Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Oct. 30, 2013 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'Select Income REIT | ' |
Entity Central Index Key | '0001537667 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Non-accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 49,829,792 |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Real estate properties: | ' | ' |
Land | $705,645 | $675,092 |
Buildings and improvements | 866,280 | 620,686 |
Real estate properties, gross | 1,571,925 | 1,295,778 |
Accumulated depreciation | -61,587 | -46,697 |
Real estate properties, net | 1,510,338 | 1,249,081 |
Acquired real estate leases, net | 114,937 | 95,248 |
Cash and cash equivalents | 14,540 | 20,373 |
Restricted cash | 42 | 42 |
Rents receivable, net of allowance for doubtful accounts of $764 and $644, respectively | 52,174 | 38,885 |
Deferred leasing costs, net | 5,541 | 4,816 |
Deferred financing costs, net | 5,313 | 5,517 |
Due from related persons | ' | 585 |
Other assets | 12,266 | 16,105 |
Total assets | 1,715,151 | 1,430,652 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ' | ' |
Revolving credit facility | 80,000 | 95,000 |
Term loan | 350,000 | 350,000 |
Mortgage notes payable | 27,309 | 27,778 |
Accounts payable and accrued expenses | 20,023 | 19,703 |
Assumed real estate lease obligations, net | 19,317 | 20,434 |
Rents collected in advance | 9,491 | 6,518 |
Security deposits | 9,658 | 9,335 |
Due to related persons | 1,827 | 1,701 |
Total liabilities | 517,625 | 530,469 |
Commitments and contingencies | ' | ' |
Shareholders' equity: | ' | ' |
Common shares of beneficial interest, $0.01 par value: 75,000,000 and 50,000,000 shares authorized, respectively, 49,829,792 and 39,282,592 shares issued and outstanding, respectively | 498 | 393 |
Additional paid in capital | 1,160,904 | 876,920 |
Cumulative net income | 120,263 | 51,251 |
Cumulative other comprehensive income (loss) | -42 | 25 |
Cumulative common distributions | -84,097 | -28,406 |
Total shareholders' equity | 1,197,526 | 900,183 |
Total liabilities and shareholders' equity | $1,715,151 | $1,430,652 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
CONDENSED CONSOLIDATED BALANCE SHEETS | ' | ' |
Rents receivable, allowance for doubtful accounts (in dollars) | $764 | $644 |
Common shares, par value (in dollars per share) | $0.01 | $0.01 |
Common shares, shares authorized | 75,000,000 | 50,000,000 |
Common shares, shares issued | 49,829,792 | 39,282,592 |
Common shares, shares outstanding | 49,829,792 | 39,282,592 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Revenues: | ' | ' | ' | ' |
Rental income | $41,169 | $26,444 | $117,333 | $74,272 |
Tenant reimbursements and other income | 7,415 | 4,434 | 21,057 | 12,113 |
Total revenues | 48,584 | 30,878 | 138,390 | 86,385 |
Expenses: | ' | ' | ' | ' |
Real estate taxes | 5,020 | 3,895 | 14,805 | 11,213 |
Other operating expenses | 4,267 | 1,815 | 11,367 | 5,615 |
Depreciation and amortization | 8,485 | 3,888 | 22,445 | 9,682 |
Acquisition related costs | 790 | 583 | 1,479 | 1,258 |
General and administrative | 3,208 | 2,626 | 8,884 | 5,664 |
Total expenses | 21,770 | 12,807 | 58,980 | 33,432 |
Operating income | 26,814 | 18,071 | 79,410 | 52,953 |
Interest expense (including amortization of debt premiums and deferred financing fees of $369, $358, $1,090 and $669, respectively) | -3,232 | -2,467 | -10,484 | -4,436 |
Equity in earnings of an investee | 64 | 115 | 219 | 189 |
Income before income tax expense | 23,646 | 15,719 | 69,145 | 48,706 |
Income tax expense | -52 | ' | -132 | ' |
Net income | 23,594 | 15,719 | 69,013 | 48,706 |
Other comprehensive income: | ' | ' | ' | ' |
Equity in unrealized gain (loss) of an investee | 14 | 35 | -67 | 34 |
Other comprehensive income (loss) | 14 | 35 | -67 | 34 |
Comprehensive income | $23,608 | $15,754 | $68,946 | $48,740 |
Weighted average common shares outstanding (in shares) | 49,686 | 31,206 | 42,790 | 25,226 |
Net income per common share (in dollars per share) | $0.47 | $0.50 | $1.61 | $1.93 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Parenthetical) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME | ' | ' | ' | ' |
Interest expense, amortization of debt premiums and deferred financing fees | $369 | $358 | $1,090 | $669 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net income | $69,013 | $48,706 |
Adjustments to reconcile net income to cash provided by operating activities | ' | ' |
Depreciation | 14,890 | 6,962 |
Net amortization of debt premiums and deferred financing fees | 1,090 | 669 |
Amortization of acquired real estate leases | 7,732 | 2,717 |
Amortization of deferred leasing costs | 625 | 414 |
Provision for losses on rents receivable | 180 | 322 |
Straight line rental income | -9,763 | -3,402 |
Other non-cash expenses | 1,115 | 360 |
Equity in earnings of equity investments | -219 | -189 |
Change in assets and liabilities: | ' | ' |
Restricted cash | ' | -42 |
Rents receivable | -3,705 | 1,159 |
Deferred leasing costs | -1,350 | -1,094 |
Other assets | -4,509 | -3,732 |
Due from related persons | 585 | ' |
Accounts payable and accrued expenses | 1,686 | 2,826 |
Rents collected in advance | 2,973 | 1,663 |
Security deposits | 323 | -13 |
Due to related persons | -463 | 1,333 |
Cash provided by operating activities | 80,203 | 58,659 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Real estate acquisitions | -293,631 | -236,538 |
Real estate improvements | -3,869 | -963 |
Investment in Affiliates Insurance Company | ' | -5,335 |
Cash used in investing activities | -297,500 | -242,836 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Proceeds from issuance of common shares, net | 283,510 | 180,814 |
Proceeds from borrowings | 308,000 | 806,500 |
Payments on borrowings | -323,161 | -364,500 |
Deferred financing fees | -1,194 | -6,521 |
Repayment of demand note | ' | -400,000 |
Distributions to common shareholders | -55,691 | -15,288 |
Owner's net distributions | ' | -6,138 |
Cash provided by financing activities | 211,464 | 194,867 |
Increase (decrease) in cash and cash equivalents | -5,833 | 10,690 |
Cash and cash equivalents at beginning of period | 20,373 | ' |
Cash and cash equivalents at end of period | 14,540 | 10,690 |
Supplemental disclosures: | ' | ' |
Interest paid | 9,294 | 2,956 |
Income taxes paid | 325 | ' |
Non-cash investing activities: | ' | ' |
Real estate acquired by issuance of shares and assumption of demand note | ' | -913,286 |
Real estate acquired by assumption of mortgage notes payable | ' | -26,000 |
Non-cash financing activities: | ' | ' |
Issuance of common shares | 577 | 513,647 |
Issuance of demand note | ' | 400,000 |
