Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Aug. 13, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | STORE CAPITAL Corp | |
Entity Central Index Key | 1,538,990 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 126,858,765 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | |
Real estate investments: | |||
Land and improvements | $ 1,032,120 | $ 843,843 | |
Building and improvements | 2,189,415 | 1,790,530 | |
Intangible lease assets | 73,642 | 60,184 | |
Total real estate investments | 3,295,177 | 2,694,557 | |
Less accumulated depreciation and amortization | (137,784) | (98,671) | |
Real estate investments, net | 3,157,393 | 2,595,886 | |
Real estate investments held for sale, net | 10,633 | ||
Loans and direct financing receivables | 168,273 | 111,354 | |
Net investments | 3,336,299 | [1] | 2,707,240 |
Cash and cash equivalents | 66,244 | 136,313 | |
Deferred costs, net | 42,277 | 37,136 | |
Other assets | 43,039 | 32,923 | |
Total assets | 3,487,859 | 2,913,612 | |
Liabilities: | |||
Non-recourse debt obigations of consolidated special purpose entities, net | 1,638,811 | 1,284,151 | |
Dividends payable | 31,715 | 13,123 | |
Accounts payable and accrued expenses | 25,650 | 30,486 | |
Other liabilities | 6,030 | 3,168 | |
Total liabilities | 1,702,206 | 1,330,928 | |
Stockholders’ equity: | |||
Common stock, $0.01 par value per share, 375,000,000 shares authorized, 126,858,765 and 115,212,541 shares issued and outstanding, respectively | 1,269 | 1,152 | |
Capital in excess of par value | 1,862,951 | 1,636,203 | |
Distributions in excess of retained earnings | (78,239) | (54,405) | |
Accumulated other comprehensive loss | (328) | (266) | |
Total stockholders’ equity | 1,785,653 | 1,582,684 | |
Total liabilities and stockholders’ equity | $ 3,487,859 | $ 2,913,612 | |
[1] | The dollar amount of investments includes the investment in land, buildings, improvements and lease intangibles related to real estate investments as well as the carrying amount of the loans and direct financing receivables. |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2015 | Dec. 31, 2014 |
Condensed Consolidated Balance Sheet | ||
Common stock, par value per share | $ 0.01 | $ 0.01 |
Common shares, authorized shares | 375,000,000 | 375,000,000 |
Common shares, issued shares | 126,858,765 | 115,212,541 |
Common shares, outstanding shares | 126,858,765 | 115,212,541 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | ||
Revenues: | |||||
Rental revenues | $ 65,662 | $ 42,609 | $ 124,500 | $ 80,143 | |
Interest income on loans and direct financing receivables | 3,217 | 2,059 | 5,815 | 3,849 | |
Other income | 21 | 354 | 44 | 359 | |
Total revenues | 68,900 | 45,022 | 130,359 | 84,351 | |
Expenses: | |||||
Interest | 20,637 | 16,637 | 37,866 | 31,042 | |
Transaction costs | 607 | 1,160 | 866 | 1,558 | |
Property costs | 356 | 108 | 651 | 145 | |
General and administrative | 7,210 | 4,883 | 13,845 | 9,066 | |
Depreciation and amortization | 21,568 | 13,149 | 40,460 | 24,710 | |
Provision for impairment of real estate | [1] | 1,000 | |||
Total expenses | 50,378 | 35,937 | 94,688 | 66,521 | |
Income from continuing operations before income taxes | 18,522 | 9,085 | 35,671 | 17,830 | |
Income tax expense | 83 | 50 | 166 | 102 | |
Income from continuing operations | 18,439 | 9,035 | 35,505 | 17,728 | |
Income from discontinued operations | 250 | 1,096 | |||
Income before gain on dispostions of real estate investments | 18,439 | 9,285 | 35,505 | 18,824 | |
Gain on dispositions of real estate investments | 1,195 | 1,137 | 1,195 | 1,137 | |
Net income | $ 19,634 | $ 10,422 | $ 36,700 | $ 19,961 | |
Net income per share of common stock—basic and diluted: | |||||
Continuing operations (in dollars per share) | $ 0.17 | $ 0.14 | $ 0.31 | $ 0.28 | |
Discontinued operations (in dollars per share) | 0.02 | ||||
Net income (in dollars per share) | $ 0.17 | $ 0.15 | $ 0.31 | $ 0.30 | |
Weighted average common shares outstanding: | |||||
Weighted average shares outstanding used in basic income per share (in shares) | 117,507,861 | 70,413,343 | 116,078,522 | 66,739,688 | |
Weighted average shares outstanding used in diluted income per share (in shares) | 117,507,861 | 70,413,343 | 116,078,522 | 66,739,688 | |
Dividends declared per common sshare (in dollars per share) | $ 0.2500 | $ 0.2455 | $ 0.5000 | $ 0.4850 | |
[1] | The dollar amount of investments includes the investment in land, buildings, improvements and lease intangibles related to real estate investments as well as the carrying amount of the loans and direct financing receivables. |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Condensed Consolidated Statement of Comprehensive Income | ||||
Net income | $ 19,634 | $ 10,422 | $ 36,700 | $ 19,961 |
Other comprehensive income (loss): | ||||
Change in unrealized losses on cash flow hedges | 12 | (230) | (216) | (340) |
Cash flow hedge losses reclassified to interest expense | 77 | 80 | 154 | 159 |
Total other comprehensive income (loss) | 89 | (150) | (62) | (181) |
Total comprehensive income | $ 19,723 | $ 10,272 | $ 36,638 | $ 19,780 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | |||
Operating activities | ||||
Net income | $ 36,700 | $ 19,961 | ||
Adjustments to net income: | ||||
Depreciation and amortization | 40,460 | 24,710 | ||
Provision for impairment of real estate | [1] | 1,000 | ||
Amortization of deferred financing costs and other noncash interest expense | 3,051 | 2,812 | ||
Amortization of equity-based compensation | 2,159 | 1,140 | ||
Gain on dispositions of real estate | (1,195) | (2,106) | ||
Noncash revenue and other | (121) | (1,004) | ||
Changes in operating assets and liabilities: | ||||
Deferred costs | (826) | (848) | ||
Other assets | (598) | 864 | ||
Accounts payable and other liabilities | 1,639 | 384 | ||
Net cash provided by operating activities | 82,269 | 45,913 | ||
Investing activities | ||||
Acquisition of and additions to real estate | (629,499) | (522,644) | ||
Investment in loans and direct financing receivables | (61,519) | [1] | (40,713) | |
Collections of principal on loans and direct financing receivables | 4,579 | [1] | 5,975 | |
Proceeds from disposition of real estate | 11,948 | 16,628 | ||
Transfers (to) from restricted deposits | (7,646) | 684 | ||
Net cash used in investing activities | (682,137) | (540,070) | ||
Financing activities | ||||
Borrowings under credit facilities | 356,000 | 252,080 | ||
Repayments under credit facilities | (356,000) | (252,080) | ||
Borrowings under non‑recourse debt obligations of consolidated special purpose entities | 364,840 | 286,089 | ||
Repayments under non‑recourse debt obligations of consolidated special purpose entities | (9,883) | (8,573) | ||
Financing costs paid | (7,868) | (8,944) | ||
Proceeds from the issuance of common stock | 234,141 | 290,412 | ||
Offering costs paid | (9,486) | |||
Dividends paid | (41,945) | (31,948) | ||
Net cash provided by financing activities | 529,799 | 527,036 | ||
Net (decrease) increase in cash and cash equivalents | (70,069) | 32,879 | ||
Cash and cash equivalents, beginning of period | 136,313 | 61,814 | ||
Cash and cash equivalents, end of period | 66,244 | 94,693 | ||
Supplemental disclosure of noncash investing activities: | ||||
Accrued tenant improvement advances included in real estate investments | 10,666 | 4,765 | ||
Non-recourse debt obligations assumed in conjunction with acquisition of property | 23,259 | |||
Supplemental disclosure of cash flow information: | ||||
Cash paid during the period for interest, net of amounts capitalized | 34,200 | 27,716 | ||
Cash paid during the period for income and franchise taxes | $ 862 | $ 405 | ||
[1] | The dollar amount of investments includes the investment in land, buildings, improvements and lease intangibles related to real estate investments as well as the carrying amount of the loans and direct financing receivables. |
Organization and Formation Acti
Organization and Formation Activities | 6 Months Ended |
Jun. 30, 2015 | |
Organization and Formation Activities | |
Organization and Formation Activities | 1. Organization and Formation Activities STORE Capital Corporation (STORE Capital or the Company) was formed in Maryland on May 17, 2011 to acquire single ‑tenant operational real estate to be leased on a long ‑term, net basis to companies that operate across a wide variety of industries within the service, retail and industrial sectors of the United States economy. From time to time, it may also provide mortgage financing to its customers. On November 21, 2014, the Company completed the initial public offering (IPO) of its common stock. The shares began trading on the New York Stock Exchange on November 18, 2014 under the ticker symbol “STOR”. The Company was originally formed as a wholly-owned subsidiary of STORE Holding Company, LLC (STORE Holding), a Delaware limited liability company. In March 2015, STORE Holding redeemed all of its Series A membership interests that were held by members of the Company’s board and senior management through the distribution of common shares of the Company to those members. Following this redemption, the voting interests of STORE Holding are entirely owned by entities managed by a global investment management firm. In June 2015, the Company completed a follow-on stock offering in which the Company issued and sold 11,562,500 shares of common stock and STORE Holding sold 9,712,500 shares from its holdings of the Company’s common stock. At June 30, 2015, there were 126,858,765 shares of the Company’s common stock outstanding, of which 72,436,144 shares were held by STORE Holding, representing a 57.1% ownership of the Company. STORE Capital has made an election to qualify, and believes it is operating in a manner to continue to qualify, as a real estate investment trust (REIT) for federal income tax purposes beginning with its initial taxable year ended December 31, 2011. As a REIT, it will generally not be subject to federal income taxes to the extent that it distributes all of its taxable income to its stockholders and meets other specific requirements. |
Summary of Significant Accounti
Summary of Significant Accounting Principles | 6 Months Ended |
Jun. 30, 2015 | |
Summary of Significant Accounting Principles | |
Summary of Significant Accounting Principles | 2. Summary of Significant Accounting Principles Basis of Accounting and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and the rules and regulations of the U.S. Securities and Exchange Commission (SEC). In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of interim periods are not necessarily indicative of the results for the entire year. Certain information and note disclosures, normally included in financial statements prepared in accordance with GAAP, have been condensed or omitted from these statements and, accordingly, these statements should be read in conjunction with the Company’s audited consolidated financial statements as filed with the SEC in its Annual Report on Form 10-K for the fiscal year ended December 31, 2014. These consolidated statements include the accounts of STORE Capital and its subsidiaries which are wholly ‑owned and controlled by the Company through its voting interest. One of the Company’s wholly ‑owned subsidiaries, STORE Capital Advisors, LLC, provides all of the general and administrative services for the day ‑to ‑day operations of the consolidated group, including property acquisition and lease origination, real estate portfolio management and marketing, accounting and treasury services. The remaining subsidiaries were formed to acquire and hold real estate investments or to facilitate non ‑recourse secured borrowing activities. Generally, the initial operations of the real estate subsidiaries are funded by an interest ‑bearing intercompany loan from STORE Capital, and such intercompany loan is repaid when the subsidiary issues long ‑term debt secured by its properties. All intercompany account balances and transactions have been eliminated in consolidation. Certain of the Company’s wholly ‑owned consolidated subsidiaries were formed as special purpose entities. Each special purpose entity is a separate legal entity and is the sole owner of its assets and liabilities. The assets of the special purpose entities are not available to pay or otherwise satisfy obligations to the creditors of any owner or affiliate of the special purpose entity. At June 30, 2015 and December 31, 2014, assets totaling $ 3.1 billion and $ 2.5 billion, respectively, were held and third-party li abilities totaling $1.7 billion and $ 1.3 billion, respectively, were o wed by these special purpose entities and are included in the accompanying consolidated balance sheets. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Although management believes its estimates are reasonable, actual results could differ from those estimates. Segment Reporting The Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC) Topic 280, Segment Reporting , established standards for the manner in which enterprises report information about operating segments. The Company views its operations as one reportable segment. Accounting for Real Estate Investments STORE Capital records the acquisition of real estate properties at cost, including acquisition and closing costs. The Company allocates the cost of real estate properties to the tangible and intangible assets and liabilities acquired based on their estimated relative fair values. Real estate properties subject to an existing in ‑place lease at the date of acquisition are recorded as business combinations and each tangible and intangible asset and liability acquired is recorded at fair value. Management uses multiple sources to estimate fair value, including independent appraisals and information obtained about each property as a result of its pre ‑acquisition due diligence and its marketing and leasing activities. The Company expenses transaction costs associated with real estate acquisitions accounted for as business combinations in the period incurred. In ‑place lease intangibles are valued based on management’s estimates of lost rent and carrying costs during the time it would take to locate a tenant if the property were vacant, considering current market conditions and costs to execute similar leases. In estimating lost rent and carrying costs, management considers market rents, real estate taxes, insurance, costs to execute similar leases including leasing commissions and other related costs. The value assigned to in ‑place leases is amortized on a straight ‑line basis as a component of depreciation and amortization expense typically over the remaining term of the related leases. The fair value of any above ‑market and below ‑market leases is estimated based on the present value of the difference between the contractual amounts to be paid pursuant to the in ‑place lease and management’s estimate of current market lease rates for the property, measured over a period equal to the remaining term of the lease. Capitalized above ‑market lease intangibles are amortized over the remaining term of the respective leases as a decrease to rental revenue. Below ‑market lease intangibles are amortized as an increase in rental revenue over the remaining term of the respective leases plus the fixed ‑rate renewal periods on those leases, if any. Should a lease terminate early, the unamortized portion of any related lease intangible is immediately recognized in operations. The Company’s real estate portfolio is depreciated using the straight ‑line method over the estimated remaining useful life of the properties, which generally ranges from 30 to 40 years for buildings and is 15 years for land improvements. Properties classified as held for sale are recorded at the lower of their carrying value or their fair value, less anticipated closing costs. Any properties classified as held for sale are not depreciated. Impairment STORE Capital reviews its real estate investments and related lease intangibles periodically for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through operations. Management considers factors such as expected future undiscounted cash flows, estimated residual value, market trends (such as the effects of leasing demand and competition) and other factors including bona fide purchase offers received from third parties in making this assessment. These factors are classified as Level 3 inputs within the fair value hierarchy. An asset is considered impaired if the carrying value of the asset exceeds its estimated undiscounted cash flows and the impairment is calculated as the amount by which the carrying value of the asset exceeds its estimated fair value. Estimating future cash flows is highly subjective and such estimates could differ materially from actual results. Revenue Recognition STORE Capital leases real estate to its tenants under long ‑term net leases that are predominantly classified as operating leases. Direct costs associated with lease origination, offset by any lease origination fees received, are deferred and amortized over the related lease term as an adjustment to rental revenue. Substantially all of the leases are triple ‑net, which provide that the lessees are responsible for the payment of all property operating expenses, including property taxes, maintenance and insurance. The Company may collect property taxes from its customers and remit those taxes to governmental authorities; such property taxes are presented on a net basis in the consolidated income statements. The Company’s leases generally provide for rent escalations throughout the lease terms. For leases that provide for specific contractual escalations, rental revenue is recognized on a straight ‑line basis so as to produce a constant periodic rent over the term of the lease. Accordingly, accrued rental revenue, calculated as the aggregate difference between the rental revenue recognized on a straight ‑line basis and scheduled rents, represents unbilled rent receivables that the Company will receive only if the tenants make all rent payments required through the expiration of the lease. The Company provides an estimated reserve for uncollectible straight ‑line rental revenue based on management’s assessment of the risks inherent in those lease contracts, giving consideration to industry default rates for long ‑term receivables. There was $7.0 million and $ 4.7 million of accrued straight ‑line rental