Document and Entity Information
Document and Entity Information - shares shares in Millions | 9 Months Ended | |
Sep. 30, 2017 | Nov. 09, 2017 | |
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, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity common stock, shares outstanding (shares) | 310.8 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Investment in real estate assets: | ||
Land | $ 1,193,043 | $ 1,156,417 |
Buildings, fixtures and improvements | 3,364,812 | 3,214,212 |
Intangible lease assets | 587,189 | 553,149 |
Total real estate investments, at cost | 5,145,044 | 4,923,778 |
Less: accumulated depreciation and amortization | (490,178) | (389,768) |
Total real estate investments, net | 4,654,866 | 4,534,010 |
Cash and cash equivalents | 4,231 | 9,754 |
Restricted cash | 11,002 | 8,040 |
Rents and tenant receivables, net | 68,916 | 65,446 |
Due from affiliates | 4 | 58 |
Prepaid expenses, derivative assets, revenue bonds and other assets | 9,638 | 5,513 |
Deferred costs, net | 3,270 | 1,514 |
Assets held for sale | 1,594 | 0 |
Total assets | 4,753,521 | 4,624,335 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Notes payable and credit facility, net | 2,454,282 | 2,246,259 |
Accounts payable and accrued expenses | 32,989 | 25,310 |
Due to affiliates | 3,784 | 5,333 |
Intangible lease liabilities, net | 47,607 | 49,075 |
Distributions payable | 16,001 | 16,498 |
Deferred rental income, derivative liabilities and other liabilities | 14,890 | 15,091 |
Total liabilities | 2,569,553 | 2,357,566 |
Commitments and contingencies | ||
Redeemable common stock and noncontrolling interest | 187,056 | 188,938 |
STOCKHOLDERS’ EQUITY | ||
Preferred stock, $0.01 par value per share; 10,000,000 shares authorized, none issued and outstanding | 0 | 0 |
Common stock, $0.01 par value per share; 490,000,000 shares authorized, 311,637,622 and 311,817,004 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively | 3,116 | 3,118 |
Capital in excess of par value | 2,607,301 | 2,607,304 |
Accumulated distributions in excess of earnings | (613,163) | (531,567) |
Accumulated other comprehensive loss | (342) | (1,024) |
Total stockholders’ equity | 1,996,912 | 2,077,831 |
Total liabilities, redeemable common stock, noncontrolling interest and stockholders’ equity | $ 4,753,521 | $ 4,624,335 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
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) | 311,637,622 | 311,817,004 |
Common stock, shares outstanding (shares) | 311,637,622 | 311,817,004 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues: | ||||
Rental income | $ 94,103 | $ 89,370 | $ 278,354 | $ 265,341 |
Tenant reimbursement income | 12,921 | 12,426 | 37,954 | 37,599 |
Total revenues | 107,024 | 101,796 | 316,308 | 302,940 |
Operating expenses: | ||||
General and administrative | 3,270 | 3,246 | 10,301 | 9,735 |
Property operating | 7,345 | 5,738 | 20,881 | 16,603 |
Real estate tax | 9,276 | 8,612 | 27,646 | 25,939 |
Advisory fees and expenses | 11,149 | 10,587 | 32,863 | 31,100 |
Acquisition-related | 110 | 1,417 | 1,520 | 3,592 |
Depreciation and amortization | 36,461 | 33,452 | 106,145 | 100,399 |
Impairment | 1,658 | 1,430 | 1,658 | 1,430 |
Total operating expenses | 69,269 | 64,482 | 201,014 | 188,798 |
Operating income | 37,755 | 37,314 | 115,294 | 114,142 |
Other income (expense): | ||||
Interest expense and other, net | (23,335) | (20,473) | (67,968) | (58,416) |
Loss recognized on equity interest re-measured to fair value | 0 | (652) | 0 | (652) |
Income before real estate dispositions | 14,420 | 16,189 | 47,326 | 55,074 |
Gain on dispositions of real estate, net | 15,349 | 1,939 | 16,801 | 2,053 |
Net income | 29,769 | 18,128 | 64,127 | 57,127 |
Net income allocated to noncontrolling interest | 33 | 32 | 99 | 99 |
Net income attributable to the Company | $ 29,736 | $ 18,096 | $ 64,028 | $ 57,028 |
Weighted average number of common shares outstanding: | ||||
Basic and diluted (in shares) | 311,649,032 | 311,558,083 | 311,698,622 | 311,871,727 |
Net income per common share: | ||||
Basic and diluted (USD per share) | $ 0.10 | $ 0.06 | $ 0.21 | $ 0.18 |
Distributions declared per common share (USD per share) | $ 0.16 | $ 0.16 | $ 0.47 | $ 0.47 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 29,769 | $ 18,128 | $ 64,127 | $ 57,127 |
Other comprehensive income (loss) | ||||
Unrealized gain (loss) on interest rate swaps | 99 | 3,751 | (2,175) | (13,535) |
Amount of loss reclassified from other comprehensive income into income as interest expense | 447 | 2,181 | 2,857 | 6,768 |
Total other comprehensive income (loss) | 546 | 5,932 | 682 | (6,767) |
Comprehensive income | 30,315 | 24,060 | 64,809 | 50,360 |
Comprehensive income allocated to noncontrolling interest | 33 | 32 | 99 | 99 |
Comprehensive income attributable to the Company | $ 30,282 | $ 24,028 | $ 64,710 | $ 50,261 |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - 9 months ended Sep. 30, 2017 - USD ($) $ in Thousands | Total | Common Stock | Capital in Excess of Par Value | Accumulated Distributions in Excess of Earnings | Accumulated Other Comprehensive Income (Loss) |
Balance, (shares) at Dec. 31, 2016 | 311,817,004 | 311,817,004 | |||
Balance, at Dec. 31, 2016 | $ 2,077,831 | $ 3,118 | $ 2,607,304 | $ (531,567) | $ (1,024) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock (shares) | 7,665,673 | ||||
Issuance of common stock | 76,851 | $ 76 | 76,775 | ||
Distributions to investors | (145,624) | (145,624) | |||
Redemptions of common stock (shares) | (7,845,055) | ||||
Redemptions of common stock | (78,623) | $ (78) | (78,545) | ||
Changes in redeemable common stock | 1,767 | 1,767 | |||
Comprehensive income | $ 64,710 | 64,028 | 682 | ||
Balance, (shares) at Sep. 30, 2017 | 311,637,622 | 311,637,622 | |||
Balance, at Sep. 30, 2017 | $ 1,996,912 | $ 3,116 | $ 2,607,301 | $ (613,163) | $ (342) |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 64,127 | $ 57,127 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization, net | 104,220 | 99,555 |
Amortization of deferred financing costs | 3,958 | 4,190 |
Amortization of fair value adjustment of mortgage notes payable assumed | (64) | (63) |
Straight-line rental income | (7,651) | (8,888) |
Bad debt expense | 1,637 | |
Bad debt expense | (1) | |
Equity in income of unconsolidated joint venture | 0 | (615) |
Return on investment from unconsolidated joint venture | 0 | 615 |
Impairment of real estate assets | 1,658 | 1,430 |
Fair value adjustment to contingent consideration | (337) | (2,672) |
Ineffectiveness of interest rate swaps | (80) | 0 |
Write-off of deferred financing costs | 896 | 0 |
Gain on disposition of real estate assets, net | (16,801) | (2,053) |
Loss recognized on equity interest re-measured to fair value | 0 | 652 |
Changes in assets and liabilities: | ||
Rents and tenant receivables | 1,667 | 139 |
Prepaid expenses and other assets | (1,443) | (618) |
Accounts payable and accrued expenses | 7,819 | 8,237 |
Deferred rental income and other liabilities | 47 | (1,404) |
Due from affiliates | 54 | 47 |
Due to affiliates | (1,549) | (161) |
Net cash provided by operating activities | 158,158 | 155,517 |
Cash flows from investing activities: | ||
Investment in real estate assets and capital expenditures | (309,412) | (197,038) |
Investment in revenue bonds | (2,081) | 0 |
Return of investment in unconsolidated joint venture | 0 | 1,033 |
Acquisition of unconsolidated joint venture partner's interest | 0 | (1,626) |
Proceeds from disposition of real estate assets | 97,154 | 25,947 |
Payment of property escrow deposits | (11,416) | (5,404) |
Refund of property escrow deposits | 11,666 | 6,404 |
Change in restricted cash | (2,962) | (1,714) |
Net cash used in investing activities | (217,051) | (172,398) |
Cash flows from financing activities: | ||
Redemptions of common stock | (78,623) | (83,517) |
Offering costs related to DRIP Offerings | 0 | (66) |
Distributions to investors | (69,270) | (64,068) |
Proceeds from notes payable and credit facility | 1,514,706 | 441,420 |
Repayments of credit facility and notes payable | (1,300,001) | (279,315) |
Payment of loan deposits | (1,064) | (3,378) |
Refund of loan deposits | 1,064 | 3,378 |
Deferred financing costs paid | (13,228) | (3,341) |
Distributions to noncontrolling interest | (214) | (199) |
Earnout liability paid | 0 | (1,866) |
Net cash provided by financing activities | 53,370 | 9,048 |
Net decrease in cash and cash equivalents | (5,523) | (7,833) |
Cash and cash equivalents, beginning of period | 9,754 | 26,316 |
Cash and cash equivalents, end of period | $ 4,231 | $ 18,483 |
Organization and Business
Organization and Business | 9 Months Ended |
Sep. 30, 2017 | |
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 elected to be taxed, and currently qualifies, as a real estate investment trust (“REIT”) for U.S. federal income tax purposes beginning with its 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. (“VEREIT”), a widely-held public company whose shares of common stock are listed on the New York Stock Exchange (NYSE: VER). VEREIT indirectly owns and/or controls 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. 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 the distribution reinvestment plan (the “DRIP”) portion of the Offering 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 portion of the Offering 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 portion of the Offering 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. 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 portion of the Offering. The remaining approximately 404,000 unsold shares from the Offering were deregistered. The Company registered $247.0 million of shares of common stock under the DRIP pursuant to a Registration Statement filed on Form S-3 (Registration No. 333-192958) (the “Initial DRIP Offering”), 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 ceased issuing shares under the Initial DRIP Offering effective as of June 30, 2016. At the completion of the Initial DRIP Offering, a total of approximately $241.7 million of common stock had been issued. The remaining $5.3 million of unsold shares from the Initial DRIP Offering were deregistered. The Company registered an additional $600.0 million of shares of common stock under the DRIP pursuant to a Registration Statement filed on Form S-3 (Registration No. 333-212832) (the “Secondary DRIP Offering,” and together with the Initial DRIP Offering, the “DRIP Offerings,” and the DRIP Offerings collectively with the Offering, the “Offerings”), which was filed with the SEC on August 2, 2016 and automatically became effective with the SEC upon filing. The Company began to issue shares under the Secondary DRIP Offering on August 2, 2016 and will continue to issue shares under the Secondary DRIP Offering. On September 27, 2015, the Company announced that its board of directors (the “Board”) had 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. On November 10, 2016, the Board established an updated estimated per share net asset value (“NAV”) of the Company’s common stock, as of September 30, 2016, of $9.92 per share. On March 24, 2017, the Board established an updated estimated per share NAV of the Company’s common stock, as of December 31, 2016, of $10.08 per share. In determining the estimated per share NAVs as of August 31, 2015, September 30, 2016 and December 31, 2016, the Board considered information and analysis, including valuation materials that were provided by a third-party valuation expert, information provided by CR IV Advisors, and the estimated per share NAV recommendation made by the valuation committee of the Board, which committee is comprised entirely of independent directors. The Company’s estimated per share NAVs are not audited or reviewed by its independent registered public accounting firm. Prior to October 1, 2015, distributions were reinvested in shares of the Company’s common stock under the DRIP at a price of $9.50 per share. From October 1, 2015 to November 13, 2016, distributions were reinvested in shares of the Company’s common stock under the DRIP at a price of $9.70 per share, the estimated value per share as of August 31, 2015, as determined by the Board. From November 14, 2016 to March 27, 2017, distributions were reinvested in shares of the Company’s common stock under the DRIP at a price of $9.92 per share, the estimated per share NAV as of September 30, 2016, as determined by the Board. Commencing on March 28, 2017, distributions are reinvested in shares of the Company’s common stock under the DRIP at a price of $10.08 per share, the estimated per share NAV as of December 31, 2016, as determined by the Board. As of September 30, 2017 , the Company had issued approximately 336.8 million shares of its common stock in the Offerings, including 38.5 million shares issued in the DRIP Offerings, for gross offering proceeds of $3.3 billion before organization and offering costs, selling commissions and dealer manager fees of $306.0 million . As of September 30, 2017 , the Company owned 908 properties, which includes nine properties owned through a consolidated joint venture arrangement (the “Consolidated Joint Venture”), comprising 26.8 million rentable square feet of commercial space located in 45 states. As of September 30, 2017 , the rentable square feet at these properties was 97.5% leased, including month-to-month agreements, if any. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The summary of significant accounting policies presented below is designed to assist in understanding the Company’s condensed consolidated financial statements. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”), in all material respects, and have been consistently applied in preparing the accompanying condensed consolidated financial statements. Principles of Consolidation and Basis of Presentation The condensed consolidated 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 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, 2016 , and related notes thereto, set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . The condensed consolidated 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 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”). VIEs are entities where investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or where equity investors, as a group, lack one of the following characteristics: (a) the power to direct the activities that most significantly impact the entity’s economic performance, (b) the obligation to absorb the expected losses of the entity, or (c) the right to receive the expected returns of the entity. The Company consolidates any VIEs when it is determined to be the primary beneficiary of the VIE’s operations. For legal entities being evaluated for consolidation, the Company must first determine whether the interests that it holds and fees it receives qualify as variable interests in the entity. 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. The Company’s evaluation includes consideration of fees paid to the Company where the Company acts as a decision maker or service provider to the entity being evaluated. If the Company determines that it holds a variable interest in an entity, it evaluates whether that entity is a VIE. A VIE must be consolidated by its primary beneficiary, which is generally defined as the party who has a controlling financial interest in 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 and its obligation to absorb losses from or right to receive benefits of the VIE that could potentially be significant to the VIE. The Company consolidates any VIEs when the Company is determined to be the primary beneficiary of the VIE, and the difference between consolidating the VIE and accounting for it using the equity method could be material to the Company’s consolidated financial statements. The Company continually evaluates the need to consolidate any VIEs based on standards set forth in GAAP as described above. As of September 30, 2017 and December 31, 2016 , the Company determined that it had a controlling interest in the Consolidated Joint Venture and therefore met the GAAP requirements for consolidation. 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 condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Real Estate Investments Real estate assets are stated at cost, less accumulated depreciation and amortization. Amounts capitalized to real estate assets consist of the costs of acquisition, including acquisition-related fees and certain 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 costs are expensed as incurred. In April 2017, the Company early adopted Accounting Standards Update (“ASU”) No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”), which clarifies the definition of a business by adding guidance to assist entities in evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The Company’s acquisitions qualify as asset acquisitions, and as such, acquisition-related fees and certain acquisition-related expenses related to these asset acquisitions are capitalized. Prior to the adoption of ASU 2017-01, all acquisition-related fees and expenses were expensed as incurred, and all of the Company’s acquisitions were accounted for as business combinations. The Company considers the period of future benefit of each respective asset to determine the appropriate useful life. The estimated useful lives of the Company’s real estate assets by class are generally as follows: Buildings 40 years Site improvements 15 years Tenant improvements Lesser of useful life or lease term Intangible lease assets Lease term Recoverability of Real Estate Assets 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 part of the Company’s quarterly impairment review procedures, the Company recorded impairment charges of $1.7 million related to one property as a result of delinquent rental payments during the nine months ended September 30, 2017 . As part of the Company’s quarterly impairment review procedures, the Company recorded impairment charges of $1.4 million related to one property leased to a tenant that filed for bankruptcy during the nine months ended September 30, 2016 . The assumptions and uncertainties utilized in the evaluation of the impairment of real estate assets are discussed in detail in Note 3 — Fair Value Measurements. See also Note 4 — Real Estate Investments for further discussion regarding real estate investment activity. Assets Held for Sale 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, 2017 , the Company identified one property as held for sale, which was sold subsequent to September 30, 2017 , as discussed in Note 14 — Subsequent Events. There were no assets identified as held for sale as of December 31, 2016 . Allocation of Purchase Price of Real Estate Assets Upon the acquisition of real properties, the Company allocates the purchase price, including acquisition-related fees and certain acquisition-related expenses after the adoption of ASU 2017-01, to acquired tangible assets, consisting of land, buildings and improvements, and to identified intangible assets and liabilities, consisting of the value of above- and below-market leases and the value of in-place leases, based in each case on their respective fair values. 