Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 01, 2019 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-37390 | |
Entity Registrant Name | Global Net Lease, Inc. | |
Entity Incorporation, State or Country Code | MD | |
Entity Address, Address Line One | 405 Park Ave., 3rd Floor | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Tax Identification Number | 45-2771978 | |
Entity Address, Postal Zip Code | 10022 | |
City Area Code | 212 | |
Local Phone Number | 415-6500 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Shares, Shares Outstanding | 84,485,990 | |
Entity Central Index Key | 0001526113 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Common Stock | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | GNL | |
Security Exchange Name | NYSE | |
7.25% Series A Cumulative Redeemable Preferred Stock [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 7.25% Series A Cumulative Redeemable Preferred Stock, $0.01 par value | |
Trading Symbol | GNL PR A | |
Security Exchange Name | NYSE |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Real estate investments, at cost: | ||
Land | $ 389,589 | $ 398,911 |
Buildings, fixtures and improvements | 2,441,341 | 2,345,202 |
Construction in progress | 12,821 | 1,235 |
Acquired intangible lease assets | 653,665 | 675,551 |
Total real estate investments, at cost | 3,497,416 | 3,420,899 |
Less accumulated depreciation and amortization | (481,639) | (437,974) |
Total real estate investments, net | 3,015,777 | 2,982,925 |
Assets held for sale | 121,064 | 112,902 |
Cash and cash equivalents | 178,722 | 100,324 |
Restricted cash | 12,953 | 3,369 |
Derivative assets, at fair value | 5,658 | 8,730 |
Unbilled straight-line rent | 50,613 | 47,183 |
Prepaid expenses and other assets | 79,476 | 22,245 |
Due from related parties | 20 | 16 |
Deferred tax assets | 3,288 | 3,293 |
Goodwill and other intangible assets, net | 22,098 | 22,180 |
Deferred financing costs, net | 5,090 | 6,311 |
Total Assets | 3,494,759 | 3,309,478 |
LIABILITIES AND EQUITY | ||
Mortgage notes payable, net | 1,286,033 | 1,129,807 |
Borrowings outstanding | 259,527 | 363,894 |
Term loan, net | 277,403 | 278,727 |
Acquired intangible lease liabilities, net | 32,724 | 35,757 |
Derivative liabilities, at fair value | 7,204 | 3,886 |
Due to related parties | 124 | 790 |
Accounts payable and accrued expenses | 46,244 | 31,529 |
Prepaid rent | 21,119 | 16,223 |
Deferred tax liability | 15,140 | 15,227 |
Taxes payable | 613 | 2,228 |
Dividends payable | 3,001 | 2,664 |
Total Liabilities | 1,949,132 | 1,880,732 |
Commitments and contingencies | 0 | 0 |
Stockholders' Equity: | ||
7.25% Series A cumulative redeemable preferred stock, $0.01 par value, liquidation preference $25.00 per share, 13,409,650 shares authorized, 5,957,848 and 5,416,890 issued and outstanding as of June 30, 2019 and December 31, 2018, respectively | 59 | 54 |
Common Stock, $0.01 par value, 150,000,000 shares authorized, 83,861,900 shares issued and outstanding as of June 30, 2019; 100,000,000 shares authorized, 76,080,625 shares issued and outstanding as of December 31, 2018 | 2,169 | 2,091 |
Additional paid-in capital | 2,196,183 | 2,031,981 |
Accumulated other comprehensive (loss) income | (3,982) | 6,810 |
Accumulated deficit | (656,411) | (615,448) |
Total Stockholders’ Equity | 1,538,018 | 1,425,488 |
Non-controlling interest | 7,609 | 3,258 |
Total Equity | 1,545,627 | 1,428,746 |
Total Liabilities and Equity | $ 3,494,759 | $ 3,309,478 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Preferred stock, authorized (shares) | 16,670,000 | 16,670,000 |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (shares) | 150,000,000 | 100,000,000 |
Common stock, issued (shares) | 83,861,900 | 76,080,625 |
Common stock, outstanding (shares) | 83,861,900 | 76,080,625 |
Redeemable Preferred Stock | ||
Preferred stock, dividend rate | 7.25% | 7.25% |
Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, liquidation preference (usd per share) | $ 25 | $ 25 |
Preferred stock, authorized (shares) | 13,409,650 | 13,409,650 |
Preferred stock, issued (shares) | 5,957,848 | 5,416,890 |
Preferred stock, outstanding (shares) | 5,957,848 | 5,416,890 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
Revenue from tenants | $ 76,119 | $ 70,971 | $ 151,587 | $ 139,057 |
Expenses (income): | ||||
Property operating | 7,049 | 8,211 | 14,408 | 15,681 |
Fire recovery | 0 | (1) | 0 | (80) |
Operating fees to related parties | 8,162 | 7,138 | 16,205 | 13,969 |
Acquisition, transaction and other costs (Note 9) | 847 | 1,114 | 1,109 | 2,439 |
General and administrative | 2,318 | 2,556 | 5,524 | 4,607 |
Equity-based compensation | 2,429 | (23) | 4,538 | (855) |
Depreciation and amortization | 31,084 | 29,813 | 62,387 | 59,309 |
Total expenses | 51,889 | 48,808 | 104,171 | 95,070 |
Operating income before gain (loss) on dispositions of real estate investments | 24,230 | 22,163 | 47,416 | 43,987 |
Gain (loss) on dispositions of real estate investments | 6,923 | (3,818) | 7,815 | (3,818) |
Operating income | 31,153 | 18,345 | 55,231 | 40,169 |
Other income (expense): | ||||
Interest expense | (15,689) | (14,415) | (30,851) | (27,390) |
Loss on extinguishment of debt | (765) | (1,285) | (765) | (1,285) |
Gain on derivative instruments | 1,390 | 6,333 | 1,630 | 3,398 |
Unrealized (loss) income on undesignated foreign currency advances and other hedge ineffectiveness | 0 | (47) | 76 | (90) |
Other income | 19 | 12 | 23 | 23 |
Total other expense, net | (15,045) | (9,402) | (29,887) | (25,344) |
Net income before income tax | 16,108 | 8,943 | 25,344 | 14,825 |
Income tax expense | (780) | (1,200) | (1,740) | (2,270) |
Net income | 15,328 | 7,743 | 23,604 | 12,555 |
Preferred Stock dividends | (2,707) | (2,455) | (5,192) | (4,906) |
Net income attributable to common stockholders | $ 12,621 | $ 5,288 | $ 18,412 | $ 7,649 |
Basic and Diluted Earnings Per Share: | ||||
Basic and diluted net income per share attributable to common stockholders (usd per share) | $ 0.15 | $ 0.08 | $ 0.22 | $ 0.11 |
Weighted average shares outstanding: | ||||
Basic (shares) | 83,847,120 | 67,292,021 | 82,667,421 | 67,289,639 |
Diluted (shares) | 85,165,549 | 67,292,021 | 83,985,850 | 67,289,639 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 15,328 | $ 7,743 | $ 23,604 | $ 12,555 |
Other comprehensive income (loss) | ||||
Cumulative translation adjustment | (288) | (16,878) | (1,611) | (6,078) |
Designated derivatives, fair value adjustments | (3,908) | 1,401 | (8,849) | 5,747 |
Other comprehensive loss | (4,196) | (15,477) | (10,460) | (331) |
Comprehensive income (loss) | 11,132 | (7,734) | 13,144 | 12,224 |
Preferred Stock dividends | (2,707) | (2,455) | (5,192) | (4,906) |
Comprehensive income (loss) attributable to common stockholders | $ 8,425 | $ (10,189) | $ 7,952 | $ 7,318 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Redeemable Preferred Stock | Preferred Stock | Preferred StockRedeemable Preferred Stock | Common Stock | Additional Paid-in Capital | Additional Paid-in CapitalRedeemable Preferred Stock | Accumulated Other Comprehensive (Loss) Income | Accumulated Deficit | Total Stockholders’ Equity | Total Stockholders’ EquityRedeemable Preferred Stock | Non-controlling interest |
Beginning Balance (shares) at Dec. 31, 2017 | 5,409,650 | 67,287,231 | ||||||||||
Beginning Balance at Dec. 31, 2017 | $ 1,414,243 | $ 54 | $ 2,003 | $ 1,860,058 | $ 19,447 | $ (468,396) | $ 1,413,166 | $ 1,077 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Issuance of stock (shares) | 4,015 | 19,384 | ||||||||||
Issuance of stock | (72) | $ (219) | (72) | $ (219) | (72) | $ (219) | ||||||
Dividends declared, common stock | (71,661) | (71,661) | (71,661) | |||||||||
Dividends declared, preferred stock | (4,906) | (4,906) | (4,906) | |||||||||
Equity-based compensation | (854) | 223 | 223 | (1,077) | ||||||||
Distributions to non-controlling interest holders | (158) | (158) | (158) | |||||||||
Net Income | 12,555 | 12,555 | 12,555 | |||||||||
Cumulative translation adjustment | (6,078) | (6,078) | (6,078) | |||||||||
Designated derivatives, fair value adjustments | 5,747 | 5,747 | 5,747 | |||||||||
Ending Balance (shares) at Jun. 30, 2018 | 5,413,665 | 67,306,615 | ||||||||||
Ending Balance at Jun. 30, 2018 | 1,348,597 | $ 54 | $ 2,003 | 1,859,990 | 19,116 | (532,566) | 1,348,597 | 0 | ||||
Beginning Balance (shares) at Mar. 31, 2018 | 5,411,326 | 67,287,231 | ||||||||||
Beginning Balance at Mar. 31, 2018 | 1,394,495 | $ 54 | $ 2,003 | 1,859,746 | 34,593 | (502,026) | 1,394,370 | 125 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Issuance of stock (shares) | 2,339 | 19,384 | ||||||||||
Issuance of stock | (59) | 200 | (59) | 200 | (59) | 200 | ||||||
Dividends declared, common stock | (35,828) | (35,828) | (35,828) | |||||||||
Dividends declared, preferred stock | (2,455) | (2,455) | (2,455) | |||||||||
Equity-based compensation | (22) | 103 | 103 | (125) | ||||||||
Distributions to non-controlling interest holders | 0 | 0 | 0 | |||||||||
Net Income | 7,743 | 7,743 | 7,743 | |||||||||
Cumulative translation adjustment | (16,878) | (16,878) | (16,878) | |||||||||
Designated derivatives, fair value adjustments | 1,401 | 1,401 | 1,401 | |||||||||
Ending Balance (shares) at Jun. 30, 2018 | 5,413,665 | 67,306,615 | ||||||||||
Ending Balance at Jun. 30, 2018 | 1,348,597 | $ 54 | $ 2,003 | 1,859,990 | 19,116 | (532,566) | 1,348,597 | 0 | ||||
Beginning Balance (shares) at Dec. 31, 2018 | 5,416,890 | 76,080,625 | ||||||||||
Beginning Balance at Dec. 31, 2018 | 1,428,746 | $ 54 | $ 2,091 | 2,031,981 | 6,810 | (615,448) | 1,425,488 | 3,258 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Issuance of stock (shares) | 540,958 | 7,781,275 | ||||||||||
Issuance of stock | 150,586 | 13,512 | $ 5 | $ 78 | 150,508 | 13,507 | 150,586 | 13,512 | ||||
Dividends declared, common stock | (58,237) | (58,237) | (58,237) | |||||||||
Dividends declared, preferred stock | (5,192) | (5,192) | (5,192) | |||||||||
Equity-based compensation | 4,538 | 187 | 187 | 4,351 | ||||||||
Distributions to non-controlling interest holders | (270) | (270) | (270) | |||||||||
Net Income | 23,604 | 23,604 | 23,604 | |||||||||
Cumulative translation adjustment | (1,611) | (1,611) | (1,611) | |||||||||
Designated derivatives, fair value adjustments | (8,849) | (8,849) | (8,849) | |||||||||
Ending Balance (shares) at Jun. 30, 2019 | 5,957,848 | 83,861,900 | ||||||||||
Ending Balance at Jun. 30, 2019 | 1,545,627 | $ 59 | $ 2,169 | 2,196,183 | (3,982) | (656,411) | 1,538,018 | 7,609 | ||||
Beginning Balance at Mar. 31, 2019 | 1,537,562 | 1,532,311 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Issuance of stock (shares) | 472,854 | 21,953 | ||||||||||
Issuance of stock | 388 | $ 11,899 | $ 4 | 388 | $ 11,895 | 388 | $ 11,899 | |||||
Dividends declared, common stock | (14,940) | (14,940) | (14,940) | |||||||||
Dividends declared, preferred stock | (2,707) | (2,707) | (2,707) | |||||||||
Equity-based compensation | 2,429 | 71 | 71 | 2,358 | ||||||||
Distributions to non-controlling interest holders | (136) | (136) | (136) | |||||||||
Net Income | 15,328 | 15,328 | 15,328 | |||||||||
Cumulative translation adjustment | (288) | (288) | (288) | |||||||||
Designated derivatives, fair value adjustments | (3,908) | (3,908) | (3,908) | |||||||||
Ending Balance (shares) at Jun. 30, 2019 | 5,957,848 | 83,861,900 | ||||||||||
Ending Balance at Jun. 30, 2019 | $ 1,545,627 | $ 59 | $ 2,169 | $ 2,196,183 | $ (3,982) | $ (656,411) | $ 1,538,018 | $ 7,609 |
CONSOLDATED STATEMENT OF CHANGE
CONSOLDATED STATEMENT OF CHANGES IN EQUITY - Parenthetical - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||||
Common stock, dividends (in USD per share) | $ 0.53 | $ 0.53 | $ 1.06 | $ 1.06 |
Preferred stock, dividends (in USD per share) | $ 0.45 | $ 0.45 | $ 0.90 | $ 0.90 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 23,604 | $ 12,555 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 30,819 | 31,892 |
Amortization of intangibles | 31,568 | 27,416 |
Amortization of deferred financing costs | 2,919 | 2,400 |
Amortization of mortgage discounts and premiums, net | 202 | 530 |
Amortization of below-market lease liabilities | (2,006) | (1,807) |
Amortization of above-market lease assets | 2,220 | 2,371 |
Amortization of above- and below- market ground lease assets | 467 | 488 |
Bad debt expense | 136 | 104 |
Unbilled straight-line rent | (3,557) | (3,336) |
Equity-based compensation | 4,538 | (855) |
Unrealized loss (gain) on foreign currency transactions, derivatives, and other | (3) | (3,706) |
Unrealized loss on undesignated foreign currency advances and other hedge ineffectiveness | 76 | 90 |
Payments for settlement of derivatives | (1,773) | 0 |
Loss on extinguishment of debt | 765 | 1,285 |
(Gain) loss on disposition of real estate investments | (7,815) | 3,818 |
Changes in operating assets and liabilities, net: | ||
Prepaid expenses and other assets | (3,523) | (7,358) |
Deferred tax assets | 5 | 23 |
Accounts payable and accrued expenses | (10,592) | 7,800 |
Prepaid rent | 4,896 | (1,845) |
Deferred tax liability | (87) | (350) |
Taxes payable | (1,615) | (542) |
Net cash provided by operating activities | 71,244 | 70,973 |
Cash flows from investing activities: | ||
Investment in real estate and real estate related assets | (210,991) | (161,786) |
Deposits for real estate acquisitions | (2,270) | (24,551) |
Capital expenditures | (12,146) | (546) |
Proceeds from dispositions of real estate investments | 89,916 | 19,376 |
Payments for settlement of derivatives | 0 | (561) |
Net cash used in investing activities | (135,491) | (168,068) |
Cash flows from financing activities: | ||
Borrowings under revolving credit facilities | 116,000 | 192,000 |
Repayments on revolving credit facilities | (220,000) | (30,000) |
Proceeds from mortgage notes payable | 375,369 | 32,750 |
Payments on mortgage notes payable | (213,192) | (25,362) |
Proceeds from issuance of common stock, net | 150,586 | (72) |
Proceeds from issuance of preferred stock, net | 13,512 | (219) |
Payments of financing costs | (5,768) | (1,285) |
Dividends paid on Common Stock | (58,153) | (71,661) |
Dividends paid on Preferred Stock | (4,940) | (4,906) |
Distributions to non-controlling interest holders | (270) | (158) |
Net cash provided by financing activities | 153,144 | 91,087 |
Net change in cash, cash equivalents and restricted cash | 88,897 | (6,008) |
Effect of exchange rate changes on cash | (915) | (5,520) |
Cash, cash equivalents and restricted cash, beginning of period | 103,693 | 107,727 |
Cash, cash equivalents and restricted cash, end of period | 191,675 | 96,199 |
Cash, cash equivalents and restricted cash, end of period | 103,693 | 107,727 |
Supplemental Disclosures: | ||
Cash paid for interest | 30,668 | 24,981 |
Cash paid for income taxes | $ 3,641 | $ 2,812 |
Organization
Organization | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Global Net Lease, Inc. (the “Company”), incorporated on July 13, 2011 , is a Maryland corporation that elected to be taxed as a real estate investment trust (“REIT”) for United States (“U.S.”) federal income tax purposes beginning with the taxable year ended December 31, 2013. The Company’s common stock, $0.01 par value per share (“Common Stock” is listed on the New York Stock Exchange under the symbol “GNL,” and the Company’s 7.25% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share (“Series A Preferred Stock”), is listed on the New York Stock Exchange under the symbol “GNL PR A.” The Company invests in commercial properties, with an emphasis on sale-leaseback transactions involving single tenant net-leased commercial properties. Substantially all of the Company’s business is conducted through the Global Net Lease Operating Partnership, L.P. (the “OP”), a Delaware limited partnership. The Company has retained Global Net Lease Advisors, LLC (the “Advisor”) to manage the Company’s affairs on a day-to-day basis. The Company’s properties are managed and leased by Global Net Lease Properties, LLC (the “Property Manager”). The Advisor, and the Property Manager are under common control with AR Global Investments, LLC (the successor business to AR Capital LLC, “AR Global”) and these related parties receive compensation and fees for various services provided to the Company. As of June 30, 2019 , the Company owned 288 properties consisting of 28.3 million rentable square feet, which were 99.6% leased, with a weighted-average remaining lease term of 8.0 years. Based on the percentage of annualized rental income on a straight-line basis as of June 30, 2019 , 57.6% of the Company’s properties are located in the U.S. and 42.4% in Europe. The Company may also originate or acquire first mortgage loans, mezzanine loans, preferred equity or securitized loans (secured by real estate). As of June 30, 2019 , the Company did not own any first mortgage loans, mezzanine loans, preferred equity or securitized loans. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited consolidated financial statements of the Company included herein were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to this Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair statement of results for the interim periods. All intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three and six months ended June 30, 2019 are not necessarily indicative of the results for the entire year or any subsequent interim period. These unaudited 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, 2018 , which are included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 28, 2019. Except for those required by new accounting pronouncements discussed below, there have been no significant changes to the Company’s significant accounting policies during the six months ended June 30, 2019 , other than those relating to new accounting pronouncements (see “Recently Issued Accounting Pronouncements” section below). The accompanying unaudited consolidated financial statements include the accounts of the Company, the OP and its subsidiaries. All intercompany accounts and transactions are eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity (“VIE”) for which the Company is the primary beneficiary. The Company has determined that the OP is a VIE of which the Company is the primary beneficiary. Substantially all of the Company’s assets and liabilities are held by the OP. Reclassifications The Company has aggregated revenue from its lease components and non-lease components (tenant operating expense reimbursements) into one line (see additional information in the “Recently Issued Accounting Pronouncements” section below. The prior period has been reclassified to conform to this presentation. Judgments and Estimates The Company regularly makes a number of estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses in order to prepare its consolidated financial statements in conformity with GAAP. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, such as the prevailing economic and business environment. Management adjusts such estimates when facts and circumstances dictate. The most significant estimates management makes include recoverability of accounts receivable, allocation of property purchase price to tangible and intangible assets acquired and liabilities assumed, determination of impairment of long-lived assets, valuation of derivative financial instruments, valuation of compensation plans, and estimating the useful life of a long-lived asset. Actual results could differ materially from those estimated. Investments in Real Estate Investments in real estate are recorded at cost. Improvements and replacements are capitalized when they extend the useful life of the asset. Costs of repairs and maintenance are expensed as incurred. At the time an asset is acquired, the Company evaluates the inputs, processes and outputs of the asset acquired to determine if the transaction is a business combination or an asset acquisition. If an acquisition qualifies as a business combination, the related transaction costs are recorded as an expense in the consolidated statements of operations. If an acquisition qualifies as an asset acquisition, the related transaction costs are generally capitalized and subsequently amortized over the useful life of the acquired assets. In both a business combination and an asset acquisition, the Company allocates the purchase price of acquired properties to tangible and identifiable intangible assets or liabilities based on their respective fair values. Tangible assets may include land, land improvements, buildings, fixtures and tenant improvements on an as if vacant basis. Intangible assets or liabilities may include the value of in-place leases, above- and below- market leases and other identifiable assets or liabilities based on lease or property specific characteristics. In addition, any assumed mortgages receivable or payable and any assumed or issued non-controlling interests (in a business combination) are recorded at their estimated fair values. In allocating the fair value to assumed mortgages, amounts are recorded to debt premiums or discounts based on the present value of the estimated cash flows, which is calculated to account for either above or below-market interest rates. In a business combination, the difference between the purchase price and the fair value of identifiable net assets acquired is either recorded as goodwill or as a bargain purchase gain. In an asset acquisition, the difference between the acquisition price (including capitalized transaction costs) and the fair value of identifiable net assets acquired is allocated to the non-current assets. All acquisitions during the six months ended June 30, 2019 and the year ended December 31, 2018 were asset acquisitions. Purchase Accounting and Acquisition of Real Estate The Company allocates the purchase price of acquired properties to tangible and identifiable intangible assets acquired based on their respective fair values. Tangible assets include land, land improvements, buildings, fixtures and tenant improvements on an as-if vacant basis. The Company utilizes various estimates, processes and information to determine the as-if vacant property value. Estimates of value are made using customary methods, including data from appraisals, comparable sales, discounted cash flow analysis and other methods. Amounts allocated to land, land improvements, buildings and fixtures are based on cost segregation studies performed by independent third parties or on the Company’s analysis of comparable properties in the Company’s portfolio. Identifiable intangible assets include amounts allocated to acquire leases for above- and below-market lease rates, the value of in-place leases, and the value of customer relationships, as applicable. Factors considered in the analysis of the in-place lease intangibles include an estimate of carrying costs during the expected lease-up period for each property, taking into account current market conditions and costs to execute similar leases. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at contract rates during the expected lease-up period, which typically ranges from 12 to 18 months . The Company also estimates costs to execute similar leases including leasing commissions, legal and other related expenses. Above-market and below-market lease values for acquired properties are initially recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease, and (ii) management’s estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the remaining initial term plus the term of any below-market fixed rate renewal options for below-market leases. The capitalized above-market lease values are amortized as a reduction of base rental revenue over the remaining terms of the respective leases, and the capitalized below-market lease values are amortized as an increase to base rental revenue over the remaining initial terms plus the terms of any below-market fixed rate renewal options of the respective leases. If a tenant with a below market rent renewal does not renew, any remaining unamortized amount will be taken into income at that time. The aggregate value of intangible assets related to customer relationship, as applicable, is measured based on the Company’s evaluation of the specific characteristics of each tenant’s lease and the Company’s overall relationship with the tenant. Characteristics considered by the Company in determining these values include the nature and extent of its existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals, among other factors. In making estimates of fair values for purposes of allocating purchase price, the Company utilizes a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other market data. The Company also considers information obtained about each property as a result of the Company’s pre-acquisition due diligence in estimating the fair value of the tangible and intangible assets acquired and intangible liabilities assumed. Derivative Instruments 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. Certain of the Company’s foreign operations expose the Company to fluctuations of foreign interest rates and exchange rates. These fluctuations may impact the value of the Company’s cash receipts and payments in the Company’s functional currency, the U.S. Dollar (“USD”). The Company enters into derivative financial instruments to protect the value or fix the amount of certain obligations in terms of its functional currency. The Company records all derivatives on the consolidated balance sheets at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. The accounting for subsequent changes in the fair value of these derivatives depends on whether each has been designed and qualifies for hedge accounting treatment. If the Company elects not to apply hedge accounting treatment (or for derivatives that do not qualify as hedges), any changes in the fair value of these derivative instruments is recognized immediately in gains (losses) on derivative instruments in the consolidated statements of operations. If a derivative is designated and qualifies for cash flow hedge accounting treatment, the change in the estimated fair value of the derivative is recorded in other comprehensive income (loss) in the consolidated statements of comprehensive income (loss) to the extent that it is effective. Any ineffective portion of a change in derivative fair value is immediately recorded in earnings. Impairment of Long Lived Assets When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the asset for impairment. This review is based on an estimate of the future undiscounted cash flows expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. If impairment exists due to the inability to recover the carrying value of a property, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss is the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net earnings. Goodwill The Company evaluates goodwill for impairment at least annually, in the fourth quarter of each year, or upon the occurrence of a triggering event. A triggering event is an event or circumstance that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company performed a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. Based on the Company’s assessment, it determined that the goodwill was not impaired as of December 31, 2018. Revenue Recognition The Company’s revenues, which are derived primarily from lease contracts, which include rents that each tenant pays in accordance with the terms of each lease agreement and are reported on a straight-line basis over the initial term of the lease. As of June 30, 2019 , these leases had an average remaining lease term of 8.0 years. Since many of the Company’s leases provide for rental increases at specified intervals, straight-line basis accounting requires the Company to record a receivable for, and include in revenues, unbilled rent receivables that the Company will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. For new leases after acquisition, the commencement date is considered to be the date the lease modification is executed. The Company defers the revenue related to lease payments received from tenants in advance of their due dates. When the Company acquires a property, the acquisition date is considered to be the commencement date for purposes of this calculation. In addition to base rent, the Company’s lease agreements generally require tenants to pay or reimburse the Company for all property operating expenses, which primarily reflect insurance costs and real estate taxes incurred by the Company and subsequently reimbursed by the tenant. However, some limited property operating expenses that are not the responsibility of the tenant are absorbed by the Company. Under ASC 842, the Company has elected to report combined lease and non-lease components in a single line “Revenue from tenants.” For comparative purposes, the Company has also elected to reflect prior revenue and reimbursements previously reported under ASC 840 on a single line as well. For expenses paid directly by the tenant, under both ASC 842 and 840, the Company has reflected them on a net basis. The following tables present future base rent payments on a cash basis due to the Company over the periods indicated. These amounts exclude tenant reimbursements and 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. As of June 30, 2019 : (In thousands) Future Base Rent Payments (1) 2019 (remainder) $ 142,050 2020 286,480 2021 287,630 2022 278,744 2023 256,504 2024 212,866 Thereafter 728,617 $ 2,192,891 ___________________________________________ (1) Assumes exchange rates of £1.00 to $1.27 for British Pounds Sterling (“GBP”) and €1.00 to $1.14 for EUR as of June 30, 2019 for illustrative purposes, as applicable. As of December 31, 2018 : (In thousands) Future Base Rent Payments (1) 2019 $ 275,118 2020 278,651 2021 279,630 2022 270,569 2023 247,237 Thereafter 856,838 Total $ 2,208,043 ___________________________________________ (1) Assumes exchange rates of £1.00 to $1.27 for GBP and €1.00 to $1.14 for EUR as of December 31, 2018 for illustrative purposes, as applicable. The Company continually reviews receivables related to rent and unbilled rent receivables and determines collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. Under the new leasing standard (see the “Recently Issued Accounting Pronouncements” section below), the Company is required to assess, based on credit risk only, if it is probable that it will collect virtually all of the lease payments at lease commencement date and it must continue to reassess collectability periodically thereafter based on new facts and circumstances affecting the credit risk of the tenant. Partial reserves, or the ability to assume partial recovery are no longer permitted. If the Company determines that it is probable it will collect virtually all of the lease payments (rent and common area maintenance), the lease will continue to be accounted for on an accrual basis (i.e. straight-line). However, if the Company determines it is not probable that it will collect virtually all of the lease payments, the lease will be accounted for on a cash basis and a full reserve would be recorded on previously accrued amounts in cases where it was subsequently concluded that collection was not probable. Cost recoveries from tenants are included in Revenue from tenants on the accompanying consolidated statements of operations in the period the related costs are incurred, as applicable. Under ASC 842, uncollectible amounts are reflected as reductions in revenue. Under ASC 840, the Company recorded such amounts as bad debt expense as part of property operating expenses. During the six month periods ended June 30, 2019 and 2018 , such amounts were $0.1 million . Income Taxes The Company elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), beginning with the taxable year ended December 31, 2013. Commencing with such taxable year, the Company was organized to operate in such a manner as to qualify for taxation as a REIT under the Code and believes it has so qualified. The Company intends to continue to operate in such a manner to continue to qualify for taxation as a REIT, but no assurance can be given that it will operate in a manner so as to remain qualified as a REIT. As a REIT, the Company generally will not be subject to federal corporate income tax to the extent it distributes annually all of its REIT taxable income. REITs are subject to a number of other organizational and operational requirements. The Company conducts business in various states and municipalities within the U.S. and Puerto Rico, the United Kingdom and Western Europe and, as a result, the Company or one of its subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and certain foreign jurisdictions. As a result, the Company may be subject to certain federal, state, local and foreign taxes on its income and assets, including alternative minimum taxes, taxes on any undistributed income and state, local or foreign income, franchise, property and transfer taxes. Any of these taxes decrease the Company’s earnings and available cash. In addition, the Company’s international assets and operations, including those owned through direct or indirect subsidiaries that are disregarded entities for U.S. federal income tax purposes, continue to be subject to taxation in the foreign jurisdictions where those assets are held or those operations are conducted. Significant judgment is required in determining the Company’s tax provision and in evaluating its tax positions. The Company establishes tax reserves based on a benefit recognition model, which the Company believes could result in a greater amount of benefit (and a lower amount of reserve) being initially recognized in certain circumstances. Provided that the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50 percent likely of being ultimately