Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Jun. 30, 2014 | Jul. 23, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'Select Income REIT | ' |
Entity Central Index Key | '0001537667 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Jun-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 59,891,803 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Real estate properties: | ' | ' |
Land | $754,759 | $732,509 |
Buildings and improvements | 1,098,719 | 913,948 |
Real estate properties, gross | 1,853,478 | 1,646,457 |
Accumulated depreciation | -80,162 | -67,223 |
Real estate properties, net | 1,773,316 | 1,579,234 |
Acquired real estate leases, net | 125,571 | 129,426 |
Cash and cash equivalents | 20,804 | 20,025 |
Restricted cash | 42 | 42 |
Rents receivable, net of allowance for doubtful accounts of $1,100 and $936, respectively | 59,557 | 55,335 |
Deferred leasing costs, net | 6,024 | 5,599 |
Deferred financing costs, net | 3,845 | 4,834 |
Other assets | 7,732 | 7,364 |
Total assets | 1,996,891 | 1,801,859 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ' | ' |
Revolving credit facility | 74,000 | 159,000 |
Term loan | 350,000 | 350,000 |
Mortgage notes payable | 19,103 | 27,147 |
Accounts payable and accrued expenses | 19,107 | 20,655 |
Assumed real estate lease obligations, net | 27,020 | 26,966 |
Rents collected in advance | 9,043 | 8,637 |
Security deposits | 10,217 | 8,359 |
Due to related parties | 2,098 | 2,404 |
Total liabilities | 510,588 | 603,168 |
Commitments and contingencies | ' | ' |
Shareholders' equity: | ' | ' |
Common shares of beneficial interest, $0.01 par value: 75,000,000 shares authorized, 59,888,823 and 49,829,541 shares issued and outstanding, respectively | 599 | 498 |
Additional paid in capital | 1,439,958 | 1,160,894 |
Cumulative net income | 199,609 | 144,343 |
Cumulative other comprehensive income (loss) | 16 | -25 |
Cumulative common distributions | -153,879 | -107,019 |
Total shareholders' equity | 1,486,303 | 1,198,691 |
Total liabilities and shareholders' equity | $1,996,891 | $1,801,859 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
CONDENSED CONSOLIDATED BALANCE SHEETS | ' | ' |
Rents receivable, allowance for doubtful accounts (in dollars) | $1,100 | $936 |
Common shares, par value (in dollars per share) | $0.01 | $0.01 |
Common shares, shares authorized | 75,000,000 | 75,000,000 |
Common shares, shares issued | 59,888,823 | 49,829,541 |
Common shares, shares outstanding | 59,888,823 | 49,829,541 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Revenues: | ' | ' | ' | ' |
Rental income | $48,465 | $38,706 | $93,528 | $76,164 |
Tenant reimbursements and other income | 8,092 | 7,240 | 16,057 | 13,642 |
Total revenues | 56,557 | 45,946 | 109,585 | 89,806 |
Expenses: | ' | ' | ' | ' |
Real estate taxes | 5,483 | 5,159 | 10,935 | 9,785 |
Other operating expenses | 4,502 | 3,852 | 9,029 | 7,100 |
Depreciation and amortization | 10,495 | 7,295 | 19,789 | 13,960 |
Acquisition related costs | 136 | 156 | 374 | 689 |
General and administrative | 2,198 | 2,957 | 7,374 | 5,676 |
Total expenses | 22,814 | 19,419 | 47,501 | 37,210 |
Operating income | 33,743 | 26,527 | 62,084 | 52,596 |
Interest expense (including amortization of debt premiums and deferred financing fees of $399, $385, $804 and $721, respectively) | -3,634 | -3,779 | -6,992 | -7,252 |
Gain on early extinguishment of debt | ' | ' | 243 | ' |
Income before income tax expense and equity in earnings of an investee | 30,109 | 22,748 | 55,335 | 45,344 |
Income tax expense | -19 | -40 | -90 | -80 |
Equity in earnings of an investee | 118 | 79 | 21 | 155 |
Net income | 30,208 | 22,787 | 55,266 | 45,419 |
Other comprehensive income: | ' | ' | ' | ' |
Equity in unrealized gain (loss) of an investee | 22 | -73 | 41 | -81 |
Other comprehensive income (loss) | 22 | -73 | 41 | -81 |
Comprehensive income | $30,230 | $22,714 | $55,307 | $45,338 |
Weighted average common shares outstanding (in shares) | 54,178 | 39,288 | 52,021 | 39,285 |
Net income per common share (in dollars per share) | $0.56 | $0.58 | $1.06 | $1.16 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Parenthetical) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME | ' | ' | ' | ' |
Interest expense, amortization of debt premiums and deferred financing fees | $399 | $385 | $804 | $721 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net income | $55,266 | $45,419 |
Adjustments to reconcile net income to cash provided by operating activities | ' | ' |
Depreciation | 12,950 | 9,327 |
Net amortization of debt premiums and deferred financing fees | 804 | 721 |
Amortization of acquired real estate leases and assumed real estate obligations | 6,326 | 4,756 |
Amortization of deferred leasing costs | 464 | 402 |
Provision for losses on rents receivable | 165 | 46 |
Straight line rental income | -8,057 | -5,655 |
Gain on early extinguishment of debt | -243 | ' |
Other non-cash expenses | 1,404 | 746 |
Equity in earnings of equity investments | -21 | -155 |
Change in assets and liabilities: | ' | ' |
Rents receivable | 3,670 | -1,425 |
Deferred leasing costs | -889 | -1,175 |
Other assets | 590 | -1,268 |
Due from related parties | ' | 444 |
Accounts payable and accrued expenses | -886 | 1,056 |
Rents collected in advance | 406 | -756 |
Security deposits | 1,858 | 300 |
Due to related parties | 151 | -230 |
Net cash provided by operating activities | 73,958 | 52,553 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Real estate acquisitions | -208,816 | -162,925 |
Real estate improvements | -1,436 | -2,534 |
