Document and Entity Information
Document and Entity Information - shares shares in Millions | 9 Months Ended | |
Sep. 30, 2015 | Nov. 10, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | COLE CREDIT PROPERTY TRUST IV, INC. | |
Entity Central Index Key | 1,498,547 | |
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 | |
Entity common stock, shares outstanding | 311.1 |
Condensed Consolidated Unaudite
Condensed Consolidated Unaudited Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Investment in real estate assets: | ||
Land | $ 1,083,593 | $ 972,983 |
Buildings and improvements, less accumulated depreciation of $137,539 and $78,186, respectively | 2,871,358 | 2,539,770 |
Acquired intangible lease assets, less accumulated amortization of $82,663 and $48,085, respectively | 415,965 | 391,917 |
Total investment in real estate assets, net | 4,370,916 | 3,904,670 |
Investment in unconsolidated joint venture | 18,525 | 19,170 |
Total investment in real estate and related assets, net | 4,389,441 | 3,923,840 |
Cash and cash equivalents | 34,594 | 55,287 |
Restricted cash | 9,508 | 4,560 |
Rents and tenant receivables, less allowance for doubtful accounts of $201 and $67, respectively | 45,977 | 34,929 |
Due from affiliates | 3 | 470 |
Property escrow deposits, prepaid expenses and other assets | 4,006 | 7,137 |
Deferred financing costs, less accumulated amortization of $10,139 and $6,781, respectively | 15,649 | 12,924 |
Assets held for sale | 1,086 | 0 |
Total assets | 4,500,264 | 4,039,147 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Credit facility and notes payable, net | 1,940,424 | 1,466,507 |
Accounts payable and accrued expenses | 44,358 | 25,355 |
Due to affiliates | 5,386 | 5,473 |
Acquired below-market lease intangibles, less accumulated amortization of $13,888 and $8,807, respectively | 61,254 | 55,535 |
Distributions payable | 15,973 | 16,189 |
Deferred rental income, derivative liabilities and other liabilities | 29,521 | 21,710 |
Total liabilities | $ 2,096,916 | $ 1,590,769 |
Commitments and contingencies | ||
Redeemable common stock and noncontrolling interest | $ 178,700 | $ 121,972 |
STOCKHOLDERS’ EQUITY | ||
Preferred stock, $0.01 par value; 10,000,000 shares authorized, none issued and outstanding | 0 | 0 |
Common stock, $0.01 par value; 490,000,000 shares authorized, 310,902,853 and 304,950,000 shares issued and outstanding, respectively | 3,109 | 3,050 |
Capital in excess of par value | 2,607,386 | 2,607,448 |
Accumulated distributions in excess of earnings | (372,549) | (280,035) |
Accumulated other comprehensive loss | (13,298) | (4,057) |
Total stockholders’ equity | 2,224,648 | 2,326,406 |
Total liabilities and stockholders’ equity | $ 4,500,264 | $ 4,039,147 |
Condensed Consolidated Unaudit3
Condensed Consolidated Unaudited Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Buildings and improvements, accumulated depreciation | $ 137,539 | $ 78,186 |
Acquired intangible lease assets, accumulated amortization | 82,663 | 48,085 |
Allowance for doubtful accounts receivable | 201 | 67 |
Deferred financing costs, accumulated amortization | 10,139 | 6,781 |
Acquired below market lease intangibles, accumulated amortization | $ 13,888 | $ 8,807 |
Preferred stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Preferred stock, shares outstanding (shares) | 0 | 0 |
Common stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 490,000,000 | 490,000,000 |
Common stock, shares issued (shares) | 310,902,853 | 304,950,000 |
Common stock, shares outstanding (shares) | 310,902,853 | 304,950,000 |
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 | $ 81,958 | $ 56,522 | $ 236,472 | $ 149,870 |
Tenant reimbursement income | 12,230 | 8,069 | 34,207 | 23,133 |
Total revenue | 94,188 | 64,591 | 270,679 | 173,003 |
Expenses: | ||||
General and administrative expenses | 2,664 | 2,555 | 8,832 | 8,546 |
Property operating expenses | 5,068 | 3,804 | 14,882 | 10,505 |
Real estate tax expenses | 9,361 | 5,831 | 24,908 | 15,626 |
Advisory fees and expenses | 8,926 | 6,011 | 25,733 | 16,078 |
Acquisition-related expenses | 2,518 | 21,009 | 11,785 | 39,755 |
Depreciation | 20,469 | 14,298 | 59,353 | 37,304 |
Amortization | 10,486 | 7,385 | 30,233 | 20,137 |
Total operating expenses | 59,492 | 60,893 | 175,726 | 147,951 |
Operating income | 34,696 | 3,698 | 94,953 | 25,052 |
Interest expense and other | (16,211) | (7,845) | (43,177) | (23,063) |
Net income (loss) | 18,485 | (4,147) | 51,776 | 1,989 |
Net income (loss) allocated to noncontrolling interest | 33 | 9 | 84 | (5) |
Net income (loss) attributable to the Company | $ 18,452 | $ (4,156) | $ 51,692 | $ 1,994 |
Weighted average number of common shares outstanding: | ||||
Basic and diluted (in shares) | 310,373,519 | 301,550,277 | 308,443,392 | 288,015,506 |
Net income (loss) attributable to the Company per common share: | ||||
Basic and diluted (USD per share) | $ 0.06 | $ (0.01) | $ 0.17 | $ 0.01 |
Distributions declared per common share (USD per share) | $ 0.16 | $ 0.16 | $ 0.47 | $ 0.47 |
Condensed Consolidated Unaudit5
Condensed Consolidated Unaudited Statements 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) | $ 18,485 | $ (4,147) | $ 51,776 | $ 1,989 |
Other comprehensive (loss) income: | ||||
Unrealized (loss) gain on interest rate swaps | (10,036) | 1,630 | (13,730) | (3,933) |
Amount of loss reclassified from other comprehensive (loss) income into income as interest expense | 1,912 | 1,324 | 4,489 | 3,920 |
Total other comprehensive (loss) income | (8,124) | 2,954 | (9,241) | (13) |
Comprehensive income (loss) | 10,361 | (1,193) | 42,535 | 1,976 |
Comprehensive income (loss) allocated to noncontrolling interest | 33 | 9 | 84 | (5) |
Comprehensive income (loss) attributable to the Company | $ 10,328 | $ (1,202) | $ 42,451 | $ 1,981 |
Condensed Consolidated Unaudit6
Condensed Consolidated Unaudited Statement of Stockholder's Equity - 9 months ended Sep. 30, 2015 - USD ($) $ in Thousands | Total | Common Stock | Capital in Excess of Par Value | Accumulated Distributions in Excess of Earnings | Accumulated Other Comprehensive Loss |
Balance (shares) at Dec. 31, 2014 | 304,950,000 | 304,950,000 | |||
Balance at Dec. 31, 2014 | $ 2,326,406 | $ 3,050 | $ 2,607,448 | $ (280,035) | $ (4,057) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock (shares) | 8,868,132 | ||||
Issuance of common stock | 84,244 | $ 88 | 84,156 | ||
Distributions to investors | (144,206) | (144,206) | |||
Redemptions and cancellations of common stock (shares) | (2,915,279) | ||||
Redemptions and cancellations of common stock | (28,165) | $ (29) | (28,136) | ||
Changes in redeemable common stock | (56,082) | (56,082) | |||
Comprehensive income (loss) | $ 42,451 | 51,692 | (9,241) | ||
Balance (shares) at Sep. 30, 2015 | 310,902,853 | 310,902,853 | |||
Balance at Sep. 30, 2015 | $ 2,224,648 | $ 3,109 | $ 2,607,386 | $ (372,549) | $ (13,298) |
Condensed Consolidated Unaudit7
Condensed Consolidated Unaudited Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Net income | $ 51,776 | $ 1,989 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 59,353 | 37,304 |
Amortization of intangible lease assets and below-market lease intangibles, net | 29,795 | 19,227 |
Amortization of deferred financing costs | 3,358 | 2,388 |
Amortization of fair value adjustment of mortgage notes payable assumed | (278) | (73) |
Straight-line rental income | (8,923) | (5,582) |
Bad debt expense | 178 | 206 |
Equity in income of unconsolidated joint venture | (660) | (563) |
Return on investment from unconsolidated joint venture | 900 | 441 |
Fair value adjustment to contingent consideration | (1,756) | 0 |
Changes in assets and liabilities: | ||
Rents and tenant receivables | (2,303) | (6,598) |
Prepaid expenses and other assets | (768) | (1,365) |
Accounts payable and accrued expenses | 10,289 | 8,931 |
Deferred rental income, derivative liabilities and other liabilities | (2,554) | 2,681 |
Due from affiliates | 467 | 0 |
Due to affiliates | (87) | (1,464) |
Net cash provided by operating activities | 138,787 | 57,522 |
Cash flows from investing activities: | ||
Investment in real estate assets and capital expenditures | (472,116) | (1,320,383) |
Real estate developments | (51,818) | (24,173) |
Return of investment in unconsolidated joint venture | 405 | 0 |
Escrowed funds for acquisition of real estate investments | 0 | (70,254) |
Payment of property escrow deposits | (436) | (6,148) |
Refund of property escrow deposits | 4,335 | 7,863 |
Change in restricted cash | (4,948) | 2,960 |
Net cash used in investing activities | (524,578) | (1,410,135) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 0 | 837,668 |
Redemptions and cancellations of common stock | (28,165) | (6,426) |
Offering costs on issuance of common stock | 0 | (84,914) |
Distributions to investors | (60,178) | (53,405) |
Proceeds from notes payable and borrowing facilities | 928,366 | 450,000 |
Repayments of notes payable and borrowing facilities | (469,405) | (289) |
Payment of loan deposits | (2,742) | 0 |
Refund of loan deposits | 2,742 | 545 |
Change in escrowed investor proceeds | 0 | (5,147) |
Deferred financing costs paid | (6,082) | (777) |
Contributions from noncontrolling interests | 762 | 965 |
Distributions to noncontrolling interests | (200) | 0 |
Other financing activities | 0 | (689) |
Net cash provided by financing activities | 365,098 | 1,137,531 |
Net decrease in cash and cash equivalents | (20,693) | (215,082) |
Cash and cash equivalents, beginning of period | 55,287 | 300,574 |
Cash and cash equivalents, end of period | $ 34,594 | $ 85,492 |
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 Credit Property Trust IV, 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. The Company is the sole general partner of and owns, directly or indirectly, 100% of the partnership interests in Cole Operating Partnership IV, LP, a Delaware limited partnership. The Company is externally managed by Cole REIT Advisors IV, LLC (“CR IV Advisors”), a Delaware limited liability company and 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 and 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, CR IV Advisors, the Company’s dealer manager for the Offering (as defined below), Cole Capital Corporation (“CCC”), the Company’s property manager, CREI Advisors, LLC (“CREI Advisors”), and the Company’s sponsor, Cole Capital. As a result of VEREIT’s acquisition of Cole, VEREIT indirectly owns and/or controls CR IV Advisors, CCC, CREI Advisors and Cole Capital. On January 26, 2012 , pursuant to a Registration Statement on Form S-11 (Registration No. 333-169533) (the “Registration Statement”) filed under the Securities Act of 1933, as amended (the “Securities Act”), the Company commenced its initial public offering on a “best efforts” basis of up to a maximum of $2.975 billion in shares of common stock (the “Offering”). On November 25, 2013 , the Company reallocated $400.0 million in shares from its distribution reinvestment plan (the “DRIP”) to the primary portion of the Offering, and on February 18, 2014 , the Company reallocated an additional $23.0 million in shares from the DRIP to the primary portion of the Offering. As a result of these reallocations, the Offering offered up to a maximum of approximately 292.3 million shares of common stock at a price of $10.00 per share in the primary portion of the Offering and up to approximately 5.5 million additional shares pursuant to the DRIP under which the Company’s stockholders could have elected to have distributions reinvested in additional shares of common stock at a price of $9.50 per share. As of February 25, 2014, the Company no longer accepted subscription agreements in connection with the Offering because it had received subscription agreements that allowed it to reach the maximum primary offering. The Company ceased issuing shares in the Offering on April 4, 2014 . At the completion of the Offering, a total of approximately 297.4 million shares of common stock had been issued, including approximately 292.3 million shares of common stock sold to the public pursuant to the primary portion of the Offering and approximately 5.1 million shares of common stock issued pursuant to the DRIP. The remaining approximately 404,000 unsold shares from the Offering were deregistered. In addition, the Company registered 26.0 million shares of common stock under the DRIP pursuant to a Registration Statement filed on Form S-3 (Registration No. 333-192958) (the “DRIP Offering” and collectively with the Offering, the “Offerings”), which was filed with the U.S. Securities and Exchange Commission (the “SEC”) on December 19, 2013 and automatically became effective with the SEC upon filing. The Company has issued, and expects that it will continue to issue, shares of common stock in the DRIP Offering. On September 27, 2015, the Company announced that its board of directors (the “Board”) established an estimated value of the Company’s common stock, as of August 31, 2015, of $9.70 per share for purposes of assisting broker-dealers that participated in the Offering in meeting their customer account statement reporting obligations under National Association of Securities Dealers Conduct Rule 2340. Going forward, the Company intends to publish an updated estimated value per share on at least an annual basis. Pursuant to the terms of the Company’s DRIP, as of August 31, 2015, distributions are reinvested in shares of our common stock at $9.70 per share, the estimated per share value as determined by the Board. Effective September 3, 2015, T. Patrick Duncan was elected as an independent director of the Company by the Board. Mr. Duncan was also appointed as a member of the audit committee of the Board. Mr. Duncan replaced J. Marc Myers, who resigned as a director due to personal reasons. Mr. Myers’s resignation was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. On November 11, 2015, Mr. Duncan was elected as non-executive chairman of the Board, replacing Thomas W. Roberts as chairman of the Board. Mr. Roberts will continue to serve as the Company’s president and chief executive officer, as well as a director of the Company. As of September 30, 2015 , the Company had issued approximately 315.0 million shares of its common stock in the Offerings, including 17.7 million shares issued in the DRIP Offering, for gross offering proceeds of $3.1 billion before organization and offering costs, selling commissions and dealer manager fees of $306.0 million . As of September 30, 2015 , the Company had redeemed approximately 4.1 million shares for $39.9 million (at an average price per share of $9.69 ). As of September 30, 2015 , the Company owned 853 properties, which includes nine properties owned through a consolidated joint venture arrangement (the “Consolidated Joint Venture”), comprising 22.9 million rentable square feet of commercial space located in 45 states. As of September 30, 2015 , the rentable space at these properties was 98% leased. In addition, through an unconsolidated joint venture arrangement, as of September 30, 2015 , the Company had an interest in one property comprising 176,000 rentable square feet of commercial space (the “Unconsolidated Joint Venture”). |
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 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, its wholly-owned subsidiaries and the Consolidated Joint Venture in which the Company has a controlling financial interest. All intercompany balances and transactions have been eliminated in consolidation. The Company evaluates its relationships and investments to determine if it has variable interests. A variable interest is an investment or other interest that will absorb portions of an entity’s expected losses or receive portions of the entity’s expected residual returns. If the Company determines that it has a variable interest in an entity, it evaluates whether such interest is in a variable interest entity (“VIE”). A VIE is broadly defined as an entity where either (1) the equity investors as a group, if any, lack the power through voting or similar rights to direct the activities of an entity that most significantly impact the entity’s economic performance or (2) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. The Company consolidates any VIEs when it is determined to be the primary beneficiary of the VIE’s operations. A variable interest holder is considered to be the primary beneficiary of a VIE if it has the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and has the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to the VIE. The Company qualitatively assesses whether it is (or is not) the primary beneficiary of a VIE. Consideration of various factors include, but are not limited to, the Company’s ability to direct the activities that most significantly impact the entity’s economic performance, its form of ownership interest, its representation on the entity’s governing body, the size and seniority of its investment, its ability and the rights of other investors to participate in policy making decisions and to replace the manager of and/or liquidate the entity. The Company continually evaluates the need to consolidate its joint venture arrangements based on standards set forth in GAAP. In determining whether the Company has a controlling interest in a joint venture arrangement and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, power to make decisions and contractual and substantive participating rights of the partners/members as well as whether the entity is a VIE for which the Company may be the primary beneficiary. As of September 30, 2015 and December 31, 2014 , the Company determined that it had a controlling interest in the Consolidated Joint Venture, and, therefore, met the requirements for consolidation. As of September 30, 2015 and December 31, 2014 , the Company was not required to consolidate the Unconsolidated Joint Venture as the applicable joint venture entity did not qualify as a VIE and the Company did not meet the control requirement for 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, (ii) amount of loss reclassified from accumulated other comprehensive (loss) income into income as interest expense in the Company’s condensed consolidated statements of comprehensive income (loss), and (iii) straight-line rental income, fair value adjustment to contingent consideration, and real estate developments 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 $2.7 million . However, 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 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 and comprehensive 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. During the nine months ended September 30, 2015 , the Company identified one land parcel as held for sale, which was sold subsequent to September 30, 2015 , as discussed in Note 11 to these condensed consolidated unaudited financial statements. No assets were identified as held for sale as of 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 has acquired, and may continue to 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 (the “Contingent Payments”). 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 escrowed funds to the Company or the seller or a combination thereof. Contingent consideration arrangements are 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, are recorded upon acquisition of the respective property at their estimated fair values, and any changes to the estimated fair values subsequent to acquisition are 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 estimates 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 are initially 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 is 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. Noncontrolling Interest-Redeemable Interest in Consolidated Joint Venture On June 27, 2014 , the Company completed the formation of the Consolidated Joint Venture. Pursuant to the joint venture agreement, the joint venture partner has a right to exercise an option after two years whereby the Company will be required to purchase the ownership interest of the joint venture partner at fair market value. The Company determined it had a controlling interest in the Consolidated Joint Venture and therefore met the GAAP requirements for consolidation. The Company recorded the noncontrolling interest of $2.7 million as temporary equity, in the mezzanine section of the balance sheet, due to the redemption option existing outside the control of the Company. Investment in Unconsolidated Joint Venture The Company accounts for its unconsolidated joint venture arrangement using the equity method of accounting as the Company has the ability to exercise significant influence, but not control, over operating and financial policies of this investment. The equity method of accounting requires the investment to be initially recorded at cost and subsequently adjusted for the Company’s share of equity in the Unconsolidated Joint Venture’s earnings and distributions. The Company is required to determine whether an event or change in circumstances has occurred that may have a significant adverse effect on the fair value of its investment in the Unconsolidated Joint Venture. If an event or change in circumstance has occurred, the Company is required to evaluate the Unconsolidated Joint Venture for potential impairment and determine if the carrying amount of its investment exceeds its fair value. An impairment charge is recorded when an impairment is deemed to be other-than-temporary. To determine whether an impairment is other-than-temporary, the Company considers whether it has the ability and intent to hold the investment until the carrying amount is fully recovered. The evaluation of an investment in an Unconsolidated Joint Venture 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 related to the Unconsolidated Joint Venture for the nine months ended September 30, 2015 and 2014 . Restricted Cash The Company had $9.5 million and $4.6 million in restricted cash as of September 30, 2015 and December 31, 2014 , respectively. Included in restricted cash was $396,000 and $2.7 million held by lenders in lockbox accounts as of September 30, 2015 and December 31, 2014 , respectively. As part of certain debt agreements, rents from certain encumbered properties are deposited directly into a lockbox account, from which the monthly debt service payment is disbursed to the lender and the excess is then disbursed to the Company. Also included in restricted cash was $9.1 million and $1.9 million held by lenders in escrow accounts for real estate taxes and other lender reserves for certain properties, in accordance with the respective lender’s loan agreement, as of September 30, 2015 and December 31, 2014 , respectively. Cash and Cash Equivalents As of September 30, 2015 , the Company had cash on deposit, including restricted cash, at 11 financial institutions, four of which had Company deposits in excess of federally insured levels, totaling $34.6 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. The Company had certain geographic concentrations in its property holdings. In particular, as of September 30, 2015 , 77 of the Company’s properties were located in California and 101 of the Company’s properties were located in Texas , which accounted for 11% and 10% , respectively, of the Company’s 2015 gross annualized rental revenues. In addition, the Company had tenants in the discount store and pharmacy industries, which comprised 14% and 11% , respectively, of the Company’s 2015 gross annualized rental revenues. 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 had an allowance for uncollectible accounts of $201,000 and $67,000 , respectively. 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: Notes payable and credit facility – 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. These financial instruments are considered Level 2. As of September 30, 2015 and December 31, 2014 , the estimated fair value of the Company’s debt was $1.95 billion and $1.5 billion , respectively, which approximated the carrying value at each such date. 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. Contingent consideration arrangements – The contingent consideration arrangements are carried at fair value and are valued using Level 3 inputs. The fair value of the Contingent Payments is determined based on the estimated timing and probability of successfully leasing vacant space subsequent to the Company’s acquisition of certain properties. During the nine months ended September 30, 2015 , the Company recorded an additional obligation with an estimated fair value of $2.9 million upon purchase of a property. In addition, during the nine months ended September 30, 2015 , the fair value of the outstanding contingent consideration arrangements had a net decrease of $1.8 million , which resulted in a reduction to acquisition-related expenses in the accompanying condensed consolidated unaudited statements of operations. The total estimated fair value of contingent consideration arrangements was $4.5 million and $3.4 million as of September 30, 2015 and December 31, 2014 , respectively, and is included in the accompanying condensed consolidated unaudited balance sheets in deferred rental income, derivative liabilities and other liabilities. 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 such 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 asset 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 (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Financial liabilities: Interest rate swaps $ (13,298 ) $ — $ (13,298 ) $ — Contingent consideration (4,529 ) — — (4,529 ) Total financial liabilities $ (17,827 ) $ — $ (13,298 ) $ (4,529 ) Balance as of Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Financial liabilities: Interest rate swaps $ (4,057 ) $ — $ (4,057 ) $ — Contingent consideration (3,405 ) — — (3,405 ) Total financial liabilities $ (7,462 ) $ — $ (4,057 ) $ (3,405 ) The following are reconciliations of the changes in liabilities with Level 3 inputs in the fair value hierarchy for the nine months ended September 30, 2015 and 2014 (in thousands): Contingent Consideration Arrangements Beginning Balance, December 31, 2014 $ (3,405 ) Purchases and fair value adjustments: Purchases (2,880 ) Fair value adjustments 1,756 Ending Balance, September 30, 2015 $ (4,529 ) Contingent Consideration Arrangements Beginning Balance, December 31, 2013 $ (784 ) Purchases and payments made: Purchases (5,342 ) Principal payments made 689 Ending Balance, September 30, 2014 $ (5,437 ) |