realized upon settlement. The Company derecognizes the tax position when the likelihood of the tax position being sustained is no longer more likely than not. The Company recognizes deferred income taxes in certain of its subsidiaries taxable in the U.S. or in foreign jurisdictions. Deferred income taxes are generally the result of temporary differences (items that are treated differently for tax purposes than for GAAP purposes). In addition, deferred tax assets arise from unutilized tax net operating losses, generated in prior years. The Company provides a valuation allowance against its deferred income tax assets when it believes that it is more likely than not that all or some portion of the deferred income tax asset may not be realized. Whenever a change in circumstances causes a change in the estimated realizability of the related deferred income tax asset, the resulting increase or decrease in the valuation allowance is included in deferred income tax expense (benefit). The Company derives most of its REIT taxable income from its real estate operations in the U.S. and has historically distributed all of its REIT taxable income to its shareholders. As such, the Company’s real estate operations are generally not subject to federal tax, and accordingly, no provision has been made for U.S. federal income taxes in the consolidated financial statements for these operations. These operations may be subject to certain state, local, and foreign taxes, as applicable. The Company’s deferred tax assets and liabilities are primarily the result of temporary differences related to the following: • Basis differences between tax and GAAP for certain international real estate investments. For income tax purposes, in certain acquisitions, the Company assumes the seller’s basis, or the carry-over basis, in the acquired assets. The carry-over basis is typically lower than the purchase price, or the GAAP basis, resulting in a deferred tax liability with an offsetting increase to goodwill or the acquired tangible or intangible assets; • Timing differences generated by differences in the GAAP basis and the tax basis of assets such as those related to capitalized acquisition costs and depreciation expense; and • Tax net operating losses in certain subsidiaries, including those domiciled in foreign jurisdictions that may be realized in future periods if the respective subsidiary generates sufficient taxable income. The Company recognizes current income tax expense for state and local income taxes and taxes incurred in its foreign jurisdictions. The Company’s current income tax expense fluctuates from period to period based primarily on the timing of its taxable income. Reportable Segments The Company determined that it has one reportable segment, with activities related to investing in real estate. The Company’s investments in real estate generate rental revenue and other income through the leasing of properties, which comprise 100% of total consolidated revenues. Management evaluates the operating performance of the Company’s investments in real estate on an individual property level. Equity-Based Compensation The Company has a stock-based incentive award plan for its directors, and awards thereunder which are accounted for under the guidance for employee share based payments. The cost of services received in exchange for a stock award is measured at the grant date fair value of the award and the expense for such awards is included in equity-based compensation on consolidated statements of operations and is recognized over the vesting period or when the requirements for exercise of the award have been met (see Note 12 — Equity-Based Compensation ). Multi-Year Outperformance Agreements Concurrent with the Listing and modifications to the Fourth Amended and Restated Advisory Agreement (the “Advisory Agreement”) by and among the Company, the OP and the Advisor, the Company entered into a multi-year outperformance agreement with the Advisor in June 2015 (the “2015 OPP”). Following the end of the performance period under the 2015 OPP on June 2, 2018, the Company entered into a new multi-year outperformance agreement with the Advisor in July 2018 (the “2018 OPP”) (see Note 12 — Equity-Based Compensation). Under the 2015 OPP, the Company recorded equity-based compensation expense associated with the awards over the requisite service period on a graded basis. Under the 2018 OPP, effective June 2, 2018, the Company records equity-based compensation evenly over the requisite service period of approximately 2.8 years from the grant date. The equity-based compensation expense was adjusted each reporting period for changes in the estimated market-related performance. Under new accounting guidance adopted by the Company on January 1, 2019, total equity-based compensation expense calculated as of adoption of the new guidance will be fixed as of that date and will not be remeasured in subsequent periods. For additional information see Recently Issued Accounting Pronouncements section below. Recently Issued Accounting Pronouncements Adopted as of January 1, 2019: ASU No. 2016-02 — Leases In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”) which provides new guidance related to the accounting for leases, as well as the related disclosures. For lessors of real estate, leases are accounted for using an approach substantially the same as previous accounting guidance for operating leases and direct financing leases. For lessees, the new standard requires the application of a dual lease classification approach, classifying leases as either operating or finance leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. Lease expense for operating leases is recognized on a straight-line basis over the term of the lease, while lease expense for finance leases is recognized based on an effective interest method over the term of the lease. Also, lessees must recognize a right-of-use asset (“ROU”) and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Further, certain transactions where at inception of the lease the buyer-lessor accounted for the transaction as a purchase of real estate and a new lease, may now be required to have symmetrical accounting to the seller-lessee if the transaction was not a qualified sale-leaseback and accounted for as a financing transaction. Upon adoption, lessors were allowed a practical expedient, which the Company has elected, by class of underlying assets to account for lease and non-lease components (such as tenant reimbursements of property operating expenses) as a single lease component as an operating lease because (a) the non-lease components have the same timing and pattern of transfer as the associated lease component; and (b) the lease component, if accounted for separately, would be classified as an operating lease. Additionally, only incremental direct leasing costs may be capitalized under this new guidance, which is consistent with the Company’s existing policies. Also, upon adoption, companies were allowed a practical expedient package, which the Company has elected, that allowed the Company: (a) to not reassess whether any expired or existing contracts entered into prior to January 1, 2019 are or contain leases; (b) to not reassess the lease classification for any expired or existing leases entered into prior to January 1, 2019 (including assessing sale-leaseback transactions); and (c) to not reassess initial direct costs for any expired or existing leases entered into prior to January 1, 2019. As a result, all of the Company’s existing leases will continue to be classified as operating leases under the new standard. Further, any existing leases for which the property is leased to a tenant in a transaction that at inception was a sale-leaseback transaction will continue to be treated (absent a modification) as operating leases. The Company did not have any leases that would be considered financing leases as of January 1, 2019. The Company assessed the impact of adoption from both a lessor and lessee perspective, which is discussed in more detail below, and adopted the new guidance prospectively on January 1, 2019, using a prospective transition approach under which the Company elected to apply the guidance effective January 1, 2019 and not adjust prior comparative reporting periods (except for the Company’s presentation of lease revenue discussed below). Lessor Accounting As discussed above, the Company was not required to re-assess the classification of its leases, which are considered operating leases under ASU 2016-02. The following is a summary of the most significant impacts to the Company of the new accounting guidance, as lessor: • Because the Company elected the practical expedient noted above to not separate non-lease component revenue from the associated lease component, the Company has aggregated revenue from its lease components and non-lease components (tenant operating expense reimbursements) into one line. The prior period has been conformed to this new presentation. • Changes in the Company’s assessment of receivables that result in bad debt expense is now required to be recorded as an adjustment to revenue, rather than a charge to bad debt expense. This new classification applies for the first quarter of 2019 and reclassification of prior period amounts is not permitted. At transition on January 1, 2019, after assessing its reserve balances at December 31, 2018 under the new guidance, the Company wrote off accounts receivable of $3.4 million , net of $2.2 million in bad debt reserves as an adjustment to the opening balance of accumulated deficit, and accordingly rent for these tenants is currently recorded on a cash basis. • Indirect leasing costs in connection with new or extended tenant leases, if any, are being expensed. Under prior accounting guidance, the recognition would have been deferred. Lessee Accounting The Company is a lessee under ground leases for seven properties as of January 1, 2019. The following is a summary of the most significant impacts to the Company of the new accounting guidance, as lessee: • Upon adoption of the new standard, the Company recorded ROU assets and lease liabilities equal to $24.0 million for the present value of the lease payments related to its ground leases. These amounts are included in prepaid expenses and other assets and accounts payable and accrued expenses on the consolidated balance sheet. • The Company also reclassified $27.0 million , net related to amounts previously reported as above and below market ground lease intangibles to the ROU assets. For additional information and disclosures related to these operating leases, see Note 9 — Commitments and Contingencies. Other Recently Issued Accounting Pronouncements In July 201 |
Real Estate Investments, Net
Real Estate Investments, Net | 6 Months Ended |
Jun. 30, 2019 | |
Real Estate [Abstract] | |
Real Estate Investments, Net | Real Estate Investments, Net Property Acquisitions The following table presents the allocation of the assets acquired and liabilities assumed during the six months ended June 30, 2019 and 2018 , and, in the case of assets located outside of the United States, based on the exchange rate at the time of purchase. All acquisitions in both periods were considered asset acquisitions for accounting purposes. Six Months Ended June 30, (Dollar amounts in thousands) 2019 2018 Real estate investments, at cost: Land $ 10,978 $ 18,816 Buildings, fixtures and improvements 165,261 122,796 Total tangible assets 176,239 141,612 Acquired intangible lease assets: In-place leases 35,698 24,669 Above-market lease assets 352 — Below-market lease liabilities (1,298 ) (4,495 ) Cash paid for acquired real estate investments $ 210,991 $ 161,786 Number of properties purchased 11 13 Acquired Intangible Lease Assets The Company allocates a portion of the fair value of real estate acquired to identified intangible assets and liabilities, consisting of the value of origination costs (tenant improvements, leasing commissions, and legal and marketing costs), the value of above-market and below-market leases, and the value of tenant relationships, if applicable, based in each case on their relative fair values. The Company periodically assesses whether there are any indicators that the value of the intangible assets may be impaired by performing a net present value analysis of future cash flows, discounted for the inherent risk associated with each investment. For the three and six months ended June 30, 2019 and 2018 , the Company did not record any impairment charges for the intangible assets associated with the Company’s real estate investments. Dispositions When the Company sells a property, any gains or losses from the sale are reflected within Gain (loss) on dispositions of real estate investments in the consolidated statements of operations. During the three months ended June 30, 2019 , the Company sold 63 properties located in the United States ( 62 Family Dollar retail stores and one industrial property) and one property located in the United Kingdom for a total contract sales price of $83.3 million , resulting in an aggregate gain of $6.9 million , which is reflected in gains on dispositions of real estate investments in the accompanying consolidated statements of operations for the three months ended June 30, 2019 . During the six months ended June 30, 2019 , the Company sold 64 properties located in the United States ( 62 Family Dollar retail stores and two industrial properties) and one property located in the United Kingdom for a total contract sales price of $92.8 million , resulting in a gain of $7.8 million , which is reflected in gains on dispositions of real estate investments in the accompanying consolidated statements of operations for the six months ended June 30, 2019 . During the three and six months ended June 30, 2018 , the Company sold one real estate asset located in San Jose, California for a total contract sales price of $20.3 million , resulting in net proceeds of $1.3 million after repayment of mortgage debt and a loss of $3.8 million , which is reflected in loss on dispositions of real estate investments in the accompanying consolidated statements of operations for the three and six months ended June 30, 2018 . Assets Held for Sale When assets are identified by management as held for sale, the Company stops recognizing depreciation and amortization expense on the identified assets and estimates the sales price, net of costs to sell, of those assets. If the carrying amount of the assets classified as held for sale exceeds the estimated net sales price, the Company records an impairment charge equal to the amount by which the carrying amount of the assets exceeds the Company’s estimate of the net sales price of the assets. As of June 30, 2019 and December 31, 2018 , the Company had four and three properties, respectively, which were not considered discontinued operations and therefore are recorded and classified as held for sale. During the quarter ended June 30, 2019 , the Company classified one additional property located in Harrison, New Jersey as held for sale, in addition to the three properties that were classified as held for sale at December 31, 2018 . Accordingly, the operating results of these properties remain classified within continuing operations for all periods presented. Significant Tenants There were no tenants whose annualized rental income on a straight-line basis represented 10.0% or greater of consolidated annualized rental income on a straight-line basis for all properties as of June 30, 2019 and December 31, 2018 . The termination, delinquency or non-renewal of leases by any major tenant may have a material adverse effect on revenues. Geographic Concentration The following table lists the countries and U.S. states where the Company has concentrations of properties where annualized rental income on a straight-line basis represented greater than 10.0% of consolidated annualized rental income on a straight-line basis as of June 30, 2019 and December 31, 2018 . Country / U.S. State June 30, December 31, United States 57.6% 55.7% Michigan 13.8% 13.7% United Kingdom 18.1% 19.0% |
Mortgage Notes Payable, Net
Mortgage Notes Payable, Net | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Mortgage Notes Payable, Net | Mortgage Notes Payable, Net Mortgage notes payable, net as of June 30, 2019 and December 31, 2018 consisted of the following: Encumbered Properties Outstanding Loan Amount (1) Effective Interest Rate Interest Rate Country Portfolio June 30, December 31, Maturity (In thousands) (In thousands) Finland: Finnair (9) — $ — $ 32,501 —% — — Tokmanni (9) — — 33,159 —% — — Finland 5 84,145 — 1.7% (2) Fixed/Variable Feb. 2024 France: Auchan 1 9,438 9,498 1.7% (3) Fixed Dec. 2019 Pole Emploi 1 6,595 6,637 1.7% (3) Fixed Dec. 2019 Sagemcom 1 40,822 41,083 1.7% (3) Fixed Dec. 2019 Worldline 1 5,685 5,722 1.9% (3) Fixed Jul. 2020 DCNS 1 10,802 10,872 1.5% (3) Fixed Dec. 2020 ID Logistics II 2 11,939 12,016 1.3% Fixed Jun. 2021 Germany Rheinmetall (10)(11) — — 12,130 —% — — OBI DIY (10)(11) — — 5,150 —% — — RWE AG 3 71,068 71,524 1.6% (3) Fixed Oct. 2019 Rexam (12) — — 5,876 —% — — Metro Tonic (12) — — 30,326 —% — — ID Logistics I (12) — — 4,578 —% — — Germany 5 58,561 — 2.0% (14) Fixed/Variable Jun. 2023 Luxembourg: DB Luxembourg (13) — — 41,198 —% — — The Netherlands: ING Amsterdam (13) — — 50,353 —% — — Luxembourg/ The Netherlands Benelux 3 136,451 — 1.4% Fixed Jun. 2024 Total EUR denominated 23 435,506 372,623 United Kingdom: UK Multi-Property Cross Collateralized Loan 43 292,039 292,890 3.2% (4) Fixed/Variable Aug. 2023 Total GBP denominated 43 292,039 292,890 United States: Quest Diagnostics 1 52,800 52,800 4.5% (5) Variable Sep. 2019 AT&T Services 1 33,550 33,550 2.0% (6) Variable Dec. 2020 Penske Logistics (7) 1 70,000 70,000 4.7% Fixed Nov. 2028 Multi-Tenant Mortgage Loan I (7) 12 187,000 187,000 4.4% Fixed Nov. 2027 Multi-Tenant Mortgage Loan II 8 32,750 32,750 4.4% Fixed Feb. 2028 Multi-Tenant Mortgage Loan III 7 98,500 98,500 4.9% Fixed Dec. 2028 Multi-Tenant Mortgage Loan IV 16 97,500 — 4.6% Fixed May 2029 Total USD denominated 46 572,100 474,600 Gross mortgage notes payable 112 1,299,645 1,140,113 3.2% Mortgage discount (86 ) (569 ) Deferred financing costs, net of accumulated amortization (8) (13,526 ) (9,737 ) Mortgage notes payable, net 112 $ 1,286,033 $ 1,129,807 3.2% _______________________________ (1) Amounts borrowed in local currency and translated at the spot rate in effect at the applicable reporting date. (2) 80% fixed as a result of a “pay-fixed” interest rate swap agreement and 20% variable. Variable portion is approximately 1.4% plus 3-month Euribor. Euribor rate in effect as of June 30, 2019 . (3) Fixed as a result of a “pay-fixed” interest rate swap agreement. (4) 80% fixed as a result of a “pay-fixed” interest rate swap agreement and 20% variable. Variable portion is approximately 2.0% plus 3 -month GBP LIBOR. LIBOR rate in effect as of June 30, 2019 . (5) The interest rate is 2.0% plus 1-month LIBOR. LIBOR rate in effect is as of June 30, 2019 . (6) The interest rate is 2.0% plus 1-month Adjusted LIBOR as defined in the mortgage agreement. LIBOR rate in effect is as of June 30, 2019 . (7) The borrower’s (wholly owned subsidiaries of the Company) financial statements are included within the Company’s consolidated financial statements, however, the borrowers’ assets and credit are only available to pay the debts of the borrowers and their liabilities constitute obligations of the borrowers. (8) Deferred financing costs represent commitment fees, legal fees, and other costs associated with obtaining commitments for financing. These costs are amortized over the terms of the respective financing agreements using the effective interest method. Unamortized deferred financing costs are expensed when the associated debt is refinanced or paid down before maturity. Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined that the financing will not close. (9) These loans were refinanced in February 2019 as part of the Finland Refinancing (see below for further details). (10) These loans were repaid in full upon maturity in January 2019. (11) These loans were encumbered in May 2019 as part of the German Refinancing (see below for further details). (12) These loans were refinanced in May 2019 as part of the German Refinancing (see below for further details). (13) These loans were refinanced in June 2019 as part of the Benelux Refinancing (see below for further details). (14) The loan initially bore interest at a rate of 3-month Euribor plus 1.80% per annum, but, following the replacement of an easement on one property, the loan will bear interest going forward at a rate of Euribor plus 1.55% per annum beginning on October 1, 2019. 80% fixed as a result of a “pay-fixed” interest rate swap agreement and 20% variable. The following table presents future scheduled aggregate principal payments on the Company’s gross mortgage notes payable over the next five calendar years and thereafter as of June 30, 2019 : (In thousands) Future Principal Payments (1) 2019 (remainder) $ 180,723 2020 52,550 2021 24,238 2022 19,046 2023 316,743 2024 220,596 Thereafter 485,749 Total $ 1,299,645 _________________________ (1) Assumes exchange rates of £1.00 to $1.27 for GBP and €1.00 to $1.14 for EUR as of June 30, 2019 for illustrative purposes, as applicable. The Company’s mortgage notes payable agreements require compliance with certain property-level financial covenants including debt service coverage ratios. As of June 30, 2019 , the Company was in compliance with all financial covenants under its mortgage notes payable agreements. The total gross carrying value of unencumbered assets as of June 30, 2019 was $1.3 billion , of which approximately $1.0 billion of this amount was included in the unencumbered asset pool comprising the borrowing base under the Revolving Credit Facility (as defined in Note 5 — Credit Facilities ) and therefore is not available to serve as collateral for future borrowings. Benelux Refinancing On June 12, 2019, the Company, through certain wholly owned subsidiaries borrowed €120.0 million from Landesbank Hessen-Thüringen Girozentrale, secured by three of the Company’s properties located in the Netherlands and Luxembourg. The loan bears interest at a fixed rate of 1.383% and matures on June 11, 2024. The loan is interest-only, with the principal due at maturity. At the closing of the loan, approximately €80.3 million of the net proceeds was used to repay all outstanding indebtedness encumbering two of the properties. German Refinancing On May 10, 2019, the Company, through certain wholly owned subsidiaries borrowed €51.5 million from Landesbank Hessen-Thüringen Girozentrale, secured by five of the Company’s properties located in Germany. The loan is interest-only with the principal due at maturity, which is June 30, 2023. The maturity date may be extended at the Company’s option to February 29, 2024 subject to conditions. The loan initially bore interest at a rate of 3-month Euribor plus 1.80% per annum, but, following the replacement of an easement on one property, the loan will bear interest going forward at a rate of Euribor plus 1.55% per annum beginning on October 1, 2019. The Company also entered into a swap to fix the interest rate for 80% of the principal amount. The net proceeds from the loan were used to repay all €35.6 million outstanding in mortgage indebtedness that previously encumbered three of the properties that secure the loan. Multi-Tenant Mortgage Loan IV On April 12, 2019, the Company, through certain wholly owned subsidiaries, borrowed $97.5 million from Column Financial, Inc. and Société Générale Financial Corporation, secured by 16 of the Company’s single tenant net leased office and industrial properties located in 12 states that were simultaneously removed from the borrowing base under the Revolving Credit Facility. At closing, approximately $90.0 million was used to repay outstanding indebtedness under the Revolving Credit Facility, with the remaining proceeds, after costs and fees related to the loan, available for working capital and general corporate purposes. The loan bears interest at a fixed rate of 4.489% and has a maturity date of May 6, 2029. The loan is interest-only, with the principal balance due on the maturity date. The Company may prepay the loan in whole or in part at any time, subject to certain fees and any unpaid interest depending on the timing and other circumstances of the prepayment. Finland Refinancing On February 6, 2019, the Company, through certain wholly owned subsidiaries borrowed an aggregate of €74.0 million ( $84.2 million based on the prevailing exchange rate on that date) secured by mortgages on the Company’s five properties located in Finland. The maturity date of this loan is February 1, 2024, and it bears interest at a rate of 3 -month Euribor plus 1.4% per year, with the interest rate for approximately €59.2 million ( $67.4 million based on the prevailing exchange rate on that date) fixed by an interest rate swap agreement. The amount fixed by swap agreement represents 80% of the principal amount of the loan and is fixed at 1.8% per year. The loan is interest-only with the principal due at maturity. At the closing of the loan, €57.4 million ( $65.3 million based on the prevailing exchange rate on that date) was used to repay all outstanding indebtedness encumbering the five properties, with the remaining proceeds, after costs and fees related to the loan, available for working capital and general corporate purposes. Multi-Tenant Mortgage Loan II On January 26, 2018, the Company, through certain wholly owned subsidiaries, borrowed $32.8 million . The loan bears interest at a fixed interest rate of 4.32% per annum and matures in February 2028. The loan is interest only with the principal due at maturity and is secured by eight properties in six states, totaling approximately 627,500 square feet. Proceeds were primarily used to repay approximately $30.0 million of outstanding indebtedness under the Revolving Credit Facility. |
Credit Facilities
Credit Facilities | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Credit Facilities | Credit Facilities The table below details the outstanding balances as of June 30, 2019 and December 31, 2018 under the credit agreement with KeyBank National Association (“KeyBank”), as agent, and the other lender parties thereto, which provides for a $632.0 million senior unsecured multi-currency revolving credit facility (the “Revolving Credit Facility”) and a €246.5 million ( $280.3 million based on the prevailing exchange rate as of June 30, 2019 ) senior unsecured term loan facility (the “Term Loan” and, together with the Revolving Credit Facility, the “Credit Facility”). On August 1, 2019, the Company, through the OP, entered into an amendment and restatement of the credit agreement related to the Credit Facility (the “Credit Facility Amendment”) to, among other things, increase the aggregate total commitments, lower the interest rate and revise certain covenants. See “ Note 14 — Subsequent Events for additional details. June 30, 2019 December 31, 2018 (In thousands) TOTAL USD (1) USD GBP EUR TOTAL USD (2) USD GBP EUR Revolving Credit Facility $ 259,527 $ 174,625 £ 40,000 € 30,000 $ 363,894 $ 278,625 £ 40,000 € 30,000 Term Loan 280,273 — — 246,481 282,069 — — 246,481 Deferred financing costs (2,870 ) — — — (3,342 ) — — — Term Loan, Net 277,403 — — 246,481 278,727 — — 246,481 Total Credit Facility $ 536,930 $ 174,625 £ 40,000 € 276,481 $ 642,621 $ 278,625 £ 40,000 € 276,481 (1) Assumes exchange rates of £1.00 to $1.27 for GBP and €1.00 to $1.14 for EUR as of June 30, 2019 for illustrative purposes, as applicable. (2) Assumes exchange rates of £1.00 to $1.27 for GBP and €1.00 to $1.14 for EUR as of December 31, 2018 for illustrative purposes, as applicable. Credit Facility - Terms On July 24, 2017, the Company, through the OP, entered into a credit agreement with KeyBank. Based on USD equivalents at the closing, on July 24, 2017, the aggregate total commitments under the Credit Facility were $725.0 million . On July 2, 2018, upon the Company’s request, the lenders under the Credit Facility increased the aggregate total commitments from $722.2 million to $914.4 million , based on prevailing exchange rates on that date, with approximately $132.0 million of the increase allocated to the Revolving Credit Facility and approximately €51.8 million ( $60.2 million based on the prevailing exchange rate on that date) allocated to the Term Loan. The Company used all the proceeds from the increased borrowings under the Term Loan to repay amounts outstanding under the Revolving Credit Facility. Upon the Company’s request, subject in all respects to the consent of the lenders in their sole discretion, the aggregate total commitments under the Credit Facility may be increased up to an aggregate additional amount of $35.6 million , allocated to either or both portions of the Credit Facility, with total commitments under the Credit Facility not to exceed $950.0 million . The Credit Facility consists of two components, a Revolving Credit Facility and a Term Loan. The Revolving Credit Facility is interest-only and matures on July 24, 2021 , subject to one one -year extension at the Company’s option. The Term Loan portion of the Credit Facility is interest-only and matures on July 24, 2022 . Borrowings under the Credit Facility bear interest at a variable rate per annum based on an applicable margin that varies based on the ratio of consolidated total indebtedness and the consolidated total asset value of the Company and its subsidiaries plus either (i) LIBOR, as applicable to the currency being borrowed, or (ii) a “base rate” equal to the greatest of (a) KeyBank’s “prime rate,” (b) 0.5% above the Federal Funds Effective Rate, or (c) 1.0% above one-month LIBOR. The range of applicable interest rate margins is from 0.60% to 1.20% per annum with respect to base rate borrowings and 1.60% to 2.20% per annum with respect to LIBOR borrowings. As of June 30, 2019 , the Credit Facility had a weighted-average effective interest rate of 2.6% after giving effect to interest rate swaps in place. The Credit Facility requires the Company through the OP to pay an unused fee per annum of 0.25% of the unused balance of the Revolving Credit Facility if the unused balance exceeds or is equal to 50% of the total commitment or a fee per annum of 0.15% of the unused balance of the Revolving Credit Facility if the unused balance is less than 50% of the total commitment. From and after the time the Company obtains an investment grade credit rating, the unused fee will be replaced with a facility fee based on the total commitment under the Revolving Credit Facility multiplied by 0.30% , decreasing as the Company’s credit rating increases. The availability of borrowings under the Revolving Credit Facility is based on the value of a pool of eligible unencumbered real estate assets owned by the Company and compliance with various ratios related to those assets. As of June 30, 2019 , the Company had an outstanding balance of $259.5 million under the Revolving Credit Facility, with approximately $90.7 million available for future borrowings, and an outstanding balance of $277.4 million under the Term Loan, net of deferred financing costs. Any future borrowings under the Revolving Credit Facility may, at the option of the Company, be denominated in USD, EUR, Canadian Dollars, GBP or Swiss Francs. The Term Loan is denominated in EUR. Amounts borrowed may not, however, be converted to, or repaid in, another currency once borrowed. In April 2019, the Company, through certain wholly owned subsidiaries, entered into a new loan agreement with Column Financial, Inc. and Société Générale Financial Corporation secured by 16 of the Company’s single tenant net leased office and industrial properties located in 12 states that were simultaneously removed from the borrowing base under the Revolving Credit Facility. For additional information, see Note 4 — Mortgage Notes Payable, net. The Company, through the OP, may reduce the amount committed under the Revolving Credit Facility and repay outstanding borrowings under the Credit Facility, in whole or in part, at any time without premium or penalty, other than customary “breakage” costs payable on LIBOR borrowings. In the event of a default, the lenders have the right to terminate their obligations under the Credit Facility agreement and to accelerate the payment on any unpaid principal amount of all outstanding loans. The Credit Facility also imposes certain affirmative and negative covenants on the OP, the Company and certain of its subsidiaries including restrictive covenants with respect to, among other things, liens, indebtedness, investments, distributions (see additional information below), mergers and asset sales, as well as financial covenants requiring the OP to maintain, among other things, ratios related to leverage, secured leverage, fixed charge coverage and unencumbered debt services, as well as a minimum consolidated tangible net worth. Under the terms of the Credit Facility, the Company may not pay distributions, including cash dividends payable with respect to Common Stock, Series A Preferred Stock, or any other classes or series of preferred stock that the Company may issue in a future offering, or redeem or otherwise repurchase shares of the Company’s capital stock, Common Stock, Series A Preferred Stock, or any other classes or series of preferred stock the Company may issue in a future offering, that exceed 95% of the Company’s Adjusted FFO as defined in the Credit Facility for any period of four consecutive fiscal quarters, except in limited circumstances, including that for one fiscal quarter in each calendar year, the Company may pay cash distributions, make redemptions and make repurchases in an aggregate amount equal to no more than 100% of its Adjusted FFO. The Company used the exception to pay dividends that were between 95% of Adjusted FFO to 100% of Adjusted FFO during the quarter ended on March 31, 2019. The Company’s ability to comply with the restrictions on the payment of distributions in the Credit Facility depends on its ability to generate sufficient cash flows from its existing properties and through acquisitions or otherwise such that its cash flows in the applicable periods exceed the level of Adjusted FFO required by these restrictions. Among other things, there can be no assurance the Company will complete acquisitions and other investments on a timely basis or on acceptable terms and conditions, if at all. If the Company is not able to increase the amount of cash it has available to pay dividends, including through additional cash flows the Company expects to generate from completing acquisitions, the Company may have to reduce dividend payments or identify other financing sources to fund the payment of dividends at their current levels. Alternatively, the Company could elect to pay a portion of its dividends in shares if approved by the Company’s board of directors. The Company and certain of its subsidiaries have guaranteed the OP’s obligations under the Credit Facility pursuant to a guarantee and a related contribution agreement which governs contribution rights of the guarantors in the event any amounts become payable under the guaranty. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments 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. This alternative approach also reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The 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 and those inputs are significant. Level 3 — Unobservable inputs that 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. However, the Company expects that changes in classifications between levels will be rare. 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. As of June 30, 2019 and December 31, 2018 , 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 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. Financial Instruments Measured at Fair Value on a Recurring Basis The following table presents information about the Company’s assets and liabilities (including derivatives that are presented net) measured at fair value on a recurring basis as of June 30, 2019 and December 31, 2018 , aggregated by the level in the fair value hierarchy within which those instruments fall. (In thousands) Quoted Prices in Active Markets Level 1 Significant Other Observable Inputs Level 2 Significant Unobservable Inputs Level 3 Total June 30, 2019 Foreign currency forwards, net (GBP & EUR) $ — $ 5,658 $ — $ 5,658 Interest rate swaps, net (GBP & EUR) $ — $ (7,204 ) $ — $ (7,204 ) December 31, 2018 Foreign currency forwards, net (GBP & EUR) $ — $ 5,472 $ — $ 5,472 Interest rate swaps, net (GBP & EUR) $ — $ (628 ) $ — $ (628 ) 2018 OPP (1) $ — $ — $ (18,804 ) $ (18,804 ) (1) Effective with the adoption of ASU 2018-07 on January 1, 2019, the 2018 OPP is no longer measured at fair market value on a recurring basis (see Note 2 — Summary of Significant Accounting Policies — Recently Issued Accounting Pronouncements and see Note 12 — Equity-Based Compensation for additional information). The valuation of the 2018 OPP was determined using a Monte Carlo simulation. This analysis reflected the contractual terms of the 2018 OPP, including the performance periods and total return hurdles, as well as observable market-based inputs, including interest rate curves, and unobservable inputs, such as expected volatility. As a result, the Company determined that the 2018 OPP valuation in its entirety was classified in Level 3 of the fair value hierarchy as of December 31, 2018 . A review of the fair value hierarchy classification is conducted on a quarterly basis. Changes in the type of inputs may result in a reclassification for certain assets. There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the six months ended June 30, 2019 . Level 3 Valuations As discussed above, the 2018 OPP is no longer measured at fair value on a recurring basis and according with newly adopted accounting rules is being amortized on a straight-line basis beginning on January 1, 2019 (see Note 2 — Summary of Significant Accounting Policies — Recently Issued Accounting Pronouncements and see Note 12 — Equity-Based Compensation for additional information). Financial Instruments not Measured at Fair Value on a Recurring Basis The Company is required to disclose the fair value of financial instruments for which it is practicable to estimate value. The fair value of short-term financial instruments such as cash and cash equivalents, restricted cash, due to/from related parties, prepaid expenses and other assets, accounts payable, deferred rent and dividends payable approximate their carrying value on the consolidated balance sheets due to their short-term nature. The fair values of the Company’s remaining financial instruments that are not reported at fair value on the consolidated balance sheets are reported below. June 30, 2019 December 31, 2018 (In thousands) Level Carrying Amount Fair Value Carrying Amount Fair Value Mortgage notes payable (1) (2) 3 $ 1,286,033 $ 1,336,784 $ 1,129,807 $ 1,157,710 Revolving Credit Facility (3) 3 $ 259,527 $ 260,777 $ 363,894 $ 365,591 Term Loan (3) (4) 3 $ 277,403 $ 283,635 $ 278,727 $ 283,558 __________________________________________________________ (1) Carrying value includes $1.3 billion gross mortgage notes payable less $0.1 million of mortgage discounts and $13.5 million of deferred financing costs as of June 30, 2019 . (2) Carrying value includes $1.1 billion gross mortgage notes payable less $0.6 million of mortgage discounts and $9.7 million of deferred financing costs as of December 31, 2018 . (3) Both the Revolving Credit Facility and the Term Loan are part of the Credit Facility ( see Note 5 — Credit Facilities for more information). (4) Carrying value includes $280.3 million and $282.1 million gross Term Loan payable less $2.9 million and $3.3 million of deferred financing costs as of June 30, 2019 and December 31, 2018 , respectively. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 6 Months Ended |
Jun. 30, 2019 | |
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. Certain of the Company’s foreign operations expose the Company to fluctuations of foreign interest rates and exchange rates. These fluctuations may impact the value of the Company’s cash receipts and payments in terms of the Company’s functional currency. The Company enters into derivative financial instruments to protect the value or fix the amount of certain obligations in terms of its functional currency, the USD. 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 speculative or other purposes other than interest rate and currency risk management. The use of derivative financial instruments carries certain risks, including the risk that any counterparty to a contractual arrangement may not be able to perform under the agreement. To mitigate this risk, the Company only enters into a derivative financial instrument with a counterparty with a high credit rating with a major financial institution which the Company and its affiliates may also have other financial relationships with. The Company does not anticipate that any such counterparty will fail to meet its obligations. The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheets as of June 30, 2019 and December 31, 2018 : (In thousands) Balance Sheet Location June 30, December 31, Derivatives designated as hedging instruments: Interest rate “pay-fixed” swaps (USD) Derivative (liabilities) assets, at fair value $ (783 ) $ 3,258 Interest rate “pay-fixed” swaps (GBP) Derivative liabilities, at fair value (4,698 ) (1,157 ) Interest rate “pay-fixed” swaps (EUR) Derivative liabilities, at fair value (1,598 ) (1,443 ) Total $ (7,079 ) $ 658 Derivatives not designated as hedging instruments: Foreign currency forwards (GBP-USD) Derivative assets, at fair value $ 3,121 $ 3,247 Foreign currency forwards (EUR-USD) Derivative assets, at fair value 2,537 2,225 Interest rate swaps (EUR) Derivative liabilities, at fair value (125 ) (1,286 ) Total $ 5,533 $ 4,186 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 this objective, the Company primarily uses interest rate swaps. Interest rate swaps designated as cash flow hedges 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. Effective January 1, 2019, all of the changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive income (loss) and are subsequently reclassified into earnings in the period that the hedged forecasted transaction impacts earnings. Prior to January 1, 2019, the ineffective portion of the change in fair value of the derivatives was recognized directly in earnings. During the three and six months ended June 30, 2019 , such derivatives were used to hedge the variable cash flows associated with variable-rate debt. Additionally, during the three and six months ended June 30, 2019 and 2018 , the Company accelerated the reclassification of amounts in other comprehensive income to earnings as a result of the hedged forecasted transactions becoming probable not to occur. During the three and six months ended June 30, 2019 , the accelerated amounts were gains of $2,151 and losses of $24,449 , respectively. During the three and six months ended June 30, 2018 , the accelerated amounts were gains of of $339 and losses of $22,691 , respectively. 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 12 months, the Company estimates that an additional $1.6 million will be reclassified from other comprehensive income as an increase to interest expense. As of June 30, 2019 and December 31, 2018 , the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk: June 30, 2019 December 31, 2018 Derivatives Number of Instruments Notional Amount Number of Instruments Notional Amount (In thousands) (In thousands) Interest rate “pay-fixed” swaps (GBP) 48 $ 233,630 48 $ 234,312 Interest rate “pay-fixed” swaps (EUR) 17 247,773 13 212,255 Interest rate “pay-fixed” swaps (USD) 3 150,000 3 150,000 Total 68 $ 631,403 64 $ 596,567 In connection with a multi-property loan which refinanced all of the Company’s mortgage notes payable secured by its properties located in Finland during the first quarter of 2019, the Company terminated five interest rate swaps with an aggregate notional amount of €57.4 million for a payment of approximately $0.8 million . Following these terminations, $0.7 million was recorded in AOCI and is being recorded as an adjustment to interest expense over the term of the original EUR hedges and respective borrowings. Of the amount recorded in AOCI following these terminations, $0.1 million was recorded as an increase to interest expense for the six months ended June 30, 2019 and approximately $0.5 million remained in AOCI as of June 30, 2019 . In connection with a multi-property loan which refinanced all of the Company’s mortgage notes payable denominated in GBP, during the third quarter of 2018, the Company terminated 15 interest rate swaps with an aggregate notional amount of £208.8 million and one floor with a notional amount of £28.1 million . Following these terminations, the amount relating to GBP borrowings still outstanding of approximately $1.2 million was recorded in AOCI and is being recorded as an adjustment to interest expense over the term of the original GBP hedges and respective borrowings. Of the amount recorded in AOCI following these terminations, $0.1 million was recorded as an increase to interest expense for the six months ended June 30, 2019 and approximately $0.4 million remained in AOCI as of June 30, 2019 . The table below details the location in the consolidated financial statements of the gain or loss recognized on interest rate derivatives designated as cash flow hedges for the three months ended June 30, 2019 and 2018 . Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2019 2018 2019 2018 Amount of (loss) gain recognized in accumulated other comprehensive income (loss) from derivatives (effective portion) $ (4,397 ) $ 7,076 $ (9,094 ) $ 6,646 Amount of loss reclassified from accumulated other comprehensive income (loss) into income as interest expense (effective portion) $ (481 ) $ (1,039 ) $ (980 ) $ (2,344 ) Total interest expense recorded in the consolidated statement of operations $ 15,689 $ 14,415 $ 30,851 $ 27,390 Net Investment Hedges The Company is exposed to fluctuations in foreign currency exchange rates on property investments in foreign countries which pay rental income, incur property related expenses and hold debt instruments in currencies other than its functional currency, the USD. Through the third quarter of 2018, the Company used foreign currency derivatives including cross currency swaps to hedge its exposure to changes in foreign exchange rates on certain of its foreign investments. Cross currency swaps involve fixing the applicable exchange rate for delivery of a specified amount of foreign currency on specified dates. Effective January 1, 2019, for derivatives designated as net investment hedges, all of the changes in the fair value of the derivatives are reported in AOCI (outside of earnings) as part of the cumulative translation adjustment. Prior to January 1, 2019, the ineffective portion of the change in fair value of the derivatives, if any, was recognized directly in earnings. Amounts are reclassified out of AOCI into earnings when the hedged net investment is either sold or substantially liquidated. As of June 30, 2019 and December 31, 2018 the Company did not have foreign currency derivatives that were designated as net investment hedges used to hedge its net investments in foreign operation. Non-designated Derivatives The Company is exposed to fluctuations in the exchange rates of its functional currency, the USD, against the GBP and the EUR. The Company uses foreign currency derivatives, including options, currency forward and cross currency swap agreements to manage its exposure to fluctuations in GBP-USD and EUR-USD exchange rates. While these derivatives are economically hedging the fluctuations in foreign currencies, they do not meet the strict hedge accounting requirements to be classified as hedging instruments. Changes in the fair value of derivatives not designated as hedges under qualifying hedging relationships are recorded directly in net income (loss). The Company recorded gains of $1.4 million and $1.7 million for the three and six months ended June 30, 2019 , respectively. The Company recorded gains of $6.3 million and $3.4 million for the three and six months ended June 30, 2018 , respectively. As of June 30, 2019 and December 31, 2018 , the Company had the following outstanding derivatives that were not designated as hedges under qualifying hedging relationships. June 30, 2019 December 31, 2018 Derivatives Number of Instruments Notional Amount Number of Instruments Notional Amount (In thousands) (In thousands) Foreign currency forwards (GBP-USD) 40 $ 32,500 50 $ 43,000 Foreign currency forwards (EUR-USD) 30 29,000 38 39,500 Interest rate swaps (EUR) 1 10,802 5 138,625 Total 71 $ 72,302 93 $ 221,125 Offsetting Derivatives The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of June 30, 2019 and December 31, 2018 . The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the accompanying consolidated balance sheets. Gross Amounts Not Offset on the Balance Sheet (In thousands) Gross Amounts of Recognized Assets Gross Amounts of Recognized (Liabilities) Gross Amounts Offset on the Balance Sheet Net Amounts of (Liabilities) Assets presented on the Balance Sheet Financial Instruments Cash Collateral Received (Posted) Net Amount June 30, 2019 $ 5,658 $ (7,204 ) $ — $ (1,546 ) $ — $ — $ (1,546 ) December 31, 2018 $ 8,730 $ (3,886 ) $ — $ 4,844 $ — $ — $ 4,844 In addition to the above derivative arrangements, the Company also uses non-derivative financial instruments to hedge its exposure to foreign currency exchange rate fluctuations as part of its risk management program, including foreign denominated debt issued and outstanding with third parties to protect the value of its net investments in foreign subsidiaries against exchange rate fluctuations. The Company has drawn, and expects to continue to draw, foreign currency advances under the Credit Facility to fund certain investments in the respective local currency which creates a natural hedge against the original equity invested in the real estate investments, removing the need for the final cross currency swaps (see Note 4 — Mortgage Notes Payable, Net ). Credit-risk-related Contingent Features The Company has agreements with each of its derivative counterparties that contain a provision where if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations. As of June 30, 2019 , the fair value of derivatives in a net liability position including accrued interest but excluding any adjustment for nonperformance risk related to these agreements was $8.0 million . As of June 30, 2019 , the Company had not posted any collateral related to these agreements and was not in breach of any agreement provisions. 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. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity Common Stock As of June 30, 2019 and December 31, 2018 , the Company had 83.9 million and 76.1 million shares of Common Stock outstanding, respectively, excluding unvested restricted stock units in respect of shares of Common Stock (“RSUs”) and long-term incentive plan units of limited partner interest in the OP (“LTIP Units”). LTIP Units may be convertible into shares of Common Stock in the future. ATM Program — Common Stock The Company has an “at the market” equity offering program (the “ATM Program”) pursuant to which the Company may sell shares of Common Stock, from time to time through its sales agents. During the three months ended March 31, 2019 , the Company sold 7,759,322 shares of Common Stock through the ATM Program for gross proceeds of $152.8 million , before commissions paid of $1.5 million and additional issuance costs of $1.2 million . Following these sales, the Company had raised all $175.0 million contemplated by its existing equity distribution agreement related to the ATM Program. In February 2019, the Company terminated its existing equity distribution agreement and entered into a new equity distribution agreement with substantially the same sales agents on substantially the same terms. As of June 30, 2019 , there have been no shares of common stock sold under the new equity distribution agreement. The Company did not sell any shares of common stock during the three or six months ended June 30, 2018 . Preferred Stock The Company is authorized to issue up to 16,670,000 shares of Preferred Stock, of which it has classified and designated 13,409,650 as authorized shares of its Series A Preferred Stock as of June 30, 2019 and December 31, 2018 . The Company had 5,957,848 and 5,416,890 shares of Series A Preferred Stock issued and outstanding, as of June 30, 2019 and December 31, 2018 , respectively. ATM Program — Series A Preferred Stock In March 2018, the Company established an “at the market” equity offering program for its Series A Preferred Stock (the “Preferred Stock ATM Program”) pursuant to which the Company may raise aggregate sales proceeds of $200.0 million through sales of shares of Series A Preferred Stock from time to time through its sales agents. During the three months ended June 30, 2019 , the Company sold 472,854 shares of Series A Preferred Stock through the Preferred Stock ATM Program for gross proceeds of $12.1 million , before commissions paid of approximately $0.2 million and additional issuance costs of approximately $0.2 million . During the six months ended June 30, 2019 , the Company sold 540,958 shares of Series A Preferred Stock through the Preferred Stock ATM Program for gross proceeds of $13.8 million , before commissions paid of approximately $0.2 million and additional issuance costs of approximately $0.3 million . During the three months ended June 30, 2018 , the Company sold 2,339 shares of Series A Preferred Stock through the Preferred Stock ATM Program for net proceeds of $58,668 , after commissions paid of $880 and additional issuance costs of $24,819 . During the six months ended June 30, 2018 , the Company sold 4,015 shares of Series A Preferred Stock through the Preferred Stock ATM Program for net proceeds of $0.1 million , after commissions paid of $1,509 and additional issuance costs of $0.3 million . Dividends Common Stock Dividends Historically, and through March 31, 2019, the Company generally paid dividends on Common Stock on the 15th day of each month (or, if not a business day, the next succeeding business day) to Common Stock holders of record on the applicable record date during the month at an annualized rate of $2.13 per share or $0.1775 per share on a monthly basis. Prior to July 2018, the record date for the Company’s regular dividend was generally the 8th day of the applicable month. On April 5, 2019, the Company’s board of directors approved a change in the Company’s Common Stock dividend policy. Accordingly, consistent with its peers, the Company anticipates paying future dividends authorized by its board of directors on shares of its Common Stock on a quarterly basis in arrears on the 15th day of the first month following the end of each fiscal quarter (unless otherwise specified) to common stock holders of record on the record date for such payment. This change affects the frequency of dividend payments only, and does not impact the annualized dividend rate on Common Stock of $2.13 . The Company’s board of directors may alter the amounts of dividends paid or suspend dividend payments at any time prior to declaration and therefore dividend payments are not assured. For purposes of the presentation of information herein, the Company may refer to distributions by the OP on OP Units and LTIP Units as dividends. In addition, see Note 5 — Credit Facilities f or additional information on the restrictions on the payment of dividends and other distributions imposed by the Credit Facility. Preferred Stock Dividend Dividends on Series A Preferred Stock accrue in an amount equal to $0.453125 per share per quarter to Series A Preferred Stock holders, which is equivalent to 7.25% of the $25.00 liquidation preference per share of Series A Preferred Stock per annum. Dividends on the Series A Preferred Stock are payable quarterly in arrears on the 15th day of January, April, July and October of each year (or, if not on a business day, on the next succeeding business day) to holders of record at the close of business on the record date set by the Company’s board of directors, which must be not more than 30 nor fewer than 10 days prior to the applicable payment date. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Lessee Arrangements — Ground Leases The Company leases land under ground leases for eight of its properties with lease durations ranging from 16 to 85 years as of June 30, 2019 . On January 1, 2019, the Company adopted ASU 2016- 02 and recorded ROU assets and lease liabilities related to these ground leases, which are all considered operating leases under the new standard (see Note 2 — Summary of Significant Accounting Polices for additional information on the impact of adopting the new standard). As of June 30, 2019 , the Company’s balance sheet includes ROU assets and liabilities of $51.6 million and $24.6 million , respectively, which are included in prepaid expenses and other assets and accounts payable and accrued expenses, respectively. In determining operating ROU assets and lease liabilities for the Company’s existing operating leases upon the adoption of the new lease guidance as well as for new operating leases in the current period, the Company was required to estimate an appropriate incremental borrowing rate on a fully-collateralized basis for the terms of the leases. Since the terms of the Company’s ground leases are significantly longer than the terms of borrowings available to the Company on a fully-collateralized basis, the Company’s estimate of this rate required significant judgment. The Company’s ground operating leases have a weighted-average remaining lease term of approximately 34.0 years and a weighted-average discount rate of 4.33% as of June 30, 2019 . For the three and six months ended June 30, 2019 , the Company paid cash of approximately $0.3 million and $0.7 million for amounts included in the measurement of lease liabilities and recorded expense of $0.3 million and $0.7 million , respectively, on a straight-line basis in accordance with the standard. The lease expense is recorded in property operating expenses in the consolidated statements of operations and comprehensive loss. The Company entered one additional ground lease during the quarter ended June 30, 2019 . The Company incurred rent expense on ground leases of $0.3 million and $0.7 million during the three and six months ended June 30, 2018. The following table reflects the base cash rental payments due from the Company as of June 30, 2019 : (In thousands) Future Base Rent Payments (1) 2019 (remainder) $ 1,038 2020 1,385 2021 1,385 2022 1,385 2023 1,385 2024 1,390 Thereafter 40,189 Total minimum lease payments (2) 48,157 Less: Effects of discounting (23,516 ) Total present value of lease payments $ 24,641 (1) Assumes exchange rates of £1.00 to $1.27 for GBP and €1.00 to $1.14 for EUR as of June 30, 2019 for illustrative purposes, as applicable. (2) Ground lease rental payments due for the Company’s ING Amsterdam lease are not included in the table above as the Company’s ground for this property is prepaid through 2050. The following table reflects the base cash rental payments due from the Company as of December 31, 2018: (In thousands) Future Base Rent Payments (1) 2019 $ 1,371 2020 1,371 2021 1,371 2022 1,371 2023 1,371 Thereafter 40,519 Total minimum lease payments (2) 47,374 Less: Effects of discounting (23,370 ) Total present value of lease payments $ 24,004 (1) Assumes exchange rates of £1.00 to $1.27 for GBP and €1.00 to $1.14 for EUR as of December 31, 2018 for illustrative purposes, as applicable. (2) Ground lease rental payments due for the Company’s ING Amsterdam lease are not included in the table above as the Company’s ground for this property is prepaid through 2050. Litigation and Regulatory Matters In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters. There are no material legal or regulatory proceedings pending or known to be contemplated against the Company. On January 25, 2018, the Former Service Provider filed a complaint against (i) the Company and the OP; (ii) the Property Manager, Global Net Lease Special Limited Partner, LLC, an affiliate of AR Global that directly owns the Advisor and the Property Manager, and the Advisor (collectively, the “GNL Advisor Defendants”); and (iii) AR Capital Global Holdings, LLC, and AR Global (together, the “AR Defendants”), in the Supreme Court of the State of New York, County of New York (“New York Supreme Court”). The complaint alleged that the notice sent to the Former Service Provider by the Company on January 15, 2018, terminating the Former Service Provider Agreement, was a pretext to enable the AR Defendants to seize the Former Service Provider’s business. The complaint alleged breach of contract against the Company, the OP and the GNL Advisor Defendants, and tortious interference against the AR Defendants. The complaint sought: (i) monetary damages against the defendants, (ii) to enjoin the termination of the Service Provider Agreement, and (iii) judgment declaring the termination to be void. On March 4, 2019, the parties entered into a settlement agreement pursuant to which the lawsuit was dismissed. The Company paid $7.4 million to the Former Service Provider pursuant to the settlement agreement. The Company recorded a reserve of $7.4 million related to the then anticipated settlement payment during the fourth quarter of 2018 and subsequently paid the settlement amount during the first quarter of 2019. During the six months ended June 30, 2019 , the Company incurred approximately $1.0 million in additional legal expenses related to this litigation. These costs are included in acquisition, transaction and other costs in the consolidated statement of operations. 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. As of June 30, 2019 , the Company had not been notified by any governmental authority of any non-compliance, liability or other claim, and is not aware of any other environmental condition that it believes will have a material adverse effect on the results of operations. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions As of June 30, 2019 and December 31, 2018 , AR Global and certain affiliates owned, in the aggregate, 35,900 shares of outstanding Common Stock. The Advisor, which is an affiliate of AR Global, and its affiliates currently may incur, and, the Former Service Provider previously incurred costs and fees on behalf of the Company. As of June 30, 2019 and December 31, 2018 , the Company had $20,000 and $16,000 , respectively, of receivables from former affiliates of the Advisor. As of June 30, 2019 , AR Global indirectly owned 95% of the membership interests in the Advisor and Scott J. Bowman, the Company’s former chief executive officer and president, directly owned the other 5% of the membership interests in the Advisor. Prior to his resignation as chief executive officer and president of the Company, Mr. Bowman owned 10% of the membership interests in the Advisor and AR Global indirectly owned the other 90% of the membership interests in the Advisor. James L. Nelson, the Company’s chief executive officer and president, holds a non-controlling profit interest in the Advisor and Property Manager. Mr. Nelson was appointed the Company’s chief executive officer and president, effective as of August 8, 2017. The Company is the sole general partner of the OP and there were no OP Units held by anyone other than the Company outstanding as of June 30, 2019 and December 31, 2018 . The OP made distributions to holders of OP Units other than the Company of $0.1 million during the three and six months ended June 30, 2018. In addition, the Company paid $0.1 million and $0.3 million in distributions to the Advisor as the sole holder of LTIP Units during the three and six months ended June 30, 2019 , respectively, and the Company paid $0.1 million and $0.3 million in distributions related to LTIP Units during the three and six months ended June 30, 2018, respectively. These distributions are included in accumulated deficit in the audited consolidated statements of equity. As of June 30, 2019 and December 31, 2018 , the Company had no unpaid distributions on the LTIP Units. Fees Paid in Connection with the Operations of the Company On June 2, 2015, concurrent with its listing on the New York Stock Exchange, the Company entered into the Advisory Agreement, which was subsequently amended on August 14, 2018 (the “August Amendment”) and November 6, 2018 (the “November Amendment”). These amendments only revise the provisions regarding the effective annual thresholds of Core AFFO Per Share (as defined in the Advisory Agreement) that the Company must satisfy for the Advisor to be paid Incentive Compensation (as defined in the Advisory Agreement). Under the Advisory Agreement, the Company pays the Advisor the following fees in cash monthly in advance: (i) a base fee of $18.0 million per annum (“Minimum Base Management Fee”); and (ii) a variable fee, equal to 1.25% per annum of the cumulative net proceeds realized by the Company from the issuance of any common equity, including any common equity issued in exchange for or conversion of preferred stock or exchangeable notes, as well as, from any other issuances of common, preferred, or other forms of equity of the Company, including units of any operating partnership (“Variable Base Management Fee”). Additionally, the Company pays the Advisor the Incentive Compensation, an amount earned each quarter, 50% payable in cash and 50% payable in shares of Common Stock (subject to certain lock up restrictions). The Incentive Compensation is calculated on an annual basis at the end of the Company’s fiscal year but is payable throughout the course of a year, in quarterly installments, subject to a final year-end adjustment. At the end of each fiscal year, the difference, if any, between the amount of the Incentive Compensation actually paid to the Advisor in the preceding year under the quarterly installments and the actual amount payable for the fiscal year is either repaid by or paid to the Advisor as applicable. Shares of Common Stock that were issued as a portion of any quarterly installment payment are retained and, for purposes of any repayment required to be made by the Advisor, have the value they had at the time of issuance and are adjusted in respect of any dividend or other distribution received prior to the time of repayment but not subsequent dividends or other distributions. Under the Advisory Agreement, prior to the August Amendment, the Incentive Compensation was equal to: (a) 15% of the Company’s Core AFFO (as defined in the Advisory Agreement) per weighted-average share of Common Stock outstanding for the applicable period (“Core AFFO Per Share”) (1) in excess of an incentive hurdle based on an annualized Core AFFO Per Share of $2.37 , plus (b) 10% of the Core AFFO Per Share in excess of an incentive hurdle of an annualized Core AFFO Per Share of $3.08 . The $2.37 and $3.08 incentive hurdles were subject to annual increases of 1% to 3% . Under the Advisory Agreement, as amended by the August Amendment, the Incentive Fee Lower Hurdle (as defined in the Advisory Agreement) was decreased from $2.37 to (a) $2.15 for the 12 months ending June 30, 2019, and (b) $2.25 for the 12 months ending June 30, 2020, and the Incentive Fee Upper Hurdle (as defined in the Advisory Agreement) was decreased from $3.08 to (a) $2.79 for the 12 months ending June 30, 2019, and (b) $2.92 for the 12 months ending June 30, 2020. During the three and six months ended June 30, 2019 and 2018 , no Incentive Compensation was earned. In addition, the August Amendment revised the provisions in the Advisory Agreement governing adjustments to these annual thresholds. The annual thresholds may, beginning with effect from July 1, 2020, be increased each year in the sole discretion of a majority of the Company’s independent directors (in their good faith reasonable judgment, after consultation with the Advisor), by a percentage equal to between 0% and 3% instead of 1% and 3% . In addition, in August 2023 and every five years thereafter, the Advisor will have a right to request that the Company’s independent directors reduce the then current Incentive Fee Lower Hurdle and Incentive Fee Upper Hurdle and make a determination whether any reduction in the annual thresholds is warranted. The annual aggregate amount of the Minimum Base Management Fee and Variable Base Management Fee (collectively, the “Base Management Fee”) that may be paid under the Advisory Agreement are subject to varying caps based on assets under management (“AUM”) (2) , as defined in the Advisory Agreement. The amount of the Base Management Fee to be paid under the Advisory Agreement is capped at the AUM for the preceding year multiplied by (a) 0.75% if equal to or less than $3.0 billion ; (b) 0.75% less (i) a fraction, (x) the numerator of which is the AUM for such specified period less $3.0 billion and (y) the denominator of which is $11.7 billion multiplied by 0.35% if AUM is greater than $3.0 billion but less than $14.6 billion ; or (c) 0.4% if equal to or greater than $14.7 billion . _______________________________ (1) For purposes of the Advisory Agreement, as amended by the November Amendment, Core AFFO per share means (i) net income adjusted for the following items (to the extent they are included in net income): (a) real estate related depreciation and amortization; (b) net income from unconsolidated partnerships and joint ventures; (c) one-time costs that the Advisor deems to be non-recurring; (d) non-cash equity compensation (other than any Restricted Share Payments (as defined in the Advisory Agreement)); (e) other non-cash income and expense items; (f) certain non-cash interest expenses related to securities that are convertible to Common Stock; (g) gain (or loss) from the sale of investments; (h) impairment loss on real estate; (i) acquisition and transaction related costs (now known as acquisition, transaction and other costs on the face of the Company’s income statement); (j) straight-line rent; (k) amortization of above and below market leases assets and liabilities; (l) amortization of deferred financing costs; (m) accretion of discounts and amortization of premiums on debt investments; (n) marked-to-market adjustments included in net income; (o) unrealized gain (loss) resulting from consolidation from, or deconsolidation to, equity accounting, (p) consolidated and unconsolidated partnerships and joint ventures and (q) Incentive Compensation, (ii) divided by the weighted-average outstanding shares of Common Stock on a fully-diluted basis for such period. (2) For purposes of the Advisory Agreement, AUM means, for a specified period, an amount equal to (A) (i) the aggregate costs of the Company’s investments (including acquisition fees and expenses) at the beginning of such period (before reserves for depreciation of bad debts, or similar non-cash reserves) plus (ii) the aggregate cost of the Company’s investment at the end of such period (before reserves from depreciation or bad debts, or similar non-cash reserves) divided by (B) two (2). In addition, the per annum aggregate amount of the Base Management Fee and the Incentive Compensation to be paid under the Advisory Agreement is capped at (a) 1.25% of the AUM for the previous year if AUM is less than or equal to $5.0 billion ; (b) 0.95% if the AUM is equal to or exceeds $15.0 billion ; or (c) a percentage equal to: (A) 1.25% less (B) (i) a fraction, (x) the numerator of which is the AUM for such specified period less $5.0 billion and (y) the denominator of which is $10.0 billion multiplied by (ii) 0.30% if AUM is greater than $5.0 billion but less than $15.0 billion . The Variable Base Management Fee is also subject to reduction if there is a sale or sales of one or more Investments in a single or series of related transactions exceeding $200.0 million and a special dividend(s) related thereto is paid to stockholders. The Company has also agreed under the Advisory Agreement to reimburse, indemnify and hold harmless each of the Advisor and its affiliates, and the directors, officers, employees, partners, members, stockholders, other equity holders, agents and representatives of the Advisor and its affiliates (each, a “Advisor Indemnified Party”), of and from any and all expenses, losses, damages, liabilities, demands, charges and claims of any nature whatsoever (including reasonable attorneys’ fees) in respect of or arising from any acts or omissions of the Advisor Indemnified Party performed in good faith under the Advisory Agreement and not constituting bad faith, willful misconduct, gross negligence, or reckless disregard of duties on the part of the Advisor Indemnified Party. In addition, the Company has agreed to advance funds to an Advisor Indemnified Party for reasonable legal fees and other reasonable costs and expenses incurred as a result of any claim, suit, action or proceeding for which indemnification is being sought, subject to repayment if the Advisor Indemnified Party is later found pursuant to a final and non-appealable order or judgment to not be entitled to indemnification. Property Management Fees The Property Manager provides property management and leasing services for properties owned by the Company, for which the Company pays fees equal to: (i) with respect to stand-alone, single-tenant net leased properties which are not part of a shopping center, 2.0% of gross revenues from the properties managed and (ii) with respect to all other types of properties, 4.0% of gross revenues from the properties managed. For services related to overseeing property management and leasing services provided by any person or entity that is not an affiliate of the Property Manager, the Company pays the Property Manager an oversight fee equal to 1.0% of gross revenues of the property managed. This oversight fee is no longer applicable to 12 of the Company’s properties which became subject to a separate property management agreement with the Property Manager in connection with a multi-property mortgage loan in October 2017 (the “12-Property PMLA”) on otherwise identical terms to the then effective primary property and management leasing agreement (the “Primary PMLA”), which remained applicable to all other properties. In February 2019, the Company entered into an amendment to the Primary PMLA, following which it continues to have a one-year term that is automatically extended for an unlimited number of successive one-year terms unless terminated by either party upon notice. Under the Primary PMLA prior to this amendment, either the Company or the Property Manager could terminate upon 60 days’ written notice prior to end of the applicable term. Following this amendment, either the Company or the Property Manager may terminate the Primary PMLA at any time upon at least 12 months’ prior written notice. The 12 -Property PMLA was not similarly amended. In connection with a multi-property mortgage loan in April 2019, 16 of the Company’s properties became subject to another separate property management agreement with the Property Manager on the same terms as the 12-Property PMLA. Solely with respect to the Company’s investments in properties located in Europe, prior to the effectiveness of the termination of the Former Service Provider in March 2018, the Former Service Provider received, from the Property Manager, a portion of the fees payable to the Property Manager equal to: (i) with respect to single-tenant net leased properties which are not part of a shopping center, 1.75% of the gross revenues from such properties and (ii) with respect to all other types of properties, 3.5% of the gross revenues from such properties. The Property Manager was paid 0.25% of the gross revenues from European single-tenant net leased properties which are not part of a shopping center and 0.5% of the gross revenues from all other types of properties, reflecting a split of the oversight fee with the Former Service Provider. Following the termination of the Former Service Provider, the Former Service Provider no longer receives any amounts from the Advisor. For additional information, see Note 1 — Organization. Professional Fees and Other Reimbursements The Company reimburses the Advisor’s costs of providing administrative services, subject to the limitation that the Company will not reimburse the Advisor for any amount by which the Company’s operating expenses (including the asset management fee) at the end of the four preceding fiscal quarters exceeds the greater of (a) 2.0% of average invested assets and (b) 25.0% of net income, unless the excess amount is otherwise approved by the Company’s board of directors. Additionally, the Company reimburses the Advisor for expenses of the Advisor and its affiliates incurred on behalf of the Company, except for those expenses that are specifically the responsibility of the Advisor under the Advisory Agreement, such as fees and compensation paid to the Former Service Provider prior to its termination and the Advisor’s overhead expenses, rent and travel expenses, professional services fees incurred with respect to the Advisor for the operation of its business, insurance expenses (other than with respect to the Company’s directors and officers) and information technology expenses. The following table reflects related party fees incurred, forgiven and contractually due as of and for the periods presented: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Payable as of (In thousands) Incurred Forgiven Incurred Forgiven Incurred Forgiven Incurred Forgiven June 30, 2019 December 31, 2018 One-time fees and reimbursements: Fees on gain from sale of investments $ — $ — $ — $ — $ — $ — $ — $ — $ — $ 49 (2) Ongoing fees (3) : Asset management fees (1) 6,694 — 5,658 — 13,365 — 11,315 — — — Property management fees 1,468 — 1,132 — 2,840 — 2,303 — — — Total related party operational fees and reimbursements $ 8,162 $ — $ 6,790 $ — $ 16,205 $ — $ 13,618 $ — $ — $ 49 ___________________________________________________________________________ (1) The Advisor, in accordance with the Advisory Agreement, received asset management fees in cash equal to one quarter of the annual Minimum Base Management Fee of $18.0 million and the Variable Base Management Fee. The Variable Base Management Fee was $2.2 million and $4.4 million for the three and six months ended June 30, 2019 , respectively. The Variable Base Management Fee was $1.2 million and $2.3 million for the three and six months ended June 30, 2018 , respectively. (2) Balance included within due to related parties on the consolidated balance sheets as of June 30, 2019 and December 31, 2018 . (3) The Company incurred general and administrative costs and other expense reimbursements of approximately $0.6 million and $0.2 million for the six months ended June 30, 2019 and 2018 , respectively, which are recorded within general and administrative expenses on the audited consolidated statements of operations and are not reflected in the table above. Fees Paid in Connection with the Liquidation of the Company’s Real Estate Assets In connection with any sale or similar transaction involving any investment, subject to the terms of the Advisory Agreement, the Company will pay to the Advisor a fee in connection with net gain recognized by the Company in connection with the sale or transaction (the “Gain Fee”) unless the proceeds of the sale or transaction are reinvested in one or more investments within 180 days thereafter. The Gain Fee is calculated at the end of each month and paid, to the extent due, with the next installment of the Base Management Fee. The Gain Fee is calculated by aggregating all of the gains and losses from the preceding month. As of December 31, 2018 , the Gain Fee due to the Advisor was approximately $49,000 . There was no Gain Fee for the six months ended June 30, 2019 . |
Economic Dependency
Economic Dependency | 6 Months Ended |
Jun. 30, 2019 | |
Economic Dependency [Abstract] | |
Economic Dependency | Economic Dependency Under various agreements, the Company has engaged or will engage the Advisor, its affiliates and entities under common control with the Advisor, to provide certain services that are essential to the Company, including asset management services, supervision of the management and leasing of properties owned by the Company, asset acquisition and disposition decisions, the sale of shares of Common Stock available for issue, transfer agency services, as well as other administrative responsibilities for the Company including accounting services and investor relations. As a result of these relationships, the Company is dependent upon the Advisor and its affiliates. In the event that these companies are unable to provide the Company with the respective services, the Company will be required to find alternative providers of these services. |
Equity-Based Compensation
Equity-Based Compensation | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Compensation [Abstract] | |
Equity-Based Compensation | Equity-Based Compensation Stock Option Plan The Company has a stock option plan (the “Plan”) which authorizes the grant of nonqualified Common Stock options to the Company’s directors, officers, advisors, consultants and other personnel of the Company, the Advisor and the Property Manager and their affiliates, subject to the absolute discretion of the board of directors and the applicable limitations of the Plan. The exercise price for all stock options granted under the Plan equal to the closing price of a share of Common Stock on the last trading day preceding the date of grant. A total of 0.5 million shares have been authorized and reserved for issuance under the Plan. As of June 30, 2019 and December 31, 2018 , no stock options were issued under the Plan. Restricted Share Plan The Company’s employee and director incentive restricted share plan (“RSP”) provides the Company with the ability to grant awards of restricted shares of Common Stock (“Restricted Shares”) and RSUs to the Company’s directors, officers and employees, employees of the Advisor and its affiliates, employees of entities that provide services to the Company, directors of the Advisor or of entities that provide services to the Company, certain consultants to the Company and the Advisor and its affiliates or to entities that provide services to the Company. The Company pays independent director compensation as follows: (i) the annual retainer payable to all independent directors is $100,000 per year, (ii) the annual retainer for the non-executive chair is $105,000 , (iii) the annual retainer for independent directors serving on the audit committee, compensation committee or nominating and corporate governance committee is $30,000 . All annual retainers are payable 50% in the form of cash and 50% in the form of RSUs which vest over a three -year period. In addition, the directors have the option to elect to receive the cash component in the form of RSUs which would vest over a three -year period. Under the RSP, the number of shares of Common Stock available for awards is equal to 10.0% of the Company’s outstanding shares of Common Stock on a fully diluted basis at any time. If any awards granted under the RSP are forfeited for any reason, the number of forfeited shares is again available for purposes of granting awards under the RSP. Restricted Share awards entitle the recipient to receive shares of Common Stock from us under terms that provide for vesting over a specified period of time. Restricted Shares may not, in general, be sold or otherwise transferred until restrictions are removed and the shares have vested. Holders of Restricted Shares receive cash dividends prior to the time that the restrictions on the Restricted Shares have lapsed. Any dividends to holders of Restricted Shares payable in shares of Common Stock are subject to the same restrictions as the underlying Restricted Shares. RSUs represent a contingent right to receive shares of Common Stock at a future settlement date, subject to satisfaction of applicable vesting conditions or other restrictions, as set forth in the RSP and an award agreement evidencing the grant of RSUs. RSUs may not, in general, be sold or otherwise transferred until restrictions are removed and the rights to the shares of Common Stock have vested. Holders of RSUs do not have or receive any voting rights with respect to the RSUs or any shares underlying any award of RSUs, but such holders are generally credited with dividend or other distribution equivalents which are subject to the same vesting conditions or other restrictions as the underlying RSUs and only paid at the time such RSUs are settled in shares of Common Stock. RSU award agreements generally provide for accelerated vesting of all unvested RSUs in connection with a termination without cause from the Company’s board of directors or a change of control and accelerated vesting of the portion of the unvested RSUs scheduled to vest in the year of the recipient’s voluntary resignation from or failure to be re-elected to the Company’s board of directors. The following table reflects the amount of RSUs outstanding as of June 30, 2019 : Number of RSUs Weighted-Average Issue Price Unvested, December 31, 2018 46,352 $ 22.04 Vested (21,955 ) 22.56 Granted 16,563 18.89 Unvested, June 30, 2019 40,960 20.49 The fair value of the RSUs granted is based on the market price of Common Stock as of the grant date, and is expensed over the vesting period. Compensation expense related to RSUs was $0.1 million and $0.2 million for the three and six months ended June 30, 2019 , respectively. Compensation expense related to RSUs was $0.2 million and $0.2 million for the three and six months ended June 30, 2018 , respectively. Compensation expense is recorded as equity-based compensation in the accompanying consolidated statements of operations. As of June 30, 2019 , the Company had $0.8 million unrecognized compensation costs related to unvested RSUs granted under the RSP. That cost is expected to be recognized over a weighted-average period of 2.1 years . Multi-Year Outperformance Agreement On July 16, 2018, the Company’s compensation committee approved the 2018 OPP, which was subsequently entered into by the Company and the OP with the Advisor on July 19, 2018. The 2018 OPP was entered into in connection with the conclusion of the performance period under the 2015 OPP on June 2, 2018. Because no performance goals under the 2015 OPP were achieved during the performance period, no LTIP Units issued under the 2015 OPP were earned and all LTIP Units issued under the 2015 OPP were automatically forfeited without the payment of any consideration by the Company or the OP effective as of June 2, 2018. The equity-based compensation expense associated with the awards pursuant to the 2015 OPP was adjusted each reporting period for changes in the estimated market-related performance and expensed over the requisite service period on a graded vesting basis. Under new accounting rules adopted by the Company on January 1, 2019, the total fair value of the LTIP Units of $18.8 million was calculated as of adoption of the new guidance is fixed as of that date and will not be remeasured in subsequent periods unless the 2018 OPP is amended (see Note 2 — Summary of Significant Accounting Policies for a description of new accounting rules related to non-employee equity awards). The value of LTIP Units is being recorded evenly over the requisite service period of approximately 2.8 years from the grant date. In February 2019, the Company entered into an amendment to the 2018 OPP with the Advisor to reflect a change in the peer group resulting from the merger of two members of the peer group, Government Properties Income Trust and Select Income REIT, with Government Properties Income Trust surviving the merger renamed as Office Properties Income Trust. Under the accounting rules, the Company was required to calculate any excess of the new value of Award LTIP Units in accordance with the provisions of the amendment ( $29.9 million ) over the fair value immediately prior to the amendment ( $23.3 million ). This excess of approximately $6.6 million is being expensed over the period from February 21, 2019, the date the Company’s compensation committee approved the amendment, through June 2, 2021. During the three and six months ended June 30, 2019 , the Company recorded compensation expense related to the 2018 OPP of $2.4 million and $4.4 million , respectively. During the three and six months ended June 30, 2018 , the Company recorded reductions to expense related to the 2015 OPP of $0.1 million and $1.1 million , respectively. LTIP Units/Distributions/Redemption The rights of the Advisor as the holder of the LTIP Units are governed by the terms of the LTIP Units contained in the agreement of limited partnership of the OP. Until an LTIP Unit is earned in accordance with the provisions of the applicable outperformance award agreement, the holder of the LTIP Unit is entitled to distributions on the LTIP Unit equal to 10% of the distributions (other than distributions of sale proceeds) made on an OP Unit. The Company paid $0.3 million and $0.2 million in distributions related to LTIP Units during the six months ended June 30, 2019 and 2018, respectively, which is included in accumulated deficit in the consolidated statement of changes in equity. Distributions paid with respect to an LTIP Unit will not be subject to forfeiture, even if the LTIP Unit is ultimately forfeited because it is not earned in accordance with the terms of the agreement under which it was issued. After an LTIP Unit is earned, the holder will be entitled to a priority catch-up distribution per earned LTIP Unit equal to the accrued distributions on OP Units during the applicable performance period, less distributions already paid on the LTIP Unit during the performance period. As of the valuation date on the final day of the applicable performance period, the earned LTIP Units will become entitled to the same distributions as OP Units. At the time the Advisor’s capital account with respect to an LTIP Unit is economically equivalent to the average capital account balance of an OP Unit, the LTIP Unit has been earned and it has been vested for 30 days, the Advisor, in its sole discretion, will be entitled to convert the LTIP Unit into an OP Unit in accordance with the limited partnership agreement of the OP. In accordance with, and subject to the terms of, the limited partnership agreement of the OP, OP Units may be redeemed on a one-for-one basis for, at the Company’s election, shares of Common Stock or the cash equivalent thereof. 2018 OPP Based on a maximum award value of $50.0 million and $19.57 (the “Initial Share Price”), the closing price of Common Stock on June 1, 2018, the trading day prior to the effective date of the 2018 OPP, the Advisor was issued a total of 2,554,930 LTIP Units (the “Award LTIP Units”) pursuant to the 2018 OPP. The Award LTIP Units represent the maximum number of LTIP Units that could be earned by the Advisor based on the Company’s total shareholder return (“TSR”), including both share price appreciation and Common Stock dividends, against the Initial Share Price over a performance period (the “Performance Period”), commencing on June 2, 2018 and ending on the earliest of (i) June 2, 2021, (ii) the effective date of any Change of Control (as defined in the 2018 OPP) and (iii) the effective date of any termination of the Advisor’s service as advisor of the Company. Half of the Award LTIP Units (the “Absolute TSR LTIP Units”) will be eligible to be earned as of the last day of the Performance Period (the “Valuation Date”) if the Company achieves an absolute TSR with respect to threshold, target and maximum performance goals for the Performance Period as follows: Performance Level (% of Absolute TSR LTIP Units Earned) Absolute TSR Number of Absolute TSR LTIP Units Earned Below Threshold — % Less than 24 % — Threshold 25 % 24 % 319,366 Target 50 % 30 % 638,733 Maximum 100 % 36 % or higher 1,277,465 If the Company’s absolute TSR is more than 24% but less than 30% , or more than 30% but less than 36% , the percentage of the Absolute TSR LTIP Units earned will be determined using linear interpolation as between those tiers, respectively. Half of the Award LTIP Units (the “Relative TSR LTIP Units”) will be eligible to be earned as of the Valuation Date if the amount, expressed in terms of basis points (bps), whether positive or negative, by which the Company’s absolute TSR on the Valuation Date exceeds the average TSR of a peer group consisting of Lexington Realty Trust, W.P. Carey Inc. and Office Properties Income Trust as of the Valuation Date as follows: Performance Level (% of Relative TSR LTIP Units Earned) Relative TSR Excess Number of Absolute TSR LTIP Units Earned Below Threshold — % Less than -600 basis points — Threshold 25 % -600 basis points 319,366 Target 50 % — basis points 638,733 Maximum 100 % +600 basis points 1,277,465 If the relative TSR excess is more than -600 basis points but less than 0 basis points, or more than 0 basis points but less than +600 bps, the percentage of the Relative TSR LTIP Units earned will be determined using linear interpolation as between those tiers, respectively. If the Valuation Date is the effective date of a Change of Control or a termination of the Advisor for any reason (i.e., with or without cause), then calculations relating to the number of Award LTIP Units earned pursuant to the 2018 OPP will be performed based on actual performance as of (and including) the effective date of the Change of Control or termination (as applicable) based on the performance through the last trading day prior to the effective date of the Change of Control or termination (as applicable), with the hurdles for calculating absolute TSR pro-rated to reflect that the Performance Period lasted less than three years but without pro-rating the number of Absolute TSR LTIP Units or Relative TSR LTIP Units the Advisor would be eligible to earn to reflect the shortened period. The award of LTIP Units under the 2018 OPP is administered by the compensation committee of the Company’s board of directors, provided that any of the compensation committee’s powers can be exercised instead by the board if the board so elects. Following the Valuation Date, the compensation committee is responsible for determining the number of Absolute TSR LTIP Units and Relative TSR LTIP Units earned, as calculated by an independent consultant engaged by the compensation committee and as approved by the compensation committee in its reasonable and good faith discretion. The compensation committee also must approve the transfer of any Absolute TSR LTIP Units and Relative TSR LTIP Units (or OP Units into which they may be converted in accordance with the terms of the agreement of limited partnership of the OP). LTIP Units earned as of the Valuation Date will also become vested as of the Valuation Date. Any LTIP Units that are not earned and vested after the Compensation Committee makes the required determination will automatically and without notice be forfeited without the payment of any consideration by the Company or the OP, effective as of the Valuation Date. The rights of the Advisor as the holder of the LTIP Units are governed by the terms of the LTIP Units contained in the agreement of limited partnership of the OP. The agreement of limited partnership of the OP was amended in July 2018 in connection with the execution of the 2018 OPP to reflect the issuance of LTIP Units thereunder and to make certain clarifying and ministerial revisions, but these amendments did not alter the terms of the LTIP Units established in connection with the Company’s entry into the 2015 OPP in June 2015. 2015 OPP In connection with the listing of Common Stock on the New York Stock Exchange, on June 2, 2015, the Company entered into the 2015 OPP with the OP and the Advisor. Under the 2015 OPP, the Advisor was issued 3,013,933 LTIP Units in the OP with a maximum award value on the issuance date equal to 5.00% of the Company’s market capitalization (the “OPP Cap”). Because no performance goals under the 2015 OPP were achieved, no LTIP Units issued under the 2015 OPP were earned and all LTIP Units issued under the 2015 OPP were automatically forfeited without the payment of any consideration by the Company or the OP, effective as of June 2, 2018. Under the 2015 OPP, the Advisor was eligible to earn a number of LTIP Units with a value equal to a portion of the OPP Cap upon the first, second and third anniversaries of June 2, 2015 , based on the Company’s achievement of certain levels of absolute TSR and the amount by which the Company’s absolute TSR exceeded the average TSR of a peer group for the three -year performance period commencing on June 2, 2015 (the “ Three -Year Period”); each 12-month period during the Three -Year Period (the “ One -Year Periods”); and the initial 24-month period of the Three -Year Period (the “ Two -Year Period”), as follows: Performance Period Annual Period Interim Period Absolute Component: 4% of any excess Total Return attained above an absolute hurdle measured from the beginning of such period: 21% 7% 14% Relative Component: 4% of any excess Total Return attained above the Total Return for the performance period of the Peer Group*, subject to a ratable sliding scale factor as follows based on achievement of cumulative Total Return measured from the beginning of such period: • 100% will be earned if cumulative Total Return achieved is at least: 18% 6% 12% • 50% will be earned if cumulative Total Return achieved is: —% —% —% • 0% will be earned if cumulative Total Return achieved is less than: —% —% —% • a percentage from 50% to 100% calculated by linear interpolation will be earned if the cumulative Total Return achieved is between: 0% - 18% 0% - 6% 0% - 12% _______________________________________________________ * The “Peer Group” was comprised of Gramercy Property Trust Inc., Lexington Realty Trust, Select Income REIT, and W.P. Carey Inc. The potential outperformance award was calculated at the end of each One -Year Period, the Two -Year Period and the Three -Year Period. The award earned for the Three -Year Period was based on a formula less any awards earned for the Two -Year Period and One -Year Periods, but not less than zero; the award earned for the Two -Year Period was based on a formula less any award earned for the first and second One -Year Period, but not less than zero. Any LTIP Units that were unearned at the end of the Three -Year Period were to be forfeited. One third of any earned LTIP Units were to vest, subject to the Advisor’s continued service through each vesting date, on each of the third, fourth and fifth anniversaries of June 2, 2015. Any earned and vested LTIP Units would have been converted into OP Units in accordance with the terms and conditions of the limited partnership agreement of the OP. The 2015 OPP provided for early calculation of LTIP Units earned and for the accelerated vesting of any earned LTIP Units in the event the Advisor was terminated or in the event the Company incurred a change in control, in either case prior to the end of the Three -Year Period. As of June 2, 2017 (end of the Two -Year Period), June 2, 2016 (end of the first One -Year Period) and June 2, 2018 (end of the Three -Year Period), no LTIP units were earned by the Advisor under the terms of the 2015 OPP. Accordingly, all LTIP Units that had been issued under the 2015 OPP were automatically forfeited without the payment of any consideration by the Company or the OP as of the end of the Three -Year Period. Other Equity-Based Compensation The Company may issue Common Stock in lieu of cash to pay fees earned by the Company’s directors at each director’s election. There are no restrictions on the shares issued since these payments in lieu of cash relate to fees earned for services performed. There were no such shares of Common Stock issued in lieu of cash during the six months ended June 30, 2019 and 2018 . |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following is a summary of the basic and diluted net income per share computation for the periods presented: Three Months Ended June 30, Six Months Ended June 30, (In thousands, except share and per share data) 2019 2018 2019 2018 Net income attributable to common stockholders $ 12,621 $ 5,288 $ 18,412 $ 7,649 Adjustments to net income attributable to common stockholders for common share equivalents (174 ) (26 ) (334 ) (210 ) Adjusted net income attributable to common stockholders $ 12,447 $ 5,262 $ 18,078 $ 7,439 Basic and diluted net income per share attributable to common stockholders $ 0.15 $ 0.08 $ 0.22 $ 0.11 Weighted average shares outstanding: Basic 83,847,120 67,292,021 82,667,421 67,289,639 Diluted 85,165,549 67,292,021 83,985,850 67,289,639 Under current authoritative guidance for determining earnings per