement. As of September 30, 2015 , the fixed rate debt outstanding of $60.3 million has interest rates ranging from 3.81% to 4.05% per annum. The debt outstanding matures on various dates from October 2021 to February 2025. The aggregate balance of gross real estate assets, net of gross intangible lease liabilities, securing the fixed rate debt outstanding was $99.1 million as of September 30, 2015 . Each of the mortgage notes payable comprising the fixed rate debt is secured by the respective properties on which the debt was placed. On December 16, 2014, the Company entered into a $20.0 million unsecured revolving line of credit with Series C, LLC, an affiliate of the Company’s advisor (the “Series C Line of Credit”). The Series C Line of Credit bears interest at a rate per annum equal to the one-month LIBOR plus 2.45% with accrued interest payable monthly in arrears and principal due upon maturity on December 15, 2015. In the event the Series C Line of Credit is not paid off on the maturity date, the loan includes default provisions. The Series C Line of Credit has been approved by a majority of the Company’s board of directors (including a majority of the independent directors) not otherwise interested in the transaction as fair, competitive and commercially reasonable and no less favorable to the Company than a comparable loan between unaffiliated parties under the same circumstances. As of September 30, 2015 , the Company had no amounts outstanding on the Series C Line of Credit and $20.0 million available for borrowing. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Litigation In the ordinary course of business, the Company may become subject to litigation and claims. The Company is not aware of any material pending legal proceedings, other than ordinary routine litigation incidental to the Company’s business, to which the Company is a party or of which the Company’s properties are the subject. Purchase Commitments As of September 30, 2015 , the Company had entered into purchase agreements with unaffiliated third-party sellers to acquire a 100% interest in four retail properties, subject to meeting certain criteria, for an aggregate purchase price of $21.9 million , exclusive of closing costs. As of September 30, 2015 , the Company had $585,000 of property escrow deposits held by escrow agents in connection with these future property acquisitions, all of which may be forfeited under certain circumstances if the transactions are not completed. Environmental Matters In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. In addition, the Company may own or acquire certain properties that are subject to environmental remediation. Generally, the seller of the property, the tenant of the property and/or another third party is responsible for environmental remediation costs related to a property subject to environmental remediation. Additionally, in connection with the purchase of certain properties, the respective sellers and/or tenants may agree to indemnify the Company against future remediation costs. The Company also carries environmental liability insurance on its properties that provides limited coverage for any remediation liability or pollution liability for third-party bodily injury or property damage claims for which the Company may be liable. The Company is not aware of any environmental matters which it believes are reasonably likely to have a material effect on its results of operations, financial condition or liquidity. |
Related-Party Transactions and
Related-Party Transactions and Arrangements | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS | RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS The Company has incurred, and will continue to incur, commissions, fees and expenses payable to Cole Advisors and certain of its affiliates in connection with the Offering, and the acquisition, management and performance of the Company’s assets. Offering In connection with the Offering, CCC, the Company’s dealer manager, will receive selling commissions, an asset-based dealer manager fee and/or an asset-based distribution fee, as summarized in the table below for each class of common stock: Selling Commission (1) Dealer Manager Fee (2) Distribution Fee (2) W Shares — 0.55 % — A Shares up to 3.75% 0.55 % 0.50 % I Shares — 0.25 % — (1) The selling commission is based on the offering price for A Shares. The selling commission expressed as a percentage of NAV per A Share, rather than the offering price, is up to 3.90% , subject to rounding and the effect of volume discounts the Company is offering on certain purchases of $150,001 or more of A Shares. Selling commissions are deducted directly from the offering price for A Shares and paid to CCC. CCC reallows 100% of the selling commissions on A Shares to participating broker-dealers. (2) The dealer manager and distribution fees accrue daily in an amount equal to 1/365th of the percentage of NAV per W Share, A Share or I Share, as applicable, for such day on a continuous basis. CCC, in its sole discretion, may reallow a portion of the dealer manager fee and distribution fee to participating broker-dealers. All organization and offering expenses associated with the sale of the Company’s common stock (excluding selling commissions, the distribution fee and the dealer manager fee) are paid for by Cole Advisors or its affiliates and can be reimbursed by the Company up to 0.75% of the aggregate gross offering proceeds, excluding selling commissions charged on A Shares sold in the Primary Offering. As of September 30, 2015 , Cole Advisors or its affiliates had paid organization and offering costs in excess of the 0.75% in connection with the Offering. These excess costs were not included in the financial statements of the Company because such costs were not a liability of the Company as they exceeded 0.75% of gross proceeds from the Offering. As the Company raises additional proceeds from the Offering, these excess costs may become payable to Cole Advisors. The Company recorded commissions, fees and expense reimbursements as shown in the table below for services provided by Cole Advisors and its affiliates related to the services described above during the periods indicated (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Offering: Selling commissions $ 18 $ 259 $ 63 $ 478 Selling commissions reallowed by CCC $ 18 $ 259 $ 63 $ 478 Distribution fees $ 23 $ 12 $ 63 $ 17 Distribution fees reallowed by CCC $ 23 $ 9 $ 57 $ 11 Dealer manager fees $ 196 $ 159 $ 547 $ 382 Dealer manager fees reallowed by CCC $ 22 $ 12 $ 71 $ 20 Organization and offering expense reimbursement $ 115 $ 171 $ 230 $ 440 As of September 30, 2015 , $334,000 had been incurred, but not yet paid, for services provided by Cole Advisors or its affiliates in connection with the offering stage of the Offering and was a liability of the Company. Acquisitions, Operations and Performance The Company pays Cole Advisors an asset-based advisory fee that is payable in arrears on a monthly basis and accrues daily in an amount equal to 1/365th of 0.90% of the Company’s NAV for each class of common stock, for each day. The Company reimburses Cole Advisors for the operating expenses it paid or incurred in connection with the services provided to the Company, subject to the limitation that the Company will not reimburse for any amount by which its operating expenses (including the advisory fee) at the end of the four preceding fiscal quarters exceeds the greater of (1) 2% of average invested assets; or (2) 25% of net income, other than any additions to reserves for depreciation, bad debts or other similar non-cash reserves and excluding any gain from the sale of assets for that period. In addition, the Company reimburses Cole Advisors for all out-of-pocket expenses incurred in connection with the acquisition of the Company’s investments. While most of the acquisition expenses are expected to be paid to third parties, a portion of the out-of-pocket acquisition expenses may be reimbursed to Cole Advisors or its affiliates. Acquisition expenses, together with any acquisition fees paid to third parties for a particular real estate-related asset, will in no event exceed 6% of the gross purchase price of such asset. Cole Advisors implemented an expense cap for the three months ended December 31, 2013, which has been continued for the nine months ended September 30, 2015 and will be continued for the three months ending December 31, 2015 , whereby Cole Advisors funds all general and administrative expenses of the Company that are in excess of an amount calculated by multiplying the average NAV for the respective three month period by an annualized rate of 1.25% (the “Excess G&A”). General and administrative expenses, as presented in these condensed consolidated unaudited financial statements, include, but are not limited to, legal fees, audit fees, board of directors costs, professional fees, escrow and trustee fees, insurance, state franchise and income taxes and fees for unused amounts on the Line of Credit. At Cole Advisors’ discretion, it may fund the Excess G&A through reimbursement to the Company or payment to third parties on behalf of the Company, but in no event will the Company be liable to Cole Advisors in future periods for such historical amounts paid or reimbursed. During the three and nine months ended September 30, 2015 , the Company incurred $264,000 and $485,000 , respectively, of Excess G&A which will be reimbursed by Cole Advisors, of which $264,000 had not been reimbursed and was due to the Company as of September 30, 2015 . As of September 30, 2015 , the $264,000 was included as a reduction to due to affiliates on the condensed consolidated unaudited balance sheets. As compensation for services provided pursuant to the advisory agreement, the Company also pays Cole Advisors a performance-based fee calculated based on the Company’s annual total return to stockholders for each class of common stock (defined