Investment in Affiliates Insurance Company | -825 | ' |
Net cash used in investing activities | -211,077 | -165,459 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Proceeds from issuance of common shares, net | 277,373 | -96 |
Proceeds from borrowings | 228,000 | 163,000 |
Repayments of borrowings | -320,615 | -23,108 |
Deferred financing fees | ' | -1,194 |
Distributions to common shareholders | -46,860 | -33,783 |
Net cash provided by financing activities | 137,898 | 104,819 |
Increase (decrease) in cash and cash equivalents | 779 | -8,087 |
Cash and cash equivalents at beginning of period | 20,025 | 20,373 |
Cash and cash equivalents at end of period | 20,804 | 12,286 |
SUPPLEMENTAL DISCLOSURE: | ' | ' |
Interest paid | 6,296 | 6,245 |
Income taxes paid | $93 | $305 |
Basis_of_Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2014 | |
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, 2013, 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 with or among our consolidated subsidiaries 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. | |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2014 | |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | ' |
Note 2. Recent Accounting Pronouncements | |
In April 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This update amends the criteria for reporting discontinued operations to, among other things, raise the threshold for disposals to qualify as discontinued operations. This update is effective for interim and annual reporting periods, beginning after December 15, 2014, with early adoption permitted. We currently expect that, when adopted, this update will reduce the number of any future property dispositions we make to be presented as discontinued operations in our condensed consolidated financial statements. | |
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which provides guidance for revenue recognition. This update is effective for interim and annual reporting periods beginning after December 15, 2016. We are currently in the process of evaluating the impact, if any, the adoption of this ASU will have on our consolidated financial statements. | |
Real_Estate_Properties
Real Estate Properties | 6 Months Ended | ||||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||||
Real Estate Properties | ' | ||||||||||||||||||||||
Real Estate Properties | ' | ||||||||||||||||||||||
Note 3. Real Estate Properties | |||||||||||||||||||||||
As of June 30, 2014, we owned 50 properties (280 buildings, leasable land parcels and easements) with approximately 27.0 million rentable square feet. | |||||||||||||||||||||||
During the six months ended June 30, 2014, we acquired two properties (two buildings) with a combined 986,937 rentable square feet for an aggregate purchase price of $207,860, excluding closing costs. We allocated the purchase prices of these acquisitions based on the estimated fair values of the acquired assets and assumed liabilities. Details of these completed acquisitions are as follows: | |||||||||||||||||||||||
Assumed | |||||||||||||||||||||||
Acquired | Real Estate | ||||||||||||||||||||||
Properties | Square | Purchase | Building and | Real Estate | Lease | ||||||||||||||||||
Date | Location | \Buildings | Feet | Price (1) | Land | Improvements | Leases | Obligations | |||||||||||||||
April 2014 | Naperville, IL (2) | 1-Jan | 819,513 | $ | 187,500 | $ | 13,757 | $ | 173,743 | $ | — | $ | — | ||||||||||
April 2014 | Mahwah, NJ (3) | 1-Jan | 167,424 | 20,360 | 8,492 | 9,451 | 3,968 | (1,551 | ) | ||||||||||||||
2-Feb | 986,937 | $ | 207,860 | $ | 22,249 | $ | 183,194 | $ | 3,968 | $ | (1,551 | ) | |||||||||||
(1) The allocation of purchase price is based on preliminary estimates and may change upon the completion of (i) third party appraisals and (ii) our analysis of acquired in place leases and building valuations. Purchase price excludes acquisition costs. | |||||||||||||||||||||||
(2) Property was acquired and simultaneously leased back to an affiliate of the seller in a sale/leaseback transaction. We accounted for this transaction as an acquisition of assets. We recognized acquisition costs of $956 which we capitalized as part of the transaction. | |||||||||||||||||||||||
(3) This acquisition was accounted for as business combination. | |||||||||||||||||||||||
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. Due to the uncertainty of the timing and amount of costs we may incur, we cannot reasonably estimate the fair value and we have not recognized a liability in the financial statements for these costs. 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 remediation. In general, 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, although some of our tenants may maintain such insurance. However, as of June 30, 2014 and December 31, 2013, accrued environmental remediation costs totaling $8,150 were included in accounts payable and accrued expenses in our condensed consolidated balance sheets. These accrued environmental remediation costs relate to maintenance of our properties for current uses and, because of the indeterminable timing of the remediation, these amounts have not been discounted to present value. 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 our condensed consolidated statements of income and comprehensive income. | |||||||||||||||||||||||
Segment_Information_and_Tenant
Segment Information and Tenant Concentration | 6 Months Ended |
Jun. 30, 2014 | |
