Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 06, 2017 | |
Entity Information [Line Items] | ||
Entity Registrant Name | VEREIT, Inc. | |
Entity Central Index Key | 1,507,385 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 974,228,040 | |
Entity Current Reporting Status | Yes | |
VEREIT Operating Partnership, L.P. [Member] | ||
Entity Information [Line Items] | ||
Entity Registrant Name | VEREIT Operating Partnership, L.P. | |
Entity Central Index Key | 1,528,059 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Current Reporting Status | Yes |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Real estate investments, at cost: | ||
Land | $ 2,866,305 | $ 2,895,625 |
Buildings, fixtures and improvements | 10,585,796 | 10,644,296 |
Intangible lease assets | 2,027,304 | 2,044,521 |
Total real estate investments, at cost | 15,479,405 | 15,584,442 |
Less: accumulated depreciation and amortization | 2,784,481 | 2,331,643 |
Total real estate investments, net | 12,694,924 | 13,252,799 |
Investment in unconsolidated entities | 44,101 | 46,077 |
Investment in direct financing leases, net | 33,402 | 39,455 |
Investment securities, at fair value | 41,677 | 47,215 |
Mortgage notes receivable, net | 20,510 | 22,764 |
Cash and cash equivalents | 54,363 | 256,452 |
Restricted cash | 27,797 | 45,018 |
Intangible assets, net | 12,173 | 24,609 |
Rent and tenant receivables and other assets, net | 336,938 | 330,705 |
Goodwill | 1,462,585 | 1,462,203 |
Due from affiliates, net | 6,638 | 21,349 |
Real estate assets held for sale, net | 1,625 | 38,928 |
Total assets | 14,736,733 | 15,587,574 |
LIABILITIES AND EQUITY | ||
Mortgage notes payable and other debt, net | 2,115,633 | 2,671,106 |
Corporate bonds, net | 2,820,164 | 2,226,224 |
Convertible debt, net | 981,490 | 973,340 |
Credit facility, net | 0 | 496,578 |
Below-market lease liabilities, net | 204,051 | 224,023 |
Accounts payable and accrued expenses | 152,413 | 146,137 |
Deferred rent, derivative and other liabilities | 63,876 | 68,039 |
Distributions payable | 172,129 | 162,578 |
Due to affiliates | 8 | 16 |
Total liabilities | 6,509,764 | 6,968,041 |
Commitments and contingencies | ||
EQUITY | ||
Preferred stock, $0.01 par value, 100,000,000 shares authorized and 42,834,138 issued and outstanding as of each of September 30, 2017 and December 31, 2016 | 428 | 428 |
Common stock, $0.01 par value, 1,500,000,000 shares authorized and 974,245,345 and 974,146,650 issued and outstanding as of September 30, 2017 and December 31, 2016, respectively | 9,742 | 9,741 |
Additional paid-in-capital | 12,648,967 | 12,640,171 |
Accumulated other comprehensive loss | (3,330) | (2,556) |
Accumulated deficit | (4,592,533) | (4,200,423) |
Total stockholders’ equity | 8,063,274 | 8,447,361 |
Non-controlling interests | 163,695 | 172,172 |
Total equity | 8,226,969 | 8,619,533 |
Total liabilities and equity | 14,736,733 | 15,587,574 |
VEREIT Operating Partnership, L.P. [Member] | ||
Real estate investments, at cost: | ||
Land | 2,866,305 | 2,895,625 |
Buildings, fixtures and improvements | 10,585,796 | 10,644,296 |
Intangible lease assets | 2,027,304 | 2,044,521 |
Total real estate investments, at cost | 15,479,405 | 15,584,442 |
Less: accumulated depreciation and amortization | 2,784,481 | 2,331,643 |
Total real estate investments, net | 12,694,924 | 13,252,799 |
Investment in unconsolidated entities | 44,101 | 46,077 |
Investment in direct financing leases, net | 33,402 | 39,455 |
Investment securities, at fair value | 41,677 | 47,215 |
Mortgage notes receivable, net | 20,510 | 22,764 |
Cash and cash equivalents | 54,363 | 256,452 |
Restricted cash | 27,797 | 45,018 |
Intangible assets, net | 12,173 | 24,609 |
Rent and tenant receivables and other assets, net | 336,938 | 330,705 |
Goodwill | 1,462,585 | 1,462,203 |
Due from affiliates, net | 6,638 | 21,349 |
Real estate assets held for sale, net | 1,625 | 38,928 |
Total assets | 14,736,733 | 15,587,574 |
LIABILITIES AND EQUITY | ||
Mortgage notes payable and other debt, net | 2,115,633 | 2,671,106 |
Corporate bonds, net | 2,820,164 | 2,226,224 |
Convertible debt, net | 981,490 | 973,340 |
Credit facility, net | 0 | 496,578 |
Below-market lease liabilities, net | 204,051 | 224,023 |
Accounts payable and accrued expenses | 152,413 | 146,137 |
Deferred rent, derivative and other liabilities | 63,876 | 68,039 |
Distributions payable | 172,129 | 162,578 |
Due to affiliates | 8 | 16 |
Total liabilities | 6,509,764 | 6,968,041 |
Commitments and contingencies | ||
EQUITY | ||
Total partners’ equity | 8,224,663 | 8,617,130 |
Non-controlling interests | 2,306 | 2,403 |
Total equity | 8,226,969 | 8,619,533 |
Total liabilities and equity | 14,736,733 | 15,587,574 |
VEREIT Operating Partnership, L.P. [Member] | Preferred Units [Member] | ||
EQUITY | ||
General Partners' capital account | 800,010 | 853,821 |
Limited Partners' capital account | 3,063 | 3,171 |
VEREIT Operating Partnership, L.P. [Member] | Common Stock [Member] | ||
EQUITY | ||
General Partners' capital account | 7,263,264 | 7,593,540 |
Limited Partners' capital account | $ 158,326 | $ 166,598 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (shares) | 42,834,138 | 42,834,138 |
Preferred stock, shares outstanding (shares) | 42,834,138 | 42,834,138 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 1,500,000,000 | 1,500,000,000 |
Common stock, shares issued (shares) | 974,245,345 | 974,146,650 |
Common stock, shares outstanding (shares) | 974,245,345 | 974,146,650 |
VEREIT Operating Partnership, L.P. [Member] | Preferred Units [Member] | ||
General partners', units issued (shares) | 42,834,138 | 42,834,138 |
General partners', units outstanding (shares) | 42,834,138 | 42,834,138 |
Limited partners', units issued (shares) | 86,874 | 86,874 |
Limited partners', units outstanding (shares) | 86,874 | 86,874 |
VEREIT Operating Partnership, L.P. [Member] | Common Stock [Member] | ||
General partners', units issued (shares) | 974,245,345 | 974,146,650 |
General partners', units outstanding (shares) | 974,245,345 | 974,146,650 |
Limited partners', units issued (shares) | 23,748,347 | 23,748,347 |
Limited partners', units outstanding (shares) | 23,748,347 | 23,748,347 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Revenues: | |||||
Rental income | $ 282,341 | $ 303,383 | $ 862,371 | $ 928,706 | |
Direct financing lease income | 376 | 494 | 1,212 | 1,598 | |
Operating expense reimbursements | 23,826 | 27,969 | 72,103 | 77,862 | |
Cole Capital revenue | 27,185 | 31,069 | 83,001 | 94,788 | |
Total revenues | 333,728 | 362,915 | 1,018,687 | 1,102,954 | |
Operating expenses: | |||||
Cole Capital reallowed fees and commissions | 2,373 | 5,897 | 7,907 | 20,940 | |
Acquisition-related | 909 | 90 | 2,282 | 373 | |
Litigation and other non-routine costs, net of insurance recoveries | 9,507 | 4,630 | 36,793 | 2,372 | |
Property operating | 30,645 | 34,820 | 96,288 | 107,832 | |
General and administrative | 29,796 | 29,761 | 88,355 | 92,255 | |
Depreciation and amortization | 176,523 | 195,173 | 543,963 | 596,826 | |
Impairments | 6,363 | 6,872 | 30,857 | 176,214 | |
Total operating expenses | 256,116 | 277,243 | 806,445 | 996,812 | |
Operating income | 77,612 | 85,672 | 212,242 | 106,142 | |
Other (expense) income: | |||||
Interest expense | (71,708) | (79,869) | (219,072) | (242,763) | |
Gain (loss) on extinguishment and forgiveness of debt, net | 9,756 | (2,003) | 18,691 | (1,751) | |
Other income, net | 1,907 | 1,744 | 4,540 | 4,022 | |
Equity in income and gain on disposition of unconsolidated entities | 374 | 212 | 805 | 10,686 | |
Gain (loss) on derivative instruments, net | 1,294 | (2,023) | 2,710 | (3,286) | |
Total other expenses, net | (58,377) | (81,939) | (192,326) | (233,092) | |
Income (loss) before taxes and real estate dispositions | 19,235 | 3,733 | 19,916 | (126,950) | |
(Loss) gain on disposition of real estate and held for sale assets, net | (688) | 28,111 | 54,432 | 45,723 | |
Income (loss) before taxes | 18,547 | 31,844 | 74,348 | (81,227) | |
Provision for income taxes | (2,053) | (1,598) | (8,878) | (1,374) | |
Net income (loss) | 16,494 | 30,246 | 65,470 | (82,601) | |
Net (income) loss attributable to non-controlling interests | [1] | (400) | (751) | (1,530) | 2,156 |
Net income (loss) attributable to the General Partner / OP | $ 16,094 | $ 29,495 | $ 63,940 | $ (80,445) | |
Basic and diluted net (loss) income per share attributable to common stockholders (in dollars per share) | $ 0 | $ 0.01 | $ 0.01 | $ (0.15) | |
Distributions declared per common share / unit (in dollars per share) | $ 0.14 | $ 0.14 | $ 0.41 | $ 0.41 | |
VEREIT Operating Partnership, L.P. [Member] | |||||
Revenues: | |||||
Rental income | $ 282,341 | $ 303,383 | $ 862,371 | $ 928,706 | |
Direct financing lease income | 376 | 494 | 1,212 | 1,598 | |
Operating expense reimbursements | 23,826 | 27,969 | 72,103 | 77,862 | |
Cole Capital revenue | 27,185 | 31,069 | 83,001 | 94,788 | |
Total revenues | 333,728 | 362,915 | 1,018,687 | 1,102,954 | |
Operating expenses: | |||||
Cole Capital reallowed fees and commissions | 2,373 | 5,897 | 7,907 | 20,940 | |
Acquisition-related | 909 | 90 | 2,282 | 373 | |
Litigation and other non-routine costs, net of insurance recoveries | 9,507 | 4,630 | 36,793 | 2,372 | |
Property operating | 30,645 | 34,820 | 96,288 | 107,832 | |
General and administrative | 29,796 | 29,761 | 88,355 | 92,255 | |
Depreciation and amortization | 176,523 | 195,173 | 543,963 | 596,826 | |
Impairments | 6,363 | 6,872 | 30,857 | 176,214 | |
Total operating expenses | 256,116 | 277,243 | 806,445 | 996,812 | |
Operating income | 77,612 | 85,672 | 212,242 | 106,142 | |
Other (expense) income: | |||||
Interest expense | (71,708) | (79,869) | (219,072) | (242,763) | |
Gain (loss) on extinguishment and forgiveness of debt, net | 9,756 | (2,003) | 18,691 | (1,751) | |
Other income, net | 1,907 | 1,744 | 4,540 | 4,022 | |
Equity in income and gain on disposition of unconsolidated entities | 374 | 212 | 805 | 10,686 | |
Gain (loss) on derivative instruments, net | 1,294 | (2,023) | 2,710 | (3,286) | |
Total other expenses, net | (58,377) | (81,939) | (192,326) | (233,092) | |
Income (loss) before taxes and real estate dispositions | 19,235 | 3,733 | 19,916 | (126,950) | |
(Loss) gain on disposition of real estate and held for sale assets, net | (688) | 28,111 | 54,432 | 45,723 | |
Income (loss) before taxes | 18,547 | 31,844 | 74,348 | (81,227) | |
Provision for income taxes | (2,053) | (1,598) | (8,878) | (1,374) | |
Net income (loss) | 16,494 | 30,246 | 65,470 | (82,601) | |
Net (income) loss attributable to non-controlling interests | [2] | (9) | (12) | 12 | 23 |
Net income (loss) attributable to the General Partner / OP | $ 16,485 | $ 30,234 | $ 65,482 | $ (82,578) | |
Basic and diluted net (loss) income per unit attributable to common unitholders (in dollars per share) | $ 0 | $ 0.01 | $ 0.01 | $ (0.15) | |
Distributions declared per common share / unit (in dollars per share) | $ 0.14 | $ 0.14 | $ 0.41 | $ 0.41 | |
[1] | Represents (income) loss attributable to limited partners and consolidated joint venture partners. | ||||
[2] | Represents (income) loss attributable to consolidated joint venture partners. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Net income (loss) | $ 16,494 | $ 30,246 | $ 65,470 | $ (82,601) | |
Other comprehensive income (loss): | |||||
Unrealized (loss) gain on interest rate derivatives | (214) | 3,178 | (17) | (9,811) | |
Reclassification of previous unrealized (gain) loss on interest rate derivatives into net income (loss) | (939) | 4,650 | (229) | 8,668 | |
Unrealized loss on investment securities, net | (283) | (29) | (547) | (1,599) | |
Total other comprehensive (loss) income | (1,436) | 7,799 | (793) | (2,742) | |
Total comprehensive income (loss) | 15,058 | 38,045 | 64,677 | (85,343) | |
Comprehensive (income) loss attributable to non-controlling interests | [1] | (365) | (940) | (1,511) | 2,236 |
Total comprehensive income (loss) attributable to the General Partner / OP | 14,693 | 37,105 | 63,166 | (83,107) | |
VEREIT Operating Partnership, L.P. [Member] | |||||
Net income (loss) | 16,494 | 30,246 | 65,470 | (82,601) | |
Other comprehensive income (loss): | |||||
Unrealized (loss) gain on interest rate derivatives | (214) | 3,178 | (17) | (9,811) | |
Reclassification of previous unrealized (gain) loss on interest rate derivatives into net income (loss) | (939) | 4,650 | (229) | 8,668 | |
Unrealized loss on investment securities, net | (283) | (29) | (547) | (1,599) | |
Total other comprehensive (loss) income | (1,436) | 7,799 | (793) | (2,742) | |
Total comprehensive income (loss) | 15,058 | 38,045 | 64,677 | (85,343) | |
Comprehensive (income) loss attributable to non-controlling interests | [2] | (9) | (12) | 12 | 23 |
Total comprehensive income (loss) attributable to the General Partner / OP | $ 15,049 | $ 38,033 | $ 64,689 | $ (85,320) | |
[1] | Represents comprehensive (income) loss attributable to limited partners and consolidated joint venture partners. | ||||
[2] | Represents (income) loss attributable to consolidated joint venture partners. |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total | Series D Preferred Stock [Member] | Preferred Stock [Member] | Total Stockholders' Equity | Total Stockholders' EquitySeries D Preferred Stock [Member] | Total Stockholders' EquityPreferred Stock [Member] | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] | Accumulated Deficit [Member]Series D Preferred Stock [Member] | Accumulated Deficit [Member]Preferred Stock [Member] | Non-Controlling Interests [Member] | Non-Controlling Interests [Member]Preferred Stock [Member] | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Cumulative effect adjustment for equity-based compensation forfeitures | $ 384 | $ (384) | ||||||||||||||
Beginning balance (shares) at Dec. 31, 2015 | 42,834,138 | 904,884,394 | ||||||||||||||
Beginning balance at Dec. 31, 2015 | $ 8,713,959 | $ 8,523,987 | $ 428 | $ 9,049 | 11,931,768 | $ (2,025) | (3,415,233) | $ 189,972 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Issuance of common stock, net (shares) | 69,000,000 | |||||||||||||||
Issuance of common stock, net | 702,482 | 702,482 | $ 690 | 701,792 | ||||||||||||
Conversion of OP units to common stock (shares) | 15,450 | |||||||||||||||
Conversion of OP units to common stock | 159 | 159 | (159) | |||||||||||||
Repurchases of common stock to settle tax obligation (shares) | (424,726) | |||||||||||||||
Repurchases of common stock to settle tax obligation | (4,148) | (4,148) | $ (4) | (4,144) | ||||||||||||
Equity-based compensation, net (shares) | 708,701 | |||||||||||||||
Equity-based compensation, net | 7,097 | 7,097 | $ 7 | 7,090 | ||||||||||||
Contributions from non-controlling interest holders | 675 | 675 | ||||||||||||||
Distributions declared on common stock | (382,819) | (382,819) | (382,819) | |||||||||||||
Distributions to non-controlling interest holders | (9,889) | (9,889) | ||||||||||||||
Distributions | $ (400) | $ (53,919) | $ (400) | $ (53,811) | $ (400) | $ (53,811) | (108) | |||||||||
Net income (loss) | (82,601) | (80,445) | (80,445) | (2,156) | ||||||||||||
Other comprehensive loss | (2,742) | (2,662) | (2,662) | (80) | ||||||||||||
Ending balance (shares) at Sep. 30, 2016 | 42,834,138 | 974,183,819 | ||||||||||||||
Ending balance at Sep. 30, 2016 | 8,887,695 | 8,709,440 | $ 428 | $ 9,742 | 12,637,049 | (4,687) | (3,933,092) | 178,255 | ||||||||
Beginning balance (shares) at Dec. 31, 2016 | 42,834,138 | 974,146,650 | ||||||||||||||
Beginning balance at Dec. 31, 2016 | 8,619,533 | 8,447,361 | $ 428 | $ 9,741 | 12,640,171 | (2,556) | (4,200,423) | 172,172 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Repurchases of common stock under the Share Repurchase Program (shares) | [1] | (68,759) | ||||||||||||||
Repurchases of common stock under the Share Repurchase Program | [1] | (518) | (518) | $ (1) | (517) | |||||||||||
Repurchases of common stock to settle tax obligation (shares) | (222,923) | |||||||||||||||
Repurchases of common stock to settle tax obligation | (1,913) | (1,913) | $ (2) | (1,911) | ||||||||||||
Equity-based compensation, net (shares) | 390,377 | |||||||||||||||
Equity-based compensation, net | 11,228 | 11,228 | $ 4 | 11,224 | ||||||||||||
Distributions declared on common stock | (401,805) | (401,805) | (401,805) | |||||||||||||
Distributions to non-controlling interest holders | (9,880) | (9,880) | ||||||||||||||
Distributions | $ (434) | $ (53,919) | $ (434) | $ (53,811) | $ (434) | $ (53,811) | $ (108) | |||||||||
Net income (loss) | 65,470 | 63,940 | 63,940 | 1,530 | ||||||||||||
Other comprehensive loss | (793) | (774) | (774) | (19) | ||||||||||||
Ending balance (shares) at Sep. 30, 2017 | 42,834,138 | 974,245,345 | ||||||||||||||
Ending balance at Sep. 30, 2017 | $ 8,226,969 | $ 8,063,274 | $ 428 | $ 9,742 | $ 12,648,967 | $ (3,330) | $ (4,592,533) | $ 163,695 | ||||||||
[1] | The Company’s Share Repurchase Program (as defined in Note 15 – Equity), which was authorized by the board of directors on May 12, 2017, allows for the repurchase of up to $200.0 million of the Company’s outstanding shares of Common Stock |
CONSOLIDATED STATEMENTS OF CHA7
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - OP - USD ($) $ in Thousands | Total | General Partner [Member] | VEREIT Operating Partnership, L.P. [Member] | VEREIT Operating Partnership, L.P. [Member]Total Partners' Capital [Member] | VEREIT Operating Partnership, L.P. [Member]Preferred Units [Member]General Partner [Member] | VEREIT Operating Partnership, L.P. [Member]Preferred Units [Member]Limited Partner [Member] | VEREIT Operating Partnership, L.P. [Member]Common Units [Member]General Partner [Member] | VEREIT Operating Partnership, L.P. [Member]Common Units [Member]Limited Partner [Member] | VEREIT Operating Partnership, L.P. [Member]Non-Controlling Interests [Member] | |
Beginning balance (shares) at Dec. 31, 2015 | 42,834,138 | 86,874 | 904,884,394 | 23,763,797 | ||||||
Beginning balance at Dec. 31, 2015 | $ 8,713,959 | $ 8,712,102 | $ 925,569 | $ 3,315 | $ 7,598,418 | $ 184,800 | $ 1,857 | |||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||||||
Issuance of common stock (shares) | 69,000,000 | |||||||||
Issuance of common stock | $ 702,482 | 702,482 | 702,482 | $ 702,482 | ||||||
Conversion of Limited Partners' Common OP Units to General Partner's Common OP Units (shares) | 15,450 | (15,450) | ||||||||
Conversion of Limited Partners' Common OP Units to General Partner's Common OP Units | $ 159 | $ (159) | ||||||||
Repurchases of Common OP Units to settle tax obligation (shares) | (424,726) | |||||||||
Repurchases of common OP Units to settle tax obligation | (4,148) | (4,148) | (4,148) | $ (4,148) | ||||||
Equity-based compensation, net (shares) | 708,701 | |||||||||
Equity-based compensation, net | 7,097 | 7,097 | $ 7,097 | |||||||
Contributions from non-controlling interest holders | 675 | 675 | 675 | |||||||
Distributions to Common OP Units and non-controlling interest holders | (9,889) | (393,108) | (393,022) | (383,219) | (9,803) | (86) | ||||
Distributions to Preferred OP Units | (53,919) | (53,919) | $ (53,811) | $ (108) | ||||||
Net income (loss) | (82,601) | (82,601) | (82,578) | (80,445) | (2,133) | (23) | ||||
Other comprehensive loss | (2,742) | (2,742) | (2,742) | $ (2,662) | $ (80) | |||||
Ending balance (shares) at Sep. 30, 2016 | 42,834,138 | 86,874 | 974,183,819 | 23,748,347 | ||||||
Ending balance at Sep. 30, 2016 | 8,887,695 | 8,885,272 | $ 871,758 | $ 3,207 | $ 7,837,682 | $ 172,625 | 2,423 | |||
Beginning balance (shares) at Dec. 31, 2016 | 42,834,138 | 86,874 | 974,146,650 | 23,748,347 | ||||||
Beginning balance at Dec. 31, 2016 | 8,619,533 | 8,617,130 | $ 853,821 | $ 3,171 | $ 7,593,540 | $ 166,598 | 2,403 | |||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||||||
Repurchases of common OP Units under the Share Repurchase Program (shares) | (68,759) | |||||||||
Repurchases of common OP Units under the Share Repurchase Program | (518) | [1] | (518) | (518) | $ (518) | |||||
Repurchases of Common OP Units to settle tax obligation (shares) | (222,923) | (222,923) | ||||||||
Repurchases of common OP Units to settle tax obligation | (1,913) | (1,913) | (1,913) | $ (1,913) | ||||||
Equity-based compensation, net (shares) | 390,377 | |||||||||
Equity-based compensation, net | 11,228 | 11,228 | $ 11,228 | |||||||
Distributions to Common OP Units and non-controlling interest holders | (9,880) | (412,119) | (412,034) | (402,239) | (9,795) | (85) | ||||
Distributions to Preferred OP Units | (53,919) | (53,919) | $ (53,811) | $ (108) | ||||||
Net income (loss) | 65,470 | 65,470 | 65,482 | 63,940 | 1,542 | (12) | ||||
Other comprehensive loss | $ (793) | (793) | (793) | $ (774) | $ (19) | |||||
Ending balance (shares) at Sep. 30, 2017 | 42,834,138 | 86,874 | 974,245,345 | 23,748,347 | ||||||
Ending balance at Sep. 30, 2017 | $ 8,226,969 | $ 8,224,663 | $ 800,010 | $ 3,063 | $ 7,263,264 | $ 158,326 | $ 2,306 | |||
[1] | The Company’s Share Repurchase Program (as defined in Note 15 – Equity), which was authorized by the board of directors on May 12, 2017, allows for the repurchase of up to $200.0 million of the Company’s outstanding shares of Common Stock |
CONSOLIDATED STATEMENTS OF CHA8
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) | May 12, 2017USD ($) |
The Share Repurchase Program [Member] | |
Value of stock authorized for repurchase under stock repurchase program (up to) | $ 200,000,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 65,470 | $ (82,601) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 562,673 | 610,291 |
Gain on real estate assets and joint venture, net | (54,432) | (55,921) |
Impairments | 30,857 | 176,214 |
Equity-based compensation | 11,224 | 7,097 |
Equity in income of unconsolidated entities | (805) | (488) |
Distributions from unconsolidated entities | 2,782 | 3,007 |
Gain on investment securities | (65) | 0 |
(Gain) loss on derivative instruments, net | (2,710) | 3,286 |
(Gain) loss on extinguishment and forgiveness of debt, net | (18,691) | 1,751 |
Changes in assets and liabilities: | ||
Investment in direct financing leases | 1,575 | 1,861 |
Rent and tenant receivables and other assets, net | (19,463) | (51,702) |
Due from affiliates, net | 4,411 | 50 |
Accounts payable and accrued expenses | 13,759 | (6,726) |
Deferred rent, derivative and other liabilities | (27) | (1,235) |
Due to affiliates | (8) | (230) |
Net cash provided by operating activities | 596,550 | 604,654 |
Cash flows from investing activities: | ||
Investments in real estate assets | (403,886) | (19,952) |
Capital expenditures and leasing costs | (14,081) | (15,892) |
Real estate developments | (10,863) | (6,288) |
Principal repayments received from borrowers | 6,281 | 4,906 |
Investments in unconsolidated entities | 0 | (2,500) |
Proceeds from disposition of real estate and joint venture | 366,237 | 615,246 |
Investment in leasehold improvements and other assets | (446) | (726) |
Deposits for real estate assets | (32,946) | (11,686) |
Uses and refunds of deposits for real estate assets | 20,989 | 9,753 |
Line of credit advances to affiliates | (400) | (10,300) |
Line of credit repayments from affiliates | 10,700 | 50,000 |
Change in restricted cash | 14,606 | (5,674) |
Net cash (used in) provided by investing activities | (43,809) | 606,887 |
Cash flows from financing activities: | ||
Proceeds from mortgage notes payable | 4,283 | 1,450 |
Payments on mortgage notes payable and other debt, including debt extinguishment and swap termination costs | (389,775) | (145,802) |
Proceeds from credit facility | 0 | 783,000 |
Payments on credit facility, including swap termination costs | (501,107) | (1,743,000) |
Proceeds from corporate bonds | 600,000 | 1,000,000 |
Payments on corporate bonds, including extinguishment costs | 0 | (1,311,208) |
Payments of deferred financing costs | (9,313) | (19,056) |
Repurchases of common stock under the Share Repurchase Program | (518) | 0 |
Repurchases of common stock to settle tax obligations | (1,913) | (4,148) |
Proceeds from the issuance of Common Stock, net of underwriters’ discount | 0 | 702,765 |
Payments of equity issuance costs | 0 | (274) |
Contributions from non-controlling interest holders | 0 | 675 |
Distributions paid | (456,487) | (428,428) |
Net cash used in financing activities | (754,830) | (1,164,026) |
Net change in cash and cash equivalents | (202,089) | 47,515 |
Cash and cash equivalents, beginning of period | 256,452 | 69,103 |
Cash and cash equivalents, end of period | 54,363 | 116,618 |
VEREIT Operating Partnership, L.P. [Member] | ||
Cash flows from operating activities: | ||
Net income (loss) | 65,470 | (82,601) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 562,673 | 610,291 |
Gain on real estate assets and joint venture, net | (54,432) | (55,921) |
Impairments | 30,857 | 176,214 |
Equity-based compensation | 11,224 | 7,097 |
Equity in income of unconsolidated entities | (805) | (488) |
Distributions from unconsolidated entities | 2,782 | 3,007 |
Gain on investment securities | (65) | 0 |
(Gain) loss on derivative instruments, net | (2,710) | 3,286 |
(Gain) loss on extinguishment and forgiveness of debt, net | (18,691) | 1,751 |
Changes in assets and liabilities: | ||
Investment in direct financing leases | 1,575 | 1,861 |
Rent and tenant receivables and other assets, net | (19,463) | (51,702) |
Due from affiliates, net | 4,411 | 50 |
Accounts payable and accrued expenses | 13,759 | (6,726) |
Deferred rent, derivative and other liabilities | (27) | (1,235) |
Due to affiliates | (8) | (230) |
Net cash provided by operating activities | 596,550 | 604,654 |
Cash flows from investing activities: | ||
Investments in real estate assets | (403,886) | (19,952) |
Capital expenditures and leasing costs | (14,081) | (15,892) |
Real estate developments | (10,863) | (6,288) |
Principal repayments received from borrowers | 6,281 | 4,906 |
Investments in unconsolidated entities | 0 | (2,500) |
Proceeds from disposition of real estate and joint venture | 366,237 | 615,246 |
Investment in leasehold improvements and other assets | (446) | (726) |
Deposits for real estate assets | (32,946) | (11,686) |
Uses and refunds of deposits for real estate assets | 20,989 | 9,753 |
Line of credit advances to affiliates | (400) | (10,300) |
Line of credit repayments from affiliates | 10,700 | 50,000 |
Change in restricted cash | 14,606 | (5,674) |
Net cash (used in) provided by investing activities | (43,809) | 606,887 |
Cash flows from financing activities: | ||
Proceeds from mortgage notes payable | 4,283 | 1,450 |
Payments on mortgage notes payable and other debt, including debt extinguishment and swap termination costs | (389,775) | (145,802) |
Proceeds from credit facility | 0 | 783,000 |
Payments on credit facility, including swap termination costs | (501,107) | (1,743,000) |
Proceeds from corporate bonds | 600,000 | 1,000,000 |
Payments on corporate bonds, including extinguishment costs | 0 | (1,311,208) |
Payments of deferred financing costs | (9,313) | (19,056) |
Repurchases of common stock under the Share Repurchase Program | (518) | 0 |
Repurchases of common stock to settle tax obligations | (1,913) | (4,148) |
Proceeds from the issuance of Common Stock, net of underwriters’ discount | 0 | 702,765 |
Payments of equity issuance costs | 0 | (274) |
Contributions from non-controlling interest holders | 0 | 675 |
Distributions paid | (456,487) | (428,428) |
Net cash used in financing activities | (754,830) | (1,164,026) |
Net change in cash and cash equivalents | (202,089) | 47,515 |
Cash and cash equivalents, beginning of period | 256,452 | 69,103 |
Cash and cash equivalents, end of period | 54,363 | 116,618 |
2016 Term Loan [Member] | ||
Cash flows from financing activities: | ||
Proceeds from 2016 Term Loan | 0 | 300,000 |
Repayment of 2016 Term Loan | 0 | (300,000) |
2016 Term Loan [Member] | VEREIT Operating Partnership, L.P. [Member] | ||
Cash flows from financing activities: | ||
Proceeds from 2016 Term Loan | 0 | 300,000 |
Repayment of 2016 Term Loan | $ 0 | $ (300,000) |
Organization
Organization | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization VEREIT ® is a Maryland corporation, incorporated on December 2, 2010, that qualified as a real estate investment trust (“REIT”) for U.S. federal income tax purposes beginning in the taxable year ended December 31, 2011. The OP is a Delaware limited partnership of which the General Partner is the sole general partner. VEREIT’s common stock, par value $0.01 per share (“Common Stock”), and its 6.70% Series F Cumulative Redeemable Preferred Stock, par value $0.01 per share (“Series F Preferred Stock”) trade on the New York Stock Exchange (“NYSE”) under the trading symbols, “VER” and “VER PRF,” respectively. As used herein, the terms the “Company,” “we,” “our” and “us” refer to VEREIT, together with its consolidated subsidiaries, including the OP. The Company is a full-service real estate operating company with investment management capabilities that operates through two reportable segments, its real estate investment (“REI”) segment and its investment management segment, Cole Capital ® (“Cole Capital”), as further discussed in Note 3 – Segment Reporting . Through the REI segment, the Company owns and actively manages a diversified portfolio of retail, restaurant, office and industrial real estate properties subject to long-term net leases with creditworthy tenants. The Company actively manages its portfolio considering a number of metrics including property type, concentration and key economic factors for appropriate balance and diversity. Through the Cole Capital segment, the Company is responsible for raising capital for and managing the affairs of the Cole REITs ® (as defined in Note 3 – Segment Reporting ) on a day-to-day basis, identifying and making acquisitions and investments on the Cole REITs’ behalf, and recommending to the respective board of directors of each of the Cole REITs an approach for providing investors with liquidity. Cole Capital receives compensation and reimbursement for performing these services. To support both reportable segments, the Company employs a shared services model pursuant to which its personnel are integral in providing, among other things, transactional and operational functions to the Company’s owned portfolio and the Cole REITs. Substantially all of the REI segment’s operations are conducted through the OP. VEREIT is the sole general partner and holder of 97.6% of the common equity interests in the OP as of September 30, 2017 with the remaining 2.4% of the common equity interests owned by unaffiliated investors and certain former directors, officers and employees of ARC Properties Advisors, LLC (the “Former Manager”). Under the limited partnership agreement of the OP, as amended (the “LPA”), after holding units of limited partner interests in the OP (“OP Units”) for a period of one year , unless an earlier redemption is otherwise consented to by VEREIT, holders of OP Units have the right to redeem the OP Units for the cash value of a corresponding number of shares of VEREIT’s Common Stock or, at the option of VEREIT, a corresponding number of shares of VEREIT’s Common Stock. The remaining rights of the holders of OP Units are limited, however, and do not include the ability to replace the General Partner or to approve the sale, purchase or refinancing of the OP’s assets. Substantially all of the Cole Capital segment’s operations are conducted through Cole Capital Advisors, Inc. (“CCA”), an Arizona corporation and a wholly owned subsidiary of the OP. CCA is treated as a taxable REIT subsidiary (“TRS”) under Section 856 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). The actions of the OP and its relationship with the General Partner are governed by the LPA. The General Partner does not have any significant assets other than its investment in the OP. Therefore, the assets and liabilities of the General Partner and the OP are the same. Additionally, pursuant to the LPA, all administrative expenses and expenses associated with the formation, continuity, existence and operation of the General Partner incurred by the General Partner on the OP’s behalf shall be treated as expenses of the OP. Further, when the General Partner issues any equity instrument that has been approved by the General Partner’s board of directors, the LPA requires the OP to issue to the General Partner equity instruments with substantially similar terms, to protect the integrity of the Company’s umbrella partnership REIT structure, pursuant to which each holder of interests in the OP has a proportionate economic interest in the OP reflecting its capital contributions thereto. OP Units issued to the General Partner are referred to as General Partner OP Units. OP Units issued to parties other than the General Partner are referred to as Limited Partner OP Units. The LPA also provides that the OP issue debt with terms and provisions consistent with debt issued by the General Partner. The LPA will be amended to provide for the issuance of any additional class of equivalent equity instruments to the extent the General Partner’s board of directors authorizes the issuance of any new class of equity securities. |
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 Basis of Accounting The consolidated financial statements of the Company presented herein include the accounts of the General Partner and its consolidated subsidiaries, including the OP. All intercompany transactions have been eliminated upon consolidation. The financial statements are prepared on the accrual basis of accounting in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair presentation of results for the interim periods. The results of operations for the three and nine months ended September 30, 2017 are not necessarily indicative of the results for the entire year or any subsequent interim period. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2016 of the Company, which are included in the Company’s Annual Report on Form 10-K filed on February 23, 2017. There have been no significant changes to the Company’s significant accounting policies during the nine months ended September 30, 2017 , except the Company adopted Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”), as disclosed within the “Acquisition-Related Expenses and Litigation and Other Non-routine Costs” and “Recent Accounting Pronouncements” sections herein. Information and footnote disclosures normally included in financial statements have been condensed or omitted pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) and U.S. GAAP. Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of the Company and its consolidated subsidiaries and consolidated joint venture arrangements. The portions of the consolidated joint venture arrangements not owned by the Company are presented as non-controlling interests in VEREIT’s and the OP’s consolidated balance sheets, statements of operations, statements of comprehensive income (loss) and statements of changes in equity. In addition, as described in Note 1 – Organization , certain third parties have been issued OP Units. Holders of OP Units are considered to be non-controlling interest holders in the OP and their ownership interest in the limited partner’s share is presented as non-controlling interests in VEREIT’s consolidated balance sheets, statements of operations, statements of comprehensive income (loss) and statements of changes in equity. Further, a portion of the earnings and losses of the OP are allocated to non-controlling interest holders based on their respective ownership percentages. Upon conversion of OP Units to Common Stock, any difference between the fair value of shares of Common Stock issued and the carrying value of the OP Units converted is recorded as a component of equity. As of both September 30, 2017 and December 31, 2016 , there were approximately 23.75 million Limited Partner OP Units outstanding. 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 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 then qualitatively assesses whether it is (or is not) the primary beneficiary of a VIE, which is generally defined as the party who has a controlling financial interest in the 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 these VIEs based on standards set forth in U.S. GAAP. Acquisition-Related Expenses and Litigation and Other Non-routine Costs As further disclosed in the “Recent Accounting Pronouncements” section herein, in January 2017, the Company elected to early adopt 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. During the nine months ended September 30, 2017 , all real estate acquisitions qualified as asset acquisitions, and external acquisition costs related to these asset acquisitions were capitalized. Prior to January 1, 2017, external costs related to property acquisitions were expensed as incurred. Internal costs, such as employee salaries, related to activities necessary to complete, or affect, self-originating asset acquisitions or business combinations are classified as acquisition-related expenses in the accompanying consolidated statements of operations. Any costs incurred as a result of a business combination will be classified as acquisition-related expenses or other non-routine transaction related expenses and expensed as incurred. External acquisition-related costs incurred in relation to mergers and litigation resulting therefrom and other non-routine transactions are included in litigation and other non-routine costs, net of insurance recoveries in the consolidated statements of operations. The Company has also incurred legal fees and other costs associated with the Audit Committee Investigation (defined below) and the litigations and investigations resulting therefrom, which are considered non-routine. The Company has directors’ and officers’ insurance and the insurance carriers have paid certain defense costs subject to standard reservation of rights under the respective policies. Litigation and other non-routine costs include the following costs (amounts in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Litigation and other non-routine costs: Audit Committee Investigation and related matters (1) $ 9,476 $ 5,221 $ 36,501 $ 13,413 Legal fees and expenses (2) 31 59 292 155 Total costs incurred 9,507 5,280 36,793 13,568 Insurance recoveries — (650 ) — (11,196 ) Total $ 9,507 $ 4,630 $ 36,793 $ 2,372 ___________________________________ (1) Includes all fees and costs associated with the previously-announced investigation conducted by the audit committee (the “Audit Committee”) of the Company’s board of directors (the “Audit Committee Investigation”) and various litigations and investigations prompted by the results of the Audit Committee Investigation, including fees and costs incurred pursuant to the Company’s advancement obligations and in connection with related insurance recovery matters. (2) Includes legal fees and expenses associated with litigation resulting from prior mergers. Recent Accounting Pronouncements In May 2014, the U.S. Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”) (Topic 606), 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 financial statements and internal accounting processes and controls. Once ASU 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. Based upon a preliminary analysis, the Company does not expect that the adoption of ASU 2014-09 will have a material impact on its REI segment. The Company is currently evaluating whether the adoption of ASU 2014-09 will have any impact on the timing of revenue recognition of the Cole Capital segment. 