Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 25, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | Select Income REIT | |
Entity Central Index Key | 1,537,667 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 89,374,029 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Real estate properties: | ||
Land | $ 1,036,425 | $ 1,036,425 |
Buildings and improvements | 3,084,054 | 3,083,243 |
Real estate properties, gross | 4,120,479 | 4,119,668 |
Accumulated depreciation | (184,180) | (164,779) |
Real estate properties, net | 3,936,299 | 3,954,889 |
Acquired real estate leases, net | 550,664 | 566,195 |
Cash and cash equivalents | 31,294 | 17,876 |
Restricted cash | 44 | 1,171 |
Rents receivable, including straight line rents of $98,567 and $92,264, respectively, net of allowance for doubtful accounts of $566 and $464, respectively | 106,741 | 99,307 |
Deferred leasing costs, net | 10,053 | 7,221 |
Other assets, net | 57,715 | 37,686 |
Total assets | 4,692,810 | 4,684,345 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||
Unsecured revolving credit facility | 328,000 | 303,000 |
Unsecured term loan, net | 348,000 | 347,876 |
Senior unsecured notes, net | 1,427,169 | 1,426,025 |
Mortgage notes payable, net | 286,516 | 286,706 |
Accounts payable and other liabilities | 86,123 | 105,403 |
Assumed real estate lease obligations, net | 84,255 | 86,495 |
Rents collected in advance | 15,439 | 16,295 |
Security deposits | 11,838 | 11,845 |
Due to related persons | 4,393 | 3,740 |
Total liabilities | $ 2,591,733 | $ 2,587,385 |
Commitments and contingencies | ||
Shareholders' equity: | ||
Common shares of beneficial interest, $.01 par value: 125,000,000 shares authorized; 89,374,029 shares issued and outstanding | $ 894 | $ 894 |
Additional paid in capital | 2,178,531 | 2,178,477 |
Cumulative net income | 357,765 | 324,986 |
Cumulative other comprehensive loss | (3,616) | (19,587) |
Cumulative common distributions | (432,497) | (387,810) |
Total shareholders' equity | 2,101,077 | 2,096,960 |
Total liabilities and shareholders' equity | $ 4,692,810 | $ 4,684,345 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Rents receivable, including straight line rents (in dollars) | $ 98,567 | $ 92,264 |
Rents receivable, allowance for doubtful accounts (in dollars) | $ 566 | $ 464 |
Common shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common shares, shares authorized | 125,000,000 | 125,000,000 |
Common shares, shares issued | 89,374,029 | 89,374,029 |
Common shares, shares outstanding | 89,374,029 | 89,374,029 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
REVENUES: | ||
Rental income | $ 97,860 | $ 80,478 |
Tenant reimbursements and other income | 19,372 | 13,937 |
Total revenues | 117,232 | 94,415 |
EXPENSES: | ||
Real estate taxes | 10,288 | 8,357 |
Other operating expenses | 12,958 | 9,007 |
Depreciation and amortization | 33,469 | 24,719 |
Acquisition related costs | 58 | 20,539 |
General and administrative | 6,976 | 6,792 |
Total expenses | 63,749 | 69,414 |
Operating income | 53,483 | 25,001 |
Interest expense (including net amortization of debt premiums and discounts and debt issuance costs of $1,374 and $1,171, respectively) | (20,609) | (14,179) |
Loss on early extinguishment of debt | (6,845) | |
Income before income tax expense and equity in earnings of an investee | 32,874 | 3,977 |
Income tax expense | (139) | (31) |
Equity in earnings of an investee | 77 | 72 |
Net income | 32,812 | 4,018 |
Net income allocated to noncontrolling interest | (33) | (41) |
Net income attributed to SIR | 32,779 | 3,977 |
Other comprehensive income (loss): | ||
Unrealized gain on investment in available for sale securities | 16,821 | |
Unrealized (loss) gain on interest rate swap | (902) | 218 |
Equity in unrealized gain of an investee | 52 | 45 |
Other comprehensive income | 15,971 | 263 |
Comprehensive income | 48,783 | 4,281 |
Comprehensive income allocated to noncontrolling interest | (33) | (41) |
Comprehensive income attributed to SIR | $ 48,750 | $ 4,240 |
Weighted average common shares outstanding, basic (in shares) | 89,286 | 79,489 |
Weighted average common shares outstanding, diluted (in shares) | 89,295 | 79,498 |
Basic and diluted net income attributed to SIR per common share (in dollars per share) | $ 0.37 | $ 0.05 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||
Interest Expense, (including net amortization of debt premiums and discounts and debt issuance costs) | $ 1,374 | $ 1,171 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 32,812 | $ 4,018 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 19,458 | 14,940 |
Net amortization of debt premiums and discounts and debt issuance costs | 1,374 | 1,171 |
Amortization of acquired real estate leases and assumed real estate lease obligations | 13,292 | 8,754 |
Amortization of deferred leasing costs | 321 | 239 |
Provision for losses on rents receivable | 103 | 99 |
Straight line rental income | (6,302) | (5,827) |
Loss on early extinguishment of debt | 6,845 | |
Other non-cash expenses, net | (285) | 627 |
Equity in earnings of an investee | (77) | (72) |
Change in assets and liabilities: | ||
Restricted cash | 1,127 | (309) |
Rents receivable | (1,235) | (974) |
Deferred leasing costs | (3,411) | (204) |
Other assets | (3,428) | (4,772) |
Accounts payable and other liabilities | (15,001) | 8,359 |
Rents collected in advance | (856) | (4,155) |
Security deposits | (7) | (74) |
Due to related persons | 653 | 10,565 |
Net cash provided by operating activities | 38,538 | 39,230 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Real estate acquisitions | (1,962,016) | |
Real estate improvements | (1,395) | (19) |
Proceeds from sale of properties, net | 509,045 | |
Net cash used in investing activities | (1,395) | (1,452,990) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of senior unsecured notes, net | 1,433,694 | |
Proceeds from borrowings | 40,000 | 1,550,000 |
Payments of borrowings | (15,064) | (1,486,064) |
Debt issuance costs | (25,654) | |
Distributions to common shareholders | (44,687) | (37,735) |
Purchase of noncontrolling interest | (3,908) | |
Distributions to noncontrolling interest | (66) | (70) |