below), payable annually in arrears. The performance fee is calculated such that for any calendar year in which the total return per share for a particular class exceeds 6% (the “ 6% Return”), Cole Advisors receives 25% of the excess total return on such class above the 6% Return allocable to that class, but in no event will the Company pay Cole Advisors more than 10% of the aggregate total return, for that class, for such year. However, in the event the NAV per share of the Company’s W Shares, A Shares or I Shares decreases below the base NAV for the respective share class ( $15.00 , $16.72 and $16.82 for the W Shares, A Shares and I Shares, respectively) (the “Base NAV”), the performance-based fee for a respective class will not be calculated on any increase in NAV up to the Base NAV for the respective share class. In addition, the performance fee will not be paid with respect to any calendar year in which the NAV per share as of the last business day of the calendar year (the “Ending NAV”) for the respective share class is less than the Base NAV of that class. The Base NAV of any share class is subject to downward adjustment in the event that the Company’s board of directors, including a majority of the independent directors, determines that such an adjustment is necessary to provide an appropriate incentive to Cole Advisors to perform in a manner that seeks to maximize stockholder value and is in the best interests of the Company’s stockholders. In the event of any stock dividend, stock split, recapitalization or similar change in the Company’s capital structure, the Base NAV for the respective share class shall be ratably adjusted to reflect the effect of any such event. The total return to stockholders is defined, for each class of the Company’s common stock, as the change in NAV per share plus distributions per share for such class. The NAV per share for a class calculated on the last trading day of a calendar year shall be the amount against which changes in NAV per share for such class are measured during the subsequent calendar year. Therefore, for each class of the Company’s common stock, payment of the performance-based component of the advisory fee (1) is contingent upon the Company’s actual annual total return exceeding the 6% Return and the Ending NAV per share for the respective share class being greater than the Base NAV of that class, (2) will vary in amount based on the Company’s actual performance, (3) cannot cause the Company’s total return as a percentage of stockholders’ invested capital for the year to be reduced below 6% and (4) is payable to Cole Advisors if the Company’s total return exceeds the 6% Return in a particular calendar year, even if the total return to stockholders (or any particular stockholder) on a cumulative basis over any longer or shorter period has been less than 6% per annum. Cole Advisors will not be obligated to return any portion of advisory fees paid based on the Company’s subsequent performance. The Company recorded fees and expense reimbursements as shown in the table below for services provided by Cole Advisors or its affiliates related to the services described above during the periods indicated (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Acquisitions, Operations and Performance: Acquisition expenses $ 95 $ 151 $ 135 $ 286 Advisory fee $ 331 $ 263 $ 921 $ 635 Operating expense reimbursement $ — $ — $ — $ — Performance fee $ 362 $ 41 $ 765 $ 41 As of September 30, 2015 , $1.2 million had been incurred, but not yet paid, for services provided by Cole Advisors or its affiliates in connection with the acquisitions and operations stage and was a liability of the Company. Cole Advisors waived its right to receive operating expense reimbursements for the three and nine months ended September 30, 2015 and 2014 ; accordingly, the Company did not reimburse Cole Advisors for any such expenses during the three and nine months ended September 30, 2015 and 2014 . During the nine months ended September 30, 2015 , Cole Advisors permanently waived its right to operating and other expense reimbursements totaling $960,000 , and thus the Company is not responsible for this amount. Due to Affiliates As of September 30, 2015 , $1.3 million was due to Cole Advisors and its affiliates primarily related to performance fee, advisory, distribution and dealer manager fees and the reimbursement of organization, offering and acquisition expenses as well as platform fees, net of amounts owed by Cole Advisors of $264,000 , which were included in amounts due to affiliates on the condensed consolidated unaudited balance sheet. As of December 31, 2014 , $1.8 million was due to Cole Advisors and its affiliates related to performance fees, advisory, distribution and dealer manager fees, the reimbursement of organization and offering expenses, and escrow deposits that were paid on the Company’s behalf in connection with the acquisition of the Company’s properties, which were included in amounts due to affiliates on the condensed consolidated unaudited balance sheet. |
Economic Dependency
Economic Dependency | 9 Months Ended |
Sep. 30, 2015 | |
Economic Dependency [Abstract] | |
ECONOMIC DEPENDENCY | ECONOMIC DEPENDENCY Under various agreements, the Company has engaged or will engage Cole Advisors and its affiliates to provide certain services that are essential to the Company, including asset management services, supervision of the management and leasing of properties owned by the Company, asset acquisition and disposition decisions, the sale of shares of the Company’s common stock available for issuance, as well as other administrative responsibilities for the Company including accounting services and investor relations. As a result of these relationships, the Company is dependent upon Cole Advisors and its affiliates. In the event that these companies are unable to provide the Company with these services, the Company would be required to find alternative providers of these services. |
Property Dispositions
Property Dispositions | 9 Months Ended |
Sep. 30, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Property Dispositions | PROPERTY DISPOSITIONS During the nine months ended September 30, 2015 , the Company disposed of four single-tenant properties and one anchored shopping center, for an aggregate gross sales price of $21.9 million and a gain of $5.6 million . No disposition fees were paid to affiliates in connection with the sale of the properties and the Company has no continuing involvement with these properties. The gain on sale of real estate is included in gain on disposition of real estate, net in the condensed consolidated unaudited statements of operations for all periods presented. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Status of the Offering As of November 10, 2015 , the Company had received $179.2 million in gross offering proceeds through the issuance of approximately 10.6 million shares of its common stock in the Offering (including shares issued pursuant to the DRIP). Investment in Real Estate Assets Subsequent to September 30, 2015 , the Company acquired a 100% interest in one real estate property for an aggregate purchase price of $3.6 million . The acquisition was funded with proceeds from the Offering. The Company has not completed its initial purchase price allocation with respect to this property and therefore cannot provide the disclosure for this property in Note 4 to these condensed consolidated unaudited financial statements. Share Redemptions Subsequent to September 30, 2015 and through November 10, 2015 , the Company redeemed approximately 151,000 shares for $2.7 million . Line of Credit As of November 10, 2015 , the Company had $40.0 million outstanding under the Line of Credit and $43.3 million available for borrowing under the Line of Credit and the Series C Line of Credit. Cap on General and Administrative Expenses As discussed in Note 9 to these condensed consolidated unaudited financial statements, Cole Advisors stated that it will continue the existing expense cap for the three months ending December 31, 2015, whereby Cole Advisors will fund all Excess G&A of the Company for such period. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of presentation | The condensed consolidated unaudited financial statements of the Company have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting, including the instructions to Form 10-Q and Article 10 of Regulation S-X, and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. In the opinion of management, the statements for the interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair presentation of the results for such periods. Results for these interim periods are not necessarily indicative of full year results. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended December 31, 2014 , and related notes thereto set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 . The condensed consolidated unaudited financial statements should also be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this Quarterly Report on Form 10-Q. |
Principles of consolidation | The condensed consolidated unaudited financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Reclassifications | Reclassifications Certain amounts in the Company’s prior period consolidated financial statements have been reclassified to conform to the current period presentation. The Company has chosen to break out the details of (i) real estate tax expenses in the Company’s condensed consolidated statements of operations and (ii) straight-line rental income, in the Company’s condensed consolidated statement of cash flows. As such, the corresponding prior period amounts have also been broken out into separate line items to conform to the current financial statement presentation. The reclassifications for the three and nine months ended September 30, 2014 had no effect on previously reported totals or subtotals. |