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 U.S. 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 U.S. 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. The Company expects the accounting for leases pursuant to which the Company is the lessee to change and is currently evaluating the impact. Leases pursuant to which the Company is the lessee primarily consist of corporate offices and ground leases. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) (“ASU 2016-13”). ASU 2016-13 is intended to improve financial reporting by requiring more timely recognition of credit losses on loans and other financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investment in leases and other such commitments. ASU 2016-13 requires that financial 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 U.S. GAAP. ASU 2016-13 is effective for fiscal years, and interim periods within, beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within, beginning after December 15, 2018. The Company is currently evaluating the impact this amendment will have on its consolidated financial statements. In August 2016, the FASB issued ASU 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, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims and distributions received from equity method investments. The Company is currently evaluating the impact of this amendment on distributions received from equity method investments and does not expect the other three items to have a material impact on its statement of cash flows. In November 2016, the FASB issued ASU 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 January 2017, the FASB issued 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 guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods, with early adoption permitted, and is required to be applied prospectively to any transactions occurring within the period of adoption. The Company has elected to early adopt ASU 2017-01 effective January 1, 2017. As the Company expects that a majority of its real estate acquisitions will be considered asset acquisitions, external acquisition costs related to these asset acquisitions will be capitalized. Prior to 2017, all acquisition-related costs were expensed as incurred. The adoption of this pronouncement resulted in capitalization of $1.9 million of external acquisitions-related costs during the nine months ended September 30, 2017 . Internal costs, such as employee salaries, related to activities necessary to complete, or affect, self-originating asset acquisitions or business combinations are classified as acquisition-related expenses in the accompanying consolidated statements of operations. Upon adoption of ASU 2017-01, the Company's real estate dispositions qualify as asset dispositions and as such, no portion of the Company’s REI segment’s goodwill was allocated to the cost basis of these assets in determining the gain or loss on disposition of real estate and held for sale assets. Prior to January 1, 2017, when the Company disposed of a property or classified a property as held for sale, it constituted a business per U.S. GAAP and the Company allocated a portion of the REI segment's goodwill to the cost basis of that property in determining the gain or loss on the disposition of real estate and held for sale assets. In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Others (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which simplifies the measurement of goodwill impairment by eliminating Step 2 from the goodwill impairment test (comparing the implied fair value of goodwill with the carrying amount of goodwill). ASU 2017-04 is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. The adoption of this standard is applied prospectively and may result in a different impairment charge as compared to the existing standard. The Company is currently evaluating the impact this amendment will have on its consolidated financial statements and whether to early adopt during the 2017 fourth quarter annual impairment test. In February 2017, the FASB issued ASU 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) requires entities 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 will 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 May 2017, FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting. This ASU clarifies which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions and classification of the awards are the same immediately before and after the modification. This ASU is effective for fiscal years beginning after December 15, 2017 and interim periods therein, with early adoption permitted. The Company does not expect that the adoption of ASU 2017-09 will have a material impact on its consolidated financial statements. In August 2017, FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. 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 it will have a material impact on its consolidated financial statements. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting The Company has organized its operations into two segments for management and internal financial reporting purposes, REI and Cole Capital, as further discussed below. REI – Through its REI segment, the Company owns and actively manages a diversified portfolio of retail, restaurant, office and industrial real estate properties subject to long-term net leases with creditworthy tenants. As of September 30, 2017 , the Company owned 4,094 properties comprising 92.5 million square feet of retail and commercial space located in 49 states, Puerto Rico and Canada, which includes properties owned through consolidated joint ventures. The rentable space at these properties was 98.7% leased with a weighted-average remaining lease term of 9.5 years. In addition, as of September 30, 2017 , the Company owned eight commercial mortgage-backed securities (“CMBS”) and eight mortgage notes receivable. Cole Capital – Through its Cole Capital segment, the Company is responsible for managing the day-to-day affairs of Cole Credit Property Trust IV, Inc. (“CCPT IV”); Cole Real Estate Income Strategy (Daily NAV), Inc. (“INAV”); Cole Office & Industrial REIT (CCIT II), Inc. (“CCIT II”); Cole Office & Industrial REIT (CCIT III), Inc. (“CCIT III”); Cole Credit Property Trust V, Inc. (“CCPT V”); and other real estate offerings in registration (collectively with CCPT IV, INAV, CCIT II, CCIT III and CCPT V, the “Cole REITs”), raising capital for those Cole REITs still in offering, identifying and making acquisitions and investments on the Cole REITs’ behalf and recommending to the respective board of directors of each of the Cole REITs an approach for providing investors with liquidity. Cole Capital serves as the dealer manager and distributes shares of common stock for certain Cole REITs, advises them regarding offerings, manages relationships with participating broker-dealers and financial advisors, and provides assistance in connection with compliance matters relating to the offerings. Cole Capital receives compensation and reimbursement for services relating to the Cole REITs’ offerings and the investment, management, financing and disposition of their respective assets, as applicable. Cole Capital also develops new REIT offerings and assists in obtaining regulatory approvals from the SEC, the Financial Industry Regulatory Authority, Inc. and various blue sky jurisdictions for such offerings. See Note 17 – Related Party Transactions and Arrangements for further discussion on the Cole REITs. The Company allocates certain operating expenses, such as legal fees, employee related costs and benefits and general overhead expenses between its operating segments. The following tables present a summary of the comparative financial results and total assets for each segment (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 REI segment: Revenues: Rental income $ 282,341 $ 303,383 $ 862,371 $ 928,706 Direct financing lease income 376 494 1,212 1,598 Operating expense reimbursements 23,826 27,969 72,103 77,862 Total real estate investment revenues 306,543 331,846 935,686 1,008,166 Operating expenses: Acquisition-related 909 90 2,246 334 Litigation and other non-routine costs, net of insurance recoveries 9,507 4,630 36,793 2,372 Property operating 30,645 34,820 96,288 107,832 General and administrative 13,075 12,069 39,929 37,998 Depreciation and amortization 171,576 187,897 529,306 574,124 Impairment of real estate 6,363 6,872 30,857 176,214 Total operating expenses 232,075 246,378 735,419 898,874 Operating income 74,468 85,468 200,267 109,292 Other (expense) income: Interest expense (71,708 ) (79,869 ) (219,072 ) (242,763 ) Gain (loss) on extinguishment and forgiveness of debt, net 9,756 (2,003 ) 18,691 (1,751 ) Other income, net 1,405 1,649 3,834 3,433 Equity in income and gain on disposition of unconsolidated entities 374 212 805 10,686 Gain (loss) on derivative instruments, net 1,294 (2,023 ) 2,710 (3,286 ) Total other expenses, net (58,879 ) (82,034 ) (193,032 ) (233,681 ) Income (loss) before taxes and real estate dispositions 15,589 3,434 7,235 (124,389 ) (Loss) gain on disposition of real estate and held for sale assets, net (688 ) 28,111 54,432 45,723 Income (loss) before taxes 14,901 31,545 61,667 (78,666 ) Provision for income taxes (1,185 ) (1,539 ) (5,439 ) (4,695 ) Net income (loss) $ 13,716 $ 30,006 $ 56,228 $ (83,361 ) Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Cole Capital segment: Revenues: Offering-related fees and reimbursements $ 3,882 $ 9,545 $ 12,721 $ 32,850 Transaction service fees and reimbursements 4,000 3,779 13,159 10,639 Management fees and reimbursements 19,303 17,745 57,121 51,299 Total Cole Capital revenues 27,185 31,069 83,001 94,788 Operating expenses: Cole Capital reallowed fees and commissions 2,373 5,897 7,907 20,940 Acquisition-related — — 36 39 General and administrative 16,721 17,692 48,426 54,257 Depreciation and amortization 4,947 7,276 14,657 22,702 Total operating expenses 24,041 30,865 71,026 97,938 Operating income (loss) 3,144 204 11,975 (3,150 ) Total other income, net 502 95 706 589 Income (loss) before taxes 3,646 299 12,681 (2,561 ) (Provision for) benefit from income taxes (868 ) (59 ) (3,439 ) 3,321 Net income $ 2,778 $ 240 $ 9,242 $ 760 Total Company: Total revenues $ 333,728 $ 362,915 $ 1,018,687 $ 1,102,954 Total operating expenses $ (256,116 ) $ (277,243 ) $ (806,445 ) $ (996,812 ) Total other expense, net $ (58,377 ) $ (81,939 ) $ (192,326 ) $ (233,092 ) Net income (loss) $ 16,494 $ 30,246 $ 65,470 $ (82,601 ) Total Assets September 30, 2017 December 31, 2016 REI segment $ 14,522,637 $ 15,337,623 Cole Capital segment 214,096 249,951 Total Company $ 14,736,733 $ 15,587,574 |
Goodwill and Other Intangibles
Goodwill and Other Intangibles | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangibles | Goodwill and Other Intangibles Goodwill In connection with prior mergers, the Company recorded goodwill as a result of the merger consideration exceeding the net assets acquired. The goodwill recorded as a result of the merger of Cole with and into a wholly owned subsidiary of the Company (the “Cole Merger”) was allocated between the Company’s two segments, the REI segment and the Cole Capital segment. The REI segment and the Cole Capital segment each comprise one reporting unit. As of each of September 30, 2017 and December 31, 2016 , $1.3 billion and $124.8 million of goodwill was allocated to the REI segment and the Cole Capital segment, respectively. During the nine months ended September 30, 2017 , one property classified as held for sale as of December 31, 2016 was classified as held and used, resulting in an increase to the goodwill allocated to the REI segment of $0.4 million . During the nine months ended September 30, 2016 , the Company allocated $53.8 million of goodwill to dispositions and held for sale assets, which was included in (loss) gain on disposition of real estate and held for sale assets, net in the consolidated statement of operations. The Company evaluates goodwill for impairment annually or more frequently when an event occurs or circumstances change that indicate the carrying value, by reporting unit, may not be recoverable. The Company’s annual testing date is during the fourth quarter. The Company tests goodwill for impairment by first comparing the carrying value of net assets to the fair value of each reporting unit. If the fair value is determined to be less than the carrying value or if qualitative factors indicate that it is more likely than not that goodwill is impaired, a second step is performed to compute the amount of impairment as the difference between the fair value of goodwill and the carrying value. The Company estimates the fair value of the reporting units using discounted cash flows and relevant competitor multiples. The evaluation of goodwill for potential impairment requires the Company’s management to exercise significant judgment and to make certain assumptions. While the Company believes its assumptions are reasonable, there are no guarantees as to actual results. Changes in assumptions based on actual results may have a material impact on the Company’s financial results. The fair value of the Cole Capital segment is dependent upon actual results, including, but not limited to, the timing and amount of aggregate capital raised and deployed on behalf of the Cole REITs, which is influenced by the Company’s ability to continue to reinstate certain selling agreements that were suspended as a result of the Audit Committee Investigation and the resulting restatements, as well as regulatory requirements affecting broker-dealers and financial advisors. If the Company is unable to continue to reinstate selling agreements or raise and deploy capital as estimated, the fair values of the Cole Capital segment and intangible assets may be less than the respective carrying value, resulting in an impairment that could have a material effect on the Company’s financial results. In addition, the actual timing of closing an offering or executing a liquidity event on behalf of a Cole REIT or the commencement of operations of newly formed REITs, which are not yet effective, may differ from the Company’s assumptions. During the nine months ended September 30, 2017 and 2016 , management monitored the actual performance of the business segments relative to the fair value assumptions used during the annual goodwill impairment test. For the periods presented, management determined it remained more likely than not that the fair value of each reporting unit was greater than its carrying value. Intangible Assets The intangible assets primarily consisted of management and advisory contracts that the Company has with certain Cole REITs, which are subject to an estimated remaining useful life of approximately two years. The Company evaluates intangible assets for impairment when an event occurs or circumstances change that indicate the carrying value may not be recoverable. The Company tests intangible assets for impairment by first comparing the carrying value of the asset group to 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 value, the Company will adjust the intangible assets to their respective fair values and recognize an impairment loss. The Company will estimate the fair value of the intangible assets using a discounted cash flow model specific to the applicable Cole REITs. The evaluation of intangible assets for potential impairment requires the Company’s management to exercise significant judgment and to make certain assumptions. While the Company believes its assumptions are reasonable, there are no guarantees as to actual results. Changes in assumptions based on actual results may have a material impact on the Company’s financial results. There were no events or changes in circumstances that indicated that intangible assets were impaired during the nine months ended September 30, 2017 or 2016 . The Company recorded $4.1 million and $12.4 million of amortization expense related to the intangible assets for the three and nine months ended September 30, 2017 and $6.2 million and $19.9 million of amortization expense related to the intangible assets for the three and nine months ended September 30, 2016 , respectively. The estimated amortization expense is expected to be $4.1 million for the remainder of the year ending December 31, 2017, $4.0 million for the year ending December 31, 2018 and $3.8 million for the nine months ending September 30, 2019. The intangible assets were $12.2 million and $24.6 million , net of accumulated amortization of $42.0 million and $29.6 million , respectively, as of September 30, 2017 and December 31, 2016 . Intangible Lease Assets and Liabilities Intangible lease assets and liabilities of the Company consisted of the following as of September 30, 2017 and December 31, 2016 (amounts in thousands, except weighted-average useful life): Weighted-Average Useful Life September 30, 2017 December 31, 2016 Intangible lease assets: In-place leases and other intangibles, net of accumulated amortization of $580,588 and $494,131, respectively 15.1 $ 1,100,403 $ 1,192,756 Leasing commissions, net of accumulated amortization of $2,601 and $1,836, respectively 10.5 11,117 10,231 Above-market lease assets and deferred lease incentives, net of accumulated amortization of $83,670 and $69,670, respectively 16.2 248,925 275,897 Total intangible lease assets, net $ 1,360,445 $ 1,478,884 Intangible lease liabilities: Below-market leases, net of accumulated amortization of $70,070 and $56,891, respectively 18.4 $ 204,051 $ 224,023 The following table provides the projected amortization expense and adjustments to rental income related to the intangible lease assets and liabilities for the next five years as of September 30, 2017 (amounts in thousands) : October 1, 2017 - December 31, 2017 2018 2019 2020 2021 In-place leases and other intangibles: Total projected to be included in amortization expense $ 36,584 $ 134,741 $ 124,069 $ 116,168 $ 107,582 Leasing commissions: Total projected to be included in amortization expense 423 1,207 1,192 1,170 1,133 Above-market lease assets and deferred lease incentives: Total projected to be deducted from rental income 6,054 23,615 21,701 21,265 20,857 Below-market lease liabilities: Total projected to be included in rental income 6,351 19,283 18,578 17,420 16,093 |
Real Estate Investments
Real Estate Investments | 9 Months Ended |
Sep. 30, 2017 | |
Real Estate [Abstract] | |
Real Estate Investments | Real Estate Investments During the nine months ended September 30, 2017 , the Company acquired controlling financial interests in 65 commercial properties and three land parcels for an aggregate purchase price of $453.9 million (the “2017 Acquisitions”), which includes $1.9 million of external acquisition-related expenses that were capitalized in accordance with ASU 2017-01 and includes 22 properties acquired in a nonmonetary exchange discussed below. Prior to the adoption of ASU 2017-01, costs related to property acquisitions were expensed as incurred. During the nine months ended September 30, 2016 , the Company acquired a controlling interest in one commercial property for a purchase price of $20.0 million (the “2016 Acquisitions”). The following table presents the allocation of the fair values of the assets acquired and liabilities assumed during the periods presented (in thousands): Nine Months Ended September 30, 2017 2016 Real estate investments, at cost: Land $ 82,337 $ 4,215 Buildings, fixtures and improvements 293,419 14,555 Total tangible assets 375,756 18,770 Acquired intangible assets: In-place leases and other intangibles (1) 68,306 1,182 Above-market leases (2) 10,270 — Assumed intangible liabilities: Below-market leases (3) (395 ) — Total purchase price of assets acquired $ 453,937 $ 19,952 ____________________________________ (1) The weighted average amortization period for acquired in-place leases and other intangibles is 16.7 years and 14.5 years for 2017 Acquisitions and 2016 Acquisitions, respectively. (2) The weighted average amortization period for acquired above-market leases is 18.1 years for 2017 Acquisitions. (3) The weighted average amortization period for acquired intangible lease liabilities is 20.0 years for 2017 Acquisitions. Future Lease Payments The following table presents future minimum base rent payments due to the Company over the next five years and thereafter. These amounts exclude contingent rent payments, as applicable, that may be collected from certain tenants based on provisions related to sales thresholds and increases in annual rent based on exceeding certain economic indexes among other items (in thousands): Future Minimum Operating Lease Future Minimum (1) October 1, 2017 - December 31, 2017 $ 265,570 $ 867 2018 1,084,301 3,016 2019 1,050,277 2,397 2020 1,015,625 2,023 2021 975,554 1,899 Thereafter 6,441,525 3,993 Total $ 10,832,852 $ 14,195 ____________________________________ (1) 29 properties are subject to direct financing leases and, therefore, revenue is recognized as direct financing lease income on the discounted cash flows of the lease payments. Amounts reflected are the minimum base rental cash payments due to the Company under the lease agreements on these respective properties. Investment in Direct Financing Leases, Net The components of the Company’s net investment in direct financing leases as of September 30, 2017 and December 31, 2016 are as follows (in thousands): September 30, 2017 December 31, 2016 Future minimum lease payments receivable $ 14,195 $ 17,147 Unguaranteed residual value of property 23,146 27,450 Unearned income (3,939 ) (5,142 ) Net investment in direct financing leases $ 33,402 $ 39,455 Property Dispositions and Held for Sale Assets During the nine months ended September 30, 2017 , the Company disposed of 112 properties, including six properties transferred to the lender in either a deed-in-lieu of foreclosure or foreclosure sale transaction as discussed in Note 10 – Debt and 15 properties disposed of in connection with the nonmonetary exchange discussed below, for an aggregate gross sales price of $507.5 million , of which our share was $491.0 million after the profit participation payments related to the disposition of 24 Red Lobster properties. The dispositions resulted in proceeds of $366.2 million after a mortgage loan assumption of $66.0 million and closing costs. Additionally, the Company’s tax provision for the nine months ended September 30, 2017 included $1.7 million of Canadian tax on the gain on sale of certain Canadian properties. The Company recorded a gain of $54.9 million related to the sales which is included in (loss) gain on disposition of real estate and held for sale assets, net in the accompanying consolidated statements of operations. During the nine months ended September 30, 2016 , the Company disposed of 223 properties for an aggregate gross sales price of $672.5 million , of which our share was $646.4 million after the profit participation payment related to the disposition of 47 Red Lobsters. The dispositions resulted in proceeds of $573.0 million after a debt assumption of $55.0 million and closing costs. The Company recorded a gain of $50.7 million , which included $28.8 million of goodwill allocated to the cost basis of such properties, which is included in (loss) gain on disposition of real estate and held for sale assets, net in the accompanying consolidated statements of operations. The Company has no continuing involvement with these properties. During the nine months ended September 30, 2016 , the Company also disposed of one property owned by an unconsolidated joint venture for a gross sales price of $113.5 million , of which our share was $102.1 million based on our ownership interest in the joint venture, resulting in proceeds of $42.3 million after debt repayments of $57.0 million and closing costs. The Company recorded a gain of $10.2 million related to the sale, which is included in equity in income and gain on disposition of unconsolidated entities in the accompanying consolidated statements of operations. As of September 30, 2017 , there were two properties classified as held for sale which are expected to be sold in the next 12 months as part of the Company’s portfolio management strategy. During the nine months ended September 30, 2017 , the Company recorded a loss of $0.5 million related to held for sale properties. No goodwill was allocated to the cost basis of any additional properties classified as held for sale during the nine months ended September 30, 2017 . During the nine months ended September 30, 2016 , the Company recorded a loss of $5.0 million related to properties classified as held for sale during the respective period, which included $22.7 million of goodwill allocated to the cost basis of such properties. The loss on properties held for sale is included in (loss) gain on disposition of real estate and held for sale assets, net in the accompanying consolidated statements of operations. Nonmonetary Exchange During the nine months ended September 30, 2017 , the Company completed a nonmonetary exchange through the simultaneous acquisition of 22 Bob Evans properties and disposition of 15 Red Lobster properties. Pursuant to Nonmonetary Transactions, ASC (Topic 845), the cost of a nonmonetary asset acquired in exchange for another nonmonetary asset is the fair value of the asset surrendered to obtain the acquired nonmonetary asset, and a gain or loss should be recognized on the exchange. The fair value of the asset received should be used to measure the cost if the fair value of the asset received is more reliable than the fair value of the asset surrendered. The Company estimated the fair value of the Bob Evans and Red Lobster properties using valuation techniques consistent with the income approach and concluded that the fair value was $50.1 million . As the fair value of the assets received exceeded the book value of the assets surrendered, the Company recorded a gain of $7.4 million , which is included in (loss) gain on disposition of real estate and held for sale assets, net in the accompanying consolidated statements of operations. Impairment of Real Estate Investments The Company performs quarterly impairment review procedures, primarily through continuous monitoring of events and changes in circumstances that could indicate the carrying value of its real estate assets may not be recoverable. Impairment indicators that the Company considers include, but are not limited to, decrease in net operating income, bankruptcy or other credit concerns of a property’s major tenant or tenants, such as history of late payments, a decrease in the expected holding period of a property, as well as significant decreases in a property’s revenues due to lease terminations, vacancies, co-tenancy clauses or reduced lease rates. When impairment indicators are identified or if a property is considered to have a more likely than not probability of being disposed of within the next 12 to 24 months, the Company assesses the recoverability of the assets by determining whether the carrying value of the assets will be recovered through the undiscounted future cash flows expected from the use of the assets and their eventual disposition. U.S. GAAP requires us to utilize the Company’s expected holding period of our properties when assessing recoverability. In the event that such expected undiscounted future cash flows do not exceed the carrying value, the Company will adjust the real estate assets to their respective estimated 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 and considering the factors mentioned above, real estate assets and an investment in a property subject to a direct financing lease with carrying values totaling $87.9 million were deemed to be impaired and their carrying values were reduced to their estimated fair values of $57.0 million resulting in impairment charges of $30.9 million during the nine months ended September 30, 2017 . During 2017, the Company identified additional office properties for potential sale and certain restaurant and other properties for potential sale that management has determined, based on discussions with the current tenants, will not be re-leased. During the nine months ended September 30, 2016 , management identified certain properties for potential sale as part of its portfolio management strategy to reduce exposure to office properties. Additionally, a tenant of 59 restaurants filed for bankruptcy. As part of the Company’s quarterly impairment review procedures and considering the factors mentioned above, real estate assets with carrying values totaling $655.1 million were deemed to be impaired and their carrying values were reduced to their estimated fair values of $478.9 million , resulting in impairment charges of $176.2 million during the nine months ended September 30, 2016 . Consolidated Joint Ventures The Company had interests in two joint ventures that owned two properties as of each of September 30, 2017 and December 31, 2016 (the “Consolidated Joint Ventures”). As of September 30, 2017 and December 31, 2016 , the Consolidated Joint Ventures had total assets of $65.8 million and $64.8 million , respectively, of which $60.4 million and $58.8 million were real estate investments, net of accumulated depreciation and amortization, for the respective periods. One property is secured by a mortgage note payable of $15.4 million , which was non-recourse to the Company. The Company has the ability to control operating and financial policies of the Consolidated Joint Ventures. There are restrictions on the use of these assets as the Company would generally be required to obtain the approval of each partner (the “Partner”) in accordance with the joint venture agreement for any major transactions. The Company and each Partner are subject to the provisions of each joint venture agreement, which includes provisions for when additional contributions may be required to fund certain cash shortfalls. The Partners’ share of the Consolidated Joint Ventures’ income was $9,000 and $12,000 for the three months ended September 30, 2017 and 2016 , respectively. The Partners’ share of the Consolidated Joint Ventures’ loss was $12,000 and $23,000 for the nine months ended September 30, 2017 and 2016 , respectively. The Partners’ share of the Consolidated Joint Ventures’ income and loss are included in net (income) loss attributable to non-controlling interests in the consolidated statements of operations. Unconsolidated Joint Ventures The Company’s investment in unconsolidated joint venture arrangements (the “Unconsolidated Joint Ventures”) consisted of interests in two joint ventures that owned two properties as of each of September 30, 2017 and December 31, 2016 . As of September 30, 2017 and December 31, 2016 , the Company owned aggregate equity investments of $40.3 million and $41.3 million , respectively, in the Unconsolidated Joint Ventures. The Company accounts for its investments in Unconsolidated Joint Ventures using the equity method of accounting as the Company has the ability to exercise significant influence, but not control, over operating and financial policies of these investments. The equity method of accounting requires the investment to be initially recorded at cost and subsequently adjusted for the Company’s share of equity in earnings and distributions from the joint ventures. As of September 30, 2017 , the Company’s maximum exposure to risk was $40.3 million , the carrying value of the investments, which is presented in investment in unconsolidated entities in the consolidated balance sheet. The Unconsolidated Joint Ventures had total debt outstanding of $20.4 million as of September 30, 2017 , none of which is recourse to the Company, as discussed in Note 10 – Debt . The Company and the respective unconsolidated joint venture partners are subject to the provisions of the applicable joint venture agreement, which includes provisions for when additional contributions may be required to fund certain cash shortfalls. The Company records its proportionate share of net income (loss) from the Unconsolidated Joint Ventures in the equity in income and gain on disposition of unconsolidated entities in the consolidated statements of operations. During the three and nine months ended September 30, 2017 , the Company recognized $0.4 million and $1.3 million of net income, respectively, from two Unconsolidated Joint Ventures. During the three and nine months ended September 30, 2016 , the Company recognized $0.2 million and $0.6 million of net income, respectively, from the unconsolidated joint ventures which owned two and three properties, during those respective periods. The following is a summary of the Company’s percentage ownership and carrying amount related to each of the Unconsolidated Joint Ventures as of September 30, 2017 and December 31, 2016 (dollar amounts in thousands): Carrying Amount of Investment (2) Name of Joint Venture Partner Ownership % (1) September 30, 2017 December 31, 2016 Cole/Mosaic JV South Elgin IL, LLC Affiliate of Mosaic Properties and Development, LLC 50% $ 5,621 $ 5,891 Cole/Faison JV Bethlehem GA, LLC Faison-Winder Investors, LLC 90% 34,690 35,438 $ 40,311 $ 41,329 _______________________________________________ (1) The Company’s ownership interest in this table reflects its legal ownership interest. Legal ownership may, at times, not equal the Company’s economic interest in the listed properties because of various provisions in certain joint venture agreements regarding distributions of cash flow based on capital account balances, allocations of profits and losses and payments of preferred returns. As a result, the Company’s actual economic interest (as distinct from its legal ownership interest) in certain of the properties could fluctuate from time to time and may not wholly align with its legal ownership interests. (2) The total carrying amount of the investments was greater than the underlying equity in net assets by $6.1 million and $6.4 million as of September 30, 2017 and December 31, 2016 , respectively. This difference relates to a purchase price allocation of goodwill and a step up in fair value of the investment assets acquired in connection with the Cole Merger. The step up in fair value was allocated to the individual investment assets and is being amortized in accordance with the Company’s depreciation policy. |
Investment Securities, at Fair
Investment Securities, at Fair Value | 9 Months Ended |
Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities, at Fair Value | Investment Securities, at Fair Value Investment securities are considered available-for-sale and, therefore, increases or decreases in the fair value of these investments are recorded in accumulated other comprehensive income (loss) as a component of equity in the consolidated balance sheets unless the securities are considered to be other-than-temporarily impaired at which time the losses are reclassified to expense. The following tables detail the unrealized gains and losses on investment securities as of September 30, 2017 and December 31, 2016 (in thousands): September 30, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value CMBS $ 43,306 $ 1,086 $ (2,715 ) $ 41,677 December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value CMBS $ 48,297 $ 1,248 $ (2,330 ) $ 47,215 As of each of September 30, 2017 and December 31, 2016 , the Company owned eight CMBS with an estimated aggregate fair value of $41.7 million and $47.2 million , respectively. The Company generally receives monthly payments of principal and interest on the CMBS. As of September 30, 2017 , the Company earned interest on the CMBS at rates ranging between 5.88% and 8.95% . As of September 30, 2017 , the fair value of six CMBS were below their amortized cost. In estimating other-than-temporary impairment losses, management considers a variety of factors, including: (i) whether the Company has the intent to sell the impaired security, (ii) whether the Company expects to hold the investment for a period of time sufficient to allow for anticipated recovery in fair value, and (iii) whether the company expects to recover the entire amortized cost basis of the security. The Company believes that none of the unrealized losses on investment securities are other-than-temporary as management expects the Company will fully recover the entire amortized cost basis of all securities. As of September 30, 2017 , the Company had no other-than-temporary impairment losses. The scheduled maturity of the Company’s CMBS as of September 30, 2017 are as follows (in thousands): September 30, 2017 Amortized Cost Fair Value Due within one year $ — $ — Due after one year through five years 17,984 18,430 Due after five years through 10 years 12,011 9,336 Due after 10 years 13,311 13,911 Total $ 43,306 $ 41,677 |
Mortgage Notes Receivable
Mortgage Notes Receivable | 9 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
Mortgage Notes Receivable | Mortgage Notes Receivable As of September 30, 2017 , the Company owned eight mortgage notes receivable with a weighted-average interest rate of 6.2% and weighted-average years to maturity of 12.9 years. During the nine months ended September 30, 2017 , one mortgage note with a carrying value of $1.5 million at repayment was paid in full prior to the maturity date. The following table details the mortgage notes receivable as of September 30, 2017 (dollar amounts in thousands): Outstanding Balance Carrying Value Interest Rate Range Maturity Date Range $ 22,700 $ 20,510 5.9 % – 6.8% December 2026 – January 2033 The Company’s mortgage notes receivable are comprised primarily of fully-amortizing or nearly fully-amortizing first mortgage loans. The Company has one mortgage note receivable where the Company does not receive monthly payments of principal and interest but rather the interest is capitalized into the outstanding balance that is due at maturity. The mortgage notes receivable are primarily on commercial real estate, each leased to a single tenant. Therefore, the Company’s monitoring of the credit quality of its mortgage notes receivable is focused primarily on an analysis of the tenant, including review of tenant quality and ratings, trends in the tenant’s industry and general economic conditions and an analysis of measures of collateral coverage, such as an estimate of the loan-to-value ratio (principal amount outstanding divided by the estimated value of the property) and its remaining term until maturity. The following table summarizes the scheduled aggregate principal payments due to the Company on the mortgage notes receivable subsequent to September 30, 2017 (in thousands): Outstanding Balance Due within one year $ 915 Due after one year through five years 4,341 Due after five years through 10 years 7,071 Due after 10 years (1) 14,175 Total $ 26,502 ____________________________________ (1) Includes additional $3.8 million of interest that will be capitalized into the outstanding balance of the mortgage note receivable subsequent to September 30, 2017 . |
Rent and Tenant Receivables and
Rent and Tenant Receivables and Other Assets, Net | 9 Months Ended |