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 determination of the fair values of the real estate assets and liabilities acquired requires the use of significant assumptions with regard to the current market rental rates, rental growth rates, capitalization and discount rates, interest rates and other variables. The use of alternative estimates may result in a different allocation of the Company’s purchase price, which could materially impact the Company’s results of operations. Investment in Held-to-Maturity Securities The Company has investments classified as held-to-maturity securities, which consist of revenue bonds acquired in connection with the purchase of an anchored shopping center. The bonds have a 9.0% interest rate and mature on November 1, 2044. As of September 30, 2017 , the Company classified these investments as held-to-maturity as the Company has the intent and ability to hold the securities to maturity. These investments are initially recognized in prepaid expenses, derivative assets, revenue bonds and other assets on the condensed consolidated balance sheets and are subsequently measured using amortized cost. The Company’s investments in revenue bonds are reviewed for impairment, including the evaluation of changes in events or circumstances that may indicate that the carrying amount of the investment may not be recoverable. Realization is dependent on a number of factors, including investment performance, market conditions and payment structure. The Company will record an impairment charge if it is determined that a decline in the value of the investment below its carrying amount is other than temporary, recovery of its cost basis is uncertain, and/or it is uncertain if the investment will be held to maturity. The analysis of determining whether the impairment of a security is deemed to be other-than-temporary requires significant judgments and assumptions. The use of alternative judgments and assumptions could result in a different conclusion. Redeemable Noncontrolling 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 (the “Option”), which became effective on June 27, 2016 , whereby the Company will be required to purchase the ownership interest of the joint venture partner at fair market value. As of September 30, 2017 , the Option has not been exercised. The Company determined it had a controlling interest in the Consolidated Joint Venture and, therefore, met the GAAP requirements for consolidation. The Company recorded net income of $99,000 and paid distributions of $214,000 related to the noncontrolling interest during the nine months ended September 30, 2017 . The Company recorded the noncontrolling interest of $2.4 million as temporary equity in the mezzanine section of the condensed consolidated balance sheets, due to the ability to exercise the Option being outside the control of the Company. Restricted Cash The Company had $11.0 million and $8.0 million in restricted cash as of September 30, 2017 and December 31, 2016 , respectively. Included in restricted cash was $3.9 million and $4.0 million held by lenders in lockbox accounts as of September 30, 2017 and December 31, 2016 , 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 disbursed to the Company. Also included in restricted cash was $7.1 million and $4.0 million held by lenders in escrow accounts for real estate taxes and other lender reserves for certain properties, in accordance with the associated lender’s loan agreement, as of September 30, 2017 and December 31, 2016 , respectively. 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 earned and collectability is reasonably assured. When the Company acquires a property, the terms of 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, including any straight-line rent, and current and future operating expense reimbursements from tenants 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 uncertain, the Company will record an increase in the allowance for uncollectible accounts. As of September 30, 2017 and December 31, 2016 , the Company had an allowance for uncollectible accounts of $1.4 million and $221,000 , respectively. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by various standard setting bodies that may have an impact on the Company’s accounting and reporting. Except as otherwise stated below, the Company is currently evaluating the effect that certain of these new accounting requirements may have on the Company’s accounting and related reporting and disclosures in the Company’s condensed consolidated financial statements: In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which supersedes the revenue recognition requirements in Revenue Recognition, Accounting Standards Codification (“ASC”) (Topic 605) and will require an entity to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. For public business entities, the guidance should be applied to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Companies may use either a full retrospective or a modified retrospective approach to adopt ASU 2014-09. The Company plans to use the modified retrospective approach to adopt ASU 2014-09. In accordance with the Company’s plan for the adoption of ASU 2014-09, the Company’s implementation team has identified the Company’s revenue streams, performed an in-depth review of the Company’s revenue contracts and identified the related performance obligations and is evaluating the impact on the Company’s consolidated financial statements and internal accounting processes and controls. Once ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which, as discussed below, sets forth principles for the recognition, measurement, presentation and disclosure of leases, goes into effect, ASU 2014-09 may apply to non-lease components in the lease agreements. In February 2016, the FASB issued ASU 2016-02, which will require that a lessee recognize assets and liabilities on the balance sheet for all leases with a lease term of more than 12 months, with the result being the recognition of a right of use asset and a lease liability and the disclosure of key information about the entity’s leasing arrangements. The lessor accounting model under ASU 2016-02 is similar to current guidance; however it limits the capitalization of initial direct leasing costs, such as internally generated costs. ASU 2016-02 retains a distinction between finance leases ( i.e., capital leases under current GAAP) and operating leases. The classification criteria for distinguishing between finance leases and operating leases will be substantially similar to the classification criteria for distinguishing between capital leases and operating leases under current GAAP. The amendments in ASU 2016-02 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. A modified retrospective approach is required for existing leases that have not expired upon adoption and provides for certain practical expedients. The Company’s implementation team has developed an inventory of all leases and is identifying any non-lease components in the lease agreements and is evaluating the impact to the Company, both as lessor and lessee, and its consolidated financial statements. Upon the adoption of ASU 2016-02, the Company will record certain expenses paid directly by a tenant that protect the Company’s interests in its properties, such as insurance and real estate taxes, and the related operating expense reimbursement revenue, with no impact on net income. Based upon a preliminary analysis, the Company does not expect the accounting for leases pursuant to which the Company is the lessor to materially change as a result of the adoption of ASU 2016-02. The Company does not expect the accounting for one ground lease pursuant to which the Company is the lessee to have a material impact on its consolidated financial statements. ASU No. 2016-01, Financial Instruments (Subtopic 825-10) — The amendments in this update require all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under the equity method of accounting or those that result in consolidation of the investee). The amendments in this update also require an entity to present separately in other comprehensive income (loss) the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition, the amendments in this update require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the consolidated balance sheets or the accompanying notes to the consolidated financial statements. The amendments in this update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) (“ASU 2016-13”). ASU 2016-13 is intended to improve financial reporting requiring more timely recognition of credit losses on loans and other financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investment in leases and other such commitments. ASU 2016-13 requires that financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The amendments in ASU 2016-13 require the Company to measure all expected credit losses based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the financial assets and eliminates the “incurred loss” methodology under current GAAP. ASU 2016-13 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within those years, beginning after December 15, 2018. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which is intended to address diversity in practice related to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted, and requires retrospective adoption unless it is impracticable to apply, in which case it is to be applied prospectively as of the earliest date practicable. The Company plans to adopt ASU 2016-15 during the fourth quarter of fiscal year 2017 and has determined that this standard is relevant to its presentation of debt prepayment and debt extinguishment costs and contingent consideration payments made after a business combination. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”), which provides guidance on the presentation of restricted cash and restricted cash equivalents in the statement of cash flows. In accordance with ASU 2016-18, restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown on the statements of cash flows. The amendments of ASU 2016-18 are effective for reporting periods beginning after December 15, 2017, with early adoption permitted. The Company plans to adopt ASU 2016-18 during the fourth quarter of 2017 and apply the standard retrospectively for all periods presented. The Company does not expect it will have a material impact on its consolidated financial statements. In February 2017, the FASB issued ASU No. 2017-05, Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (“ASU 2017-05”), which clarifies the following: (1) nonfinancial assets within the scope of Subtopic 610-20 may include nonfinancial assets transferred within a legal entity to a counterparty; (2) an entity should allocate consideration to each distinct asset by applying the guidance in Topic 606 on allocating the transaction price to performance obligations; and (3) entities are required to derecognize a distinct nonfinancial asset or distinct in substance nonfinancial asset in a partial sale transaction when it (a) does not have (or ceases to have) a controlling financial interest in the legal entity that holds the asset in accordance with Subtopic 810 and (b) transfers control of the asset in accordance with Topic 606. The adoption of this standard may result in higher gains on the sale of partial real estate interests, including contributions of nonfinancial assets to a joint venture or other noncontrolling investee, due to recognizing the full gain when the derecognition criteria are met and recording the retained noncontrolling interest at its fair value. ASU 2017-05 is effective for annual periods, and interim periods therein, beginning after December 15, 2017. Early adoption is permitted. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”). The targeted amendments in this ASU help simplify certain aspects of hedge accounting and result in a more accurate portrayal of the economics of an entity’s risk management activities in its financial statements. This ASU applies to the Company’s interest rate swaps designated as cash flow hedges. Upon adoption of this ASU, all changes in the fair value of highly effective cash flow hedges will be recorded in accumulated other comprehensive income rather than recognized directly in earnings. Under current U.S. GAAP, the ineffective portion of the change in fair value of cash flow hedges is recognized directly in earnings. This eliminates the requirement to separately measure and disclose ineffectiveness for qualifying cash flow hedges. ASU 2017-12 is effective for public entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The ASU is required to be adopted using a modified retrospective approach with early adoption permitted. The Company plans to adopt ASU 2017-12 during the first quarter of fiscal year 2018 and does not expect that it will have a material impact on its consolidated financial statements. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2017 | |
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 under current market conditions. 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. Current and prior period liabilities’ carrying and fair values exclude net deferred financing costs. These financial instruments are valued using Level 2 inputs. As of September 30, 2017 , the estimated fair value of the Company’s debt was $2.48 billion , compared to the carrying value of $2.47 billion . The estimated fair value of the Company’s debt as of December 31, 2016 was $2.25 billion , compared to the carrying value of $2.26 billion . 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. In addition, credit valuation adjustments are incorporated into the fair values to account for the Company’s potential nonperformance risk and the performance risk of the respective counterparties. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with those derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and its counterparties. However, as of September 30, 2017 and December 31, 2016 , the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determined that the credit valuation adjustments are not significant to the overall valuation of the Company’s derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. Contingent consideration arrangements — The contingent consideration arrangements are carried at fair value and are valued using Level 3 inputs. The fair value of additional consideration paid in connection with the acquisition of properties subject to contingent consideration arrangements is determined based on key assumptions, including, but not limited to, rental rates, discount rates and the estimated timing and probability of successfully leasing vacant space subsequent to the Company’s acquisition of certain properties. Revenue bonds — The fair value estimates of the Company’s revenue bonds are based on assumptions that management believes market participants would use in pricing, using widely accepted valuation techniques including discounted cash flow analysis. This analysis reflects the contractual terms of the bonds, including the period to maturity, and uses unobservable market-based inputs, including discount rates ranging from 7.75% to 9.0% . As a result, the Company has determined that its revenue bonds are classified in Level 3 of the fair value hierarchy. As of September 30, 2017 , the estimated fair value of the Company’s revenue bonds was $2.1 million . Other financial instruments — The Company considers the carrying values of its cash and cash equivalents, restricted cash, tenant receivables, accounts payable and accrued expenses, other liabilities, due to affiliates and distributions payable in order to approximate their fair values because of the short period of time between their origination and their expected realization as well as 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, upon disposition of the financial assets and liabilities. As of September 30, 2017 and December 31, 2016 , there have been no transfers of financial assets or liabilities between fair value hierarchy levels. Items Measured at Fair Value on a Recurring Basis In accordance with the fair value hierarchy described above, the following tables show the fair value of the Company’s financial assets and liabilities that are required to be measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016 (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 assets: Interest rate swaps $ 3,178 $ — $ 3,178 $ — Total financial assets $ 3,178 $ — $ 3,178 $ — Financial liabilities: Interest rate swaps $ (3,440 ) $ — $ (3,440 ) $ — Total financial liabilities $ (3,440 ) $ — $ (3,440 ) $ — 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 assets: Interest rate swaps $ 2,327 $ — $ 2,327 $ — Total financial assets $ 2,327 $ — $ 2,327 $ — Financial liabilities: Interest rate swaps $ (3,351 ) $ — $ (3,351 ) $ — Contingent consideration (337 ) — — (337 ) Total financial liabilities $ (3,688 ) $ — $ (3,351 ) $ (337 ) The following are reconciliations of the changes in financial assets and liabilities with Level 3 inputs in the fair value hierarchy for the nine months ended September 30, 2017 and 2016 (in thousands): Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Beginning Balance, December 31, 2016 $ (337 ) Purchases and fair value adjustments: Purchases 2,081 Fair value adjustments 337 Ending Balance, September 30, 2017 $ 2,081 Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Beginning Balance, December 31, 2015 $ (4,538 ) Purchases and fair value adjustments: Purchases (332 ) Fair value adjustments 2,672 Payments made 1,866 Ending Balance, September 30, 2016 $ (332 ) Items Measured at Fair Value on a Non-Recurring Basis (Including Impairment Charges) Certain financial and nonfinancial assets and liabilities are measured at fair value on a nonrecurring basis and are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. The Company’s process for identifying and recording impairment related to real estate assets and intangible assets is discussed in Note 2 — Summary of Significant Accounting Policies. As discussed in Note 4 — Real Estate Investments, during the nine months ended September 30, 2017 , real estate assets related to one property totaling approximately 5,000 square feet were deemed to be impaired, and its carrying value was reduced to an estimated fair value of $1.0 million , resulting in impairment charges of $1.7 million . During the nine months ended September 30, 2016 , real estate assets related to one property totaling approximately 7,000 square feet were deemed to be impaired, and its carrying value was reduced to an estimated fair value of $1.4 million , resulting in impairment charges of $1.4 million . The Company estimates fair values using Level 3 inputs and using a combined income and market approach, specifically using discounted cash flow analysis and recent comparable sales transactions. The evaluation of real estate assets for potential impairment requires the Company’s management to exercise significant judgment and to make certain key assumptions, including, but not limited to, the following: (1) terminal capitalization; (2) discount rates; (3) the number of years the property will be held; (4) property operating expenses; and (5) re-leasing assumptions, including the number of months to re-lease, market rental income and required tenant improvements. There are inherent uncertainties in making these estimates such as market conditions and the future performance and sustainability of the Company’s tenants. The following table presents the impairment charges by asset class recorded during the nine months ended September 30, 2017 and 2016 (in thousands): Nine Months Ended September 30, 2017 2016 Asset class impaired: Land 375 $ 502 Buildings, fixtures and improvements 887 713 Intangible lease assets 396 215 Total impairment loss $ 1,658 $ 1,430 |