Use of estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Investment in and recoverability of real estate assets | Investment in and Recoverability of Real Estate Assets Real estate assets are stated at cost, less accumulated depreciation and amortization. Amounts capitalized to real estate assets consist of the cost of acquisition, excluding acquisition related expenses, construction and any tenant improvements, major improvements and betterments that extend the useful life of the real estate assets and leasing costs. All repairs and maintenance are expensed as incurred. The Company is required to make subjective assessments as to the useful lives of its depreciable assets. The Company considers the period of future benefit of each respective asset to determine the appropriate useful life of the assets. Real estate assets, other than land, are depreciated or amortized on a straight-line basis. The estimated useful lives of the Company’s real estate assets by class are generally as follows: Buildings 40 years Tenant improvements Lesser of useful life or lease term Intangible lease assets Lease term The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate assets may not be recoverable. Impairment indicators that the Company considers include, but are not limited to, bankruptcy or other credit concerns of a property’s major tenant, such as a history of late payments, rental concessions and other factors, a significant decrease in a property’s revenues due to lease terminations, vacancies, co-tenancy clauses, reduced lease rates or other circumstances. When indicators of potential impairment are present, the Company assesses the recoverability of the assets by determining whether the carrying amount of the assets will be recovered through the undiscounted future cash flows expected from the use of the assets and their eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying amount, the Company will adjust the real estate assets to their respective fair values and recognize an impairment loss. Generally, fair value is determined using a discounted cash flow analysis and recent comparable sales transactions. As of September 30, 2015 , the Company noted potential impairment indicators at a property with an aggregate carrying value of $1.1 million due to a fire loss at the property. However, based on insurance coverage and the continued receipt of rental income from the tenant, the Company’s estimate of undiscounted cash flows indicated that such carrying amount was expected to be recovered as of September 30, 2015 , and as such no impairment loss was recorded. Nonetheless, it is reasonably possible that the estimate of undiscounted cash flows may change in the near term, which may result in the need to record an impairment loss to reduce such asset to fair value. Any such impairment losses will affect the Company’s assets and stockholders’ equity, operating and net income. The evaluation of properties for potential impairment requires the Company’s management to exercise significant judgment and to make certain assumptions. The use of different judgments and assumptions could result in different conclusions. No impairment indicators were identified and no impairment losses were recorded during the nine months ended September 30, 2014 . When developing estimates of expected future cash flows, the Company makes certain assumptions regarding future market rental income amounts subsequent to the expiration of current lease agreements, property operating expenses, terminal capitalization and discount rates, the expected number of months it takes to re-lease the property, required tenant improvements and the number of years the property will be held for investment. The use of alternative assumptions in estimating expected future cash flows could result in a different determination of the property’s expected future cash flows and a different conclusion regarding the existence of an impairment, the extent of such loss, if any, as well as the fair value of the real estate assets. When a real estate asset is identified by the Company as held for sale, the Company will cease depreciation and amortization of the assets related to the property and estimate the fair value, net of selling costs. If, in management’s opinion, the fair value, net of selling costs, of the asset is less than the carrying amount of the asset, an adjustment to the carrying amount would be recorded to reflect the estimated fair value of the property, net of selling costs. |
Allocation of purchase price of real estate assets | Allocation of Purchase Price of Real Estate Assets Upon the acquisition of real properties, the Company allocates the purchase price to acquired tangible assets, consisting of land, buildings and improvements, and identified intangible assets and liabilities, consisting of the value of above market and below market leases and the value of in-place leases, based in each case on their respective fair values. Acquisition related expenses are expensed as incurred. The Company utilizes independent appraisals to assist in the determination of the fair values of the tangible assets of an acquired property (which includes land and buildings). The information in the appraisal, along with any additional information available to the Company’s management, is used in estimating the amount of the purchase price that is allocated to land. Other information in the appraisal, such as building value and market rents, may be used by the Company’s management in estimating the allocation of purchase price to the building and to intangible lease assets and liabilities. The appraisal firm has no involvement in management’s allocation decisions other than providing this market information. The fair values of above market and below market lease intangibles are recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (1) the contractual amounts to be paid pursuant to the in-place leases and (2) an estimate of fair market lease rates for the corresponding in-place leases, which is generally obtained from independent appraisals, measured over a period equal to the remaining non-cancelable term of the lease including, for below market leases, any bargain renewal periods. The above market and below market lease intangibles are capitalized as intangible lease assets or liabilities, respectively. Above market leases are amortized as a reduction to rental income over the remaining terms of the respective leases. Below market leases are amortized as an increase to rental income over the remaining terms of the respective leases, including any bargain renewal periods. In considering whether or not the Company expects a tenant to execute a bargain renewal option, the Company evaluates economic factors and certain qualitative factors at the time of acquisition, such as the financial strength of the tenant, the remaining lease term, the tenant mix of the leased property, the Company’s relationship with the tenant and the availability of competing tenant space. If a lease were to be terminated prior to its stated expiration, all unamortized amounts of above market or below market lease intangibles relating to that lease would be recorded as an adjustment to rental income. The fair values of in-place leases include estimates of direct costs associated with obtaining a new tenant and opportunity costs associated with lost rental and other property income, which are avoided by acquiring a property with an in-place lease. Direct costs associated with obtaining a new tenant include commissions and other direct costs, and are estimated in part by utilizing information obtained from independent appraisals and management’s consideration of current market costs to execute a similar lease. The intangible values of opportunity costs, which are calculated using the contractual amounts to be paid pursuant to the in-place leases over a market absorption period for a similar lease, are capitalized as intangible lease assets and are amortized to expense over the remaining term of the respective leases. If a lease were to be terminated prior to its stated expiration, all unamortized amounts of in-place lease assets relating to that lease would be expensed. The Company may acquire certain properties subject to contingent consideration arrangements that may obligate the Company to pay additional consideration to the seller based on the outcome of future events. Additionally, the Company may acquire certain properties for which it funds certain contingent consideration amounts into an escrow account pending the outcome of certain future events. The outcome may result in the release of all or a portion of the escrow funds to the Company or the seller or a combination thereof. Contingent consideration arrangements will be based on a predetermined formula and have set time periods regarding the obligation to make future payments, including funds released to the seller from escrow accounts, or the right to receive escrowed funds as set forth in the respective purchase and sale agreement. Contingent consideration arrangements, including amounts funded through an escrow account, will be recorded upon acquisition of the respective property at their estimated fair value, and any changes to the estimated fair value subsequent to acquisition will be reflected in the accompanying condensed consolidated unaudited statements of operations. The determination of the amount of contingent consideration arrangements is based on the probability of several possible outcomes, as identified by management. The Company will estimate the fair value of assumed mortgage notes payable based upon indications of current market pricing for similar types of debt financing with similar maturities. Assumed mortgage notes payable will initially be recorded at their estimated fair value as of the assumption date, and any difference between such estimated fair value and the mortgage note’s outstanding principal balance will be amortized to interest expense over the term of the respective mortgage note payable. The determination of the fair values of the real estate assets and liabilities acquired requires the use of significant assumptions with regard to the current market rental rates, rental growth rates, capitalization and discount rates, interest rates and other variables. The use of alternative estimates may result in a different allocation of the Company’s purchase price, which could materially impact the Company’s results of operations. |