Sep. 30, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Rent and Tenant Receivables and Other Assets, Net | Rent and Tenant Receivables and Other Assets, Net Rent and tenant receivables and other assets, net consisted of the following as of September 30, 2017 and December 31, 2016 (in thousands): September 30, 2017 December 31, 2016 Accounts receivable, net (1) $ 38,182 $ 49,148 Straight-line rent receivable, net (2) 220,975 201,584 Deferred costs, net (3) 8,347 16,154 Prepaid expenses 10,147 6,814 Leasehold improvements, property and equipment, net (4) 12,982 14,702 Restricted escrow deposits 5,644 5,741 Deferred tax asset and tax receivable 32,753 31,113 Program development costs, net (5) 3,828 3,161 Interest rate swap assets, at fair value 351 199 Other assets 3,729 2,089 Total $ 336,938 $ 330,705 ___________________________________ (1) Allowance for doubtful accounts included in accounts receivable, net was $6.0 million and $5.7 million as of September 30, 2017 and December 31, 2016 , respectively. (2) Allowance for doubtful accounts included in straight-line rent receivable, net was $1.6 million and $0.3 million as of September 30, 2017 and December 31, 2016 , respectively. (3) Amortization expense for deferred costs related to the revolving credit facility totaled $2.6 million for each of the three months ended September 30, 2017 and 2016 and $7.8 million for each of the nine months ended September 30, 2017 and 2016 , respectively. Accumulated amortization for deferred costs related to the revolving credit facility were $37.6 million and $29.8 million as of September 30, 2017 and December 31, 2016 , respectively. (4) Amortization expense for leasehold improvements totaled $0.3 million and $0.9 million for the three and nine months ended September 30, 2017 and 2016 , respectively. Accumulated amortization was $4.4 million and $3.5 million as of September 30, 2017 and December 31, 2016 , respectively. Depreciation expense for property and equipment totaled $0.5 million and $1.3 million for the three and nine months ended September 30, 2017 , respectively, and $0.6 million and $1.6 million for the three and nine months ended September 30, 2016 , respectively. Accumulated depreciation was $5.2 million and $3.9 million as of September 30, 2017 and December 31, 2016 , respectively. (5) As of September 30, 2017 and December 31, 2016 , the Company had reserves of $5.9 million and $31.7 million , respectively, relating to the program development costs. |
Fair Value Measures
Fair Value Measures | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measures | Fair Value Measures The Company determines fair value based on quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. U.S. GAAP guidance defines three levels of inputs that may be used to measure fair value: Level 1 – Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability. Level 3 – Unobservable inputs reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques. The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. Changes in the type of inputs may result in a reclassification for certain assets. There were no transfers between Level 1, Level 2 or Level 3 of the fair value hierarchy during the nine months ended September 30, 2017 . The Company expects that changes in classifications between levels will be infrequent. Items Measured at Fair Value on a Recurring Basis The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis, based on market rates of the Company’s positions and other observable interest rates as discussed in Note 6 – Investment Securities, at Fair Value and Note 11 – Derivatives and Hedging Activities , as of September 30, 2017 and December 31, 2016 , aggregated by the level in the fair value hierarchy within which those instruments fall (in thousands): Level 1 Level 2 Level 3 Balance as of September 30, 2017 Assets: CMBS $ — $ — $ 41,677 $ 41,677 Derivative assets — 351 — 351 Total assets $ — $ 351 $ 41,677 $ 42,028 Level 1 Level 2 Level 3 Balance as of December 31, 2016 Assets: CMBS $ — $ — $ 47,215 $ 47,215 Derivative assets — 199 — 199 Total assets $ — $ 199 $ 47,215 $ 47,414 Liabilities: Derivative liabilities $ — $ (3,547 ) $ — $ (3,547 ) CMBS – The Company’s CMBS are carried at fair value and are valued using Level 3 inputs. The Company used estimated non-binding quoted market prices from the trading desks of financial institutions that are dealers in such securities for similar CMBS tranches that actively participate in the CMBS market. Broker quotes are only indicative of fair value and may not necessarily represent what the Company would receive in an actual trade for the applicable instrument. Management determines that the prices are representative of fair value through its knowledge of and experience in the market. The significant unobservable input used in valuing the CMBS is the discount rate or market yield used to discount the estimated future cash flows expected to be received from the underlying investment, which include both future principal and interest payments. Significant increases or decreases in the discount rate or market yield would result in a decrease or increase in the fair value measurement. The following risks are included in the consideration and selection of discount rates or market yields: risk of default, rating of the investment and comparable company investments. Derivative Assets and Liabilities – The Company’s derivative financial instruments relate to interest rate swaps, discussed in Note 11 – Derivatives and Hedging Activities . The valuation of derivative instruments is determined using a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and implied volatilities. 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 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 , the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has 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. The fair value of short-term financial instruments such as cash and cash equivalents, restricted cash, due to affiliates and accounts payable approximate their carrying value in the accompanying consolidated balance sheets due to their short-term nature and are classified as Level 1 under the fair value hierarchy. The following are reconciliations of the changes in assets and liabilities with Level 3 inputs in the fair value hierarchy for the nine months ended September 30, 2017 and 2016 (in thousands): CMBS Balance as of December 31, 2016 $ 47,215 Total gains and losses Unrealized loss included in other comprehensive income, net (547 ) Purchases, issuance, settlements Return of principal received (4,077 ) Amortization included in net income, net (914 ) Ending Balance, September 30, 2017 $ 41,677 CMBS Balance as of December 31, 2015 $ 53,304 Total gains and losses Unrealized loss included in other comprehensive loss, net (1,599 ) Purchases, issuance, settlements Return of principal received (3,786 ) Accretion included in net loss, net 179 Ending Balance, September 30, 2016 $ 48,098 The fair values of the Company’s financial instruments that are not reported at fair value in the consolidated balance sheets are reported below (dollar amounts in thousands): Level Carrying Amount at September 30, 2017 Fair Value at September 30, 2017 Carrying Amount at December 31, 2016 Fair Value at December 31, 2016 Assets: Mortgage notes receivable 3 $ 20,510 $ 28,539 $ 22,764 $ 30,460 Liabilities (1) : Mortgage notes payable and other debt, net 2 $ 2,129,461 $ 2,186,955 $ 2,687,739 $ 2,713,155 Corporate bonds, net 2 2,848,591 2,944,615 2,248,063 2,273,850 Convertible debt, net 2 990,922 1,021,580 987,106 1,004,733 Credit facility 2 — — 500,000 500,000 Total liabilities $ 5,968,974 $ 6,153,150 $ 6,422,908 $ 6,491,738 _______________________________________________ (1) Current and prior period liabilities’ carrying and fair values exclude net deferred financing costs. Mortgage notes receivable – The fair value of the Company’s fixed-rate loan portfolio is estimated with a discounted cash flow analysis, utilizing scheduled cash flows and discount rates estimated by management to approximate market interest rates. Debt – The fair value is estimated by an independent third party using a discounted cash flow analysis, based on management’s estimates of observable market interest rates. Corporate bonds and convertible debt are valued using quoted market prices in active markets with limited trading volume when available. Items Measured at Fair Value on a Non-Recurring Basis 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. Real Estate Assets As discussed in Note 5 – Real Estate Investments , during the nine months ended September 30, 2017 , net real estate assets and an investment in a property subject to a direct financing lease representing 53 properties were deemed to be impaired and their carrying values were reduced to their estimated fair value of $57.0 million , resulting in impairment charges of $30.9 million . During the nine months ended September 30, 2016 , net real estate assets related to 139 properties were deemed to be impaired and their carrying values totaling $655.1 million were reduced to their estimated fair values of $478.9 million , resulting in impairment charges of $176.2 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) capitalization rate; (2) discount rates; (3) number of years property will be held; (4) property operating expenses; and (5) re-leasing assumptions including 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 performance and sustainability of the Company’s tenants. For the Company’s impairment tests for the real estate assets during the nine months ended September 30, 2017 , the Company used a range of discount rates from 7.4% to 7.8% with a weighted-average rate of 7.5% and capitalization rates from 6.9% to 10.0% with a weighted-average rate of 8.2% . The following table presents the impairment charges by asset class recorded during the nine months ended September 30, 2017 (dollar amounts in thousands): Nine Months Ended September 30, 2017 Properties impaired (1) 53 Asset classes impaired: Investment in real estate assets, net $ 30,327 Investment in direct financing leases, net 553 Below-market lease liabilities, net (23 ) Total impairment loss $ 30,857 _______________________________________________ (1) Six of these properties were disposed of during the nine months ended September 30, 2017 . |
Debt
Debt | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt As of September 30, 2017 , the Company had $5.9 billion of debt outstanding, including net premiums and net deferred financing costs, with a weighted-average years to maturity of 4.7 years and a weighted-average interest rate of 4.2% . The following table summarizes the carrying value of debt as of September 30, 2017 and December 31, 2016 , and the debt activity for the nine months ended September 30, 2017 (in thousands): Nine Months Ended September 30, 2017 Balance as of December 31, 2016 Debt Issuances Repayments, Extinguishment and Assumptions Accretion and Amortization Balance as of September 30, 2017 Mortgage notes payable: Outstanding balance $ 2,629,949 $ 4,283 $ (545,307 ) $ — $ 2,088,925 (1) Net premiums (2) 36,751 — (528 ) (9,422 ) 26,801 Deferred costs (16,633 ) — 576 2,229 (13,828 ) Other debt: Outstanding balance 20,947 — (7,233 ) — 13,714 Premium (2) 92 — — (71 ) 21 Mortgages and other debt, net 2,671,106 4,283 (552,492 ) (7,264 ) 2,115,633 Corporate bonds: Outstanding balance 2,250,000 600,000 — — 2,850,000 Discount (3) (1,937 ) — — 528 (1,409 ) Deferred costs (21,839 ) (9,497 ) — 2,909 (28,427 ) Corporate bonds, net 2,226,224 590,503 — 3,437 2,820,164 Convertible debt: Outstanding balance 1,000,000 — — — 1,000,000 Discount (3) (12,894 ) — — 3,816 (9,078 ) Deferred costs (13,766 ) — — 4,334 (9,432 ) Convertible debt, net 973,340 — — 8,150 981,490 Credit facility: Outstanding balance 500,000 — (500,000 ) — — Deferred costs (4) (3,422 ) — 2,030 1,392 — Credit facility, net 496,578 — (497,970 ) 1,392 — Total debt $ 6,367,248 $ 594,786 $ (1,050,462 ) $ 5,715 $ 5,917,287 ____________________________________ (1) Includes $16.2 million related to one mortgage note payable in default. (2) Net premiums on mortgage notes payable and other debt were recorded upon the assumption of the respective debt instruments in relation to the various mergers and acquisitions. 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) Discounts on the corporate bonds and convertible debt were recorded based upon the fair value of the respective debt instruments as of the respective issuance dates. Amortization of these discounts is recorded as an increase to interest expense over the remaining term of the respective debt instruments using the effective-interest method. (4) Deferred costs relate to the term portion of the credit facility. Mortgage Notes Payable The Company’s mortgage notes payable consisted of the following as of September 30, 2017 (dollar amounts in thousands): Encumbered Properties Gross Carrying Value of Collateralized Properties (1) Outstanding Balance Weighted-Average Interest Rate (2) Weighted-Average Years to Maturity Fixed-rate debt (3) 501 $ 4,146,793 $ 2,073,481 4.91 % 4.5 Variable-rate debt 1 32,938 15,444 4.49 % 0.1 Total (4) 502 $ 4,179,731 $ 2,088,925 4.91 % 4.4 ____________________________________ (1) Gross carrying value is gross real estate assets, including investment in direct financing leases, net of gross real estate liabilities. (2) Weighted-average interest rate for variable-rate debt represents the interest rate in effect as of September 30, 2017 . (3) Includes $79.2 million of variable-rate debt fixed by way of interest rate swap arrangements. (4) The table above does not include the loan amount associated with an Unconsolidated Joint Venture of $20.4 million , none of which is recourse to the Company. The loan represents a secured fixed rate of 5.20% and a maturity of July 2021 . The Company’s mortgage loan agreements generally restrict corporate guarantees and require the maintenance of financial covenants, including maintenance of certain financial ratios (such as specified debt to equity and debt service coverage ratios). The mortgage loan agreements contain no dividend restrictions except in the event of default or when a distribution would drive liquidity below the applicable thresholds. At September 30, 2017 , except for the loan in default described below, the Company believes it was in compliance with the financial covenants under the mortgage loan agreements and had no restrictions on the payment of dividends. As of September 30, 2017 , the Company had $16.2 million related to one outstanding mortgage note payable in default. The Company is engaged with the servicer to determine a method of settlement. On August 31, 2017, the Company entered into a deed-in-lieu of foreclosure agreement with the lender of a mortgage loan secured by one property, with an outstanding balance of $41.6 million on the date of agreement and conveyed its interest in the property to satisfy the mortgage loan. As a result of the deed-in-lieu of foreclosure transaction, the Company recognized a gain on forgiveness of debt of $6.7 million , which is included in gain (loss) on extinguishment and forgiveness of debt, net in the accompanying consolidated statements of operations. On August 29, 2017, the Company completed the foreclosure sale of one property secured by a mortgage loan and was relieved of all obligations on the non-recourse loan. On the date of the foreclosure sale, the mortgage loan had an outstanding balance of $20.5 million . The Company recognized a gain on forgiveness of debt of $4.8 million , which is included in gain (loss) on extinguishment and forgiveness of debt, net in the accompanying consolidated statements of operations as a result of the transaction. On June 27, 2017, the Company entered into a deed-in-lieu of foreclosure agreement with the lender of a mortgage loan, secured by four properties, with an outstanding balance of $38.3 million and conveyed all interests in the properties to satisfy the mortgage loan. As a result of the deed-in-lieu of foreclosure transaction, the Company recognized a gain on forgiveness of debt of $9.0 million , which is included in gain (loss) on extinguishment and forgiveness of debt, net in the accompanying consolidated statements of operations. On December 30, 2016, the Company received a notice of default from the lender of a non-recourse loan secured by 16 properties, which had an outstanding balance of $11.6 million on the notice date, due to the Company's intentional non-repayment of the loan balance at maturity. During the nine months ended September 30, 2017 , the Company cured the default by fully repaying the outstanding loan balance. The following table summarizes the scheduled aggregate principal repayments due on mortgage notes subsequent to September 30, 2017 (in thousands): Total October 1, 2017 - December 31, 2017 (1) $ 33,981 2018 67,603 2019 223,171 2020 265,582 2021 353,274 Thereafter 1,145,314 Total $ 2,088,925 ___________________________________ (1) Includes $16.2 million , excluding accrued interest, related to one mortgage note payable in default. Other Debt As of September 30, 2017 , the Company had a secured term loan from KBC Bank, N.V. with an outstanding principal balance of $13.7 million and remaining unamortized premium of $21,000 (the “KBC Loan”). At September 30, 2017 , the interest coupon on the KBC Loan was fixed at 5.81% . Subsequent to September 30, 2017 , the Company repaid the remaining outstanding principal balance of the KBC Loan. The KBC Loan provided for monthly payments of both principal and interest. The KBC Loan was secured by various investment assets held by the Company. The following table is a summary of the outstanding balance and carrying value of the collateral by asset type as of September 30, 2017 (in thousands): Outstanding Balance Collateral Carrying Value Mortgage notes receivable $ 4,945 $ 18,400 CMBS 8,769 30,204 Total $ 13,714 $ 48,604 Corporate Bonds On August 11, 2017, the Company closed a senior note offering, consisting of $600.0 million aggregate principal amount of the Operating Partnership’s 3.950% Senior Notes due 2027 (the “2027 Senior Notes”) (the offering of the 2027 Senior Notes, the “2017 Bond Offering”). As of September 30, 2017 , the OP had $2.85 billion aggregate principal amount of senior unsecured notes (the “Senior Notes”) outstanding comprised of the following (dollar amounts in thousands): Outstanding Balance September 30, 2017 Interest Rate Maturity Date 2019 Senior Notes 750,000 3.000 % February 6, 2019 2021 Senior Notes 400,000 4.125 % June 1, 2021 2024 Senior Notes 500,000 4.600 % February 6, 2024 2026 Senior Notes 600,000 4.875 % June 1, 2026 2027 Senior Notes 600,000 — 3.950 % — August 15, 2027 Total balance and weighted-average interest rate $ 2,850,000 4.033 % The Senior Notes are guaranteed by the General Partner. The OP may redeem all or a part of any series of the Senior Notes at any time, at its option, for the redemption prices set forth in the indenture governing the Senior Notes. If the redemption date is 30 or fewer days prior to the maturity date with respect to the 2019 Senior Notes and the 2021 Senior Notes or is 90 or fewer days prior to the maturity date with respect to the 2024 Senior Notes, the 2026 Senior Notes and the 2027 Senior Notes, the redemption price will equal 100% of the principal amount of the Senior Notes of the applicable series to be redeemed, plus accrued and unpaid interest on the amount being redeemed to, but excluding, the applicable redemption date. The Senior Notes are registered under the Securities Act of 1933, as amended, (the “Securities Act”) and are freely transferable. The indenture governing our Senior Notes requires us to maintain financial ratios which include maintaining (i) a maximum limitation on incurrence of total debt less than or equal to 65% of Total Assets (as defined in the indenture), (ii) maximum limitation on incurrence of secured debt less than or equal to 40% of Total Assets (as defined in the indenture), (iii) a minimum debt service coverage ratio of at least 1.5 x and (iv) a minimum unencumbered asset value of at least 150% of the aggregate principal amount of all of the outstanding Unsecured Debt (as defined in the indenture). The Company believes it was in compliance with the financial covenants pursuant to the indenture governing the Senior Notes as of September 30, 2017 . Convertible Debt The following table presents each of the Company’s $597.5 million aggregate principal amount of convertible senior notes due 2018 (the “2018 Convertible Notes”) and $402.5 million aggregate principal amount of convertible senior notes due 2020 (the “2020 Convertible Notes” and, together with the 2018 Convertible Notes, the “Convertible Notes”) with their respective terms (dollar amounts in thousands). The OP has issued corresponding identical convertible notes to the General Partner. Outstanding Balance (1) Interest Rate Conversion Rate (2) Maturity Date 2018 Convertible Notes $ 597,500 3.00 % 60.5997 August 1, 2018 2020 Convertible Notes 402,500 3.75 % 66.7249 December 15, 2020 Total balance and weighted-average interest rate $ 1,000,000 3.30 % ____________________________________ (1) Excludes the carrying value of the conversion options recorded within additional paid-in capital of $28.6 million and the unamortized discount of $9.1 million as of September 30, 2017 . The discount will be amortized over the remaining weighted average term of 1.8 years. (2) Conversion rate represents the amount of the General Partner OP Units per $1,000 principal amount of Convertible Notes converted as of September 30, 2017 , as adjusted in accordance with the applicable indentures as a result of cash dividend payments. The 2018 Convertible Notes may be converted into cash, shares of the Company’s common stock or a combination thereof in limited circumstances prior to February 1, 2018 and may be converted into such consideration at any time on or after February 1, 2018. The 2020 Convertible Notes may be converted into cash, shares of the Company’s common stock or a combination thereof, in limited circumstances prior to June 15, 2020, and may be converted into such consideration at any time on or after June 15, 2020. There were no changes to the terms of the Convertible Notes and the Company believes it was in compliance with the financial covenants pursuant to the indenture governing the Convertible Notes as of September 30, 2017 . Credit Facility The General Partner, as guarantor, and the OP, as borrower, are parties to an unsecured credit facility (the “Credit Facility”) pursuant to a credit agreement, dated as of June 30, 2014, as amended, with Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent and other lenders party thereto (the “Credit Agreement”). As of September 30, 2017 , the Credit Facility had no outstanding balance and allowed for maximum borrowings of $2.3 billion under its revolving credit facility, subject to borrowing availability. The maximum aggregate dollar amount of letters of credit that may be outstanding at any one time under the Credit Facility is $25.0 million . The Operating Partnership used a portion of the proceeds from the 2017 Bond Offering discussed above to repay all of the outstanding borrowings, swap termination costs and accrued and unpaid interest, under the Credit Facility’s $0.5 billion term loan facility (the "Credit Facility Term Loan”) on August 11, 2017, resulting in the write-off of unamortized deferred financing costs of $2.0 million , which is included in gain (loss) on extinguishment and forgiveness of debt, net in the accompanying consolidated statements of operations. The revolving credit facility generally bears interest at an annual rate of LIBOR plus 1.00% to 1.80% or Base Rate plus 0.00% to 0.80% (based upon the General Partner’s then current credit rating). “Base Rate” is defined as the highest of the prime rate, the federal funds rate plus 0.50% or a floating rate based on one month LIBOR, determined on a daily basis. The Credit Facility Term Loan generally bears interest at an annual rate of LIBOR plus 1.15% to 2.05% , or Base Rate plus 0.15% to 1.05% (based upon the General Partner’s then current credit rating). In addition, the Credit Agreement provides the flexibility for interest rate auctions, pursuant to which, at the Company’s election, the Company may request that lenders make competitive bids to provide revolving loans, which competitive bids may be at pricing levels that differ from the foregoing interest rates. The Credit Agreement provides for monthly interest payments under the Credit Facility. In the event of default, at the election of a majority of the lenders (or automatically upon a bankruptcy event of default with respect to the OP or the General Partner), the commitments of the lenders under the Credit Facility will mature, and payment of any unpaid amounts in respect of the Credit Facility will be accelerated. The Credit Facility terminates on June 30, 2018 , unless extended in accordance with the terms of the Credit Agreement. The Credit Agreement provides for a one -year extension option, exercisable at the Company’s election and subject to certain customary conditions, as well as certain customary “amend and extend” provisions. At any time, upon timely notice by the OP and subject to any breakage fees, the OP may prepay borrowings under the Credit Facility (subject to certain limitations applicable to the prepayment of any loans obtained through an interest rate auction, as described above). The OP incurs a fee equal to 0.15% to 0.25% per annum (based upon the General Partner’s then current credit rating) multiplied by the commitments (whether or not utilized) in respect of the revolving credit facility. In addition, the OP incurs customary administrative agent, letter of credit issuance, letter of credit fronting, extension and other fees. The Credit Facility requires restrictions on corporate guarantees, as well as the maintenance of financial covenants, including the maintenance of certain financial ratios (such as specified debt to equity and debt service coverage ratios) and the maintenance of a minimum net worth. The key financial covenants in the Credit Facility, as defined and calculated per the terms of the Credit Agreement, include maintaining (i) a maximum leverage ratio less than or equal to 60% , (ii) a minimum fixed charge coverage ratio of at least 1.5 x, (iii) a secured leverage ratio less than or equal to 45% , (iv) a total unencumbered asset value ratio less than or equal to 60% , (v) a minimum tangible net worth covenant of at least $5.5 billion , (vi) a minimum unencumbered interest coverage ratio of at least 1.75 x and (vii) a minimum unencumbered asset value of at least $8.0 billion (up to 30% of which may be comprised of restaurant properties from December 31, 2016 on). The Company believes it was in compliance with the financial covenants pursuant to the Credit Agreement and is not restricted from accessing any borrowing availability under the Credit Facility as of September 30, 2017 . |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities | Derivatives and Hedging Activities Risk Management Objective of Using Derivatives The Company may use derivative financial instruments, including interest rate swaps, caps, options, floors and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company’s operating and financial structure as well as to hedge specific anticipated transactions. The Company does not intend to utilize derivatives for purposes other than interest rate risk management. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which the Company and its affiliates may also have other financial relationships. The Company does not anticipate that any of the counterparties will fail to meet their obligations. Cash Flow Hedges of Interest Rate Risk The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The effective portion of changes in the fair value of derivatives designated that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the three and nine months ended September 30, 2017 and 2016 , such derivatives were used to hedge the variable cash flows associated with variable-rate debt. During the three and nine months ended September 30, 2017 , the Company reclassified previously unrealized gains of $0.1 million and unrealized losses of $0.2 million , respectively, from accumulated other comprehensive income into interest expense as a result of the hedged forecasted transactions affecting earnings. The Company also reclassified unrealized losses of $0.2 million and $0.6 million , respectively, from accumulated other comprehensive income into interest expense associated with settled interest rate derivatives. The ineffective portion of the change in fair value of the derivatives designated that qualify as cash flow hedges is recognized directly in earnings. During the three and nine months ended September 30, 2017 , the Company recorded a gain of $0.2 million and $1.6 million , respectively, in earnings related to the ineffective portion of the change in fair value of derivatives designated that qualify as cash flow hedges. During the three and nine months ended September 30, 2016 , the Company recorded a gain of $1.0 million and $1.1 million , respectively, in such earnings. Earnings related to the ineffective portion of the change in fair value of derivatives designated that qualify as cash flow hedges are included in gain (loss) on derivative instruments, net in the accompanying consolidated statements of operations. The ineffectiveness is primarily attributable to the designation of acquired interest rate swaps with a non-zero fair value at inception associated with the Cole Merger. During the three months ended September 30, 2017 , the Company terminated six of its interest rate swaps in connection with the early repayment of mortgage loans and borrowings under the Credit Facility Term Loan, as discussed in Note 10 – Debt , and accelerated the reclassification of a portion of the amounts in other comprehensive income to earnings as a result of a portion of the hedged forecasted transactions becoming probable not to occur. A gain of $1.1 million was recorded in relation to the acceleration, which is included in gain (loss) on derivative instruments, net in the accompanying consolidated statements of operations. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. During the next twelve months, the Company estimates that an additional $0.4 million will be reclassified from other comprehensive income as an increase to interest expense. During the three and nine months ended September 30, 2017 , loans associated with six and thirteen derivative instruments, respectively, with aggregate notional values of $550.9 million and $662.4 million at the respective settlement date, were repaid in full and one derivative previously designated as a cash flow hedge with a notional value of $27.8 million was de-designated as it was not probable the forecasted hedged transaction would occur. As of September 30, 2017 and December 31, 2016 , the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (dollar amounts in thousands): Interest Rate Swaps September 30, 2017 December 31, 2016 Number of Instruments — 14 Notional Amount $ — $ 690,816 The table below presents the fair value of the Company’s derivative financial instruments as well as their classification in the consolidated balance sheets as of September 30, 2017 and December 31, 2016 (in thousands): Derivatives Designated as Hedging Instruments Balance Sheet Location September 30, 2017 December 31, 2016 Interest rate swaps Rent and tenant receivables and other assets, net $ — $ 3 Interest rate swaps Deferred rent, derivative and other liabilities $ — $ (3,547 ) Derivatives Not Designated as Hedging Instruments Derivatives not designated as hedges are not speculative and are used to manage the Company’s exposure to interest rate movements and other identified risks but do not meet the requirements to be classified as hedging instruments. A gain of $21,000 and $17,000 for the three and nine months ended September 30, 2017 , respectively, related to the change in the fair value of derivatives not designated as hedging instruments was recorded in gain (loss) on derivative instruments, net in the accompanying consolidated statements of operations. The Company recorded a gain of $0.3 million and a loss of $1.1 million for the three and nine months ended September 30, 2016 , respectively. As discussed above, during the three months ended September 30, 2017 , one derivative previously designated as a cash flow hedge with a notional value of $27.8 million was de-designated as it was not probable the forecasted hedged transaction would occur. As of September 30, 2017 and December 31, 2016 , the Company had the following outstanding interest rate derivatives that were not designated as qualifying hedging relationships (dollar amounts in thousands): Interest Rate Swap September 30, 2017 December 31, 2016 Number of Instruments 2 1 Notional Amount $ 79,212 $ 51,400 The table below presents the fair value of the Company’s derivative financial instrument not designated as a hedge as well as its classification in the consolidated balance sheets as of September 30, 2017 and December 31, 2016 (in thousands): Derivatives Not Designated as Hedging Instruments Balance Sheet Location September 30, 2017 December 31, 2016 Interest rate swaps Rent and tenant receivables and other assets, net $ 351 $ 196 Tabular Disclosure of Offsetting Derivatives The table below details a gross presentation, the effects of offsetting and a net presentation of the Company’s derivatives as of September 30, 2017 and December 31, 2016 (in thousands). The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. Offsetting of Derivative Assets and Liabilities Gross Amounts of Recognized Assets Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts of Assets Presented in the Consolidated Balance Sheets Net Amounts of Liabilities Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Received Net Amount September 30, 2017 $ 351 $ — $ — $ 351 $ — $ — $ — $ 351 December 31, 2016 $ 199 $ (3,547 ) $ — $ 199 $ (3,547 ) $ — $ — $ (3,348 ) Credit Risk Related Contingent Features The Company has agreements with each of its derivative counterparties that contain a provision specifying that if the Company either defaults or is capable of being declared in default on any of its indebtedness, the Company could also be declared in default on its derivative obligations. As of September 30, 2017 , the fair value of the interest rate derivatives in a net asset position, including accrued interest but excluding any adjustment for nonperformance risk related to these agreements, was $0.3 million . As of September 30, 2017 , the Company has not posted any collateral related to these agreements and was not in breach of any provisions in these agreements. 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 of $0.3 million at September 30, 2017 . |