Net cash (used in) provided by financing activities | (23,725) | 1,434,171 |
Increase in cash and cash equivalents | 13,418 | 20,411 |
Cash and cash equivalents at beginning of period | 17,876 | 13,504 |
Cash and cash equivalents at end of period | 31,294 | 33,915 |
SUPPLEMENTAL DISCLOSURE: | ||
Interest paid | 32,821 | 3,601 |
Income taxes paid | $ (83) | $ (250) |
NON-CASH INVESTING ACTIVITIES: | ||
Real estate acquired by issuance of shares | (716,666) | |
Real estate acquired by assumption of mortgage notes payable | $ (297,698) | |
Real estate sold by assumption of mortgage notes payable | 29,955 | |
Working capital assumed | (23,433) | |
NON-CASH FINANCING ACTIVITIES: | ||
Assumption of mortgage notes payable | 297,698 | |
Mortgage notes payable assumed in real estate sale | (29,955) | |
Issuance of SIR common shares | $ 716,666 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2016 | |
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 consolidated financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2015, 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 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. Reclassifications have been made to the prior years’ condensed consolidated financial statements to conform to the current year’s presentation. 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, useful lives of fixed assets and the assessments of the carrying values and impairments of long lived assets. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2016 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | Note 2. Recent Accounting Pronouncements On January 1, 2016, we adopted the Financial Accounting Standards Board, or FASB, Accounting Standards Update, or ASU, No. 2015-02, Consolidation . Among other things, this update changed how an entity determines the primary beneficiary of a variable interest entity. The implementation of this update did not have an impact in our condensed consolidated financial statements. On January 1, 2016, we adopted FASB ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs , which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the associated debt liability, and ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements – Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting , which addresses the presentation of debt issuance costs related to line of credit arrangements. The implementation of these updates resulted in the reclassification of certain of our capitalized debt issuance costs as an offset to the associated debt liability in our condensed consolidated balance sheets. The classification of capitalized debt issuance costs related to our unsecured revolving credit facility remains unchanged in accordance with ASU No. 2015-15. As of December 31, 2015, debt issuance costs related to our unsecured term loan, senior unsecured notes and mortgage notes payable of $2,124 , $9,607 and $41, respectively, were reclassified from assets to an offset to the associated debt liability in our condensed consolidated balance sheets. On January 1, 2016, we adopted FASB ASU No. 2015-16, Simplifying the Accounting for Measurement-Period Adjustments , which eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. Instead, acquirers must recognize measurement-period adjustments during the period in which they determine the amounts, including the effect on earnings of any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date. The implementation of this update did not have an impact in our condensed consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities , which changes how entities measure certain equity investments and present changes in the fair value of financial liabilities measured under the fair value option that are attributable to their own credit. This update is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted subject to certain conditions. Currently, changes in fair value of these investments are recorded through other comprehensive income. Under this ASU, these changes will be recorded through earnings. We are continuing to evaluate this guidance, but we expect the implementation of this guidance will affect the accounting for changes in the fair value of available for sale equity investments we hold in our condensed consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02 , Leases , which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). ASU No. 2016-02 requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. ASU No. 2016-02 is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. We are currently assessing the potential impact the adoption of ASU No. 2016-02 will have in our condensed consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation , which identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. ASU No. 2016-09 is effective for reporting periods beginning after December 31, 2016. We are currently assessing the potential impact that the adoption of ASU No. 2016-09 will have in our condensed consolidated financial statements. |
Real Estate Properties
Real Estate Properties | 3 Months Ended |
Mar. 31, 2016 | |
Real Estate Properties | |
Real Estate Properties | Note 3. Real Estate Properties As of March 31 , 2016, we owned 119 properties ( 360 buildings, leasable land parcels and easements) with approximately 44,706,000 rentable square feet. On February 29, 2016, we acquired the 11% of a joint venture arrangement that we did not previously own which joint venture owned an office building containing approximately 344,000 square feet located in Duluth, GA. We paid $3,908 for this 11% interest. Following this acquisition, we own 100% of this office building. See Note 8 for more information regarding this joint venture arrangement, our acquisition of the 11% interest and certain resulting accounting. 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 our 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 lands or to undertake this environmental cleanup. 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 March 31, 2016 and December 31, 2015, accrued environmental remediation costs totaling $8,160 were included in accounts payable and other liabilities 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 comprehensive income. |
Tenant Concentration and Segmen