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 94 commercial properties, including properties held in the Consolidated Joint Venture, for an aggregate purchase price of $485.5 million (the “ 2015 Acquisitions”). The Company purchased the 2015 Acquisitions with net proceeds from the Offerings and available borrowings. The purchase price allocation for each of the Company’s acquisitions is preliminary and subject to change as the Company 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 acquisitions purchased during the nine months ended September 30, 2015 (in thousands): 2015 Acquisitions Land $ 111,696 Building and improvements 326,155 Acquired in-place leases 52,006 Acquired above-market leases 6,657 Acquired below-market leases (10,800 ) Fair value adjustment of assumed notes payable (253 ) Total purchase price $ 485,461 The Company recorded revenue for the three and nine months ended September 30, 2015 of $8.9 million and $17.3 million , respectively, and a net income (loss) for the three and nine months ended September 30, 2015 of $329,000 and $(6.2) million , respectively, related to the 2015 Acquisitions. The following information summarizes selected financial information of the Company as if all of 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 (loss), on a pro forma basis, for the three and nine months ended September 30, 2015 and 2014 , respectively (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Pro forma basis: Revenue $ 95,232 $ 74,548 $ 282,887 $ 202,536 Net income (loss) $ 21,134 $ (3,561 ) $ 66,265 $ (346 ) The pro forma information for the three and nine months ended September 30, 2015 was adjusted to exclude $2.5 million and $11.8 million , respectively, of acquisition-related expenses recorded during the three and nine months ended September 30, 2015 . Accordingly, these costs 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 transactions occurred at the beginning of 2014 , nor does it purport to represent the results of future operations. Development Project During the year ended December 31, 2014, the Company acquired one land parcel, upon which an approximately 1.6 million square foot industrial property is expected to be constructed. The land, acquired for an aggregate amount of $23.9 million , is included in buildings and improvements on the accompanying condensed consolidated unaudited balance sheet. As of September 30, 2015 , the Company had a total investment of $90.7 million and has committed to invest an additional estimated amount of $16.7 million related to the development project, subject to satisfaction of certain criteria. 2014 Property Acquisitions During the nine months ended September 30, 2014 , the Company acquired 334 commercial properties, including properties held in the Consolidated Joint Venture, for an aggregate purchase price of $1.3 billion (the “ 2014 Acquisitions”). The Company purchased the 2014 Acquisitions with net proceeds from the Offering and available borrowings. 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 $ 298,370 Building and improvements 928,198 Acquired in-place leases 122,822 Acquired above-market leases 13,110 Acquired below-market leases (13,319 ) Fair value adjustment of assumed notes payable (765 ) Total purchase price $ 1,348,416 The Company recorded revenue for the three and nine months ended September 30, 2014 of $16.8 million and $28 million , respectively, and a net loss for the three and nine months ended September 30, 2014 of $14.5 million and $27.5 million , respectively, related to the 2014 Acquisitions. 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 $ 78,302 $ 60,789 $ 235,678 $ 154,195 Net income (loss) $ 26,537 $ 1,873 $ 79,726 $ (36,451 ) The pro forma information for the three and nine months ended September 30, 2014 was adjusted to exclude $21.0 million and $39.8 million , respectively, of acquisition-related expenses recorded during the three and nine months ended September 30, 2014 . Accordingly, these costs were instead recognized in the pro forma information for the three and 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. |
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. The following table summarizes the terms of the Company’s executed interest rate swap agreements designated as hedging instruments as of September 30, 2015 and December 31, 2014 (dollars in thousands): Outstanding Notional Fair Value of Liabilities as of Balance Sheet Amount as of Interest Effective Maturity September 30, December 31, Location September 30, 2015 Rates (1) Dates Dates 2015 2014 Interest Rate Swaps (2) Deferred rental income, derivative liabilities and other liabilities $ 869,503 3.00% to 4.75% 6/24/2013 to 12/31/2015 6/24/2018 to 10/01/2020 $ (13,298 ) $ (4,057 ) (1) The interest rates consist of the underlying index swapped to a fixed rate and the applicable interest rate spread as of September 30, 2015 . (2) As of September 30, 2015 , the Company had six interest rate swap agreements. During the three months ended September 30, 2015 , the Company entered into two interest rate swap agreements, one of which was entered into on September 29, 2015 with an effective date of October 1, 2015. Additional disclosures related to the fair value of the Company’s derivative instruments are included in Note 3. 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 $1.9 million and $4.5 million , respectively. The amount reclassified to interest expense as interest payments for the three and nine months ended September 30, 2014 was $1.3 million and $3.9 million , respectively. 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 $8.2 million will be reclassified from other comprehensive income (loss) as an increase to interest expense. The following table summarizes the unrealized (loss) income on the Company’s derivative instruments and hedging activities for the three and nine months ended September 30, 2015 and 2014 (in thousands): Amount of (Loss) Income Recognized in Other Comprehensive Income (Loss) Three Months Ended September 30, Nine Months Ended September 30, Derivatives in Cash Flow Hedging Relationships 2015 2014 2015 2014 Interest Rate Swaps (1) $ (8,124 ) $ 2,954 $ (9,241 ) $ (13 ) (1) There were no portions of the change in the fair value of the interest rate swaps that were considered ineffective during the three and nine months ended September 30, 2015 or 2014. The Company has agreements with each of its derivative counterparties that contain a provision 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 $14.0 million 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 respective credit quality of the Company and the counterparty. There were no termination events or events of default related to the interest rate swaps as of September 30, 2015 . |
Notes Payable And Credit Facili
Notes Payable And Credit Facility | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE AND CREDIT FACILITY | NOTES PAYABLE AND CREDIT FACILITY As of September 30, 2015 , the Company had $1.9 billion of debt outstanding, with weighted average years to maturity of 4.3 years and a weighted average interest rate of 3.2% . The following table summarizes the debt balances as of September 30, 2015 and December 31, 2014 and the debt activity for the nine months ended September 30, 2015 (in thousands): During the Nine Months Ended September 30, 2015 Balance as of December 31, 2014 Debt Issuances & Assumption Repayments Other (1) Balance as of Fixed rate debt $ 566,507 $ 271,180 $ (405 ) $ (24 ) $ 837,258 Variable rate debt — 53,500 — — 53,500 Credit facility 900,000 618,666 (469,000 ) — 1,049,666 Total $ 1,466,507 $ 943,346 $ (469,405 ) $ (24 ) $ 1,940,424 (1) Represents fair value adjustment of an assumed mortgage note payable, net of amortization. As of September 30, 2015 , the fixed rate debt outstanding of $837.3 million included $57.8 million of variable rate debt that is fixed through interest rate swap agreements, which had the effect of fixing the variable interest rates per annum through the maturity date of the variable rate debt. In addition, the fixed rate debt includes mortgage notes assumed with a total face amount of $40.2 million and a fair value of $41.2 million at the date of assumption. The fixed rate debt has interest rates ranging from 3.35% to 5.23% per annum. The debt outstanding matures on various dates from November 2015 through October 2025 . The aggregate balance of gross real estate assets, net of gross intangible lease liabilities, securing the fixed rate debt outstanding was $1.5 billion 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. As of September 30, 2015 , the variable rate debt outstanding of $53.5 million had a weighted average interest rate of 2.86% . The variable rate debt outstanding matures on various dates from February 2018 to February 2020 . The aggregate balance of gross real estate assets, net of gross intangible lease liabilities, securing the variable rate debt outstanding was $106.8 million as of September 30, 2015 . The Company has an amended and restated unsecured credit facility (the “Credit Facility”) with JPMorgan Chase Bank, N.A. (“JPMorgan Chase”), which provides for borrowings of up to $1.2 billion , which includes a $561.7 million unsecured term loan (the “Term Loan”) and up to $643.3 million in unsecured revolving loans (the “Revolving Loans”). The Credit Facility may be increased up to a maximum of $1.6 billion . The Term Loan matures on August 15, 2018 and the Revolving Loans mature on August 15, 2017 ; however, the Company may elect to extend the maturity date for the Revolving Loans to August 15, 2018 subject to satisfying certain conditions set forth in the amended and restated unsecured credit agreement among the Company and JPMorgan Chase, as administrative agent (as amended, the “Amended and Restated Credit Agreement”). Depending upon the type of loan specified and overall leverage ratio, the Revolving Loans bear interest at the one-month, two-month, three-month or six-month London Interbank Offered Rate (“LIBOR”) multiplied by the statutory reserve rate (the “Eurodollar Rate”) plus (i) an interest rate spread ranging from 1.65% when the Company’s overall leverage ratio, generally defined in the Amended and Restated Credit Agreement as the total consolidated outstanding indebtedness of the Company divided by the total asset value of the Company (as defined in the Amended and Restated Credit Agreement) (the “Leverage Ratio”) is 45% or less to 2.50% when the Leverage Ratio is greater than 60% (the “Spread”) or (ii) a base rate, ranging from 0.65% when the Leverage Ratio is 45% or less to 1.50% when the Leverage Ratio is greater than 60% , plus the greater of: (a) JPMorgan Chase’s Prime Rate; (b) the Federal Funds Effective Rate (as defined in the Amended and Restated Credit Agreement) plus 0.50% ; or (c) the Eurodollar Rate plus 1.00% . The Company executed an interest rate swap agreement on certain cash flows related to variable rate debt, which is currently associated with $300.0 million of the Term Loan (the “2013 Swapped Term Loan”), which had the effect of fixing the variable interest rate per annum on August 15, 2013 through the maturity date of the loan at 1.713% (the “2013 Swap