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 information was as follows for the nine months ended September 30, 2017 and 2016 (in thousands): Nine Months Ended September 30, 2017 2016 Supplemental Disclosures: Cash paid for interest $ 200,617 $ 246,602 Cash paid for income taxes $ 10,690 $ 18,822 Non-cash investing and financing activities: Accrued capital expenditures and real estate developments $ 6,750 $ 3,556 Accrued deferred financing costs $ 181 $ 860 Distributions declared and unpaid $ 146,596 $ 146,118 Accrued equity issuance costs $ — $ 9 Mortgage note payable relieved by foreclosure or a deed-in-lieu of foreclosure $ 100,388 $ 38,050 Mortgage notes payable assumed in real estate disposition $ 66,000 $ 55,000 Nonmonetary Exchanges: Intangible lease liability received $ (151 ) $ — Real estate investments received $ 50,204 $ — Real estate investments relinquished and gain on disposition $ (47,474 ) $ — Rent and tenant receivables and other assets, net relinquished $ (2,602 ) $ — Intangible lease liability relinquished $ 242 $ — Real estate investments received from a ground lease expiration $ 259 $ — |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consisted of the following as of September 30, 2017 and December 31, 2016 (in thousands): September 30, 2017 December 31, 2016 Accrued interest $ 39,886 $ 43,188 Accrued real estate taxes 36,797 38,877 Accrued legal fees 34,981 17,827 Accounts payable 8,186 5,030 Accrued other 32,563 41,215 Total $ 152,413 $ 146,137 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation The Company is involved in various routine legal proceedings and claims incidental to the ordinary course of its business. There are no material legal proceedings pending against the Company, except as follows: Government Investigations and Litigation Relating to the Audit Committee Investigation As previously reported, on October 29, 2014, the Company filed a Current Report on Form 8-K (the “October 29 8-K”) reporting the Audit Committee’s conclusion, based on the preliminary findings of its investigation, that certain previously issued consolidated financial statements of the Company, including those included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2014 and June 30, 2014, and related financial information should no longer be relied upon. The Company also reported that the Audit Committee had based its conclusion on the preliminary findings of its investigation into concerns regarding accounting practices and other matters that were first reported to the Audit Committee in early September 2014 and that the Audit Committee believed that an error in the calculation of adjusted funds from operations for the first quarter of 2014 had been identified but intentionally not corrected when the Company reported its financial results for the three and six months ended June 30, 2014. Prior to the filing of the October 29 8-K, the Audit Committee previewed for the SEC the information contained in the filing. Subsequent to that filing, the SEC provided notice that it had commenced a formal investigation and issued subpoenas calling for the production of various documents. In addition, the United States Attorney’s Office for the Southern District of New York contacted counsel for the Audit Committee and counsel for the Company with respect to this matter, and the Secretary of the Commonwealth of Massachusetts issued a subpoena calling for the production of various documents. The Company has been cooperating with these regulators in their investigations. In connection with these investigations, on September 8, 2016, the United States Attorney’s Office for the Southern District of New York announced the filing of criminal charges against the Company’s former Chief Financial Officer and former Chief Accounting Officer (the “Criminal Action”), as well as the fact that the former Chief Accounting Officer pleaded guilty to the charges filed. Also on September 8, 2016, the SEC announced the filing of a civil complaint against the same two individuals in the United States District Court for the Southern District of New York (the “SEC Civil Action”). The SEC Civil Action was, for the most part, stayed pending the conclusion of the Criminal Action. On June 30, 2017, following a jury trial, the former Chief Financial Officer was convicted of the charges filed. The SEC has indicated that it intends to file a motion for summary judgment in the SEC Civil Action. As discussed below, the Company and certain of its former officers and directors have been named as defendants in a number of lawsuits filed following the October 29 8-K, including class actions, derivative actions, and individual actions seeking money damages and other relief under the federal securities laws and state laws in both federal and state courts in New York, Maryland and Arizona. Between October 30, 2014 and January 20, 2015, the Company and certain of its former officers and directors, among other individuals and entities, were named as defendants in ten securities class action complaints filed in the United States District Court for the Southern District of New York. The court consolidated these actions under the caption In re American Realty Capital Properties, Inc. Litigation, No. 15-MC-00040 (AKH) (the “SDNY Consolidated Securities Class Action”). The plaintiffs filed a second amended class action complaint on December 11, 2015, which asserted claims for violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Certain defendants, including the Company and the OP, filed motions to dismiss the second amended class action complaint (or portions thereof), which were granted in part and denied in part by the court. The Company and the OP answered the second amended class action complaint on July 29, 2016. On September 8, 2016, the court issued an order directing plaintiffs to file a third amended complaint to reflect certain prior rulings by the court. The third amended complaint was filed on September 30, 2016 and the defendants were not required to file new answers. Document production is substantially complete. Plaintiffs in the SDNY Consolidated Securities Class Action filed a motion for class certification and a hearing on the motion was held on August 24, 2017. On August 31, 2017, the court issued orders granting plaintiffs’ motion for class certification and granting summary judgment to defendants with respect to one of plaintiffs’ claims under Section 11 of the Securities Act of 1933. The defendants have filed petitions seeking leave to appeal the court’s order granting class certification. The court held a status conference on November 1, 2017 to discuss a schedule for depositions. The court directed the parties to appear for a follow-up conference on December 4, 2017 to further discuss a deposition schedule. The Company, certain of its former officers and directors, and the OP, among others, have also been named as defendants in additional individual securities fraud actions filed in the United States District Court for the Southern District of New York: Jet Capital Master Fund, L.P. v. American Realty Capital Properties, Inc., et al., No. 15-cv-307; Twin Securities, Inc. v. American Realty Capital Properties, Inc., et al., No. 15-cv-1291; HG Vora Special Opportunities Master Fund, Ltd v. American Realty Capital Properties, Inc., et al., No. 15-cv-4107; BlackRock ACS US Equity Tracker Fund, et al. v. American Realty Capital Properties, Inc. et al., No. 15-cv-08464; PIMCO Funds: PIMCO Diversified Income Fund, et al. v. American Realty Capital Properties, Inc. et al., No. 15-cv-08466; Clearline Capital Partners LP, et al. v. American Realty Capital Properties, Inc. et al., No. 15-cv-08467; Pentwater Equity Opportunities Master Fund Ltd., et al. v. American Realty Capital Properties, Inc. et al., No. 15-cv-08510; Archer Capital Master Fund, et al. v. American Realty Capital Properties, Inc. et al, No. 16-cv-05471; Atlas Master Fund et al. v. American Realty Capital Properties, Inc. et al., No. 16-cv-05475; Eton Park Fund, L.P. v. American Realty Capital Properties, Inc., et al., No. 16-cv-09393; Reliance Standard Life Insurance Company, et al, v. American Realty Capital Properties, Inc. et al, No. 17-cv-02796; and Fir Tree Capital Opportunity Master Fund, L.P. et al. v. American Realty Capital Properties, Inc. et al., No. 17-cv-04975 (the “Fir Tree Action”) (collectively, the “Opt-Out Actions”). The Opt-Out Actions assert claims arising out of allegedly false and misleading statements in connection with the purchase or sale of the Company’s securities. The Company has filed answers to the complaints in all of the Opt-Out Actions except the Fir Tree Action, in which there is a pending motion to dismiss. Discovery in the Opt-Out Actions is being coordinated with discovery in the SDNY Consolidated Securities Class Action. On October 27, 2015, the Company and certain of its former officers, among others, were named as defendants in an individual securities fraud action filed in the United States District Court for the District of Arizona, captioned Vanguard Specialized Funds, et al. v. VEREIT, Inc. et al., No. 15-cv-02157 (the “Vanguard Action”). The Vanguard Action asserts claims arising out of allegedly false and misleading statements in connection with the purchase or sale of the Company’s securities. On January 21, 2016, the Company filed a motion to transfer the Vanguard Action to the United States District Court for the Southern District of New York and a motion to dismiss the complaint. On September 29, 2016, the court entered an order denying the Company’s motion to transfer and granting in part and denying in part the Company’s motion to dismiss. The Company filed an answer to the complaint on November 4, 2016. Discovery is ongoing and a status conference is scheduled in the matter for November 14, 2017. The Company was also named as a nominal defendant, and certain of its former officers and directors were named as defendants, in shareholder derivative actions filed in the United States District Court for the Southern District of New York: Witchko v. Schorsch, et al., No. 15-cv-06043 (the “Witchko Action”); and Serafin, et al. v. Schorsch, et al., No. 15-cv-08563 (the “Serafin Action”). The court consolidated the Witchko Action and the Serafin Action (together “the SDNY Derivative Action”) and the plaintiffs designated the complaint filed in the Witchko Action as the operative complaint in the SDNY Derivative Action. The SDNY Derivative Action seeks money damages and other relief on behalf of the Company for alleged breaches of fiduciary duty, among other claims. On February 12, 2016, the Company and other defendants filed a motion to dismiss the SDNY Derivative Action due to plaintiffs’ failure to plead facts demonstrating that the Board’s decision to refuse plaintiffs’ pre-suit demands was wrongful and not a protected business judgment. On June 9, 2016, the court granted in part and denied in part the Company’s and other defendants’ motions to dismiss. Plaintiffs filed an amended complaint on June 30, 2016, and the Company and other defendants filed answers to the amended complaint on July 22, 2016. Discovery in the Witchko Action is being coordinated with discovery in the SDNY Consolidated Securities Class Action. On December 3, 2015, the Company was named as a nominal defendant and certain of its former officers and directors were named as defendants in a shareholder derivative action filed in the Circuit Court for Baltimore City in Maryland, Frampton v. Schorsch, et al., No. 24-C-15-006269 (the “Frampton Action”). The Frampton Action seeks money damages and other relief on behalf of the Company for, among other things, alleged breaches of fiduciary duty and contribution and indemnification. By order dated November 4, 2016, the Frampton Action was stayed pending resolution of the SDNY Derivative Action. On June 10, 2016, the Company was named as a nominal defendant, and certain of its former officers and directors, among others, were named as defendants, in a shareholder derivative action filed in the Supreme Court of the State of New York, Kosky v. Schorsch, et al., No. 653093/2016 (the “Kosky Action”). The Kosky Action seeks money damages and other relief on behalf of the Company for, among other things, alleged breaches of fiduciary duty, negligence, and breach of contract. On October 6, 2016, the parties filed a stipulation staying the Kosky Action until resolution of the SDNY Consolidated Securities Class Action. On October 6, 2016, the Company was named as a nominal defendant, and certain of its former officers and directors, among others, were named as defendants, in a shareholder derivative action filed in the United States District Court for the District of Maryland, captioned Meloche v. Schorsch, et al., 16-cv-03366 (the “Meloche Action”). An amended complaint was filed on January 17, 2017. The Meloche Action seeks money damages and other relief on behalf of the Company for alleged breaches of fiduciary duty and negligence. The Company filed a motion to transfer or stay the action on March 24, 2017. By order dated May 16, 2017, the Meloche Action was stayed until resolution of the SDNY Derivative Action. The Company has not reserved amounts for any of the litigation or investigation matters discussed above either because it has not concluded that a loss is probable in the particular matter or because for some matters, it believes that a loss is probable but that any probable loss or reasonably possible range of loss is not reasonably estimable at this time. The Company is currently unable to reasonably estimate a range of reasonably possible loss because these matters involve significant uncertainties, including the complexity of the facts and the legal theory and the nature of the claims. The ultimate resolution of these matters, the timing of which is unknown, may materially impact the Company’s business, financial condition, liquidity and results of operations. Cole Litigation Matter In December 2013, Realistic Partners filed a putative class action lawsuit against the Company and the then-members of its board of directors in the Supreme Court for the State of New York, captioned Realistic Partners v. American Realty Capital Partners, et al., No. 654468/2013. Cole was later added as a defendant. The plaintiff alleged, among other things, that the board of the Company breached its fiduciary duties in connection with the transactions contemplated under the Cole Merger Agreement (in connection with the merger between a wholly owned subsidiary of Cole and Cole Holdings Corporation) and that Cole aided and abetted those breaches. In January 2014, the parties entered into a memorandum of understanding regarding settlement of all claims asserted on behalf of the alleged class of the Company’s stockholders. The proposed settlement terms required the Company to make certain additional disclosures related to the Cole Merger, which were included in a Current Report on Form 8-K filed by the Company with the SEC on January 17, 2014. The memorandum of understanding also contemplated that the parties would enter into a stipulation of settlement, which would be subject to customary conditions, including confirmatory discovery and court approval following notice to the Company’s stockholders, and provided that the defendants would not object to a payment of up to $625,000 for attorneys’ fees. If the parties enter into a stipulation of settlement, which has not occurred, a hearing will be scheduled at which the court will consider the fairness, reasonableness and adequacy of the settlement. There can be no assurance that the parties will enter into a stipulation of settlement, that the court will approve any proposed settlement, or that any eventual settlement will be under the same terms as those contemplated by the memorandum of understanding. Contractual Lease Obligations The following table reflects the minimum base rent payments due from the Company over the next five years and thereafter for certain ground lease obligations, which are substantially reimbursable by our tenants, and office lease obligations (in thousands): Future Minimum Base Rent Payments Ground Leases Office Leases October 1, 2017 - December 31, 2017 $ 3,679 $ 1,227 2018 14,458 4,376 2019 14,416 4,359 2020 14,297 4,381 2021 13,589 4,368 Thereafter 231,750 8,415 Total $ 292,189 $ 27,126 Purchase Commitments Cole Capital enters into purchase and sale agreements and deposits funds into escrow towards the purchase of real estate assets, most of which are expected to be assigned to one of the Cole REITs at or prior to the closing of the respective acquisition. As of September 30, 2017 , Cole Capital was a party to eighteen purchase and sale agreements with unaffiliated third-party sellers to purchase a 100% interest in 20 properties, subject to meeting certain criteria, for an aggregate purchase price of $198.7 million , exclusive of closing costs. As of September 30, 2017 , Cole Capital had $5.2 million of property escrow deposits held by escrow agents in connection with these future property acquisitions, which may be forfeited if the transactions are not completed under certain circumstances. Cole Capital will be reimbursed by the assigned Cole REIT for amounts escrowed when the property is assigned to the respective Cole REIT. 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. The Company has not been notified by any governmental authority of any non-compliance, liability or other claim, and is not aware of any other environmental condition, in each case, that it believes will have a material adverse effect on the results of operations. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Equity | Equity Common Stock and General Partner OP Units The General Partner is authorized to issue up to 1.5 billion shares of Common Stock. As of September 30, 2017 , the General Partner had approximately 974.2 million shares of Common Stock issued and outstanding. Additionally, the Operating Partnership had approximately 974.2 million General Partner OP Units issued and outstanding as of September 30, 2017 , corresponding to the General Partner’s outstanding shares of Common Stock. Common Stock Continuous Offering Program On September 19, 2016, the Company registered a continuous equity offering program (the “Program”) pursuant to which the Company can offer and sell, from time to time through September 19, 2019 in “at-the-market” offerings or certain other transactions, shares of Common Stock with an aggregate gross sales price of up to $750.0 million , through its sales agents. As of September 30, 2017 , no shares of Common Stock have been issued pursuant to the Program. Preferred Stock and Preferred OP Units Series F Preferred Stock As of September 30, 2017 , there were approximately 42.8 million shares of Series F Preferred Stock (and approximately 42.8 million corresponding General Partner Series F Preferred Units) and 86,874 Limited Partner Series F Preferred Units issued and outstanding. The Series F Preferred Stock pays cumulative cash dividends at the rate of 6.70% per annum on their liquidation preference of $25.00 per share (equivalent to $1.675 per share on an annual basis). The Series F Preferred Stock is not redeemable by the Company before January 3, 2019, the fifth anniversary of the date on which such Series F Preferred Stock was issued (the “Initial Redemption Date”), except under circumstances intended to preserve the General Partner’s status as a REIT for federal and/or state income tax purposes and except upon the occurrence of a change of control. On and after the Initial Redemption Date, the General Partner may, at its option, redeem shares of the Series F Preferred Stock, in whole or from time to time in part, at a redemption price of $25.00 per share plus, subject to exceptions, any accrued and unpaid dividends thereon to the date fixed for redemption. The shares of Series F Preferred Stock have no stated maturity, are not subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless the General Partner redeems or otherwise repurchases them or they become convertible and are converted into Common Stock (or, if applicable, alternative consideration). The Series F Preferred Stock trades on the NYSE under the symbol “VER PRF”. The Series F Preferred Units contain the same terms as the Series F Preferred Stock. Limited Partner OP Units As of both September 30, 2017 and December 31, 2016 , the Operating Partnership had approximately 23.75 million Limited Partner OP Units outstanding. As of September 30, 2017 , the Company has received redemption requests totaling approximately 13.1 million Limited Partner OP Units from certain affiliates of the Former Manager, which would have been redeemable for a corresponding number of shares of Common Stock. The Company believes it has potential claims against recipients of those OP Units and has engaged in discussions with affiliates of the Former Manager regarding the redemption requests. Pending any resolution, the Company does not currently intend to satisfy any of the redemption requests. In light of the potential claims, since October 15, 2015, the OP has not paid distributions in respect of a substantial portion of the outstanding Limited Partner OP Units when the Common Stock dividends were otherwise paid. Common Stock Dividends On August 2, 2017, the Company’s board of directors declared a quarterly cash dividend of $0.1375 per share of common stock (equaling an annualized dividend rate of $0.55 per share) for the third quarter of 2017 to stockholders of record as of September 29, 2017, which was paid on October 16, 2017. An equivalent distribution by the Operating Partnership is applicable per OP unit, except as noted above. Share Repurchase Program On May 12, 2017, the Company’s board of directors authorized the repurchase of up to $200.0 million shares of the Company’s outstanding Common Stock over the subsequent 12 months, as market conditions warrant (the “Share Repurchase Program”). Repurchases may be made through open market purchases, privately negotiated transactions, structured or derivative transactions, including accelerated stock repurchase transactions, or other methods of acquiring shares in accordance with applicable securities laws and other legal requirements. The Share Repurchase Program does not obligate the Company to make any repurchases at a specific time or in a specific situation. Repurchases are subject to prevailing market conditions, the trading price of the stock, the Company’s financial performance and other conditions. During the nine months ended September 30, 2017 , the Company repurchased 68,759 shares of Common Stock in multiple open market transactions for $0.5 million as part of the Share Repurchase Program, which are currently deemed to be authorized but unissued shares of Common Stock. Additional shares of Common Stock repurchased by the Company under the Share Repurchase Program, if any, will be returned to the status of authorized but unissued shares of Common Stock. Common Stock Repurchases to Settle Tax Obligations Under the General Partner’s Equity Plan (defined below), individuals have the option to have the General Partner repurchase shares vesting from awards made under the Equity Plan in order to satisfy the minimum federal and state tax withholding obligations. During the nine months ended September 30, 2017 , the General Partner repurchased 222,923 shares to satisfy the federal and state tax withholding obligations on behalf of employees. |
Equity-based Compensation
Equity-based Compensation | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity-based Compensation | Equity-based Compensation Equity Plan The General Partner has adopted an equity plan (the “Equity Plan”), which provides for the grant of stock options, stock appreciation rights, restricted shares of Common Stock (“Restricted Shares”), restricted stock units (“Restricted Stock Units”), deferred stock units (“Deferred Stock Units”), dividend equivalent rights and other stock-based awards to the General Partner’s and its affiliates’ non-executive directors, officers and other employees and advisors or consultants who provide services to the General Partner or its affiliates. To date, the General Partner has granted fully vested shares of Common Stock, Restricted Shares, Restricted Stock Units and Deferred Stock Units under the Equity Plan. Restricted Shares provide for rights identical to those of Common Stock. Restricted Stock Units do not provide for any rights of a common stockholder prior to the vesting of such Restricted Stock Units. In accordance with U.S. GAAP, Restricted Shares are considered issued and outstanding. As is the case when fully vested shares of Common Stock are issued from the Equity Plan, for each Restricted Share awarded under the Equity Plan, the Operating Partnership issues a General Partner OP Unit to the General Partner with identical terms. Upon vesting of Restricted Stock Units or Deferred Stock Units, the Operating Partnership issues a General Partner OP Unit to the General Partner for each share of Common Stock issued as a result of such vesting. The General Partner has authorized and reserved a total number of shares equal to 10.0% of the total number of issued and outstanding shares of Common Stock (on a fully diluted basis assuming the redemption of all OP Units for shares of Common Stock) to be issued at any time under the Equity Plan for equity incentive awards. As of September 30, 2017 , the General Partner had cumulatively awarded under its Equity Plan approximately 4.0 million Restricted Shares, net of the forfeiture of 3.7 million Restricted Shares through that date, 4.9 million Restricted Stock Units, net of the forfeiture of 0.6 million Restricted Stock Units through that date, and 0.3 million Deferred Stock Units, collectively representing approximately 9.2 million shares of Common Stock. Accordingly, as of such date, approximately 90.6 million additional shares were available for future issuance. Restricted Shares The Company has issued Restricted Shares to certain employees and non-executive directors beginning in 2011. In addition, the Company issued Restricted Shares to employees of affiliates of the Former Manager prior to 2015. The fair value of the Restricted Shares granted to employees under the Equity Plan is generally determined using the closing stock price on the grant date and is expensed over the requisite service period on a straight-line basis. The fair value of Restricted Shares granted to non-executive directors and employees of affiliates of the Former Manager under the Equity Plan was measured based upon the fair value of goods or services received or the equity instruments granted, whichever was more reliably determinable, and was expensed in full at the date of grant. During the three and nine months ended September 30, 2017 , the Company recorded $0.4 million and $1.3 million , respectively, of compensation expense related to the Restricted Shares, which is recorded in general and administrative expense in the accompanying consolidated statements of operations. The following table details the activity of the Restricted Shares during the nine months ended September 30, 2017 : Restricted Shares Weighted-Average Grant Date Fair Value Unvested shares, December 31, 2016 562,406 $ 13.78 Vested (196,937 ) 14.03 Forfeited (46,386 ) 13.91 Unvested shares, September 30, 2017 319,083 $ 13.61 Time-Based Restricted Stock Units Under the Equity Plan, the Company may award Restricted Stock Units to employees that will vest if the recipient maintains his/her employment over the requisite service period (the “Time-Based Restricted Stock Units”). The fair value of the Time-Based Restricted Stock Units granted to employees under the Equity Plan is generally determined using the closing stock price on the grant date and is expensed over the requisite service period on a straight-line basis, which is generally three years. During the three and nine months ended September 30, 2017 , the Company recorded $1.4 million and $3.9 million , respectively, of compensation expense related to the Time-Based Restricted Stock Units, which is recorded in general and administrative expense in the accompanying consolidated statements of operations. Deferred Stock Units The Company may award Deferred Stock Units to non-executive directors under the Equity Plan (the “Deferred Stock Units”). Each Deferred Stock Unit represents the right to receive one share of Common Stock. The Deferred Stock Units provide for immediate vesting on the grant date and will be settled with Common Stock either on the earlier of the date on which the respective director separates from the Company or the third anniversary of the grant date, or if granted pursuant to the director’s voluntary election to participate in the director’s deferred compensation program, on the date the director separates from the Company (or upon a change of control or death). The fair value of the Deferred Stock Units is determined using the closing stock price on the grant date and is expensed over the requisite service period or on the grant date for awards with no requisite service period. During the three and nine months ended September 30, 2017 , the Company recorded approximately $40,000 and $1.0 million , respectively, of expense related to Deferred Stock Units, which is recorded in general and administrative expense in the accompanying consolidated statements of operations. The following table details the activity of the Time-Based Restricted Stock Units and Deferred Stock Units during the nine months ended September 30, 2017 . Time-Based Restricted Stock Units Weighted-Average Grant Date Fair Value Deferred Stock Units Weighted-Average Grant Date Fair Value Unvested units, December 31, 2016 1,085,914 $ 8.43 — $ — Granted 673,381 8.90 117,003 7.91 Vested (412,692 ) 8.62 (117,003 ) 7.91 Forfeited (16,936 ) 8.54 — — Unvested units, September 30, 2017 1,329,667 $ 8.61 — $ — Long-Term Incentive Awards The General Partner may award long-term incentive-based Restricted Stock Units (the “LTI Target Awards”) to employees under the Equity Plan. Vesting of the LTI Target Awards is based upon the General Partner’s level of achievement of total stockholder return (“TSR”), including both share price appreciation and Common Stock dividends, as measured equally against a market index and against a peer group generally over a three year period. The fair value and derived service period of the LTI Target Awards as of their grant date is determined using a Monte Carlo simulation which takes into account multiple input variables that determine the probability of satisfying the required TSR, as outlined in the award agreements. This method requires the input of assumptions, including the future dividend yield, the expected volatility of the Common Stock and the expected volatility of the market index constituents and the peer group. Compensation expense is recognized on a straight-line basis over the derived service period regardless of whether the necessary TSR is attained, provided that the requisite service condition has been achieved. During the three and nine months ended September 30, 2017 , the Company recorded $1.8 million and $5.1 million , respectively, of expense related to the LTI Target Awards, which is recorded in general and administrative expense in the accompanying consolidated statements of operations. The following table details the activity of the LTI Target Awards during the nine months ended September 30, 2017 . LTI Target Awards Weighted-Average Grant Date Fair Value Unvested units, December 31, 2016 1,522,487 $ 9.00 Granted 726,867 8.96 Forfeited (3,413 ) 11.77 Unvested units, September 30, 2017 2,245,941 $ 8.98 |
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 Cole Capital Cole Capital is contractually responsible for managing the Cole REITs’ affairs on a day-to-day basis, identifying and making acquisitions and investments on the Cole REITs’ behalf, and recommending to the respective board of directors of each of the Cole REITs an approach for providing investors with liquidity. In addition, the Company is responsible for raising capital for certain Cole REITs, advises them regarding offerings, manages relationships with participating broker-dealers and financial advisors, and provides assistance in connection with compliance matters relating to the offerings. The Company receives compensation and reimbursement for services relating to the Cole REITs’ offerings and the investment, management and disposition of their respective assets, as applicable. Offering-Related Revenue The Company generally receives a selling commission, dealer manager fee and/or a distribution and stockholder servicing fee based on the gross offering proceeds related to the sale of shares of the Cole REITs’ common stock in their primary offerings. The Company has reallowed 100% of selling commissions earned to participating broker-dealers. The Company, in its sole discretion, may reallow all or a portion of its dealer manager and distribution and stockholder servicing fee to such participating broker-dealers as a marketing and due diligence expense reimbursement, based on factors such as the volume of shares issued by such participating broker-dealers and the amount of marketing support provided. No selling commissions or dealer manager fees are paid to the Company or other broker-dealers with respect to shares issued under the respective Cole REIT’s distribution reinvestment plan, under which the stockholders may elect to have distributions reinvested in additional shares. All other organization and offering expenses associated with the sale of the Cole REITs’ common stock are paid for in advance by the Company and subject to reimbursement by the Cole REITs, up to certain limits in accordance with their respective advisory agreements and charters. As these costs are incurred, they are recorded as reimbursement revenue, up to the respective limit, and are included in offering-related revenues in the financial results for Cole Capital. Expenses paid on behalf of the Cole REITs in excess of these limits that are expected to be collected based on future estimated offering proceeds are recorded as program development costs, which are included in rent and tenant receivables and other assets, net in the accompanying consolidated balance sheets. The Company assesses the collectability of the program development costs, considering the offering period and historical and forecasted sales of shares under the Cole REITs’ respective offerings and reserves for any balances considered not collectible. Additional reserves are generally recorded if actual proceeds raised from the offerings and corresponding program development costs incurred differ from management’s assumptions. As of each of September 30, 2017 and December 31, 2016 , the Company had organization and offering costs recorded as program development costs, included in rent and tenant receivables and other assets, net in the consolidated balance sheets, of $3.8 million and $3.2 million , respectively, which were net of reserves of $5.9 million and $31.7 million , respectively. The following table shows the offering fee summary information for the Cole REITs conducting offerings as of September 30, 2017 : Selling Commissions (1) Dealer Manager Fees (2) Annual Distribution and Stockholder Servicing Fee (2) Open Programs CCPT V Class A Shares 7% 2% —% Class T Shares 3% 2% 1% (3) INAV Wrap Class Shares —% 0.55% (4) —% Advisor Class Shares up to 3.75% 0.55% (4) 0.5% (4) Institutional Class Shares —% 0.25% (4) —% CCIT III Class A Shares 7% 2% —% Class T Shares 3% 2% 1% (3) _______________________________________________ (1) The Company reallowed 100% of selling commissions to participating broker-dealers during the three and nine months ended September 30, 2017 and 2016 . (2) The Company may reallow all or a portion of its dealer manager fee and/or distribution and stockholder servicing fee to participating broker-dealers as a marketing and due diligence expense reimbursement. (3) The maximum amount of the distribution and stockholder servicing fee with respect to sales of Class T shares is 4.0% of the gross offering proceeds for CCPT V and CCIT III. Distribution and stockholder servicing fees continue to be paid after the offering closes if the 4.0% maximum has not been met. (4) Fees are accrued daily in the amount of 1/365th of a percentage of the estimated per share NAV and payable monthly in arrears. Transaction Service Revenue The Company earns acquisition fees related to the acquisition, development or construction of properties on behalf of certain of the Cole REITs. In addition, the Company is reimbursed for acquisition expenses incurred in the process of acquiring properties up to certain limits per the respective advisory agreement. The Company is not reimbursed for personnel costs in connection with services for which it receives acquisition fees or real estate commissions. In addition, the Company may earn disposition fees related to the sale of one or more properties, including those held indirectly through joint ventures, on behalf of a Cole REIT and other affiliates. The following table shows the transaction-related fees for the Cole REITs and other real estate programs as of September 30, 2017 : Program Acquisition Fees (1) Disposition Fees Performance Fees (2) Financing Coordination Fee (3) Open Programs CCPT V 2% 1% 15% — INAV — — — — CCIT III 2% 1% 15% 1% Closed Programs CCIT II 2% 1% 15% — CCPT IV 2% 1% 15% — Other Programs Various Various Various — _______________________________________________ (1) Percent taken on gross purchase price. (2) Performance fee paid only under the following circumstances: (i) if shares are listed on a national securities exchange; (ii) if the respective Cole REIT is sold or the assets are liquidated; or (iii) upon termination of the advisory agreement. In connection with such events, the performance fee will only be earned upon the return to investors of their net capital invested and a 6% annual cumulative, non-compounded return ( 8% in the case of CCIT II and CCPT IV). (3) Financing coordination fee payable for services in connection with the origination, assumption, or refinancing of any debt (other than loans advanced by the Company) to acquire properties or make other permitted investments. Management Service Revenue The Company earns advisory and asset and property management fees from certain Cole REITs and other real estate programs. The Company may also be reimbursed for expenses incurred in providing advisory and asset and property management services, subject to certain limitations. In addition, the Company earns a performance fee relating to INAV for any year in which the total return on stockholders’ capital exceeds 6% per annum on a calendar year basis. The following table shows the management fees for the Cole REITs as of September 30, 2017 : Program Asset Management / Advisory Fees (1) Performance Fees (2) Open Programs CCPT V 0.65% - 0.75% — INAV 0.90% 25% CCIT III 0.65% - 0.75% — Closed Programs CCIT II 0.65% - 0.75% — CCPT IV 0.65% - 0.75% — Other Programs Various — _______________________________________________ (1) Annualized fee based on the average monthly invested assets or average assets, as defined in the respective agreements, or net asset value, if available. (2) The performance fee is limited to 10% of the aggregate total return, for each class, for any individual year. The table below reflects the revenue earned from the Cole REITs (including closed programs, as applicable) and joint ventures for the three and nine months ended September 30, 2017 and 2016 (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Offering-related fees and reimbursements Selling commissions (1) $ 1,816 $ 5,008 $ 6,336 $ 18,112 Dealer manager and distribution fees (2) 1,278 2,237 3,766 7,292 Reimbursement revenue 788 2,300 2,619 7,446 Offering-related fees and reimbursements 3,882 9,545 12,721 32,850 Transaction service fees and reimbursements Acquisition fees 3,320 2,593 9,965 8,053 Financing coordination fee — 220 — 220 Reimbursement revenues 644 686 2,145 2,024 Transaction service fees and reimbursements 3,964 3,499 12,110 10,297 Management fees and reimbursements Asset and property management fees and leasing fees 56 53 161 159 Advisory and performance fee revenue 14,532 13,011 42,318 37,621 Reimbursement revenues 4,620 4,430 14,070 12,803 Management fees and reimbursements 19,208 17,494 56,549 50,583 Interest income on Affiliate Lines of Credit 24 — 221 308 Total related party revenues (3) $ 27,078 $ 30,538 81,601 94,038 ___________________________________ (1) The Company reallowed 100% of selling commissions to participating broker-dealers during the three and nine months ended September 30, 2017 and 2016 . (2) During the three and nine months ended September 30, 2017 , the Company reallowed $0.6 million and $1.6 million , respectively, of dealer manager fees and/or distribution and stockholder servicing fees to participating broker-dealers as a marketing and due diligence expense reimbursement. During the three and nine months ended September 30, 2016 , the Company reallowed $0.9 million and $2.8 million , respectively, of such fees. (3) Total related party revenues excludes fees earned from 1031 real estate programs of $0.1 million and $1.6 million for the three and nine months ended September 30, 2017 , respectively, and $0.5 million and $1.1 million for the three and nine months ended September 30, 2016 , respectively. Investment in the Cole REITs As of September 30, 2017 and December 31, 2016 , the Company owned aggregate equity investments of $3.8 million and $4.7 million , respectively, in the Cole REITs and other affiliated offerings, presented in investment in unconsolidated entities in the consolidated balance sheets. The Company accounts for these investments using the equity method of accounting which requires the investment to be initially recorded at cost and subsequently adjusted for the Company’s share of equity in the respective Cole REIT’s earnings and distributions. The Company records its proportionate share of net income or loss from the Cole REITs in equity in income and gain on disposition of unconsolidated entities in the consolidated statements of operations. During the three and nine months ended September 30, 2017 , the Company recognized $45,000 and $0.5 million of net loss, respectively, from the Cole REITs. During the three and nine months ended September 30, 2016 , the Company recognized $1,000 and $128,000 of net loss, respectively, from the Cole REITs. The table below presents certain information related to the Company’s investments in the Cole REITs as of September 30, 2017 (carrying amount in thousands): September 30, 2017 Cole REIT % of Outstanding Shares Owned Carrying Amount of Investment CCPT V 0.77% $ 1,270 INAV 0.06% 128 CCIT II 0.43% 1,154 CCIT III 16.89% 731 CCPT IV 0.01% 107 Funds not yet in offering 100.00% 400 Total $ 3,790 Due to Affiliates Due to affiliates, as reported in the accompanying consolidated balance sheets, was $8,000 and $16,000 as of September 30, 2017 and December 31, 2016 , respectively, related to amounts due to the Cole REITs. Due from Affiliates, Net As of September 30, 2017 and December 31, 2016 , $6.6 million and $11.0 million , respectively, was expected to be collected from affiliates, excluding any outstanding balances from a line of credit with one of the Cole REITs, discussed below, related to services provided by the Company and expenses subject to reimbursement by the Cole REITs in accordance with their respective advisory and property management agreements. On September 23, 2016, the Company entered into a $30.0 million revolving line of credit (the “Subordinate Promissory Note”) with Cole Corporate Income Operating Partnership III, LP (“CCI III OP”), the operating partnership of CCIT III (the “Subordinate Promissory Note Agreement”). The Subordinate Promissory Note bears variable interest rates of one-month LIBOR plus the Credit Facility Margin (as defined in the Subordinate Promissory Note Agreement), which ranges from 2.20% to 2.75% , plus 1.75% and matures on September 22, 2017. On March 28, 2017, CCI III OP entered into a modification agreement in order to extend the maturity date of the Subordinate Promissory Note from September 22, 2017 to September 30, 2018. During the three months ended September 30, 2017 , CCI III OP repaid all of the outstanding borrowings under the Subordinate Promissory Note. As of December 31, 2016 , the Subordinate Promissory Note had an interest rate of 5.12% and $10.3 million was outstanding. |
Net Income (Loss) Per Share_Uni