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 include buildings and leased industrial lands 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 building or land 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 building or leased land as a building or land parcel with at least 90% of its rentable square footage leased to one tenant. Our buildings and lands are primarily leased to single tenants; however, we do own some multi tenant buildings on the island of Oahu, HI. | |
Indebtedness
Indebtedness | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Indebtedness | ' | |||||||
Indebtedness | ' | |||||||
Note 5. Indebtedness | ||||||||
In January 2014, we repaid, at par, a $7,500 mortgage note which was secured by a building located in Chelmsford, MA. This mortgage was scheduled to mature in 2016. | ||||||||
At June 30, 2014 and December 31, 2013, our outstanding indebtedness consisted of the following: | ||||||||
June 30, | December 31, | |||||||
2014 | 2013 | |||||||
Revolving credit facility, due in 2016 | $ | 74,000 | $ | 159,000 | ||||
Term loan, due in 2017 | 350,000 | 350,000 | ||||||
Mortgage note payable, 5.950% interest rate, including unamortized premium of $988 and $1,131, respectively, due in 2017 (1) | 19,103 | 19,361 | ||||||
Mortgage note payable, 5.689% interest rate, including unamortized premium of $0 and $286, respectively, due in 2016 (1)(2) | — | 7,786 | ||||||
$ | 443,103 | $ | 536,147 | |||||
(1) We assumed these mortgages in connection with our acquisition of certain properties. The stated interest rates for these mortgage debts are the contractually stated rates; we recorded the assumed mortgages at estimated fair value on the date of acquisition and we amortize the fair value premiums to interest expense over the respective terms of the mortgages to reduce interest expense to the estimated market interest rates as of the date of acquisition. | ||||||||
(2) This mortgage note was repaid, at par, in January 2014. | ||||||||
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. 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. As of June 30, 2014, the interest rate premium on our revolving credit facility was 130 basis points and our facility fee was 30 basis points. As of June 30, 2014, the interest rate payable on borrowings under our revolving credit facility was 1.45%. The weighted average interest rate for borrowings under the revolving credit facility was 1.45% for both the three and six months ended June 30, 2014 and 1.50% for both the three and six months ended June 30, 2013. 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 June 30, 2014 and July 23, 2014, we had $74,000 and $60,000, 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 June 30, 2014. The interest rate premium is subject to adjustment based upon changes to our leverage or credit ratings. As of June 30, 2014, the interest rate payable for the amount outstanding under our term loan was 1.70%. The weighted average interest rate for the amount outstanding under our term loan was 1.69% for both the three and six months ended June 30, 2014 and 1.75% and 1.76% for the three and six months ended June 30, 2013, respectively. | ||||||||
Our revolving 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, which includes Reit Management & Research LLC, or RMR, ceasing to act as our business manager and property manager. Our revolving 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 June 30, 2014. | ||||||||
At June 30, 2014, one of our properties (two buildings) with an aggregate net book value of $20,530 secured a mortgage note we assumed in connection with our acquisition of the property. The aggregate principal amount outstanding under the mortgage note as of June 30, 2014 was $18,115. This mortgage note is non-recourse, subject to certain limited exceptions, and does not contain any material financial covenants. | ||||||||
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Fair Value of Financial Instruments | ' | |||||||
Fair Value of Financial Instruments | ' | |||||||
Note 6. Fair Value of Financial Instruments | ||||||||
Our financial instruments at June 30, 2014 included cash and cash equivalents, rents receivable, equity investments, a mortgage note payable, our revolving credit facility, our term loan, amounts due to related persons and accounts payable. At June 30, 2014, the fair value of our financial instruments approximated their carrying values in our condensed consolidated financial statements due to their short term nature or variable interest rates, except as follows: | ||||||||
Carrying | Estimated | |||||||
Amount | Fair Value | |||||||
Mortgage note payable | $ | 19,103 | $ | 19,660 | ||||
We estimate the fair value of our mortgage note payable by using discounted cash flow analyses and currently prevailing market rates for similar mortgage notes as of June 30, 2014. 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 | 6 Months Ended |
Jun. 30, 2014 | |
Shareholders' Equity | ' |
Shareholders' Equity | ' |
Note 7. Shareholders’ Equity | |
Sale of Shares: | |
During the second quarter of 2014, we sold 10,000,000 of our common shares in a public offering, including 1,000,000 of our common shares sold when the underwriters partially exercised their option to purchase additional shares, at a price of $29.00 per share raising net proceeds of approximately $277,373, after deducting estimated offering expenses and the underwriting discount. We used the net proceeds from this offering to partially repay amounts outstanding under our revolving credit facility and for general business purposes. | |
Issuance of Shares: | |