Tenant Concentration and Segment Information | 3 Months Ended |
Mar. 31, 2016 | |
Tenant Concentration and Segment Information | |
Tenant Concentration and Segment Information | Note 4. Tenant Concentration and Segment Information 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 land parcel as a building or land parcel with at least 90% of its rentable square feet leased to one tenant. Our buildings and lands are primarily leased to single tenants; however, we also own some multi-tenant buildings on the island of Oahu, HI, and one mainland multi-tenant office building. For the three months ended March 3 1 , 2016 and 2015, approximately 19.9% and 24.5% , respectively, of total revenues was from 11 properties ( 229 buildings, leasable land parcels and easements) with a combined approximately 17,778,000 rentable square feet that we own on Oahu, HI. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 3 Months Ended |
Mar. 31, 2016 | |
Derivatives and Hedging Activities | |
Derivatives and Hedging Activities | Note 5. Derivatives and Hedging Activities We are exposed to certain risks relating to our ongoing business operations, including the effect of changes in interest rates. We use derivative instruments to manage only a part of our interest rate risk. We have an interest rate swap agreement to manage our interest rate risk exposure on a $41,000 mortgage note due 2020, with interest payable at a rate equal to a spread over LIBOR. We assumed this mortgage note and related interest rate swap agreement in connection with our acquisition of Cole Corporate Income Trust, Inc., or CCIT, in January 2015. We record all derivatives on the balance sheet at fair value. The following table summarizes the terms of our outstanding interest rate swap agreement, which we designate as a cash flow hedge: Fair Value Notional of Liability Amount as of Interest Effective Maturity as of Balance Sheet Location March 31, 2016 Rate (1) Date Date March 31, 2016 Interest Rate Swap Accounts Payable and Other Liabilities $ 1/29/2015 8/3/2020 $ (1) The interest rate consists of the underlying index swapped to a fixed rate and the applicable interest rate spread . The table below presents the effects of our interest rate derivative in our condensed consolidated statements of comprehensive income for the three months ended March 31 , 2016 and 2015: Three Months Ended March 31, 2016 2015 Amount of gain (loss) recognized in cumulative other comprehensive income (loss) (effective portion) $ $ Amount of gain (loss) reclassified from cumulative other comprehensive income (loss) into interest expense (effective portion) $ $ We may enter into additional interest rate swaps or hedge agreements to manage some of our additional interest rate risk associated with our other floating rate borrowings. |
Indebtedness
Indebtedness | 3 Months Ended |
Mar. 31, 2016 | |
Indebtedness | |
Indebtedness | Note 6. Indebtedness Our principal debt obligations at March 31, 2016 were: (1) our $328,000 of outstanding borrowings under our $750,000 unsecured revolving credit facility; (2) our $350,000 unsecured term loan; (3) an aggregate outstanding principal amount of $1,450,000 of public issuances of senior unsecured notes; and (4) an aggregate outstanding principal amount of $285,433 of mortgage notes. Our $750,000 unsecured revolving credit facility and our $350,000 unsecured term loan are governed by a credit agreement with a syndicate of institutional lenders. This credit agreement includes a feature under which the maximum aggregate borrowing availability under the unsecured revolving credit facility and the unsecured term loan may be increased to up to $2,200,000 on a combined basis under certain circumstances. Our $750,000 unsecured revolving credit facility has a maturity date of March 29, 2019, interest payable on borrowings of LIBOR plus 105 basis points and a facility fee of 20 basis points per annum, based on the total amount of lending commitments. Both the interest rate premium and the facility fee for the unsecured revolving credit facility are subject to adjustment based on changes to our credit ratings. Upon the payment of an extension fee and meeting other conditions, we have the option to extend the maturity date of the unsecured revolving credit facility to March 29, 2020. As of both March 31, 2016 and December 31, 2015, the annual interest rate payable on borrowings under our unsecured revolving credit facility was 1.44% . The weighted average annual interest rate for borrowings under our unsecured revolving credit facility was 1.44% and 1.28% for the three months ended March 31, 2016 and 2015, respectively. We can borrow, repay and reborrow funds available under our unsecured revolving credit facility until maturity, and no principal repayment is due until maturity. As of March 31, 2016 and April 25, 2016, we had $328,000 and $318,000 , respectively, outstanding under our unsecured revolving credit facility. Our $350,000 unsecured term loan has a maturity date of March 31, 2020 and interest payable on the amount outstanding of LIBOR plus 115 basis points. The interest rate premium for our unsecured term loan is subject to adjustment based on changes to our credit ratings. As of March 31, 2016 and December 31, 2015, the annual interest rate payable for the amount outstanding under our unsecured term loan was 1.59% and 1.39% , respectively. The weighted average annual interest rate for the amount outstanding under our unsecured term loan was 1.58% and 1.35% for the three months ended March 31, 2016 and 2015, respectively. Our credit agreement and our senior unsecured notes indenture and its supplement provide for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default, such as, in the case of our credit agreement, a change of control of us, which includes The RMR Group LLC, or RMR LLC, ceasing to act as our business manager and property manager. Our senior unsecured notes indenture and its supplement and our credit agreement also contain a number of covenants, including covenants that restrict our ability to incur debts or to make distributions under certain circumstances, and generally require us to maintain certain financial ratios. We believe we were in compliance with the terms and conditions of the respective covenants under our senior unsecured notes indenture and its supplement and our credit agreement at March 31, 2016. At March 31, 2016 , nine of our properties ( 12 buildings) with a net book value of $455,388 had secured mortgage notes we assumed in connection with our acquisition of those properties. The aggregate principal amount outstanding under these mortgage notes as of March 31, 2016 was $285,433 . These mortgage notes are non-recourse, subject to certain limited exceptions, and do not contain any material financial covenants. |