Assumption of mortgage notes payable | ' | $26,000 |
Basis_of_Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2013 | |
Basis of Presentation | ' |
Basis of Presentation | ' |
Note 1. Basis of Presentation | |
The accompanying condensed consolidated financial statements of Select Income REIT and its subsidiaries, or SIR, we, us or our, are unaudited. Certain information and disclosures required by U.S. generally accepted accounting principles, or GAAP, for complete financial statements have been condensed or omitted. We believe the disclosures made are adequate to make the information presented not misleading. However, the accompanying condensed consolidated financial statements should be read in conjunction with the financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2012, or our Annual Report. In the opinion of our management, all adjustments, which include only normal recurring adjustments considered necessary for a fair presentation, have been included. All material intercompany transactions and balances have been eliminated. Our operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. | |
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. Actual results could differ from those estimates. Significant estimates in the condensed consolidated financial statements include the allowance for doubtful accounts, purchase price allocations and useful lives of fixed assets. | |
The accompanying condensed consolidated financial statements include the 251 properties, or the Initial Properties, that were owned by CommonWealth REIT and its subsidiaries, or CWH, until they were contributed to us by CWH on February 16, 2012. Our condensed consolidated financial statements for the nine months ended September 30, 2012, include information for the period from January 1, 2012 to March 12, 2012 when we were a wholly owned subsidiary of CWH. Because of the significant changes resulting from our initial public offering, or IPO, on March 12, 2012, or the Closing Date, our financial results for the nine months ended September 30, 2013 are not comparable to our financial results for the nine months ended September 30, 2012. |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2013 | |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | ' |
Note 2. Recent Accounting Pronouncements | |
Effective January 2013, we adopted Financial Accounting Standards Board, or FASB, Accounting Standards Update No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. This update is the culmination of the FASB’s deliberation on reporting reclassification adjustments from accumulated other comprehensive income, or AOCI. This standard does not change the current requirements for reporting net income or other comprehensive income. However, it requires disclosure of amounts reclassified out of AOCI in their entirety, by component, on the face of the statement of operations or in the notes thereto. Amounts that are not required to be reclassified in their entirety to net income must be cross referenced to other disclosures that provide additional detail. This update was effective prospectively for interim and annual reporting periods beginning after December 15, 2012. The implementation of this update did not cause any material changes to the disclosures in, or the presentation of, our condensed consolidated financial statements. |
Real_Estate_Properties
Real Estate Properties | 9 Months Ended | ||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||
Real Estate Properties | ' | ||||||||||||||||||||||
Real Estate Properties | ' | ||||||||||||||||||||||
Note 3. Real Estate Properties | |||||||||||||||||||||||
During the nine months ended September 30, 2013, we acquired six properties with a combined 1,089,960 rentable square feet for an aggregate purchase price of $301,920, excluding closing costs. We allocated the purchase prices of these acquisitions based on the estimated fair values of the acquired assets and assumed liabilities. The Addison, TX acquisition was accounted for as an acquisition of assets. All other acquisitions during the nine months ended September 30, 2013 were accounted for as business combinations. Details of these completed acquisitions are as follows: | |||||||||||||||||||||||
Assumed | |||||||||||||||||||||||
Acquired | Real Estate | ||||||||||||||||||||||
Number of | Square | Purchase | Building and | Real Estate | Lease | ||||||||||||||||||
Date | Location | Properties | Feet | Price (1) | Land | Improvements | Leases | Obligations | |||||||||||||||
January 2013 | Addison, TX (2) | 2 | 553,799 | $ | 105,000 | $ | 10,107 | $ | 94,893 | $ | — | $ | — | ||||||||||
February 2013 | Provo, UT | 2 | 125,225 | 34,720 | 3,400 | 25,938 | 5,382 | — | |||||||||||||||
March 2013 | San Antonio, TX | 1 | 99,986 | 18,600 | 3,197 | 12,175 | 3,507 | (279 | ) | ||||||||||||||
July 2013 | Richmond, VA | 1 | 310,950 | 143,600 | 13,849 | 109,823 | 19,928 | — | |||||||||||||||
6 | 1,089,960 | $ | 301,920 | $ | 30,553 | $ | 242,829 | $ | 28,817 | $ | (279 | ) | |||||||||||
(1) Purchase price excludes acquisition related costs. | |||||||||||||||||||||||
(2) Property was acquired and simultaneously leased back to the seller in a sale/leaseback transaction. We capitalized acquisition costs of $232 related to this transaction. | |||||||||||||||||||||||
In October 2013, we acquired a single tenant, net leased office property located in Vernon Hills, IL with 99,579 rentable square feet. The purchase price of this property was $18,000, excluding closing costs, and was accounted for as a business combination. As of the date of this filing, the purchase price allocation is pending third party appraisals and has not been finalized. | |||||||||||||||||||||||
Also in October 2013, we agreed to acquire four single tenant, net leased properties located in San Jose, CA with a combined 250,731 rentable square feet for an aggregate purchase price of $64,900, excluding closing costs. Our agreement to acquire these properties is subject to conditions typical of commercial real estate transactions, including satisfactory completion of our diligence. Accordingly, we can provide no assurance that we will acquire all or any of these properties. | |||||||||||||||||||||||