We issued 46,782 common shares to RMR during the six months ended June 30, 2014 and 2,980 shares in July 2014, as part of the business management fee payable by us under our business management agreement. See Note 8 for further information regarding this agreement. | |
Distributions: | |
In February 2014, we paid a distribution of $0.46 per common share, or approximately $22,922, to shareholders of record on January 13, 2014. | |
In May 2014, we paid a distribution of $0.48 per common share, or approximately $23,938, to shareholders of record on April 14, 2014. | |
In July 2014, we declared a quarterly distribution of $0.48 per common share, or approximately $28,748, to shareholders of record on July 25, 2014. We expect to pay this distribution on or about August 21, 2014 using existing cash balances and borrowings under our revolving credit facility. | |
Related_Person_Transactions
Related Person Transactions | 6 Months Ended |
Jun. 30, 2014 | |
Related Person Transactions | ' |
Related Person Transactions | ' |
Note 8. Related Person Transactions | |
RMR: 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: (i) a business management agreement, which relates to our business generally, and (ii) a property management agreement, which relates to our property level operations. | |
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. 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 a majority of the companies that RMR or its affiliates provide management services to 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. | |
On May 9, 2014, we and RMR entered into amendments to our business management agreement and property management agreement. As amended, RMR may terminate the agreements upon 120 days’ written notice. Prior to the amendments, RMR could terminate the agreements upon 60 days’ written notice and could also terminate the property management agreement upon five business days’ notice if we underwent a change of control. The amendments also provide for certain termination payments by us to RMR in the event that we terminate the agreements other than for cause, including certain proportional adjustments to the termination fees if we merge with another real estate investment trust, or REIT, to which RMR is providing management services or if we spin off a subsidiary of ours to which we contributed properties and to which RMR is providing management services both at the time of the spin-off and on the date of the expiration or termination of the agreement. Finally, as amended, RMR agrees to provide certain transition services to us for 120 days following an applicable termination by us or notice of termination by RMR. | |
Pursuant to our business management agreement with RMR, we recognized business management fees of $962 and $2,259 for the three months ended June 30, 2014 and 2013, respectively, and $5,333 and $4,426 for the six months ended June 30, 2014 and 2013, respectively. The fees for the six months ended June 30, 2014 include $427 of estimated 2014 incentive fees payable in common shares in 2015 based on our common share total return. The lower business management fees recognized for the three months ended June 30, 2014, compared with the three months ended March 31, 2014, reflect the reversal recognized for the three months ended June 30, 2014, of the amount by which the estimated 2014 incentive fee accrued as of March 31, 2014 exceeded the amount of that fee estimated as of June 30, 2014. The business management fee we recognized for the 2014 and 2013 periods are included in general and administrative expenses in our condensed consolidated financial statements. In accordance with the terms of our business management agreement, as amended in December 2013, we issued 13,917 of our common shares to RMR for the six months ended June 30, 2014 as payment for 10% of the base business management fee we recognized for such period. In March 2014, we also issued 32,865 of our common shares to RMR for the incentive fee for 2013 pursuant to the business management agreement. | |
In connection with our property management agreement with RMR, the aggregate property management and construction supervision fees we recognized were $1,577 and $1,311 for the three months ended June 30, 2014 and 2013, respectively, and $3,067 and $2,569 for the six months ended June 30, 2014 and 2013, respectively. These amounts are included in operating expenses or have been capitalized, as appropriate, in our condensed consolidated financial statements. | |
CWH: We were formerly a 100% owned subsidiary of CommonWealth REIT, or CWH. As of June 30, 2014, CWH was our largest shareholder and owned 22,000,000 of our common shares, or approximately 36.7% of our outstanding common shares. One of our Managing Trustees, Mr. Barry Portnoy, was a managing trustee of CWH until March 25, 2014. Our other Managing Trustee, Mr. Adam Portnoy, was the President of CWH until May 23, 2014 and was a managing trustee of CWH until March 25, 2014. In addition, Mr. John Popeo, our Treasurer and Chief Financial Officer, also served as the treasurer and chief financial officer of CWH until May 23, 2014, and one of our Independent Trustees, Mr. William Lamkin, was an independent trustee of CWH until March 25, 2014. RMR provides management services to both us and CWH. | |