Net Income (Loss) Per Share/Unit | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share/Unit | Net Income (Loss) Per Share/Unit The General Partner’s unvested Restricted Shares contain non-forfeitable rights to dividends and are considered to be participating securities in accordance with U.S. GAAP and, therefore, are included in the computation of earnings per share under the two-class computation method. Under the two-class computation method, net losses are not allocated to participating securities unless the holder of the security has a contractual obligation to share in the losses. The unvested Restricted Shares are not allocated losses as the awards do not have a contractual obligation to share in losses of the General Partner. The two-class computation method is an earnings allocation formula that determines earnings per share for each class of shares of Common Stock and participating securities according to dividends declared (or accumulated) and participation rights in undistributed earnings. Net Income (Loss) Per Share The following is a summary of the basic and diluted net income (loss) per share computation for the General Partner for the three and nine months ended September 30, 2017 and 2016 (dollar amounts in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Net income (loss) attributable to the General Partner $ 16,094 $ 29,495 $ 63,940 $ (80,445 ) Dividends to preferred shares and units (17,973 ) (17,973 ) (53,919 ) (53,919 ) Net (loss) income available to the General Partner (1,879 ) 11,522 10,021 (134,364 ) Earnings allocated to participating securities (43 ) (154 ) (434 ) (400 ) Income attributable to limited partners — 739 1,542 — Net (loss) income available to common stockholders used in basic and diluted net loss per share $ (1,922 ) $ 12,107 $ 11,129 $ (134,764 ) Weighted average number of common stock outstanding - basic 974,167,088 943,480,170 974,060,160 917,233,898 Effect of Limited Partner OP Units and dilutive securities — 25,206,373 24,025,813 — Weighted average number of common stock outstanding - diluted 974,167,088 968,686,543 998,085,973 917,233,898 Basic and diluted net (loss) income per share attributable to common stockholders $ (0.00 ) $ 0.01 $ 0.01 $ (0.15 ) For the three months ended September 30, 2017 , diluted net loss per share attributable to common stockholders excludes approximately 0.5 million unvested Restricted Shares and Restricted Stock Units and approximately 23.7 million OP Units as the effect would have been antidilutive. For the nine months ended September 30, 2017 , diluted net income per share attributable to common stockholders excludes approximately 84,000 unvested Restricted Shares as the effect would have been antidilutive. For the nine months ended September 30, 2016 , diluted net loss per share attributable to common stockholders excludes approximately 0.9 million unvested Restricted Shares and Restricted Stock Units and approximately 23.8 million OP Units as the effect would have been antidilutive. Net Income (Loss) Per Unit The following is a summary of the basic and diluted net income (loss) per unit attributable to common unitholders, which includes all common general partner unitholders and limited partner unitholders. The computation for the OP for the three and nine months ended September 30, 2017 and 2016 (dollar amounts in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Net income (loss) attributable to the Operating Partnership $ 16,485 $ 30,234 $ 65,482 $ (82,578 ) Dividends to preferred units (17,973 ) (17,973 ) (53,919 ) (53,919 ) Net (loss) income available to the Operating Partnership (1,488 ) 12,261 11,563 (136,497 ) Earnings allocated to participating units (43 ) (154 ) (434 ) (400 ) Net (loss) income available to common unitholders used in basic and diluted net loss per unit $ (1,531 ) $ 12,107 $ 11,129 $ (136,897 ) Weighted average number of common units outstanding - basic 997,915,435 967,237,921 997,808,507 940,995,665 Effect of dilutive securities — 1,448,622 277,466 — Weighted average number of common units outstanding - diluted 997,915,435 968,686,543 998,085,973 940,995,665 Basic and diluted net (loss) income per unit attributable to common unitholders $ (0.00 ) $ 0.01 $ 0.01 $ (0.15 ) For the three months ended September 30, 2017 , diluted net loss per unit attributable to common unitholders excludes approximately 0.5 million unvested Restricted Shares and Restricted Stock Units as the effect would have been antidilutive. For the nine months ended September 30, 2017 , diluted net income per unit attributable to common unitholders excludes approximately 84,000 unvested Restricted Shares as the effect would have been antidilutive. For the nine months ended September 30, 2016 , diluted net loss per unit attributable to common unitholders excludes approximately 0.9 million unvested Restricted Shares and Restricted Stock Units as the effect would have been antidilutive. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The General Partner currently qualifies and has elected to be taxed as a REIT for U.S. federal income tax purposes under Sections 856 through 860 of the Internal Revenue Code. As a REIT, the General Partner generally is not subject to federal income tax, with the exception of its TRS entities. However, the General Partner, including its TRS entities, and the Operating Partnership are still subject to certain state and local income and franchise taxes in the various jurisdictions in which they operate. Cole Capital Income Taxes Based on the above, Cole Capital’s business, substantially all of which is conducted through a TRS, recognized a provision of $0.9 million and $3.4 million for the three and nine months ended September 30, 2017 and a provision of $0.1 million and a benefit of $3.3 million for the three and nine months ended September 30, 2016 , respectively, which are included in provision for income taxes in the accompanying consolidated statements of operations. REI Income Taxes The REI segment recognized a provision of $1.2 million and $5.4 million for the three and nine months ended September 30, 2017 , respectively, and a provision of $1.5 million and $4.7 million for the three and nine months ended September 30, 2016 , respectively, which are included in provision for income taxes in the accompanying consolidated statements of operations. The Company had no unrecognized tax benefits as of or during the nine months ended September 30, 2017 and 2016 . Any interest and penalties related to unrecognized tax benefits would be recognized in provision for income taxes in the accompanying consolidated statements of operations. The Company files income tax returns in the U.S. federal jurisdiction, Canadian federal jurisdiction and various state and local jurisdictions, and is subject to routine examinations by the respective tax authorities. With few exceptions, the Company is no longer subject to federal or state examinations by tax authorities for years before 2012. As of September 30, 2017 , the OP and the General Partner had no material uncertain income tax positions. The tax years subsequent to and including the fiscal year ended December 31, 2012 remain open to examination by the major taxing jurisdictions to which the OP, the General Partner, American Realty Capital Trust III, Inc., CapLease, Inc., American Realty Capital Trust IV, Inc., Cole Real Estate Investments, Inc., and Cole Credit Property Trust, Inc. are subject. |
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 : Real Estate Investment Activity From October 1, 2017 through November 1, 2017, the Company disposed of four properties for an aggregate gross sales price of $41.5 million , of which the Company’s share was $40.5 million based on the Company’s ownership interest in a consolidated joint venture, and an estimated gain of $9.9 million . One of the Unconsolidated Joint Ventures sold a land parcel for an aggregate gross sales price of $2.5 million , of which the Company’s share was $2.2 million based on the Company’s ownership interest in the unconsolidated joint venture. In addition, the Company acquired six properties for an aggregate purchase price of $45.0 million , excluding capitalized external acquisition-related expenses. Common Stock Dividend On November 7, 2017, the Company’s board of directors declared a quarterly cash dividend of $0.1375 per share of common stock (equaling an annualized dividend rate of $0.55 per share) for the fourth quarter of 2017 to stockholders of record as of December 29, 2017, which will be paid on January 16, 2018. An equivalent distribution by the Operating Partnership is applicable per OP unit. Preferred Stock Dividend On November 7, 2017, the Company’s board of directors declared a monthly cash dividend to holders of the Series F Preferred Stock for January 2018 through March 2018 with respect to the periods included in the table below. The corresponding record and payment dates for each month's Series F Preferred Stock dividend are also shown in the table below. The dividend for the Series F Preferred Stock accrues daily on a 360 -day annual basis equal to an annualized dividend rate of $1.675 per share, or $0.1395833 per 30 -day month. Period Record Date Payment Date December 15, 2017 - January 14, 2018 January 1, 2018 January 16, 2018 January 15, 2018 - February 14, 2018 February 1, 2018 February 15, 2018 February 15, 2018 - March 14, 2018 March 1, 2018 March 15, 2018 |
Summary of Significant Accoun30
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Accounting | The consolidated financial statements of the Company presented herein include the accounts of the General Partner and its consolidated subsidiaries, including the OP. All intercompany transactions have been eliminated upon consolidation. The financial statements are prepared on the accrual basis of accounting in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair presentation of results for the interim periods. The results of operations for the three and nine months ended September 30, 2017 are not necessarily indicative of the results for the entire year or any subsequent interim period. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2016 of the Company, which are included in the Company’s Annual Report on Form 10-K filed on February 23, 2017. There have been no significant changes to the Company’s significant accounting policies during the nine months ended September 30, 2017 , except the Company adopted Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”), as disclosed within the “Acquisition-Related Expenses and Litigation and Other Non-routine Costs” and “Recent Accounting Pronouncements” sections herein. Information and footnote disclosures normally included in financial statements have been condensed or omitted pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) and U.S. GAAP. |
Principles of Consolidation and Basis of Presentation | The consolidated financial statements include the accounts of the Company and its consolidated subsidiaries and consolidated joint venture arrangements. The portions of the consolidated joint venture arrangements not owned by the Company are presented as non-controlling interests in VEREIT’s and the OP’s consolidated balance sheets, statements of operations, statements of comprehensive income (loss) and statements of changes in equity. In addition, as described in Note 1 – Organization , certain third parties have been issued OP Units. Holders of OP Units are considered to be non-controlling interest holders in the OP and their ownership interest in the limited partner’s share is presented as non-controlling interests in VEREIT’s consolidated balance sheets, statements of operations, statements of comprehensive income (loss) and statements of changes in equity. Further, a portion of the earnings and losses of the OP are allocated to non-controlling interest holders based on their respective ownership percentages. Upon conversion of OP Units to Common Stock, any difference between the fair value of shares of Common Stock issued and the carrying value of the OP Units converted is recorded as a component of equity. As of both September 30, 2017 and December 31, 2016 , there were approximately 23.75 million Limited Partner OP Units outstanding. 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 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 then qualitatively assesses whether it is (or is not) the primary beneficiary of a VIE, which is generally defined as the party who has a controlling financial interest in the 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 these VIEs based on standards set forth in U.S. GAAP. |
Acquisition-Related Expenses and Litigation and Other Non-routine Costs | As further disclosed in the “Recent Accounting Pronouncements” section herein, in January 2017, the Company elected to early adopt 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. During the nine months ended September 30, 2017 , all real estate acquisitions qualified as asset acquisitions, and external acquisition costs related to these asset acquisitions were capitalized. Prior to January 1, 2017, external costs related to property acquisitions were expensed as incurred. Internal costs, such as employee salaries, related to activities necessary to complete, or affect, self-originating asset acquisitions or business combinations are classified as acquisition-related expenses in the accompanying consolidated statements of operations. Any costs incurred as a result of a business combination will be classified as acquisition-related expenses or other non-routine transaction related expenses and expensed as incurred. External acquisition-related costs incurred in relation to mergers and litigation resulting therefrom and other non-routine transactions are included in litigation and other non-routine costs, net of insurance recoveries in the consolidated statements of operations. The Company has also incurred legal fees and other costs associated with the Audit Committee Investigation (defined below) and the litigations and investigations resulting therefrom, which are considered non-routine. The Company has directors’ and officers’ insurance and the insurance carriers have paid certain defense costs subject to standard reservation of rights under the respective policies. |
Recent Accounting Pronouncements | In May 2014, the U.S. Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”) (Topic 606), 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 financial statements and internal accounting processes and controls. Once ASU 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. Based upon a preliminary analysis, the Company does not expect that the adoption of ASU 2014-09 will have a material impact on its REI segment. The Company is currently evaluating whether the adoption of ASU 2014-09 will have any impact on the timing of revenue recognition of the Cole Capital segment. 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 U.S. 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 U.S. 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. The Company expects the accounting for leases pursuant to which the Company is the lessee to change and is currently evaluating the impact. Leases pursuant to which the Company is the lessee primarily consist of corporate offices and ground leases. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) (“ASU 2016-13”). ASU 2016-13 is intended to improve financial reporting by requiring more timely recognition of credit losses on loans and other financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investment in leases and other such commitments. ASU 2016-13 requires that financial 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 U.S. GAAP. ASU 2016-13 is effective for fiscal years, and interim periods within, beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within, beginning after December 15, 2018. The Company is currently evaluating the impact this amendment will have on its consolidated financial statements. In August 2016, the FASB issued ASU 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, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims and distributions received from equity method investments. The Company is currently evaluating the impact of this amendment on distributions received from equity method investments and does not expect the other three items to have a material impact on its statement of cash flows. In November 2016, the FASB issued ASU 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 January 2017, the FASB issued 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 guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods, with early adoption permitted, and is required to be applied prospectively to any transactions occurring within the period of adoption. The Company has elected to early adopt ASU 2017-01 effective January 1, 2017. As the Company expects that a majority of its real estate acquisitions will be considered asset acquisitions, external acquisition costs related to these asset acquisitions will be capitalized. Prior to 2017, all acquisition-related costs were expensed as incurred. The adoption of this pronouncement resulted in capitalization of $1.9 million of external acquisitions-related costs during the nine months ended September 30, 2017 . Internal costs, such as employee salaries, related to activities necessary to complete, or affect, self-originating asset acquisitions or business combinations are classified as acquisition-related expenses in the accompanying consolidated statements of operations. Upon adoption of ASU 2017-01, the Company's real estate dispositions qualify as asset dispositions and as such, no portion of the Company’s REI segment’s goodwill was allocated to the cost basis of these assets in determining the gain or loss on disposition of real estate and held for sale assets. Prior to January 1, 2017, when the Company disposed of a property or classified a property as held for sale, it constituted a business per U.S. GAAP and the Company allocated a portion of the REI segment's goodwill to the cost basis of that property in determining the gain or loss on the disposition of real estate and held for sale assets. In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Others (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which simplifies the measurement of goodwill impairment by eliminating Step 2 from the goodwill impairment test (comparing the implied fair value of goodwill with the carrying amount of goodwill). ASU 2017-04 is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. The adoption of this standard is applied prospectively and may result in a different impairment charge as compared to the existing standard. The Company is currently evaluating the impact this amendment will have on its consolidated financial statements and whether to early adopt during the 2017 fourth quarter annual impairment test. In February 2017, the FASB issued ASU 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) requires entities 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 will 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 May 2017, FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting. This ASU clarifies which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions and classification of the awards are the same immediately before and after the modification. This ASU is effective for fiscal years beginning after December 15, 2017 and interim periods therein, with early adoption permitted. The Company does not expect that the adoption of ASU 2017-09 will have a material impact on its consolidated financial statements. In August 2017, FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. 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 it will have a material impact on its consolidated financial statements. |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Litigation and Other Non-Routine Transaction Related Expenses | Litigation and other non-routine costs include the following costs (amounts in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Litigation and other non-routine costs: Audit Committee Investigation and related matters (1) $ 9,476 $ 5,221 $ 36,501 $ 13,413 Legal fees and expenses (2) 31 59 292 155 Total costs incurred 9,507 5,280 36,793 13,568 Insurance recoveries — (650 ) — (11,196 ) Total $ 9,507 $ 4,630 $ 36,793 $ 2,372 ___________________________________ (1) Includes all fees and costs associated with the previously-announced investigation conducted by the audit committee (the “Audit Committee”) of the Company’s board of directors (the “Audit Committee Investigation”) and various litigations and investigations prompted by the results of the Audit Committee Investigation, including fees and costs incurred pursuant to the Company’s advancement obligations and in connection with related insurance recovery matters. (2) Includes legal fees and expenses associated with litigation resulting from prior mergers. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Summary of Comparative Financial Results and Total Assets | The following tables present a summary of the comparative financial results and total assets for each segment (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 REI segment: Revenues: Rental income $ 282,341 $ 303,383 $ 862,371 $ 928,706 Direct financing lease income 376 494 1,212 1,598 Operating expense reimbursements 23,826 27,969 72,103 77,862 Total real estate investment revenues 306,543 331,846 935,686 1,008,166 Operating expenses: Acquisition-related 909 90 2,246 334 Litigation and other non-routine costs, net of insurance recoveries 9,507 4,630 36,793 2,372 Property operating 30,645 34,820 96,288 107,832 General and administrative 13,075 12,069 39,929 37,998 Depreciation and amortization 171,576 187,897 529,306 574,124 Impairment of real estate 6,363 6,872 30,857 176,214 Total operating expenses 232,075 246,378 735,419 898,874 Operating income 74,468 85,468 200,267 109,292 Other (expense) income: Interest expense (71,708 ) (79,869 ) (219,072 ) (242,763 ) Gain (loss) on extinguishment and forgiveness of debt, net 9,756 (2,003 ) 18,691 (1,751 ) Other income, net 1,405 1,649 3,834 3,433 Equity in income and gain on disposition of unconsolidated entities 374 212 805 10,686 Gain (loss) on derivative instruments, net 1,294 (2,023 ) 2,710 (3,286 ) Total other expenses, net (58,879 ) (82,034 ) (193,032 ) (233,681 ) Income (loss) before taxes and real estate dispositions 15,589 3,434 7,235 (124,389 ) (Loss) gain on disposition of real estate and held for sale assets, net (688 ) 28,111 54,432 45,723 Income (loss) before taxes 14,901 31,545 61,667 (78,666 ) Provision for income taxes (1,185 ) (1,539 ) (5,439 ) (4,695 ) Net income (loss) $ 13,716 $ 30,006 $ 56,228 $ (83,361 ) Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Cole Capital segment: Revenues: Offering-related fees and reimbursements $ 3,882 $ 9,545 $ 12,721 $ 32,850 Transaction service fees and reimbursements 4,000 3,779 13,159 10,639 Management fees and reimbursements 19,303 17,745 57,121 51,299 Total Cole Capital revenues 27,185 31,069 83,001 94,788 Operating expenses: Cole Capital reallowed fees and commissions 2,373 5,897 7,907 20,940 Acquisition-related — — 36 39 General and administrative 16,721 17,692 48,426 54,257 Depreciation and amortization 4,947 7,276 14,657 22,702 Total operating expenses 24,041 30,865 71,026 97,938 Operating income (loss) 3,144 204 11,975 (3,150 ) Total other income, net 502 95 706 589 Income (loss) before taxes 3,646 299 12,681 (2,561 ) (Provision for) benefit from income taxes (868 ) (59 ) (3,439 ) 3,321 Net income $ 2,778 $ 240 $ 9,242 $ 760 Total Company: Total revenues $ 333,728 $ 362,915 $ 1,018,687 $ 1,102,954 Total operating expenses $ (256,116 ) $ (277,243 ) $ (806,445 ) $ (996,812 ) Total other expense, net $ (58,377 ) $ (81,939 ) $ (192,326 ) $ (233,092 ) Net income (loss) $ 16,494 $ 30,246 $ 65,470 $ (82,601 ) Total Assets September 30, 2017 December 31, 2016 REI segment $ 14,522,637 $ 15,337,623 Cole Capital segment 214,096 249,951 Total Company $ 14,736,733 $ 15,587,574 |
Goodwill and Other Intangibles
Goodwill and Other Intangibles (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible lease assets and liabilities of the Company consisted of the following as of September 30, 2017 and December 31, 2016 (amounts in thousands, except weighted-average useful life): Weighted-Average Useful Life September 30, 2017 December 31, 2016 Intangible lease assets: In-place leases and other intangibles, net of accumulated amortization of $580,588 and $494,131, respectively 15.1 $ 1,100,403 $ 1,192,756 Leasing commissions, net of accumulated amortization of $2,601 and $1,836, respectively 10.5 11,117 10,231 Above-market lease assets and deferred lease incentives, net of accumulated amortization of $83,670 and $69,670, respectively 16.2 248,925 275,897 Total intangible lease assets, net $ 1,360,445 $ 1,478,884 Intangible lease liabilities: Below-market leases, net of accumulated amortization of $70,070 and $56,891, respectively 18.4 $ 204,051 $ 224,023 |
Schedule of Projected Amortization Expense and Adjustments | The following table provides the projected amortization expense and adjustments to rental income related to the intangible lease assets and liabilities for the next five years as of September 30, 2017 (amounts in thousands) : October 1, 2017 - December 31, 2017 2018 2019 2020 2021 In-place leases and other intangibles: Total projected to be included in amortization expense $ 36,584 $ 134,741 $ 124,069 $ 116,168 $ 107,582 Leasing commissions: Total projected to be included in amortization expense 423 1,207 1,192 1,170 1,133 Above-market lease assets and deferred lease incentives: Total projected to be deducted from rental income 6,054 23,615 21,701 21,265 20,857 Below-market lease liabilities: Total projected to be included in rental income 6,351 19,283 18,578 17,420 16,093 |
Real Estate Investments (Tables
Real Estate Investments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Real Estate [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table presents the allocation of the fair values of the assets acquired and liabilities assumed during the periods presented (in thousands): Nine Months Ended September 30, 2017 2016 Real estate investments, at cost: Land $ 82,337 $ 4,215 Buildings, fixtures and improvements 293,419 14,555 Total tangible assets 375,756 18,770 Acquired intangible assets: In-place leases and other intangibles (1) 68,306 1,182 Above-market leases (2) 10,270 — Assumed intangible liabilities: Below-market leases (3) (395 ) — Total purchase price of assets acquired $ 453,937 $ 19,952 ____________________________________ (1) The weighted average amortization period for acquired in-place leases and other intangibles is 16.7 years and 14.5 years for 2017 Acquisitions and 2016 Acquisitions, respectively. (2) The weighted average amortization period for acquired above-market leases is 18.1 years for 2017 Acquisitions. (3) The weighted average amortization period for acquired intangible lease liabilities is 20.0 years for 2017 Acquisitions. |
Schedule of Future Minimum Operating Lease Base Rent Payments | The following table presents future minimum base rent payments due to the Company over the next five years and thereafter. These amounts exclude contingent rent payments, as applicable, that may be collected from certain tenants based on provisions related to sales thresholds and increases in annual rent based on exceeding certain economic indexes among other items (in thousands): Future Minimum Operating Lease Future Minimum (1) October 1, 2017 - December 31, 2017 $ 265,570 $ 867 2018 1,084,301 3,016 2019 1,050,277 2,397 2020 1,015,625 2,023 2021 975,554 1,899 Thereafter 6,441,525 3,993 Total $ 10,832,852 $ 14,195 ____________________________________ (1) 29 properties are subject to direct financing leases and, therefore, revenue is recognized as direct financing lease income on the discounted cash flows of the lease payments. Amounts reflected are the minimum base rental cash payments due to the Company under the lease agreements on these respective properties. The following table reflects the minimum base rent payments due from the Company over the next five years and thereafter for certain ground lease obligations, which are substantially reimbursable by our tenants, and office lease obligations (in thousands): Future Minimum Base Rent Payments Ground Leases Office Leases October 1, 2017 - December 31, 2017 $ 3,679 $ 1,227 2018 14,458 4,376 2019 14,416 4,359 2020 14,297 4,381 2021 13,589 4,368 Thereafter 231,750 8,415 Total $ 292,189 $ 27,126 |
Schedule of Future Minimum Direct Financing Lease Payments | The following table presents future minimum base rent payments due to the Company over the next five years and thereafter. These amounts exclude contingent rent payments, as applicable, that may be collected from certain tenants based on provisions related to sales thresholds and increases in annual rent based on exceeding certain economic indexes among other items (in thousands): Future Minimum Operating Lease Future Minimum (1) October 1, 2017 - December 31, 2017 $ 265,570 $ 867 2018 1,084,301 3,016 2019 1,050,277 2,397 2020 1,015,625 2,023 2021 975,554 1,899 Thereafter 6,441,525 3,993 Total $ 10,832,852 $ 14,195 ____________________________________ (1) 29 properties are subject to direct financing leases and, therefore, revenue is recognized as direct financing lease income on the discounted cash flows of the lease payments. Amounts reflected are the minimum base rental cash payments due to the Company under the lease agreements on these respective properties. |
Schedule of Capital Leased Assets | The components of the Company’s net investment in direct financing leases as of September 30, 2017 and December 31, 2016 are as follows (in thousands): September 30, 2017 December 31, 2016 Future minimum lease payments receivable $ 14,195 $ 17,147 Unguaranteed residual value of property 23,146 27,450 Unearned income (3,939 ) (5,142 ) Net investment in direct financing leases $ 33,402 $ 39,455 |
Summary of Unconsolidated Joint Ventures | The following is a summary of the Company’s percentage ownership and carrying amount related to each of the Unconsolidated Joint Ventures as of September 30, 2017 and December 31, 2016 (dollar amounts in thousands): Carrying Amount of Investment (2) Name of Joint Venture Partner Ownership % (1) September 30, 2017 December 31, 2016 Cole/Mosaic JV South Elgin IL, LLC Affiliate of Mosaic Properties and Development, LLC 50% $ 5,621 $ 5,891 Cole/Faison JV Bethlehem GA, LLC Faison-Winder Investors, LLC 90% 34,690 35,438 $ 40,311 $ 41,329 _______________________________________________ (1) The Company’s ownership interest in this table reflects its legal ownership interest. Legal ownership may, at times, not equal the Company’s economic interest in the listed properties because of various provisions in certain joint venture agreements regarding distributions of cash flow based on capital account balances, allocations of profits and losses and payments of preferred returns. As a result, the Company’s actual economic interest (as distinct from its legal ownership interest) in certain of the properties could fluctuate from time to time and may not wholly align with its legal ownership interests. (2) The total carrying amount of the investments was greater than the underlying equity in net assets by $6.1 million and $6.4 million as of September 30, 2017 and December 31, 2016 , respectively. This difference relates to a purchase price allocation of goodwill and a step up in fair value of the investment assets acquired in connection with the Cole Merger. The step up in fair value was allocated to the individual investment assets and is being amortized in accordance with the Company’s depreciation policy. |
Investment Securities, at Fai35
Investment Securities, at Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Unrealized Gains and Losses on Investment Securities | The following tables detail the unrealized gains and losses on investment securities as of September 30, 2017 and December 31, 2016 (in thousands): September 30, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value CMBS $ 43,306 $ 1,086 $ (2,715 ) $ 41,677 December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value CMBS $ 48,297 $ 1,248 $ (2,330 ) $ 47,215 |
Schedule of Maturity of CMBS | The scheduled maturity of the Company’s CMBS as of September 30, 2017 are as follows (in thousands): September 30, 2017 Amortized Cost Fair Value Due within one year $ — $ — Due after one year through five years 17,984 18,430 Due after five years through 10 years 12,011 9,336 Due after 10 years 13,311 13,911 Total $ 43,306 $ 41,677 |
Mortgage Notes Receivable (Tabl
Mortgage Notes Receivable (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
Schedule of Mortgage Notes Receivable | The following table details the mortgage notes receivable as of September 30, 2017 (dollar amounts in thousands): Outstanding Balance Carrying Value Interest Rate Range Maturity Date Range $ 22,700 $ 20,510 5.9 % – 6.8% December 2026 – January 2033 |
Schedule of Aggregate Principal Payments Due on Mortgage Notes Receivable | The following table summarizes the scheduled aggregate principal payments due to the Company on the mortgage notes receivable subsequent to September 30, 2017 (in thousands): Outstanding Balance Due within one year $ 915 Due after one year through five years 4,341 Due after five years through 10 years 7,071 Due after 10 years (1) 14,175 Total $ 26,502 ____________________________________ (1) Includes additional $3.8 million of interest that will be capitalized into the outstanding balance of the mortgage note receivable subsequent to September 30, 2017 . |
Rent and Tenant Receivables a37
Rent and Tenant Receivables and Other Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Rent and Tenant Receivables and Other Assets, Net | Rent and tenant receivables and other assets, net consisted of the following as of September 30, 2017 and December 31, 2016 (in thousands): September 30, 2017 December 31, 2016 Accounts receivable, net (1) $ 38,182 $ 49,148 Straight-line rent receivable, net (2) 220,975 201,584 Deferred costs, net (3) 8,347 16,154 Prepaid expenses 10,147 6,814 Leasehold improvements, property and equipment, net (4) 12,982 14,702 Restricted escrow deposits 5,644 5,741 Deferred tax asset and tax receivable 32,753 31,113 Program development costs, net (5) 3,828 3,161 Interest rate swap assets, at fair value 351 199 Other assets 3,729 2,089 Total $ 336,938 $ 330,705 ___________________________________ (1) Allowance for doubtful accounts included in accounts receivable, net was $6.0 million and $5.7 million as of September 30, 2017 and December 31, 2016 , respectively. (2) Allowance for doubtful accounts included in straight-line rent receivable, net was $1.6 million and $0.3 million as of September 30, 2017 and December 31, 2016 , respectively. (3) Amortization expense for deferred costs related to the revolving credit facility totaled $2.6 million for each of the three months ended September 30, 2017 and 2016 and $7.8 million for each of the nine months ended September 30, 2017 and 2016 , respectively. Accumulated amortization for deferred costs related to the revolving credit facility were $37.6 million and $29.8 million as of September 30, 2017 and December 31, 2016 , respectively. (4) Amortization expense for leasehold improvements totaled $0.3 million and $0.9 million for the three and nine months ended September 30, 2017 and 2016 , respectively. Accumulated amortization was $4.4 million and $3.5 million as of September 30, 2017 and December 31, 2016 , respectively. Depreciation expense for property and equipment totaled $0.5 million and $1.3 million for the three and nine months ended September 30, 2017 , respectively, and $0.6 million and $1.6 million for the three and nine months ended September 30, 2016 , respectively. Accumulated depreciation was $5.2 million and $3.9 million as of September 30, 2017 and December 31, 2016 , respectively. (5) As of September 30, 2017 and December 31, 2016 , the Company had reserves of $5.9 million and $31.7 million , respectively, relating to the program development costs. |
Fair Value Measures (Tables)
Fair Value Measures (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis, based on market rates of the Company’s positions and other observable interest rates as discussed in Note 6 – Investment Securities, at Fair Value and Note 11 – Derivatives and Hedging Activities , as of September 30, 2017 and December 31, 2016 , aggregated by the level in the fair value hierarchy within which those instruments fall (in thousands): Level 1 Level 2 Level 3 Balance as of September 30, 2017 Assets: CMBS $ — $ — $ 41,677 $ 41,677 Derivative assets — 351 — 351 Total assets $ — $ 351 $ 41,677 $ 42,028 Level 1 Level 2 Level 3 Balance as of December 31, 2016 Assets: CMBS $ — $ — $ 47,215 $ 47,215 Derivative assets — 199 — 199 Total assets $ — $ 199 $ 47,215 $ 47,414 Liabilities: Derivative liabilities $ — $ (3,547 ) $ — $ (3,547 ) |
Reconciliations of Changes in Liabilities with Level 3 Inputs | The following are reconciliations of the changes in assets and liabilities with Level 3 inputs in the fair value hierarchy for the nine months ended September 30, 2017 and 2016 (in thousands): CMBS Balance as of December 31, 2016 $ 47,215 Total gains and losses Unrealized loss included in other comprehensive income, net (547 ) Purchases, issuance, settlements Return of principal received (4,077 ) Amortization included in net income, net (914 ) Ending Balance, September 30, 2017 $ 41,677 CMBS Balance as of December 31, 2015 $ 53,304 Total gains and losses Unrealized loss included in other comprehensive loss, net (1,599 ) Purchases, issuance, settlements Return of principal received (3,786 ) Accretion included in net loss, net 179 Ending Balance, September 30, 2016 $ 48,098 |
Reconciliations of Changes in Assets with Level 3 Inputs | The following are reconciliations of the changes in assets and liabilities with Level 3 inputs in the fair value hierarchy for the nine months ended September 30, 2017 and 2016 (in thousands): CMBS Balance as of December 31, 2016 $ 47,215 Total gains and losses Unrealized loss included in other comprehensive income, net (547 ) Purchases, issuance, settlements Return of principal received (4,077 ) Amortization included in net income, net (914 ) Ending Balance, September 30, 2017 $ 41,677 CMBS Balance as of December 31, 2015 $ 53,304 Total gains and losses Unrealized loss included in other comprehensive loss, net (1,599 ) Purchases, issuance, settlements Return of principal received (3,786 ) Accretion included in net loss, net 179 Ending Balance, September 30, 2016 $ 48,098 |
Fair Value, by Balance Sheet Grouping | The fair values of the Company’s financial instruments that are not reported at fair value in the consolidated balance sheets are reported below (dollar amounts in thousands): Level Carrying Amount at September 30, 2017 Fair Value at September 30, 2017 Carrying Amount at December 31, 2016 Fair Value at December 31, 2016 Assets: Mortgage notes receivable 3 $ 20,510 $ 28,539 $ 22,764 $ 30,460 Liabilities (1) : Mortgage notes payable and other debt, net 2 $ 2,129,461 $ 2,186,955 $ 2,687,739 $ 2,713,155 Corporate bonds, net 2 2,848,591 2,944,615 2,248,063 2,273,850 Convertible debt, net 2 990,922 1,021,580 987,106 1,004,733 Credit facility 2 — — 500,000 500,000 Total liabilities $ 5,968,974 $ 6,153,150 $ 6,422,908 $ 6,491,738 _______________________________________________ (1) Current and prior period liabilities’ carrying and fair values exclude net deferred financing costs |