Fair Value of Assets and Liabil
Fair Value of Assets and Liabilities | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value of Assets and Liabilities | |
Fair Value of Assets and Liabilities | Note 7. Fair Value of Assets and Liabilities The table below presents certain of our assets and liabilities measured at fair value at March 31, 2016, categorized by the level of inputs, as defined in the fair value hierarchy under GAAP, used in the valuation of each asset and liability: Fair Value at Reporting Date Using Quoted Prices in Significant Active Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs Description Total (Level 1) (Level 2) (Level 3) Recurring Fair Value Measurements: Assets: Investment in RMR Inc. (1) $ $ $ — $ — Liabilities: Interest rate swap (2) $ $ — $ $ — (1) Our 1,586,836 shares of class A common stock of The RMR Group Inc., or RMR Inc., which are included in other assets in our condensed consolidated balance sheets, are reported at fair value which is based on quoted market prices (Level 1 inputs). Our historical cost basis for these shares is $42,686 . The unrealized loss of $2,999 for these shares as of March 31, 2016 is included in cumulative other comprehensive loss in our condensed consolidated balance sheets. We evaluated the decline in the fair value of the RMR Inc. shares and determined that based on the severity and duration of the decline, and our ability and intent to hold the investment for a reasonable period of time sufficient for a forecasted recovery of fair value, we do not consider the investment to be other-than-temporarily impaired at March 31, 2016. (2) As discussed in Note 5, we have an interest rate swap agreement on a $41,000 mortgage note. This interest rate swap agreement is carried at fair value and is included in accounts payable and other liabilities in our condensed consolidated balance sheets and is valued using Level 2 inputs. The fair value of this instrument is determined using interest rate pricing models. Considerable judgment is necessary to develop estimated fair values of financial assets and liabilities. Accordingly, the estimate presented in the table above is not necessarily indicative of the amount for which we could be liable upon extinguishment of the liability. In addition to the asset and liability described in the table above, our financial instruments include cash and cash equivalents, restricted cash, rents receivable, an unsecured revolving credit facility, an unsecured term loan, senior unsecured notes, mortgage notes payable, accounts payable, rents collected in advance, security deposits and amounts due to related persons. At March 31 , 2016 and December 31, 2015, 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: At March 31, 2016 At December 31, 2015 Carrying Estimated Carrying Estimated Amount (1) Fair Value Amount (1) Fair Value Senior unsecured notes, due 2018 at 2.85% $ $ $ $ Senior unsecured notes, due 2020 at 3.60% $ $ $ $ Senior unsecured notes, due 2022 at 4.15% $ $ $ $ Senior unsecured notes, due 2025 at 4.50% $ $ $ $ Mortgage notes payable $ $ $ $ (1) Includes unamortized debt issuance costs, premiums and discounts. We estimate the fair value of our senior unsecured notes using an average of the bid and ask prices of the notes as of the measurement date (Level 2 inputs). We estimate the fair value of our mortgage notes payable using discounted cash flow analyses and currently prevailing market rates as of the measurement date (Level 3 inputs). Because Level 3 inputs are unobservable, our estimated fair value may differ materially from the actual fair value. |
Noncontrolling Interest
Noncontrolling Interest | 3 Months Ended |
Mar. 31, 2016 | |
Noncontrolling Interest. | |
Noncontrolling Interest | Note 8. Noncontrolling Interest An office building containing approximately 344,000 square feet located in Duluth, GA was owned pursuant to a joint venture arrangement. On February 29, 2016, we acquired the 11% ownership interest of our joint venture partner for $3,908 . As a result, for periods from and after that date, there is no longer a noncontrolling interest with respect to this office building. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2016 | |
Shareholders' Equity | |
Shareholders' Equity | Note 9. Shareholders’ Equity On February 23, 2016, we paid a regular quarterly distribution of $0.50 per common share, or $44,687 , to shareholders of record on January 22, 2016. On April 13, 2016, we declared a regular quarterly distribution of $0.50 per common share, or approximately $44,700 , to shareholders of record on April 25, 2016. We expect to pay this distribution on or about May 19, 2016. |
Cumulative Other Comprehensive
Cumulative Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2016 | |
Cumulative Other Comprehensive Income (Loss) | |
Cumulative Other Comprehensive Income (Loss) | Note 10. Cumulative Other Comprehensive Income (Loss) The following table presents changes in the amounts we recognized in cumulative other comprehensive income (loss) by component for the three months ended March 31, 2016: Unrealized Gain Unrealized Equity in (Loss) on Investment Gain (Loss) Unrealized Gain in Available for on Derivative (Loss) of an Sale Securities Instruments (1) Investee (2) Total Balance at December 31, 2015 $ $ $ $ Other comprehensive income (loss) before reclassifications Amounts reclassified from cumulative other comprehensive income (loss) to net income — Net current period other comprehensive income (loss) Balance at March 31, 2016 $ $ $ $ (1) Amounts reclassified from cumulative other comprehensive income (loss) are included in interest expense in our condensed consolidated statements of comprehensive income. (2) Amounts reclassified from cumulative other comprehensive income (loss) are included in equity in earnings of an investee in our condensed consolidated statements of comprehensive income. |