revenue, net of allowances of $2.5 million and $1.7 million, at June 30, 2015 and December 31, 2014, respectively, included in other assets on the consolidated balance sheets. Leases that have contingent rent escalators indexed to future increases in the Consumer Price Index (CPI) may adjust over a one ‑year period or over multiple ‑year periods. Generally, these escalators increase rent at the lesser of (a) 1 to 1.25 times the increase in the CPI over a specified period or (b) a fixed percentage. Because of the volatility and uncertainty with respect to future changes in the CPI, the Company’s inability to determine the extent to which any specific future change in the CPI is probable at each rent adjustment date during the entire term of these leases and the Company’s view that the multiplier does not represent a significant leverage factor, increases in rental revenue from leases with this type of escalator are recognized only after the changes in the rental rates have actually occurred. For leases that have contingent rentals that are based on a percentage of the tenant’s gross sales, the Company recognizes contingent rental revenue when the threshold upon which the contingent lease payment is based is actually reached. Approximately 1.5% of the Company’s investment portfolio is subject to leases that provide for contingent rent based on a percentage of the tenant’s gross sales. The Company suspends revenue recognition if the collectibility of amounts due pursuant to a lease is not reasonably assured or if the tenant’s monthly lease payments become more than 60 days past due, whichever is earlier. The Company reviews its rent receivables for collectibility on a regular basis, taking into consideration changes in factors such as the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area where the property is located. In the event that the collectibility of a receivable with respect to any tenant is in doubt, a provision for uncollectible amounts will be established or a direct write ‑off of the specific rent receivable will be made. As of June 30, 2015, the Company had a $0.6 million provision for uncollectible contractual rent payments due from tenants; there was no provision at December 31, 2014. Loans Receivable STORE Capital holds its loans receivable for long ‑term investment. Loans receivable are carried at amortized cost, including related unamortized discounts or premiums, if any. Revenue Recognition The Company recognizes interest income on loans receivable using the effective ‑interest method applied on a loan ‑by ‑loan basis. Direct costs associated with originating loans are offset against any related fees received and the balance, along with any premium or discount, is deferred and amortized as an adjustment to interest income over the term of the related loan receivable using the effective interest method. A loan receivable is placed on nonaccrual status when the loan has become 60 days past due, or earlier if management determines that full recovery of the contractually specified payments of principal and interest is doubtful. While on nonaccrual status, interest income is recognized only when received. As of June 30, 2015 and December 31, 2014, there were no loans on nonaccrual status. Impairment and Provision for Loan Losses The Company periodically evaluates the collectibility of its loans receivable, including accrued interest, by analyzing the underlying property ‑level economics and trends, collateral value and quality and other relevant factors in determining the adequacy of its allowance for loan losses. A loan is determined to be impaired when, in management’s judgment based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Specific allowances for loan losses are provided for impaired loans on an individual loan basis in the amount by which the carrying value exceeds the estimated fair value of the underlying collateral less disposition costs. There was no allowance for loan losses at June 30, 2015 or December 31, 2014. Direct Financing Receivables Certain of the Company’s real estate investment transactions are accounted for as direct financing leases. The Company records the direct financing receivables at their net investment, determined as the aggregate minimum lease payments and the estimated residual value of the leased property less unearned income. The unearned income is recognized over the life of the related contracts so as to produce a constant rate of return on the net investment in the asset. Cash and Cash Equivalents Cash and cash equivalents include cash and highly liquid investment securities with maturities at acquisition of three months or less. The Company invests cash primarily in money ‑market funds of a major financial institution, consisting predominantly of U.S. Government obligations. Restricted Cash and Escrow Deposits The Company had $23.4 million and $15.4 million of restricted cash and deposits in escrow at June 30, 2015 and December 31, 2014, respectively, which were included in other assets on the consolidated balance sheets. Deferred Costs Deferred costs consist principally of financing costs related to the issuance of the Company’s debt. Deferred financing costs are amortized as an increase to interest expense over the term of the related debt instrument using the effective interest method. Deferred costs also include lease origination costs, which are amortized as a decrease to rental revenue over the term of the respective lease. Derivative Instruments and Hedging Activities The Company may enter into derivatives contracts as part of its overall financing strategy to manage the Company’s exposure to changes in interest rates associated with current and/or future debt issuances. The Company does not use derivatives for trading or speculative purposes. The Company records its derivatives on the balance sheet at fair value as either an asset or liability. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the earnings effect of the hedged forecasted transactions in a cash flow hedge. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (loss). Amounts reported in accumulated other comprehensive income (loss) related to cash flow hedges are reclassified to operations as an adjustment to interest expense as interest payments are made on the hedged debt transaction. As of June 30, 2015, the Company had entered into two interest rate swap agreements with current notional amounts of $12.6 million and $6.5 million that were designated as cash flow hedges associated with the Company’s secured, variable ‑rate mortgage note payable due in 2019 (Note 4). Fair Value Measurement The Company estimates fair value of financial and non-financial assets and liabilities based on the framework established in fair value accounting guidance. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The hierarchy described below prioritizes inputs to the valuation techniques used in measuring the fair value of assets and liabilities. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs to be used when available. The hierarchy is broken down into three levels based on the reliability of inputs as follows: · Level 1—Quoted market prices in active markets for identical assets and liabilities that the Company has the ability to access. · Level 2—Significant inputs that are observable, either directly or indirectly. These types of inputs would include quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets in inactive markets and market ‑corroborated inputs. · Level 3—Inputs that are unobservable and significant to the overall fair value measurement of the assets or liabilities. These types of inputs include the Company’s own assumptions. Share ‑based Compensation Certain directors and employees of the Company have been granted long ‑term incentive awards, including restricted shares and stock units of the Company’s common stock and profits interest units issued by STORE Holding, which provide them with equity interests as an incentive to remain in the Company’s service and align executives’ interests with those of the Company’s equity holders. During the six months ended June 30, 2015, the Company granted restricted share awards (RSAs) representing 86,746 shares of restricted common stock to its executive officers and certain directors and other employees. During the same period, 161,979 shares of restricted stock vested and 3,022 shares of restricted stock were forfeited. As of June 30, 2015, the Company had 577,651 shares of restricted common stock outstanding. The Company estimates the fair value of RSAs at the date of grant and recognizes that amount in general and administrative expense ratably over the vesting period at the greater of the amount amortized on a straight ‑line basis or the amount vested. The fair value of the RSAs is based on the per-share price of the common stock on the date of the grant. Prior to the Company’s IPO, the fair value was based on the per ‑share price of the common stock issued in the Company’s private equity offerings. In March 2015, the Company issued 348,220 restricted stock units (RSUs) with both a market condition and a service condition to its executive officers. The number of common shares to be received at vesting will range from zero to 100% of the total RSUs granted based on total shareholder return (TSR) on the Company’s common stock measured against the benchmark TSR of a peer group over a three -year performance period ending December 31, 2017. The TSR is a measure of stock price appreciation plus dividends paid during the measurement period. To the extent market and service conditions are met, the RSUs vest 50% at the end of 2017 and, subject to continued employment, 50% at the end of 2018. The Company valued the RSUs using a Monte Carlo simulation model on the date of grant which resulted in a grant date fair value of $4.4 million. The Monte Carlo simulation was computed based on a volatility assumption of 23.51% , a risk-free interest rate of 0.84% and a dividend yield of zero . The RSUs accrue dividend equivalents which are paid only if the award vests. At June 30, 2015, there were 348,220 RSUs outstanding. Income Taxes As a REIT, the Company generally will not be subject to federal income tax; however, it is still subject to state and local income taxes and to federal income and excise tax on its undistributed income. STORE Investment Corporation is the Company’s wholly ‑owned taxable REIT subsidiary (TRS) created to engage in non ‑qualifying REIT activities. The TRS is subject to federal, state and local income taxes. Management of the Company determines whether any tax positions taken or expected to be taken meet the “more ‑likely ‑than ‑not” threshold of being sustained by the applicable federal, state or local tax authority. Tax returns filed for 2011 through 2014 are subject to examination by these jurisdictions. As of June 30, 2015 and December 31, 2014, management concluded that there is no tax liability relating to uncertain income tax positions. The Company’s policy is to recognize interest related to any underpayment of income taxes as interest expense and to recognize any penalties as operating expenses. There was no accrual for interest or penalties at June 30, 2015 or December 31, 2014. Net Income Per Common Share Net income per common share has been computed pursuant to the guidance in the FASB ASC Topic 260, Earnings Per Share . The guidance requires the classification of the Company’s unvested restricted common stock, which contain rights to receive non ‑forfeitable dividends, as participating securities requiring the two ‑class method of computing net income per common share. The following table is a reconciliation of the numerator and denominator used in the computation of basic and diluted income per common share (dollars in thousands): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Numerator: Net income $ $ $ $ Less: preferred stock dividends — — Net income attributable to common stockholders Less: earnings attributable to unvested restricted shares Net income used in basic and diluted income per share $ $ $ $ Denominator: Weighted average common shares outstanding Less: Weighted average number of shares of unvested restricted stock Weighted average shares outstanding used in basic income per share Effects of dilutive securities: Add: Treasury stock method impact of potentially dilutive securities (a) — — — — Weighted average shares outstanding used in diluted income per share (a) For the three months ended June 30, 2015 and 2014, excludes 160,971 shares and 49,451 shares, respectively, and for the six months ended June 30, 2015 and 2014, excludes 184,605 shares and 65,217 shares, respectively, related to unvested restricted shares as the effect would be antidilutive. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or the SEC. The Company adopts the new pronouncements as of the specified effective date. When permitted, the Company may elect to early adopt the new pronouncements. Unless otherwise discussed, these new accounting pronouncements include technical corrections to existing guidance or introduce new guidance related to specialized industries or entities and therefore will have minimal, if any, impact on the Company’s financial position or results of operations upon adoption. In May 2014, the FASB issued Accounting Standards Update (ASU) 2014 ‑09, Revenue from Contracts with Customers: Topic 606 . This new guidance establishes a principles ‑based approach for accounting for revenue from contracts with customers. Lease contracts covered by Topic 840, Leases , are excluded from the scope of this new guidance. At the time of issuance, this new standard was effective for public companies for annual reporting periods beginning after December 15, 2016 and early adoption was not permitted. On July 9, 2015, the FASB decided to defer by one year the effective date of the standard for public companies which will now be effective for annual reporting periods beginning after December 15, 2017 and early adoption is permitted but only as of an annual reporting period beginning after December 15, 2016. As leases are excluded from this guidance, the Company does not anticipate this standard to have a material impact on its financial position, results of operations and cash flows. In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-30) – Simplifying the Presentation of Debt Issuance Costs. This guidance was issued to simplify the presentation of debt issuance costs by requiring debt issuance costs to be presented as a deduction from the corresponding debt liability and, therefore, make the presentation of debt issuance costs consistent with the presentation of debt discounts or premiums. This new standard is effective for public companies for annual reporting periods beginning after December 15, 2015, with early adoption permitted. Upon adoption, the new guidance is required to be applied retrospectively. The Company is currently evaluating the impact of the adoption of this new standard which is expected to result in reclassifications of certain deferred costs on the Company’s balance sheets but will not have an impact on its results of operations or cash flows. |
Investments
Investments | 6 Months Ended |
Jun. 30, 2015 | |
Investments: | |
Investments | 3. Investments At June 30, 2015, STORE Capital had investments in 1,175 property locations representing 1,162 owned properties (of which 15 are accounted for as direct financing receivables), eight ground lease interests and five properties which secure certain mortgage loans. The gross acquisition cost of the real estate investments totaled $3.31 billion at June 30, 2015. In addition, the Company held loans and direct financing receivables with an aggregate carrying amount at June 30, 2015 of $ 168.3 million. As of June 30, 2015, a substantial portion of these investments are assets of consolidated special purpose entity subsidiaries and are pledged as collateral under the non ‑recourse obligations of these special purpose entities (Note 4). During the six months ended June 30, 2015, the Company had the following gross real estate and loan activity (dollars in thousands): Number of Dollar Investment Amount of Locations Investments (a) Gross investments, December 31, 2014 $ Acquisition of and additions to real estate (b)(c) Investment in loans and direct financing receivables Sales of real estate Principal collections on loans and direct financing receivables Provision for impairment of real estate Other Gross investments, June 30, 2015 (d) Less accumulated depreciation and amortization (d) Net investments, June 30, 2015 $ (a) The dollar amount of investments includes the investment in land, buildings, improvements and lease intangibles related to real estate investments as well as the carrying amount of the loans and direct financing receivables. (b) Includes $0.4 million of interest capitalized to properties under construction. (c) Excludes $15.4 million of tenant improvement advances disbursed in 2015 which were accrued as of December 31, 2014. (d) Includes the dollar amount of investments ( $ 11.5 million) and the accumulated depreciation ( $ 0.9 million) related to real estate investments held for sale at June 30, 2015. The following table shows information regarding the diversification of the Company’s total investment portfolio among the different industries in which its tenants and borrowers operate as of June 30, 2015 (dollars in thousands): Percentage of Number of Dollar Total Dollar Investment Amount of Amount of Locations Investments (a) Investments Restaurants $ % Health clubs Early childhood education centers Movie theaters Furniture stores Sporting goods stores Colleges and professional schools All other service industries All other retail industries All industrial $ % (a) The dollar amount of investments includes the gross investment in land, buildings, improvements and lease intangibles related to real estate investments as well as the carrying amount of the loans and direct financing receivables . Significant Credit and Revenue Concentration STORE Capital’s real estate investments are leased or financed to 274 customers geographically dispersed throughout 46 states. Only one state, Texas ( 12% ), accounted for 10% or more of the total dollar amount of STORE Capital’s investment portfolio at June 30, 2015. None of the Company’s 274 customers represented more than 10% of the Company’s real estate investment portfolio at