Real Estate Investments
Real Estate Investments | 9 Months Ended |
Sep. 30, 2017 | |
Real Estate [Abstract] | |
REAL ESTATE INVESTMENTS | REAL ESTATE INVESTMENTS 2017 Property Acquisitions During the nine months ended September 30, 2017 , the Company acquired 40 commercial properties for an aggregate purchase price of $300.5 million (the “ 2017 Acquisitions”), of which 36 were determined to be asset acquisitions and four were accounted for as business combinations as they were acquired prior to the adoption of ASU 2017-01 in April 2017. The Company funded the 2017 Acquisitions with net cash provided by operations and available borrowings. The following table summarizes the consideration transferred for the properties purchased during the nine months ended September 30, 2017 (in thousands): 2017 Acquisitions Investments in real estate: Purchase price of asset acquisitions $ 245,138 Purchase price of business combinations 55,386 Total purchase price of real estate investments acquired (1) $ 300,524 ______________________ (1) The weighted average amortization period for the 2017 Acquisitions is 16.6 years for acquired in-place leases and other intangibles, 13.6 years for acquired above-market leases and 8.5 years for acquired intangible lease liabilities. During the nine months ended September 30, 2017 , the Company acquired a 100% interest in 36 commercial properties for an aggregate purchase price of $245.1 million , which were accounted for as asset acquisitions (the “ 2017 Asset Acquisitions ”). The aggregate purchase price includes $5.9 million of external acquisition-related expenses that were capitalized in accordance with ASU 2017-01. Prior to the adoption of ASU 2017-01, costs related to property acquisitions were expensed as incurred. The following table summarizes the purchase price allocation for the 2017 Asset Acquisitions purchased during the nine months ended September 30, 2017 (in thousands): 2017 Asset Acquisitions Land $ 32,583 Buildings, fixtures and improvements 173,681 Acquired in-place leases and other intangibles 36,733 Acquired above-market leases 3,624 Revenue bonds 2,081 Intangible lease liabilities (3,564 ) Total purchase price $ 245,138 During the nine months ended September 30, 2017 , the Company acquired a 100% interest in four commercial properties for an aggregate purchase price of $55.4 million , which were accounted for as business combinations (the “ 2017 Business Combination Acquisitions ”). The purchase price allocation for each of the Company’s 2017 Business Combination Acquisitions is preliminary and subject to change as the Company finalizes the allocations, which the Company expects will be prior to the end of the current fiscal year. 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 allocations for the 2017 Business Combination Acquisitions purchased during the nine months ended September 30, 2017 (in thousands): 2017 Business Combination Acquisitions Land $ 9,873 Buildings, fixtures and improvements 41,186 Acquired in-place leases and other intangibles 5,974 Acquired above-market leases 988 Intangible lease liabilities (2,635 ) Total purchase price $ 55,386 The Company recorded revenue for the three and nine months ended September 30, 2017 of $1.3 million and $3.6 million , respectively, and net income of $491,000 and $163,000 for the three and nine months ended September 30, 2017 , respectively, related to the 2017 Business Combination Acquisitions . In addition, the Company recorded $1.3 million of acquisition-related expenses for the nine months ended September 30, 2017 , which is included in acquisition-related expenses on the condensed consolidated statements of operations. The following information summarizes selected financial information of the Company as if all of the 2017 Business Combination Acquisitions were completed on January 1, 2016 for each period presented below. The table below presents the Company’s estimated revenue and net income, on a pro forma basis, for the three and nine months ended September 30, 2017 and 2016 , respectively (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Pro forma basis: Revenue $ 107,024 $ 103,140 $ 316,619 $ 306,864 Net income $ 29,736 $ 18,374 $ 65,114 $ 56,740 The pro forma information for the nine months ended September 30, 2017 was adjusted to exclude $1.3 million of acquisition-related fees and expenses recorded during such periods related to the 2017 Business Combination Acquisitions . Accordingly, these expenses were instead recognized in the pro forma information for the nine months ended September 30, 2016 . 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 2016 , nor does it purport to represent the results of future operations. 2017 Property Dispositions During the nine months ended September 30, 2017 , the Company disposed of 14 retail properties for an aggregate gross sales price of $98.6 million , resulting in proceeds of $64.1 million after closing costs and the repayment of the $33.0 million variable rate debt secured by one of the disposed properties and a gain of $16.8 million . No disposition fees were paid to CR IV Advisors or its affiliates in connection with the sale of the properties and the Company has no continuing involvement with these properties. The gain on sale of real estate is included in gain on disposition of real estate, net in the consolidated statements of operations. 2017 Impairment of a Property The Company performs quarterly impairment review procedures, primarily through continuous monitoring of events and changes in circumstances that could indicate that the carrying value of certain of its real estate assets may not be recoverable. See Note 2 — Summary of Significant Accounting Policies for a discussion of the Company’s accounting policies regarding impairment of real estate assets. During the nine months ended September 30, 2017 , one property with a carrying value of $2.7 million was deemed to be impaired and its carrying value was reduced to an estimated fair value of $1.0 million , resulting in impairment charges of $1.7 million , which were recorded in the condensed consolidated statements of operations. See Note 3 — Fair Value Measurements for a further discussion regarding these impairment charges. 2016 Property Acquisitions During the nine months ended September 30, 2016 , the Company acquired 14 commercial properties for an aggregate purchase price of $197.0 million (the “ 2016 Acquisitions”). The 2016 Acquisitions were accounted for as business combinations. The Company funded the 2016 Acquisitions with net proceeds from the Initial DRIP Offering, net cash provided by operations 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 allocations for the 2016 Acquisitions (in thousands): 2016 Acquisitions Land $ 45,741 Buildings, fixtures and improvements 134,375 Acquired in-place leases and other intangibles (1) 16,807 Acquired above-market leases (2) 3,398 Intangible lease liabilities (3) (3,295 ) Total purchase price $ 197,026 ____________________________________ (1) The weighted average amortization period for acquired in-place leases and other intangibles was 7.2 years for the 2016 Acquisitions. (2) The weighted average amortization period for acquired above-market leases was 5.2 years for the 2016 Acquisitions. (3) The weighted average amortization period for acquired intangible lease liabilities was 6.1 years for the 2016 Acquisitions. The Company recorded revenue for the three and nine months ended September 30, 2016 of $3.4 million and $5.3 million , respectively, and a net loss for the three and nine months ended September 30, 2016 of $313,000 and $2.1 million , respectively, related to the 2016 Acquisitions. The following information summarizes selected financial information of the Company as if all of the 2016 Acquisitions were completed on January 1, 2015 for each period presented below. The table below presents the Company’s estimated revenue and net income, on a pro forma basis, for the three and nine months ended September 30, 2016 and 2015 , respectively (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Pro forma basis: Revenue $ 103,315 $ 98,982 $ 311,312 $ 284,660 Net income $ 17,973 $ 18,728 $ 58,777 $ 51,839 The pro forma information for the three and nine months ended September 30, 2016 was adjusted to exclude $1.4 million and $3.6 million , respectively, of acquisition-related fees and expenses recorded during the three and nine months ended September 30, 2016 . Accordingly, these costs were instead recognized in the pro forma information for the three and nine months ended September 30, 2015 . 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 2015 , nor does it purport to represent the results of future operations. 2016 Property Dispositions During the nine months ended September 30, 2016 , the Company disposed of three retail properties and one anchored shopping center for an aggregate gross sales price of $26.6 million , resulting in proceeds of $25.9 million after closing costs and a gain of $2.1 million . No disposition fees were paid to CR IV Advisors or its affiliates in connection with the sale of the properties and the Company has no continuing involvement with these properties. The gain on sale of real estate is included in gain on disposition of real estate, net in the consolidated statements of operations. 2016 Impairment of a Property During the nine months ended September 30, 2016 , one property with a carrying value of $2.8 million was deemed to be impaired and its carrying value was reduced to an estimated fair value of $1.4 million , resulting in impairment charges of $1.4 million , which were recorded in the condensed consolidated statements of operations. 2016 Unconsolidated Joint Venture During the nine months ended September 30, 2016 , the Company acquired the partner’s (the “Unconsolidated Joint Venture Partner”) approximately 10% interest in a multi-tenant property comprising 176,000 rentable square feet of commercial space (the “Unconsolidated Joint Venture”). The Company has determined that this transaction qualified as a business combination to be accounted for under the acquisition method. Accordingly, the assets and liabilities of this transaction were recorded in the Company’s condensed consolidated balance sheets at their estimated fair value as of the acquisition date. The fair value of the assets acquired, liabilities assumed and equity interests were estimated using significant assumptions consistent with the Company’s policy concerning the allocation of the purchase price of real estate assets, including current market rental rates, rental growth rates, capitalization and discount rates, interest rates and other variables. The results of this transaction are included in the Company’s condensed consolidated statements of operations beginning September 22, 2016. The following table summarizes the transaction related to the business combination, including the preliminary amounts recognized for assets acquired and liabilities assumed, as indicated (in thousands): September 22, 2016 Carrying value of the Company’s equity interest before business combination (1) $ 18,952 Fair value of amounts recognized for assets acquired and liabilities assumed: Land 4,685 Buildings, fixtures and improvements 11,615 Acquired in-place leases and other intangibles 1,340 Acquired above-market leases 1,168 Intangible lease liabilities (618 ) Other assets and liabilities 110 Total net assets 18,300 Loss recognized on equity interest re-measured to fair value $ (652 ) ____________________________________ (1) Includes $1.6 million of cash paid to the Unconsolidated Joint Venture Partner. Consolidated Joint Venture As of September 30, 2017 , the Company had an interest in a Consolidated Joint Venture that owns and manages nine properties, with total assets of $52.7 million , which included $52.1 million of real estate assets, net of accumulated depreciation and amortization of $4.8 million , and total liabilities of $769,000 . The Consolidated Joint Venture does not have any debt outstanding as of September 30, 2017 . The Company has the ability to control operating and financial policies of the Consolidated Joint Venture. There are restrictions on the use of these assets as the Company would generally be required to obtain the partner’s (the “Consolidated Joint Venture Partner”) approval in accordance with the joint venture agreement for any major transactions. The Company and the Consolidated Joint Venture Partner are subject to the provisions of the joint venture agreement, which includes provisions for when additional contributions may be required to fund certain cash shortfalls. |
Intangible Lease Assets
Intangible Lease Assets | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Lease Assets | INTANGIBLE LEASE ASSETS Intangible lease assets consisted of the following as of September 30, 2017 and December 31, 2016 (in thousands, except weighted average life remaining): September 30, 2017 December 31, 2016 In-place leases and other intangibles, net of accumulated amortization of $155,772 and $125,620, respectively (with a weighted average life remaining of 10.6 and 10.7 years, respectively) $ 363,977 $ 364,038 Acquired above-market leases, net of accumulated amortization of $23,888 and $18,723, respectively (with a weighted average life remaining of 8.8 and 8.9 years, respectively) 43,552 44,768 $ 407,529 $ 408,806 Amortization of the above-market leases is recorded as a reduction to rental revenue, and amortization expense for the in-place leases and other intangibles is included in depreciation and amortization in the accompanying condensed consolidated statements of operations. The following table summarizes the amortization expense related to the intangible lease assets for the three and nine months ended September 30, 2017 and September 30, 2016 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 In-place lease and other intangible amortization $ 12,567 $ 11,055 $ 35,402 $ 34,486 Above-market lease amortization $ 1,877 $ 1,705 $ 5,498 $ 4,901 As of September 30, 2017 , the estimated amortization expense relating to the intangible lease assets for each of the five succeeding fiscal years is as follows (in thousands): Amortization Expense In-Place Leases and Other Intangibles Above-Market Leases Remainder of 2017 $ 10,923 $ 1,774 2018 $ 42,289 $ 6,397 2019 $ 38,454 $ 5,299 2020 $ 36,120 $ 4,724 2021 $ 32,685 $ 4,100 |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 9 Months Ended |
Sep. 30, 2017 | |