Weighted Average Common Shares
Weighted Average Common Shares | 3 Months Ended |
Mar. 31, 2016 | |
Weighted Average Common Shares | |
Weighted Average Common Shares | Note 11. Weighted Average Common Shares The following table provides a reconciliation of the weighted average number of common shares used in the calculation of basic and diluted earnings per share (in thousands): Three Months Ended March 31, 2016 2015 Weighted average common shares for basic earnings per share Effect of dilutive securities: unvested share awards Weighted average common shares for diluted earnings per share |
Related Person Transactions
Related Person Transactions | 3 Months Ended |
Mar. 31, 2016 | |
Related Person Transactions | |
Related Person Transactions | Note 12. Related Person Transactions We have relationships and historical and continuing transactions with RMR LLC and others related to it, including other companies to which RMR LLC provides management services and which have trustees, directors and officers who are also trustees or officers of us. These relationships include Government Properties Income Trust, or GOV, our largest shareholder, which owned approximately 27.9% of our outstanding common shares at March 31, 2016. For further information about these and other such relationships and certain other related person transactions, please refer to our Annual Report. RMR LLC : Pursuant to our business management agreement with RMR LLC, we recognized net business management fees of $5,007 and $4,646 for the three months ended March 31, 2016 and 2015, respectively. No incentive fees were estimated to be payable to RMR LLC for the three months ended March 31, 2016 and 2015, respectively. The net business management fees we recognized for the 2016 and 2015 periods are included in general and administrative expenses in our condensed consolidated statements of comprehensive income. In accordance with the terms of our business management agreement, we issued 18,656 of our common shares to RMR LLC for the three months ended March 31, 2015 as payment for a part of the business management fee we recognized for that period. Beginning June 2015, all management fees under our business management agreement are paid in cash. Pursuant to our property management agreement with RMR LLC, we recognized aggregate net property management and construction supervision fees of $3,114 and $2,625 for the three months ended March 31, 2016 and 2015, respectively. These amounts are included in other operating expenses or have been capitalized, as appropriate, in our condensed consolidated financial statements. We are generally responsible for all of our operating expenses, including certain expenses incurred by RMR LLC on our behalf. Our property level operating expenses are generally incorporated into rents charged to our tenants, including certain payroll and related costs incurred by RMR LLC. We reimbursed RMR LLC $1,621 and $880 for property management related expenses for the three months ended March 31, 2016 and 2015, respectively; these amounts are included in other operating expenses in our condensed consolidated statements of comprehensive income. We have historically awarded share grants to certain RMR LLC employees under our equity compensation plan. In addition, under our business management agreement we reimburse RMR LLC for our allocable costs for internal audit services. The amounts recognized as expense for share grants to RMR LLC employees and internal audit costs were $339 and $235 for the three months ended March 31, 2016 and 2015, respectively; these amounts are included in general and administrative expenses in our condensed consolidated statements of comprehensive income. We lease office space to RMR LLC in one of our properties located in Seattle, WA. Pursuant to our lease agreement with RMR LLC, we recognized rental income from RMR LLC for leased office space of approximately $5 for each of the three months ended March 31, 2016 and 2015, respectively. RMR Inc. : In June 2015, we and three other real estate investment trusts, or REITs, to which RMR LLC provides management services, including GOV, or collectively, the Other REITs, participated in a transaction whereby we and the Other REITs each acquired shares of class A common stock of RMR Inc. and simultaneously amended our business and property management agreements with RMR LLC to, among other things, provide for continuing 20 year terms. RMR Inc. is the managing member of RMR LLC and RMR LLC is a subsidiary of RMR Inc. The controlling shareholder of RMR Inc., ABP Trust, is owned by our Managing Trustees. In connection with our acquisition of shares of class A common stock of RMR Inc., we recorded a liability for the amount by which the estimated fair value of these shares exceeded the price we paid for these shares; this liability is included in accounts payable and other liabilities in our condensed consolidated balance sheets. We are amortizing this liability ratably through December 31, 2035 as a reduction to our management fees expense. For the three months ended March 31, 2016, we amortized $558 of this liability, which amount is reflected in the net business management and property management fee amounts for that period referenced above. As of March 31, 2016, the unamortized amount of this liability was $44,072 . As of March 31, 2016, we own 1,586,836 shares of class A common stock of RMR Inc. We receive dividends on these shares as declared and paid by RMR Inc. to all holders of shares of RMR Inc. class A common stock. We did not receive any dividends on these shares during the three months ended March 31, 2016. However, on April 13, 2016, RMR Inc. declared a dividend of $0.2993 on its shares of class A common stock payable to shareholders of record on April 25, 2016. RMR Inc. has indicated that this dividend represents a regular quarterly dividend of $0.25 per share of class A common stock for the quarter ended March 31, 2016 plus a