June 30, 2015, with the largest customer representing less than 3% of the total investment portfolio. On an annualized basis, the largest customer also represented less than 3% of the Company’s annualized investment portfolio revenues as of June 30, 2015. The Company’s customers operate their businesses across 259 concepts and the largest of these concepts represented 3% of the Company’s annualized investment portfolio revenues as of June 30, 2015. Intangible Lease Assets The following details intangible lease assets and related accumulated amortization (in thousands): June 30, December 31, 2015 2014 In-place lease assets $ (a) $ Above-market lease assets Ground lease interest assets Total intangible lease assets Accumulated amortization (a) Net intangible lease assets $ $ (a) Includes the dollar amount of in-place lease intangibles ( $276,000 ) and the accumulated amortization ($47,000) related to real estate investments held for sale at June 30, 2015. Aggregate lease intangible amortization included in expense was $1.4 million and $0.9 million during the three months ended June 30, 2015 and 2014, respectively, and was $2.8 million and $1.7 million during the six months ended June 30, 2015 and 2014, respectively. The amount amortized as a decrease to rental revenue for capitalized above ‑market lease intangibles was $0.3 million and $0.2 million during the three months ended June 30, 2015 and 2014, respectively, and was $0.5 million and $0.2 million for the six months ended June 30, 2015 and 2014, respectively. Based on the balance of the intangible assets at June 30, 2015, the aggregate amortization expense is expected to be $2.8 million for the remainder of 2015, $5.6 million in 2016, $5.5 million in 2017, $5.3 million in 2018, $5.0 million in 2019 and $4.4 million in 2020 and the amount expected to be amortized as a decrease to rental revenue is expected to be $0.6 million for the remainder of 2015 and $1.2 million in each of the next five years. The weighted average remaining amortization period is approximately 10 years for the in ‑place lease intangibles, approximately nine years for the above ‑market lease intangibles and approximately 75 years for the amortizing ground lease interests. Real Estate Investments The Company’s investment properties are leased to tenants under long ‑term operating leases that typically include one or more renewal options. The weighted average remaining noncancelable lease term at June 30, 2015 was approximately 15 years. Substantially all of the leases are triple ‑net, which provide that the lessees are responsible for the payment of all property operating expenses, including property taxes, maintenance and insurance; therefore, STORE Capital is generally not responsible for repairs or other capital expenditures related to the properties. At June 30, 2015, six of the Company’s properties were vacant and not subject to a lease. Scheduled future minimum rentals to be received under the remaining noncancelable term of the operating leases at June 30, 2015, are as follows (in thousands): Remainder of 2015 $ 2016 2017 2018 2019 2020 Thereafter Total future minimum rentals $ Since lease renewal periods are exercisable at the option of the lessee, the preceding table presents future minimum lease payments due during the initial lease term only. In addition, the future minimum lease payments do not include any contingent rentals such as lease escalations based on future changes in CPI. Loans and Direct Financing Receivables At June 30, 2015, the Company held 12 loans receivable with an aggregate carrying amount of $ 92.4 million. T en of the loans are mortgage loans secured by land and/or buildings and improvements on the mortgaged property. The two other loans are secured by the tenant’s equipment. One of the mortgage loans is a short ‑term loan that requires monthly interest ‑only payments with a balloon payment at maturity. The remaining mortgage loans receivable generally require the borrowers to make monthly principal and interest payments based on a 40 ‑year amortization period with balloon payments, if any, at maturity. The other secured loans require the borrower to make monthly interest ‑only payments for an established period and then either monthly principal and interest payments through maturity or a balloon payment at maturity. The Company’s loans and direct financing receivables are summarized below (dollars in thousands): Stated Interest Maturity June 30, December 31, Type Rate Date 2015 2014 Mortgage loan receivable % $ — $ Mortgage loan receivable % Jan. 2017 Mortgage loan receivable % Jan. 2028 Mortgage loan receivable % Jul. 2032 Mortgage loan receivable % Jan. 2035 — Mortgage loan receivable % Mar. 2053 Mortgage loan receivable % Jun. 2053 Mortgage loan receivable % Jun. 2053 Mortgage loan receivable % Aug. 2053 Mortgage loans receivable (a) % Feb. 2055 — Total mortgage loans receivable Equipment loan receivable % — Equipment loan receivable % Mar. 2017 — Equipment loan receivable % May 2022 — Total principal amount outstanding—loans receivable Unamortized loan origination costs Direct financing receivables Total loans and direct financing receivables $ $ (a) Represents two mortgage loans receivable secured by a single property. The loans have an initial interest rate of 8.50% and are subject to increases over the term of the loans. The loans allow for prepayment in whole, but not in part, with penalties ranging from 20% to 70% depending on the timing of the prepayment. The long ‑term mortgage loans receivable generally allow for prepayments in whole, but not in part, without penalty or with penalties typically ranging from 1% to 5% , depending on the timing of the prepayment, except as noted in the table above. All other loans receivable allow for prepayments in whole or in part without penalty . Absent prepayments, scheduled maturities are expected to be as follows (in thousands): Scheduled Balloon Total Principal Payments Payments Remainder of 2015 $ $ — $ 2016 — 2017 2018 — 2019 — 2020 — Thereafter Total principal repayments $ $ $ As of June 30, 2015, the Company had $ 75.9 million of investments in transactions accounted for as direct financing leases; the components of the investments accounted for as direct financing receivables were as follows (in thousands): Minimum lease payments receivable $ Estimated residual value of leased assets Unearned income Net investment $ |
Debt
Debt | 6 Months Ended |
Jun. 30, 2015 | |
Debt | |
Debt | 4. Debt Credit Facilities In September 2014, the Company entered into a $300 million unsecured revolving credit facility with a group of lenders which replaced the Company’s previous two secured credit facilities that aggregated $300 million. The facility is used to partially fund real estate acquisitions pending the issuance of long-term, fixed-rate debt. This facility, which includes an accordion feature that allows the size of the facility to be increased up to $500 million, is for an initial term of three years and includes a one -year extension option subject to certain conditions and the payment of a 0.2% extension fee. The facility is recourse to the Company and includes a guaranty from STORE Capital Acquisitions, LLC, one of the Company’s direct wholly-owned subsidiaries. Borrowings under this facility require monthly payments of interest at a rate selected by the Company of either (1) one-month LIBOR plus a credit spread ranging from 1.75% to 2.50% , or (2) the Base Rate , as defined in the agreement, plus a credit spread ranging from 0.75% to 1.50% . The credit spread used is based on the Company’s leverage ratio as defined in the agreement; based on the recent leverage ratio calculations, borrowings under the facility made on or after April 1, 2015 bear interest at one-month LIBOR plus 1.75% . The Company must also pay a 0.25% non-use fee on the unused portion of the facility. Borrowing availability under the facility is limited to 50% of the value of the Company’s eligible unencumbered assets at any point in time. At June 30, 2015, the Company had no borrowings outstanding and a pool of eligible unencumbered assets aggregating approximately $1.1 billion. The Company is subject to various financial and nonfinancial covenants under this unsecured credit facility including a maximum leverage of 65% , a minimum EBITDA to fixed char ge s ratio of 1.5 to 1, mi nimum consolidated net worth of $600 million plus 75% of additional equity raised after September 2014, and a maximum dividend payout ratio limited to 95% of Funds from Operations, all as defined in the agreement. As of June 30, 2015, the Company was in compliance with these covenants. On April 8, 2015, the Company entered into a four -month (including the one -month extension option), $50 million unsecured loan facility with a bank as a temporary supplement to borrowing capacity under its unsecured revolving credit facility. This loan facility was subject to the same borrowing limitations and covenants as the unsecured revolving credit facility discussed above and borrowings under this loan facility required monthly payments of interest at a rate selected by the Company of either (1) one-month LIBOR plus 2.00% , or (2) the Base Rate , as defined in the agreement. This facility expired in accordance with its terms in July 2015. Prior to September 19, 2014, the Company had two bank credit facilities that were secured by real estate properties which were pledged as collateral under the facilities as well as the Company’s equity interests in certain of its special purpose entity subsidiaries and the Company’s holdings of the Class B notes issued under its STORE Master Funding debt program discussed below. These previous secured credit facilities bore interest at one-month LIBOR plus a credit spread ranging from 2.45% to 3.00% . The financing costs related to the establishment of the Company’s credit facilities are deferred and amortized to interest expense over the term of the credit facilities. At June 30, 2015 and December 31, 2014, unamortized financing costs related to the Company’s credit facility totaled $1.9 million and $2.4 million, respectively. Non ‑Recourse Debt Obligations of Consolidated Special Purpose Entities During 2012, the Company implemented the STORE Master Funding debt program pursuant to which certain of its consolidated special purpose entities issue multiple series of non ‑recourse net ‑lease mortgage notes from time to time that are collateralized by the assets owned by these entities and their related leases (collateral). One of the principal features of the program is that, as additional series of notes are issued, new collateral is contributed to the collateral pool thereby increasing the size and diversity of the collateral pool for the benefit of all noteholders, including those who invested in prior series. Another feature of the program is the ability to substitute collateral from time to time subject to meeting certain prescribed conditions and criteria. The notes are generally segregated into Class A amortizing notes and Class B non ‑amortizing notes. The Company has retained each of the Class B notes which aggregate $108.0 million at June 30, 2015. The Class A notes require monthly principal and interest payments with a balloon payment due at maturity and these notes may be prepaid at any time, subject to a yield maintenance prepayment premium. As of June 30, 2015, the aggregate collateral pool securing the net ‑lease mortgage notes is comprised primarily of single tenant commercial real estate properties with an aggregate investment amount of approximately $2.0 billion. A number of additional consolidated special purpose entity subsidiaries of the Company have financed their real estate properties with traditional first mortgage debt. The notes generally require monthly principal and interest payments with balloon payments due at maturity. In general, these mortgage notes payable can be prepaid in whole or in part upon payment of a yield maintenance premium. The mortgage notes payable are collateralized by real estate properties owned by these consolidated special purpose entity subsidiaries with an aggregate investment amount of approximately $327.8 million at June 30, 2015. The mortgage notes payable, which are obligations of the consolidated special purpose entities as described in Note 2, contain various covenants customarily found in mortgage notes, including a limitation on the issuing entity’s ability to incur additional indebtedness on the underlying real estate. Although this mortgage debt generally is non ‑recourse, there are customary limited exceptions to recourse for matters such as fraud, misrepresentation, gross negligence or willful misconduct, misapplication of payments, bankruptcy and environmental liabilities. Certain of the mortgage notes payable also require the posting of cash reserves with the lender or trustee if specified coverage ratios are not maintained by the Company or one of its tenants. As of June 30, 2015, the Company had one variable-rate mortgage note (outstanding principal balance of $19.1 million) which had effectively been converted to a fixed-rate note through the use of two interest rate swaps. The Company has an agreement with the counterparty to the interest rate swaps which contains a provision that, if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, the Company could also be declared in default on its interest rate swap obligations. As of June 30, 2015, the termination value of the Company’s interest rate swaps was a liability of approximately $0.4 million. Financing costs related to the issuance of the non ‑recourse debt obligations are deferred and amortized to interest expense over the terms of the related notes. As of June 30, 2015 and December 31, 2014, unamortized financing costs related to all non ‑recourse debt obligations of the consolidated special purpose entities totaled $35.9 million and $30.9 million, respectively. The non ‑recourse debt obligations of the consolidated special purpose entity subsidiaries are summarized below (dollars in thousands): Coupon Outstanding Balance Maturity Interest June 30, December 31, Date Rate 2015 2014 Non-recourse net-lease mortgage notes: Series 2012-1, Class A Aug. 2019 % $ $ Series 2013-1, Class A-1 Mar. 2020 % Series 2013-2, Class A-1 Jul. 2020 % Series 2013-3, Class A-1 Nov. 2020 % Series 2014-1, Class A-1 Apr. 2021 % Series 2015-1, Class A-1 Apr. 2022 % — Series 2013-1, Class A-2 Mar. 2023 % Series 2013-2, Class A-2 Jul. 2023 % Series 2013-3, Class A-2 Nov. 2023 % Series 2014-1, Class A-2 Apr. 2024 % Series 2015-1, Class A-2 Apr. 2025 % — Non-recourse mortgage notes payable: $21,443 note issued July 2005 (a) Aug. 2015 % (a) $4,000 note issued August 2006 (b) Sept. 2016 % (b) $3,800 note issued September 2006 (c) Oct. 2016 % (c) $7,088 note issued April 2007 (d) May 2017 % (d) $4,400 note issued August 2007 (e) Sept. 2017 % (e) $8,000 note issued January 2012; assumed in December 2013 Jan. 2018 % $20,530 note issued December 2011 and amended February 2012 Jan. 2019 % (f) $6,500 note issued December 2012 Dec. 2019 % $2,956 note issued June 2013 Jun. 2020 % (g) $16,100 note issued February 2014 Mar. 2021 % $13,000 note issued May 2012 May 2022 % $14,950 note issued July 2012 Aug. 2022 % $26,000 note issued August 2012 Sept. 2022 % $6,400 note issued November 2012 Dec. 2022 % $11,895 note issued March 2013 Apr. 2023 % $17,500 note issued August 2013 Sept. 2023 % $10,075 note issued March 2014 Apr. 2024 % $7,750 note issued February 2013 Mar. 2038 % (h) $6,944 notes issued March 2013 Apr. 2038 % (i) Unamortized net premium Total non-recourse debt obligations of consolidated special purpose entities $ $ (a) Note was assumed in June 2014 at a premium; estimated effective yield at assumption of 3.69% . Subsequent to June 30, 2015, this note was refinanced in the amount of $21.1 million; the new note has an interest rate of 4.36% and matures in August 2025. (b) Note was assumed in July 2012 at a premium; estimated effective yield at assumption of 5.15% . (c) Note was assumed in April 2014 at a premium; estimated effective yield at assumption of 3.88% . (d) Note was assumed in December 2013 at a premium; estimated effective yield at assumption of 4.45% . (e) Note was assumed in September 2014 at a premium; estimated effective yield at assumption of 3.40% . (f) Note is a variable ‑rate note which resets monthly at one ‑month LIBOR + 3.50% . The Company has entered into two interest rate swap agreements that effectively convert the floating rate on a $12.6 million portion and a $6.5 million portion of this mortgage note payable to fixed rates of 5.299% and 5.230% , respectively. (g) Note is a variable ‑rate note which resets monthly at one ‑month LIBOR + 3.00% ; rate shown is effective rate at June 30, 2015 . (h) Interest rate is effective for first 10 years and will reset to greater of (1) initial rate plus 400 basis points or (2) Treasury rate plus 400 basis points. (i) Interest rate is effective for first 10 years and will reset to the lender’s then prevailing interest rate. As of June 30, 2015, the scheduled debt maturities, including balloon payments, during the next five years and thereafter are as follows (in thousands): Scheduled Balloon Principal Payments Total Remainder of 2015 $ $ (a) $ 2016 2017 2018 2019 2020 Thereafter $ $ $ (a) The note payable to which this balloon payment related was refinanced subsequent to June 30, 2015; the new note payable matures in August 2025 . |
Stockholders_ Equity
Stockholders’ Equity | 6 Months Ended |
Jun. 30, 2015 | |
Stockholders’ Equity | |
Stockholders' Equity Note Disclosure [Text Block] | 5. Stockholders’ Equity On November 3, 2014, the Company’s board of directors declared a 1.67 ‑for ‑one split of its common stock effected through a dividend to its stockholders. The stock dividend was treated as a stock split for accounting purposes; the $0.01 par value of the common stock was unchanged. The Company declared dividends payable to common stockholders totaling $60.5 million and $31.9 million during the six months ended June 30, 2015 and 2014, respectively. On March 30, 2015, STORE Holding redeemed all of its Series A membership interests that were held by members of the Company’s board and senior management through the distribution of 653,382 common shares of the Company to those members. In June 2015, the Company completed a follow-on stock offering in which the Company issued and sold 11,562,500 shares of common stock and STORE Holding sold 9,712,500 shares from its holdings of the Company’s common stock. The Company received $224.7 million in proceeds, net of both underwriters’ discount and offering expenses, in connection with this offering. STORE Holding held 72,436,144 of the Company’s common shares at June 30, 2015 and 82,802,026 common shares at December 31, 2014. |