In 2012, we completed our initial public offering, or IPO. To facilitate 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, (i) the current assets and liabilities of the 29 properties (251 buildings, leasable land parcels and easements) contributed to us by CWH, or the Initial Properties, as of the time of closing of the IPO, were settled between us and CWH so that CWH retained all pre-closing current assets and liabilities and we assumed all post-closing current assets and liabilities and (ii) 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, and we filed a registration statement on Form S-3 to permit the resale by CWH of some or all of our common shares owned by CWH. Under the registration agreement, CWH agreed to pay all expenses incurred by us relating to the registration and any sale of the shares in an Offering. On March 31, 2014, we notified CWH that, effective that same day, we had elected to terminate the registration agreement with CWH as a result of the removal, without cause, of all of the trustees of CWH which constituted a change of control of CWH as provided in that agreement. | |
On July 9, 2014, CWH sold 21,500,000 of our common shares that it owned to Government Properties Income Trust, or GOV, and sold 500,000 of our common shares that it owned to RMR. We were not a contracting party to this transaction. We understand that, following these sales, CWH no longer owned any of our common shares. RMR provides management services to GOV; our Managing Trustees serve as managing trustees of GOV; our Independent Trustee, Jeffrey Somers, serves as an independent trustee of GOV; our President and Chief Operating Officer serves as an officer of GOV; and GOV’s other executive officer is an officer of RMR. In connection with this transaction, and in light of the fact that GOV would own greater than 10% of our common shares, our Independent Trustees voted to except GOV from the provisions of the Maryland General Corporation Law applicable to business combinations with interested shareholders. | |
AIC: We, RMR, GOV and four other companies to which RMR provides management services each currently own approximately 14.3% of Affiliates Insurance Company, or AIC, an Indiana insurance company. All of our Trustees and most of the trustees and directors of the other AIC shareholders 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. | |
In June 2014, we and the other shareholders of AIC renewed our participation in an insurance program arranged by AIC. In connection with that renewal, we purchased a one-year property insurance policy providing $500,000 of coverage, with respect to which AIC is a reinsurer of certain coverage amounts. We paid AIC a premium, including taxes and fees, of approximately $434 in connection with that policy, which amount may be adjusted from time to time as we acquire or dispose of properties that are included in the policy. As of June 30, 2014, we had invested $6,160 in our AIC investment since we became an equity owner of AIC in 2012. 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 as all of our Trustees are also directors of AIC. Our investment in AIC had a carrying value of $6,801 and $5,913 as of June 30, 2014 and December 31, 2013, respectively, which amounts are included in other assets on our condensed consolidated balance sheets. We recognized income of $118 and $79 for the three months ended June 30, 2014 and 2013, respectively, and $21 and $155 for the six months ended June 30, 2014 and 2013, respectively, related to our investment in AIC. | |
On March 25, 2014, as a result of the removal, without cause, of all of the trustees of CWH, CWH underwent a change in control, as defined in the shareholders agreement among us, the other shareholders of AIC and AIC. As a result of that change in control and in accordance with the terms of the shareholders agreement, on May 9, 2014, we and those other shareholders purchased pro rata the AIC shares CWH owned. Pursuant to that purchase, we purchased 2,857 AIC shares from CWH for $825. Following these purchases, we and the other remaining six shareholders each owned approximately 14.3% of AIC. | |
Directors’ and Officers’ Liability Insurance: In June 2014, we, RMR and four other companies to which RMR provides management services extended the combined directors’ and officers’ liability insurance policy described in our Annual Report for an interim period. | |
Pro_Forma_Information_Unaudite
Pro Forma Information (Unaudited) | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Pro Forma Information (Unaudited) | ' | |||||||
Pro Forma Information (Unaudited) | ' | |||||||
Note 9. Pro Forma Information (Unaudited) | ||||||||
During the year ended December 31, 2013, we acquired seven properties (11 buildings) for an aggregate purchase price of $384,820, 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 second quarter of 2014, we acquired two properties (two buildings) for an aggregate purchase price of $207,860, excluding closing costs, and sold 10,000,000 of our common shares in a public offering, including 1,000,000 common shares sold when the underwriters partially exercised their option to purchase additional shares, at a price of $29.00 per share. | ||||||||
The following table presents our pro forma results of operations for the six months ended June 30, 2014 and 2013 as if these acquisitions and financing activities had occurred on January 1, 2013. 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 net 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 2014, and for other reasons. | ||||||||
Six Months Ended June 30, | ||||||||
2014 | 2013 | |||||||
Total revenues | $ | 114,242 | $ | 104,500 | ||||
Net income | $ | 58,963 | $ | 51,436 | ||||
Net income per share | $ | 1.13 | $ | 1.03 | ||||