pro rata dividend of $0.0493 per share of class A common stock for the period from December 14, 2015 to December 31, 2015. RMR Inc. has indicated that it expects to pay this dividend on or about May 19, 2016. AIC : We and six other companies to which RMR LLC provides management services each own in equal amounts Affiliates Insurance Company, or AIC. We and the other AIC shareholders participate in a combined property insurance program arranged and reinsured in part by AIC. As of March 31, 2016, our investment in AIC had a carrying value of $6,956; this amount is included in other assets in our condensed consolidated balance sheets. We recognized income of $77 and $72 related to our investment in AIC for the three months ended March 31, 2016 and 2015, respectively. Our other comprehensive income includes our proportional share of unrealized gains on securities which are owned by AIC of $52 and $45 for the three months ended March 31, 2016 and 2015, respectively. |
Derivatives and Hedging Activ19
Derivatives and Hedging Activities (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Derivatives and Hedging Activities | |
Summary of interest rate swap derivatives | Fair Value Notional of Liability Amount as of Interest Effective Maturity as of Balance Sheet Location March 31, 2016 Rate (1) Date Date March 31, 2016 Interest Rate Swap Accounts Payable and Other Liabilities $ 1/29/2015 8/3/2020 $ The interest rate consists of the underlying index swapped to a fixed rate and the applicable interest rate spread |
Schedule of effects on consolidated statements of income and comprehensive income | Three Months Ended March 31, 2016 2015 Amount of gain (loss) recognized in cumulative other comprehensive income (loss) (effective portion) $ $ Amount of gain (loss) reclassified from cumulative other comprehensive income (loss) into interest expense (effective portion) $ $ |
Fair Value of Assets and Liab20
Fair Value of Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value of Assets and Liabilities | |
Schedule fair value of assets and liabilities measurement on recurring basis | Fair Value at Reporting Date Using Quoted Prices in Significant Active Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs Description Total (Level 1) (Level 2) (Level 3) Recurring Fair Value Measurements: Assets: Investment in RMR Inc. (1) $ $ $ — $ — Liabilities: Interest rate swap (2) $ $ — $ $ — (1) Our 1,586,836 shares of class A common stock of The RMR Group Inc., or RMR Inc., which are included in other assets in our condensed consolidated balance sheets, are reported at fair value which is based on quoted market prices (Level 1 inputs). Our historical cost basis for these shares is $42,686 . The unrealized loss of $2,999 for these shares as of March 31, 2016 is included in cumulative other comprehensive loss in our condensed consolidated balance sheets. We evaluated the decline in the fair value of the RMR Inc. shares and determined that based on the severity and duration of the decline, and our ability and intent to hold the investment for a reasonable period of time sufficient for a forecasted recovery of fair value, we do not consider the investment to be other-than-temporarily impaired at March 31, 2016. (2) As discussed in Note 5, we have an interest rate swap agreement on a $41,000 mortgage note. This interest rate swap agreement is carried at fair value and is included in accounts payable and other liabilities in our condensed consolidated balance sheets and is valued using Level 2 inputs. The fair value of this instrument is determined using interest rate pricing models. Considerable judgment is necessary to develop estimated fair values of financial assets and liabilities. Accordingly, the estimate presented in the table above is not necessarily indicative of the amount for which we could be liable upon extinguishment of the liability. |
Schedule of carrying value and the estimated fair market value of mortgage notes payable | At March 31, 2016 At December 31, 2015 Carrying Estimated Carrying Estimated Amount (1) Fair Value Amount (1) Fair Value Senior unsecured notes, due 2018 at 2.85% $ $ $ $ Senior unsecured notes, due 2020 at 3.60% $ $ $ $ Senior unsecured notes, due 2022 at 4.15% $ $ $ $ Senior unsecured notes, due 2025 at 4.50% $ $ $ $ Mortgage notes payable $ $ $ $ (1) Includes unamortized debt issuance costs, premiums and discounts. |
Cumulative Other Comprehensiv21
Cumulative Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Cumulative Other Comprehensive Income (Loss) | |
Cumulative Other Comprehensive Income (Loss) | Unrealized Gain Unrealized Equity in (Loss) on Investment Gain (Loss) Unrealized Gain in Available for on Derivative (Loss) of an Sale Securities Instruments (1) Investee (2) Total Balance at December 31, 2015 $ $ $ $ Other comprehensive income (loss) before reclassifications Amounts reclassified from cumulative other comprehensive income (loss) to net income — Net current period other comprehensive income (loss) Balance at March 31, 2016 $ $ $ $ (1) Amounts reclassified from cumulative other comprehensive income (loss) are included in interest expense in our condensed consolidated statements of comprehensive income. Amounts reclassified from cumulative other comprehensive income (loss) are included in equity in earnings of an investee in our condensed consolidated statements of comprehensive income. |
Weighted Average Common Shares
Weighted Average Common Shares (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Weighted Average Common Shares | |
Schedule of weighted average common shares, basic and diluted | Three Months Ended March 31, 2016 2015 Weighted average common shares for basic earnings per share Effect of dilutive securities: unvested share awards Weighted average common shares for diluted earnings per share |
Recent Accounting Pronounceme23
Recent Accounting Pronouncements (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Term loan, due in 2020 | Accounting Standards Update 2015-03 | |
New Accounting Pronouncements or Change in Accounting Principle | |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ 2,124 |
Mortgage note payable | Accounting Standards Update 2015-03 | |