Certain of our real estate assets contain hazardous substances, including asbestos. We believe the asbestos at our properties is contained in accordance with current environmental regulations and we have no current plans to remove it. If these properties were demolished today, certain environmental regulations specify the manner in which the asbestos must be removed and we could incur substantial costs complying with such regulations. Certain of our industrial lands in Hawaii may require environmental remediation, especially if the use of those lands is changed; however, we do not have any present plans to change the use of those land parcels or to undertake this environmental cleanup. We do not have any insurance designated to limit any losses that we may incur as a result of known or unknown environmental conditions which are not caused by an insured event, such as, for example, fire or flood. However, as of September 30, 2013 and December 31, 2012, accrued environmental remediation costs totaling $8,349 and $8,644, respectively, were included in accounts payable and accrued expenses in our condensed consolidated balance sheets. These accrued expenses relate to maintenance of our properties for current uses. We do not believe that there are environmental conditions at any of our properties that will have a material adverse effect on us. However, no assurances can be given that such conditions are not present in our properties or that other costs we incur to remediate contamination will not have a material adverse effect on our business or financial condition. Charges for environmental remediation costs are included in other operating expenses in the condensed consolidated statements of income and comprehensive income. |
Segment_Information_and_Tenant
Segment Information and Tenant Concentration | 9 Months Ended |
Sep. 30, 2013 | |
Segment Information and Tenant Concentration | ' |
Segment Information and Tenant Concentration | ' |
Note 4. Segment Information and Tenant Concentration | |
We operate in one business segment: ownership of properties that are primarily net leased to single tenants, with no one tenant accounting for more than 10% of our total revenues. A “net leased property” or a property being “net leased” means that the property’s lease requires the tenant to pay rent and pay, or reimburse us, for all, or substantially all, property level operating expenses and capital expenditures, such as real estate taxes, insurance, utilities, maintenance and repairs, other than, in certain circumstances, roof and structural element related expenditures; in some instances, tenants instead reimburse us for all expenses in excess of certain amounts included in the stated rent. We define a single tenant leased property as a property with at least 90% of its rentable square footage leased to one tenant. Our properties are primarily leased to single tenants; however, we do own some multi tenant buildings on the island of Oahu, HI. |
Indebtedness
Indebtedness | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Indebtedness | ' | |||||||
Indebtedness | ' | |||||||
Note 5. Indebtedness | ||||||||
At September 30, 2013 and December 31, 2012, our outstanding indebtedness consisted of the following: | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Revolving credit facility, due in 2016 | $ | 80,000 | $ | 95,000 | ||||
Term loan, due in 2017 | 350,000 | 350,000 | ||||||
Mortgage note payable, 5.950% interest rate, including unamortized premium of $1,204 and $1,415, respectively, due in 2017 (1) | 19,490 | 19,862 | ||||||
Mortgage note payable, 5.689% interest rate, including unamortized premium of $319 and $416, respectively, due in 2016 (1) | 7,819 | 7,916 | ||||||
$ | 457,309 | $ | 472,778 | |||||
(1) We assumed these mortgages in connection with our acquisitions of certain properties. The stated interest rates for these mortgage debts are the contractually stated rates; we recorded the assumed mortgages at their estimated fair value on the date of acquisition and we are amortizing the fair value premiums to interest expense over the respective terms of the mortgages to reduce interest expense based on the estimated market interest rates as of the date of acquisition. | ||||||||
We have a $750,000 unsecured revolving credit facility that is available for general business purposes, including acquisitions. The maturity date of our revolving credit facility is March 11, 2016 and, subject to the payment of an extension fee and meeting certain other conditions, our revolving credit facility includes an option for us to extend the stated maturity date by one year to March 11, 2017. In addition, our revolving credit facility includes a feature under which maximum borrowings may be increased to $1,000,000 in certain circumstances. In February 2013, we partially exercised our option to increase the available borrowing amount under our revolving credit facility from $500,000 to $750,000. Borrowings under our revolving credit facility bear interest at LIBOR plus a premium. We also pay a facility fee on the total amount of lending commitments under our revolving credit facility. Both the interest rate premium and the facility fee are subject to adjustment based upon changes to our leverage or credit ratings. At September 30, 2013, the interest rate premium on our revolving credit facility was 130 basis points and our facility fee was 30 basis points. As of September 30, 2013, the interest rate payable on borrowings under our revolving credit facility was 1.48% and the weighted average annual interest rate for borrowings under the revolving credit facility was 1.49% and 1.50% for the three and nine months ended September 30, 2013, respectively. We can borrow, repay and reborrow funds available under our revolving credit facility until maturity, and no principal repayment is due until maturity. As of September 30, 2013 and October 30, 2013, we had $80,000 and $94,000, respectively, outstanding under our revolving credit facility. | ||||||||
We also have a $350,000 unsecured term loan that matures on July 11, 2017 and is prepayable without penalty at any time. In addition, our term loan includes a feature under which maximum borrowings may be increased to up to $700,000 in certain circumstances. Our term loan bears interest at a rate of LIBOR plus a premium, which was 155 basis points as of September 30, 2013. The interest rate premium is subject to adjustment based upon changes to our leverage or credit ratings. As of September 30, 2013, the interest rate payable for the amount outstanding under our term loan was 1.73% and the weighted average interest rate for the amount outstanding under our term loan was 1.74% and 1.75% for the three and nine months ended September 30, 2013, respectively. | ||||||||
Our credit facility agreement and our term loan agreement provide for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default, including a change of control of us and the termination of our business management agreement or our property management agreement with Reit Management & Research LLC, or RMR. Our credit facility agreement and our term loan agreement also contain a number of financial and other covenants, including covenants that restrict our ability to incur indebtedness or to make distributions under certain circumstances and require us to maintain financial ratios and a minimum net worth. We believe we were in compliance with the terms of our revolving credit facility and term loan covenants at September 30, 2013. | ||||||||