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. As of September 30, 2017 , the Company had 12 executed interest rate swap agreements. The following table summarizes the terms of the Company’s 11 interest rate swap agreements designated as hedging instruments effective as of September 30, 2017 and December 31, 2016 (dollar amounts in thousands): Outstanding Notional Fair Value of Assets and (Liabilities) Balance Sheet Amount as of Interest Effective Maturity September 30, December 31, Location September 30, 2017 Rates (1) Dates Dates 2017 2016 Interest Rate Swaps Prepaid expenses, derivative assets, revenue bonds and other assets $ 690,066 2.55% to 3.91% 6/30/2015 to 9/1/2016 8/15/2018 to 7/1/2021 $ 3,178 $ 2,327 Interest Rate Swaps Deferred rental income, derivative liabilities and other liabilities $ 338,737 3.46% to 4.75% 6/24/2013 to 8/23/2013 6/24/2018 to 8/24/2020 $ (923 ) $ (3,351 ) ____________________________________ (1) The interest rates consist of the underlying index swapped to a fixed rate and the applicable interest rate spread as of September 30, 2017 . During the nine months ended September 30, 2017 , the Company entered into one interest rate swap agreement associated with a $811.7 million notional amount, effective on August 15, 2018. The following table summarizes the terms of this interest rate swap agreement designated as a hedging instrument as of September 30, 2017 and December 31, 2016 (dollar amounts in thousands): Outstanding Notional Fair Value of Liability Balance Sheet Amount as of Interest Effective Maturity September 30, December 31, Location September 30, 2017 Rate (1) Date Date 2017 2016 Interest Rate Swap Deferred rental income, derivative liabilities and other liabilities $ 811,666 3.77 % 8/15/2018 3/15/2021 $ (2,517 ) $ — ____________________________________ (1) The interest rate consists of the underlying index swapped to a fixed rate and the applicable interest rate spread as of September 30, 2017 . Additional disclosures related to the fair value of the Company’s derivative instruments are included in Note 3 — Fair Value Measurements. 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 in order 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. For the three months ended September 30, 2017 and 2016 , the amounts reclassified were $447,000 and $2.2 million , respectively, and for the nine months ended September 30, 2017 and 2016 , the amounts reclassified were $2.9 million and $6.8 million , respectively. During the next 12 months, the Company estimates that an additional $180,000 will be reclassified from other comprehensive income (loss) as an increase to interest expense. Any ineffective portion of the change in fair value of the derivative instruments is recorded in interest expense. During the nine months ended September 30, 2017 , $79,000 of the change in the fair value of the interest rate swaps was considered ineffective. There were no portions of the change in the fair value of the interest rate swaps that were considered ineffective during the nine months ended September 30, 2016 . The Company has agreements with each of its derivative counterparties that contain provisions whereby if the Company defaults on certain of its unsecured indebtedness, the Company could also be declared in default on its derivative obligations, resulting in an acceleration of payment. If the Company had breached any of these provisions, it could have been required to settle its obligations under the agreements at their aggregate termination value, inclusive of interest payments, of $3.7 million at September 30, 2017 . In addition, the Company is exposed to credit risk in the event of non-performance by its derivative counterparties. The Company believes it mitigates its credit risk by entering into agreements with creditworthy counterparties. The Company records credit risk valuation adjustments on its interest rate swaps based on the credit quality of the Company and the respective counterparty. There were no termination events or events of default related to the interest rate swaps as of September 30, 2017 . |
Notes Payable And Credit Facili
Notes Payable And Credit Facility | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE AND CREDIT FACILITY | NOTES PAYABLE AND CREDIT FACILITY As of September 30, 2017 , the Company had $2.5 billion of debt outstanding, including net deferred financing costs, with weighted average years to maturity of 4.5 years and a weighted average interest rate of 3.5% . The weighted average years to maturity is computed using the scheduled repayment date as specified in each loan agreement where applicable. The weighted average interest rate is computed using the interest rate in effect until the scheduled repayment date. Should a loan not be repaid by its scheduled repayment date, the applicable interest rate will increase as specified in the respective loan agreement. The following table summarizes the debt balances as of September 30, 2017 and December 31, 2016 , and the debt activity for the nine months ended September 30, 2017 (in thousands): During the Nine Months Ended September 30, 2017 Balance as of December 31, 2016 Debt Issuances & Assumptions (1) Repayments and Modifications Accretion and (Amortization) Balance as of Fixed rate debt $ 1,164,622 $ 53,206 $ (335 ) $ — $ 1,217,493 Variable rate debt 53,500 — (33,000 ) — 20,500 Credit facility 1,039,666 1,461,500 (1,266,666 ) — 1,234,500 Total debt 2,257,788 1,514,706 (1,300,001 ) — 2,472,493 Net premiums (2) 506 — — (65 ) 441 Deferred costs (3) (12,035 ) (10,078 ) 717 (4 ) 2,744 (18,652 ) Total debt, net $ 2,246,259 $ 1,504,628 $ (1,299,284 ) $ 2,679 $ 2,454,282 ____________________________________ (1) Includes deferred financing costs incurred during the period. (2) Net premiums on mortgage notes payable were recorded upon the assumption of the respective debt instruments. Amortization of these net premiums is recorded as a reduction to interest expense over the remaining term of the respective debt instruments using the effective-interest method. (3) Deferred costs relate to mortgage notes payable and the term portion of the Credit Facility (as defined below). (4) Includes $503,000 of deferred financing costs of the term portion of the Credit Facility written off during the period resulting from the Second Amended and Restated Credit Agreement, as defined below. As of September 30, 2017 , the fixed rate debt outstanding of $1.2 billion included $217.1 million of variable rate debt that is fixed through interest rate swap agreements, which has the effect of fixing the variable interest rates per annum through the maturity date of the variable rate debt. The fixed rate debt has interest rates ranging from 2.6% to 5.0% per annum. The fixed rate debt outstanding matures on various dates from June 2018 through October 2025 . The aggregate balance of gross real estate assets, net of gross intangible lease liabilities, securing the fixed rate debt outstanding was $2.2 billion as of September 30, 2017 . 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, 2017 , the variable rate debt outstanding of $20.5 million had a weighted average interest rate of 4.5% . The variable rate debt outstanding matures on February 26, 2020 . With respect to the Company’s $24.2 million of debt maturing within the next year, the Company expects to use borrowings available under the Credit Facility or enter into new financing arrangements in order to meet its debt obligations. The aggregate balance of gross real estate assets, net of gross intangible lease liabilities, securing the variable rate debt outstanding was $40.8 million as of September 30, 2017 . During the nine months ended September 30, 2017 , the Company entered into a second amended and restated unsecured credit agreement (the “Second Amended and Restated Credit Agreement”) with JPMorgan Chase Bank, N.A. as administrative agent (“JPMorgan Chase”), and the other lenders party thereto that provides for borrowings of up to $1.40 billion , which includes a $1.05 billion unsecured term loan (the “Term Loan”) and up to $350.0 million in unsecured revolving loans (the “Revolving Loans” and collectively, with the Term Loan, the “Credit Facility”). The Term Loan matures on March 15, 2022 and the Revolving Loans mature on March 15, 2021 ; however, the Company has the right to extend the maturity date of the Revolving Loans to March 15, 2022. Depending upon the type of loan specified and overall leverage ratio, the Credit Facility bears interest at (i) 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 an interest rate spread ranging from 1.65% to 2.25% or (ii) a base rate, ranging from 0.65% to 1.25% , plus the greater of: (a) JPMorgan Chase’s Prime Rate; (b) the Federal Funds Effective Rate (as defined in the Second Amended and Restated Credit Agreement) plus 0.50% ; or (c) the one-month LIBOR multiplied by the statutory reserve rate plus 1.00% . As of September 30, 2017 , the Revolving Loans outstanding totaled $184.5 million at a weighted average interest rate of 3.0% . As of September 30, 2017 , the Term Loan outstanding totaled $1.05 billion , $811.7 million of which is subject to interest rate swap agreements (the “Swapped Term Loan”). The interest rate swap agreements had the effect of fixing the Eurodollar Rate per annum of the Swapped Term Loan. As of September 30, 2017 , the weighted average all-in rate for the Swapped Term Loan was 3.2% . As of September 30, 2017 , the Company had $1.23 billion outstanding under the Credit Facility at a weighted average interest rate of 3.1% and $164.9 million in unused capacity, subject to borrowing availability. The Second 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 Second Amended and Restated Credit Agreement requires the Company to maintain a minimum consolidated net worth greater than or equal to the sum of (i) $2.0 billion plus (ii) 75% of the equity issued minus (iii) the aggregate amount of any redemptions or similar transaction from the date of the Second Amended and Restated Credit Agreement, a leverage ratio less than or equal to 60% , a fixed charge coverage ratio greater than 1.50 , an unsecured debt to unencumbered asset value ratio equal to or less than 60% , an unsecured debt service coverage ratio greater than 1.75 , a secured debt ratio equal to or less than 40% and the amount of secured debt that is recourse debt at no greater than 15% of total asset value. The Company believes it was in compliance with the financial covenants under the Second Amended and Restated Credit Agreement, as well as the financial covenants under the Company’s various fixed and variable rate debt agreements, as of September 30, 2017 . Maturities The following table summarizes the scheduled aggregate principal repayments for the Company’s outstanding debt subsequent to September 30, 2017 for each of the five succeeding fiscal years and the period thereafter (in thousands): Principal Repayments Remainder of 2017 $ 116 2018 24,211 2019 49,799 2020 333,215 2021 285,102 Thereafter 1,780,050 Total $ 2,472,493 |
Intangible Lease Liabilities
Intangible Lease Liabilities | 9 Months Ended |
Sep. 30, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Intangible Lease Liabilities | INTANGIBLE LEASE LIABILITIES Intangible lease liabilities of the Company consisted of the following as of September 30, 2017 and December 31, 2016 (in thousands, except weighted average life): September 30, 2017 December 31, 2016 Acquired below-market liabilities, net of accumulated amortization of $29,396 and $23,241, respectively (with a weighted average life remaining of 7.6 and 7.8 years, respectively) $ 47,607 $ 49,075 Amortization of below-market leases is recorded as an increase to rental revenue in the accompanying condensed consolidated statements of operations. The following table summarizes the amortization of intangible lease liabilities for the three and nine months ended September 30, 2017 and September 30, 2016 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Amortization of below-market leases $ 2,898 $ 2,012 $ 7,469 $ 5,788 As of September 30, 2017 , the estimated amortization of the intangible lease liabilities for each of the five succeeding fiscal years is as follows (in thousands): Amortization of Below-Market Leases Remainder of 2017 $ 2,329 2018 $ 8,372 2019 $ 7,508 2020 $ 6,703 2021 $ 4,573 |
Supplemental Cash Flow Disclosu
Supplemental Cash Flow Disclosures | 9 Months Ended |
Sep. 30, 2017 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW DISCLOSURES | SUPPLEMENTAL CASH FLOW DISCLOSURES Supplemental cash flow disclosures for the nine months ended September 30, 2017 and 2016 are as follows (in thousands): Nine Months Ended September 30, 2017 2016 Supplemental Disclosures of Non-Cash Investing and Financing Activities: Distributions declared and unpaid $ 16,001 $ 15,969 Accrued capital expenditures $ 535 $ 1,115 Accrued deferred financing costs $ — $ 4 Common stock issued through distribution reinvestment plan $ 76,851 $ 82,383 Change in fair value of interest rate swaps $ 682 $ (6,767 ) Contingent consideration recorded upon property acquisitions $ — $ 332 Consolidation of real estate joint venture $ — $ 18,300 Supplemental Cash Flow Disclosures: Interest paid $ 63,045 $ 54,401 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
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. 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. 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 and/or pollution liability for third-party bodily injury and/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, 2017 | |
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 Offerings and the acquisition, management and disposition of its assets. Acquisition fees and expenses The Company pays CR IV Advisors or its affiliates 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. In addition, the Company reimburses CR IV Advisors or its affiliates 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, unless otherwise approved by a majority of the Board, including a majority of the Company’s independent directors, as commercially competitive, fair and reasonable to the Company. Advisory fees and expenses The Company pays CR IV Advisors a monthly advisory fee based upon the Company’s monthly average invested assets, which, effective January 1, 2017, is based on the estimated market value of such assets used to determine the Company’s estimated per share NAV as of December 31, 2016, as discussed in Note 1 — Organization and Business, and for those assets acquired subsequent to December 31, 2016, is based on the purchase price. The monthly advisory fee is equal to the following amounts: (1) an annualized rate of 0.75% paid on the Company’s average invested assets that are between $0 and $2.0 billion ; (2) an annualized rate of 0.70% paid on the Company’s average invested assets that are between $2.0 billion and $4.0 billion ; and (3) an annualized rate of 0.65% paid on the Company’s average invested assets that are over $4.0 billion . Operating expenses 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 the 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 excluding 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 CR IV Advisors or its affiliates for the salaries and benefits paid to personnel in connection with the services for which CR IV Advisors receives acquisition fees, and the Company will not reimburse CR IV Advisors for salaries and benefits paid to the Company’s executive officers. Disposition fees 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 one or more properties (or the Company’s entire portfolio), the Company will pay CR IV Advisors or its affiliates a disposition fee in an amount equal to up to one-half of the real estate or brokerage commission paid by the Company to third parties on the sale of such property, not to exceed 1.0% of the contract price of the property sold; provided, however, in no event may the total disposition fees paid to CR IV Advisors, its affiliates and 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. During the three and nine months ended September 30, 2017 and 2016 , no disposition fees were incurred for any such services provided by CR IV Advisors or its affiliates. Subordinated performance fees 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, from regular distributions plus special distributions paid from proceeds of such sale, 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 the three and nine months ended September 30, 2017 and 2016 , no subordinated performance fees were incurred related to any such events. 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, 2017 2016 2017 2016 Acquisition fees and expenses $ 2,338 $ 2,087 $ 6,336 $ 4,442 Advisory fees and expenses $ 11,149 $ 10,587 $ 32,863 $ 31,100 Operating expenses $ 1,072 $ 1,121 $ 3,495 $ 3,135 Of the amounts shown above, $3.8 million and $5.5 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, 2017 and 2016 , respectively, and such amounts were recorded as liabilities of the Company as of such dates. Due to/from Affiliates As of September 30, 2017 and December 31, 2016 , $3.8 million and $5.3 million , respectively, had been incurred primarily for advisory and operating expenses by CR IV Advisors or its affiliates, but had not yet been reimbursed by the Company. These amounts were included in due to affiliates in the condensed consolidated balance sheets for such periods. As of September 30, 2017 and December 31, 2016 , $4,000 and $58,000 , respectively, were due from CR IV Advisors or its affiliates related to amounts received by affiliates of the advisor which were due to the Company. |
Economic Dependency
Economic Dependency | 9 Months Ended |
Sep. 30, 2017 | |
Economic Dependency [Abstract] | |
ECONOMIC DEPENDENCY | ECONOMIC DEPENDENCY Under various agreements, the Company has engaged and may in the future engage CR IV Advisors or 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, 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 or 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. |
Operating Leases
Operating Leases | 9 Months Ended |
Sep. 30, 2017 | |
Leases [Abstract] | |