Rate”). Based on the Company’s leverage ratio, the 2013 Swapped Term Loan bears interest at the 2013 Swap Rate plus the Spread, which totaled 3.36% as of September 30, 2015 . During the nine months ended September 30, 2015 , the Company executed an interest rate swap agreement on certain cash flows related to variable rate debt, which is currently associated with $261.7 million of the Term Loan (the “2015 Swapped Term Loan”), which had the effect of fixing the variable interest rate per annum on May 29, 2015 through the maturity date of the loan at 1.130% (the “2015 Swap Rate”). Based on the Company’s leverage ratio, the 2015 Swapped Term Loan bears interest at the 2015 Swap Rate plus the Spread, which totaled 2.78% as of September 30, 2015 . The Company also executed an interest rate swap agreement during the nine months ended September 30, 2015 on certain cash flows related to variable rate debt, which currently represents $250.0 million of the Revolving Loans (the “Swapped Revolver Loan”), which had the effect of fixing the variable interest rate per annum beginning on December 31, 2015 through the maturity date of the Revolving Loans at 1.353% (the “Swapped Revolver Rate”). The Swapped Revolver Loan will bear interest at the Swapped Revolver Rate plus the Spread, which totaled 3.0% as of September 30, 2015 . As of September 30, 2015 , the Company had $1.0 billion outstanding under the Credit Facility and $155.3 million available for borrowing. The Amended and Restated Credit Agreement contains provisions with respect to covenants, events of default and remedies customary for facilities of this nature. In particular, the Amended and Restated Credit Agreement requires the Company to maintain a minimum consolidated net worth greater than or equal to the sum of (i) $425.0 million plus (ii) 75% of the issuance of equity from the date of the Amended and Restated Credit Agreement, a leverage ratio less than or equal to 60% , a fixed charge coverage ratio equal to or greater than 1.50 , an unsecured debt to unencumbered asset value ratio less than or equal to 50% , an unsecured debt service coverage ratio equal to or greater than 1.75 and a secured debt ratio equal to or less than 30% . Based on the Company’s analysis and review of its results of operations and financial condition, the Company believes it was in compliance with the covenants under the Amended and Restated Credit Agreement as of September 30, 2015 . |
Supplemental Cash Flow Disclosu
Supplemental Cash Flow Disclosures | 9 Months Ended |
Sep. 30, 2015 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW DISCLOSURES | SUPPLEMENTAL CASH FLOW DISCLOSURES Supplemental cash flow disclosures for the nine months ended September 30, 2015 and 2014 are as follows (in thousands): Nine Months Ended September 30, 2015 2014 Supplemental Disclosures of Non-Cash Investing and Financing Activities: Distributions declared and unpaid $ 15,973 $ 15,539 Accrued capital expenditures $ 16,435 $ 5,405 Common stock issued through distribution reinvestment plan $ 84,244 $ 76,349 Net unrealized loss on interest rate swaps $ (9,241 ) $ (13 ) Contingent consideration recorded upon property acquisitions $ 2,880 $ 5,342 Fair value of notes payable assumed in real estate acquisition $ 15,233 $ 25,979 Supplemental Cash Flow Disclosures: Interest paid $ 39,852 $ 21,366 |
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 eight retail properties, subject to meeting certain criteria, for an aggregate purchase price of $66.0 million , exclusive of closing costs. As of September 30, 2015 , the Company had $886,000 of property escrow deposits held by escrow agents in connection with these future property acquisitions, all of which will be forfeited if the transactions are not completed under certain circumstances. Additionally, the Company was contractually obligated to purchase 25 properties under a purchase and sale agreement, of which the Company had purchased 24 properties as of September 30, 2015 . During the nine months ended September 30, 2015 , the seller released the Company from its obligation to purchase the remaining property. These deposits are included in the accompanying condensed consolidated unaudited balance sheets in property escrow deposits, prepaid expenses and other assets. None of these escrow deposits have been forfeited. 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 commissions, fees and expenses payable to CR IV Advisors and certain of its affiliates in connection with the Offering and the acquisition, management and disposition of its assets. Offering In connection with the Offering, CCC, the Company’s dealer manager for the Offering, received selling commissions of up to 7.0% of gross offering proceeds before reallowance of selling commissions earned by participating broker-dealers. CCC reallowed 100% of selling commissions earned to participating broker-dealers. In addition, CCC received up to 2.0% of gross offering proceeds before reallowance to participating broker-dealers as a dealer manager fee in connection with the primary portion of the Offering. CCC, in its sole discretion, has reallowed a portion of its dealer manager fee to participating broker-dealers. No selling commissions or dealer manager fees are or were paid to CCC or other participating broker-dealers with respect to shares issued pursuant to the DRIP portion of the Offering or the DRIP Offering. All other organization and offering expenses associated with the sale of the Company’s common stock in the Offering (excluding selling commissions and dealer manager fees) were paid by CR IV Advisors or its affiliates and were reimbursed by the Company up to 2.0% of aggregate gross offering proceeds. A portion of the other organization and offering expenses were considered to be underwriting compensation. The Company recorded commissions, fees and expense reimbursements as shown in the table below for services provided by CR IV 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 Offering: Selling commissions $ — $ — $ — $ 55,902 Selling commissions reallowed by CCC $ — $ — $ — $ 55,902 Dealer manager fees $ — $ — $ — $ 16,780 Dealer manager fees reallowed by CCC $ — $ — $ — $ 9,326 Other offering costs $ — $ — $ — $ 7,271 All amounts related to the nine months ended September 30, 2014 have been paid to CR IV Advisors and its affiliates. Acquisitions and Operations CR IV Advisors or its affiliates also receive acquisition fees of up to 2.0% of: (1) the contract purchase price of each property or asset the Company acquires; (2) the amount paid in respect of the development, construction or improvement of each asset the Company acquires; (3) the purchase price of any loan the Company acquires; and (4) the principal amount of any loan the Company originates. Additionally, CR IV Advisors or its affiliates are reimbursed for acquisition-related expenses incurred in the process of acquiring properties, so long as the total acquisition fees and expenses relating to the transaction do not exceed 6.0% of the contract purchase price. The Company pays CR IV Advisors a monthly advisory fee based upon the Company’s monthly average invested assets, which is equal to the following amounts: (1) an annualized rate of 0.75% paid on the value of the Company’s average invested assets that are between $0 to $2.0 billion ; (2) an annualized rate of 0.70% paid on the value of the Company’s average invested assets that are between $2.0 billion to $4.0 billion ; and (3) an annualized rate of 0.65% paid on the value of the Company’s average invested assets that are over $4.0 billion . The Company reimburses CR IV Advisors or its affiliates for certain expenses CR IV Advisors or its affiliates paid or incurred in connection with the services provided to the Company, subject to the limitation that the Company will not reimburse CR IV Advisors or its affiliates for any amount by which their operating expenses (including the advisory fee) at the end of the four preceding fiscal quarters exceed the greater of: (1) 2.0% of average invested assets, or (2) 25.0% 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. The Company will not reimburse for personnel costs in connection with services for which CR IV Advisors receives acquisition fees. The Company recorded fees and expense reimbursements as shown in the table below for services provided by CR IV 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 Acquisition and Operations: Acquisition fees and expenses $ 2,561 $ 16,948 $ 10,459 $ 30,099 Advisory fees and expenses $ 8,926 $ 6,011 $ 25,733 $ 16,078 Operating expenses $ 997 $ 731 $ 2,974 $ 2,513 Of the amounts shown above, $5.4 million and $1.1 million had been incurred, but not yet paid, for services provided by CR IV Advisors or its affiliates in connection with the acquisition and operations activities during the nine months ended September 30, 2015 and 2014 , respectively. The $5.4 million and $1.1 million incurred but not yet paid as of September 30, 2015 and 2014 , respectively, were liabilities of the Company as of such dates. Liquidation/Listing If CR IV Advisors or its affiliates provide a substantial amount of services (as determined by a majority of the Company’s independent directors) in connection with the sale of properties, the Company will pay CR IV Advisors or its affiliates a disposition fee in an amount equal to up to one-half of the brokerage commission paid on the sale of the property, not to exceed 1.0% of the contract price of the property sold; provided, however, in no event may the disposition fee paid to CR IV Advisors or its affiliates, when added to the real estate commissions paid to unaffiliated third parties, exceed the lesser of the customary competitive real estate commission or an amount equal to 6.0% of the contract sales price. If the Company is sold or its assets are liquidated, CR IV Advisors will be entitled to receive a subordinated performance fee equal to 15.0% of the net sale proceeds remaining after investors have received a return of their net capital invested and an 8.0% annual cumulative, non-compounded return. Alternatively, if the Company’s shares are listed on a national securities exchange, CR IV Advisors will be entitled to a subordinated performance fee equal to 15.0% of the amount by which the market value of the Company’s outstanding stock plus all distributions paid by the Company prior to listing exceeds the sum of the total amount of capital raised from investors and the amount of distributions necessary to generate an 8.0% annual cumulative, non-compounded return to investors. As an additional alternative, upon termination of the advisory agreement, CR IV Advisors may be entitled to a subordinated performance fee similar to the fee to which CR IV Advisors would have been entitled had the portfolio been liquidated (based on an independent appraised value of the portfolio) on the date of termination. During each of the nine months ended September 30, 2015 and 2014 , no commissions or fees were incurred for any services provided by CR IV Advisors and its affiliates in connection with the liquidation/listing stage. Due to/from Affiliates As of September 30, 2015 , $5.4 million was due to CR IV Advisors or its affiliates primarily related to advisory, operating and acquisition-related expenses that had not yet been reimbursed by the Company. As of December 31, 2014 , $5.5 million was due to CR IV Advisors or its affiliates primarily related to advisory, operating and acquisition-related expenses that had not yet been reimbursed by the Company. As of December 31, 2014, $470,000 was due from CR IV Advisors and its affiliates primarily related to amounts paid by the Company on dead deals which were reimbursable by the advisor. |