At September 30, 2013, three of our properties with an aggregate net book value of $29,419 secured two mortgage notes we assumed in connection with our acquisitions of such properties. The aggregate principal amount outstanding under those two mortgage notes as of September 30, 2013, was $25,786. These mortgage notes are non-recourse, subject to certain limited exceptions, and do not contain any material financial covenants. |
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Fair Value of Financial Instruments | ' | |||||||
Fair Value of Financial Instruments | ' | |||||||
Note 6. Fair Value of Financial Instruments | ||||||||
Our financial instruments at September 30, 2013 include cash and cash equivalents, rents receivable, equity investments, mortgage notes payable, our revolving credit facility, our term loan, amounts due to and from related persons, accounts payable and other accrued expenses. At September 30, 2013, the fair value of our financial instruments approximated their carrying values in our condensed consolidated financial statements, except as follows: | ||||||||
Carrying | Estimated | |||||||
Amount | Fair Value | |||||||
Mortgage notes payable | $ | 27,309 | $ | 27,646 | ||||
We estimate the fair values of our mortgage notes payable by using discounted cash flow analyses and currently prevailing market rates for similar mortgage notes as of September 30, 2013. These inputs are categorized as level 3 inputs as defined in the fair value hierarchy under the accounting standards for Fair Value Measurements and Disclosures. Because level 3 inputs are unobservable, our estimated fair value may differ materially from the actual fair value. |
Shareholders_Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2013 | |
Shareholders' Equity | ' |
Shareholders' Equity | ' |
Note 7. Shareholders’ Equity | |
In June 2013, we amended our declaration of trust, increasing the number of our authorized shares of beneficial interest from 50,000,000 to 75,000,000. All of our authorized shares are currently classified as common shares, $.01 par value per share, or our common shares. | |
Share Issuances: | |
In May 2013, we granted 2,000 of our common shares, valued at $27.61 per share, the closing price of our common shares on the New York Stock Exchange, or the NYSE, on that day, to each of our five Trustees as part of their annual compensation. | |
In July 2013, we sold 10,500,000 of our common shares in a public offering at a price of $28.25 per share, raising net proceeds of approximately $283,610. We used the net proceeds from this offering to partially repay amounts outstanding under our revolving credit facility and for general business purposes, including acquisitions. | |
In September 2013, pursuant to our 2012 Equity Compensation Plan, we granted an aggregate of 37,200 of our common shares to our officers and certain employees of our manager, RMR, valued at $24.77 per share, the closing price of our common shares on the NYSE, on that day. | |
Distributions: | |
In February 2013, we paid a distribution on our common shares of $0.42 per share, or approximately $16,499, to shareholders of record on January 22, 2013. | |
In May 2013, we paid a distribution on our common shares of $0.44 per share, or approximately $17,284, to shareholders of record on April 23, 2013. | |
In August 2013, we paid a distribution on our common shares of $0.44 per share, or approximately $21,909, to shareholders of record on July 24, 2013. | |
In October 2013, we declared a regular quarterly distribution of $0.46 per common share, or approximately $22,922, to shareholders of record on October 24, 2013. We expect to pay this distribution on or about November 20, 2013 using existing cash balances and borrowings under our revolving credit facility. |
Related_Person_Transactions
Related Person Transactions | 9 Months Ended |
Sep. 30, 2013 | |
Related Person Transactions | ' |
Related Person Transactions | ' |
Note 8. Related Person Transactions | |
We have no employees. Personnel and various services we require to operate our business are provided to us by RMR. We have two agreements with RMR to provide management and administrative services to us: (1) a business management agreement, which relates to our business generally, and (2) a property management agreement, which relates to our property level operations. | |
Under our business management agreement with RMR, we acknowledge that RMR also provides management services to other companies, which include CWH. One of our Managing Trustees, Mr. Barry Portnoy, is Chairman, majority owner and an employee of RMR. Our other Managing Trustee, Mr. Adam Portnoy, is the son of Mr. Barry Portnoy, and an owner, President, Chief Executive Officer and a director of RMR. Each of our executive officers is also an officer of RMR. CWH’s executive officers are officers of RMR. Our Independent Trustees also serve as independent directors or independent trustees of other public companies to which RMR provides management services. Mr. Barry Portnoy serves as a managing director or managing trustee of those companies and Mr. Adam Portnoy serves as a managing trustee of a majority of those companies. In addition, officers of RMR serve as officers of those companies. | |
Pursuant to our business management agreement with RMR, we recognized business management fees of $2,472 and $1,494 for the three months ended September 30, 2013 and 2012, respectively. We recognized business management fees of $6,899 for the nine months ended September 30, 2013 and $2,994 for the period beginning on March 12, 2012, the date on which we entered into the business management agreement, through September 30, 2012. These amounts are included in general and administrative expenses in our condensed consolidated financial statements. | |
In connection with our property management agreement with RMR, we incurred property management and construction supervision fees of $1,419 and $929 for the three months ended September 30, 2013 and 2012, respectively. We incurred property management and construction supervision fees of $3,988 for the nine months ended September 30, 2013 and $1,894 for the period beginning on March 12, 2012, the date on which we entered into the property management agreement, through September 30, 2012. These amounts are included in operating expenses or have been capitalized, as appropriate, in our condensed consolidated financial statements. | |