Income from Discontinued Operat
Income from Discontinued Operations | 6 Months Ended |
Jun. 30, 2015 | |
Income from Discontinued Operations | |
Income from Discontinued Operations | 6. Income from Discontinued Operations Periodically, the Company may sell real estate properties it owns. Effective January 1, 2014, the Company adopted ASU No. 2014 ‑08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (ASU 2014 ‑08), under which only disposals representing a strategic shift in operations of the Company and that have (or will have) a major effect on the Company’s operations and financial results are to be presented as discontinued operations. The Company was required to continue to classify any property disposal or property classified as held for sale as of December 31, 2013 as discontinued operations prospectively; therefore, the gains and losses from these property dispositions and all operations from these properties were reclassified to discontinued operations, net of any related income tax, in the consolidated statements of income. This presentation has no impact on net income or cash flow. The Company did not classify any additional property disposals as discontinued operations subsequent to December 31, 2013. Amounts reclassified to discontinued operations during the three and six months ended June 30, 2014 included $24,000 and $127,000 , respectively, of income from real estate operations and $226,000 and $969,000 , respectively, of gain on disposition of properties related to assets that had been classified as held for sale prior to the Company’s adoption of ASU 2014 ‑08. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies | |
Commitments and Contingencies | 7. Commitments and Contingencies In the normal course of business, the Company enters into various types of commitments to purchase real estate properties. These commitments are generally subject to the Company’s customary due diligence process and, accordingly, a number of specific conditions must be met before the Company is obligated to purchase the properties. At the time the Company purchases a property, the Company may also agree to fund future improvements to the property. As of June 30, 2015, the Company had approximately $52.6 million in commitments to fund improvements to real estate properties previously acquired which will generally result in increases to the rental revenue due under the related contracts. The Company has employment agreements with each of its executive officers which will expire in November 2018. The agreements provide for minimum annual base salaries and annual incentive compensation based on the satisfactory achievement of reasonable performance criteria and objectives to be adopted by the Company’s Board of Directors each year. In addition, each officer is eligible to receive equity awards as determined by the Company’s Board of Directors. In the event an executive officer is terminated without cause or terminates employment for good reason, the Company is liable for a lump ‑sum severance payment in an amount equal to, in the case of the Company’s Chief Executive Officer, the sum of (i) two times his base salary and (ii) two times the target cash bonus for which he was eligible in the prior fiscal year (whether or not received); and, in the case of the Company’s other executive officers, the sum of (i) 1.5 times his or her base salary and (ii) 1.5 times the target cash bonus for which he or she was eligible in the prior fiscal year (whether or not received); plus, in the case of all executive officers, certain other specified termination benefits. In the event of a termination without cause, as defined in the employment agreements, the executive officer is entitled to immediate vesting of any and all outstanding unvested shares of the Company’s restricted stock that he or she has been awarded as part of the Company’s incentive compensation program. For unvested RSUs, in the event of a qualified termination, as defined in the award agreement, the executive officer is entitled to a portion of any earned award, as determined under the award agreement, based on the elapsed performance period. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Measurements | |
Fair Value Measurements | 8. Fair Value of Financial Instruments The Company’s derivatives are required to be measured at fair value in the Company’s consolidated financial statements on a recurring basis. Derivatives are measured under a market approach, using prices obtained from a nationally recognized pricing service and pricing models with market observable inputs such as interest rates and equity index levels. These measurements are classified as Level 2 within the fair value hierarchy. The fair value of the Company’s derivatives (interest rate swaps) at June 30, 2015 and December 31, 2014 was a liability of $328,000 and $266,000 , respectively, included in other liabilities on the consolidated balance sheets. In addition to the disclosures for assets and liabilities required to be measured at fair value at the balance sheet date, companies are required to disclose the estimated fair values of all financial instruments, even if they are not carried at their fair value. The fair values of financial instruments are estimates based upon market conditions and perceived risks at June 30, 2015 and December 31, 2014. These estimates require management’s judgment and may not be indicative of the future fair values of the assets and liabilities. Financial assets and liabilities for which the carrying values approximate their fair values include cash and cash equivalents, restricted cash and escrow deposits, accounts receivable, accounts payable and tenant deposits. Generally these assets and liabilities are short ‑term in duration and are recorded at fair value on the consolidated balance sheets. Additionally, the Company believes the carrying values of its fixed ‑rate loans receivable approximate fair values based on market quotes for comparable instruments or discounted cash flow analysis using estimates of the amount and timing of future cash flows, market rates and credit spreads. The estimated fair values of the non ‑recourse debt obligations of consolidated special purpose entities have been derived based on market observable inputs such as interest rates and discounted cash flow analyses using estimates of the amount and timing of future cash flows, market rates and credit spreads. These measurements are classified as Level 2 within the fair value hierarchy. At June 30, 2015, these debt obligations had a carrying value of $ 1,638.8 million and an estimated fair value of $1,735.6 million. At December 31, 2014, these debt obligations had a carrying value of $1,284.2 million and an estimated fair value of $1,349.0 million. |
Summary of Significant Accoun15
Summary of Significant Accounting Principles (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Summary of Significant Accounting Principles | |
Basis of Accounting and Principles of Consolidation | Basis of Accounting and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and the rules and regulations of the U.S. Securities and Exchange Commission (SEC). In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of interim periods are not necessarily indicative of the results for the entire year. Certain information and note disclosures, normally included in financial statements prepared in accordance with GAAP, have been condensed or omitted from these statements and, accordingly, these statements should be read in conjunction with the Company’s audited consolidated financial statements as filed with the SEC in its Annual Report on Form 10-K for the fiscal year ended December 31, 2014. These consolidated statements include the accounts of STORE Capital and its subsidiaries which are wholly ‑owned and controlled by the Company through its voting interest. One of the Company’s wholly ‑owned subsidiaries, STORE Capital Advisors, LLC, provides all of the general and administrative services for the day ‑to ‑day operations of the consolidated group, including property acquisition and lease origination, real estate portfolio management and marketing, accounting and treasury services. The remaining subsidiaries were formed to acquire and hold real estate investments or to facilitate non ‑recourse secured borrowing activities. Generally, the initial operations of the real estate subsidiaries are funded by an interest ‑bearing intercompany loan from STORE Capital, and such intercompany loan is repaid when the subsidiary issues long ‑term debt secured by its properties. All intercompany account balances and transactions have been eliminated in consolidation. Certain of the Company’s wholly ‑owned consolidated subsidiaries were formed as special purpose entities. Each special purpose entity is a separate legal entity and is the sole owner of its assets and liabilities. The assets of the special purpose entities are not available to pay or otherwise satisfy obligations to the creditors of any owner or affiliate of the special purpose entity. At June 30, 2015 and December 31, 2014, assets totaling $ 3.1 billion and $ 2.5 billion, respectively, were held and third-party li abilities totaling $1.7 billion and $ 1.3 billion, respectively, were o wed by these special purpose entities and are included in the accompanying consolidated balance sheets. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Although management believes its estimates are reasonable, actual results could differ from those estimates. |
Segment Reporting | Segment Reporting The Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC) Topic 280, Segment Reporting , established standards for the manner in which enterprises report information about operating segments. The Company views its operations as one reportable segment. |
Accounting for Real Estate Investments | Accounting for Real Estate Investments STORE Capital records the acquisition of real estate properties at cost, including acquisition and closing costs. The Company allocates the cost of real estate properties to the tangible and intangible assets and liabilities acquired based on their estimated relative fair values. Real estate properties subject to an existing in ‑place lease at the date of acquisition are recorded as business combinations and each tangible and intangible asset and liability acquired is recorded at fair value. Management uses multiple sources to estimate fair value, including independent appraisals and information obtained about each property as a result of its pre ‑acquisition due diligence and its marketing and leasing activities. The Company expenses transaction costs associated with real estate acquisitions accounted for as business combinations in the period incurred. In ‑place lease intangibles are valued based on management’s estimates of lost rent and carrying costs during the time it would take to locate a tenant if the property were vacant, considering current market conditions and costs to execute similar leases. In estimating lost rent and carrying costs, management considers market rents, real estate taxes, insurance, costs to execute similar leases including leasing commissions and other related costs. The value assigned to in ‑place leases is amortized on a straight ‑line basis as a component of depreciation and amortization expense typically over the remaining term of the related leases. The fair value of any above ‑market and below ‑market leases is estimated based on the present value of the difference between the contractual amounts to be paid pursuant to the in ‑place lease and management’s estimate of current market lease rates for the property, measured over a period equal to the remaining term of the lease. Capitalized above ‑market lease intangibles are amortized over the remaining term of the respective leases as a decrease to rental revenue. Below ‑market lease intangibles are amortized as an increase in rental revenue over the remaining term of the respective leases plus the fixed ‑rate renewal periods on those leases, if any. Should a lease terminate early, the unamortized portion of any related lease intangible is immediately recognized in operations. The Company’s real estate portfolio is depreciated using the straight ‑line method over the estimated remaining useful life of the properties, which generally ranges from 30 to 40 years for buildings and is 15 years for land improvements. Properties classified as held for sale are recorded at the lower of their carrying value or their fair value, less anticipated closing costs. Any properties classified as held for sale are not depreciated. |
Real Estate Investments, Impairment | Impairment STORE Capital reviews its real estate investments and related lease intangibles periodically for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through operations. Management considers factors such as expected future undiscounted cash flows, estimated residual value, market trends (such as the effects of leasing demand and competition) and other factors including bona fide purchase offers received from third parties in making this assessment. These factors are classified as Level 3 inputs within the fair value hierarchy. An asset is considered impaired if the carrying value of the asset exceeds its estimated undiscounted cash flows and the impairment is calculated as the amount by which the carrying value of the asset exceeds its estimated fair value. Estimating future cash flows is highly subjective and such estimates could differ materially from actual results. |
Real Estate Investments, Revenue Recognition | Revenue Recognition STORE Capital leases real estate to its tenants under long ‑term net leases that are predominantly classified as operating leases. Direct costs associated with lease origination, offset by any lease origination fees received, are deferred and amortized over the related lease term as an adjustment to rental revenue. Substantially all of the leases are triple ‑net, which provide that the lessees are responsible for the payment of all property operating expenses, including property taxes, maintenance and insurance. The Company may collect property taxes from its customers and remit those taxes to governmental authorities; such property taxes are presented on a net basis in the consolidated income statements. The Company’s leases generally provide for rent escalations throughout the lease terms. For leases that provide for specific contractual escalations, rental revenue is recognized on a straight ‑line basis so as to produce a constant periodic rent over the term of the lease. Accordingly, accrued rental revenue, calculated as the aggregate difference between the rental revenue recognized on a straight ‑line basis and scheduled rents, represents unbilled rent receivables that the Company will receive only if the tenants make all rent payments required through the expiration of the lease. The Company provides an estimated reserve for uncollectible straight ‑line rental revenue based on management’s assessment of the risks inherent in those lease contracts, giving consideration to industry default rates for long ‑term receivables. There was $7.0 million and $ 4.7 million of accrued straight ‑line rental revenue, net of allowances of $2.5 million and $1.7 million, at June 30, 2015 and December 31, 2014, respectively, included in other assets on the consolidated balance sheets. Leases that have contingent rent escalators indexed to future increases in the Consumer Price Index (CPI) may adjust over a one ‑year period or over multiple ‑year periods. Generally, these escalators increase rent at the lesser of (a) 1 to 1.25 times the increase in the CPI over a specified period or (b) a fixed percentage. Because of the volatility and uncertainty with respect to future changes in the CPI, the Company’s inability to determine the extent to which any specific future change in the CPI is probable at each rent adjustment date during the entire term of these leases and the Company’s view that the multiplier does not represent a significant leverage factor, increases in rental revenue from leases with this type of escalator are recognized only after the changes in the rental rates have actually occurred. For leases that have contingent rentals that are based on a percentage of the tenant’s gross sales, the Company recognizes contingent rental revenue when the threshold upon which the contingent lease payment is based is actually reached. Approximately 1.5% of the Company’s investment portfolio is subject to leases that provide for contingent rent based on a percentage of the tenant’s gross sales. The Company suspends revenue recognition if the collectibility of amounts due pursuant to a lease is not reasonably assured or if the tenant’s monthly lease payments become more than 60 days past due, whichever is earlier. The Company reviews its rent receivables for collectibility on a regular basis, taking into consideration changes in factors such as the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area where the property is located. In the event that the collectibility of a receivable with respect to any tenant is in doubt, a provision for uncollectible amounts will be established or a direct write ‑off of the specific rent receivable will be made. As of June 30, 2015, the Company had a $0.6 million provision for uncollectible contractual rent payments due from tenants; there was no provision at December 31, 2014. |