Summary of Impairment Charges by Asset Class | The following table presents the impairment charges by asset class recorded during the nine months ended September 30, 2017 (dollar amounts in thousands): Nine Months Ended September 30, 2017 Properties impaired (1) 53 Asset classes impaired: Investment in real estate assets, net $ 30,327 Investment in direct financing leases, net 553 Below-market lease liabilities, net (23 ) Total impairment loss $ 30,857 _______________________________________________ (1) Six of these properties were disposed of during the nine months ended September 30, 2017 . |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Instrument [Line Items] | |
Schedule of Debt | The following table summarizes the carrying value of debt as of September 30, 2017 and December 31, 2016 , and the debt activity for the nine months ended September 30, 2017 (in thousands): Nine Months Ended September 30, 2017 Balance as of December 31, 2016 Debt Issuances Repayments, Extinguishment and Assumptions Accretion and Amortization Balance as of September 30, 2017 Mortgage notes payable: Outstanding balance $ 2,629,949 $ 4,283 $ (545,307 ) $ — $ 2,088,925 (1) Net premiums (2) 36,751 — (528 ) (9,422 ) 26,801 Deferred costs (16,633 ) — 576 2,229 (13,828 ) Other debt: Outstanding balance 20,947 — (7,233 ) — 13,714 Premium (2) 92 — — (71 ) 21 Mortgages and other debt, net 2,671,106 4,283 (552,492 ) (7,264 ) 2,115,633 Corporate bonds: Outstanding balance 2,250,000 600,000 — — 2,850,000 Discount (3) (1,937 ) — — 528 (1,409 ) Deferred costs (21,839 ) (9,497 ) — 2,909 (28,427 ) Corporate bonds, net 2,226,224 590,503 — 3,437 2,820,164 Convertible debt: Outstanding balance 1,000,000 — — — 1,000,000 Discount (3) (12,894 ) — — 3,816 (9,078 ) Deferred costs (13,766 ) — — 4,334 (9,432 ) Convertible debt, net 973,340 — — 8,150 981,490 Credit facility: Outstanding balance 500,000 — (500,000 ) — — Deferred costs (4) (3,422 ) — 2,030 1,392 — Credit facility, net 496,578 — (497,970 ) 1,392 — Total debt $ 6,367,248 $ 594,786 $ (1,050,462 ) $ 5,715 $ 5,917,287 ____________________________________ (1) Includes $16.2 million related to one mortgage note payable in default. (2) Net premiums on mortgage notes payable and other debt were recorded upon the assumption of the respective debt instruments in relation to the various mergers and acquisitions. 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) Discounts on the corporate bonds and convertible debt were recorded based upon the fair value of the respective debt instruments as of the respective issuance dates. Amortization of these discounts is recorded as an increase to interest expense over the remaining term of the respective debt instruments using the effective-interest method. (4) Deferred costs relate to the term portion of the credit facility. |
Mortgage Notes Payable [Member] | |
Debt Instrument [Line Items] | |
Schedule of Debt | The Company’s mortgage notes payable consisted of the following as of September 30, 2017 (dollar amounts in thousands): Encumbered Properties Gross Carrying Value of Collateralized Properties (1) Outstanding Balance Weighted-Average Interest Rate (2) Weighted-Average Years to Maturity Fixed-rate debt (3) 501 $ 4,146,793 $ 2,073,481 4.91 % 4.5 Variable-rate debt 1 32,938 15,444 4.49 % 0.1 Total (4) 502 $ 4,179,731 $ 2,088,925 4.91 % 4.4 ____________________________________ (1) Gross carrying value is gross real estate assets, including investment in direct financing leases, net of gross real estate liabilities. (2) Weighted-average interest rate for variable-rate debt represents the interest rate in effect as of September 30, 2017 . (3) Includes $79.2 million of variable-rate debt fixed by way of interest rate swap arrangements. (4) The table above does not include the loan amount associated with an Unconsolidated Joint Venture of $20.4 million , none of which is recourse to the Company. The loan represents a secured fixed rate of 5.20% and a maturity of July 2021 . |
Schedule of Aggregate Principal Payments of Mortgages | The following table summarizes the scheduled aggregate principal repayments due on mortgage notes subsequent to September 30, 2017 (in thousands): Total October 1, 2017 - December 31, 2017 (1) $ 33,981 2018 67,603 2019 223,171 2020 265,582 2021 353,274 Thereafter 1,145,314 Total $ 2,088,925 ___________________________________ (1) Includes $16.2 million , excluding accrued interest, related to one mortgage note payable in default. |
Other Debt [Member] | |
Debt Instrument [Line Items] | |
Schedule of Debt | The following table is a summary of the outstanding balance and carrying value of the collateral by asset type as of September 30, 2017 (in thousands): Outstanding Balance Collateral Carrying Value Mortgage notes receivable $ 4,945 $ 18,400 CMBS 8,769 30,204 Total $ 13,714 $ 48,604 |
Corporate Bonds [Member] | |
Debt Instrument [Line Items] | |
Schedule of Debt | As of September 30, 2017 , the OP had $2.85 billion aggregate principal amount of senior unsecured notes (the “Senior Notes”) outstanding comprised of the following (dollar amounts in thousands): Outstanding Balance September 30, 2017 Interest Rate Maturity Date 2019 Senior Notes 750,000 3.000 % February 6, 2019 2021 Senior Notes 400,000 4.125 % June 1, 2021 2024 Senior Notes 500,000 4.600 % February 6, 2024 2026 Senior Notes 600,000 4.875 % June 1, 2026 2027 Senior Notes 600,000 — 3.950 % — August 15, 2027 Total balance and weighted-average interest rate $ 2,850,000 4.033 % |
Convertible Debt [Member] | |
Debt Instrument [Line Items] | |
Schedule of Debt | The following table presents each of the Company’s $597.5 million aggregate principal amount of convertible senior notes due 2018 (the “2018 Convertible Notes”) and $402.5 million aggregate principal amount of convertible senior notes due 2020 (the “2020 Convertible Notes” and, together with the 2018 Convertible Notes, the “Convertible Notes”) with their respective terms (dollar amounts in thousands). The OP has issued corresponding identical convertible notes to the General Partner. Outstanding Balance (1) Interest Rate Conversion Rate (2) Maturity Date 2018 Convertible Notes $ 597,500 3.00 % 60.5997 August 1, 2018 2020 Convertible Notes 402,500 3.75 % 66.7249 December 15, 2020 Total balance and weighted-average interest rate $ 1,000,000 3.30 % ____________________________________ (1) Excludes the carrying value of the conversion options recorded within additional paid-in capital of $28.6 million and the unamortized discount of $9.1 million as of September 30, 2017 . The discount will be amortized over the remaining weighted average term of 1.8 years. (2) Conversion rate represents the amount of the General Partner OP Units per $1,000 principal amount of Convertible Notes converted as of September 30, 2017 , as adjusted in accordance with the applicable indentures as a result of cash dividend payments. |
Derivatives and Hedging Activ40
Derivatives and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Designated as Hedging Instrument [Member] | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Schedule of Interest Rate Derivatives | As of September 30, 2017 and December 31, 2016 , the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (dollar amounts in thousands): Interest Rate Swaps September 30, 2017 December 31, 2016 Number of Instruments — 14 Notional Amount $ — $ 690,816 |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The table below presents the fair value of the Company’s derivative financial instruments as well as their classification in the consolidated balance sheets as of September 30, 2017 and December 31, 2016 (in thousands): Derivatives Designated as Hedging Instruments Balance Sheet Location September 30, 2017 December 31, 2016 Interest rate swaps Rent and tenant receivables and other assets, net $ — $ 3 Interest rate swaps Deferred rent, derivative and other liabilities $ — $ (3,547 ) |
Not Designated as Hedging Instrument [Member] | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Schedule of Interest Rate Derivatives | As of September 30, 2017 and December 31, 2016 , the Company had the following outstanding interest rate derivatives that were not designated as qualifying hedging relationships (dollar amounts in thousands): Interest Rate Swap September 30, 2017 December 31, 2016 Number of Instruments 2 1 Notional Amount $ 79,212 $ 51,400 |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The table below presents the fair value of the Company’s derivative financial instrument not designated as a hedge as well as its classification in the consolidated balance sheets as of September 30, 2017 and December 31, 2016 (in thousands): Derivatives Not Designated as Hedging Instruments Balance Sheet Location September 30, 2017 December 31, 2016 Interest rate swaps Rent and tenant receivables and other assets, net $ 351 $ 196 |
Schedule of Offsetting Assets | The table below details a gross presentation, the effects of offsetting and a net presentation of the Company’s derivatives as of September 30, 2017 and December 31, 2016 (in thousands). The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. Offsetting of Derivative Assets and Liabilities Gross Amounts of Recognized Assets Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts of Assets Presented in the Consolidated Balance Sheets Net Amounts of Liabilities Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Received Net Amount September 30, 2017 $ 351 $ — $ — $ 351 $ — $ — $ — $ 351 December 31, 2016 $ 199 $ (3,547 ) $ — $ 199 $ (3,547 ) $ — $ — $ (3,348 ) |
Schedule of Offsetting Liabilities | The table below details a gross presentation, the effects of offsetting and a net presentation of the Company’s derivatives as of September 30, 2017 and December 31, 2016 (in thousands). The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. Offsetting of Derivative Assets and Liabilities Gross Amounts of Recognized Assets Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts of Assets Presented in the Consolidated Balance Sheets Net Amounts of Liabilities Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Received Net Amount September 30, 2017 $ 351 $ — $ — $ 351 $ — $ — $ — $ 351 December 31, 2016 $ 199 $ (3,547 ) $ — $ 199 $ (3,547 ) $ — $ — $ (3,348 ) |
Supplemental Cash Flow Disclo41
Supplemental Cash Flow Disclosures (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Disclosures | Supplemental cash flow information was as follows for the nine months ended September 30, 2017 and 2016 (in thousands): Nine Months Ended September 30, 2017 2016 Supplemental Disclosures: Cash paid for interest $ 200,617 $ 246,602 Cash paid for income taxes $ 10,690 $ 18,822 Non-cash investing and financing activities: Accrued capital expenditures and real estate developments $ 6,750 $ 3,556 Accrued deferred financing costs $ 181 $ 860 Distributions declared and unpaid $ 146,596 $ 146,118 Accrued equity issuance costs $ — $ 9 Mortgage note payable relieved by foreclosure or a deed-in-lieu of foreclosure $ 100,388 $ 38,050 Mortgage notes payable assumed in real estate disposition $ 66,000 $ 55,000 Nonmonetary Exchanges: Intangible lease liability received $ (151 ) $ — Real estate investments received $ 50,204 $ — Real estate investments relinquished and gain on disposition $ (47,474 ) $ — Rent and tenant receivables and other assets, net relinquished $ (2,602 ) $ — Intangible lease liability relinquished $ 242 $ — Real estate investments received from a ground lease expiration $ 259 $ — |
Accounts Payable and Accrued 42
Accounts Payable and Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accounts payable and accrued expenses consisted of the following as of September 30, 2017 and December 31, 2016 (in thousands): September 30, 2017 December 31, 2016 Accrued interest $ 39,886 $ 43,188 Accrued real estate taxes 36,797 38,877 Accrued legal fees 34,981 17,827 Accounts payable 8,186 5,030 Accrued other 32,563 41,215 Total $ 152,413 $ 146,137 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | The following table presents future minimum base rent payments due to the Company over the next five years and thereafter. These amounts exclude contingent rent payments, as applicable, that may be collected from certain tenants based on provisions related to sales thresholds and increases in annual rent based on exceeding certain economic indexes among other items (in thousands): Future Minimum Operating Lease Future Minimum (1) October 1, 2017 - December 31, 2017 $ 265,570 $ 867 2018 1,084,301 3,016 2019 1,050,277 2,397 2020 1,015,625 2,023 2021 975,554 1,899 Thereafter 6,441,525 3,993 Total $ 10,832,852 $ 14,195 ____________________________________ (1) 29 properties are subject to direct financing leases and, therefore, revenue is recognized as direct financing lease income on the discounted cash flows of the lease payments. Amounts reflected are the minimum base rental cash payments due to the Company under the lease agreements on these respective properties. The following table reflects the minimum base rent payments due from the Company over the next five years and thereafter for certain ground lease obligations, which are substantially reimbursable by our tenants, and office lease obligations (in thousands): Future Minimum Base Rent Payments Ground Leases Office Leases October 1, 2017 - December 31, 2017 $ 3,679 $ 1,227 2018 14,458 4,376 2019 14,416 4,359 2020 14,297 4,381 2021 13,589 4,368 Thereafter 231,750 8,415 Total $ 292,189 $ 27,126 |
Equity-based Compensation (Tabl
Equity-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Activity for Share-based Compensation | The following table details the activity of the Restricted Shares during the nine months ended September 30, 2017 : Restricted Shares Weighted-Average Grant Date Fair Value Unvested shares, December 31, 2016 562,406 $ 13.78 Vested (196,937 ) 14.03 Forfeited (46,386 ) 13.91 Unvested shares, September 30, 2017 319,083 $ 13.61 The following table details the activity of the LTI Target Awards during the nine months ended September 30, 2017 . LTI Target Awards Weighted-Average Grant Date Fair Value Unvested units, December 31, 2016 1,522,487 $ 9.00 Granted 726,867 8.96 Forfeited (3,413 ) 11.77 Unvested units, September 30, 2017 2,245,941 $ 8.98 The following table details the activity of the Time-Based Restricted Stock Units and Deferred Stock Units during the nine months ended September 30, 2017 . Time-Based Restricted Stock Units Weighted-Average Grant Date Fair Value Deferred Stock Units Weighted-Average Grant Date Fair Value Unvested units, December 31, 2016 1,085,914 $ 8.43 — $ — Granted 673,381 8.90 117,003 7.91 Vested (412,692 ) 8.62 (117,003 ) 7.91 Forfeited (16,936 ) 8.54 — — Unvested units, September 30, 2017 1,329,667 $ 8.61 — $ — |
Related Party Transactions an45
Related Party Transactions and Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Offering Related Revenue [Member] | |
Related Party Transaction [Line Items] | |
Schedule of Related Party Transactions | The following table shows the offering fee summary information for the Cole REITs conducting offerings as of September 30, 2017 : Selling Commissions (1) Dealer Manager Fees (2) Annual Distribution and Stockholder Servicing Fee (2) Open Programs CCPT V Class A Shares 7% 2% —% Class T Shares 3% 2% 1% (3) INAV Wrap Class Shares —% 0.55% (4) —% Advisor Class Shares up to 3.75% 0.55% (4) 0.5% (4) Institutional Class Shares —% 0.25% (4) —% CCIT III Class A Shares 7% 2% —% Class T Shares 3% 2% 1% (3) _______________________________________________ (1) The Company reallowed 100% of selling commissions to participating broker-dealers during the three and nine months ended September 30, 2017 and 2016 . (2) The Company may reallow all or a portion of its dealer manager fee and/or distribution and stockholder servicing fee to participating broker-dealers as a marketing and due diligence expense reimbursement. (3) The maximum amount of the distribution and stockholder servicing fee with respect to sales of Class T shares is 4.0% of the gross offering proceeds for CCPT V and CCIT III. Distribution and stockholder servicing fees continue to be paid after the offering closes if the 4.0% maximum has not been met. (4) Fees are accrued daily in the amount of 1/365th of a percentage of the estimated per share NAV and payable monthly in arrears. |
Transaction Related Fees [Member] | |
Related Party Transaction [Line Items] | |
Schedule of Related Party Transactions | The following table shows the transaction-related fees for the Cole REITs and other real estate programs as of September 30, 2017 : Program Acquisition Fees (1) Disposition Fees Performance Fees (2) Financing Coordination Fee (3) Open Programs CCPT V 2% 1% 15% — INAV — — — — CCIT III 2% 1% 15% 1% Closed Programs CCIT II 2% 1% 15% — CCPT IV 2% 1% 15% — Other Programs Various Various Various — _______________________________________________ (1) Percent taken on gross purchase price. (2) Performance fee paid only under the following circumstances: (i) if shares are listed on a national securities exchange; (ii) if the respective Cole REIT is sold or the assets are liquidated; or (iii) upon termination of the advisory agreement. In connection with such events, the performance fee will only be earned upon the return to investors of their net capital invested and a 6% annual cumulative, non-compounded return ( 8% in the case of CCIT II and CCPT IV). (3) Financing coordination fee payable for services in connection with the origination, assumption, or refinancing of any debt (other than loans advanced by the Company) to acquire properties or make other permitted investments. |
Management Service Revenue [Member] | |
Related Party Transaction [Line Items] | |
Schedule of Related Party Transactions | The following table shows the management fees for the Cole REITs as of September 30, 2017 : Program Asset Management / Advisory Fees (1) Performance Fees (2) Open Programs CCPT V 0.65% - 0.75% — INAV 0.90% 25% CCIT III 0.65% - 0.75% — Closed Programs CCIT II 0.65% - 0.75% — CCPT IV 0.65% - 0.75% — Other Programs Various — _______________________________________________ (1) Annualized fee based on the average monthly invested assets or average assets, as defined in the respective agreements, or net asset value, if available. (2) The performance fee is limited to 10% of the aggregate total return, for each class, for any individual year. |
Revenue from Managed REITs [Member] | |
Related Party Transaction [Line Items] | |
Schedule of Related Party Transactions | The table below reflects the revenue earned from the Cole REITs (including closed programs, as applicable) and joint ventures for the three and nine months ended September 30, 2017 and 2016 (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Offering-related fees and reimbursements Selling commissions (1) $ 1,816 $ 5,008 $ 6,336 $ 18,112 Dealer manager and distribution fees (2) 1,278 2,237 3,766 7,292 Reimbursement revenue 788 2,300 2,619 7,446 Offering-related fees and reimbursements 3,882 9,545 12,721 32,850 Transaction service fees and reimbursements Acquisition fees 3,320 2,593 9,965 8,053 Financing coordination fee — 220 — 220 Reimbursement revenues 644 686 2,145 2,024 Transaction service fees and reimbursements 3,964 3,499 12,110 10,297 Management fees and reimbursements Asset and property management fees and leasing fees 56 53 161 159 Advisory and performance fee revenue 14,532 13,011 42,318 37,621 Reimbursement revenues 4,620 4,430 14,070 12,803 Management fees and reimbursements 19,208 17,494 56,549 50,583 Interest income on Affiliate Lines of Credit 24 — 221 308 Total related party revenues (3) $ 27,078 $ 30,538 81,601 94,038 ___________________________________ (1) The Company reallowed 100% of selling commissions to participating broker-dealers during the three and nine months ended September 30, 2017 and 2016 . (2) During the three and nine months ended September 30, 2017 , the Company reallowed $0.6 million and $1.6 million , respectively, of dealer manager fees and/or distribution and stockholder servicing fees to participating broker-dealers as a marketing and due diligence expense reimbursement. During the three and nine months ended September 30, 2016 , the Company reallowed $0.9 million and $2.8 million , respectively, of such fees. (3) Total related party revenues excludes fees earned from 1031 real estate programs of $0.1 million and $1.6 million for the three and nine months ended September 30, 2017 , respectively, and $0.5 million and $1.1 million for the three and nine months ended September 30, 2016 , respectively. |
Investments In Managed REITs [Member] | |
Related Party Transaction [Line Items] | |
Schedule of Related Party Transactions | The table below presents certain information related to the Company’s investments in the Cole REITs as of September 30, 2017 (carrying amount in thousands): September 30, 2017 Cole REIT % of Outstanding Shares Owned Carrying Amount of Investment CCPT V 0.77% $ 1,270 INAV 0.06% 128 CCIT II 0.43% 1,154 CCIT III 16.89% 731 CCPT IV 0.01% 107 Funds not yet in offering 100.00% 400 Total $ 3,790 |
Net Income (Loss) Per Share_U46
Net Income (Loss) Per Share/Unit (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Summary of Basic and Diluted Net Loss Per Share | The following is a summary of the basic and diluted net income (loss) per unit attributable to common unitholders, which includes all common general partner unitholders and limited partner unitholders. The computation for the OP for the three and nine months ended September 30, 2017 and 2016 (dollar amounts in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Net income (loss) attributable to the Operating Partnership $ 16,485 $ 30,234 $ 65,482 $ (82,578 ) Dividends to preferred units (17,973 ) (17,973 ) (53,919 ) (53,919 ) Net (loss) income available to the Operating Partnership (1,488 ) 12,261 11,563 (136,497 ) Earnings allocated to participating units (43 ) (154 ) (434 ) (400 ) Net (loss) income available to common unitholders used in basic and diluted net loss per unit $ (1,531 ) $ 12,107 $ 11,129 $ (136,897 ) Weighted average number of common units outstanding - basic 997,915,435 967,237,921 997,808,507 940,995,665 Effect of dilutive securities — 1,448,622 277,466 — Weighted average number of common units outstanding - diluted 997,915,435 968,686,543 998,085,973 940,995,665 Basic and diluted net (loss) income per unit attributable to common unitholders $ (0.00 ) $ 0.01 $ 0.01 $ (0.15 ) The following is a summary of the basic and diluted net income (loss) per share computation for the General Partner for the three and nine months ended September 30, 2017 and 2016 (dollar amounts in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Net income (loss) attributable to the General Partner $ 16,094 $ 29,495 $ 63,940 $ (80,445 ) Dividends to preferred shares and units (17,973 ) (17,973 ) (53,919 ) (53,919 ) Net (loss) income available to the General Partner (1,879 ) 11,522 10,021 (134,364 ) Earnings allocated to participating securities (43 ) (154 ) (434 ) (400 ) Income attributable to limited partners — 739 1,542 — Net (loss) income available to common stockholders used in basic and diluted net loss per share $ (1,922 ) $ 12,107 $ 11,129 $ (134,764 ) Weighted average number of common stock outstanding - basic 974,167,088 943,480,170 974,060,160 917,233,898 Effect of Limited Partner OP Units and dilutive securities — 25,206,373 24,025,813 — Weighted average number of common stock outstanding - diluted 974,167,088 968,686,543 998,085,973 917,233,898 Basic and diluted net (loss) income per share attributable to common stockholders $ (0.00 ) $ 0.01 $ 0.01 $ (0.15 ) |
Subsequent Events (Tables)
Subsequent Events (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Schedule of Record and Payments Dates for Preferred Stock Dividends | On November 7, 2017, the Company’s board of directors declared a monthly cash dividend to holders of the Series F Preferred Stock for January 2018 through March 2018 with respect to the periods included in the table below. The corresponding record and payment dates for each month's Series F Preferred Stock dividend are also shown in the table below. The dividend for the Series F Preferred Stock accrues daily on a 360 -day annual basis equal to an annualized dividend rate of $1.675 per share, or $0.1395833 per 30 -day month. Period Record Date Payment Date December 15, 2017 - January 14, 2018 January 1, 2018 January 16, 2018 January 15, 2018 - February 14, 2018 February 1, 2018 February 15, 2018 February 15, 2018 - March 14, 2018 March 1, 2018 March 15, 2018 |
Organization (Details)
Organization (Details) | 9 Months Ended | |
Sep. 30, 2017segment$ / shares | Dec. 31, 2016$ / shares | |
Real Estate Properties [Line Items] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Series F Cumulative Redeemable Preferred Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Number of reportable segments | segment | 2 | |
VEREIT Operating Partnership, L.P. [Member] | ||
Real Estate Properties [Line Items] | ||
Partnership units, holding period until right to redeem | 1 year | |
General Partner [Member] | ||
Real Estate Properties [Line Items] | ||
General partner ownership interest in OP | 97.60% | |
Limited Partner [Member] | VEREIT Operating Partnership, L.P. [Member] | ||
Real Estate Properties [Line Items] | ||
Common equity interests owned by certain unaffiliated investors | 2.40% | |
Series F Preferred Stock [Member] | ||
Real Estate Properties [Line Items] | ||
Series F Cumulative Redeemable Preferred Stock, dividend rate | 6.70% | |
Series F Cumulative Redeemable Preferred Stock, par value (in dollars per share) | $ 0.01 |
Summary of Significant Accoun49
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Accounting Standards Update 2017-01 [Member] | New Accounting Pronouncement, Early Adoption, Effect [Member] | ||
Principles of Consolidation and Basis of Presentation | ||
Capitalized acquisition costs | $ 1.9 | |
VEREIT Operating Partnership, L.P. [Member] | Common Stock [Member] | ||
Principles of Consolidation and Basis of Presentation | ||
Limited Partner OP Units outstanding (shares) | 23,748,347 | 23,748,347 |
Summary of Significant Accoun50
Summary of Significant Accounting Policies - Litigation and Other Non-Routine Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Litigation and other non-routine costs: | ||||
Audit Committee Investigation and related matters | $ 9,476 | $ 5,221 | $ 36,501 | $ 13,413 |
Legal fees and expenses | 31 | 59 | 292 | 155 |
Total costs incurred | 9,507 | 5,280 | 36,793 | 13,568 |
Insurance recoveries | 0 | (650) | 0 | (11,196) |
Total | $ 9,507 | $ 4,630 | $ 36,793 | $ 2,372 |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) ft² in Millions | 9 Months Ended | |
Sep. 30, 2017ft²securitystatesegmentloanproperty | Dec. 31, 2016security | |
Segment Reporting Information [Line Items] | ||
Number of operating segments | segment | 2 | |
Number of loans held for investment | loan | 8 | |
Commercial Mortgage Backed Securities [Member] | ||
Segment Reporting Information [Line Items] | ||
Number of securities held | security | 8 | 8 |
REI Segment [Member] | Consolidated Properties [Member] | ||
Segment Reporting Information [Line Items] | ||
Number of properties owned | property | 4,094 | |
Square feet of property | ft² | 92.5 | |
Number of states in which entity operates | state | 49 | |
Percentage of rentable space leased | 98.70% | |
Real estate property, weighted average remaining lease term | 9 years 5 months 27 days |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Financial Results by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Revenues: | |||||
Rental income | $ 282,341 | $ 303,383 | $ 862,371 | $ 928,706 | |
Direct financing lease income | 376 | 494 | 1,212 | 1,598 | |
Operating expense reimbursements | 23,826 | 27,969 | 72,103 | 77,862 | |
Total revenues | 333,728 | 362,915 | 1,018,687 | 1,102,954 | |
Operating expenses: | |||||
Cole Capital reallowed fees and commissions | 2,373 | 5,897 | 7,907 | 20,940 | |
Acquisition-related | 909 | 90 | 2,282 | 373 | |
Litigation and other non-routine costs, net of insurance recoveries | 9,507 | 4,630 | 36,793 | 2,372 | |
Property operating | 30,645 | 34,820 | 96,288 | 107,832 | |
General and administrative | 29,796 | 29,761 | 88,355 | 92,255 | |
Depreciation and amortization | 176,523 | 195,173 | 543,963 | 596,826 | |
Impairment of real estate | 6,363 | 6,872 | 30,857 | 176,214 | |
Total operating expenses | 256,116 | 277,243 | 806,445 | 996,812 | |
Operating income | 77,612 | 85,672 | 212,242 | 106,142 | |
Other (expense) income: | |||||
Interest expense | (71,708) | (79,869) | (219,072) | (242,763) | |
Gain (loss) on extinguishment and forgiveness of debt, net | 9,756 | (2,003) | 18,691 | (1,751) | |
Other income, net | 1,907 | 1,744 | 4,540 | 4,022 | |
Equity in income and gain on disposition of unconsolidated entities | 374 | 212 | 805 | 10,686 | |
Gain (loss) on derivative instruments, net | 1,294 | (2,023) | 2,710 | (3,286) | |
Total other expenses, net | (58,377) | (81,939) | (192,326) | (233,092) | |
Income (loss) before taxes and real estate dispositions | 19,235 | 3,733 | 19,916 | (126,950) | |
(Loss) gain on disposition of real estate and held for sale assets, net | (688) | 28,111 | 54,432 | 45,723 | |
Income (loss) before taxes | 18,547 | 31,844 | 74,348 | (81,227) | |
(Provision for) benefit from income taxes | (2,053) | (1,598) | (8,878) | (1,374) | |
Net income (loss) | 16,494 | 30,246 | 65,470 | (82,601) | |
Total Assets | 14,736,733 | 14,736,733 | $ 15,587,574 | ||
Total Company: | |||||
Total revenues | 333,728 | 362,915 | 1,018,687 | 1,102,954 | |
Total operating expenses | (256,116) | (277,243) | (806,445) | (996,812) | |
Total other expense, net | (58,377) | (81,939) | (192,326) | (233,092) | |
Net income (loss) | 16,494 | 30,246 | 65,470 | (82,601) | |
REI segment [Member] | |||||
Revenues: | |||||
Rental income | 282,341 | 303,383 | 862,371 | 928,706 | |
Direct financing lease income | 376 | 494 | 1,212 | 1,598 | |
Operating expense reimbursements | 23,826 | 27,969 | 72,103 | 77,862 | |
Total revenues | 306,543 | 331,846 | 935,686 | 1,008,166 | |
Operating expenses: | |||||
Acquisition-related | 909 | 90 | 2,246 | 334 | |
Litigation and other non-routine costs, net of insurance recoveries | 9,507 | 4,630 | 36,793 | 2,372 | |
Property operating | 30,645 | 34,820 | 96,288 | 107,832 | |
General and administrative | 13,075 | 12,069 | 39,929 | 37,998 | |
Depreciation and amortization | 171,576 | 187,897 | 529,306 | 574,124 | |
Impairment of real estate | 6,363 | 6,872 | 30,857 | 176,214 | |
Total operating expenses | 232,075 | 246,378 | 735,419 | 898,874 | |
Operating income | 74,468 | 85,468 | 200,267 | 109,292 | |
Other (expense) income: | |||||
Interest expense | (71,708) | (79,869) | (219,072) | (242,763) | |
Gain (loss) on extinguishment and forgiveness of debt, net | 9,756 | (2,003) | 18,691 | (1,751) | |
Other income, net | 1,405 | 1,649 | 3,834 | 3,433 | |
Equity in income and gain on disposition of unconsolidated entities | 374 | 212 | 805 | 10,686 | |
Gain (loss) on derivative instruments, net | 1,294 | (2,023) | 2,710 | (3,286) | |
Total other expenses, net | (58,879) | (82,034) | (193,032) | (233,681) | |
Income (loss) before taxes and real estate dispositions | 15,589 | 3,434 | 7,235 | (124,389) | |
(Loss) gain on disposition of real estate and held for sale assets, net | (688) | 28,111 | 54,432 | 45,723 | |
Income (loss) before taxes | 14,901 | 31,545 | 61,667 | (78,666) | |
(Provision for) benefit from income taxes | (1,185) | (1,539) | (5,439) | (4,695) | |
Net income (loss) | 13,716 | 30,006 | 56,228 | (83,361) | |
Total Assets | 14,522,637 | 14,522,637 | 15,337,623 | ||
Total Company: | |||||
Total revenues | 306,543 | 331,846 | 935,686 | 1,008,166 | |
Total operating expenses | (232,075) | (246,378) | (735,419) | (898,874) | |
Total other expense, net | (58,879) | (82,034) | (193,032) | (233,681) | |
Net income (loss) | 13,716 | 30,006 | 56,228 | (83,361) | |
Cole Capital segment [Member] | |||||
Revenues: | |||||
Offering-related fees and reimbursements | 3,882 | 9,545 | 12,721 | 32,850 | |
Transaction service fees and reimbursements | 4,000 | 3,779 | 13,159 | 10,639 | |
Management fees and reimbursements | 19,303 | 17,745 | 57,121 | 51,299 | |
Total revenues | 27,185 | 31,069 | 83,001 | 94,788 | |
Operating expenses: | |||||
Cole Capital reallowed fees and commissions | 2,373 | 5,897 | 7,907 | 20,940 | |
Acquisition-related | 0 | 0 | 36 | 39 | |
General and administrative | 16,721 | 17,692 | 48,426 | 54,257 | |
Depreciation and amortization | 4,947 | 7,276 | 14,657 | 22,702 | |
Total operating expenses | 24,041 | 30,865 | 71,026 | 97,938 | |
Operating income | 3,144 | 204 | 11,975 | (3,150) | |
Other (expense) income: | |||||
Total other expenses, net | 502 | 95 | 706 | 589 | |
Income (loss) before taxes | 3,646 | 299 | 12,681 | (2,561) | |
(Provision for) benefit from income taxes | (868) | (59) | (3,439) | 3,321 | |
Net income (loss) | 2,778 | 240 | 9,242 | 760 | |
Total Assets | 214,096 | 214,096 | $ 249,951 | ||
Total Company: | |||||
Total revenues | 27,185 | 31,069 | 83,001 | 94,788 | |
Total operating expenses | (24,041) | (30,865) | (71,026) | (97,938) | |
Total other expense, net | 502 | 95 | 706 | 589 | |
Net income (loss) | $ 2,778 | $ 240 | $ 9,242 | $ 760 |
Goodwill and Other Intangible53
Goodwill and Other Intangibles - Goodwill Narrative (Details) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2017USD ($)segmentproperty | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)property | |
Goodwill [Line Items] | |||
Number of segments | segment | 2 | ||
Goodwill | $ 1,462,585 | $ 1,462,203 | |
REI Segment [Member] | |||
Goodwill [Line Items] | |||
Number of segments | segment | 1 | ||
Goodwill | $ 1,300,000 | $ 1,300,000 | |
Number of properties classified held for sale | property | 1 | ||
Number of properties classified as held for use | property | 1 | ||
Increase to goodwill | $ 400 | ||
Goodwill allocated to dispositions and held for sale assets | $ 53,800 | ||
Cole Capital Segment [Member] | |||
Goodwill [Line Items] | |||
Number of segments | segment | 1 | ||
Goodwill | $ 124,800 | $ 124,800 |
Goodwill and Other Intangible54
Goodwill and Other Intangibles - Intangible Assets Narrative (Details) - USD ($) $ in Thousands | 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] | |||||
Amortization expense | $ 4,100 | $ 6,200 | $ 12,400 | $ 19,900 | |
Intangible assets | 12,173 | $ 12,173 | $ 24,609 | ||
Cole REITs [Member] | Management And Advisory Contracts [Member] | |||||
Related Party Transaction [Line Items] | |||||
Estimated useful life | 2 years | ||||
Estimated amortization expense for remainder of 2017 | 4,100 | $ 4,100 | |||
Estimated amortization expense for 2018 | 4,000 | 4,000 | |||
Estimated amortization expense for nine months ended 30th September 2019 | 3,800 | 3,800 | |||
Intangible assets | 12,200 | 12,200 | 24,600 | ||
Accumulated amortization | $ 42,000 | $ 42,000 | $ 29,600 |
Goodwill and Other Intangible55
Goodwill and Other Intangibles - Intangible Lease Assets and Liabilities (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Intangible lease liabilities: | ||
Accumulated amortization | $ 70,070 | $ 56,891 |
Weighted-Average Useful Life | 18 years 4 months 26 days | |
Intangible lease liabilities, net | $ 204,051 | 224,023 |
Total Intangible Lease Assets [Member] | ||
Intangible lease assets: | ||
Intangible lease assets, net | 1,360,445 | 1,478,884 |
In-place leases and other intangible assets [Member] | ||
Intangible lease assets: | ||
Accumulated amortization | $ 580,588 | 494,131 |
Weighted-Average Useful Life | 15 years 23 days | |
Intangible lease assets, net | $ 1,100,403 | 1,192,756 |
Leasing Commissions [Member] | ||
Intangible lease assets: | ||
Accumulated amortization | $ 2,601 | 1,836 |
Weighted-Average Useful Life | 10 years 6 months 18 days | |
Intangible lease assets, net | $ 11,117 | 10,231 |
Above-Market Leases [Member] | ||
Intangible lease assets: | ||
Accumulated amortization | $ 83,670 | 69,670 |
Weighted-Average Useful Life | 16 years 2 months 28 days | |
Intangible lease assets, net | $ 248,925 | $ 275,897 |
Goodwill and Other Intangible56
Goodwill and Other Intangibles - Projected Amortization Expense and Adjustments (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Below-market lease liabilities: | |
October 1, 2017 - December 31, 2017 | $ 6,351 |
2,018 | 19,283 |
2,019 | 18,578 |
2,020 | 17,420 |
2,021 | 16,093 |
In-place leases and other intangible assets [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
October 1, 2017 - December 31, 2017 | 36,584 |
2,018 | 134,741 |
2,019 | 124,069 |
2,020 | 116,168 |
2,021 | 107,582 |
Leasing Commissions [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
October 1, 2017 - December 31, 2017 | 423 |
2,018 | 1,207 |
2,019 | 1,192 |
2,020 | 1,170 |
2,021 | 1,133 |
Above-Market Lease Assets [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
October 1, 2017 - December 31, 2017 | 6,054 |
2,018 | 23,615 |
2,019 | 21,701 |
2,020 | 21,265 |
2,021 | $ 20,857 |
Real Estate Investments - Narra
Real Estate Investments - Narrative (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017USD ($)land_parcelproperty | Sep. 30, 2016USD ($)property | |
2017 Acquisitions [Member] | ||
Business Acquisition [Line Items] | ||
Number of properties acquired | property | 65 | |
Number of land parcels acquired | land_parcel | 3 | |
Total purchase price of assets acquired | $ | $ 453,937 | |
2016 Acquisitions [Member] | ||
Business Acquisition [Line Items] | ||
Number of properties acquired | property | 1 | |
Total purchase price of assets acquired | $ | $ 19,952 | |
Accounting Standards Update 2017-01 [Member] | New Accounting Pronouncement, Early Adoption, Effect [Member] | ||
Business Acquisition [Line Items] | ||
Capitalized acquisition costs | $ | $ 1,900 | |
Bob Evans [Member] | ||
Business Acquisition [Line Items] | ||
Number of real estate properties acquired | property | 22 |
Real Estate Investments - Asset
Real Estate Investments - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Assumed intangible liabilities: | ||
Below market lease, weighted average useful life | 18 years 4 months 26 days | |
In-place leases and other intangible assets [Member] | ||
Assumed intangible liabilities: | ||
Weighted-Average Useful Life | 15 years 23 days | |
Above-market leases [Member] | ||
Assumed intangible liabilities: | ||
Weighted-Average Useful Life | 16 years 2 months 28 days | |
2017 Acquisitions [Member] | ||
Real estate investments, at cost: | ||
Land | $ 82,337 | |
Buildings, fixtures and improvements | 293,419 | |
Total tangible assets | 375,756 | |
Assumed intangible liabilities: | ||
Total purchase price of assets acquired | 453,937 | |
2017 Acquisitions [Member] | In-place leases and other intangible assets [Member] | ||
Acquired intangible assets: | ||
Acquired intangible assets | $ 68,306 | |
Assumed intangible liabilities: | ||
Weighted-Average Useful Life | 16 years 8 months 9 days | |
2017 Acquisitions [Member] | Above-market leases [Member] | ||
Acquired intangible assets: | ||
Acquired intangible assets | $ 10,270 | |
Assumed intangible liabilities: | ||
Weighted-Average Useful Life | 18 years 1 month 21 days | |
2017 Acquisitions [Member] | Below-market leases [Member] | ||
Assumed intangible liabilities: | ||
Below-market leases | $ (395) | |
Below market lease, weighted average useful life | 19 years 11 months 16 days | |
2016 Acquisitions [Member] | ||