On September 20, 2013, we and RMR agreed to restructure the base business management and incentive fees payable to RMR under our business management agreement beginning in 2014, as follows: | |
· The base business management fees we pay to RMR will be calculated on the basis of the lower of: (i) gross historical cost of our real estate assets, as defined, or (ii) our total market capitalization. Market capitalization will include the market value of our common shares, plus the liquidation preference of preferred shares, if any, and the principal amount of debt. The market value of our common shares will be calculated based on the average shares outstanding multiplied by the average closing share price during the period in which the fees are earned. | |
· 10% of the base business management fees we pay to RMR will be paid in our common shares. The amount of our common shares granted as part of the base business management fee will be calculated based on the average closing share price during the period in which the fees are earned. | |
· The annual incentive fees which may be earned by RMR will be calculated based upon total returns realized by our common shareholders (i.e., share price appreciation plus dividends) in excess of benchmarks. The benchmarks will be set by our Compensation Committee, which is comprised solely of Independent Trustees, and will be disclosed in our annual meeting proxy statements. Incentive fees will be paid in our common shares which will vest over a multiyear period and will be subject to a “claw back” in the event of certain material restatements of our financial results. | |
We were formerly a 100% owned subsidiary of CWH. CWH is our largest shareholder and, as of September 30, 2013, CWH owned 22,000,000 of our common shares, or approximately 44.2% of our outstanding common shares. One of our Managing Trustees, Mr. Barry Portnoy, is a managing trustee of CWH. Our other Managing Trustee, Mr. Adam Portnoy, is a managing trustee and the President of CWH. In addition, Mr. John Popeo, our Treasurer and Chief Financial Officer, also serves as the Treasurer and Chief Financial Officer of CWH, and one of our Independent Trustees, Mr. William Lamkin, is an independent trustee of CWH. RMR provides management services to both us and CWH. | |
In March 2012, we completed our IPO of 9,200,000 of our common shares (including 1,200,000 common shares sold pursuant to the full exercise of the underwriters’ option to purchase additional shares) for net proceeds (after deducting underwriters’ discounts and commissions and expenses) of approximately $180,814. We applied those net proceeds, along with proceeds of our initial borrowings under our revolving credit facility, to repay in full a note to CWH for $400,000, or the CWH Note, which we issued to CWH at the time it transferred the Initial Properties to us, and to reimburse CWH for costs that CWH incurred in connection with our organization and preparation for our IPO. In connection with our IPO, we and CWH entered into a transaction agreement that governs our separation from and relationship with CWH. The transaction agreement provides that, among other things, (1) the current assets and liabilities of the Initial Properties, as of the time of closing of the IPO, were settled between us and CWH so that CWH will retain all pre-closing current assets and liabilities and we will assume all post-closing current assets and liabilities and (2) we will indemnify CWH with respect to any liability relating to any property transferred by CWH to us, including any liability which relates to periods prior to our formation, other than the pre-closing current assets and current liabilities that CWH retained with respect to the Initial Properties. | |
In March 2013, we entered into a registration agreement with CWH, pursuant to which we agreed to register for resale by CWH up to 22,000,000 of our common shares owned by CWH, or an Offering. We currently have an effective registration statement on Form S-3 that may provide for that possible resale by CWH. Under the registration agreement, CWH agreed to pay all expenses incurred by us relating to the registration and sale of the shares in an Offering. Our obligation to register the shares for resale in an Offering is subject to certain conditions and may be terminated in certain circumstances, in each case, as described in the registration agreement. CWH agreed to indemnify us, our officers, Trustees and controlling persons, and we agreed to indemnify CWH and CWH’s officers, trustees and controlling persons, against certain liabilities in connection with an Offering, including liabilities under the Securities Act of 1933, as amended, and we and CWH agreed to reimburse payments that the other may make in respect of those liabilities. As of September 30, 2013, we paid or accrued $636 of amounts due from CWH related to this agreement. | |
In May 2012, we purchased 20,000 shares of common stock of Affiliates Insurance Company, or AIC, for approximately $5,335. Concurrently with this purchase, we entered into an amended and restated shareholders agreement with AIC, RMR, CWH and five other companies to which RMR provides management services. We, RMR, CWH and five other companies to which RMR provides management services each currently own 12.5% of AIC. All of our Trustees, all of the trustees and directors of the other publicly held AIC shareholders and nearly all of the directors of RMR currently serve on the board of directors of AIC. RMR provides management and administrative services to AIC pursuant to a management and administrative services agreement with AIC. | |
Although we own less than 20% of AIC, we use the equity method to account for this investment because we believe that we have significant influence over AIC because all of our Trustees are also directors of AIC. Our investment in AIC had a carrying value of $5,781 and $5,629 as of September 30, 2013 and December 31, 2012, respectively, which amounts are included in other assets on our condensed consolidated balance sheets. We recognized income of $64 and $219 for the three and nine months ended September 30, 2013, respectively, arising from our investment in AIC. We recognized income of $115 for the three months ended September 30, 2012 and $189 during the period from May 21, 2012 to September 30, 2012 related to this investment. We and the other shareholders of AIC have purchased property insurance providing $500,000 of coverage pursuant to an insurance program arranged by AIC and with respect to which AIC is a reinsurer of certain coverage amounts. This program was entered into in June 2013 for a one year term, and we paid a premium, including taxes and fees, of $559, which amount may be adjusted from time to time as we acquire or dispose of properties that are included in this program. We periodically consider the possibilities for expanding our insurance relationships with AIC to include other types of insurance and may in the future participate in additional insurance offerings AIC may provide or arrange. We may invest additional amounts in AIC in the future if the expansion of this insurance business requires additional capital, but we are not obligated to do so. By participating in this insurance business with RMR and the other companies to which RMR provides management services, we expect that we may benefit financially by possibly reducing our insurance expenses or by realizing our pro rata share of any profits of this insurance business. | |