Loans Receivable | Loans Receivable STORE Capital holds its loans receivable for long ‑term investment. Loans receivable are carried at amortized cost, including related unamortized discounts or premiums, if any. Revenue Recognition The Company recognizes interest income on loans receivable using the effective ‑interest method applied on a loan ‑by ‑loan basis. Direct costs associated with originating loans are offset against any related fees received and the balance, along with any premium or discount, is deferred and amortized as an adjustment to interest income over the term of the related loan receivable using the effective interest method. A loan receivable is placed on nonaccrual status when the loan has become 60 days past due, or earlier if management determines that full recovery of the contractually specified payments of principal and interest is doubtful. While on nonaccrual status, interest income is recognized only when received. As of June 30, 2015 and December 31, 2014, there were no loans on nonaccrual status. Impairment and Provision for Loan Losses The Company periodically evaluates the collectibility of its loans receivable, including accrued interest, by analyzing the underlying property ‑level economics and trends, collateral value and quality and other relevant factors in determining the adequacy of its allowance for loan losses. A loan is determined to be impaired when, in management’s judgment based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Specific allowances for loan losses are provided for impaired loans on an individual loan basis in the amount by which the carrying value exceeds the estimated fair value of the underlying collateral less disposition costs. There was no allowance for loan losses at June 30, 2015 or December 31, 2014. |
Direct Financing Receivables | Direct Financing Receivables Certain of the Company’s real estate investment transactions are accounted for as direct financing leases. The Company records the direct financing receivables at their net investment, determined as the aggregate minimum lease payments and the estimated residual value of the leased property less unearned income. The unearned income is recognized over the life of the related contracts so as to produce a constant rate of return on the net investment in the asset. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash and highly liquid investment securities with maturities at acquisition of three months or less. The Company invests cash primarily in money ‑market funds of a major financial institution, consisting predominantly of U.S. Government obligations. |
Restricted Cash and Escrow Deposits | Restricted Cash and Escrow Deposits The Company had $23.4 million and $15.4 million of restricted cash and deposits in escrow at June 30, 2015 and December 31, 2014, respectively, which were included in other assets on the consolidated balance sheets. |
Deferred Costs | Deferred Costs Deferred costs consist principally of financing costs related to the issuance of the Company’s debt. Deferred financing costs are amortized as an increase to interest expense over the term of the related debt instrument using the effective interest method. Deferred costs also include lease origination costs, which are amortized as a decrease to rental revenue over the term of the respective lease. |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities The Company may enter into derivatives contracts as part of its overall financing strategy to manage the Company’s exposure to changes in interest rates associated with current and/or future debt issuances. The Company does not use derivatives for trading or speculative purposes. The Company records its derivatives on the balance sheet at fair value as either an asset or liability. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the earnings effect of the hedged forecasted transactions in a cash flow hedge. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (loss). Amounts reported in accumulated other comprehensive income (loss) related to cash flow hedges are reclassified to operations as an adjustment to interest expense as interest payments are made on the hedged debt transaction. As of June 30, 2015, the Company had entered into two interest rate swap agreements with current notional amounts of $12.6 million and $6.5 million that were designated as cash flow hedges associated with the Company’s secured, variable ‑rate mortgage note payable due in 2019 (Note 4). |
Fair Value Measurement | Fair Value Measurement The Company estimates fair value of financial and non-financial assets and liabilities based on the framework established in fair value accounting guidance. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The hierarchy described below prioritizes inputs to the valuation techniques used in measuring the fair value of assets and liabilities. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs to be used when available. The hierarchy is broken down into three levels based on the reliability of inputs as follows: · Level 1—Quoted market prices in active markets for identical assets and liabilities that the Company has the ability to access. · Level 2—Significant inputs that are observable, either directly or indirectly. These types of inputs would include quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets in inactive markets and market ‑corroborated inputs. Level 3—Inputs that are unobservable and significant to the overall fair value measurement of the assets or liabilities. These types of inputs include the Company’s own assumptions. |
Share‑based Compensation | Share ‑based Compensation Certain directors and employees of the Company have been granted long ‑term incentive awards, including restricted shares and stock units of the Company’s common stock and profits interest units issued by STORE Holding, which provide them with equity interests as an incentive to remain in the Company’s service and align executives’ interests with those of the Company’s equity holders. During the six months ended June 30, 2015, the Company granted restricted share awards (RSAs) representing 86,746 shares of restricted common stock to its executive officers and certain directors and other employees. During the same period, 161,979 shares of restricted stock vested and 3,022 shares of restricted stock were forfeited. As of June 30, 2015, the Company had 577,651 shares of restricted common stock outstanding. The Company estimates the fair value of RSAs at the date of grant and recognizes that amount in general and administrative expense ratably over the vesting period at the greater of the amount amortized on a straight ‑line basis or the amount vested. The fair value of the RSAs is based on the per-share price of the common stock on the date of the grant. Prior to the Company’s IPO, the fair value was based on the per ‑share price of the common stock issued in the Company’s private equity offerings. In March 2015, the Company issued 348,220 restricted stock units (RSUs) with both a market condition and a service condition to its executive officers. The number of common shares to be received at vesting will range from zero to 100% of the total RSUs granted based on total shareholder return (TSR) on the Company’s common stock measured against the benchmark TSR of a peer group over a three -year performance period ending December 31, 2017. The TSR is a measure of stock price appreciation plus dividends paid during the measurement period. To the extent market and service conditions are met, the RSUs vest 50% at the end of 2017 and, subject to continued employment, 50% at the end of 2018. The Company valued the RSUs using a Monte Carlo simulation model on the date of grant which resulted in a grant date fair value of $4.4 million. The Monte Carlo simulation was computed based on a volatility assumption of 23.51% , a risk-free interest rate of 0.84% and a dividend yield of zero . The RSUs accrue dividend equivalents which are paid only if the award vests. At June 30, 2015, there were 348,220 RSUs outstanding. |
Income Taxes | Income Taxes As a REIT, the Company generally will not be subject to federal income tax; however, it is still subject to state and local income taxes and to federal income and excise tax on its undistributed income. STORE Investment Corporation is the Company’s wholly ‑owned taxable REIT subsidiary (TRS) created to engage in non ‑qualifying REIT activities. The TRS is subject to federal, state and local income taxes. Management of the Company determines whether any tax positions taken or expected to be taken meet the “more ‑likely ‑than ‑not” threshold of being sustained by the applicable federal, state or local tax authority. Tax returns filed for 2011 through 2014 are subject to examination by these jurisdictions. As of June 30, 2015 and December 31, 2014, management concluded that there is no tax liability relating to uncertain income tax positions. The Company’s policy is to recognize interest related to any underpayment of income taxes as interest expense and to recognize any penalties as operating expenses. There was no accrual for interest or penalties at June 30, 2015 or December 31, 2014. |
Net Income Per Common Share | Net Income Per Common Share Net income per common share has been computed pursuant to the guidance in the FASB ASC Topic 260, Earnings Per Share . The guidance requires the classification of the Company’s unvested restricted common stock, which contain rights to receive non ‑forfeitable dividends, as participating securities requiring the two ‑class method of computing net income per common share. The following table is a reconciliation of the numerator and denominator used in the computation of basic and diluted income per common share (dollars in thousands): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Numerator: Net income $ $ $ $ Less: preferred stock dividends — — Net income attributable to common stockholders Less: earnings attributable to unvested restricted shares Net income used in basic and diluted income per share $ $ $ $ Denominator: Weighted average common shares outstanding Less: Weighted average number of shares of unvested restricted stock Weighted average shares outstanding used in basic income per share Effects of dilutive securities: Add: Treasury stock method impact of potentially dilutive securities (a) — — — — Weighted average shares outstanding used in diluted income per share (a) For the three months ended June 30, 2015 and 2014, excludes 160,971 shares and 49,451 shares, respectively, and for the six months ended June 30, 2015 and 2014, excludes 184,605 shares and 65,217 shares, respectively, related to unvested restricted shares as the effect would be antidilutive. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or the SEC. The Company adopts the new pronouncements as of the specified effective date. When permitted, the Company may elect to early adopt the new pronouncements. Unless otherwise discussed, these new accounting pronouncements include technical corrections to existing guidance or introduce new guidance related to specialized industries or entities and therefore will have minimal, if any, impact on the Company’s financial position or results of operations upon adoption. In May 2014, the FASB issued Accounting Standards Update (ASU) 2014 ‑09, Revenue from Contracts with Customers: Topic 606 . This new guidance establishes a principles ‑based approach for accounting for revenue from contracts with customers. Lease contracts covered by Topic 840, Leases , are excluded from the scope of this new guidance. At the time of issuance, this new standard was effective for public companies for annual reporting periods beginning after December 15, 2016 and early adoption was not permitted. On July 9, 2015, the FASB decided to defer by one year the effective date of the standard for public companies which will now be effective for annual reporting periods beginning after December 15, 2017 and early adoption is permitted but only as of an annual reporting period beginning after December 15, 2016. As leases are excluded from this guidance, the Company does not anticipate this standard to have a material impact on its financial position, results of operations and cash flows. In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-30) – Simplifying the Presentation of Debt Issuance Costs. This guidance was issued to simplify the presentation of debt issuance costs by requiring debt issuance costs to be presented as a deduction from the corresponding debt liability and, therefore, make the presentation of debt issuance costs consistent with the presentation of debt discounts or premiums. This new standard is effective for public companies for annual reporting periods beginning after December 15, 2015, with early adoption permitted. Upon adoption, the new guidance is required to be applied retrospectively. The Company is currently evaluating the impact of the adoption of this new standard which is expected to result in reclassifications of certain deferred costs on the Company’s balance sheets but will not have an impact on its results of operations or cash flows. |
Summary of Significant Accoun16
Summary of Significant Accounting Principles (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Summary of Significant Accounting Principles | |
Reconciliation of the numerator and denominator used in the computation of basic and diluted income per common share | The following table is a reconciliation of the numerator and denominator used in the computation of basic and diluted income per common share (dollars in thousands): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Numerator: Net income $ $ $ $ Less: preferred stock dividends — — Net income attributable to common stockholders Less: earnings attributable to unvested restricted shares Net income used in basic and diluted income per share $ $ $ $ Denominator: Weighted average common shares outstanding Less: Weighted average number of shares of unvested restricted stock Weighted average shares outstanding used in basic income per share Effects of dilutive securities: Add: Treasury stock method impact of potentially dilutive securities (a) — — — — Weighted average shares outstanding used in diluted income per share (a) For the three months ended June 30, 2015 and 2014, excludes 160,971 shares and 49,451 shares, respectively, and for the six months ended June 30, 2015 and 2014, excludes 184,605 shares and 65,217 shares, respectively, related to unvested restricted shares as the effect would be antidilutive. |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Investments: | |
Schedule of gross real estate and loan activity | During the six months ended June 30, 2015, the Company had the following gross real estate and loan activity (dollars in thousands): Number of Dollar Investment Amount of Locations Investments (a) Gross investments, December 31, 2014 $ Acquisition of and additions to real estate (b)(c) Investment in loans and direct financing receivables Sales of real estate Principal collections on loans and direct financing receivables Provision for impairment of real estate Other Gross investments, June 30, 2015 (d) Less accumulated depreciation and amortization (d) Net investments, June 30, 2015 $ (a) The dollar amount of investments includes the investment in land, buildings, improvements and lease intangibles related to real estate investments as well as the carrying amount of the loans and direct financing receivables. (b) Includes $0.4 million of interest capitalized to properties under construction. (c) Excludes $15.4 million of tenant improvement advances disbursed in 2015 which were accrued as of December 31, 2014. Includes the dollar amount of investments ( $ 11.5 million) and the accumulated depreciation ( $ 0.9 million) related to real estate investments held for sale at June 30, 2015. |
Schedule of investment portfolio diversification by industry | The following table shows information regarding the diversification of the Company’s total investment portfolio among the different industries in which its tenants and borrowers operate as of June 30, 2015 (dollars in thousands): Percentage of Number of Dollar Total Dollar Investment Amount of Amount of Locations Investments (a) Investments Restaurants $ % Health clubs Early childhood education centers Movie theaters Furniture stores Sporting goods stores Colleges and professional schools All other service industries All other retail industries All industrial $ % The dollar amount of investments includes the gross investment in land, buildings, improvements and lease intangibles related to real estate investments as well as the carrying amount of the loans and direct financing receivables . |
Schedule detailing intangible lease assets and related accumulated amortization | The following details intangible lease assets and related accumulated amortization (in thousands): June 30, December 31, 2015 2014 In-place lease assets $ (a) $ Above-market lease assets Ground lease interest assets Total intangible lease assets Accumulated amortization (a) Net intangible lease assets $ $ Includes the dollar amount of in-place lease intangibles ( $276,000 ) and the accumulated amortization ($47,000) related to real estate investments held for sale at June 30, 2015. |
Schedule of future minimum rentals to be received under operating leases | Scheduled future minimum rentals to be received under the remaining noncancelable term of the operating leases at June 30, 2015, are as follows (in thousands): Remainder of 2015 $ 2016 2017 2018 2019 2020 Thereafter Total future minimum rentals $ |
Schedule summarizing loans and direct financing receivables | The Company’s loans and direct financing receivables are summarized below (dollars in thousands): Stated Interest Maturity June 30, December 31, Type Rate Date 2015 2014 Mortgage loan receivable % $ — $ Mortgage loan receivable % Jan. 2017 Mortgage loan receivable % Jan. 2028 Mortgage loan receivable % Jul. 2032 Mortgage loan receivable % Jan. 2035 — Mortgage loan receivable % Mar. 2053 Mortgage loan receivable % Jun. 2053 Mortgage loan receivable % Jun. 2053 Mortgage loan receivable % Aug. 2053 Mortgage loans receivable (a) % Feb. 2055 — Total mortgage loans receivable Equipment loan receivable % — Equipment loan receivable % Mar. 2017 — Equipment loan receivable % May 2022 — Total principal amount outstanding—loans receivable Unamortized loan origination costs Direct financing receivables Total loans and direct financing receivables $ $ Represents two mortgage loans receivable secured by a single property. The loans have an initial interest rate of 8.50% and are subject to increases over the term of the loans. The loans allow for prepayment in whole, but not in part, with penalties ranging from 20% to 70% depending on the timing of the prepayment. |