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 CR IV 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 CR IV 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. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Issuance of Shares of Common Stock in the DRIP Offering The Company continues to issue shares of common stock in the DRIP Offering. As of November 10, 2015 , the Company had issued approximately 19.6 million shares pursuant to the DRIP Offering, resulting in gross proceeds to the Company of $186.7 million . Redemption of Shares of Common Stock Subsequent to September 30, 2015 and through November 10, 2015 , the Company redeemed approximately 1.8 million shares for $16.8 million (at an average price per share of $9.50 ). Credit Facility and Note Payable As of November 10, 2015 , the Company had $1.1 billion outstanding under the Credit Facility and available borrowings of $115.2 million . Subsequent to September 30, 2015 , the Company also entered into notes payable totaling $50 million , with a weighted average interest rate of 3.59% as of November 10, 2015 . Subsequent to September 30, 2015 , the Company also paid off a note payable totaling $14.9 million . Investment in Real Estate Assets Subsequent to September 30, 2015 and through November 10, 2015 , the Company acquired five commercial real estate properties for an aggregate purchase price of $64.3 million . Acquisition-related expenses totaling $1.6 million were expensed as incurred. The Company has not completed its initial purchase price allocations with respect to these properties and therefore cannot provide similar disclosures to those included in Note 4 to these condensed consolidated unaudited financial statements for these properties. Property Dispositions As of September 30, 2015 , one land parcel was classified as held for sale, as discussed in Note 2 to these condensed consolidated unaudited financial statements. Subsequent to September 30, 2015 , the Company sold the property for an aggregate gross sale price of $1.1 million resulting in net cash proceeds of $1.1 million and representing a loss of $81,000 , subject to finalization of closing costs. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | 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 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, its wholly-owned subsidiaries and the Consolidated Joint Venture in which the Company has a controlling financial interest. All intercompany balances and transactions have been eliminated in consolidation. The Company evaluates its relationships and investments to determine if it has variable interests. A variable interest is an investment or other interest that will absorb portions of an entity’s expected losses or receive portions of the entity’s expected residual returns. If the Company determines that it has a variable interest in an entity, it evaluates whether such interest is in a variable interest entity (“VIE”). A VIE is broadly defined as an entity where either (1) the equity investors as a group, if any, lack the power through voting or similar rights to direct the activities of an entity that most significantly impact the entity’s economic performance or (2) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. The Company consolidates any VIEs when it is determined to be the primary beneficiary of the VIE’s operations. A variable interest holder is considered to be the primary beneficiary of a VIE if it has the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and has the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to the VIE. The Company qualitatively assesses whether it is (or is not) the primary beneficiary of a VIE. Consideration of various factors include, but are not limited to, the Company’s ability to direct the activities that most significantly impact the entity’s economic performance, its form of ownership interest, its representation on the entity’s governing body, the size and seniority of its investment, its ability and the rights of other investors to participate in policy making decisions and to replace the manager of and/or liquidate the entity. The Company continually evaluates the need to consolidate its joint venture arrangements based on standards set forth in GAAP. In determining whether the Company has a controlling interest in a joint venture arrangement and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, power to make decisions and contractual and substantive participating rights of the partners/members as well as whether the entity is a VIE for which the Company may be the primary beneficiary. As of September 30, 2015 and December 31, 2014 , the Company determined that it had a controlling interest in the Consolidated Joint Venture, and, therefore, met the requirements for consolidation. As of September 30, 2015 and December 31, 2014 , the Company was not required to consolidate the Unconsolidated Joint Venture as the applicable joint venture entity did not qualify as a VIE and the Company did not meet the control requirement for 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, (ii) amount of loss reclassified from accumulated other comprehensive (loss) income into income as interest expense in the Company’s condensed consolidated statements of comprehensive income (loss), and (iii) straight-line rental income, fair value adjustment to contingent consideration, and real estate developments 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 $2.7 million . However, 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 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 and comprehensive 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. During the nine months ended September 30, 2015 , the Company identified one land parcel as held for sale, which was sold subsequent to September 30, 2015 , as discussed in Note 11 to these condensed consolidated unaudited financial statements. |
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 has acquired, and may continue to 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 (the “Contingent Payments”). 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 escrowed funds to the Company or the seller or a combination thereof. Contingent consideration arrangements are 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, are recorded upon acquisition of the respective property at their estimated fair values, and any changes to the estimated fair values subsequent to acquisition are 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 estimates 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 are initially 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 is 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. |
Noncontrolling Interest-Redeemable Interest in Consolidated Joint Venture | Noncontrolling Interest-Redeemable Interest in Consolidated Joint Venture On June 27, 2014 , the Company completed the formation of the Consolidated Joint Venture. Pursuant to the joint venture agreement, the joint venture partner has a right to exercise an option after two years whereby the Company will be required to purchase the ownership interest of the joint venture partner at fair market value. The Company determined it had a controlling interest in the Consolidated Joint Venture and therefore met the GAAP requirements for consolidation. |
Investment in Unconsolidated Joint Venture | Investment in Unconsolidated Joint Venture The Company accounts for its unconsolidated joint venture arrangement using the equity method of accounting as the Company has the ability to exercise significant influence, but not control, over operating and financial policies of this investment. The equity method of accounting requires the investment to be initially recorded at cost and subsequently adjusted for the Company’s share of equity in the Unconsolidated Joint Venture’s earnings and distributions. The Company is required to determine whether an event or change in circumstances has occurred that may have a significant adverse effect on the fair value of its investment in the Unconsolidated Joint Venture. If an event or change in circumstance has occurred, the Company is required to evaluate the Unconsolidated Joint Venture for potential impairment and determine if the carrying amount of its investment exceeds its fair value. An impairment charge is recorded when an impairment is deemed to be other-than-temporary. To determine whether an impairment is other-than-temporary, the Company considers whether it has the ability and intent to hold the investment until the carrying amount is fully recovered. The evaluation of an investment in an Unconsolidated Joint Venture 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. |
Restricted Cash, Cash and Cash Equivalents | Restricted Cash The Company had $9.5 million and $4.6 million in restricted cash as of September 30, 2015 and December 31, 2014 , respectively. Included in restricted cash was $396,000 and $2.7 million held by lenders in lockbox accounts as of September 30, 2015 and December 31, 2014 , respectively. As part of certain debt agreements, rents from certain encumbered properties are deposited directly into a lockbox account, from which the monthly debt service payment is disbursed to the lender and the excess is then disbursed to the Company. Also included in restricted cash was $9.1 million and $1.9 million held by lenders in escrow accounts for real estate taxes and other lender reserves for certain properties, in accordance with the respective lender’s loan agreement, as of September 30, 2015 and December 31, 2014 , respectively. Cash and Cash Equivalents As of September 30, 2015 , the Company had cash on deposit, including restricted cash, at 11 financial institutions, four of which had Company deposits in excess of federally insured levels, totaling $34.6 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. The Company had certain geographic concentrations in its property holdings. In particular, as of September 30, 2015 , 77 of the Company’s properties were located in California and 101 of the Company’s properties were located in Texas , which accounted for 11% and 10% , respectively, of the Company’s 2015 gross annualized rental revenues. In addition, the Company had tenants in the discount store and pharmacy industries, which comprised 14% and 11% , respectively, of the Company’s 2015 gross annualized rental revenues. |
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. |
Allowance for Uncollectible Accounts | 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). |
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 Accoun20
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Summary of Useful Lives of Real Estate 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, Assets and Liabilities Measured on Recurring Basis | In accordance with the fair value hierarchy described above, the following tables show the fair value of the Company’s financial asset 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 (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Financial liabilities: Interest rate swaps $ (13,298 ) $ — $ (13,298 ) $ — Contingent consideration (4,529 ) — — (4,529 ) Total financial liabilities $ (17,827 ) $ — $ (13,298 ) $ (4,529 ) Balance as of Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Financial liabilities: Interest rate swaps $ (4,057 ) $ — $ (4,057 ) $ — Contingent consideration (3,405 ) — — (3,405 ) Total financial liabilities $ (7,462 ) $ — $ (4,057 ) $ (3,405 ) |
Schedule of Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following are reconciliations of the changes in liabilities with Level 3 inputs in the fair value hierarchy for the nine months ended September 30, 2015 and 2014 (in thousands): Contingent Consideration Arrangements Beginning Balance, December 31, 2014 $ (3,405 ) Purchases and fair value adjustments: Purchases (2,880 ) Fair value adjustments 1,756 Ending Balance, September 30, 2015 $ (4,529 ) Contingent Consideration Arrangements Beginning Balance, December 31, 2013 $ (784 ) Purchases and payments made: Purchases (5,342 ) Principal payments made 689 Ending Balance, September 30, 2014 $ (5,437 ) |
Real Estate Acquisitions (Table
Real Estate Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary purchase price allocation for acquisitions purchased during the nine months ended September 30, 2015 (in thousands): 2015 Acquisitions Land $ 111,696 Building and improvements 326,155 Acquired in-place leases 52,006 Acquired above-market leases 6,657 Acquired below-market leases (10,800 ) Fair value adjustment of assumed notes payable (253 ) Total purchase price $ 485,461 The following table summarizes the purchase price allocation (in thousands): 2014 Acquisitions Land $ 298,370 Building and improvements 928,198 Acquired in-place leases 122,822 Acquired above-market leases 13,110 Acquired below-market leases (13,319 ) Fair value adjustment of assumed notes payable (765 ) Total purchase price $ 1,348,416 |
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 $ 78,302 $ 60,789 $ 235,678 $ 154,195 Net income (loss) $ 26,537 $ 1,873 $ 79,726 $ (36,451 ) 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, 2015 and 2014 , respectively (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Pro forma basis: Revenue $ 95,232 $ 74,548 $ 282,887 $ 202,536 Net income (loss) $ 21,134 $ (3,561 ) $ 66,265 $ (346 ) |
Derivative Instruments and He23