Effective July 2013, we, RMR, CWH and four other companies to which RMR provides management services purchased from an unrelated third party insurer a combined directors’ and officers’ liability insurance policy providing $10,000 of aggregate coverage. We paid a premium of approximately $133 in connection with this policy. |
Pro_Forma_Information
Pro Forma Information | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Pro Forma Information | ' | |||||||
Pro Forma Information | ' | |||||||
Note 9. Pro Forma Information | ||||||||
During the nine months ended September 30, 2013, we acquired six properties for an aggregate purchase price of $301,920, excluding closing costs. During the third quarter of 2013, we sold 10,500,000 of our common shares in a public offering at a price of $28.25 per share. | ||||||||
During the period from the Closing Date to December 31, 2012, we acquired 16 properties for an aggregate purchase price of $438,013, including the assumption of $26,000 of mortgage debt and excluding closing costs. During the first quarter of 2012, CWH contributed the Initial Properties to us. In return, we issued to CWH: (i) 22,000,000 common shares (including 1,000 common shares initially issued to CWH in December 2011 in connection with our formation) and (ii) the CWH Note. Also during the first quarter of 2012, we issued 9,200,000 of our common shares in connection with our IPO (including 1,200,000 common shares sold pursuant to the full exercise of the underwriters’ option to purchase additional shares). Simultaneous with the closing of our IPO, we entered into our revolving credit facility and used net proceeds from our IPO and borrowings under our revolving credit facility to repay in full the CWH Note. During the fourth quarter of 2012, we sold 8,050,000 of our common shares in a public offering (including 1,050,000 common shares sold pursuant to the full exercise of the underwriters’ option to purchase additional shares) at a price of $24.00 per share. | ||||||||
The following table presents our pro forma results of operations for the nine months ended September 30, 2013 and 2012 as if these acquisitions and financing activities had occurred on January 1, 2012. This pro forma data is not necessarily indicative of what our actual results of operations would have been for the periods presented, nor does it represent the results of operations for any future period. Differences could result from numerous factors, including future changes in our portfolio of investments, changes in interest rates, changes in our capital structure, changes in property level operating expenses, changes in property level revenues, including rents expected to be received on our existing leases or leases we may enter into during and after 2013, and for other reasons. | ||||||||
Nine Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
Total revenues | $ | 145,700 | $ | 142,241 | ||||
Net income | $ | 74,680 | $ | 71,697 | ||||
Net income per share | $ | 1.5 | $ | 1.44 | ||||
During the nine months ended September 30, 2013, we recognized revenues of $51,436 and operating income of $42,218 arising from our 2012 and 2013 acquisitions. |
Real_Estate_Properties_Tables
Real Estate Properties (Tables) | 9 Months Ended | ||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||
Real Estate Properties | ' | ||||||||||||||||||||||
Schedule of purchase prices of acquisitions allocated based on the estimated fair values of the acquired assets and assumed liabilities | ' | ||||||||||||||||||||||
Assumed | |||||||||||||||||||||||
Acquired | Real Estate | ||||||||||||||||||||||
Number of | Square | Purchase | Building and | Real Estate | Lease | ||||||||||||||||||
Date | Location | Properties | Feet | Price (1) | Land | Improvements | Leases | Obligations | |||||||||||||||
January 2013 | Addison, TX (2) | 2 | 553,799 | $ | 105,000 | $ | 10,107 | $ | 94,893 | $ | — | $ | — | ||||||||||
February 2013 | Provo, UT | 2 | 125,225 | 34,720 | 3,400 | 25,938 | 5,382 | — | |||||||||||||||
March 2013 | San Antonio, TX | 1 | 99,986 | 18,600 | 3,197 | 12,175 | 3,507 | (279 | ) | ||||||||||||||
July 2013 | Richmond, VA | 1 | 310,950 | 143,600 | 13,849 | 109,823 | 19,928 | — | |||||||||||||||
6 | 1,089,960 | $ | 301,920 | $ | 30,553 | $ | 242,829 | $ | 28,817 | $ | (279 | ) | |||||||||||
(1) Purchase price excludes acquisition related costs. | |||||||||||||||||||||||
(2) Property was acquired and simultaneously leased back to the seller in a sale/leaseback transaction. We capitalized acquisition costs of $232 related to this transaction. |
Indebtedness_Tables
Indebtedness (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Indebtedness | ' | |||||||
Schedule of outstanding indebtedness | ' | |||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Revolving credit facility, due in 2016 | $ | 80,000 | $ | 95,000 | ||||
Term loan, due in 2017 | 350,000 | 350,000 | ||||||
Mortgage note payable, 5.950% interest rate, including unamortized premium of $1,204 and $1,415, respectively, due in 2017 (1) | 19,490 | 19,862 | ||||||
Mortgage note payable, 5.689% interest rate, including unamortized premium of $319 and $416, respectively, due in 2016 (1) | 7,819 | 7,916 | ||||||
$ | 457,309 | $ | 472,778 | |||||
(1) We assumed these mortgages in connection with our acquisitions of certain properties. The stated interest rates for these mortgage debts are the contractually stated rates; we recorded the assumed mortgages at their estimated fair value on the date of acquisition and we are amortizing the fair value premiums to interest expense over the respective terms of the mortgages to reduce interest expense based on the estimated market interest rates as of the date of acquisition. |
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Fair Value of Financial Instruments | ' | |||||||