share, all unvested share-based payment awards that contain non-forfeitable rights to distributions are considered to be participating securities and therefore are included in the computation of earnings per share under the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common shares and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. The Company’s unvested RSUs and unearned LTIP Units contain rights to receive distributions considered to be non-forfeitable, in certain limited circumstances, and therefore the Company applies the two-class method of computing earnings per share. The calculation of earnings per share above excludes the non-forfeitable distributions to the unvested RSUs and unearned LTIP Units from the numerator. Diluted net income per share assumes the conversion of all Common Stock share equivalents into an equivalent number of shares of Common Stock, unless the effect is anti-dilutive. The Company considers unvested RSUs and LTIP Units to be common share equivalents. The following table shows common share equivalents on a weighted average basis that were excluded from the calculation of diluted earnings per share for the three and six months ended June 30, 2019 and 2018 : Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Unvested RSUs 40,964 46,767 40,964 46,767 LTIP Units (1) 1,277,465 — 1,277,465 — Total anti-dilutive common share equivalents 1,318,429 46,767 1,318,429 46,767 (1) Weighted-average number of LTIP Units outstanding. There were 2,554,930 LTIP Units issued and outstanding under the 2018 OPP as of June 30, 2019 and June 30, 2018 . The 3,013,933 LTIP Units issued under the 2015 OPP were forfeited as of June 2, 2018 since no LTIP Units were earned under the 2015 OPP. See Note 12 — Equity-Based Compensation for additional information on the 2018 OPP and 2015 OPP. Conditionally issuable shares relating to the 2018 OPP award (see Note 12 — Equity-Based Compensation ) are included in the computation of fully diluted EPS on a weighted average basis for the three and six months ended June 30, 2019 based on shares that would be issued if the balance sheet date were the end of the measurement period. No common share equivalents related to LTIP Units were included in the computation for the three and six months ended June 30, 2018 because no LTIP Units would have been earned (and, therefore, no shares of Common Stock could have been issued with respect to LTIP Units) based on the stock price at June 30, 2018 . |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q, and determined that there have not been any events that have occurred that would require adjustments to, or disclosures in the consolidated financial statements, except for as disclosed below. Acquisitions Subsequent to June 30, 2019 , the Company acquired six properties for an aggregate total base purchase price of $48.7 million , excluding acquisition related costs. Facility Amendment On August 1, 2019, the Company, through the OP, entered into the Credit Facility Amendment, an amendment and restatement of the credit agreement related to the Credit Facility, to, among other things, increase the aggregate total commitments, lower the interest rate and revise certain covenants. Based on USD equivalents at the closing of the Credit Facility Amendment, the aggregate total commitments under the Credit Facility were increased to $1.235 billion from approximately $906.2 million . As of June 30, 2019, the Company had an outstanding balance of $259.5 million under the Revolving Credit Facility and an outstanding balance of $277.4 million under the Term Loan, net of deferred financing costs. Following the closing of the Credit Facility Amendment, the entire €359.6 million ( $400.0 million based on USD equivalents) total commitment with the respect to the Term Loan component was outstanding, and $170.7 million of the $835.0 million total commitment with the respect to the Revolving Credit Facility component was outstanding. Based on USD equivalents, this represented an increase of $39.4 million in the aggregate amount outstanding under the Credit Facility. Following the Credit Facility Amendment, upon the Company’s request, subject in all respects to the consent of the lenders in their sole discretion, these aggregate total commitments may be increased up to an aggregate additional amount of approximately $515.0 million , allocated to either or among both components of the Credit Facility, with total commitments under the Credit Facility not to exceed $1.75 billion , increased from a maximum of $950.0 million prior to the Credit Facility Amendment. Prior to the Credit Facility Amendment, the Revolving Credit Facility was scheduled to mature on July 24, 2021, subject to one one-year extension at the Company’s option, and the Term Loan was scheduled to mature on July 24, 2022. Following the Credit Facility Amendment, the Revolving Credit Facility now matures on August 1, 2023, subject to two six-month extensions at the Company’s option, and the Term Loan now matures on August 1, 2024. Borrowings under the Credit Facility bear interest at a variable rate per annum based on an applicable margin that varies based on the ratio of consolidated total indebtedness and the consolidated total asset value of the Company and its subsidiaries plus either (i) LIBOR, as applicable to the currency being borrowed, or (ii) a “base rate” equal to the greatest of (a) KeyBank’s “prime rate,” (b) 0.5% above the Federal Funds Effective Rate, or (c) 1.0% above one-month LIBOR. Prior to the Credit Facility Amendment, the range of applicable interest rate margins was from 0.60% to 1.20% per annum with respect to base rate borrowings and 1.60% to 2.20% per annum with respect to LIBOR borrowings. Following the Credit Facility Amendment, the applicable interest rate margin is based on a range from 0.45% to 1.05% per annum with respect to base rate borrowings under the Revolving Credit Facility, 1.45% to 2.05% per annum with respect to LIBOR borrowings under the Revolving Credit Facility, 0.40% to 1.00% per annum with respect to base rate borrowings under the Term Loan and 1.40% to 2.00% per annum with respect to LIBOR borrowings under the Term Loan. The Credit Facility Amendment also added terms governing the establishment of a replacement index to serve as an alternative to LIBOR, if necessary. As of June 30, 2019, the Credit Facility had a weighted-average effective interest rate of 2.6% after giving effect to interest rate swaps in place. Following the Credit Facility Amendment, the Credit Facility had a weighted-average effective interest rate of 2.30% after giving effect to interest rate swaps in place. The availability of borrowings under the Revolving Credit Facility is based on the value of a pool of eligible unencumbered real estate assets owned by the Company and compliance with various ratios related to those assets, and the Credit Facility Amendment also included amendments to provisions governing the calculation of the value of the borrowing base. The Credit Facility Amendment also revised certain affirmative and negative covenants on the OP, the Company and certain of its subsidiaries including financial covenants and the covenant restricting the payment of distributions. The revisions to the restrictive covenants with respect to distributions increased the maximum amount the Company may use to pay cash distributions. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Accounting | Basis of Presentation The accompanying unaudited consolidated financial statements of the Company included herein were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to this Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair statement of results for the interim periods. All intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three and six months ended June 30, 2019 are not necessarily indicative of the results for the entire year or any subsequent interim period. These unaudited 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, 2018 |
Principles of Consolidation | The accompanying unaudited consolidated financial statements include the accounts of the Company, the OP and its subsidiaries. All intercompany accounts and transactions are eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity (“VIE”) for which the Company is the primary beneficiary. The Company has determined that the OP is a VIE of which the Company is the primary beneficiary. Substantially all of the Company’s assets and liabilities are held by the OP. |
Reclassification | Reclassifications The Company has aggregated revenue from its lease components and non-lease components (tenant operating expense reimbursements) into one line (see additional information in the “Recently Issued Accounting Pronouncements” section below. The prior period has been reclassified to conform to this presentation. |
Judgments and Estimates | Judgments and Estimates The Company regularly makes a number of estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses in order to prepare its consolidated financial statements in conformity with GAAP. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, such as the prevailing economic and business environment. Management adjusts such estimates when facts and circumstances dictate. The most significant estimates management makes include recoverability of accounts receivable, allocation of property purchase price to tangible and intangible assets acquired and liabilities assumed, determination of impairment of long-lived assets, valuation of derivative financial instruments, valuation of compensation plans, and estimating the useful life of a long-lived asset. Actual results could differ materially from those estimated. |
Investments in Real Estate | Investments in Real Estate Investments in real estate are recorded at cost. Improvements and replacements are capitalized when they extend the useful life of the asset. Costs of repairs and maintenance are expensed as incurred. At the time an asset is acquired, the Company evaluates the inputs, processes and outputs of the asset acquired to determine if the transaction is a business combination or an asset acquisition. If an acquisition qualifies as a business combination, the related transaction costs are recorded as an expense in the consolidated statements of operations. If an acquisition qualifies as an asset acquisition, the related transaction costs are generally capitalized and subsequently amortized over the useful life of the acquired assets. In both a business combination and an asset acquisition, the Company allocates the purchase price of acquired properties to |
Purchase Accounting and Acquisition of Real Estate | Purchase Accounting and Acquisition of Real Estate The Company allocates the purchase price of acquired properties to tangible and identifiable intangible assets acquired based on their respective fair values. Tangible assets include land, land improvements, buildings, fixtures and tenant improvements on an as-if vacant basis. The Company utilizes various estimates, processes and information to determine the as-if vacant property value. Estimates of value are made using customary methods, including data from appraisals, comparable sales, discounted cash flow analysis and other methods. Amounts allocated to land, land improvements, buildings and fixtures are based on cost segregation studies performed by independent third parties or on the Company’s analysis of comparable properties in the Company’s portfolio. Identifiable intangible assets include amounts allocated to acquire leases for above- and below-market lease rates, the value of in-place leases, and the value of customer relationships, as applicable. Factors considered in the analysis of the in-place lease intangibles include an estimate of carrying costs during the expected lease-up period for each property, taking into account current market conditions and costs to execute similar leases. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at contract rates during the expected lease-up period, which typically ranges from 12 to 18 months . The Company also estimates costs to execute similar leases including leasing commissions, legal and other related expenses. Above-market and below-market lease values for acquired properties are initially recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease, and (ii) management’s estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the remaining initial term plus the term of any below-market fixed rate renewal options for below-market leases. The capitalized above-market lease values are amortized as a reduction of base rental revenue over the remaining terms of the respective leases, and the capitalized below-market lease values are amortized as an increase to base rental revenue over the remaining initial terms plus the terms of any below-market fixed rate renewal options of the respective leases. If a tenant with a below market rent renewal does not renew, any remaining unamortized amount will be taken into income at that time. The aggregate value of intangible assets related to customer relationship, as applicable, is measured based on the Company’s evaluation of the specific characteristics of each tenant’s lease and the Company’s overall relationship with the tenant. Characteristics considered by the Company in determining these values include the nature and extent of its existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals, among other factors. In making estimates of fair values for purposes of allocating purchase price, the Company utilizes a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other market data. The Company also considers information obtained about each property as a result of the Company’s pre-acquisition due diligence in estimating the fair value of the tangible and intangible assets acquired and intangible liabilities assumed. |
Derivative Instruments | Derivative Instruments 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. Certain of the Company’s foreign operations expose the Company to fluctuations of foreign interest rates and exchange rates. These fluctuations may impact the value of the Company’s cash receipts and payments in the Company’s functional currency, the U.S. Dollar (“USD”). The Company enters into derivative financial instruments to protect the value or fix the amount of certain obligations in terms of its functional currency. The Company records all derivatives on the consolidated balance sheets at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. The accounting for subsequent changes in the fair value of these derivatives depends on whether each has been designed and qualifies for hedge accounting treatment. If the Company elects not to apply hedge accounting treatment (or for derivatives that do not qualify as hedges), any changes in the fair value of these derivative instruments is recognized immediately in gains (losses) on derivative instruments in the consolidated statements of operations. If a derivative is designated and qualifies for cash flow hedge accounting treatment, the change in the estimated fair value of the derivative is recorded in other comprehensive income (loss) in the consolidated statements of comprehensive income (loss) to the extent that it is effective. Any ineffective portion of a change in derivative fair value is immediately recorded in earnings. |
Impairment of Long Lived Assets | Impairment of Long Lived Assets When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the asset for impairment. This review is based on an estimate of the future undiscounted cash flows expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. If impairment exists due to the inability to recover the carrying value of a property, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss is the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net earnings. |
Goodwill | Goodwill The Company evaluates goodwill for impairment at least annually, in the fourth quarter of each year, or upon the occurrence of a triggering event. A triggering event is an event or circumstance that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company performed a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. Based on the Company’s assessment, it determined that the goodwill was not impaired as of December 31, 2018. |
Revenue Recognition | Revenue Recognition The Company’s revenues, which are derived primarily from lease contracts, which include rents that each tenant pays in accordance with the terms of each lease agreement and are reported on a straight-line basis over the initial term of the lease. As of June 30, 2019 , these leases had an average remaining lease term of 8.0 years. Since many of the Company’s leases provide for rental increases at specified intervals, straight-line basis accounting requires the Company to record a receivable for, and include in revenues, unbilled rent receivables that the Company will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. For new leases after acquisition, the commencement date is considered to be the date the lease modification is executed. The Company defers the revenue related to lease payments received from tenants in advance of their due dates. When the Company acquires a property, the acquisition date is considered to be the commencement date for purposes of this calculation. In addition to base rent, the Company’s lease agreements generally require tenants to pay or reimburse the Company for all property operating expenses, which primarily reflect insurance costs and real estate taxes incurred by the Company and subsequently reimbursed by the tenant. However, some limited property operating expenses that are not the responsibility of the tenant are absorbed by the Company. Under ASC 842, the Company has elected to report combined lease and non-lease components in a single line “Revenue from tenants.” For comparative purposes, the Company has also elected to reflect prior revenue and reimbursements previously reported under ASC 840 on a single line as well. For expenses paid directly by the tenant, under both ASC 842 and 840, the Company has reflected them on a net basis. The following tables present future base rent payments on a cash basis due to the Company over the periods indicated. These amounts exclude tenant reimbursements and 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. As of June 30, 2019 : (In thousands) Future Base Rent Payments (1) 2019 (remainder) $ 142,050 2020 286,480 2021 287,630 2022 278,744 2023 256,504 2024 212,866 Thereafter 728,617 $ 2,192,891 ___________________________________________ (1) Assumes exchange rates of £1.00 to $1.27 for British Pounds Sterling (“GBP”) and €1.00 to $1.14 for EUR as of June 30, 2019 for illustrative purposes, as applicable. As of December 31, 2018 : (In thousands) Future Base Rent Payments (1) 2019 $ 275,118 2020 278,651 2021 279,630 2022 270,569 2023 247,237 Thereafter 856,838 Total $ 2,208,043 ___________________________________________ (1) Assumes exchange rates of £1.00 to $1.27 for GBP and €1.00 to $1.14 for EUR as of December 31, 2018 for illustrative purposes, as applicable. The Company continually reviews receivables related to rent and unbilled rent receivables and determines collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. Under the new leasing standard (see the “Recently Issued Accounting Pronouncements” section below), the Company is required to assess, based on credit risk only, if it is probable that it will collect virtually all of the lease payments at lease commencement date and it must continue to reassess collectability periodically thereafter based on new facts and circumstances affecting the credit risk of the tenant. Partial reserves, or the ability to assume partial recovery are no longer permitted. If the Company determines that it is probable it will collect virtually all of the lease payments (rent and common area maintenance), the lease will continue to be accounted for on an accrual basis (i.e. straight-line). However, if the Company determines it is not probable that it will collect virtually all of the lease payments, the lease will be accounted for on a cash basis and a full reserve would be recorded on previously accrued amounts in cases where it was subsequently concluded that collection was not probable. Cost recoveries from tenants are included in Revenue from tenants on the accompanying consolidated statements of operations in the period the related costs are incurred, as applicable. |
Income Taxes | Income Taxes The Company elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), beginning with the taxable year ended December 31, 2013. Commencing with such taxable year, the Company was organized to operate in such a manner as to qualify for taxation as a REIT under the Code and believes it has so qualified. The Company intends to continue to operate in such a manner to continue to qualify for taxation as a REIT, but no assurance can be given that it will operate in a manner so as to remain qualified as a REIT. As a REIT, the Company generally will not be subject to federal corporate income tax to the extent it distributes annually all of its REIT taxable income. REITs are subject to a number of other organizational and operational requirements. The Company conducts business in various states and municipalities within the U.S. and Puerto Rico, the United Kingdom and Western Europe and, as a result, the Company or one of its subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and certain foreign jurisdictions. As a result, the Company may be subject to certain federal, state, local and foreign taxes on its income and assets, including alternative minimum taxes, taxes on any undistributed income and state, local or foreign income, franchise, property and transfer taxes. Any of these taxes decrease the Company’s earnings and available cash. In addition, the Company’s international assets and operations, including those owned through direct or indirect subsidiaries that are disregarded entities for U.S. federal income tax purposes, continue to be subject to taxation in the foreign jurisdictions where those assets are held or those operations are conducted. Significant judgment is required in determining the Company’s tax provision and in evaluating its tax positions. The Company establishes tax reserves based on a benefit recognition model, which the Company believes could result in a greater amount of benefit (and a lower amount of reserve) being initially recognized in certain circumstances. Provided that the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50 percent likely of being ultimately realized upon settlement. The Company derecognizes the tax position when the likelihood of the tax position being sustained is no longer more likely than not. The Company recognizes deferred income taxes in certain of its subsidiaries taxable in the U.S. or in foreign jurisdictions. Deferred income taxes are generally the result of temporary differences (items that are treated differently for tax purposes than for GAAP purposes). In addition, deferred tax assets arise from unutilized tax net operating losses, generated in prior years. The Company provides a valuation allowance against its deferred income tax assets when it believes that it is more likely than not that all or some portion of the deferred income tax asset may not be realized. Whenever a change in circumstances causes a change in the estimated realizability of the related deferred income tax asset, the resulting increase or decrease in the valuation allowance is included in deferred income tax expense (benefit). The Company derives most of its REIT taxable income from its real estate operations in the U.S. and has historically distributed all of its REIT taxable income to its shareholders. As such, the Company’s real estate operations are generally not subject to federal tax, and accordingly, no provision has been made for U.S. federal income taxes in the consolidated financial statements for these operations. These operations may be subject to certain state, local, and foreign taxes, as applicable. The Company’s deferred tax assets and liabilities are primarily the result of temporary differences related to the following: • Basis differences between tax and GAAP for certain international real estate investments. For income tax purposes, in certain acquisitions, the Company assumes the seller’s basis, or the carry-over basis, in the acquired assets. The carry-over basis is typically lower than the purchase price, or the GAAP basis, resulting in a deferred tax liability with an offsetting increase to goodwill or the acquired tangible or intangible assets; • Timing differences generated by differences in the GAAP basis and the tax basis of assets such as those related to capitalized acquisition costs and depreciation expense; and • Tax net operating losses in certain subsidiaries, including those domiciled in foreign jurisdictions that may be realized in future periods if the respective subsidiary generates sufficient taxable income. The Company recognizes current income tax expense for state and local income taxes and taxes incurred in its foreign jurisdictions. The Company’s current income tax expense fluctuates from period to period based primarily on the timing of its taxable income. |
Reportable Segments | Reportable Segments The Company determined that it has one reportable segment, with activities related to investing in real estate. The Company’s investments in real estate generate rental revenue and other income through the leasing of properties, which comprise 100% of total consolidated revenues. Management evaluates the operating performance of the Company’s investments in real estate on an individual property level. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Adopted as of January 1, 2019: ASU No. 2016-02 — Leases In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”) which provides new guidance related to the accounting for leases, as well as the related disclosures. For lessors of real estate, leases are accounted for using an approach substantially the same as previous accounting guidance for operating leases and direct financing leases. For lessees, the new standard requires the application of a dual lease classification approach, classifying leases as either operating or finance leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. Lease expense for operating leases is recognized on a straight-line basis over the term of the lease, while lease expense for finance leases is recognized based on an effective interest method over the term of the lease. Also, lessees must recognize a right-of-use asset (“ROU”) and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Further, certain transactions where at inception of the lease the buyer-lessor accounted for the transaction as a purchase of real estate and a new lease, may now be required to have symmetrical accounting to the seller-lessee if the transaction was not a qualified sale-leaseback and accounted for as a financing transaction. Upon adoption, lessors were allowed a practical expedient, which the Company has elected, by class of underlying assets to account for lease and non-lease components (such as tenant reimbursements of property operating expenses) as a single lease component as an operating lease because (a) the non-lease components have the same timing and pattern of transfer as the associated lease component; and (b) the lease component, if accounted for separately, would be classified as an operating lease. Additionally, only incremental direct leasing costs may be capitalized under this new guidance, which is consistent with the Company’s existing policies. Also, upon adoption, companies were allowed a practical expedient package, which the Company has elected, that allowed the Company: (a) to not reassess whether any expired or existing contracts entered into prior to January 1, 2019 are or contain leases; (b) to not reassess the lease classification for any expired or existing leases entered into prior to January 1, 2019 (including assessing sale-leaseback transactions); and (c) to not reassess initial direct costs for any expired or existing leases entered into prior to January 1, 2019. As a result, all of the Company’s existing leases will continue to be classified as operating leases under the new standard. Further, any existing leases for which the property is leased to a tenant in a transaction that at inception was a sale-leaseback transaction will continue to be treated (absent a modification) as operating leases. The Company did not have any leases that would be considered financing leases as of January 1, 2019. The Company assessed the impact of adoption from both a lessor and lessee perspective, which is discussed in more detail below, and adopted the new guidance prospectively on January 1, 2019, using a prospective transition approach under which the Company elected to apply the guidance effective January 1, 2019 and not adjust prior comparative reporting periods (except for the Company’s presentation of lease revenue discussed below). Lessor Accounting As discussed above, the Company was not required to re-assess the classification of its leases, which are considered operating leases under ASU 2016-02. The following is a summary of the most significant impacts to the Company of the new accounting guidance, as lessor: • Because the Company elected the practical expedient noted above to not separate non-lease component revenue from the associated lease component, the Company has aggregated revenue from its lease components and non-lease components (tenant operating expense reimbursements) into one line. The prior period has been conformed to this new presentation. • Changes in the Company’s assessment of receivables that result in bad debt expense is now required to be recorded as an adjustment to revenue, rather than a charge to bad debt expense. This new classification applies for the first quarter of 2019 and reclassification of prior period amounts is not permitted. At transition on January 1, 2019, after assessing its reserve balances at December 31, 2018 under the new guidance, the Company wrote off accounts receivable of $3.4 million , net of $2.2 million in bad debt reserves as an adjustment to the opening balance of accumulated deficit, and accordingly rent for these tenants is currently recorded on a cash basis. • Indirect leasing costs in connection with new or extended tenant leases, if any, are being expensed. Under prior accounting guidance, the recognition would have been deferred. Lessee Accounting The Company is a lessee under ground leases for seven properties as of January 1, 2019. The following is a summary of the most significant impacts to the Company of the new accounting guidance, as lessee: • Upon adoption of the new standard, the Company recorded ROU assets and lease liabilities equal to $24.0 million for the present value of the lease payments related to its ground leases. These amounts are included in prepaid expenses and other assets and accounts payable and accrued expenses on the consolidated balance sheet. • The Company also reclassified $27.0 million , net related to amounts previously reported as above and below market ground lease intangibles to the ROU assets. For additional information and disclosures related to these operating leases, see Note 9 — Commitments and Contingencies. Other Recently Issued Accounting Pronouncements In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815) : (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-Controlling Interests with a Scope Exception guidance that changes the method to determine the classification of certain financial instruments with a down round feature as liabilities or equity instruments and clarify existing disclosure requirements for equity-classified instruments. A down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. As a result, a freestanding equity-linked financial instrument no longer would be accounted for as a derivative liability, rather, an entity that presents earnings per share is required to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features. The revised guidance is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2018. The revised guidance became effective for the Company effective January 1, 2019 and it did not have an impact on the Company’s consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”). The purpose of this updated guidance is to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. ASU 2017-12 is effective for public business entities for fiscal years beginning after December 15, 2018. The Company adopted ASU 2017-12 on January 1, 2019 using a modified retrospective transition method, as required, and recognized the cumulative effect of the change on the opening balance of each affected component of equity as of the date of adoption. The opening balance sheet adjustment specifically related to the elimination of the requirement for separate measurement of hedge ineffectiveness and resulted in a credit, or decrease, to accumulated deficit of $0.3 million , with a corresponding debit, or decrease, to accumulated other comprehensive income. In February 2018, the FASB issued ASU 2018-02, Income Statement- Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The new guidance addresses the impact of Tax Cuts and Jobs Act signed into law on December 22, 2017, (“Tax Cuts and Jobs Act”) on items within accumulated other comprehensive (loss) income (“AOCI”) which do not reflect the appropriate tax rate. ASU 2018-02 allows the Company to retrospectively reclassify the income tax effects on items in AOCI to retained earnings for all periods in which the effect of the change in the U.S. federal corporate income tax rate was recognized. In addition, all companies are required to disclose whether the company has elected to reclassify the income tax effects of the Tax Cuts and Jobs Act to retained earnings and disclose information about any other income tax effects that are reclassified from AOCI by the Company. The amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. Companies are required to apply the proposed amendments either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The revised guidance became effective for the Company effective January 1, 2019 and it did not have an impact on the Company’s consolidated financial statements. In July 2018, the FASB issued ASU 2018-07, Compensation- Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”) as an amendment and update expanding the scope of Topic 718. The amendment specifies that Topic 718 now applies to all share-based payment transactions, even non-employee awards, in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. Under the new guidance, a wards to nonemployees are measured on the grant date, rather than on the earlier of the performance commitment date or the date at which the nonemployee’s performance is complete. Also, the awards would be measured by estimating the fair value of the equity instruments to be issued, rather than the fair value of the goods or services received or the fair value of the equity instruments issued, whichever can be measured more reliably. In addition, entities may use the expected term to measure nonemployee awards or elect to use the contractual term as the expected term, on an award-by-award basis. The new guidance is effective for the Company in annual periods beginning after December 15, 2018, and interim periods within those annual periods, with early adoption permitted. The Company adopted the new guidance on January 1, 2019 and began applying the new rules to its non-employee award made to the Advisor pursuant to the 2018 OPP. As a result, total equity-based compensation expense calculated as of adoption of the new guidance will be fixed as of that date and will not be remeasured in subsequent periods (unless modified). In addition, the expense is being recorded over the requisite service period of approximately 2.8 years from the grant date. See Note 12 — Equity-Based Compensation for additional information on the awards to the Advisor pursuant to the 2018 OPP and the 2015 OPP. Pending Adoption as of June 30, 2019: In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which changes how entities measure credit losses for financial assets carried at amortized cost. The update eliminates the requirement that a credit loss must be probable before it can be recognized and instead requires an entity to recognize the current estimate of all expected credit losses. Additionally, the update requires credit losses on available-for-sale debt securities to be carried as an allowance rather than as a direct write-down of the asset. The amendments become effective for reporting periods beginning after December 15, 2019. On July 25, 2018, the FASB proposed an amendment to ASU 2016-13 to clarify that operating lease receivables recorded by lessors (including unbilled straight-line rent) are explicitly excluded from the scope of ASU 2016-13. Early adoption is permitted for reporting periods beginning after December 15, 2018. The Company is currently evaluating the impact of this new guidance. |