Real estate investments, at cost: | ||
Land | $ 4,215 | |
Buildings, fixtures and improvements | 14,555 | |
Total tangible assets | 18,770 | |
Assumed intangible liabilities: | ||
Total purchase price of assets acquired | 19,952 | |
2016 Acquisitions [Member] | In-place leases and other intangible assets [Member] | ||
Acquired intangible assets: | ||
Acquired intangible assets | $ 1,182 | |
Assumed intangible liabilities: | ||
Weighted-Average Useful Life | 14 years 6 months | |
2016 Acquisitions [Member] | Above-market leases [Member] | ||
Acquired intangible assets: | ||
Acquired intangible assets | $ 0 | |
2016 Acquisitions [Member] | Below-market leases [Member] | ||
Assumed intangible liabilities: | ||
Below-market leases | $ 0 |
Real Estate Investments - Futur
Real Estate Investments - Future Lease Payments (Details) $ in Thousands | Sep. 30, 2017USD ($)property |
Future Minimum Operating Lease Base Rent Payments | |
October 1, 2017 - December 31, 2017 | $ 265,570 |
2,018 | 1,084,301 |
2,019 | 1,050,277 |
2,020 | 1,015,625 |
2,021 | 975,554 |
Thereafter | 6,441,525 |
Total | 10,832,852 |
Future Minimum Direct Financing Lease Payments | |
October 1, 2017 - December 31, 2017 | 867 |
2,018 | 3,016 |
2,019 | 2,397 |
2,020 | 2,023 |
2,021 | 1,899 |
Thereafter | 3,993 |
Total | $ 14,195 |
Number of properties subject to direct financing leases | property | 29 |
Real Estate Investments - Inves
Real Estate Investments - Investment in Direct Financing Leases, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Real Estate [Abstract] | ||
Future minimum lease payments receivable | $ 14,195 | $ 17,147 |
Unguaranteed residual value of property | 23,146 | 27,450 |
Unearned income | (3,939) | (5,142) |
Net investment in direct financing leases | $ 33,402 | $ 39,455 |
Real Estate Investments - Prope
Real Estate Investments - Property Dispositions and Held for Sale Assets Narrative (Details) | Jun. 27, 2017property | Sep. 30, 2017USD ($)property | Sep. 30, 2016USD ($)property |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of real estate properties disposed | property | 6 | ||
Number of properties secured by each non-recourse loan | property | 4 | 6 | |
Proceeds after debt assumptions and closing costs | $ 366,237,000 | $ 615,246,000 | |
Foreign Tax Authority [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Tax provision for the gain on sale of property | $ 1,700,000 | ||
Consolidated Property Dispositions, 2017 [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of real estate properties disposed | property | 112 | ||
Aggregate proceeds | $ 507,500,000 | ||
Company's share of proceeds | 491,000,000 | ||
Proceeds after debt assumptions and closing costs | 366,200,000 | ||
Debt assumed | 66,000,000 | ||
Gain related to sale | $ 54,900,000 | ||
Red Lobster [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of real estate properties disposed | property | 24 | 47 | |
Number of real estate properties disposed in non monetary exchange | property | 15 | ||
Consolidated Property Dispositions, 2016 [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of real estate properties disposed | property | 223 | ||
Aggregate proceeds | $ 672,500,000 | ||
Company's share of proceeds | 646,400,000 | ||
Proceeds after debt assumptions and closing costs | 573,000,000 | ||
Debt assumed | 55,000,000 | ||
Gain related to sale | 50,700,000 | ||
Goodwill included in sale | 28,800,000 | ||
Unconsolidated Property Dispositions, 2016 [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Company's share of proceeds | $ 102,100,000 | ||
Number of disposed properties owned by unconsolidated joint ventures | property | 1 | ||
Net proceeds | $ 113,500,000 | ||
Proceeds from after debt repayments and closing costs | 42,300,000 | ||
Debt repayments | 57,000,000 | ||
Gain related to sale of unconsolidated entities | 10,200,000 | ||
Property Dispositions, 2017 [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of properties classified held for sale | property | 2 | ||
Net loss on sale of properties | $ 500,000 | ||
Goodwill allocated to dispositions and held for sale assets | $ 0 | ||
Property Dispositions, 2016 [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Net loss on sale of properties | 5,000,000 | ||
Goodwill allocated to dispositions and held for sale assets | $ 22,700,000 |
Real Estate Investments - Nonmo
Real Estate Investments - Nonmonetary Exchange Narrative (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2017USD ($)property | Sep. 30, 2016property | |
Real Estate [Line Items] | ||
Number of real estate properties disposed | 6 | |
Red Lobster [Member] | ||
Real Estate [Line Items] | ||
Number of real estate properties disposed in non monetary exchange | 15 | |
Number of real estate properties disposed | 24 | 47 |
Fair value of assets disposed | $ | $ 50.1 | |
Gain on acquisition and disposition of assets | $ | $ 7.4 | |
Bob Evans [Member] | ||
Real Estate [Line Items] | ||
Number of real estate properties acquired | 22 | |
Fair value of properties acquired | $ | $ 50.1 |
Real Estate Investments - Impai
Real Estate Investments - Impairment of Real Estate Investments Narrative (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($)restaurant | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impairment charges | $ 30,857 | $ 176,200 |
Tenant file for bankruptcy, number of restaurants | restaurant | 59 | |
Reported Value Measurement [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying value of real estate assets deemed to be impaired | 87,900 | $ 655,100 |
Estimate of Fair Value Measurement [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated fair value of real estate assets deemed to be impaired | $ 57,000 | $ 478,900 |
Minimum [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Period for determining disposal is more likely than not | 12 months | |
Maximum [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Period for determining disposal is more likely than not | 24 months |
Real Estate Investments - Conso
Real Estate Investments - Consolidated Joint Ventures Narrative (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017USD ($)property | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)propertyjoint_venture | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)propertyjoint_venture | ||
Schedule of Equity Method Investments [Line Items] | ||||||
Total assets | $ 14,736,733,000 | $ 14,736,733,000 | $ 15,587,574,000 | |||
Real estate investments, net | 12,694,924,000 | 12,694,924,000 | 13,252,799,000 | |||
Net income (loss) attributable to non-controlling interests | [1] | 400,000 | $ 751,000 | 1,530,000 | $ (2,156,000) | |
VEREIT Operating Partnership, L.P. [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Total assets | 14,736,733,000 | 14,736,733,000 | 15,587,574,000 | |||
Real estate investments, net | 12,694,924,000 | 12,694,924,000 | $ 13,252,799,000 | |||
Net income (loss) attributable to non-controlling interests | [2] | $ 9,000 | $ 12,000 | $ (12,000) | $ (23,000) | |
Mortgages [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Number of properties owned | property | 502 | 502 | ||||
Joint ventures [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Number of joint ventures | joint_venture | 2 | 2 | ||||
Total assets | $ 65,800,000 | $ 65,800,000 | $ 64,800,000 | |||
Real estate investments, net | $ 60,400,000 | $ 60,400,000 | $ 58,800,000 | |||
Number of properties with secured mortgage note payable | property | 1 | 1 | ||||
Joint ventures [Member] | Mortgages [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Mortgage note payable | $ 15,444,000 | $ 15,444,000 | ||||
Joint ventures [Member] | Consolidated Properties [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Number of properties owned | property | 2 | 2 | 2 | |||
[1] | Represents (income) loss attributable to limited partners and consolidated joint venture partners. | |||||
[2] | Represents (income) loss attributable to consolidated joint venture partners. |
Real Estate Investments - Uncon
Real Estate Investments - Unconsolidated Joint Ventures Narrative (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($)propertyjoint_venture | Sep. 30, 2016USD ($)property | Sep. 30, 2017USD ($)propertyjoint_venture | Sep. 30, 2016USD ($)property | Dec. 31, 2016USD ($)propertyjoint_venture | |
Schedule of Equity Method Investments [Line Items] | |||||
Aggregate equity investments | $ 44,101,000 | $ 44,101,000 | $ 46,077,000 | ||
Net (loss) income | $ 805,000 | $ 488,000 | |||
Mortgages [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Number of properties owned | property | 502 | 502 | |||
Aggregate balance outstanding | $ 2,088,925,000 | $ 2,088,925,000 | 2,629,949,000 | ||
Unconsolidated Joint Venture [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Aggregate equity investments | 40,300,000 | 40,300,000 | $ 41,300,000 | ||
Net (loss) income | 400,000 | $ 200,000 | 1,300,000 | $ 600,000 | |
Unconsolidated Joint Venture [Member] | Mortgages [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Aggregate balance outstanding | 20,400,000 | 20,400,000 | |||
Unconsolidated Joint Venture [Member] | Mortgages [Member] | Recourse debt [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Aggregate balance outstanding | $ 0 | $ 0 | |||
Unconsolidated Properties [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Number of real estate properties held during period | property | 2 | 3 | |||
Unconsolidated Properties [Member] | REI segment [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Number of unconsolidated joint ventures | joint_venture | 2 | 2 | 2 | ||
Number of properties owned | property | 2 | 2 | 2 |
Real Estate Investments - Owner
Real Estate Investments - Ownership and Carrying Amounts for Unconsolidated Ventures (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Schedule of Equity Method Investments [Line Items] | ||
Ownership % | 100.00% | |
Carrying value of Investment | $ 40,311 | $ 41,329 |
Underlying equity in net assets | $ 6,100 | 6,400 |
Cole/Mosaic JV South Elgin IL, LLC [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership % | 50.00% | |
Carrying value of Investment | $ 5,621 | 5,891 |
Cole/Faison JV Bethlehem GA, LLC [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership % | 90.00% | |
Carrying value of Investment | $ 34,690 | $ 35,438 |
Investment Securities, at Fai67
Investment Securities, at Fair Value - Unrealized Gains and Losses (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | $ 41,677 | $ 47,215 |
CMBS [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 43,306 | 48,297 |
Gross Unrealized Gains | 1,086 | 1,248 |
Gross Unrealized Losses | (2,715) | (2,330) |
Fair Value | $ 41,677 | $ 47,215 |
Investment Securities, at Fai68
Investment Securities, at Fair Value - Narrative (Details) | 9 Months Ended | |
Sep. 30, 2017USD ($)security | Dec. 31, 2016USD ($)security | |
Schedule of Available-for-sale Securities [Line Items] | ||
Investment securities, at fair value | $ 41,677,000 | $ 47,215,000 |
CMBS [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Number of securities owned | security | 8 | 8 |
Investment securities, at fair value | $ 41,677,000 | $ 47,215,000 |
Number of securities with fair value below amortized cost | security | 6 | |
Other-than-temporary impairment losses | $ 0 | |
CMBS [Member] | Minimum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Interest rate | 5.88% | |
CMBS [Member] | Maximum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Interest rate | 8.95% |
Investment Securities, at Fai69
Investment Securities, at Fair Value - Scheduled Maturity of CMBS (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value | ||
Total | $ 41,677 | $ 47,215 |
CMBS [Member] | ||
Amortized Cost | ||
Due within one year | 0 | |
Due after one year through five years | 17,984 | |
Due after five years through 10 years | 12,011 | |
Due after 10 years | 13,311 | |
Amortized Cost | 43,306 | 48,297 |
Fair Value | ||
Due within one year | 0 | |
Due after one year through five years | 18,430 | |
Due after five years through 10 years | 9,336 | |
Due after 10 years | 13,911 | |
Total | $ 41,677 | $ 47,215 |
Mortgage Notes Receivable - Nar
Mortgage Notes Receivable - Narrative (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017USD ($)loan | Dec. 31, 2016USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of mortgage notes receivable | 8 | |
Mortgage notes receivable, net | $ | $ 20,510 | $ 22,764 |
Mortgage notes receivable [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of mortgage notes receivable | 8 | |
Weighted-average interest rate | 6.20% | |
Weighted-average years to maturity | 12 years 10 months 24 days | |
Mortgage notes receivable, net | $ | $ 20,510 | $ 1,500 |
Number of mortgage notes with capitalized principal and interest | 1 |
Mortgage Notes Receivable - Sch
Mortgage Notes Receivable - Schedule of Mortgage Notes Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Carrying Value | $ 20,510 | $ 22,764 |
Mortgage notes receivable [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Outstanding Balance | 22,700 | |
Carrying Value | $ 20,510 | $ 1,500 |
Mortgage notes receivable [Member] | Minimum [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Interest Rate Range | 5.90% | |
Mortgage notes receivable [Member] | Maximum [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Interest Rate Range | 6.80% |
Mortgage Notes Receivable - Agg
Mortgage Notes Receivable - Aggregate Principal Payments (Details) - Mortgage notes receivable [Member] $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Due within one year | $ 915 |
Due after one year through five years | 4,341 |
Due after five years through 10 years | 7,071 |
Due after 10 years | 14,175 |
Total | 26,502 |
Interest scheduled to be capitalized | $ 3,800 |
Rent and Tenant Receivables a73
Rent and Tenant Receivables and Other Assets, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||||
Accounts receivable, net | $ 38,182 | $ 38,182 | $ 49,148 | ||
Straight-line rent receivable, net | 220,975 | 220,975 | 201,584 | ||
Deferred costs, net | 8,347 | 8,347 | 16,154 | ||
Prepaid expenses | 10,147 | 10,147 | 6,814 | ||
Leasehold improvements, property and equipment, net | 12,982 | 12,982 | 14,702 | ||
Restricted escrow deposits | 5,644 | 5,644 | 5,741 | ||
Deferred tax asset and tax receivable | 32,753 | 32,753 | 31,113 | ||
Program development costs, net | 3,828 | 3,828 | 3,161 | ||
Interest rate swap assets, at fair value | 351 | 351 | 199 | ||
Other assets | 3,729 | 3,729 | 2,089 | ||
Total | 336,938 | 336,938 | 330,705 | ||
Rent and Tenant Receivables and Other Assets, Net [Member] | Program Development Costs [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Reserves related to program development costs | 5,900 | 5,900 | 31,700 | ||
Leasehold Improvements [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Amortization expense | 300 | $ 300 | 900 | $ 900 | |
Accumulated amortization and depreciation | 4,400 | 4,400 | 3,500 | ||
Property and Equipment [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Accumulated amortization and depreciation | 5,200 | 5,200 | 3,900 | ||
Depreciation expense | 500 | 600 | 1,300 | 1,600 | |
Line of Credit [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Amortization expense | 2,600 | $ 2,600 | 7,800 | $ 7,800 | |
Accumulated amortization for deferred costs | 37,600 | 37,600 | 29,800 | ||
Accounts Receivable [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Allowance for doubtful accounts | 6,000 | 6,000 | 5,700 | ||
Rent Receivables [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Allowance for doubtful accounts | $ 1,600 | $ 1,600 | $ 300 |
Fair Value Measures - Fair Valu
Fair Value Measures - Fair Value of Assets and Liabilities, Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Assets: | ||
Derivative assets | $ 351 | $ 199 |
Liabilities: | ||
Derivative liabilities | 0 | (3,547) |
Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
CMBS | 41,677 | 47,215 |
Derivative assets | 351 | 199 |
Total assets | 42,028 | 47,414 |
Liabilities: | ||
Derivative liabilities | (3,547) | |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | ||
Assets: | ||
CMBS | 0 | 0 |
Derivative assets | 0 | 0 |
Total assets | 0 | 0 |
Liabilities: | ||
Derivative liabilities | 0 | |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | ||
Assets: | ||
CMBS | 0 | 0 |
Derivative assets | 351 | 199 |
Total assets | 351 | 199 |
Liabilities: | ||
Derivative liabilities | (3,547) | |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ||
Assets: | ||
CMBS | 41,677 | 47,215 |
Derivative assets | 0 | 0 |
Total assets | $ 41,677 | 47,215 |
Liabilities: | ||
Derivative liabilities | $ 0 |
Fair Value Measures - Reconcili
Fair Value Measures - Reconciliation of Changes in Assets and Liabilities with Unobservable Inputs (Details) - CMBS [Member] - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 47,215 | $ 53,304 |
Total gains and losses | ||
Unrealized loss included in other comprehensive income (loss), net | (547) | (1,599) |
Purchases, issuance, settlements | ||
Return of principal received | (4,077) | (3,786) |
Amortization included in net income, net | (914) | |
Accretion included in net loss, net | 179 | |
Ending balance | $ 41,677 | $ 48,098 |
Fair Value Measures - Fair Va76
Fair Value Measures - Fair Value of Financial Instruments by Balance Sheet Location (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Carrying Amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total liabilities | $ 5,968,974 | $ 6,422,908 |
Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total liabilities | 6,153,150 | 6,491,738 |
Level 3 [Member] | Carrying Amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets | 20,510 | 22,764 |
Level 3 [Member] | Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets | 28,539 | 30,460 |
Level 2 [Member] | Mortgage Notes Payable [Member] | Carrying Amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total liabilities | 2,129,461 | 2,687,739 |
Level 2 [Member] | Mortgage Notes Payable [Member] | Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total liabilities | 2,186,955 | 2,713,155 |
Level 2 [Member] | Corporate Bonds, Net [Member] | Senior Unsecured Note [Member] | Carrying Amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total liabilities | 2,848,591 | 2,248,063 |
Level 2 [Member] | Corporate Bonds, Net [Member] | Senior Unsecured Note [Member] | Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total liabilities | 2,944,615 | 2,273,850 |
Level 2 [Member] | Convertible Debt, Net [Member] | Convertible Senior Notes [Member] | Carrying Amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total liabilities | 990,922 | 987,106 |
Level 2 [Member] | Convertible Debt, Net [Member] | Convertible Senior Notes [Member] | Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total liabilities | 1,021,580 | 1,004,733 |
Level 2 [Member] | Credit Facility [Member] | Credit Facilities [Member] | Carrying Amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total liabilities | 0 | 500,000 |
Level 2 [Member] | Credit Facility [Member] | Credit Facilities [Member] | Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total liabilities | $ 0 | $ 500,000 |
Fair Value Measures - Narrative
Fair Value Measures - Narrative (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017USD ($)property | Sep. 30, 2016USD ($)property | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Properties impaired | property | 53 | 139 |
Impairment charges | $ 30,857 | $ 176,200 |
Minimum [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Discount rates | 7.40% | |
Capitalization rates | 6.90% | |
Maximum [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Discount rates | 7.80% | |
Capitalization rates | 10.00% | |
Weighted Average [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Discount rates | 7.50% | |
Capitalization rates | 8.20% | |
Reported Value Measurement [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying value of real estate assets deemed to be impaired | $ 87,900 | 655,100 |
Estimate of Fair Value Measurement [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated fair value of real estate assets deemed to be impaired | $ 57,000 | $ 478,900 |
Fair Value Measures - Impairmen
Fair Value Measures - Impairment Charges by Asset Class (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017USD ($)property | Sep. 30, 2016USD ($)property | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Properties impaired | property | 53 | 139 |
Total impairment loss | $ 30,857 | $ 176,200 |
Number of real estate properties disposed | property | 6 | |
Investment in Real Estate Assets, Net [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total impairment loss | $ 30,327 | |
Investment in Direct Financing Leases, Net [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total impairment loss | 553 | |
Below-Market Lease Liabilities, Net [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total impairment loss | $ (23) |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Debt Disclosure [Abstract] | ||
Outstanding balance | $ 5,917,287 | $ 6,367,248 |
Weighted-average years to maturity | 4 years 8 months 5 days | |
Weighted-average interest rate | 4.20% |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) $ in Thousands | 9 Months Ended | ||||
Sep. 30, 2017USD ($)note_payable | Aug. 31, 2017USD ($) | Aug. 29, 2017USD ($) | Jun. 27, 2017USD ($) | Dec. 30, 2016USD ($) | |
Debt [Roll Forward] | |||||
Total debt, Beginning balance | $ 6,367,248 | ||||
Debt Issuances, Net | 594,786 | ||||
Repayments, Extinguishment and Assumptions, Net | (1,050,462) | ||||
Accretion and Amortization | 5,715 | ||||
Total debt, Ending balance | 5,917,287 | ||||
Mortgages and Other Debt [Member] | |||||
Debt [Roll Forward] | |||||
Total debt, Beginning balance | 2,671,106 | ||||
Debt Issuances, Net | 4,283 | ||||
Repayments, Extinguishment and Assumptions, Net | (552,492) | ||||
Accretion and Amortization | (7,264) | ||||
Total debt, Ending balance | 2,115,633 | ||||
Mortgage Notes Payable [Member] | |||||
Debt [Roll Forward] | |||||
Outstanding balance, Beginning balance | 2,629,949 | ||||
Net premiums (discount), Beginning balance | 36,751 | ||||
Deferred costs, Beginning balance | (16,633) | ||||
Debt Issuances | 4,283 | ||||
Repayments, Extinguishment and Assumptions | (545,307) | ||||
Repayments, Extinguishment and Assumptions of Debt, Net premiums | (528) | ||||
Repayments, Extinguishment and Assumptions of Debt, Deferred costs | 576 | ||||
Accretion and Amortization, (Premiums) Discount | (9,422) | ||||
Accretion and Amortization, Deferred costs | 2,229 | ||||
Outstanding balance, Ending balance | 2,088,925 | ||||
Net premiums (discount), Ending balance | 26,801 | ||||
Deferred costs, Ending balance | (13,828) | ||||
Mortgage notes in connection with default from non-recourse loan | $ 16,200 | $ 41,600 | $ 20,500 | $ 38,300 | $ 11,600 |
Number of mortgage notes payable in default | note_payable | 1 | ||||
Other Debt [Member] | |||||
Debt [Roll Forward] | |||||
Outstanding balance, Beginning balance | $ 20,947 | ||||
Net premiums (discount), Beginning balance | 92 | ||||
Repayments, Extinguishment and Assumptions | (7,233) | ||||
Accretion and Amortization, (Premiums) Discount | (71) | ||||
Outstanding balance, Ending balance | 13,714 | ||||
Net premiums (discount), Ending balance | 21 | ||||
Corporate Bonds [Member] | |||||
Debt [Roll Forward] | |||||
Outstanding balance, Beginning balance | 2,250,000 | ||||
Net premiums (discount), Beginning balance | (1,937) | ||||
Deferred costs, Beginning balance | (21,839) | ||||
Total debt, Beginning balance | 2,226,224 | ||||
Debt Issuances | 600,000 | ||||
Debt Issuances, Deferred Costs | (9,497) | ||||
Debt Issuances, Net | 590,503 | ||||
Repayments, Extinguishment and Assumptions, Net | 0 | ||||
Accretion and Amortization, (Premiums) Discount | 528 | ||||
Accretion and Amortization, Deferred costs | 2,909 | ||||
Accretion and Amortization | 3,437 | ||||
Outstanding balance, Ending balance | 2,850,000 | ||||
Net premiums (discount), Ending balance | (1,409) | ||||
Deferred costs, Ending balance | (28,427) | ||||
Total debt, Ending balance | 2,820,164 | ||||
Convertible Debt [Member] | |||||
Debt [Roll Forward] | |||||
Outstanding balance, Beginning balance | 1,000,000 | ||||
Net premiums (discount), Beginning balance | (12,894) | ||||
Deferred costs, Beginning balance | (13,766) | ||||
Total debt, Beginning balance | 973,340 | ||||
Accretion and Amortization, (Premiums) Discount | 3,816 | ||||
Accretion and Amortization, Deferred costs | 4,334 | ||||
Accretion and Amortization | 8,150 | ||||
Outstanding balance, Ending balance | 1,000,000 | ||||
Net premiums (discount), Ending balance | (9,078) | ||||
Deferred costs, Ending balance | (9,432) | ||||
Total debt, Ending balance | 981,490 | ||||
Credit Facility [Member] | |||||
Debt [Roll Forward] | |||||
Outstanding balance, Beginning balance | 500,000 | ||||
Deferred costs, Beginning balance | (3,422) | ||||
Total debt, Beginning balance | 496,578 | ||||
Repayments, Extinguishment and Assumptions | (500,000) | ||||
Repayments, Extinguishment and Assumptions of Debt, Deferred costs | 2,030 | ||||
Repayments, Extinguishment and Assumptions, Net | (497,970) | ||||
Accretion and Amortization, Deferred costs | 1,392 | ||||
Accretion and Amortization | 1,392 | ||||
Total debt, Ending balance | $ 0 |
Debt - Mortgage Notes Payable (
Debt - Mortgage Notes Payable (Details) | 9 Months Ended | |
Sep. 30, 2017USD ($)property | Dec. 31, 2016USD ($) | |
Debt Instrument [Line Items] | ||
Weighted-Average Interest Rate | 4.20% | |
Weighted-Average Years to Maturity | 4 years 8 months 5 days | |
Mortgage Notes Payable [Member] | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 502 | |
Gross Carrying Value of Collateralized Properties | $ 4,179,731,000 | |
Outstanding Balance | $ 2,088,925,000 | $ 2,629,949,000 |
Weighted-Average Interest Rate | 4.91% | |
Mortgage Notes Payable [Member] | Unconsolidated Joint Venture [Member] | ||
Debt Instrument [Line Items] | ||
Outstanding Balance | $ 20,400,000 | |
Mortgage Notes Payable [Member] | Weighted-Average [Member] | ||
Debt Instrument [Line Items] | ||
Weighted-Average Years to Maturity | 4 years 5 months 5 days | |
Mortgage Notes Payable [Member] | Maximum [Member] | Unconsolidated Joint Venture [Member] | ||
Debt Instrument [Line Items] | ||
Fixed and variable rate, maximum | 5.20% | |
Mortgage Notes Payable [Member] | Fixed-rate debt [Member] | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 501 | |
Gross Carrying Value of Collateralized Properties | $ 4,146,793,000 | |
Outstanding Balance | $ 2,073,481,000 | |
Weighted-Average Interest Rate | 4.91% | |
Mortgage Notes Payable [Member] | Fixed-rate debt [Member] | Interest Rate Swap [Member] | ||
Debt Instrument [Line Items] | ||
Outstanding Balance | $ 79,200,000 | |
Mortgage Notes Payable [Member] | Fixed-rate debt [Member] | Weighted-Average [Member] | ||
Debt Instrument [Line Items] | ||
Weighted-Average Years to Maturity | 4 years 5 months 16 days | |
Mortgage Notes Payable [Member] | Variable-rate debt [Member] | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 1 | |
Gross Carrying Value of Collateralized Properties | $ 32,938,000 | |
Outstanding Balance | $ 15,444,000 | |
Weighted-Average Interest Rate | 4.49% | |
Mortgage Notes Payable [Member] | Variable-rate debt [Member] | Weighted-Average [Member] | ||
Debt Instrument [Line Items] | ||
Weighted-Average Years to Maturity | 1 month 6 days | |
Mortgage Notes Payable [Member] | Recourse debt [Member] | Unconsolidated Joint Venture [Member] | ||
Debt Instrument [Line Items] | ||
Outstanding Balance | $ 0 |
Debt - Mortgage Notes Payable N
Debt - Mortgage Notes Payable Narrative (Details) $ in Thousands | Aug. 31, 2017USD ($)property | Aug. 29, 2017USD ($)property | Jun. 27, 2017USD ($)property | Sep. 30, 2017USD ($)note_payable | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)propertynote_payable | Sep. 30, 2016USD ($) | Dec. 30, 2016USD ($)property |
Debt Instrument [Line Items] | ||||||||
Number of properties secured by each non-recourse loan | property | 4 | 6 | ||||||
Gain (loss) on extinguishment and forgiveness of debt, net | $ | $ 9,756 | $ (2,003) | $ 18,691 | $ (1,751) | ||||
Mortgage Notes Payable [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Mortgage notes in connection with default from non-recourse loan | $ | $ 41,600 | $ 20,500 | $ 38,300 | $ 16,200 | $ 16,200 | $ 11,600 | ||
Number of mortgage notes payable in default | note_payable | 1 | 1 | ||||||
Number of properties secured by each non-recourse loan | property | 1 | 1 | ||||||
Gain (loss) on extinguishment and forgiveness of debt, net | $ | $ 6,700 | $ 4,800 | $ 9,000 | |||||
Number of non-recourse loan secured properties | property | 16 |
Debt - Aggregate Principal Repa
Debt - Aggregate Principal Repayments on Mortgage Notes (Details) - Mortgage Notes Payable [Member] $ in Thousands | Sep. 30, 2017USD ($)note_payable | Aug. 31, 2017USD ($) | Aug. 29, 2017USD ($) | Jun. 27, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 30, 2016USD ($) |
Debt Instrument [Line Items] | ||||||
October 1, 2017 - December 31, 2017 | $ 33,981 | |||||
2,018 | 67,603 | |||||
2,019 | 223,171 | |||||
2,020 | 265,582 | |||||
2,021 | 353,274 | |||||
Thereafter | 1,145,314 | |||||
Total | 2,088,925 | $ 2,629,949 | ||||
Mortgage notes in connection with default from non-recourse loan | $ 16,200 | $ 41,600 | $ 20,500 | $ 38,300 | $ 11,600 | |
Number of mortgage notes payable in default | note_payable | 1 |
Debt - Other Debt Narrative (De
Debt - Other Debt Narrative (Details) - Other Debt [Member] - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Aggregate balance outstanding | $ 13,714 | $ 20,947 |
Unamortized net premium (less than) | $ 21 | $ 92 |
Interest rate | 5.81% |
Debt - Summary of Outstanding a
Debt - Summary of Outstanding and Carrying Value of Collateral by Asset Type (Details) - Other Debt [Member] - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Outstanding Balance | $ 13,714 | $ 20,947 |
Collateral Carrying Value | 48,604 | |
Mortgage notes receivable [Member] | ||
Debt Instrument [Line Items] | ||
Outstanding Balance | 4,945 | |
Collateral Carrying Value | 18,400 | |
CMBS [Member] | ||
Debt Instrument [Line Items] | ||
Outstanding Balance | 8,769 | |
Collateral Carrying Value | $ 30,204 |
Debt - Corporate Bonds Narrativ
Debt - Corporate Bonds Narrative (Details) - Corporate Bonds [Member] - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2017 | Aug. 11, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | |||
Aggregate balance outstanding | $ 2,850,000 | $ 2,250,000 | |
Covenant terms, maximum limitation on incurrence of total debt, percentage of total assets | 65.00% | ||
Covenant terms, maximum limitation on incurrence of secured debt, percentage of total assets | 40.00% | ||
Covenant terms, minimum debt service coverage ratio | 1.5 | ||
Covenant terms, minimum unencumbered asset value, percentage | 150.00% | ||
VEREIT Operating Partnership, L.P. [Member] | |||
Debt Instrument [Line Items] | |||
Aggregate balance outstanding | $ 2,850,000 | ||
Interest rate | 4.033% | ||
VEREIT Operating Partnership, L.P. [Member] | 2019 Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Aggregate balance outstanding | $ 750,000 | ||
Interest rate | 3.00% | ||
Maximum number of days prior to maturity date | 30 days | ||
Redemption price, percentage of principal | 100.00% | ||
VEREIT Operating Partnership, L.P. [Member] | 2021 Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Aggregate balance outstanding | $ 400,000 | ||
Interest rate | 4.125% | ||
Maximum number of days prior to maturity date | 30 days | ||
Redemption price, percentage of principal | 100.00% | ||
VEREIT Operating Partnership, L.P. [Member] | 2024 Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Aggregate balance outstanding | $ 500,000 | ||
Interest rate | 4.60% | ||
Maximum number of days prior to maturity date | 90 days | ||
Redemption price, percentage of principal | 100.00% | ||
VEREIT Operating Partnership, L.P. [Member] | 2026 Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Aggregate balance outstanding | $ 600,000 | ||
Interest rate | 4.875% | ||
Maximum number of days prior to maturity date | 90 days | ||
Redemption price, percentage of principal | 100.00% | ||
VEREIT Operating Partnership, L.P. [Member] | 2027 Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Aggregate balance outstanding | $ 600,000 | $ 600,000 | |
Interest rate | 3.95% | 3.95% | |
Maximum number of days prior to maturity date | 90 days | ||
Redemption price, percentage of principal | 100.00% |
Debt - Corporate Bonds (Details
Debt - Corporate Bonds (Details) - Corporate Bonds [Member] - USD ($) $ in Thousands | Sep. 30, 2017 | Aug. 11, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||
Outstanding Balance | $ 2,850,000 | $ 2,250,000 | |
VEREIT Operating Partnership, L.P. [Member] | |||
Debt Instrument [Line Items] | |||
Outstanding Balance | $ 2,850,000 | ||
Interest Rate | 4.033% | ||
2019 Senior Notes [Member] | VEREIT Operating Partnership, L.P. [Member] | |||
Debt Instrument [Line Items] | |||
Outstanding Balance | $ 750,000 | ||
Interest Rate | 3.00% | ||
2021 Senior Notes [Member] | VEREIT Operating Partnership, L.P. [Member] | |||
Debt Instrument [Line Items] | |||
Outstanding Balance | $ 400,000 | ||
Interest Rate | 4.125% | ||
2024 Senior Notes [Member] | VEREIT Operating Partnership, L.P. [Member] | |||
Debt Instrument [Line Items] | |||
Outstanding Balance | $ 500,000 | ||
Interest Rate | 4.60% | ||
2026 Senior Notes [Member] | VEREIT Operating Partnership, L.P. [Member] | |||
Debt Instrument [Line Items] | |||
Outstanding Balance | $ 600,000 | ||
Interest Rate | 4.875% | ||
2027 Senior Notes [Member] | VEREIT Operating Partnership, L.P. [Member] | |||
Debt Instrument [Line Items] | |||
Outstanding Balance | $ 600,000 | $ 600,000 | |
Interest Rate | 3.95% | 3.95% |
Debt - Convertible Debt Narrati
Debt - Convertible Debt Narrative (Details) - Convertible Debt [Member] - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Aggregate balance outstanding | $ 1,000,000 | $ 1,000,000 |
2018 Convertible Notes [Member] | ||
Debt Instrument [Line Items] | ||
Aggregate balance outstanding | 597,500 | |
2020 Convertible Notes [Member] | ||
Debt Instrument [Line Items] | ||
Aggregate balance outstanding | $ 402,500 |
Debt - Convertible Debt (Detail
Debt - Convertible Debt (Details) | 9 Months Ended | |
Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($) | |
Debt Instrument [Line Items] | ||
Weighted-average interest rate | 4.20% | |
Carrying value conversion options in additional paid-in capital | $ 28,600,000 | |
Convertible Debt [Member] | ||
Debt Instrument [Line Items] | ||
Outstanding Balance | $ 1,000,000,000 | $ 1,000,000,000 |
Weighted-average interest rate | 3.30% | |
Unamortized discount | $ 9,078,000 | $ 12,894,000 |
Remaining amortization period | 1 year 9 months 15 days | |
Amount of General Partner OP Units per principal amount | $ 1,000 | |
Convertible Debt [Member] | 2018 Convertible Notes [Member] | ||
Debt Instrument [Line Items] | ||
Outstanding Balance | $ 597,500,000 | |
Interest Rate | 3.00% | |
Convertible Debt [Member] | 2020 Convertible Notes [Member] | ||
Debt Instrument [Line Items] | ||
Outstanding Balance | $ 402,500,000 | |
Interest Rate | 3.75% | |
VEREIT Operating Partnership, L.P. [Member] | Convertible Debt [Member] | 2018 Convertible Notes [Member] | ||
Debt Instrument [Line Items] | ||
Conversion Rate | 0.0605997 | |
VEREIT Operating Partnership, L.P. [Member] | Convertible Debt [Member] | 2020 Convertible Notes [Member] | ||
Debt Instrument [Line Items] | ||
Conversion Rate | 0.0667249 |
Debt - Credit Facility Narrativ
Debt - Credit Facility Narrative (Details) | Aug. 11, 2017USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($) |
Line of Credit Facility [Line Items] | |||
Outstanding balance | $ 5,917,287,000 | $ 6,367,248,000 | |
Outstanding balance | 0 | 496,578,000 | |
VEREIT Operating Partnership, L.P. [Member] | |||
Line of Credit Facility [Line Items] | |||
Outstanding balance | 0 | 496,578,000 | |
Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Outstanding balance | 0 | $ 496,578,000 | |
Maximum borrowing capacity | 2,300,000,000 | ||
Maximum aggregate amount outstanding at any one time | $ 25,000,000 | ||
Length of extension option | 1 year | ||
Maximum leverage ratio (less than or equal to) | 60.00% | ||
Minimum fixed charge coverage ratio (of at least) | 1.5 | ||
Secured leverage ratio (less than or equal to) | 45.00% | ||
Unencumbered asset value ratio (less than or equal to) | 60.00% | ||
Minimum tangible net worth covenant (of at least) | $ 5,500,000,000 | ||
Minimum unencumbered interest coverage ratio (of at least) | 1.75 | ||
Minimum unencumbered asset value (of at least) | $ 8,000,000,000 | ||
Credit Facility [Member] | Fixed Interest Rate [Member] | |||
Line of Credit Facility [Line Items] | |||
Outstanding balance | $ 500,000,000 | ||
Write-off of unamortized deferred financing costs | $ 2,000,000 | ||
Credit Facility [Member] | Revolving Credit Facility [Member] | LIBOR [Member] | Minimum [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 1.00% | ||
Credit Facility [Member] | Revolving Credit Facility [Member] | LIBOR [Member] | Maximum [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 1.80% | ||
Credit Facility [Member] | Revolving Credit Facility [Member] | Base Rate [Member] | Minimum [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 0.00% | ||
Credit Facility [Member] | Revolving Credit Facility [Member] | Base Rate [Member] | Maximum [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 0.80% | ||
Credit Facility [Member] | Revolving Credit Facility [Member] | Federal Funds Rate [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 0.50% | ||
Credit Facility [Member] | Loans Payable [Member] | LIBOR [Member] | Minimum [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 1.15% | ||
Credit Facility [Member] | Loans Payable [Member] | LIBOR [Member] | Maximum [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 2.05% | ||
Credit Facility [Member] | Loans Payable [Member] | Base Rate [Member] | Minimum [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 0.15% | ||
Credit Facility [Member] | Loans Payable [Member] | Base Rate [Member] | Maximum [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 1.05% | ||
Credit Facility [Member] | Unencumbered Asset [Member] | Tranche One [Member] | |||
Line of Credit Facility [Line Items] | |||
Unencumbered Asset Value ratio | 30.00% | ||
Credit Facility [Member] | VEREIT Operating Partnership, L.P. [Member] | Minimum [Member] | |||
Line of Credit Facility [Line Items] | |||
Commitment fee percentage | 0.15% | ||
Credit Facility [Member] | VEREIT Operating Partnership, L.P. [Member] | Maximum [Member] | |||
Line of Credit Facility [Line Items] | |||
Commitment fee percentage | 0.25% |
Derivatives and Hedging Activ91
Derivatives and Hedging Activities - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($)derivative | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)derivative | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)derivative | |
Derivative [Line Items] | |||||
Derivative assets | $ 351 | $ 351 | $ 199 | ||
Loans Payable [Member] | Credit Facility [Member] | |||||
Derivative [Line Items] | |||||
Reclassified from AOCI into interest expense | 1,100 | ||||
Cash Flow Hedging [Member] | |||||
Derivative [Line Items] | |||||
Notional amount | $ 27,800 | $ 27,800 | |||
Number of instruments held | derivative | 1 | 1 | |||
Interest Rate Swap [Member] | |||||