Operating Leases | OPERATING LEASES The Company’s real estate assets are leased to tenants under operating leases for which the terms and expirations vary. As of September 30, 2017 , the leases had a weighted-average remaining term of 9.8 years. Certain leases include provisions to extend the lease agreements, options for early termination after paying a specified penalty, rights of first refusal to purchase the property at competitive market rates, and other negotiated terms and conditions. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. As of September 30, 2017 , the future minimum rental income from the Company’s investment in real estate assets under non-cancelable operating leases, assuming no exercise of renewal options for the succeeding five fiscal years and thereafter, was as follows (in thousands): Future Minimum Rental Income Remainder of 2017 $ 92,490 2018 358,539 2019 343,351 2020 330,829 2021 314,676 Thereafter 2,242,089 Total $ 3,681,974 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS The following events occurred subsequent to September 30, 2017 : Redemption of Shares of Common Stock Subsequent to September 30, 2017 , the Company redeemed approximately 2.5 million shares pursuant to the Company’s share redemption program for $25.0 million (at an average price per share of $10.08 ). Management, in its discretion, limited the amount of shares redeemed for the three months ended September 30, 2017 to shares issued in the DRIP Offerings during the respective period. The remaining redemption requests totaling approximately 9.8 million shares went unfulfilled. Investment in Real Estate Assets Subsequent to September 30, 2017 , the Company acquired one commercial real estate property for a purchase price of $3.2 million . The Company has not completed its initial purchase price allocation with respect to this property and therefore cannot provide similar disclosures to those included in Note 4 — Real Estate Investments in these condensed consolidated financial statements for this property. Property Disposition As of September 30, 2017 , one property was classified as held for sale, as discussed in Note 2 — Summary of Significant Accounting Policies. Subsequent to September 30, 2017 , the Company disposed of this property for a gross sales price of $1.9 million , resulting in proceeds of $1.9 million after closing costs and a gain of $242,000 . No disposition fees were paid to CR IV Advisors or its affiliates in connection with the sale of the property and the Company has no continuing involvement with this property. Sale of Cole Capital On November 13, 2017 the parent of the Company’s sponsor entered into a purchase and sale agreement to sell its ownership interest in the Company’s sponsor. The completion of this sale is subject to the receipt of regulatory approvals and other customary closing conditions and is expected to occur at the end of the fourth quarter of 2017 or during the first quarter of 2018. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Accounting | The summary of significant accounting policies presented below is designed to assist in understanding the Company’s condensed consolidated financial statements. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”), in all material respects, and have been consistently applied in preparing the accompanying condensed consolidated financial statements. |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The condensed consolidated 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 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, 2016 , and related notes thereto, set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . The condensed consolidated 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 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”). VIEs are entities where investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or where equity investors, as a group, lack one of the following characteristics: (a) the power to direct the activities that most significantly impact the entity’s economic performance, (b) the obligation to absorb the expected losses of the entity, or (c) the right to receive the expected returns of the entity. The Company consolidates any VIEs when it is determined to be the primary beneficiary of the VIE’s operations. For legal entities being evaluated for consolidation, the Company must first determine whether the interests that it holds and fees it receives qualify as variable interests in the entity. 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. The Company’s evaluation includes consideration of fees paid to the Company where the Company acts as a decision maker or service provider to the entity being evaluated. If the Company determines that it holds a variable interest in an entity, it evaluates whether that entity is a VIE. A VIE must be consolidated by its primary beneficiary, which is generally defined as the party who has a controlling financial interest in 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 and its obligation to absorb losses from or right to receive benefits of the VIE that could potentially be significant to the VIE. The Company consolidates any VIEs when the Company is determined to be the primary beneficiary of the VIE, and the difference between consolidating the VIE and accounting for it using the equity method could be material to the Company’s consolidated financial statements. The Company continually evaluates the need to consolidate any VIEs based on standards set forth in GAAP as described above. As of September 30, 2017 and December 31, 2016 , the Company determined that it had a controlling interest in the Consolidated Joint Venture and therefore met the GAAP requirements for consolidation. |
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 condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Real Estate Investments, Recoverability of Real Estate Assets, and Assets Held for Sale | Real Estate Investments Real estate assets are stated at cost, less accumulated depreciation and amortization. Amounts capitalized to real estate assets consist of the costs of acquisition, including acquisition-related fees and certain 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 costs are expensed as incurred. In April 2017, the Company early adopted Accounting Standards Update (“ASU”) No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”), which clarifies the definition of a business by adding guidance to assist entities in evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The Company’s acquisitions qualify as asset acquisitions, and as such, acquisition-related fees and certain acquisition-related expenses related to these asset acquisitions are capitalized. Prior to the adoption of ASU 2017-01, all acquisition-related fees and expenses were expensed as incurred, and all of the Company’s acquisitions were accounted for as business combinations. The Company considers the period of future benefit of each respective asset to determine the appropriate useful life. The estimated useful lives of the Company’s real estate assets by class are generally as follows: Buildings 40 years Site improvements 15 years Tenant improvements Lesser of useful life or lease term Intangible lease assets Lease term Recoverability of Real Estate Assets 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 part of the Company’s quarterly impairment review procedures, the Company recorded impairment charges of $1.7 million related to one property as a result of delinquent rental payments during the nine months ended September 30, 2017 . As part of the Company’s quarterly impairment review procedures, the Company recorded impairment charges of $1.4 million related to one property leased to a tenant that filed for bankruptcy during the nine months ended September 30, 2016 . The assumptions and uncertainties utilized in the evaluation of the impairment of real estate assets are discussed in detail in Note 3 — Fair Value Measurements. See also Note 4 — Real Estate Investments for further discussion regarding real estate investment activity. Assets Held for Sale When a real estate asset is identified by the Company as held for sale, the Company will cease depreciation and amortization of the assets related to the property and estimate the fair value, net of selling costs. If, in management’s opinion, the fair value, net of selling costs, of the asset is less than the carrying amount of the asset, an adjustment to the carrying amount would be recorded to reflect the estimated fair value of the property, net of selling costs. |
Allocation of Purchase Price of Real Estate Assets | Allocation of Purchase Price of Real Estate Assets Upon the acquisition of real properties, the Company allocates the purchase price, including acquisition-related fees and certain acquisition-related expenses after the adoption of ASU 2017-01, to acquired tangible assets, consisting of land, buildings and improvements, and to identified intangible assets and liabilities, consisting of the value of above- and below-market leases and the value of in-place leases, based in each case on their respective fair values. 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 determination of the fair values of the real estate assets and liabilities acquired requires the use of significant assumptions with regard to the current market rental rates, rental growth rates, capitalization and discount rates, interest rates and other variables. The use of alternative estimates may result in a different allocation of the Company’s purchase price, which could materially impact the Company’s results of operations. |
Investment in Held-to-Maturity Securities | Investment in Held-to-Maturity Securities The Company has investments classified as held-to-maturity securities, which consist of revenue bonds acquired in connection with the purchase of an anchored shopping center. The bonds have a 9.0% interest rate and mature on November 1, 2044. As of September 30, 2017 , the Company classified these investments as held-to-maturity as the Company has the intent and ability to hold the securities to maturity. These investments are initially recognized in prepaid expenses, derivative assets, revenue bonds and other assets on the condensed consolidated balance sheets and are subsequently measured using amortized cost. The Company’s investments in revenue bonds are reviewed for impairment, including the evaluation of changes in events or circumstances that may indicate that the carrying amount of the investment may not be recoverable. Realization is dependent on a number of factors, including investment performance, market conditions and payment structure. The Company will record an impairment charge if it is determined that a decline in the value of the investment below its carrying amount is other than temporary, recovery of its cost basis is uncertain, and/or it is uncertain if the investment will be held to maturity. The analysis of determining whether the impairment of a security is deemed to be other-than-temporary requires significant judgments and assumptions. The use of alternative judgments and assumptions could result in a different conclusion. |
Redeemable Noncontrolling Interest in Consolidated Joint Venture | Redeemable Noncontrolling 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 (the “Option”), which became effective on June 27, 2016 , whereby the Company will be required to purchase the ownership interest of the joint venture partner at fair market value. As of September 30, 2017 , the Option has not been exercised. The Company determined it had a controlling interest in the Consolidated Joint Venture and, therefore, met the GAAP requirements for consolidation. The Company recorded net income of $99,000 and paid distributions of $214,000 related to the noncontrolling interest during the nine months ended September 30, 2017 . The Company recorded the noncontrolling interest of $2.4 million as temporary equity in the mezzanine section of the condensed consolidated balance sheets, due to the ability to exercise the Option being outside the control of the Company. |
Restricted Cash | Restricted Cash The Company had $11.0 million and $8.0 million in restricted cash as of September 30, 2017 and December 31, 2016 , respectively. Included in restricted cash was $3.9 million and $4.0 million held by lenders in lockbox accounts as of September 30, 2017 and December 31, 2016 , 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 disbursed to the Company. Also included in restricted cash was $7.1 million and $4.0 million held by lenders in escrow accounts for real estate taxes and other lender reserves for certain properties, in accordance with the associated lender’s loan agreement, as of September 30, 2017 and December 31, 2016 , respectively. |
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 earned and collectability is reasonably assured. When the Company acquires a property, the terms of 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, including any straight-line rent, and current and future operating expense reimbursements from tenants 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 uncertain, the Company will record an increase in the allowance for uncollectible accounts. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by various standard setting bodies that may have an impact on the Company’s accounting and reporting. Except as otherwise stated below, the Company is currently evaluating the effect that certain of these new accounting requirements may have on the Company’s accounting and related reporting and disclosures in the Company’s condensed consolidated financial statements: In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which supersedes the revenue recognition requirements in Revenue Recognition, Accounting Standards Codification (“ASC”) (Topic 605) and will require an entity to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. For public business entities, the guidance should be applied to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Companies may use either a full retrospective or a modified retrospective approach to adopt ASU 2014-09. The Company plans to use the modified retrospective approach to adopt ASU 2014-09. In accordance with the Company’s plan for the adoption of ASU 2014-09, the Company’s implementation team has identified the Company’s revenue streams, performed an in-depth review of the Company’s revenue contracts and identified the related performance obligations and is evaluating the impact on the Company’s consolidated financial statements and internal accounting processes and controls. Once ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which, as discussed below, sets forth principles for the recognition, measurement, presentation and disclosure of leases, goes into effect, ASU 2014-09 may apply to non-lease components in the lease agreements. In February 2016, the FASB issued ASU 2016-02, which will require that a lessee recognize assets and liabilities on the balance sheet for all leases with a lease term of more than 12 months, with the result being the recognition of a right of use asset and a lease liability and the disclosure of key information about the entity’s leasing arrangements. The lessor accounting model under ASU 2016-02 is similar to current guidance; however it limits the capitalization of initial direct leasing costs, such as internally generated costs. ASU 2016-02 retains a distinction between finance leases ( i.e., capital leases under current GAAP) and operating leases. The classification criteria for distinguishing between finance leases and operating leases will be substantially similar to the classification criteria for distinguishing between capital leases and operating leases under current GAAP. The amendments in ASU 2016-02 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. A modified retrospective approach is required for existing leases that have not expired upon adoption and provides for certain practical expedients. The Company’s implementation team has developed an inventory of all leases and is identifying any non-lease components in the lease agreements and is evaluating the impact to the Company, both as lessor and lessee, and its consolidated financial statements. Upon the adoption of ASU 2016-02, the Company will record certain expenses paid directly by a tenant that protect the Company’s interests in its properties, such as insurance and real estate taxes, and the related operating expense reimbursement revenue, with no impact on net income. Based upon a preliminary analysis, the Company does not expect the accounting for leases pursuant to which the Company is the lessor to materially change as a result of the adoption of ASU 2016-02. The Company does not expect the accounting for one ground lease pursuant to which the Company is the lessee to have a material impact on its consolidated financial statements. ASU No. 2016-01, Financial Instruments (Subtopic 825-10) — The amendments in this update require all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under the equity method of accounting or those that result in consolidation of the investee). The amendments in this update also require an entity to present separately in other comprehensive income (loss) the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition, the amendments in this update require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the consolidated balance sheets or the accompanying notes to the consolidated financial statements. The amendments in this update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) (“ASU 2016-13”). ASU 2016-13 is intended to improve financial reporting requiring more timely recognition of credit losses on loans and other financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investment in leases and other such commitments. ASU 2016-13 requires that financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The amendments in ASU 2016-13 require the Company to measure all expected credit losses based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the financial assets and eliminates the “incurred loss” methodology under current GAAP. ASU 2016-13 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within those years, beginning after December 15, 2018. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which is intended to address diversity in practice related to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted, and requires retrospective adoption unless it is impracticable to apply, in which case it is to be applied prospectively as of the earliest date practicable. The Company plans to adopt ASU 2016-15 during the fourth quarter of fiscal year 2017 and has determined that this standard is relevant to its presentation of debt prepayment and debt extinguishment costs and contingent consideration payments made after a business combination. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”), which provides guidance on the presentation of restricted cash and restricted cash equivalents in the statement of cash flows. In accordance with ASU 2016-18, restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown on the statements of cash flows. The amendments of ASU 2016-18 are effective for reporting periods beginning after December 15, 2017, with early adoption permitted. The Company plans to adopt ASU 2016-18 during the fourth quarter of 2017 and apply the standard retrospectively for all periods presented. The Company does not expect it will have a material impact on its consolidated financial statements. In February 2017, the FASB issued ASU No. 2017-05, Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (“ASU 2017-05”), which clarifies the following: (1) nonfinancial assets within the scope of Subtopic 610-20 may include nonfinancial assets transferred within a legal entity to a counterparty; (2) an entity should allocate consideration to each distinct asset by applying the guidance in Topic 606 on allocating the transaction price to performance obligations; and (3) entities are required to derecognize a distinct nonfinancial asset or distinct in substance nonfinancial asset in a partial sale transaction when it (a) does not have (or ceases to have) a controlling financial interest in the legal entity that holds the asset in accordance with Subtopic 810 and (b) transfers control of the asset in accordance with Topic 606. The adoption of this standard may result in higher gains on the sale of partial real estate interests, including contributions of nonfinancial assets to a joint venture or other noncontrolling investee, due to recognizing the full gain when the derecognition criteria are met and recording the retained noncontrolling interest at its fair value. ASU 2017-05 is effective for annual periods, and interim periods therein, beginning after December 15, 2017. Early adoption is permitted. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”). The targeted amendments in this ASU help simplify certain aspects of hedge accounting and result in a more accurate portrayal of the economics of an entity’s risk management activities in its financial statements. This ASU applies to the Company’s interest rate swaps designated as cash flow hedges. Upon adoption of this ASU, all changes in the fair value of highly effective cash flow hedges will be recorded in accumulated other comprehensive income rather than recognized directly in earnings. Under current U.S. GAAP, the ineffective portion of the change in fair value of cash flow hedges is recognized directly in earnings. This eliminates the requirement to separately measure and disclose ineffectiveness for qualifying cash flow hedges. ASU 2017-12 is effective for public entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The ASU is required to be adopted using a modified retrospective approach with early adoption permitted. The Company plans to adopt ASU 2017-12 during the first quarter of fiscal year 2018 and does not expect that it will have a material impact on its consolidated financial statements. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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 Site improvements 15 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, 2017 | |