Investment in marketable securities | Investment in Marketable Securities Investment in marketable securities consists primarily of the Company’s investment in corporate and government debt securities. The Company determines the appropriate classification for debt securities at the time of purchase and reevaluates such designation as of each balance sheet date. As of September 30, 2015 , the Company classified its investments as available-for-sale as the Company is not actively trading the securities; however, the Company may sell them prior to their maturity. These investments are carried at their estimated fair value with unrealized gains and losses reported in accumulated other comprehensive income. The Company monitors its available-for-sale securities for impairments. A loss is recognized when the Company determines that a decline in the estimated fair value of a security below its amortized cost is other-than-temporary. The Company considers many factors in determining whether the impairment of a security is deemed to be other-than-temporary, including, but not limited to, the length of time the security has had a decline in estimated fair value below its amortized cost, the amount of the unrealized loss, the intent and ability of the Company to hold the security for a period of time sufficient for a recovery in value, recent events specific to the issuer or industry, external credit ratings and recent changes in such ratings. The analysis of determining whether the impairment of a security is deemed to be other-than-temporary requires significant judgment and assumptions. The use of alternative judgments and assumptions could result in a different conclusion. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity computed under the effective interest method and is recorded in the accompanying condensed consolidated unaudited statements of operations in interest and other expense, net. Upon the sale of a security, the realized net gain or loss is computed on the specific identification method. |
Restricted cash and escrows and cash and cash equivalents | Restricted Cash and Escrows The Company had $512,000 in restricted cash as of September 30, 2015 . Included in restricted cash were escrowed investor proceeds of $457,000 for which shares of common stock had not been issued as of September 30, 2015 , and $55,000 in lender cash management accounts. As part of certain debt agreements, rent from certain of the Company’s tenants is deposited directly into a lockbox account, from which funds in excess of the required minimum balance are disbursed on a weekly basis to the Company. Cash and Cash Equivalents As of September 30, 2015 , the Company had cash on deposit, including restricted cash, at four financial institutions, three of which had Company deposits in excess of federally insured levels, totaling $13.0 million ; however, the Company has not experienced any losses in such accounts. The Company limits significant cash deposits to accounts held by financial institutions with high credit standing; therefore, the Company believes it is not exposed to any significant credit risk on its cash deposits. |
Property concentrations | Property Concentrations As of September 30, 2015 , no single tenant accounted for greater than 10% of the Company’s 2015 gross annualized rental revenues. Tenants in the discount store , drugstore , and grocery industries accounted for 16% , 11% , and 10% , respectively, of the Company’s 2015 gross annualized rental revenues. Additionally, the Company has certain geographic concentrations in its property holdings. In particular, as of September 30, 2015 , six of the Company’s properties were located in Texas , and seven of the Company’s properties were located in Ohio , accounting for 12% and 10% , respectively, of the Company’s 2015 gross annualized rental revenues. |
Derivative instruments and hedging activities | Derivative Instruments and Hedging Activities The Company accounts for its derivative instruments at fair value. Accounting for changes in the fair value of a derivative instrument depends on the intended use of the derivative instrument and the designation of the derivative instrument. The change in fair value of the effective portion of any derivative instrument that is designated as a hedge is recorded as other comprehensive (loss) income. The changes in fair value for derivative instruments that are not designated as hedges or that do not meet the hedge accounting criteria are recorded as a gain or loss to operations. |
Revenue recognition | Revenue Recognition Certain properties have leases where minimum rental payments increase during the term of the lease. The Company records rental income for the full term of each lease on a straight-line basis. When the Company acquires a property, the terms of any existing leases are considered to commence as of the acquisition date for the purpose of this calculation. The Company defers the recognition of contingent rental income, such as percentage rents, until the specific target that triggers the contingent rental income is achieved. Expected reimbursements from tenants for recoverable real estate taxes and operating expenses are included in tenant reimbursement income in the period when such costs are incurred. The Company continually reviews receivables related to rent and unbilled rent receivables and determines collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. In the event that the collectability of a receivable is in doubt, the Company will record an increase in the allowance for uncollectible accounts or record a direct write-off of the receivable in the condensed consolidated unaudited statements of operations and comprehensive income (loss). As of September 30, 2015 and December 31, 2014 , the Company did not have an allowance for uncollectible accounts. |
Earnings per share | Earnings per Share We have three classes of common stock with nonforfeitable dividend rights that are determined based on a different NAV for each class. Accordingly, we utilize the two-class method to determine our earnings per share, which results in the same earnings per share for each of the classes. |
Recent accounting pronouncements | Recent Accounting Pronouncements In May 2014, the U.S. Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which supersedes the revenue recognition requirements in Revenue Recognition (Topic 605) and requires an entity to recognize revenue in a way that depicts the transfer of promised goods or services to customers, including real estate sales, in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB provided for a one-year deferral of the effective date for ASU 2014-09, which is now effective for fiscal years and interim periods beginning after December 15, 2017. Early adoption is permitted for annual reporting periods beginning after December 15, 2016 and the interim periods within that year. The Company is currently evaluating the impact of the new standard on the Company’s condensed consolidated unaudited financial statements. In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis (“ASU 2015-02”), which eliminates the deferral of Financial Accounting Standard 167, modifies the evaluation of whether limited partnerships and similar legal entities are variable or voting interest entities, eliminates the presumption that the general partner should consolidate a limited partnership, modifies the consolidation analysis for reporting entities that are involved with variable interest entities, particularly those that have fee arrangements and related party relationships, and provides a scope exception for reporting entities with interests in legal entities that operate as registered money market funds. These changes will require re-evaluation of the consolidation conclusion for certain entities and will require the Company to revise its analysis regarding the consolidation or deconsolidation of such entities. ASU 2015-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, with early adoption permitted. Companies may elect to apply the amendments in ASU 2015-02 using a modified retrospective approach or by applying the amendments retrospectively. The Company is currently evaluating the impact of the new standard on the Company’s condensed consolidated unaudited financial statements. In April 2015, the FASB issued ASU No. 2015-03 Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation and Subsequent Measurement of Debt Issuance Costs (“ASU 2015-03”). The update requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability rather than presenting the deferred charge as an asset. The previous requirement to recognize debt issuance costs as deferred charges conflicts with the guidance in FASB Concepts Statement No. 6, “Elements of Financial Statements”, which states that debt issuance costs are similar to debt discounts and effectively reduce the proceeds of borrowing, thereby increasing the effective interest rate. FASB Concepts Statement No. 6 further states that debt issuance costs cannot be an asset because they provide no future economic benefit. After the update is adopted, debt disclosures would include the face amount of the debt liability and the effective interest rate. In August 2015, the FASB sought to clarify questions that arose after ASU 2015-03 was issued by issuing ASU No. 2015-15, Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements (“ASU 2015-15”). The update clarifies that debt issuance costs related to securing a revolving line of credit may be presented as an asset and subsequently amortized ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. Both ASU 2015-03 and ASU 2015-15 are effective for fiscal years beginning after December 15, 2015, and are to be applied retrospectively, with early adoption permitted. The Company is currently evaluating the impact of these new standards on the Company’s condensed consolidated unaudited financial statements. In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805), Simplifying the Accounting for Measurement-Period Adjustments (“ASU 2015-16”), which eliminates the requirement that an acquirer in a business combination retrospectively account for measurement-period adjustments. Measurement-period adjustments should be recognized during the period in which the adjustment amount is determined, including any earnings impact that the acquirer would have recorded in prior periods if the accounting was completed at the acquisition date. ASU 2015-16 is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this new standard on the Company’s condensed consolidated unaudited financial statements. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Investment in and valuation of real estate and related assets | The estimated useful lives of the Company’s real estate assets by class are generally as follows: Buildings 40 years Tenant improvements Lesser of useful life or lease term Intangible lease assets Lease term |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of Company's Financial Assets and Liabilities | In accordance with the fair value hierarchy described above, the following tables show the fair value of the Company’s financial assets and liabilities that are required to be measured at fair value on a recurring basis as of September 30, 2015 and December 31, 2014 (in thousands): Balance as of Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs September 30, 2015 (Level 1) (Level 2) (Level 3) Financial asset: Marketable securities $ 4,623 $ 4,623 $ — $ — Financial liability: Interest rate swaps $ (737 ) $ — $ (737 ) $ — Balance as of Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs December 31, 2014 (Level 1) (Level 2) (Level 3) Financial asset: Marketable Securities $ 490 $ 490 $ — $ — |
Real Estate Acquisitions (Table
Real Estate Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Schedule of purchase price allocation | The following table summarizes the purchase price allocation (in thousands): 2014 Acquisitions Land $ 21,067 Building and improvements 85,060 Acquired in-place leases 12,898 Acquired above market leases 3,286 Acquired below market leases (863 ) Total purchase price $ 121,448 The following table summarizes the preliminary purchase price allocation for the properties purchased during the nine months ended September 30, 2015 (in thousands): 2015 Acquisitions Land $ 1,672 Building and improvements 4,910 Acquired in-place leases 759 Acquired below market leases (21 ) Total purchase price $ 7,320 |
Business acquisition, pro forma information | The table below presents the Company’s estimated revenue and net income (loss), on a pro forma basis, for the three and nine months ended September 30, 2014 and 2013 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2014 2013 2014 2013 Pro forma basis: Revenue $ 3,993 $ 3,158 $ 12,037 $ 8,526 Net income (loss) $ 234 $ (266 ) $ 1,264 $ (1,015 ) The following information summarizes selected financial information of the Company as if the 2015 Acquisitions were completed on January 1, 2014 for each period presented below. The table below presents the Company’s estimated revenue and net income, on a pro forma basis, for the three and nine months ended September 30, 2015 and 2014 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Pro forma basis Revenue $ 4,832 $ 3,584 $ 14,505 $ 8,909 Net income $ 1,195 $ (37 ) $ 7,749 $ 372 |
Marketable Securities (Tables)
Marketable Securities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Available-for-sale securities | The following is a summary of the Company’s available-for-sale securities as of September 30, 2015 (in thousands): Available-for-Sale Securities Amortized Cost Basis Unrealized Loss Fair Value U.S. Treasury Bonds $ 933 $ 8 $ 941 U.S. Agency Bonds 1,134 1 1,135 Corporate Bonds 2,582 (35 ) 2,547 Total available-for-sale securities $ 4,649 $ (26 ) $ 4,623 |
Schedule of available-for-sale securities reconciliation | The following table provides the activity for the marketable securities during the nine months ended September 30, 2015 (in thousands): Amortized Cost Basis Unrealized Gain (Loss) Fair Value Marketable securities as of December 31, 2014 $ 487 $ 3 $ 490 Face value of marketable securities acquired 5,765 — 5,765 Premiums and discounts on purchase of marketable securities, net of acquisition costs 134 — 134 Amortization on marketable securities (8 ) — (8 ) Sales and maturities of securities (1,729 ) — (1,729 ) Decrease in fair value of marketable securities — (29 ) (29 ) Marketable securities as of September 30, 2015 $ 4,649 $ (26 ) $ 4,623 |
Investments classified by contractual maturity date | The scheduled maturities of the Company’s marketable securities as of September 30, 2015 are as follows (in thousands): Available-for-Sale Securities Amortized Cost Estimated Fair Value Due within one year $ 377 $ 377 Due after one year through five years 1,244 1,244 Due after five years through ten years 2,305 2,279 Due after ten years 723 723 Total $ 4,649 $ 4,623 |
Derivative Instruments and He25
Derivative Instruments and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of derivative instruments | The following table summarizes the terms of the Company’s executed swap agreements designated as hedging instruments as of September 30, 2015 (in thousands). The Company did not have any executed swap agreements as of September 30, 2014 . Outstanding Notional Amount as of Interest Effective Maturity Fair Value of Liabilities as of Balance Sheet Location September 30, 2015 Rate (1) Date Date September 30, 2015 Interest Rate Swaps Derivative liability, deferred rental income, and other liabilities $ 40,000 3.49 % 6/30/2015 9/12/2019 $ (737 ) (1) The interest rate consists of the underlying index swapped to a fixed rate and the applicable interest rate spread. |
Schedule of derivative instruments, gain (loss) | The following table summarizes the unrealized loss on the Company’s derivative instruments and hedging activities for the three and nine months ended September 30, 2015 (in thousands). The Company did not own any derivative instruments for the three and nine months ended September 30, 2014 . Amount of Loss Recognized as Other Comprehensive Loss Derivatives in Cash Flow Hedging Relationships Three Months Ended September 30, 2015 Nine Months Ended September 30, 2015 Interest Rate Swaps (1) $ (563 ) $ (737 ) (1) There were no portions of the change in the fair value of the interest rate swaps that were considered ineffective during the nine months ended September 30, 2015 . |
Lines of Credit and Notes Pay26
Lines of Credit and Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Summary of Debt Activity | The following table summarizes the debt activity for the nine months ended September 30, 2015 and the debt balances as of September 30, 2015 and December 31, 2014 (in thousands): During the Nine Months Ended September 30, 2015 Balance as of Debt Issuance Repayments Balance as of September 30, 2015 Line of credit $ 100,000 $ 23,000 $ (83,000 ) $ 40,000 Fixed rate debt 20,304 39,950 — 60,254 Line of credit with affiliate — 10,000 (10,000 ) — Total $ 120,304 $ 72,950 $ (93,000 ) $ 100,254 |
Related-Party Transactions an27
Related-Party Transactions and Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The Company recorded commissions, fees and expense reimbursements as shown in the table below for services provided by Cole Advisors and its affiliates related to the services described above during the periods indicated (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Offering: Selling commissions $ 18 $ 259 $ 63 $ 478 Selling commissions reallowed by CCC $ 18 $ 259 $ 63 $ 478 Distribution fees $ 23 $ 12 $ 63 $ 17 Distribution fees reallowed by CCC $ 23 $ 9 $ 57 $ 11 Dealer manager fees $ 196 $ 159 $ 547 $ 382 Dealer manager fees reallowed by CCC $ 22 $ 12 $ 71 $ 20 Organization and offering expense reimbursement $ 115 $ 171 $ 230 $ 440 The Company recorded fees and expense reimbursements as shown in the table below for services provided by Cole Advisors or its affiliates related to the services described above during the periods indicated (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Acquisitions, Operations and Performance: Acquisition expenses $ 95 $ 151 $ 135 $ 286 Advisory fee $ 331 $ 263 $ 921 $ 635 Operating expense reimbursement $ — $ — $ — $ — Performance fee $ 362 $ 41 $ 765 $ 41 In connection with the Offering, CCC, the Company’s dealer manager, will receive selling commissions, an asset-based dealer manager fee and/or an asset-based distribution fee, as summarized in the table below for each class of common stock: Selling Commission (1) Dealer Manager Fee (2) Distribution Fee (2) W Shares — 0.55 % — A Shares up to 3.75% 0.55 % 0.50 % I Shares — 0.25 % — (1) The selling commission is based on the offering price for A Shares. The selling commission expressed as a percentage of NAV per A Share, rather than the offering price, is up to 3.90% , subject to rounding and the effect of volume discounts the Company is offering on certain purchases of $150,001 or more of A Shares. Selling commissions are deducted directly from the offering price for A Shares and paid to CCC. CCC reallows 100% of the selling commissions on A Shares to participating broker-dealers. (2) The dealer manager and distribution fees accrue daily in an amount equal to 1/365th of the percentage of NAV per W Share, A Share or I Share, as applicable, for such day on a continuous basis. CCC, in its sole discretion, may reallow a portion of the dealer manager fee and distribution fee to participating broker-dealers. |