During the six months ended June 30, 2014, we recognized revenues of $25,426 and operating income of $21,143 arising from our 2013 and 2014 acquisitions. | ||||||||
Real_Estate_Properties_Tables
Real Estate Properties (Tables) | 6 Months Ended | ||||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||||
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 | ||||||||||||||||||||||
Properties | Square | Purchase | Building and | Real Estate | Lease | ||||||||||||||||||
Date | Location | \Buildings | Feet | Price (1) | Land | Improvements | Leases | Obligations | |||||||||||||||
April 2014 | Naperville, IL (2) | 1-Jan | 819,513 | $ | 187,500 | $ | 13,757 | $ | 173,743 | $ | — | $ | — | ||||||||||
April 2014 | Mahwah, NJ (3) | 1-Jan | 167,424 | 20,360 | 8,492 | 9,451 | 3,968 | (1,551 | ) | ||||||||||||||
2-Feb | 986,937 | $ | 207,860 | $ | 22,249 | $ | 183,194 | $ | 3,968 | $ | (1,551 | ) | |||||||||||
(1) The allocation of purchase price is based on preliminary estimates and may change upon the completion of (i) third party appraisals and (ii) our analysis of acquired in place leases and building valuations. Purchase price excludes acquisition costs. | |||||||||||||||||||||||
(2) Property was acquired and simultaneously leased back to an affiliate of the seller in a sale/leaseback transaction. We accounted for this transaction as an acquisition of assets. We recognized acquisition costs of $956 which we capitalized as part of the transaction. | |||||||||||||||||||||||
(3) This acquisition was accounted for as business combination. |
Indebtedness_Tables
Indebtedness (Tables) | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Indebtedness | ' | |||||||
Schedule of outstanding indebtedness | ' | |||||||
June 30, | December 31, | |||||||
2014 | 2013 | |||||||
Revolving credit facility, due in 2016 | $ | 74,000 | $ | 159,000 | ||||
Term loan, due in 2017 | 350,000 | 350,000 | ||||||
Mortgage note payable, 5.950% interest rate, including unamortized premium of $988 and $1,131, respectively, due in 2017 (1) | 19,103 | 19,361 | ||||||
Mortgage note payable, 5.689% interest rate, including unamortized premium of $0 and $286, respectively, due in 2016 (1)(2) | — | 7,786 | ||||||
$ | 443,103 | $ | 536,147 | |||||
(1) We assumed these mortgages in connection with our acquisition of certain properties. The stated interest rates for these mortgage debts are the contractually stated rates; we recorded the assumed mortgages at estimated fair value on the date of acquisition and we amortize the fair value premiums to interest expense over the respective terms of the mortgages to reduce interest expense to the estimated market interest rates as of the date of acquisition. | ||||||||
(2) This mortgage note was repaid, at par, in January 2014. | ||||||||
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
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 note payable | $ | 19,103 | $ | 19,660 | ||||
Pro_Forma_Information_Unaudite1
Pro Forma Information (Unaudited) (Tables) | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Pro Forma Information (Unaudited) | ' | |||||||
Schedule of pro forma results of operations | ' | |||||||
Six Months Ended June 30, | ||||||||
2014 | 2013 | |||||||
Total revenues | $ | 114,242 | $ | 104,500 | ||||
Net income | $ | 58,963 | $ | 51,436 | ||||
Net income per share | $ | 1.13 | $ | 1.03 | ||||
Real_Estate_Properties_Details
Real Estate Properties (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Apr. 30, 2014 | Jun. 30, 2014 | Apr. 30, 2014 | Jun. 30, 2014 |
In Thousands, unless otherwise specified | sqft | Building | Mahwah, NJ | Naperville, IL | Naperville, IL | Naperville, IL |
Building | Property | Building | sqft | Office building | ||
Property | Property | Building | sqft | |||
sqft | Property | |||||
Real Estate Properties | ' | ' | ' | ' | ' | ' |
Number of properties owned | 50 | ' | ' | ' | ' | ' |
Number of buildings, leasable land parcels easements contributed to the reporting entity | 280 | ' | ' | ' | ' | ' |
Rentable square feet | 27,000,000 | ' | ' | ' | ' | ' |
Accrued environmental remediation costs | $8,150 | $8,150 | ' | ' | ' | ' |
Square feet | 986,937 | ' | 167,424 | ' | 819,513 | 986,937 |
Purchase price excluding closing costs | 207,860 | 384,820 | 20,360 | ' | 187,500 | ' |
Purchase price allocation of real estate properties acquired | ' | ' | ' | ' | ' | ' |
Number of properties acquired | 2 | 7 | 1 | ' | 1 | ' |
Number of buildings acquired | 2 | 11 | 1 | ' | 1 | ' |
Square feet | 986,937 | ' | 167,424 | ' | 819,513 | 986,937 |
Purchase price | 207,860 | 384,820 | 20,360 | ' | 187,500 | ' |
Land | 22,249 | ' | 8,492 | ' | 13,757 | ' |
Buildings and Improvements | 183,194 | ' | 9,451 | ' | 173,743 | ' |
Acquired Real Estate Leases | 3,968 | ' | 3,968 | ' | ' | ' |
Assumed Real Estate Lease Obligations | -1,551 | ' | -1,551 | ' | ' | ' |
Acquisition costs | ' | ' | ' | $956 | ' | ' |
Segment_Information_and_Tenant1
Segment Information and Tenant Concentration (Details) | 6 Months Ended |
Jun. 30, 2014 | |
item | |
Segment Information and Tenant Concentration | ' |
Number of business segments | 1 |
Minimum percentage of rentable square footage of a building or land leased as a building or land parcel to single tenant | 90.00% |
Number of tenants under single tenant leased buildings and lands | 1 |
Indebtedness_Details
Indebtedness (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jul. 23, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jan. 31, 2014 |