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 assets and liabilities that are required to be measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016 (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 assets: Interest rate swaps $ 3,178 $ — $ 3,178 $ — Total financial assets $ 3,178 $ — $ 3,178 $ — Financial liabilities: Interest rate swaps $ (3,440 ) $ — $ (3,440 ) $ — Total financial liabilities $ (3,440 ) $ — $ (3,440 ) $ — 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 assets: Interest rate swaps $ 2,327 $ — $ 2,327 $ — Total financial assets $ 2,327 $ — $ 2,327 $ — Financial liabilities: Interest rate swaps $ (3,351 ) $ — $ (3,351 ) $ — Contingent consideration (337 ) — — (337 ) Total financial liabilities $ (3,688 ) $ — $ (3,351 ) $ (337 ) |
Schedule of Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following are reconciliations of the changes in financial assets and liabilities with Level 3 inputs in the fair value hierarchy for the nine months ended September 30, 2017 and 2016 (in thousands): Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Beginning Balance, December 31, 2016 $ (337 ) Purchases and fair value adjustments: Purchases 2,081 Fair value adjustments 337 Ending Balance, September 30, 2017 $ 2,081 Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Beginning Balance, December 31, 2015 $ (4,538 ) Purchases and fair value adjustments: Purchases (332 ) Fair value adjustments 2,672 Payments made 1,866 Ending Balance, September 30, 2016 $ (332 ) |
Schedule of Impaired Assets | The following table presents the impairment charges by asset class recorded during the nine months ended September 30, 2017 and 2016 (in thousands): Nine Months Ended September 30, 2017 2016 Asset class impaired: Land 375 $ 502 Buildings, fixtures and improvements 887 713 Intangible lease assets 396 215 Total impairment loss $ 1,658 $ 1,430 |
Real Estate Investments (Tables
Real Estate Investments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Real Estate [Abstract] | |
Schedule of Real Estate Properties | The following table summarizes the consideration transferred for the properties purchased during the nine months ended September 30, 2017 (in thousands): 2017 Acquisitions Investments in real estate: Purchase price of asset acquisitions $ 245,138 Purchase price of business combinations 55,386 Total purchase price of real estate investments acquired (1) $ 300,524 ______________________ (1) The weighted average amortization period for the 2017 Acquisitions is 16.6 years for acquired in-place leases and other intangibles, 13.6 years for acquired above-market leases and 8.5 years for acquired intangible lease liabilities. |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the purchase price allocation for the 2017 Asset Acquisitions purchased during the nine months ended September 30, 2017 (in thousands): 2017 Asset Acquisitions Land $ 32,583 Buildings, fixtures and improvements 173,681 Acquired in-place leases and other intangibles 36,733 Acquired above-market leases 3,624 Revenue bonds 2,081 Intangible lease liabilities (3,564 ) Total purchase price $ 245,138 The following table summarizes the preliminary purchase price allocations for the 2017 Business Combination Acquisitions purchased during the nine months ended September 30, 2017 (in thousands): 2017 Business Combination Acquisitions Land $ 9,873 Buildings, fixtures and improvements 41,186 Acquired in-place leases and other intangibles 5,974 Acquired above-market leases 988 Intangible lease liabilities (2,635 ) Total purchase price $ 55,386 The following table summarizes the transaction related to the business combination, including the preliminary amounts recognized for assets acquired and liabilities assumed, as indicated (in thousands): September 22, 2016 Carrying value of the Company’s equity interest before business combination (1) $ 18,952 Fair value of amounts recognized for assets acquired and liabilities assumed: Land 4,685 Buildings, fixtures and improvements 11,615 Acquired in-place leases and other intangibles 1,340 Acquired above-market leases 1,168 Intangible lease liabilities (618 ) Other assets and liabilities 110 Total net assets 18,300 Loss recognized on equity interest re-measured to fair value $ (652 ) ____________________________________ (1) Includes $1.6 million of cash paid to the Unconsolidated Joint Venture Partner. The following table summarizes the purchase price allocations for the 2016 Acquisitions (in thousands): 2016 Acquisitions Land $ 45,741 Buildings, fixtures and improvements 134,375 Acquired in-place leases and other intangibles (1) 16,807 Acquired above-market leases (2) 3,398 Intangible lease liabilities (3) (3,295 ) Total purchase price $ 197,026 ____________________________________ (1) The weighted average amortization period for acquired in-place leases and other intangibles was 7.2 years for the 2016 Acquisitions. (2) The weighted average amortization period for acquired above-market leases was 5.2 years for the 2016 Acquisitions. (3) The weighted average amortization period for acquired intangible lease liabilities was 6.1 years for the 2016 Acquisitions. |
Business Acquisition, Pro Forma Information | The following information summarizes selected financial information of the Company as if all of the 2017 Business Combination Acquisitions were completed on January 1, 2016 for each period presented below. The table below presents the Company’s estimated revenue and net income, on a pro forma basis, for the three and nine months ended September 30, 2017 and 2016 , respectively (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Pro forma basis: Revenue $ 107,024 $ 103,140 $ 316,619 $ 306,864 Net income $ 29,736 $ 18,374 $ 65,114 $ 56,740 The table below presents the Company’s estimated revenue and net income, on a pro forma basis, for the three and nine months ended September 30, 2016 and 2015 , respectively (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Pro forma basis: Revenue $ 103,315 $ 98,982 $ 311,312 $ 284,660 Net income $ 17,973 $ 18,728 $ 58,777 $ 51,839 |
Intangible Lease Assets (Tables
Intangible Lease Assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of finite-lived intangible assets | Intangible lease assets consisted of the following as of September 30, 2017 and December 31, 2016 (in thousands, except weighted average life remaining): September 30, 2017 December 31, 2016 In-place leases and other intangibles, net of accumulated amortization of $155,772 and $125,620, respectively (with a weighted average life remaining of 10.6 and 10.7 years, respectively) $ 363,977 $ 364,038 Acquired above-market leases, net of accumulated amortization of $23,888 and $18,723, respectively (with a weighted average life remaining of 8.8 and 8.9 years, respectively) 43,552 44,768 $ 407,529 $ 408,806 |
Schedule of finite-lived intangible assets amortization expense | The following table summarizes the amortization expense related to the intangible lease assets for the three and nine months ended September 30, 2017 and September 30, 2016 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 In-place lease and other intangible amortization $ 12,567 $ 11,055 $ 35,402 $ 34,486 Above-market lease amortization $ 1,877 $ 1,705 $ 5,498 $ 4,901 |
Schedule of finite-lived intangible assets, future amortization expense | As of September 30, 2017 , the estimated amortization expense relating to the intangible lease assets for each of the five succeeding fiscal years is as follows (in thousands): Amortization Expense In-Place Leases and Other Intangibles Above-Market Leases Remainder of 2017 $ 10,923 $ 1,774 2018 $ 42,289 $ 6,397 2019 $ 38,454 $ 5,299 2020 $ 36,120 $ 4,724 2021 $ 32,685 $ 4,100 |
Derivative Instruments and He27
Derivative Instruments and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The following table summarizes the terms of the Company’s 11 interest rate swap agreements designated as hedging instruments effective as of September 30, 2017 and December 31, 2016 (dollar amounts in thousands): Outstanding Notional Fair Value of Assets and (Liabilities) Balance Sheet Amount as of Interest Effective Maturity September 30, December 31, Location September 30, 2017 Rates (1) Dates Dates 2017 2016 Interest Rate Swaps Prepaid expenses, derivative assets, revenue bonds and other assets $ 690,066 2.55% to 3.91% 6/30/2015 to 9/1/2016 8/15/2018 to 7/1/2021 $ 3,178 $ 2,327 Interest Rate Swaps Deferred rental income, derivative liabilities and other liabilities $ 338,737 3.46% to 4.75% 6/24/2013 to 8/23/2013 6/24/2018 to 8/24/2020 $ (923 ) $ (3,351 ) ____________________________________ (1) The interest rates consist of the underlying index swapped to a fixed rate and the applicable interest rate spread as of September 30, 2017 . During the nine months ended September 30, 2017 , the Company entered into one interest rate swap agreement associated with a $811.7 million notional amount, effective on August 15, 2018. The following table summarizes the terms of this interest rate swap agreement designated as a hedging instrument as of September 30, 2017 and December 31, 2016 (dollar amounts in thousands): Outstanding Notional Fair Value of Liability Balance Sheet Amount as of Interest Effective Maturity September 30, December 31, Location September 30, 2017 Rate (1) Date Date 2017 2016 Interest Rate Swap Deferred rental income, derivative liabilities and other liabilities $ 811,666 3.77 % 8/15/2018 3/15/2021 $ (2,517 ) $ — ____________________________________ (1) The interest rate consists of the underlying index swapped to a fixed rate and the applicable interest rate spread as of September 30, 2017 . |
Notes Payable And Credit Faci28
Notes Payable And Credit Facility (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The following table summarizes the debt balances as of September 30, 2017 and December 31, 2016 , and the debt activity for the nine months ended September 30, 2017 (in thousands): During the Nine Months Ended September 30, 2017 Balance as of December 31, 2016 Debt Issuances & Assumptions (1) Repayments and Modifications Accretion and (Amortization) Balance as of Fixed rate debt $ 1,164,622 $ 53,206 $ (335 ) $ — $ 1,217,493 Variable rate debt 53,500 — (33,000 ) — 20,500 Credit facility 1,039,666 1,461,500 (1,266,666 ) — 1,234,500 Total debt 2,257,788 1,514,706 (1,300,001 ) — 2,472,493 Net premiums (2) 506 — — (65 ) 441 Deferred costs (3) (12,035 ) (10,078 ) 717 (4 ) 2,744 (18,652 ) Total debt, net $ 2,246,259 $ 1,504,628 $ (1,299,284 ) $ 2,679 $ 2,454,282 ____________________________________ (1) Includes deferred financing costs incurred during the period. (2) Net premiums on mortgage notes payable were recorded upon the assumption of the respective debt instruments. Amortization of these net premiums is recorded as a reduction to interest expense over the remaining term of the respective debt instruments using the effective-interest method. (3) Deferred costs relate to mortgage notes payable and the term portion of the Credit Facility (as defined below). (4) Includes $503,000 of deferred financing costs of the term portion of the Credit Facility written off during the period resulting from the Second Amended and Restated Credit Agreement, as defined below. |
Schedule of Maturities of Long-term Debt | The following table summarizes the scheduled aggregate principal repayments for the Company’s outstanding debt subsequent to September 30, 2017 for each of the five succeeding fiscal years and the period thereafter (in thousands): Principal Repayments Remainder of 2017 $ 116 2018 24,211 2019 49,799 2020 333,215 2021 285,102 Thereafter 1,780,050 Total $ 2,472,493 |
Intangible Lease Liabilities (T
Intangible Lease Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of finite-lived intangible liabilities | Intangible lease liabilities of the Company consisted of the following as of September 30, 2017 and December 31, 2016 (in thousands, except weighted average life): September 30, 2017 December 31, 2016 Acquired below-market liabilities, net of accumulated amortization of $29,396 and $23,241, respectively (with a weighted average life remaining of 7.6 and 7.8 years, respectively) $ 47,607 $ 49,075 |
Schedule of amortization expense of below market lease | The following table summarizes the amortization of intangible lease liabilities for the three and nine months ended September 30, 2017 and September 30, 2016 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Amortization of below-market leases $ 2,898 $ 2,012 $ 7,469 $ 5,788 |
Schedule of finite-lived intangible liabilities, future amortization expense | As of September 30, 2017 , the estimated amortization of the intangible lease liabilities for each of the five succeeding fiscal years is as follows (in thousands): Amortization of Below-Market Leases Remainder of 2017 $ 2,329 2018 $ 8,372 2019 $ 7,508 2020 $ 6,703 2021 $ 4,573 |
Supplemental Cash Flow Disclo30
Supplemental Cash Flow Disclosures (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | Supplemental cash flow disclosures for the nine months ended September 30, 2017 and 2016 are as follows (in thousands): Nine Months Ended September 30, 2017 2016 Supplemental Disclosures of Non-Cash Investing and Financing Activities: Distributions declared and unpaid $ 16,001 $ 15,969 Accrued capital expenditures $ 535 $ 1,115 Accrued deferred financing costs $ — $ 4 Common stock issued through distribution reinvestment plan $ 76,851 $ 82,383 Change in fair value of interest rate swaps $ 682 $ (6,767 ) Contingent consideration recorded upon property acquisitions $ — $ 332 Consolidation of real estate joint venture $ — $ 18,300 Supplemental Cash Flow Disclosures: Interest paid $ 63,045 $ 54,401 |
Related Party Transactions and
Related Party Transactions and Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | 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, 2017 2016 2017 2016 Acquisition fees and expenses $ 2,338 $ 2,087 $ 6,336 $ 4,442 Advisory fees and expenses $ 11,149 $ 10,587 $ 32,863 $ 31,100 Operating expenses $ 1,072 $ 1,121 $ 3,495 $ 3,135 |
Operating Leases (Tables)
Operating Leases (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Leases [Abstract] | |
Schedule of future minimum rental payments for operating leases | As of September 30, 2017 , the future minimum rental income from the Company’s investment in real estate assets under non-cancelable operating leases, assuming no exercise of renewal options for the succeeding five fiscal years and thereafter, was as follows (in thousands): Future Minimum Rental Income Remainder of 2017 $ 92,490 2018 358,539 2019 343,351 2020 330,829 2021 314,676 Thereafter 2,242,089 Total $ 3,681,974 |
Organization and Business (Deta
Organization and Business (Details) $ / shares in Units, ft² in Millions | Apr. 04, 2014shares | Feb. 18, 2014USD ($)$ / sharesshares | Nov. 25, 2013USD ($) | Sep. 30, 2017USD ($)ft²statepropertyshares | Jun. 30, 2016USD ($) | Dec. 31, 2016$ / sharesshares | Nov. 13, 2016$ / shares | Sep. 30, 2016USD ($)$ / shares | Aug. 02, 2016USD ($) | Sep. 30, 2015$ / shares | Sep. 27, 2015$ / shares | Dec. 19, 2013USD ($) | Jan. 26, 2012USD ($) |
Organization and business [Line Items] | |||||||||||||
Common stock, shares authorized (shares) | 490,000,000 | 490,000,000 | |||||||||||
Issuance of common stock | $ | $ 76,851,000 | ||||||||||||
Common stock, shares outstanding (shares) | 311,637,622 | 311,817,004 | |||||||||||
Number of owned properties (property) | property | 908 | ||||||||||||
Rentable square feet (sqft) | ft² | 26.8 | ||||||||||||
Number of states in which entity owns properties (state) | state | 45 | ||||||||||||
Percentage of rentable space leased | 97.50% | ||||||||||||
Consolidated Properties | |||||||||||||
Organization and business [Line Items] | |||||||||||||
Number of owned properties (property) | property | 9 | ||||||||||||
The Share Redemption Program | |||||||||||||
Organization and business [Line Items] | |||||||||||||
Net asset value per share (USD per share) | $ / shares | $ 10.08 | $ 9.92 | |||||||||||
IPO | |||||||||||||
Organization and business [Line Items] | |||||||||||||
Common stock, shares authorized, value (maximum) | $ | $ 2,975,000,000 | ||||||||||||
Common stock, shares authorized, value reallocated | $ | $ 23,000,000 | $ 400,000,000 | |||||||||||
Common stock, shares authorized (shares) | 292,300,000 | ||||||||||||
Share price (USD per share) | $ / shares | $ 10 | $ 9.70 | |||||||||||
Issuance of common stock (shares) | 297,400,000 | ||||||||||||
Shares subscribed and issued (shares) | 292,300,000 | ||||||||||||
Unsold shares deregistered (shares) | 404,000 | ||||||||||||
Issuance of common stock | $ | $ 3,300,000,000 | ||||||||||||
Net asset value per share (USD per share) | $ / shares | $ 9.92 | ||||||||||||
Common stock, shares outstanding (shares) | 336,800,000 | ||||||||||||
Offering costs, selling commissions, and dealer management fees | $ | $ 306,000,000 | ||||||||||||