Organization and Business (Deta
Organization and Business (Details) $ / shares in Units, ft² in Millions | 9 Months Ended | ||
Sep. 30, 2015ft²memberspropertystates$ / shares | Aug. 26, 2013USD ($)class_of_stock | Dec. 06, 2011USD ($) | |
Organization and business | |||
Number of board of directors members | members | 4 | ||
Number of independent board of directors members | members | 3 | ||
Number of states in which entity owns properties | states | 28 | ||
Percentage of rentable space leased (in square feet) | 99.60% | ||
Consolidated properties | |||
Organization and business | |||
Number of owned properties | property | 73 | ||
Rentable square feet (in square feet) | ft² | 1.6 | ||
Common Class W | |||
Organization and business | |||
Share price (in dollars per share) | $ / shares | $ 18.16 | ||
Common Class A | |||
Organization and business | |||
Share price (in dollars per share) | $ / shares | 18.12 | ||
Common Class I | |||
Organization and business | |||
Share price (in dollars per share) | $ / shares | $ 18.23 | ||
IPO | |||
Organization and business | |||
Common stock, value authorized | $ 4,000,000,000 | ||
Classes of common stock, additions | class_of_stock | 2 | ||
Multi-class offering | |||
Organization and business | |||
Common stock, value authorized | $ 4,000,000,000 | ||
Classes of common stock | class_of_stock | 3 | ||
Multi-class offering | Primary offering | |||
Organization and business | |||
Common stock, value authorized | $ 3,500,000,000 | ||
Multi-class offering | Distribution reinvestment plan | |||
Organization and business | |||
Common stock, value authorized | $ 500,000,000 | ||
Cole OP | |||
Organization and business | |||
General partner partnership interest percentage | 100.00% |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Details) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2015USD ($)single_tenant_property | Dec. 31, 2014USD ($)single_tenant_property | Aug. 26, 2013class_of_stock | |
Valuation of real estate and related assets | |||
Number of real estate properties held for sale | single_tenant_property | 0 | 0 | |
Restricted cash | $ 512 | $ 25 | |
Building | |||
Valuation of real estate and related assets | |||
Acquired real estate asset, useful life | 40 years | ||
Fire Loss Property | |||
Valuation of real estate and related assets | |||
Value of property with potential impairment indicators | $ 1,100 | ||
Escrowed Investor Proceeds | |||
Valuation of real estate and related assets | |||
Restricted cash | 457 | ||
Lender Cash Management Accounts | |||
Valuation of real estate and related assets | |||
Restricted cash | $ 55 | ||
Multi-class offering | |||
Valuation of real estate and related assets | |||
Classes of common stock | class_of_stock | 3 |
Summary of Significant Accoun30
Summary of Significant Accounting Policies - Concentration of credit risk (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2015USD ($)financial_institutionspropertytenant | |
Concentration Risk | |
Cash on deposit, number of financial institutions | 4 |
Cash on deposit, number of financial institutions which had deposits in excess of current federally insured limits | 3 |
Texas | |
Concentration Risk | |
Number of owned properties | property | 6 |
Ohio | |
Concentration Risk | |
Number of owned properties | property | 7 |
Gross annualized rental revenues by industry | |
Concentration Risk | |
Concentration risk, percentage | 10.00% |
Credit concentration risk | Demand deposits | |
Concentration Risk | |
Concentration risk, credit risk, financial instrument, maximum exposure | $ | $ 13 |
Credit concentration risk | Gross annualized rental revenues by industry | Texas | |
Concentration Risk | |
Concentration risk, percentage | 12.00% |
Credit concentration risk | Gross annualized rental revenues by industry | Ohio | |
Concentration Risk | |
Concentration risk, percentage | 10.00% |
Customer concentration risk | Gross annualized rental revenues by industry | |
Concentration Risk | |
Number of tenants | tenant | 0 |
Customer concentration risk | Gross annualized rental revenues by industry | Discount store industry | |
Concentration Risk | |
Concentration risk, percentage | 16.00% |
Customer concentration risk | Gross annualized rental revenues by industry | Drugstore industry | |
Concentration Risk | |
Concentration risk, percentage | 11.00% |
Customer concentration risk | Gross annualized rental revenues by industry | Grocery industry | |
Concentration Risk | |
Concentration risk, percentage | 10.00% |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Marketable securities | $ 4,623 | |
Carrying amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Line of credit | 100,300 | $ 120,300 |
Fair value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Marketable securities | 4,623 | 490 |
Fair value, inputs, level 2 | Fair value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Line of credit | 100,000 | 120,300 |
Recurring | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Marketable securities | 4,623 | 490 |
Recurring | Fair Value, Inputs, level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Marketable securities | 4,623 | 490 |
Recurring | Fair value, inputs, level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Marketable securities | 0 | 0 |
Recurring | Fair Value, Inputs, level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Marketable securities | 0 | $ 0 |
Recurring | Interest Rate Swap | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Derivative Liability | (737) | |
Recurring | Interest Rate Swap | Fair Value, Inputs, level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Derivative Liability | 0 | |
Recurring | Interest Rate Swap | Fair value, inputs, level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Derivative Liability | (737) | |
Recurring | Interest Rate Swap | Fair Value, Inputs, level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Derivative Liability | $ 0 |
Real Estate Acquisitions (Detai
Real Estate Acquisitions (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2013USD ($) | Sep. 30, 2015USD ($)commercial_properties | Sep. 30, 2014USD ($)commercial_properties | Sep. 30, 2013USD ($) | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | ||||||
Acquisition related expenses | $ 150 | $ 639 | $ 217 | $ 1,222 | ||
2015 Acquisitions | ||||||
Business Acquisition | ||||||
Business acquisition, percentage of voting interests acquired | 100.00% | 100.00% | ||||
Number of real estate acquisitions (in number of properties) | commercial_properties | 3 | |||||
Total purchase price | $ 7,300 | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | ||||||
Land | $ 1,672 | 1,672 | ||||
Building and improvements | 4,910 | 4,910 | ||||
Total purchase price | 7,300 | 7,300 | ||||
Revenue of acquiree since acquisition date | 55 | 58 | ||||
Net loss of acquiree since acquisition date | 23 | 42 | ||||
Acquisition related expenses | 150 | 217 | ||||
Pro forma basis | ||||||
Revenue | 4,832 | 3,584 | 14,505 | 8,909 | ||
Net income (loss) | 1,195 | $ (37) | 7,749 | $ 372 | ||
2015 Acquisitions | Acquired in-place leases | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | ||||||
Acquired in-place and above market leases | 759 | 759 | ||||
2015 Acquisitions | Acquired below market leases | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | ||||||
Acquired below market leases | $ (21) | $ (21) | ||||
2014 Acquisitions | ||||||
Business Acquisition | ||||||
Business acquisition, percentage of voting interests acquired | 100.00% | 100.00% | ||||
Number of real estate acquisitions (in number of properties) | commercial_properties | 39 | |||||
Total purchase price | $ 121,400 | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | ||||||
Land | $ 21,067 | 21,067 | ||||
Building and improvements | 85,060 | 85,060 | ||||
Total purchase price | 121,448 | 121,448 | ||||
Revenue of acquiree since acquisition date | 1,200 | 1,800 | ||||
Net loss of acquiree since acquisition date | 192 | 579 | ||||
Acquisition related expenses | 639 | 1,200 | ||||
Pro forma basis | ||||||
Revenue | 3,993 | $ 3,158 | 12,037 | $ 8,526 | ||
Net income (loss) | 234 | $ (266) | 1,264 | $ (1,015) | ||
2014 Acquisitions | Acquired in-place leases | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | ||||||
Acquired in-place and above market leases | 12,898 | 12,898 | ||||
2014 Acquisitions | Acquired above market leases | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | ||||||
Acquired in-place and above market leases | 3,286 | 3,286 | ||||
2014 Acquisitions | Acquired below market leases | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | ||||||
Acquired below market leases | $ (863) | $ (863) |
Marketable Securities (Details)
Marketable Securities (Details) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2015USD ($)security | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2014USD ($) | |
Schedule of Available-for-sale Securities | ||||
Investment in marketable securities | $ 4,623 | $ 490 | ||
Amortized Cost Basis | $ 4,649 | 4,649 | ||
Unrealized Loss | (26) | (26) | 3 | |
Fair Value | 4,623 | 4,623 | ||
Amortized Cost Basis Rollforward | ||||
Marketable securities as of September 30, 2015 | 4,649 | |||
Unrealized Gain Rollforward | ||||
Marketable securities as of December 31, 2014 | 3 | |||
Decrease in fair value of marketable securities | (29) | |||
Marketable securities as of September 30, 2015 | (26) | |||
Fair Value Rollforward | ||||
Decrease in fair value of marketable securities | (29) | |||
Marketable securities as of September 30, 2015 | 4,623 | |||
Amortized Cost | ||||
Due within one year | 377 | |||
Due after one year through five years | 1,244 | |||
Due after five years through ten years | 2,305 | |||
Due after ten years | 723 | |||
Total | 4,649 | 4,649 | ||
Estimated Fair Value | ||||
Due within one year | 377 | |||
Due after one year through five years | 1,244 | |||