Schedule of maturities of loans receivable | Absent prepayments, scheduled maturities are expected to be as follows (in thousands): Scheduled Balloon Total Principal Payments Payments Remainder of 2015 $ $ — $ 2016 — 2017 2018 — 2019 — 2020 — Thereafter Total principal repayments $ $ $ |
Schedule of the components of the investments accounted for as direct financing receivables | Scheduled Balloon Total Principal Payments Payments Remainder of 2015 $ $ — $ 2016 — 2017 2018 — 2019 — 2020 — Thereafter Total principal repayments $ $ $ As of June 30, 2015, the Company had $ 75.9 million of investments in transactions accounted for as direct financing leases; the components of the investments accounted for as direct financing receivables were as follows (in thousands): Minimum lease payments receivable $ Estimated residual value of leased assets Unearned income Net investment $ |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Debt | |
Schedule of Debt | The non ‑recourse debt obligations of the consolidated special purpose entity subsidiaries are summarized below (dollars in thousands): Coupon Outstanding Balance Maturity Interest June 30, December 31, Date Rate 2015 2014 Non-recourse net-lease mortgage notes: Series 2012-1, Class A Aug. 2019 % $ $ Series 2013-1, Class A-1 Mar. 2020 % Series 2013-2, Class A-1 Jul. 2020 % Series 2013-3, Class A-1 Nov. 2020 % Series 2014-1, Class A-1 Apr. 2021 % Series 2015-1, Class A-1 Apr. 2022 % — Series 2013-1, Class A-2 Mar. 2023 % Series 2013-2, Class A-2 Jul. 2023 % Series 2013-3, Class A-2 Nov. 2023 % Series 2014-1, Class A-2 Apr. 2024 % Series 2015-1, Class A-2 Apr. 2025 % — Non-recourse mortgage notes payable: $21,443 note issued July 2005 (a) Aug. 2015 % (a) $4,000 note issued August 2006 (b) Sept. 2016 % (b) $3,800 note issued September 2006 (c) Oct. 2016 % (c) $7,088 note issued April 2007 (d) May 2017 % (d) $4,400 note issued August 2007 (e) Sept. 2017 % (e) $8,000 note issued January 2012; assumed in December 2013 Jan. 2018 % $20,530 note issued December 2011 and amended February 2012 Jan. 2019 % (f) $6,500 note issued December 2012 Dec. 2019 % $2,956 note issued June 2013 Jun. 2020 % (g) $16,100 note issued February 2014 Mar. 2021 % $13,000 note issued May 2012 May 2022 % $14,950 note issued July 2012 Aug. 2022 % $26,000 note issued August 2012 Sept. 2022 % $6,400 note issued November 2012 Dec. 2022 % $11,895 note issued March 2013 Apr. 2023 % $17,500 note issued August 2013 Sept. 2023 % $10,075 note issued March 2014 Apr. 2024 % $7,750 note issued February 2013 Mar. 2038 % (h) $6,944 notes issued March 2013 Apr. 2038 % (i) Unamortized net premium Total non-recourse debt obligations of consolidated special purpose entities $ $ (a) Note was assumed in June 2014 at a premium; estimated effective yield at assumption of 3.69% . Subsequent to June 30, 2015, this note was refinanced in the amount of $21.1 million; the new note has an interest rate of 4.36% and matures in August 2025. (b) Note was assumed in July 2012 at a premium; estimated effective yield at assumption of 5.15% . (c) Note was assumed in April 2014 at a premium; estimated effective yield at assumption of 3.88% . (d) Note was assumed in December 2013 at a premium; estimated effective yield at assumption of 4.45% . (e) Note was assumed in September 2014 at a premium; estimated effective yield at assumption of 3.40% . (f) Note is a variable ‑rate note which resets monthly at one ‑month LIBOR + 3.50% . The Company has entered into two interest rate swap agreements that effectively convert the floating rate on a $12.6 million portion and a $6.5 million portion of this mortgage note payable to fixed rates of 5.299% and 5.230% , respectively. (g) Note is a variable ‑rate note which resets monthly at one ‑month LIBOR + 3.00% ; rate shown is effective rate at June 30, 2015 . (h) Interest rate is effective for first 10 years and will reset to greater of (1) initial rate plus 400 basis points or (2) Treasury rate plus 400 basis points. (i) Interest rate is effective for first 10 years and will reset to the lender’s then prevailing interest rate. |
Schedule of Maturities of Long-term Debt | As of June 30, 2015, the scheduled debt maturities, including balloon payments, during the next five years and thereafter are as follows (in thousands): Scheduled Balloon Principal Payments Total Remainder of 2015 $ $ (a) $ 2016 2017 2018 2019 2020 Thereafter $ $ $ The note payable to which this balloon payment related was refinanced subsequent to June 30, 2015; the new note payable matures in August 2025 |
Organization and Formation Ac19
Organization and Formation Activities (Details) - Jun. 30, 2015 - shares | Total |
Related Party Transaction [Line Items] | |
Common stock outstanding | 126,858,765 |
Shares issued | 11,562,500 |
STORE Holding Company, majority shareholder of the Company | |
Related Party Transaction [Line Items] | |
Percentage ownership of the entity | 57.10% |
Common stock outstanding | 72,436,144 |
Shares sold by related party | 9,712,500 |
Summary of Significant Accoun20
Summary of Significant Accounting Principles (Details) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015USD ($)segmentloan | Dec. 31, 2014USD ($)loan | |
Basis of Accounting and Principles of Consolidation | ||
Assets owned | $ 3,487,859,000 | $ 2,913,612,000 |
Liabilities owed | $ 1,702,206,000 | 1,330,928,000 |
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | ||
Number of Reportable Segments | segment | 1 | |
Accounting for Real Estate Investments | ||
Accrued straight‑line rental revenue, net of allowance | $ 7,000,000 | 4,700,000 |
Accrued straight‑line rental revenue, allowance | $ 2,500,000 | 1,700,000 |
Leases indexed to increases in the CPI, minimum adjustment period | 1 year | |
Leases indexed to increases in the CPI, minimum multiplier increasing rent (in multipliers) | 1 | |
Leases indexed to increases in the CPI, maximum multiplier increasing rent (in multipliers) | 1.25 | |
Portion of investment portfolio subject to contingent rent based upon tenant sales (as a percent) | 1.50% | |
Loans receivable | ||
Allowance for loan losses | $ 0 | 0 |
Restricted Cash and Escrow Deposits | ||
Restricted Cash and Deposits | $ 23,400,000 | 15,400,000 |
Rent receivables | ||
Loans receivable | ||
Maximum past due period for tenant lease payments causing suspension of revenue recognition. | 60 days | |
Provision for uncollectible contractual rent payments | $ 600,000 | $ 0 |
Loans receivable | ||
Loans receivable | ||
Maximum past due period for loans payments causing nonaccrual status. | 60 days | |
Loans on nonaccrual status (in loans) | loan | 0 | 0 |
Buildings | Maximum | ||
Accounting for Real Estate Investments | ||
Property, Plant and Equipment, Useful Life | 40 years | |
Buildings | Minimum | ||
Accounting for Real Estate Investments | ||
Property, Plant and Equipment, Useful Life | 30 years | |
Land improvements | ||
Accounting for Real Estate Investments | ||
Property, Plant and Equipment, Useful Life | 15 years | |
Consolidated special purpose entities | ||
Basis of Accounting and Principles of Consolidation | ||
Assets owned | $ 3,100,000,000 | $ 2,500,000,000 |
Liabilities owed | $ 1,700,000,000 | $ 1,300,000,000 |
Summary of Significant Accoun21
Summary of Significant Accounting Principles (Details 2) $ in Thousands | 1 Months Ended | 3 Months Ended | 4 Months Ended | 6 Months Ended | |||
Mar. 31, 2015USD ($)shares | Jun. 30, 2015USD ($)agreementshares | Jun. 30, 2014USD ($)shares | Jun. 30, 2015USD ($)agreementshares | Jun. 30, 2015USD ($)agreementshares | Jun. 30, 2014USD ($)shares | Dec. 31, 2014USD ($) | |
Income Tax Examination, Penalties and Interest Accrued | |||||||
Uncertain income tax positions | $ | $ 0 | $ 0 | $ 0 | $ 0 | |||
Accrual for interest or penalities | $ | 0 | $ 0 | 0 | $ 0 | |||
Numerator: | |||||||
Net income | $ | 19,634 | $ 10,422 | 36,700 | $ 19,961 | |||
Less: preferred stock dividends | $ | (8) | (8) | |||||
Net income attributable to common stockholders | $ | 19,634 | 10,414 | 36,700 | 19,953 | |||
Less: earnings attributable to unvested restricted shares | $ | (142) | (120) | (285) | (236) | |||
Net income used in basic and diluted income per share | $ | $ 19,492 | $ 10,294 | $ 36,415 | $ 19,717 | |||
Denominator: | |||||||
Weighted average common shares outstanding | 118,086,159 | 70,899,341 | 116,658,926 | 67,188,542 | |||
Less: Weighted average number of shares of unvested restricted stock (in shares) | (578,298) | (485,998) | (580,404) | (448,854) | |||
Weighted average shares outstanding used in basic income per share (in shares) | 117,507,861 | 70,413,343 | 116,078,522 | 66,739,688 | |||
Effects of dilutive securities: | |||||||
Weighted average shares outstanding used in diluted income per share (in shares) | 117,507,861 | 70,413,343 | 116,078,522 | 66,739,688 | |||
Antidilutive unvested restricted shares (in shares) | 160,971 | 49,451 | 184,605 | 65,217 | |||
Interest rate swaps | |||||||
Derivative Instruments and Hedging Activities | |||||||
Number of agreements | agreement | 2 | 2 | 2 | ||||
Derivative one [Member] | Designated as hedging instrument | Interest rate swaps | |||||||
Derivative Instruments and Hedging Activities | |||||||
Current notional amounts | $ | $ 12,600 | $ 12,600 | $ 12,600 | ||||
Derivative two [Member] | Designated as hedging instrument | Interest rate swaps | |||||||
Derivative Instruments and Hedging Activities | |||||||
Current notional amounts | $ | $ 6,500 | $ 6,500 | $ 6,500 | ||||
Restricted Stock | |||||||
Share‑based Compensation | |||||||
Granted in period (in shares) | 86,746 | ||||||
Vested in period (in shares) | 161,979 | ||||||
Forfeited in period (in shares) | (3,022) | ||||||
Outstanding (in shares) | 577,651 | 577,651 | 577,651 | ||||
Restricted stock units | Executive Officer [Member] | |||||||
Share‑based Compensation | |||||||
Grant date fair value | $ | $ 4,400 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||||||
Volatility rate (as a percent) | 23.51% | ||||||
Risk free interest rate (as a percent) | 0.84% | ||||||
Dividend yield (as a percent) | 0.00% | ||||||
Restricted stock units | Executive Officer [Member] | Vesting Based On Service And Market Conditions[Member] | |||||||
Share‑based Compensation | |||||||
Granted in period (in shares) | 348,220 | ||||||
Outstanding (in shares) | 348,220 | 348,220 | 348,220 | ||||
Period over which TSR of the company measured against the benchmark TSR of a peer group | 3 years | ||||||
Restricted stock units | Executive Officer [Member] | Vesting Based On Service And Market Conditions[Member] | Maximum | |||||||
Share‑based Compensation | |||||||
Number of common shares to be received at vesting (as a percent) | 100.00% | ||||||
Restricted stock units | Executive Officer [Member] | Vesting Based On Service And Market Conditions[Member] | Minimum | |||||||
Share‑based Compensation | |||||||
Number of common shares to be received at vesting (as a percent) | 0.00% | ||||||
Restricted stock units | Executive Officer [Member] | Vesting Based On Service And Market Conditions[Member] | 2017 | |||||||
Share‑based Compensation | |||||||
Vesting percentage (as a percent) | 50.00% | ||||||
Restricted stock units | Executive Officer [Member] | Vesting Based On Service And Market Conditions[Member] | 2018 | |||||||
Share‑based Compensation | |||||||
Vesting percentage (as a percent) | 50.00% |
Investments (Details)
Investments (Details) $ in Thousands | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2015USD ($)property | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($)property | |||
Investments: | |||||
Number of property locations of investments (in locations) | property | 1,175 | 947 | |||
Number of owned properties (in properties) | property | 1,162 | ||||
Number of properties owned as direct financing receivables | property | 15 | ||||
Number of ground lease interests (in properties) | property | 8 | ||||
Number of properties which secure certain mortgage loans (in properties) | property | 5 | ||||
Gross acquisition cost of real estate investments | $ 3,310,000 | ||||
Number of Investment Locations | |||||
NumberOfRealEstatePropertiesGroundLeasesAndMortgages | property | 1,175 | 947 | |||
Acquisition of and additions to real estate | property | [1] | 227 | |||
Investment in loans and direct financing receivables | property | 6 | ||||
Sales of real estate | property | (4) | ||||
Principal collections on loans and direct financing receivables | property | (1) | ||||
NumberOfRealEstatePropertiesGroundLeasesAndMortgages | property | 1,175 | 947 | |||
Dollar Amount of Investments | |||||
Gross investments, December 31, 2014 | [2] | $ 2,805,911 | |||
Acquisition of and additions to real estate | [1],[2] | 624,742 | |||
Investment in loans and direct financing receivables | (61,519) | [2] | $ (40,713) | ||
Sales of real estate | [2] | (11,559) | |||
Principal collections on loans and direct financing receivables | (4,579) | [2] | $ (5,975) | ||
Provision for impairment of real estate | [2] | 1,000 | |||
Other | [2] | (21) | |||
Gross investments, June 30, 2015 | [2] | 3,475,013 | [3],[4] | $ 2,805,911 | |
Less accumulated depreciation and amortization | [2],[3] | (138,714) | |||
Net investments | 3,336,299 | [2] | $ 2,707,240 | ||
Tenant improvement advances disbursed | 15,400 | ||||
Interested capitalized | 400 | ||||
Dollar amount of real estate investments held for sale | 11,500 | ||||
Accumulated Depreciation of real estate investments held for sale | $ 900 | ||||
[1] | Includes $0.4 million of interest capitalized to properties under construction.Excludes $15.4 million of tenant improvement advances disbursed in 2015 which were accrued as of December 31, 2014. | ||||
[2] | The dollar amount of investments includes the investment in land, buildings, improvements and lease intangibles related to real estate investments as well as the carrying amount of the loans and direct financing receivables. | ||||
[3] | Includes the dollar amount of investments ($11.5 million) and the accumulated depreciation ($0.9 million) related to real estate investments held for sale at June 30, 2015. | ||||
[4] | The dollar amount of investments includes the gross investment in land, buildings, improvements and lease intangibles related to real estate investments as well as the carrying amount of the loans and direct financing receivables |
Investments (Details 2)
Investments (Details 2) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015USD ($)property | Dec. 31, 2014USD ($)property | |||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||||
Number of property locations of investments (in locations) | 1,175 | 947 | ||
Dollar Amount of Investments | $ | [3] | $ 3,475,013 | [1],[2] | $ 2,805,911 |
Percentage of Total Dollar Amount of Investments | 100.00% | |||
Restaurants | ||||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||||
Number of property locations of investments (in locations) | 581 | |||
Dollar Amount of Investments | $ | [2] | $ 947,584 | ||
Percentage of Total Dollar Amount of Investments | 27.00% | |||
Health clubs | ||||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||||
Number of property locations of investments (in locations) | 46 | |||
Dollar Amount of Investments | $ | [2] | $ 253,571 | ||
Percentage of Total Dollar Amount of Investments | 7.00% | |||
Early childhood education centers | ||||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||||
Number of property locations of investments (in locations) | 127 | |||
Dollar Amount of Investments | $ | [2] | $ 244,035 | ||
Percentage of Total Dollar Amount of Investments | 7.00% | |||
Movie theaters | ||||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||||
Number of property locations of investments (in locations) | 30 | |||
Dollar Amount of Investments | $ | [2] | $ 237,860 | ||
Percentage of Total Dollar Amount of Investments | 7.00% | |||
Furniture stores | ||||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||||
Number of property locations of investments (in locations) | 24 | |||
Dollar Amount of Investments | $ | [2] | $ 146,645 | ||
Percentage of Total Dollar Amount of Investments | 4.00% | |||
Sporting goods stores | ||||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||||
Number of property locations of investments (in locations) | 15 | |||
Dollar Amount of Investments | $ | [2] | $ 122,693 | ||
Percentage of Total Dollar Amount of Investments | 4.00% | |||
Colleges and professional schools | ||||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||||
Number of property locations of investments (in locations) | 6 | |||
Dollar Amount of Investments | $ | [2] | $ 79,101 | ||
Percentage of Total Dollar Amount of Investments | 2.00% | |||
All other service industries | ||||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||||
Number of property locations of investments (in locations) | 213 | |||
Dollar Amount of Investments | $ | [2] | $ 782,754 | ||
Percentage of Total Dollar Amount of Investments | 23.00% | |||
All other retail industries | ||||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||||
Number of property locations of investments (in locations) | 56 | |||
Dollar Amount of Investments | $ | [2] | $ 235,610 | ||
Percentage of Total Dollar Amount of Investments | 7.00% | |||
Industrial | ||||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||||
Number of property locations of investments (in locations) | 77 | |||
Dollar Amount of Investments | $ | [2] | $ 425,160 | ||
Percentage of Total Dollar Amount of Investments | 12.00% | |||
[1] | Includes the dollar amount of investments ($11.5 million) and the accumulated depreciation ($0.9 million) related to real estate investments held for sale at June 30, 2015. | |||
[2] | The dollar amount of investments includes the gross investment in land, buildings, improvements and lease intangibles related to real estate investments as well as the carrying amount of the loans and direct financing receivables | |||
[3] | The dollar amount of investments includes the investment in land, buildings, improvements and lease intangibles related to real estate investments as well as the carrying amount of the loans and direct financing receivables. |
Investments (Details 3)
Investments (Details 3) - Jun. 30, 2015 | stateitem |
Real estate investment portfolio | Geographic concentration | |
Significant Credit and Revenue Concentration | |
Number of customers | 274 |
Number of states over which real estate investments are dispersed (in states) | state | 46 |
Concentration Percentage for threshold | 10.00% |
Real estate investment portfolio | Geographic concentration | Texas | |