Acquired Intangible Lease Assets | Acquired Intangible Lease Assets |
Fair Value of Financial Instruments | 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. This alternative approach also reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The 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 and those inputs are significant. Level 3 — Unobservable inputs that 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. However, the Company expects that changes in classifications between levels will be rare. 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. As of June 30, 2019 and December 31, 2018 , 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 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. |
Earnings Per Share | Conditionally issuable shares relating to the 2018 OPP award (see Note 12 — Equity-Based Compensation ) are included in the computation of fully diluted EPS on a weighted average basis for the three and six months ended June 30, 2019 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Future Base Rent Payments Due to the Company - Topic 842 | The following tables present future base rent payments on a cash basis due to the Company over the periods indicated. These amounts exclude tenant reimbursements and 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. As of June 30, 2019 : (In thousands) Future Base Rent Payments (1) 2019 (remainder) $ 142,050 2020 286,480 2021 287,630 2022 278,744 2023 256,504 2024 212,866 Thereafter 728,617 $ 2,192,891 ___________________________________________ (1) Assumes exchange rates of £1.00 to $1.27 for British Pounds Sterling (“GBP”) and €1.00 to $1.14 for EUR as of June 30, 2019 for illustrative purposes, as applicable. |
Future Base Rent Payments Due to the Company - Topic 840 | As of December 31, 2018 : (In thousands) Future Base Rent Payments (1) 2019 $ 275,118 2020 278,651 2021 279,630 2022 270,569 2023 247,237 Thereafter 856,838 Total $ 2,208,043 ___________________________________________ (1) Assumes exchange rates of £1.00 to $1.27 for GBP and €1.00 to $1.14 for EUR as of December 31, 2018 for illustrative purposes, as applicable. The following table reflects the base cash rental payments due from the Company as of December 31, 2018: (In thousands) Future Base Rent Payments (1) 2019 $ 1,371 2020 1,371 2021 1,371 2022 1,371 2023 1,371 Thereafter 40,519 Total minimum lease payments (2) 47,374 Less: Effects of discounting (23,370 ) Total present value of lease payments $ 24,004 (1) Assumes exchange rates of £1.00 to $1.27 for GBP and €1.00 to $1.14 for EUR as of December 31, 2018 for illustrative purposes, as applicable. (2) Ground lease rental payments due for the Company’s ING Amsterdam lease are not included in the table above as the Company’s ground for this property is prepaid through 2050. |
Real Estate Investments, Net (T
Real Estate Investments, Net (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Real Estate [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The following table presents the allocation of the assets acquired and liabilities assumed during the six months ended June 30, 2019 and 2018 , and, in the case of assets located outside of the United States, based on the exchange rate at the time of purchase. All acquisitions in both periods were considered asset acquisitions for accounting purposes. Six Months Ended June 30, (Dollar amounts in thousands) 2019 2018 Real estate investments, at cost: Land $ 10,978 $ 18,816 Buildings, fixtures and improvements 165,261 122,796 Total tangible assets 176,239 141,612 Acquired intangible lease assets: In-place leases 35,698 24,669 Above-market lease assets 352 — Below-market lease liabilities (1,298 ) (4,495 ) Cash paid for acquired real estate investments $ 210,991 $ 161,786 Number of properties purchased 11 13 |
Geographic Rental Income Concentration | The following table lists the countries and U.S. states where the Company has concentrations of properties where annualized rental income on a straight-line basis represented greater than 10.0% of consolidated annualized rental income on a straight-line basis as of June 30, 2019 and December 31, 2018 . Country / U.S. State June 30, December 31, United States 57.6% 55.7% Michigan 13.8% 13.7% United Kingdom 18.1% 19.0% |
Mortgage Notes Payable, Net (Ta
Mortgage Notes Payable, Net (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Mortgage notes payable, net as of June 30, 2019 and December 31, 2018 consisted of the following: Encumbered Properties Outstanding Loan Amount (1) Effective Interest Rate Interest Rate Country Portfolio June 30, December 31, Maturity (In thousands) (In thousands) Finland: Finnair (9) — $ — $ 32,501 —% — — Tokmanni (9) — — 33,159 —% — — Finland 5 84,145 — 1.7% (2) Fixed/Variable Feb. 2024 France: Auchan 1 9,438 9,498 1.7% (3) Fixed Dec. 2019 Pole Emploi 1 6,595 6,637 1.7% (3) Fixed Dec. 2019 Sagemcom 1 40,822 41,083 1.7% (3) Fixed Dec. 2019 Worldline 1 5,685 5,722 1.9% (3) Fixed Jul. 2020 DCNS 1 10,802 10,872 1.5% (3) Fixed Dec. 2020 ID Logistics II 2 11,939 12,016 1.3% Fixed Jun. 2021 Germany Rheinmetall (10)(11) — — 12,130 —% — — OBI DIY (10)(11) — — 5,150 —% — — RWE AG 3 71,068 71,524 1.6% (3) Fixed Oct. 2019 Rexam (12) — — 5,876 —% — — Metro Tonic (12) — — 30,326 —% — — ID Logistics I (12) — — 4,578 —% — — Germany 5 58,561 — 2.0% (14) Fixed/Variable Jun. 2023 Luxembourg: DB Luxembourg (13) — — 41,198 —% — — The Netherlands: ING Amsterdam (13) — — 50,353 —% — — Luxembourg/ The Netherlands Benelux 3 136,451 — 1.4% Fixed Jun. 2024 Total EUR denominated 23 435,506 372,623 United Kingdom: UK Multi-Property Cross Collateralized Loan 43 292,039 292,890 3.2% (4) Fixed/Variable Aug. 2023 Total GBP denominated 43 292,039 292,890 United States: Quest Diagnostics 1 52,800 52,800 4.5% (5) Variable Sep. 2019 AT&T Services 1 33,550 33,550 2.0% (6) Variable Dec. 2020 Penske Logistics (7) 1 70,000 70,000 4.7% Fixed Nov. 2028 Multi-Tenant Mortgage Loan I (7) 12 187,000 187,000 4.4% Fixed Nov. 2027 Multi-Tenant Mortgage Loan II 8 32,750 32,750 4.4% Fixed Feb. 2028 Multi-Tenant Mortgage Loan III 7 98,500 98,500 4.9% Fixed Dec. 2028 Multi-Tenant Mortgage Loan IV 16 97,500 — 4.6% Fixed May 2029 Total USD denominated 46 572,100 474,600 Gross mortgage notes payable 112 1,299,645 1,140,113 3.2% Mortgage discount (86 ) (569 ) Deferred financing costs, net of accumulated amortization (8) (13,526 ) (9,737 ) Mortgage notes payable, net 112 $ 1,286,033 $ 1,129,807 3.2% _______________________________ (1) Amounts borrowed in local currency and translated at the spot rate in effect at the applicable reporting date. (2) 80% fixed as a result of a “pay-fixed” interest rate swap agreement and 20% variable. Variable portion is approximately 1.4% plus 3-month Euribor. Euribor rate in effect as of June 30, 2019 . (3) Fixed as a result of a “pay-fixed” interest rate swap agreement. (4) 80% fixed as a result of a “pay-fixed” interest rate swap agreement and 20% variable. Variable portion is approximately 2.0% plus 3 -month GBP LIBOR. LIBOR rate in effect as of June 30, 2019 . (5) The interest rate is 2.0% plus 1-month LIBOR. LIBOR rate in effect is as of June 30, 2019 . (6) The interest rate is 2.0% plus 1-month Adjusted LIBOR as defined in the mortgage agreement. LIBOR rate in effect is as of June 30, 2019 . (7) The borrower’s (wholly owned subsidiaries of the Company) financial statements are included within the Company’s consolidated financial statements, however, the borrowers’ assets and credit are only available to pay the debts of the borrowers and their liabilities constitute obligations of the borrowers. (8) Deferred financing costs represent commitment fees, legal fees, and other costs associated with obtaining commitments for financing. These costs are amortized over the terms of the respective financing agreements using the effective interest method. Unamortized deferred financing costs are expensed when the associated debt is refinanced or paid down before maturity. Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined that the financing will not close. (9) These loans were refinanced in February 2019 as part of the Finland Refinancing (see below for further details). (10) These loans were repaid in full upon maturity in January 2019. (11) These loans were encumbered in May 2019 as part of the German Refinancing (see below for further details). (12) These loans were refinanced in May 2019 as part of the German Refinancing (see below for further details). (13) These loans were refinanced in June 2019 as part of the Benelux Refinancing (see below for further details). (14) The loan initially bore interest at a rate of 3-month Euribor plus 1.80% per annum, but, following the replacement of an easement on one property, the loan will bear interest going forward at a rate of Euribor plus 1.55% per annum beginning on October 1, 2019. 80% fixed as a result of a “pay-fixed” interest rate swap agreement and 20% variable. |
Schedule of Maturities of Long-term Debt | The following table presents future scheduled aggregate principal payments on the Company’s gross mortgage notes payable over the next five calendar years and thereafter as of June 30, 2019 : (In thousands) Future Principal Payments (1) 2019 (remainder) $ 180,723 2020 52,550 2021 24,238 2022 19,046 2023 316,743 2024 220,596 Thereafter 485,749 Total $ 1,299,645 _________________________ (1) Assumes exchange rates of £1.00 to $1.27 for GBP and €1.00 to $1.14 for EUR as of June 30, 2019 for illustrative purposes, as applicable. |
Credit Facilities (Tables)
Credit Facilities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Outstanding Balance Under Credit Agreement | The table below details the outstanding balances as of June 30, 2019 and December 31, 2018 under the credit agreement with KeyBank National Association (“KeyBank”), as agent, and the other lender parties thereto, which provides for a $632.0 million senior unsecured multi-currency revolving credit facility (the “Revolving Credit Facility”) and a €246.5 million ( $280.3 million based on the prevailing exchange rate as of June 30, 2019 ) senior unsecured term loan facility (the “Term Loan” and, together with the Revolving Credit Facility, the “Credit Facility”). On August 1, 2019, the Company, through the OP, entered into an amendment and restatement of the credit agreement related to the Credit Facility (the “Credit Facility Amendment”) to, among other things, increase the aggregate total commitments, lower the interest rate and revise certain covenants. See “ Note 14 — Subsequent Events for additional details. June 30, 2019 December 31, 2018 (In thousands) TOTAL USD (1) USD GBP EUR TOTAL USD (2) USD GBP EUR Revolving Credit Facility $ 259,527 $ 174,625 £ 40,000 € 30,000 $ 363,894 $ 278,625 £ 40,000 € 30,000 Term Loan 280,273 — — 246,481 282,069 — — 246,481 Deferred financing costs (2,870 ) — — — (3,342 ) — — — Term Loan, Net 277,403 — — 246,481 278,727 — — 246,481 Total Credit Facility $ 536,930 $ 174,625 £ 40,000 € 276,481 $ 642,621 $ 278,625 £ 40,000 € 276,481 (1) Assumes exchange rates of £1.00 to $1.27 for GBP and €1.00 to $1.14 for EUR as of June 30, 2019 for illustrative purposes, as applicable. (2) Assumes exchange rates of £1.00 to $1.27 for GBP and €1.00 to $1.14 for EUR as of December 31, 2018 for illustrative purposes, as applicable. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Liabilities Measured on Recurring Basis | The following table presents information about the Company’s assets and liabilities (including derivatives that are presented net) measured at fair value on a recurring basis as of June 30, 2019 and December 31, 2018 , aggregated by the level in the fair value hierarchy within which those instruments fall. (In thousands) Quoted Prices in Active Markets Level 1 Significant Other Observable Inputs Level 2 Significant Unobservable Inputs Level 3 Total June 30, 2019 Foreign currency forwards, net (GBP & EUR) $ — $ 5,658 $ — $ 5,658 Interest rate swaps, net (GBP & EUR) $ — $ (7,204 ) $ — $ (7,204 ) December 31, 2018 Foreign currency forwards, net (GBP & EUR) $ — $ 5,472 $ — $ 5,472 Interest rate swaps, net (GBP & EUR) $ — $ (628 ) $ — $ (628 ) 2018 OPP (1) $ — $ — $ (18,804 ) $ (18,804 ) (1) Effective with the adoption of ASU 2018-07 on January 1, 2019, the 2018 OPP is no longer measured at fair market value on a recurring basis (see Note 2 — Summary of Significant Accounting Policies — Recently Issued Accounting Pronouncements and see Note 12 — Equity-Based Compensation for additional information). |
Fair Value, by Balance Sheet Grouping | The fair values of the Company’s remaining financial instruments that are not reported at fair value on the consolidated balance sheets are reported below. June 30, 2019 December 31, 2018 (In thousands) Level Carrying Amount Fair Value Carrying Amount Fair Value Mortgage notes payable (1) (2) 3 $ 1,286,033 $ 1,336,784 $ 1,129,807 $ 1,157,710 Revolving Credit Facility (3) 3 $ 259,527 $ 260,777 $ 363,894 $ 365,591 Term Loan (3) (4) 3 $ 277,403 $ 283,635 $ 278,727 $ 283,558 __________________________________________________________ (1) Carrying value includes $1.3 billion gross mortgage notes payable less $0.1 million of mortgage discounts and $13.5 million of deferred financing costs as of June 30, 2019 . (2) Carrying value includes $1.1 billion gross mortgage notes payable less $0.6 million of mortgage discounts and $9.7 million of deferred financing costs as of December 31, 2018 . (3) Both the Revolving Credit Facility and the Term Loan are part of the Credit Facility ( see Note 5 — Credit Facilities for more information). (4) Carrying value includes $280.3 million and $282.1 million gross Term Loan payable less $2.9 million and $3.3 million of deferred financing costs as of June 30, 2019 and December 31, 2018 , respectively. |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
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 on the consolidated balance sheets as of June 30, 2019 and December 31, 2018 : (In thousands) Balance Sheet Location June 30, December 31, Derivatives designated as hedging instruments: Interest rate “pay-fixed” swaps (USD) Derivative (liabilities) assets, at fair value $ (783 ) $ 3,258 Interest rate “pay-fixed” swaps (GBP) Derivative liabilities, at fair value (4,698 ) (1,157 ) Interest rate “pay-fixed” swaps (EUR) Derivative liabilities, at fair value (1,598 ) (1,443 ) Total $ (7,079 ) $ 658 Derivatives not designated as hedging instruments: Foreign currency forwards (GBP-USD) Derivative assets, at fair value $ 3,121 $ 3,247 Foreign currency forwards (EUR-USD) Derivative assets, at fair value 2,537 2,225 Interest rate swaps (EUR) Derivative liabilities, at fair value (125 ) (1,286 ) Total $ 5,533 $ 4,186 |
Schedule of Interest Rate Derivatives | As of June 30, 2019 and December 31, 2018 , the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk: June 30, 2019 December 31, 2018 Derivatives Number of Instruments Notional Amount Number of Instruments Notional Amount (In thousands) (In thousands) Interest rate “pay-fixed” swaps (GBP) 48 $ 233,630 48 $ 234,312 Interest rate “pay-fixed” swaps (EUR) 17 247,773 13 212,255 Interest rate “pay-fixed” swaps (USD) 3 150,000 3 150,000 Total 68 $ 631,403 64 $ 596,567 |
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | The table below details the location in the consolidated financial statements of the gain or loss recognized on interest rate derivatives designated as cash flow hedges for the three months ended June 30, 2019 and 2018 . Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2019 2018 2019 2018 Amount of (loss) gain recognized in accumulated other comprehensive income (loss) from derivatives (effective portion) $ (4,397 ) $ 7,076 $ (9,094 ) $ 6,646 Amount of loss reclassified from accumulated other comprehensive income (loss) into income as interest expense (effective portion) $ (481 ) $ (1,039 ) $ (980 ) $ (2,344 ) Total interest expense recorded in the consolidated statement of operations $ 15,689 $ 14,415 $ 30,851 $ 27,390 |
Disclosure of Credit Derivatives | As of June 30, 2019 and December 31, 2018 , the Company had the following outstanding derivatives that were not designated as hedges under qualifying hedging relationships. June 30, 2019 December 31, 2018 Derivatives Number of Instruments Notional Amount Number of Instruments Notional Amount (In thousands) (In thousands) Foreign currency forwards (GBP-USD) 40 $ 32,500 50 $ 43,000 Foreign currency forwards (EUR-USD) 30 29,000 38 39,500 Interest rate swaps (EUR) 1 10,802 5 138,625 Total 71 $ 72,302 93 $ 221,125 |
Offsetting Assets | The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of June 30, 2019 and December 31, 2018 . The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the accompanying consolidated balance sheets. Gross Amounts Not Offset on the Balance Sheet (In thousands) Gross Amounts of Recognized Assets Gross Amounts of Recognized (Liabilities) Gross Amounts Offset on the Balance Sheet Net Amounts of (Liabilities) Assets presented on the Balance Sheet Financial Instruments Cash Collateral Received (Posted) Net Amount June 30, 2019 $ 5,658 $ (7,204 ) $ — $ (1,546 ) $ — $ — $ (1,546 ) December 31, 2018 $ 8,730 $ (3,886 ) $ — $ 4,844 $ — $ — $ 4,844 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Base Cash Rental Payments - Topic 842 | The following table reflects the base cash rental payments due from the Company as of June 30, 2019 : (In thousands) Future Base Rent Payments (1) 2019 (remainder) $ 1,038 2020 1,385 2021 1,385 2022 1,385 2023 1,385 2024 1,390 Thereafter 40,189 Total minimum lease payments (2) 48,157 Less: Effects of discounting (23,516 ) Total present value of lease payments $ 24,641 (1) Assumes exchange rates of £1.00 to $1.27 for GBP and €1.00 to $1.14 for EUR as of June 30, 2019 for illustrative purposes, as applicable. (2) Ground lease rental payments due for the Company’s ING Amsterdam lease are not included in the table above as the Company’s ground for this property is prepaid through 2050. |
Future Base Cash Rental Payments - Topic 840 | As of December 31, 2018 : (In thousands) Future Base Rent Payments (1) 2019 $ 275,118 2020 278,651 2021 279,630 2022 270,569 2023 247,237 Thereafter 856,838 Total $ 2,208,043 ___________________________________________ (1) Assumes exchange rates of £1.00 to $1.27 for GBP and €1.00 to $1.14 for EUR as of December 31, 2018 for illustrative purposes, as applicable. The following table reflects the base cash rental payments due from the Company as of December 31, 2018: (In thousands) Future Base Rent Payments (1) 2019 $ 1,371 2020 1,371 2021 1,371 2022 1,371 2023 1,371 Thereafter 40,519 Total minimum lease payments (2) 47,374 Less: Effects of discounting (23,370 ) Total present value of lease payments $ 24,004 (1) Assumes exchange rates of £1.00 to $1.27 for GBP and €1.00 to $1.14 for EUR as of December 31, 2018 for illustrative purposes, as applicable. (2) Ground lease rental payments due for the Company’s ING Amsterdam lease are not included in the table above as the Company’s ground for this property is prepaid through 2050. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of Amount Contractually Due and Forgiven in Connection With Operation Related Services | The following table reflects related party fees incurred, forgiven and contractually due as of and for the periods presented: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Payable as of (In thousands) Incurred Forgiven Incurred Forgiven Incurred Forgiven Incurred Forgiven June 30, 2019 December 31, 2018 One-time fees and reimbursements: Fees on gain from sale of investments $ — $ — $ — $ — $ — $ — $ — $ — $ — $ 49 (2) Ongoing fees (3) : Asset management fees (1) 6,694 — 5,658 — 13,365 — 11,315 — — — Property management fees 1,468 — 1,132 — 2,840 — 2,303 — — — Total related party operational fees and reimbursements $ 8,162 $ — $ 6,790 $ — $ 16,205 $ — $ 13,618 $ — $ — $ 49 ___________________________________________________________________________ (1) The Advisor, in accordance with the Advisory Agreement, received asset management fees in cash equal to one quarter of the annual Minimum Base Management Fee of $18.0 million and the Variable Base Management Fee. The Variable Base Management Fee was $2.2 million and $4.4 million for the three and six months ended June 30, 2019 , respectively. The Variable Base Management Fee was $1.2 million and $2.3 million for the three and six months ended June 30, 2018 , respectively. (2) Balance included within due to related parties on the consolidated balance sheets as of June 30, 2019 and December 31, 2018 . (3) The Company incurred general and administrative costs and other expense reimbursements of approximately $0.6 million and $0.2 million for the six months ended June 30, 2019 and 2018 , respectively, which are recorded within general and administrative expenses on the audited consolidated statements of operations and are not reflected in the table above. |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Compensation [Abstract] | |
Schedule of Share-based Compensation Arrangements by Share-based Payment Award | The following table reflects the amount of RSUs outstanding as of June 30, 2019 : Number of RSUs Weighted-Average Issue Price Unvested, December 31, 2018 46,352 $ 22.04 Vested (21,955 ) 22.56 Granted 16,563 18.89 Unvested, June 30, 2019 40,960 20.49 |
Schedule of Share Based Compensation Total Return | Under the 2015 OPP, the Advisor was eligible to earn a number of LTIP Units with a value equal to a portion of the OPP Cap upon the first, second and third anniversaries of June 2, 2015 , based on the Company’s achievement of certain levels of absolute TSR and the amount by which the Company’s absolute TSR exceeded the average TSR of a peer group for the three -year performance period commencing on June 2, 2015 (the “ Three -Year Period”); each 12-month period during the Three -Year Period (the “ One -Year Periods”); and the initial 24-month period of the Three -Year Period (the “ Two -Year Period”), as follows: Performance Period Annual Period Interim Period Absolute Component: 4% of any excess Total Return attained above an absolute hurdle measured from the beginning of such period: 21% 7% 14% Relative Component: 4% of any excess Total Return attained above the Total Return for the performance period of the Peer Group*, subject to a ratable sliding scale factor as follows based on achievement of cumulative Total Return measured from the beginning of such period: • 100% will be earned if cumulative Total Return achieved is at least: 18% 6% 12% • 50% will be earned if cumulative Total Return achieved is: —% —% —% • 0% will be earned if cumulative Total Return achieved is less than: —% —% —% • a percentage from 50% to 100% calculated by linear interpolation will be earned if the cumulative Total Return achieved is between: 0% - 18% 0% - 6% 0% - 12% _______________________________________________________ * The “Peer Group” was comprised of Gramercy Property Trust Inc., Lexington Realty Trust, Select Income REIT, and W.P. Carey Inc. Half of the Award LTIP Units (the “Absolute TSR LTIP Units”) will be eligible to be earned as of the last day of the Performance Period (the “Valuation Date”) if the Company achieves an absolute TSR with respect to threshold, target and maximum performance goals for the Performance Period as follows: Performance Level (% of Absolute TSR LTIP Units Earned) Absolute TSR Number of Absolute TSR LTIP Units Earned Below Threshold — % Less than 24 % — Threshold 25 % 24 % 319,366 Target 50 % 30 % 638,733 Maximum 100 % 36 % or higher 1,277,465 Half of the Award LTIP Units (the “Relative TSR LTIP Units”) will be eligible to be earned as of the Valuation Date if the amount, expressed in terms of basis points (bps), whether positive or negative, by which the Company’s absolute TSR on the Valuation Date exceeds the average TSR of a peer group consisting of Lexington Realty Trust, W.P. Carey Inc. and Office Properties Income Trust as of the Valuation Date as follows: Performance Level (% of Relative TSR LTIP Units Earned) Relative TSR Excess Number of Absolute TSR LTIP Units Earned Below Threshold — % Less than -600 basis points — Threshold 25 % -600 basis points 319,366 Target 50 % — basis points 638,733 Maximum 100 % +600 basis points 1,277,465 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following is a summary of the basic and diluted net income per share computation for the periods presented: Three Months Ended June 30, Six Months Ended June 30, (In thousands, except share and per share data) 2019 2018 2019 2018 Net income attributable to common stockholders $ 12,621 $ 5,288 $ 18,412 $ 7,649 Adjustments to net income attributable to common stockholders for common share equivalents (174 ) (26 ) (334 ) (210 ) Adjusted net income attributable to common stockholders $ 12,447 $ 5,262 $ 18,078 $ 7,439 Basic and diluted net income per share attributable to common stockholders $ 0.15 $ 0.08 $ 0.22 $ 0.11 Weighted average shares outstanding: Basic 83,847,120 67,292,021 82,667,421 67,289,639 Diluted 85,165,549 67,292,021 83,985,850 67,289,639 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table shows common share equivalents on a weighted average basis that were excluded from the calculation of diluted earnings per share for the three and six months ended June 30, 2019 and 2018 : Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Unvested RSUs 40,964 46,767 40,964 46,767 LTIP Units (1) 1,277,465 — 1,277,465 — Total anti-dilutive common share equivalents 1,318,429 46,767 1,318,429 46,767 (1) Weighted-average number of LTIP Units outstanding. There were 2,554,930 LTIP Units issued and outstanding under the 2018 OPP as of June 30, 2019 and June 30, 2018 . The 3,013,933 LTIP Units issued under the 2015 OPP were forfeited as of June 2, 2018 since no LTIP Units were earned under the 2015 OPP. See Note 12 — Equity-Based Compensation for additional information on the 2018 OPP and 2015 OPP. |
Organization - Narrative (Detai
Organization - Narrative (Details) ft² in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2019ft²property$ / shares | Jun. 30, 2018 | Dec. 31, 2018$ / shares | |
Operations [Line Items] | |||
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 | |
Number of properties (property) | property | 288 | ||
Rentable square feet (sqft) | ft² | 28.3 | ||
Occupancy rate | 99.60% | ||
Weighted average remaining lease term | 8 years | ||
United States | |||
Operations [Line Items] | |||
Entity-wide revenue percentage | 57.60% | 55.70% | |
Europe | |||
Operations [Line Items] | |||
Percentage of portfolio investments | 42.40% | ||
Redeemable Preferred Stock | |||
Operations [Line Items] | |||
Preferred stock, dividend rate | 7.25% | 7.25% | |
Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands | Jan. 01, 2019USD ($)property | Jun. 30, 2019USD ($)segment$ / € | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2019$ / £ | Dec. 31, 2018$ / € | Dec. 31, 2018USD ($) | Dec. 31, 2018$ / £ |
Quantifying Misstatement in Current Year Financial Statements [Line Items] | ||||||||
Weighted average remaining lease term | 8 years | |||||||
Foreign currency exchange rate, tanslation | 1.14 | 1.27 | 1.14 | 1.27 | ||||
Uncollectable Lease Receivables | $ 100 | $ 100 | ||||||
Number of reportable segments | segment | 1 | |||||||
Number of ground leases | property | 7 | |||||||
Right-of-use asset | $ 51,600 | |||||||
Right-of-use liability | 24,641 | |||||||
Accumulated deficit decrease | $ (656,411) | $ (615,448) | ||||||
Minimum | ||||||||
Quantifying Misstatement in Current Year Financial Statements [Line Items] | ||||||||
Lease-up period | 12 months | |||||||
Maximum | ||||||||
Quantifying Misstatement in Current Year Financial Statements [Line Items] | ||||||||
Lease-up period | 18 months | |||||||
2015 OPP | ||||||||
Quantifying Misstatement in Current Year Financial Statements [Line Items] | ||||||||
Requisite service period | 2 years 9 months 18 days | |||||||
Accounting Standards Update 2016-02 | ||||||||
Quantifying Misstatement in Current Year Financial Statements [Line Items] | ||||||||
Accounts receivable | $ 3,400 | |||||||
Bad debt reserve | 2,200 | |||||||
Right-of-use asset | 24,000 | |||||||
Right-of-use liability | 24,000 | |||||||
Ground lease intangible | 27,000 | |||||||
Accounting Standards Update 2017-12 | ||||||||
Quantifying Misstatement in Current Year Financial Statements [Line Items] | ||||||||
Accumulated deficit decrease | $ 300 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Future Base Rent Payments (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Lessor, Operating Lease, Payments, Fiscal Year Maturity [Abstract] | ||
2019 (remainder) | $ 142,050 | |
2020 | 286,480 | |
2021 | 287,630 | |
2022 | 278,744 | |
2023 | 256,504 | |
2024 | 212,866 | |
Thereafter | 728,617 | |
Total | $ 2,192,891 | |
Operating Leases, Future Minimum Payments Receivable [Abstract] | ||
2019 | $ 275,118 | |
2020 | 278,651 | |
2021 | 279,630 | |
2022 | 270,569 | |
2023 | 247,237 | |
Thereafter | 856,838 | |
Total | $ 2,208,043 |
Real Estate Investments, Net -
Real Estate Investments, Net - Schedule of Business Acquisitions, by Acquisition (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019USD ($)property | Jun. 30, 2018USD ($)property | |
Real estate investments, at cost: | ||
Land | $ 10,978 | $ 18,816 |
Buildings, fixtures and improvements | 165,261 | 122,796 |
Total tangible assets | 176,239 | 141,612 |
Acquired intangible lease assets: | ||
Cash paid for acquired real estate investments | $ 210,991 | $ 161,786 |
Number of properties purchased (property) | property | 11 | 13 |
In-place leases | ||
Acquired intangible lease assets: | ||
Acquired intangibles | $ 35,698 | $ 24,669 |
Above market lease assets | ||
Acquired intangible lease assets: | ||
Acquired intangibles | 352 | 0 |
Below market lease liabilities | ||
Acquired intangible lease assets: | ||
Below-market lease liabilities | $ (1,298) | $ (4,495) |
Real Estate Investments, Net _2
Real Estate Investments, Net - Dispositions (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019USD ($)property | Jun. 30, 2018USD ($)property | Jun. 30, 2019USD ($)property | Jun. 30, 2018USD ($)property | Dec. 31, 2018property | |
Real Estate [Line Items] | |||||
Proceeds from dispositions of real estate investments, net | $ | $ 89,916 | $ 19,376 | |||
Gain (loss) on dispositions of real estate investments | $ | $ 6,923 | $ (3,818) | $ 7,815 | $ (3,818) | |
Number of real estate properties held for sale | property | 1 | 4 | 3 | ||
Properties Sold | |||||
Real Estate [Line Items] | |||||