Schedule of carrying value and the estimated fair market value of mortgage notes payable | ' | |||||||
Carrying | Estimated | |||||||
Amount | Fair Value | |||||||
Mortgage notes payable | $ | 27,309 | $ | 27,646 | ||||
Pro_Forma_Information_Tables
Pro Forma Information (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Pro Forma Information | ' | |||||||
Schedule of pro forma results of operations | ' | |||||||
Nine Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
Total revenues | $ | 145,700 | $ | 142,241 | ||||
Net income | $ | 74,680 | $ | 71,697 | ||||
Net income per share | $ | 1.5 | $ | 1.44 |
Basis_of_Presentation_Details
Basis of Presentation (Details) (CWH) | Feb. 16, 2013 |
Property | |
CWH | ' |
Basis of Presentation | ' |
Number of properties owned | 251 |
Real_Estate_Properties_Details
Real Estate Properties (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Feb. 28, 2013 | Mar. 31, 2013 | Jul. 31, 2013 | Oct. 31, 2013 | Oct. 31, 2013 | Jan. 31, 2013 |
In Thousands, unless otherwise specified | Property | Property | Provo, UT | San Antonio, TX | Richmond, VA | Vernon Hills, IL | San Jose, CA | Addison, TX |
sqft | sqft | Property | Property | Office building | Subsequent event | sqft | ||
Property | sqft | sqft | Subsequent event | Property | Property | |||
sqft | sqft | |||||||
Purchase price allocation of real estate properties acquired | ' | ' | ' | ' | ' | ' | ' | ' |
Number of properties | 6 | 16 | 2 | 1 | 1 | ' | 4 | 2 |
Square Feet | 1,089,960 | ' | 125,225 | 99,986 | 310,950 | 99,579 | 250,731 | 553,799 |
Purchase price | $301,920 | $438,013 | $34,720 | $18,600 | $143,600 | $18,000 | $64,900 | $105,000 |
Land | 30,553 | ' | 3,400 | 3,197 | 13,849 | ' | ' | 10,107 |
Buildings and Improvements | 242,829 | ' | 25,938 | 12,175 | 109,823 | ' | ' | 94,893 |
Acquired Real Estate Leases | 28,817 | ' | 5,382 | 3,507 | 19,928 | ' | ' | ' |
Assumed Real Estate Lease Obligations | -279 | ' | ' | -279 | ' | ' | ' | ' |
Acquisition costs | ' | ' | ' | ' | ' | ' | ' | 232 |
Accrued environmental remediation costs | $8,349 | $8,644 | ' | ' | ' | ' | ' | ' |
Segment_Information_and_Tenant1
Segment Information and Tenant Concentration (Details) | 9 Months Ended |
Sep. 30, 2013 | |
item | |
Segment Information and Tenant Concentration | ' |
Number of business segments | 1 |
Minimum percentage of rentable square footage of property leased to single tenant | 90.00% |
Number of tenants under single tenant leased property | 1 |
Indebtedness_Details
Indebtedness (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 | Oct. 30, 2013 | Feb. 28, 2013 | Jan. 31, 2013 | Dec. 31, 2012 |
Indebtedness | ' | ' | ' | ' | ' | ' |
Unsecured revolving credit facility | $80,000 | $80,000 | ' | ' | ' | $95,000 |
Term loan | 350,000 | 350,000 | ' | ' | ' | 350,000 |
Mortgage notes payable | 27,309 | 27,309 | ' | ' | ' | 27,778 |
Total | 457,309 | 457,309 | ' | ' | ' | 472,778 |
Number of real estate properties collateralized | 3 | 3 | ' | ' | ' | ' |
Aggregate net book value of secured properties | 29,419 | 29,419 | ' | ' | ' | ' |
Number of assumed secured mortgage loans | 2 | 2 | ' | ' | ' | ' |
Revolving credit facility, due in 2016 | ' | ' | ' | ' | ' | ' |
Indebtedness | ' | ' | ' | ' | ' | ' |
Unsecured revolving credit facility | 80,000 | 80,000 | ' | ' | ' | 95,000 |
Maximum borrowing capacity of revolving credit facility | 750,000 | 750,000 | ' | 750,000 | 500,000 | ' |
Period of extension in maturity | ' | '1 year | ' | ' | ' | ' |
Increased maximum borrowing capacity | 1,000,000 | 1,000,000 | ' | ' | ' | ' |
Variable base rate | ' | 'LIBOR | ' | ' | ' | ' |
Spread on variable rate (as a percent) | ' | 1.30% | ' | ' | ' | ' |
Facility fee (as a percent) | ' | 0.30% | ' | ' | ' | ' |
Interest rate at the end of the period (as a percent) | 1.48% | 1.48% | ' | ' | ' | ' |
Weighted average annual interest rate (as a percent) | 1.49% | 1.50% | ' | ' | ' | ' |
Principal repayment due until maturity | ' | 0 | ' | ' | ' | ' |
Borrowings outstanding | 80,000 | 80,000 | 94,000 | ' | ' | ' |
Term loan, due in 2017 | ' | ' | ' | ' | ' | ' |
Indebtedness | ' | ' | ' | ' | ' | ' |
Term loan | 350,000 | 350,000 | ' | ' | ' | 350,000 |
Variable base rate | ' | 'LIBOR | ' | ' | ' | ' |
Spread on variable rate (as a percent) | ' | 1.55% | ' | ' | ' | ' |
Interest rate at the end of the period (as a percent) | 1.73% | 1.73% | ' | ' | ' | ' |
Weighted average annual interest rate (as a percent) | 1.74% | 1.75% | ' | ' | ' | ' |
Maximum borrowings | 700,000 | 700,000 | ' | ' | ' | ' |
Mortgage note payable, due in 2017 | ' | ' | ' | ' | ' | ' |
Indebtedness | ' | ' | ' | ' | ' | ' |
Mortgage notes payable | 19,490 | 19,490 | ' | ' | ' | 19,862 |
Interest rate (as a percent) | 5.95% | 5.95% | ' | ' | ' | 5.95% |
Unamortized premium | 1,204 | 1,204 | ' | ' | ' | 1,415 |
Mortgage note payable, due in 2016 | ' | ' | ' | ' | ' | ' |
Indebtedness | ' | ' | ' | ' | ' | ' |
Mortgage notes payable | 7,819 | 7,819 | ' | ' | ' | 7,916 |
Interest rate (as a percent) | 5.69% | 5.69% | ' | ' | ' | 5.69% |
Unamortized premium | 319 | 319 | ' | ' | ' | 416 |
Mortgage note payable | ' | ' | ' | ' | ' | ' |
Indebtedness | ' | ' | ' | ' | ' | ' |
Total | $25,786 | $25,786 | ' | ' | ' | ' |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Fair Value of Financial Instruments | ' | ' |
Mortgage notes payable | $27,309 | $27,778 |
Carrying Amount | Mortgage note payable | ' | ' |
Fair Value of Financial Instruments | ' | ' |
Mortgage notes payable | 27,309 | ' |
Fair Value | Mortgage note payable | ' | ' |
Fair Value of Financial Instruments | ' | ' |
Mortgage notes payable | $27,646 | ' |
Shareholders_Equity_Details
Shareholders' Equity (Details) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | ||||||||
In Thousands, except Share data, unless otherwise specified | 31-May-13 | Feb. 28, 2013 | Aug. 31, 2013 | Jul. 31, 2013 | Mar. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Jun. 30, 2013 | Dec. 31, 2012 | 31-May-13 | Sep. 30, 2013 | Oct. 31, 2013 |
Trustees | Officers and employees | Subsequent event | |||||||||||
item | Distribution declared | ||||||||||||
Shareholders' Equity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common shares, shares authorized | 50,000,000 | ' | ' | ' | ' | 75,000,000 | 75,000,000 | ' | 75,000,000 | 50,000,000 | ' | ' | ' |
Common shares, par value (in dollars per share) | ' | ' | ' | ' | ' | $0.01 | $0.01 | ' | $0.01 | $0.01 | ' | ' | ' |
Number of shares granted to each trustee under the award plan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,000 | ' | ' |
Closing share price of the entity's common shares (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $27.61 | ' | ' |