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 interest rate swap agreements designated as hedging instruments as of September 30, 2015 and December 31, 2014 (dollars in thousands): Outstanding Notional Fair Value of Liabilities as of Balance Sheet Amount as of Interest Effective Maturity September 30, December 31, Location September 30, 2015 Rates (1) Dates Dates 2015 2014 Interest Rate Swaps (2) Deferred rental income, derivative liabilities and other liabilities $ 869,503 3.00% to 4.75% 6/24/2013 to 12/31/2015 6/24/2018 to 10/01/2020 $ (13,298 ) $ (4,057 ) (1) The interest rates consist of the underlying index swapped to a fixed rate and the applicable interest rate spread as of September 30, 2015 . (2) As of September 30, 2015 , the Company had six interest rate swap agreements. During the three months ended September 30, 2015 , the Company entered into two interest rate swap agreements, one of which was entered into on September 29, 2015 with an effective date of October 1, 2015. |
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | The following table summarizes the unrealized (loss) income on the Company’s derivative instruments and hedging activities for the three and nine months ended September 30, 2015 and 2014 (in thousands): Amount of (Loss) Income Recognized in Other Comprehensive Income (Loss) Three Months Ended September 30, Nine Months Ended September 30, Derivatives in Cash Flow Hedging Relationships 2015 2014 2015 2014 Interest Rate Swaps (1) $ (8,124 ) $ 2,954 $ (9,241 ) $ (13 ) (1) There were no portions of the change in the fair value of the interest rate swaps that were considered ineffective during the three and nine months ended September 30, 2015 or 2014. |
Notes Payable And Credit Faci24
Notes Payable And Credit Facility (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The following table summarizes the debt balances as of September 30, 2015 and December 31, 2014 and the debt activity for the nine months ended September 30, 2015 (in thousands): During the Nine Months Ended September 30, 2015 Balance as of December 31, 2014 Debt Issuances & Assumption Repayments Other (1) Balance as of Fixed rate debt $ 566,507 $ 271,180 $ (405 ) $ (24 ) $ 837,258 Variable rate debt — 53,500 — — 53,500 Credit facility 900,000 618,666 (469,000 ) — 1,049,666 Total $ 1,466,507 $ 943,346 $ (469,405 ) $ (24 ) $ 1,940,424 (1) Represents fair value adjustment of an assumed mortgage note payable, net of amortization. |
Supplemental Cash Flow Disclo25
Supplemental Cash Flow Disclosures (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | Supplemental cash flow disclosures for the nine months ended September 30, 2015 and 2014 are as follows (in thousands): Nine Months Ended September 30, 2015 2014 Supplemental Disclosures of Non-Cash Investing and Financing Activities: Distributions declared and unpaid $ 15,973 $ 15,539 Accrued capital expenditures $ 16,435 $ 5,405 Common stock issued through distribution reinvestment plan $ 84,244 $ 76,349 Net unrealized loss on interest rate swaps $ (9,241 ) $ (13 ) Contingent consideration recorded upon property acquisitions $ 2,880 $ 5,342 Fair value of notes payable assumed in real estate acquisition $ 15,233 $ 25,979 Supplemental Cash Flow Disclosures: Interest paid $ 39,852 $ 21,366 |
Related-Party Transactions an26
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 CR IV 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 Offering: Selling commissions $ — $ — $ — $ 55,902 Selling commissions reallowed by CCC $ — $ — $ — $ 55,902 Dealer manager fees $ — $ — $ — $ 16,780 Dealer manager fees reallowed by CCC $ — $ — $ — $ 9,326 Other offering costs $ — $ — $ — $ 7,271 The Company recorded fees and expense reimbursements as shown in the table below for services provided by CR IV 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 Acquisition and Operations: Acquisition fees and expenses $ 2,561 $ 16,948 $ 10,459 $ 30,099 Advisory fees and expenses $ 8,926 $ 6,011 $ 25,733 $ 16,078 Operating expenses $ 997 $ 731 $ 2,974 $ 2,513 |
Organization and Business (Deta
Organization and Business (Details) $ / shares in Units, ft² in Thousands | Apr. 04, 2014shares | Feb. 18, 2014USD ($)$ / sharesshares | Nov. 25, 2013USD ($) | Sep. 30, 2015USD ($)ft²propertystatesshares | Sep. 30, 2015USD ($)ft²propertystates$ / sharesshares | Aug. 31, 2015$ / shares | Dec. 31, 2014shares | Dec. 19, 2013shares | Jan. 26, 2012USD ($) |
Organization and business [Line Items] | |||||||||
Common stock, shares authorized (in shares) | 490,000,000 | 490,000,000 | 490,000,000 | ||||||
Share price (in dollars per share) | $ / shares | $ 9.70 | ||||||||
Issuance of common stock | $ | $ 84,244,000 | ||||||||
Number of owned properties (in number of properties) | property | 853 | 853 | |||||||
Rentable square feet (in square feet) | ft² | 22,900 | 22,900 | |||||||
Number of states in which entity owns properties (in number of states) | states | 45 | 45 | |||||||
Percentage of rentable space leased | 98.00% | 98.00% | |||||||
Consolidated Properties | |||||||||
Organization and business [Line Items] | |||||||||
Number of owned properties (in number of properties) | property | 9 | 9 | |||||||
Unconsolidated joint venture | |||||||||
Organization and business [Line Items] | |||||||||
Number of owned properties (in number of properties) | property | 1 | 1 | |||||||
Rentable square feet (in square feet) | ft² | 176 | 176 | |||||||
Common Stock | |||||||||
Organization and business [Line Items] | |||||||||
Issuance of common stock, shares (in shares) | 8,868,132 | ||||||||
Issuance of common stock | $ | $ 88,000 | ||||||||
Common Stock | |||||||||
Organization and business [Line Items] | |||||||||
Redemptions of common stock, shares | 4,100,000 | ||||||||
Redemptions of common stock | $ | $ 39,900,000 | ||||||||
Stock redemption, average price per share | $ / shares | $ 9.69 | ||||||||
Distribution reinvestment plan | |||||||||
Organization and business [Line Items] | |||||||||
Share price (in dollars per share) | $ / shares | $ 9.70 | ||||||||
Common stock shares registered dividend reinvestment plan | 26,000,000 | ||||||||
IPO | |||||||||
Organization and business [Line Items] | |||||||||
Common stock, shares authorized, value | $ | $ 2,975,000,000 | ||||||||
Share price (in dollars per share) | $ / shares | $ 10 | ||||||||
Issuance of common stock, shares (in shares) | 297,400,000 | ||||||||
Unsold shares deregistered | 404,000 | ||||||||
IPO | Common Stock | |||||||||
Organization and business [Line Items] | |||||||||
Issuance of common stock, shares (in shares) | 292,300,000 | ||||||||
IPO | Distribution reinvestment plan | |||||||||
Organization and business [Line Items] | |||||||||
Common stock, shares authorized (in shares) | 5,500,000 | ||||||||
Share price (in dollars per share) | $ / shares | $ 9.50 | ||||||||
Issuance of common stock, shares (in shares) | 5,100,000 | ||||||||
IPO | Maximum | |||||||||
Organization and business [Line Items] | |||||||||
Common stock, shares authorized (in shares) | 292,300,000 | ||||||||
IPO | Maximum | Distribution reinvestment plan | |||||||||
Organization and business [Line Items] | |||||||||
Common stock, shares authorized, value reallocated | $ | $ 23,000,000 | $ 400,000,000 | |||||||
IPO And Secondary Offering | |||||||||
Organization and business [Line Items] | |||||||||
Issuance of common stock, shares (in shares) | 315,000,000 | ||||||||
Issuance of common stock | $ | $ 3,100,000,000 | ||||||||
Offering costs, selling commissions, and dealer management fees | $ | $ 306,000,000 | ||||||||
IPO And Secondary Offering | Distribution reinvestment plan | |||||||||
Organization and business [Line Items] | |||||||||
Stock issued during period, shares, dividend reinvestment plan | 17,700,000 | ||||||||
CCPT IV OP | |||||||||
Organization and business [Line Items] | |||||||||
General partner partnership interest percentage | 100.00% |
Summary of Significant Accoun28
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands | Jun. 27, 2014 | Sep. 30, 2015 | Dec. 31, 2014 |
Valuation of real estate and related assets [Line Items] | |||
Carrying value of real estate | $ 2,700 | ||
Consolidated joint venture options, vesting period | 2 years | ||
Noncontrolling interest | $ 2,700 | ||
Restricted cash | 9,508 | $ 4,560 | |
Allowance for doubtful accounts receivable | 201 | 67 | |
Restricted cash, rents from certain encumbered properties | |||
Valuation of real estate and related assets [Line Items] | |||
Restricted cash | 396 | 2,700 | |
Restricted cash, tenant and capital improvements, leasing commissions, repairs and maintenance and other lender reserves for certain properties | |||
Valuation of real estate and related assets [Line Items] | |||
Restricted cash | $ 9,100 | $ 1,900 | |
Building | |||
Valuation of real estate and related assets [Line Items] | |||
Acquired real estate asset, useful life | 40 years |
Summary of Significant Accoun29
Summary of Significant Accounting Policies - Concentration of credit risk (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2015USD ($)financial_institutionpropertytenant | |
Concentration Risk [Line Items] | |
Cash on deposit, number of financial institutions (financial institutions) | financial_institution | 11 |
Cash on deposit, number of financial institutions which have deposits in excess of current federally insured limits (financial institutions) | financial_institution | 4 |
Concentration risk, credit risk, financial instrument, maximum exposure | $ | $ 34.6 |
Number of owned properties (in number of properties) | 853 |
Geographic concentration risk | California | |
Concentration Risk [Line Items] | |
Number of owned properties (in number of properties) | 77 |
Geographic concentration risk | Texas | |
Concentration Risk [Line Items] | |
Number of owned properties (in number of properties) | 101 |
Gross annualized rental revenue | Customer concentration risk | |
Concentration Risk [Line Items] | |
Number of tenants (in tenants) | tenant | 0 |
Gross annualized rental revenue | Customer concentration risk | Discount store industry | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 14.00% |
Gross annualized rental revenue | Customer concentration risk | Pharmacy Industry | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 11.00% |
Gross annualized rental revenue | Geographic concentration risk | California | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 11.00% |
Gross annualized rental revenue | Geographic concentration risk | Texas | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 10.00% |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Additional obligation | $ 2,880,000 | $ 5,342,000 | |
Decrease in obligation | (1,756,000) | ||
Contingent consideration recorded upon property acquisitions | 2,880,000 | 5,342,000 | |
Fair value assets and liabilities, transfers amount | 0 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Contingent consideration | (2,880,000) | $ (5,342,000) | |
Fair value, measurements, recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration recorded upon property acquisitions | 4,529,000 | $ 3,405,000 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Contingent consideration | (4,529,000) | (3,405,000) | |
Total liabilities | (17,827,000) | (7,462,000) | |
Interest Rate Swaps | Fair value, measurements, recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Financial liabilities | (13,298,000) | (4,057,000) | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair value, measurements, recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration recorded upon property acquisitions | 0 | 0 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Contingent consideration | 0 | 0 | |
Total liabilities | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Interest Rate Swaps | Fair value, measurements, recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Financial liabilities | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Lines of credit, fair value disclosure | 1,950,000,000 | 1,500,000,000 | |
Significant Other Observable Inputs (Level 2) | Fair value, measurements, recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration recorded upon property acquisitions | 0 | 0 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Contingent consideration | 0 | 0 | |
Total liabilities | (13,298,000) | (4,057,000) | |
Significant Other Observable Inputs (Level 2) | Interest Rate Swaps | Fair value, measurements, recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Financial liabilities | (13,298,000) | (4,057,000) | |