Distribution reinvestment plan | |||||||||||||
Organization and business [Line Items] | |||||||||||||
Common stock, shares authorized (shares) | 5,500,000 | ||||||||||||
Share price (USD per share) | $ / shares | $ 9.50 | $ 9.70 | $ 9.50 | ||||||||||
Shares subscribed and issued (shares) | 5,100,000 | ||||||||||||
Common stock shares registered dividend reinvestment plan, value | $ | $ 600,000,000 | $ 247,000,000 | |||||||||||
Issuance of common stock | $ | $ 241,700,000 | ||||||||||||
Shares deregistered, value | $ | $ 5,300,000 | ||||||||||||
Common stock, shares outstanding (shares) | 38,500,000 | ||||||||||||
CCPT IV OP | |||||||||||||
Organization and business [Line Items] | |||||||||||||
General partner partnership interest percentage | 100.00% |
Summary of Significant Accoun34
Summary of Significant Accounting Policies (Real Estate Investment) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($)property | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)property | Sep. 30, 2016USD ($)property | Dec. 31, 2016property | |
Real Estate Properties [Line Items] | |||||
Impairment of real estate assets | $ | $ 1,658 | $ 1,430 | $ 1,658 | $ 1,430 | |
Number of impaired properties | 1 | 1 | |||
Number of real estate property held for sale | 1 | 1 | 0 | ||
Building | |||||
Real Estate Properties [Line Items] | |||||
Acquired real estate asset, useful life | 40 years | ||||
Site improvements | |||||
Real Estate Properties [Line Items] | |||||
Acquired real estate asset, useful life | 15 years | ||||
Held-to-maturity revenue bonds | |||||
Real Estate Properties [Line Items] | |||||
Stated interest rate (percent) | 9.00% |
Summary of Significant Accoun35
Summary of Significant Accounting Policies (Redeemable Noncontrolling Interest in Consolidated Joint Venture) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Accounting Policies [Abstract] | ||||
Net income allocated to noncontrolling interest | $ 33 | $ 32 | $ 99 | $ 99 |
Payments to Noncontrolling Interests | 214 | $ 199 | ||
Noncontrolling interest | $ 2,400 | $ 2,400 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies (Restricted Cash) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted Cash | $ 11,002 | $ 8,040 |
Restricted cash, held by lenders in lockbox accounts | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted Cash | 3,900 | 4,000 |
Restricted cash, held by lenders in escrow | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted Cash | $ 7,100 | $ 4,000 |
Summary of Significant Accoun37
Summary of Significant Accounting Policies (Revenue Recognition) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | ||
Allowance for doubtful accounts receivable | $ 1,400 | $ 221 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) ft² in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($)ft² | Sep. 30, 2016USD ($)ft² | Sep. 30, 2017USD ($)ft²property | Sep. 30, 2016USD ($)ft²property | Dec. 31, 2016USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Number of impaired properties | property | 1 | 1 | |||
Area of real estate property impaired | ft² | 5 | 7 | 5 | 7 | |
Impairment of real estate assets | $ 1,658 | $ 1,430 | $ 1,658 | $ 1,430 | |
Estimate of Fair Value Measurement | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Real estate investment property, net, carrying value of impaired property | 1,000 | $ 1,400 | 1,000 | $ 1,400 | |
Significant Other Observable Inputs (Level 2) | Estimate of Fair Value Measurement | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Debt instrument fair value disclosure | 2,480,000 | 2,480,000 | $ 2,250,000 | ||
Significant Other Observable Inputs (Level 2) | Carrying Value | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Debt instrument fair value disclosure | 2,470,000 | $ 2,470,000 | $ 2,260,000 | ||
Significant Unobservable Inputs (Level 3) | Investments | Minimum | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair value inputs, discount rate | 7.75% | ||||
Significant Unobservable Inputs (Level 3) | Investments | Maximum | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair value inputs, discount rate | 9.00% | ||||
Significant Unobservable Inputs (Level 3) | Estimate of Fair Value Measurement | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Revenue bonds | $ 2,100 | $ 2,100 |
Fair Value Measurements (Schedu
Fair Value Measurements (Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration | $ 0 | $ (332) | |
Fair value, measurements, recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate swaps | 3,178 | $ 2,327 | |
Total financial assets | 3,178 | 2,327 | |
Interest rate swaps | (3,440) | (3,351) | |
Contingent consideration | (337) | ||
Total financial liabilities | (3,440) | (3,688) | |
Fair value, measurements, recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate swaps | 0 | 0 | |
Total financial assets | 0 | 0 | |
Interest rate swaps | 0 | 0 | |
Contingent consideration | 0 | ||
Total financial liabilities | 0 | 0 | |
Fair value, measurements, recurring | Significant Other Observable Inputs (Level 2) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate swaps | 3,178 | 2,327 | |
Total financial assets | 3,178 | 2,327 | |
Interest rate swaps | (3,440) | (3,351) | |
Contingent consideration | 0 | ||
Total financial liabilities | (3,440) | (3,351) | |
Fair value, measurements, recurring | Significant Unobservable Inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate swaps | 0 | 0 | |
Total financial assets | 0 | 0 | |
Interest rate swaps | 0 | 0 | |
Contingent consideration | (337) | ||
Total financial liabilities | $ 0 | $ (337) |
Fair Value Measurements (Sche40
Fair Value Measurements (Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ (337) | $ (4,538) |
Purchases | 2,081 | |
Purchases | (332) | |
Fair value adjustments | 337 | 2,672 |
Payments made | 1,866 | |
Ending balance | $ (332) | |
Ending Balance | $ 2,081 |
Fair Value Measurements (Sche41
Fair Value Measurements (Schedule of Impaired Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Impairment of real estate assets | $ 1,658 | $ 1,430 | $ 1,658 | $ 1,430 |
Land | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Impairment of real estate assets | 375 | 502 | ||
Buildings, fixtures and improvements | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Impairment of real estate assets | 887 | 713 | ||
Intangible lease assets | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Impairment of real estate assets | $ 396 | $ 215 |
Real Estate Investments (Narrat
Real Estate Investments (Narrative) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)property | Sep. 30, 2016USD ($)property | Dec. 31, 2016 | |
Business Acquisition [Line Items] | |||||
Number of properties acquired | property | 40 | ||||
Total purchase price | $ 300,500 | $ 300,500 | |||
Below market lease, weighted average useful life | 7 years 7 months 5 days | 7 years 9 months 17 days | |||
Acquisition costs | 110 | $ 1,417 | $ 1,520 | $ 3,592 | |
2017 Acquisitions | |||||
Business Acquisition [Line Items] | |||||
Number of businesses acquired (property) | property | 4 | ||||
Below market lease, weighted average useful life | 8 years 6 months | ||||
Business combination, pro forma information, revenue of acquiree since acquisition date, actual | 1,300 | $ 3,600 | |||
Business combination, pro forma information, earnings (loss) of acquiree since acquisition date, actual | 491 | 163 | |||
Acquisition costs | 1,300 | ||||
Purchase price of business combinations | 55,386 | 55,386 | |||
2016 Acquisitions | |||||
Business Acquisition [Line Items] | |||||
Number of businesses acquired (property) | property | 14 | ||||
Below market lease, weighted average useful life | 6 years 1 month 5 days | ||||
Purchase price of business combinations | $ 197,000 | ||||
Business combination, pro forma information, revenue of acquiree since acquisition date, actual | 3,400 | 5,300 | |||
Business combination, pro forma information, earnings (loss) of acquiree since acquisition date, actual | 313 | 2,100 | |||
Acquisition costs | $ 1,400 | $ 3,600 | |||
2017 Asset Acquisitions | |||||
Business Acquisition [Line Items] | |||||
Total purchase price | 245,138 | $ 245,138 | |||
Number of properties acquired | property | 36 | ||||
External acquisition-related expense | $ 5,900 | $ 5,900 | |||
Acquired above-market leases | 2017 Acquisitions | |||||
Business Acquisition [Line Items] | |||||
Acquired finite-lived intangible assets, weighted average useful life | 13 years 7 months 6 days | ||||
Acquired above-market leases | 2016 Acquisitions | |||||
Business Acquisition [Line Items] | |||||
Acquired finite-lived intangible assets, weighted average useful life | 5 years 2 months 12 days | ||||
Acquired in-place leases and other intangibles | 2017 Acquisitions | |||||
Business Acquisition [Line Items] | |||||
Acquired finite-lived intangible assets, weighted average useful life | 16 years 7 months 6 days | ||||
Acquired in-place leases and other intangibles | 2016 Acquisitions | |||||
Business Acquisition [Line Items] | |||||
Acquired finite-lived intangible assets, weighted average useful life | 7 years 2 months 12 days |
Real Estate Investments (Purcha
Real Estate Investments (Purchase Price of Real Estate Investment) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||
Purchase price of asset acquisitions | $ 300,500 | |
Total purchase price of real estate investments acquired | 5,145,044 | $ 4,923,778 |
2017 Acquisitions | ||
Business Acquisition [Line Items] | ||
Purchase price of business combinations | 55,386 | |
Total purchase price of real estate investments acquired | 300,524 | |
2017 Asset Acquisitions | ||
Business Acquisition [Line Items] | ||
Purchase price of asset acquisitions | $ 245,138 |
Real Estate Investments (Schedu
Real Estate Investments (Schedule of Recognized Identified Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Business Acquisition [Line Items] | |||
Land | $ 1,193,043 | $ 1,156,417 | |
Total purchase price | 300,500 | ||
2017 Asset Acquisitions | |||
Business Acquisition [Line Items] | |||
Land | 32,583 | ||
Buildings, fixtures and improvements | 173,681 | ||
Acquired in-place leases and other intangibles | 36,733 | ||
Acquired above-market leases | 3,624 | ||
Revenue bonds | 2,081 | ||
Intangible lease liabilities | (3,564) | ||
Total purchase price | 245,138 | ||
2017 Acquisitions | |||
Business Acquisition, Purchase Price Allocation [Abstract] | |||
Land | 9,873 | ||
Buildings, fixtures and improvements | 41,186 | ||
Intangible lease liabilities | (2,635) | ||
Total purchase price | 55,386 | ||
2016 Acquisitions | |||
Business Acquisition, Purchase Price Allocation [Abstract] | |||
Land | $ 45,741 | ||
Buildings, fixtures and improvements | 134,375 | ||
Intangible lease liabilities | (3,295) | ||
Total purchase price | 197,026 | ||
Acquired in-place leases and other intangibles | 2017 Acquisitions | |||
Business Acquisition, Purchase Price Allocation [Abstract] | |||
Acquired finite-lived intangible asset - leases, amount | 5,974 | ||
Acquired in-place leases and other intangibles | 2016 Acquisitions | |||
Business Acquisition, Purchase Price Allocation [Abstract] | |||
Acquired finite-lived intangible asset - leases, amount | 16,807 | ||
Acquired above-market leases | 2017 Acquisitions | |||
Business Acquisition, Purchase Price Allocation [Abstract] | |||
Acquired finite-lived intangible asset - leases, amount | $ 988 | ||
Acquired above-market leases | 2016 Acquisitions | |||
Business Acquisition, Purchase Price Allocation [Abstract] | |||
Acquired finite-lived intangible asset - leases, amount | $ 3,398 |
Real Estate Investments (Busine
Real Estate Investments (Business Acquisition, Pro Forma Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Pro forma basis (unaudited) | ||||||
Acquisition costs | $ 110 | $ 1,417 | $ 1,520 | $ 3,592 | ||
2017 Acquisitions | ||||||
Pro forma basis (unaudited) | ||||||
Revenue | 107,024 | 103,140 | 316,619 | 306,864 | ||
Net income | $ 29,736 | 18,374 | 65,114 | 56,740 | ||
Acquisition costs | $ 1,300 | |||||
2016 Acquisitions | ||||||
Pro forma basis (unaudited) | ||||||
Revenue | 103,315 | $ 98,982 | 311,312 | $ 284,660 | ||
Net income | 17,973 | $ 18,728 | 58,777 | $ 51,839 | ||
Acquisition costs | $ 1,400 | $ 3,600 |
Real Estate Investments (Proper
Real Estate Investments (Property Dispositions) (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)property | Sep. 30, 2016USD ($)property | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from disposition of properties | $ 97,154,000 | $ 25,947,000 | ||
Repayments of debt | 1,300,001,000 | |||
Gain on dispositions of real estate, net | $ 15,349,000 | $ 1,939,000 | $ 16,801,000 | $ 2,053,000 |
Property Dispositions, 2017 | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of properties disposed | property | 14 | |||
Aggregate gross sales price | $ 98,600,000 | |||
Proceeds from disposition of properties | 64,100,000 | |||
Repayments of debt | 33,000,000 | |||
Gain on dispositions of real estate, net | 16,800,000 | |||
Property Dispositions, 2016 | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of properties disposed | property | 3 | |||
Aggregate gross sales price | $ 26,600,000 | |||
Proceeds from disposition of properties | 25,900,000 | |||
Gain on dispositions of real estate, net | 2,100,000 | |||
Affiliated entity | Disposition fee | Property Dispositions, 2017 | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Disposition fees paid | $ 0 | |||
Affiliated entity | Disposition fee | Property Dispositions, 2016 | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Disposition fees paid | $ 0 |
Real Estate Investments (Consol
Real Estate Investments (Consolidated and Unconsolidated Joint Ventures) (Details) ft² in Thousands, $ in Thousands | Sep. 22, 2016USD ($) | Sep. 30, 2017USD ($)ft²property | Dec. 31, 2016USD ($) | Sep. 30, 2016ft² |
Business Acquisition [Line Items] | ||||
Rentable square feet (sqft) | ft² | 26,800 | |||
Number of owned properties (property) | property | 908 | |||
Assets | $ 4,753,521 | $ 4,624,335 | ||
Real estate investments, at cost | 5,145,044 | 4,923,778 | ||
Real estate investment property, accumulated depreciation | 490,178 | 389,768 | ||
Liabilities | $ 2,569,553 | $ 2,357,566 | ||
Consolidated Properties | ||||
Business Acquisition [Line Items] | ||||
Number of owned properties (property) | property | 9 | |||
Unconsolidated Joint Venture | ||||
Business Acquisition [Line Items] | ||||
Voting interest acquired | 10.00% | |||
Rentable square feet (sqft) | ft² | 176 | |||
Carrying value of the Company’s equity interest before business combination | $ 18,952 | |||
Land | 4,685 | |||
Buildings, fixtures and improvements | 11,615 | |||
Intangible lease liabilities | (618) | |||
Other assets and liabilities | 110 | |||
Purchase price of business combinations | 18,300 | |||
Loss recognized on equity interest remeasured to fair value | (652) | |||
Cash paid to Unconsolidated Joint Venture Partner | 1,600 | |||
Consolidated Joint Venture | ||||
Business Acquisition [Line Items] | ||||
Assets | $ 52,700 | |||
Real estate investments, at cost | 52,100 | |||
Real estate investment property, accumulated depreciation | 4,800 | |||
Liabilities | $ 769 | |||
Consolidated Joint Venture | Consolidated Properties | ||||
Business Acquisition [Line Items] | ||||
Number of owned properties (property) | property | 9 | |||
Acquired in-place leases and other intangibles | Unconsolidated Joint Venture | ||||
Business Acquisition [Line Items] | ||||
Acquired finite-lived intangible asset - leases, amount | 1,340 | |||
Acquired above-market leases | Unconsolidated Joint Venture | ||||
Business Acquisition [Line Items] | ||||
Acquired finite-lived intangible asset - leases, amount | $ 1,168 |
Real Estate Investments (Impair
Real Estate Investments (Impairment of Property) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)property | Sep. 30, 2016USD ($)property | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Number of impaired properties | property | 1 | 1 | ||
Real estate investment, net | $ 2,800 | $ 2,800 | ||
Impairment of real estate assets | $ 1,658 | 1,430 | $ 1,658 | 1,430 |
Estimate of Fair Value Measurement | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Real estate investment property, net, carrying value of impaired property | 1,000 | $ 1,400 | 1,000 | $ 1,400 |
Carrying Value | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Real estate investment, net | $ 2,700 | $ 2,700 |
Intangible Lease Assets (Detail
Intangible Lease Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible leased assets | $ 407,529 | $ 408,806 |
Acquired in-place leases and other intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible leased assets | 363,977 | 364,038 |
Accumulated amortization | $ 155,772 | $ 125,620 |
Useful life | 10 years 7 months 5 days | 10 years 8 months 11 days |
Acquired above-market leases | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible leased assets | $ 43,552 | $ 44,768 |
Accumulated amortization | $ 23,888 | $ 18,723 |
Useful life | 8 years 9 months 18 days | 8 years 10 months 24 days |
Intangible Lease Assets (Schedu
Intangible Lease Assets (Schedule of finite-lived intangible assets amortization expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Acquired in-place leases and other intangibles | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 12,567 | $ 11,055 | $ 35,402 | $ 34,486 |
Acquired above-market leases | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 1,877 | $ 1,705 | $ 5,498 | $ 4,901 |
Intangible Lease Assets (Estima
Intangible Lease Assets (Estimated Amortization of Intangible lease assets) (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Acquired in-place leases and other intangibles | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Remainder of 2017 | $ 10,923 |
2,018 | 42,289 |
2,019 | 38,454 |
2,020 | 36,120 |
2,021 | 32,685 |
Acquired above-market leases | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Remainder of 2017 | 1,774 |
2,018 | 6,397 |
2,019 | 5,299 |
2,020 | 4,724 |
2,021 | $ 4,100 |
Derivative Instruments and He52
Derivative Instruments and Hedging Activities (Narrative) (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($)derivative | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)derivative | Sep. 30, 2016USD ($) | Dec. 31, 2016derivative | |
Derivatives, Fair Value [Line Items] | |||||
Amount of loss reclassified from other comprehensive income into income as interest expense | $ 447,000 | $ 2,181,000 | $ 2,857,000 | $ 6,768,000 | |