New Accounting Pronouncements or Change in Accounting Principle | |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | 41 |
Senior unsecured notes | |
New Accounting Pronouncements or Change in Accounting Principle | |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ 9,607 |
Real Estate Properties (Details
Real Estate Properties (Details) $ in Thousands | Feb. 29, 2016USD ($)ft² | Mar. 31, 2016USD ($)ft²propertybuilding | Dec. 31, 2015USD ($) |
Real Estate Properties | |||
Number of properties owned | property | 119 | ||
Number of buildings, leasable land parcels easements | building | 360 | ||
Net rentable area | 44,706,000 | ||
Accrued environmental remediation costs | $ | $ 8,160 | $ 8,160 | |
Duluth, GA | |||
Real Estate Properties | |||
Ownership percentage acquired | 11.00% | ||
Square Feet | 344,000 | ||
Purchase price allocation of real estate properties acquired | |||
Aggregate purchase price | $ | $ 3,908 | ||
Percentage of interest in joint venture | 100.00% | ||
Oahu, HI | |||
Real Estate Properties | |||
Net rentable area | 17,778,000 | ||
Purchase price allocation of real estate properties acquired | |||
Number of properties acquired | property | 11 | ||
Number of buildings acquired | building | 229 |
Tenant Concentration and Segm25
Tenant Concentration and Segment Information (Details) | 3 Months Ended | |
Mar. 31, 2016ft²itempropertybuilding | Mar. 31, 2015 | |
Number of business segments | item | 1 | |
Minimum percentage of rentable square feet 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 | item | 1 | |
Net rentable area | ft² | 44,706,000 | |
Oahu, HI | ||
Percentage of revenues | 19.90% | 24.50% |
Number of properties acquired | property | 11 | |
Number of buildings acquired | building | 229 | |
Net rentable area | ft² | 17,778,000 |
Derivatives and Hedging Activ26
Derivatives and Hedging Activities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Designated Cash Flow Hedge RollForward | ||
Amount of gain (loss) recognized in cumulative other comprehensive income (loss) (effective portion) | $ (996) | $ 356 |
Amount of gain (loss) reclassified from cumulative other comprehensive income (loss) into interest expense (effective portion) | 94 | (138) |
Unrealized gain on derivative instrument | (902) | $ 218 |
Interest Rate Swap | Cash Flow Hedging | Designated as Hedging Instrument | Cole Corporate Income Trust, Inc. (CCIT) | ||
Derivative Instruments, Gain (Loss) | ||
Derivative, outstanding notional amount | $ 41,000 | |
Hedge rate (as a percent) | 4.16% | |
Derivative, effective date | Jan. 29, 2015 | |
Derivative, maturity date | Aug. 3, 2020 | |
Cash flow hedge derivative instrument liabilities at fair value | $ 2,094 |
Indebtedness (Details)
Indebtedness (Details) $ in Thousands | Jan. 09, 2015 | Mar. 31, 2016USD ($)propertybuilding | Mar. 31, 2015USD ($) | Apr. 25, 2016USD ($) | Dec. 31, 2015USD ($) |
Indebtedness | |||||
Unsecured revolving credit facility | $ 328,000 | $ 303,000 | |||
Unsecured Term Loan, net | 348,000 | 347,876 | |||
Senior unsecured notes, net | 1,427,169 | 1,426,025 | |||
Mortgage notes payable, net | 286,516 | $ 286,706 | |||
Maximum borrowing capacity of revolving credit facility | $ 2,200,000 | ||||
Number of real estate properties collateralized | property | 9 | ||||
Number of buildings collateralized | building | 12 | ||||
Loss on early extinguishment of debt | $ 6,845 | ||||
Aggregate net book value of secured properties | $ 455,388 | ||||
Revolving credit facility, due in 2019 | LIBOR | |||||
Indebtedness | |||||
Unsecured revolving credit facility | $ 328,000 | ||||
Spread on variable rate (as a percent) | 1.05% | ||||
Facility fee (as a percent) | 0.20% | ||||
Interest rate at the end of the period (as a percent) | 1.44% | 1.44% | |||
Weighted average annual interest rate (as a percent) | 1.44% | 1.28% | |||
Principal repayment due until maturity | $ 0 | ||||
Revolving credit facility amount outstanding | $ 318,000 | ||||
Term loan, due in 2020 | LIBOR | |||||
Indebtedness | |||||
Unsecured Term Loan, net | $ 350,000 | ||||
Spread on variable rate (as a percent) | 1.15% | ||||
Interest rate at the end of the period (as a percent) | 1.59% | 1.39% | |||
Weighted average annual interest rate (as a percent) | 1.58% | 1.35% | |||
Mortgage note payable | |||||
Indebtedness | |||||
Assumed mortgage principal | $ (285,433) | ||||
Senior unsecured bridge loan facility member | |||||
Indebtedness | |||||
Unsecured revolving credit facility | 750,000 | ||||
Senior unsecured notes | |||||
Indebtedness | |||||
Aggregate principal amount | $ 1,450,000 |
Fair Value of Assets and Liab28
Fair Value of Assets and Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Unrealized gain on investment in available for sale securities | $ 16,821 | |
Senior unsecured notes, net | 1,427,169 | $ 1,426,025 |
Mortgage notes payable, net | $ 286,516 | 286,706 |
Class A common shares | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Shares holding | 1,586,836 | |
Historical cost | $ 42,686 | |
Unrealized gain on investment in available for sale securities | 2,999 | |
Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Mortgage notes payable, net | 246,283 | 246,473 |
Estimated Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Investment in RMR Inc. | 39,687 | |
Interest rate swap | (2,094) | |
Mortgage notes payable, net | 247,643 | 242,435 |
Estimated Fair Value | Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Investment in RMR Inc. | 39,687 | |
Estimated Fair Value | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Interest rate swap | (2,094) | |
Cole Corporate Income Trust, Inc. (CCIT) | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Mortgage notes payable with related interest rate swap | 41,000 | |
Senior unsecured notes, 2.85%, due in 2018 | Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Senior unsecured notes, net | 347,772 | 347,448 |
Senior unsecured notes, 2.85%, due in 2018 | Estimated Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Senior unsecured notes, net | 349,316 | 353,063 |
Senior unsecured notes, 3.60%, due in 2020 | Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Senior unsecured notes, net | 395,043 | 394,712 |