Significant Unobservable Inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration recorded upon property acquisitions | 4,500,000 | 3,400,000 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Contingent consideration | (4,500,000) | (3,400,000) | |
Significant Unobservable Inputs (Level 3) | Fair value, measurements, recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration recorded upon property acquisitions | 4,529,000 | 3,405,000 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Contingent consideration | (4,529,000) | (3,405,000) | |
Total liabilities | (4,529,000) | (3,405,000) | |
Significant Unobservable Inputs (Level 3) | Interest Rate Swaps | Fair value, measurements, recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Financial liabilities | 0 | 0 | |
Contingent Consideration Obligation | Significant Unobservable Inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Additional obligation | 2,900,000 | ||
Decrease in obligation | 1,800,000 | ||
Reported Value Measurement [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Lines of credit, fair value disclosure | $ 1,950,000,000 | $ 1,500,000,000 |
Fair Value Measurements - Liabi
Fair Value Measurements - Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ (3,405) | $ (784) |
Purchases | (2,880) | (5,342) |
Fair value adjustments | 1,756 | |
Principal payments made | 689 | |
Ending balance | $ (4,529) | $ (5,437) |
Real Estate Acquisitions (Detai
Real Estate Acquisitions (Details) $ in Thousands, ft² in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2015USD ($)ft²land_parcel | Sep. 30, 2014USD ($) | Sep. 30, 2013USD ($) | Sep. 30, 2015USD ($)ft²land_parcelproperty | Sep. 30, 2014USD ($)property | Sep. 30, 2013USD ($) | Dec. 31, 2014USD ($)ft²land_parcel | |
Pro forma basis (unaudited) | |||||||
Acquisition-related expenses | $ 2,518 | $ 21,009 | $ 11,785 | $ 39,755 | |||
Number of land parcels (parcel) | land_parcel | 1 | 1 | |||||
Rentable square feet (in square feet) | ft² | 22.9 | 22.9 | |||||
2015 Acquisitions | |||||||
Business Acquisition [Line Items] | |||||||
Number of businesses acquired (in properties) | property | 94 | ||||||
Total purchase price | $ 485,500 | ||||||
Business Acquisition, Purchase Price Allocation [Abstract] | |||||||
Land | $ 111,696 | 111,696 | |||||
Building and improvements | 326,155 | 326,155 | |||||
Fair value adjustment of assumed notes payable | (253) | (253) | |||||
Total purchase price | 485,461 | 485,461 | |||||
Business combination, pro forma information, revenue of acquiree since acquisition date, actual | 8,900 | 17,300 | |||||
Business combination, pro forma information, earnings (loss) of acquiree since acquisition date, actual | 329 | (6,200) | |||||
Pro forma basis (unaudited) | |||||||
Revenue | 95,232 | 74,548 | 282,887 | 202,536 | |||
Net income (loss) | 21,134 | (3,561) | 66,265 | $ (346) | |||
Acquisition-related expenses | 2,500 | 11,800 | |||||
2015 Acquisitions | Acquired in-place leases | |||||||
Business Acquisition, Purchase Price Allocation [Abstract] | |||||||
Acquired finite-lived intangible asset - leases, amount | 52,006 | 52,006 | |||||
2015 Acquisitions | Acquired above-market leases | |||||||
Business Acquisition, Purchase Price Allocation [Abstract] | |||||||
Acquired finite-lived intangible asset - leases, amount | 6,657 | 6,657 | |||||
2015 Acquisitions | Acquired below-market leases | |||||||
Business Acquisition, Purchase Price Allocation [Abstract] | |||||||
Acquired below-market leases | (10,800) | (10,800) | |||||
Development Projects | |||||||
Business Acquisition [Line Items] | |||||||
Total purchase price | $ 23,900 | ||||||
Pro forma basis (unaudited) | |||||||
Number of land parcels (parcel) | land_parcel | 1 | ||||||
Rentable square feet (in square feet) | ft² | 1.6 | ||||||
Total investment | $ 90,700 | 90,700 | |||||
Additional estimated investment | $ 16,700 | ||||||
2014 Acquisitions | |||||||
Business Acquisition [Line Items] | |||||||
Number of businesses acquired (in properties) | property | 334 | ||||||
Business Acquisition, Purchase Price Allocation [Abstract] | |||||||
Land | 298,370 | $ 298,370 | |||||
Building and improvements | 928,198 | 928,198 | |||||
Fair value adjustment of assumed notes payable | (765) | (765) | |||||
Total purchase price | 1,348,416 | 1,348,416 | |||||
Business combination, pro forma information, revenue of acquiree since acquisition date, actual | 16,800 | 28,000 | |||||
Business combination, pro forma information, earnings (loss) of acquiree since acquisition date, actual | (14,500) | (27,500) | |||||
Pro forma basis (unaudited) | |||||||
Revenue | 78,302 | $ 60,789 | 235,678 | $ 154,195 | |||
Net income (loss) | 26,537 | $ 1,873 | 79,726 | $ (36,451) | |||
Acquisition-related expenses | 21,000 | 39,800 | |||||
2014 Acquisitions | Acquired in-place leases | |||||||
Business Acquisition, Purchase Price Allocation [Abstract] | |||||||
Acquired finite-lived intangible asset - leases, amount | 122,822 | 122,822 | |||||
2014 Acquisitions | Acquired above-market leases | |||||||
Business Acquisition, Purchase Price Allocation [Abstract] | |||||||
Acquired finite-lived intangible asset - leases, amount | 13,110 | 13,110 | |||||
2014 Acquisitions | Acquired below-market leases | |||||||
Business Acquisition, Purchase Price Allocation [Abstract] | |||||||
Acquired below-market leases | $ (13,319) | $ (13,319) |
Derivative Instruments and He33
Derivative Instruments and Hedging Activities (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015USD ($)derivative | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)derivative | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | ||
Derivatives, Fair Value [Line Items] | ||||||
Amount of loss reclassified from other comprehensive (loss) income into income as interest expense | $ 1,912 | $ 1,324 | $ 4,489 | $ 3,920 | ||
Cash Flow Hedging | Interest Rate Swaps | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Amount of (Loss) Income Recognized in Other Comprehensive Income (Loss) | [1] | (8,124) | $ 2,954 | (9,241) | $ (13) | |
Derivative liability, event of default, termination amount | 14,000 | 14,000 | ||||
Cash Flow Hedging | Interest Rate Swaps | Deferred rental income, derivative liabilities and other liabilities | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Outstanding Notional Amount | [2] | 869,503 | 869,503 | |||
Fair Value of Liabilities as of | [2] | $ (13,298) | $ (13,298) | $ (4,057) | ||
Number of interest rate swap agreements (derivative) | derivative | 6 | 6 | ||||
Number of interest rate swaps entered into | derivative | 2 | |||||
Cash Flow Hedging | Interest Rate Swaps | Deferred rental income, derivative liabilities and other liabilities | Minimum | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Interest Rate | [2],[3] | 3.00% | 3.00% | |||
Cash Flow Hedging | Interest Rate Swaps | Deferred rental income, derivative liabilities and other liabilities | Maximum | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Interest Rate | [2],[3] | 4.75% | 4.75% | |||
Interest Expense | Cash Flow Hedging | Interest Rate Swaps | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Interest rate cash flow hedge gain (loss) to be reclassified during next 12 months | $ 8,200 | $ 8,200 | ||||
[1] | There were no portions of the change in the fair value of the interest rate swaps that were considered ineffective during the three and nine months ended September 30, 2015 or 2014. | |||||
[2] | As of September 30, 2015, the Company had six interest rate swap agreements. During the three months ended September 30, 2015, the Company entered into two interest rate swap agreements, one of which was entered into on September 29, 2015 with an effective date of October 1, 2015. | |||||
[3] | The interest rates consist of the underlying index swapped to a fixed rate and the applicable interest rate spread as of September 30, 2015. |
Notes Payable And Credit Faci34
Notes Payable And Credit Facility (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | ||
Short-Term and Long-Term Debt [Roll Forward] | |||
Notes payable and credit facility, beginning balance | $ 1,466,507,000 | ||
Debt Issuances & Assumption | 943,346,000 | ||
Repayments | (469,405,000) | ||
Debt instrument, increase (decrease), other, net | [1] | (24,000) | |
Notes payable and credit facility, ending balance | $ 1,940,424,000 | ||
Debt instrument, weighted average years to maturity | 4 years 3 months | ||
Debt, weighted average interest rate | 3.20% | ||
Fair value of notes payable assumed in real estate acquisition | $ 15,233,000 | $ 25,979,000 | |
Fixed rate debt | |||
Short-Term and Long-Term Debt [Roll Forward] | |||
Notes payable and credit facility, beginning balance | 566,507,000 | ||
Debt Issuances & Assumption | 271,180,000 | ||
Repayments | (405,000) | ||
Debt instrument, increase (decrease), other, net | [1] | (24,000) | |
Notes payable and credit facility, ending balance | 837,258,000 | ||
Variable rate debt | |||
Short-Term and Long-Term Debt [Roll Forward] | |||
Notes payable and credit facility, beginning balance | 0 | ||
Debt Issuances & Assumption | 53,500,000 | ||
Repayments | 0 | ||
Debt instrument, increase (decrease), other, net | [1] | 0 | |
Notes payable and credit facility, ending balance | 53,500,000 | ||
Debt security, amount, aggregate gross real estate assets net of gross intangible lease liabilities | 106,800,000 | ||
Line of credit | Revolving credit facility | |||
Short-Term and Long-Term Debt [Roll Forward] | |||
Line of credit, current borrowing capacity | $ 155,300,000 | ||
Line of credit | Revolving credit facility | LIBOR | |||
Short-Term and Long-Term Debt [Roll Forward] | |||
Debt instrument, basis spread on variable rate | 1.00% | ||
Line of credit | Revolving credit facility | Federal funds rate plus | |||
Short-Term and Long-Term Debt [Roll Forward] | |||
Debt instrument, basis spread on variable rate | 0.50% | ||
Line of credit | Term loan | Cash Flow Hedging | Interest Rate Swaps | |||
Short-Term and Long-Term Debt [Roll Forward] | |||
Derivative, Amount of Hedged Item | $ 300,000,000 | ||
Notes payable | |||
Short-Term and Long-Term Debt [Roll Forward] | |||
Debt security, amount, aggregate gross real estate assets net of gross intangible lease liabilities | 1,500,000,000 | ||
Unsecured Debt | Term loan | Cash Flow Hedging | Interest Rate Swaps | |||
Short-Term and Long-Term Debt [Roll Forward] | |||
Derivative, Amount of Hedged Item | $ 261,700,000 | ||
Fixed rate debt | Notes payable | Minimum | |||
Short-Term and Long-Term Debt [Roll Forward] | |||
Line of credit fixed interest rate | 3.35% | ||
Fixed rate debt | Notes payable | Maximum | |||
Short-Term and Long-Term Debt [Roll Forward] | |||
Line of credit fixed interest rate | 5.23% | ||
Fixed rate debt | Mortgage notes payable | |||
Short-Term and Long-Term Debt [Roll Forward] | |||
Notes payable and credit facility, ending balance | $ 40,200,000 | ||
Fair value of notes payable assumed in real estate acquisition | $ 41,200,000 | ||
Variable rate debt | Notes payable | |||
Short-Term and Long-Term Debt [Roll Forward] | |||
Debt, weighted average interest rate | 2.86% | ||
JPMorgan chase, revolving credit facility | Line of credit | Revolving credit facility | |||
Short-Term and Long-Term Debt [Roll Forward] | |||
Notes payable and credit facility, beginning balance | $ 900,000,000 | ||
Debt Issuances & Assumption | 618,666,000 | ||
Repayments | (469,000,000) | ||
Debt instrument, increase (decrease), other, net | [1] | 0 | |
Notes payable and credit facility, ending balance | 1,049,666,000 | ||
Line of credit, maximum borrowing capacity | 1,600,000,000 | ||
Line of credit facility, covenant, minimum consolidated net worth | $ 425,000,000 | ||
Line of credit facility, covenant, minimum consolidated net worth, percentage of equity issuance | 75.00% | ||
JPMorgan chase, revolving credit facility | Line of credit | Revolving credit facility | Minimum | |||
Short-Term and Long-Term Debt [Roll Forward] | |||
Line of credit facility, covenant, leverage ratio | 60.00% | ||
Debt instrument, covenant, unsecured debt to unencumbered asset value ratio | 50.00% | ||
Line of credit facility, covenant, secured debt ratio | 30.00% | ||
JPMorgan chase, revolving credit facility | Line of credit | Revolving credit facility | Maximum | |||
Short-Term and Long-Term Debt [Roll Forward] | |||
Debt instrument, covenant, fixed charge coverage ratio | 1.50 | ||
Line of credit facility, covenant, unsecured debt service coverage ratio | 1.75 | ||
JPMorgan chase, revolving credit facility | Unsecured Debt | |||
Short-Term and Long-Term Debt [Roll Forward] | |||
Line of credit, maximum borrowing capacity | $ 1,200,000,000 | ||