Ineffective portion of change in fair value of interest rate swaps | $ 79,000 | $ 0 | |||
Interest Rate Swap | |||||
Derivatives, Fair Value [Line Items] | |||||
Number of interest rate derivatives held (derivative) | derivative | 12 | 12 | |||
Cash Flow Hedging | Interest Rate Swap | |||||
Derivatives, Fair Value [Line Items] | |||||
Number of interest rate derivatives held (derivative) | derivative | 11 | 11 | 11 | ||
Number of interest rate swaps entered into (derivative) | derivative | 1 | ||||
Derivative liability, event of default, termination amount | $ 3,700,000 | $ 3,700,000 | |||
Cash Flow Hedging | Interest Rate Swap | Interest Expense | |||||
Derivatives, Fair Value [Line Items] | |||||
Interest rate cash flow hedge gain (loss) to be reclassified during next 12 months | 180,000 | 180,000 | |||
Cash Flow Hedging | One Interest Rate Swap | Deferred rental income, derivative liabilities and other liabilities | |||||
Derivatives, Fair Value [Line Items] | |||||
Outstanding Notional Amount | $ 811,666,000 | $ 811,666,000 |
Derivative Instruments and He53
Derivative Instruments and Hedging Activities (Schedule of Derivative Instruments) (Details) - Cash Flow Hedging - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Prepaid expenses, derivative assets, revenue bonds and other assets | Eleven Interest Rate Swaps | ||
Derivative [Line Items] | ||
Outstanding Notional Amount | $ 690,066 | |
Fair Value of Assets | $ 3,178 | $ 2,327 |
Prepaid expenses, derivative assets, revenue bonds and other assets | Eleven Interest Rate Swaps | Minimum | ||
Derivative [Line Items] | ||
Derivative, Fixed Interest Rate | 2.55% | |
Prepaid expenses, derivative assets, revenue bonds and other assets | Eleven Interest Rate Swaps | Maximum | ||
Derivative [Line Items] | ||
Derivative, Fixed Interest Rate | 3.91% | |
Deferred rental income, derivative liabilities and other liabilities | Eleven Interest Rate Swaps | ||
Derivative [Line Items] | ||
Outstanding Notional Amount | $ 338,737 | |
Fair Value of Liabilities | $ (923) | (3,351) |
Deferred rental income, derivative liabilities and other liabilities | Eleven Interest Rate Swaps | Minimum | ||
Derivative [Line Items] | ||
Derivative, Fixed Interest Rate | 3.46% | |
Deferred rental income, derivative liabilities and other liabilities | Eleven Interest Rate Swaps | Maximum | ||
Derivative [Line Items] | ||
Derivative, Fixed Interest Rate | 4.75% | |
Deferred rental income, derivative liabilities and other liabilities | One Interest Rate Swap | ||
Derivative [Line Items] | ||
Outstanding Notional Amount | $ 811,666 | |
Derivative, Fixed Interest Rate | 3.77% | |
Fair Value of Liabilities | $ (2,517) | $ 0 |
Notes Payable And Credit Faci54
Notes Payable And Credit Facility (Schedule of Debt) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Short-Term and Long-Term Debt [Roll Forward] | |
Long-term debt, gross, beginning balance | $ 2,257,788 |
Net premiums, beginning balance | 506 |
Deferred costs, beginning balance | (12,035) |
Long-term debt, beginning balance | 2,246,259 |
Debt issuance & assumptions | 1,514,706 |
Debt issuance and assumptions costs | (10,078) |
Repayments and Modifications | (1,300,001) |
Repayments and Modifications Deferred Costs | 717 |
Accretion and (Amortization) | (65) |
Amortization of financing costs related to revolving credit facility | 2,744 |
Proceeds from debt, net of issuance and assumption costs | 1,504,628 |
Repayments and Modifications, Extinguishment and Assumptions of Debt, Net | (1,299,284) |
Accretion and (Amortization) | 2,679 |
Long-term debt, gross, ending balance | 2,472,493 |
Net premiums, ending balance | 441 |
Deferred costs, ending balance | (18,652) |
Long-term debt, ending balance | 2,454,282 |
Fixed Rate Debt | |
Short-Term and Long-Term Debt [Roll Forward] | |
Long-term debt, gross, beginning balance | 1,164,622 |
Debt issuance & assumptions | 53,206 |
Repayments and Modifications | (335) |
Long-term debt, gross, ending balance | 1,217,493 |
Variable Rate Debt | |
Short-Term and Long-Term Debt [Roll Forward] | |
Long-term debt, gross, beginning balance | 53,500 |
Debt issuance & assumptions | 0 |
Repayments and Modifications | (33,000) |
Long-term debt, gross, ending balance | 20,500 |
Line of Credit | |
Short-Term and Long-Term Debt [Roll Forward] | |
Long-term debt, gross, beginning balance | 1,039,666 |
Debt issuance & assumptions | 1,461,500 |
Repayments and Modifications | (1,266,666) |
Long-term debt, gross, ending balance | 1,234,500 |
JPMorgan Chase Bank, N.A. | Term Loan | Line of Credit | |
Short-Term and Long-Term Debt [Roll Forward] | |
Repayments and Modifications Deferred Costs | $ 503 |
Notes Payable And Credit Faci55
Notes Payable And Credit Facility (Narrative) (Details) | 9 Months Ended | |
Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($) | |
Debt Instrument [Line Items] | ||
Long-term debt | $ 2,454,282,000 | $ 2,246,259,000 |
Weighted average years to maturity | 4 years 6 months | |
Weighted average interest rate (percent) | 3.50% | |
Repayments and Modifications Deferred Costs | $ 717,000 | |
Long-term debt, gross | 2,472,493,000 | 2,257,788,000 |
Debt maturing within the next year | 24,211,000 | |
Long-term line of credit | 2,454,282,000 | 2,246,259,000 |
Line of Credit | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 1,234,500,000 | 1,039,666,000 |
Fixed Rate Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 1,217,493,000 | 1,164,622,000 |
Debt security, amount, aggregate gross real estate assets net of gross intangible lease liabilities | $ 2,200,000,000 | |
Fixed Rate Debt | Minimum | ||
Debt Instrument [Line Items] | ||
Stated interest rate (percent) | 2.60% | |
Fixed Rate Debt | Maximum | ||
Debt Instrument [Line Items] | ||
Stated interest rate (percent) | 5.00% | |
Variable Rate Debt | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate (percent) | 4.50% | |
Long-term debt, gross | $ 20,500,000 | $ 53,500,000 |
Debt security, amount, aggregate gross real estate assets net of gross intangible lease liabilities | $ 40,800,000 | |
JPMorgan Chase Bank, N.A. | Line of Credit | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate (percent) | 3.10% | |
Line of credit maximum borrowing capacity | $ 1,400,000,000 | |
Long-term line of credit | 1,230,000,000 | |
Line of credit, current borrowing capacity | 164,900,000 | |
Line of credit facility, covenant, minimum consolidated net worth | $ 2,000,000,000 | |
Line of credit facility, covenant, minimum consolidated net worth, percentage of equity issuance (percent) | 75.00% | |
Debt instrument, covenant, fixed charge coverage ratio, minimum | 1.5 | |
JPMorgan Chase Bank, N.A. | Line of Credit | Minimum | ||
Debt Instrument [Line Items] | ||
Stated interest rate (percent) | 0.65% | |
Line of credit facility, covenant, unsecured debt service coverage ratio | 1.75 | |
JPMorgan Chase Bank, N.A. | Line of Credit | Maximum | ||
Debt Instrument [Line Items] | ||
Stated interest rate (percent) | 1.25% | |
Line of credit facility, covenant, leverage ratio (percent) | 60.00% | |
Debt instrument, covenant, unsecured debt to unencumbered asset value ratio (percent) | 60.00% | |
Line of credit facility, covenant, secured debt ratio (percent) | 40.00% | |
Line of credit facility, covenant, recourse debt ratio (percent) | 15.00% | |
JPMorgan Chase Bank, N.A. | Line of Credit | Statutory Reserve Rate | Minimum | ||
Debt Instrument [Line Items] | ||
Debt instrument, basis spread on variable rate (percent) | 1.65% | |
JPMorgan Chase Bank, N.A. | Line of Credit | Statutory Reserve Rate | Maximum | ||
Debt Instrument [Line Items] | ||
Debt instrument, basis spread on variable rate (percent) | 2.25% | |
JPMorgan Chase Bank, N.A. | Line of Credit | Federal funds rate plus | ||
Debt Instrument [Line Items] | ||
Debt instrument, basis spread on variable rate (percent) | 0.50% | |
JPMorgan Chase Bank, N.A. | Line of Credit | One-Month LIBOR | ||
Debt Instrument [Line Items] | ||
Debt instrument, basis spread on variable rate (percent) | 1.00% | |
JPMorgan Chase Bank, N.A. | Term Loan | Line of Credit | ||
Debt Instrument [Line Items] | ||
Repayments and Modifications Deferred Costs | $ 503,000 | |
Line of credit maximum borrowing capacity | 1,050,000,000 | |
Long-term line of credit | 1,050,000,000 | |
JPMorgan Chase Bank, N.A. | Revolving Credit Facility | Line of Credit | ||
Debt Instrument [Line Items] | ||
Line of credit maximum borrowing capacity | 350,000,000 | |
Long-term line of credit | 184,500,000 | |
Interest Rate Swap | Variable Rate Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 217,100,000 | |
Cash Flow Hedging | Interest Rate Swap | JPMorgan Chase Bank, N.A. | Term Loan | Line of Credit | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate (percent) | 3.20% | |
Long-term line of credit | $ 811,700,000 | |
Cash Flow Hedging | Interest Rate Swap | JPMorgan Chase Bank, N.A. | Revolving Credit Facility | Line of Credit | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate (percent) | 3.00% |
Notes Payable And Credit Faci56
Notes Payable And Credit Facility (Schedule of Maturities of Long-term Debt) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
Remainder of 2017 | $ 116 | |
2,018 | 24,211 | |
2,019 | 49,799 | |
2,020 | 333,215 | |
2,021 | 285,102 | |
Thereafter | 1,780,050 | |
Total | $ 2,472,493 | $ 2,257,788 |
Intangible Lease Liabilities (S
Intangible Lease Liabilities (Schedule of lease liabilities) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Other Liabilities Disclosure [Abstract] | ||
Below market leases net of amortization | $ 47,607 | $ 49,075 |
Below market lease, accumulated amortization | $ 29,396 | $ 23,241 |
Below market lease, weighted average useful life | 7 years 7 months 5 days | 7 years 9 months 17 days |
Supplemental Cash Flow Disclo58
Supplemental Cash Flow Disclosures (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Supplemental Disclosures of Non-Cash Investing and Financing Activities: | |||
Distributions declared and unpaid | $ 16,001 | $ 15,969 | $ 16,498 |
Accrued capital expenditures | 535 | 1,115 | |
Accrued deferred financing costs | 0 | 4 | |
Common stock issued through distribution reinvestment plan | 76,851 | 82,383 | |
Change in fair value of interest rate swaps | 682 | (6,767) | |
Contingent consideration recorded upon property acquisitions | 0 | 332 | |
Consolidation of real estate joint venture | 0 | 18,300 | |
Supplemental Cash Flow Disclosures: | |||
Interest paid | $ 63,045 | $ 54,401 |
Intangible Lease Liabilities 59
Intangible Lease Liabilities (Schedule of amortization expense of below market lease) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Other Liabilities Disclosure [Abstract] | ||||
Amortization of below market lease | $ 2,898 | $ 2,012 | $ 7,469 | $ 5,788 |
Intangible Lease Liabilities 60
Intangible Lease Liabilities (Schedule of future amortization expense) (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Below Market Lease, Amortization Income, Maturity Schedule [Abstract] | |
Remainder of 2017 | $ 2,329 |
2,018 | 8,372 |
2,019 | 7,508 |
2,020 | 6,703 |
2,021 | $ 4,573 |
Related Party Transactions an61
Related Party Transactions and Arrangements (Acquisition fees and expenses) (Details) - Advisors - Acquisition fees and expenses - Maximum | Sep. 30, 2017 |
Related Party Transaction [Line Items] | |
Acquisition and advisory fee (percent) | 2.00% |
Acquisition fees and expenses, reimbursement (percent) | 6.00% |
Related Party Transactions an62
Related Party Transactions and Arrangements (Advisory fees and expenses) (Details) | Sep. 30, 2017USD ($) |
Average invested assets between $0 to $2 billion | Minimum | |
Related Party Transaction [Line Items] | |
Average invested assets | $ 0 |
Average invested assets between $0 to $2 billion | Maximum | |
Related Party Transaction [Line Items] | |
Average invested assets | 2,000,000,000 |
Average invested assets between $2 billion to $4 billion | Minimum | |
Related Party Transaction [Line Items] | |
Average invested assets | 2,000,000,000 |
Average invested assets between $2 billion to $4 billion | Maximum | |
Related Party Transaction [Line Items] | |
Average invested assets | 4,000,000,000 |
Average invested assets over $4 billion | Minimum | |
Related Party Transaction [Line Items] | |
Average invested assets | $ 4,000,000,000 |
Advisors | Advisory Fees and Expenses | Average invested assets between $0 to $2 billion | |
Related Party Transaction [Line Items] | |
Asset management or advisory fees (percent) | 0.75% |
Advisors | Advisory Fees and Expenses | Average invested assets between $2 billion to $4 billion | |
Related Party Transaction [Line Items] | |
Asset management or advisory fees (percent) | 0.70% |
Advisors | Advisory Fees and Expenses | Average invested assets over $4 billion | |
Related Party Transaction [Line Items] | |
Asset management or advisory fees (percent) | 0.65% |
Related Party Transactions an63
Related Party Transactions and Arrangements (Operating expenses) (Details) - Advisors - Minimum | Sep. 30, 2017 |
Related Party Transaction [Line Items] | |
Operating expense reimbursement percent of average invested assets (percent) | 2.00% |
Operating expense reimbursement percent of net income (percent) | 25.00% |
Related Party Transactions an64
Related Party Transactions and Arrangements (Disposition fees) (Details) - Advisors - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Brokerage commission fee | Maximum | ||||
Related Party Transaction [Line Items] | ||||
Commissions performance and other fees (percent) | 50.00% | 50.00% | ||
Property sales commission | ||||
Related Party Transaction [Line Items] | ||||
Commissions performance and other fees (percent) | 1.00% | 1.00% | ||
Related party transaction, expenses from transactions with related party | $ 0 | $ 0 | $ 0 | $ 0 |
Property portfolio | Maximum | ||||
Related Party Transaction [Line Items] | ||||
Commissions performance and other fees (percent) | 6.00% | 6.00% |
Related Party Transactions an65
Related Party Transactions and Arrangements (Subordinated performance fees) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||||
Due to affiliates | $ 3,784,000 | $ 3,784,000 | $ 5,333,000 | ||
Advisors | |||||
Related Party Transaction [Line Items] | |||||
Cumulative noncompounded annual return (percent) | 8.00% | 8.00% | |||
Due to affiliates | $ 3,800,000 | $ 3,800,000 | $ 5,300,000 | ||
Advisors | Subordinated performance fees | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction, expenses from transactions with related party | $ 0 | $ 0 | $ 0 | $ 0 | |
Advisors | Subordinate performace fees on event of sale of company | |||||
Related Party Transaction [Line Items] | |||||
Commissions performance and other fees (percent) | 15.00% | 15.00% | |||
Advisors | Subordinate performance fees for listing | |||||
Related Party Transaction [Line Items] | |||||
Commissions performance and other fees (percent) | 15.00% | 15.00% | |||
Advisors | Acquisitions and Operations Costs | |||||
Related Party Transaction [Line Items] | |||||
Due to affiliates | $ 3,800,000 | 5,500,000 | $ 3,800,000 | 5,500,000 | |
Advisors | Acquisition fees and expenses | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction, expenses from transactions with related party | 2,338,000 | 2,087,000 | 6,336,000 | 4,442,000 | |
Advisors | Operating expenses | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction, expenses from transactions with related party | 1,072,000 | 1,121,000 | 3,495,000 | 3,135,000 | |
Advisors | Advisory Fees and Expenses | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction, expenses from transactions with related party | $ 11,149,000 | $ 10,587,000 | $ 32,863,000 | $ 31,100,000 |
Related Party Transactions an66
Related Party Transactions and Arrangements (Due to/from Affiliates) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | ||
Due to affiliates | $ 3,784 | $ 5,333 |
Due from affiliates | 4 | 58 |
Advisors | ||
Related Party Transaction [Line Items] | ||
Due to affiliates | $ 3,800 | $ 5,300 |
Operating Leases (Details)
Operating Leases (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Leases [Abstract] | |
Operating lease, weighted average remaining lease term | 9 years 9 months 18 days |
Operating Leases, Future Minimum Payments Receivable [Abstract] | |
Remainder of 2017 | $ 92,490 |
2,018 | 358,539 |
2,019 | 343,351 |
2,020 | 330,829 |
2,021 | 314,676 |
Thereafter | 2,242,089 |
Total | $ 3,681,974 |
Subsequent Events (Redemption o
Subsequent Events (Redemption of Shares of Common Stock) (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 1 Months Ended | 9 Months Ended |
Nov. 13, 2017 | Sep. 30, 2017 | |
Subsequent Event | ||
Redemptions of common stock | $ 78,623 | |
Subsequent event | ||
Subsequent Event | ||
Redemption of common stock (shares) | 2.5 | |
Redemptions of common stock | $ 25,000 | |
Common stock, average redemption price per share (USD per share) | $ 10.08 | |
Unfulfilled shares from redemption requests (shares) | 9.8 |
Subsequent Events (Investment i
Subsequent Events (Investment in Real Estate Assets) (Details) - Subsequent event $ in Millions | 1 Months Ended |
Nov. 13, 2017USD ($)property | |
Subsequent Event | |
Number of businesses acquired (property) | property | 1 |
Total purchase price | $ | $ 3.2 |
Subsequent Events (Property Dis
Subsequent Events (Property Dispositions) (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Nov. 13, 2017USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)property | Sep. 30, 2016USD ($) | |
Subsequent Event | |||||
Proceeds from disposition of properties | $ 97,154,000 | $ 25,947,000 | |||
Gain on dispositions of real estate, net | $ 15,349,000 | $ 1,939,000 | $ 16,801,000 | $ 2,053,000 | |
Property Dispositions, 2017 | |||||
Subsequent Event | |||||
Number of properties disposed | property | 14 | ||||
Aggregate gross sales price | $ 98,600,000 | ||||
Proceeds from disposition of properties | 64,100,000 | ||||
Gain on dispositions of real estate, net | 16,800,000 | ||||
Disposition fee | Affiliated entity | Property Dispositions, 2017 | |||||
Subsequent Event | |||||
Disposition fees paid | $ 0 | ||||
Subsequent event | Property Dispositions, 2017 | |||||
Subsequent Event | |||||
Aggregate gross sales price | $ 1,900,000 | ||||
Proceeds from disposition of properties | 1,900,000 | ||||
Gain on dispositions of real estate, net | 242,000 | ||||
Subsequent event | Disposition fee | Affiliated entity | Property Dispositions, 2017 | |||||
Subsequent Event | |||||
Disposition fees paid | $ 0 |