Senior unsecured notes, 3.60%, due in 2020 | Estimated Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Senior unsecured notes, net | 400,378 | 402,984 |
Senior unsecured notes, 4.15%, due in 2022 | Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Senior unsecured notes, net | 294,694 | 294,471 |
Senior unsecured notes, 4.15%, due in 2022 | Estimated Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Senior unsecured notes, net | 297,438 | 293,373 |
Senior unsecured notes, 4.50%, due in 2025 | Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Senior unsecured notes, net | 389,660 | 389,394 |
Senior unsecured notes, 4.50%, due in 2025 | Estimated Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Senior unsecured notes, net | $ 378,802 | $ 386,000 |
Noncontrolling Interest (Detail
Noncontrolling Interest (Details) - Duluth, GA $ in Thousands | Feb. 29, 2016USD ($)ft² |
Temporary Equity, Carrying Amount, Including Portion Attributable to Noncontrolling Interests | |
Aggregate purchase price | $ | $ 3,908 |
Ownership percentage acquired | 11.00% |
Square Feet | ft² | 344,000 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 25, 2016 | Feb. 23, 2016 |
Distributions | ||
Quarterly dividend payable on common stock (in dollars per share) | $ 0.50 | |
Distribution to common shareholders | $ 44,700 | |
Distribution declared | ||
Distributions | ||
Distribution paid on common shares (in dollars per share) | $ 0.50 | |
Distribution to common shareholders | $ 44,687 |
Cumulative Other Comprehensiv31
Cumulative Other Comprehensive Income (Loss) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Accumulated Other Comprehensive Income (Loss) | |
Balance at the beginning of the period | $ (19,587) |
Other comprehensive income (loss) before reclassifications | 15,878 |
Amounts reclassified from cumulative other comprehensive income (loss) to net income | 93 |
Net current period other comprehensive income (loss) | 15,971 |
Balance at the end of the period | (3,616) |
Unrealized Loss on Investment in Available for Sale Securities | |
Accumulated Other Comprehensive Income (Loss) | |
Balance at the beginning of the period | (19,820) |
Other comprehensive income (loss) before reclassifications | 16,821 |
Net current period other comprehensive income (loss) | 16,821 |
Balance at the end of the period | (2,999) |
Unrealized Gain on Derivative Instruments | |
Accumulated Other Comprehensive Income (Loss) | |
Balance at the beginning of the period | 276 |
Other comprehensive income (loss) before reclassifications | (996) |
Amounts reclassified from cumulative other comprehensive income (loss) to net income | 94 |
Net current period other comprehensive income (loss) | (902) |
Balance at the end of the period | (626) |
Equity in Unrealized Gain (Loss) of an Investee | |
Accumulated Other Comprehensive Income (Loss) | |
Balance at the beginning of the period | (43) |
Other comprehensive income (loss) before reclassifications | 53 |
Amounts reclassified from cumulative other comprehensive income (loss) to net income | (1) |
Net current period other comprehensive income (loss) | 52 |
Balance at the end of the period | $ 9 |
Weighted Average Common Share32
Weighted Average Common Shares (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Weighted Average Common Shares | ||
Weighted average common shares outstanding, basic (in shares) | 89,286 | 79,489 |
Effect of dilutive securities restricted stock awards | 9 | 9 |
Weighted average common shares outstanding, diluted (in shares) | 89,295 | 79,498 |
Related Person Transactions - U
Related Person Transactions - Up-C Transaction (Details) $ / shares in Units, $ in Thousands | Apr. 13, 2016$ / shares | Jun. 30, 2015agreement | Mar. 31, 2016USD ($)agreementshares | Mar. 31, 2015USD ($)shares | Apr. 25, 2016$ / shares | Dec. 31, 2015$ / shares |
Related Party Transaction, Due from (to) Related Party [Abstract] | ||||||
Quarterly dividend payable on common stock (in dollars per share) | $ / shares | $ 0.50 | |||||
Income (Loss) from Equity Method Investments | $ 77 | $ 72 | ||||
Equity in unrealized gain of an investee | $ 52 | 45 | ||||
GOV | ||||||
Related Party Transaction, Due from (to) Related Party [Abstract] | ||||||
Percentage of interest, equity method | 27.90% | |||||
RMR Inc | ||||||
Related Party Transaction, Due from (to) Related Party [Abstract] | ||||||
Number of related entities with an equity interest in an affiliate entity | agreement | 3 | |||||
RMR LLC | ||||||
Related Party Transaction, Due from (to) Related Party [Abstract] | ||||||
Business management fees incurred | $ 5,007 | $ 4,646 | ||||
Shares issued under the business management agreement | shares | 18,656 | |||||
Property management and construction supervision fees incurred | 3,114 | $ 2,625 | ||||
Related party reimbursement expenses | 1,621 | 880 | ||||
Accrual for RMR LLC employee share grants and internal audit costs | 339 | 235 | ||||
Rental income earned | 5 | 5 | ||||
Management agreement continuing terms (in years) | 20 years | |||||
RMR LLC | ||||||
Related Party Transaction, Due from (to) Related Party [Abstract] | ||||||
Incentive fees payable | 0 | 0 | ||||
AIC | ||||||
Related Party Transaction, Due from (to) Related Party [Abstract] | ||||||
Investment at carrying value | 6,956 | |||||
Income (Loss) from Equity Method Investments | 77 | 72 | ||||
Equity in unrealized gain of an investee | $ 52 | $ 45 | ||||
Number of related entities with an equity interest in an affiliate entity | agreement | 6 | |||||
Class A common shares | ||||||
Related Party Transaction, Due from (to) Related Party [Abstract] | ||||||
Shares holding | shares | 1,586,836 | |||||
Class A common shares | RMR Inc | ||||||
Related Party Transaction, Due from (to) Related Party [Abstract] | ||||||
Recognized amortization of the liability | $ 558 | |||||
Related Party Transaction Amortization Of Liability | 558 | |||||
Initial other liabilities | $ 44,072 | |||||
Shares holding | shares | 1,586,836 | |||||
Class A common shares | RMR Inc | ||||||
Related Party Transaction, Due from (to) Related Party [Abstract] | ||||||
Distributions per share paid or payable (in dollars per share) | $ / shares | $ 0.2993 | |||||
Quarterly dividend payable on common stock (in dollars per share) | $ / shares | $ 0.25 | $ 0.0493 |