JPMorgan chase, revolving credit facility | Unsecured Debt | Revolving credit facility | |||
Short-Term and Long-Term Debt [Roll Forward] | |||
Line of credit, maximum borrowing capacity | 643,300,000 | ||
JPMorgan chase, revolving credit facility | Unsecured Debt | Term loan | |||
Short-Term and Long-Term Debt [Roll Forward] | |||
Line of credit, maximum borrowing capacity | 561,700,000 | ||
Fixed rate debt, variable rate debt fixed through the use of interest rate swaps | Notes payable | |||
Short-Term and Long-Term Debt [Roll Forward] | |||
Notes payable and credit facility, ending balance | $ 57,800,000 | ||
Eurodollar rate loan | Unsecured Debt | Revolving credit facility | LIBOR | Minimum | |||
Short-Term and Long-Term Debt [Roll Forward] | |||
Debt instrument, basis spread on variable rate | 1.65% | ||
Eurodollar rate loan | Unsecured Debt | Revolving credit facility | LIBOR | Maximum | |||
Short-Term and Long-Term Debt [Roll Forward] | |||
Debt instrument, basis spread on variable rate | 2.50% | ||
Secured Revolving Credit Facility, Eurodollar Rate | Line of credit | Revolving credit facility | Leverage Ratio Less than or Equal to Fifty Percent | |||
Short-Term and Long-Term Debt [Roll Forward] | |||
Leverage Ratio | 45.00% | ||
Secured Revolving Credit Facility, Eurodollar Rate | Line of credit | Revolving credit facility | Leverage Ratio Greater than Sixty-Five Percent | |||
Short-Term and Long-Term Debt [Roll Forward] | |||
Leverage Ratio | 60.00% | ||
Base rate committed loans | Unsecured Debt | Base Rate | Minimum | |||
Short-Term and Long-Term Debt [Roll Forward] | |||
Debt instrument, basis spread on variable rate | 0.65% | ||
Base rate committed loans | Unsecured Debt | Base Rate | Maximum | |||
Short-Term and Long-Term Debt [Roll Forward] | |||
Debt instrument, basis spread on variable rate | 1.50% | ||
2015 Swapped Term Loan | Unsecured Debt | Term loan | Cash Flow Hedging | Interest Rate Swaps | |||
Short-Term and Long-Term Debt [Roll Forward] | |||
Debt, weighted average interest rate | 2.78% | ||
Derivative, interest rate swap, effective fixed rate | 1.13% | ||
JP Morgan Chase, Swapped Revolver Loan | Unsecured Debt | Revolving credit facility | Cash Flow Hedging | Interest Rate Swaps | |||
Short-Term and Long-Term Debt [Roll Forward] | |||
Debt, weighted average interest rate | 3.00% | ||
Derivative, Amount of Hedged Item | $ 250,000,000 | ||
Derivative, interest rate swap, effective fixed rate | 1.353% | ||
2013 Swapped Term Loan | Unsecured Debt | Term loan | Cash Flow Hedging | Interest Rate Swaps | |||
Short-Term and Long-Term Debt [Roll Forward] | |||
Debt, weighted average interest rate | 3.36% | ||
Derivative, interest rate swap, effective fixed rate | 1.713% | ||
[1] | Represents fair value adjustment of an assumed mortgage note payable, net of amortization. |
Supplemental Cash Flow Disclo35
Supplemental Cash Flow Disclosures (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Supplemental Disclosures of Non-Cash Investing and Financing Activities: | |||||
Distributions declared and unpaid | $ 15,973 | $ 15,539 | $ 15,973 | $ 15,539 | $ 16,189 |
Accrued capital expenditures | 16,435 | 5,405 | |||
Common stock issued through distribution reinvestment plan | 84,244 | 76,349 | |||
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | (8,124) | 2,954 | (9,241) | (13) | |
Contingent consideration recorded upon property acquisitions | $ 2,880 | $ 5,342 | 2,880 | 5,342 | |
Fair value of notes payable assumed in real estate acquisition | 15,233 | 25,979 | |||
Supplemental Cash Flow Disclosures: | |||||
Interest paid | $ 39,852 | $ 21,366 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2015USD ($)property | |
Capital addition purchase commitments | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
Ownership interest acquired | 100.00% |
Number of businesses acquired (in properties) | 8 |
Total purchase price | $ | $ 66,000 |
Escrow deposit, property acquisition | $ | $ 886 |
Purchase agreement for 25 properties | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
Number of businesses acquired (in properties) | 24 |
Number of properties committed to purchase (in properties) | 25 |
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 [Line Items] | |||||
Due to affiliates | $ 5,386,000 | $ 5,386,000 | $ 5,473,000 | ||
Advisors | |||||
Related Party Transaction [Line Items] | |||||
Due to affiliates | $ 5,400,000 | $ 5,400,000 | 5,500,000 | ||
Cumulative noncompounded annual return | 8.00% | 8.00% | |||
Advisors | Listing commission | |||||
Related Party Transaction [Line Items] | |||||
Commissions performance and other fees percent | 15.00% | 15.00% | |||
Advisors | Minimum | |||||
Related Party Transaction [Line Items] | |||||
Operating expense reimbursement percent of average invested assets | 2.00% | 2.00% | |||
Operating expense reimbursement percent of net income | 25.00% | 25.00% | |||
Average invested assets between $0 to $2 billion | Advisors | |||||
Related Party Transaction [Line Items] | |||||
Asset management or advisory fees percent | 0.75% | 0.75% | |||
Average invested assets between $0 to $2 billion | Advisors | Maximum | |||||
Related Party Transaction [Line Items] | |||||
Average invested assets | $ 2,000,000,000 | $ 2,000,000,000 | |||
Average invested assets between $0 to $2 billion | Advisors | Minimum | |||||
Related Party Transaction [Line Items] | |||||
Average invested assets | $ 0 | $ 0 | |||
Average invested assets between $2 billion to $4 billion | Advisors | |||||
Related Party Transaction [Line Items] | |||||
Asset management or advisory fees percent | 0.70% | 0.70% | |||
Average invested assets between $2 billion to $4 billion | Advisors | Maximum | |||||
Related Party Transaction [Line Items] | |||||
Average invested assets | $ 4,000,000,000 | $ 4,000,000,000 | |||
Average invested assets between $2 billion to $4 billion | Advisors | Minimum | |||||
Related Party Transaction [Line Items] | |||||
Average invested assets | $ 2,000,000,000 | $ 2,000,000,000 | |||
Average invested assets over $4 billion | Advisors | |||||
Related Party Transaction [Line Items] | |||||
Asset management or advisory fees percent | 0.65% | 0.65% | |||
Average invested assets over $4 billion | Advisors | Minimum | |||||
Related Party Transaction [Line Items] | |||||
Average invested assets | $ 4,000,000,000 | $ 4,000,000,000 | |||
Selling commissions | Dealer manager commission | Maximum | |||||
Related Party Transaction [Line Items] | |||||
Commissions percentage on stock sales and related dealer manager fees | 7.00% | 7.00% | |||
Selling commissions | Advisors | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction, expenses from transactions with related party | $ 0 | $ 0 | $ 0 | $ 55,902,000 | |
Selling commissions reallowed by cole capital | Dealer manager commission reallowed | |||||
Related Party Transaction [Line Items] | |||||
Commissions percentage on stock sales and related dealer manager fees | 100.00% | 100.00% | |||
Selling commissions reallowed by cole capital | Advisors | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction, expenses from transactions with related party | $ 0 | 0 | $ 0 | 55,902,000 | |
Dealer manager fee | Dealer manager | |||||
Related Party Transaction [Line Items] | |||||
Commissions percentage on stock sales and related dealer manager fees | 2.00% | 2.00% | |||
Dealer manager fee | Advisors | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction, expenses from transactions with related party | $ 0 | 0 | $ 0 | 16,780,000 | |
Dealer manager fee reallowed by cole capital | Advisors | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction, expenses from transactions with related party | 0 | 0 | 0 | 9,326,000 | |
Other organization and offering expenses | Advisors | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction, expenses from transactions with related party | $ 0 | 0 | $ 0 | 7,271,000 | |
Other organization and offering expenses | Advisors | Maximum | |||||
Related Party Transaction [Line Items] | |||||
Organization and offering expense | 2.00% | 2.00% | |||
Acquisition fees and expenses | Advisors | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction, expenses from transactions with related party | $ 2,561,000 | 16,948,000 | $ 10,459,000 | 30,099,000 | |
Acquisition fees and expenses | Advisors | Maximum | |||||
Related Party Transaction [Line Items] | |||||
Acquisition and advisory fee | 6.00% | 6.00% | |||
Acquisition fees and expenses | Advisors | Maximum | Contract purchase price of each asset | |||||
Related Party Transaction [Line Items] | |||||
Acquisition and advisory fee | 2.00% | 2.00% | |||
Advisory fees and expenses | Advisors | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction, expenses from transactions with related party | $ 8,926,000 | 6,011,000 | $ 25,733,000 | 16,078,000 | |
Operating expenses | Advisors | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction, expenses from transactions with related party | 997,000 | 731,000 | 2,974,000 | 2,513,000 | |
Acquisitions and operations costs | Advisors | |||||
Related Party Transaction [Line Items] | |||||
Due to affiliates | $ 5,400,000 | $ 1,100,000 | $ 5,400,000 | $ 1,100,000 | |
Property sales commission | Advisors | Contract sale price of each property | |||||
Related Party Transaction [Line Items] | |||||
Commissions performance and other fees percent | 1.00% | 1.00% | |||
Brokerage Commission Fee | Advisors | Maximum | |||||
Related Party Transaction [Line Items] | |||||
Commissions performance and other fees percent | 50.00% | 50.00% | |||
Property portfolio | Advisors | Maximum | |||||
Related Party Transaction [Line Items] | |||||
Commissions performance and other fees percent | 6.00% | 6.00% | |||
Performance fee | Advisors | |||||
Related Party Transaction [Line Items] | |||||
Commissions performance and other fees percent | 15.00% | 15.00% | |||
Dead Deals Reimbursable by Advisor | Advisors | |||||
Related Party Transaction [Line Items] | |||||
Due to affiliates | $ 470,000 |
Subsequent Events - (Details)
Subsequent Events - (Details) $ / shares in Units, $ in Thousands, shares in Millions | Nov. 10, 2015USD ($)shares | Nov. 10, 2015USD ($)property$ / sharesshares | Sep. 30, 2015USD ($)land_parcel | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)land_parcelproperty | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) |
Subsequent Event | |||||||
Issuance of common stock | $ 84,244 | ||||||
Debt, long-term and short-term, combined amount | $ 1,940,424 | $ 1,940,424 | $ 1,466,507 | ||||
Debt, weighted average interest rate | 3.20% | 3.20% | |||||
Acquisition costs | $ 2,518 | $ 21,009 | $ 11,785 | $ 39,755 | |||
Number of land parcels (parcel) | land_parcel | 1 | 1 | |||||
2015 Acquisitions | |||||||
Subsequent Event | |||||||
Number of businesses acquired (in properties) | property | 94 | ||||||
Total purchase price | $ 485,500 | ||||||
Acquisition costs | $ 2,500 | 11,800 | |||||
Credit facility | Line of credit | |||||||
Subsequent Event | |||||||
Line of credit, current borrowing capacity | 155,300 | 155,300 | |||||
Credit facility | Line of credit | JPMorgan chase, revolving credit facility | |||||||
Subsequent Event | |||||||
Debt, long-term and short-term, combined amount | $ 1,049,666 | $ 1,049,666 | $ 900,000 | ||||
Subsequent event | |||||||
Subsequent Event | |||||||
Redemptions of common stock, shares | shares | 1.8 | ||||||
Redemptions of common stock | $ 16,800 | ||||||
Stock redemption, average price per share | $ / shares | $ 9.50 | ||||||
Notes assumed | $ 50,000 | ||||||
Repayment of debt | 14,900 | ||||||
Proceeds from sale of property held-for-sale | 1,100 | ||||||
Loss on disposition of property | $ 81 | ||||||
Subsequent event | 2015 Acquisitions | |||||||
Subsequent Event | |||||||
Number of businesses acquired (in properties) | property | 5 | ||||||
Total purchase price | $ 64,300 | ||||||
Acquisition costs | $ 1,600 | ||||||
Subsequent event | Notes payable | |||||||
Subsequent Event | |||||||
Debt, weighted average interest rate | 3.59% | 3.59% | |||||
Subsequent event | Credit facility | Line of credit | |||||||
Subsequent Event | |||||||
Line of credit, current borrowing capacity | $ 115,200 | $ 115,200 | |||||
Subsequent event | Credit facility | Line of credit | JPMorgan chase, revolving credit facility | |||||||
Subsequent Event | |||||||
Debt, long-term and short-term, combined amount | $ 1,100,000 | 1,100,000 | |||||
Subsequent event | Secondary offering | |||||||
Subsequent Event | |||||||
Issuance of common stock, shares (in shares) | shares | 19.6 | ||||||
Issuance of common stock | $ 186,700 |