Proceeds from dispositions of real estate investments, gross | $ | $ 83,300 | $ 92,800 | |||
United States | |||||
Real Estate [Line Items] | |||||
Number of real estate properties sold | property | 63 | 64 | |||
United Kingdom | |||||
Real Estate [Line Items] | |||||
Number of real estate properties sold | property | 1 | 1 | |||
San Jose, California | |||||
Real Estate [Line Items] | |||||
Number of real estate properties sold | property | 1 | 1 | |||
San Jose, California | Properties Sold | |||||
Real Estate [Line Items] | |||||
Proceeds from dispositions of real estate investments, gross | $ | $ 20,300 | $ 20,300 | |||
Proceeds from dispositions of real estate investments, net | $ | 1,300 | 1,300 | |||
Gain (loss) on dispositions of real estate investments | $ | $ 3,800 | $ (3,800) | |||
Family Dollar | United States | |||||
Real Estate [Line Items] | |||||
Number of real estate properties sold | property | 62 | 62 | |||
Industrial Property | United States | |||||
Real Estate [Line Items] | |||||
Number of real estate properties sold | property | 1 | 2 |
Real Estate Investments, Net _3
Real Estate Investments, Net - Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas (Details) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Entity-wide revenue percentage | 57.60% | 55.70% |
Michigan | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Entity-wide revenue percentage | 13.80% | 13.70% |
United Kingdom | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Entity-wide revenue percentage | 18.10% | 19.00% |
Mortgage Notes Payable, Net - S
Mortgage Notes Payable, Net - Schedule of Long-term Debt Instruments (Details) $ in Thousands | Oct. 01, 2019 | Feb. 06, 2019 | Jun. 30, 2019USD ($)property | Dec. 31, 2018USD ($) |
Debt Instrument [Line Items] | ||||
Mortgage notes payable, net | $ 1,286,033 | $ 1,129,807 | ||
Mortgage notes payable | ||||
Debt Instrument [Line Items] | ||||
Encumbered Properties (property) | property | 112 | |||
Outstanding Loan Amount | $ 1,299,645 | 1,140,113 | ||
Effective Interest Rate | 3.20% | |||
Mortgage discount | $ (86) | (569) | ||
Deferred financing costs, net of accumulated amortization | (13,526) | (9,737) | ||
Mortgage notes payable, net | $ 1,286,033 | 1,129,807 | ||
Mortgage notes payable | Finland | ||||
Debt Instrument [Line Items] | ||||
Percentage fixed interest rate | 80.00% | 80.00% | ||
Percentage variable interest rate | 20.00% | |||
Interest rate spread | 1.80% | |||
Mortgage notes payable | Finland | Euribor | ||||
Debt Instrument [Line Items] | ||||
Interest rate spread | 1.40% | |||
Mortgage notes payable | Germany | Euribor | ||||
Debt Instrument [Line Items] | ||||
Interest rate spread | 1.80% | |||
Mortgage notes payable | Quest Diagnostics | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Interest rate spread | 2.00% | |||
Mortgage notes payable | UK Multi-Property Cross Collateralized Loan | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Interest rate spread | 2.00% | |||
Mortgage notes payable | EUR | ||||
Debt Instrument [Line Items] | ||||
Encumbered Properties (property) | property | 23 | |||
Outstanding Loan Amount | $ 435,506 | 372,623 | ||
Mortgage notes payable | EUR | Finnair | ||||
Debt Instrument [Line Items] | ||||
Encumbered Properties (property) | property | 0 | |||
Outstanding Loan Amount | $ 0 | 32,501 | ||
Effective Interest Rate | 0.00% | |||
Mortgage notes payable | EUR | Tokmanni | ||||
Debt Instrument [Line Items] | ||||
Encumbered Properties (property) | property | 0 | |||
Outstanding Loan Amount | $ 0 | 33,159 | ||
Effective Interest Rate | 0.00% | |||
Mortgage notes payable | EUR | Finland | ||||
Debt Instrument [Line Items] | ||||
Encumbered Properties (property) | property | 5 | |||
Outstanding Loan Amount | $ 84,145 | 0 | ||
Effective Interest Rate | 1.70% | |||
Mortgage notes payable | EUR | Auchan | ||||
Debt Instrument [Line Items] | ||||
Encumbered Properties (property) | property | 1 | |||
Outstanding Loan Amount | $ 9,438 | 9,498 | ||
Effective Interest Rate | 1.70% | |||
Mortgage notes payable | EUR | Pole Emploi | ||||
Debt Instrument [Line Items] | ||||
Encumbered Properties (property) | property | 1 | |||
Outstanding Loan Amount | $ 6,595 | 6,637 | ||
Effective Interest Rate | 1.70% | |||
Mortgage notes payable | EUR | Sagemcom | ||||
Debt Instrument [Line Items] | ||||
Encumbered Properties (property) | property | 1 | |||
Outstanding Loan Amount | $ 40,822 | 41,083 | ||
Effective Interest Rate | 1.70% | |||
Mortgage notes payable | EUR | Worldline | ||||
Debt Instrument [Line Items] | ||||
Encumbered Properties (property) | property | 1 | |||
Outstanding Loan Amount | $ 5,685 | 5,722 | ||
Effective Interest Rate | 1.90% | |||
Mortgage notes payable | EUR | DCNS | ||||
Debt Instrument [Line Items] | ||||
Encumbered Properties (property) | property | 1 | |||
Outstanding Loan Amount | $ 10,802 | 10,872 | ||
Effective Interest Rate | 1.50% | |||
Mortgage notes payable | EUR | ID Logistics II | ||||
Debt Instrument [Line Items] | ||||
Encumbered Properties (property) | property | 2 | |||
Outstanding Loan Amount | $ 11,939 | 12,016 | ||
Effective Interest Rate | 1.30% | |||
Mortgage notes payable | EUR | Rheinmetall | ||||
Debt Instrument [Line Items] | ||||
Encumbered Properties (property) | property | 0 | |||
Outstanding Loan Amount | $ 0 | 12,130 | ||
Effective Interest Rate | 0.00% | |||
Mortgage notes payable | EUR | OBI DIY | ||||
Debt Instrument [Line Items] | ||||
Encumbered Properties (property) | property | 0 | |||
Outstanding Loan Amount | $ 0 | 5,150 | ||
Effective Interest Rate | 0.00% | |||
Mortgage notes payable | EUR | RWE AG | ||||
Debt Instrument [Line Items] | ||||
Encumbered Properties (property) | property | 3 | |||
Outstanding Loan Amount | $ 71,068 | 71,524 | ||
Effective Interest Rate | 1.60% | |||
Mortgage notes payable | EUR | Rexam | ||||
Debt Instrument [Line Items] | ||||
Encumbered Properties (property) | property | 0 | |||
Outstanding Loan Amount | $ 0 | 5,876 | ||
Effective Interest Rate | 0.00% | |||
Mortgage notes payable | EUR | Metro Tonic | ||||
Debt Instrument [Line Items] | ||||
Encumbered Properties (property) | property | 0 | |||
Outstanding Loan Amount | $ 0 | 30,326 | ||
Effective Interest Rate | 0.00% | |||
Mortgage notes payable | EUR | ID Logistics I | ||||
Debt Instrument [Line Items] | ||||
Encumbered Properties (property) | property | 0 | |||
Outstanding Loan Amount | $ 0 | 4,578 | ||
Effective Interest Rate | 0.00% | |||
Mortgage notes payable | EUR | Germany | ||||
Debt Instrument [Line Items] | ||||
Encumbered Properties (property) | property | 5 | |||
Outstanding Loan Amount | $ 58,561 | 0 | ||
Effective Interest Rate | 2.00% | |||
Mortgage notes payable | EUR | DB Luxembourg | ||||
Debt Instrument [Line Items] | ||||
Encumbered Properties (property) | property | 0 | |||
Outstanding Loan Amount | $ 0 | 41,198 | ||
Effective Interest Rate | 0.00% | |||
Mortgage notes payable | EUR | ING Amsterdam | ||||
Debt Instrument [Line Items] | ||||
Encumbered Properties (property) | property | 0 | |||
Outstanding Loan Amount | $ 0 | 50,353 | ||
Effective Interest Rate | 0.00% | |||
Mortgage notes payable | EUR | Benelux | ||||
Debt Instrument [Line Items] | ||||
Encumbered Properties (property) | property | 3 | |||
Outstanding Loan Amount | $ 136,451 | 0 | ||
Effective Interest Rate | 1.40% | |||
Mortgage notes payable | GBP | ||||
Debt Instrument [Line Items] | ||||
Encumbered Properties (property) | property | 43 | |||
Outstanding Loan Amount | $ 292,039 | 292,890 | ||
Percentage fixed interest rate | 80.00% | |||
Mortgage notes payable | GBP | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Percentage variable interest rate | 20.00% | |||
Mortgage notes payable | GBP | UK Multi-Property Cross Collateralized Loan | ||||
Debt Instrument [Line Items] | ||||
Encumbered Properties (property) | property | 43 | |||
Outstanding Loan Amount | $ 292,039 | 292,890 | ||
Effective Interest Rate | 3.20% | |||
Mortgage notes payable | USD | ||||
Debt Instrument [Line Items] | ||||
Encumbered Properties (property) | property | 46 | |||
Outstanding Loan Amount | $ 572,100 | 474,600 | ||
Mortgage notes payable | USD | Quest Diagnostics | ||||
Debt Instrument [Line Items] | ||||
Encumbered Properties (property) | property | 1 | |||
Outstanding Loan Amount | $ 52,800 | 52,800 | ||
Effective Interest Rate | 4.50% | |||
Mortgage notes payable | USD | AT&T Services | ||||
Debt Instrument [Line Items] | ||||
Encumbered Properties (property) | property | 1 | |||
Outstanding Loan Amount | $ 33,550 | 33,550 | ||
Effective Interest Rate | 2.00% | |||
Mortgage notes payable | USD | AT&T Services | Adjusted LIBOR | ||||
Debt Instrument [Line Items] | ||||
Interest rate spread | 2.00% | |||
Mortgage notes payable | USD | Penske Logistics | ||||
Debt Instrument [Line Items] | ||||
Encumbered Properties (property) | property | 1 | |||
Outstanding Loan Amount | $ 70,000 | 70,000 | ||
Effective Interest Rate | 4.70% | |||
Mortgage notes payable | USD | Multi-Tenant Mortgage Loan I | ||||
Debt Instrument [Line Items] | ||||
Encumbered Properties (property) | property | 12 | |||
Outstanding Loan Amount | $ 187,000 | 187,000 | ||
Effective Interest Rate | 4.40% | |||
Mortgage notes payable | USD | Multi-Tenant Mortgage Loan II | ||||
Debt Instrument [Line Items] | ||||
Encumbered Properties (property) | property | 8 | |||
Outstanding Loan Amount | $ 32,750 | 32,750 | ||
Effective Interest Rate | 4.40% | |||
Mortgage notes payable | USD | Multi-Tenant Mortgage Loan III | ||||
Debt Instrument [Line Items] | ||||
Encumbered Properties (property) | property | 7 | |||
Outstanding Loan Amount | $ 98,500 | 98,500 | ||
Effective Interest Rate | 4.90% | |||
Mortgage notes payable | USD | Multi-Tenant Mortgage Loan IV | ||||
Debt Instrument [Line Items] | ||||
Encumbered Properties (property) | property | 16 | |||
Outstanding Loan Amount | $ 97,500 | $ 0 | ||
Effective Interest Rate | 4.60% | |||
Forecast | Mortgage notes payable | Germany | Euribor | ||||
Debt Instrument [Line Items] | ||||
Interest rate spread | 1.55% |
Mortgage Notes Payable, Net -_2
Mortgage Notes Payable, Net - Schedule of Maturities of Long-term Debt (Details) $ in Thousands | Jun. 30, 2019$ / € | Jun. 30, 2019USD ($) | Jun. 30, 2019$ / £ | Dec. 31, 2018$ / € | Dec. 31, 2018USD ($) | Dec. 31, 2018$ / £ |
Debt Instrument [Line Items] | ||||||
Foreign currency exchange rate (gbp, eur per usd) | 1.14 | 1.27 | 1.14 | 1.27 | ||
Mortgage notes payable | ||||||
Debt Instrument [Line Items] | ||||||
2019 (remainder) | $ 180,723 | |||||
2020 | 52,550 | |||||
2021 | 24,238 | |||||
2022 | 19,046 | |||||
2023 | 316,743 | |||||
2024 | 220,596 | |||||
Thereafter | 485,749 | |||||
Mortgage notes payable | $ 1,299,645 | $ 1,140,113 |
Mortgage Notes Payable, Net - N
Mortgage Notes Payable, Net - Narrative (Details) $ in Billions | Jun. 30, 2019USD ($) |
Debt Instrument [Line Items] | |
Carrying value of encumbered assets | $ 1.3 |
Line of Credit | |
Debt Instrument [Line Items] | |
Carrying value of encumbered assets | $ 1 |
Mortgage Notes Payable, Net - B
Mortgage Notes Payable, Net - Benelux Refinancing (Details) - Benelux - Landesbank Hessen-Thuringen Girozentrale € in Millions | Jun. 12, 2019EUR (€)property |
Debt Instrument [Line Items] | |
Collateral, number of leased offices and industrial properties | property | 3 |
Mortgage notes payable | |
Debt Instrument [Line Items] | |
Proceeds from loans borrowed | € 120 |
Interest rate | 1.383% |
Repayments of debt | € 80.3 |
Mortgage Notes Payable, Net - G
Mortgage Notes Payable, Net - German Refinancing (Details) - Germany € in Millions | Oct. 01, 2019 | May 10, 2019EUR (€)property | Jun. 30, 2019 |
Mortgage notes payable | Euribor | |||
Debt Instrument [Line Items] | |||
Interest rate spread | 1.80% | ||
Landesbank Hessen-Thuringen Girozentrale | |||
Debt Instrument [Line Items] | |||
Collateral, number of leased offices and industrial properties | property | 5 | ||
Landesbank Hessen-Thuringen Girozentrale | Mortgage notes payable | |||
Debt Instrument [Line Items] | |||
Percentage fixed interest rate | 80.00% | ||
Repayments of debt | € 35.6 | ||
Landesbank Hessen-Thuringen Girozentrale | Mortgage notes payable | Euribor | |||
Debt Instrument [Line Items] | |||
Proceeds from loans borrowed | € 51.5 | ||
Interest rate spread | 1.80% | ||
Forecast | Mortgage notes payable | Euribor | |||
Debt Instrument [Line Items] | |||
Interest rate spread | 1.55% | ||
Forecast | Landesbank Hessen-Thuringen Girozentrale | Mortgage notes payable | Euribor | |||
Debt Instrument [Line Items] | |||
Interest rate spread | 1.55% |
Mortgage Notes Payable, Net - M
Mortgage Notes Payable, Net - Multi-Tenant Mortgage Loan IV (Details) € in Millions, $ in Millions | Apr. 12, 2019USD ($)leased_office_and_industrial_propertysate | Apr. 12, 2019EUR (€)leased_office_and_industrial_propertysate | Jan. 26, 2018USD ($)sate | Apr. 30, 2019sate | Jun. 30, 2019 |
Column Financial, Inc. and Societe Generale Financial Corporation | |||||
Debt Instrument [Line Items] | |||||
Number of states in which mortgaged properties are located (state) | sate | 12 | ||||
Multi-Tenant Mortgage Loan IV | Column Financial, Inc. and Societe Generale Financial Corporation | |||||
Debt Instrument [Line Items] | |||||
Collateral, number of leased offices and industrial properties | leased_office_and_industrial_property | 16 | 16 | |||
Multi-Tenant Mortgage Loan IV | Mortgage notes payable | Column Financial, Inc. and Societe Generale Financial Corporation | |||||
Debt Instrument [Line Items] | |||||
Proceeds from loans borrowed | $ | $ 97.5 | ||||
Repayments of debt | € | € 90 | ||||
Interest rate | 4.489% | ||||
Multi-Tenant Mortgage Loan | Mortgage notes payable | |||||
Debt Instrument [Line Items] | |||||
Number of states in which mortgaged properties are located (state) | sate | 12 | 12 | 6 | ||
Repayments of debt | $ | $ 30 | ||||
Interest rate | 4.32% |
Mortgage Notes Payable, Net - F
Mortgage Notes Payable, Net - Finnish Refinancing (Details) - Finland € in Millions, $ in Millions | Feb. 06, 2019USD ($)property | Feb. 06, 2019EUR (€)property | Jun. 30, 2019 | Feb. 06, 2019EUR (€) |
Debt Instrument [Line Items] | ||||
Collateral, number of leased offices and industrial properties | 5 | 5 | ||
Mortgages | ||||
Debt Instrument [Line Items] | ||||
Proceeds from refinancing | $ 84.2 | € 74 | ||
Debt bearing fixed interest rate | $ 67.4 | € 59.2 | ||
Percentage fixed interest rate | 80.00% | 80.00% | 80.00% | |
Interest rate spread | 1.80% | 1.80% | ||
Repayments of debt | $ 65.3 | € 57.4 | ||
Mortgages | Euribor | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 1.40% | 1.40% | ||
Interest rate spread | 1.40% |
Mortgage Notes Payable, Net -_3
Mortgage Notes Payable, Net - Multi-Tenant Mortgage Loan II (Details) $ in Millions | Apr. 12, 2019sate | Jan. 26, 2018USD ($)ft²propertysate | Jun. 30, 2019ft² |
Debt Instrument [Line Items] | |||
Area of property (sqft) | ft² | 28,300,000 | ||
Mortgage notes payable | Multi-tenant mortgage loan | |||
Debt Instrument [Line Items] | |||
Gross proceeds from credit facility | $ | $ 32.8 | ||
Stated interest rate | 4.32% | ||
Number of mortgaged properties (property) | property | 8 | ||
Number of states in which mortgaged properties are located (state) | sate | 12 | 6 | |
Area of property (sqft) | ft² | 627,500 | ||
Repayments of outstanding indebtedness | $ | $ 30 |
Credit Facilities - Credit Faci
Credit Facilities - Credit Facility (Details) € in Millions | Apr. 12, 2019leased_office_and_industrial_property | Jul. 02, 2018USD ($) | Jul. 02, 2018EUR (€) | Jul. 24, 2017USD ($)extension | Apr. 30, 2019sate | Jun. 30, 2019USD ($) | Jun. 30, 2019EUR (€) | Dec. 31, 2018USD ($) |
Line of Credit Facility [Line Items] | ||||||||
Borrowings outstanding | $ 259,527,000 | $ 363,894,000 | ||||||
Maximum distribution as percentage of FFO | 95.00% | |||||||
Maximum distribution as percentage of FFO, under exception | 100.00% | |||||||
Column Financial, Inc. and Societe Generale Financial Corporation | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Number of states in which mortgaged properties are located (state) | sate | 12 | |||||||
Credit Facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Weighted-average effective interest rate | 2.60% | 2.60% | ||||||
Credit Facility | Federal Funds | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Basis spread on base rate determination | 0.50% | |||||||
Credit Facility | LIBOR | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Basis spread on base rate determination | 1.00% | |||||||
Credit Facility | LIBOR | Minimum | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Interest rate spread | 1.60% | |||||||
Credit Facility | LIBOR | Maximum | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Interest rate spread | 2.20% | |||||||
Credit Facility | Base Rate | Minimum | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Interest rate spread | 0.60% | |||||||
Credit Facility | Base Rate | Maximum | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Interest rate spread | 1.20% | |||||||
Credit Facility | Revolving Credit Facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Available for future borrowings | $ 90,700,000 | |||||||
Borrowings outstanding | 259,500,000 | |||||||
Credit Facility | Term Loan | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Borrowings outstanding | 277,400,000 | |||||||
Credit Facility | KeyBank National Association | Unsecured debt | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Maximum borrowing capacity | $ 725,000,000 | 906,200,000 | ||||||
Increase in aggregate commitments | $ 35,600,000 | |||||||
Total line of credit commitment | 950,000,000 | |||||||
Number of extensions | extension | 1 | |||||||
Extension term | 1 year | |||||||
Credit Facility | KeyBank National Association | Unsecured debt | Minimum | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Maximum borrowing capacity | 722,200,000 | |||||||
Credit Facility | KeyBank National Association | Unsecured debt | Maximum | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Maximum borrowing capacity | 914,400,000 | |||||||
Credit Facility | KeyBank National Association | Unsecured debt | Revolving Credit Facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Maximum borrowing capacity | 632,000,000 | |||||||
Increase in maximum borrowing capacity | 132,000,000 | |||||||
Facility fee multiplier | 0.0030 | |||||||
Borrowings outstanding | 259,527,000 | $ 363,894,000 | ||||||
Credit Facility | KeyBank National Association | Unsecured debt | Revolving Credit Facility | Above Threshold | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Unused capacity commitment fee | 0.25% | |||||||
Commitment fee percentage | 50.00% | |||||||
Credit Facility | KeyBank National Association | Unsecured debt | Revolving Credit Facility | Below Threshold | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Unused capacity commitment fee | 0.15% | |||||||
Commitment fee percentage | 50.00% | |||||||
Credit Facility | KeyBank National Association | Unsecured debt | Term Loan Facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Maximum borrowing capacity | $ 280,300,000 | € 246.5 | ||||||
Increase in maximum borrowing capacity | $ 60,200,000 | € 51.8 | ||||||
Multi-Tenant Mortgage Loan IV | Column Financial, Inc. and Societe Generale Financial Corporation | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Collateral, number of leased offices and industrial properties | leased_office_and_industrial_property | 16 |
Credit Facilities - Outstanding
Credit Facilities - Outstanding Balance Under Credit Agreement (Details) € in Thousands, £ in Thousands, $ in Thousands | Jun. 30, 2019$ / € | Jun. 30, 2019USD ($) | Jun. 30, 2019$ / £ | Jun. 30, 2019EUR (€) | Jun. 30, 2019GBP (£) | Dec. 31, 2018$ / € | Dec. 31, 2018USD ($) | Dec. 31, 2018$ / £ | Dec. 31, 2018EUR (€) | Dec. 31, 2018GBP (£) |
Line of Credit Facility [Line Items] | ||||||||||
Borrowings outstanding | $ 259,527 | $ 363,894 | ||||||||
Term Loan, Net | 277,403 | 278,727 | ||||||||
Foreign currency exchange rate (gbp, eur per usd) | 1.14 | 1.27 | 1.14 | 1.27 | ||||||
Credit Facility | Revolving Credit Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Borrowings outstanding | 259,500 | |||||||||
KeyBank National Association | Credit Facility | Unsecured debt | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Total Credit Facility | 536,930 | 642,621 | ||||||||
KeyBank National Association | Credit Facility | Unsecured debt | USD | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Total Credit Facility | 174,625 | 278,625 | ||||||||
KeyBank National Association | Credit Facility | Unsecured debt | GBP | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Total Credit Facility | £ | £ 40,000 | £ 40,000 | ||||||||
KeyBank National Association | Credit Facility | Unsecured debt | EUR | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Total Credit Facility | € | € 276,481 | € 276,481 | ||||||||
KeyBank National Association | Credit Facility | Unsecured debt | Revolving Credit Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Borrowings outstanding | 259,527 | 363,894 | ||||||||
KeyBank National Association | Credit Facility | Unsecured debt | Revolving Credit Facility | USD | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Borrowings outstanding | 174,625 | 278,625 | ||||||||
KeyBank National Association | Credit Facility | Unsecured debt | Revolving Credit Facility | GBP | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Borrowings outstanding | £ | 40,000 | 40,000 | ||||||||
KeyBank National Association | Credit Facility | Unsecured debt | Revolving Credit Facility | EUR | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Borrowings outstanding | € | 30,000 | 30,000 | ||||||||
KeyBank National Association | Credit Facility | Unsecured debt | Term Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Term Loan | 280,273 | 282,069 | ||||||||
Deferred financing costs | (2,870) | (3,342) | ||||||||
Term Loan, Net | 277,403 | 278,727 | ||||||||
KeyBank National Association | Credit Facility | Unsecured debt | Term Facility | USD | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Term Loan | 0 | 0 | ||||||||
Deferred financing costs | 0 | 0 | ||||||||
Term Loan, Net | $ 0 | $ 0 | ||||||||
KeyBank National Association | Credit Facility | Unsecured debt | Term Facility | GBP | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Term Loan | £ | 0 | 0 | ||||||||
Deferred financing costs | £ | 0 | 0 | ||||||||
Term Loan, Net | £ | £ 0 | £ 0 | ||||||||
KeyBank National Association | Credit Facility | Unsecured debt | Term Facility | EUR | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Term Loan | € | 246,481 | 246,481 | ||||||||
Deferred financing costs | € | 0 | 0 | ||||||||
Term Loan, Net | € | € 246,481 | € 246,481 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Fair Value, Financial Instruments Measured on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
2018 OPP | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity fair value | $ (18,804) | |
Foreign currency forwards, net (GBP & EUR) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset fair value | $ 5,658 | 5,472 |
Interest rate swaps, net (GBP & EUR) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset fair value | (7,204) | (628) |
Quoted Prices in Active Markets Level 1 | 2018 OPP | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity fair value | 0 | |
Quoted Prices in Active Markets Level 1 | Foreign currency forwards, net (GBP & EUR) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset fair value | 0 | 0 |
Quoted Prices in Active Markets Level 1 | Interest rate swaps, net (GBP & EUR) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset fair value | 0 | 0 |
Significant Other Observable Inputs Level 2 | 2018 OPP | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity fair value | 0 | |
Significant Other Observable Inputs Level 2 | Foreign currency forwards, net (GBP & EUR) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset fair value | 5,658 | 5,472 |
Significant Other Observable Inputs Level 2 | Interest rate swaps, net (GBP & EUR) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset fair value | (7,204) | (628) |
Significant Unobservable Inputs Level 3 | 2018 OPP | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity fair value | (18,804) | |
Significant Unobservable Inputs Level 3 | Foreign currency forwards, net (GBP & EUR) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset fair value | 0 | 0 |
Significant Unobservable Inputs Level 3 | Interest rate swaps, net (GBP & EUR) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset fair value | $ 0 | $ 0 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Fair Value, by Balance Sheet Grouping (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes payable | $ 1,286,033 | $ 1,129,807 |
Mortgage notes payable | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes payable | 1,286,033 | 1,129,807 |
Deferred financing costs | 13,526 | 9,737 |
Term Loan | 1,299,645 | 1,140,113 |
Significant Unobservable Inputs Level 3 | Mortgage notes payable | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt, fair value | 1,286,033 | 1,129,807 |
Mortgage notes payable | 1,300,000 | 1,100,000 |
Mortgage discount | 100 | 600 |
Deferred financing costs | 13,500 | 9,700 |
Significant Unobservable Inputs Level 3 | Mortgage notes payable | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt, fair value | 1,336,784 | 1,157,710 |
Significant Unobservable Inputs Level 3 | Line of Credit | Revolving Credit Facility | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt, fair value | 259,527 | 363,894 |
Significant Unobservable Inputs Level 3 | Line of Credit | Revolving Credit Facility | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt, fair value | 260,777 | 365,591 |
Significant Unobservable Inputs Level 3 | Line of Credit | Term Facility | Credit Facility | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt, fair value | 277,403 | 278,727 |
Significant Unobservable Inputs Level 3 | Line of Credit | Term Facility | Credit Facility | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt, fair value | 283,635 | 283,558 |
KeyBank National Association | Unsecured debt | Term Facility | Credit Facility | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Deferred financing costs | 2,870 | 3,342 |
Term Loan | $ 280,273 | $ 282,069 |
Derivatives and Hedging Activ_3
Derivatives and Hedging Activities - Schedule of Derivatives in Statement of Financial Position, Fair Value (Details) - Swap - Significant Other Observable Inputs Level 2 - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, at fair value | $ (7,079) | $ 658 |
Designated as Hedging Instrument | Interest rate swaps, net | USD | Derivatives liabilities, at fair value | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, at fair value | (783) | |
Designated as Hedging Instrument | Interest rate swaps, net | USD | Derivatives assets, at fair value | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, at fair value | 3,258 | |
Designated as Hedging Instrument | Interest rate swaps, net | GBP | Derivatives liabilities, at fair value | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, at fair value | (4,698) | (1,157) |
Designated as Hedging Instrument | Interest rate swaps, net | EUR | Derivatives liabilities, at fair value | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, at fair value | (1,598) | (1,443) |
Not Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, at fair value | 5,533 | 4,186 |
Not Designated as Hedging Instrument | Interest rate swaps, net | EUR | Derivatives liabilities, at fair value | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, at fair value | (125) | (1,286) |
Not Designated as Hedging Instrument | Foreign currency forwards | GBP | Derivatives assets, at fair value | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, at fair value | 3,121 | 3,247 |
Not Designated as Hedging Instrument | Foreign currency forwards | EUR | Derivatives assets, at fair value | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, at fair value | $ 2,537 | $ 2,225 |
Derivatives and Hedging Activ_4
Derivatives and Hedging Activities - Narrative (Details) € in Millions, £ in Millions | 3 Months Ended | 6 Months Ended | |||||||
Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($)derivative | Sep. 30, 2018USD ($)derivative | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2019EUR (€) | Dec. 31, 2018USD ($) | Sep. 30, 2018GBP (£) | |
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Gain for accelerated reclassification of amounts in other comprehensive income to earnings | $ (2,151) | $ (339) | |||||||
Loss for accelerated reclassification of amounts in other comprehensive income to earnings | $ 24,449 | $ 22,691 | |||||||
Loss to be reclassified from other comprehensive income | 1,600,000 | ||||||||
Accumulated other comprehensive (loss) income | (3,982,000) | (3,982,000) | $ 6,810,000 | ||||||
Gains (losses) on derivative instruments | 1,390,000 | 6,333,000 | 1,630,000 | 3,398,000 | |||||
Fair value of derivatives in net liability position | 8,000,000 | 8,000,000 | |||||||
Not Designated as Hedging Instrument | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Gains (losses) on derivative instruments | 1,400,000 | $ 6,300,000 | 1,700,000 | $ 3,400,000 | |||||
Interest rate swaps, net | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Amount of (loss) gain recognized in accumulated other comprehensive income (loss) from derivatives (effective portion) | (4,397,000) | (9,094,000) | |||||||
Multi-Property Loan, Finland | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Number interest rates swaps terminated | derivative | 5 | ||||||||
Notional amount | € | € 57.4 | ||||||||
Payment to settle derivatives | $ 800,000 | ||||||||
Amount of (loss) gain recognized in accumulated other comprehensive income (loss) from derivatives (effective portion) | 700,000 | ||||||||
Amount of loss reclassified from accumulated other comprehensive income (loss) into income as interest expense (effective portion) | 100,000 | ||||||||
Accumulated other comprehensive (loss) income | 500,000 | 500,000 | |||||||
Multi-Property GBP Loan | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Amount of loss reclassified from accumulated other comprehensive income (loss) into income as interest expense (effective portion) | 100,000 | ||||||||
Accumulated other comprehensive (loss) income | $ 400,000 | $ 1,200,000 | $ 400,000 | ||||||
Multi-Property GBP Loan | Interest rate swaps, net | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Number interest rates swaps terminated | derivative | 15 | ||||||||
Notional amount | £ | £ 208.8 | ||||||||
Multi-Property GBP Loan | Interest Rate Floor | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Number interest rates swaps terminated | derivative | 1 | ||||||||
Notional amount | £ | £ 28.1 |
Derivatives and Hedging Activ_5
Derivatives and Hedging Activities - Schedule of Interest Rate Derivatives (Details) - Designated as Hedging Instrument - Cash Flow Hedging - Swap $ in Thousands | Jun. 30, 2019USD ($)derivative | Dec. 31, 2018USD ($)derivative |
Derivative [Line Items] | ||
Number of Instruments | derivative | 68 | 64 |
Notional Amount | $ | $ 631,403 | $ 596,567 |
GBP | ||
Derivative [Line Items] | ||
Number of Instruments | derivative | 48 | 48 |
Notional Amount | $ | $ 233,630 | $ 234,312 |
EUR | ||
Derivative [Line Items] | ||
Number of Instruments | derivative | 17 | 13 |
Notional Amount | $ | $ 247,773 | $ 212,255 |
USD | ||
Derivative [Line Items] | ||
Number of Instruments | derivative | 3 | 3 |
Notional Amount | $ | $ 150,000 | $ 150,000 |
Derivatives and Hedging Activ_6
Derivatives and Hedging Activities - Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Interest Expense | $ 15,689 | $ 14,415 | $ 30,851 | $ 27,390 |
Interest rate swaps, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of (loss) gain recognized in accumulated other comprehensive income (loss) from derivatives (effective portion) | (4,397) | (9,094) | ||
Interest rate swaps, net | Interest Expense | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of loss reclassified from accumulated other comprehensive income (loss) into income as interest expense (effective portion) | $ (481) | $ (980) | ||
Cash Flow Hedging | Interest rate swaps, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of (loss) gain recognized in accumulated other comprehensive income (loss) from derivatives (effective portion) | 7,076 | 6,646 | ||
Cash Flow Hedging | Interest rate swaps, net | Interest Expense | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of loss reclassified from accumulated other comprehensive income (loss) into income as interest expense (effective portion) | $ (1,039) | $ (2,344) |
Derivatives and Hedging Activ_7
Derivatives and Hedging Activities - Foreign Cross Currency Derivatives (Details) - Not Designated as Hedging Instrument - Swap $ in Thousands | Jun. 30, 2019USD ($)derivative | Dec. 31, 2018USD ($)derivative |
Derivative [Line Items] | ||
Number of Instruments (derivative) | derivative | 71 | 93 |
Notional Amount | $ | $ 72,302 | $ 221,125 |
Foreign currency forwards | GBP | ||
Derivative [Line Items] | ||
Number of Instruments (derivative) | derivative | 40 | 50 |
Notional Amount | $ | $ 32,500 | $ 43,000 |
Foreign currency forwards | EUR | ||
Derivative [Line Items] | ||
Number of Instruments (derivative) | derivative | 30 | 38 |
Notional Amount | $ | $ 29,000 | $ 39,500 |
Interest rate swaps, net | EUR | ||
Derivative [Line Items] | ||
Number of Instruments (derivative) | derivative | 1 | 5 |
Notional Amount | $ | $ 10,802 | $ 138,625 |
Derivatives and Hedging Activ_8
Derivatives and Hedging Activities - Offsetting Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Gross Amounts of Recognized Assets | $ 5,658 | $ 8,730 |