Significant Credit and Revenue Concentration | |
Concentration Percentage | 12.00% |
Number of states accounting for 10% or more | state | 1 |
Real estate investment portfolio | Customer concentration | |
Significant Credit and Revenue Concentration | |
Concentration Percentage for threshold | 10.00% |
Number of customers representing more than 10% | 0 |
Real estate investment portfolio | Customer concentration | Largest customer, investment portfolio | Maximum | |
Significant Credit and Revenue Concentration | |
Concentration Percentage | 3.00% |
Real estate investment portfolio | Concept concentration | |
Significant Credit and Revenue Concentration | |
Number of concepts (in categories) | 259 |
Investment portfolio revenues | Customer concentration | Largest customer, investment portfolio revenues | Maximum | |
Significant Credit and Revenue Concentration | |
Concentration Percentage | 3.00% |
Investment portfolio revenues | Concept concentration | Maximum | |
Significant Credit and Revenue Concentration | |
Concentration Percentage | 3.00% |
Investments (Details 4)
Investments (Details 4) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)propertyitem | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($) | |
Intangible Lease Assets | |||||
Intangible lease assets | $ 73,918,000 | $ 73,918,000 | $ 60,184,000 | ||
Accumulated amortization | (9,354,000) | (9,354,000) | (6,006,000) | ||
Net intangible lease assets | 64,564,000 | 64,564,000 | 54,178,000 | ||
Amortization in the next five years | |||||
Remainder of 2015 | 2,800,000 | 2,800,000 | |||
2,016 | 5,600,000 | 5,600,000 | |||
2,017 | 5,500,000 | 5,500,000 | |||
2,018 | 5,300,000 | 5,300,000 | |||
2,019 | 5,000,000 | 5,000,000 | |||
2,020 | 4,400,000 | $ 4,400,000 | |||
Accounting for Real Estate Investments | |||||
Typical number of renewal options | item | 1 | ||||
Remaining noncancelable lease term | 15 years | ||||
Number Of Real Estate Properties Vacant Not Subject to Lease | property | 6 | ||||
Future minimum rentals to be received under the remaining noncancelable term of the operating leases | |||||
Remainder of 2015 | 138,498,000 | $ 138,498,000 | |||
2,016 | 277,639,000 | 277,639,000 | |||
2,017 | 277,863,000 | 277,863,000 | |||
2,018 | 277,911,000 | 277,911,000 | |||
2,019 | 277,816,000 | 277,816,000 | |||
2,020 | 275,865,000 | 275,865,000 | |||
Thereafter | 2,607,991,000 | 2,607,991,000 | |||
Total future minimum rentals | 4,133,583,000 | 4,133,583,000 | |||
Decrease to rental revenue | |||||
Amortization in the next five years | |||||
Remainder of 2015 | 600,000 | 600,000 | |||
2,016 | 1,200,000 | 1,200,000 | |||
2,017 | 1,200,000 | 1,200,000 | |||
2,018 | 1,200,000 | 1,200,000 | |||
2,019 | 1,200,000 | 1,200,000 | |||
2,020 | 1,200,000 | 1,200,000 | |||
Amortization expense | |||||
Intangible Lease Assets | |||||
Amount amortized | 1,400,000 | $ 900,000 | 2,800,000 | $ 1,700,000 | |
Leases, Acquired-in-Place [Member] | |||||
Intangible Lease Assets | |||||
Intangible lease assets | 56,346,000 | $ 56,346,000 | 47,359,000 | ||
Amortization in the next five years | |||||
Weighted average remaining amortization period | 10 years | ||||
Leases, Acquired-in-Place [Member] | Assets Held-for-sale [Member] | |||||
Intangible Lease Assets | |||||
Intangible lease assets | 276,000 | $ 276,000 | |||
Accumulated amortization | (47,000) | (47,000) | |||
Above Market Leases [Member] | |||||
Intangible Lease Assets | |||||
Intangible lease assets | 10,273,000 | $ 10,273,000 | 5,526,000 | ||
Amortization in the next five years | |||||
Weighted average remaining amortization period | 9 years | ||||
Above Market Leases [Member] | Decrease to rental revenue | |||||
Intangible Lease Assets | |||||
Amount amortized | 300,000 | $ 200,000 | $ 500,000 | $ 200,000 | |
Ground lease interest assets | |||||
Intangible Lease Assets | |||||
Intangible lease assets | $ 7,299,000 | $ 7,299,000 | $ 7,299,000 | ||
Amortization in the next five years | |||||
Weighted average remaining amortization period | 75 years |
Investments (Details 5)
Investments (Details 5) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2015USD ($)propertyloan | Dec. 31, 2014USD ($) | ||
Loans and direct financing receivables | |||
Number of loans receivable | loan | 12 | ||
Number of properties which secure certain mortgage loans (in properties) | property | 5 | ||
Gross carrying amount of loans receivable | $ 92,400 | ||
Number of mortgage loans | loan | 10 | ||
Number of short-term mortgage loans | loan | 1 | ||
Amortization period of long-term mortgage loans | 40 years | ||
Mortgage loans receivable | $ 89,621 | $ 64,992 | |
Total principal repayments | 91,326 | 65,086 | |
Unamortized loan origination costs | 1,035 | 497 | |
Direct financing receivables | 75,912 | 45,771 | |
Total loans and direct financing receivables | $ 168,273 | 111,354 | |
Minimum | |||
Loans and direct financing receivables | |||
Long‑term mortgage loans receivable prepayment penalty rate | 1.00% | ||
Maximum | |||
Loans and direct financing receivables | |||
Long‑term mortgage loans receivable prepayment penalty rate | 5.00% | ||
Mortgage loan receivable, 0.085 interest rate, Apr. 2015 maturity date | |||
Loans and direct financing receivables | |||
Number of loans receivable | loan | 2 | ||
Number of properties which secure certain mortgage loans (in properties) | property | 1 | ||
Stated Interest Rate (as a percent) | 8.50% | ||
Mortgage loans receivable | 4,300 | ||
Mortgage loan receivable, 0.0909 interest rate, Jan. 2017 maturity date | |||
Loans and direct financing receivables | |||
Stated Interest Rate (as a percent) | 9.09% | ||
Mortgage loans receivable | $ 1,933 | 1,933 | |
Mortgage loan receivable, 0.0835 interest rate, Jan. 2028 maturity date | |||
Loans and direct financing receivables | |||
Stated Interest Rate (as a percent) | 8.35% | ||
Mortgage loans receivable | $ 3,769 | 3,775 | |
Mortgage loan receivable, 0.0875 interest rate, Jul. 2032 maturity date | |||
Loans and direct financing receivables | |||
Stated Interest Rate (as a percent) | 8.75% | ||
Mortgage loans receivable | $ 23,947 | 23,998 | |
Mortgage loan receivable, 0.0745 interest rate, Jan. 2035 maturity date | |||
Loans and direct financing receivables | |||
Stated Interest Rate (as a percent) | 7.45% | ||
Mortgage loans receivable | $ 498 | ||
Mortgage loan receivable, 0.09 interest rate, Mar. 2053 maturity date | |||
Loans and direct financing receivables | |||
Stated Interest Rate (as a percent) | 9.00% | ||
Mortgage loans receivable | $ 14,569 | 14,595 | |
Mortgage loan receivable, 0.0875 interest rate, Jun. 2053 maturity date | |||
Loans and direct financing receivables | |||
Stated Interest Rate (as a percent) | 8.75% | ||
Mortgage loans receivable | $ 6,346 | 6,357 | |
Mortgage loan receivable, 0.085 interest rate, Jun. 2053 maturity date | |||
Loans and direct financing receivables | |||
Stated Interest Rate (as a percent) | 8.50% | ||
Mortgage loans receivable | $ 6,749 | 6,697 | |
Mortgage loan receivable, 0.0825 interest rate, Aug. 2053 maturity date | |||
Loans and direct financing receivables | |||
Stated Interest Rate (as a percent) | 8.25% | ||
Mortgage loans receivable | $ 3,331 | 3,337 | |
Mortgage loan receivable, 0.085 interest rate, Feb. 2055 maturity date | |||
Loans and direct financing receivables | |||
Stated Interest Rate (as a percent) | [1] | 8.50% | |
Mortgage loans receivable | [1] | $ 28,479 | |
Mortgage loan receivable, 0.085 interest rate, Feb. 2055 maturity date | Minimum | |||
Loans and direct financing receivables | |||
Prepayment penalities | 20.00% | ||
Mortgage loan receivable, 0.085 interest rate, Feb. 2055 maturity date | Maximum | |||
Loans and direct financing receivables | |||
Prepayment penalities | 70.00% | ||
Equipment loan receivable, 0.10 interest rate, Jan. 2015 maturity date | |||
Loans and direct financing receivables | |||
Stated Interest Rate (as a percent) | 10.00% | ||
Equipment loans receivable | $ 94 | ||
Equipment loan receivable, 0.0775 interest rate, Mar. 2017 maturity date | |||
Loans and direct financing receivables | |||
Stated Interest Rate (as a percent) | 7.75% | ||
Equipment loans receivable | $ 1,063 | ||
Equipment loan receivable, 0.0875 interest rate, May. 2022 maturity date | |||
Loans and direct financing receivables | |||
Stated Interest Rate (as a percent) | 8.75% | ||
Equipment loans receivable | $ 642 | ||
[1] | Represents two mortgage loans receivable secured by a single property. The loans have an initial interest rate of 8.50% and are subject to increases over the term of the loans. The loans allow for prepayment in whole, but not in part, with penalties ranging from 20% to 70% depending on the timing of the prepayment. |
Investments (Details 6)
Investments (Details 6) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Scheduled loan receivable maturities | ||
Remainder of 2015 | $ 159 | |
2,016 | 332 | |
2,017 | 3,419 | |
2,018 | 507 | |
2,019 | 552 | |
2,020 | 602 | |
Thereafter | 85,755 | |
Total principal repayments | 91,326 | $ 65,086 |
Components of investments accounted for as direct financing receivables | ||
Minimum lease payments receivable | 197,935 | |
Estimated residual value of leased assets | 9,174 | |
Unearned income | (131,197) | |
Net investment | 75,912 | $ 45,771 |
Scheduled principal | ||
Scheduled loan receivable maturities | ||
Remainder of 2015 | 159 | |
2,016 | 332 | |
2,017 | 423 | |
2,018 | 507 | |
2,019 | 552 | |
2,020 | 602 | |
Thereafter | 61,886 | |
Total principal repayments | 64,461 | |
Balloon payments | ||
Scheduled loan receivable maturities | ||
2,017 | 2,996 | |
Thereafter | 23,869 | |
Total principal repayments | $ 26,865 |
Debt (Details)
Debt (Details) - Subsequent Event Type [Domain] | Apr. 08, 2015USD ($) | Apr. 01, 2015 | Sep. 19, 2014USD ($)facility | Apr. 08, 2014 | Jun. 30, 2015USD ($)agreement | Dec. 31, 2014USD ($) |
Credit facilities | ||||||
Initial term | 4 months | |||||
Extension option term | 1 month | |||||
Debt Instrument interest rate description | one-month LIBOR | |||||
Credit spread (as a percent) | 2.00% | |||||
Minimum EBITDA to fixed charges ratio covenant (as a percent) | 1.5 | |||||
Base rate | ||||||
Credit facilities | ||||||
Debt Instrument interest rate description | Base Rate | |||||
One-Month LIBOR | ||||||
Credit facilities | ||||||
Debt Instrument interest rate description | one-month LIBOR | |||||
Revolving credit facility | ||||||
Credit facilities | ||||||
Unamortized financing costs related to all debt | $ 1,900,000 | $ 2,400,000 | ||||
Interest rate swaps | ||||||
Credit facilities | ||||||
Number of agreements | agreement | 2 | |||||
Fair value, swaps | $ 328,000 | $ 266,000 | ||||
Interest rate swaps | Non‑recourse mortgage notes payable: | ||||||
Credit facilities | ||||||
Number of agreements | agreement | 2 | |||||
Termination value, liability position which includes accrued interest | $ 400,000 | |||||
New unsecured credit facility | Revolving credit facility | ||||||
Credit facilities | ||||||
Size of the facilities (in dollars) | $ 300,000,000 | |||||
Size of the facility with the accordion feature (in dollars) | $ 500,000,000 | |||||
Initial term | 3 years | |||||
Extension option term | 1 year | |||||
Extension fee (as a percent) | 0.20% | |||||
Non-use fee (as a percent) | 0.25% | |||||
Borrowing availability, limitation as a percentage of the value of the Company's eligible unencumbered assets (as a percent) | 50.00% | |||||
Eligible unencumbered assets (in dollars) | $ 1,100,000,000 | |||||
Maximum leverage covenant (as a percent) | 65.00% | |||||
Minimum consolidated net worth, base (in dollars) | $ 600,000,000 | |||||
Minimum consolidated net worth, percentage of any additional equity raised (as a percent) | 75.00% | |||||
Maximum dividend payout ratio (as a percent) | 95.00% | |||||
Unsecured loan facility | $ 300,000,000 | |||||
New unsecured credit facility | Revolving credit facility | Base rate | ||||||
Credit facilities | ||||||
Debt Instrument interest rate description | Base Rate | |||||
New unsecured credit facility | Revolving credit facility | Base rate | Minimum | ||||||
Credit facilities | ||||||
Credit spread (as a percent) | 0.75% | |||||
New unsecured credit facility | Revolving credit facility | Base rate | Maximum | ||||||
Credit facilities | ||||||
Credit spread (as a percent) | 1.50% | |||||
New unsecured credit facility | Revolving credit facility | One-Month LIBOR | ||||||
Credit facilities | ||||||
Debt Instrument interest rate description | one-month LIBOR | |||||
Credit spread (as a percent) | 1.75% | |||||
New unsecured credit facility | Revolving credit facility | One-Month LIBOR | Minimum | ||||||
Credit facilities | ||||||
Credit spread (as a percent) | 1.75% | |||||
New unsecured credit facility | Revolving credit facility | One-Month LIBOR | Maximum | ||||||
Credit facilities | ||||||
Credit spread (as a percent) | 2.50% | |||||
Unsecured loan facility with a bank | ||||||
Credit facilities | ||||||
Size of the facilities (in dollars) | $ 50,000,000 | |||||
Unsecured loan facility | $ 50,000,000 | |||||
Previous two secured credit facilities | ||||||
Credit facilities | ||||||
Size of the facilities (in dollars) | $ 300,000,000 | |||||
Number of facilities | facility | 2 | |||||
Unsecured loan facility | $ 300,000,000 | |||||
Previous two secured credit facilities | One-Month LIBOR | Minimum | ||||||
Credit facilities | ||||||
Credit spread (as a percent) | 2.45% | |||||
Previous two secured credit facilities | One-Month LIBOR | Maximum | ||||||
Credit facilities | ||||||
Credit spread (as a percent) | 3.00% | |||||
Part One of first credit facility | One-Month LIBOR | ||||||
Credit facilities | ||||||
Debt Instrument interest rate description | one-month LIBOR |
Debt - (Details 2)
Debt - (Details 2) | Apr. 08, 2015 | Apr. 01, 2015 | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($)agreement | Dec. 31, 2014USD ($) | |
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Retained non-amortizing notes | $ 108,000,000 | |||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Total non‑recourse debt obligations | $ 1,638,811,000 | $ 1,284,151,000 | ||||
Debt Instrument, Description of Variable Rate Basis | one-month LIBOR | |||||
Credit spread (as a percent) | 2.00% | |||||
Interest rate swaps | ||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Number of agreements | agreement | 2 | |||||
Base rate | ||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Debt Instrument, Description of Variable Rate Basis | Base Rate | |||||
One-Month LIBOR | ||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Debt Instrument, Description of Variable Rate Basis | one-month LIBOR | |||||
Non‑recourse mortgage notes payable: | Interest rate swaps | ||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Number of agreements | agreement | 2 | |||||
Non‑recourse mortgage notes payable: | $20,530 note issued December 2011 and amended February 2012 | Interest rate swaps | ||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Number of agreements | agreement | 2 | |||||
Non‑recourse mortgage notes payable: | $12.6 million portion of note issued December 2011 and amended February 2012 | Interest rate swaps | ||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Outstanding balance | $ 12,600,000 | |||||
Fixed rate | 5.299% | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | $ 12,600,000 | |||||
Non‑recourse mortgage notes payable: | $6.6 million portion of note issued December 2011 and amended February 2012 | Interest rate swaps | ||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Outstanding balance | $ 6,500,000 | |||||
Fixed rate | 5.23% | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | $ 6,500,000 | |||||
Consolidated special purpose entities | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Aggregate investment amount | 2,000,000 | |||||
Unamortized financing costs related to all debt | 35,900,000 | 30,900,000 | ||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Outstanding balance | 1,638,612,000 | 1,283,495,000 | ||||
Unamortized net premium | 199,000 | 656,000 | ||||
Total non‑recourse debt obligations | 1,638,811,000 | 1,284,151,000 | ||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Remainder of 2015 | 29,234,000 | |||||
2,016 | 28,162,000 | |||||
2,017 | 32,262,000 | |||||
2,018 | 29,560,000 | |||||
2,019 | 235,129,000 | |||||
2,020 | 311,753,000 | |||||
Thereafter | 972,512,000 | |||||
Long-term Debt | 1,638,612,000 | 1,283,495,000 | ||||
Consolidated special purpose entities | Scheduled principal | ||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Outstanding balance | 157,967,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Remainder of 2015 | 10,524,000 | |||||
2,016 | 21,613,000 | |||||
2,017 | 22,341,000 | |||||
2,018 | 22,895,000 | |||||
2,019 | 21,590,000 | |||||
2,020 | 15,767,000 | |||||
Thereafter | 43,237,000 | |||||
Long-term Debt | 157,967,000 | |||||
Consolidated special purpose entities | Balloon payments | ||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Outstanding balance | 1,480,645,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Remainder of 2015 | 18,710,000 | |||||
2,016 | 6,549,000 | |||||
2,017 | 9,921,000 | |||||
2,018 | 6,665,000 | |||||
2,019 | 213,539,000 | |||||
2,020 | 295,986,000 | |||||
Thereafter | 929,275,000 | |||||
Long-term Debt | $ 1,480,645,000 | |||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2012-1, Class A Due August 2019 | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Stated Interest Rate (as a percent) | 5.77% | |||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Stated Interest Rate (as a percent) | 5.77% | |||||
Outstanding balance | $ 205,883,000 | 207,503,000 | ||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | $ 205,883,000 | 207,503,000 | ||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2013-1, Class A-1 Due March 2020 | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Stated Interest Rate (as a percent) | 4.16% | |||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Stated Interest Rate (as a percent) | 4.16% | |||||
Outstanding balance | $ 144,634,000 | 145,876,000 | ||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | $ 144,634,000 | 145,876,000 | ||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2013-2, Class A-1 Due July 2020 | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Stated Interest Rate (as a percent) | 4.37% | |||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Stated Interest Rate (as a percent) | 4.37% | |||||