In Thousands, unless otherwise specified | Building | Revolving credit facility, due in 2016 | Revolving credit facility, due in 2016 | Revolving credit facility, due in 2016 | Revolving credit facility, due in 2016 | Revolving credit facility, due in 2016 | Revolving credit facility, due in 2016 | Term loan, due in 2017 | Term loan, due in 2017 | Term loan, due in 2017 | Term loan, due in 2017 | Term loan, due in 2017 | Mortgage note payable, due in 2017 | Mortgage note payable, due in 2017 | Mortgage note payable, due in 2016 | Mortgage note payable, due in 2016 | Mortgage note payable | Mortgage note payable | |
Property | Chelmsford, MA | ||||||||||||||||||
Indebtedness | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repayment of mortgage notes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $7,500 |
Unsecured revolving credit facility | 74,000 | 159,000 | 74,000 | ' | 74,000 | ' | ' | 159,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term loan | 350,000 | 350,000 | ' | ' | ' | ' | ' | ' | 350,000 | ' | 350,000 | ' | 350,000 | ' | ' | ' | ' | ' | ' |
Mortgage note payable | 19,103 | 27,147 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 19,103 | 19,361 | ' | 7,786 | ' | ' |
Total | 443,103 | 536,147 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.95% | 5.95% | 5.69% | 5.69% | ' | ' |
Unamortized premium | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 988 | 1,131 | 0 | 286 | ' | ' |
Maximum borrowing capacity of revolving credit facility | ' | ' | 750,000 | ' | 750,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period of extension in maturity | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increased maximum borrowing capacity | ' | ' | 1,000,000 | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Variable base rate | ' | ' | ' | ' | 'LIBOR | ' | ' | ' | ' | ' | 'LIBOR | ' | ' | ' | ' | ' | ' | ' | ' |
Spread on variable rate (as a percent) | ' | ' | ' | ' | 1.30% | ' | ' | ' | ' | ' | 1.55% | ' | ' | ' | ' | ' | ' | ' | ' |
Facility fee (as a percent) | ' | ' | ' | ' | 0.30% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate at the end of the period (as a percent) | ' | ' | 1.45% | ' | 1.45% | ' | ' | ' | 1.70% | ' | 1.70% | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average annual interest rate (as a percent) | ' | ' | 1.45% | 1.50% | 1.45% | 1.50% | ' | ' | 1.69% | 1.75% | 1.69% | 1.76% | ' | ' | ' | ' | ' | ' | ' |
Principal repayment due until maturity | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Borrowings outstanding | ' | ' | 74,000 | ' | 74,000 | ' | 60,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum borrowings | ' | ' | ' | ' | ' | ' | ' | ' | 700,000 | ' | 700,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of real estate properties collateralized | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of buildings collateralized | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate net book value of secured properties | 20,530 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate principal amount outstanding under mortgage notes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $18,115 | ' |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair Value of Financial Instruments | ' | ' |
Mortgage note payable | $19,103 | $27,147 |
Carrying Amount | Mortgage note payable | ' | ' |
Fair Value of Financial Instruments | ' | ' |
Mortgage note payable | 19,103 | ' |
Fair Value | Mortgage note payable | ' | ' |
Fair Value of Financial Instruments | ' | ' |
Mortgage note payable | $19,660 | ' |
Shareholders_Equity_Details
Shareholders' Equity (Details) (USD $) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 1 Months Ended | 6 Months Ended | 1 Months Ended | ||||
In Thousands, except Share data, unless otherwise specified | 31-May-14 | Feb. 28, 2014 | Jun. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jul. 31, 2014 | Mar. 31, 2014 | Jun. 30, 2014 | Jul. 31, 2014 |
Subsequent event | RMR | RMR | RMR | |||||||
Distribution declared | Subsequent event | |||||||||
Sale and issuances of shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common shares issued, including shares issued under underwriters' option to purchase additional shares | ' | ' | 10,000,000 | 10,500,000 | ' | ' | ' | ' | ' | ' |
Common shares sold pursuant to option to purchase additional shares | ' | ' | 1,000,000 | ' | 1,000,000 | ' | ' | ' | ' | ' |
Common shares issued as part of the business fee payable | ' | ' | ' | ' | ' | ' | ' | 32,865 | 46,782 | 2,980 |
Price per share (in dollars per share) | ' | ' | $29 | ' | ' | ' | ' | ' | ' | ' |
Net proceeds from issuance of common shares | ' | ' | $277,373 | ' | $277,373 | ($96) | ' | ' | ' | ' |
Distributions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Distribution paid on common shares (in dollars per share) | $0.48 | $0.46 | ' | ' | ' | ' | ' | ' | ' | ' |
Quarterly dividend payable on common stock (in dollars per share) | ' | ' | ' | ' | ' | ' | $0.48 | ' | ' | ' |
Distribution to common shareholders | $23,938 | $22,922 | ' | ' | ' | ' | $28,748 | ' | ' | ' |
Related_Person_Transactions_De
Related Person Transactions (Details) (USD $) | 3 Months Ended | 6 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | 6 Months Ended | 1 Months Ended | 0 Months Ended | 6 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | 6 Months Ended | 0 Months Ended | ||||||||||
In Thousands, except Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | 9-May-14 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jul. 31, 2014 | Jul. 09, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2013 | 9-May-14 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | Jul. 09, 2014 |