Gross Amounts of Recognized (Liabilities) | (7,204) | (3,886) |
Gross Amounts Offset on the Balance Sheet | 0 | 0 |
Net Amounts of (Liabilities) Assets presented on the Balance Sheet | (1,546) | 4,844 |
Financial Instruments | 0 | 0 |
Cash Collateral Received (Posted) | 0 | 0 |
Net Amount | $ (1,546) | $ 4,844 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Mar. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Mar. 31, 2018 | |
Conversion of Stock [Line Items] | ||||||||
Common stock, outstanding (shares) | 83,861,900 | 83,861,900 | 76,080,625 | |||||
Preferred stock, authorized (shares) | 16,670,000 | 16,670,000 | 16,670,000 | |||||
Common stock dividend rate (usd per share) | $ 2.13 | $ 2.13 | ||||||
Common stock, monthly dividend rate (usd per share) | $ 0.1775 | |||||||
Agent | At-the-Market Program | ||||||||
Conversion of Stock [Line Items] | ||||||||
Number of shares issued (shares) | 7,759,322 | |||||||
Gross proceeds from sale of stock | $ 152,800,000 | |||||||
Commissions paid | 1,500,000 | |||||||
Payments of stock offering costs | $ 1,200,000 | |||||||
Aggregate common stock offering price | $ 175,000,000 | |||||||
Redeemable Preferred Stock | ||||||||
Conversion of Stock [Line Items] | ||||||||
Preferred stock, authorized (shares) | 13,409,650 | 13,409,650 | 13,409,650 | |||||
Preferred stock, issued (shares) | 5,957,848 | 5,957,848 | 5,416,890 | |||||
Dividend payout (usd per share) | $ 0.453125 | |||||||
Preferred stock, dividend rate | 7.25% | 7.25% | ||||||
Preferred stock, liquidation preference (usd per share) | $ 25 | $ 25 | $ 25 | |||||
Redeemable Preferred Stock | Maximum | ||||||||
Conversion of Stock [Line Items] | ||||||||
Periods for dividend payment | 30 days | |||||||
Redeemable Preferred Stock | Minimum | ||||||||
Conversion of Stock [Line Items] | ||||||||
Periods for dividend payment | 10 days | |||||||
Redeemable Preferred Stock | Agent | At-the-Market Program | ||||||||
Conversion of Stock [Line Items] | ||||||||
Number of shares issued (shares) | 472,854 | 2,339 | 540,958 | 4,015 | ||||
Gross proceeds from sale of stock | $ 12,100,000 | $ 58,668,000 | $ 13,800,000 | |||||
Commissions paid | 200,000 | 880,000 | 200,000 | $ 1,509,000 | ||||
Payments of stock offering costs | $ 200,000 | $ 24,819,000 | $ 300,000 | 300,000 | ||||
Aggregate preferred stock offering price | $ 200,000,000 | |||||||
Net proceeds | $ 100,000 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Thousands | Mar. 04, 2019USD ($) | Jun. 30, 2019USD ($)property | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)property | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) |
Loss Contingencies [Line Items] | ||||||
Number of properties subject to gound leases | property | 8 | 8 | ||||
Right-of-use asset | $ 51,600 | $ 51,600 | ||||
Right-of-use liability | $ 24,641 | $ 24,641 | ||||
Weighted average remaining lease term | 34 years | 34 years | ||||
Weighted average discount rate | 4.33% | 4.33% | ||||
Payments | $ 300 | $ 700 | ||||
Expense | $ 300 | 700 | ||||
Rent expense | $ 300 | $ 700 | ||||
Payments for legal settlements | $ 7,400 | |||||
Legal settlement reserve | $ 7,400 | |||||
Asset management fees | Service Provider | Defendants vs. Service Providers | ||||||
Loss Contingencies [Line Items] | ||||||
Legal expenses | $ 1,000 | |||||
Minimum | ||||||
Loss Contingencies [Line Items] | ||||||
Term of contract | 16 years | 16 years | ||||
Maximum | ||||||
Loss Contingencies [Line Items] | ||||||
Term of contract | 85 years | 85 years |
Commitments and Contingencies_2
Commitments and Contingencies - Operating Leases Future Minimum Payments (Details) $ in Thousands | Jun. 30, 2019$ / € | Jun. 30, 2019USD ($) | Jun. 30, 2019$ / £ | Dec. 31, 2018$ / € | Dec. 31, 2018USD ($) | Dec. 31, 2018$ / £ |
Operating Lease Liabilities, Payments Due [Abstract] | ||||||
2019 (remainder) | $ 1,038 | |||||
2020 | 1,385 | |||||
2021 | 1,385 | |||||
2022 | 1,385 | |||||
2023 | 1,385 | |||||
2024 | 1,390 | |||||
Thereafter | 40,189 | |||||
Total minimum lease payments | 48,157 | |||||
Less: Effects of discounting | (23,516) | |||||
Total present value of lease payments | $ 24,641 | |||||
Foreign currency exchange rate (gbp, eur per usd) | 1.14 | 1.27 | 1.14 | 1.27 | ||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||||
2019 | $ 1,371 | |||||
2020 | 1,371 | |||||
2021 | 1,371 | |||||
2022 | 1,371 | |||||
2023 | 1,371 | |||||
Thereafter | 40,519 | |||||
Total minimum lease payments | 47,374 | |||||
Less: Effects of discounting | (23,370) | |||||
Total present value of lease payments | $ 24,004 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) | Aug. 14, 2018USD ($)$ / shares | Jun. 02, 2015USD ($)$ / shares | Jun. 30, 2019USD ($)shares | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)shares | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($)shares | Oct. 31, 2017property |
Related Party Transaction [Line Items] | ||||||||
Due from related parties | $ 20,000 | $ 20,000 | $ 16,000 | |||||
Number of real estate properties, no longer subject to oversight fee (property) | property | 12 | |||||||
Period to reinvest proceeds to not be included in the Sale | 180 years | |||||||
Due to related parties | 124,000 | $ 124,000 | $ 790,000 | |||||
Stand Alone, Single Tenant, Net Leased | Gross Revenue, Managed Properties | Unaffiliated Third Party Property Management Services | Europe | ||||||||
Related Party Transaction [Line Items] | ||||||||
Property management fee, percent fee | 0.25% | |||||||
All Other Properties, Other than Stand Alone, Single Tenant, Net Leased | Gross Revenue, Managed Properties | Unaffiliated Third Party Property Management Services | Europe | ||||||||
Related Party Transaction [Line Items] | ||||||||
Property management fee, percent fee | 0.50% | |||||||
Singe Tenant Net Lease, Not Part of Shopping Center | Gross Revenue, Managed Properties | Unaffiliated Third Party Property Management Services | Europe | ||||||||
Related Party Transaction [Line Items] | ||||||||
Property management fee, percent fee | 1.75% | |||||||
All Other Property Types, Other Than Stand Alone, Single Tenant, Net Leased and Not Part of Shopping Center | Gross Revenue, Managed Properties | Unaffiliated Third Party Property Management Services | Europe | ||||||||
Related Party Transaction [Line Items] | ||||||||
Property management fee, percent fee | 3.50% | |||||||
Advisor | ||||||||
Related Party Transaction [Line Items] | ||||||||
Maximum percent of assets under management, range three | 0.40% | |||||||
Maximum amount under management, range three | $ 14,700,000,000 | |||||||
Advisor | Maximum | ||||||||
Related Party Transaction [Line Items] | ||||||||
Cap on annum aggregate amount, range two | $ 14,600,000,000 | |||||||
OP Units | ||||||||
Related Party Transaction [Line Items] | ||||||||
Distributions paid to partners | $ 100,000 | $ 100,000 | ||||||
LTIP Units | ||||||||
Related Party Transaction [Line Items] | ||||||||
Distributions paid to partners | $ 100,000 | 100,000 | $ 300,000 | 300,000 | ||||
Global Net Lease Advisors, LLC | Advisor And Scott J. Bowman | Chief Executive Officer | ||||||||
Related Party Transaction [Line Items] | ||||||||
Direct membership interest | 5.00% | 5.00% | ||||||
Global Net Lease Advisors, LLC | Scott J. Bowman | Chief Executive Officer | ||||||||
Related Party Transaction [Line Items] | ||||||||
Direct membership interest | 10.00% | 10.00% | ||||||
AR Global, LLC | Global Net Lease Advisors, LLC | ||||||||
Related Party Transaction [Line Items] | ||||||||
Indirect membership interest | 95.00% | 95.00% | ||||||
AR Global, LLC | Global Net Lease Advisors, LLC | Advisor | ||||||||
Related Party Transaction [Line Items] | ||||||||
Indirect membership interest | 90.00% | 90.00% | ||||||
Special Limited Partner | ||||||||
Related Party Transaction [Line Items] | ||||||||
Operating partnership units (shares) | shares | 35,900 | 35,900 | 35,900 | |||||
Advisor | ||||||||
Related Party Transaction [Line Items] | ||||||||
Maximum percent of assets under management, range one | 0.75% | |||||||
Maximum amount under management, range one | $ 3,000,000,000 | |||||||
Cap on annum aggregate amount, range two denominator | $ 11,700,000,000 | |||||||
Minimum base management fee and incentive compensation payable, maximum percent of assets under management, range two | 0.35% | |||||||
Advisor | Properties Sold | ||||||||
Related Party Transaction [Line Items] | ||||||||
Due to related parties | $ 49,000 | |||||||
Gain (loss) on sale of property | $ 0 | |||||||
Advisor | Amended Advisory Agreement | ||||||||
Related Party Transaction [Line Items] | ||||||||
Minimum monthly base management fee | $ 18,000,000 | |||||||
Amended Advisory Agreement, variable fee payable | 1.25% | |||||||
Amended Advisory Agreement, incentive compensation payable in cash | 50.00% | |||||||
Amended Advisory Agreement, incentive compensation payable in shares | 50.00% | |||||||
Percent of Core AFFO per weighted average share outstanding in excess of incentive hurdle one | 15.00% | |||||||
Amended Advisory Agreement, incentive compensation core AFFO per share, incentive hurdle one (usd per share) | $ / shares | $ 2.37 | |||||||
Percent of Core AFFO per weighted average share outstanding in excess of incentive hurdle two | 10.00% | |||||||
Amended Advisory Agreement, incentive compensation core AFFO per share, incentive hurdle two (usd per share) | $ / shares | $ 3.08 | |||||||
Amended Advisory Agreement, incentive compensation core AFFO per share, incentive hurdle one, period one (usd per share) | $ / shares | $ 2.15 | |||||||
Amended Advisory Agreement, incentive compensation core AFFO per share, incentive hurdle one, period two (usd per share) | $ / shares | 2.25 | |||||||
Amended Advisory Agreement, incentive compensation core AFFO per share, incentive hurdle two, period one (usd per share) | $ / shares | 2.79 | |||||||
Amended Advisory Agreement, incentive compensation core AFFO per share, incentive hurdle two, period two (usd per share) | $ / shares | $ 2.92 | |||||||
Minimum base management fee and incentive compensation payable, maximum percent of assets under management, range two | 0.30% | |||||||
Minimum base management fee and incentive compensation payable, maximum percent of assets under management, range one | 1.25% | |||||||
Minimum base management fee and incentive compensation payable, cap on annum aggregate amount, maximum amount of assets under management, range three | $ 5,000,000,000 | |||||||
Minimum base management fee and incentive compensation payable, maximum percent of assets under management, range two | 0.95% | |||||||
Minimum base management fee and incentive compensation payable, cap on annum aggregate amount, maximum amount of assets under management, range two | $ 15,000,000,000 | |||||||
Minimum base management fee and incentive compensation payable, cap on annum aggregate amount, maximum amount of assets under management, range three calculation base | 1.25% | |||||||
Minimum base management fee and incentive compensation payable, cap on annum aggregate amount, maximum Amount of assets under management, range three calculation denominator | $ 10,000,000,000 | |||||||
Amended Advisory Agreement, variable fee payable, maximum sale of investments to trigger possible reduction | $ 200,000,000 | |||||||
Advisor | Amended Advisory Agreement | Minimum | ||||||||
Related Party Transaction [Line Items] | ||||||||
Amended Advisory Agreement, incentive compensation core AFFO per share, incentive hurdle possible annual increase | 0.00% | 1.00% | ||||||
Advisor | Amended Advisory Agreement | Maximum | ||||||||
Related Party Transaction [Line Items] | ||||||||
Amended Advisory Agreement, incentive compensation core AFFO per share, incentive hurdle possible annual increase | 3.00% | 3.00% | ||||||
Minimum base management fee and incentive compensation payable, cap on annum aggregate amount, maximum amount of assets under management, range three | $ 15,000,000,000 | |||||||
Advisor | American Realty Capital Global Advisors, LLC | ||||||||
Related Party Transaction [Line Items] | ||||||||
Due from related parties | $ 20,000 | $ 20,000 | $ 16,000 | |||||
Advisor | American Realty Capital Global Advisors, LLC | Maximum | Average Invested Assets | Greater Of | ||||||||
Related Party Transaction [Line Items] | ||||||||
Operating expenses as a percentage of benchmark | 2.00% | 2.00% | ||||||
Advisor | American Realty Capital Global Advisors, LLC | Maximum | Net Income, Excluding Additions to Non-cash Reserves and Gains on Sales of Assets | Greater Of | ||||||||
Related Party Transaction [Line Items] | ||||||||
Operating expenses as a percentage of benchmark | 25.00% | 25.00% | ||||||
Property Manager | American Realty Capital Global Properties, LLC | Maximum | Gross Revenue, Managed Properties | ||||||||
Related Party Transaction [Line Items] | ||||||||
Oversight fees as a percentage of benchmark | 1.00% | 1.00% | ||||||
Property Manager | American Realty Capital Global Properties, LLC | Maximum | Gross Revenue, Managed Properties | Stand Alone, Single Tenant, Net Leased | ||||||||
Related Party Transaction [Line Items] | ||||||||
Oversight fees as a percentage of benchmark | 2.00% | 2.00% | ||||||
Property Manager | American Realty Capital Global Properties, LLC | Maximum | Gross Revenue, Managed Properties | All Other Properties, Other than Stand Alone, Single Tenant, Net Leased | ||||||||
Related Party Transaction [Line Items] | ||||||||
Oversight fees as a percentage of benchmark | 4.00% | 4.00% | ||||||
Incurred | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related party expenses | $ 8,162,000 | 6,790,000 | $ 16,205,000 | 13,618,000 | ||||
Incurred | Recurring Fees | Incentive compensation | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related party expenses | $ 0 | $ 0 | $ 0 | $ 0 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Amount Contractually Due and Forgiven in Connection With Operation Related Services (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Advisor | Variable Base Management Fee | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses | $ 2,200 | $ 1,200 | $ 4,400 | $ 2,300 | |
Incurred | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses | 8,162 | 6,790 | 16,205 | 13,618 | |
Forgiven | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses | 0 | 0 | 0 | 0 | |
Payable | |||||
Related Party Transaction [Line Items] | |||||
Related party payable | 0 | 0 | $ 49 | ||
Nonrecurring Fees | Fees on gain from sale of investments | Incurred | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses | 0 | 0 | 0 | 0 | |
Nonrecurring Fees | Fees on gain from sale of investments | Forgiven | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses | 0 | 0 | 0 | 0 | |
Nonrecurring Fees | Fees on gain from sale of investments | Payable | |||||
Related Party Transaction [Line Items] | |||||
Related party payable | 0 | 0 | 49 | ||
Recurring Fees | Asset management fees | Incurred | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses | 6,694 | 5,658 | 13,365 | 11,315 | |
Recurring Fees | Asset management fees | Forgiven | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses | 0 | 0 | 0 | 0 | |
Recurring Fees | Asset management fees | Payable | |||||
Related Party Transaction [Line Items] | |||||
Related party payable | 0 | 0 | 0 | ||
Recurring Fees | Property management fees | Incurred | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses | 1,468 | 1,132 | 2,840 | 2,303 | |
Recurring Fees | Property management fees | Forgiven | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses | 0 | $ 0 | 0 | 0 | |
Recurring Fees | Property management fees | Payable | |||||
Related Party Transaction [Line Items] | |||||
Related party payable | $ 0 | 0 | $ 0 | ||
General and Administrative Expense | Incurred | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses | $ 600 | $ 200 |
Equity-Based Compensation - Nar
Equity-Based Compensation - Narrative (Details) | Jul. 19, 2018USD ($)$ / sharesshares | Jun. 02, 2015shares | Jun. 30, 2019USD ($)shares | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)shares | Jun. 30, 2018USD ($)shares | Dec. 31, 2018shares | Feb. 28, 2019USD ($) | Jan. 31, 2019USD ($) | Jan. 01, 2019USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Equity-based compensation | $ 2,429,000 | $ (22,000) | $ 4,538,000 | $ (854,000) | ||||||
Distributions paid | $ (270,000) | $ (158,000) | ||||||||
Director | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares issued in lieu of cash (shares) | shares | 0 | 0 | ||||||||
Incentive Restricted Share Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Annual retainer payable, cash | 50.00% | 50.00% | ||||||||
Annual retainer payable, restricted stock units | 50.00% | 50.00% | ||||||||
Incentive Restricted Share Plan | Independent Directors | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Annual retainer payable | $ 100,000 | $ 100,000 | ||||||||
Incentive Restricted Share Plan | Non-Executive Chair | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Annual retainer payable | 105,000 | 105,000 | ||||||||
Incentive Restricted Share Plan | Directors, Servicing on Committees | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Annual retainer payable | $ 30,000 | $ 30,000 | ||||||||
2015 OPP | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares issued during the period (shares) | shares | 3,013,933 | |||||||||
Requisite service period | 2 years 9 months 18 days | |||||||||
Distribution percent entitled to by LTIP holders | 10.00% | 10.00% | ||||||||
Award value, percent of market capitalization | 5.00% | |||||||||
2018 Multi Year Outperformance Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Maximum award value | $ 50,000,000 | |||||||||
Share price (usd per share) | $ / shares | $ 19.57 | |||||||||
2018 Multi Year Outperformance Plan | Minimum | Tier One | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Absolute TSR | 24.00% | |||||||||
Relative TSR excess | (0.06) | |||||||||
2018 Multi Year Outperformance Plan | Minimum | Tier Two | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Absolute TSR | 36.00% | |||||||||
Relative TSR excess | 0 | |||||||||
2018 Multi Year Outperformance Plan | Maximum | Tier One | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Absolute TSR | 30.00% | |||||||||
Relative TSR excess | 0 | |||||||||
2018 Multi Year Outperformance Plan | Maximum | Tier Two | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Absolute TSR | 30.00% | |||||||||
Relative TSR excess | 0.06 | |||||||||
Stock Options | Stock Option Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares authorized (shares) | shares | 500,000 | 500,000 | ||||||||
Shares issued during the period (shares) | shares | 0 | 0 | ||||||||
Restricted Stock Units (RSUs) | Incentive Restricted Share Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Percentage of maximum Common Stock available for issuance | 10.00% | |||||||||
Vesting period | 3 years | |||||||||
Restricted Stock | Incentive Restricted Share Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based compensation expense | $ 100,000 | 200,000 | $ 200,000 | $ 200,000 | ||||||
Restricted Stock | Restricted Share Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Compensation expense | 800,000 | $ 800,000 | ||||||||
Weighted average period of recognition | 2 years 1 month 6 days | |||||||||
LTIP Units | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Distributions paid | $ (300,000) | (200,000) | ||||||||
LTIP Units | 2018 Multi Year Outperformance Plan | Advisor | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares issued during the period (shares) | shares | 2,554,930 | |||||||||
Share-Based Payment Arrangement, Nonemployee | 2015 OPP | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Requisite service period | 2 years 9 months 18 days | |||||||||
Share-Based Payment Arrangement, Nonemployee | LTIP Units | 2015 OPP | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Equity fair value | $ 18,800,000 | |||||||||
Share-Based Payment Arrangement, Nonemployee | LTIP Units | 2018 Multi Year Outperformance Plan Amendment | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based compensation expense | 100,000 | 1,100,000 | ||||||||
Equity fair value | $ 29,900,000 | $ 23,300,000 | ||||||||
Fair value in excess | 6,600,000 | $ 6,600,000 | ||||||||
Non-controlling interest | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Equity-based compensation | 2,358,000 | $ (125,000) | 4,351,000 | $ (1,077,000) | ||||||
Non-controlling interest | Share-Based Payment Arrangement, Nonemployee | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Equity-based compensation | $ 2,400,000 | $ 4,400,000 | ||||||||
Below Threshold | 2015 OPP | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting period | 1 year | |||||||||
Below Threshold | 2018 Multi Year Outperformance Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Absolute TSR | 24.00% | |||||||||
Relative TSR excess | (0.06) | |||||||||
Below Threshold | LTIP Units | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting percent | 33.33% | |||||||||
Threshold | 2015 OPP | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting period | 2 years | |||||||||
Threshold | 2018 Multi Year Outperformance Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Absolute TSR | 24.00% | |||||||||
Relative TSR excess | (0.06) | |||||||||
Threshold | LTIP Units | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting percent | 33.33% | |||||||||
Target | 2015 OPP | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award performance period | 3 years | |||||||||
Vesting period | 3 years | |||||||||
Target | 2018 Multi Year Outperformance Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Absolute TSR | 30.00% | |||||||||
Relative TSR excess | 0 | |||||||||
Target | LTIP Units | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting percent | 33.33% | |||||||||
Maximum | 2018 Multi Year Outperformance Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Absolute TSR | 36.00% | |||||||||
Relative TSR excess | 0.06 |
Equity-Based Compensation - Sum
Equity-Based Compensation - Summary (Details) - Restricted Share Plan - Restricted Stock | 6 Months Ended |
Jun. 30, 2019$ / sharesshares | |
Number of RSUs | |
Unvested, beginning balance (in shares) | shares | 46,352 |
Vested (in shares) | shares | (21,955) |
Granted (in shares) | shares | 16,563 |
Unvested, ending balance (in shares) | shares | 40,960 |
Weighted-Average Issue Price | |
Unvested, beginning balance (in USD per share) | $ / shares | $ 22.04 |
Vested (in USD per share) | $ / shares | 22.56 |
Granted (in USD per share) | $ / shares | 18.89 |
Unvested, ending balance (in USD per share) | $ / shares | $ 20.49 |
Equity-Based Compensation - S_2
Equity-Based Compensation - Summary of Target and Maximum Performance Goals (Details) - 2018 Multi Year Outperformance Plan | Jul. 19, 2018shares |
Below Threshold | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance Level (% of Absolute TSR LTIP Units Earned) | 0.00% |
Absolute TSR | 24.00% |
Number of Absolute TSR LTIP Units Earned (shares) | 0 |
Performance Level (% of Relative TSR LTIP Units Earned) | 0.00% |
Relative TSR Excess | (0.06) |
Number of Absolute TSR LTIP Units Earned (shares) | 0 |
Threshold | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance Level (% of Absolute TSR LTIP Units Earned) | 25.00% |
Absolute TSR | 24.00% |
Number of Absolute TSR LTIP Units Earned (shares) | 319,366 |
Performance Level (% of Relative TSR LTIP Units Earned) | 25.00% |
Relative TSR Excess | (0.06) |
Number of Absolute TSR LTIP Units Earned (shares) | 319,366 |
Target | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance Level (% of Absolute TSR LTIP Units Earned) | 50.00% |
Absolute TSR | 30.00% |
Number of Absolute TSR LTIP Units Earned (shares) | 638,733 |
Performance Level (% of Relative TSR LTIP Units Earned) | 50.00% |
Relative TSR Excess | 0 |
Number of Absolute TSR LTIP Units Earned (shares) | 638,733 |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance Level (% of Absolute TSR LTIP Units Earned) | 100.00% |
Absolute TSR | 36.00% |
Number of Absolute TSR LTIP Units Earned (shares) | 1,277,465 |
Performance Level (% of Relative TSR LTIP Units Earned) | 100.00% |
Relative TSR Excess | 0.06 |
Number of Absolute TSR LTIP Units Earned (shares) | 1,277,465 |
Equity-Based Compensation - Sch
Equity-Based Compensation - Schedule of Total Return (Details) - 2015 OPP | Jun. 02, 2015 |
Performance Period | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Absolute component, base percent | 4.00% |
Absolute component of total return, percent | 21.00% |
Relative component, base percent | 4.00% |
Relative component, 100% of cumulative total return, percent | 18.00% |
Relative component, 50% of cumulative total return, percent | 0.00% |
Relative component, 0% of cumulative total return, percent | 0.00% |
Performance Period | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Relative component, 50%-100% of cumulative total return, percent | 0.00% |
Performance Period | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Relative component, 50%-100% of cumulative total return, percent | 18.00% |
Annual Period | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Absolute component, base percent | 4.00% |
Absolute component of total return, percent | 7.00% |
Relative component, base percent | 4.00% |
Relative component, 100% of cumulative total return, percent | 6.00% |
Relative component, 50% of cumulative total return, percent | 0.00% |
Relative component, 0% of cumulative total return, percent | 0.00% |
Annual Period | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Relative component, 50%-100% of cumulative total return, percent | 0.00% |
Annual Period | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Relative component, 50%-100% of cumulative total return, percent | 6.00% |
Interim Period | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Absolute component, base percent | 4.00% |
Absolute component of total return, percent | 14.00% |
Relative component, base percent | 4.00% |
Relative component, 100% of cumulative total return, percent | 12.00% |
Relative component, 50% of cumulative total return, percent | 0.00% |
Relative component, 0% of cumulative total return, percent | 0.00% |
Interim Period | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Relative component, 50%-100% of cumulative total return, percent | 0.00% |
Interim Period | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Relative component, 50%-100% of cumulative total return, percent | 12.00% |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Net income attributable to common stockholders | $ 12,621 | $ 5,288 | $ 18,412 | $ 7,649 |
Adjustments to net income attributable to common stockholders for common share equivalents | (174) | (26) | (334) | (210) |
Adjusted net income attributable to common stockholders | $ 12,447 | $ 5,262 | $ 18,078 | $ 7,439 |
Basic and diluted net income per share attributable to common stockholders (usd per share) | $ 0.15 | $ 0.08 | $ 0.22 | $ 0.11 |
Weighted average shares outstanding: | ||||
Basic (shares) | 83,847,120 | 67,292,021 | 82,667,421 | 67,289,639 |
Diluted (shares) | 85,165,549 | 67,292,021 | 83,985,850 | 67,289,639 |
Earnings Per Share - Schedule_2
Earnings Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | Jun. 02, 2018 | Jun. 02, 2015 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Common shares excluded from computation of EPS (in shares) | 1,318,429 | 46,767 | 1,318,429 | 46,767 | ||
2015 OPP | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Shares issued during the period (shares) | 3,013,933 | |||||
Unvested RSUs | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Common shares excluded from computation of EPS (in shares) | 40,964 | 46,767 | 40,964 | 46,767 | ||
LTIP Units | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Common shares excluded from computation of EPS (in shares) | 1,277,465 | 0 | 1,277,465 | 0 | ||
LTIP Units | 2018 Multi Year Outperformance Plan | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Shares issued during the period (shares) | 2,554,930 | 2,554,930 | ||||
LTIP Units | 2015 OPP | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Shared forfeited (shares) | 3,013,933 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | |
LTIP Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dilutive effect of share based compensation arrangements (shares) | 0 | 0 |
Subsequent Events - (Details)
Subsequent Events - (Details) € in Millions | Aug. 01, 2019USD ($) | Jul. 24, 2017USD ($) | Aug. 07, 2019USD ($)property | Jun. 30, 2019USD ($)property | Jun. 30, 2018property | Jun. 30, 2019EUR (€) | Dec. 31, 2018USD ($) | Jul. 02, 2018USD ($) |
Subsequent Event [Line Items] | ||||||||
Number of properties acquired | property | 11 | 13 | ||||||
Borrowings outstanding, credit facility | $ 259,527,000 | $ 363,894,000 | ||||||
Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of properties acquired | property | 6 | |||||||
Asset purchase price | $ 48,700,000 | |||||||
Credit Facility | ||||||||
Subsequent Event [Line Items] | ||||||||
Weighted-average effective interest rate | 2.60% | 2.60% | ||||||
Credit Facility | Federal Funds | ||||||||
Subsequent Event [Line Items] | ||||||||
Basis spread on base rate determination | 0.50% | |||||||
Credit Facility | LIBOR | ||||||||
Subsequent Event [Line Items] | ||||||||
Basis spread on base rate determination | 1.00% | |||||||
Credit Facility | Unsecured debt | KeyBank National Association | ||||||||
Subsequent Event [Line Items] | ||||||||
Maximum borrowing capacity (up to) | $ 725,000,000 | $ 906,200,000 | ||||||
Increase in aggregate commitments (up to) | $ 35,600,000 | |||||||
Total line of credit commitment | 950,000,000 | |||||||
Credit Facility | Unsecured debt | KeyBank National Association | Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Increase in aggregate commitments (up to) | $ 39,400,000 | |||||||
Credit Facility Amendment | Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Maximum borrowing capacity (up to) | 1,235,000,000 | |||||||
Increase in aggregate commitments (up to) | 515,000,000 | |||||||
Total line of credit commitment | $ 1,750,000,000 | |||||||
Weighted-average effective interest rate | 2.30% | |||||||
Minimum | Credit Facility | Base Rate | ||||||||
Subsequent Event [Line Items] | ||||||||
Interest rate spread | 0.60% | |||||||
Minimum | Credit Facility | LIBOR | ||||||||
Subsequent Event [Line Items] | ||||||||
Interest rate spread | 1.60% | |||||||
Minimum | Credit Facility | Unsecured debt | KeyBank National Association | ||||||||
Subsequent Event [Line Items] | ||||||||
Maximum borrowing capacity (up to) | 722,200,000 | |||||||
Maximum | Credit Facility | Base Rate | ||||||||
Subsequent Event [Line Items] | ||||||||
Interest rate spread | 1.20% | |||||||
Maximum | Credit Facility | LIBOR | ||||||||
Subsequent Event [Line Items] | ||||||||
Interest rate spread | 2.20% | |||||||
Maximum | Credit Facility | Unsecured debt | KeyBank National Association | ||||||||
Subsequent Event [Line Items] | ||||||||
Maximum borrowing capacity (up to) | $ 914,400,000 | |||||||
Revolving Credit Facility | Credit Facility | ||||||||
Subsequent Event [Line Items] | ||||||||
Borrowings outstanding, credit facility | 259,500,000 | |||||||
Borrowings outstanding, term loan | 170,700,000 | |||||||
Revolving Credit Facility | Credit Facility | Unsecured debt | KeyBank National Association | ||||||||
Subsequent Event [Line Items] | ||||||||
Maximum borrowing capacity (up to) | 632,000,000 | |||||||
Borrowings outstanding, credit facility | 259,527,000 | $ 363,894,000 | ||||||
Revolving Credit Facility | Credit Facility Amendment | Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Maximum borrowing capacity (up to) | $ 835,000,000 | |||||||
Revolving Credit Facility | Minimum | Credit Facility Amendment | Base Rate | Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Interest rate spread | 0.45% | |||||||
Revolving Credit Facility | Minimum | Credit Facility Amendment | LIBOR | Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Interest rate spread | 1.45% | |||||||
Revolving Credit Facility | Maximum | Credit Facility Amendment | Base Rate | Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Interest rate spread | 1.05% | |||||||
Revolving Credit Facility | Maximum | Credit Facility Amendment | LIBOR | Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Interest rate spread | 2.05% | |||||||
Term Loan | Credit Facility | ||||||||
Subsequent Event [Line Items] | ||||||||
Borrowings outstanding, credit facility | 277,400,000 | |||||||
Borrowings outstanding, term loan | $ 400,000,000 | € 359.6 | ||||||
Term Loan | Minimum | Credit Facility Amendment | Base Rate | Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Interest rate spread | 0.40% | |||||||
Term Loan | Minimum | Credit Facility Amendment | LIBOR | Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Interest rate spread | 1.40% | |||||||
Term Loan | Maximum | Credit Facility Amendment | Base Rate | Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Interest rate spread | 1.00% | |||||||
Term Loan | Maximum | Credit Facility Amendment | LIBOR | Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Interest rate spread | 2.00% |
Uncategorized Items - gnl630201
Label | Element | Value |
Accounting Standards Update 2016-02 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (1,200,000) |
Accounting Standards Update 2016-02 [Member] | Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (1,200,000) |
Accounting Standards Update 2016-02 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (1,200,000) |
Accounting Standards Update 2017-12 [Member] | AOCI Attributable to Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (332,000) |
Accounting Standards Update 2017-12 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 332,000 |