Due after five years through ten years | 2,279 | |||
Due after ten years | 723 | |||
Total | $ 4,623 | 4,623 | ||
Available-for-sale Securities, Other Disclosure Items [Abstract] | ||||
Number of Securities Sold | security | 48 | |||
Proceeds from sale and maturities of marketable securities | $ 1,717 | $ 226 | ||
Loss on sale of marketable securities | 12 | $ (2) | ||
Unrealized gain (loss) on investments | (29) | |||
Amortized Cost Basis | ||||
Schedule of Available-for-sale Securities | ||||
Amortized Cost Basis | 4,649 | 4,649 | 487 | |
Amortized Cost Basis Rollforward | ||||
Marketable securities as of December 31, 2014 | 487 | |||
Face value of marketable securities acquired | 5,765 | |||
Premiums and discounts on purchase of marketable securities, net of acquisition costs | 134 | |||
Amortization on marketable securities | (8) | |||
Sales and maturities of securities | (1,729) | |||
Marketable securities as of September 30, 2015 | 4,649 | |||
Fair Value Rollforward | ||||
Face value of marketable securities acquired | 5,765 | |||
Premiums and discounts on purchase of marketable securities, net of acquisition costs | 134 | |||
Amortization on marketable securities | (8) | |||
Amortized Cost | ||||
Total | 4,649 | 4,649 | 487 | |
Fair Value | ||||
Schedule of Available-for-sale Securities | ||||
Fair Value | 490 | 4,623 | 490 | |
Amortized Cost Basis Rollforward | ||||
Face value of marketable securities acquired | 5,765 | |||
Premiums and discounts on purchase of marketable securities, net of acquisition costs | 134 | |||
Amortization on marketable securities | (8) | |||
Unrealized Gain Rollforward | ||||
Decrease in fair value of marketable securities | (29) | |||
Fair Value Rollforward | ||||
Marketable securities as of December 31, 2014 | 490 | |||
Face value of marketable securities acquired | 5,765 | |||
Premiums and discounts on purchase of marketable securities, net of acquisition costs | 134 | |||
Amortization on marketable securities | (8) | |||
Sales and maturities of securities | (1,729) | |||
Decrease in fair value of marketable securities | (29) | |||
Marketable securities as of September 30, 2015 | 4,623 | |||
Estimated Fair Value | ||||
Total | 490 | 4,623 | $ 490 | |
U.S. Treasury Bonds | ||||
Schedule of Available-for-sale Securities | ||||
Amortized Cost Basis | 933 | 933 | ||
Unrealized Loss | 8 | 8 | ||
Fair Value | 941 | 941 | ||
Amortized Cost Basis Rollforward | ||||
Marketable securities as of September 30, 2015 | 933 | |||
Unrealized Gain Rollforward | ||||
Marketable securities as of September 30, 2015 | 8 | |||
Fair Value Rollforward | ||||
Marketable securities as of September 30, 2015 | 941 | |||
Amortized Cost | ||||
Total | 933 | 933 | ||
Estimated Fair Value | ||||
Total | 941 | 941 | ||
U.S. Agency Bonds | ||||
Schedule of Available-for-sale Securities | ||||
Amortized Cost Basis | 1,134 | 1,134 | ||
Unrealized Loss | 1 | 1 | ||
Fair Value | 1,135 | 1,135 | ||
Amortized Cost Basis Rollforward | ||||
Marketable securities as of September 30, 2015 | 1,134 | |||
Unrealized Gain Rollforward | ||||
Marketable securities as of September 30, 2015 | 1 | |||
Fair Value Rollforward | ||||
Marketable securities as of September 30, 2015 | 1,135 | |||
Amortized Cost | ||||
Total | 1,134 | 1,134 | ||
Estimated Fair Value | ||||
Total | 1,135 | 1,135 | ||
Corporate Bonds | ||||
Schedule of Available-for-sale Securities | ||||
Amortized Cost Basis | 2,582 | 2,582 | ||
Unrealized Loss | (35) | (35) | ||
Fair Value | 2,547 | 2,547 | ||
Amortized Cost Basis Rollforward | ||||
Marketable securities as of September 30, 2015 | 2,582 | |||
Unrealized Gain Rollforward | ||||
Marketable securities as of September 30, 2015 | (35) | |||
Fair Value Rollforward | ||||
Marketable securities as of September 30, 2015 | 2,547 | |||
Amortized Cost | ||||
Total | 2,582 | 2,582 | ||
Estimated Fair Value | ||||
Total | $ 2,547 | $ 2,547 |
Derivative Instruments and He34
Derivative Instruments and Hedging Activities (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015USD ($)swap_agreement | Sep. 30, 2014USD ($)swap_agreement | Sep. 30, 2015USD ($)swap_agreement | Sep. 30, 2014USD ($)swap_agreement | |
Derivatives, Fair Value [Line Items] | ||||
Amount of loss reclassified from other comprehensive (loss) income into income as interest expense | $ 137 | $ 0 | $ 137 | $ 0 |
Unrealized loss on interest rate swaps | $ (700) | $ 0 | $ (874) | $ 0 |
Interest Rate Swap | ||||
Derivatives, Fair Value [Line Items] | ||||
Number of swap agreements | swap_agreement | 1 | 0 | 1 | 0 |
Cash Flow Hedging | Interest Rate Swap | ||||
Derivatives, Fair Value [Line Items] | ||||
Interest rate cash flow hedge gain (loss) to be reclassified during next twelve months | $ 462 | $ 462 | ||
Unrealized loss on interest rate swaps | (563) | (737) | ||
Derivative liability, event of default, termination amount | 751 | 751 | ||
Cash Flow Hedging | Interest Rate Swap | Derivative Liabilities, Deferred Rent and Other Liabilities | ||||
Derivatives, Fair Value [Line Items] | ||||
Outstanding notional amount | $ 40,000 | $ 40,000 | ||
Interest rate (percentage) | 3.49% | 3.49% | ||
Fair value of liabilities | $ (737) | $ (737) |
Lines of Credit and Notes Pay35
Lines of Credit and Notes Payable (Details) - USD ($) | Dec. 16, 2014 | Sep. 30, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Debt Instrument | ||||
Debt outstanding | $ 120,304,000 | $ 100,254,000 | $ 120,304,000 | |
Weighted average years to maturity | 5 years 10 months 24 days | |||
Weighted average interest rate (percentage) | 3.19% | |||
Debt Outstanding [Roll Forward] | ||||
Balance as of December 31, 2014 | $ 120,304,000 | |||
Debt Issuance | 72,950,000 | |||
Repayments | (93,000,000) | |||
Balance as of September 30, 2015 | 100,254,000 | |||
Line of credit and notes payable | $ 100,254,000 | 120,304,000 | ||
Line of Credit | ||||
Debt Outstanding [Roll Forward] | ||||
Line of credit facility, maximum borrowing capacity | $ 125,000,000 | |||
Line of credit facilities, borrowing base calculation, percentage applied to the value of qualified properties | 65.00% | |||
Line of credit and notes payable | $ 40,000,000 | |||
Line of credit, remaining borrowing capacity | 23,300,000 | |||
Debt security, amount, aggregate gross real estate assets net of gross intangible lease liabilities | 117,400,000 | |||
Line of Credit | Revolving Credit Facility | ||||
Debt Outstanding [Roll Forward] | ||||
Line of credit facility, maximum borrowing capacity | 85,000,000 | |||
JPMorgan Chase, Revolving Credit Facility | Line of Credit | Revolving Credit Facility | ||||
Debt Instrument | ||||
Debt outstanding | 40,000,000 | 40,000,000 | 100,000,000 | |
Debt Outstanding [Roll Forward] | ||||
Balance as of December 31, 2014 | 100,000,000 | |||
Debt Issuance | 23,000,000 | |||
Repayments | (83,000,000) | |||
Balance as of September 30, 2015 | 40,000,000 | |||
JPMorgan Chase, Revolving Credit Facility | Unsecured Debt | Term Loan | ||||
Debt Outstanding [Roll Forward] | ||||
Line of credit facility, maximum borrowing capacity | 40,000,000 | |||
Fixed Rate Debt | Loans Payable | ||||
Debt Instrument | ||||
Debt outstanding | 20,304,000 | 60,254,000 | 20,304,000 | |
Debt Outstanding [Roll Forward] | ||||
Balance as of December 31, 2014 | 20,304,000 | |||
Debt Issuance | 39,950,000 | |||
Repayments | 0 | |||
Balance as of September 30, 2015 | 60,254,000 | |||
Debt security, amount, aggregate gross real estate assets net of gross intangible lease liabilities | $ 99,100,000 | |||
Amended Credit Facility | Line of Credit | ||||
Debt Outstanding [Roll Forward] | ||||
Line of credit facilities, borrowing base calculation, percentage applied to the value of qualified properties | 60.00% | |||
Affiliated Line of Credit, Series C, LLC Loan | Line of Credit | Revolving Credit Facility | ||||
Debt Instrument | ||||
Debt outstanding | 0 | $ 0 | $ 0 | |
Debt Outstanding [Roll Forward] | ||||
Balance as of December 31, 2014 | 0 | |||
Debt Issuance | 10,000,000 | |||
Repayments | (10,000,000) | |||
Balance as of September 30, 2015 | $ 0 | |||
Leverage Ratio Less than or Equal to Fifty Percent | Secured Revolving Credit Facility, Base Rate | Line of Credit | Revolving Credit Facility | ||||
Debt Outstanding [Roll Forward] | ||||
Debt instrument, interest rate, stated percentage | 0.90% | |||
Leverage ratio | 50.00% | |||
Leverage Ratio Less than or Equal to Fifty Percent | Secured Revolving Credit Facility, Eurodollar Rate | Line of Credit | Revolving Credit Facility | ||||
Debt Outstanding [Roll Forward] | ||||
Debt instrument, interest rate, stated percentage | 1.90% | |||
Leverage ratio | 50.00% | |||
Leverage Ratio Greater than Sixty Percent [Member] | Secured Revolving Credit Facility, Base Rate | Line of Credit | Revolving Credit Facility | ||||
Debt Outstanding [Roll Forward] | ||||
Debt instrument, interest rate, stated percentage | 1.45% | |||
Leverage ratio | 60.00% | |||
Leverage Ratio Greater than Sixty Percent [Member] | Secured Revolving Credit Facility, Eurodollar Rate | Line of Credit | Revolving Credit Facility | ||||
Debt Outstanding [Roll Forward] | ||||
Debt instrument, interest rate, stated percentage | 2.45% | |||
Leverage ratio | 60.00% | |||
Federal Funds Effective Rate | Secured Revolving Credit Facility | Line of Credit | Revolving Credit Facility | ||||
Debt Outstanding [Roll Forward] | ||||
Basis spread on variable rate | 0.50% | |||
Statutory Reserve Rate | Secured Revolving Credit Facility | Line of Credit | Revolving Credit Facility | ||||
Debt Outstanding [Roll Forward] | ||||
Basis spread on variable rate | 1.00% | |||
Series C, Llc | Affiliate of Company Advisor | Unsecured Debt | Revolving Credit Facility | ||||
Debt Outstanding [Roll Forward] | ||||
Line of credit facility, maximum borrowing capacity | $ 20,000,000 | |||
Line of credit, remaining borrowing capacity | $ 20,000,000 | |||
Line of credit, amount outstanding | $ 0 | |||