Outstanding balance | $ 103,903,000 | 104,740,000 | ||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | $ 103,903,000 | 104,740,000 | ||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2013-3, Class A-1 Due November 2020 | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Stated Interest Rate (as a percent) | 4.24% | |||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Stated Interest Rate (as a percent) | 4.24% | |||||
Outstanding balance | $ 75,175,000 | 75,767,000 | ||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | $ 75,175,000 | 75,767,000 | ||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2014‑1, Class A‑1 Due April 2021 | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Stated Interest Rate (as a percent) | 4.21% | |||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Stated Interest Rate (as a percent) | 4.21% | |||||
Outstanding balance | $ 119,350,000 | 119,650,000 | ||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | $ 119,350,000 | 119,650,000 | ||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2015-1, Class A-1 Due April 2022 | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Stated Interest Rate (as a percent) | 3.75% | |||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Stated Interest Rate (as a percent) | 3.75% | |||||
Outstanding balance | $ 94,921,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | $ 94,921,000 | |||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2013-1, Class A-2 Due March 2023 | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Stated Interest Rate (as a percent) | 4.65% | |||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Stated Interest Rate (as a percent) | 4.65% | |||||
Outstanding balance | $ 98,351,000 | 99,196,000 | ||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | $ 98,351,000 | 99,196,000 | ||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2013-2, Class A-2 Due July 2023 | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Stated Interest Rate (as a percent) | 5.33% | |||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Stated Interest Rate (as a percent) | 5.33% | |||||
Outstanding balance | $ 94,193,000 | 94,951,000 | ||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | $ 94,193,000 | 94,951,000 | ||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2013-3, Class A-2 Due November 2023 | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Stated Interest Rate (as a percent) | 5.21% | |||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Stated Interest Rate (as a percent) | 5.21% | |||||
Outstanding balance | $ 97,629,000 | 98,398,000 | ||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | $ 97,629,000 | 98,398,000 | ||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2014‑1, Class A‑2 Due April 2024 | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Stated Interest Rate (as a percent) | 5.00% | |||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Stated Interest Rate (as a percent) | 5.00% | |||||
Outstanding balance | $ 139,242,000 | 139,592,000 | ||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | $ 139,242,000 | 139,592,000 | ||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2015-1, Class A-2 Due April 2025 | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Stated Interest Rate (as a percent) | 4.17% | |||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Stated Interest Rate (as a percent) | 4.17% | |||||
Outstanding balance | $ 269,775,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | 269,775,000 | |||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Aggregate investment amount | 327,800,000 | |||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Principal amount | $ 8,000,000 | |||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $21,443 note issued July 2005 | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Stated Interest Rate (as a percent) | [1] | 5.26% | ||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Principal amount | $ 21,443,000 | |||||
Stated Interest Rate (as a percent) | [1] | 5.26% | ||||
Outstanding balance | [1] | $ 18,746,000 | 18,956,000 | |||
Estimated effective yield at assumption (as a percent) | 3.69% | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | [1] | $ 18,746,000 | 18,956,000 | |||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $21.1 million note refinanced subsequent to June 2015 | Subsequent Event | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Stated Interest Rate (as a percent) | 4.36% | |||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Stated Interest Rate (as a percent) | 4.36% | |||||
Outstanding balance | $ 21,100,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | $ 21,100,000 | |||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $4,000 note issued August 2006 | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Stated Interest Rate (as a percent) | [2] | 6.33% | ||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Principal amount | $ 4,000,000 | |||||
Stated Interest Rate (as a percent) | [2] | 6.33% | ||||
Outstanding balance | [2] | $ 3,272,000 | 3,326,000 | |||
Estimated effective yield at assumption (as a percent) | 5.15% | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | [2] | $ 3,272,000 | 3,326,000 | |||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $3,800 note issued September 2006 | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Stated Interest Rate (as a percent) | [3] | 6.47% | ||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Principal amount | $ 3,800,000 | |||||
Stated Interest Rate (as a percent) | [3] | 6.47% | ||||
Outstanding balance | [3] | $ 3,483,000 | 3,512,000 | |||
Estimated effective yield at assumption (as a percent) | 3.88% | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | [3] | $ 3,483,000 | 3,512,000 | |||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $7,088 note issued April 2007 | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Stated Interest Rate (as a percent) | [4] | 6.00% | ||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Principal amount | $ 7,088,000 | |||||
Stated Interest Rate (as a percent) | [4] | 6.00% | ||||
Outstanding balance | [4] | $ 6,623,000 | 6,676,000 | |||
Estimated effective yield at assumption (as a percent) | 4.45% | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | [4] | $ 6,623,000 | 6,676,000 | |||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $4,400 note issued August 2007 | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Stated Interest Rate (as a percent) | [5] | 6.7665% | ||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Principal amount | $ 4,400,000 | |||||
Stated Interest Rate (as a percent) | [5] | 6.7665% | ||||
Outstanding balance | [5] | $ 3,754,000 | 3,807,000 | |||
Estimated effective yield at assumption (as a percent) | 3.40% | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | [5] | $ 3,754,000 | 3,807,000 | |||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $8,000 note issued January 2012; assumed on December 2013 | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Stated Interest Rate (as a percent) | 4.778% | |||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Stated Interest Rate (as a percent) | 4.778% | |||||
Outstanding balance | $ 7,377,000 | 7,511,000 | ||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | $ 7,377,000 | 7,511,000 | ||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $20,530 note issued December 2011 and amended February 2012 | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Stated Interest Rate (as a percent) | [6] | 5.275% | ||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Principal amount | $ 20,530,000 | |||||
Stated Interest Rate (as a percent) | [6] | 5.275% | ||||
Outstanding balance | $ 19,085,000 | 19,317,000 | ||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | $ 19,085,000 | 19,317,000 | ||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $20,530 note issued December 2011 and amended February 2012 | One-Month LIBOR | ||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Credit spread (as a percent) | 3.50% | |||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $6,500 note issued December 2012 | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Stated Interest Rate (as a percent) | 4.806% | |||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Principal amount | $ 6,500,000 | |||||
Stated Interest Rate (as a percent) | 4.806% | |||||
Outstanding balance | $ 6,133,000 | 6,207,000 | ||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | $ 6,133,000 | 6,207,000 | ||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $2,956 note issued June 2013 | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Stated Interest Rate (as a percent) | [7] | 3.184% | ||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Principal amount | $ 2,956,000 | |||||
Stated Interest Rate (as a percent) | [7] | 3.184% | ||||
Outstanding balance | $ 2,792,000 | 2,827,000 | ||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | $ 2,792,000 | 2,827,000 | ||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $2,956 note issued June 2013 | One-Month LIBOR | ||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Credit spread (as a percent) | 3.00% | |||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $16,100 note issued February 2014 | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Stated Interest Rate (as a percent) | 4.83% | |||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Principal amount | $ 16,100,000 | |||||
Stated Interest Rate (as a percent) | 4.83% | |||||
Outstanding balance | $ 15,688,000 | 15,857,000 | ||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | $ 15,688,000 | 15,857,000 | ||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $13,000 note issued May 2012 | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Stated Interest Rate (as a percent) | 5.195% | |||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Principal amount | $ 13,000,000 | |||||
Stated Interest Rate (as a percent) | 5.195% | |||||
Outstanding balance | $ 12,183,000 | 12,326,000 | ||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | $ 12,183,000 | 12,326,000 | ||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $14,950 note issued July 2012 | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Stated Interest Rate (as a percent) | 4.95% | |||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Principal amount | $ 14,950,000 | |||||
Stated Interest Rate (as a percent) | 4.95% | |||||
Outstanding balance | $ 13,686,000 | 13,863,000 | ||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | $ 13,686,000 | 13,863,000 | ||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $26,000 note issued August 2012 | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Stated Interest Rate (as a percent) | 5.05% | |||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Principal amount | $ 26,000,000 | |||||
Stated Interest Rate (as a percent) | 5.05% | |||||
Outstanding balance | $ 24,519,000 | 24,805,000 | ||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | $ 24,519,000 | 24,805,000 | ||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $6,400 note issued November 2012 | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Stated Interest Rate (as a percent) | 4.707% | |||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Principal amount | $ 6,400,000 | |||||
Stated Interest Rate (as a percent) | 4.707% | |||||
Outstanding balance | $ 6,054,000 | 6,127,000 | ||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | $ 6,054,000 | 6,127,000 | ||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $11,895 note issued March 2013 | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Stated Interest Rate (as a percent) | 4.7315% | |||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Principal amount | $ 11,895,000 | |||||
Stated Interest Rate (as a percent) | 4.7315% | |||||
Outstanding balance | $ 11,345,000 | 11,478,000 | ||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | $ 11,345,000 | 11,478,000 | ||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $17,500 note issued August 2013 | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Stated Interest Rate (as a percent) | 5.46% | |||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Principal amount | $ 17,500,000 | |||||
Stated Interest Rate (as a percent) | 5.46% | |||||
Outstanding balance | $ 16,919,000 | 17,091,000 | ||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | $ 16,919,000 | 17,091,000 | ||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $10,075 note issued March 2014 | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Stated Interest Rate (as a percent) | 5.10% | |||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Principal amount | $ 10,075,000 | |||||
Stated Interest Rate (as a percent) | 5.10% | |||||
Outstanding balance | $ 9,913,000 | 9,984,000 | ||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | $ 9,913,000 | 9,984,000 | ||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $7,750 note issued February 2013 | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Stated Interest Rate (as a percent) | [8] | 4.81% | ||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Principal amount | $ 7,750,000 | |||||
Stated Interest Rate (as a percent) | [8] | 4.81% | ||||
Outstanding balance | $ 7,382,000 | 7,468,000 | ||||
Interest rate term before reset | 10 years | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | $ 7,382,000 | 7,468,000 | ||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $7,750 note issued February 2013 | Initial rate | ||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Credit spread (as a percent) | 4.00% | |||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $7,750 note issued February 2013 | Treasury rate | ||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Credit spread (as a percent) | 4.00% | |||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $6,944 notes issued March 2013 | ||||||
Non‑Recourse Debt Obligations of Consolidated Special Purpose Entities [Line items] | ||||||
Stated Interest Rate (as a percent) | [9] | 4.50% | ||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | ||||||
Principal amount | $ 6,944,000 | |||||
Stated Interest Rate (as a percent) | [9] | 4.50% | ||||
Outstanding balance | $ 6,602,000 | 6,684,000 | ||||
Interest rate term before reset | 10 years | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | ||||||
Long-term Debt | $ 6,602,000 | $ 6,684,000 | ||||
[1] | Note was assumed in June 2014 at a premium; estimated effective yield at assumption of 3.69%. Subsequent to June 30, 2015, this note was refinanced in the amount of $21.1 million; the new note has an interest rate of 4.36% and matures in August 2025. | |||||
[2] | Note was assumed in July 2012 at a premium; estimated effective yield at assumption of 5.15%. | |||||
[3] | Note was assumed in April 2014 at a premium; estimated effective yield at assumption of 3.88% | |||||
[4] | Note was assumed in December 2013 at a premium; estimated effective yield at assumption of 4.45% | |||||
[5] | Note was assumed in September 2014 at a premium; estimated effective yield at assumption of 3.40% | |||||
[6] | Note is a variablerate note which resets monthly at onemonth LIBOR + 3.50%. The Company has entered into two interest rate swap agreements that effectively convert the floating rate on a $12.6 million portion and a $6.5 million portion of this mortgage note payable to fixed rates of 5.299% and 5.230%, respectively. | |||||
[7] | Note is a variablerate note which resets monthly at onemonth LIBOR + 3.00%; rate shown is effective rate at June 30, 2015 | |||||
[8] | Interest rate is effective for first 10 years and will reset to greater of (1) initial rate plus 400 basis points or (2) Treasury rate plus 400 basis points. | |||||
[9] | Interest rate is effective for first 10 years and will reset to the lender’s then prevailing interest rate. |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) $ / shares in Units, $ in Millions | Mar. 30, 2015shares | Nov. 03, 2014 | Jun. 30, 2015USD ($)$ / sharesshares | Jun. 30, 2015USD ($)$ / sharesshares | Jun. 30, 2014USD ($) | Dec. 31, 2014$ / sharesshares |
Common stock | ||||||
Stock split ratio | 1.67 | |||||
Shares issued | 11,562,500 | |||||
Net proceeds from issuance of common stock | $ | $ 224.7 | |||||
Declared dividends payable to common stockholders (in dollars) | $ | $ 60.5 | $ 31.9 | ||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||
STORE Holding, parent of the Company | ||||||
Common stock | ||||||
Shares sold by related party | 9,712,500 | |||||
Store Holding's distribution | 653,382 | |||||
Holdings in common stock (in shares) | 72,436,144 | 72,436,144 | 82,802,026 |
Income from Discontinued Oper31
Income from Discontinued Operations (Details) - Jun. 30, 2014 - USD ($) | Total | Total |
Income from Discontinued Operations | ||
Income from discontinued real estate investments | $ 24,000 | $ 127,000 |
Gain on the dispositions of real estate investments | $ 226,000 | $ 969,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Jun. 30, 2015 $ in Millions | USD ($) |
Chief Executive Officer [Member] | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Number of times of basic pay | 2 |
Number of times of the target cash bonus | 2 |
Other Executive Officer [Member] | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Number of times of basic pay | 1.5 |
Number of times of the target cash bonus | 1.5 |
Commitments to fund improvements to real estate properties | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Purchase Commitment, Remaining Minimum Amount Committed | $ 52.6 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Derivatives [Line items] | ||
Total non‑recourse debt obligations | $ 1,638,811,000 | $ 1,284,151,000 |
Interest rate swaps | ||
Derivatives [Line items] | ||
Fair value, swaps | 328,000 | 266,000 |
Consolidated special purpose entities | ||
Derivatives [Line items] | ||
Total non‑recourse debt obligations | 1,638,811,000 | 1,284,151,000 |
Consolidated special purpose entities | Level 2 Fair Value | Carrying value | ||
Derivatives [Line items] | ||
Total non‑recourse debt obligations | 1,638,800,000 | 1,284,200,000 |
Consolidated special purpose entities | Level 2 Fair Value | Fair value | ||
Derivatives [Line items] | ||
Total non‑recourse debt obligations | $ 1,735,600,000 | $ 1,349,000,000 |