Derivative [Line Items] | |||||
Amount of gain (loss) related to change in fair value and other ineffectiveness | $ 21 | $ 300 | $ 17 | $ (1,100) | |
Derivative assets | 300 | 300 | |||
Aggregate termination value had provisions been breached | $ 300 | $ 300 | |||
Interest Rate Swap [Member] | Loans Payable [Member] | Credit Facility [Member] | |||||
Derivative [Line Items] | |||||
Number of interest rate swaps | derivative | 6 | 6 | |||
Interest Rate Swap [Member] | Cash Flow Hedging [Member] | |||||
Derivative [Line Items] | |||||
Gain (Loss) in earnings related to ineffective portion | $ 200 | $ 1,000 | $ 1,600 | $ 1,100 | |
Interest Rate Swap [Member] | Cash Flow Hedging [Member] | Interest Expense [Member] | |||||
Derivative [Line Items] | |||||
Reclassified from AOCI into interest expense | 100 | (200) | |||
Reclassified from AOCI interest expense in relation to previously settled interest rate derivatives | 200 | 600 | |||
Derivative loss to be reclassified during next 12 months | $ 400 | $ 400 | |||
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | |||||
Derivative [Line Items] | |||||
Number of interest rate swaps | derivative | 0 | 0 | 14 | ||
Number of derivative instruments associated with loans | derivative | 6 | 13 | |||
Notional amount | $ 0 | $ 0 | $ 690,816 | ||
Six Interest Rate Swaps [Member] | Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | |||||
Derivative [Line Items] | |||||
Notional amount | 550,900 | 550,900 | |||
Thirteen Interest Rate Swaps [Member] | Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | |||||
Derivative [Line Items] | |||||
Notional amount | $ 662,400 | $ 662,400 |
Derivatives and Hedging Activ92
Derivatives and Hedging Activities - Schedule of Interest Rate Derivatives (Details) $ in Thousands | Sep. 30, 2017USD ($)derivative | Dec. 31, 2016USD ($)derivative |
Cash Flow Hedging [Member] | ||
Derivative [Line Items] | ||
Notional Amount | $ 27,800 | |
Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | Cash Flow Hedging [Member] | ||
Derivative [Line Items] | ||
Number of Instruments | derivative | 0 | 14 |
Notional Amount | $ 0 | $ 690,816 |
Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | ||
Derivative [Line Items] | ||
Number of Instruments | derivative | 2 | 1 |
Notional Amount | $ 79,212 | $ 51,400 |
Derivatives and Hedging Activ93
Derivatives and Hedging Activities - Schedule of Derivative Instruments in Statement of Financial Position, Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Derivatives, Fair Value [Line Items] | ||
Derivative assets | $ 351 | $ 199 |
Derivative liabilities | 0 | (3,547) |
Interest Rate Swap [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 300 | |
Interest Rate Swap [Member] | Not Designated as Hedging Instrument [Member] | Rent and Tenant Receivables and Other Assets, Net [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 351 | 196 |
Interest Rate Swap [Member] | Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | Rent and Tenant Receivables and Other Assets, Net [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 0 | 3 |
Interest Rate Swap [Member] | Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | Deferred rent, derivative liabilities and other liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | $ 0 | $ (3,547) |
Derivatives and Hedging Activ94
Derivatives and Hedging Activities - Tabular Disclosure Offsetting Derivatives (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Gross Amounts of Recognized Assets | $ 351 | $ 199 |
Gross Amounts of Recognized Liabilities | 0 | (3,547) |
Gross Amounts Offset in the Consolidated Balance Sheets | 0 | 0 |
Net Amounts of Assets Presented in the Consolidated Balance Sheets | 351 | 199 |
Net Amounts of Liabilities Presented in the Consolidated Balance Sheets | 0 | 3,547 |
Financial Instruments | 0 | 0 |
Cash Collateral Received | 0 | 0 |
Net Amount | $ 351 | $ (3,348) |
Supplemental Cash Flow Disclo95
Supplemental Cash Flow Disclosures (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Supplemental Disclosures: | ||
Cash paid for interest | $ 200,617 | $ 246,602 |
Cash paid for income taxes | 10,690 | 18,822 |
Non-cash investing and financing activities: | ||
Accrued capital expenditures and real estate developments | 6,750 | 3,556 |
Accrued deferred financing costs | 181 | 860 |
Distributions declared and unpaid | 146,596 | 146,118 |
Accrued equity issuance costs | 0 | 9 |
Mortgage note payable relieved by foreclosure or a deed-in-lieu of foreclosure | 100,388 | 38,050 |
Mortgage notes payable assumed in real estate disposition | 66,000 | 55,000 |
Nonmonetary Exchanges: | ||
Intangible lease liability received | (151) | 0 |
Real estate investments received | 50,204 | 0 |
Real estate investments relinquished and gain on disposition | (47,474) | 0 |
Rent and tenant receivables and other assets, net relinquished | (2,602) | 0 |
Intangible lease liability relinquished | 242 | 0 |
Real estate investments received from a ground lease expiration | $ 259 | $ 0 |
Accounts Payable and Accrued 96
Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Accrued interest | $ 39,886 | $ 43,188 |
Accrued real estate taxes | 36,797 | 38,877 |
Accrued legal fees | 34,981 | 17,827 |
Accounts payable | 8,186 | 5,030 |
Accrued other | 32,563 | 41,215 |
Total | $ 152,413 | $ 146,137 |
Commitments and Contingencies -
Commitments and Contingencies - Litigation Narrative (Details) $ in Thousands | Sep. 08, 2016plaintiff | Dec. 31, 2013USD ($) | Jan. 20, 2015lawsuit |
SDNY Actions [Member] | Pending Litigation [Member] | |||
Loss Contingencies [Line Items] | |||
Number of claims | lawsuit | 10 | ||
Putative Class Action [Member] | Pending Litigation [Member] | |||
Loss Contingencies [Line Items] | |||
Stipulation of settlement, maximum attorney fees | $ | $ 625 | ||
Audit Committee Investigation [Member] | SDNY Actions [Member] | |||
Loss Contingencies [Line Items] | |||
Number of individuals in civil complaint | plaintiff | 2 |
Commitments and Contingencies98
Commitments and Contingencies - Future Obligations (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Ground Leases [Member] | |
Operating Leased Assets [Line Items] | |
October 1, 2017 - December 31, 2017 | $ 3,679 |
2,018 | 14,458 |
2,019 | 14,416 |
2,020 | 14,297 |
2,021 | 13,589 |
Thereafter | 231,750 |
Total | 292,189 |
Office Leases [Member] | |
Operating Leased Assets [Line Items] | |
October 1, 2017 - December 31, 2017 | 1,227 |
2,018 | 4,376 |
2,019 | 4,359 |
2,020 | 4,381 |
2,021 | 4,368 |
Thereafter | 8,415 |
Total | $ 27,126 |
Commitments and Contingencies99
Commitments and Contingencies - Purchase Commitments Narrative (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017USD ($)propertyreal_estate_investment_trustagreement | Dec. 31, 2016USD ($) | |
Unrecorded Unconditional Purchase Obligation [Line Items] | ||
Escrow deposits | $ 5,644 | $ 5,741 |
Purchase Commitment [Member] | Private Capital Management Segment [Member] | ||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||
Number of Managed REITs to be assigned | real_estate_investment_trust | 1 | |
Number of purchase and sale agreements | agreement | 18 | |
Percentage of voting interests acquired | 100.00% | |
Number of properties acquired | property | 20 | |
Aggregate purchase price | $ 198,700 | |
Escrow deposits | $ 5,200 |
Equity - Common Stock and Gener
Equity - Common Stock and General Partner Common OP Units (Details) - shares | Sep. 30, 2017 | Dec. 31, 2016 |
Class of Stock [Line Items] | ||
Common stock, shares authorized (shares) | 1,500,000,000 | 1,500,000,000 |
Common stock, shares outstanding (shares) | 974,245,345 | 974,146,650 |
Common stock, shares issued (shares) | 974,245,345 | 974,146,650 |
VEREIT Operating Partnership, L.P. [Member] | Common Stock [Member] | ||
Class of Stock [Line Items] | ||
General partners', units outstanding (shares) | 974,245,345 | 974,146,650 |
General partners', units issued (shares) | 974,245,345 | 974,146,650 |
VEREIT Operating Partnership, L.P. [Member] | Common Stock [Member] | General Partner [Member] | ||
Class of Stock [Line Items] | ||
General partners', units outstanding (shares) | 974,200,000 | |
General partners', units issued (shares) | 974,200,000 |
Equity - Common Stock Continuou
Equity - Common Stock Continuous Offering Program (Details) - Common Stock [Member] - USD ($) | Sep. 30, 2017 | Sep. 19, 2016 |
Class of Stock [Line Items] | ||
Distribution agreement gross sales price (up to) | $ 750,000,000 | |
Distribution agreement stock issued | $ 0 |
Equity - Series F Preferred Sto
Equity - Series F Preferred Stock (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Class of Stock [Line Items] | ||
Preferred stock, shares issued (shares) | 42,834,138 | 42,834,138 |
Preferred stock, shares outstanding (shares) | 42,834,138 | 42,834,138 |
Series F Preferred Stock [Member] | ||
Class of Stock [Line Items] | ||
Preferred stock, shares issued (shares) | 42,800,000 | |
Preferred stock, dividend rate (percent) | 6.70% | |
Preferred stock, liquidation preference per share (in dollars per share) | $ 25 | |
Dividend rate (in dollars per share) | $ 1.675 | |
VEREIT Operating Partnership, L.P. [Member] | Preferred Units [Member] | ||
Class of Stock [Line Items] | ||
General partners', units issued (shares) | 42,834,138 | 42,834,138 |
General partners', units outstanding (shares) | 42,834,138 | 42,834,138 |
Series F preferred units (shares) | 86,874 | 86,874 |
Limited partners', units outstanding (shares) | 86,874 | 86,874 |
Equity - Limited Partner OP Uni
Equity - Limited Partner OP Units (Details) - VEREIT Operating Partnership, L.P. [Member] - Common Stock [Member] - shares | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Class of Stock [Line Items] | ||
Limited partners', units outstanding (shares) | 23,748,347 | 23,748,347 |
Limited Partner [Member] | ||
Class of Stock [Line Items] | ||
Limited partners', units outstanding (shares) | 23,750,000 | 23,750,000 |
Number of units requested for redemption (shares) | 13,100,000 |
Equity - Common Stock Dividends
Equity - Common Stock Dividends (Details) - $ / shares | Aug. 02, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 |
Equity [Abstract] | |||||
Quarterly dividend of common stock declared (in dollars per share) | $ 0.1375 | $ 0.14 | $ 0.14 | $ 0.41 | $ 0.41 |
Annualized dividend rate (in dollars per share) | $ 0.55 |
Equity - Share Repurchase Progr
Equity - Share Repurchase Program (Details) - The Share Repurchase Program [Member] - USD ($) | May 12, 2017 | Sep. 30, 2017 |
Equity, Class of Treasury Stock [Line Items] | ||
Value of stock authorized for repurchase under stock repurchase program (up to) | $ 200,000,000 | |
Stock authorization period | 12 months | |
Repurchases of common stock under the Share Repurchase Program | $ 500,000 | |
Common Stock [Member] | ||
Equity, Class of Treasury Stock [Line Items] | ||
Repurchases of common stock under the Share Repurchase Program (shares) | 68,759 |
Equity - Common Stock Repurchas
Equity - Common Stock Repurchases (Details) | 9 Months Ended |
Sep. 30, 2017shares | |
General Partner [Member] | |
Class of Stock [Line Items] | |
Common stock repurchases (shares) | 222,923 |
Equity-based Compensation - Equ
Equity-based Compensation - Equity Plan Narrative (Details) - Equity Plan [Member] shares in Millions | 9 Months Ended |
Sep. 30, 2017shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Maximum authorized amount as a percentage of shares authorized | 10.00% |
Shares available for future issuance (shares) | 90.6 |
Common Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Cumulative Restricted share awards (shares) | 4 |
Cumulative Restricted share awards forfeited (shares) | 3.7 |
Cumulative Restricted Stock Units (shares) | 4.9 |
Cumulative Restricted Stock Units forfeited (shares) | 0.6 |
Cumulative Deferred Stock Units (shares) | 0.3 |
Shares issued in period (shares) | 9.2 |
Equity-based Compensation - Res
Equity-based Compensation - Restricted Shares Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
General and Administrative Expense [Member] | Equity Plan [Member] | Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation expense | $ 0.4 | $ 1.3 |
Equity-based Compensation - Sum
Equity-based Compensation - Summary of Restricted Shares Activity (Details) - Equity Plan [Member] - Restricted Stock [Member] | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Number of Shares/Units | |
Unvested shares, Beginning Balance (shares) | shares | 562,406 |
Vested (shares) | shares | (196,937) |
Forfeited (shares) | shares | (46,386) |
Unvested shares, Ending Balance (shares) | shares | 319,083 |
Weighted-Average Grant Date Fair Value | |
Unvested shares, Beginning Balance (in dollars per share) | $ / shares | $ 13.78 |
Vested (in dollars per share) | $ / shares | 14.03 |
Forfeited (in dollars per share) | $ / shares | 13.91 |
Unvested shares, Ending Balance (in dollars per share) | $ / shares | $ 13.61 |
Equity-based Compensation - Tim
Equity-based Compensation - Time-Based Restricted Stock Units Narrative (Details) - Time-Based Restricted Stock Units [Member] - Equity Plan [Member] - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Requisite service period | 3 years | |
General and Administrative Expense [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation expense | $ 1.4 | $ 3.9 |
Equity-based Compensation - Def
Equity-based Compensation - Deferred Stock Units Narrative (Details) - Equity Plan [Member] - Deferred Stock Units [Member] $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017USD ($)shares | Sep. 30, 2017USD ($)shares | |
General and Administrative Expense [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation expense | $ | $ 40 | $ 1,000 |
General Partner [Member] | Common Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Right to receive common stock, number of shares (shares) | shares | 1 | 1 |
Equity-based Compensation - 112
Equity-based Compensation - Time-Based Restricted Stock Units and Deferred Stock Units (Details) - Equity Plan [Member] | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Time-Based Restricted Stock Units [Member] | |
Number of Shares/Units | |
Unvested shares, Beginning Balance (shares) | shares | 1,085,914 |
Granted (shares) | shares | 673,381 |
Vested (shares) | shares | (412,692) |
Forfeited (shares) | shares | (16,936) |
Unvested shares, Ending Balance (shares) | shares | 1,329,667 |
Weighted-Average Grant Date Fair Value | |
Unvested shares, Beginning Balance (in dollars per share) | $ / shares | $ 8.43 |
Granted (in dollars per share) | $ / shares | 8.90 |
Vested (in dollars per share) | $ / shares | 8.62 |
Forfeited (in dollars per share) | $ / shares | 8.54 |
Unvested shares, Ending Balance (in dollars per share) | $ / shares | $ 8.61 |
Deferred Stock Units [Member] | |
Number of Shares/Units | |
Unvested shares, Beginning Balance (shares) | shares | 0 |
Granted (shares) | shares | 117,003 |
Vested (shares) | shares | (117,003) |
Forfeited (shares) | shares | 0 |
Unvested shares, Ending Balance (shares) | shares | 0 |
Weighted-Average Grant Date Fair Value | |
Unvested shares, Beginning Balance (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 7.91 |
Vested (in dollars per share) | $ / shares | 7.91 |
Forfeited (in dollars per share) | $ / shares | 0 |
Unvested shares, Ending Balance (in dollars per share) | $ / shares | $ 0 |
Equity-based Compensation - Lon
Equity-based Compensation - Long-Term Incentive Awards Narrative (Details) - Equity Plan [Member] - Long Term Incentive Target Awards [Member] - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
General and Administrative Expense [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation expense | $ 1.8 | $ 5.1 |
Equity-based Compensation - LTI
Equity-based Compensation - LTI Target Awards (Details) - Equity Plan [Member] - LTI Target Awards [Member] | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Number of Shares/Units | |
Unvested shares, Beginning Balance (shares) | shares | 1,522,487 |
Granted (shares) | shares | 726,867 |
Forfeited (shares) | shares | (3,413) |
Unvested shares, Ending Balance (shares) | shares | 2,245,941 |
Weighted-Average Grant Date Fair Value | |
Unvested shares, Beginning Balance (in dollars per share) | $ / shares | $ 9 |
Granted (in dollars per share) | $ / shares | 8.96 |
Forfeited (in dollars per share) | $ / shares | 11.77 |
Unvested shares, Ending Balance (in dollars per share) | $ / shares | $ 8.98 |
Related Party Transactions a115
Related Party Transactions and Arrangements - Offering-Related Revenue Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Program Development Costs [Member] | Rent and Tenant Receivables and Other Assets, Net [Member] | |||
Related Party Transaction [Line Items] | |||
Reserves related to program development costs | $ 5.9 | $ 31.7 | |
Cole REITs [Member] | Selling Commissions Allowable [Member] | |||
Related Party Transaction [Line Items] | |||
Revenue from related party, percentage | 100.00% | 100.00% | |
Cole REITs [Member] | Program Development Costs [Member] | Rent and Tenant Receivables and Other Assets, Net [Member] | |||
Related Party Transaction [Line Items] | |||
Organization and offering costs | $ 3.8 | 3.2 | |
Reserves related to program development costs | $ 5.9 | $ 31.7 |
Related Party Transactions a116
Related Party Transactions and Arrangements - Offering Fee Summary (Details) | Sep. 30, 2017 | Sep. 30, 2016 |
Cole REITs [Member] | Selling Commissions Allowable [Member] | ||
Related Party Transaction [Line Items] | ||
Revenue from related party, percentage | 100.00% | 100.00% |
CCPT V [Member] | Selling Commissions [Member] | Class A Shares [Member] | ||
Related Party Transaction [Line Items] | ||
Revenue from related party, percentage of gross offering proceeds | 7.00% | |
CCPT V [Member] | Selling Commissions [Member] | Class T Shares [Member] | ||
Related Party Transaction [Line Items] | ||
Revenue from related party, percentage of gross offering proceeds | 3.00% | |
CCPT V [Member] | Dealer Manager Fees [Member] | Class A Shares [Member] | ||
Related Party Transaction [Line Items] | ||
Revenue from related party, percentage of gross offering proceeds | 2.00% | |
CCPT V [Member] | Dealer Manager Fees [Member] | Class T Shares [Member] | ||
Related Party Transaction [Line Items] | ||
Revenue from related party, percentage of gross offering proceeds | 2.00% | |
CCPT V [Member] | Annual Distribution and Stockholder Servicing Fee [Member] | Class T Shares [Member] | ||
Related Party Transaction [Line Items] | ||
Revenue from related party, percentage of gross offering proceeds | 1.00% | |
CCPT V [Member] | Annual Distribution and Stockholder Servicing Fee [Member] | Maximum [Member] | Class T Shares [Member] | ||
Related Party Transaction [Line Items] | ||
Revenue from related party, percentage of gross offering proceeds | 4.00% | |
INAV [Member] | Selling Commissions [Member] | Maximum [Member] | Advisor Class Shares [Member] | ||
Related Party Transaction [Line Items] | ||
Revenue from related party, percentage of gross offering proceeds | 3.75% | |
INAV [Member] | Dealer Manager Fees [Member] | Wrap Class Shares [Member] | ||
Related Party Transaction [Line Items] | ||
Revenue from related party, percentage of gross offering proceeds | 0.55% | |
INAV [Member] | Dealer Manager Fees [Member] | Advisor Class Shares [Member] | ||
Related Party Transaction [Line Items] | ||
Revenue from related party, percentage of gross offering proceeds | 0.55% | |
INAV [Member] | Dealer Manager Fees [Member] | Institutional Class Shares [Member] | ||
Related Party Transaction [Line Items] | ||
Revenue from related party, percentage of gross offering proceeds | 0.25% | |
INAV [Member] | Dealer Manager Fees [Member] | INAV Classes [Member] | ||
Related Party Transaction [Line Items] | ||
Daily accrual percentage of estimated per share NAV and payable monthly in arrears | 0.27% | |
INAV [Member] | Annual Distribution and Stockholder Servicing Fee [Member] | Advisor Class Shares [Member] | ||
Related Party Transaction [Line Items] | ||
Revenue from related party, percentage of gross offering proceeds | 0.50% | |
CCIT III [Member] | Selling Commissions [Member] | Class A Shares [Member] | ||
Related Party Transaction [Line Items] | ||
Revenue from related party, percentage of gross offering proceeds | 7.00% | |
CCIT III [Member] | Selling Commissions [Member] | Class T Shares [Member] | ||
Related Party Transaction [Line Items] | ||
Revenue from related party, percentage of gross offering proceeds | 3.00% | |
CCIT III [Member] | Dealer Manager Fees [Member] | Class A Shares [Member] | ||
Related Party Transaction [Line Items] | ||
Revenue from related party, percentage of gross offering proceeds | 2.00% | |
CCIT III [Member] | Dealer Manager Fees [Member] | Class T Shares [Member] | ||
Related Party Transaction [Line Items] | ||
Revenue from related party, percentage of gross offering proceeds | 2.00% | |
CCIT III [Member] | Annual Distribution and Stockholder Servicing Fee [Member] | Class T Shares [Member] | ||
Related Party Transaction [Line Items] | ||
Revenue from related party, percentage of gross offering proceeds | 1.00% | |
CCIT III [Member] | Annual Distribution and Stockholder Servicing Fee [Member] | Maximum [Member] | Class T Shares [Member] | ||
Related Party Transaction [Line Items] | ||
Revenue from related party, percentage of gross offering proceeds | 4.00% |
Related Party Transactions a117
Related Party Transactions and Arrangements - Transaction Service Revenue (Details) | 9 Months Ended |
Sep. 30, 2017property | |
Cole REITs [Member] | Acquisition and Disposition Fee Revenue [Member] | |
Related Party Transaction [Line Items] | |
Number (or more) of properties to earn disposition fees | 1 |
CCPT V [Member] | |
Related Party Transaction [Line Items] | |
Threshold for return on stockholders' capital | 6.00% |
CCPT V [Member] | Acquisition Fees [Member] | |
Related Party Transaction [Line Items] | |
Revenue from related party, percentage | 2.00% |
CCPT V [Member] | Disposition Fees [Member] | |
Related Party Transaction [Line Items] | |
Revenue from related party, percentage | 1.00% |
CCPT V [Member] | Performance Fees [Member] | |
Related Party Transaction [Line Items] | |
Revenue from related party, percentage | 15.00% |
CCIT III [Member] | |
Related Party Transaction [Line Items] | |
Threshold for return on stockholders' capital | 6.00% |
CCIT III [Member] | Acquisition Fees [Member] | |
Related Party Transaction [Line Items] | |
Revenue from related party, percentage | 2.00% |
CCIT III [Member] | Disposition Fees [Member] | |
Related Party Transaction [Line Items] | |
Revenue from related party, percentage | 1.00% |
CCIT III [Member] | Performance Fees [Member] | |
Related Party Transaction [Line Items] | |
Revenue from related party, percentage | 15.00% |
CCIT III [Member] | Financing coordination fee [Member] | |
Related Party Transaction [Line Items] | |
Revenue from related party, percentage | 1.00% |
CCIT II [Member] | |
Related Party Transaction [Line Items] | |
Threshold for return on stockholders' capital | 8.00% |
CCIT II [Member] | Acquisition Fees [Member] | |
Related Party Transaction [Line Items] | |
Revenue from related party, percentage | 2.00% |
CCIT II [Member] | Disposition Fees [Member] | |
Related Party Transaction [Line Items] | |
Revenue from related party, percentage | 1.00% |
CCIT II [Member] | Performance Fees [Member] | |
Related Party Transaction [Line Items] | |
Revenue from related party, percentage | 15.00% |
CCPT IV [Member] | |
Related Party Transaction [Line Items] | |
Threshold for return on stockholders' capital | 8.00% |
CCPT IV [Member] | Acquisition Fees [Member] | |
Related Party Transaction [Line Items] | |
Revenue from related party, percentage | 2.00% |
CCPT IV [Member] | Disposition Fees [Member] | |
Related Party Transaction [Line Items] | |
Revenue from related party, percentage | 1.00% |
CCPT IV [Member] | Performance Fees [Member] | |
Related Party Transaction [Line Items] | |
Revenue from related party, percentage | 15.00% |
Related Party Transactions a118
Related Party Transactions and Arrangements - Management Service Revenue (Details) | Sep. 30, 2017 |
CCPT V [Member] | |
Related Party Transaction [Line Items] | |
Threshold for return on stockholders' capital | 6.00% |
CCPT V [Member] | Asset Management / Advisory Fees [Member] | Minimum [Member] | |
Related Party Transaction [Line Items] | |
Revenue from related party, percentage | 0.65% |
CCPT V [Member] | Asset Management / Advisory Fees [Member] | Maximum [Member] | |
Related Party Transaction [Line Items] | |
Revenue from related party, percentage | 0.75% |
INAV [Member] | |
Related Party Transaction [Line Items] | |
Threshold for return on stockholders' capital | 6.00% |
INAV [Member] | Asset Management / Advisory Fees [Member] | |
Related Party Transaction [Line Items] | |
Revenue from related party, percentage | 0.90% |
INAV [Member] | Performance Fees [Member] | |
Related Party Transaction [Line Items] | |
Revenue from related party, percentage | 25.00% |
Percent of aggregate total return for any individual year | 10.00% |
CCIT III [Member] | |
Related Party Transaction [Line Items] | |
Threshold for return on stockholders' capital | 6.00% |
CCIT III [Member] | Asset Management / Advisory Fees [Member] | Minimum [Member] | |
Related Party Transaction [Line Items] | |
Revenue from related party, percentage | 0.65% |
CCIT III [Member] | Asset Management / Advisory Fees [Member] | Maximum [Member] | |
Related Party Transaction [Line Items] | |
Revenue from related party, percentage | 0.75% |
CCIT II [Member] | |
Related Party Transaction [Line Items] | |
Threshold for return on stockholders' capital | 8.00% |
CCIT II [Member] | Asset Management / Advisory Fees [Member] | Minimum [Member] | |
Related Party Transaction [Line Items] | |
Revenue from related party, percentage | 0.65% |
CCIT II [Member] | Asset Management / Advisory Fees [Member] | Maximum [Member] | |
Related Party Transaction [Line Items] | |
Revenue from related party, percentage | 0.75% |
CCPT IV [Member] | |
Related Party Transaction [Line Items] | |
Threshold for return on stockholders' capital | 8.00% |
CCPT IV [Member] | Asset Management / Advisory Fees [Member] | Minimum [Member] | |
Related Party Transaction [Line Items] | |
Revenue from related party, percentage | 0.65% |
CCPT IV [Member] | Asset Management / Advisory Fees [Member] | Maximum [Member] | |
Related Party Transaction [Line Items] | |
Revenue from related party, percentage | 0.75% |
Related Party Transactions a119
Related Party Transactions and Arrangements - Schedule of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Related Party Transaction [Line Items] | ||||
Related-party revenues | $ 27,078 | $ 30,538 | $ 81,601 | $ 94,038 |
Affiliated Entity [Member] | Revolving Credit Facility [Member] | Credit Facility [Member] | ||||
Related Party Transaction [Line Items] | ||||
Interest income on Affiliate Lines of Credit | 24 | 0 | 221 | 308 |
Offering-related fees and reimbursements [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related-party revenues | 3,882 | 9,545 | 12,721 | 32,850 |
Selling commissions [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related-party revenues | 1,816 | 5,008 | 6,336 | 18,112 |
Dealer manager and distribution fees [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related-party revenues | 1,278 | 2,237 | 3,766 | 7,292 |
Reimbursement revenue [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related-party revenues | 788 | 2,300 | 2,619 | 7,446 |
Transaction service fees and reimbursements [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related-party revenues | 3,964 | 3,499 | 12,110 | 10,297 |
Acquisition fees [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related-party revenues | 3,320 | 2,593 | 9,965 | 8,053 |
Financing coordination fee [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related-party revenues | 0 | 220 | 0 | 220 |
Reimbursement revenues [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related-party revenues | 644 | 686 | 2,145 | 2,024 |
Management fees and reimbursements [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related-party revenues | 19,208 | 17,494 | 56,549 | 50,583 |
Asset and property management fees and leasing fees [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related-party revenues | 56 | 53 | 161 | 159 |
Advisory and performance fee revenue [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related-party revenues | 14,532 | 13,011 | 42,318 | 37,621 |
Reimbursement revenues [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related-party revenues | $ 4,620 | $ 4,430 | $ 14,070 | $ 12,803 |
Selling commissions allowable [Member] | Cole REITs [Member] | ||||
Related Party Transaction [Line Items] | ||||
Selling commissions reallowed | 100.00% | 100.00% | 100.00% | 100.00% |
Dealer manager fees reimbursement [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related-party revenues | $ 600 | $ 900 | $ 1,600 | $ 2,800 |
Revenue from managed real estate investment trusts, excluding fees from real estate programs [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related-party revenues | $ 100 | $ 500 | $ 1,600 | $ 1,100 |
Related Party Transactions a120
Related Party Transactions and Arrangements - Investment in the Cole REITs Narrative (Details) - USD ($) $ in Thousands | 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] | |||||
Aggregate equity investments | $ 44,101 | $ 44,101 | $ 46,077 | ||
Net loss | (805) | $ (488) | |||
Cole REITs [Member] | |||||
Related Party Transaction [Line Items] | |||||
Aggregate equity investments | 3,790 | 3,790 | |||
Net loss | 45 | $ 1 | 500 | $ 128 | |
Cole REITs [Member] | |||||
Related Party Transaction [Line Items] | |||||
Aggregate equity investments | $ 3,800 | $ 3,800 | $ 4,700 |
Related Party Transactions a121
Related Party Transactions and Arrangements - Schedule of Investment in the Cole REITs (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | ||
% of Outstanding Shares Owned | 100.00% | |
Carrying Amount of Investment | $ 44,101 | $ 46,077 |
Funds not yet in offering | 400 | |
Cole REITs [Member] | ||
Related Party Transaction [Line Items] | ||
Carrying Amount of Investment | $ 3,790 | |
CCPT V [Member] | ||
Related Party Transaction [Line Items] | ||
% of Outstanding Shares Owned | 0.77% | |
Carrying Amount of Investment | $ 1,270 | |
INAV [Member] | ||
Related Party Transaction [Line Items] | ||
% of Outstanding Shares Owned | 0.06% | |
Carrying Amount of Investment | $ 128 | |
CCIT II [Member] | ||
Related Party Transaction [Line Items] | ||
% of Outstanding Shares Owned | 0.43% | |
Carrying Amount of Investment | $ 1,154 | |
CCIT III [Member] | ||
Related Party Transaction [Line Items] | ||
% of Outstanding Shares Owned | 16.89% | |
Carrying Amount of Investment | $ 731 | |
CCPT IV [Member] | ||
Related Party Transaction [Line Items] | ||
% of Outstanding Shares Owned | 0.01% | |
Carrying Amount of Investment | $ 107 |
Related Party Transactions a122
Related Party Transactions and Arrangements - Due To Affiliates Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | ||
Due to affiliates | $ 8 | $ 16 |
Cole REITs [Member] | ||
Related Party Transaction [Line Items] | ||
Due to affiliates | $ 8 | $ 16 |
Related Party Transactions a123
Related Party Transactions and Arrangements - Due from Affiliates, Net Narrative (Details) - USD ($) | Sep. 23, 2016 | Sep. 30, 2017 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | |||
Due from affiliates, net | $ 6,638,000 | $ 21,349,000 | |
Credit Facility [Member] | |||
Related Party Transaction [Line Items] | |||
Maximum borrowing capacity | $ 2,300,000,000 | ||
Credit Facility [Member] | Revolving Credit Facility [Member] | Minimum [Member] | LIBOR [Member] | |||
Related Party Transaction [Line Items] | |||
Basis spread on variable rate | 1.00% | ||
Credit Facility [Member] | Revolving Credit Facility [Member] | Maximum [Member] | LIBOR [Member] | |||
Related Party Transaction [Line Items] | |||
Basis spread on variable rate | 1.80% | ||
CCI III OP [Member] | Credit Facility [Member] | Revolving Credit Facility [Member] | |||
Related Party Transaction [Line Items] | |||
Due from affiliates, net | $ 10,300,000 | ||
Maximum borrowing capacity | $ 30,000,000 | ||
Interest rate | 5.12% | ||
CCI III OP [Member] | Credit Facility [Member] | Revolving Credit Facility [Member] | LIBOR [Member] | |||
Related Party Transaction [Line Items] | |||
Basis spread on variable rate | 1.75% | ||
CCI III OP [Member] | Credit Facility [Member] | Revolving Credit Facility [Member] | Minimum [Member] | |||
Related Party Transaction [Line Items] | |||
Variable interest rate | 2.20% | ||
CCI III OP [Member] | Credit Facility [Member] | Revolving Credit Facility [Member] | Maximum [Member] | |||
Related Party Transaction [Line Items] | |||
Variable interest rate | 2.75% | ||
Excluding balances from Cole REITs [Member] | |||
Related Party Transaction [Line Items] | |||
Due from affiliates, net | $ 6,600,000 | $ 11,000,000 |
Net Income (Loss) Per Share_124
Net Income (Loss) Per Share/Unit - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) attributable to the General Partner | $ 16,094 | $ 29,495 | $ 63,940 | $ (80,445) |
Dividends to preferred shares and units | (17,973) | (17,973) | (53,919) | (53,919) |
Net (loss) income available to the General Partner | (1,879) | 11,522 | 10,021 | (134,364) |
Earnings allocated to participating securities | (43) | (154) | (434) | (400) |
Income attributable to limited partners | 0 | 739 | 1,542 | 0 |
Net (loss) income attributable to common stockholders/unitholders and limited partners used in basic and diluted net income (loss) per share/unit | $ (1,922) | $ 12,107 | $ 11,129 | $ (134,764) |
Weighted average number of common stock outstanding - basic (shares) | 974,167,088 | 943,480,170 | 974,060,160 | 917,233,898 |
Effect of Limited Partner OP Units and dilutive securities (shares) | 0 | 25,206,373 | 24,025,813 | 0 |
Weighted average number of common units outstanding - diluted (shares) | 974,167,088 | 968,686,543 | 998,085,973 | 917,233,898 |
Basic and diluted net (loss) income per share attributable to common stockholders (in dollars per share) | $ 0 | $ 0.01 | $ 0.01 | $ (0.15) |
Net Income (Loss) Per Share_125
Net Income (Loss) Per Share/Unit - Narrative (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | |
Restricted Stock and Restricted Stock Units (RSUs) [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (shares) | 500 | 84 | 900 |
Restricted Stock and Restricted Stock Units (RSUs) [Member] | VEREIT Operating Partnership, L.P. [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (shares) | 500 | 84 | 900 |
Limited Partner Common Stock Units [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (shares) | 23,700 | 23,800 |
Net Income (Loss) Per Share_126
Net Income (Loss) Per Share/Unit - Schedule of Earnings Per Share, Basic and Diluted, Operating Partnership (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Net income (loss) attributable to the Operating Partnership | $ 16,094 | $ 29,495 | $ 63,940 | $ (80,445) |
Dividends to preferred units | (17,973) | (17,973) | (53,919) | (53,919) |
Net (loss) income attributable to common stockholders/unitholders and limited partners used in basic and diluted net income (loss) per share/unit | $ (1,922) | $ 12,107 | $ 11,129 | $ (134,764) |
Weighted average number of common stock outstanding - basic (shares) | 974,167,088 | 943,480,170 | 974,060,160 | 917,233,898 |
Effect of dilutive securities (shares) | 0 | 25,206,373 | 24,025,813 | 0 |
Weighted average number of common units outstanding - diluted (shares) | 974,167,088 | 968,686,543 | 998,085,973 | 917,233,898 |
VEREIT Operating Partnership, L.P. [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Net income (loss) attributable to the Operating Partnership | $ 16,485 | $ 30,234 | $ 65,482 | $ (82,578) |
Dividends to preferred units | (17,973) | (17,973) | (53,919) | (53,919) |
Net (loss) income available to the Operating Partnership | (1,488) | 12,261 | 11,563 | (136,497) |
Earnings allocated to participating units | (43) | (154) | (434) | (400) |
Net (loss) income attributable to common stockholders/unitholders and limited partners used in basic and diluted net income (loss) per share/unit | $ (1,531) | $ 12,107 | $ 11,129 | $ (136,897) |
Weighted average number of common stock outstanding - basic (shares) | 997,915,435 | 967,237,921 | 997,808,507 | 940,995,665 |
Effect of dilutive securities (shares) | 0 | 1,448,622 | 277,466 | 0 |
Weighted average number of common units outstanding - diluted (shares) | 997,915,435 | 968,686,543 | 998,085,973 | 940,995,665 |
Basic and diluted net income (loss) per unit attributable to common unitholders (in dollars per share) | $ 0 | $ 0.01 | $ 0.01 | $ (0.15) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
(Provision for) benefit from income taxes | $ (2,053,000) | $ (1,598,000) | $ (8,878,000) | $ (1,374,000) |
Unrecognized tax benefits | 0 | 0 | 0 | 0 |
Cole Capital Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
(Provision for) benefit from income taxes | (868,000) | (59,000) | (3,439,000) | 3,321,000 |
REI Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
(Provision for) benefit from income taxes | (1,185,000) | (1,539,000) | (5,439,000) | (4,695,000) |
VEREIT Operating Partnership, L.P. [Member] | ||||
Segment Reporting Information [Line Items] | ||||
(Provision for) benefit from income taxes | (2,053,000) | $ (1,598,000) | (8,878,000) | $ (1,374,000) |
Unrecognized tax benefits | $ 0 | $ 0 |
Subsequent Events - Real Estate
Subsequent Events - Real Estate Investment Activity (Details) $ in Thousands | 1 Months Ended | 9 Months Ended |
Nov. 01, 2017USD ($)property | Sep. 30, 2017USD ($)property | |
Subsequent Event [Line Items] | ||
Number of real estate properties disposed | property | 6 | |
2017 Acquisitions [Member] | ||
Subsequent Event [Line Items] | ||
Number of properties acquired | property | 65 | |
Aggregate purchase price | $ 453,937 | |
Subsequent Event [Member] | 2017 Acquisitions [Member] | ||
Subsequent Event [Line Items] | ||
Number of properties acquired | property | 6 | |
Aggregate purchase price | $ 45,000 | |
Subsequent Event [Member] | Property Dispositions, 2017 [Member] | ||
Subsequent Event [Line Items] | ||
Number of real estate properties disposed | property | 4 | |
Aggregate gross sales price | $ 41,500 | |
Company's share of proceeds | 40,500 | |
Estimated gain on sale of properties | 9,900 | |
Subsequent Event [Member] | Unconsolidated Property Dispositions, 2017 [Member] | ||
Subsequent Event [Line Items] | ||
Company's share of proceeds | 2,200 | |
Net proceeds | $ 2,500 |
Subsequent Events - Common Stoc
Subsequent Events - Common Stock Dividend (Details) - $ / shares | Nov. 07, 2017 | Aug. 02, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 |
Subsequent Event [Line Items] | ||||||
Quarterly dividend of common stock declared (in dollars per share) | $ 0.1375 | $ 0.14 | $ 0.14 | $ 0.41 | $ 0.41 | |
Annualized dividend rate (in dollars per share) | $ 0.55 | |||||
Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Quarterly dividend of common stock declared (in dollars per share) | $ 0.1375 | |||||
Annualized dividend rate (in dollars per share) | $ 0.55 |
Subsequent Events - Preferred S
Subsequent Events - Preferred Stock Dividend (Details) - Subsequent Event [Member] | Nov. 07, 2017$ / shares |
Subsequent Event [Line Items] | |
Dividend accrual period on annual basis | 360 days |
Annual dividend rate (in dollars per share) | $ 1.675 |
Annualized dividend rate, per 30-day month (in dollars per share) | $ 0.1395833 |