Series C, Llc | Affiliate of Company Advisor | London Interbank Offered Rate (LIBOR) | Unsecured Debt | Revolving Credit Facility | ||||
Debt Outstanding [Roll Forward] | ||||
Basis spread on variable rate | 2.45% | |||
Minimum | Fixed Rate Debt | Loans Payable | ||||
Debt Outstanding [Roll Forward] | ||||
Debt instrument, interest rate, stated percentage | 3.81% | |||
Maximum | Fixed Rate Debt | Loans Payable | ||||
Debt Outstanding [Roll Forward] | ||||
Debt instrument, interest rate, stated percentage | 4.05% | |||
Interest Rate Swap | Cash Flow Hedging | 2015 Swapped Term Loan | Unsecured Debt | Term Loan | ||||
Debt Outstanding [Roll Forward] | ||||
Line of credit facility, maximum borrowing capacity | $ 40,000,000 | |||
Interest rate at period end | 3.49% | |||
Interest Rate Swap | Cash Flow Hedging | London Interbank Offered Rate (LIBOR) | 2015 Swapped Term Loan | Unsecured Debt | Term Loan | ||||
Debt Outstanding [Roll Forward] | ||||
Basis spread on variable rate | 1.53% |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Unaffiliated third party sellers $ in Thousands | 9 Months Ended |
Sep. 30, 2015USD ($)commercial_properties | |
Business Acquisition | |
Business acquisition, percentage of voting interests acquired | 100.00% |
Number of real estate acquisitions (in number of properties) | commercial_properties | 4 |
Total purchase price | $ 21,900 |
Escrow deposit | $ 585 |
Related-Party Transactions an37
Related-Party Transactions and Arrangements (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Related Party Transaction | |||||
Due to Affiliate | $ 1,280,000 | $ 1,280,000 | $ 1,816,000 | ||
Common Class W | |||||
Related Party Transaction | |||||
Share price, base net asset value (in dollars per share) | $ 15 | $ 15 | |||
Common Class A | |||||
Related Party Transaction | |||||
Share price, base net asset value (in dollars per share) | 16.72 | 16.72 | |||
Common Class I | |||||
Related Party Transaction | |||||
Share price, base net asset value (in dollars per share) | $ 16.82 | $ 16.82 | |||
Advisors | |||||
Related Party Transaction | |||||
Excess general and administrative expense, annualized rate limitation (percent) | 1.25% | 1.25% | |||
Due to affiliates | $ 1,300,000 | $ 1,300,000 | $ 1,800,000 | ||
Advisors | Minimum | |||||
Related Party Transaction | |||||
Operating expense reimbursement percent of average invested assets | 2.00% | 2.00% | |||
Operating expense reimbursement percent of net income | 25.00% | 25.00% | |||
Selling commissions | Dealer manager | Common Class W | |||||
Related Party Transaction | |||||
Daily asset based related party fee percent (up to 3.75% for common class A shares) | 0.00% | 0.00% | |||
Selling commissions | Dealer manager | Common Class A | |||||
Related Party Transaction | |||||
Daily asset based related party fee percent (up to 3.75% for common class A shares) | 3.75% | 3.75% | |||
Common stock, share purchase volume discount | $ 150,001 | $ 150,001 | |||
Selling commissions | Dealer manager | Common Class I | |||||
Related Party Transaction | |||||
Daily asset based related party fee percent (up to 3.75% for common class A shares) | 0.00% | 0.00% | |||
Selling commissions | Dealer manager | Maximum | Common Class A | |||||
Related Party Transaction | |||||
Daily asset based related party fee percent (up to 3.75% for common class A shares) | 3.90% | 3.90% | |||
Selling commissions | Advisors | |||||
Related Party Transaction | |||||
Related party transaction, expenses from transactions with related party | $ 18,000 | $ 259,000 | $ 63,000 | $ 478,000 | |
Selling commissions reallowed by CCC | Advisors | |||||
Related Party Transaction | |||||
Related party transaction, expenses from transactions with related party | $ 18,000 | 259,000 | $ 63,000 | 478,000 | |
Selling commissions reallowed by CCC | Advisors | Common Class A | |||||
Related Party Transaction | |||||
Daily asset based related party fee reallowed to third party percent | 100.00% | 100.00% | |||
Distribution fees | Dealer manager | Common Class W | |||||
Related Party Transaction | |||||
Daily asset based related party fee percent (up to 3.75% for common class A shares) | 0.00% | 0.00% | |||
Distribution fees | Dealer manager | Common Class A | |||||
Related Party Transaction | |||||
Daily asset based related party fee percent (up to 3.75% for common class A shares) | 0.50% | 0.50% | |||
Distribution fees | Dealer manager | Common Class I | |||||
Related Party Transaction | |||||
Daily asset based related party fee percent (up to 3.75% for common class A shares) | 0.00% | 0.00% | |||
Distribution fees | Advisors | |||||
Related Party Transaction | |||||
Related party transaction, expenses from transactions with related party | $ 23,000 | 12,000 | $ 63,000 | 17,000 | |
Distribution fees reallowed by CCC | Advisors | |||||
Related Party Transaction | |||||
Related party transaction, expenses from transactions with related party | $ 23,000 | 9,000 | $ 57,000 | 11,000 | |
Dealer manager fees | Dealer manager | Common Class W | |||||
Related Party Transaction | |||||
Daily asset based related party fee percent (up to 3.75% for common class A shares) | 0.55% | 0.55% | |||
Dealer manager fees | Dealer manager | Common Class A | |||||
Related Party Transaction | |||||
Daily asset based related party fee percent (up to 3.75% for common class A shares) | 0.55% | 0.55% | |||
Dealer manager fees | Dealer manager | Common Class I | |||||
Related Party Transaction | |||||
Daily asset based related party fee percent (up to 3.75% for common class A shares) | 0.25% | 0.25% | |||
Dealer manager fees | Advisors | |||||
Related Party Transaction | |||||
Related party transaction, expenses from transactions with related party | $ 196,000 | 159,000 | $ 547,000 | 382,000 | |
Dealer manager fees reallowed by CCC | Advisors | |||||
Related Party Transaction | |||||
Related party transaction, expenses from transactions with related party | 22,000 | 12,000 | 71,000 | 20,000 | |
Organization and offering expense reimbursement | Advisors | |||||
Related Party Transaction | |||||
Related party transaction, expenses from transactions with related party | $ 115,000 | 171,000 | $ 230,000 | 440,000 | |
Organization and offering expense reimbursement | Advisors | Maximum | |||||
Related Party Transaction | |||||
Organization and offering expense limit (percent) | 0.75% | 0.75% | |||
Commissions, Fees and Expense Reimbursements | Advisors | |||||
Related Party Transaction | |||||
Due to Affiliate | $ 334,000 | $ 334,000 | |||
Acquisition expenses | Advisors | |||||
Related Party Transaction | |||||
Daily asset based related party fee percent (up to 3.75% for common class A shares) | 0.90% | 0.90% | |||
Related party transaction, expenses from transactions with related party | $ 95,000 | 151,000 | $ 135,000 | 286,000 | |
Acquisition expenses | Advisors | Maximum | |||||
Related Party Transaction | |||||
Acquisition and advisory fee (percent) | 6.00% | 6.00% | |||
Excess general and administrative expenses to be reimbursed | Advisors | |||||
Related Party Transaction | |||||
Related party transaction, expenses from transactions with related party | $ 264,000 | $ 485,000 | |||
Advisory fee | Advisors | |||||
Related Party Transaction | |||||
Related party transaction, expenses from transactions with related party | 331,000 | 263,000 | 921,000 | 635,000 | |
Operating expense reimbursement | Advisors | |||||
Related Party Transaction | |||||
Related party transaction, expenses from transactions with related party | 0 | 0 | 0 | 0 | |
Performance fee | Advisors | |||||
Related Party Transaction | |||||
Related party transaction, expenses from transactions with related party | $ 362,000 | $ 41,000 | $ 765,000 | $ 41,000 | |
Performance fee, percent applied to total return on stockholders' capital between 6 percent and 10 percent | 25.00% | 25.00% | |||
Performance fee | Advisors | Maximum | |||||
Related Party Transaction | |||||
Total return threshold to receive performance fee (percent) | 10.00% | 10.00% | |||
Performance fee | Advisors | Minimum | |||||
Related Party Transaction | |||||
Total return threshold to receive performance fee (percent) | 6.00% | 6.00% | |||
Fees and Expense Reimbursements | Advisors | |||||
Related Party Transaction | |||||
Due to Affiliate | $ 1,200,000 | $ 1,200,000 | |||
Waived Fees and Expense Reimbursements | Advisors | |||||
Related Party Transaction | |||||
Related party transaction, expenses from transactions with related party | $ 960,000 |
Property Dispositions (Details)
Property Dispositions (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)shopping_centersingle_tenant_property | Sep. 30, 2014USD ($) | |
Discontinued Operations and Disposal Groups [Abstract] | ||||
Number of single tenant properties sold | single_tenant_property | 4 | |||
Number of anchored shopping centers sold | shopping_center | 1 | |||
Gross sale price of real estate | $ 21,900 | |||
Gain on disposition of real estate, net | $ 964 | $ 0 | $ 5,642 | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) shares in Thousands, $ in Thousands | 1 Months Ended | 9 Months Ended | |
Nov. 13, 2015USD ($)property | Nov. 10, 2015USD ($)shares | Sep. 30, 2015USD ($) | |
Subsequent Event | |||
Issuance of common stock | $ 30,810 | ||
Line of Credit | |||
Subsequent Event | |||
Line of credit, remaining borrowing capacity | $ 23,300 | ||
Subsequent event | |||
Subsequent Event | |||
Issuance of common stock | $ 179,200 | ||
Issuance of common stock, shares | shares | 10,600 | ||
Redemption of stock (in shares) | shares | 151 | ||
Value of stock redeemed (in usd) | $ 2,700 | ||
Subsequent event | Line of Credit | |||
Subsequent Event | |||
Line of credit, amount outstanding | 40,000 | ||
Line of credit, remaining borrowing capacity | $ 43,300 | ||
Acquisitions, Subsequent Period | Subsequent event | |||
Subsequent Event | |||
Business acquisition, percentage of voting interests acquired | 100.00% | ||
Number of real estate acquisitions (in number of properties) | property | 1 | ||
Total purchase price | $ 3,600 |