item | item | RMR | RMR | RMR | RMR | RMR | RMR | RMR | RMR | RMR | RMR | CWH | CWH | AIC | AIC | AIC | AIC | AIC | AIC | AIC | AIC | GOV | |||
item | item | item | Subsequent event | Subsequent event | Amended Agreement | Property | Maximum | item | item | item | item | Maximum | Subsequent event | ||||||||||||
CWH | Building | CWH | |||||||||||||||||||||||
Related Person Transactions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of employees | 0 | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of agreements to avail management and administrative services | ' | ' | ' | ' | ' | 2 | ' | 2 | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period of prior written notice for termination of the service agreements by the related party | ' | ' | ' | ' | '120 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period of prior written notice for termination of the service agreements by the related party before amendment | ' | ' | ' | ' | '60 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of business days notice for termination of property management agreement by the related party, if the entity undergoes a change of control | ' | ' | ' | ' | '5 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period over which transition services will be provided by the related party after termination of the agreement | ' | ' | ' | ' | '120 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business management fees incurred | ' | ' | ' | ' | ' | ' | ' | $962 | $2,259 | $5,333 | $4,426 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated incentive fees recorded | ' | ' | ' | ' | ' | ' | ' | ' | ' | 427 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued under the business management agreement | ' | ' | ' | ' | ' | ' | 32,865 | ' | ' | 46,782 | ' | 2,980 | ' | 13,917 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Management fee payable in common shares (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property management and construction supervision fees incurred | ' | ' | ' | ' | ' | ' | ' | 1,577 | 1,311 | 3,067 | 2,569 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ownership interest previously held (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common shares owned | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 22,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of outstanding common shares owned | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 36.70% | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% |
Number of properties contributed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 29 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of Buildings Leasable Lands and Easements Contributed to Reporting Entity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 251 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of common shares issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 22,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of other companies owning outstanding shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4 | 4 | ' | 4 | ' | ' | ' | ' |
Number of shares of common stock sold by shareholder of the entity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 21,500,000 |
Percentage of interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 14.30% | 14.30% | 14.30% | ' | 14.30% | ' | ' | 20.00% | ' |
Coverage of property insurance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' |
Property insurance program term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' |
Amount invested | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,160 | ' | ' | ' | ' |
Premium paid for combined directors' and officers' liability insurance policy | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 434 | ' | ' | ' | ' | ' | ' | ' |
Investment at carrying value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,801 | 6,801 | ' | 6,801 | ' | 5,913 | ' | ' |
Recognized income (loss) related to investment | 118 | 79 | 21 | 155 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 118 | 79 | 21 | 155 | ' | ' | ' |
Aggregate value of shares purchased under the shareholders agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $825 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares purchased under the shareholders agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,857 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of other remaining shareholders | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of other companies providing management services | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Pro_Forma_Information_Unaudite2
Pro Forma Information (Unaudited) (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Jun. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 |
Property | Property | Property | |||
Building | Building | Building | |||
Pro Forma Information | ' | ' | ' | ' | ' |
Number of properties acquired | 2 | ' | 2 | ' | 7 |
Number of buildings acquired | 2 | ' | 2 | ' | 11 |
Purchase price excluding closing costs | $207,860 | ' | $207,860 | ' | $384,820 |
Number of common shares sold in public offering | 10,000,000 | 10,500,000 | ' | ' | ' |
Common shares sold pursuant to option to purchase additional shares | 1,000,000 | ' | 1,000,000 | ' | ' |
Price per share (in dollars per share) | $29 | $28.25 | $29 | ' | ' |
Pro forma results of operations | ' | ' | ' | ' | ' |
Total revenues | ' | ' | 114,242 | 104,500 | ' |
Net income | ' | ' | 58,963 | 51,436 | ' |
Net income per share (in dollars per share) | ' | ' | $1.13 | $1.03 | ' |
Revenue | ' | ' | 25,426 | ' | ' |
Operating income | ' | ' | $21,143 | ' | ' |