Number of trustees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5 | ' | ' |
Number of common shares sold in public offering | ' | ' | ' | 10,500,000 | ' | 10,500,000 | ' | ' | ' | ' | ' | 37,200 | ' |
Price per share (in dollars per share) | ' | ' | ' | $28.25 | ' | $28.25 | $28.25 | ' | ' | $24 | ' | $24.77 | ' |
Net proceeds from issuance of common shares | ' | ' | ' | $283,610 | $180,814 | ' | $283,510 | $180,814 | ' | ' | ' | ' | ' |
Distributions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Distribution paid on common shares (in dollars per share) | $0.44 | $0.42 | $0.44 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Distribution to common shareholders | $17,284 | $16,499 | $21,909 | ' | ' | ' | ' | ' | ' | ' | ' | ' | $22,922 |
Distribution payable declared (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.46 |
Related_Person_Transactions_De
Related Person Transactions (Details) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 4 Months Ended | 9 Months Ended | |||||||||||
In Thousands, except Share data, unless otherwise specified | Jul. 31, 2013 | Mar. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Mar. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Jul. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2011 | Mar. 31, 2012 | Sep. 30, 2013 | Jun. 30, 2013 | 31-May-12 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2013 | Dec. 31, 2012 |
item | item | RMR | RMR | RMR | RMR | RMR | CWH | CWH | CWH | CWH | AIC | AIC | AIC | AIC | AIC | AIC | AIC | |||||||
item | item | item | item | item | ||||||||||||||||||||
Related Person Transactions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of employees | ' | ' | 0 | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of agreements to avail management and administrative services | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business management fees incurred | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2,472 | $1,494 | $2,994 | $6,899 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property management and construction supervision fees incurred | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,419 | 929 | 1,894 | 3,988 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business management fees to be paid in common shares (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ownership interest previously held (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' |
Common shares owned | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 22,000,000 | ' | ' | ' | ' | ' | ' | ' |
Percentage of outstanding common shares owned | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 44.20% | ' | ' | ' | ' | ' | ' | ' |
Common shares issued, including shares issued under underwriters' option to purchase additional shares | ' | 9,200,000 | ' | 8,050,000 | ' | 9,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common shares sold pursuant to option to purchase additional shares | ' | 1,200,000 | ' | 1,050,000 | ' | 1,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net proceeds from issuance of common shares | 283,610 | 180,814 | ' | ' | ' | ' | 283,510 | 180,814 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Note repaid | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 400,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of common shares issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 22,000,000 | 1,000 | 22,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Related party reimbursement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 636 | ' | ' | ' | ' | ' | ' | ' |
Common shares issued by equity method investee | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20,000 | ' | ' | ' | ' | ' |
Investment at carrying value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,335 | 5,781 | ' | ' | 5,781 | 5,629 |
Number of other companies owning outstanding shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5 | ' | ' | 5 | ' |
Percentage of interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12.50% | ' | ' | 12.50% | ' |
Recognized income related to investment | ' | ' | 64 | ' | 115 | ' | 219 | 189 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 64 | 115 | 189 | 219 | ' |
Coverage of property insurance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' |
Property insurance program term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' |
Premium paid for combined directors' and officers' liability insurance policy | ' | ' | ' | ' | ' | ' | ' | ' | 133 | ' | ' | ' | ' | ' | ' | ' | ' | 559 | ' | ' | ' | ' | ' | ' |
Number of entities to whom RMR provides management services | ' | ' | ' | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate coverage of combined directors' and officers' liability insurance policy purchased by the related party | ' | ' | ' | ' | ' | ' | ' | ' | $10,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Pro_Forma_Information_Details
Pro Forma Information (Details) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | |||||
In Thousands, except Share data, unless otherwise specified | Jul. 31, 2013 | Mar. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Mar. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Mar. 31, 2013 | Dec. 31, 2011 | Mar. 31, 2012 |
Property | Property | Property | Property | CWH | CWH | CWH | |||||
Pro Forma Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of properties acquired | ' | ' | 6 | 16 | ' | 6 | ' | 16 | ' | ' | ' |
Purchase price | ' | ' | $301,920 | $438,013 | ' | $301,920 | ' | $438,013 | ' | ' | ' |
Number of common shares sold in public offering | 10,500,000 | ' | 10,500,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Price per share (in dollars per share) | $28.25 | ' | $28.25 | $24 | ' | $28.25 | ' | $24 | ' | ' | ' |
Assumption of mortgage debt | ' | ' | ' | ' | ' | ' | ' | 26,000 | ' | ' | ' |
Number of common shares issued | ' | ' | ' | ' | ' | ' | ' | ' | 22,000,000 | 1,000 | 22,000,000 |
Common shares issued, including shares issued under underwriters' option to purchase additional shares | ' | 9,200,000 | ' | 8,050,000 | 9,200,000 | ' | ' | ' | ' | ' | ' |
Common shares sold pursuant to option to purchase additional shares | ' | 1,200,000 | ' | 1,050,000 | 1,200,000 | ' | ' | ' | ' | ' | ' |
Pro forma results of operations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total revenues | ' | ' | ' | ' | ' | 145,700 | 142,241 | ' | ' | ' | ' |
Net income | ' | ' | ' | ' | ' | 74,680 | 71,697 | ' | ' | ' | ' |
Net income per share (in dollars per share) | ' | ' | ' | ' | ' | $1.50 | $1.44 | ' | ' | ' | ' |
Revenue | ' | ' | ' | ' | ' | 51,436 | ' | ' | ' | ' | ' |
Operating income | ' | ' | ' | ' | ' | $42,218 | ' | ' | ' | ' | ' |